Kelvin Flynn22 October 2015

STRICTLY PRIVATE AND CONFIDENTIAL

A presentation to the Freight & Logistics Council of WA

Northern Gateway

Presentation to FLCWA

Who is Sirona Capital?

Why invest in Industrial land?

Northlink WA – a game changer

Northern Gateway, Bullsbrook – metro freight distribution

Northern Gateway, Muchea – regional distribution and logistics

Our vision for Northern Gateway

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Who is Sirona Capital?

Local, WA owned, 10 investment professionals, Australian Financial Services Licence (AFSL)

Private Equity with a focus on Real Estate Development

Active also in Metals & Mining, Oil & Gas and Agriculture

Backed by HNW, family office and institutional capital

Value investors with long term investment horizon

Flagship projects include:

– Northern Gateway, and

– Kings Square, Fremantle

“Long” investment in Fremantle’s rejuvenation

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Why invest in industrial land in Perth?

SUPPLY SIDE:

Perth metro has the highest cost industrial land in Australia

Historical and continuing slow release of industrial land has resulted in a long-term and proven structural supply shortage

Development and planning hurdles include:

– Land amalgamation;

– Environmental approvals (“green tape”);

– Planning restrictions (“red tape”); and

– Cost of development

Investment and funding for industrial development and land banking in WA is historically lacking

Future industrial development at other major planned estates is constrained eg. Perth Airport by expansion of airport activities (third runway and new passenger terminals)

DEMAND SIDE:

Significant changes in distribution and logistics, eg. Internet, growth in parcels, and technology

Continuing relatively strong population growth

The WA resources production boom continues to underpin the State’s economy and growth following the end of the construction boom

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Sirona Capital formed a positive investment view on the Supply & Demand balance of Perth metro industrial. We then embarked on a review of strategic locations, land

availability and positive planning outcomes.

Land Supply - EELS

In 2009, a review was undertaken of all industrial land developments in the process of being developed and/or planned

The Economic and Employment Land Strategy (EELS, 2012) provides an overview of the amount of available industrial land at 2009 and the amount of industrial land in the development supply pipeline (expected to be released) from 2009-2025

EELS predicted 2065ha of total available land supply to 2025

In analysing true competing supply, Sirona has adjusted the supply forecast for:

– South Bullsbrook and Muchea – Sirona’s actual delivered supply;

– Nambeelup and Pinjarra – deductions for non metro supply; and

– Perth airport – deduction while the 3rd runway planning is worked through (long term disruption).

Sirona estimates available supply reduces to ~1500ha in the market through to 2025

5Source: EELS, April 2012

Land Absorption - EELS

EELS forecast land absorption rates of 150ha in 2014 growing to 300ha in 2025 which implies an average annual absorption rate of 225ha per annum over the period

Over the period 2009-2025, total demand for industrial land is predicted to be 3200ha

This means that projected supply of only ~1500ha against forecast absorption of 3200ha leaves the market short 1700ha

In summary, we forecast that the competitive supply is only half of what the market needs through to 2025 - Sirona’s view is that the demand forecast may be aggressive – irrespective, Sirona’s investment thesis assumes tight supply to continue to 2025

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Source: EELS, 2012

Large lot availability in the Perth Metropolitan area

An analysis of the availability of industrial land in major industrial precincts today in the Perth metropolitan area further emphasises a shortage of available large lot (i.e. > 5ha) serviced industrial land

Only 84.3 ha of large lot land is currently available on the market across 7 key industrial areas

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Industrial Complex Small lot (<5ha)(ha)

Large lot (>5ha)(ha)

Total (ha)

