Raine and Horne Commercial

| 1 Q2 2022 Insights

2 | Welcome 03 Why Raine & Horne Commercial? 04 At a Glance – Key Market Drivers 05 Australian Capital Territory 06 New South Wales 08 Queensland 24 South Australia 31 Tasmania 34 Victoria 36 Western Australia 39 International 41 National & International Map 46 Contents

Welcome | 3 Welcome to Raine & Horne Commercial Insights for Q2 2022. Our latest findings from Raine & Horne Commercial property experts around Australia – and indeed around the world, confirm that commercial property continues to be a robust investment. We are seeing a recovery in both retail and officemarkets, whichweremost impacted by COVID-19. This pick up in demand isn’t just a sign of a healthy property market. It points more broadly to a strong business sector and a rapidly recovering economy. While the growth of online retailing was expected to impact the retail property market, Commercial Insights reveals that many retail spaces are now being purchased or leased for alternative uses by boutique enterprises such as micro breweries and coffee roasters, for example. Office markets are rebounding too as teams make a return to formal workplaces. It’s a trend that should also underpin growth in CBD retail markets. Industrial property continues to surge ahead, driven by demand from owner occupiers and investors, coupled with a significant undersupply of properties available to lease or buy. The result has been a growing number of off market sales and intense buyer competition for properties listed for sale at auction. With few new industrial developments in the pipeline across Australia, the strength of industrial property appears likely to continue for some time. Looking ahead, it is no secret that we are entering a new – and for many Australians – unfamiliar environment of rising interest rates and inflation. In this climate, I fully expect commercial property to become even more sought after as investors seek tangible assets. In recent years we have seen reports of investors losing money to cryptocurrencies, or experiencing the volatility of uncertain sharemarkets. Little wonder then, that commercial property continues to be an attractive investment. In a world of uncertainty, commercial property offers long leases that give investors the benefit of certain rent returns backed by capital growth. And that’s exactly what many investors want in their portfolio. I invite you to read through Commercial Insights Q2 2022 for expert commentary on how the commercial propertymarket is faring in your patch – and beyond. Welcome Angus Raine Executive Chairman Raine & Horne Group

4 | Welcome For almost 140 years, Raine & Horne has been assisting Australians achieve their property objectives. Since our launch in 1984, Raine & Horne Commercial has been an active market participant and is now one of the largest commercial property groups in Australia, with over 25 offices servicing every state capital, key regional growth centres and the Asia-Pacific region. We are a full-service commercial real estate network with a broad suite of commercial, industrial and retail property services including sales, leasing, consulting, business broking, business recovery and insolvency, facilities and asset management services. Why Raine &Horne Commercial?

Welcome | 5 At a Glance - The KeyMarket Drivers Investors seeking solid assets in an uncertain world Sharemarket volatility, the fall of speculative investments such as cryptocurrencies, and rising inflationaredriving investors to tangibleassetsofferingattractive returns. Commercial property fits this bill, with the potential to deliver healthy net yields and long termvalue growth. Low interest rates Interest rates in Australia continue to be low by historical standards despite a recent uptick in the cash rate by the Reserve Bank. Even as interest rates normalise to pre-pandemic levels, it is still often cheaper for a business to purchase its premises rather than lease. This is driving intense demand from owner occupiers, especially in the industrial property market. A return to ‘normal’ For two years ourway of living and doing business has been reshaped by the COVIDpandemic. But this is changing. Consumers are returning to bricks and mortar shops, offices are seeing a return of workers, and Australia has re-opened its borders to the world. As we welcome new arrivals to our country – be they immigrants or tourists, sectors such as retail and tourismwill rebound, and this will underpin demand for commercial property. Tight supply For several years now, the boom in residential property values has seen commercial properties make way for residential developments. Coupled with limited development of new industrial estates, many Raine & Horne commercial experts are reporting a significant undersupply of commercial properties. An ongoing shortage of new commercial developments suggests the current supply/demand imbalance could continue for some time.

