URBIS Gosford Residential Market Assessment by alanddevelopments

GOSFORD RESIDENTIAL MARKET ASSESSMENT

PreparedforALAND

August2022

COVID-19ANDTHE POTENTIALIMPACTON DATAINFORMATION

Thedataandinformationthatinformsandsupports ouropinions,estimates,surveys,forecasts, projections,conclusion,judgments,assumptionsand recommendationscontainedinthisreport(Report Content)arepredominantlygeneratedoverlong periods,andisreflectiveofthecircumstances applyinginthepast.Significanteconomic,healthand otherlocalandworldeventscan,however,takea periodoftimeforthemarkettoabsorbandtobe reflectedinsuchdataandinformation.Inmany instancesachangeinmarketthinkingandactual marketconditionsasatthedateofthisreportmay notbereflectedinthedataandinformationusedto supporttheReportContent.

TherecentinternationaloutbreakoftheNovel Coronavirus(COVID-19),whichtheWorldHealth Organisationdeclaredaglobalhealthemergencyin January2020andpandemicon11March2020,has andcontinuestocauseconsiderablebusiness uncertaintywhichinturnmateriallyimpactsmarket conditionsandtheAustralianandworldeconomies morebroadly.

Theuncertaintyhasandiscontinuingtoimpactthe Australianrealestatemarketandbusiness operations.Thefullextentoftheimpactonthereal estatemarketandmorebroadlyontheAustralian economyandhowlongthatimpactwilllastisnot knownanditisnotpossibletoaccuratelyand definitivelypredict.Somebusinesssectors,suchas theretail,hotelandtourismsectors,havereported materialimpactsontradingperformance.For example,ShoppingCentreoperatorsarereporting materialreductionsinfoottrafficnumbers, particularlyincentresthatordinarilyexperiencea highproportionofinternationalvisitors.

Thedataandinformationthatinformsandsupports theReportContentiscurrentasatthedateofthis reportand(unlessotherwisespecificallystatedinthe Report)doesnotnecessarilyreflectthefullimpactof theCOVID-19OutbreakontheAustralianeconomy,

theasset(s)andanyassociatedbusinessoperations towhichthereportrelates.Itisnotpossibleto ascertainwithcertaintyatthistimehowthemarket andtheAustralianeconomymorebroadlywill respondtothisunprecedentedeventandthevarious programsandinitiativesgovernmentshaveadopted inattemptingtoaddressitsimpact.Itispossiblethat themarketconditionsapplyingtotheasset(s)and anyassociatedbusinessoperationstowhichthe reportrelatesandthebusinesssectortowhichthey belonghasbeen,andmaybefurther,materially impactedbytheCOVID-19Outbreakwithinashort spaceoftimeandthatitwillhavealongerlasting impactthanwehaveassumed.Clearly,theCOVID19Outbreakisanimportantriskfactoryoumust carefullyconsiderwhenrelyingonthereportandthe ReportContent.

Wherewehavesoughttoaddresstheimpactofthe COVID-19OutbreakintheReport,wehavehadto makeestimates,assumptions,conclusionsand judgementsthat(unlessotherwisespecificallystated intheReport)arenotdirectlysupportedbyavailable andreliabledataandinformation.AnyReport ContentaddressingtheimpactoftheCOVID-19 Outbreakontheasset(s)andanyassociated businessoperationstowhichthereportrelatesorthe Australianeconomymorebroadlyis(unless otherwisespecificallystatedintheReport) unsupportedbyspecificandreliabledataand informationandmustnotbereliedon.

Tothemaximumextentpermittedbylaw,Urbis(its officers,employeesandagents)expresslydisclaim allliabilityandresponsibility,whetherdirector indirect,toanyperson(includingtheInstructing Party)inrespectofanylosssufferedorincurredasa resultoftheCOVID-19Outbreakmaterially impactingtheReportContent,butonlytotheextent thatsuchimpactisnotreflectedinthedataand informationusedtosupporttheReportContent.

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ThisreportisdatedAugust2022andincorporatesinformationand eventsuptothatdateonlyandexcludesanyinformationarising,or eventoccurring,afterthatdatewhichmayaffectthevalidityofUrbis PtyLtd’s(Urbis)opinioninthisreport.Urbispreparedthisreportonthe instructions,andforthebenefitonly,ofALANDforthepurposeofa MarketAssessmentandnotforanyotherpurposeoruse.Urbis expresslydisclaimsanyliabilitytotheInstructingPartywhoreliesor purportstorelyonthisreportforanypurposeotherthanthePurpose andtoanypartyotherthantheInstructingPartywhoreliesorpurports torelyonthisreportforanypurposewhatsoever(includingthe Purpose).

Inpreparingthisreport,Urbiswasrequiredtomakejudgementswhich maybeaffectedbyunforeseenfutureeventsincludingwars,civil unrest,economicdisruption,financialmarketdisruption,business cycles,industrialdisputes,labourdifficulties,politicalactionand changesofgovernmentorlaw,thelikelihoodandeffectsofwhichare notcapableofpreciseassessment.

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©UrbisPtyLtd ABN50105256228 AllRightsReserved.Nomaterialmaybereproduced withoutpriorpermission. Youmustreadtheimportantdisclaimerappearingwithin thebodyofthisreport. 10/08/2022 GosfordMarketAssessmentPage3 Urbisstaffresponsibleforthisreportwere: DirectorAlexStuart SeniorConsultantJenniferWilliams ResearchAnalystMaxForrester AssistantResearch AnalystSabinaKrslovic ProjectcodeP0041519

Urbisacknowledgestheimportantcontribution thatAboriginalandTorresStraitIslander peoplemakeincreatingastrongandvibrant Australiansociety.

Weacknowledge,ineachofouroffices,the TraditionalOwnersonwhoselandwestand.

CONTENTS 10/08/2022 GosfordMarketAssessmentPage4 ExecutiveSummary5 Introduction7 ResidentialAssessment11 StudyAreaDefinition12 PopulationGrowthandDemographics15 Supply22 CompetitorAnalysis26 Demand34 Appendices44

EXECUTIVE SUMMARY

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EXECUTIVESUMMARY

ProjectBackground

ALANDownsalargedevelopmentsiteat108-118DonnisonStreet,Gosford. ALANDrequiresmarketevidencetoinformthedesignoftheprojectandensure thattheoffermeetsmarketneeds.Urbishasbeenengagedtoassessthemarket potentialforresidentialapartments.

SubjectSite

ThesubjectsiteisincloseproximitytoGosfordtrainstation.Thesiteisextremely welllocatedinregardtolocalamenity,withplentifulentertainment,public transport,employmentcentresandamajorhospitalalllocatedwithinGosford. Thedevelopmentisproposedtocompriseresidential,shortstayaccommodation andsomehospitalityandbeveragewhichwillbringinmorevisitorstotheregion andincreaseamenityavailabletofutureresidents.

ResidentialAssessment

Gosfordisanaffordablelocation,locatedonlyanhourfromnorthernareasof Sydney.Thereisaneedfordevelopmentstocatertoworkingprofessionalsand localinvestorswhilealsocateringtowardsthehigherendofthemarketdesiring luxuryhousingwithinthewaterfrontarea.

Keyresidentialdriverssuchaspublictransport,majorshoppingcentres, hospitals,schoolsandemploymentprecinctssupporttheGosfordapartment market.Overall,theStudyAreahasaveragedaround200newapartmentsales peryear,overthepastfiveyears.

Residentialapartmentsaresupportedonthesubjectsitewithkeyfindings/ recommendationscomprising:

•Take-Up:Basedonhistoricalandprojecteddemandandcompetition,the SubjectSitecouldachieveasalesrateofaround50-60peryear(about5-6 permonth)in2023andafter.However,thereisariskofadeteriorationinthe market,withinflationandinterestratesrising.

•BuyerMix:Itisanticipatedthatmostbuyerswillbefirsthomebuyers,or investors,followedbysmallerproportionofdownsizers.

•Mix:Recommendedthatmostapartmentsinthedevelopmentcontaintwo bedroomsandtwobathrooms.Thisproductisattractivetobothyounger couplesandinvestors,whicharelikelytobethemajorbuyersegmentsforthe project.One-bedroomapartmentsarealsoattractivetosomefirsthome buyersandinvestors,althoughthemajoritywouldbelookingfortwobedrooms duetotherelativeaffordabilityinthemarket.Three-bedroomapartments shouldaccountfor10-15%ofdwellings,targetingthesmallerportionofbuyers attractedtolargerapartmentsontheCentralCoast.

•ApartmentSizesandPositioning:Therecommendedinternalsizesshown belowarebasedonacomparisonwithrecentprojectswithconsiderationthat slightlylargersizeswouldassistwithattainingapremiummarket.

•Prices:Thepricesareindicativeandwilldependonmanyfactors,suchasthe finaldesignandqualityoftheproject.Theproject'sprojectedsalespricesin $2022havebeenestimatedbasedonrecentoff-the-planpricesandnew apartmentresalesinthearea.Thepricesconsidertheincreasing attractivenessoftheCentralCoasttoSydneysiders,sincetheCOVID-19 pandemic.Thisenablesdevelopmentstoattractmoreaffluentbuyers.Assuch charginghighercomparablepricesthancomparabledevelopmentssuchas BonythonTowerisattainableforALAND.

