Quarterly Property Report

DECEMBER 2019 QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 2

Introduction

Welcome to the latest Capital growth in office and a range of geopolitical edition of Banner Asset industrial property has slowed outcomes including further Management’s Quarterly somewhat after an extended improvements in US-China Property Report. period of strong growth but trade relations and the recently As we begin 2020, the remains high, and further averted no-deal Brexit. economy seems to have yield compression is expected In our Spotlight section, we turned a corner, with growth amid record low interest look at some of the key trends gradually increasing and rates, elevated infrastructure likely to influence the real the unemployment rate investment and rapid growth estate market in Australia 2 edging lower. in ecommerce . this year. The rebound in residential Still, notable downside risks to We hope you find these property prices has gained the economic outlook remain, insights useful. momentum, with dwelling with consumer spending values posting the biggest remaining subdued, business quarterly rise in a decade1, and consumer confidence boosted by muted supply weak, and expectations after a slowdown in of a sluggish pickup in construction activity. global growth hinging on

1 CoreLogic Monthly Housing & Economic Chart Pack, January 2020 2 Knight Frank 2020 Outlook Report Research Insight Through the Looking Glass QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 3

Economic update

Gross domestic product Australia’s unemployment The Reserve Bank of Australia’s population grew rose by 1.7% in the third rate fell to a nine-month Australia kept its target by 1.5% in the year through quarter of 2019 from a year low of 5.1% in December, cash rate steady at a record June, a slight pullback from earlier, an acceleration from 5.2% in November. low of 0.75% in December. 1.6% in the year through from a 1.4% in the second March. quarter.

Source: Australian Bureau of Statistics, Reserve Bank of Australia

Australian economic growth has Rates on hold at Employment accelerated on the back of increased government spending and a weaker record low continues to rise Australia dollar that helped to boost After three rate cuts earlier in 2019, the The unemployment rate edged down to demand for Australia’s exports. Gross Reserve Bank of Australia (RBA) kept its 5.1% in December, the lowest reading domestic product (GDP) rose by target cash rate steady at a record low since March. The breakdown of the data 1.7% (on a rolling annual basis) in the 0.75% in December. was less encouraging with full time September quarter from a year earlier, jobs falling by 300 and only part time RBA Governor Philip Lowe noted that accelerating from a rise of 1.4% in the positions rising.5 the economy appeared to have reached June quarter.3 a “gentle turning point” after hitting The better-than-expected result Outside the government sector, a soft patch in the second half of prompted some analysts to wind back however, domestic growth remained 2018, while global conditions had also expectations for further imminent relatively subdued, with dwelling improved.4 interest rate cuts from the RBA, investment recording its fourth however, many still expect another 25 consecutive decline. Household spending basis points cut by May, according to a growth also remained weak following a survey by Reuters.6 prolonged period of low-income growth.

3 Australian Bureau of Statistics, Australian National Accounts: National Income, Expenditure and Product, June 2019 4 Reserve Bank of Australia, Minutes of the Monetary Policy Meeting of the Reserve Bank Board, Sydney- 3 December 2019 5 Australian Bureau of Statistics, Labour Force, Australia, Dec 2019 6 Reuters, Australia jobless hits nine-month low, analysts give up on February rate cut, January 23, 2020. Available at: https://www.reuters.com/article/us-australia- economy-employment/australia-jobless-hits-nine-month-low-analysts-give-up-on-february-rate-cut-idUSKBN1ZM0BV QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 4

Global and domestic Growth expected to OFFICIAL INTEREST RATES risks remain pick up gradually Despite the pickup in economic growth, The RBA’s central scenario is for notable domestic and international risks Australia’s economic growth to pick 0.75% to the outlook remain, including the up gradually to around 3% in 2021, STEADY AT RECORD LOW trajectory of residential construction, supported by the low level of interest which has fallen sharply after a strong rates, recent tax cuts, ongoing runup in recent years. government spending on infrastructure, COMPANY PROFITS the upswing in housing prices and 3 Q Consumer spending has been weighed a brighter outlook for the resources down by slow income growth and sector.7 continues to be a key uncertainty on the domestic front as wages growth remains Over the long term, the Australian 9.4% constrained. Meanwhile, the impact economy remains supported by ANNUAL GROWTH on the economy of recent devastating solid population growth. Australia’s (DOWN FROM 13% IN 2Q) bushfires across the country, coming population rose by 1.5% in the year amid a prolonged severe drought, has through June, albeit a slight pullback AUSTRALIAN yet to be quantified. from the 1.6% pace of previous GOVERNMENT quarters.8 Globally, financial market conditions INFRASTRUCTURE have improved somewhat following SPEND some progress in China-US trade

negotiations, monetary policy easing by several central banks, and signs of stabilisation in the manufacturing $100B industry. OVER 10 YEARS