6 | Welcome Australian Capital Territory Commercial Markets Overview

Australian Capital Territory | 7 Angus Raine, Executive Chairman of Raine & Horne Commercial says that across the region, retail and industrial properties are yielding 5-7% on average, while office property yields range from 6-8%. These yields are expected to remain stable through the remainder of 2022. According to Angus, a number of factors are driving the commercial property market in the ACT. He points to the savings of zero stamp duty on properties under $1.6 million, which is contributing to the government providing a safe haven for investors. In addition, Angus says the increasing population of Canberra and surrounds is driving demand for commercial space. Angus sums up the market saying, “The ACT had done well compared to other states during the COVID pandemic. High vaccination rates and limited lockdowns have ensured that all sectors have performed reasonably well. We are continuing to see new businesses opening up, and existing businesses expand their operations, and we expect this to continue throughout 2022.” Commercial ACT

8 | New South Wales New South Wales Commercial Markets Overview

New South Wales | 9 Across the Southwestern/Western Sydney markets, yields range from 4% on industrial property to 6% for retail and office space according to Mark Ammoun of Commercial Bankstown. Vacancy rates are tight – currently sitting at 2-3% for industrial assets, rising to 5-6% for retail space, and 5.5-6.5% in the office market. Mark explains, “The post-COVID acceleration in the commercial sector, and more specifically within the industrial space, has continued strongly throughout the year, with further growth forecast. “The market continues to perform with record levels of growth resulting in the best industrial property market we have seen.” The general market fundamentals in the Southwestern/Western Sydney regions continue to be strong, with demand considerably outstripping supply. Mark says this is resulting in double digit growth of industrial property values. “This is due mainly to a record low cost of money, and a large cohort of owner occupiers competing aggressively for the limited stock available, more often than not outbidding investors,” adds Mark. Mark Ammoun mark.ammoun@rhc.com.au Bankstown

10 | New South Wales Michael Buium says that in Sydney’s Eastern Suburbs market, current average yields are 3.5% for industrial property, rising to 4.5-5% for office space and 5% for retail properties. Michael explains that industrial buyers are mainly owner occupiers, and even investors are happy to look at vacant warehouses as they know that they can achieve a strong rental outcome. In the retail market, a property needs to be leased to a strong tenant otherwise it can be challenging to achieve a result. That said, Michael adds, “We have healthy signs especially in hospitality that tenants want to go back to business.” As a guide to the market, Michael and the team at Commercial Bondi Junction leased an office terrace in Potts Point for $290,000 per annum. Michael Buium michael.buium@rhc.com.au Bondi Junction

New South Wales | 11 Brad Rogers of Commercial Central Coast says yields are currently 4.75-5.5% for industrial property, rising to 5-6% for retail space and 5-5.75% for office property. Both the retail and industrial property markets are seeing vacancies below 5%, however this rises to between 10% and 15% for office property. According to Brad, a low supply of land on the Central Coast – and more affordable prices than Sydney, is driving the market. As a guide to the strength of the market, the team at Commercial Central Coast settled 29 deals in the first quarter of 2022 alone. An 8-unit industrial complex in Berkeley Vale has been sold off the plan, with units ranging in size from 189-225 square metres. A 14-unit complex in Tuggerah sold out prior to construction commencing. Brad Rogers brad@cc.rhc.com.au Central Coast

12 | New South Wales Across Sydney’s Inner West, yields for both retail and industrial assets are currently averaging 3.5% according to Luke Smith of Commercial Inner West | South Sydney. Vacancies in the area are low – currently less than 5% for industrial properties. Luke explains the main drivers of the local market saying, “Our markets are centrally positioned, generally being between 5-20 kilometres south/south-west of the Sydney CBD. Industrial property in these locations are low in supply and high in demand. Along with traditional industrial users, we have seen a rise in small eCommerce businesses, and alternative users such as breweries, distilleries and coffee roasters, competing for space.” Luke adds that developers are still actively looking for opportunities especially those offering value given the increased costs of construction. The team at Commercial Inner West | South Sydney have racked up considerable sales success recently. 29-31 Alfreda Street, Coogee, a 2,208 square metre prominent freehold building across four levels with leases in place to two successful businesses, was sold at auction for $16.8 million. The sales campaign attracted over 256 enquiries and 43 contracts were issued. An industrial warehouse at 12-16 FavershamStreet, Marrickville sold for $5.3million after 12 contracts were issued. The property transacted at a rate of $6,910 per square metre. A 450 square metre former ambulance station requiring substantial renovation located at 158 Edinburgh Road, Marrickville sold at auction on behalf of the NSW Government. The property sold $3 million plus GST in a hotly contested battle after 20 contracts were issued. Luke Smith lsmith@rhcss.com.au Inner West | South Sydney

