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LEASING SERVICES Leasing Strategy (continued) Tenants in both Stages 1 and 2 typically have lead times between six and twelve months. The objective in targeting these tenants is prior to practical completion of building works. The success of these Stages will be determined by the critical marketing material in hand and communication of the USP’s. Stage 3: This is the stage we believe will yield the most amount of target tenants. Due to the floor plate size broader appeal is anticipated in the single whole floor market. Tenants in Stage 3 typically have lead times of between four to nine months when looking to complete their own fitout. Noting target completion dates of the priority refurbishment areas is May 2020 results in good timing to attract these target tenants. Our single and multi-floor strategy will ultimately drive superior financial outcomes than that of a whole building user who will leverage the fact they are a whole building user more than what a single or multi floor tenant can. Important to note we do not recommend the further splitting of floors unless the tenant is minimum 1.5 levels and the split area is from the laneway. Interconnecting Stairs We also suggest that one of the key factors in the strategy will be the treatment of the interconnecting stairs and exceptional harbour views from the upper levels. We believe that in order to achieve the premium rental from a single floor user these stairs will need to be removed rather than boxed. We provide a rental showing both scenarios, removed and boxed, and the rental impact both scenarios have. Achievable Rentals and Incentives We have reviewed the current rentals for Prime Grade and achieved rentals in buildings in Sydney (Current average rent is $1,300/sqm). Incentives Estimated incentive range of 17 to 22% of the first years gross rent. Incentive Structure: While all efforts will be made to negotiate a structure that is either rent free or rent abatement flexibility toward providing capex toward tenants fit out is required. Tenants are accustomed in taking capex from incentive and without this ability to provide capex the leasing campaign’s timeframe may be impacted. Rent Review Structure Typical rent review increases are currently in the order of 3.75% to 4.0%. Lease Term For occupiers seeking this style of accommodation and floor plate size we expect lease terms of 3-5 years with options. 102