Source: ABS; Australian Government, Department of 7 Reserve Bank of Australia, Statement on Monetary Policy – November 2019 Infrastructure, Transport, Cities 8 Australian Bureau of Statistics, Australian Demographic Statistics, Jun 2019 and Regional Development

THE RESERVE BANK OF AUSTRALIA HAS CUT RATES TO A NEW RECORD LOW OF 0.75%

Source: RBA 4.75% 4.75% 4.25% 3.50% 3.00% 2.75% 2.50% 2.50% 2.50% 2.00% 2.00% 1.75% 1.50% 1.50% 1.50% 1.50% 1.50% 1.25% 0.75% 05-Jun-13 03-Jun-15 02-Feb-11 08-Jun-11 05-Jun-19 07-Jun-17 07-Dec-11 02-Dec-15 05-Dec-12 06-Jun-12 05-Dec-18 04-Jun-14 04-Dec-13 08-Jun-16 06-Jun-18 03-Dec-14 07-Dec-16 06-Dec-17 04-Dec-19 QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 5

RESERVE BANK OF AUSTRALIA FORECASTS FOR YEAR-ENDED GDP GROWTH

Source: RBA Statement on Monetary Policy November 2019 3.00% 3.00% 2.75% 2.50% 2.25% Dec 2021 Dec 2019 Dec 2020 June 2021 June 2020 June

FORECAST

UNEMPLOYMENT RATE

Source: ABS 5.3% 5.3% 5.3% 5.2% 5.2% 5.2% 5.2% 5.2% 5.1% 5.1% 5.0% 5.0% 5.0% Jan 2019 Feb 2019 Oct 2019 Dec 2018 Dec 2019 Aug 2019 July 2019 Nov 2019 May 2019 Sept 2019 June 2019 April 2019 March 2019 ACTUAL QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 6

Residential

Australia’s housing market continues to Vacancy rates may Short supply driving rebound. National residential dwelling values increased by 4.0% over the have peaked prices higher December quarter, the fastest quarterly Vacancy rates rose marginally to 2.5% Prices are being buoyed by lack of growth rate since November 2009, in December from 2.2% the previous supply. The construction cycle turned according to data from CoreLogic. month, according to SQM Research, down at the end of 2018, bringing to an Across the capital cities, prices rose by however the rise was mainly due to the end a long upswing that started in 2012. 4.7%, with regional values lagging at seasonal movements of some students The value of new buildings constructed 9 1.5% growth. and some industry specific workers.10 has fallen by 11% over the year through September.11 Annual growth has now also turned “It is actually quite likely we have positive, with national dwelling reached the peak in national rental Despite the recent pickup in residential values rising by 2.3% over the year. vacancy rates with ongoing strong prices, forward indicators of supply As confidence has improved, settled population growth absorbing current remain somewhat mixed. Building sales have rebounded, with capital city surplus rental stock over 2020,” said approvals are down by 3.8% over the sales rising by 4% in December from a Managing Director of SQM Research year through November but have risen year earlier. Capital city rents also rose Louis Christopher on releasing the 12% over the latest month12, suggesting slightly over the year, boosted by strong statistics. supply may be beginning to adjust to population growth and a slowdown in increased demand. construction.9

9 CoreLogic Monthly Housing & Economic Chart Pack, January 2020 10 ABS, Building Activity, Australia, Sep 2019 11 ABS, Building Activity, Australia, Sep 2019 12 ABS, Building Approvals, Australia, Nov 2019 QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 7

DECEMBER MARKET SNAPSHOT

Source: SQM Research (Vacancy rates), CoreLogic (All other data)

NATIONAL SYDNEY MELBOURNE BRISBANE

CAPITAL CITY DWELLING DWELLING DWELLING DWELLING PRICES PRICES PRICES PRICES +4.7% +6.2% +6.1% +2.4% (ON QUARTER) (ON QUARTER) (ON QUARTER) (ON QUARTER) +3.0% +5.3% +5.3% +0.3% (ON YEAR) (ON YEAR) (ON YEAR) (ON YEAR)

