2016 H2 Metro Office RFR

Accelerating success.

Second Half 2016

METRO OFFICE

Research and Forecast Report

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Metro Office | Research & Forecast Report | Second Half 2016 3

Metro Office snapshot 4

National overview 5

Metro office market snapshots

Sydney 6

Melbourne 10

Brisbane 14

Adelaide 16

Perth 18

Newcastle 20

Gold Coast 21

Our experience – Metro office 22

CONTENTS

METRO OFFICE SNAPSHOT

H1 2016 H2 2016

SYDNEY

24.7%24.6%

ADELAIDE

15.0%15.0%

PERTH(WEST PERTH)

32.5%35.0%

NEWCASTLE

13.5%10.0%

MELBOURNE

20.0%20.0%

BRISBANE

34.0%34.0%

NET SUPPLY ADDITIONS

INCENTIVES (A GRADE)

H1 2016 H2 2016

SYDNEY 8.0%5.6%

BRISBANE 2.3%-6.5%

PERTH(WEST PERTH) -4.6%-5.9%

ADELAIDEFRINGE 10.2%7.6%

NEWCASTLE 3.3%3.2%

MELBOURNEMETRO 2.9%2.6%

NET FACE RENTAL GROWTH (A GRADE)

SYDNEY

7.5% 7.2%

MELBOURNEMETRO

7.2% 7.1%

BRISBANE

8.1% 8.1%

ADELAIDEFRINGE

PERTH(WEST PERTH)

NEWCASTLE(A GRADE)

7.1% 7.0%7.6% 7.5%

8.6% 8.3%H1 2016 H2 2016

YIELDS (PRIME GRADE)

MELBOURNE

PERTH ADELAIDEH1 2016

2,715 1,975

NEWCASTLE3,700

-18,466SYDNEY

-4,073

H2 2016 BRISBANE2,860

MELBOURNE

PERTH1,865

ADELAIDE1,362

NEWCASTLE6,894

-45,547

SYDNEY-43,001


By Kate Gray Associate Director | Research [email protected]

SummaryMetro office markets have generally performed well over the first half with most major metro markets seeing yields compress over this period. Rental growth has been seen in most major markets and demand for space has mostly improved resulting in vacancy falling. Residential conversion remains a key issue for new supply in most markets, in particular those markets which are not protected with a commercial zoning.

SydneyMost Sydney metro markets have seen improved market conditions over the last six months, with most recording falls in vacancy. Rental growth has also returned and when combined with falls in incentives in some markets this has resulted in good growth in effective rents. The new supply pipeline has remained restrained, and some markets have seen significant withdrawals without increases in supply, due to many buildings being converted to residential use.

MelbourneThe Melbourne Metropolitan office market saw strong growth in rents across most major sub markets over the year to September 2016. The City Fringe and the Inner East leasing markets have continued to drive growth in the metro office market, with both areas experiencing the largest annual growth on record. We expect solid growth to continue in these areas, as tenant demand flourishes on the back of attractive amenity and an abundance of retail offerings. Low vacancy rates were seen across the majority of the metro office market, in an environment where restricted supply is met with significantly stronger demand. However, while supply is currently limited, the level of strength demonstrated by tenant enquiry and recent leasing activity, particularly in the City Fringe and Inner East should lease to new supply in these markets.

BrisbaneStrong yield compression continued for well-balanced assets under pressure from fierce competition from investors despite headwinds in the occupier sector. As the overall vacancy rate increased in the first half of 2016, face and effective rents remained resilient, declining by a modest 0.5 per cent over the year. It is expected that as a result of the thin development pipeline, in the medium term vacancy rates will taper off and as a result modest increases to net effective rents are expected.

AdelaideThe Adelaide metro markets has seen vacancy rise, but vacancy in both markets are still well below the vacancy seen in the CBD markets. Rental growth has been stagnant, but there has been a slight adjustment in incentives which has improved net effective rental growth. New supply remains limited, although there have been several refurbishments within the Adelaide Fringe market either complete or underway over the last half. Longer term, these markets are likely to change significantly, with a conversion to residential or mixed use.

PerthThe fall-out from the slower economic growth and higher CBD office vacancy continues to impact Perth suburban office precincts.

Competition for tenants is as strong as it has been in past cyclical downturns due to the increased supply of competitive stock added over the past 5 years. Lower achievable rents and significant vacancy should mean limited supply going forward, allowing existing vacancies to be absorbed as economic activity improves and population growth helps drive new demand.

NewcastleThe strength and diversification of the local economy has resulted in increased demand and rental growth, with A Grade rentals nearing $500/m² gross plus parking. This rental growth, coupled with yield compression, has resulted in renewed interest from developers for commercial projects. The increase in demand has seen A Grade vacancy fall to 4.1 per cent. Lower grade stock is still in demand, although withdrawals for residential conversion continues.

Gold CoastThe Gold Coast continued to improve over the first half as investors and occupiers turn their attention to the final two years of preparations for the 2018 Commonwealth Games following the success of the Rio Olympic Games. A small negative net absorption result for the half was the first negative net absorption result in five years, indicating the underlying growth of the Gold Coast market. Whilst progress has been slow in the diversification of the Gold Coast economy away from its reliance on tourism and construction, the first green shoots are beginning to appear.

NATIONAL OVERVIEW

6

The Sydney Metro market has continued the momentum which materialised mid-last year, with increased leasing and investment activity causing an uplift in effective rents and compression in yields. There were four underlying factors which contributed to this. Firstly, a historically high infrastructure spend is currently

Metro Office | Second Half 2016SYDNEY

Research & Forecast Report

underway with a state and federal government commitment of $88.2 billion allocated over the next four years. Just under half of this is apportioned to public transportation projects. This will have a positive impact on staff retention and connect the metro markets to larger working populations.

Secondly, the substantial withdrawals for residential and infrastructure projects have forced tenants back into the market to vie for a diminishing availability space. There was above 43,000sqm of commercial space withdrawn in the first half of the year. Indeed, this increased tenant demand and limited space have both incited effective rental growth. Gross incentives have declined by as much as five per cent in certain markets. Notwithstanding this, the supply pipeline remains constrained with changes to current planning regimes underway. The council amalgamation process has raised uncertainty over key issues like zoning, height, and FSRs allowances. In Macquarie Park, St Leonards, and Chatswood, commercial developments remain on hold as developers assess further changes to zoning and possible residential conversion. However, in markets such as Parramatta and North Sydney where the commercial core is protected,

Record high infrastructure spend in NSW of $88.2 billion over next four years.

Over 43,000sqm of space withdrawn for residential and infrastructure projects in past six months.

Supply across markets restricted by uncertainty from changes to planning regime.

