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Indicative Development Option Artist Impression

AGENDA ITEMS1. Recap From Member’s Briefing Meeting In December 20122. Action Moving Forward3. Subsidiary Club Involvement4. Consulting Team5. Pre-DA Submission to Council 6. Indicative Development Option7. CBD Apartment Supply8. The Next Stage9. Cost to Move to the Next Stage – December 201310. Expressions of Interest 11. Corporate Governance12. Consultant Selection Process 13. Consultant Recommendations14. Media Plan 15. Action Plan from 17 October 2013 16. Questions & Answers

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WHY DEVELOP NOW?

1. Not a new idea - previously considered in 2002

2. Forms part of the Controlled Development Plan

3. Addresses competitive CBD environment; Global Financial Crisis, Legislation Changes and Increased Local Competition,

4. Future Online Gaming

5. The timing is right

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CITY TATTERSALLS CLUB GUIDING PRINCIPLES

The potential development has been created to align with the Club’s Guiding Principles.

1. Retain City Tattersalls Club (CTC) as a registered Club recognising and ensuring compliance with the CTC ACT and Rules.

2. Retain ownership of all assets by our Club

3. Primary focus on Club, subsidiary clubs and members both now and in the future

4. Maximise value of the Club assets in short, medium and long term

5. Minimise cost and maximise benefits of the Club

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6. Minimise risk to the club

7. Achieve a long term reduction in financial dependence on gaming and

secure the long term financial future of the Club

8. Create a long term new business model for Club

9. Continued trading of the Club

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CITY TATTERSALLS CLUB GUIDING PRINCIPLES

WHAT IS THE PREFERRED DEVELOPMENT FOR OUR CLUB?

1. Highest and Best UseThe highest and best use of the CTC site. Based on independent marketing advice.Appropriate uses within the City of Sydney planning framework.

2. Independent CTC SiteNot reliant on neighbouring properties.

Retain 202-204 Pitt Street as a neighbouring building which facilitates continuous trading on all floors with dedicated street entrance during the build.

3. Mixed Use – Club, Hotel, Private Apartments and CommercialProvision of Club use, new serviced apartments (hotel accommodation), private apartments and commercial above with separate dedicated street access

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WHAT IS THE PREFERRED DEVELOPMENT FOR OUR CLUB?

4. 194 Pitt StreetAmalgamation of 194 Pitt Street into total development adding to the overall development potential

Without 194 Pitt Street this development would not be possible

5. No Parking and Loading Dock

Addresses the key site constraints of car parking, loading and services.

6. Lease

Long term lease for private apartments

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WHAT IS THE PREFERRED DEVELOPMENT FOR OUR CLUB?

7. HeritageThe Pre-DA proposes an envelope which addresses key planning constraints including solar height plane, FSR and heritage. It protects the significant façade and key interiors of the site and proposes a tower set back behind them as part of the varied City skyline.

8. New Business model

Allows for a new business model

9. Unleashes the Airspace Position CTC as a going concern along with a physical presence as a CBD destination of choice with iconic Club branding on top of the tower. Maximise the international appeal of the sitewith panoramic views of the city, gardens, harbour and greater metropolitan area

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WORK COMPLETED BY 4 DECEMBER 2012…1. Reviewed current controls for site

2. Identified “highest and best” use

3. Identified constraints (e.g. structural, fire, traffic)

4. Prepared schematic diagrams

5. Met with senior Council representatives

6. Submitted formal letter of enquiry to SCC (and considered verbal and written responses)

7. Prepared preliminary financial modelling

8. Prepared concept plan and modelling

9. Research preferred development partners

10. Strategic planning in relation to Club uses

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WHAT ARE THE BENEFITS OF PRE-DA ADVICE FROM COUNCIL?

