1

December 2015

Liverpool Market

Overview

2

Capital of the Southwest

Good Access and Amenity

Trains, Buses and Motorways;

Westfield, Clubs and pubs

Significant Population Growth

50% in City Centre over 15 years

Major Infrastructure Investment

Rail, Airport and Civic Improvements

Wholesale Pricing,

Limited Competition

Few institutional owners and managers

Progressive Council Policies

New planning controls increasing height

and density

3

A Growing CBD

36km West of

Sydney CBD

CBD Population

2015 – 22,000

2030 – 31,600

CBD Jobs

2015 – 22,000

2030 – 34,000

Office Market

Size 87,000 sqm

4

LGA Overview

Population of

200,000 (LGA)

88,000 Jobs

13,000 businesses

$8.4B

Regional GDP

5

Access – Trains, Buses & Roadways

6

A Walkable CBD

Liverpool

Hospital

Liverpool

Girls School

Sydney Southwest

Private Hospital

All Saints

Catholic College

South West

TAFE NSW

Eat Street

Westfield

Pioneer

Memorial Park

7

Active Precinct – Liverpool City Centre Plan

Health &

Education

High Rise

Living

Maquarie

Mall

Eat Street

Corporate,

Council &

Justice

Urban

Breathing

Urban

Breathing High Rise

Living

8

Future Density – New Zoning Controls First Stage approved by NSW Gateway 3/11/2015

