2018 / 2019 Transactions

COMMERCIAL SALES

2018 / 2019 TRANSACTIONS

cushmanwakefield.com.au The team at Cushman & Wakefield Valuation & Advisory have pleasure in enclosing analysis of key 2018/2019 transactions across the Sydney CBD, North Sydney and Metropolitan commercial markets.

We hope these are of assistance to you and we look forward to also updating you over 2019 on the expansion of Cushman & Wakefield Valuation & Advisory.

David Castles Adam Elias Tim Miles Daniel Hiscox National Director Divisional Director Divisional Director Valuer Sydney CBD Sydney CBD Sydney CBD Sydney CBD [email protected] [email protected] [email protected] [email protected]

Lachlan Graham Matt Lucas Tony Seo Divisional Director Associate Director Senior Valuer Metropolitan Metropolitan Metropolitan [email protected] [email protected] [email protected]

cushmanwakefield.com VALUATION AND ADVISORY COMMERCIAL SALES SUMMARY

2018/2019 TRANSACTIONS

SYDNEY CBD

10-20 BOND STREET, 10 SHELLEY STREET, 60 MARGARET STREET, 12 SHELLEY STREET, SYDNEY SYDNEY SYDNEY SYDNEY

Sale Price/Date: $325M Sale Price/Date: $533M Sale Price/Date: $420M Sale Price/Date: $270M MAR-19 DEC-18 DEC-18 DEC-18 Core Market Yield: 4.96% Core Market Yield: 5.03% Core Market Yield: 5.10% Core Market Yield: 5.22% IRR: 6.55% IRR: 6.89% IRR: 6.55% IRR: 6.98% $/m² NLA: 16,850M2 $/m² NLA: 19,227M2 $/m² NLA: 16,883M2 $/m² NLA: 18,037M2

183 CLARENCE STREET, WESTPAC PLACE, 55 CLARENCE STREET 117 CLARENCE STREET SYDNEY 275 KENT STREET, SYDNEY SYDNEY SYDNEY

Sale Price/Date: $180.3M Sale Price/Date: $721.9M Sale Price/Date: $256M Sale Price/Date: $153M SEP-18 JUN-18 MAY-18 MAY-18 Core Market Yield: 5.04% Core Market Yield: 4.53% Core Market Yield: 4.94% Core Market Yield: 5.20% IRR: 6.60% IRR: 6.59% IRR: 6.64% IRR: 6.66% $/m² NLA: 22,919M2 $/m² NLA: 18,724M2 $/m² NLA: 17,195M2 $/m² NLA: 12,223M2 NORTH SYDNEY

52 GOULBURN STREET 1 YORK STREET, COCA COLA PLACE, 80 MOUNT STREET SYDNEY SYDNEY 40 MOUNT ST, NTH SYDNEY NORTH SYDNEY

Sale Price/Date: $176M Sale Price/Date: $205M Sale Price/Date: $226.5M Sale Price/Date: $71M MAR-18 JAN-18 DEC-18 SEP-18 Core Market Yield: 5.22% Core Market Yield: 5.89% Core Market Yield: 5.23% Core Market Yield: 5.17% IRR: 6.49% IRR: 6.67% IRR: 6.65% IRR: 6.01% $/m² NLA: 15,235M2 $/m² NLA: 11,128M2 $/m² NLA: 15,874M2 $/m² NLA: 11,460M2

NORTHPOINT, 77 PACIFIC HIGHWAY 54 MILLER STREET, 123 WALKER STREET 100 MILLER ST, NTH SYDNEY NORTH SYDNEY NORTH SYDNEY NORTH SYDNEY

Sale Price/Date: $300M Sale Price/Date: $112.35M Sale Price/Date: $59.4M Sale Price/Date: $21.3M APR-18 MAY-18 MAR-18 MAR-18 Core Market Yield: 4.81% Core Market Yield: 5.4% Core Market Yield: 6.0% Core Market Yield: 4.98% IRR: 6.37% IRR: 6.9% IRR: 7.0% IRR: 6.62% 2 $/m² NLA: 16,248M $/m² NLA: 11,963M2 $/m² NLA: 8,541M2 $/m² NLA: 10,730M2 VALUATION AND ADVISORY COMMERCIAL SALES SUMMARY

2018/2019 TRANSACTIONS

METROPOLITAN

100 BROADWAY, 9 GEORGE STREET 465 VICTORIA AVENUE 67 ALBERT AVENUE ULTIMO PARRAMATTA CHATSWOOD CHATSWOOD

Sale Price/Date: $77.14M Sale Price/Date: $44.3M Sale Price/Date: $166.5M Sale Price/Date: $158M DEC-18 DEC-18 NOV-18 NOV-18 Passing Initial Yield: 5.05% Core Market Yield: 6.01% Core Market Yield: 5.8% Core Market Yield: 5.71% IRR: 7.15% IRR: 7.13% IRR: 6.93% IRR: 6.72% $/m² NLA: 14,153M2 $/m² NLA: 7,970M2 $/m² NLA: 10,646M2 $/m² NLA: 10,707M2

33 ARGYLE STREET 91 PHILLIP STREET 72 CHRISTIE STREET 19 HARRIS STREET PARRAMATTA PARRAMATTA ST LEONARDS PYRMONT

Sale Price/Date: $40.8M Sale Price/Date: $56.63M Sale Price/Date: $157.55M Sale Price/Date: $143M NOV-18 OCT-18 SEP-18 SEP-18 Core Market Yield: 5.68% Core Market Yield: 5.5% Core Market Yield: 5.00% Core Market Yield: 5.42% IRR: 6.56% IRR: 6.7% IRR: 6.51% IRR: 6.68% 2 $/m² NLA: 7,727M 2 $/m² NLA: 9,292M2 $/m² NLA: 13,993M2 $/m² NLA: 11,378M

60 STATION STREET 223 LIVERPOOL ROAD STRATA LOTS 1 & 2, PIER 8/9, 154 PACIFIC HIGHWAY PARRAMATTA ASHFIELD 23 HICKSON RD, WALSH BAY ST LEONARDS

Sale Price/Date: $277.6M Sale Price/Date: $46M Sale Price/Date: $90.5M Sale Price/Date: $60.2M AUG-18 AUG-18 JUN-18 MAY-18 Core Market Yield: 5.36% Core Market Yield: 6.64% Core Market Yield: 6.36% Core Market Yield: 6.15% IRR: 6.48% IRR: 8.07% IRR: 7.18% IRR: 7.37% 2 $/m² NLA: 10,789M $/m² NLA: 4,733M2 $/m² NLA: 10,619M2 $/m² NLA: 9,557M2

4-10 BRIDGE STREET 2 LINCOLN STREET 2 MERIDITH STREET 11 BOWDEN STREET PYMBLE LANE COVE WEST BANKSTOWN ALEXANDRIA

Sale Price/Date: $14.55M Sale Price/Date: $28.075M Sale Price/Date: $74.5M Sale Price/Date: $48.85M APR-18 MAR-18 FEB-18 FEB-18 Core Market Yield: 6.2% Core Market Yield: 6.8% Core Market Yield: 7.0% Core Market Yield: 5.81% IRR: 6.6% IRR: 7.6% IRR: 7.9% IRR: 6.80% $/m² NLA: 5,895M2 $/m² NLA: 3,031M2 $/m² NLA: 5,427M2 $/m² NLA: 8,574M2 SYDNEY CBD SALES ANALYSIS 2018/2019 TRANSACTIONS

10-20 BOND STREET, SYDNEY NSW

The property comprises two commercial office towers (constructed in 1979 and fully refurbished in 2010/2011) known as 10 & 20 Bond Street. 10 Bond Street comprises an 8 level B-grade office building whilst 20 Bond Street comprises a 32 level A-grade office tower. A retail plaza area supporting 5 retail tenancies extends between the two buildings. Seven basement levels extend across the site and accommodate a Fitness First Gym and 150 car spaces fully leased to Secure Parking. KEY DETAILS Sale Date: March 2019 Sale Price: Sales$325,000,000 Analysis (50%) – headline price Vendor: Oxford Investa Property Partners (OIPP) Purchaser: Mirvac NABERS Rating: Energy: 5.5 Star Water: 2.5 Star Land Area: 3,250m2 NLA: 38,278m2 Parking: 150 spaces Vacancy: 7.7% (2,961m²) No of Tenants: 33 office tenants & 1 retail tenants. Net Passing Income: Circa $24 million INPUTS ANALYSIS Market Rentals: Office: Average $1,120/m2 pa gross Passing Initial Yield: 4.63% Retail: Average $626/m2 pa gross Core Market Yield*: 4.96% Avg Cmpd Mkt Growth: 3.9% (10 year) 10 Yr IRR (after costs): 6.55% Outgoings: $6,933,660 ($181/m2) Rate/m² NLA: $16,850/m² Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention Weighted Average Lease Income Area Allowances: Incentive (10 yrs): 22.5%-25% (average 21.3%) Expiry (Yrs): 3.2 yrs 3.4 yrs Cap Adjustment Period: 36 months Average Running Yield: 5 yr 10 yr Terminal Yield: 5.25% (12mth horizon – circa 7,100m2 expiry (before capex) 5.45% 6.08% accounted for) Capital Expenditure: Total Capex: Circa $800/m2 overall *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc). Lease Expiry by Area Use Composition by Passing Income

NLA (m²) Car Parking 14,000 5% 36 mths; 49% NLA 12,000 Retail 9% 10,000

8,000

6,000

4,000

2,000

0 Office Current Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 86% Initial Expiries Renewals Vacancy Expiry Capture Window

COMMENTS

• Well-presented office buildings (10 Bond St – B-grade & 20 Bond St – A grade) providing a diversified tenancy profile with a WALE of 3.2 years (by income). • Major building tenants are The Trust Co (9% of NLA), Hudson (7.6% of NLA), JWS Services (6.6% of NLA) and Travelex (5.4% of NLA). • As currently tenanted, 83.5% of the NLA for 20 Bond is occupied on a whole floor or contiguous floor basis with the remaining 16.5% of NLA comprising subdivided suites. • For 10 Bond, 76.3% of the NLA is occupied on a whole floor basis with the remaining 23.7% of NLA comprising subdivided suites. • Ground floor retail plaza plus Fitness First tenancy over several basement levels. • Seven levels of basement accommodating 150 car spaces fully leased to Secure Parking on a five year lease expiring August 2020 with annual 3.50% rent reviews. • Off market transaction via pre-emptive purchase rights of a 50% interest which was triggered via Oxford Property Group’s purchase of the Investa Office Fund (IOF). • Sold on an ‘as is, where is’ basis albeit with some minor price adjustments applied at settlement (circa $2.5 million).

