Outlook West End - April 2016 by Publication / Brochure

OUTLOOK WEST END

APRIL 2016

STRATEGIC LOCATION

INFRASTRUCTURE INVESTMENT

EMPLOYMENT GROWTH

A CONTEXT ON BUSINESS, CULTURE, LIFESTYLE AND RESIDENTIAL

West End offers significant commercial, entertainment and leisure amenity alongside a riverfront setting, all within three kilometres of the Brisbane CBD. CONNECTIVITY PROVIDED BY INTEGRATED CYCLING, FERRY & BUS NETWORKS

BUSTLING CAFES, DINING DESTINATIONS AND BOUTIQUE RETAIL AMENITY

BOUTIQUE CAFES AND DINING

POP

INF

CYCLE NETWORK

EMP

WEST END

3KM FROM THE BRISBANE CBD, QUEENSLAND’S LARGEST EMPLOYMENT NODE

West End accommodates all three of the Urbis economics and research fundamentals that make a sustainable suburb – Population, Infrastructure and Employment. BRISBANE RIVER

Positioned within walking distance to a wealth of retail and lifestyle amenity / Pg 02 Significant completed and proposed infrastructure investment / Pg 04 Surrounded by major employment nodes with almost 100,000 new jobs by 2031 / Pg 05

POPULATION GROWTH West End has outperformed previous population projections in recent times / Pg 06

SALE PRICE GROWTH

NEW PRODUCT PREMIUM

West End’s median apartment sale price shows a premium over the Brisbane LGA / Pg 08 New apartments in West End are showing rental premiums of up to 26.8 per cent over the total West End market / Pg 08

WALKABILITY & ACCESSIBILITY

BRISBANE AIRPORT 20MIN

West End

7 8

WILLIAM JOLLY BRIDGE

GO BETWEEN BRIDGE

9 11

10 12

2 1

23 MILTON

3KM TO CITY

TOOWONG BRISBANE RIVER

TRAIN BUS CITYCAT

West End offers a riverfront setting within close proximity to significant commercial, entertainment and leisure amenity, located less than three kilometres from the Brisbane CBD.

URBIS WEST END OUTLOOK © URBIS.COM.AU

Providing riverfront living and CBD proximity, West End balances inner-city lifestyle and extensive green space. Boundary Street showcases an eclectic mix of fashion, restaurants, cafes and nightlife, providing locals with access to a 24/7 activity hub. The regular West End Farmers’ Markets and a calendar of festivals continues to attract visitors from throughout Brisbane, while art galleries, theatres and music venues play host to a vibrant arts scene.

West End’s central location within Inner Brisbane offers convenient walkability in every direction. A walk along the river connects to Brisbane’s leading cultural centre and key food and dining hotspots, with Grey Street providing a cosmopolitan mix of multicultural cuisine. West End also is well serviced by ferry and bus networks, providing public transport connectivity to the Brisbane CBD and other key destinations.

28 17

34 33

GOLD COAST 50MIN

31 WOOLLOONGABBA

21 22

18 ST LUCIA

WEST END

10 11 12

1 2

Boundary Street Dining & Entertainment Precinct The Markets Shopping Centre & Coles Supermarket

Hardgrave Road Dining Precinct

Melbourne Street Dining Precinct

Little Stanley Street Dining Precinct

Brisbane Convention & Exhibition Centre

Queen Street Mall

The Barracks Retail & Dining Precinct

13 14 15 16 17 18 19 20

Education

Entertainment, Shopping & Dining

Cultural

MASTERPLAN DEPICTS EXISTING AND FUTURE DEVELOPMENTS

21 22 23

Gallery of Modern Art (GOMA) Queensland Art Gallery State Library of Queensland Queensland Museum Queensland Performing Arts Centre (QPAC) Queensland Theatre Company Queensland University of Technology – Gardens Point Queensland University of Technology – Kelvin Grove Griffith University – South Bank University of Queensland Tafe Queensland – South Bank Campus Brisbane State High School Somerville House St Laurence’s College West End State School