New South Wales | 13 Bruce Schell of Commercial Liverpool says the region is continuing to experience consistent activity in the industrial market (both sales and leasing). Yields have remained in the 4-5% range, with continuous enquiry and demand for properties within the environs of Western Sydney International (Nancy-Bird Walton) Airport, due to be operational in 2026. Bruce explains, “There is a steady demand for smaller office suites (sub-150 square metres) in both A and B-grade spaces as population growth heightens activity. In addition, Liverpool Council is continuing excavation on the site of the proposed Civic Plaza development, which on completion will feature a 22-level tower to accommodate a combination of commercial, retail and education spaces, and an 8-level, 84-room hotel. On the retail front, demand has slipped following the ongoing impact of the pandemic. While this has dampened rental expectations, Bruce reports a steady interest to buy properties for redevelopment. “Looking past the present situation, we believe there is an upside for new developments being commenced in the foreseeable future with the capacity to achieve consistent rentals,” says Bruce. Bruce Schell bruce.schell@rhc.com.au Liverpool

14 | New South Wales Daniel Krobot of Commercial Macarthur says yields on retail and office assets are around 5%, while yields on industrial property are about 4-5%. In the retail market, vacancy rates are 5-10%. Daniel says, “With the exception of food retail, retail assets are becoming less desirable (especially high street) in our area, where we have multiple large retail shopping centres.” Industrial property is experiencing a vacancy rate below 2%. “I believe we have seen the peak in prices, and the market may now remain level,” says Daniel. “There is still a complete lack of stock available, but looming cost of money pressures will cause more caution in the market and likely result in a pull back on the crazy prices being paid for industrial assets.” The office market has a vacancy rate of around 5%, and Daniel says lack of stock is a hallmark of the current market. He adds that leasing is slowing for properties above 200 square metres. The team at Commercial Macarthur managed the sale of 28a Williamson Road, Ingleburn – a 1,848 square metre factory on a 5,000 square metre site, which sold for $6.1 million off market. Already, the team have sold 45% of the planned strata business suites due to be constructed at HQ Gregory Hills, a 10,000 square metre office/retail development. In addition, 19 units have been sold off the plan at 12 Tyree Place, Braemar, a 21-unit industrial development. “The market continues to perform with record levels of growth resulting in the best industrial property market we have seen.” Daniel Krobot daniel.krobot@rhc.com.au Macarthur

New South Wales | 15 Across the Newcastle region, current yields are averaging 5.3% for retail property, rising to 5.5% for office assets and 6% for industrial space. Warren Plumb of Commercial Newcastle expects these yields to rise as we head through 2022. According to Warren, the retail market in Newcastle has seen a moderate uptick in market activity since the lifting of lockdowns in late 2021. He expects the industrial market to lift substantially given the lack of industrial land in the Newcastle area. Warren expects only a slim change in the office market as we progress through the year. A low supply of land on the Central Coast – and more affordable prices than Sydney, is driving the market. Warren Plumb warren.plumb@newcastle.rhc.com.au Newcastle

16 | New South Wales Nick Moloney says current average yields in North Sydney are 4-5% for industrial and office space, rising to 5.5-6.5% for retail properties. In the retail market, Nick says, “Existing businesses that have survived COVID lockdowns are now experiencing stronger trading conditions as the return to CBDs continues to gain traction. Vacancy for retail space has now levelled out across the Lower North Shore, with some recent evidence showing new groups are targeting and securing leases. As a guide, we recently leased a prime retail space in Kirribilli to teahouse chain Chatime – a site that had struggled to gain interest during the lockdown of 2021. Nick adds, “The North Sydney market is currently experiencing a significant increase in new commercial office space for lease, bringing A-grade space to the market. The superior buildings are drawing tenants such as Channel 9 to the area.” The team at Commercial North Sydney secured the recent sale of 20 Hope Street for $2.15 million following 116 enquires and 14 contracts issued. The sales campaign lasted just 14 days. Eight properties in one line at 161 Walker Street, North Sydney were sold for a combined price of $8.834 million. Nick Moloney nick@rhcns.com.au North Sydney