Wangara 19.6 5.7 25.3Neerabup (Meridian Park) 6.1 Nil 6.1

Bullsbrook 2.8 31.1 33.9Muchea 3.1 Nil 3.1

Forrestdale 36.7 6.0 42.7Hazelmere 7.7 Nil 7.7Bibra Lake 1.4 Nil 1.4

Cockburn Central 3.4 5.2 8.6O’Connor 3.0 Nil 3.0

Malaga 3.0 Nil 3.0Osborne Park 1.4 Nil 1.4

Welshpool 0.9 Nil 0.9Jandakot City 26.5 10.0 36.5

Henderson Nil 12.8 12.8Naval Base 0.2 Nil 0.2Kwinana 13.4 Nil 13.4

East Rockingham Nil 13.5 13.5TOTAL 129.2 84.3 213.5

Source: Realcommercial.com.au, Oct 2015

Perth’s Road & Rail Freight Network

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Perth’s freight network is evolving rapidly with ~$4.5b of major

infrastructure projects including Northlink WA, Gateway and Perth

Freight Link. This will significantly reduce freight cost, travel times and open up the north east metropolitan area for major industrial development.

Northlink WA

14mtpa of freight is transported north-south versus 7mpta east-west (Source: MRWA)

Northlink WA is a new 37km link from the intersection of the Reid and Tonkin Highways (key freight ring roads) to Great Northern Highway and Brand Highway at Muchea

It will become the main north-south route for major freight traffic

The $1.2 billion Northlink WA is funded and scheduled for completion in 2019

Designed with grade separation at all major intersections for maximum efficiency and road safety

Muchea and its related heavy vehicle infrastructure (RTAA) will be ideally located at the terminating junction of Northlink WA

Detailed traffic forecasts (and actuals) confirm >2,800 heavy vehicle movements per day (post mining construction boom)

Northlink WA is critical road infrastructure which advances the

development of Northern Gateway, Bullsbrook and Muchea.

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Northern Gateway, Bullsbrook

Less than 1km south of Bullsbrook, in the City of Swan, and 35km north east of the Perth CBD

Total South Bullsbrook Industrial Precinct area is 430ha, of which Northern Gateway, Bullsbrook comprises 200ha

First ‘priority’ industrial precinct to be rezoned under the State Government’s Economic and Employment Land Strategy (EELS), and will provide a strong economic and employment base for the north eastern metropolitan region

The site has become the highest priority of all identified industrial sites throughout the metro area, due to a number of land amalgamation, planning and environmental issues which restrict other locations

Bullsbrook Intermodal Terminal recently gazetted by WAPC adjoining Northern Gateway, Bullsbrook

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Development ready, but will further benefit from the construction and delivery of Northlink WA (2019)

Northern Gateway, Bullsbrook also includes the only land designated for the development of the serviced commercial uses to support the greater industrial precinct (e.g. fuel, food retail, showroom, bulky goods etc.)

Northern Gateway, Bullsbrook – Development Concept Plan

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Northern Gateway, Muchea The WAPC identified land east of the Muchea town

site as an employment node in 2011 as part of the Muchea Employment Node Structure Plan (MENSP)

WAPC recognised potential as an industrial area that could take advantage of long-term transport opportunities offered by Northlink WA

Sirona has acquired a strategic 150ha industrial zoned land parcel immediately adjacent to terminus of Northlink WA and is proposing to develop a heavy vehicle services hub to support heavy vehicle traffic servicing the resources and agricultural industries

Rezoned to Industrial Development in June 2015

An approved local structure plan and subdivision plan predominantly incorporating General Industrial Zoning is anticipated to be obtained by August 2016

Upgrades to Great Northern Highway between Wubin and Muchea will allow triple length road trains to travel further south, reducing or eliminating the need for the Wubin and Apple Street (Upper Swan) RTAAs

The property is also immediately adjacent to the proposed Muchea RTAA (completion 2019) – creates WA’s largest convergence of stationary heavy vehicles

Secured leading national fuel retailer for Australia’s largest truck stop

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Northern Gateway, Muchea – Proposed Development Concept Plan

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Jandakot City Case Study

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Jandakot City illustrates how quickly large lot DC land is absorbed in the Perth Metro area, driven by supply and demand imbalances

Development really kicked off in 2012 and accelerated due to Jandakot being the only large DC land available in the Perth metro area with good road infrastructure linkages

35 facilities built in the last 3 years with a further 5 under construction or commencing, and of these, only 4 facilities are on sites over 5 hectares

Jandakot City is now a major DC industrial hub and in our view is a strong representation of our vision for Bullsbrook

Source: Google Earth (12/07/2015)Source: Google Earth (09/12/2012)

2012 – Development Commences 2015 – Jandakot City developed for major distribution centres

Our Vision for Northern Gateway

GOVERNMENT AND COMMUNITY BENEFITS…

JOBS, JOBS, JOBS in the north eastern corridor!