Infrastructure

Recreation & Green Space

Davies Park & West End Markets

Orleigh Park

Musgrave Park

South Bank Parklands

City Botanic Gardens

Roma Street Parklands

Suncorp Stadium

Brisbane Cricket Ground – The Gabba

Riverside Cycle & Pedestrian Path

Lady Cilento Children’s Hospital

Mater Hospital

Wesley Hospital

St Vincent’s Private Hospital

Princess Alexandra Hospital

Future Queen’s Wharf Development URBIS WEST END OUTLOOK © URBIS.COM.AU

INFRASTRUCTURE

Recent infrastructure investment has provided a catalyst for employment growth and residential demand.

West End Catchment The large majority of West End’s infrastructure is already present and useable. This puts the suburb in an envious position over other inner-city suburbs, which are leveraging their future growth on planned infrastructure projects. Broad investment from public and private enterprises has enabled the West End Catchment (West End and South Brisbane) to develop a wealth of infrastructure that will continue to drive employment growth and demand for residential dwellings within the market.

Queen’s Wharf $3 BILLION

Inner Brisbane’s first car-accessible bridge in 40 years links South Brisbane to the Brisbane CBD and northern suburbs.

Lady Cilento Children’s Hospital $1.2 BILLION

$100+ MILLION

359 beds

2,500 staff

Mater Public & Private Hospital’s

Queensland Cultural Centre

950 beds

$1.15 BILLION

A world class multi-venue centre encompassing QPAC, Queensland Museum, State Library of Queensland, Queensland Art Gallery and GOMA. 4

$338 MILLION

Howard Smith Wharves

The planned revitalisation of Howard Smith Wharves will include mixed-use commercial, hotel, community facilities and public open space. 3

Go Between Bridge

Queen’s Wharf Brisbane, an integrated resort development including casino, hotel, retail, theatre and convention uses, will provide the city of Brisbane with a world-class tourism, leisure and entertainment precinct.

7,500 staff

Wesley Hospital

526 beds

Brisbane Convention & Exhibition Centre $333 MILLION

2,270 staff

St Vincent’s Private Hospital

164 beds

The BCEC hosts on average 1,300 events per year, generating in excess of $200 million in economic benefits for Brisbane and Queensland.

350 staff

CYCLE PATH TRAIN STATIONS CITY GLIDER BUS CITYCAT STOPS MILTON COMMERCIAL OFFICE PARK

MILTON

GO BETWEEN BRIDGE

WILLIAM JOLLY BRIDGE KURILPA BRIDGE

5 15

BRISBANE CBD

VICTORIA BRIDGE

1 CITY BOTANIC GARDENS

4 10 13

DAVIES PARK

WEST END DINING PRECINCT

12 WEST END

URBIS WEST END OUTLOOK © URBIS.COM.AU

GOODWILL BRIDGE

ORLEIGH PARK

KANGAROO POINT

SOUTH BRISBANE

RIVERSIDE SOUTH

3KM TO CITY

MUSGRAVE PARK

HIGHGATE HILL

LEGEND

QUEENSLAND UNIVERSITY OF TECHNOLOGY

UNIVERSITY OF QUEENSLAND

GRIFFITH UNIVERSITY

TAFE QUEENSLAND – SOUTH BANK CAMPUS

SOUTH BANK PARKLANDS

CULTURAL PRECINCT

EMPLOYMENT

Almost 100,000 new jobs within walking distance by 2031.

West End Catchment

West End is located within three kilometres from Queensland’s largest employment node, the Brisbane CBD. Furthermore, the neighbouring South Brisbane commercial precinct has evolved into a major white collar employment node providing significant local employment.

