Burwood East Market Outlook - English

MARKET OUTLOOK BURWOOD EAST Burwood East offers convenient access to local employment and education centres as well as attractive lifestyle amenity, with direct links to Melbourne's CBD via tram and major arterial roads.

01 Australian Economy 02 Why Melbourne 03 Walkability & Accessibility 04 Infrastructure 05 Employment & Education 06 Population & Demographics 07 Residential Market 08 Rental Market Prepared exclusively for

Frasers Property Group

January 2021

AUSTRALIAN ECONOMY

Australia's economy has proven resilient amidst turbulent times, with solid foundations for rebound and growth.

Australia maintained strong economic growth over the decade to 2019, with real GDP growing at an average of 2.5% per annum. Australia is also a resilient economy, achieving positive growth of 1.9% in 2009 during the GFC. Recently, Australia's economy has avoided a more severe contraction from the pandemic, when compared with other developed countries.

international borders will likely reopen in 2021. This would set Australia on a steady recovery of population growth, likely hitting strong pre-COVID-19 population growth rates by 2026.

Australia offers strong fundamentals for a resilient economy - good governance, coupled with strong and transparent institutions. This was clearly demonstrated in Australia's effective pandemic response and resilience of the Australian dollar, which has strengthened since March 2020. Australia has also implemented a range of demand stimulating measures, such as stamp duty waiver, monetary policy supporting the property sector, vaccine arrangements, and individual tax relief. These measures have well-positioned Australia for a strong rebound in the years ahead.

Australia's strong population growth is a key factor in the country's growing economy. High levels of inward migration ensure the country continues to benefit from a diverse culture and strong international ties. In comparison with other developed nations, Australia has experienced high average annual population growth, at 1.6% for the decade to 2019. Recent international border closures have slowed inward migration and population growth in the immediate term. However, Federal Budget has indicated that REAL GDP GROWTH Comparison of selected developed nations Canada 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% -12.0%

1.9%

Japan 2.8%

2.4%

United Kingdom

New Zealand 3.8%

2.1%

2.3%

2.6%

United States 2.8%

2.5%

Australia

2.7%

1.8% -4.2%

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: International Monetary Fund, Urbis

SGD

AUD/SGD, USD & EUR

1.20

USD

EUR

CNY

HKD

1.10 1.00 0.90 0.80 0.70 0.60 0.50 Jun-2015

Jun-2016

Source: Reserve Bank of Australia, Urbis

Jun-2017 Jun-2018 Period (End of Month)

Jun-2019

Jun-2020

10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00

AUD/CNY & HKD

EXCHANGE RATE Comparison of selected developed nations against AUD

AVERAGE ANNUAL POPULATION GROWTH 2009-2019

1.6%

1.3%

1.1%

0.7%

0.7%

-0.1%

AUSTRALIA

NEW ZEALAND

CANADA

UNITED STATES

UNITED KINGDOM

JAPAN

Source: The World Bank, Urbis.

Note that 2019 data is most recent.

2

Market Outlook Burwood East

WHY MELBOURNE

Melbourne’s global brand continues to grow after ranking second place for the World's Most Liveable City, in 2018 and 2019.

In 2018 and 2019, Melbourne was ranked the second most liveable city in the world. This follows seven previous consecutive years as number one, as voted by the Economist Intelligence Unit. This strong performance can be attributed to strong healthcare, education and infrastructure, along with the city’s cultural diversity, environment and political stability.

Melbourne is a global events destination, hosting many annual events which attract visitors from around the world.

EVENTS HOSTED IN MELBOURNE Australian Open Tennis Grand Slam Melbourne F1 Grand Prix AFL Grand Final

Melbourne's liveability not only attracts tourists, but also makes it the fastest growing city in Australia in absolute terms, growing by over 550,000 people between 2011 and 2016. Greater Melbourne's population is anticipated to surpass Greater Sydney's within the next 15-20 years, making it Australia's most populous city. Leading up to this, Melbourne anticipates to welcome over 95,000 residents annually. Melbourne's internationally praised response to a second wave in 2020 has further enhanced its appeal to new residents as a liveable and safe city in 2021. Melbourne's residential market has remained resilient, and despite an overall fall in sales and median prices during 2020, apartment sales and house prices were still higher than the same period in the previous year (2019). The aid of government stimulus like the HomeBuilder and First Home Owner Grants and Stamp Duty waivers, further supports Melbourne's residential market recovery.