The above information is purely for the purpose of a broad guide and whilst we understand the facts to be generally reliable we are unable to guarantee their accuracy. The information contained within may be confidential and must not be reproduced or circulated without the written consent of Cushman & Wakefield Valuations. Liability limited by a scheme approved under Professional Standards Legislation

10 SHELLEY STREET, SYDNEY NSW

16-level, A-grade office building constructed circa 2003 with major refurbishment undertaken prior to the Suncorp lease commencement in October 2017. Improvements comprise multi-level basement parking (104 spaces), ground floor retail and 15 upper office levels. Circa $35 million refurbishment works were undertaken in 2017 comprising lobby upgrade, on-floor works and establishment of a rooftop terrace. KEY DETAILS Sale Date: December 2018 Sale Price: $533,000,000 Vendor: SalesBrookfield Analysis Purchaser: Charter Hall NABERS Rating: Energy: 5 Star Water: 3 Star Land Area: 2,364m² NLA: 27,721.7m² Parking: 104 spaces Vacancy: Nil No of Tenants: 2 office tenants & 1 retail tenant. Net Passing Income: Circa $24 million INPUTS ANALYSIS Market Rentals (Avg): Office: $1,150/m2 pa gross ($995/m² passing) Passing Initial Yield: 4.50% Retail: $1,204/m2 pa gross (passing) Core Market Yield*: 5.03% (reflecting rental reversions) 4.58% (reflecting no rental reversion) Avg Cmpd Mkt Growth: 3.9% (10 year) 10 Yr IRR (after costs): 6.89% (reflecting rental reversions) Outgoings: $4,813,580 ($174/m2) 6.64% (reflecting no rental reversion) Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention Rate/m² NLA: $19,227/m² Allowances: Incentive (10 yrs): 22.5%-27.5% (average 23.75%) Weighted Average Lease Income Area Cap Adjustment Period: 12 months Expiry (Yrs): 9.1 yrs 9.2 yrs Terminal Yield: 4.75% - non reversionary basis Average Running Yield: 5 yr 10 yr 5.25% - reversionary basis (Reversionary Basis) 4.9% 5.2% Capital Expenditure: Total Capex: $578/m2 (Non Reversionary Basis) 4.9% 5.1% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc). LeaseExpiry ExpiryProfile by by Area NLA Use Composition by Passing Income 100% 90% 80% 70% 60% Other Office 0.7% 50% 95.4% 40% Parking 30%

% of Net of% Net LettableArea 3.4% 20% 10% Retail 0.5% 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11

Vacant Future Expiries

COMMENTS

• Refurbished A-grade asset being well located in the Barangaroo Precinct of the CBD. 82.5% of the building NLA is leased to Suncorp expiring September 2028. The remaining office floors are leased to Iress Limited until May 2024 with annual 4% increases. • The property was purchased in conjunction with the adjoining 12 Shelley Street for $270 million as well as 21 Sussex Street (pumphouse) for $1 million. The purchaser also owns 1 Shelley Street and these acquisitions represent a strategic ‘Precinct control’ position. • We are advised that all outstanding incentives will be paid out by the vendor and our analysis reflects such. • Given that the major tenant lease (Suncorp) was negotiated circa 2015, the passing rent is now considered to be substantially below market (circa 16%) albeit given the remaining 9.8 year lease term with fixed 3.75% review structure there is no ability to capture any positive reversion until Sep 2028. • We understand that investment variables were viewed differently by the various interested parties with some having greater regard to the initial/running yield and some having greater regard to the longer term rental reversion potential. • Our analysis indicates the different investment parameters reflected by this transaction having regard to both the longer term rental reversion potential as well as the initial/running yield.

60 MARGARET STREET & MET CENTRE, SYDNEY NSW

60 Margaret St - Comprises an A-grade office tower with 30 levels of office space plus a two level basement car park providing 142 spaces. MetCentre - comprises a CBD Shopping Centre which provides predominantly retail accommodation over two levels including a foodcourt level and two further levels (Woolworths basement and Plaza Café / Bar precinct). KEY DETAILS Sale Date: December 2018 Sale Price: Sales$420,000,000 Analysis (50% interest) Vendor: PAG Purchaser: Blackstone NABERS Rating: Energy: 4 Star Water: 3 Star Land Area: 4,464m² NLA: Office: 40,397.6m² Retail: 6,411.1m² Parking: 142 spaces Vacancy: Office: 6.5% of NLA Retail: Nil Net Passing Income: Office: Circa $30.5million Retail: Circa $13.75 million

INPUTS ANALYSIS Market Rentals: Office: Average $1,100/m² pa gross Passing Initial Yield: Office:4.50% Retail: 6.14% Retail: Average $2,500/m2 pa gross Office Retail Combined Core Market Yield*: 5.10% 5.50% 5.29% Avg Cmpd Mkt Growth: 4.2% (Office 10 year) 2.65% (Retail 10 year) 10 Yr IRR (after costs): Office Retail Combined Outgoings: Office -$174/m2 Retail - $580/m2 6.55% 7.00% 6.75% Office Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention Rate/m² NLA: $16,833/m² $24,947/m² $20,793/m² Allowances: Incentive (10 yrs): 20%-25% (average 22.75%) Weighted Average Lease Office Retail Cap Adjustment Period: Office – 36 months Retail – 24 months Expiry (Yrs): 5.1 yrs 3.4 yrs Terminal Yield: Office – 5.50% Retail – 6.0% Capital Expenditure: Office (10 yrs): $578/m2 Retail (10 yrs): $205/m²

*Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

COMMENTS

General • Off market transaction of a 50% interest. • Notional apportionment advised at $340M for the office tower and $80M for the shopping centre (50% interest) with investment parameters above reflective of this. • We are advised that all outstanding incentives were paid out by the Vendor and accordingly our calculations reflect this.

60 Margaret St • Refurbished A-grade asset being well located in the Western Precinct of the CBD and 93.5% leased with an income weighted WALE of 5.1 years. • The two major building tenants are ING (24.1% of NLA) and Cliftons (10.0% of NLA) with remaining tenancies comprising a mixture of whole and contiguous floor tenants (circa 50% of NLA) and subdivided suite tenancies (8.1% of NLA).

MetCentre • CBD retail centre essentially fully leased with a WALE of 3.5 yrs (by income). • Woolworths occupy approximately 23% of the total GLA and provide 8% of the total gross rental income. The specialties occupy approximately 77% of the total GLA and provide 91% of the total gross income for the Centre. • In addition to Woolworths, other chain specialty traders represented in the Centre include ING, Lorna Jane, Witchery, Nine West, Sportsgirl, Virgin Active, Mad Mex, Top Juice and Oxford.

12 SHELLEY STREET, SYDNEY NSW

11-level, A-grade office building constructed circa 2007. Improvements comprise basement parking (69 cars), End of Trip facilities, ground floor retail and 10 upper office levels. The office component is fully leased to American Express with 9.9 year WALE. KEY DETAILS Sale Date: December 2018 Sale Price: $270,000,000 Vendor: Brookfield Purchaser: SalesCharter Analysis Hall NABERS Rating: Energy: 5 Star Water: 3 Star Land Area: 3,355m² NLA: 14,969m² Parking: 69 spaces Vacancy: 0.4% (64.3m²) No of Tenants: 1 office tenants & 3 retail tenants. Net Passing Income: Circa $12.7 million INPUTS ANALYSIS Market Rentals (Avg): Office: $1,100/m2 pa gross ($952/m² passing) Passing Initial Yield: 4.70% Retail: $997/m2 pa gross (passing) Core Market Yield*: 5.22% (reflecting rental reversions) 4.73% (reflecting no rental reversion) Avg Cmpd Mkt Growth: 3.9% (10 year) 10 Yr IRR (after costs): 6.98% (reflecting rental reversions) Outgoings: $2,652,797 ($177/m2) 6.55% (reflecting no rental reversion) Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention Rate/m² NLA: $18,037/m² (ex Pumphouse sale) Allowances: Incentive (10 yrs): 22.5%-27.5% (average 23.75%) Weighted Average Lease Income Area Cap Adjustment Period: 12 months Expiry (Yrs): 9.9 yrs 9.9 yrs Terminal Yield: 5.00% - non reversionary basis Average Running Yield: 5 yr 10 yr 5.50% - reversionary basis (Reversionary Basis) 5.3% 5.8% Capital Expenditure: Total Capex: $782/m2 (Non Reversionary Basis) 5.3% 5.8% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

ExpiryLease Profile Expiry by by NLA Area UseUse Composition Composition by by Passing Passing IncomeIncome 100% 90% 80% 70% Office 90.0% 60% 50% Other 40% 2.0%

30% Parking % of Net of % Net LettableArea 20% 5.5% 10% Retail 2.5% 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Vacant Future Expiries

COMMENTS

• A-grade asset being well located in the Barangaroo Precinct of the CBD. • 96.5% of the building NLA is leased to American Express expiring December 2028 with annual 3.75% rental increases. Four retail areas leased to 3 different tenants and one vacancy. • The property was purchased in conjunction with the adjoining 10 Shelley Street for $533 million as well as 21 Sussex Street (pumphouse) for $1 million. The purchaser also owns 1 Shelley Street and these acquisitions represent a strategic ‘Precinct control’ position. • We are advised that all outstanding incentives will be paid out by the vendor and our analysis reflects such. • The major tenant lease (American Express) commenced in January 2018 (albeit was negotiated earlier), however is considered to be substantially below market (circa 15%). However given the remaining 10 year lease term with fixed 3.75% review structure there is no ability to capture positive reversion until Dec 2028. • We understand that investment variables were viewed differently by the various interested parties with some having greater regard to the initial/running yield and some having greater regard to the longer term rental reversion potential. • Our analysis indicates the different investment parameters reflected by this transaction having regard to both the longer term rental reversion potential as well as the initial/running yield.

183 - 185 CLARENCE STREET, SYDNEY NSW

Fund through sale of a proposed A-grade office development due for completion in July 2020 and comprising the refurbishment/redevelopment of the existing heritage assets (disused substation and warehouse) over 7 levels with a 7 level glass extension above. Has frontages to both Clarence and Kent Streets. Comprises a leasehold interest with 96 years remaining. KEY DETAILS Sale Date: September 2018 Sale Price: $180,300,000 Vendor: SalesBuilt Analysis Purchaser: THC Real Estate (Nuveen) Land Area: 1,030.8m2 NLA: 7,867.0m2 Parking: Nil Vacancy: 0% Net Passing Income: Circa $9 million

INPUTS ANALYSIS Market Rentals: Office: Average circa $1,300/m2 pa gross Passing Initial Yield: 5.04% Retail: Average $1,455m2 pa gross Core Market Yield*: 5.04% Avg Cmpd Mkt Growth: 3.9 (10 year) IRR (after costs): 5 yr 10 yr Outgoings: Circa $160/m2 5.70% 6.60% Leasing/Incentive Downtime (10 yrs): 6 months @ 60% retention Rate/m² NLA: $22,919/m² Allowances: Incentive (10 yrs): 22.5%-27.5% (average 23.75%) Weighted Average Lease Income Area Cap Adjustment Period: 12 months Expiry (Yrs): 4.4 yrs 4.5 yrs Terminal Yield: 5.25% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $530/m2 (10 yr). (before capex) 4.3% 4.5% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

ExpiryLease Profile Expiry by by NLAArea Use Composition by Passing Income 100% 90% 80% 70% 60% Office 50% 94.4% 40% Retail

30% 5.6% % of Net of % Net LettableArea 20% 10% 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11

Vacant Future Expiries

COMMENTS

• Fund through transaction of an A-grade asset with the Western Corridor Precinct of the Sydney CBD due for completion in mid 2020. • 40% (Levels 2 – 5, 2,942m²) is precommitted by to Built (builder / Vendor) for 7 years with annual 4% increases. • 3 year rental guarantee over the remaining unleased areas at Practical Completion (Estimated July 2020) ranging between $1,090m² - $1,175m² net for the office accommodation with annual 4% fixed annual increases. • Two retail tenancies, one fronting Kent Street (20m²) with the other fronting Clarence Street (127m²) as well as a lobby café (61m²) are also subject to the rental guarantee.

