February 2014 Savills Research Insight

Insight Australian Retail Market February 2014 Savills Research Australian Retail Market

Highlights In seasonally adjusted terms, national retail turnover growth was up 2.9 percent in the 12 months to November 2013. The rate of growth has fallen slightly from 3.2 percent in the year to November 2012.

The retail sector faces both cyclical and structural issues. Some cyclical issues are starting to move in its favour.

The level of retail construction is showing signs of recovery as capital conditions (both debt and equity) begin to thaw.

Savills recorded $6.1 billion of retail property transactions nationally in the year to December 2013, up from $4 billion in the previous year.

Institutions were the most active in the investment market for the year ended June 2013 purchasing 61 percent of all retail property sold.

02 February 2014

2013 Highlights during the global financial crisis. With the size of the workforce The Australian workforce has growing and more people coming In times of economic uncertainty grown by almost a million people into the country (and less leaving) retail property is largely regarded from 10.7 million to 11.6 million it is little wonder that a recovery as a defensive investment due from November 2007 to November in housing is underway. It may not to the large percentage of non- 2013. Over the past year we have feel like a boom, but it is starting. discretionary spending supporting shed jobs in Agriculture, Real Credit growth has been rising for income streams, such as food. Estate, Manufacturing, Mining and a year and prices for dwellings are Over the past 25 years, shopping IT. However, we have created twice starting to rise again. as many jobs as we have lost – centres have been increasingly Changes in consumer spending Retail, Healthcare, Government acquired by institutional owners patterns since 2007 appear to and Transport. Over the six years who could actively manage, have had an adverse effect on of the global financial crisis we have develop and maintain these department store, apparel and shed jobs in Manufacturing and centres. The global financial crisis discretionary retailing turnover Agriculture but we have created severely curtailed the purchasing generally. This has impacted five times as many jobs elsewhere. power of institutions and allowed tenants in Regional and some These same trends have been other buyers to enter the market. Sub-Regional shopping centres. present for 30 years (with some Lower turnover combined with The retail sector faces both cyclical bumps along the way). Agriculture increasing rents has led to and structural issues. Some and Manufacturing have been in specialty occupancy costs rising cyclical issues are starting to move the doldrums for 30 years – an to an average of 22 percent (and in its favour. Consumer confidence entire generation – this is not new in some cases substantially higher) is improving, certainly not news. Whilst we have lost 256,000 in Super Regional, Major Regional deteriorating and the cyclical falls in jobs in these two sectors, we have and Regional Shopping Centres. interest rates are certainly helping. created 21 times the same number This is a level that could generally Employment is growing strongly in of jobs in other sectors – a total of be described as unsustainable four or five sectors and shrinking 5.3 million jobs. How much more and any one or combinations of in four or five sectors and the jobs is earned in these newly created three things are likely to happen gained and lost are not necessarily jobs? If workers are paid more, from here. One, occupancy costs in the same physical place. This they put more into superannuation, fall to a more sustainable level; means certain catchment areas are they pay more tax, they spend two, incentives are provided by doing it tough and some are doing more and they pay more for a the landlord to mitigate the high well. house – a virtuous property cycle. occupancy costs; three, turnover The size and shape of the The newly arrived population have increases as consumers return. workforce has a profound impact a profound impact on property In any case, the returns from on retail property because wages because they need somewhere to this sector of retail appear to be determine spending and jobs live and goods to put in it. Instant constrained for the foreseeable define catchment areas. housing and bulky goods demand. future. is almost unique in the world as Less people leaving the country The structural issues facing retail being one of very few countries means fewer houses freed up for are more formidable but not that have expanded their workforce those arriving.

“Consumer confidence is improving, certainly not deteriorating and the cyclical falls in interest rates are certainly helping.” Tony Crabb, Savills Research

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Australian Retail Retail Property Sales ($m and number) Dec-03 to Dec-13 Sales >$5m (LHS) No (RHS) $8,000 250

$7,000 200 $6,000

$5,000 150

$4,000

$3,000 100

$2,000 50 $1,000

$0 0

Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13

Source: Savills Research

Australian Retail Retail Property Sales by Price Range ($m) “Savills recorded Dec-03 to Dec-13 $6.1 billion of <$10m $10m - $50m $50 - $100m >$100m $8,000 shopping centre $7,000 transactions $6,000 nationally.”

