01 Perth Overview

02 Education & Demographics

03 Investment & Employment

04 Perth Infrastructure

05 Residential Property Market

Prepared exclusively for PindanAugust 2017

MARKET OUTLOOKPERTH WESTERN AUSTRALIA

PERTH OVERVIEW

ECONOMIC GROWTHOver the last decade, Western Australia was the strongest performing economy in the nation.

Source: ABS, IMF (Constant Prices), OECD.

AVERAGE ANNUAL GROWTH 10 YEAR TO 2015/16:

33% HIGHER THAN THE NATIONAL EQUIVALENT OF $69,134 IN THE SAME PERIOD

WA’s GSP per capita was $92,056 in June 2016.

Australia

2.8%

IMF Advanced Economies

1.5%

WA

5%

NSW

2.2%

VIC

2.2%

KEY TRADING PARTNERS

Source: ABS, IMF: World Economic Outlook (WEO) Note: Association for Southeast Nations (ASEAN 5) includes Indonesia, Malaysia, the Phillipines, Singapore and Thailand.

Proportion of WA exports (as of May 2017)

Forecast GDP growth to 2022

China 62% 5.9%

Japan 15% 0.6%

South Korea 7% 3.0%

Asean 5 9% 5.3%

China is predicted to be the world’s largest economy come 2026 (The Economist). Further sources of export demand include growth centres of Asia.

Source: Department of State Development

ONE OF THE WORLD’S TOP TEN MOST LIVEABLE CITIES.

3.5 hrs

Jakarta

Kuala LumpurSingapore

New Delhi

IMPORTANT TIMEZONE

1 hour timezone

5 hour business timezone

Perth shares a time zone with approximately 60% of the world’s population. The recent introduction of Perth-London direct flights reinforces the Perth’s role as Australia’s Western Gateway and provides a vital entry point for European travellers.

SINCE MAY 2016, EXPORTS TO CHINA HAS INCREASED BY 28%.

Market Outlook Perth, Western Australia2

LIVEABILITYThe Economist Intelligence Unit scores cities on over 30 factors within five broad categories: stability, healthcare, culture, education and infrastructure. Perth has ranked in the top ten most liveable cities for over ten years. In 2016, Perth was ranked 7th, up from 8th in 2015.

Source: Economist Intelligence Unit

PERTH’S LIVEABILITY SCORESCity Rank Overall

(100=ideal, 0=intolerable)

Infrastructure

Education

Healthcare

Culture

Stability

Overall0

102030405060708090

100

EMERGING ARTS CAPITALThe 2017 Perth International Arts Festival ran for three weeks and was hosted at the newly developed Elizabeth Quay.

Prepared by Urbis; Source: WAAPA, ECU’s 2016 Annual Report, PIA, Fringe World

Perth hosts Australia’s oldest

International Arts Festival (64 years).

With 3,400 artists and 700 acts, the

2017 Perth Fringe World Festival was the third largest worldwide.

The Western Australian Academy

of Performing Arts (WAAPA) at Edith Cowen University (ECU) has been ranked as one of the best 25 acting schools in the world

Australia’s western gateway and most accessible capital city to the world’s strongest economic growth regions.

PERTH’S 13% POPULATION GROWTH IN THE FIVE YEARS TO JUNE 2016 EXCEEDS SYDNEY, MELBOURNE AND BRISBANE

9 hrs

8 hrs

5 hrs

10 hrs

Perth

Jakarta

Kuala LumpurSingapore

Beijing

Tokyo

Shanghai

Hong Kong

Over 750,000 people viewed events at one

of 150 venues and had total flow on economic impact $84.3 million.

Prepared exclusively for Pindan 3

PRIMARY & SECONDARY EDUCATIONPerth’s primary and secondary schools, both public and private, provide a high-quality education to students. Many private schools offer on-campus boarding facilities for secondary school (or older) students. In its latest budget, the state government proposed $4.84b to education. In 2016 student enrolment growth increased by 1.3% from the previous year and a forecast of 9.0% (or 26,551 students) growth between 2014-2019.

TERTIARY EDUCATION• The University of Western Australia (UWA) ranks

among the top 1% of universities in the world. It is the only WA member of Australia’s “Group of Eight”: the country’s leading research institutions.

• An excellent location for education. According to QS Best Student Cities 2016 list, Perth ranks 35 in the world.

• The Western Australian Academy of Performing Arts (WAAPA) and Edith Cowen University (ECU) has been ranked as one of the best 25 acting schools in the world (The Hollywood Reporter 2012).

• There are also 11 Technical and Further Education (TAFE) Colleges in Western Australia.

DEMOGRAPHICS• Perth was the fastest growing capital city over the

five years to June 2016.• The WA Government is planning for Greater Perth

to grow from approximately 2 million people to 3.5 million by 2050.

• Perth’s population is projected to outnumber that of Brisbane from 2028, making Perth Australia’s third most populous city according to ABS Population Projections.

• As at June 2016, Western Australia accounts for 11% of Australia’s total population and 79% of WA’s population resided in Greater Perth.

• As at 2016, 43% of Greater Perth’s population was born overseas. The city’s social fabric reflected over 200 nationalities speaking 270 languages.