WEST END & SOUTH BRISBANE

BRISBANE CBD

12,493

58,941

222,178

BY 2031

3,691

27,398

65,633

jobs

Benefiting from CBD proximity and a wealth of infrastructure, West End and South Brisbane have seen a growing concentration of employers within the precinct, with projections that an additional 27,398 jobs will be created in the catchment by 2031 (NIEIR Employment Forecasts). West End also provides easy access to other employment centres, like the Wesley Hospital and the University of Queensland. Lady Cilento Children’s Hospital

WEST END

new jobs

INCREASE

Prepared by Urbis; Source: NIEIR Employment Forecasts, PCA Office Market Report, Urbis

Cultural Precinct

Queensland University of Technology

EDUCATION

Within a two kilometre proximity of Queensland’s two largest universities. West End is located centrally to South East Queensland’s major education providers. Within a two kilometre radius, there are more than 131,500 students, including in excess of 18,000 international students, currently studying in 13 educational institutes. These include the University of Queensland, Queensland University of Technology, Tafe Queensland – South Bank Campus and Griffith University, with demand for local dwellings influenced by this significant student population. In addition to tertiary facilities, the West End Catchment also includes a number of Brisbane’s top secondary colleges, including Brisbane State High School, St Laurence’s College and Somerville House.

jobs

West End Proximity

30,000

47,299

TAFE QUEENSLAND – SOUTH BANK CAMPUS

QUEENSLAND UNIVERSITY OF TECHNOLOGY

35,151

3,611

UNIVERSITY OF QUEENSLAND

GRIFFITH UNIVERSITY SOUTH BANK CAMPUS

students

Prepared by Urbis; Source: UQ, QUT, Tafe Queensland, Griffith University

URBIS WEST END OUTLOOK © URBIS.COM.AU

15,967

15,000 10,664

10,000

8,531 6,567

765 NEW RESIDENTS PER ANNUM

5,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

PERIOD (ANNUAL)

Prepared by Urbis; Source: OESR Estimated Resident Population and Population Projections

AGE DISTRIBUTION 16%

WEST END BRISBANE LGA

14%

STRONG GEN Y REPRESENTATION

12% 10% 8% 6% 4% 2%

URBIS WEST END OUTLOOK © URBIS.COM.AU

TOTAL PERSONAL INCOME / WEEK 14%

22% EARNING OVER $1,500 PER WEEK

WEST END BRISBANE LGA

12% 10% 8% 6% 4%

INCOME BRACKET

$2000 or more

$1,500 to $1,999

$1,250 to $1,499

$1,000 to $1, 249

$800 to $999

$600 to $799

$400 to $599

$300 to $399

$200 to $299

85 +

80 to 84

75 to 79

70 to 74

65 to 69

60 to 64

55 to 59

50 to 54

45 to 49

40 to 44

35 to 39

30 to 34

AGE DISTRIBUTION

Prepared by Urbis; Source: ABS

25 to 29

20 to 24

15 to 19

10 to 14

$1 to $199

The income distribution of West End shows that residents outperform the Brisbane LGA benchmark in the highest end income brackets. This higher income distribution in West End is especially promising and, given the relative age of the population, points to a significant young professional demographic. With an appetite for inner-city living but with limited savings available to purchase a dwelling, this young professional group choose to use their incomes to rent lowmaintenance accommodation in well-located suburbs.

19,328

20,000

5 to 9

Demographic changes have long been accredited as vital determinants of economic growth in relation to property market demand and supply fluctuations. The key economic fundamentals that support West End have attracted the demographic that West End is dominated by, with the age group of 20 to 34 making up more than 36 per cent of the population. This group has a proportion 42 per cent higher than the Brisbane LGA benchmark. The more mature Gen Y market, those aged 25 to 34 years of age, saw the greatest growth in proportion over the Census periods 2006 to 2011, growing from 22.3 per cent of the population to 25.4 per cent of the population. The Gen Y demographic typically seeks out locations that provide a wealth of amenity within walking distance (retail, education), connectivity to key destinations and proximity to employment opportunities.

21,146

0 to 4

West End’s location, benefiting from large employment nodes coupled with significant infrastructure, provides key economic fundamentals. These factors, combined with the potential for residential development, will contribute to sustained long-term population growth within the suburb. Urbis expects this growth to once again outperform the forecast projections.