$5,000 Savills Research

$4,000

$3,000

$2,000

$1,000

$0

Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13

Source: Savills Research

insurmountable. Savills expect evolve and challenge more categories and more room for the non-mining the retail sector to evolve to take over time. New business models are side of the economy to grow. advantage of the structural issues establishing themselves. One of the rather than be over-run by them. new business models is a “clicks and Savills recorded $6.1 billion of The ageing of the population will bricks” strategy where the store and shopping centre transactions continue to create challenges for the online presence work together to nationally in the 12 months to retailers as they jockey for the drive sales. This strategy is still in its December 2013, up from $4 billion dollars of retirees. Retirees can be infancy in Australia. in the previous year and up on the expected to prefer services over five-year average of $3.5 billion. In Recently, the Reserve Bank of goods and will not necessarily the year to December 2013, 118 Australia has forecast a peak in continue to dwell in their traditional shopping centres were sold against mining investment and has seen catchment areas. Internet retailing 92 the previous year and an fit to cut interest rates to their has already changed the face of increase on the five year average of current level of 2.5 percent. This retailing for certain categories of 86 sales per annum. also reflects ongoing low levels of goods and will no doubt continue to inflation, a steady labour market

04 February 2014

Clearly, both buyers and sellers Important recent ÎÎThe acquisition of were unwilling to transact large transactions include: in Victoria by shopping centres in 2009. The private equity group Blackstone in ÎÎA 50 percent share in Centro uncertainty surrounding the global June 2013 from Australian Prime Bankstown traded in June 2013 for credit crisis left buyers and sellers Property Fund Retail and Lend $284.3 million as aprt of a portfolio paralysed. In 2010, a thaw in Lease Funds Management Limited with a total value of $602 million. The conditions meant both buyers and for a purchase price of $360 million two level Regional shopping centre sellers could transact with greater reflects a market yield in the vicinity has a total GLA of 82,742 square confidence. This is reflected in the of 7.25%. This three level Regional metres. The Centre comprises increase of sales of centres in the shopping centre has a Centre GLA a Myer Department Store, Big greater than $100 million range. of approximately 61,940 square W, target and Kmart Discount metres, comprising a two level Traditionally, the retail property Department Stores. A Woolworths Target Discount Department Store market in Australia has been a two and a Supa IGA are complemented that was previously occupied tiered market, with the majority by 14 mini majors and 120 specialty by Myer, a Kmart Discount of sales volume occurring in the stores. The centre had 8 percent Department Store, Coles and Aldi lower value range and a select few vacant at the time of sale. The supermarkets, an eight screen major retail investment properties passing yield was 7.14%. Parking for Hoyts cinema complex and changing ownership in any given 3,237 vehicles is made possible on a approximately 185 specialty and period. However, it can be seen site of 11.153 hectares. kiosk tenancies. clearly during the height of the ÎÎThe May 2013 purchase of global financial crisis in 2008 and ÎÎIn November 2013, Harbourside the GPT Group’s 50 percent 2009, there was a significant fall in Shopping Centre transacted for interest in Shopping high-end sales. $252 million on an initial yield of Centre on the central coast of 6.48%. The Centre has a GLA of In the 12 months to December NSW reportedly purchased for 19,930 square metres and houses 2007 $2.6 billion transacted in $397.1 million by South Korea’s 11 mini majors, 155 specialty the greater than $100 million National Pension Service. The stores and has provision for 255 category. This fell to $153 million transaction reflected a market yield car spaces. The Centre comprises in one transaction in the year to of between 6.00%-6.25% and various leasehold stratum lots on a December 2009 and has risen to an IRR of approximately 8.75%. 99 year lease expiring in 2087. $2.9 billion in the year to December The remaining 50% is owned by 2013 with 13 shopping centre Australian Prime Property Fund transactions recorded in the Retail, with the Centre being greater than $100 million category. managed by Lend Lease. Lend Lease will continue to manage the Centre as the purchase excluded any management rights. Erina Fair is a predominantly single level, major Regional shopping centre with a total GLA of 102,291 square metres. The centre comprises a Myer Department Store, , Kmart and Target Discount Department Stores, Woolworths, Coles and Aldi supermarkets, a Hoyts cinema complex, in addition to 249 specialty tenancies.