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Type MixInternalSize (sq.m) IndicativePrice ($2022) 1Bed,1Car15-25%50-60$450,000-$550,000 2Bed,2Bath,1Car60-70%70-80$600,000-$710,000 3Bed,2Bath1-2Car10-15%100-120$850,000-$1,050,000

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INTRODUCTION

ProjectBackground

ALANDPropertyDevelopmentshaspurchaseda large-mixeduse,DevelopmentApplication(DA) approvedsiteon108DonnisonSt,Gosford (“SubjectSite”).ALANDrequiresmarketevidence toinformthefinaldesignoftheprojecttoensure thattheoffermeetsthemarketneeds.

Urbishasbeenengagedtoassessthemarket potentialforresidentialapartmentsontheSubject Site.

Theresidentialassessmentwillinvolvethe analysisofthefollowing:

•ArelevantresidentialStudyArea;

•Populationanddemographicanalysesforthe StudyArea;

•Analysinghistoricalbuildingcompletionand approvaldataalongwithfutureapartment supply;

•Competitoranalysis;

•Analysingmarketdemand;and

•Providingrecommendationsfordevelopment mixandpricing.

DraftBuildingPlans

SourcePlaceStudioSketches:

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SUBJECTSITE

KeyFindings

Thesubjectsiteislocatedat108DonnisonStreet, Gosfordandcomprisesanareaofapproximately 5,654sq.m.Thesiteislocatedonthecornerof Mann,BakerandDonnisonStreetsinGosford.

Surroundinglandusescomprise:

•GosfordTrainStation,GosfordHospitaland threelocalschoolstothenorth.

•TheImperialShoppingCentretotheNortheast ofthesubjectsite

•Retail,commercialandresidentialapartments surroundingthesite,includingtheCentral CoastLeaguesClubtothesouth-west.

•CentralCoastStadiumtothesouth-westofthe subjectsite.

Mosthigh-densityresidentialbuildingsonthe CentralCoastarelocatedwithinGosfordCBDand itssurroundswithmanylocatedalongMannSt. Therearesporadicmediumdensityresidential developmentsinotherareassuchasWoyWoy andTerrigal.

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108DonnisonStreet,Gosford(SubjectSite) SourcePlaceStudioSketches:

DRAFTPLANS

KeyFindings

Thedraftplansforthesubjectsitecomprisea mixed-usedevelopmentacrosstwotowers,which willincluderesidential,shortstayaccommodation, commercialandagroundfloorpub.

Thetowersbeingdevelopedwillconsistofatotal of323residentialunits.Thebreakdownisas

follows:

DraftGroundFloorPlan

Thebuildingswillconsistof28levelsincluding groundfloorretail/Pubtenancies(1,954sq.m) abovefourlevelsofcarparkingwith714parking spacesacrossthetwobuildings.TheWestTower willincluderesidentialusesonfloors5-27,with carparkingbelow.TheEasttowerwillinclude hotelaccommodationonlevels5-11,totalling133 roomsalongwithresidentialonfloors12-27.

Thefloorspacebreakdownforthetwobuildingsis

asfollows:

•ResidentialUnits:31,468sq.mGFA

•Hotel:10,987sq.mGFA

•Retail/Pub:1,954GFA

•Carparking:714parkingspots

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TypeUnits%of Total Internal Area (sq.m) 1Bed,1Bath5015.5%49-51 2Bed2baths19861.3%78-88 3Bed2baths6720.7%103 4Bed82.4%139-189

SourcePlaceStudioSketches:

RESIDENTIAL ASSESSMENT

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STUDYAREA DEFINITION

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RESIDENTIALSTUDYAREA

KeyFindings

TheResidentialStudyAreareferstothe geographicmarketforapartmentsonthesubject site.Itisboundedby:

•PacificMotorwaytothewest

•Patongatothesouth

•TerrigalandNorthAvocatotheeast

•CutrockRoadtothenorth.

ThisStudyAreawasdefinedbyassessing migrationstatisticsfromthe2016ABSCensus.

2021ABSCensusmigrationdataisnotavailable untilOctober2022.Thesestatisticsidentifythe originoflocalresidentsand,therefore,providean indicationoftheareafromwhicharesidential developmentatthesubjectsitewoulddraw residentsfrom.

TheStudyAreaincludesthebulkofapartment developmentsinGosfordandsurroundsandalso developmentsinothercentreslikeWoyWoy, ErinaandTerrigal.

AsshowninMapoverleaf,allsurrounding StatisticalAreaTwo’s(SA2s)thataccountforat leasta1%shareofnewresidentsintheGosford–SpringfieldSA2(wherethesubjectsiteislocated) formtheResidentialStudyArea.

StudyAreaOutline

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SourceUrbis

MIGRATIONANALYSIS

KeyFindings

Themaprightoutlinesthe2011-2016ABS CensusmigrationdatafortheCentralCoast region.2021ABSCensusdataisnotavailable untilthestage2releaseinOctober2022.

Themigrationdatashowstheplaceofresidence forcurrentGosford-SpringfieldSA2residents comparedto2011.Forexample,1.3%ofGosford –SpringfieldResidentsin2016movedfromthe Niagara-LisarowSA2sincethe2011census.

AllsurroundingStatisticalAreaTwo’s(SA2s)that accountforatleasta1%shareofnewresidentsin theGosford–SpringfieldSA2(wherethesubject siteislocated)wereincludedintheResidential StudyArea.

Themapalsohighlightsnewresidentsintothe Gosford–SpringfieldSA2frombeyondthe CentralCoastLGA:

−MetropolitanSydney(10.7%)

−Overseas(5.4%)

−RegionalNSW(3.2%)

−Interstate(2.4%)

Assuch,theproposeddevelopmentisexpectedto competewiththeproposeddevelopmentswithin thisStudyArea.

Thefollowingsectionassessesthelikelydemand foradditionalapartmentswithintheStudyArea andtheirsupportabilityonthesubjectsite.

MigrationAnalysis,2016ABSCensus

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SourceUrbis

POPULATION GROWTH& DEMOGRAPHICS

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HISTORICALPOPULATIONGROWTH

KeyFindings

Therateandextentoffuturepopulationgrowthin theStudyAreawillhaveasubstantialbearingon futuredemandforresidentialdwellingswithinthe SubjectSite.

ThepopulationintheStudyAreahasgrownfrom 122,759in2012to129,357in2022.This representsanadditional6,598residents,atan annualgrowthrateof0.5%.

Growthasapercentagehasbeenstablesince 2012,withahighof0.9%experiencedin2021. Thishighgrowthrateislikelytocontinuewiththe CentralCoastregionbecominganattractive destinationforrelocationofresidentsfromGreater Sydney.

Acrossthisperiod,theGosford–SpringfieldSA2 (withintheStudyArea)hasgrownfrom18,932to 20,569atanannualgrowthrateof0.8%,a sizeableandaboveaverageincreasewithinthe StudyArea.Increasingpopulationleadstogreater demandforhousing.

ThegrowthoftheStudyAreapopulationby componentdemonstratestheeffectthepandemic hadonNetOverseasMigration,withthis componentshrinkingfrom659in2019to10in 2022.Withinternationalbordersbeingreopened, NetOverseasMigrationisexpectedtopickupin thecomingyears,whileNetInternalMigrationwill continuetobesignificant.Acrosstheprevious fouryearstherehasbeenlittlegrowthfromnatural increase,meaningthatgrowthhascomefrom peoplemovingwithinAustraliatotheStudyArea orfromoverseastoAustralia.Thistrendissetto remainconstantinthemedium-term.

HistoricalPopulationGrowth,2012-22(StudyArea) HistoricalPopulationGrowthbyComponent,2019-22(StudyArea) 10/08/2022 GosfordMarketAssessmentPage16 -200 0 200 400 600 800 1,000 1,200 2019202020212022 Share of Annual Growth NaturalChangeNetInternalMigrationNetOverseasMigration Source:Urbis,DepartmentofPlanningandEnvironment Source:Urbis,DepartmentofPlanningandEnvironment 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9% 1.0% 118,000 120,000 122,000 124,000 126,000 128,000 130,000 20122013201420152016201720182019202020212022 Growth Rate Population PopulationGrowthRate

FORECASTPOPULATIONGROWTH

KeyFindings

Theforecastpopulationgrowthwillsignificantly impacttheassessmentofdemandforhousing withintheStudyArea.

TheStudyAreaisprojectedtogrowto150,809 residentsfrom129,357overthe20yearsto2041, anadditional21,458residents.Thiswillresultin increaseddemandforhousingwithintheStudy Area.