New South Wales | 17 Yields in the Parramatta region range from 4.5-5% for industrial and office assets through to an average of 5% for retail space. Duarte Figueira of Commercial Parramatta expects these yields to remain stable through 2022. As a guide to market snippets, Duarte says buyers are actively looking for properties that can be further developed. Retail properties in the area are attracting interest from foreign investors, and all segments of the commercial market in Parramatta are rebounding following the lifting of lockdowns in 2021. The industrial market is particularly hotly contested with a vacancy rate of just 2%. In a major leasing transaction, the team at Commercial Parramatta secured the lease of 28 George Street, Parramatta – a 2,800 square metre space, to the University of New England. Duarte Figueira dfigueira@rhc.com.au Parramatta

18 | New South Wales There’s a lot happening in the Penrith market right now. As Colin Henry of Commercial Penrith explains, current average yields for industrial assets are 5%, rising to 4.5-5% for retail properties, and 5% for office space. Retail yields are expected to fall due to rising inflation. On the office front, Colin is forecasting yields to fall, adding, “Unless there is a good quality lease term in place a property is unlikely to appeal to investors.” In terms of industrial property, yields are expected to stay the same. Colin notes, “We are experiencing the highest level of demand in industrial property at the moment – and we are still seeing limited stock levels.” The team at Commercial Penrith have managed a number of significant deals recently including the leasing of 1,406 square metres at Werrington Corporate Centre, being one of the largest commercial office leases ever committed in the Penrith LGA. Colin Henry colin.henry@rhc.com.au Penrith

New South Wales | 19 Luke Horton of Commercial PortMacquarie says buyer demand for all types of commercial property remains strongwithin PortMacquarie. The low cost of money and increased number of self-managed super funds are key factors driving demand for commercial real estate in the region, as well as out of town investors looking for opportunities. As a result, yields have tightened and now reflect between 5-6% net, and there has been no differential in yields across industrial, retail or office property. Businesses involved in the employment/training sector and government funded businesses are themost active in the office leasingmarket. Building companies remain busy too, and are actively renting and purchasing warehouses, as well as setting up sales offices and administration space. “Rents have increased in industrial property by up to 50% over the past three years due to demand,” says Luke. “Lease renewals have been more challenging. The mum and dad business operators are still cautious and recovering from impacts of local fire and flood events and COVID restrictions that, combined, have affected the local area for over four years. Most are electing for one-year renewals to see how the next 12 months work out.” “The prospect of more interest rate hikes, ongoing wet weather and a new Federal Government, were among the reasons many tenants were going down the short lease commitment path,” Luke said. Several large long termownership landholdingswithin Port Macquarie have been put on themarket recently, somewith price expectations more than $100 million, which is encouraging for the area to see new buyer/investor opportunities. Luke Horton lhorton@rhcpmq.com.au Port Macquarie

20 | New South Wales Anthony Bouteris of Commercial Sutherland Shire, says yields range from 4-5% on retail and office assets, with a range of 3.5%-4.5% on industrial property. According to Anthony, “Owner occupiers, especially tradies, are still fueling demand for industrial assets. Also, we are seeing demand from companies located close to the city that are looking at relocating to cheaper office space in the Shire.” Retail leasing has picked up in the Shire, and the team at Commercial Sutherland Shire have leased in excess of $450,000 per annum in retail leases over the last two months. Industrial sales and leasing is the tightest it has ever been in the Shire says Anthony, driven partly by a shortage of industrial land in the Sydney metro area. Anthony’s team, for example, just leased Unit 1/10 Northumberland Drive, Caringbah for $250 per square metre net. Demand for office space to purchase has increased in the last two months, with good signs the sector is recovering well after COVID. Anthony Bouteris anthony@rhmiranda.com.au Sutherland Shire

New South Wales | 21 Bob Newlan of Commercial Tamworth says yields in the area range from 6% on retail property through to 7% on industrial assets and 8% on office stock. “In the face of the poor weather and the impact of COVID 19, the Tamworth market remains strong,” says Bob. “The issue we have is the shortage of product at present. Otherwise the market is sound.” Bob says demand remains strong for industrial property but supply is now quite low. Retail activity, whilst impacted by COVID in recent times, remains strong, supporting low vacancy rates in the retail property segment. In the office market, demand is moderate, and Bob says “supply is satisfactory.” As a guide to the health of the Tamworth market, the team at Commercial Tamworth secured the sale of 12 Kingsford Smith Street, Tamworth – an industrial factory, for $780,000 or 5% net return. 181 Marius Street, Tamworth was sold as a development site in the CBD for $1.9 million. An investment site at 82 Brisbane Street, Tamworth was sold for a 7% net return. In the leasing market, 329 Peel Street, Tamworth was leased for $75,000 plus GST gross per annum. Bob Newlan bob.newlan@rhc.com.au Tamworth