MARKET HIGHLIGHTS

By Sas Liyanage Research Analyst | Research [email protected]

Sydney Metro Rail

Estimate Project Value

Westconnex Northconnex Sydney's Rail Future 2 Upgrade

Parramatta Light Rail

Pinch roads and clearways

Bus Rapid Transit and Bus PriorityInfrastructure

Trac Management Upgrades SmartMotorways Gateway to

the southWestern Sydney

Airport preparatoryWestern Sydney

Infrastructure Plan

$11.5-$12.5 billion $16.8 billion $3 billion $1.098 billion $1 billion $452.2 million $233.8 million

(2016-17) $200 million $460 million $339.2 million $115 million$4.67 billion

Infrastructure development and metro markets

Source: Colliers Edge/NSW State Budget 2016-17/Federal State Budget 2016-17




Total return (Rolling annual pa%)

5.0

7.0

9.0

11.0

13.0

15.0

17.0

19.0

21.0

Mar

-13

Apr-

13

May

-13

Jun-

13

Jul-1

3

Aug-

13

Sep-

13

Oct

-13

Nov-

13

Dec-

13

Jan-

14

Feb-

14

Mar

-14

Apr-

14

May

-14

Jun-

14

Jul-1

4

Aug-

14

Sep-

14

Oct

-14

Nov-

14

Dec-

14

Jan-

15

Feb-

15

Mar

-15

Apr-

15

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov-

15

Dec-

15

Jan-

16

Feb-

16

Mar

-16

Tota

l Ret

urn

(pa%

)

Sydney CBD Oce North Sydney Chatswood/Crows Nest/St Leonards Oce Parramatta Oce North Ryde Oce

Source: Colliers Edge/MSCI

National growth statistics – 24 month period

-10.00% -5.00% 0.00% 5.00% 10.00% 15.00%

NSW

VIC

QLD

SA

WA

Retail Turnover Employed Persons Economic Growth

Source: Colliers Edge/ABS Final Demand (Jun16), ABS Labor Force State (Jul-16), ABS Retail Turnover (Jun16)

a confluence of increased tenant demand and low levels of vacancy have triggered the commencement of new developments. Although new developments largely remain contingent on pre-commitment, the occasional speculative exception like DEXUS’ 100 Mount Street is anticipated. Given DEXUS’ large portfolio, and possible refurbishments such as 201 Miller Street, the development could be backfilled with existing tenants.

Thirdly, a growing number of institutions are now considering Metro developments given the rising acquisition costs of CBD assets. The number of Metro funds created in the past six months has increased, too. The search of return and the product have forced an expansion in geographic scope and risk profile. Meanwhile, the total return in Sydney’s metro assets has swelled to 19.2 per cent per annum in the last year, according to MSCI.

And finally, total employed persons in the NSW economy has increased by 201,413. A lack of available space and rapid escalation of rents in the CBD have pushed tenants toward the metro markers. Australia’s shift to a service based economy has emerged in Sydney’s Metro market. The CBD Fringe market vacancy rate has reached record lows as digital marketing and advertising firms continue their steady expansion. Similarly, educational users are aggressively seeking options in the Western and South Sydney market to capture the surging demand for student services.

North ShoreThe North Sydney market has experienced an influx of leasing and investment demand from acquisitions for the metro line and displacement from residential projects in locations such as Milsons Point, McMahons Point and St Leonards. In the first half 28,265sqm was withdrawn, with an additional 72,538sqm

3 Innovation Road, Macquarie Park Sold on behalf of IOOF

mooted for withdrawal over the next five years. Meanwhile, the forthcoming development at 177 Pacific Highway is understood to be fully leased following NBN Co.’s commitment to the last two floors. The 100 Mount Street development acquired by DEXUS in February has now commenced. With a 6,229sqm commitment by Laing O’Rourke, the development is yet to secure an anchor

8

tenant. North Sydney’s remaining major development, 1 Dennison Street, and 77 Berry Street was acquired by the Winten Property Group in June with a proposal of 53,800sqm of space.

North Sydney underwent its strongest half of investment sales since the GFC with over $495 million in sales. This was underscored by the sale of 100 Arthur Street for $315 million, purchased by Ascendas-Singbridge for an initial yield of 6.26 per cent. Offshore investment accounted for over 79 per cent of the investment volume for the year. Investment volumes are expected to decline in the next six months given the lack of stock on-market. The high levels of investment demand, moreover, will likely impose downward pressure on yields.

North Sydney’s leasing activity has had the strongest start to the year since 2006, with 33,500sqm of leases signed this year. Activity in the secondary market has surged, led by displaced tenants. Consequently, the demand was weighted toward smaller size leases – sub 500sqm. Lease commencements in the B-grade market were 60 per cent higher than the preceding six months; and almost double compared with the same period last year. Symptomatic of the leasing demand: the RMS vacated space at 101 Miller Street has had just under half the space leased or under offer. From the 15,614sqm of vacant space in June, almost 8,000sqm has now been accounted for. These tenants have predominantly come from within the market itself; one displaced from a compulsory acquisition of 181 Miller Street. With higher tenant demand, gross incentives have fallen. The average A Grade incentive has dropped to a range between 25-28 per cent and B Grade incentives 15-20 per cent. Gross rents have increased by up to $50-$80/sqm in the past six months. To cater for the increased demand from smaller sized tenants, refurbished B grade spaces are now being sub-divided. This uplift in rents is expected to continue with the combined North Shore vacancy currently at

7.2 per cent, the lowest since the 5.3 per cent recorded in 2001.

In St Leonards and Chatswood, the impacts of sizable residential development have somewhat affected the precinct’s commercial culture. Tenants in these markets have migrated into the larger markets like North Sydney and Macquarie Park. The amenity in North Sydney still remains a drawcard, although it has limited capacity to service rising demand. As such, it’s likely some tenants will have no choice but to remain within the market, or migrate to North Ryde/Macquarie Park.

In St Leonards, the vacancy rate has reached its lowest point in 15 years. This was underpinned by withdrawals for residential conversion. The market has not experienced a period of positive net supply since January 2013. The St Leonards/Crows Nest market remains in the midst of planning deliberation between three presiding councils. In the long-run, though, the market will benefit from the new Metro station in Crows Nest and comparatively higher parking allowances, important for car-dependent users.

In Chatswood, the long-awaited sale of The Zenith took place. Chatswood’s vacancy rate reached its lowest point since mid-2007 but is expected to increase over the next 12 months with Abigroup, Leightons, and Vodafone vacating space in this market. As the precinct’s A Grade vacancy climbs, owners will look to sub-divide tenancies to cater for the increased sub-500sqm leasing demand.