TheStudyAreaisforecasttohaveanannual growthrateof0.8%overtheperiod2022-41.This isincomparisontotheGreaterSydneyforecast growthrateof1.1%.Thegrowthrateofthe Gosford–SpringfieldSA2isprojectedtobe1.5% overthetimeperiod,reflectingadesirabilityofthe locationandthehighamountofresidential developmentexpectedtooccurinthearea. Therefore,therewillstillbestrongdemandfor housingwithintheGosfordareaitself.

TheprojectedagedistributionwithintheStudy Areafrom2021to2041isshownonthebottom chart.Theproportionofresidentsaged60and aboveisforecasttoincreasefrom28.2%in2021 to31.8%by2041.Thisgrowingcohortmeans thereisasubstantialmarketsegmentfor apartmentsinthefutureasolderresidentslookto downsizeandworkerslookforaccommodation closetotheGosfordCBDanditsamenities.

10/08/2022 GosfordMarketAssessmentPage17 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9% 1.0% 120,000 125,000 130,000 135,000 140,000 145,000 150,000 155,000 Growth Rate Population PopulationGrowthRate 17.6%16.6%15.7%15.4%15.3% 11.5%11.9%12.2%11.5%10.9% 17.4%17.4%17.3%17.5%17.7% 25.4%24.4%24.1%24.1%24.3% 28.2%29.8%30.8%31.5%31.8% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 20212026203120362041 Population Age Breakdwn 0-1415-2425-3940-5960+

ForecastPopulationGrowth,2023-2041(StudyArea) ForecastPopulationGrowthbyAge,2021-41(StudyArea)

Source:DepartmentofPlanningandEnvironment Source:Urbis,DepartmentofPlanningandEnvironment

HOUSEHOLDGROWTH

KeyFindings

Householdtypeprojectionsareanimportantfactor fordeterminingwhattypeofapartmentswillbein demandinthefuture.

IntheStudyArea,Lonepersonhouseholdsare expectedtogrowby2.7%from28.8%in2021to 31.5%in2041.Thiswillincreasethedemandfor studioand1bedroomdwellings.

Couplewithchildrenhouseholdsareexpectedto declineby3%from27.3%in2021to24.3%in 2041.Thiswillreducethedemandfor2-3 bedroomdwellings.

Otherhouseholdtypesareseeingminimalchange and,therefore,shouldnotsignificantlyaffectthe demandforhousingtypes.

Asaresultoftheincreaseinloneperson households,thehouseholdsizeintheStudyArea isforecasttodecreasefrom2.50to2.37overthe studyperiod(to2041).Thehouseholdsizeis significantlylowerintheGosford–SpringfieldSA2 at2.17comparedtotheStudyAreaandGreater SydneyRegionat2.5and2.71respectively.

Lowerhouseholdsizeswillleadtomoredwellings requiredperperson,whichmeansthemarket demandfordwellingsincreases.

HouseholdTypeProjections(StudyArea) HouseholdSizeProjections(StudyArea) 10/08/2022 GosfordMarketAssessmentPage18 25.6%26.3%26.7%26.7%26.6% 27.3%26.1%25.1%24.6%24.3% 12.2%11.8%11.6%11.5%11.5% 2.7%2.7%2.7%2.6%2.6% 28.8%29.6%30.4%31.0%31.5% 3.4%3.5%3.5%3.5%3.4% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 20212026203120362041 Household Type Share Coupleonly Couplewithchildren Singleparent MultipleandOtherfamilyhouseholds Loneperson Group Region 20212026203120362041 StudyArea2.502.462.432.402.37 Gosford–SpringfieldSA22.172.162.152.122.11 GreaterSydneyRegion2.712.662.622.582.55 Source:Urbis,DepartmentOfPlanningandEnvironment Source:Urbis,DepartmentofPlanningandEnvironment

EMPLOYMENTFORECAST

KeyFindings

TheamountofjobsintheStudyAreahasacrucial roleinimpactingthedemandforhousingas peoplewantohaveaccesstoemployment. FortheStudyArea,TransportforNSWforecasts thattotalemploymentwillincreaseby9,604jobs overtheperiod2021-41.Thisrepresentsan annualgrowthrateof4.9%.Theseextrajobswill attractmorepeopletotheStudyArea.

Theindustrywiththemostadditionaljobsisthe HealthCareandSocialAssistancesectorwithan additional2,573forecastjobsatanannualgrowth rateof5.6%.Muchofthisgrowthisbecauseof theexpansionoftheGosfordHospitaland increasedalliedhealthservicesassociatedwith thehospital.

Theindustryforecasttohavethehighestannual growthrateisEducationandTraining.This reflectsthegreaterproportionofeducation professionalsintheareawiththeconstructionof theCentralCoastClinicalSchool.

ThetableshowsthatemploymentintheStudy Areamainlyconsistsofworkersintheservices industry.IndustrysectorssuchasManufacturing, Agriculture,ForestryandFishing,andMining makeupasmallamountoftheforecast employment.

EmploymentForecast,2021-2041(StudyArea)

10/08/2022 GosfordMarketAssessmentPage19 Forecast 202120262031203620412021-41 IndustrySectorNo.No.No.No.No.TotalChangeAnnualGrowth % HealthCareandSocialAssistance13,92614,68415,35516,05816,4992,5735.6% RetailTrade8,1008,3158,5338,7458,884 7843.0% EducationandTraining5,4455,6936,0136,4536,8861,4427.7% AccommodationandFoodServices5,2465,4705,7625,9496,039 7934.6% Construction5,1435,2715,5275,6545,831 6884.1% Professional,ScientificandTechnicalServices3,7214,0354,1964,3984,575 8546.8% PublicAdministrationandSafety3,6213,7613,9374,1014,171 5504.6% OtherServices3,0303,2153,3873,5373,661 6316.2% Manufacturing2,2312,2652,2982,3432,384 1532.2% AdministrativeandSupportServices1,8621,8811,9301,9962,050 1883.2% FinancialandInsuranceServices1,5051,5251,5601,6391,694 1893.9% Rental,HiringandRealEstateServices1,1451,2541,3061,3611,410 2656.8% Transport,PostalandWarehousing1,0611,0971,1151,1441,160 992.9% InformationMediaandTelecommunications1,0211,0431,0611,1121,137 1163.5% WholesaleTrade8979419719971,017 1204.1% ArtsandRecreationServices776804855896932 1556.0% Electricity,Gas,WaterandWasteServices181187193197202 203.5% Agriculture,ForestryandFishing10699989488 -18-6.2% Mining2626262728 11.8% TotalEmployment 59,04461,56664,12466,70068,6479,6044.9% 8,884, employedin RetailTrade in2041 16,499, employedin HealthCare andSocial Assistancein 2041 6,886, employedin Education andTraining in2041 Source:Urbis,TransportforNSW

DEMOGRAPHICCHARACTERISTICS

KeyFindings

Whencomparingthedemographicprofileofthe studareawithGreaterSydneythemostprominent differencesarethemoreelderlypopulationand smallerhouseholdsintheStudyArea.

TheStudyAreahasanaverageageof42.7, approximately15%greaterthantheSydney average.Thisindicatestheareawillhaveahigher demandfor1-2bedroomdwellings, TheaveragehouseholdsizeoftheStudyAreais 2.4,approximately11%lessthanGreaterSydney. Alowerhouseholdsizeindicatesthattherewillbe agreaterdemandfordwellingsintheStudyArea. ApartfromthesecharacteristicstheStudyAreais notsubstantiallydifferentfromgreaterSydney. Currently2021ABSCensusdataisnotavailable forEducationandworkforceinformation.Dataon employmentandeducationwasobtainedfromthe 2016census.

Asof2016,71%oftheStudyAreasworkforce wasclassifiedaswhitecollarworkers.Thisisin accordancewiththeABS’sdefinitionofWhite collarworkersasbeingthosewho’soccupationis classifiedasbeingoneofthefollowing:Manager, Professional,CommunityandPersonalService, ClericalandAdministrativeWorkerorSales Workers.

TheStudyAreahasaloweducationalattainment comparedtotheGreaterSydneyaverage. Howeverwiththeincreasingnumberofindividuals movingtotheareafromSydneythisisexpected tochangeincomingyears.

KeyDemographicCharacteristics,2021(StudyArea)

10/08/2022 GosfordMarketAssessmentPage20 -25%-20%-15%-10%-5%0%5%10%15%20%25% $110,100 42.7 2.4 36% 12% 17% Avg.HouseholdIncome AverageAge Avg.HouseholdSize Couplefamilywithchildren<15 %ofHighIncomeEarners Aged0-14 StudyArea CategoryPercentagein StudyArea Totalin StudyArea Percentagein GreaterSydney TotalinGreater Sydney WhiteCollarworkers71%37,03675.1%1,571,159 Managersand Professionals 34%17,53341.5%868,016 Bachelordegreeor above 19%17,1561,073,59733.9% Certificate3or4or Diploma 32%28,904759,72024.0% Year10educationor below 45%40,4811,333,58242.1% Source:Urbis,ABSCensus2016 Source:Urbis,ABSCensus2021 VariationFromSydneyAverage

TARGETBUYERMARKET

KeyFindings

Theapartmentsforthedevelopmentwilllikelybe purchasedbyamixoffirsthomebuyers,investors andasmallerpercentageofdownsizers. Theareadoesnothaveahighpercentageof residentsagedbetween25-39at17%asof2021, however,thedriversforfirsthomebuyerscoming totheareaarestrongincludingaccesstojobsand healthservices.Furthermore,thecompetitor analysishasshownthatsimilardevelopments haveattractedahighproportionoffirsthome buyers.