WESTPAC PLACE, 275 KENT STREET, SYDNEY NSW

Westpac Place comprises two connected A-grade office towers with common foyer, two levels of retail and two basement levels of tenant parking (214 spaces), completed in mid-2006. The smaller “Sussex Tower” comprises a 21-level office tower located at the western side, whilst the taller “Kent Tower” comprises a 32-level office tower located at the eastern side of the site fronting Kent Street. Significant refurbishment works are currently underway to enlarge and re-orientate the main building foyer/lobby, refurbish and reconfigure the retail and food court component and provide additional landscaping to the adjoining Urban Park. KEY DETAILSSales Analysis Sale Date: June 2018 Sale Price: $721,900,000 (50% interest) Vendor: Blackstone Purchaser: ISPT NABERS Rating: Energy: 5 Star Water: 3.5 Star Land Area: 9,736m² NLA: Retail: 2,532.3m² Office: 74,576.2m² Total: 77,108.5m² Parking: 214 spaces Vacancy: Currently 1.7% of NLA (1,340.1m²) comprising the retail component. Net Passing Income: Circa $75 million INPUTS ANALYSIS Market Rentals: Office: $1,158/m² gross Passing Initial Yield: 5.20% Retail: $1,203/m² gross Core Market Yield*: 4.53% Avg Cmpd Mkt Growth: 3.9% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $178/m2 p.a. 6.60% 6.59% Leasing/Incentive N/A Office fully leased Rate/m² NLA: $18,724/m² Allowances: Weighted Average Lease Income Area Cap Adjustment Period: Capex - 24 months Expiry (Yrs): 10.4 yrs 10.7yrs Terminal Yield: 4.75% Capital Expenditure: Sinking fund $20/m² Yrs 1-3 *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc). LeaseExpiry Expiry Profile by Area - by NLA UseTenant Composition Composition by Passing by Passing Income Income 100% Westpac - (Levels 1-23) 75% 90% 80% 70% 60% 50% 40%

30% % of Net of Net % LettableArea 20% Cogent Energy 0% Retail Specialty 10% 0% 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Westpac - Skyrise Vacant Future Expiries 25%

COMMENTS

• The building was sold via an “expression of interest” campaign which closed in March 2018 with interested parties comprising both local institutional and off-shore investors. • Major building tenant Westpac (99.4% of NLA) renewed for a further 12 year period over Levels 1-23 and a 6 year period over Levels 24-32 commencing 1 November 2018 at expiration of their current lease. • Passive income profile with income based WALE of 10.4 years. • Westpac rent is reviewed annually via fixed CPI + 1.5% increases. • Forming part of the lease renewal to Westpac are agreed lessor works to substantially refurbish and reconfigure the ground level foyer and retail component at circa $60 million (100% interest). • The immediate income profile is negatively impacted by the outstanding incentive and agreed capital works associated with the Westpac lease renewal (totalling circa $270M - 100% interest).

55 CLARENCE STREET, SYDNEY NSW

Comprises a B-grade office building with ground level and 17 levels of office accommodation within the western corridor of the CBD. The building includes three floors basement levels of parking for 88 vehicles. Refurbished in late 1997. The foyer was refurbished in early 2004. Renovation works include enlargement of the foyer space was completed in mid-2015 and installation of new facade was completed in late 2015. KEY DETAILS Sale Date: May 2018 Sale Price: Sales$ 256Analysis,000,000 Vendor: AEW Capital Management Purchaser: Zone Q NABERS Rating: Energy: 5 Star Water: 3 Star Land Area: 1,376m² NLA: 14,887.9m2 Parking: 88 spaces Vacancy: 4.2% (629.6m²) No of Tenants: 31 Commercial, 1 Retail and Wilson Parking Net Passing Income: Circa $11 million INPUTS ANALYSIS Market Rentals: Office: Average $978/m2 pa gross Passing Initial Yield: 4.34% Retail: Average $3,000/m2 pa gross Core Market Yield*: 4.94% Avg Cmpd Mkt Growth: 3.7% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $2,355,647 ($158/m2) 5.38% 6.64% Leasing/Incentive Downtime (10 yrs): 6-12 months @ 60% retention Rate/m² NLA: $17,195/m² Allowances: Incentive (10 yrs): 15% - 20% Weighted Average Lease Income Area Cap Adjustment Period: 24 months Expiry (Yrs): 1.9 yrs 1.8 yrs Terminal Yield: 5.25 % Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $556/m2 (before capex) 4.3% 4.7% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

Expiry Profile by NLA Composition by Passing Income Lease Expiry by Area 0.5%Tenant Composition by Passing Income 100% 6.5% 90% 15.4% 80% 18.0% 70% 6.6% 60% 5.1% 50% 4.9% 40%

30% 8.3%

% of Net of Net % LettableArea 34.8% 20% 10% 0% Allianz Australia Services Pty Ltd Sungard Systems Pty Limited Rainmaker Information Pty Ltd Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Ambition Corporate Services Pty Ltd AAPT Ltd >250m² Sub Floor Tenants <250m² Sub Floor Tenants Wilson Parking Australia 1992 Pty Ltd Retail & Other Vacant Future Expiries

COMMENTS

• B-grade commercial building with ground floor, 17 levels of office accommodation above and 3 basement levels of parking (leased to Wilson Parking) and located within the Western Corridor precinct of the Sydney CBD and in close proximity to the Barangaroo South commercial precinct. • Primarily leased to Allianz Australia (circa 16.8% of NLA) and AAPT (circa 9.3% of NLA), due for expiry in October 2018 and April 2019 respectively. Overall provides a typical B-grade multi tenanted profile with a WALE (by income) of 1.9 years. • The property was off market. • We note that all outstanding incentives were payable by the Vendor and have not been reflected in our calculations.

117 CLARENCE STREET, SYDNEY NSW

A 14 Level B-grade commercial office building originally constructed circa 1972 and refurbished 1996 and 2007 (ground floor entrance/foyer, hotel/pub and upper commercial levels 8-11). Accommodation comprises basement parking for 29 vehicles, upper basement and lower ground level comprising the ‘Office Hotel’ at Kent and Erskine Streets, ground level café and service commercial tenancy and 11 upper office levels. KEY DETAILS Sale Date: May 2018 Sale Price: Sales$153,000,000 Analysis Vendor: Roxy Pacific Holdings Purchaser: Investa NABERS Rating: Energy: 4.5 Star Water: 4 Star Land Area: 1,283m² NLA: 12,517m2 Parking: 29 basement spaces Vacancy: 0.0% No of Tenants: Fully leased to 15 tenants (Majors inc GPNSW & The Smith Family) Net Passing Income: Circa $7,250,000 INPUTS ANALYSIS Market Rentals: Office: Average $835/m2 pa gross Passing Initial Yield: 4.75% Retail: Average $508/m2 pa gross (passing) Core Market Yield*: 5.20% Avg Cmpd Mkt Growth: 3.7% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $140/m2 – C&W Estimate 5.69% 6.66% Leasing/Incentive Downtime (10 yrs): 6-12months @ 50% retention Rate/m² NLA: $12,223/m² Allowances: Incentive (10 yrs): 15%-20% Weighted Average Lease Income Area Cap Adjustment Period: 36 months Expiry (Yrs): 2.6 yrs 3.0 yrs Terminal Yield: 5.625% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $657/m2 (before capex) 4.0% 4.7% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc). ExpiryLease Profile Expiry byby Area NLA Use CompositionUse Composition by by Passing Passing Income Income 100% 90% 80% 70% 60% Office 91.0% 50% Other 40% 0.2% 30% % of Net of Net % LettableArea Parking 20% 2.2% 10% 0% Retail Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 6.6%

Future Expiries Vacant

COMMENTS

• B-grade office building situated within a Western Corridor position with frontages to Clarence, Kent and Erskine Streets. • Fully occupied at the date of sale, leased to 15 different tenants including GPNSW (46% of NLA) and The Smith Family (12.3% if NLA) with a WALE of 2.6 years (by income) • 55.1% of the office NLA comprises subdivided tenancies with the remaining 44.9% of NLA leased on whole floor basis. • 80.2% of the buildings NLA is to expire within the first 3 years and has been captured within our Capitalisation Calculations reflecting a risk adjusted Core Market Yield. • The ‘Office Hotel’ pub tenancy, fronting Kent and Erskine Streets, is leased until March 2032 and provides 4.6% of the passing income. • We have been advised that Investa has purchased the asset as a potential development play, also owning ~25% of the Unit Entitlement within the adjoining building 123 Clarence Street. • The property was marketed for sale by via an expressions of interest campaign. • We are advised that all outstanding incentives are to be paid out by the vendor upon settlement therefore our calculations make no account for existing lease incentives.

52 GOULBURN STREET, SYDNEY NSW

A 2007 constructed Stratum titled 10-level office tower with in the World Square precinct situated to the north-western corner of Goulburn and Pitt Streets. Common basement level with rights to 210 car spaces with a ground floor retail tenancy. KEY DETAILS Sale Date: March 2018 Sale Price: $176,000,000 (50% interest) Vendor: Credit Suisse Purchaser: SalesArcadia Analysis NABERS Rating: Energy: 6 Star (5.5 star without GreenPower) Water: 4.5 Star Land Area: Stratum Lots 103 & 104 – 15,180m² NLA: 23,104m2 Parking: 210 spaces on common basement level Vacancy: 0.0% No of Tenants: Office fully leased to ATO with a single retail tenant. Net Passing Income: Circa $16.75 million INPUTS ANALYSIS Market Rentals: Office: Average $823/m2 pa gross Passing Initial Yield: 4.75% Retail: $1,541/m2 pa gross Core Market Yield*: 5.22% Avg Cmpd Mkt Growth: 3.9% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $ 2,466,953 ($107/m2) 3.86% 6.49% Leasing/Incentive Downtime (10 yrs):6-12 months @ 50% retention Rate/m² NLA: $15,235/m² Allowances: Incentive (10 yrs): 22.5% -27.5% (average 23.75%) Weighted Average Lease Income Area Cap Adjustment Period: 12 months Expiry (Yrs): 4.6 yrs 4.6 yrs Terminal Yield: 5.5% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $775/m² (before capex) 4.7% 4.8% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

Expiry Lease Profile Expiry - by AreaNLA TenantTenant Composition Composition by by Passing Passing Income 100% 90% 80% 70% 99% 60% 50% 40% 30% % of Net Lettable Area Lettable Net of % 1% 20% 10% 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11

Vacant Future Expiries Commonwealth of Australia (ATO) Kippo

COMMENTS

• A-grade freehold (Stratum titled) office building situated within the World Square precinct on the southern boundary of the Midtown of the Sydney CBD. • The office component is 100% occupied by the Australian Tax Office expiring in October 2022 with annual 3.5% rental increases. • Currently considered to be leased below market with strong potential for rental reversions given current demand for CBD office space. • The property was marketed for sale by via an Expressions of Interest (EOI) campaign which closed 22 February 2018. We are advised that there was strong interest in the subject property from a range of major local and offshore institutional owners. • Arcadia now has a total stake of 50% in the World Square Precinct, comprising 50% interest in the shopping centre and car park, 680 George Street, 50 Goulburn Street and now 52 Goulburn Street. • We are advised that all outstanding incentives are to be paid out by the vendor upon settlement therefore our calculations make no account for existing lease incentives.