Macquarie Park has once again demonstrated another strong half of results. In the past two years, over 48,103sqm of space has been taken up. North Ryde, in particular, is attracting tenants from the fringe Western-Sydney markets like Castle Hill, Brookvale, and Liverpool. Large volumes of space were leased in 1 & 2 Julius Avenue and 3 Richardson Place. Deals in 1 & 2 Julius Avenue

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

4,600

26,500

16,000 15,000 15,000

2,300

39,383

5,713

42,00045,720

1,100

26,500 24,998

35,000

10,000

36,461

16,872

35,000

90,000

10,000

40,030

14,477

74,000

34,194

23,300

5,4005,520

34,350

5,100

NLA

(sqm

)

St Leonards North Sydney Parramatta Macquarie Park CBD Finge South Sydney

2016 2018+ Mooted2017

Sydney metro pipeline

Source: Colliers Edge




involved tenants such as Inghams and Sharp. Investment volumes have remained strong with over $154 million of sales taking place. Nonetheless, the market is still awaiting the outcomes of several planning proposals. Grosvenor Group JV Propertylink acquired four assets and Lucknow Road and Julius Avenue in North Ryde earlier this year and are now preparing a proposal for a precinct rezoning to allow for residential development.

Western SydneyParramatta’s market has lifted on a fresh wave of tenant demand and renewed infrastructure commitments. Vendors have hesitated in bringing stock to market with the potential challenges in redeploying capital. Three major sales have taken place this year. In May, 126 Church Street sold for $42 million at an initial yield of 9.09 per cent. Most recently, 18 Smith Street sold at $84.7 million for a tight yield of 6.9 per cent.

Parramatta’s vacancy rate reached its lowest point in 26 years with the A Grade vacancy at zero per cent. Consequently, the remaining vacant space in the B grade market will likely be absorbed in the near term. Unlike most other metro markets, Parramatta has protected its commercial core from encroaching residential developments. Yet the pipeline remains restricted by widespread strata ownership. Moreover, redevelopment of the major assets such as 130 George Street, 18 Smith Street or 10 Smith Street, some bellow FSR allowances, is unfeasible given their current income and development yield on costs. At this stage, there are only four uncommitted development opportunities in the market. There currently exists a government brief for 55,000sqm with either Parramatta Square 5 or 6 anticipated to secure this pre-commitment.

Parramatta’s leasing market has taken strides toward establishing itself at Sydney’s second CBD with an increased infrastructure spend and government decentralisation policies improving leasing activity. Earlier this year, the Department of Education & Communities pre-committed to DEXUS’ development at 105 Phillip Street. It will be consolidating CBD operations at 35 Bridge Street, 1 Oxford Street, and 117 Clarence Street. Elsewhere, the Department of Transport leased 2,960sqm and Department of Health leased 1,479sqm at 130 George Street.

The wider Western market has experienced a notable increase in construction-related and educational type users. In the Norwest market, this rise in demand has resulted from business looking for smaller sized tenancies to service the high levels of construction activity currently underway. Educational users have become increasingly aggressive in aiming to capture the swelling Western Sydney student market. Western Sydney University’s new 26,500sqm campus at Parramatta Square 1 is scheduled for completion late this year. They are now seeking additional options

after also taking up two floors in 8 Australian Avenue at Sydney Olympic Park. The University of NSW is said to have commenced the process of partnering with innovation and health institutions in the Westmead area, too. Nevertheless, the market is attracting tenants from the Western Sydney satellite markets. A new purpose built, six-storey building for the NRMA is under at Murry Rose Drive. It will relocate it’s 500 members of staff from North Strathfield in early 2017.

The major Western Sydney markets have suffered from a lack availability of stock on the market. The largest sale was 3 & 5 Rider Boulevard sold by Mirvac to Altis Property Partners for $234.9 million at a yield of 7.5 per cent. In Sydney Olympic Park, 10 Dawn Fraser was purchased by a Private for $80 million, in June.

Looking forward yields have scope to continue to tighten across the major markets in the West. Real rental growth is anticipated in Parramatta, Rhodes, and the Norwest markets as the tighter vacancy rate impose downward pressure on incentives.

City fringe & South SydneyThe growth in the digital marketing and advertising space has transpired in the market. A lack of space and increased demand have seen face rents climb over the year. The precinct’s A Grade vacancy has dropped to 2.5 per cent. The average incentive in the market has now fallen below 20 per cent.

One of the biggest developments in the Fringe, 100 Harris Street, is due for completion in the fourth quarter this year. The 23,000sqm building is understood to be fully leased. The Central Park development at 100 Broadway will deliver 5,400sqm of A Grade quality office over six floors.

The low vacancy in the City Fringe has prevented it from accommodating larger tenant briefs. Reckitt Benckiser, adamant in requiring a fringe building, was without any options and resulted in a move into the Southern CBD building at 680 George Street. In the near term, however, some relief will come as a total of 13,936sqm is freed up at 63 Miller Street, 223 Liverpool Street 80 Bay Street and 30 Orwell Street.

The tightness in the CBD Fringe has pushed tenants further south. However, with the majority of available space, the possibility of rezoning has prevented landlords from offering leases beyond five years. In some cases, like with buildings along McEvoy Street, only leases shorter than two years are offered. Stage 2 of Goodman’s Connect Corporate Centre is now understood to be fully leased with the 34,350sqm building scheduled for completion in late 2017.

The South Sydney market remains buoyed by tenant displacements. A tenant leased 1,550sqm in Epsom Rd after their building was compulsory acquired for the proposed Metro station in Waterloo.

10

Metro Office | Second Half 2016MELBOURNE


City fringe/inner EastRecords fall as the leasing market boomsThe City Fringe and Inner East areas saw a flurry of leasing activity over the six months to September 2016. These markets have moved from strength to strength over the last few years, on the back of rising tenant demand from creative, technology and business services firms. The outlook for investors in the Melbourne metro office is a positive one. Melbourne is the second fastest growing economy in Australia, backed by rising demand from the services sectors, which will provide supportive conditions for lower vacancy and effective rental uplift.

Tenants have continued to compete for well-located assets that offer a broad range of retail offerings and attractive amenity, as even the prospect of more robust infrastructure and public transport continues to drive demand within these areas. Moreover, given the increasingly tighter vacancy rate in the CBD, tenants have been pursuing equally attractive alternatives in the City Fringe and Inner East regions, with high quality fitouts of less than ten years seen as good value. This has driven the vacancy rate down to record lows within these areas over the last six months, the vacancy rate in the City Fringe fell 177 basis points to 4.96 per

cent, while the Inner East saw a 114 basis point decline to a sharp 4.15 per cent. Landlords have been rapidly reducing incentives in line with this demand, which currently track as low as 16 per cent on average for Prime Grade assets in both these areas.

The optimal mix of strong demand, reduced incentives and the closing of major deals has seen rental growth thrive. Average net effective rents for A Grade Space in the City Fringe were up a significant 23 per cent to $323/sqm over the last year, while the Inner East saw average A Grade net effective rents rise to $313/sqm (up 12 per cent) – both recording the highest annual growth on record, driven by the success of major leasing deals undertaken in the past six months.