MELBOURNE TOURISM Year to March 2020

Melbourne Cup Racing Carnival Virgin Australia Melbourne Fashion Festival Melbourne Food and Wine Festival

$7.6B

2.7M

Royal Melbourne Show

INTERNATIONAL VISITORS

INTERNATIONAL VISITOR SPEND

Source: Tourism Research Australia

GREATER CITY - AVERAGE ANNUAL GROWTH Forecast to 2040 ('000)

Darwin

2.8

Canberra

6.4

Brisbane

42.6

Sydney

82.4

Perth

34.3

Melbourne

95.2

Adelaide

10.0 Source: ABS, Urbis Note: Projections are pre-COVID-19.

Hobart

2.0

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WALKABILITY & ACCESSIBILITY Port Phillip Bay

Presbyterian Ladies College Deakin University Burwood Campus

No. 75 Tram Line

Burwood Heights Shopping Centre

B

W UR

OO

D

G HI

AY HW

Burwood Brickworks Shopping Centre

Burwood One Shopping Centre

Burwood East Reserve

Burwood East is located 17 kilometres east of Melbourne’s CBD with access to major roads including Burwood Highway and Blackburn Road which both link to the Monash Freeway.

Additionally, Burwood East is well serviced by Melbourne’s tram network with route 75 running every 10 minutes during peak times to Docklands.

Several bus routes also service the area and connect to railway stations providing a 30-minute journey to Melbourne’s CBD. 4

Market Outlook Burwood East

Tally Ho Business Park

Dandenong Ranges

RETAIL AMENITY Burwood Brickworks features over 30 specialty stores, including Woolworths, Dan Murphy's, Reading Cinemas, Acre Farm & Eatery, Insight Early Learning Centre, a medical centre, Choice Pharmacy, Cannings Butcher and Hu Hui Supermarket. Burwood One features over 70 stores, including Kmart, Coles, Aldi, and a brand new casual dining court. Burwood Heights Shopping Centre offers more retail amenity, with a Woolworths and BWS Liquor store.

Burwood East is easily accessible by public transport and is well positioned for commuting into the city or escaping to the beach or Dandenong Ranges for leisure.

Melbourne CBD

Box Hill Hospital

Wattle Park Golf Course

MIDDLEBOROUGH RD

Burwood East Local Government City of Whitehorse

Ha

Total Area 426 Ha Open Space 32 Ha Schools 6 Distance from Melbourne CBD 17km

EMPLOYMENT & EDUCATION

PARKS & RECREATION

Burwood East is surrounded by a range of employment opportunities, including the Tally Ho Business Park and Box Hill Hospital. The Tally Ho Business Park located at the intersection of Burwood Highway and Springvale Road is a key hub for high technology business and innovation in the eastern suburbs with corporations such as Motorola, Hewlett Packard, Pronto Software and Fujitsu.

Burwood East features ample open space and sporting facilities including the East Burwood Reserve, which offers tennis courts, two ovals, a cycling track, a basketball stadium and an athletics track. The Dandenong Ranges are also an easy drive east for an afternoon bushwalk, while Bay and Mornington Peninsula beaches are easily accessible. This diverse mix of employment, education, retail and lifestyle amenity continues to drive residential demand within Burwood East.

Furthermore, Burwood East is close to Deakin University as well as numerous private and public schools, including Glen Waverley Secondary College, Forest Hill College, Mount Scopus Memorial College, Presbyterian Ladies' College, St Benedict’s Primary School and Burwood East Primary School.

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5

INFRASTRUCTURE

There are several infrastructure projects underway or in the pipeline which will enhance Burwood East’s liveability.

The City of Whitehorse will benefit from more than $50 billion dollars worth of private and public infrastructure investment in the future pipeline. This includes commercial and mixed use projects, which will add to the existing amenity in the area, and also generate additional local jobs.

BURWOOD BRICKWORKS SHOPPING CENTRE $118 MILLION Completed Dec 2019.