1 YORK STREET, SYDNEY NSW

Leasehold interest in an Upper B-grade commercial office building (constructed 1973 and progressively refurbished) comprising four basement parking levels (101 spaces), ground floor foyer, and 22 office levels with plantrooms on levels 12-13 and rooftop. The freehold is owned by the Anglican Church Property Trust Diocese of Sydney which is leased for a term of 78 years (circa 71 years remaining). The current ground rental is structured with annual CPI increases however will spike to 6% of Land Value in 2027. KEY DETAILS Sale Date: Sales January Analysis 2018 Sale Price: $205,000,000 Vendor: HNA Group Purchaser: Blackstone NABERS Rating: Energy: 4 Star Water: 3 Star Land Area: 1,992m² (freehold site area) NLA: 18,428m² Parking: 101 spaces Vacancy: Nil – fully leased (apart from some car spaces) No of Tenants: 45 Tenants. Major tenants include Emirates, Paypal & Ebay

Net Passing Income: Circa $12.9million INPUTS ANALYSIS Market Rentals: Office: $850/m² pa gross Passing Initial Yield: 6.31% Retail: $2,758/m² pa gross (passing) Core Market Yield*: 5.89% Avg Cmpd Mkt Growth: 3.7% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $155/m2 (including ground rent) 8.57% 6.67% Leasing/Incentive Downtime (10 yrs): 6.9 months @ 60% retention Rate/m² NLA: $11,128/m² Allowances: Incentive (10 yrs): 15%-27.5% (average 19%) Weighted Average Lease Income Area Cap Adjustment Period: 24 months Expiry (Yrs): 2.8 yrs 2.9 yrs Terminal Yield: 6.375% (reflects diminishing leasehold interest) Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $715/m2 (before capex) 5.5% 5.7% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc). LeaseExpiry Expiry Profile by Area- by NLA Tenant Composition by Passing Income 100% 90% 80% 70% 60% 50% 40%

30% % of Net Lettable Area Lettable Net of % 20% 10% 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11

Vacant Future Expiries

COMMENTS

• The property comprises a prominent freestanding upper B-grade leasehold asset which has a relatively management intensive tenancy profile, although has demonstrated good tenant retention over the years. Located within the northern area of the Western Precinct of the Sydney CBD. • Leasehold interest with a remaining ground lease term of circa 71 years. • Exposure to a spike in the ground rent as at the 2027 market review whereby the ground rent is reviewed to 6% of the Unimproved Land Value. Our calculations account for this exposure based on reasonable forecasting assumptions (i.e. could increase from circa $680,000 pa to in excess of $3M pa as at July 2027. The financial exposure to this spike is reflected in our calculations. • The property was sold post a very short sales campaign whereby we understand it was offered directly to a number of major property groups. • We are advised that all outstanding incentives were paid out at settlement (and/or or price adjusted for incentives) and as such our calculation make no allowance for any existing incentives.

COCA COLA PLACE, 40 MOUNT STREET, NORTH SYDNEY NSW

A 2010 completed, A-grade commercial building comprising 3 levels of basement parking for 100 cars, lower ground floor foyer/lift lobby, café, plus quasi-retail/office tenancies on the lower ground and upper ground floor, plus 19 upper levels of office accommodation and roof-top plant rooms. KEY DETAILS Sale Date: December 2018 Sale Price: $226,500,000 (50% interest) Vendor: PGIM Real Estate on behalf of South Korea’s National Pension Fund Purchaser: SalesM&G Analysis Real Estate (25%) Investa Commercial Property Fund (25%) NABERS Rating: Energy: 5.5 Star Land Area: 2,467m² NLA: 28,538.1m² Parking: 100 spaces (1:285/m2 of NLA) Vacancy: 0.0% No of Tenants: 8 tenants Net Passing Income: Circa $21.5 million INPUTS ANALYSIS Market Rentals: Office: $800 - $900/m2 pa net Passing Initial Yield: 4.75% Parking: $725 / space per month Core Market Yield*: 5.23% Avg Cmpd Mkt Growth: 3.85% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $3,954,349 ($139/m2) 5.62% 6.65% Leasing/Incentive Downtime (10 yrs): 9-18 months @ 50% retention Rate/m² NLA: $15,874/m² Allowances: Incentive (10 yrs): 20%-22.5% (average 21.25%) Weighted Average Lease Income Area Cap Adjustment Period: 24 months Expiry (Yrs): 5.8 yrs 5.6 yrs Terminal Yield: 5.50% Average Running Yield: 5 yr 10 yr Capital Expenditure: At Expiry: $400/m2 / Sinking Fund: $30/m2 (before capex) 4.6% 5.0% Total Capex: $477/m2 (3.0% value) *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

ExpiryLease Profile Expiry by by NLA Area Use CompositionComposition by Passing by Passing Income Income

100% 0.9% 8.9% 90% Vodafone Hutchison Australia 80% 4.5% Sheldon Commercial 24.9% Interiors 70% 4.8% Coca-Cola South Pacific 60% Meat & Livestock 50% 6.2% Boral 40% 1.8% McAfee Australia

30% 8.0% Regus Ark North Sydney % of Net of Net % LettableArea 20% Gartner Australasia 10% Cogent Energy Pty Ltd 0% 39.9% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11

Vacant Future Expiries

COMMENTS

• A quality A-grade commercial office building. • Fully leased with a WALE of 5.8 years (income). Our analysis incorporates early termination rights over three Coca Cola office levels (9, 10 & 15). Should this not be reflected the WALE (income) would be 6.6 years. • Floor plates range in size from 1,100 - 2,000m². • Levels 7 – 19 afford good Sydney CBD skyline views, with most levels enjoying pleasant westerly views to the Blue Mountains. • Opportunity for good positive rental reversion across the tenancy profile. • 50% interest sold via an expressions of interest campaign which closed 27 September 2018. M&G Real Estate and the existing owner Investa Commercial Property Fund (ICPF) each acquired a 25% interest. • We note that the vendor was responsible for outstanding incentives relative to the 50% interest and therefore incentives have not been reflected in our calculations.

80 MOUNT STREET, NORTH SYDNEY NSW

A B-grade office building completed circa 1974 with subsequent refurbishments, comprising 3 levels of basement parking, ground floor retail and 14 upper levels of office accommodation, plus roof-top plant rooms. Located within the core of the North Sydney CBD with frontages to Mount Street Plaza. KEY DETAILS Sale Date: September 2018 Sale Price: $71,000,000 Vendor: SalesPropertylink Analysis Purchaser: CKK Enterprises NABERS Rating: Energy: 3.0 Star Land Area: 652m² NLA: 6,196m² Parking: 29 spaces (1:214sqm NLA) Vacancy: 11.0% No of Tenants: 29 tenants. Net Passing Income: $3,069,960 INPUTS ANALYSIS Market Rentals: Office: $595-$615/m2 pa Net Passing Initial Yield: 4.32% Core Market Yield*: 5.17% Avg Cmpd Mkt Growth: 3.75% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $898,176 ($145/m2) 4.32% 6.01% Leasing/Incentive Downtime (10 yrs): 6-9 months @ 50% retention Rate/m² NLA: $11,460/m² Allowances: Incentive (10 yrs): 17.5%-20.0% (average 18.75%) Weighted Average Lease Income Area Cap Adjustment Period: 24 months Expiry (Yrs): 2.0 yrs 2.1 yrs Terminal Yield: 5.75% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $1,301/m2(11.4% value) (before capex) 4.42% 5.17% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

Lease Expiry by Area Use Composition by Passing Income

14.0% 22.3%

24.3%

39.3%

Enerds TAB BTP Plus Grideasy

COMMENTS

• 89% leased to 29 tenants with a WALE of 2.0 years (income). • Circa 460m2 floorplates with side core, and windows to three elevations. • Prime location in the core of the North Sydney CBD adjacent to the under construction 100 Mount Street (Dexus) and 1 Denison Street (Winten), and in proximity to the under construction Victoria Cross Metro Station. • B-grade office rents have benefited from recent strong market growth. • The property has scope for repositioning subject to an active asset management strategy. • Recent upgrades to lifts and foyer. • We have incorporated $6m for outstanding capex requirement (mechanical/HVAC & essential services). • Purchased by Propertylink as part of a portfolio for circa $36,700,000 in August 2016.

NORTHPOINT - 100 MILLER STREET, NORTH SYDNEY NSW

A landmark 1977 constructed, 42-storey commercial office and retail tower comprising office accommodation over 29 levels, two retail levels, plant levels and basement parking over six levels for 388 car spaces. It has recently undergone a major redevelopment / reconfiguration to include a Woolworths, medical centre, Westpac, 23 specialty shops and food court. A hotel has been constructed and the façade fully clad. A podium rooftop bar is also to be located on Level 10, opening early 2019. KEY DETAILS Sale Date: April 2018 Sale Price: Sales$300 Analysis,000,000 (50% interest) Vendor: Redefine Global Pty Ltd Purchaser: Early Light International Holdings Ltd NABERS Rating: Energy: 3.5 Star Land Area: 5,020m² NLA: 31,695.8m² Parking: 388 spaces Vacancy: 13.1% No of Tenants: Approx. 75 Net Passing Income: Circa $22.9 million p. a. INPUTS ANALYSIS Market Rentals: Office: Average $850/m2 pa gross Passing Initial Yield: 4.45% Retail: $1,126/m2 pa gross Fully Leased Initial Yield: 5.16% Avg Cmpd Mkt Growth: 3.85% (office) 3.75% (retail) Core Market Yield*: 4.81% Outgoings: $5,189,609 ($164/m2) IRR (after costs): 5 yr 10 yr Leasing/Incentive Downtime (10 yrs): 6-9 months @ 50% retention 4.98% 6.37% Allowances: Incentive (10 yrs): 20.5% (office) 10% (retail) Rate/m² NLA: $16,248/m² Cap Adjustment Period: 24 months Weighted Average Lease Income Area Terminal Yield: 5.25% Expiry (Yrs): 4.1 yrs 3.8 yrs Capital Expenditure: Budgeted Capex – Approx. $10 mil (years 1-5) Average Running Yield: 5 yr 10 yr At Expiry: $250/m2 Sinking Fund: $25/m2 (before capex) 4.5% 4.9% Total Capex: $655/m2 *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc). ExpiryLease Profile Expiry byby Area NLA TenantUse Composition Composition by by Passing Passing Income Income 100% 1.4% 90% 1.2% 32.8% 80% 1.6% 70% 60% 10.1% 50% 40% 8.9% 30% 1.7% % of Net of % Net LettableArea 39.9% 20% 2.4% 10% 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Woolworths Medical Centre Other Retail Tenants Westpac Future Expiries Vacant Rengaya Treehouse Office (whole floor) Office (part floor) Secure Parking Store

COMMENTS

• The property was sold ‘off market’. • A prominently located asset situated at the main North Sydney intersection of the Pacific Highway and Miller Street having prime exposure. • The redevelopment included construction of a new 187 room Vibe Hotel, a new two level retail component, refurbishment of office lift lobby/entry foyer, façade cladding of the office tower and podium level rooftop bar (Level 10). • The lettable area comprises 85% office and 15% retail (NLA). • Woolworths anchors the retail component. • Circa 75 tenants in total and overall WALE (income) is 4.1 years, whilst the retail component in isolation reflects a WALE of approx.10 years. • The office component provides good Sydney CBD skyline and harbour views from Level 23 and up, whilst floorplate are (940-1,000m2) and suitable for whole floor tenancies or multiple tenant occupation. • The overall parking ratio is good, in the order of 1/82m². Operated by Secure Parking. • We are advised that all outstanding incentives and costs to complete the development are to be paid out by the vendor. Therefore our calculations make no account for existing lease incentives / outstanding costs. • Our calculations (analysis and results) reflect the office and retail component only and exclude the Vibe Hotel.