-6.4% -2.3% -0.1% (FROM RECORD HIGH (FROM RECORD (FROM RECORD HIGH IN JULY 2017) HIGH IN NOVEMBER IN APRIL 2018) 2017)

...... +4% +12% +3% -6% SETTLED SALES SETTLED SALES SETTLED SALES SETTLED SALES CAPITAL CITIES (ON YEAR) (ON YEAR) (ON YEAR) (ON YEAR) +0.7% -1.0% +1.4% +1.8% CAPITAL CITY RENTS R E N T S R E N T S R E N T S (ON YEAR) (ON YEAR) (ON YEAR) (ON YEAR) 3.5% 3.0% 3.3% 4.5% GROSS RENTAL YIELD GROSS RENTAL YIELD GROSS RENTAL YIELD GROSS RENTAL YIELD ( O N Y E A R ) 2.5% 3.6% 2.5% 2.9% V A C A N C Y VACANCY VACANCY VACANCY QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 8

Industrial & Logistics

The industrial sector continues to be a In Australia, e-commerce as a $100 billion on transport infrastructure strong performer supported by rapid proportion of total retail sales is small projects over ten years. Better rail and growth in ecommerce and record relative to established markets such as road services will improve the efficiency spending on transport infrastructure. the U.S. but growing rapidly. of logistics and delivery services, enhancing the value of industrial According to research from Savills, With more than half of Australia’s properties in proximity. the industrial sector was the best population concentrated in the East performing asset class in the 12 months Coast capitals of Sydney, Melbourne Knight Frank estimates capital growth through September, delivering a total and Brisbane, industrial land values in slowed from 7.7% in 2018 to a still-high return of 13%, as yields compressed in those markets are expected to continue 6% in 2019 after developers responded reaction to strong demand for logistics to trend upward as e-commerce and to strong tenant demand by increasing properties.13 logistic firms race to fulfill growing supply in some markets. However, demand for online purchases.14 capital growth is expected to accelerate New South Wales and Victoria states again this year, to 6.4% in 2020 and 7% lead the way with a total return of 14% The industrial and logistics real in 2021.15 and 13% respectively, with Queensland estate market is also set to be a following at 10%, boosted by strong significant beneficiary of the Australian population growth.13 Government’s plan to spend more than

13 Savills Research, Economic Property Drivers, December 2019 14 Colliers, Industrial Second Half 2019 15 Knight Frank 2020 Outlook Report Research Insight Through the Looking Glass QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 9

SYDNEY – YIELD COMPRESSION FORECAST TO CONTINUE

Sydney rents continued to rise in the year through September UP underpinned by demand from the 8% 533,810 2 transport; postal and warehousing; AVERAGE PRIME NET MILLION FACE RENT (ON YEAR) and wholesale retail sectors, DEVELOPMENT SUPPLY (2019) according to Colliers. Industrial investment activity in $1.97B New South Wales state maintained INVESTMENT ACTIVITY NSW its upward trajectory driven by 473,930 (YEAR THROUGH SEPTEMBER) demand from domestic and offshore MILLION2 investors, particularly from Japan ANNUAL AVERAGE and Europe, Colliers said in its (2009-2018) Industrial Second Half 2019 report.

Colliers forecasts yield compression to continue on the back of the OUTLOOK FOR RENTS record low cash rate and down- trending bond yields.

Source: Colliers

MELBOURNE – STRONG LEASING DEMAND

Investor appetite for industrial infrastructure projects and freeway property in Melbourne remains upgrades improving connectivity 201,800 strong as land values rise on and reducing travel times to 2 strong leasing demand. According and from the Port of Melbourne. MILLION to research from Colliers, the Melbourne industrial vacancy DEVELOPMENT SUPPLY (2019) demand is being driven by growing continues to contract, underpinned e-commerce as well as supply by ongoing demand for prime stock, chain improvements that allow for driven largely by third-party logistics consolidation and expansion into providers, online retailer and food 381,940 larger, more modern warehouses. distributors, according to Knight MILLION2 Industrial areas are also expected Frank. ANNUAL AVERAGE to benefit from major new (2009-2018) DOWN5% VACANCY Source: Colliers, Knight Frank (2019 Q3 VS Q2) QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 10