Investorsareakeytargetbuyermarket, particularlylocalinvestors.Thisisduetothe stronggrowthinunitpricesintheStudyAreaand comparativelycheaperpricesofunitsthatenable localinvestorstopurchase.

TheStudyAreaishometoarelativelylarge proportionof60+yearoldresidentswith28.2% accountedforbythisagegroupasof2021.This agecohortisprojectedtoincreasestronglyto 31.8%in2041.Thisageingpopulationwillleadto anincreasedmarketfordownsizers,inturn leadingtoincreaseddemandfor1–2bedroom units.Asofthe2021Census,around75%of householdsintheCentralCoastLGAhave3or morebedrooms.Combinedwiththelowerthan averagehouseholdsizeintheStudyArea highlightsthereisdemandforresidentsto downsize.However,itislikelydownsizerswould preferdevelopmentsintheareathataremore secludedandhavebetterviewsofthewaterfront.

BuyerSegments

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FirstHomeBuyers Investors Downsizers

SUPPLY

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APARTMENTSUPPLY

KeyFindings

Thissectionassessestheexistingandproposed supplyofresidentialdwellingsintheStudyArea.

Dwellingapprovalspeakedin2018,witha subsequentdropinapprovalsin2019and remainingatalowerlevelin2020and2021. Altogether,dwellingapprovalsaveraged967from 2016-18whileaveraging437perannumfrom 2019-21.Dwellingcompletionssubsequently increasedafterthepeakofapprovalsin2018 indicatingthatmostapprovalswereconvertedinto construction.

Apartmentswereaconsiderableportionof dwellingapprovalsfrom2016to2019.Thelevelof apartmentapprovalspeakedin2018at1,017 approvalsandhavereducedeachyear subsequentlytoreachalowof99approvalsin 2021.Thisindicatesthenumberofcompleted apartmentsintheStudyAreawilllikelyremainlow inthecomingyears.

Dwellingcompletionsdecreasedafter2019dueto theslowdownintheapartmentmarket,withthe startoftheCOVID-19pandemicin2020further contributingtothisdecline.

DwellingcompletionsfortheStudyAreabetween 2016to2021averagedapproximately633per annum.Thenumberofcompletedapartments reachedahighof959in2019beforedecliningto alowof235in2021.

Overall,therehasbeenasubstantialdeclinein dwellingapprovalsandcompletionsintheStudy Areasince2019withuncertaintyregardinghow thesewillperformintheshorttomediumtermdue torisinginterestratesandrisingconstruction costs.

DwellingApprovals2016to2021(StudyArea) DwellingCompletions2016to2021(StudyArea) 10/08/2022 GosfordMarketAssessmentPage23 Source:ABSSmallAreaCompletionEstimatesandNSWDepartmentofPlanningandEnvironment Source:ABS 0 200 400 600 800 1,000 1,200 Number201620172018201920202021 of Dwellings Completed ApartmentsHousesSemi-Detached 0 200 400 600 800 1,000 1,200 1,400 1,600 201620172018201920202021 Number of dwellings gaining Building Approval ApartmentHouseSemi-Detached

FUTUREAPARTMENTSUPPLY

KeyFindings

AccordingtoCordellConnectandUrbisresearch, therearearound37proposedapartmentprojects (with25+units)withintheStudyAreathathave thepotentialtobecompletedby2027,comprising atotalof4,826units.Theseprojectsareeither underconstruction,haveachieveddevelopment approvalorhaveappliedfordevelopment approval.

AccordingtoCordellConnectapproximately:

•419dwellingshavecommencedconstruction,

•3,088dwellingshavegaineddevelopment approval,

•990areinthedevelopmentapplicationstage and

•288dwellingsarestillintheearlyplanning stage.

Thedwellingswhichareunderconstructionor haveachieveddevelopmentapprovalcanbe consideredmorelikelytobebuilt,whilethosein thedevelopmentapplicationandearlyplanning stagesarelesscertaintocomplete.

Somerecentlyabandonedordelayedmajor residentialprojectshavereducedthefuture apartmentsupplypipelineintheStudyArea.Most notablytheGosfordAliveprojecthasbeenplaced onholdafterreceivingconditionalapprovalin 2020.Theprojectwassettodeliverfive residentialtowerscontaining1,414units.Thereis stillconsiderableuncertaintyastowhetheror whenthisprojectwillbedelivered.Thecompletion ofthisprojectwouldhaveamajoreffectonthe localapartmentmarket.

10/08/2022 GosfordMarketAssessmentPage24 Source:Urbis,CordellConnect 0 200 400 600 800 1,000 1,200 1,400 1,600 2022202320242025202620272028 Proposed Apartments UnderConstructionDevelopmentApprovalDevelopmentApplicationEarlyPlanning

ProposedApartmentsbyStatus2022-2027(StudyArea)

FUTUREAPARTMENTSUPPLY

KeyFindings

Thevastmajorityoflargeapartmentprojects withintheStudyAreaandinthedevelopment pipelinearelocatedinandaroundtheGosford CBD.Someofthekeydevelopmentareasinclude:

•GosfordCBD:21largeresidentialprojects comprising3,123units.

•NorthGosford:ninelargeresidentialprojects comprising854units.

•GosfordWest:Tworesidentialprojects comprising234units.

•PointFrederick:Tworesidentialprojects plannedwithatotalof140units.Oneproject comprising101units,whichisunder construction.

ProposedApartments(StudyArea)

GosfordMarketAssessmentPage25 SourceCordellConnect.Urbis

Therearethreeprojectswithover25unitslocated outsideofGosfordandsurroundingsuburbs(West Gosford,NorthGosfordandPointFrederick). TheseincludeadevelopmentinKaraltaRoad Erinacomprising131units,whichisinthe developmentapplicationstage.Thereareanother twoprojectsinEttalongBeachcomprisinga combined77units,includingoneunder construction. 10/08/2022

COMPETITOR ANALYSIS

10/08/2022 GosfordMarketAssessmentPage26

COMPETITIONSUMMARY

KeyCompetingLocations

Competinglocationsarethosewhichare competingdirectlyforpotentialbuyerswiththe subjectsite.Theyare:

•Apartmentdevelopmentscloselylocatedto amenities,mostlikelywithintheGosfordCBD.

•Significantapartmentdevelopmentswithinthe GosfordCBDwithover100units.

•Thesedevelopmentsareclosetoamenities suchasthehospital,trainstationandschools.

GosfordCBDisauniquemarket,offeringahigh rangeofamenitieswithineasywalkingdistance whilebeinginaregionallocationnearbynational parkssuchasBrisbaneWaterNationalPark.

WithintheCBD,orwithinwalkingdistanceare schools,GosfordHospital,Gosfordwaterfront, CentralCoastStadiumalongsideplentifulretail, cafesandothershoppingdestinations.

WithintheCentralCoastLGA,Gosford’s neighbouringsuburbPointFredrickisalso experiencinganinfluxofsignificantdevelopments. Thesesiteswillalsobecompetinglocationsfor buyerslookingintheGosfordarea.

OutsideoftheLGA,locationsinregionalareas likeNewcastleorWollongongandWestern SydneyLGA’sprovidesomecompetitioninterms ofdistancefromtheSydneyCBDandother amenitiesbutcannotcompetewithsomeof Gosford’sotheruniquemarketfeatures.For example,NewcastleisfurtherfromtheSydney CBD,whileWesternSydneydoesnothaveocean views.

DwellingMix Pricing

ThedwellingmixoftheprojectswithintheStudy Areaismixed,butcomprisesprimarilyoftwo bedroomunits.Gosfordanditssurroundingareas haverecentlyseenaninfluxofluxury developments,withstrongtransportsystemsand increasingworkplaceflexibilitycontributingtothe feasibilityoflivingoutsideoftheSydney metropolitanarea.Oftheprofiledprojects,the averagemixwas:

•Studio:4.7%

•1Bed:24.6%

•2Bed:59.2%

•3Bed:9.9%

•4Bed/Penthouse:1.6%

GrowinginterestinGosfordanditssurrounding areashasresultedinahighlymixedbuyerprofile. Theprofileddevelopmentshaveseenbuyersthat include:

•firsthomebuyers,

•youngbuyerswhoarenotbuyingtheirfirst home,

•investors,and

•downsizers.

Thestrongmixofbuyersisreflectedinthediverse offeringprovidedintheGosforddevelopments, witharangeofunitfloorspaceamongstthosewith thesamenumberofbedrooms,locationand design.