The majority of this activity was concentrated in Richmond, as it continues to retain its appeal as the creative and cool office hotspot outside of the Melbourne CBD. The relocation of Bauer Media from its Docklands office to Building 8 on 658 Church Street, which is currently leasing 823 sqm space in the $365-$380/sqm range is evidence of growing tenant interest. Colliers International also recently negotiated a deal with Designworks in the same building, covering 1,882sqm of office space, with net face rent in the $395/sqm to $420/sqm range. Growthpoint’s office building at 572-576 Swan Street saw over 23,156sqm leased on long term WALEs to David Jones and Country Road, in what was the largest leasing deal negotiated by Colliers International in the metro office market in the past 15 years.

Hawthorn in Melbourne’s Inner East was at the forefront of leasing activity for the region, recording strong take up over the last six months. Colliers International recently leased 4,423sqm of office space at 5 Burwood Road in Hawthorn, with Moores Legal, Prensa Pty Ltd, Lake Press and Tetra Pak among the tenants relocating to this property due to business expansion. Net rents in the building exceed $375/sqm net.

The strong rental landscape in Melbourne’s City Fringe and Inner East should draw renewed interest from developers, as vacancy in these areas should continue to diminish given the depth of tenant enquiry, providing more scope for rental growth. We expect this to continue over the next few years and this is likely to

Record rental growth in the City Fringe and Inner East as vacancy rates tighten.

Yields compress in the Southbank precinct following strong competition.

Supply remains limited across major sub markets.

MARKET HIGHLIGHTS

By Manal Haque Manager | Research [email protected]




Melbourne Metro net effective rental growth – Year to September 2016

2.3%

-1.3%

12.4%

11.7%

22.7%

-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Outer East

North & West

South East

Inner East

City Fringe


Melbourne metro average A grade office yields

6.00%

6.50%

7.00%

7.50%

8.00%

8.50%

9.00%

9.50%

10.00%

Mar

-04

Sep-

04

Mar

-05

Sep-

05

Mar

-06

Sep-

06

Mar

-07

Sep-

07

Mar

-08

Sep-

08

Mar

-09

Sep-

09

Mar

-10

Sep-

10

Mar

-11

Sep-

11

Mar

-12

Sep-

12

Mar

-13

Sep-

13

Mar

-14

Sep-

14

Mar

-15

Sep-

15

Mar

-16

Sep-

16

City Fringe Inner East Outer East Source: Colliers Edge

Melbourne metro vacancy rates

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

Mar

-04

Sep-

04

Mar

-05

Sep-

05

Mar

-06

Sep-

06

Mar

-07

Sep-

07

Mar

-08

Sep-

08

Mar

-09

Sep-

09

Mar

-10

Sep-

10

Mar

-11

Sep-

11

Mar

-12

Sep-

12

Mar

-13

Sep-

13

Mar

-14

Sep-

14

Mar

-15

Sep-

15

Mar

-16

Sep-

16

City Fringe Inner East Outer East South East


stimulate a new development cycle, which should give rise to new opportunities in both the leasing and investment space.

Although buyers have had limited options in City Fringe and Inner East, transaction activity in Richmond, Port Melbourne, Hawthorn, Camberwell and Collingwood, totalling over $306 million had a noticeable impact on capital values in the last half of the year. This has resulted in yields for A Grade space compressing in the last six months to 6.38 per cent from 7 per cent in the City Fringe and down 50 basis points to 6.50 per cent for the Inner East – which combined with a strong leasing outlook should continue to spur investor demand.

Outer EastUplift in rents as vacancy rates tightenOver the six months to September 2016, the leasing market in Outer East saw a more solid run than all of its suburban counterparts located beyond 10km from the CBD, despite a supply driven soft patch in 2015. Tightening vacancies across markets within close proximity to the city, has helped tenant demand, absorbing the excess Prime Grade stock which became available last year. This resulted in the vacancy rate tightening by a 1.4 per cent in the last six months, which saw incentives also decline slightly for Prime Grade assets from previous highs. As such, average net effective rents for A Grade space recovered, increasing by 2.1 per cent to $224/sqm in the last six months.

Mulgrave continues to be among the tightest in the Outer East, with about 11,344 sqm of space absorbed in the past six months alone. Box Hill, on the other hand, has been undergoing a transformation, as an influx of residential conversions continues to draw commercial property out of the market, narrowing options for tenants looking for A Grade space. This has been especially felt along Whitehorse Road which has seen an increase in residential

168 Peel Street, Windsor Sold on behalf of Uschi Schwartz

12

development. The ex-Australian Taxation office on 990 Whitehorse Road, owned by the Glorious Sun, is the only remaining building currently offering A Grade space along Whitehorse road - 40 per cent of which has already been leased. This follows a major lease of 4,000sqm with Serco at the end of 2015 and a further 4,258sqm absorbed over the last six months.

South EastLimited supply spurs strong rental growthThe South East rental market has seen a change in landscape over the last six months, through an uplift in leasing demand, as tenants looking for quality space in the considerably tighter City Fringe and Inner East markets find their options to be very limited. This demand translated to a tighter rental market, lowering the vacancy rate by 96bps in the six months to September 2016. This was despite an increase in supply of 15,170sqm during this period, attributed to the South East Water office in Frankston and the Parkview Estate Business Park in Moorabbin by Pellicano Pty Ltd – the majority of which has already been leased.

Landlords have benefited in this environment, as increased tenant demand across Melbourne’s major sub markets translated to a reduction in incentives for prime grade assets in the last half of the year - now averaging 21 per cent. While net face rents have remained broadly unchanged for Prime Grade space, net effective rents grew by more than 10 per cent over the last 12 months to be at $227/sqm.

Vacancy in the South East is expected to tighten further in the coming twelve months, as a thinner supply pipeline sees increased net absorption in existing properties. This should continue to gear rental growth over this period.

North & WestDevelopment activity paves the way for new opportunitiesWhile other smaller sub markets have had a solid six months on the leasing front, the North and West Metro areas have seen a marked increase in development activity which has been paving the way for new leasing opportunities.

A total of 17,440sqm of space was added to total stock in the last half of the year, with about 71 per cent of this supply arising from developments in Essendon Fields and Tullamarine. At Essendon Fields, the new Essendon airport terminal building on 72 Hargrave Avenue has about 3,000sqm of office space to be leased while the property on 6 English Street still has 25 per cent of vacant space on completion.

Although an increase in prime office leasing deals on the more expensive end has mulled the effect of the noticeable lift in total stock to a certain extent, large levels of vacancy has seen landlords increasing incentives to retain tenant demand. Vacant space is currently at a significant 27,910sqm, which has nudged incentives higher over the last six months and consequently lowered rents by 1 per cent.