Office

The Australian office sector continues “The spread to government bonds will Capital growth is estimated to have to deliver strong returns, supported likely remain above its historical average slowed from 8% in 2018 to 5.4% in 2019, by strong tenant demand and limited because of structural factors such as driven by a slowdown in the Sydney CBD. supply. According to Savills, the sector shorter average lease periods, however, However, Knight Frank expects gains to delivered a total return of 11% per annum we expect property yields will tighten pick up a little from here, rising to 5.8% in the 12 months through September, further from here. For example, we in 2020 and 6.4% in 2021. with 5.6% coming from capital growth estimate that Sydney prime CBD office Outside of Melbourne, the supply and 5.1% coming from income.16 property yields will decline by 50 basis pipeline has been thin for some time. points over the next two years to 4.1%,” Melbourne’s central business district The pipeline is set to grow in 2020 as Knight Frank said in its 2020 Outlook had the biggest return at 13% per yield compression and recent capital Report. annum, with Sydney CBD returning raisings spur more developments.17 11%, as the relatively low level of the Australian dollar boosted global investor NET FACE RENT GROWTH demand for strong, well-placed assets in Australia’s two most populous cities.16 Source: Knight Frank Despite a long period of yield compression in the sector, the trend has 2015-2019 2020-2024 (F) room to continue given the low level of interest rates. While yields are at record Sydney 46% 25% low levels, the average spread between prime CBD office property yields and 10- Melbourne 43% 22% year government bonds increased to 426 Brisbane 11% 16% basis points in the September quarter, its highest level since 2012, according to Perth -10% 15% Knight Frank. Adelaide 9% 14%

16 Savills Research, Economic Property Drivers, December 2019 17 Knight Frank 2020 Outlook Report Research Insight Through the Looking Glass QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 11

Spotlight on key themes for 2020 support outlook

It is fair to say 2019 was a significant heading into new territory. Official in tenant needs. It’s a good time to year for the Australian property market, interest rates are at a record low, yet assess some of the key global and local with residential prices beginning a inflation remains subdued, severe macroeconomic trends that are likely recovery after a pronounced downturn weather and unprecedented bushfires to influence the market’s performance and industrial and office property are highlighting issues of sustainability, in 2020. building on a period of sustained gains. and the evolving nature of the growing At the start of the New Year, we are ecommerce industry is driving a shift

1. ECONOMIC GROWTH EXPECTED 3. BUSINESS AND CONSUMERS TO IMPROVE BUT REMAIN LOW REMAIN CAUTIOUS Australian economic growth is expected to strengthen in While economic growth continues globally and 2020 but remain low when compared to historical averages domestically, many uncertainties regarding the outlook as residential construction weighs on growth. The Reserve are keeping businesses and consumers in a somewhat Bank of Australia has forecast year-ended gross domestic cautious frame of mind. A survey of members by the product (GDP) growth will rise to 2.75% in 2020 and Australian Institute of Company Directors (AICD) found around 3% in 2021, supported by record low interest rates, sentiment dropped to a three-year low with 60% of the upswing in housing prices, and a brighter outlook for directors expecting weakened economic conditions over the resources sector.18 the next 12 months. Global economic uncertainty, low productivity growth and China’s economic outlook were 2. GLOBAL GROWTH ON TENTATIVE selected as the top economic challenges facing Australian RECOVERY PATH business. Meanwhile, consumer confidence has declined Global economic growth looks to be stabilising and further as devastating bushfires across the country add is expected to increase from here. The International to concerns about household incomes after a long period Monetary Fund (IMF) expects global growth to rise to of subdued wages growth. The Westpac-Melbourne 3.3% in 2020 and 3.4% in2021 from 2.9% in 2019. The Institute Index of Consumer Sentiment declined by 1.8%, IMF said in its World Economic Outlook in January that with the “economy, next 12 months” sub-index falling by some indications had emerged to indicate global growth 5.4%. The sub index is down sharply (12%) from a year might be bottoming out as several countries continued ago, suggesting low confidence may continue to weigh on to ease monetary policy and tentative signs emerged consumer spending. manufacturing and trade were stabilizing. However, it 4. INTEREST RATES TO REMAIN added that these outcomes depend to an important LOWER FOR LONGER extent on avoiding further escalation in the US-China trade tensions, averting a no-deal Brexit (which has now In a speech in late November, RBA Governor Philip Lowe been achieved), and the economic ramifications of social said interest rates are likely to stay low for an extended unrest and geopolitical tensions remaining contained.19 period. However, he said rates were unlikely to go into negative territory, a move which he warned could damage confidence in the economic outlook and make people more cautious.20