22 | New South Wales Craig Tait of Raine & Horne Wagga Wagga reports, “Low interest rates and improved economic conditions have driven demand for commercial property in the Wagga Wagga region.” Yields in the area average 6-7% for retail assets, 6.5-7.5% for industrial property, and 6.5-7.5% for office space. Activity has definitely picked up post-lockdowns. Craig says that in the retail market, “We are seeing more foreign investment. One investor has purchased over $7.3 million worth of property via Raine & Horne Commercial Wagga Wagga over the past 12 months.” He adds that the office segment has also attracted “some foreign investment for office property over the past 12 months, predominantly associated with mixed use retail property.” Raine & Horne Commercial Wagga Wagga secured the sale of 80-84 Baylis Street, a multi-tenanted retail building for $3.95 million. 16 Baylis Street was leased to La Porchetta on a 5x5-year term. GPC Asia Pacific leased 1 Sutton Street on a 6x5x5-year term. Craig Tait craig.tait@wagga.rh.com.au Wagga Wagga

New South Wales | 23 Mathew Ivanoff of Commercial Wollongong says yields on commercial property in the region range from 5.5% for office space through to 6% for industrial assets and 7.5% for retail property. Overall, Mathew says it is “Positive to see a return of small business confidence purchasing and leasing larger premises following the end of COVID lockdowns.” He adds that light industrial property is highly sought together with multi-storey development sites surrounding the Wollongong CBD. The team at Commercial Wollongong recently secured the sale of a commercial building on the fringe of the CBD, for $13 million. A CBD development site was sold for $8.7 million, and a CBD entertainment precinct site secured a sale price of $9 million. As further evidence of the health of the local market, a waterside residential development site was sold for $8.1 million. Mathew Ivanoff mathew@rhw.com.au Wollongong

24 | Queensland Queensland Commercial Markets Overview

Queensland | 25 Trent Bruce of Commercial Brisbane North, says yields on commercial property in the area are typically 4.5-6% across the board. Trent explains, “There remains a strong shift for tenants to move to owner occupier status due to the availability of cheap funding. Even with rate increases it will be cheaper to buy than lease for some considerable time moving forward.” In addition, Trent is seeing strong buyer interest from interstate investors chasing higher yields than those on offer in the southern states. The industrial asset market is especially strong, with vacancies below 2%, and no sign of the market slowing throughout 2022. “Our market continues to be influenced by strong interstate migration and investors from Sydney and Melbourne,” notes Lee. “Interest rates remain low with excellent conditions for investors and owner occupiers. Our auction clearance rate for 2021 was in excess of 90%, and we see no reason why the market will not continue to shine throughout 2022.” As a guide to recent sales, the team at Commercial Brisbane North secured the sale of 3-5 Hinkler Court, Brendale – an industrial complex, for $5.22 million. A freestanding office/commercial building at 3 Gregory Terrace, Spring Hill sold for $3.5 million, and 723 & 725 Albany Creek Road, Albany Creek, a retail/medical building with 10 tenancies, sold for $8.3 million. Trent Bruce trent.bruce@rhc.com.au Brisbane North

26 | Queensland Joseph Grasso of Commercial Brisbane South says current average yields for industrial property are 5.5%. This rises to 5.75% for retail assets and 6% for office space. Joseph says the key drivers in the region are a desire to move away from flood affected areas, coupled with investors and owner occupiers taking advantage of the current low interest rate climate. He adds that strong demand for industrial property “doesn’t look like slowing down yet.” But notes, “Post-2022 we would expect that the market will return to a more normal demand/supply situation following multiple interest rate rises.” The team at Commercial Brisbane South have achieved some great runs on the board this year including the sale of 594 Boundary Road, Archerfield, a warehouse, factory and industrial complex, for $6.5 million. Another industrial property at 1436 Ipswich Road, Rocklea sold for $5.5 million. Joseph Grasso joseph@cbs.rhc.com.au Brisbane Southside