• According to SAFi forecasts by i.d, Greater Perth’s population is expected to increase by 47,600 people p.a. between 2016 and 2021. This reflects annual growth of 2.2%.

EDUCATION & DEMOGRAPHICS

01* Perth Modern School 02* Presbyterian Ladies' College 03* Penrhos College 04* Christ Church Grammer School 05* Santa Maria College 06* St Hildas Anglican School for Girls 07* Perth College 08* St Mary's Anglican Girls' School 09* Methodist Ladies' College 10* Shenton College

Prepared by Urbis; Source: Western Australian School Curriculum and Standards Authority. * Based on number of year 12 subject enrolments where a WACE course score of at least 75+ achieved (excludes vocational subjects),2016.

Prepared by Urbis; Source: Department of Education and Training

Prepared by Urbis; Source: SAFi.id

Prepared by Urbis; Source: ABS

Stat

e ra

nkin

g

The University

of WACurtin

UniversityEdith

Cowan University

Murdoch University

University Of Notre

Dame

PERTH'S UNIVERSITIES

WESTERN AUSTRALIA'S OVERSEAS STUDENT NUMBERS

STRONG FORECAST POPULATION GROWTH FOR GREATER PERTH

ESTIMATED RESIDENT POPULATION GROWTH FIVE YEARS TO JUNE 2016

On-Site Boarding Facilities

Brisbane Sydney Melbourne9% 9% 11%

Perth 13%

Thou

sand

s

1,45

5

1,57

7

1,83

4

2,10

8

2,34

6

2,57

7

2,80

1

3,02

2

0 500

1,000 1,500 2,000 2,500 3,000 3,500

2001 2006 2011 2016F 2021F 2026F 2031F 2036F

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

0

10,000

20,000

30,000

40,000

Inte

rnat

onal

St

uden

ts

Market Outlook Perth, Western Australia4

MINING, OIL AND GASAccording to the Office of the Chief Economist (December 2016), committed mining, oil and gas and infrastructure projects in WA have a combined project value of $136.7 billion. This represents 70% of the total value of all projects across Australia ($194.8 billion). Perth is one of the 20 international energy capitals. It is home to 35% of companies listed on the Australian Securities Exchange, which collectively account for the largest proportion of Australian mining companies in Africa, South America and Central Asia.

EMPLOYMENT AND TOURISMWA’s workforce has grown by 4.3% over the last five years to 1.37 million people (ABS May 2017). The highest number of employees worked in health care and social assistance, followed by construction. The mining sector is a major part of the WA economy, however ranks seventh in terms of number of people employed.

As one of the largest and most diverse states in the world, WA offers a wide range of unique holiday experiences. Perth acts as the gateway for WA tourism and the importance of the tourism sector is forecast to continue to grow. Some key facts about tourism are:

Although not a large direct employer, agriculture plays an important and growing part of the WA economy. In 2015-16, the state’s Gross Value of Agricultural Production (GVAP) was $8.2 billion, 15% of Australia’s total GVAP. WA prides itself on the outstanding quality of its produce.

INVESTMENT & EMPLOYMENT

VALUE OF COMMITTED PROJECTS BY JURISDICTION

Queensland

5.9%

South Australia

0.3%Northern Territory

21.9%

Western Australia

70.1%

Victoria

1.0%

New South Wales

0.7%

Prepared by Urbis; Source: Office of Chief Economist December 2016

30% wheat ($2.5B)

10% barley ($825M)

9% canola ($730M)

8% wool ($661M)

11% livestock ($933M)

109,000 PEOPLE EMPLOYED

$10.1B SPENT

9% INCREASE OF VISITORS TO WA

$2.3B SPENT

in tourism related industries

by tourists in Western Australia

by international visitors in the year ending March 17

year ending March 2017

Mining 94,000 6.9% of workforce

Health Care

12.2% of workforce166,800

9.3% of workforce

Retail Trade 126,800

10.8% of workforce147,400Construction

Professional, Scienti�c &

Technical trade100,900 7.4%

of workforce

7.4% of workforce

Accommodation & Food Services

102,100

7.7% of workforce105,000Education

& Training

Prepared by Urbis; Source: ABS

Prepared by Urbis; Source: Tourism Western Australia

Prepared exclusively for Pindan 5

01 Perth City Link

Linking the Perth CBD and Northbridge, City Link is one Australia’s transit orientated developments which will comprise over 1,900

apartments and 244,000 sq.m of office and retail space for 13,500 new workers. The government is investing $1.39 billion in the precinct which includes the value of the Perth Arena.

02 Perth Arena

Perth Arena has a capacity of 15,500 visitors and was ranked seventh in the world in 2014 for revenue among venues in its size

category (Pollstar). Perth Arena also hosts sporting events like the annual Hopman Cup tennis tournament and National Basketball League (NBL) matches. It opened in 2012 and had a project value of $548 million.

03 Elizabeth Quay

The public realm of Elizabeth Quay opened in January 2016 to serve as an events and recreation space. It links the Swan River

and Perth CBD. The government’s $440 million project will deliver 800 apartments, 400 hotel rooms and 225,000 sq.m of commercial space (accommodating 10,000) workers.