77 PACIFIC HIGHWAY, NORTH SYDNEY NSW

A 15 level, A-grade office building constructed in 1968 and substantially upgraded in 2002, comprising two levels of basement parking for 42 cars, six ground floor retail shops, ground floor foyer & lift lobby, 14 upper levels of office accommodation, roof top signage and plant rooms. KEY DETAILS Sale Date: May 2018 Sale Price: $112,350,000 Vendor: Stockland Purchaser: SalesAMA Analysis International NABERS Rating: Energy: 5.0 Star Land Area: 1,032m² NLA: 9,391.7m² Parking: 42 spaces (1:224m2 NLA) Vacancy: 9.5% No of Tenants: 18 tenants Net Passing Income: $5,404,279 pa INPUTS ANALYSIS Market Rentals: Office: $650/m2 pa net Passing Initial Yield: 4.8% Avg Cmpd Mkt Growth: 3.9% (10 year) Core Market Yield*: 5.4% Outgoings: $141/m2 IRR (after costs): 10 yr Leasing/Incentive Downtime (10 yrs): 6-15 months @ 50% retention 6.9% Allowances: Incentive (10 yrs): 20% gross Rate/m² NLA: $11,963/m² Cap Adjustment Period: 24 months Weighted Average Lease Income Area Terminal Yield: 5.75% Expiry (Yrs): 1.3 yrs 1.2 yrs Capital Expenditure: At Expiry: $200/m2 Sinking Fund: $20/m2 Average Running Yield: 10 yr 4.0% value (before capex) 5.1% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

ExpiryLease ProfileExpiry by by Area NLA UseUse Composition Composition by Passingby Passing Income Income 100% 90% 80% 70% Office 60% 90.0% 50% 40% Other

30% 3.6% % of Net of Net % LettableArea 20% Parking 3.8% 10% Retail 0% 2.7% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11

Vacant Future Expiries

COMMENTS

• 90.5% leased to 18 tenants with a WALE of 1.3 years (income). • Major tenant is GPNSW (Levels 14 & 15) with expiry in June 2019 (9.6% NLA). 84.2% of NLA potentially expires within the next 2 years. • The asset has been well maintained, with no major capital expenditure required. • Located towards the southern fringe of the North Sydney CBD with good harbour views from the upper levels. • B3 Commercial Core zoning. • Sold off market to a Hong Kong based investor. • We understand outstanding incentives were covered by the vendor and no rental guarantee is provided over vacancies.

54 MILLER STREET, NORTH SYDNEY NSW

A partly refurbished and well presented, circa 1971 constructed, B-grade commercial building comprising 5 split levels of basement parking, 2 x ground floor retail tenancies (shop & café), plus foyer and lift lobby, together with 13 upper levels of office accommodation and roof-top plant rooms. KEY DETAILS Sale Date: March 2018 Sale Price: $59,400,000 Vendor: Allawah Nominee Pty Ltd Purchaser: SalesAEW Analysis Asia Limited NABERS Rating: Energy: 4.5 Star Land Area: 1,012m² NLA: 6,955.9m² Parking: 74 spaces (1:94m2 NLA) Vacancy: 16.4% No of Tenants: 23 (2 retail & 21 office) Net Passing Income: $2,642,935 pa INPUTS ANALYSIS Market Rentals: Office: $540 - $590/m2 pa net Passing Initial Yield: 4.4% Avg Cmpd Mkt Growth: 3.9% (10 year) Core Market Yield*: 6.0% Outgoings: $151/m2 pa IRR (after costs): 5 yr 10 yr Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention 5.8% 7.0% Allowances: Incentive (10 yrs): 20% (average) Cap Adjustment Period: 24 months Rate/m² NLA: $8,541/m² Weighted Average Lease Income Area Terminal Yield: 6.25% Expiry (Yrs): 1.3 yrs 1.3 yrs Capital Expenditure: At Expiry: $200/m² Average Running Yield: 5 yr 10 yr Technical Due Diligence Report: $13,500,000 (10 (before capex) 1.4% 3.7% years) 22.2% value / $2,204/m² *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

LeaseExpiry Expiry Profile by Area - by NLA UseTenant Composition Composition by by Passing Passing Income Income 100% 90% 80% 40% 70% 14% 60% 50% 2% 1% 40% 5% 30% % of Net of % Net LettableArea 4% 0% 20% 9% 10% 10% 6% 9% 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Tenants (200-300m2) Tenants (100-200m2) Tenants (<100m2 Secure Gerard Vacant Future Expiries Vacant Positive RE Inchape Bayside Simavita Retail Tenants

COMMENTS

• 83.6% leased to 23 tenants (no major tenant) with a short WALE of 1.3 years (income). • The acquisition represents an asset repositioning opportunity via a capital expenditure/management program including increasing achievable market rents. • Major potential capital expenditure includes mechanical and façade works. • Located in the core of the North Sydney CBD opposite 101 Miller Street/Greenwood Plaza, in proximity to North Sydney Railway Station. • B3 Commercial Core zoning. • Previously sold in October 2016 for $52,300,000, reflecting a core market yield of 6.6%. • Sold via an EIO campaign. • Our analysis reflects that 50% of the outstanding incentives were covered by the Vendor.

123 WALKER STREET, NORTH SYDNEY NSW

A circa 1982 B-grade office building comprising basement parking for 16 vehicles, ground floor retail suite and rear office suite, five upper levels of office accommodation and rooftop plant rooms. KEY DETAILS Sale Date: March 2018 Sale Price: $21,300,000 Vendor: Private Investor Purchaser: SalesOne Analysis Smarter NABERS Rating: Energy: 3.5 Star Land Area: 563m² NLA: 1,985m² Parking: 16 spaces (1:124m² NLA) Vacancy: 0.0% No of Tenants: 5 tenants. Net Passing Income: $957,942 INPUTS ANALYSIS Market Rentals: Office: $650/m2 pa Gross Passing Initial Yield: 4.50% Core Market Yield*: 4.98% Avg Cmpd Mkt Growth: 3.79% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $257,932 ($130/m2) 5.91% 6.62% Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention Rate/m² NLA: $10,730/m² Allowances: Incentive (10 yrs): 20.0%-22.5% (average 20.50%) Weighted Average Lease Income Area Cap Adjustment Period: 36 months Expiry (Yrs): 2.5 yrs 2.5 yrs Terminal Yield: 5.50% Average Running Yield: 5 yr 10 yr Capital Expenditure: At Expiry: $200/m2 at retention (before capex) 3.77% 4.42% Sinking Fund: $20/m2 Total Capex: $457/m2 (4.3% value) *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

Use Composition by Passing Income Lease Expiry by Area Use Composition by Passing Income

100% 90% Office 80% 83.7% 70% 60% 50% Other 0.3% 40%

30% Parking % of Net of Net % LettableArea 20% 9.0% 10% 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Retail 7.0% Vacant Future Expiries

COMMENTS

• Fully leased to 5 tenants with a WALE of 2.5 years (income). • Majority of tenants have been long term occupants. • B-grade office rents have benefited from recent strong market growth. • One of only six freehold buildings between 1,000 sqm – 3,000 sqm in the North Sydney CBD. • Well located in core CBD location, benefitting from proximity to new development and Victoria Cross Metro Station. • B3 Commercial Core Zoning, no FSR restriction and a 45 metre height limit. • Given expiry profile of 97% NLA in Year 3, we have adopted a 36 month capital adjustment period.

LEVELS 5-10, 100 BROADWAY, ULTIMO NSW

Six stratum titled office levels within a 2018 completed 16 storey mixed use development also accommodating 48 residential apartments on the upper levels, a two level childcare centre, and ground floor retail. Levels 5 – 10 comprises 5,451m² office accommodation including 128m² of storage areas as well as ground floor lobby and 23 basement car spaces included on the stratum title. All areas subject to a 15 year lease to University of Technology commencing December 2018 with 2 x 10 year options. KEY DETAILS Sale Date: Sales December Analysis 2018 Sale Price: $77,140,000 Vendor: Frasers Property Purchaser: MTAA NLA: 5,450m² Parking: 23 spaces Vacancy: Nil Net Passing Income: Circa $3.9m

INPUTS ANALYSIS Market Rentals: Office: Office: $800/m² pa gross (passing) Passing Initial Yield: 5.05% Avg Cmpd Mkt Growth: 3.7% (10 years) IRR (after costs): 10 yr Outgoings: $128/m² pa 7.15% Leasing/Incentive N/A. Office fully leased. Rate/m² NLA: $14,153/m² Allowances: Weighted Average Lease Income Area Cap Adjustment Period: 12 months Expiry (Yrs): 15 yrs 15 yrs Terminal Yield: 5.50% Capital Expenditure: Sinking Fund $30/m² pa *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

Use Composition Use Composition by by Passing Passing IncomeIncome

Office Other 95.3% 1.7%

Parking 3.0% Retail 0.0%

COMMENTS

• The stratum was sold via an “expression of interest” campaign which closed in December 2018 with interested parties comprising both local institutional and off-shore investors. • New 15 year lease to University of Technology commencing December 2018 with 2 x 10 year options and annual 3.75% increases. • Passive income profile with income based WALE of 15 years. • Vendor has agreed to pay outstanding incentives are to be paid directly to the tenant.

9 GEORGE STREET, PARRAMATTA NSW

A B-grade 8-level office building constructed in 2003, comprising one ground level retail shop and 7 upper office levels with basement parking for 40 vehicles. Circa 850m2 floor plates with natural light to three elevations. KEY DETAILS Sale Date: December 2018 Sale Price: $44,300,000 Vendor: Hadley Green Investment Group Purchaser: SalesCity Analysis of Brisbane Investment Corporation NABERS Rating: Energy: 3.0 Star Land Area: 1,412m² NLA: 5,558.6m² Parking: 40 spaces

Vacancy: 31% No of Tenants: 12 Net Passing Income: $1,601,196 INPUTS ANALYSIS Market Rentals: Office: $475/m² pa Net Passing Initial Yield: 3.61% Retail: $500/m² pa Gross Fully Leased Initial Yield: 6.06% Core Market Yield*: 6.01% Avg Cmpd Mkt Growth: 3.85% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $719,578 ($129/m²) 5.98% 7.13% Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention Rate/m² NLA: $7,970/m² Allowances: Incentive (10 yrs): 17.5%-25.0% (average 20.75%) Weighted Average Lease Income Area Cap Adjustment Period: 24 months Expiry (Yrs): 2.5 yrs 2.5 yrs Terminal Yield: 6.25% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $405/m² (5.1% value) (before capex) 4.94% 5.57% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

Running Running Yield (before Yield (before Capex) Capex) Expiry Profile Profile by NLAby NLA 8.0% 7.4% 35% 7.1% 7.0% 6.8% 6.3% 30% 6.0% 6.2% 6.0% 5.7% 25% 5.0% 4.8% 20% 4.0% 3.5% 15% 3.0%

1.9%

2.0% 10% % of Net of % Net LettableArea 1.0% 5%

0.0% 0% Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Vacant Future Expiries

COMMENTS

• • 69% leased to 12 tenants, with an income based WALE of 2.6 years. • • Major tenants are Westpac Banking Corporation and Property NSW. • • Opportunity for positive rental reversion across the tenancy profile. • • No income support over the vacancies was provided. • • Existing incentives were paid out by the vendor. • • Located opposite Parramatta Law Courts within the legal precinct. • • Rectangular infill site. • • B3 Commercial Core zoning.