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Economic Commercial property yields in hospitality and services, and other. particular continue to look attractive. Retail spending in categories such Conditions The Australian economy is being as hospitality and services tend to Europe continues to move in and out rebalanced as growth in mining exhibit greater volatility due to the of recession, China manages growth softens. This means housing and discretionary nature of the spending around 7 percent and the tapering retail should continue to lift with whilst spending on food remains of quantitative easing in the United positive knock on effects to industrial relatively constant. Although turnover States appears to steady the global and office markets. As consumer may be rising, retailer profit margins bond markets, capital flows and confidence continues to rise, can be under pressure as lower currencies. so should business confidence. prices are used to entice customers As profit margins are restored, to purchase. This has been The calendar year 2013 marked a business decision making should characteristic of the Australian retail significant recovery for investment gain momentum. Some State market for some years now. markets with property sales governments will move into election Of the six retail categories most turnover at record levels and strong mode and could be expected to are showing half the growth rates gains made on local and global provide some stimulus to parts achieved over the last 20 years. sharemarkets – interest rates have of the economy providing further This is hardly surprising given the stayed low, the search for yield and momentum to investment markets. circumstances of technological security remained strong however China and the United States are change, currency movement and there has been more capital allocated forecast to contribute positively to consumer behaviour. Significant for higher risk property including Australia’s economic outlook whilst weakness continues in department development. The S&P500 index Europe could be on the cusp of a stores, clothing and household rose 25 percent to a record high subdued recovery. reflecting cheap capital and a sense goods. Whilst it is difficult to get at of economic recovery in the United With regards to retail sales turnover exactly what the consumer is doing, States. The Australian ASX200 Index figures, in seasonally adjusted terms, we know from the National Accounts rose 13 percent and the Australian national retail turnover growth was up data that household savings rates are dollar fell 15 percent against the US 2.9 percent in the year to November amongst the highest since 1987. This dollar. Nationally, over $22 billion 2013. The rate of growth has fallen in some ways explains the lacklustre of commercial property has been slightly from 3.2 percent in the year growth in retail trade. to November 2012 as consumer transacted and over 3 million square Substitution on overseas internet sites confidence improved in the face metres of industrial and office space where the strength of the Australian of falling interest rates. This growth has been reported leased which gives dollar translates to immediate cost took annual national turnover from us confidence that the markets are savings to the consumer could also a seasonally adjusted $255 billion operating normally. go some way towards explaining to $263 billion in the 12 months to weakness in clothing and department November 2013. store turnover. Also, lower shelf prices Retail turnover in Australia can for imported goods serves to keep “The calendar year 2013 be further divided into six broad dollar turnover low whilst volumes still marked a significant recovery categories. These categories are grow. Clearly there also appears to be food, household goods, department some switching from expenditure on for investment markets” stores, clothing and soft goods, goods to expenditure on services. Savills Research

National Retail Turnover Growth by Category (Seasonally Adjusted, 12 months to November 2013)

Dept H’Hold Food Stores Clothing Goods Other Hospitality Total Annual Growth 4.2% -0.5% 3.0% 1.9% 1.1% 4.0% 2.9% 5 year compound 4.5% 0.0% 1.7% 1.1% 3.6% 6.2% 3.4% 10 Year compound 5.5% 1.6% 3.3% 3.3% 4.1% 5.9% 4.5%

Source: ABS/Savills Research

06 February 2014

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Australian Retail Trade Australian Retail Change in Moving Annual Turnover by Category Retail Property Buyer Profile (%) Nov-03 to Nov-13 12 months to Dec-13