St Kilda & SouthbankInvestment market benefits from strong competitionSouthbank has seen a number of major transactions so far this year, which has propelled sales volumes to over $1 billion in the last six months. The interest from offshore investors has continued to grow over the years and has been fuelling strong

109 Burwood Road, Hawthorn Valued on behalf of GPT Metro Office Fund




Buildings 1 & 2, 572 Swan Street, Richmond Leased on behalf of GrowthPoint

competition for limited stock. One such transaction was Dexus Property’s Southgate complex which sold for $578 million to Singapore’s ARA Asset Management, spanning 76,600sqm.

Both domestic and offshore investors fiercely competed for the purchase of Twenty8 Freshwater Place, owned by GPT Group and Frasers Property. The 33,992sqm fully leased tower was successfully sold for $286 million in a Colliers International negotiated deal.

The strength of these transactions resulted in yields for Prime Grade assets compressing by 75 basis points over the last six months, to average 6.13 per cent – this is expected to continue in the months to follow.

Limited supply tightens vacancy rates, pushes rents higher St Kilda Road is seeing record low vacancy rates which can be attributed to strong leasing activity as well as conversion for residential use. Whilst these withdrawals has seen the St Kilda Road office precinct contract in terms of market size, the removal of these buildings that were coming to the end of their lifecycle as office, has had a positive effect and has been welcomed as overall quality of stock on St Kilda Road has improved relatively which has led to net face rents steadily increasing over the past 12 months. This was reflected in the vacancy rate declining by 160 basis points to 7.3 per cent over the last six months. The precinct continues to see strong competition from suburbs such as Richmond, South Yarra, Southbank and the CBD and owners need to adapt and update their buildings to cater to changes in tenant requirements. Examples of these requirements include the

need for End of Trip facilities, quality refurbishments and unique tenancy features (exposed ceilings, pendant lighting etc.) continuing the demand for industrial style/boutique office space. These requirements have evolved over the years, and once the realm of IT firms, are now on the checklist for most organisations as they seek to engage with a younger workforce.

Owners need to give careful consideration to their retail tenancies as occupiers are now expecting more than standard café offerings. Demand for car parking continues to decline as tenants continue to push for occupancy savings, however St Kilda Road remains popular with tenants with sales based workforces who have high car parking requirements due to its central location and ease of access via major arterials which is difficult to replicate in other more congested Fringe locations. Incentives remain in line with the CBD and Docklands markets and resulted in average net effective rents up increasing to $214/sqm. Strong infrastructure development and improved access to public transport will continue to drive the market. In addition, increased residential development activity should provide more scope for retail amenity, which should help boost tenant interest.

Southbank saw a strong uptake of existing stock over the six months to September 2016, given a lack of supply. The vacancy rate for A Grade space declined significantly during this period to 4.4 per cent from a previous 8.1 per cent. However, net effective rents were broadly unchanged at $330/sqm, given prevailing competition from the CBD. Looking forward, although there are no new developments in the pipeline for the next 12 months, approximately 28,000sqm of backfill space will be made available over this period - the majority of which is attributed to PWC’s relocation to new premises.

14

Leasing market active enough to support current rentsLeasing activity in the half remained subdued with continued economic pressure on traditional occupiers in the fringe locations, particularly construction and engineering firms. However, new deals to Energex and Careers Australia are example of deals being done when the location and building suit the occupier profile and pricing is competitive.The deals were part of the limited leasing deals that were completed during the half, reflected in the Property Council of Australia recording negative 2,000sqm of net absorption during the period. While the negative net absorption recorded is small, it likely doesn’t consider the relocation of Tatt’s Group from Albion to 180 Ann Street in the CBD. It is expected that strong positive net absorption will be recorded in the coming half as Flight Centre

take occupation of Southpoint in the fourth quarter of the year.The consensus outlook for the metro leasing market is considered balanced. While high levels of amenity and building quality are considered strengths of the market, there is a substantial risk that occupiers may be attracted back in the CBD while rental rates for prime stock remain at or around parity between the markets.

Yield compression continues for well-balanced assetsStrong investment activity continued in the half from a buoyant second half of 2016. In total $398 million of transactions were recorded, including the sale of Kings Row which is currently unconditional pending settlement. Other highlights in the half were the sale of Stanley Street House and the sale of the BOQ building at 100 Skyring Terrace, Newstead. These transactions further exemplify the fierce competition for well-balanced assets when they’re brought to market.

A feature of both the CBD and Metro markets in Brisbane is the lack of stock being brought to market. There is no doubt that it is currently a vendor’s market with significant enquiry volumes for all campaigns. As a result of fierce competition for high quality, annuity style assets, yields continued to compress throughout the half, particularly in the Inner South and Urban Renewal Markets.

The market is hotly anticipating the result of the current campaign for ISPT’s Green Square South Tower, which has recently been marketed by Colliers International. The asset has an 11 year WALE to the Brisbane City Council are received an unprecedented level of enquiry and the building is expected to transact at one of the sharpest yields of the year in Brisbane.

We’re continuing to see a divergence in performance between the more modern Inner South and Urban Renewal markets when compared to the traditional markets of Milton, Toowong and Spring Hill. The divergence is representative of the new paradigm of occupier markets where amenity, access to transport and co-location with clients and like business are key.

Southpoint Tower to complete in coming months, the last firm project in the development pipeline and the final unobstructed parcel of land in the Inner South Precinct until the redevelopment of the Parlamat site.

Strong Yield compression for well-balanced assets under increasing pressure from fierce competition.

Face and effective rents remained resilient in the face of substantial occupier headwinds, however, occupier markets continue to move with several large deals struck so far this year.

MARKET HIGHLIGHTS

By Peter Willington Manager | Research [email protected]

BRISBANE


Metro Office | Second Half 2016




The supply pipeline slowsSimilar to the story for the Brisbane CBD, following the pending completion of the Southpoint Development in the Inner South, only two projects are identified in the future development pipeline. There are however a number of developable sites, particularly in the Urban Renewal market which may be added to the pipeline, particularly as concerns about the volume of residential development in the precinct continue into the foreseeable future. Some developments, currently allocated for residential development may come under pressure to be converted to alternate uses, particularly as the office market in the area continues to perform well.

AMP and Sunsuper’s Coronation Drive Office Park building 7 is the most likely project to next break ground. The expanded concept is reflective of the confidence in the Business Park market in Brisbane. However, the market is closely watching the future movement of Origin Energy, that have a brief to market for approximately 18,000sqm in a deal that will likely be highly indicative of the future for the Milton market.