18 Reserve Bank of Australia, Statement on Monetary Policy – November 2019 19 International Monetary Fund, World Economic Outlook, January 2020 20 Reserve Bank of Australia Governor Philip Lowe, Unconventional Monetary Policy: Some Lessons from Overseas, Address to Business Economists Dinner, Sydney – November 26, 2019 QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 12

5. OFFICE YIELDS HAVE ROOM and investors are seeking to harden assets against the TO TIGHTEN FURTHER risk of extreme weather events. They are also using energy efficiency and other mitigation measures to reduce their Despite the strong compression we’ve seen in office risk and improve asset efficiency. For example, firms in property yields, there is room for further gains given Australia are using native landscaping to absorb heat the low level of interest rates. Knight Frank estimates and reduce air conditioning costs.” Australia has been a for example that Sydney CBD prime property yields will leader in the charge toward more efficient commercial decline by 50 basis points over the next two years to 4.1% property with its highly effective National Australian Built as investors look for relatively higher yielding assets with a Environment Rating System, or NABERS energy rating reliable income stream.21 system. Recently the implications of a warming world have 6. OFFICE RENTS LIKELY TO GROW AT MORE been starkly highlighted in Australia by unprecedented EVEN PACE ACROSS CAPITAL CITIES bushfires across the country. As climate change becomes an increasing problem for the world, investors globally are Knight Frank predicts that office properties in Brisbane, focusing keenly on the implications for their real estate Perth and Adelaide will benefit from stronger effective portfolios. Rising temperatures threaten not only physical rental growth as the improving economic outlook impacts to property but also a market impact as tenants continues to foster stronger net absorption and lower and investors demand more energy-efficient buildings. vacancy. At the same time, rental growth in Sydney and Melbourne is expected to moderate after an extended 9. AUSTRALIA IN THE SITES OF GLOBAL period of above average growth.21 INVESTORS

7. RISING ECOMMERCE SUPPORTS STRONG Lower interest rates and the weaker Australian dollar have CAPITAL INFLOWS INTO THE INDUSTRIAL made Australia an increasingly attractive destination for S E C T O R offshore investors. While interest rates have fallen in many countries around the world, the decline in Australia over Knight Frank predicts a recent surge in capital raisings the past 12 months has been relatively large compared by Real Estate Investment Trusts (REITS) will drive strong to most Organisation for Economic Co-operation and capital inflows into industrial property as they seek Development (OECD) peers. to increase exposure to the sector. Occupier demand for industrial property will remain supported by rising Sydney and Melbourne ranked near the top of the PWC ecommerce, a race by companies to improve supply chain Emerging Trends in Real Estate Asia Pacific 2020 survey, efficiencies, and record spending on public infrastructure for their investment prospects, at fourth and fifth place such as road and rail. respectively out of 22 Asian countries mentioned. PWC found Australia’s two biggest cities appeal to investors 8. CLIMATE OF CHANGE – EXTREME because they offer a liquid, stable, high-return market with WEATHER AND NATURAL DISASTERS HIT low vacancies and good prospects for growth. “Australian HOME markets offer good (for Asia) yields, reasonable liquidity, ongoing rental growth, a reliably strong economy, and An increased focus on climate risk and resilience has even a weak currency to boost the appeal for offshore been highlighted as a key theme by PWC in its Emerging investors,” the report said. Trends in Real Estate Asia Pacific 2020 report. “Owners

21 Reserve Bank of Australia Governor Philip Lowe, Unconventional Monetary Policy: Some Lessons from Overseas, Address to Business Economists Dinner, Sydney – November 26, 2019 QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 13