465 VICTORIA AVENUE, CHATSWOOD NSW

An A-grade retail/office building completed in 1995 and extensively refurbished in 2012. Improvements comprise a retail rotunda (occupied by The Avenue, a bar/restaurant cafe, a two-storey retail podium, 15 levels of office accommodation and three levels of basement parking for 235 vehicles. KEY DETAILS Sale Date: November 2018 Sale Price: $166,500,000 Vendor: Hines Global REIT Purchaser: SalesCenturia Analysis Property Funds Limited NABERS Rating: Energy: 4.5 Star Land Area: 3,198m² NLA: 15,639.0m² Parking: 235 spaces Vacancy: 0.0% No of Tenants: 15 Net Passing Income: $8,913,657

INPUTS ANALYSIS Market Rentals: Office: $540 - $600/m² pa Net Passing Initial Yield: 5.35% Retail: Average $732/m² pa Gross Core Market Yield*: 5.80% Avg Cmpd Mkt Growth: 3.85% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $2,015,190 ($129/m²) 5.73% 6.93% Leasing/Incentive Downtime (10 yrs): 6-18 months @ 50% retention Rate/m² NLA: $10,646/m² Allowances: Incentive (10 yrs): 20.0%-22.5% (average 21.25%) Weighted Average Lease Income Area Cap Adjustment Period: 24 months Expiry (Yrs): 5.1 yrs 5.5 yrs Terminal Yield: 6.125% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $483/m² (4.5% value) (before capex) 5.54% 5.57% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

RunningRunning Yield (before (before Capex) Capex) ExpiryExpiry Profile Profile by by NLA NLA 9.0% 70% 8.0% 8.0% 7.1% 60% 7.0% 6.6% 6.2% 5.9% 6.1% 50% 6.0% 5.6% 5.4% 5.2% 5.0% 40%

4.0% 30% 3.0% 20%

2.0% % of Net of Net % LettableArea 1.0% 10%

0.0% 0% -1.0% -0.3% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Vacant Initial Expiries Secondary Expiries

COMMENTS

• 100% leased to 15 tenants with a WALE of 5.1 years (income). • Constructed in 1995 and refurbished in 2010-2012, the property is considered one of the premium quality office building in Chatswood. • Major tenants include The Hollard Insurance Company (Levels 1,2,part 7,9-12,14 & 15) with expiry in November 2022 (50.8% of income) and Carnival (Part 3 and Levels 4-6) with expiry in January 2026 (20.5% of income). • The property was offered to the market as part of a portfolio of four office properties via a expressions of interest campaign. The portfolio was only offered on an in-one line basis. • We understand outstanding incentives are to be covered by the vendor and rental guarantee is to be provided over retail vacancies.

67 ALBERT AVENUE, CHATSWOOD NSW

A refurbished, multi-level, A-grade commercial building comprising basement and external parking, ground floor foyer, podium level lift lobby with cafe, together with 15 levels of office accommodation and roof-top plantrooms. The property is a leasehold interest, being subject to a long-term ground lease from Willoughby Council expiring 20 June 2112. KEY DETAILS Sale Date: November 2018 Sale Price: $158,000,000 Vendor: SalesCorVal Analysis Partners Ltd Purchaser: Mapletree Investments Pte Ltd NABERS Rating: Energy: 5 Star Land Area: 3,006m² NLA: 14,756.4m² Parking: 193 spaces (1:76/m2 of NLA) Vacancy: 2.3% No of Tenants: 22 Net Passing Income: Circa $8.77 million INPUTS ANALYSIS Market Rentals: Office: $520 - $590/m² pa net Passing Initial Yield: 5.55% Retail: $1,900/m² pa gross (café) Core Market Yield*: 5.71% Avg Cmpd Mkt Growth: 3.8% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $1,676,374 ($114/m²) 4.86% 6.72% Leasing/Incentive Downtime (10 yrs): 6-9 months @ 50% retention Rate/m² NLA: $10,707/m² Allowances: Incentive (10 yrs): 20% - 22.5% (avg 21.25%) Weighted Average Lease Income Area Cap Adjustment Period: 24 months Expiry (Yrs): 3.4 yrs 3.1 yrs Terminal Yield: 6.25% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $432/m² (4.0% value) (before capex) 4.9% 5.4% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

Running Yield (before Capex) ExpiryExpiry Profile Profile byby NLA NLA 35%

30%

25%

20%

15%

10%

% of Net of % Net LettableArea 5%

0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Vacant Future Expiries

COMMENTS

• A-grade commercial building having been most recently refurbished in 2016/17 including foyer and bathroom/amenities upgrade, installation of end of trip facilities and replacement of the BMS system. • Leasehold interest with 93.7 years remaining. • 97.7% leased with a WALE of 3.4 years (income). • Floor plates typically 900 - 1,100m². • 193 security basement car spaces leased by Secure Parking until 2025 which represents 8.9% of the passing income. • Levels 5 and up have good views to the south incorporating the Sydney CBD skyline. • Opportunity for positive rental reversion across the tenancy profile. • Sold via an expressions of interest campaign which closed 26 September 2018. • We note that all outstanding incentives were payable by the Vendor and have not been reflected in our calculations. • No income support was provided over vacancies.

33 ARGYLE STREET, PARRAMATTA NSW

A 1987 constructed lower B-grade office building comprising a quasi-retail ground floor suite and cafe, three levels of above ground parking providing 138 car spaces, 6 upper office levels (Levels 4–9) and roof top plant rooms. The property is located to the western fringe of the Parramatta CBD adjacent to Westfield Parramatta. KEY DETAILS Sale Date: November 2018 Sale Price: $40,800,000 Vendor: NSW Aboriginal Land Council Purchaser: SalesTE2 Analysis Roxy Argyle NABERS Rating: Energy: 3.0 Star Land Area: 2,048m² NLA: 5,280m² Parking: 138 spaces Vacancy: 0.0% No of Tenants: 9 Net Passing Income: $2,020,285 INPUTS ANALYSIS Market Rentals: Office: $380/m² pa net average Passing Initial Yield: 4.95% Core Market Yield*: 5.68% Avg Cmpd Mkt Growth: 3.82% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $774,333 ($147/m²) 5.21% 6.56% Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention Rate/m² NLA: $7,727/m² Allowances: Incentive (10 yrs): 17.5%-20.0% (average 18.50%) Weighted Average Lease Income Area Cap Adjustment Period: 24 months Expiry (Yrs): 3.5 yrs 3.6 yrs Terminal Yield: 6.00% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $360/m² (4.7% value) (before capex) 4.76% 5.31% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

RunningRunning Yield Yield (before(before Capex) Capex) Use CompositionExpiry Profile by Passing by NLA Income 9.0% 8.5% 50%

8.0% 45% 7.3% 6.9% 7.0% 40% 6.2% 35% 6.0% 5.2% 30% 5.0% 4.7% 4.2% 3.9% 25% 4.0% 3.8% 20% 3.0% 2.4% 15% 2.0%

% of Net of % Net LettableArea 10% 1.0% 5%

0.0% 0% Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Vacant Future Expiries

COMMENTS

• Fully leased to 9 tenants with a WALE of 3.5 years (income). • Sale and partial leaseback by NSW Aboriginal Land Council, who occupy 28% NLA under a 5 year lease. A rental rebate was provided. • B4 Mixed Use zoning, draft planning controls propose rezoning to B3 Business Core. • Marketed via an expression of interest campaign and purchased by Singapore based private investor. • Purchase price considered ‘full’, and at the upper end of a reasonable market value range with the Parramatta market witnessing a convergence in yields between grades.

91 PHILLIP STREET, PARRAMATTA NSW

An 8 level, B-grade office building constructed in 1985, comprising four levels of above ground parking for 120 cars; ground floor retail, foyer & lift lobby; 7 upper levels of office accommodation; roof top plant rooms and signage. KEY DETAILS Sale Date: October 2018 2018 Sale Price: $56,630,000 Vendor: Capital Property Funds Purchaser: SalesBlackRock Analysis NABERS Rating: Energy: 4.5 Star Land Area: 2,193m2 NLA: 6,094m2 Parking: 120 (1:51m2 NLA) Vacancy: 0% No of Tenants: 10 Net Passing Income: $2,888,091 pa

INPUTS ANALYSIS Market Rentals: Office: $475/m² pa net Passing Initial Yield: 5.1% Core Market Yield*: 5.5% Avg Cmpd Mkt Growth: 3.9% IRR (after costs): 10 yr Outgoings: $133/m² pa 6.7% Leasing/Incentive Downtime (10 yrs): 6-9 months @ 50% retention Rate/m² NLA: $9,292/m² Allowances: Incentive (10 yrs): 20% gross Weighted Average Lease Income Area Cap Adjustment Period: 36 months Expiry (Yrs): 2.8 yrs 2.9 yrs Terminal Yield: 5.75% Average Running Yield: 10 yr Capital Expenditure: At Expiry: $200/m² (before capex) 5.1% Sinking Fund: $20/m² / 4.4% Value *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

Use Composition by Passing Income ExpiryExpiry Profile Profile byby NLA NLA Use Composition by Passing Income

100% 90% 80% Office 83.7% 70% 60% 50% Other 0.3% 40% 30% Parking

% of Net of Net % LettableArea 9.0% 20% 10% 0% Retail Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 7.0%

Vacant Future Expiries

COMMENTS

• Fully leased to 10 tenants with a WALE of 2.8 years (income). • Major tenant is KPMG (Level 5 and Level 8) with expiry in September 2023 (31% NLA). • Located within the financial core of the Parramatta CBD. • B3 Commercial Core zoning, with future redevelopment potential. • Sold subject to an expressions of interest campaign with strong buyer interest. • We understand outstanding incentives were covered by the vendor.

72 CHRISTIE STREET, ST LEONARDS NSW

A 12-level (terraced) commercial building completed circa 1990, comprising four split levels of basement parking for 222 spaces, lower and upper ground levels, and six upper levels of office accommodation and roof-top plant rooms. KEY DETAILS Sale Date: September 2018 Sale Price: $157,550,000 Vendor: Proprium Capital Partners & Anton Capital Purchaser: SalesUOL Analysis Group NABERS Rating: Exempt - Due to Tenancy Refurbishment and Fit Out Works Land Area: 2,815m² NLA: 11,259.0m² Parking: 222 spaces Vacancy: 0.0% No of Tenants: 1 (Mastercard) Net Passing Income: $7,791,813 pa INPUTS ANALYSIS Market Rentals: Office: $595/m² pa Net Passing Initial Yield: 4.95% Core Market Yield*: 5.0% Avg Cmpd Mkt Growth: 3.85% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $1,121,899 ($100/m²) 6.21% 6.51% Leasing/Incentive Downtime (10 yrs): 9-18 months @ 50% retention Rate/m² NLA: $13,993/m² Allowances: Incentive (10 yrs): 22.5%-27.5% (average 23.75%) Weighted Average Lease Income Area Cap Adjustment Period: 24 months Expiry (Yrs): 9.7 yrs 9.7 yrs Terminal Yield: 5.25% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $282/m² (2.0% value) (before capex) 5.43% 5.74% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

Running Yield (before Capex) ExpiryExpiry Profile Profile by NLA by NLA 120%

100%

80%

60%

40%

% of Net of % Net LettableArea 20%

0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Vacant Future Expiries

COMMENTS

• A 1990 completed, modern commercial office building providing A-grade office accommodation with good parking provision. • It is currently fully leased to Mastercard Australia Holdings Pty Limited until 30 April 2028 under a single lease reflecting a long WALE of 9.5 years as at the date of transaction. • Mastercard lease includes a break option effective from 1 May 2026. • The sale reflects a WALE of 7.5 yrs and an IRR of 6.71% if the break option was to be exercised. • Extensive fitout works has been undertaken throughout the building for Mastercard. • The asset has previously transacted in December 2016 for headline price of $76,000,000. The transaction price has since doubled within the last 23 months.

19 HARRIS STREET, PYRMONT NSW

A low-rise commercial office building known as ‘The Glasshouse’ constructed circa 2001 and provides low rise, A-grade accommodation over ground level and 6 upper levels. 134 car spaces are provided within 2 split basement levels.