• Provides a “Comfort Document” from Sydney City Council (SCC) advising that a proposed development has reasonable/good prospects to be approved and on what major conditions

• Allows our Club to go to the market with higher confidence to seek an interested development partner

• Improves the quantity, quality and interest levels of prospective development partners in that it reduces risk and increases certainty

• Adds substantial value to the site as a development proposition

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CONCLUSION OF THE MEMBER’S BRIEFING MEETING IN DECEMBER 2012…

Members were advised of the Committee’s decision to progress to obtain a Pre-DA advice from the Sydney City Council (SCC) at a cost not to exceed $100,000

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ACTION AFTER FIRST BRIEFING MEETING…1. Engaged Consultants for advice and reports 2. Developed a detailed understanding of site constraints. For example, traffic, fire,

heritage, structure3. Consulted with Subsidiary Clubs

4. Identified all planning constraints

5. Prepared Indicative Development Option to test the preferred building envelope

6. Continued identification of potential contracting parties

7. Provided further refinement of club offering

8. Preparation of documents for Pre-DA submission

9. Pre-DA Submission

10. Receipt of Pre-DA Submission advice from Council

11. Response to Pre-DA advice from Council

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SUBSIDIARY CLUB INVOLVEMENT… • All Subsidiary Clubs are a very important part of our Club

• Identifying their needs is a critical part of the development process to ensure their needs are accommodated when planning what the clubhouse might look like if the development was to occur.

• Meetings were conducted with all Subsidiary Clubs to gather their input regarding the following areas;

1. What is the objective/mission of their Club2. What facilities and events do they offer and how regularly3. What areas of the Club do they use now and in the future4. What would they like in a redeveloped Clubhouse

• All Subsidiary Clubs attended the meetings

• Information has been collated to inform ongoing development of the Clubs facilities.

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SUBSIDIARY CLUB INVOLVEMENT…

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CONSULTING TEAM…• Tony Guilfoyle - City Tattersalls Club

• Jennifer Hill - Architectural Projects Pty Limited

• Peter Georgeson’ - Georgeson’ Associates

• Robert McCuaig and Jon Chomley, - Colliers International

• James Lidis, - Design Collaborative Planners

• Peter Webber, - Urban Design Consultants

• Robert Weiss, - Engineering Partners

• Norman Gilmore, - Building Services Engineer

• Graham Pindar, - Traffix

• Paul Sloman – Arups Engineer

• James Kennedy, - KPMG, Real Estate Advisory Services

• Aldis Birulis, - Birzulis Associates

• Stuart Boyce, - BCA Logic Pty Ltd

• Preston Rowe Patterson, Valuers

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PRE-DA SUBMISSION INFORMATION

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• The Pre-DA proposed an envelope which addresses key planning constraintsincluding solar height plane, Floor Space Ratio and heritage

• The proposed envelope was tested by an Indicative Development Option

• It protects the significant façade and key interiors of the site and proposes atower set back behind them as part of the varied City skyline

• The Pre-DA addressed the key site constraints of car parking, loading dock and services

• Feedback provided by Sydney City Council has provide CTCwith greater certainty to take the proposed envelope to the marketplace

PRE-DA SUBMISSION INFORMATION…

• Pre- DA drawings plans, elevations,

sections

• Structural Adequacy Report

• Detailed Heritage

• Urban Design Massing Study

• Draft Heritage Principles

• BCA(building Code of Australia) Report

• Environmental Design and Sustainability

• SEPP65 Compliance Review

• Lift Capacity

• Electrical Capacity Study

• Detailed View Analysis from adjacent

properties

• Traffic Capacity (Loading Bay)

• LEP and DCP Compliance Report Study

• Mechanical Capacity

• Detailed Shadow Studies

• Detailed View Analysis to the proposed

development (e.g St. Mary’s Cathedral)

• Input into development of envelope

design

• Draft Heritage Impact Assessment

REPORTS…

INDICATIVE DEVELOPMENT OPTION• The proposed envelope is a site specific control

• The Indicative Development Option;- Is not a proposal- It tests the proposed envelope

• 48 Floors of high rise development

• 7 Floors of Upgraded Dedicated Club Facilities (Floors G - 6)plus 2 shared sub-basement floors

• 7 Floors of Serviced Apartments/(Hotel Accommodation) (Floors 7 – 13)

• 32 Floors of High Quality Designer Apartments (Floors 14 – 46)

• 2 Uppermost Floors of Commercial Usage (Floors 47 & 48)(Restaurant/Bar)

INDICATIVE DEVELOPMENT OPTION

• Maximise the international appeal of the site with panoramic views of the city, gardens, harbour and greater metropolitan area

• Position CTC as a going concern along with a physical presence as a CBD destination of choice with iconic Club branding on top of the tower