25,000

Neg or Nil

Based on OESR projections, West End’s population is expected to increase by more than 12,242 new residents between 2015 and 2031, equating to an annual average growth rate of 5.2 per cent per annum. This growth is expected to be most prominent between 2015 and 2021, with an average annual growth rate of 8.3 per cent expected.

WEST END POPULATION GROWTH ESTIMATED AND PROJECTED POPULATION

Strong population growth was experienced in West End between 2004 and 2014, with the suburb registering an increase of approximately 2,834 residents over the ten-year period, to a total of 9,143 residents. The growth in this area has outperformed the traditionally conservative Queensland Government population projections, thereby explaining why the population figures are lower for the initial periods of the current forecast.

PROPORTION OF POPULATION (%)

WEST END’S PAST & FUTURE

PROPORTION OF RESIDENTS (%)

POPULATION & SHIFTING DEMOGRAPHICS

Young professionals are attracted to West End’s active local culture, high lifestyle amenity and CBD proximity.

Moving forward, the Gen Y & Empty Nester demographics will have an increasing impact on Brisbane’s residential markets. The coming decade will see significant shifts in the composition of the Australian population, influencing demand and supply patterns that will differ from previous decades. In order to explore these impacts in depth, Urbis has used a number of sources and market experience to further understand Australia’s major demographic groups, which will aid decision making on structural shifts and future demands in property in this period. The most dramatic change is expected to be the aging of the Baby Boomer generation into an empty nester/downsizer age distribution. This generation has been the focus point of the property market over the past 30 years, however this market is soon to be downsized from it status of top generation of focus. There is no denying that the Boomer demographic will still play an important role in the demand within the property market moving forward – being the biggest wave of the population moving into part-time employment and retirement in modern history. Significantly this demographic will not have as much of an impact on the property market’s structural demand and supply shifts moving into the next decade, with the Gen Y market providing this impact. The children of these Baby Boomers, “Generation Y,” have been emerging into adulthood, progressing through university, obtaining their first jobs and some even moving into their first independent home. Investment strategy needs to be sensible to possible impacts and the magnitude and differing preferences each of these demographic waves will have on property performance moving forward. Demand for property over the next decade will be greatly impacted by how each of these unique generations behaves, lives, works and utilises space. Despite the age gap, Baby Boomers seek similar dwelling characteristics to that of Generation Y – suburbs that offer diverse and inclusive communities, walkability to amenity, low maintenance living and proximity to key activity nodes.

WHAT THEY WANT

PROXIMITY TO CBD WALKABILITY & CONNECTIVITY

COMMUNITY & NETWORKS

QUALITY OF LIFE LOW MAINTENANCE DWELLINGS

GREEN SPACE SUSTAINABLE LIVING COSTS

SHIFTING DEMAND The Opportunity

BABY BOOMER GENERATION

BABY BOOMERS

33%

26%

2011 CENSUS

2021 FORECAST

Prepared by Urbis; Source: OESR Estimated Resident Population and Population Projections

»» Lifestyle will be paramount when deciding on the next property of purchase for this demographic, driven by higher density, low-maintenance living. »» Inner-city living in mixed-age environments is expected to become an important lifestyle for Boomers. »» Walkable mixed-use locations with retail, food service and entertainment activities also will attract an increasing proportion of Boomers as they decide to trade down in size, but not in amenity value.

GENERATION Y

GEN Y

GEN Y 24–30 YEARS OF AGE

30%

35%

2011 CENSUS

2021 FORECAST

Prepared by Urbis; Source: OESR Estimated Resident Population and Population Projections

»» This demographic between now and 2021 will likely be moving into independent living accommodation, which may represent one of Brisbane’s biggest dwelling demand circumstances ever to be recorded. »» Lifestyle will be paramount – Gen Y locate where they can best meet the goals of entertainment, amenity and employment. »» Diversity of ethnic group is embraced by this demographic, with higher density dwelling options often the norm in many of these diverse cultures. »» As Brisbane’s economy continues to grow – those exiting university and newly employed are expected to fuel tremendous demand for apartments.