KEY DETAILS Sale Date: September 2018 Sale Price: $143,000,000 Vendor: SalesKuehne Analysis Real Estate Sydney Pty Ltd Purchaser: AEW Asia Limited NABERS Rating: Energy: 3.5 Star Water: 1.5 Star Land Area: 2,298m² NLA: 12,568.2m² Parking: 134 basement spaces Vacancy: 0.0% No of Tenants: Fully leased to 12 tenants (excluding telecommunication tenants) Net Passing Income: Circa $6,950,000 INPUTS ANALYSIS Market Rentals: Office: Average $715/m² pa gross Passing Initial Yield: 4.87% $573/m² pa net Core Market Yield*: 5.42% Avg Cmpd Mkt Growth: 3.8% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $142/m² – C&W estimate 6.06% 6.68% Leasing/Incentive Downtime (10 yrs): 6 – 12 months Rate/m² NLA: $11,378/m² Allowances: Incentive (10 yrs): 15% - 20% Weighted Average Lease Income Area Cap Adjustment Period: 24 months Expiry (Yrs): 5.0 yrs 5.0 yrs Terminal Yield: 5.75% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $497/m² (before capex) 5.0% 4.9% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

COMMENTS

• Well maintained low-rise A-grade asset in the City Fringe suburb of Pyrmont characterised by a relatively prominent corner position at the northern end of Harris Street, with quality water views available from the north-eastern elevation. • Fully occupied at the date of sale leased to 12 tenants (excluding telecommunication tenants) with an income based WALE of 5.0 years. • The income profile is underpinned by a 6.3 year remaining lease term to major building tenant Thomson Reuters who occupy 51.7% of NLA under a 10 year lease expiring 31 January 2025 (with a further 5 year option period - minimum 12 months’ notice provision) with fixed 3.75% annual increases throughout the initial and option terms. • Other major building tenants include Natra International (7.6% of NLA – expiring October 2023), Discovery Services Australia (6.5% of NLA – expiring February 2021) and Mapfre Insurance Services (6.3% of NLA – expiring June 2020). The remainder of tenancies typically occupy < 5% of building NLA. • The subject was marketed for sale via an Expressions of Interest (EOI) campaign which closed 8 August 2018. We understand that there were strong levels of interest in the property, with formal first round offers around circa $135M to $140M with the sale process ultimately proceeding to a third round with interested parties reportedly comprised both local institutional and off-shore investors. • We were further advised that 3 formal third round offers were submitted all in close proximity to the agreed sale price of $143 Million. • We are advised that all outstanding incentives are to be paid out by the vendor upon settlement therefore our calculations make no account for existing lease incentives.

60 STATION STREET, PARRAMATTA NSW

A landmark 20 level, A-grade office building constructed in 2012 known as Eclipse Tower, comprising basement parking for 145 cars and end of trip facilities; ground floor retail, foyer & lift lobby; 19 upper levels of office accommodation; roof top plant rooms and signage. The building features a distinctive elliptical design. KEY DETAILS Sale Date: August 2018 Sale Price: $277,600,000 Vendor: REST Purchaser: SalesGPT Analysis NABERS Rating: Energy: 5.0 Star Water: 4.0 Star Land Area: 3,126m² NLA: 25,730.1m² Parking: 145 spaces Vacancy: 0.0% No of Tenants: 7 Net Passing Income: $14,426,835

INPUTS ANALYSIS Market Rentals: Office: $550 - $580/m² pa Net Passing Initial Yield: 5.20% Core Market Yield*: 5.36% Avg Cmpd Mkt Growth: 3.88% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $2,778,851 ($108/m²) 5.19% 6.48% Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention Rate/m² NLA: $10,789/m² Allowances: Incentive (10 yrs): 17.5%-20.0% (average 19.00%) Weighted Average Lease Income Area Cap Adjustment Period: 24 months Expiry (Yrs): 3.7 yrs 3.7 yrs Terminal Yield: 5.75% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $444/m² (4.1% value) (before capex) 3.93% 5.18% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

Running Running Yield Yield (before (before Capex) Use CompositionExpiry Profile by Passing by NLAIncome 8.0% 7.3% 7.1% 90% 6.7% 7.0% 5.9% 80% 5.7% 6.0% 5.3% 5.5% 5.1% 70% 5.0% 4.7% 60% 4.0% 50% 3.0% 2.0% 40% 1.0% 30%

0.0% 20% % of Net of % Net LettableArea -1.0% 10% -2.0% -1.7% 0% -3.0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Vacant Future Expiries

COMMENTS

• Fully leased to 7 tenants (all blue chip corporations) with a WALE of 3.7 years. • Anchor tenant is QBE (46% NLA), who will be relocating to GPT’s new 32 Smith Street development in 2020. Other major tenants include Deloitte and Property NSW. • Positioned to benefit from record low A-grade office vacancy in Parramatta and strong rental growth. • One of the premier office buildings in Parramatta. • 5 Star NABERS Energy rating. • Sold subject to an international expression of interest campaign.

223 LIVERPOOL ROAD, ASHFIELD NSW

A B-grade low rise office building comprising an entrance lobby, ground level office space arranged within three suites, five upper office levels (Levels 1–5) with basement car parking for 185 vehicles. Located on a prominent corner site in proximity to Ashfield Transport Interchange and Ashfield Mall. KEY DETAILS Sale Date: August 2018 Sale Price: $46,000,000 Vendor: GDI Property Group Purchaser: SalesPrivate Analysis developer NABERS Rating: Energy: 4 Star Land Area: 2,812m² NLA: 9,719.1m² Parking: 185 spaces Vacancy: 0.0% No of Tenants: 2 Net Passing Income: $3,057,002 INPUTS ANALYSIS Market Rentals: Office: $440/m² pa Gross Passing Initial Yield: 6.65% Core Market Yield*: 6.64% Avg Cmpd Mkt Growth: 3.32% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $1,147,922 ($118/m²) 7.85% 8.07% Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention Rate/m² NLA: $4,733/m² Allowances: Incentive (10 yrs): Average 20.0% Weighted Average Lease Income Area Cap Adjustment Period: 36 months Expiry (Yrs): 2.4 yrs 2.4 yrs Terminal Yield: 7.00% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $455/m² (9.6% value) (before capex) 5.06% 6.14% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

RunningRunning Yield Yield (before Capex) Capex) ExpiryExpiry Profile Profile by by NLA NLA 12.0% 10.6% 9.9% 120% 9.4% 10.0% 9.0% 9.2% 8.6%

8.0% 6.7% 6.9% 100% 6.0%

4.0% 80%

2.0%

0.0% 60%

-2.0% 40% -4.0% -3.0%

-6.0% -5.8% of % Net LettableArea 20% -8.0% Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11

Vacant Future Expiries

COMMENTS

• Fully leased to 2 tenants with a WALE of 2.4 years (income). • Circa 1,400m² floorplates with central core. • Good quality B-grade building which was constructed circa 1980s and refurbished early 2000s. • Located within proximity to Ashfield Transport Interchange and Ashfield Mall. • Opportunity for market rental reversion at lease expiry in 2021. • Given major expiry in Year 3, we have adopted a 36 month cap adjustment period. • B4 Mixed Use zoning provides for future residential redevelopment potential with current FSR of 3:1 and maximum building height of 23 metres.

STRATA LOTS 1 & 2, PIER 8/9, 23 HICKSON ROAD, WALSH BAY NSW

Strata Lots 1 & 2 within Pier 8/9, Walsh Bay, a heritage listed structure significantly refurbished/redeveloped circa 2000 for commercial office use and occupied under the terms of a ground lease with under 82 years remaining. The pier comprises approximately 11,715m² of accommodation over five levels and 3 strata lots. The subject Strata Lots 1 & 2 essentially comprise circa half of the ground and first floors and whole Levels 2, 3 and 4 with a total strata area of 10,737m². KEY DETAILS Sale Date: June 2018 Sale Price: Sales$90,500,000 Analysis Vendor: SITEX Properties Sydney No.2 Pty Ltd Purchaser: Markham Real Estate Partner Pty Ltd Strata Area: 10,737m² NLA: 8,522.5m² Parking: No onsite car spaces Vacancy: 0.0% No of Tenants: Fully leased to 7 tenants (Majors including Clemenger BBDO 42% of NLA and Hassell Service 31.5% of NLA) Net Passing Income: Circa $5.8 million

INPUTS ANALYSIS Market Rentals: Office: Average $819/m² pa gross Passing Initial Yield: 6.46% Retail: Average $1,618/m² pa gross (passing) Core Market Yield*: 6.36% Avg Cmpd Mkt Growth: 3.9% (10 year) IRR (after costs): 10 yr Outgoings: $159.42/m² 7.18% Leasing/Incentive Downtime (10 yrs): 6 - 15 months Rate/m² NLA: $10,619/m² Allowances: Incentive (10 yrs): 15% - 20% Weighted Average Lease Income Area Cap Adjustment Period: 12 months Expiry (Yrs): 5.3 yrs 5.3 yrs Terminal Yield: 6.875% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $803/m² (before capex) 6.6% 5.9% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc). ExpiryExpiry Profile Profile by NLA- by NLA TenantTenant Composition Composition by Passing Income Income 100% 3.2% 90% 32.2% 2.3% 80% 3.2% 70% 60% 5.9% 50% 4.9% 40%

30% 6.8% % of Net Lettable Area Lettable Net of % 20% 41.3% 10% 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Jackson Teece Chesterman Willis Atomic Search Malanos Group Blue Shift Simpson Solicitors Hassell Services Vacant Future Expiries Clemenger BBDO Clemenger BBDO (Lvl 4)

COMMENTS

• The property comprises a leasehold interest (circa 82 years remaining) of two fully leased Strata Titled lots (Lots 1 & 2) within Pier 8/9, Walsh Bay, a heritage listed structure significantly refurbished/redeveloped circa 2000 for commercial office use. • The two subject lots comprise 83.3% of the total strata area of the building and 81% of the total unit entitlements. • 16 car spaces are leased by the registered proprietor/vendor within the nearby Towns Place carpark under the terms of a 4 year lease with rolling 4 year option terms which align with the expiry of the ground lease for the office building. These do not form part of the property however are sub- leased and generate income to the subject. • Fully occupied at the date of sale, leased to 7 different tenants with a WALE of 5.3 years (by income). • Major tenants Clemenger BBDO and Hassell Services occupy 80.7% of NLA (49.2% and 31.5% respectively) or 80.3% of net income. • The Vendor is responsible for the payment of all residual incentives in addition to agreed capital expenditure works.