The 13,000 sq.m shopping centre officially opened for trade in December 2019, offering a mix of flagships and localised speciality stores across food and dining, entertainment, retail services, health and wellbeing. The centre aims to be the most sustainable shopping centre in the world, with a focus on recycling rain and water waste, as well as sustainable power generation. One of its key features is Australia's first urban agriculture project in a shopping centre, with a 2,000 sq.m rooftop farm run by acre farm & eatery.

The shopping centre forms part of the development of the former Burwood Brickworks site, which will be a mixed use development across 18 hectares, including retail, residential, commercial, leisure, health and wellbeing uses.

EPWORTH EASTERN PLUS STAGE 1 $50 MILLION

Under construction.

Stage 1 of the Epworth hospital upgrade will include a new emergency department, 2 operating theatres, 60 overnight acute patient beds, 15 rehab beds, and 20 consulting suites.

Car parking for an additional 57 vehicles will span over 3 levels and will interjoin with the existing car park. The new hospital facility will measure 15 stories in height and is estimated to complete in late 2020.

6

Market Outlook Burwood East

DEAKIN UNIVERSITY BURWOOD CAMPUS INFRASTRUCTURE AND UTILISATION PLAN $316.5 MILLION

Planned

A total of 46 projects are proposed for the Burwood Campus between 2015 and 2024 as outlined in the Campus Infrastructure and Utilisation Plan. Significant Projects include the refurbishment of several buildings to create undergraduate teaching laboratories, a new School of Law building and increased student accommodation creating quality affordable housing for an additional 505 students.

In October 2016, Deakin commenced work on the Burwood Link, a pedestrian crossing between the Burwood Highway and Elgar Road sides of Deakin’s Melbourne Burwood Campus. The Burwood Link finished construction in mid-2017.

SURBURBAN RAIL LOOP $50 BILLION

Construction to begin 2022+

The Suburban Rail Loop project aims to improve Victoria’s public transport system, connecting every major train line from the Frankston Line to the Werribee line, and improving access to housing, jobs, schools, universities and hospitals in Melbourne’s middle suburbs. Stage 1 of the project includes the construction of the south-east section of the loop, with a brand new train station located in Burwood. The delivery of this rail loop will connect residents to key employment precincts in Clayton, Monash, Glen Waverley, Box Hill, Sunshine, Bundoora and Werribee, as well as Melbourne Airport.

EMPLOYMENT & EDUCATION

42,800 additional jobs are forecast for Melbourne's inner south-eastern suburbs by 2031.

EMPLOYMENT

EDUCATION

Proximity and access to Melbourne's CBD is likely to be an attractor for Burwood residents with 10% of those who are employed working there. A further 13% are employed within Burwood and Burwood East, primarily centred around the Tally Ho Business Park.

Deakin University's Melbourne Campus lies in the heart of Burwood, ranked in the top 15 universities across Australia.

The university boasts over 61,000 students, almost 13,000 international students, and its English language Institute (DUELI) is the second largest university English language centre in Australia. In 2019 Deakin ranked among the top 2% of universities worldwide according to all major international university rankings including Times Higher Education. Additionally, five private, three public and two special schools are located in the Burwood East Study Area providing residents with access to all levels of education.

Around 80% of employed Burwood and Burwood East residents work in white collar jobs. This comprises of managers, professionals, sales and administration professions. The concentration of people in these jobs is 6 percentage points higher than the Greater Melbourne average.

Burwood East is well positioned to capitalise on future employment growth as part of the Monash National Employment and Innovation Cluster, which according to the Victorian Planning Authority already supports more than 75,000 jobs and $9.4 billion annually to the State economy.

2031 JOB FORECAST Inner South East Region

230,200

2020

Key industries in Melbourne’s inner south-eastern suburbs anticipated to see growth by 2031, include retail trade, healthcare and social assistance, professional, scientific and technical services, education and training. Between 2020 and 2031, an additional 42,800 new jobs are forecast for this region, with the majority in community and business services.