Gosfordhasrecentlyseenamajorinfluxinboth supplyanddemand,meaningthatthemarkethas changedsignificantly.Theincreasedsupplyhas alsobroughtaboutincreasedquality,withluxury styleapartmentsbecomingmoreprominent. TheHorizondevelopmentrepresentstheclosest comparable,basedonaverageapartmentsize andrelativelocation,However,Horizoniscloser toGosfordHospitalandlocalschools,hasaround halfthenumberofproposedapartmentsandis proposedtoincludefourrestaurantsandan upscalesupermarketinitslobby.The developmentisadvertisingastartingpricefortwo bedroom,twobathroomunitsfrom$530,000. Forbothunder-constructionandrecently completeddevelopments,thispricepoint representsthelowerendofpricesfortwo bedroomunits.Theprofileddevelopments indicatearangeofpricesfrom$530,000to $1,000,000fortwobedroomunits,howeverthe higherpricepointsalsotendtoexhibitwaterfront viewsorgreatersquaremeterage.

Theresalepricesforrecentlycompleted developmentshavebeencomparabletothe pricesforoff-the-plandevelopmentscurrently underconstruction.

10/08/2022 GosfordMarketAssessmentPage27

HORIZON,GOSFORD

Type

Mix(no.)*InternalSize(sq.m)PriceRange**

Studio 1632From$342,000

1Bed,1Bathroom5650-55From$448,000

2Bed,2Bathroom7075-100From$530,000

3Bed,2Bathroom28107.5From$772,000

Penthouse 4170From$1,700,000

Parking 265spaces

AncillaryFacilities

OutdoorswimmingpoolandSwedishsauna,steamroom,gym andworkoutspace,communityroom.

Agentcouldnotprovidethetake-uprate.

DeveloperJMGM

Location321-331MannStreet,Gosford

CouncilAreaCentralCoast

•LocatedwithinGosfordCBD

Take-upRates

BuyerProfile

*Basedonagentadvice

**PricesadvertisedasofAugust2022.

Location

Characteristics

•500metresfromGosfordHospital

•500metresfromGosfordTrainStation

•300metresfromGosfordHighSchool

CompletionQ32024

ProjectLaunch

DateJanuary2021

StatusUnderConstruction

TotalUnits174*

Property Description

•Amixed-usebuildingwith15levelsofresidential units,commercialspaceand2,500sq.mofretailon thegroundfloor.

•265carparkingspacesprovided.

•Residentsonlygymandpool,luxuriousfitoutand choiceofthreedifferentcolourschemes.

Source:HorizonGosford

Theagentindicatedabuyerprofilethatincludesinvestors,first homebuyersandyoungerbuyerswhoarenotfirsthome buyers.

10/08/2022 GosfordMarketAssessmentPage28

Source:HorizonGosford

PENINSULA,POINTFREDERICK

DeveloperMasscon Location177-179AlbanyStreet,PointFredrick

CouncilAreaCentralCoast

•1.4kmfromCentralCoastStadium

•1.9kmfromGosfordTrainStation

•2.9kmfromGosfordHospital

Location

Characteristics

•Walkingdistancetorestaurants,cafesandwaterside trails

•15minutedrivetopopularbeaches

•10minutedrivetoErinaFairShoppingCentre

CompletionQ32022

ProjectLaunch

DateAugust2019

StatusUnderConstruction

TotalUnits100

•Threeboutique-stylebuildings.

•FeaturesviewsoverlookingBrisbaneWater.

Property Description

•Utilisesenergy-efficienttechnology.

•Securebasementparkingandliftaccess.

•LocatedinsecludedsuburbofPointFrederick

AncillaryFacilitiesBasementlevelgymnasiumandshowerandtoiletfacilities.

Take-upRates

Theagentadvisedthat82apartmentshadbeensoldovera12 monthperiodequatingtoatakeuprateof6.8salespermonth.

BuyerProfile 60%owneroccupiers,40%investors.Mainlydownsizersand owneroccupiers.

*Basedonpublishedfloorplans **PricesadvertisedasofAugust2022.

10/08/2022 GosfordMarketAssessmentPage29

Type

Studio 137 399,000 1Bed,1Bathroom 453-55NotProvided 1Bed,1Bathroom+Study1350.5-56$450,000-$550,000 2Bed,2Bathroom3473-106$650,000-$980,000 2Bed,2Bathroom+Study982-106$835,000-$885,000 3Bed,2Bathroom36111.5–128.5$950,000-$1,450,000 3Bed,2Bathroom+ Study/Penthouse 3147-150$2,400,000-$3,200,000 Parking 147carspaces,7motorcyclespaces,42bicyclespaces.

Mix(no.)*InternalSize(sq.m)PriceRange**

Source:PeninsulaPointFredrick Source:Domain Source:PeninsulaPointFredrick

THEWATERFRONT,GOSFORD

Type

Mix(no.)InternalSize(sq.m)*PriceRange**

Parking 181parkingspacesand63bicyclespaces

Skyloungewithpanoramicviews,exclusivetoresidents.

DeveloperStHilliers

Location26-30MannStreet,Gosford

CouncilAreaCentralCoast

•LocatedontheedgeoftheGosfordCBD

AncillaryFacilities

Communalpodiumlevelaccessibletoallresidentsdesignedto evokeasenseofcommunity

LocatedintheCentralCoast’sretailanddiningprecinct

Location

Characteristics

•600metresfromGosfordTrainStation

•WithinwalkingdistanceofCentralCoastStadium

•200metresfromGosfordWaterfrontPark

CompletionQ22024

ProjectLaunch

Date October2021

StatusUnderConstruction

TotalUnits136

•Stage1ofthe3-stageCentralCoastQuarterdining andretailprecinct.

Take-upRates

Around65%ofallapartmentsweresoldwithinfirst3months equatingto29.5salespermonth.Over90%ofapartments weresoldasofJuly2022,indicatingatotaltakeuprateof11.1

BuyerProfile Mixofluxurybuyersinterestedindownsizing,andpeople lookingforalifestylechangewhilestayingrelativelycloseto Sydney.

**Note:Mix(No.)updatedbasedoninfoprovidedbyagentssincedraftreport **Pricesprovidedbyagent,August2022

Property Description

•621sqmofretailspaceandbasementparkingfor181 vehiclesand63bicycles.

•FeaturesviewsoverlookingBrisbaneWater.

•AdjacenttonewlydevelopedGosfordPark

10/08/2022 GosfordMarketAssessmentPage30

3Bed,2Bathroom14120$1,300,000-$1,500,000 Penthouses,3-4Bed,2-3

1Bed,1Bathroom1456$477,750-$585,000 2Bed,2Bathroom10376-90$620,000-$1,000,000

Bathroom,2car 5240$1,880,000-$3,200,000

Source:StHilliers

MERINDAH,GOSFORD

DeveloperPinnacle

Location25MannStreet,Gosford

CouncilAreaCentralCoast

•300metresfromCentralCoastStadium

Mix(no.)InternalSize(sq.m)PriceRange*

Location

Characteristics

•700metresfromGosfordTrainStation

•OverlooksBrisbaneWaterandfrontswalkandcycle ways

Completion2020

ProjectLaunch

DateSeptember2017

StatusCompleted

TotalUnits140

•Mixofluxuryresidentialandcommercialsuites.

•Waterviewsacrossall15floorsofresidentialliving.

•Allapartmentsdesignedtoofferopen-planliving spaces.

Parking 219carspaces,10motorcyclespaces,58bicyclespaces

AncillaryFacilities

Communalopenspace.Landscapedgardenssurroundingtower alongsidelandscapedterraceontheseventhstory.

Take-upRates

Throughanalysisofsalesdatawedeterminedforthefirst6 monthsofsalestherewereapproximately6salespermonth. Followedbyayearhiatusinsaleswhichwasfollowedby3per monthfortherestofthesalesperiod.

BuyerProfile

Marketreportsindicatedthatbuyersderivedprimarilyfromthe CentralCoastandthenorthernsuburbsofSydney.

10/08/2022 GosfordMarketAssessment Page31

Description

Property

Type

1Bed,1Bathroom 1955 $452,000 2Bed,2Bathroom 10681-125$573,000-$770,000

3Bed,2Bathroom 15165$750,000-$1,100,000

No.TypeSaleDatePrice 6112Bed,2Bath,1Car 05/02/2022$640,000 1013Bed,2Bath,1Car 12/01/2022$750,000 10022Bed,2Bath,1Car 17/12/2021$770,000 2082Bed,2Bath,1Car 11/11/2021$570,000 2052Bed,2Bath,1Car 11/11/2021$655,000 14072Bed,2Bath,2Car 26/10/2021$890,000 6092Bed,2Bath,1Car 23/10/2021$580,000 7013Bed,2Bath,2Car 24/09/2021$860,000 2102Bed,1Bath,1Car 23/09/2021$535,000 RECENTSALES Source:Pricefinder *BasedonsalesdatafromPricefinderstartingJanuary2021

BONYTHONTOWER,GOSFORD

Mix(no.)InternalSize(sq.m)PriceRange*

Parking 76carspaces

AncillaryFacilitiesNonespecified.