INDICATIVE DEVELOPMENT OPTIONDEDICATED CLUB FACILITIES OVER 7 FLOORS AND 2 SHARED SUB-BASEMENT FLOORS

• Member’s facilities:Upgraded restaurants, bars, gaming, fitness centre, day spa, new entertainment amenities, function areas and subsidiary club facilities

• Enlarged upgraded and dedicated foyer as the “grand entry” statement to the Club

• A continuation and enhancement of Club facilities with improved street prominence across the 4 buildings

• Integration of a wider mix of uses to benefit from tower usage

• Greater flow and efficiencies across the 4 buildings

• The choice of offerings aligned to the CBD market

• New truck lift access

• 2 shared basement levels, loading dock and new truck lift access

• Increases the critical mass for the Club usage by attractinga wider state, national and international audience.

• Amalgamation of 194 Pitt Street into total development adding to the overall development potential.

INDICATIVE DEVELOPMENT OPTIONDEDICATED CLUB FACILITIES OVER 7 FLOORS AND 2 SHARED SUB-BASEMENT FLOORS

INDICATIVE DEVELOPMENT OPTIONSERVICED APARTMENTS (HOTEL ACCOMMODATION) FLOORS 7-13

• 194 Pitt Street allows for a separate hotel identity with street prominence

• Ground floor reception and concierge

• Minimum 4 star rating aligned to the CTC brand

• 97 rooms - to be determined by market interest

• Provides funds that facilitate the upgrading of the members’ clubhouse

• The Club facilities are pivotal to the serviced apartments

INDICATIVE DEVELOPMENT OPTIONDESIGNER PRIVATE APARTMENTS FLOORS 14– 46

• 32 Floors of high quality designer apartments

• A high concentration of 1 bedroom apartments

• Mix responds to the current market needs

• Unique midtown location

• Cash generator of significant funds that facilitate the

upgrading of the members’ clubhouse

• The Club facilities complement the private apartments

• Unique mixed use development within the midtown location

• Separate grand entrance with street prominence

• Self contained secure concierge service funded by apartments

• Anticipates the international potential of the site with panoramic views of the city, gardens, harbour and greater metropolitan area

• The top levels embodies a significant destination of choicein Sydney

• Dedicated lift access via serviced apartment reception

• CTC will have a greater presence within the Sydney CBD

INDICATIVE DEVELOPMENT OPTIONCOMMERCIAL USAGE (RESTURANT/BAR)UPPER FLOORS 47 & 48

PRE-DA MEETING WITH COUNCILWHAT WAS ACHEIVED

City Tattersalls Club received a comprehensive and prompt response from Council. This allows greater certainty in the market

1) Council Response - Confirmation of our planning controls

FSR (Floor Space Ratio) Height plane Neighbouring set backs Parking Usage Mix – Unit/Hotel (Unit mix predominantly 1 Bedroom) Design Excellence Requirements ESD (Environmentally Sustainable Development) SEPP 65 (State Environmental Planning Policy)

2) Confirmation of the Proposed Development Envelope complies with Council’s controls

3) Confirmation on the requirements of the Development Application process

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OVERVIEW OF COUNCIL FEEDBACK FROM PRE-DA SUBMISSIONS…

• Pre-DA Meeting held with Council on 5 August 2013

• Council formally responded with 33 comments categorised as follows;

1. Overview and planning matters 2. Heritage matters 3. Urban Design matters

• Club has responded to comments with an amended building envelope

• Council’s requirements can all be addressed in future Development Applications

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OVERVIEW OF COUNCIL FEEDBACK FROM PRE-DA SUBMISSIONS…

SUMMARY OF KEY ISSUES TO BE ADDRESSED IN A FUTURE DEVELOPMENT APPLICATION

• APARTMENT MIX A proposal should comply with Sydney Development Control Plan (DCP) 2012

• BOUNDARY SET BACKS A proposal should comply with Sydney Development Control Plan (DCP) 2012

• STREET FRONTAGEA proposal is to address the activation of the street front uses below the awning

• INCREASED HOTEL ROOMS A proposal should increase hotel rooms in lieu of serviced apartments (Hotel Accommodation)

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Council is very supportive!

City Tattersalls Club can address all comments made by Council which gives our Club greater certainty to move forward…

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CBD APARTMENT SUPPLY

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“MARKET DEMAND IS VERY SRONG BUT SUPPLY IS LOW”

Between January 2010 and May 2013 there were 2,577 new and established apartment transactions above $200,000 within the Sydney CBD.