Spotlight on business parks as Colliers International focus on emerging marketColliers international have adopted a methodology to develop a historical time series for Brisbane’s emerging business park market. As reported last half, the Property Council of Australia have begun tracking a number of business park markets as the Brisbane Airport Corporation continue to develop mixed industry business accommodation as part of the 2014 Property Master Plan, A transition to higher order commercial development occurs

in the Brisbane Technology Park and the release of commercial accommodation in Hamilton Northshore.

The emergence of these non-traditional markets is underpinned by the decision by Puma Energy to pre-commit to locate their national headquarters in the Hamilton Brisbane Technology Park. Colliers International have begun to track leasing and sales indicators in the business park market and we look forward to reporting on movements in future editions of this report.

61 Coronation Drive, Toowong Sold on behalf of Confidential Party

Brisbane metro office sales value by year

$-

$200

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Brisbane metro office six month net absorption, supply and vacancy rate

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Supply additions Net absorption Vacancy rate (%)


16

Vacancy rises in both marketsVacancy in the Adelaide office Fringe and Metropolitan markets have both seen increases in vacancy over the last half. The Fringe market saw vacancy increase from 7.6 per cent up to 10.2 per cent in July 2015. Net absorption for the six months to July 2016 was -5,421 sqm which is one of the worst results for demand in this market since 1994. Looking forward, net absorption of the second half is likely to be subdued as Grant Thornton is expected to move from the Fringe market in to the CBD over the next half. Despite the fact that there is an improvement in white collar employment growth it is likely that vacancy will remain high in the Fringe due the addition of refurbished stock and tenant moves into different markets.

The suburban market vacancy jumped from 6.5 per cent to 7.7 per cent. This result is consistent with vacancy increasing in the fringe and CBD markets, but the metro market is still recording the tightest vacancy. The eastern markets which include Kent town and Norwood has seen vacancy tighten by all other submarkets have seen vacancy increase.

All of the fringe market has been rezoned for higher building heights and more mixed use developments over the last few

years. However this has not resulted in any new mixed use developments beginning construction at this stage. Three sales last year of 160 Greenhill Road, 128-129 Greenhill Road and 127 Greenhill Road has seen private investors purchase and refurbish the building for lease. Much of the stock in the Fringe and metro markets are of secondary grade with many of these buildings not having lifts and disability access. Over time this is making space above ground level more difficult to lease and therefore expensive refits of lifts and access are required. Car parking is still a key requirement for this market, but as workspaces have become more efficient there is not always provision for parking on site for staff and clients. Also worth noting is that the times for clearway on Greenhill Road have also been extended with parking now only allowed between 10am and 3pm and a clearway effective for the other business hours. This is likely to impact on tenants with clients unable to park close by, which may continue to limit the demand for space in this market. Several of these factors are likely to be a catalyst for either the conversion or the redevelopment of Greenhill Road and Fullarton Road into either mixed use or residential development.

Rental growth across all markets have remained limited and incentives across most grades for the fringe and metro markets are likely to fall in the 15-25 per cent range. Although demand is likely to improve, it is unlikely that vacancy will improve enough to see incentives tighten from the current levels and rental growth is likely to be limited over the next 12 months.

Investment activityInvestment activity in the Fringe market this half has been limited with two major sales recorded this year with the most recent being 100 Greenhill Road, which sold for $3.5 million in June. Much of the Fringe market is held by private investors and therefore there is reasonably limited stock available for sale. Most of the activity has been located in the metro markets with much more activity in the $1 million to $3 million price range. Both private investors and owner occupiers are very active with a significant amount of capital in the market for investment grade stock. This has resulted in a tightening of yields for the prime


ADELAIDE

Vacancy in the metro market remains the lowest of all markets despite a slight increase in the last half.

Limited new supply in the pipeline, but several buildings have been significantly refurbished.

Investment activity strongest in the $1-3 million price range.

MARKET HIGHLIGHTS

By Kate Gray Associate Director | Research [email protected]





Metro and fringe office vacancy

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grade end with yields in metro markets with a large yield range from 6 per cent to 8 per cent. The fringe market has also seen a tightening in all yields due to the weight of capital in the market.

New supply remains tightFrom a development perspective there is a limited pipeline of supply in both the Fringe and metropolitan office markets. There is a proposal to build offices for Thomas Foods at 162 Fullarton Road, Rose Park in the Fringe with an estimated completion in late 2018. In the metro markets there is a proposal to build office space at the Adelaide Airport, although construction is yet to commence. At Nile Street Port Adelaide, a 14,380sqm office building is proposed with a pre-commitment from State Government and therefore the development is likely to proceed.

There is no significant new supply under construction in either the fringe or metro office markets. There are however three significant refurbishments underway in the Fringe. The former Austereo building is currently undergoing a significant refurbishment with is expected to complete in the second half. The former rural press at 123 Greenhill Road has completed and is now available for lease.

During 2015 Pitcher Partners moved to the CBD, with the building they occupied changing hands followed by a refurbishment was leased to Raytheon. As previously mentioned Grant Thornton are expected to move from their current accommodation on Greenhill Road to the CBD, with their current space currently being marketed.

Adelaide metropolitan office market

Indicators Fringe Suburban

Grade A Gross Rents ($/m²) $450 $395

Grade A Gross Rental Growth p.a. 4.0% 0%

Prime Incentives 15-25% 15-20%

Total Market Vacancy Rate 10.2% 7.7%

Average Prime Grade Yields 6.25-7.0% 6.0%-8.0%

Prime Grade Capital Values $4,800-$5,700 $4,180-$4,400

New Supply Additions (m²) 1,445 0


8 The Parade West, Kent Town Leased on behalf of Bartwonwood Pty Ltd (Lessor)

18

Vacancy exhibiting signs of stabilityPerth CBD and West Perth vacancy rates continued to rise and rents have continued to fall over the last 6 months, with suburban office precincts suffering the flow-on impacts. Attractive leasing terms offered in central locations are drawing tenants in from suburban locations. This, in combination with subdued business start-ups, existing business downsizing and closures has led to vacant office space increasing in suburban areas.

The vacancy rate in West Perth increased to 14.8 per cent at the end of July 2016, up from 12.2 per cent in January 2016. Rents within the West Perth market have declined over the year, with net face rents falling 5.92 per cent and 5.76 per cent for A and B Grade space respectively. When incentives (which currently average 35 per cent) are factored in, rents have effectively fallen 15.65 per cent and 15.5 per cent respectively.

Colliers International notes that more landlords are now willing to be competitive and meet the market; which is acting to stabilised vacancy. This is being seen in the Great Eastern Highway Precinct (which takes in parts of Victoria Park, Burswood, Belmont, Rivervale and Ascot). Although vacancy increased from the previous vacancy survey in August 2015; this was only by a

relatively minor 1,173sqm of space in buildings over 1,000sqm. This small increase was mostly attributed to an increase in B and C Grade vacancy with 2,606sqm and 279sqm added respectively. However this was offset by a reduction of 1,712sqm in A Grade space. We estimate the current vacancy rate for buildings with over 1,000sqm of lettable area to be 16.3 per cent in the Great Eastern Highway precinct.