Prepared by Urbis

RESIDENTIAL MARKET ANALYSIS

West End’s median apartment sale price is 21 per cent higher than the Brisbane LGA.

SALES ANALYSIS

RENTAL ANALYSIS

The median sale price, based on 218 settlements, for apartments within the West End Catchment (West End and South Brisbane) was registered at $529,000 for the half-year period ending December 2015. This represents a 21 per cent premium over the Brisbane LGA median sale price for the same period.

New and near-new apartment product within the West End Catchment achieves a rental price premium over the total existing stock. Analysis of on-the-market rental data, which records advertised rents for new and near-new apartment product, indicates that one-bedroom apartments are achieving a premium of 26.8 per cent over the total existing stock. New and near-new two and three-bedroom apartments achieve a premium of 11.3 per cent and 16.5 per cent respectively.

Apartments in the West End Catchment have shown a long-term upward trend over the course of the sales cycle, with median sale price increases averaging 3.3 per cent per annum over the last ten years. Furthermore, the most recent December 2015 half-year has shown a 15.9 per cent median sale price increase over the past three years since the December 2012 half-year. West End apartments have attracted significant owneroccupier and investor demand given their premium location on the Brisbane River within close proximity to green spaces, employment nodes and retail amenity.

30-YEAR APARTMENT SALES CYCLE West End Catchment – Dec 2015 $600,000

NUMBER OF SALES — WEST END CATCHMENT MEDIAN SALE PRICE — WEST END CATCHMENT

$529,000

$500,000

400

$400,000

300

$300,000

200

$200,000

100

$100,000 $0

BRISBANE LGA ESTABLISHED PRODUCT MEDIAN SALE PRICE

500

Rental growth has been exhibited in the West End Catchment over time, with an average annual rental growth of 5.8 per cent for one-bedroom apartments, 5.9 per cent for twobedroom apartments, and 4.4 per cent for three-bedroom apartments over the ten years between December 2005 and December 2015. RENTAL COMPARISON December QTR 2015

1985 DEC 1986 DEC 1987 DEC 1988 DEC 1989 DEC 1990 DEC 1991 DEC 1992 DEC 1993 DEC 1994 DEC 1995 DEC 1996 DEC 1997 DEC 1998 DEC 1999 DEC 2000 DEC 2001 DEC 2002 DEC 2003 DEC 2004 DEC 2005 DEC 2006 DEC 2007 DEC 2008 DEC 2009 DEC 2010 DEC 2011 DEC 2012 DEC 2013 DEC 2014 DEC 2015 DEC

NUMBER OF SALES

600

The chart also highlights the rental premium for apartments in the West End Catchment over the Brisbane LGA benchmark, with a 6.4 per cent premium for one-bedroom, 32.5 per cent for two-bedroom and 40.4 per cent for threebedroom apartments.

1 BED

WEST END CATCHMENT NEW & NEAR NEW PRODUCT

2 BED

HALF-YEAR PERIOD

Prepared by Urbis; Source: APM PriceFinder

BRISBANE LGA

$529k WEST END CATCHMENT

MEDIAN SALE PRICE Prepared by Urbis; Source: APM PriceFinder

BRISBANE LGA ESTABLISHED PRODUCT WEST END CATCHMENT ESTABLISHED PRODUCT WEST END CATCHMENT NEW & NEAR NEW PRODUCT

RESIDENTIAL APARTMENT MARKET December 2015

$437.5k

WEST END CATCHMENT ESTABLISHED PRODUCT

21% PRICE PREMIUM

3 BED

BRISBANE LGA ESTABLISHED PRODUCT

$330 $351 $445 $400 $530 $590* $495

WEST END CATCHMENT ESTABLISHED PRODUCT WEST END CATCHMENT NEW & NEAR NEW PRODUCT

Prepared by Urbis; Source: RTA, realestate.com.au, Agent’s advice *Figure reflects 2 bed, 2 bath product.