154 PACIFIC HIGHWAY, ST LEONARD SNSW

A 10-level office building comprising two levels of basement parking for 182 cars, a ground floor foyer & lift lobby, incorporating a lobby café plus one office tenancy area, together with 9 upper levels of office accommodation and roof-top plant rooms. KEY DETAILS Sale Date: May 2018 Sale Price: $60,200,000 Vendor: Property Bank Australia Purchaser: SalesNSW Analysis Farmers Association NABERS Rating: Energy: 4.5 Star Land Area: 3,080m² NLA: 6,299m² Parking: 182 spaces Vacancy: 0.0% No of Tenants: 12 Net Passing Income: $3,534,853 INPUTS ANALYSIS Market Rentals: Office: $450 - $520/m² pa Net Passing Initial Yield: 5.87% Core Market Yield*: 6.15% Avg Cmpd Mkt Growth: 3.60% (10 year) IRR (after costs): 5 yr 10 yr Outgoings: $901,846 ($143/m²) 6.38% 7.37% Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention Rate/m² NLA: $9,557/m² Allowances: Incentive (10 yrs): Average 25.0% Weighted Average Lease Income Area Cap Adjustment Period: 36 months Expiry (Yrs): 2.0 yrs 2.1 yrs Terminal Yield: 6.50% Average Running Yield: 5 yr 10 yr Capital Expenditure: Total Capex: $455/m² (4.8% value) (before capex) 4.77% 5.64% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

RunningRunning Yield (before (before Capex) Capex) ExpiryExpiry Profile Profile by by NLA NLA 10.0% 45% 8.6% 9.0% 40% 8.0% 7.0% 7.0% 35% 7.0% 6.7% 6.2% 5.8% 30% 6.0% 5.3% 25% 5.0% 3.9% 20% 4.0% 3.8%

3.0% 15% 2.1%

2.0% 10% % of Net of % Net LettableArea 1.0% 5% 0.0% 0% Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Vacant Future Expiries

COMMENTS

• Fully leased to 12 tenants with a WALE of 2.0 years (income). • Circa 650m² regular shaped floorplates with central core. • The property has benefitted from recent refurbishment and upgrades to lifts, air-conditioning and the ground floor lobby and café. • Located on the fringe of the St Leonards commercial precinct. • Excellent city and district views. • Given major expiry in Year 3, we have adopted a 36 month cap adjustment period. • B3 Commercial Core zoning, however under NSW Department of Planning’s St Leonards and Crows Nest Station Precinct Interim Statement advocates an ‘active, high density mixed-use corridor’.

4-10 BRIDGE STREET, PYMBLE NSW

A mid 1980s completed five-level commercial building comprising two levels of basement car parking, ground office level (including foyer, a large covered entry courtyard area and full perimeter terrace) plus two upper levels of office accommodation. 14 on grade spaces are also provided. KEY DETAILS Sale Date: April 2018 Sale Price: $14,550,000 (GST Exclusive) Vendor: Net Venture Properties 3 (Australia) Pty Ltd Purchaser: SalesFIFECapital Analysis NABERS Rating: Energy: 3.5 Star Land Area: 2,873m² NLA: 2,468m² Parking: 103 spaces (89 basement and 14 on grade) reflecting 1 space/24m² of NLA. Vacancy: 5.3% No of Tenants: 11 Net Passing Income: $849,781 pa INPUTS ANALYSIS Market Rentals: Office: $310/m² pa net (average) Passing Initial Yield: 5.8% Car Spaces: $150/space pcm Core Market Yield*: 6.2% Avg Cmpd Mkt Growth: 3.6% IRR (after costs): 10 yr Outgoings: $331,722 ($134/m²) 6.6% Leasing/Incentive Downtime (10 yrs): 6-9 months @ 50% retention Rate/m² NLA: $5,895/m² Allowances: Incentive (10 yrs): 20% gross (average) Weighted Average Lease Income Area Cap Adjustment Period: 12 months Expiry (Yrs): 1.8 yrs 1.9 yrs Terminal Yield: 6.5% Average Running Yield: 5 yr 10 yr Capital Expenditure: At Expiry: $150/m² @50% retention (before capex) 5.0% 5.6% Sinking Fund: $15/m² / % of value: 5.66% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc). Expiry Profile - by NLA UseTenant Composition Composition by by Passing Passing IncomeIncome Expiry Profile - by NLA 0.0%

100% 4.7% 5.0% 90% 9.4% 80% 20.0% 6.6% 70% 60% 50% 9.8% 7.2% 40% 30% % of Net Lettable Area Lettable Net of % 2.8% 6.3% 20% 5.4% 10% 22.9% 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 150m2 > Tenants NSFA Baldwin Performance Incentives Vacant CHW Services Vacant Future Expiries Fox Dev Beyond Learning (HOA) LMT

Apex CMS Hospitality PM Services

COMMENTS

• A circa 1980s completed asset providing a good standard of suburban B-grade office accommodation. • The asset is 94.7% leased to 11 office tenants and it has a WALE of 1.8 years (income). • Some of the car spaces are currently utilised for storage purposes. • It is centrally located within the Pymble commercial office precinct. • Potential to benefit from increasing market rents and longer term redevelopment. • Sold via an EIO campaign which we are advised was competitive. • Our analysis reflects an outstanding incentive of circa $147,000 which was covered by the Vendor via an adjustment at settlement. • The asset previously traded for $7,950,000 in June 2014.

2 LINCOLN STREET, LANE COVE WEST NSW

A four-level office building with attached two level high clearance warehouse accommodation constructed in 1985, with basement, mezzanine and on grade parking. Located within Lane Cove Business Park, in proximity to the M2 Motorway and Lane Cove Tunnel. KEY DETAILS Sale Date: March 2018 Sale Price: $28,075,000 Vendor: Bricktop Trumen Purchaser: SalesAviator Analysis Capital Land Area: 6,739m² NLA: 9,263m² Parking: 111 spaces (1:83m² lettable area) Vacancy: 5% No of Tenants: 6 Net Passing Income: $1,917,946 pa

INPUTS ANALYSIS Market Rentals: Office: $250–$280/m² pa net Passing Initial Yield: 6.8% Warehouse: $190/m² pa net Core Market Yield*: 6.8% Avg Cmpd Mkt Growth: 3.2% (10 year) IRR (after costs): 10 yr Outgoings: $37/m² pa 7.6% Leasing/Incentive Downtime (10 yrs): 6-9 months @ 50% retention Rate/m² NLA: $3,031/m² Allowances: Incentive (10 yrs): 22.5% gross Weighted Average Lease Income Cap Adjustment Period: 24 months Expiry (Yrs): 3.6 yrs Terminal Yield: 7.0% Average Running Yield: 10 yr Capital Expenditure: At Expiry: $100/m² (before capex) 6.2% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

TenantTenant Composition Composition by Passingby Passing Income Income Expiry Profile –- by NLA 100% 90% 80% 30% 32% 70% 60% 50% 40%

30% % of Net Lettable Area Lettable Net of % 7% 20% 14% 10% 8% 9% 0% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11

Key Pharmaceuticals SLR Consulting Capital SMART Kastle Australia Tobco (Bedrule) Napa Centre Vacant Future Expiries

COMMENTS

• Sold via expressions of interest campaign. • The property is 95% leased to 6 tenants with a WALE of 3.6 years. • Major tenants are Key Pharmaceuticals (40% NLA) and SLR Consulting (23% NLA). • The building has strong tenant retention history. • Potential for strata subdivision or conversion of warehouse accommodation to office space. • Zoned IN2 Light Industrial under the Lane Cove Local Environmental Plan 2009. • Previously sold for $16,875,000 in December 2014.

2 MEREDITH STREET, BANKSTOWN NSW

A 7-level A-grade office building constructed in 1992 comprising basement parking and accommodation, ground floor level, plus 6 upper levels of office accommodation and rooftop plant rooms. Located on the western edge of the Bankstown CBD. KEY DETAILS Sale Date: February 2018 Sale Price: $74,500,000 Vendor: SC Capital Purchaser: SalesSandran Analysis NABERS Rating: Energy: 4.5 Star Land Area: 4,935m² NLA: 13,728m² Parking: 228 (1:60m2 NLA) Vacancy: 2% No of Tenants: 19 Net Passing Income: $5,570,629 pa INPUTS ANALYSIS Market Rentals: Office: $360-380/m² pa net Passing Initial Yield: 7.5% Core Market Yield*: 7.0% Avg Cmpd Mkt Growth: 3.4% (10 year) IRR (after costs): 10 yr Outgoings: $87/m² pa 7.9% Leasing/Incentive Downtime (10 yrs): 6-12 months @ 50% retention Rate/m² NLA: $5,427/m² Allowances: Incentive (10 yrs): 20% gross Weighted Average Lease Income Area Cap Adjustment Period: 24 months Expiry (Yrs): 2.3 yrs 2.3 yrs Terminal Yield: 7.25% Average Running Yield: 10 yr Capital Expenditure: Total Capex: $/m2 (before capex) 5.9% *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

Lease Expiry by Area TenantUse Composition Composition by by Passing Passing Income

NLA (m²) Lease Expiry by Area 16% 14,000 36 mths; 49% NLA 12,000

10,000 25% 16%

8,000

6,000 3%

4,000 4% 1% 2,000 5% 20% 5% 0 5% Current Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 NSW Police Centrelink Initial Expiries Renewals Vacancy Expiry Capture Window Westpac Banking Corporation (St George Bank) Benevolent Max Soultions Catholic Care MTC Mission Providence Various Sub Floor Tenants Café / Other

COMMENTS

• 98% leased to 19 tenants with a WALE of 2.3 years (income). • The only A-grade building in the local market, designed to meet government office specifications. • Major tenants include NSW Police, Centrelink and St George Bank. • Strong tenant retention history. • B4 Mixed Use zoning. • Marketed via an expression of interest campaign with interest from developers and investors.

11 BOWDEN STREET, ALEXANDRIA NSW

A 4-storey level office building constructed in 2016. The property comprises ground level office and retail (sub-lease) accommodation and 3 upper levels of office space with good natural light to most floors. The building features End of Trip facilities and bicycle storage with 55 car spaces via a car stacker on the ground floor. KEY DETAILS Sale Date: February 2018 Sale Price: $48,850,000 Vendor: Marshall Investments Purchaser: SalesAbacus Analysis Property Land Area: 2,627m2 NLA: 5,697.6m2 Parking: 55 car spaces Vacancy: 0.0% No of Tenants: 5 Tenants – Majors include APG & Co (44.5% of NLA) & William Angliss (33.3% of NLA) Net Passing Income: Circa $2.8 million

INPUTS ANALYSIS Market Rentals: Office: $538/m² pa gross (average) Passing Initial Yield: 5.84% $546/m² pa net (average) Core Market Yield*: 5.81% Avg Cmpd Mkt Growth: 3.75% office (10 year avg) IRR (after costs): 5 yr 10 yr Outgoings: $79/m² pa (as advised) 5.46% 6.80% Leasing/Incentive Downtime (10 yrs): 6-9 months @ 50% retention Rate/m² NLA: $8,574/m² Allowances: Incentive (10 yrs): 17.5% Weighted Average Lease Income Area Cap Adjustment Period: 12 months Expiry (Yrs): 5.9 yrs 5.9yrs Terminal Yield: 6.375% Capital Expenditure: Total capex over cashflow - $415/m² *Core Market Yield = the percentage return/yield analysed when the assessed fully leased net market income is divided by the adopted value/price which has been adjusted to account for property specific issues (i.e. rental reversions, rental downtime for imminent expiries, capital expenditure, current vacancies, incentives, etc).

LeaseExpiry Expiry Profile by -NLAby NLA UseTenant Composition Composition by by Passing Passing Income 100% 90% 47% 80% 70% 60% 50% 40% 30% % of Net Lettable Area Lettable Net of % 30% 20% 7% 10% 11% 0% 5% Current Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11

Vacant Future Expiries

APG & Co William Angliss Vie Studio Apparel Group G-Star

COMMENTS

• 2016 constructed well-presented commercial office building within the South Sydney suburb of Alexandria. • The property was marketed via an Expressions of Interest campaign closing in November 2017 with Abacus being the successful purchaser with settlement expected in late March 2018. • The property is currently occupied by 5 tenants, majors including APG & Co (44.5% of NLA) & William Angliss (33.3% of NLA), with a WALE of 5.9 years (by income). • We are advised that all outstanding incentives are to be paid out by the vendor upon settlement and accordingly they have been excluded from our calculations.

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