Notwithstanding very competitive CBD rents, highly attractive incentives and the allure of a central CBD location; Colliers International is still finding some tenants remain in favour of suburban locations.

Keeping or attracting tenantsThe factors that tend to keep tenants in suburban locations are - available car parking, access to existing clients, accessibility, amenity and preferences for locations which reflect a business’s operations and image.

Car bays and parking often factor into tenant decisions to stay in the suburbs. It is noted though rents have fallen significantly in the CBD, car parking costs have not. In addition to this, CBD car bay ratios per square metre of office space are significantly lower. Lower parking costs, convenience and keeping staff happy means suburban office space can still prevail as a viable alternative.

Leasing agents and tenant advocates have reported the most attractive option for suburban tenants is recently fitted out space which offers a ‘plug and play’ tenancy. This means that any incentives offered go straight into the tenants’ pockets in the form of a rent free period or rebate. Suburban landlords with dated offerings or unfitted space, who wish to remain competitive, face a financial dilemma - significant capital outlay upfront or significantly lower achievable rents over the longer term.

SupplyResearch by Colliers International shows approximately 39,667sqm of space currently under construction in Perth metropolitan office precincts. This space is scheduled for

Vacancy has increased but looks to be stabilising in some precincts.

Space with good existing fitouts easiest to lease.

Forward suburban office supply likely to be mainly limited to mixed-use projects.

MARKET HIGHLIGHTS

By Quyen Quach Senior Research Analyst | Research [email protected]

PERTH

Research & Forecast ReportResearch & Forecast Report





completion within the next 3 years, with 35,517sqm of this expected to be delivered in the next 12-18 months.

The previous resource-led demand surge had driven speculative developments and greatly increased stock. Now that demand has weakened off-the-back of softer economic conditions, it is clear Perth’s metropolitan office market is oversupplied at this stage in the economic cycle, as it is in the CBD. This oversupplied environment is expected to restrict development commencements over the next two years, while existing stock is re-absorbed and demand recovers.

One scenario Colliers International envisages that may exacerbate this oversupply and draw-out recovery lies with existing planning requirements for commercial space within new developments proximate to activity centres, aimed at encouraging local employment. These requirements have the potential to increase stock at a time where demand remains weak and vacancies above average; creating hurdles for rental rate recovery.

OutlookColliers International is forecasting some marginal increase in CBD vacancy rates in the next year, which we expect would

69 Outram Street, West Perth Sold on behalf of Fugro Properties

continue transmitting negative flow-on effects to West Perth and other suburban office precincts. Weak tenant demand and continued pressure on rents is expected for the remainder of 2016 in suburban locations. Notwithstanding this, Colliers expects vacancy rates to start stabilising in 2017 as stock additions moderate.

Face rental growth is unlikely to return in the short term. Economic conditions are expected to remain sluggish for at least another year; hindering a recovery in demand and net absorption. Landlords with dated assets will need to be highly competitive in their rental pricing and incentive offerings as the volume of quality stock available for lease remains elevated.

There appears to remain strong interest in suburban tenancies less than 200sqm. With the focus now back on small & medium size businesses, which service the population base, smaller tenancies are likely to dominate the office leasing market.

Well located assets with good secure future cash flow should continue to achieve historically tight yields in the low interest rate environment as long term investors remain optimistic and the search for yield continues.

20

Newcastle is Australia’s seventh largest city and the largest regional economy, having a Gross Regional Product of $38.5 billion (Deloitte Access Economics 2013). Unlike public perception, the local economy (Newcastle and Lake Macquarie) is diversified and stretches well beyond the traditional industrial functions associated with coal. The local economy is currently based on a range of industries including finance, defence, health, education and tourism, with a major area of economic growth being knowledge-based industries. The largest industry is health care and social assistance, whilst mining represents only 2.2 per cent of the economy.

The strength of the local economy, coupled with rental growth and yield compression has seen renewed interest in the market from developers. In Q1 2017 we will see the completion of 18 Honeysuckle Drive, by the DOMA Group, whilst another mooted project is Stage 2 The Gateway, a 9,500sqm A Grade building at Newcastle West.

A Grade vacancy fallsWe previously reported that we were foreseeing an increase in A Grade Vacancy in the short term, which was a function of the ATO downsizing in 266 King Street coupled with new development, such as 18 Honeysuckle Drive, being developed by DOMA Group.

As expected, the Property Council of Australia Office Market Report indicated an A Grade vacancy in January 2016 of 10.7 per cent, up from 2.7 per cent in January 2015. However, throughout H1 2016 we have seen strong demand from companies relocating from suburban markets, with terms agreed on 8,400sqm of A Grade space over the last 12 months. They are looking in some instances to enhance their corporate profile, however, typically the key reasons for relocating relate to access to staff amenity with a focus on attracting and retaining a skilled workforce.

A recent example of this trend is the decision by Southern Cross Austereo Newcastle to relocate from its Charlestown headquarters where they have operated since 1988 to DOMA Group’s 18 Honeysuckle Drive development. Colliers International negotiated the 1,284sqm deal, with the Chief Executive of Southern Cross Austereo describing that the staff “will be rewarded with top-floor harbour views in one of the most dynamic precincts in Newcastle”. Other examples include Suncorp, who have relocated from Charlestown into 2,501sqm at 11 Argyle Street, whilst Mine Wealth & Wellbeing (formally Auscoal Services) have relocated into 166 Parry Street from Warners Bay.

As a result, we have seen our A Grade Vacancy Rate drop to 4.1 per cent as at July 2016.

By Peter Macadam Director | Commercial [email protected]

NEWCASTLE



Newcastle A Grade market

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Whilst A Grade stock has seen strong demand, we have seen increasing vacancy in lower grade buildings or buildings in suburban locations. Nonetheless, these options remain attractive due to their affordability for budget conscious operations, or those that require a mobile workforce and on-site car parking. We will however also continue to see a withdrawal of lower grade stock for residential conversion, as is the case with EG Funds Management’s development of their 3,466sqm commercial building to a 119 apartment mixed use project, being promoted by Colliers International Residential Project Marketing as “Herald Apartments”.




The Gold Coast continued to improve as investors and occupiers become more bullish on the back of a strong tourism sector, infrastructure spending and the lead up to the 2018 Commonwealth Games. Major investments in infrastructure include the upgrade of the Gold Coast Airport, Gold Coast Rapid Transit Stage 2, the upgrade of the Jupiters Casino and the significant expansion of the Pacific Fair Shopping Centre. The Games are central to the repositioning of the Gold Coast market from reliance on the Tourism and Construction industries. Driven by continued population growth, substantial investment in legacy infrastructure and a growing trend towards agile working, confidence is increasing the Gold Coast market.