$695 $810

Apartments in the Riverside South pocket of West End are commanding a 22 per cent premium over the West End Catchment.

RESIDENTIAL MARKET ANALYSIS

Riverside South Apartment Premium

The Riverside South Precinct of West End is a private pocket in the southern corner of the suburb. Adjacent to the river, this precinct is protected from the hustle and bustle of the nearby commercial and retail amenity, forming a quiet residential sanctuary. Despite this element of privacy, this pocket is close to all necessary major infrastructure and amenity with strong walkability and connectivity aspects catered for. A CityCat terminal is within walking distance, taking residents directly to the Brisbane CBD and Hamilton (down river) and the University of Queensland (up river). The CityGlider Bus service runs directly through this southern riverside pocket of West End, connecting the precinct with the Brisbane CBD, Fortitude Valley and a number of Inner Brisbane employment nodes. The Riverside South pocket consists of a mix of established housing and apartment projects. Apartment developments within this precinct

have varying degrees of river views, however all are within walking distance to the Brisbane River and both Davies Park and Orleigh Park. In order to better understand the Riverside South precinct in comparison to the wider West End Catchment, a pocket of new and near-new apartment buildings located in the precinct have been analysed. The buildings in this analysis include Flow, Koko, Riverpoint, Waters Edge and Gardens, and, in total, contain approximately 780 apartments. The median sale price, based on 229 settled transactions, for the selected apartments within the Riverside South pocket was recorded at $647,500 for the two year period ending December 2015. This represents a 22 per cent premium over the West End Catchment median sale price and 48 per cent over the Brisbane LGA figure. This highlights the premium nature of the residential offering in the Riverside South precinct. RIVERSIDE SOUTH PRECINCT VS WEST END CATCHMENT

GO BETWEEN BRIDGE

APARTMENT

WILLIAM JOLLY BRIDGE KURILPA BRIDGE

MEDIAN SALE PRICE DECEMBER 2015

MILTON VICTORIA BRIDGE

BRISBANE CBD

$437,500 BRISBANE LGA

$529,000 WEST END CATCHMENT

$647,500

DAVIES PARK

MUSGRAVE PARK

SOUTH BRISBANE RIVERSIDE SOUTH

RIVERSIDE SOUTH WEST END GOODWILL BRIDGE

APARTMENT

PRICE PREMIUM WEST END

3KM TO CITY

ORLEIGH PARK

22% HIGHGATE HILL

OVER WEST END CATCHMENT

48% OVER BRISBANE LGA Prepared by Urbis; Source: APM PriceFinder

OUTLOOK INSIGHTS Subtitle

Orleigh Park, West End

Brisbane Level 7, 123 Albert St Brisbane QLD 4000 07 3007 3800

This publication is prepared on the instruction of Pradella Developments Pty Ltd and is not suitable for use other than by the party to whom it is addressed. As the publication involves projections and assumptions it can be affected by a number of unforeseen variables. The forecasts and assumptions are a prediction and whilst Urbis has made every effort to ensure that the forecasts and assumptions are based on reasonable information, they may be affected by assumptions that do not necessarily eventuate or by know or unknown risks and uncertainties. It should be noted that past performance is not necessarily a reliable indication of future performance. The information in the publication does not represent financial advice and should not be regarded as such. It has been prepared without taking into account your financial situation or investment objectives. You should consider the appropriateness of the information in regards to your current financial situation or needs. Urbis accepts no responsibility for the accuracy or completeness of any such material. The information is subject to change without notice and Urbis is under no obligation to update the information or correct any assumptions which may change over time. This study has been prepared for the sole use of Pradella Developments Pty Ltd and is not to be relied upon by any third party without specific approval from Urbis. This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) be reproduced, stored in a retrievals system or transmitted without prior written permission. Enquiries should be addressed to the publishers. / EMR0580