Developer

BonythonProperty&Investments(TheJohnSingleton Group)

Location159MannStreet,Gosford

CouncilAreaCentralCoast

•LocatedcentrallyintheGosfordCBD

Location

Characteristics

•300metresfromGosfordTrainStation

•1kmfromGosfordHospital

CompletionJuly2019

ProjectLaunch

DateAugust2017

StatusCompleted

TotalUnits56 Property

•Premiummixofluxuryresidentialandcommercial suites.

•Includes1and2bedroomapartments,andtwo penthouses.

•Thedevelopmentalsohousesagroundfloor restaurantandbar.

Take-upRates

Throughanalysisofsalesdatawedeterminedtherehadbeen anaveragetakeuprateof4apartmentsamonthforthefirst10 months.Whencontactedtheagentcouldnotprovidetakeup rates. BuyerProfile

Sydneypurchaserslookingtorelocate,firsthomebuyers, emptynesters,commuterswhovaluethecloseproximityto Gosford’stransporthub.

RECENTSALES

Source:Realestate.com.au,Pricefinder

10/08/2022 GosfordMarketAssessmentPage32

Description

Type

2Bed,2Bathroom3689-92$575,000-$750,000 Penthouse 2178.5-193$2,000,000

1Bed,1Bathroom1863$500,000-$600,000

No.TypeSaleDatePrice 1301Penthouse 07/04/2022$2,000,000 6041Bed,1Bath,1Car23/03/2022$510,000 11052Bed,2Bath,1Car10/12/2021$750,000 10062Bed,1Bath,1Car07/12/2021$590,000 10022Bed,2Bath,1Car19/10/2021$725,000 8062Bed,2Bath,1Car$17/09/2021$575,000 4012Bed,2Bath,1Car11/08/2021$582,500 7012Bed,2Bath,1Car09/08/2021$599,000 11041Bed,1Bath,1Car28/07/2021$520,000

Source:BonythonProperty *BasedonsalesdatafromRealestate.com.auandPricefinderstartingJanuary2021

withopenplanlivingspaces, withthebuildingoverlooking thewaterfront.

intermsoflocation,assitesare acrosstheroadfromeach other.However,this developmenthasless apartmentsthanproposedin thesubjectsite.

*SalespricesforcompletedbuildingsarebasedonmostrecentsalesafterJanuary2021

**Wherelistswerenotavailableanindicativeaveragewascalculatedbasedonaverages

^Internalareasexcludebalconiesandcarspaces

Source:Urbis,Pricefinder,RPData,Agentsandrelevantsocialmediapages

10/08/2022 GosfordMarketAssessmentPage33 ProjectSuburbStatusYieldTypeMix(no.)AverageInternalSize^(sq.m)SalesPrices* Indicative AveragePrice persq.m** Commentary HorizonGosfordConstruction174 Studio1632 $342,000$10,688Locatedonthesamestreetas thesubjectsitebutisslightly closertoGosfordHospitaland nearbyschools.Alsosupports 2,500sqmofretail. 1Bed,1Bath5652 $448,000$8,615 2Bed,2Bath7087 $530,000$6,092 3Bed,2Bath28107.5$772,000$7,181 Penthouse4170$1,700,000$10,000 PeninsulaPointFrederickConstruction100 Studio137 399,000$10,784 Locatedinaquieter residentialarea,relativelyfree

developments.Thesiteisnear thewaterfront. 1Bed,1Bathroom453NotProvidedNA 1Bed,1Bathroom+Study1363.3$450,000-$550,000$9,390 2Bed,2Bathroom3489.5$650,000-$980,000$10,973 2Bed,2Bathroom+Study994$835,000-$885,000$9,149 3Bed,2Bathroom36120$950,000$1,450,000 $10,000 3Bed,2Bathroom+ Study/Penthouse3148.5$2,400,000$3,200,000 $18,855 TheWaterfront (CentralCoast Quarter) GosfordConstruction136 1Bed,1Bath1456$440,000-$585,000$9,489 Stage1ofa3-stagemixed-use

2Bed,2Bath10384$580,000-$1,000,000$9,759 3Bed,2Bath14120$1,275,000-$1,910,000$11,667 Penthouses,3-4Bed,2-3bath,2car5240$3,200,000$10,583 MerindahGosfordCompleted140 1Bed,1Bath1955 $452,000$4,757Allapartmentsweredesigned

2Bed,2Bath10681 $573,000$6,700 3Bed,2Bath15165$750,000-

1Bed,1Bath1863$520,000$8,253Mostcomparabletosubjectsite

2Bed,2Bath3690$575,000-$750,000$7333 Penthouse2186$2,000,000$10,753

CASESTUDYSUMMARY

fromretailandlarger

precinct.Thetowerhasviews ofBrisbaneWater.

$1,100,000$4,533 BonythonTowerGosfordCompleted56

10/08/2022 GosfordMarketAssessmentPage34

DEMAND

LOCALAMENITYANDDEMANDDRIVERS

KeyFindings

Fivekeydriversofdemandforresidential buildingswithintheStudyAreahavebeen identified.

Thefollowingpagesprovideatablethatdescribes thesedriversanddetailstheimplicationsforthe subjectsite.Thesubjectsiteperformshighlyon thesedriverswithstrongaccesstolocalamenity, uniqueaccesstoenvironmentalfeaturessuchas nationalparksandbeachesandreasonable accesstoemployment.

Surroundingamenity

10/08/2022 GosfordMarketAssessmentPage35 •Amenities,hospitalandschools

SourceUrbis

•TrainStationandHighway •BushlandandNationalParks •Closeaccesstoemploymentcentres •Views

DRIVERSOFRESIDENTIALDEMAND(1/2)

KeyDriversofResidentialDemand

FactorsComponentsImplicationsfortheSubjectSite

1.Highstandardoflocalamenity

Stronglocalamenityintheformof hospitals,schools,shoppingfacilities, recreationalfacilitiesmakealocationmore attractivetoprospectivebuyers.

•TheImperialShoppingCentreisthelargestshoppingcentreinthesuburblocated400metres fromthesubjectsite.ErinaFairShoppingCentreisaregionalshoppingcentrelocated6.5km fromthesubjectsite,whichisonlya10-minutedriveduringoffpeaktimes.

•Thesubjectsiteisservicedbyseveralschoolswithina5.0kmdrivingdistanceincluding GosfordPublicSchool(1.6km),HenryKendallHighSchool(1.0km),GosfordHighSchool (2.5km)andStPhillipsChristianSchool(4.4km).

•TheGosfordTAFENSWcampusandNewcastleUniversityCentralCoastClinicalSchoolare 400metresand1.3kmrespectivelyfromthesite.

•ThesubjectsiteiswithinwalkingdistanceoftheGosfordPublicHospitalwhichcompleteda $348millionupgradein2019.GosfordPrivateHospitalis1.7kmviacarfromthesubjectsite.

•Notably,CentralCoaststadiumis300metresawayfromthesubjectsite.Thestadium regularlyhostsprofessionalRugbyLeagueandFootball(Soccer)matches.

2.TransportAccessibilityandInfrastructure

Accesstogoodpublictransportandroad infrastructureareimportanttopotential purchasersandrenters.Particularlyvalued arelinkagestothelocalandSydney employmentcentres.Futureinfrastructure projectscanrevitaliseareas,improve connectivityandlinkages,createnewjobs andreshapetheexistingcommunity.

•GosfordStationislocatedapproximately800metresfromtheSubjectSite.Thisstation operatesontheCentralCoastandHunterlinewhichconnectstotheSydneyandNewcastle CBDs.Itisanapproximately90-minutecommutebetweenGosfordandCentralstations, however,undertheNSWGovernmentFastRailinitiativethiscouldbecutdowntoaslittleas 30minutes.ThedevelopmentlocatedontheCornerofDonnisonandMannStreetswillhave greateraccesstothetrainstationthanothercompetingdevelopments,suchasthePanorama developmentinYoungStreet,WestGosfordorthePeninsuladevelopment,PointFrederick currentlyunderconstruction.

•TheCentralCoastHighwayisimmediatelysouthofthesubjectsiteandconnectstheCentral CoastfromKariongtoDoyalson.

•TheM1Motorwayiswithinwalkingdistanceofthesubjectsite,allowingfastaccessbycarto SydneyorNewcastle.

10/08/2022 GosfordMarketAssessmentPage36



Space Schools University/TAFE HealthServices Stadium

Shops,Cafes/ Restaurants

OpenSpace/ Recreational

Train–Fastrail upgrade MainRoads Bus

DRIVERSOFRESIDENTIALDEMAND(2/2)

KeyDriversofResidentialDemand

FactorsComponentsImplicationsfortheSubjectSite

3.ClosetoNature

Locationsthathavecloseaccesstonature, willbehighlydemandedasresidential locationsbymanybuyers.Thesefactors remainhighontheprioritylistsofthose lookingtorentorbuy.

NationalParks

Beaches

Waterfront

•Thelocationofthesubjectsitewillgiveresidentseasyaccesstothenaturalenvironmentof theCentralCoast.TheGosfordwaterfrontislocated650metresfromtheSubjectSite. BrisbaneWaterNationalParkislocated17.3kmfromtheSubjectSitebyroad.