CITY INVESTMENT PROSPECTS, 2020

COUNTRY/ SURVEY RANK TERRITORY RANKING

1 Singapore 6.31

2 Tokyo 6.11

3 Ho Chi Minh City 6.06

Generally 4 Sydney 5.99 good 5 Melbourne 5.95

6 Shenzhen 5.86

7 Shanghai 5.73

8 Osaka 5.69

9 Guangzhou 5.36

10 Seoul 5.29

11 Bangkok 5.11

12 Mumbai 5.07

13 Beijing 4.97

14 Taipei 4.95

Fair 15 New Delhi 4.93

16 Bangalore 4.90

17 Manila 4.87

18 Jakarta 4.86

19 Auckland 4.83

20 China-second-tier cities 4.77

21 Kuala Lumpur 4.73

Generally 22 Hong Kong SAR 3.93 poor

10. NON-BANK DEBT FEATURING MORE AS to the attractive long-term fundamentals of Australia’s BANKS STEP BACK – INVESTORS SEE property market with arguably less risk than direct COMMERCIAL REAL ESTATE DEBT AS ownership over a typically shorter investment time horizon. SAFEHAVEN IN UNCERTAIN TIMES Typically, commercial real estate debt is structured as a loan secured against a property via a first mortgage, The big-four major banks in Australia have traditionally offering stable income returns through regular interest dominated lending to the commercial property sector. payments. Set returns make debt an opportunity that’s In recent years, however, the banks, for regulatory and resistant to fluctuations in the broader real estate market, market reasons, have had to reduce the proportion of with loan-to-valuation ratio ceilings providing a capital their capital they allocate to the sector, creating an buffer between the lender and any fluctuations in the price opportunity for non-bank lenders and debt funds to play of the underlying asset. The buffer of the sponsor’s equity an increasing role in investing in commercial property will absorb the first loss in a falling market or if a specific debt in Australia, including property development debt. risk event impacts the property. Australian commercial real estate debt offers exposure QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 14

Outlook

Despite the strong gains we’ve seen in Over the long-term, the stability the Australian property market, values of Australia’s real estate market is have room to appreciate further as supported by the country’s growing investors hunt for yield in a lower-for- population and resilient economy; the $2.93 longer interest rate environment. highly transparent nature of the market; a $2.9 trillion pool of superannuation trillion The depressed level of the Australian savings 22; and high levels of per SUPERANNUATION ASSETS dollar also supports continued demand capita wealth 23. from offshore investors for Australian property assets, as constrained At this stage of the economic cycle, US supply buoys residential prices, and commercial real estate debt continues $386,058 the industrial and office sectors are to offer a lower risk entry point to AVERAGE WEALTH PER ADULT underpinned by continued growth the market combined with attractive (FOURTH HIGHEST GLOBALLY) in ecommerce, spending on risk-adjusted returns. infrastructure, and expected further US employment growth. $181,361 MEDIAN WEALTH PER ADULT (SECOND HIGHEST GLOBALLY)

Source: ASFA, Credit Suisse 22 ASFA, Superannuation Statistics, December 2019 23 Credit Suisse Research Institute, Global Wealth Report 2019 QUARTERLY PROPERTY REPORT | SEPTEMBER 2019 15

Our approach

At Banner Asset Management, we In the residential space, our focus provide an opportunity for investors to is on medium density development gain exposure to the real estate debt (apartments and townhouses) and market through lending to established land subdivision projects in the bigger and proven developers for development population centers of Sydney, Melbourne projects, or for strategic acquisition of and South East Queensland, which sites earmarked for development in the provide greater liquidity and depth future. We also provide opportunities to than other markets in Australia. This invest in direct real estate through funds includes mixed-use residential projects alongside other project partners. that incorporate some uses such as office space or retail. We are looking to We invest in developments with a proven grow our investment in industrial, as use, evidenced either by presales or growth in ecommerce drives demand for lease agreements, as well as strong warehousing and logistics. fundamentals, including proximity to population growth. MELBOURNE SYDNEY

Level 21, 90 Collins Street, Suite 7.05, Level 7, 1 Margaret Street, Melbourne VIC 3000 Sydney NSW 2000 +61 3 9929 6400 +61 2 9262 2422 [email protected] [email protected]

DISCLAIMER

Investment in the Banner Wholesale Fixed Interest Income Fund ARSN160596770 is offered by Banner Asset Management Pty Ltd and is administered by Allied Funds Management Limited (AFSLicenceNo. 416441).None of the Asset Manager, the Responsible Entity, the Investment Committee Members or their associates or directors of any other person or entity guarantees the performance ors uccess of the Fund or any particular investment, the repayment of capital invested or any rate or return on investments in the Fund. We recommend that you consider your individual objectives, financial situation,needs and circumstances in managing any investment and that you consider consulting your financial advisor.