04 Perth Stadium

The Perth Stadium is located on the Swan River and will provide 60,000 seats for major sporting and entertainment venues

which will make it the third largest stadium in Australia. It is capable of attracting national and international events to Perth. The $1.2 billion project is expected to open in 2018.

PERTH INFRASTRUCTURE

03

07

08

Market Outlook Perth, Western Australia6

05 New WA Museum

Located in the Perth Cultural Centre, the $428 million finished product (delivery in 2020) will allow curators to present innovative displays. The project comprises around 23,000 sqm of refurbished heritage and new buildings. 06 Forrestfield-Airport Link

This $2 billion train line will link Forrestfield, Perth Airport and the Perth CBD (8.5km in length) and create three new stations at Belmont, Airport Central and Forrestfield. The project was launched in 2014 and in 2016 construction commenced, with completion scheduled for 2020. 07 Riverside

Covering 40 hectares of land in East Perth, the Metropolitan Redevelopment Authority’s vision for Riverside is a cosmopolitan waterfront community and tourist destination. Upon completion, Riverside will be home to 7,000 new residents and 6,000 new workers. The Waterbank development lies at the heart of the precinct. 08 Perth Childrens Hospital

The hospital site is located in Nedlands and will replace Princess Margaret Hospital as the State’s dedicated children’s hospital. The project is $1.2 billion and is expecting completion in 2018. It will aim to provide specialty medical treatment, inpatient and outpatient care and day stay care services.09 Crown Casino Perth

Crown Perth, Western Australia’s only casino complex, has been extended. The precinct includes new cafés and restaurants as well as a six-star Crown Towers hotel which comprises 500 rooms. It has made a significant contribution to the state governments vision in the Burswood Peninsula.10 Other New Hotels

Perth’s hotel market is likely to grow in the near future as new hotels enter the market. New hotel development includes the 204 room Ritz Carlton at Elizabeth Quay and the 362 room Westin Hotel.

09

0105

04

06

02

Prepared exclusively for Pindan 7

This study has been prepared for the sole use of Pindan and is not to be relied upon by any third party for the purposes of financial investment without specific approval. As the publication involves projections and assumptions it can be affected by a number of unforeseen variables. The forecasts and assumptions are a prediction and whilst Urbis has made every effect to ensure that the forecasts and assumptions are based on reasonable information, they may be affected by incorrect assumptions or by know or unknown risks and uncertainties. This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) be reproduced, stored in a retrievals system or transmitted without prior written permission. Enquires should be addressed to the publishers.

PER0

428/

P

Prepared exclusively for Pindan

RESIDENTIAL PROPERTY MARKET

House and unit price growth and sales activity was strongest leading up to the Global Financial Crisis (GFC). House prices increased from $160,000 in 2000 to $462,500 in 2007 (27% p.a) and apartment prices increased from $108,000 in 2000 to $385,000 in 2007 (37% p.a). While Perth apartment sales have moderated since the 2013 post resources boom period, the median unit price has held up relatively well at $405,000 over 2016. Perth is emerging from a cyclical trough and the underlying fundamentals of a resilient economy, pipeline of infrastructure investment and the next wave of resource sector investment is expected to bolster the residential market over the medium to longer term.Numerous factors will drive a strong increase in demand for apartments in Perth. Key drivers are summarised as follows:Affordability: Perth has seen rapid growth in house prices over the last decade. Apartments offer a relatively affordable market entry point alternative to houses. First home buyers can enter a suburb which may otherwise be beyond their budget and downsizers can remain close to their existing residence and trade down. Shifting Demographics: Perth’s population has been growing at the fastest rate of any Australian capital city. An aging population, lower fertility rates, declining household sizes and prevalence of young overseas migrants are leading to an increase in demand for smaller dwellings. Low Land Availability: Few opportunities for new, single lot land subdivision, particularly in inner city areas are increasing market acceptance of higher density residential product. Apartment living offers proximity to a wide range of amenities. Government Policy: The Metropolitan Redevelopment Authority, City of Perth and WA Planning Commission all have central policy objectives striving for a greater variety in housing options and higher density development.

RESIDENTIAL SALES CYCLEMETROPOLITAN PERTH (2000 - 2016)

HOUSES ACROSS METROPOLITAN PERTH (March 2017)

MEDIAN PRICE GROWTH

Prepared by Urbis; Source: APM PriceFinder

Prepared by Urbis; Source: APM PriceFinder

Prepared by Urbis; Source: APM PriceFinder

1.7% ANNUAL CHANGE IN MEDIAN UNIT PRICE(10 years to March 2017)

Change in median price

(3 years)

Change in median price

(5 years)

Annual change in median price

(10 years)

-0.9% 1.8% 1.9%

0

100000

200000

300000

400000

500000

600000

01000200030004000500060007000

Med

ian

Pric

e

Num

ber

of S

ales

Apartment Sales

Apartment Median Price

House Median Price

2000

2002

2004

2006

2008

2010

2012

2014

2016

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BRISBANE

GOLD COAST

MELBOURNE

PERTH

SYDNEY

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