+42,800 jobs

273,000

2031

Source: Plan Melbourne

10 08

07

09

BURWOOD

01

Burwood Brickworks

06

04

BURWOOD EAST

03

05

02

SCHOOLS IN BURWOOD AND BURWOOD EAST

01 Blackburn English Language School

04 Burwood Heights Primary School

08 Presbyterian Ladies' College

02 Burwood East Primary School

05 Emmaus College 06 Forest Hill College

09 St Benedict’s School Primary School

03 Burwood East Special Development School

07 Mount Scopus Memorial College

10 Wattle Park Primary School

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Burwood East and Burwood are projected to welcome nearly 10,000 additional residents by 2036 - a 36% boost in population.

POPULATION There are approximately 26,200 residents living in Burwood East and Burwood. The area saw a 30% increase to its population since 2001 reflecting an annual increase of about 330 residents.

The latest government projections anticipate Burwood East and Burwood growing more than it has historically.

By 2036, the area will welcome nearly 10,000 additional residents equating to a population over 35,700.

The boost in population anticipated in Burwood East and Burwood will mean a greater number of dwellings will be required to support new residents.

Approximately 3,310 additional dwellings are needed to support new residents between 2021 and 2036. Strong future demand to live in Burwood East will only be further propelled as the supply of developable land becomes scarcer over time.

POPULATION FORECAST Burwood East Study Area

19,990

2001

21,940

20,470

2006

2011

23,670

2016

32,670

29,700

26,760

2021

2026

2031

35,760

2036

Source: ABS, SAFI, Urbis Note: Projections are pre-COVID-19.

DWELLING FORECAST Burwood East Study Area

9,060

2016 Source: ABS, SAFI, Urbis Note: Projections are pre-COVID-19.

8

Market Outlook Burwood East

10,270

2021

11,390

2026

12,440

2031

13,580

2036

Burwood East is characterised by a young, international demographic taking advantage of the high-quality education offered by Deakin University.

DEMOGRAPHICS The demographic profile of Burwood East and Burwood reflects the impact of Deakin University with 15% of residents aged between 20-24 years as at 2016. This is over double that for Greater Melbourne at 7% and largely attributable to the number of tertiary students living in the area. Additionally, there are a higher proportion of residents over 65 years old in Burwood, accounting for 18% of residents, compared with 14% in Greater Melbourne. Aside from these specific differences, there is a reasonable depth across all age cohorts, which opens up opportunities to provide a range of housing options.

Burwood East and Burwood is a popular residential area for foreign born residents, with 52% of residents born overseas compared to 36% across Greater Melbourne. This can in part be explained by the large number of international students residing in the suburb.

Recent border closures may have limited international student numbers in the short-term, however Australia remains an attractive destination for education, offering proximity to Asia and a safe, livable environment. When borders reopen (likely next year), we expect recovery of international student arrivals. The housing structure across the area differs from the typical household composition across Greater Melbourne with a higher proportion of group households, at 10% in Burwood East and Burwood, compared with 5% in Greater Melbourne.

Average household and per capita incomes in the area increased by 27% and 28% respectively in the 10 years to 2016. This may be attributed to the increase in white collar workers in the area who generally earn higher incomes.

INCOME GROWTH - BURWOOD EAST / BURWOOD 2006 - 2016

2016

2006 Average Household Income Growth Average Per Capita Income Growth

2006

2016

+28% Source: ABS, Urbis

WHO LIVES IN BURWOOD EAST / BURWOOD Greater Melbourne

Burwood East /Burwood

52%

36%

Overseas born

79%

73%

White collar professionals

33%

27%

Bachelor Degree or higher

10% AGE DISTRIBUTION 2016

+27%

Group households

5%

Source: ABS, Urbis

Burwood East Study Area

Greater Melbourne

Population of Residents

20% 15% 10% 5% 0% 0-4

5-9

10-14

15-19

20-24

25-29

30-34 35-39 Age Bracket

40-44

45-49

50-55

55-59

60-64

65+

Source: ABS, Urbis

Prepared exclusively for Frasers Property Group

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RESIDENTIAL MARKET SALE PRICE Burwood East registered a median unit price of $702,500 for the year to July 2020. Compared to the surrounding suburbs of Vermont South, Glen Waverley, Mount Waverley and Ashburton, this median price is relatively more affordable. The difference is a median price saving of between $168,000 and $527,500.

This provides a more achievable entry point into the market. The level of affordability Burwood East offers is expected to be a driver for aspiring residents looking to move into the Eastern suburbs.