Food Clothing, footwear & personal accessory Household goods Department Stores Other retailing Cafes, restaurants & takeaway food 20%

15%

10%

5%

0% Key  Private Investor 17%  Developer 1% -5%  Foreign Investor 20%  Syndicate 2%

Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13  Undisclosed 2%  Trust 36% Source: ABS/Savills Research  Fund 22%

Source: Savills Research

08 February 2014

Sales Activity increasingly finding themselves Australian Retail unable to compete again. Retail Property Vendor Profile (%) 12 months to Dec-13 Foreign and private investors remained active in the investment Evidence from transactions market for the 12 months ended between $10 million and $100 December 2013, purchasing 37 million has shown a softening in percent of all retail property sold. market yields from peak to trough. Institutions represented by Funds, This is further illustrated by analysis Trusts and Syndicates accounted of valuations of institutional assets for a combined 61 percent of where neighbourhood and sub- purchasing activity. Private investors regional yields have softened by had been sidelined from purchasing between 100 and 200 basis points retail property for a number of and regional centres have softened years due to strong demand from by around 75 basis points. Private institutional investors. Also of investors have been concentrating particular note is the emergence on initial yields as the driving force Key of foreign investors purchasing for investment rather than focusing  Private Investor 24% 20 percent of retail property sold. on total returns or market yields.  Developer 8% Evidently, the global financial crisis This is primarily due to the cost of  Foreign Investment 1% created a window of opportunity debt and the scarcity of finance  Syndicate 16% for private and foreign investors for purchases in excess of $100  Owner Occupier 15% to re enter the market. Conditions million. While interest rates remain  Mortgagee 1% relatively low, emphasis is expected  Trust 22% for Australian institutions have  Fund 13% continued to improve and so to be placed on the initial yield of private and foreign investors are investments in the short term. Source: Savills Research

Australian Retail Retail Property Sales by State ($m and number) 12 months to Dec-13

Sales >$5m (LHS) No (RHS) $3,000 60

$2,500 50

$2,000 40

$1,500 30

$1,000 20

$500 10

$0 0 NSW VIC QLD SA WA Source: Savills Research

“Institutions accounted for 61 percent of purchasing activity.” Savills Research

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Nationally, shopping centre investment yields have stabilised “Private investors have been concentrating on as highlighted in the both the chart below and in the tables of recent initial yields as the driving force for investment transactions. Neighbourhood and rather than focusing on total returns.” smaller sub-regional centres continue Tony Crabb, Savills Research to transact across a broad range of yields in line with the characteristics of the individual properties. Shopping centre yields as at yields have softened for bulky Clearly some confidence and December 2013 currently range goods shopping centres over the balance sheet repair has occurred between 5.50% and 7.00% year whilst they have firmed slightly as Trusts, Funds and Syndicates for regional shopping centres, for sub-regional shopping centres. have re-entered the market between 7.25% and 9.00% for accounting for 61 percent of sub-regional shopping centres, combined purchaser activity. between 7.00% and 10.00% for This would tend to indicate that neighbourhood shopping centres more competition is entering the and between 8.75% and 11.00% marketplace especially for highly for bulky goods centres. Typically, sought after shopping centres.

National Retail Market Yields by Centre Type (%) Dec-03 to Dec-13

Regional Sub-Regional Neighbourhood Bulky Goods 10%

9%

8%

7%

6%

5%

Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13

Source: Savills Research

10 February 2014

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Retail Supply & Construction Activity According to figures compiled by the Property Council of Australia (PCA), Australia has 1,360 enclosed shopping centres with a total retail floor space of 17.5 million square metres. The breakdown of Gross Lettable Area (GLAR) by centre type is detailed below.