R4 R4

R4

B3

B4

RE1

Zoning

B3 Commercial Core

B4 Mixed Use

R4 High Density Residential

RE1 Public Recreation - Parks

RE1

9

Local Fabric: Fats Facts

Epicentre of Multicultural Sydney

45% < 30 Years Old 150 Birthplaces

140 Languages

Youth

Older Generation

20% > 55 Years Old

10

New Infrastructure & links to Liverpool

Airport

• $2.5B Investment – Runway 1

• Operations expected to

commence mid 2020s

• International and domestic,

passenger and freight

• $5B Investment – Runway 2

Rail

• Sydney Rapid Transit

• South West Rail Link Extension

• Provides fast, efficient services

from the South West to the CBD

Moorebank Intermodal

• Freight rail operations to

commence by 2020

• $2B Investment

• Capacity to process 1 million

containers by 2031

South West

Growth Centre

• Expected population of 300,000

• 17,000Ha

• LGA’s of Liverpool,

Camden and Campbelltown

Road

• $2.9 billion on new and upgraded

roads across multiple projects

• 10 year period

• Improves connectivity between all

major Sydney centers to South

West

11

Value of Development Applications

$313M

$587M $586M $711M

$789M

$2,986B

0

500

1000

1500

2000

2500

3000

3500

2010/11 2011/12 2012/13 2013/14 2014/15 5 year total

In millions

12

Liverpool: Gentrification Projects

Macquarie Mall

• Rejuvenation of the Macquarie Mall Strip

• Completion expected by late 2016

• New paving, overhead lighting and street furniture installations

• Aim to attract night time trade and activate pedestrian core as commercial hub

Eat Street

• New restaurants establishing in Liverpool’s planned Eat Street district

• Southern end of CBD along Macquarie Street, close to Hume HWY

commuter access

• Home to numerous new cafes and eateries in rejuvenated district

Bigge Park

• Upgrades to a key civic precinct that provides recreation and

entertainment space

• Immediately adjacent to the Health & Education precinct and Liverpool Hospital

• Urban green breathing space

13

over 2,700 Units

ID Address Name Developer Units Status

1 26-32 Hume Highway Solis Coronation Property Co 185 C

2 20 Shepherd Street The Paper Mill Coronation Property Co 245 P

3 28 Shepherd Street The Bindery Coronation Property Co 169 P

4 36-40 Speed Street Speed St Units Eastview Australia Pty Ltd 71 P

5 203 Northumberland Street Scenic NSW Pty Ltd 122 P

6 100 Castlereagh Street Eagle Towers St George Concrete Plumbing 257 UC

7 420-446 Macquarie Street Skyhaus Lateral Estate 438 UC

8 311 Hume Highway The Point Hume Developments Pty Ltd 125 P

9 69-73 Elizabeth Drive Modern Property Developments 121 UC

10 32 Castlereagh Street Hope St Projects Pty Ltd 78 P

11 306 Macquarie Street School of Arts Precinct Vicliz Pty Ltd 46 UC

12 39 Scott Street Quest Hotel Ralco P

13 133 Bigge Street Peter Warren Site Peter Warren 605 P

14 4-6 Browne Parade Otis Developments 36 P

15 30-40 Hume Highway New Mangrove Pty Ltd 113 UC

16 166-176 Terminus Street Synergy Development Group 61 P

17 6-8 George Street Synergy Development Group 83 P

18 387-403 Macquarie Street Pellicano Group 168 P

19 165-191 Macquarie Street Abacus P

20 13 Bigge Street The Gallery Ronex 99 P

2,755

Residential Development –

1

20

14

15

17

13

12

4

2 3

11

19

5

9

10

6

8

7

18 16

14

Liverpool: Residential Developments

Skyhaus

• 420-446 Macquarie Street

• $95 Million Investment

• Completion mid 2017

• 29 Storey twin tower development of 419 units

• Lateral Corporation

School of Arts Precinct

• 306 Macquarie Street

• $13.5 Million Investment

• Completion mid 2016

• Mixed use development comprising 46 residential units 3 levels of commercial

totaling apx 2,000 sqm plus 3 retail shops

• Secure underground parking for 126 vehicles

15

Liverpool: Residential Developments

Papermill and Bindery

• 20 and 28 Shepherd Street

• $125 Million Investment

• Completion 2018

• 414 apartments combined

• Waterfront high rise living

• Coronation Property’s urban renewal project

Liverpool Plaza

• 165-191 Macquarie Street

• $50 Million Investment

• Heart of City over Liverpool Plaza retail

• Recently announced November 2015

• Mixed use with retail, office and residential

• Abacus Property Group

16

New and Existing Commercial Development –

14

17

ID Address

Comm.

Sqm Status

17 133 Bigge Street 40,000 P

2 52 Scott Street 33,150 P

4 23-31 Moore Street 13,200

15 25,29 & 33 Scott Street 10,175

5 211 Northumberland Street 9,430

6 33 Moore Street 9,405

7 203-209 Northumberland Street 8,700

16 124 Macquarie Street 7,300 P

8 45-47 Scott Street 5,900

9 1-7 Moore Street 4,383

10 269 Bigge Street 4,152

11 131 George Street 4,000

12 157 George Street 4,000

13 2-4 Speed Street 2,584

14 26 Castlereagh Street 2,575

1 220-230 Northumberland Street 1,739 P

3 28 Memorial Ave 1,250 UC

7

16 12

11

5

3

1

2

6 4

9

15 10 8

13

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Liverpool: Commercial Developments

Liverpool GP Super Clinic

• 2-4 Speed Street

• 2,700 sqm over 7 levels

• Internal building work completed

• Completion scheduled for mid 2016

Quest Apartments

• 39 Scott Street

• 88 rooms, 4½ star serviced apartments

• Opened April 2015

• Fully finished and operational

Marc Antony Building

• 25-35 Scott Street

• 10,175 sqm over 11 levels with 95 parking spaces

• Bicycle (58) and motorcycle (6) spaces

• Completion mid to late 2018

• $35 Million Investment

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Liverpool: Commercial Developments

Legal Services

• 124 Macquarie Street

• 7,300 sqm commercial

• 7 levels commercial, plus retail

• DA value record APX $20 Million Investment

Warren Site – Elizabeth Street

• 133 Bigge St

• 40,000 sqm commercial

• 630 residential units

• 34 Stories over 3 buildings proposed

• Precedent setting site for height, massing and density

Liverpool Civic Palace

• 52 Scott Street

• 33,150sqm of commercial space

• Commercial & Education Precinct

• Council initiative for new LCC commercial building

19

Liverpool Office Market Composition

Liverpool Office Stock

Total Market (sqm) A Grade (sqm) B Grade (sqm) C Grade (sqm) D Grade (sqm)

Liverpool Total

Stock

86,639 8,825 22,273 19,585 35,956

Liverpool Total

Vacancy

4,377 632 446 1,162 2,137

Liverpool Vacancy

Rate

5.1% 7.2% 2% 5.9% 5.9%

Liverpool

Withdrawals

0

0 0 0 0

Australian Non-CBD

Office Vacancy

10.1% 7.3% 11.1% 14.0% 11.6%

Australian Office

Vacancy

10.0% 8.9% 11.1% 12.1% 11.7%

Liverpool Vacancy

10%

26%

23%

41%

A

B

C

D

14%

10%

27%

49%

A

B

C

D

20

Major Occupants and Brands

Major Occupants Recognizable Corporate

Brands

GPNSW - FACS 13,200

Centre Link 7,500

Liverpool City Council 5,200

GPNSW 25-35 Scott 5,000

Quest Apartments 5,000

Inghams 4,700

TAFE 3,500

Brydens Law Offices 3,000

NSW Police 3,800

GP Super Clinic 2,700

ACBC 1,250

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Relative Office Market Size

57 62 86 87

151

245

281 304

357

686

849 854

-

100

200

300

400

500

600

700

800

900

Blacktown Bankstown Penrith Liverpool Wollongong Newcastle Chatswood Norwest CrowsNest/St

Leonards

Parramatta NorthSydney

North Ryde

Th

ou

san

ds

• 1 of 3 Regional centres in GWS

• Head Quarters of the South West

• Undersupply of A Grade stock

• Predominant C and D Grade Stock

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Recent Sales – Commercial Buildings

Address Site Size (SQM)

*NLA

(Apx SQM)

Price Sale Date Rate/NLA Description

215-219 George Street 683 1,350 $3,900,000 Sep 2015 $2,890 • Recognizable office and retail building in the heart of town.

