Month Hotel Number of Rooms Price Per Room

Pending Sheraton Melbourne – VIC 174 ~$689,655

Pending Hilton Melbourne South Wharf – VIC 396 ~$580,808

Pending InterContinental, Double Bay – NSW 140 ~$966,429

March Clarion Hotel City Park Grand – TAS 32 $225,000

March Endeavour Motor Inn – NSW 21 $154,762

March Camberwell Serviced Apartment Hotel – VIC 28 $535,714

March Crowne Plaza, Perth 191 $261,780

March Kingsford Smith Motel – QLD 36 $159,722

March Kingsford Riverside Inn – QLD 25 $100,000

March Hotel on Olive, Albury – NSW 60 $100,000

February Best Western Plus Brooklands Of Mornington – VIC 53 $160,377

January International Beach Resort, Gold Coast – QLD 120 $483,333

January Mercure Geelong – VIC 138 $175,362

Source: RCA

Recent Sales Transactions YTD April 2017

City Occupancy OCC YTD Growth %

ADR ADR YTD Growth %

RevPAR RevPAR YTD Growth %

Australia 75.9% 0.6% $190.06 1.4% $144.28 2.0%

Sydney 86.8% 0.5% $235.27 5.1% $204.17 5.7%

Hobart 91.5% 1.9% $186.21 3.3% $170.36 5.2%

Melbourne 84.1% 0.2% $192.21 0.7% $161.65 1.0%

Gold Coast 73.0% -3.5% $192.08 1.7% $140.30 -1.8%

Canberra/ACT 76.5% 5.6% $171.67 5.6% $131.33 11.5%

Perth 74.8% -5.7% $174.40 -10.0% $130.45 -15.1%

Adelaide 80.2% 1.4% $158.88 1.5% $127.36 2.9%

Cairns 81.7% 3.3% $137.62 8.3% $112.46 11.9%

Brisbane 69.8% 2.1% $149.47 -4.3% $104.33 -2.3%

Darwin 60.5% 11.0% $117.34 -7.8% $70.99 2.3%

Source: STR

Australia and City Hotel Market Operating Performance YTD April 2017

Executive Summary

April YTD UpdateSavills Hotels

Michael SimpsonManaging Director +61 (0) 431 649 724msimpson@savills.com.au

Contact Us - savills.com.au

Vasso Zographou Director +61 (0) 449 979 039vzographou@savills.com.au

Adrian ArcherDirector +61 (0) 481 037 429aarcher@savills.com.au

Market Performance

Australia wide RevPAR increases 2% April YTD

Market performance KPI’s fast update (April YTD):

Sydney continues to outperform Australian markets

Melbourne struggles to grow (as new supply enters the market)

Hobart occupancies exceed 90% and records second highest ADR

Adelaide displays modest growth

Cairns performs strongly throughout wet season to record double digit growth

Canberra “back in business” recording double digit growth

Darwin arrests fall in market performance KPI’s

Gold Coast falls moderately on softer occupancy

Brisbane falls moderately on softer ADR following new supply impacts

Perth slide continues as ADR takes a $20 dive due to weak economy exacerbated by new supply

Australia GDP of 1.75% in 2016/17 increasing to 2.75% in 2017/18 and 3% in 2018/19 will underpin continued economic activity

World growth is expected to become more supportive, rising from 3% in 2016 – the lowest since the GFC – to 3.5% in 2018 and 3.75% in 2019

China remains a critical determinant of Australia’s economy with forecast GDP of 6.5% in 2017 falling to 6.2% in 2018 as China transitions to a consumption based economy

Capital Markets

A wall of money struggles to find hotel assets

The dilemma of what to do with this investment capital? Sales volumes are down one third in Q1/2017 compared to Q1/2016. Hotel owners are unwilling to dispose of strong performing assets to avoid the conundrum of having nothing to buy once they sell

Hotel yields have, on average, fallen over 50bps per annum since 2011

More recently, the lack of prime assets for sale is resulting in further cap rate compression which is set to continue throughout 2017

Share of Total Visitors ('STV')

Total Visitor Nights ('TVN '000)

Total Visitors ('TV '000')

Share of Total Visitor Nights ('STVN') Visitor Nights Annual Growth YOY ('VNAG')

Visitors Annual Growth YOY ('VAG')

NSWInt'l Domestic

TV '000 3 872 29 297STV 50.8% 32.3%VAG 13.2% 4.3%TVN '000 87 533 95 718STVN 34.6% 28.6%VNAG 2.1% 5.1%

SAInt'l Domestic

TV '000 432 6 204STV 5.7% 6.8%VAG 5.8% 6.1%TVN '000 9 867 22 352STVN 3.9% 6.7%VNAG 0.1% 6.3%

VICInt'l Domestic

TV '000 2 674 21 899STV 35.1% 24.1%VAG 10.4% 1.3%TVN '000 62 936 64 446STVN 24.9% 19.3%VNAG 8.2% 1.6%

NTInt'l Domestic

TV '000 287 1 520STV 3.8% 1.7%VAG -0.2% 17.7%TVN '000 3 728 8 816STVN 1.5% 2.6%VNAG -8.2% 5.6%

QLDInt'l Domestic

TV '000 2 574 20 798STV 33.8% 22.9%VAG 10.2% 3.4%TVN '000 51 833 83 064STVN 20.5% 24.8%VNAG -2.3% 4.7%

TASInt'l Domestic

TV '000 236 2 422STV 3.1% 2.7%VAG 11.3% -7.1%TVN '000 3 418 10 379STVN 1.4% 3.1%VNAG 5.2% -4.8%

WAInt'l Domestic

TV '000 954 9 680STV 12.5% 10.7%VAG 12.4% 14.3%TVN '000 28 648 43 675STVN 11.3% 13.0%VNAG 1.1% 5.0%

ACTInt'l Domestic

TV '000 208 2 490STV 2.7% 2.7%VAG 6.5% 12.9%TVN '000 4 392 6 308STVN 1.7% 1.9%VNAG -13.9% 0.8%

International & Domestic Visitors – Who Goes Where?2 Year Ending December 2016

1 Source: Tourism Research Australia

2 Share of total visitors for both International and Domestic Visitors exceeds 100% due to multiple state visits. Source: Tourism Research Australia

Top 10 International Visitor Markets1 Year Ending December 2016

New Zealand

TV '000 1 221STV 16.0%VAG 2.8%TVN '000 14 853STVN 5.9%VNAG -7.2%

Japan

TV '000 382STV 5.0%VAG 23.8%TVN '000 9 189STVN 3.6%VNAG 10.5%

China

TV '000 1 116STV 14.6%VAG 17.2%TVN '000 45 926STVN 18.2%VNAG 16.0%

Malaysia

TV '000 347STV 4.6%VAG 14.2%TVN '000 8 187STVN 3.2%VNAG 9.7%

UK

TV '000 674STV 8.8%VAG 3.8%TVN '000 23 863STVN 9.4%VNAG -10.4%

Korea

TV '000 262STV 3.4%VAG 24.4%TVN '000 13 094STVN 5.2%VNAG 12.9%

USA

TV '000 668STV 8.8%VAG 16.5%TVN '000 14 836STVN 5.9%VNAG 10.2%

India

TV '000 244STV 3.2%VAG 11.5%TVN '000 14 643STVN 5.8%VNAG 3.3%

Singapore

TV '000 383STV 5.0%VAG 11.2%TVN '000 6 053STVN 2.4%VNAG -3.2%

Hong Kong

TV '000 227STV 3.0%VAG 13.0%TVN '000 7 256STVN 2.9%VNAG -9.4%