National Centre Stock by Type Regional Sub-Regional N’hood Bulky Goods Total GLAR 7,167,956 4,216,705 3,858,134 2,329,718 17,572,513 Number 123 244 863 130 1,360 Average 58,754 17,353 4,476 18,060 % of market 41 24 22 13

Source: PCA Shopping Centre Directory 2013/Savills Research

Whilst the PCA directory covers large sections of the retail sector, it is by no means comprehensive. A great many neighbourhood centres, bulky goods outlets and freestanding supermarkets as well as corner stores and street front retail space are not included in the directory. The following tables show selected major retail properties under construction in Australia:

New South Wales Select Retail Properties Under Construction Centre Suburb Type New Extension Refurb Comp Wollongong Centre SC Wollongong City Centre 19,000 2014 Macquarie Park City Centre 31,800 2014 Miranda Regional 17,738 2014 Bunning Rydalmere Rydalmere Bulky Goods 15,717 2014 Masters Hoxton Park Hoxton Park Bulky Goods 13,684 2014 Masters Blacktown Michinbury Bulky Goods 13,451 2014 Bunnings West Gosford Gosford Bulky Goods 13,255 2014 Liverpool Plaza Liverpool Neighbourhood 8,212 2014 Super A-Mart Bankstown Bulky Goods 5,785 2014 Greystanes Shopping Centre Greystanes Neighbourhood 5,656 2014 Schofields - Woolworths Schofields Freestanding 4,495 2014 Kiora Land Site Double Bay Freestanding 5,027 8,549 2015 Wetherill Park SC Wetherill Park Neighbourhood 11,955 2015 5 Martin Pl – Commonwealth Other 2,256 2015 Bank Building

Source: Cordell Reed Construction Data/Savills Research

“Neighbourhood and smaller sub-regional centres continue to transact across a broad range of yields in line with the characteristics of the individual properties.” Tony Crabb, Savills Research

12 February 2014

Victorian Select Retail Properties Under Construction Centre Suburb Type New Extension Refurb Comp St James Square City Centre 2,900 staged Barkly Square Stage 2 Brunswick Sub Regional 17,462 staged Collins Square, Collins Street Docklands City Centre 10,000 staged Woolworths Shopping Centre Tarneit Neighbourhood 6,000 Nov-13 Coburg Hill N’bourhood Hub Coburg Neighbourhood 4,500 Nov-13 Epping Plaza Epping Major Regional 5,000 Nov-13 Woodgrove Shopping Centre Melton Sub Regional 25,000 Dec-13 Craigieburn Town Centre Craigieburn Sub Regional 55,000 Dec-13 Pakenham Lifestyle Centre Pakenham Bulky Goods 31,673 Dec-13 Masters Keysborough Bulky Goods 13,000 Dec-13 The City Centre 47,000 Mar-14 IKEA Campbellfield Campbellfield Bulky Goods 41,000 Mar-14 Brimbank Central Deer Park Sub Regional na May-14 Melbourne City Centre 9,498 May-14 The William Melbourne City Centre 2,000 Jun-14 Central Shopping Centre South Morang Neighbourhood 4,600 Dec-14

Source: Cordell Reed Construction Data/Savills Research

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South Australia Select Retail Properties Under Construction Centre Suburb Type New Extension Refurb Comp Churchill Centre Kilburn Sub Regional 19,000 2014 Costco Kilburn Bulky Goods 14,000* 2014 Gawler Green Evanston Neighbourhood 6,700* 2014 Seaford Meadows SC Seaford Meadows Neighbourhood 6,670 2014

Source: Cordell Reed Construction Data/Savills Research *Approximate

Western Australia Select Retail Properties Under Construction Centre Suburb Type New Extension Refurb Comp Wyatt Grove Shopping Centre Hocking Neighbourhood 5,000 Feb-14 Bassendean Village Bassendean Neighbourhood 2,902 Jun-14 Eaton Fair Shopping Centre Eaton Sub Regional 15,500 Oct-14 Lakeside Joondalup Joondalup Regional 28,300 Nov-14 Carillon City Perth City Centre 2,264 Nov-14 Cockburn Gateway SC Success Sub Regional 20,600 Dec-14 Centro Warnbro Rockingham Neighbourhood 9,486 Dec-14 Wellard Square SC Wellard Neighbourhood 6,285 Jun-16

