Melbourne Quarter - Urbis CBD Market Outlook Report June 2021

Thispublication ispreparedonthe instructionofLendleaseand isnotsuitableforuseotherthanbythepartytowhom it isaddressed.Asthepublication involvesprojectionsandassumptions itcanbeaffectedbyanumberofunforeseenvariables.TheforecastsandassumptionsareapredictionandwhilstUrbishasmadeeveryefforttoensurethattheforecastsandassumptions arebasedonreasonable information,theymaybeaffectedbyassumptionsthatdonotnecessarilyeventuateorbyknown,orunknown,risksanduncertainties. Itshouldbenotedthatpast performance isnotnecessarilyareliable indicationoffutureperformance.The information inthepublicationdoesnotrepresentfinancialadviceandshouldnotberegardedassuch. Ithasbeen preparedwithouttaking intoaccountyourfinancialsituationor investmentobjectives.Youshouldconsidertheappropriatenessofthe information inregardstoyourcurrentfinancialsituation orneeds.Urbisacceptsnoresponsibilityfortheaccuracyorcompletenessofanysuchmaterial.The information issubjecttochangewithoutnoticeandUrbis isundernoobligationtoupdate the informationorcorrectanyassumptionswhichmaychangeovertime.ThisstudyhasbeenpreparedforthesoleuseofLendleaseand isnottoberelieduponbyanythirdpartywithout specificapprovalfromUrbis.Thispublication issubjecttocopyright.ExceptaspermittedundertheCopyrightAct1968,nopartof itmay, inanyformorbyanymeans(electronic,mechanical, photocopying,recordingorotherwise)bereproduced,stored inaretrievalssystemortransmittedwithoutpriorwrittenpermission.Enquiresshouldbeaddressedtothepublishers. P0006588/M RESIDENTIAL MARKET Melbourne CBD has seen strong growth in median apartment price, with an 8% increase in the last year. Long term growth has also been realised, with a 4% annual increase over the last decade reflecting a resilient residential market. RENTAL MARKET There is a sizeable investment market within Melbourne’s CBD, reflected by 74% of the population renting, compared with 29% across Greater Melbourne. New stock additions are reflected in the growth of rental contracts in the last 6 months. Melbourne CBD apartments achieved a gross rental yield of 3.6% at February 2021, compared to 2.9% in Sydney CBD. Melbourne apartments achieved a median weekly rent of $400 in March 2021, across all bed types. This is more affordable by $200, when compared to Sydney apartments. Coupled with strong rental yield and contract volume growth, Melbourne's rental apartment market is primed for recovery, a positive for potential investors. MELBOURNE VS SYDNEY MEDIAN WEEKLY RENT Apartments - March 2021 Source: PriceFinder, Urbis - Rental Intelligence Platform MEDIAN APARTMENT PRICE Melbourne CBD 10-Year Growth p.a. +4% Source: PriceFinder, Urbis Melbourne CBD $578,000 $535,000 $396,000 Source: PriceFinder, Urbis Data is at February, 2021 1-Year Growth +8% $578,000 2011 2020 2021 Melbourne apartments are 83% more affordable than Sydney. The past year saw a median off-the- plan apartment price of $578,000 in Melbourne, compared with $1,060,000 in Sydney. The cash rate is currently at a historical low of 0.1% since November 2020. New home loan rates have fallen below 3% per annum since March 2020, steadily decreasing to 2.8% in March 2021. Melbourne’s residential market is primed for strong growth. APARTMENT AFFORDABILITY February 2021 $1,060,000 83% affordability Sydney CBD Source: asx.com.au *Interest rate information is indicative only AUSTRALIA'S CASH RATE 4.8% 0.1% 4.7% May 2011 May 2021 $400 $600 $200 affordability Melbourne Sydney INDICATIVE GROSS RENTAL YIELD February 2021 3.6% 2.9% Melbourne (3000) Sydney (2000) Source: PriceFinder, Urbis Rolling Annual - Quarters 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 1 Bed 2 Bed 3 Bed MAR 11 SEP 11 MAR 12 SEP 12 MAR 13 SEP 13 MAR 14 SEP 14 MAR 15 SEP 15 MAR 16 SEP 16 MAR 17 SEP 17 MAR 18 SEP 18 MAR 19 SEP 19 MAR 20 MAR 21 SEP 20 RENTAL CONTRACT VOLUME – UNITS Melbourne (Suburb) Source: Department of Health & Human Services, Urbis.