LL CW2 - URBIS Victoria Harbour Precinct Outlook Report March

1 Bed $580 2 Bed $800 3 Bed $1,200 Thispublication ispreparedbyUrbisPtyLtdonthe instructionsofLendleaseand isforthesoleuseofLendleaseandthoseofLendlease'scustomersorprospectivecustomerstowhom Lendleasedisclosethispublication.Thepublication isnotsuitableforusebyanyotherpartyandmaynotbeprovidedtoanyotherpartywithoutthespecificapprovalofLendleaseandUrbis.The publicationcontainsforecasts,projectionsandassumptions(Content)whichmaybeaffectedbyanumberofunforeseenvariables.WhilstUrbishasmadereasonableeffortstoensurethatthe forecasts,projectionsandassumptionsarebasedonreliable informationandarereasonable,theymaybeaffectedbycircumstancesthatdonotnecessarilyeventuateorbyknownorunknown risksanduncertainties. Itshouldbenotedthatpastperformance isnotnecessarilyareliable indicationoffutureperformance.TheCOVID-19pandemic isassumednottohavematerially impactedtheContent(unlessotherwisestated).Youmustcarefullyconsiderthe impactoftheCOVID-19pandemic(includingontheContent)whenmakinganydecisionsregardingtheassets orbusinessactivitiestowhichthispublicationrelates.AnyContentaddressingthe impactoftheCOVID-19pandemicontheasset(s)andanybusinessoperationstowhichthepublication relates is(unlessotherwisespecificallystated inthepublication)unsupportedbyspecificandreliabledataand informationandmustnotbereliedon.The information inthispublicationdoes notrepresentfinancialadviceandshouldnotberegardedassuch. Ithasbeenpreparedwithouttaking intoaccountyourfinancialsituationor investmentobjectives.Youshould,beforeactingon any information inthispublication,fullyconsidertheappropriatenessofthe information,havingregardtoyourobjectivesandcurrentfinancialortaxationsituationandneedsand, ifnecessary, seekappropriateprofessionaladvice.The information issubjecttochangewithoutnoticeandUrbis isundernoobligationtoupdatethe informationorcorrectanyassumptionswhichmay changeovertime.Thispublication issubjecttocopyright.ExceptaspermittedundertheCopyrightAct1968,nopartof itmay, inanyformorbyanymeans(electronic,mechanical,photocopying, recordingorotherwise),bereproduced,stored inretrievalssystemortransmittedwithoutpriorwrittenpermissionofUrbis.Enquiriesshouldbeaddressedtothepublishers. P0045143 APARTMENT DEMAND OUTSTRIPS SUPPLY The City of Melbourne is forecast to require an additional 30,000 dwellings by 2027. The apartment pipeline for Central Melbourne equates to 8,500 at present which does not match the forecast demand. With the pipeline constrained, newly built apartments within Docklands will be in high demand. This, coupled with increasing demands from overseas migrations and an influx of international students may drive apartment prices higher. Docklands apartments have seen strong median price growth of 4% in the last 12 months to December 2022, compared with 3% across the wider City of Melbourne. Apartments within the suburb also achieved an average 9% price premium over Melbourne CBD, Southbank and wider City of Melbourne. Several factors may drive this premium: Waterside location and water and city views Newer, quality apartment stock Tranquil atmosphere Proximity to lifestyle and entertainment amenity Of the 1,610 apartment sales in Docklands that transacted over the last three years, 47 of these sales transacted over $2,000,000. Of these premium sales, almost half sold for over $2,500,000, with a higher sale price of $3,500,000. This is indicative of the proportion of premium and quality apartments and townhomes with water views in Docklands. PREMIUM APARTMENT RENTS There is a sizeable investment market within Docklands, reflected by 70% of the population renting, compared with 31% across Greater Melbourne. New apartment product in Docklands achieved an average gross rental yield of 4.0%, compared to 3.8% across Greater Melbourne in December 2022. Newly built apartment product in Docklands achieved a median weekly rent of $850 in the 95th percentile, over the three years to 2022. One, two and three bed apartments achieved weekly rents of $580, $800 and $1,200 respectively, with two bedroom apartments being the most popular choice. Coupled with high rental yield and a lower vacancy rate when compared to Melbourne CBD and Southbank, Docklands' rental market is attractive for investors and primed for growth. DOCKLANDS NEW APARTMENT WEEKLY RENTS* 2018-2022 *Data is 95th percentile Source: Urbis - Rental Intelligence Dashboard DOCKLANDS NEW APARTMENT RENTAL YIELD December 2022 1 Bed 2 Bed Source: Urbis Apartments Essentials VACANCY RATES January 2023 Source: SQM Research 1.5% Melbourne CBD 1.4% Southbank 1.3% Docklands DOCKLANDS PREMIUM APARTMENT SALES 2019-2022 *12 months to December 2022 Source: Pricefinder, Urbis*In year to Sept 2021 47 sales over $2M 45% over $2.5M Highest sale $3.5M* 3 Bed 4.0% 3.6% 4.3%