PRICE GROWTH Burwood East recorded median unit price growth of 3.6% per annum from 2010 to 2020. This demonstrates healthy long-term growth in the area.

The resilient apartment market Burwood East retains also extends in more recent periods. Median unit price grew 12% in the last 12-months to July 2020.

Meanwhile, sales volumes increased by 87% from 2019 to 2020. This is attributable in part to Burwood East's growing appeal as a suburb that can offer space and livability, coupled with access to inner-city amenities and jobs. It is also likely that Burwood East has benefited from Federal Budget's recent stimulus measures such as stamp duty waiver and expansion of the First Home Loan Deposit Scheme. These growth trends indicate continued demand for units in this area.

Burwood East has a resilient apartment market with its median price increasing 12% in the year to July 2020.

AFFORDABILITY GAP - BURWOOD EAST Year to July 2020

$1,067,500 HOUSE

$365,000 GAP

$702,500

UNITS

Source: Pricefinder, Urbis

MEDIAN PRICE GROWTH Burwood East - Units

3.6%

12.0%

P.A.

2010-20

2019-20

Source: Pricefinder, Urbis

AFFORDABILITY GAP There is a relatively large affordability gap between houses and units in Burwood East. In the year to July 2020, houses were 52% or $365,000 more expensive than units. This may shift demand in favour of units as the price point is more accessible to a broader range of purchasers.

MEDIAN UNIT PRICE Year to July 2020 Median Unit Price

Burwood East

$702,500

Vermont South

$1,050,000

Glen Waverley

$870,500

Mount Waverley

$1,000,000

Ashburton

$1,230,000

Source: Pricefinder, Urbis

10

Market Outlook Burwood East

Burwood East Saving

$347,500 $168,000 $297,500 $527,500

RENTAL MARKET

The median unit rent in Burwood East steadily grew over the decade and has continued to increase in the 12-months to September 2020 - demonstrating a resilient rental market.

RENTAL MARKET OVERVIEW

The rental market is supported by a high proportion of of tertiary students in the area, likely attending Deakin university.

MEDIAN WEEKLY RENTS The Burwood East catchment recorded median weekly rents of $260, $430 and $540 for one, two and three-bedroom units respectively over the year to September 2020.

Median weekly rent for units across the Burwood East catchment have shown steady growth over the long-term.

The median rent across all units grew by 2.0% per annum over the past decade. The 12 months to September 2020 saw rents hold steady, even amidst border closures and lockdowns during the recent pandemic. This is testament to Burwood East's resilient rental market.

RENTAL YIELD Units in Burwood achieved an indicative gross rental yield at 3.3% in the 12-months to September 2020.

This outperformed most surrounding areas including Ashburton (2.5%), Glen Waverley (3.0%) and Vermont South (2.2%).

INDICATIVE GROSS RENTAL YIELD - UNITS September 2020

2.5% 2.5%

Ashburton

3.3%

Burwood East

THE PROPORTION OF RESIDENTS THAT RENT IN BURWOOD EAST & BURWOOD HAS INCREASED BY 10 PERCENTAGE POINTS IN THE DECADE TO 2016.

MEDIAN WEEKLY RENTS Burwood East Catchment^ $550

1 Bed

$500 $450 $400 $350 $300 $250 $200

Rolling Annual - Quarters

Source: Department of Health & Human Services, Urbis ^Burwood East Catchment comprises the following suburbs: Burwood East, Burwood, Forest Hill, Vermont South, Ashburton and Ashwood.

HOUSING TENURE - RENTER Change 2006 - 2016 BURWOOD EAST AND BURWOOD

Mount Waverley

3.0% 3.3%

Burwood Source: Pricefinder, Urbis

3 Bed

2 Bed

Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20

Renting is a popular form of housing tenure with a third of households renting in Burwood East and Burwood. The proportion of renters is higher than that across Greater Melbourne at 31%. Burwood East and Burwood experienced growth in the proportion of renters from 23% in 2006 to 33% in 2016 - reflecting the strong rental market growth.

Glen Waverley

2.2%

Vermont South

GREATER MELBOURNE

23%

2006

26%

27%

2011

28%

33%

2016

31%

Source: ABS, Urbis

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P0030243

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