Source: Cordell Reed Construction Data/Savills Research

Queensland Retail Properties Under Construction Centre Suburb Type New Extension Refurb Comp Broadway on the Mall CBD City Centre 16,747 Jan-14 Masters Bundamba Freestanding 10,409 Jan-14 Aldi Varsity Lakes Freestanding 2,091 Jan-14 Masters Robina Freestanding 13,500 Feb-14 Northpoint Toowoomba Toowoomba Neighbourhood 7,270 Feb-14 Bunnings West Ipswich Freestanding 11,461 Mar-14 Masters Parkinson Freestanding 13,485 Mar-14 Big Top Shopping Centre Maroochydore Neighbourhood 12,189 Mar-14 Woolworths Shopping Centre Rothwell Neighbourhood 4,932 Apr-14 Costco Northlakes Bulky Goods 14,000 May-14 Indooroopilly SC Indooroopilly Major Regional 30,000 May-14 Aldi West End Freestanding 1,364 May-14 Stockland Hervey Bay Hervey Bay Sub Regional 20,000 Jun-15 Maroochydore Regional 35,000 Jan-16 Mt Gravatt Regional 40,000 Jan-16 Pacific Fair Broadbeach Regional 42,700 Jan-16

Source: Cordell Reed Construction Data/Savills Research

14 February 2014

Outlook Changes in consumer spending Commercial property yields patterns since 2007 appear to in particular continue to look Institutional investors have have had an adverse effect on attractive. The Australian economy re-entered the market with department store, apparel and is being rebalanced as growth freestanding assets and shopping discretionary retailing turnover in mining softens. This means centres high on their investment generally. This has impacted housing and retail should continue lists. Furthermore, local conditions tenants in Regional and some to lift with positive knock on effects have caught the attention of Sub-Regional shopping centres. to industrial and office markets. As international investors, as good Lower turnover combined with consumer confidence continues quality; tightly held assets have increasing rents has led to some to rise, so should business been available. specialty occupancy costs rising confidence. As profit margins The retail sector faces both cyclical to an average of over 22 percent are restored, business decision and structural issues. Some in Regional Shopping Centres. making should gain momentum. cyclical issues are starting to move This is a level that could generally Some State governments will move in its favour. Consumer confidence be described as unsustainable into election mode and could be is improving, certainly not and any one or combinations of expected to provide some stimulus deteriorating and the cyclical falls in three things are likely to happen to parts of the economy providing interest rates are certainly helping. from here. One, occupancy costs further momentum to investment Employment is growing strongly in fall to a more sustainable level; markets. China and the United four or five sectors and shrinking two, incentives are provided by States are forecast to contribute in four or five sectors and the jobs the landlord to mitigate the high positively to Australia’s economic gained and lost are not necessarily occupancy costs; three, turnover outlook whilst Europe could be on in the same physical place. This increases as consumers return. the cusp of a subdued recovery. means certain catchment areas In any case, the returns from are doing it tough and some are this sector of retail appear to be doing well. Strong population constrained for the foreseeable growth continues to work in the future. favour of retail turnover and, as the dollar continues to weaken, tourism numbers should start to rise commensurately. The structural issues facing retail are more formidable but not insurmountable. Savills expect the retail sector to evolve to take advantage of the structural issues rather than be over-run by them. The ageing of the population will continue to create challenges for retailers as they jockey for the dollars of retirees. Retirees can be expected to prefer services over goods and will not necessarily continue to dwell in their traditional catchment areas. Internet retailing has already changed the face of retailing for certain categories of goods and will no doubt continue to evolve and challenge more categories over time. New business models are establishing themselves. One of the new business models is a “clicks and bricks” strategy where the store and the online presence work together to drive sales. This strategy is still in its infancy in Australia.