•ThereareanarrayofbeachesontheCentralCoastwithina15kmdriveoftheSubjectSite. ThepopularTerrigalBeachis11.7km,AvocaBeachis17.2kmandEttalongBeachis15.5 kmaway.

4.EmploymentOpportunities

Residentsoftenprefertoliveclosetowork, enablingthemtominimisetraveltimesand improvework/lifebalance.

Localjobs

Hornsby,Epping andChatswood

CBD’s

SydneyCBD

•AsignificantportionofresidentsintheGosfordCBDworkoutsideoftheCentralCoastLGA withmanyregularlycommutingtoSydneyforwork.AccesstoGosfordStationandplanned upgradestotheraillinemeanthatresidentsintheCBDhaveconvenientaccessto employmentcentresinSydney,especiallythoseinHornsby,EppingandChatswood.

•ForresidentsthatworkwithintheLGA,GosfordCBDitselfisasignificantemploymentcentre withretailandcommercialopportunities.TheErinaFairRegionalShoppingCentreislocated nearbywhichincreasesaccesstoemployment

5.Views

Locationswithqualityviewsofnatureare

Waterfrontview•ManydevelopmentswithintheGosfordCBDandsurroundingareahaveattractiveviewsof thewaterfront.Thisincreasestheattractivenessofthebuildingforresidentstolivein.The developmenton128-138MannStreetdoesnothaveviewsofthewaterfrontunlikesome competitors,suchasthePeninsulainPointFredrickdevelopment.

10/08/2022 GosfordMarketAssessmentPage37

moreattractivetoresidents.

SALESCYCLE

KeyFindings

Thenumberofapartmentsalesandthemedian apartmentpricehasbeenassessedoverthe20yearperiodtoNovember2021.

ThemedianunitpriceintheStudyAreahas undergoneasteadyincreaseoverthelast20 yearsreachedahighof$674,256asofNovember 2021.Thisrepresentsanannualaveragegrowth rateof5.4%overthe20years.Thegrowthin apartmentpriceshasbeenhigherforthelastten yearsat6.9%perannum.From2020to2021 therewasayear-on-yearincreaseof$73,692in apartmentsaleprices.However,therecentrisein interestrateswillplacepressureonpricegrowth.

ThenumberofapartmentsalesintheStudyArea hasfluctuatedsignificantlyoverthetimeperiod,in linewithapartmentsupplytothemarket.Ithas fluctuatedfromalowof446in2009toahighof 1,050in2018.Therehavebeenanaverageof 692apartmentssalesperyearoverthe20-year period.Overthelastfiveyearstherehasbeenan averageof758apartmentsaleseachyear.

ApartmentPriceGrowth(StudyArea),Nov2001–Nov2021 10/08/2022 GosfordMarketAssessmentPage38 Source:Urbis,Pricefinder $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 0 200 400 600 800 1,000 1,200 Median Unit Prices ($) Number of Unit Sales (no.)

NumberofsalesUnitMedianunitprice

RENTALMARKET

KeyFindings

TheGreaterSydneyareaandtheGosford postcode2250(whichcoversmostoftheStudy Areaandiswherethevastmajorityofapartments arelocated),havebeenanalysedtogivean overviewoftherentalmarket.

Overthelastfiveyearstherehasbeena convergenceinrentalpricesbetweentheGreater SydneyareaandtheGosfordpostcode.Greater Sydneyrentsfortwobedroomapartmentshave decreasedby$30,whilerentsforthreebedroom apartmentshaveincreasedby$10.Gosford postcoderentshaveincreasedforboth2and3 bedroomapartmentsby$110and$80 respectively.Thisindicatesthatfromaprice perspectivetheGosfordmarketisbecoming integratedwiththeSydneymarket,enabling higherrentstobeobtained.

Vacancyrateshavebeenverylowacrossboth GreaterSydneyandGosfordmarketssincethe endoftheCOVID-19pandemicGreaterSydney lockdown.Avacancyrateofbetween2.5%-3.5% representsabalancebetweensupplyanddemand intherentalmarket.Avacancyratehigherthan 3.5%willnormallyleadtodecreasingrents.A vacancyrateofbelow2.5%willleadtoincreasing rents.ThevacancyratesforGreaterSydneyand Gosfordare1.6%and0.6%,respectively,asof June2022accordingtoSQMresearch.These vacancyratesrepresentinadequatesupplyinthe rentalmarketandwillleadtoincreasingrents, particularlyintheGosfordmarket.

Overall,therentalmarketintheGosfordpostcode isextremelytight,withanundersupplyof dwellingsforlocalresidents,whichislikelyto continueintothefuture.

ApartmentRentalGrowth,Sep2017-Mar2022(StudyArea) VacancyRate(StudyArea),Jun2012–Jun2022 10/08/2022 GosfordMarketAssessmentPage39 Source:Urbis,SQMResearch Source:NSWDepartmentofCommunitiesandJustice $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 Sep-17Nov-17Jan-18Mar-18May-18Jul-18Sep-18Nov-18Jan-19Mar-19May-19Jul-19Sep-19Nov-19Jan-20Mar-20May-20Jul-20Sep-20Nov-20Jan-21Mar-21May-21Jul-21Sep-21Nov-21Jan-22Mar-22 Median Rent ($) Gosfordpostocde22502BedroomGosfordpostcode22503Bedroom GreaterSydney2BedroomGreaterSydney3Bedroom 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% Jun-12Jun-13Jun-14Jun-15Jun-16Jun-17Jun-18Jun-19Jun-20Jun-21Jun-22 Vacancy Rate (%) Gosfordpostcode2250GreaterSydneyEquilibrium

TAKE-UPRATES

KeyFindings

Thetabletotherighthighlightsthetake-upof significantcomparableapartmentprojectsin Gosfordlaunchedinrecentyears.Allofthelisted projectsarecomparabletothedevelopmenton 108DonnisonStreet.

Since2018,theStudyAreahasaveraged203 newapartmentsalesperyear.Newapartment saleshavebeendecreasingsincea2019peakof 440,whichislikelyduetotheimpactofCOVID-19 andthecorrelateddecreaseindwellingapprovals.

Apartmentsalesareexpectedtoincreasein comingyearsduetothereopeningofbordersand increasinghousingunaffordabilitypushingbuyers outofSydneymarketsandintotheCentralCoast market.Furthermore,theStudyAreahasstrong andimprovingaccesstoamenitymeaningthere willlikelybestrongdemandforapartmentsinthe areainthefuture.

SalesRatesforProjects NewApartmentSales(StudyArea)* 10/08/2022 GosfordMarketAssessmentPage40 Development SuburbLaunchTotalUnitsEstimatedTakeupperMonth Horizon GosfordJanuary2020174NA Peninsula PointFrederickAugust20191006.8 TheWaterfront GosfordOctober202113611.1 Merindah GosfordSep-20171406* BonythonTower GosfordAug-2017564 Source:Pricefinder,RealEstateAgents,Urbis *FromSep-2017toMar-2018beforetakinga1-yearhiatusduetoCOVID-19 Note*:2021and2022numbersdonotincludeoff-the-plansalesyettosettle. SourceUrbis,Pricefinder 0 50 100 150 200 250 300 350 400 450 500 20182019202020212022 New Apartment (no)

MARKETDEMAND

DemandandMarketShare

ToestimatetheSubjectSitetake-upwefirstlyestimatedthedwellingdemandof theStudyAreaandappliedmarketsharestodeterminetheexpectedtake-uprate oftheSubjectSite.Forthedemandmodelling,itisnotedthatthereis considerableuncertaintyregardingtheeconomicandpropertymarketrecoveryin theaftermathofCovid-19.

CentralCoastLGAMarketDemand

PopulationprojectionsandhouseholdsizeestimatesfortheCentralCoastLGA areprovidedbytheDepartmentofPlanningandEnvironment(DPE)andadjusted byUrbis.

FromtheseprojectionswecandeterminethedwellingdemandfortheLGAwhich istheadditionalpopulationgrowthinayeardividedbythehouseholdsize projections.Inlinewithrecenttrends,apartmentshaveaccountedfor approximately30%ofnewdwellingsintheLGA.Thispercentagerepresentsthe fiveyearaverageofapartmentcompletionsintheStudyArea.Thisisprojectedto increaseto36.0%asof2034asgreenfieldlandsupplybecomesmorelimitedin thearea.

StudyAreaMarketDemand

TheStudyAreaislikelytoreceiveahighproportionofapartmentswithinthe LGA,withonaverage90%ofapartmentcompletions,withintheStudyArea.This isprojectedtodecreaseto85%asof2034asotherareascontinuedtogrowtheir portionofapartmentdevelopments.Basedonthisapproximately562apartments willbedemandedwithintheStudyAreainFY2023,increasingto702byFY2034.