The half saw increasing activity in the tourism, education and health sectors, as the Gold Coast has executed a strategy to become an Australian hub for these industries that are expected to be leading areas of growth for Queensland.

Market remains resilient as the market keeps one eye on the futureDespite negative net absorption in the market in the first half, leasing enquiry increased, primarily for expansion and project space. Lead time is however expanding as tenants weigh the available options. In a market with little future supply, it is expected that positive net absorption will return in prime stock as a number of deals currently under negotiation finalise.

Despite weaker occupier activity, the low volume of vacant space in prime stock at approximately 25,000sqm of space, and lack of stock brought to market is driving demand for well-balanced annuity type assets. No sales above $5 million were recorded in the first half of the year, however, this is primarily a result of a number of campaigns closing in late 2015. When prime stock is

brought to market, it is expected that the investment market will continue to tighten as interest increases from investors looking to move up the yield curve as the underlying fundamentals of the Gold Coast market continue to improve.

By Peter Willington Manager | Research [email protected]

GOLD COAST



33 Scarborough Street, Southport Sold on behalf of RA & GK Pty Ltd

Gold Coast metropolitan office market

REGION GROSS FACE RENT INCENTIVE RANGE

H1 2016 H2 2016 H1 2016 H2 2016

Broadbeach $475 15%-20%

Bundall $430 25%-30%

Robina $450 15%-20%

Varsity lakes $385 15%-20%

Southport $400 15%-25%

Surfer Paradise $400 25%-35%



OUR EXPERIENCE METRO OFFICE

How else can we help you?Speak to one of our property experts [email protected]

LEASED

MANAGED

SOLD

VALUED

DESIGNED AND PROJECT MANAGED

Chan Street Belconnen, ACT20,295m²On behalf of Benjamin Nominees (ACT) Pty Ltd

25 Montpelier Road Newstead, Qld2,996m²On behalf of GWC Group

Louisa Lawson Building 25 Cowlishaw Street Greenway, ACT 26,000m²On behalf of Challenger Group

36 George Street Burwood, NSW14,359m²On Behalf of Holdmark Property

545 Queen Street, Brisbane Qld13,400m²On behalf of The GPT Group

18 Smith St Parramatta, NSW$84.75 millionOn behalf of Altis

Aviation House 16 Furzer Street Phillip, ACT$68.1 millionOn Behalf of Mirvac

266 King Street Newcastle, NSW$60.05 millionOn behalf of Charter Hall

Benjamin Office Complex, Chan Street, Belconnen ACT43,000m²On behalf of Amalgamated Property Group and St George Bank

Caroline Chisholm Centre ACT42,000m²On behalf of Frasers Commercial

88 Phillip Street Parramatta, NSW5,800m²On behalf of IOOF Holdings Ltd

140 Sunnyholt Road Blacktown, NSW5,600m²On behalf of 3M

10 Julius Avenue North Ryde, NSW5,000m²On behalf of BOC Limited

3 Parramatta Square 153 Macquarie Street Parramatta, NSW35,069m²On behalf Parramatta City Council

Buildings 1 & 2, 572 Swan Street Richmond Vic22,000m²On behalf of GrowthPoint

464 deals for 567,826 square metres of metro office space

400 metro office assets achieving a 97% occupancy rate

274 deals for $3.53 billion of metro office assets

1.5 million square metres totalling over $6.9 billion worth in value

Projects delivered by our award winning team

OUR EXPERIENCE METRO OFFICE AUSTRALIAIN THE LAST 12 MONTHS

For more information about Colliers Internationaland working with us visit:www.colliers.com.au

2 Sleat Road Applecross, WA754m²On behalf of R&W Sofoulis

141 Walker Street North Sydney, NSW867m²On behalf of DEXUS Property Group

15-31 Ayliffes Road St Marys, SA1,507m²On behalf of A Torresan Nominees P/L and A A Torresan and J Torressan Nominees Pty Ltd and J G Torresan (Lessor)

464 deals for 567,826 square metres of metro office space

400 metro office assets achieving a 97% occupancy rate 30 Dundebar Road Wanneroo, WA3,160m²On behalf of Edith Cowan University

164 Fullarton Road Dulwich, SA2,356m²On behalf of Private Client

611 Coronation Drive Toowong, Qld$13.5 millionOn behalf of Confidential Party

168 Peel Street Windsor, Vic$6.25 millionOn behalf of Uschi Schwartz

69 Outram Street West Perth, WA$6.1 millionOn behalf of Fugro Properties

274 deals for $3.53 billion of metro office assets

HQ North Tower Fortitude Valley, Qld29,357m²On behalf of Cromwell Property Securities Limited

4 National Circuit ACT29,000m²On behalf of ISPT Pty Ltd

60 Station Street Parramatta, NSW25,728m²On behalf of REST Super Fund

1.5 million square metres totalling over $6.9 billion worth in value

235 Springvale Road Glen Waverly, Vic4,900m²On behalf of MYOB Winner of Best Workplace, PCA Innovation and Excellence Awards 2015

22 Lambs Road Artarmon, NSW1,600m²On behalf of De Lage Landen

885 Mountain Highway Bayswater, Vic1,600m²On behalf of Merck Millipore

Projects delivered by our award winning team

3 Innovation Road North Ryde, NSW7,582m²On behalf of Private Client


Colliers International does not give any warranty in relation to the accuracy of the information contained in this report. If you intend to rely upon the information contained herein, you must take note that the information, figures and projections have been provided by various sources and have not been verified by us. We have no belief one way or the other in relation to the accuracy of such information, figures and projections. Colliers International will not be liable for any loss or damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. © Colliers International 2016.

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OUR RESEARCH EXPERTSAnneke Thompson National Director National Office Research +61 412 581 647

Daniel Lees Director, NSW Research National Retail Research +61 410 433 383

Luke Dixon Director Colliers Edge +61 417 118 071

Chris Dibble Director NZ Research & Consulting +64 21 242 9447

Kristina Mastrullo Manager National HRL & Hotels Research +61 422 126 379

Sas Liyanage Research Analyst National Industrial Research +61 411 534 522

Manal Haque Manager VIC Research +61 497 771 020

Peter Willington Manager QLD Research +61 435 719 065

Kate Gray Associate Director, SA Research National Rural Research +61 401 610 766

Dominic Aungles Analyst ACT Research +61 428 403 009

Misha White Manager WA Research +61 411 333 922

Quyen Quach Senior Research Analyst WA Research +61 439 981 176

Julie Farmer Manager Newcastle Research +61 +61 2 4915 4009

Corinna Mooring National Information Manager +61 466 531 225

Documents

2016 H2 Metro Office RFR