Meets strategic imperative to deliver industrial land supply to the market

Potential to rebalance towards world standard rail v road freight task (30/70)

Multi user access to intermodal and inland port infrastructure

Assist with port and road congestion, improve road safety

Potential to reposition the political debate around trucks

USER AND INDUSTRY BENEFITS…

Large lot format industrial land availability

Competitively priced land

Access to industrial land in the most active and strategic freight corridorat gateway to the north west

Reduced operating and capital costs

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“Bullsbrook is the next Kewdale”. The opportunity is for Government to partner with us to accelerate the critical infrastructure required to underpin

the timely delivery of much needed large lot industrial land with arterial freight connectivity in Perth’s northern metro area

Sirona Capital

Senior Executives

Kelvin Flynn is a Managing Director and the Head of Private Equity at Sirona Capital. He is responsible for the origination and identification of investment and advisory opportunities across real estate, natural resources and agriculture as well as the firm’s strategic partnering of HNW, family office and institutional capital.

With a career spanning 25 years, Kelvin returned from Asia in 2009 to establish Sirona Capital based on a strategy to invest and advise in ‘special situations’ where capital could be deployed opportunistically for value investing. This followed a successful track record of leading and investing significant debt and equity capital in distressed and special situations and, prior to that, acting as an interim manager and adviser to multinational corporations and their stakeholders in complex workouts and restructurings.

Kelvin held the role of Executive Director / Vice President with the Asian Special Situations Group of Goldman Sachs (2006-2009), part of a proprietary balance sheet investing arm with over US$4 billion under management. Prior to that Kelvin was Managing Director of Alvarez & Marsal in Asia (2004-2006), a leading global advisor in performance improvement, turnaround management and business advisory. Kelvin was an Executive Director and Partner with Ferrier Hodgson, Australia’s leading insolvency and restructuring boutique, based in Hong Kong, Malaysia and Perth (1991-2004).

Kelvin is a director of ASX listed Mineral Resources Limited and private equity owned Global Advanced Metals Pty Ltd. Kelvin also serves as a member of the investment committee for the Methodist Ladies College Foundation.

Kelvin has a Bachelor of Commerce (Accounting & Finance) from the University of Western Australia, is a Chartered Accountant and is a member of the Australian Institute of Company Directors.

Matthew McNeilly is a Managing Director and the Head of Real Estate at Sirona Capital. He is responsible for the origination of real estate opportunities and the performance of Sirona Capital’s real estate private equity business, investments and funds.

Matthew established Sirona Capital’s real estate private equity business in 2010 and has more than 25 years of domestic and international experience in real estate acquisition, divestment, development and finance, having acted for institutions, governments, banks, corporations and family offices.

Prior to joining Sirona Capital, Matthew spent 15 years in real estate investment banking where he was responsible for advisory, financing and real estate development funds management. In 2001, Matthew founded the Perth office of Australian corporate advisory firm, Grant Samuel. He has been an executive director to the manager and trustee companies of a number of property investment entities.

Matthew is presently serving on both the Council and Foundation at Christ Church Grammar School.

Matthew holds a Bachelor of Commerce from the University of Western Australia, a Master of Business Administration from London Business School and is a Member of the Australian Institute of Company Directors (MAICD).

Matthew McNeillyManaging DirectorHead of Real Estate

Kelvin FlynnManaging Director

Head of Private Equity

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Contact Us

Kelvin Flynn, Managing Director

Level 2, 7 Havelock StreetWest Perth WA 6005Australia

Mob: +61 400 019 222Phone: +61 8 9212 1222 Email: kflynn@sironacapital.comWeb: www.sironacapital.com