MarketShareAnalysis

Throughanassessmentofthecharacteristicsofthesubjectsiteandcompetition, wehavedeterminedthatthebasemarketshareofaround16%isfeasible.This marketshareisbasedonthefollowing:

•ThesubjectsiteisclosetoGosfordTrainstation,closerthanothercompeting developmentsgivingitacompetitiveedge.Thesubjectsiteislocatedashort walkawayfromtheImperialCentreandotherretaildestinations.Thisiscloser thensomeothercompetingdevelopmentssuchasthePeninsuladevelopment inPointFrederick.Thereforethesubjectsitehasaboveaveragecompetitive positioning.

•TherearesixapartmentdevelopmentsinthepipelinewithintheStudyArea thathave200ormoreunits.Thesubjectsitewould,therefore,havearounda 16%shareofthismarket.However,thispipelinerepresentsalikelybest-case scenariowithactualcompletionsdependentonmarketconditionsand developersaccesstofinanceandabilitytopre-sellapartmentsaswellas competitionfromsmallerdevelopments.

•Duetothebetterrelativepositionofthesubjectsitetothesecompetitors,a highcasemarketshareof20%hasbeenadopted.

SubjectSiteMarketDemand

Basedonthemarketshareofbetween16-20%,annualtake-upforthesiteis projectedtoequatetobetween89-108apartmentsinFY2025,increasingto116140byFY2034.

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PROJECTEDNETTAKE-UP

10/08/2022 GosfordMarketAssessmentPage42 FY23FY24FY25FY26FY27FY28FY29FY30FY31FY32FY33FY34 CentralCoastLGADwellingDemand2,0831,9811,9502,0012,0522,0952,1422,1672,2352,2872,2962,339 ProportionofDwellingsthatare Apartments(%) 30.0%30.5%31.0%31.5%32.0%32.5%33.0%33.5%34.0%34.5%35.0%35.5% CentralCoastLGAAnnualApartment Demand 625604604630657681707726872789803831 StudyAreaShareofApartmentDemand (%) 90.0%89.5%89.0%88.5%88.0%87.5%87.0%86.5%86.0%85.5%85.0%84.5% StudyAreaAnnualApartmentDemand562541538558578596615628750675683702 CumulativeDemandforApartments5621,1031,6412,1992,7773,3723,9874,6155,3656,0396,7227,424 CumulativeApartmentSupply4191,9293,0344,2354,4354,8264,8264,8264,8264,8264,8264,826 Gap(+over/-under) -1438261,3932,0361,6581,454839211-539-1,213-1,896-2,598 MarketShareofSubjectSite SubjectSiteMarketShare(%)-Base 16%16%16%16%16%16%16%16%16%16% SubjectSiteMarketShare(%)-High 20%20%20%20%20%20%20%20%20%20% AnnualSubjectSiteTake-Up SubjectSiteAnnualApartmentDemandBase 89929598101104124111113116 SubjectSiteAnnualApartmentDemandHigh 108112116119123126150135137140 SubjectSiteCumulativeApartment Demand-Base 2713634585566587628859971,1091,225 SubjectSiteCumulativeApartment Demand-High 3284405556747979231,0731,2081,3441,485

RECOMMENDATIONS

Demand

Thetable(right)outlinestherecommendedmixandindicativepricing($2022) forthesubjectsite.

Mix

Therecommendationisthatthedevelopmentconsistsmainlyoftwo-bedroom apartments.Thisisattractivetoinvestors,familiesandyoungprofessionals movingfromSydneytotheCentralCoast.Two-bedroomapartmentsshould accountforapproximately60-70%ofthemix,astheseapartmentsareattractive toinvestorsandfirst-homebuyersinthemarket.Havingmostapartmentseither 1-2bedroomswillbeappropriateconsideringthelow,anddecreasing, householdsizeintheStudyArea.Threebedroomsshouldmakeup10-15%of themix,withinvestorsandfirsthomebuyerslookingforamoreaffordable optionintheCentralCoastmarket.Itisrecommendedthatnofourbedroomor penthouseapartmentsareincludedduetothelackofwaterfrontviewsprovided bythesubjectsite.

Size

Therecommendedinternalsizesarebasedonacomparisonwithrecent projects.Theyconsiderthedesireformorespaciousaccommodationinthearea (comparedtoSydney),thoughmaintainingaffordability.

Prices

Pricingapartmentsisdifficultinthecurrentenvironmentwithinterestratesand constructioncostsontherise.Therefore,itisuncertainiffutureoff-the-plan saleswillbeabletomatchthesalepricesachievedinourcasestudies.The pricesprovidedareindicativeanddependentonmanyfactors. Theprojectedsalespricesin$2022havebeenestimatedbasedonrecentoffthe-planpricesandnewapartmentre-salesinthearea.Itisimportantthatthe pricesreflectthebalanceofaffordabilityandluxurythatisappropriateforthe CentralCoastmarket.

RecommendedMixandPricing

MixInternalSize

1Bed,1Car15-25%50-60$450,000-$550,000

2Bed,2Bath,1Car60-70%70-80$600,000-$710,000

3Bed,2Bath1-2Car10-15%100-120$850,000-$1,050,000

SourceUrbis Take-up

Basedonhistoricalandprojecteddemandandcompetition,theSubjectSitecould achieveasalesrateofaround55-65peryear(about5permonth)in2023.These ratesaresubjecttoconsiderableuncertaintywithinterestratesrisingandproperty pricesexpectedtodecrease.However,consideringtherecordlowvacancyratein theStudyArea,thereisconsiderableundersupplyinthemarketcurrently.This meanswithoutasignificantdeteriorationinthemarketthesubjectsiteshouldbe abletoachievetheforecasttake-uprates.

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(sq.m)

($2022)

Type

IndicativePrice

10/08/2022 GosfordMarketAssessmentPage44

APPENDICES

10/08/2022 GosfordMarketAssessmentPage45 ProjectName AddressSuburb Estimated CompletionYearStageUnits PacificaGosford136-148DonnisonStreetGosford2026DevelopmentApproval727 WatersideDevelopment50-70MannStreet&141GeorgianaTerraceGosford2025DevelopmentApproval500 SchmidtNorthGosfordGateway Development 35-37,41ADwyerStreet&372-374&393-397MannStreetNorthGosford2028DevelopmentApplication391 TheArchibald108DonnisonStreet&108-118,120AMannStreetGosford2027DevelopmentApproval323 JohnWhitewayDriveUnits89JohnWhitewayDriveGosford2024DevelopmentApproval201 1ARacecourseRoadMixedUse Development-Conexions Purlieux 1ARacecourseRoadGosfordWest 2027 EarlyPlanning200 TheHorizonGosford321-331MannStreetGosford2024DevelopmentApproval184 CentralCoastQuarter-Stages2 &3 26-30MannStreetGosford 2026 DevelopmentApproval159 HenryParryDriveShopTop Housing 138-142HenryParryDriveGosford 2024 DevelopmentApproval140 CentralCoastQuarter-Northern Tower-TheWaterfront26-30MannStreetGosford2024DevelopmentApproval136 KaraltaRoadUnits85-91KaraltaRoadErina 2026 Development Application131 IkonTower333-337MannStreetGosford2024DevelopmentApproval102 Source:Urbis,CordellConnect

APARTMENTFUTURESUPPLYPIPELINE(50+APARTMENTSONLY)

APARTMENTFUTURESUPPLYPIPELINE(50+APARTMENTSONLY)CONTINUED

10/08/2022 GosfordMarketAssessmentPage46 ProjectName AddressSuburb Estimated CompletionYearStageUnits PeninsulaPointFrederick 8-10DukeStreet,177-179 AlbanyStreet&2-4Auburn Street PointFrederick 2023 UnderConstruction101 KeeversLane&BeaneStreet MixedDevelopment 2KeeversLane&43-45Beane Street Gosford 2024 Development Application98 JohnWhiteway&HenryParry DrivesApartments-The Waterview 86JohnWhiteway&79-87HenryParryDrivesGosford2023UnderConstruction96 HillsStreetApartments34-44HillsStreetNorthGosford2024DevelopmentApproval85 JohnWhitewayDriveApartments -MarquesResidences70JohnWhitewayDriveGosford2025DevelopmentApproval72 BentStreetUnits7-11BentStreetGosford 2026 Development Application69 OrmondStreetApartments15-21OrmondStreetNorthGosford2025DevelopmentApproval64 OrmondStreetNorthGosford Units 5-13AOrmondStreetNorthGosford 2022 UnderConstruction61 HillsStreetResidentialBuilding59-61HillsStreetNorthGosford2026DevelopmentApplication61 MannStreetMixedUse DevelopmentSite297MannStreetGosford2025EarlyPlanning60 Ormond&GertrudeStUnitsSarah'SPlace 10-14Ormond&195GertrudeStreetsNorthGosford2024DevelopmentApproval59 RangeRdUnits18-22RangeRoadNorthGosford2023UnderConstruction57 TheGrange73-77EtnaStreetGosford2024DevelopmentApproval55 GertrudeStreetUnits-TheMint Gosford 181-183GertrudeStreetGosford 2025 DevelopmentApproval54 JabiruEttalongBeach237-245OceanViewRoadEttalongBeach2023UnderConstruction52 Source:Urbis,CordellConnect