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Portfolio Shopping Centre Sales (12 months to December 2013) Date Property Price ($m) GLAR $/sq m Yield (%) May-13 Showg’d Village Flemington (75%) 11,054 May-13 Taylors Hill Village (75%) 7,431 May-13 Lilydale Village (75%) 5,452 May-13 Tarneit West Village (75%) 5,020 May-13 Fletcher Village (75%) 4,832 May-13 Katoomba Village (75%) 5,444 May-13 Kellyville Plaza (75%) 5,670 May-13 Coles Port Macquarie (75%) 4,629 May-13 Coles Southgate (75%) 4,681 May-13 West Gosford Shopping Centre (75%) 532.00 8,188 8.00# May-13 Winmalee Village (75%) 6,012 May-13 Kincumber Village (75%) 5,654 May-13 Northlakes Shopping Centre (75%) 4,828 May-13 Coolum Village (75%) 5,162 May-13 Deeragun Village (75%) 4,336 May-13 Sugarworld Shopping Centre (75%) 4,336 May-13 Kmart Plaza Mt Isa (75%) 9,876 May-13 St Clair Village (75%) 6,467 May-13 Gungahlin Village (75%) 12,244

Source: Savills Research #Estimate

Portfolio Shopping Centre Sales (12 months to December 2013) Date Property Price ($m) GLAR $/sq m Yield (%) Jun-13 Ocean Grove Marketplace 29.90 6,910 4,327 7.50 Jun-13 Alfred Square, Ballarat 20.00 8,964 2,231 7.50 Jun-13 Target Centre Warrnambool 19.50 6,984 2,792 8.00 Jun-13 Burdekin Plaza 18.70 5,513 3,392 8.00 Jun-13 Wyndham Vale Square 18.20 6,914 2,632 8.00 Jun-13 Langwarrin Plaza 17.20 5,087 3,381 7.80 Jun-13 Drouin Central 12.30 3,798 3,239 8.00

Source: Savills Research

Portfolio Shopping Centre Sales (12 months to December 2013) Date Property Price ($m) GLAR $/sq m Yield (%) Feb-13 Karingal (50%) 41,249 4,485# Feb-13 Cranbourne (50%) 33,783 3,706# Feb-13 Warriewood (50%) 371.4 22,153 6,521# 7.49 Feb-13 Mandurah (50%) 33,621 7,835# Feb-13 Halls Head (50%) 5,962 4,935#

Source: Savills Research #Book Value

16 February 2014

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Portfolio Shopping Centre Sales (12 months to December 2013) Date Property Price ($m) GLAR $/sq m Yield (%) Jun-13 Bankstown (50%) 79,611 7,223# Jun-13 Roselands (50%) 59,852 5,577# Jun-13 Toormina (50%) 20,833 6,288# 602.00 7.42 Jun-13 Lennox (50%) 9,490 5,005# Jun-13 Sunshine Marketplace (50%) 33,812 2,396# Jun-13 Karratha (50%) 22,871 4,463#

Source: Savills Research #Book Value

New South Wales Select Major Shopping Centre Sales (12 months to December 2013) Date Property Price ($m) GLAR $/sq m Yield (%) Feb-13 Fairfield Forum 32.00 17,954 1,782 11.30* Feb-13 23.81 4,432 5,372 7.63 Feb-13 Castle Hill Homemaker Centre 19.00 11,365 1,672 12.10 May-13 Erina Fair (50%) 397.10 102,291 7,764# 6.00-6.15* Jun-13 Armidale Plaza 20.00+ 14,743 1,357 12.00 Jun-13 Wattle Grove Plaza 22.60 4,305 5,250 8.29* Jun-13 Federation Woodcroft 22.60 4,667 4,843 8.79 Jun-13 Manning Mall 32.60 10,495 3,106 10.40 Jul-13 Auburn Home Mega Mall 55.00 32,341 1,722 7.50 Sep-13 Menai Central 31.50 10,798 2,917 na Sep-13 Home HQ North Shore 72.50 22,186 3,268 10.18 Oct-13 Oxford Square 62.70 12,088 5,187 8.00 Nov-13 Harbourside Shopping Centre 252.00 20,542 12,268 6.48 Nov-13 Lake Innes Village 17.35 4,229 4,103 8.60 Nov-13 Supa Centre Belrose 88.00 32,053 2,745 8.26 Nov-13 Federation Seven Hills 82.50 19,502 4,230 8.75* Nov-13 HomeBase Prospect 40.45 25,018 1,617 na Dec-13 175.50 28,366 6,187 7.25