Queensland | 27 According to Michael Parisi of Commercial Gold Coast, retail properties on the Coast are yielding 4-5%, figures that rise to 5-7% for industrial assets, and 7% for office space. Michael explains that yields are a key driver of the market at present. He adds that as southern buyers migrate to south east Queensland to live, they are “bringing with them an appetite for local commercial product.” The industrial market is experiencing vacancy rates below 5%, rising to 10% for office space. Michael adds, “Outside of Surfers Paradise, vacancies are tight. Within Surfers Paradise there is a high percentage of vacancies, and this will not change until there is an increase in tourism from overseas.” Michael notes that the Gold Coast/south east Queensland area has weathered storm surges with rainfall measured in meters, and the recovery is slow owing to lack of availability of building supplies and tradesmen. Despite this – and the slow return of tourism, Michael believes the Gold Coast is “showing its resilience in bouncing back to business as normal”. “Prices for property are driven up because of increased demand and low supply. This equates to competition even when average properties come to market. Sound commercial properties are now regularly achieving yields in the high 3-4% range,” says Michael. Michael Parisi michael.parisi@rhc.com.au Gold Coast

28 | Queensland The Mackay region is seeing yields of 7% for retail assets, 7.5-8% for industrial space, and 8.5-9.5% for office property says Des Besanko of Commercial Mackay. One of the key drivers in the Mackay market is the above average yields achievable in the region, which Des says is making the region very attractive to investors from southern states. In particular, Des says a diminishing supply of industrial land stock will likely put upward pressure on rents due to lack of supply alternatives. He explains, “An industrial warehousewe sold achieved a newstandard of 7.59%net yield. Until then, the next best yieldwas approximately 8% net. Local valuers had still been set on nothing below 8% net.” Des Besanko des.b@rhc.com.au Mackay

Queensland | 29 David Smith of Commercial Sunshine Coast says commercial property activity in the region has hit a significant peak. “In the six weeks leading up to the middle of December, we completed as many sales and leasing transactions under my banner as I had in the previous six months,” he notes. “We had 44,000 people move to the Sunshine Coast over the last year, and the local population is set to reach 500,000 by 2031. The key issue we face is insufficient supply of commercial property stock to keep up with demand. Availability of vacant industrial land between Noosa and Caloundra is at an all-time low, and in the 40 years of operating in the Sunshine Coast industrial and office market I have never supply so low for either sale or lease.” According to David, low interest rates are making it more sensible for SMEs to try and buy their premises in the industrial and office sectors. However, the lack of stock can be a hurdle. “IT companies are looking at industrial space because they need storage facilities,” says David. “Also, there is a growing demand for industrial property from businesses operating in the liquor industry such as boutique beer breweries and other alcohol manufacturers.” Looking ahead, David predicts that Walker Corporation’s long-term $2.5 billion investment in the Maroochydore City Centre known as Sun Central, will transform the region’s commercial real estate market. Walker Corporation has negotiated an agreement with Sunshine Coast Council to develop a 53-hectare greenfield site in the heart of Maroochydore. The development will transform the CBD into a 21st century precinct with about 160,000 square metres of commercial and retail space and 4,000 residential apartments. “We expect people with small businesses to relocate here from interstate and Brisbane, and this will drive demand for space within Sun Central,” Mr Smith said. David Smith davidcsmith@csc.rhc.com.au Sunshine Coast

30 | Queensland Andrew Lynch of Commercial Toowoomba says commercial property in the Toowoomba region is currently yielding 6-7% on average. He adds that industrial yields are expected to rise, noting, “Industrial property has been hot property with nearly everything selling within a reasonable time frame of hitting the market. We are also doing a lot of off market transactions as we have buyers on our books looking for the right property.” According to Commercial Toowoomba’s Nick Koenig, “There are a lot of owner occupiers looking at the moment, however we are seeing a shortage of suitable stock. Owner occupiers have been paying a bit more for property than investors.” The team at Commercial Toowoomba have achieved tremendous results recently including the sale of 123 North Street, Toowoomba, an industrial property, for $3.2 million, which was secured by a local company looking for larger premises for their expanding business. In the leasing market, an office at 112 Drayton Street, Dalby was leased to a corporate tenant for $116,500 per annum, while 119 Cunningham Street, was leased for over $200,000 per annum on a 7-year term. Andrew Lynch andrew.lynch@toowoomba.rh.com.au Toowoomba