Sales volume levels have been dwindling on an annual basis, with the most significant decline of 21% occurring over the over the 12 months to 2012

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The annual market share of the new apartment turnover has recently started to decrease on an annual basis.

There was no new supply finished in 2009 or 2012 and the most recently completed projects within the Sydney CBD only provided 557 apartments over the last four years.

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THE NEXT STAGE

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THE NEXT STAGE…

• The Committee has decided to progress to the next stage

• Provide Media Coverage

• Colliers International to call for Expressions of Interests

• Provide Information Memorandum to the open market (local and Interstate)

• Receipt of market responses

• Appraisal of Expressions of Interest

• Negotiation of Expressions of Interests

• Members Briefing Meeting 3 which will be held in December 2013

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COST TO MOVE TO THE NEXT STAGE DECEMBER 2013 …

• The Cost to proceed to Members Briefing Meeting 3 - $220,000• Consultant Team will assist CTC through the appraisal negotiation phases

• Consultant Team

Jennifer Hill, Architectural Projects Pty Limited Peter Georgeson’, Georgeson’ Associates Architects James Kennedy, KPMG, Real Estate Advisory Services Greg Preston, Preston Rowe Patterson, Valuer Greg Hastie, Altos Page Kirkland, Quantity Surveyors Peter Gower, Hicksons Lawyers Philip Price, RSM Bird Cameron, Taxation Consultant Anthony Tregoning, FCR Financial & Corporate Relations

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EXPRESSIONS OF INTEREST…

• City Tattersalls Club is open to all Expressions of Interests

• Initial indicators confirm a high interest

• 3 Independent Consultants (Colliers, KMPG & Preston Rowe Patterson) have confirmed the potential discounting of sale of the apartments by leasehold compared to freehold

• Expression of Interests should therefore anticipate the wide range of options to ensure maximum benefits to the member

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CORPORATE GOVERNANCE

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CORPORATE GOVERNANCEJames KennedyAssociate Director, Corporate Governance, Head of Real Estate Advisory NSW

ROLE:

Independent Advisor

Role: Advising the CEO and Board on structural arrangements and process

FOCUS:

1 ) Testing the range of commercial options and procurement approaches assessed by CTC

2) Suggesting means of optimising transparency and the commercial result

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CORPORATE GOVERNANCEJames KennedyAssociate Director, Corporate Governance, Head of Real Estate Advisory NSW

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FOCUS AREAS:

• Project as a whole

• Project Working Group

• Retaining professional advisors

• Conducting the market offer process (EOI)

• Evaluating proposals

• Critiquing deal structures

• Substantiating counterparty demands

• Appointing operational partners

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CORPORATE GOVERNANCEJames KennedyAssociate Director, Corporate Governance, Head of Real Estate Advisory NSW

CONSULTANT SELECTIONPROCESS

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CONSULTANT SELECTION PROCESS… QUANTITY SURVEYOR - TAX ACCOUNTANT - LEGAL FIRM

1. KMPG recommended three Quantity Surveyors, Tax Accountants and Lawyers to provide advice to City Tattersalls Club for the redevelopment project

2. A consulting brief developed by KPMG and City Tattersalls Club was then issued to all companies from each category for them to review and then submit a proposal

3. City Tattersalls Club rated each proposal submitted using the weighting system as provided by KPMG and the following companies were appointed to work with Club;

• Quantity Surveyors Altus Page Kirkland• Tax Accountants RSM Bird Cameron• Legal Hicksons Lawyers

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MEDIA PLAN…

Due to the current media interest a media plan has been prepared to manage the distribution of information into the market place

Key Dates

- City Tattersalls Club Media Briefing Session – Wednesday 28 August 2013

- Press Release Distributed to Marketplace - Wednesday 28 August 2013

- One-on-One Media Interviews - Wednesday 28 – Friday 30 August 2013

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ACTION PLAN TO MEMBERS BRIEFING MEETING 3 – DECEMBER 2013…

• Receipt of Expressions of Interest from the marketplace

• Club appraisal of EOI’s

• Assessment of EOI’s with Consultant Teams as required

• Negotiations with short list of prospective contracting parties

• Members Briefing Meeting 3 – Update on status of negotiation

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“No decision to proceed to develop the Airspace will be made without the members voting in favour in 2014”

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