Source: Savills Research *equated yield #rate per sq m reflects 100% of GLA na = not currently available

18 February 2014

Queensland Select Major Shopping Centre Sales (12 months to December 2013) Date Property Price ($m) GLAR $/sq m Yield (%) Feb-13 Bluewater Square, Redcliffe 41.75 10,067 4,147 9.84 Apr-13 Federation Gympie 63.80 14,054 4,540 7.55 Apr-13 Rochedale Shopping Centre 20.00 5,740 3,484 9.00 Jul-13 Homemaker City Fortitude Valley 103.77 38,271 2,711 9.35 Jul-13 Great Western Super Centre 62.90 15,387 4,088 7.57 Jul-13 Kmart Plaza, Toowoomba 55.00# 13,045 4,216 7.04 Jul-13 Logan Mega Centre 52.00 27,000 1,926 10.21 Jul-13 Deception Bay Shopping Centre 37.50 19,583 1,914 7.61 Jul-13 Inala Plaza 32.35 16,438 1,968 10.99 Oct-13 Redbank Plains Shopping Centre 21.00 5,945 3,532 na Oct-13 Ashmore City Shopping Centre 37.00 8,780 4,177 8.40 Oct-13 Wilsonton Shopping Centre 53.00 17,683 2,638 na Nov-13 Beenleigh Market Place 88.40 18,111 4,881 7.67

Source: Savills Research na = not currently available #excl excess land

Victoria Select Major Shopping Centre Sales (12 months to December 2013) Date Property Price ($m) GLAR $/sq m Yield (%) Jan-13 Mernda Village 16.90 4,200 4,024 7.76 Feb-13 Keilor Downs Plaza 67.00 18,782 3,567 8.80 Feb-13 Hogans Corner 25.55 5,568 4,589 7.55 Mar-13 Greensborough Plaza 360.00 57,850 6,223 7.25 May-13 University Hill, Bundoora 37.14 7,647 4,857 8.12* Jun-13 Bacchus Marsh Village 31.60 15,147 2,086 na Jun-13 Healesville Walk 21.20 4,971 4,265 7.93 Jul-13 Home HQ Nunawading 48.00 22,871 2,099 10.70 Oct-13 Lynbrook Village 30.00 6,811 4,405 8.00 Oct-13 House & Home Moorabbin 31.50 13,883 2,269 na Oct-13 Rosebud Plaza 100.00 23,847 4,193 7.80

Source: Savills Research na= not currently available *Equated Yield

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South Australia Select Major Shopping Centre Sales (12 months to December 2013) Date Property Price ($m) GLAR $/sq m Yield (%) Feb-13 Paralowie 8.20 3,560 2,303 9.09 Aug-13 Fairview Green 24.75 6,645 3,725 9.12 Oct-13 Southgate Plaza 60.00 15,844 3,787 7.47 Nov-13 Burbridge 6.54 2,307 2,835 6.38

Source: Savills Research

West Australia Select Major Shopping Centre Sales (12 months to December 2013) Date Property Price ($m) GLAR $/sq m Yield (%) Jan-13 Plaza Arcade 48.00 2,322 20,672 7.80 Feb-13 Claremont Quarter, Claremont (50%) 171.50 30,000 11,433 6.17 Feb-13 Phoenix Park, Spearwood 75.80 20,543 3,690 8.06 Apr-13 Melville Plaza 29.00 8,964 3,821 6.83 May-13 Rockingham Superstore 14.00 11,608 1,206 12.86 Jun-13 Secret Harbour 33.20# 5,574 4,432 7.80 Jun-13 Kelmscott Plaza 15.00 5,079 2,953 8.71 Sep-13 Karrinyup (33.3%) 246.67 54,852 13,504 5.76 Oct-13 (50%) 205.00 21,238 9,653 6.52 Oct-13 Bunbury Forum 143.28 22,353 6,410 6.65 Nov-13 Brighton Village 21.00 3,846 5,460 7.90

Source: Savills Research na = not currently available #incl. excess land

20 February 2014

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22 February 2014

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