Queensland | 31 ` South Australia Commercial Markets Overview

32 | South Australia Simon Winter, Principal of Raine & Horne Business Sales, believes the business sales market is very strong at present – and he adds that rising interest rates could drive the market higher. Simon explains, “The very low interest rates we have seen through the pandemic have seen a lot of funds shift into housing – and indeed, the property market has been a focus of bank lending. “However, during periods of higher rates we typically see an increase in business sales activity as the housing market comes off the boil and both lenders and investors look for other opportunities.” On the supply side, Simon notes that there is a steady supply of business owners across the board who are keen to sell – often underpinned by owners simply wanting a break after navigating the worst of the pandemic, or by owners who had delayed retirement plans through COVID. Summing up the business sales market, Simon says, “We are very bullish over the short to medium term. We believe the business sales market will be solid for some time to come. The number of business being sold is higher than the past two years of the pandemic, and the quality of enterprises being listed for sale is also very good. Moreover, we expect this quality to continue.” Simon Winter simon.winter@bsa.rh.com.au Business Sales

South Australia | 33 David Ente of Commercial South Australia says yields on commercial assets range from 3-5% for retail and industrial space to 4-6% on office property. He adds that industrial property has enjoyed strong growth in the past 12 months, and this is expected to stabilise. The team at Commercial SA have enjoyed significant successes this year, securing the sale of 28 Park Street, Woodville West for $7 million. David and his team also managed the sale of 19-29 Glynburn Road, Glynde for $7.2 million, and the sale of 4 Smart Road, Modbury for $3.35 million. David Ente david.ente@rhc.com.au Commercial SA

34 | Tasmania Tasmania Commercial Markets Overview

Tasmania | 35 Leslie Simpson of Commercial Hobart says current average yields in Hobart range from 4.5-5.5% for retail property, through to 4.75%- 5.25% on industrial space and 5-6% for office property. Vacancy rates are low in Hobart. Office property has a vacancy rate of just 2.7%, rising to 5-6% for industrial space and 6-8% for retail properties. Leslie explains, “Low interest rates, strong demand for industrial land and assets, a multiplier effect from the housing boom, and a strong Tasmanian economy are all driving the commercial market in Hobart.” He adds, “Sustained strong industrial demand and limited land throughout all areas of greater Hobart has resulted in exceptional growth of the industrial market in greater Hobart.” As a guide to the strength of the market, the team at Commercial Hobart managed the sale of a warehouse complex at 2 Cessna Way, Cambridge, which sold off the plan for $3.5 million. A retail warehouse complex at 6 Mertonvale Circuit, Kingston sold for $1.775 million (4.7% yield), and an office building at 447 Main Road, Glenorchy was leased for $80,000 per annum plus outgoings. Leslie Simpson leslie.simpson@rhc.com.au Hobart

36 | Victoria Victoria Commercial Markets Overview

Victoria | 37 Across Brunswick, retail property is yielding 5-6%, office assets 6-7% and industrial property is delivering yields of 4-5%. These yields are expected to remain stable, with the exception of office yields, which are forecast to fall. TimFrlan of Commercial Brunswick says low interest rates are the main driver of activity in the area. Vacancy rates in the Brunswick area range from a tiny 2% among industrial assets through to 7% for retail space, and as high as 12% for office property. Current average yields are in the order of 5-6% for retail assets, 4-5% for industrial, and 6-7% for office space. Commercial Brunswick have achieved a number of sales/leasing successes recently including the sale of 787 Sydney Road, Brunswick, a retail premises that sold for $4.5 million with vacant possession to an owner occupier. Tim Frlan tim.frlan@brunswick.rh.com.au Brunswick

38 | Victoria Patrick Mammone of Commercial Victoria says current average yields for retail property are around 4-5% for industrial assets, and 4.355% for office property. Patrick expects these yields to remain stable through 2022. In the retail market Patrick says, “The government is working hard to restore confidence among retailers, supporting them in re-opening shops and re-engaging with customers. There is also a trend for workplace teams to return to the office, which is positive for the retail segment.” The industrial market, where the vacancy rate is a tiny 2%, has remained relatively quiet during the pandemic according to Patrick. However, key indicators suggest this sector has become significantly more active in the last 2 years. There is a huge shortage of large parcels of industrial land within 40 kilometres of the Melbourne CBD. Prices indicate that another rise is on its way and yields are expected to move with the market. Increases in the last 2 years are a staggering 360% across the board and Patrick expects that this will slowly start to stabilise by Q4 of 2022. In the office sector, a growing number of employers are encouraging their workforce to return to the office. That said, a lasting trend for hybrid working space may underpin alternative uses for offices such as co-shared space. The team at Commercial Victoria recently secured the sale of 27-39 Miller Street, Epping – a 40,522 square metre, Activity Centre Zone property, for $18.2 million an increase of 343% since the property last sold in 2015. Patrick Mammone patrick@vic.rhc.com.au Commercial VIC