• Home to banner brand, Regus International

• APX 20 covered surface stalls at rear of site

269 Macquarie Street 1,056 NA $24,500,000 Jun 2015 NA • Macquarie Hotel with 24 hr liquor license

• 30 gaming machines with rare 3 hour shutdown

• Dual street frontage, next to council car park

224 Macquarie Street 316 319 $1,300,000 Apr 2015 $4,080 • City Centre retail building

• Local retail tenants create dynamic presence

104 Moore Street 597 900 $2,300,000 Jan 2015 $2,560 • Corner Moore and Northumberland

• Rear lane access

• Prominent position set amongst shops and services.

203 Northumberland

Street

1,539 8,700 $19,500,000 Oct 2014 $2,240 • Iconic Inghams building

• Home to Brydens Law Office

• Additional land of 1,310 sqm included in purchase price,

currently surface car park

61 Moore Street/

208 Macquarie Street

1,347 750 $3,150,000 Jul 2014 $4,200 • Notable character building at entrance to Macquarie Mall

• Locally known as Macquarie House

• Prominent corner location

131 George Street 1,279 4,000 $7,300,000 Nov 2013 $1,830 • Well known medical and professional building

• 4 stories with corner position and rea lane access.

• Home to many local offices of varying professions

23

Recent Sales – Commercial Sites

Address Site Size (SQM)

*GFA

(Apx SQM)

Price Sale Date Rate/GFA Description

124 Macquarie Street 1,946 7,238 $8,500,000 Feb 2015 $1,200 • Premium corner location adjacent to Westfield

• Local Investor acquisition

• Plans to re-develop into 9 storey office block of 7,238 sqm

• FSR 4:1

359 Hume HWY

4,210

5,052 $6,330,000 June 2015 $1,250 • Motor Transport acquisition

• Hume HWY site with 3 frontages

• Height limit 15m

• FSR 1.2:1

39 Scott Street 1,023 5,046 $1,650,000 April 2014 $330

• Development site to build new Quest Apartments.

• Nearby to the proposed Civic Place development.

• Hotel finish and operational

• FSR 5:1

• GFA 5,046sqm

Terminus Street 1,741 4,352 $7,442,000 May 2015 $1,700 • Liverpool City Council acquisition

• Acquired for road purposes

• FSR 2.5:1,

*GFA defined as current legislated FSR X Site Size

24

Recent Sales – Residential Sites

Address Site Size

(SQM)

Price Sale Date FSR *Rate / Unit Description

2-4 Browne

Parade

1,297 $4,000,000 Oct 2015 2:1 $137,000 • DA approved development site

• 36 units with secure underground parking

• DA approved @ 3.6:1 FSR

• FSR 2:1 = GFA 2,594 = 29 units

28 Shepherd

Street

5,887 $3,200,000 July 2015 2.5:1 $19,250 • Coronation Property high rise development

• The Papermill and The Bindery

• Gentrification and urban renewal

• FSR 2.5:1 = GFA 14,717sqm = 166 units

133 Bigge 10,180 $32,000,000 June 2015 5:1 $55,500 • Peter Warren Site

• Plans for 600+ units and 40,000 office

• 3 street frontages

• FSR 5:1 = GFA 50,900 sqm = 576 units

7-13 Norfolk

Street

2,097 $3,446,000 May 2015 2.5:1 $57,500 • DA submitted in 2007

• Previously considered for 122 residential units over 22 levels

with 5 levels of parking

• FSR 2.5:1 = GFA 5,242 sqm = 60 units

20 Shepherd

Street

9,873 $6,100,000 July 2014 1.5:1 $36,500 • Coronation Property high rise development

• The Papermill and The Bindery

• Gentrification and urban renewal

• FSR 1.5:1 = GFA 14,809 = 167 units

*Rate / Unit based on 85% efficiency and 75sqm unit size

25

What’s the opportunity

Acquire existing office stock at

wholesale prices with

residential upside

Reposition and upgrade to B-

B+ Grade stock

Acquire smaller underdeveloped

commercial buildings on large

sited and secure residential DA

Attract new external

occupants with competitively

priced quality options not

previously available

Rework existing tenancies to tap

into positive rental reversion

26

Conclusion

Good Access and Amenity

Significant Population Growth

Wholesale Pricing &

Limited Competition

Major Infrastructure Investment

Progressive Council Policies

27

Continue the Conversation

Mark Litwin

Associate Director, Capital Markets

Commercial Sales and Leasing

M 0415 742 605

E mark.litwin@au.knightfrank.com

Knight Frank services the entire commercial real estate spectrum,

with close to 300 professionals in NSW active in;

DISCLAIMER:

The information contained in this report is from sources deemed to be reliable, however we cannot guarantee the accuracy of the information and parties in receipt of this

information should undertake their own investigations upon which to rely on

Wallace Scales

Director, Capital Markets

Commercial Sales and Leasing

M 0418 438 973

E wally.scales@au.knightfrank.com

• Research and Advisory

• Commercial Sales and Leasing

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