Victoria | 39 ` Western Australia Commercial Markets Overview

40 | Western Australia Anthony Vulinovich of Commercial Western Australia says positive sentiment among investors and owner occupiers is a dominant feature of Perth’s commercial property market. The competitive construction market has seen price increases, which have been fuelled by the growth in land values amid tight supply across Perth’s industrial market. “Construction costs have substantially risen over the past 18 months, which has led prices having to be at a certain level to achieve proper margins for the developer,” Anthony says. “Hence, the Perth industrial market is very much aligned with the general market as far as building issues, the low interest rate environment and price increases.” The more traditional industrial hot spots of Perth, such as Kewdale, Welshpool, Bayswater, and Canning Vale, Bibra Lake and Wangara have very limited available stock of land or buildings for sale. Anthony says, “Investors and owner occupiers are now looking further afield, north to Neerabup, and in the south, to Rockingham, Hope Valley, and Forestdale. These areas were once seen as secondary but are now looked upon favourably for relocation.” A broad cross-section of investors are looking to Perth as a favourable opportunity. “Nationally, Perth is the most affordable market, and this is attractive to investors locally, nationally and internationally,” Anthony says. Anthony Vulinovich anthony.vulinovich@rhc.com.au Commercial WA

Western Australia | 41 ` International Commercial Markets Overview

42 | International Sanjay Chimnani says yields in Dubai are currently averaging about 6% for retail and office properties, rising to 8.5% for industrial assets. Sanjay believes yields on retail could fall to 5% as new supply enters the market. In the industrial segment, where vacancy rates are down to just 5%, yields are forecast to climb to 9%, with Sanjay saying logistics and industrial activity is on the way up. Office yields may also rise as the market is now nearing 80% plus occupancy – the highest in eight years. The COVID pandemic has had limited impact in Dubai. Sanjay explains, “We had five weeks of lockdowns and restrictions, and the impact was felt primarily by the hospitality sector due to disruption in tourist arrivals.” The team at Raine & Horne Dubai achieved recent success with the lease of office space and a warehouse to Coca-Cola, Dubai. Sanjay Chimnani sanjay.chimnani@dubai.rh.com.au Dubai

International | 43 Muhammad Zhahril Dato’ Zaki of Raine & Horne International Zaki Partners Malaysia says current average yields in the office market are currently 5-7%. This rises to 6-8% for retail property. In the retail property market, Muhammad says the eCommerce trend may slow demand for physical shops. However, the food and beverage sector is expected to take up some of the unoccupied retail space. In addition, continuous supply of new retail space may impact the occupancy rates of less competitive retail malls. In the industrial property market, demand for warehousing is increasing, especially for logistics services. Supply is also being impacted by the establishment of several ‘mega’ industrial parks in the northern regions of Peninsula Malaysia such as Kedah Rubber City, Kedah Aerotropolis and Bukit Kayu Hitam Special Border Economic Zone. Across the office property market, Muhammad believes the ongoing growth of remote working may reduce demand for conventional office space. Exchange 106 and Merdeka 118 are expected to bring multi-million square metres to the office market, which will lead to massive competition among existing office blocks. Muhammad Zhahril Dato’ Zaki Zhahril.Zaki@malaysia.rh.com.au Malaysia

44 | International Shyamlee Raju of Raine & Horne Fiji says current average yields are 3-5% across both the retail and office markets. These yields are expected to remain stable throughout the remainder of 2022 owing to a softening of the economy and the uncertainty of an upcoming election later in the year. While Shyamlee anticipates no change in the retail market over the months ahead, the office market may soften due to an oversupply and downsizing among businesses. Shyamlee Raju shyamlee.r@raineandhorne.com.fj Fiji

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