ABACUS GROUP — AGM Information 2007

Oct 11, 2007

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ASX ANNOUNCEMENT
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Notice of AGM and 2007 Securityholder Review

The enclosed documents are being sent to Abacus Property Group securityholders today.

12 October 2007

Ellis Varejes Company Secretary 612 9253 8600

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11 October 2007

Dear Investor,

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I have pleasure in inviting you to the annual general meeting of Abacus Property Group to be held on Wednesday, 14 November 2007. The enclosed notice sets out the meeting details and the items of business. If you are unable to attend the meeting, you are encouraged to complete the enclosed proxy form and return it in the envelope provided by Monday, 12 November. If you are attending the meeting, please bring your proxy form with you to assist in registration.

The meeting provides you with the opportunity to ask questions about the Group’s performance in 2007 and our current activities. The Group performed very strongly in 2007, posting another record profit as well as significant business growth. A review of our activities over the past year, including an overview of our 2007 financial results, is provided in the enclosed securityholder review.

If you want to review the 2007 concise annual report or the full financial accounts, these are available on our website. You will find them under Investor Information at www.abacusproperty.com.au or you may contact Abacus to request a printed copy be sent to you.

Abacus is also hosting a series of investor briefings across Australia from late October through early November, which may be more convenient for you to attend. These briefings will provide an overview of the Group and the 2007 results as well as information on current investment opportunities - such as the Abacus Hospitality Fund and the Abacus Diversified Income Fund II - and our other managed funds. This event was popular last year, so be sure to book early to reserve your seat. Details of dates and venues are attached.

We hope to see you at the annual general meeting or the investor briefings.

Yours faithfully,

John Thame Chairman

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ABACUS INVESTOR UPDATE BRIEFINGS

Adelaide	Time	12:00 pm – 2:00 pm
	Date	22 October 2007
	Venue	The Sebel Playford
		120 North Terrace, Adelaide
Perth	Time	11:00 am – 1:00 pm
	Date	24 October 2007
	Venue	Sheraton Perth
		207 Adelaide Terrace, Perth
Melbourne	Time	12:00 pm – 2:00 pm
	Date	1 November 2007
	Venue	Sofitel Melbourne
		25 Collins Street, Melbourne
Sydney	Time	12.00 pm – 2.00 pm
	Date	5 November 2007
	Venue	Swissôtel Sydney
		68 Market Street Sydney
Brisbane	Time	11:00 am – 1:00 pm
	Date	8 November 2007
	Venue	Sofitel Brisbane
		249 Turbot Street, Brisbane

To reserve your seat, please contact Abacus:

• email: cdavie@abacusproperty.com.au

• telephone: 02 9253 8607

notice of meetings

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The Annual General Meetings of securityholders of Abacus Group Holdings Limited and Abacus Group Projects Limited (the Companies) will be held in conjunction with Meetings of securityholders of the Abacus Trust and the Abacus Income Trust (the Trusts).

Time: 10.00 am (Sydney time) Date: Wednesday, 14 November 2007 Venue: Maple Room Swissôtel Sydney 68 Market Street Sydney NSW 2000

Abacus Group Holdings Limited ACN 080 604 619 Abacus Group Projects Limited ACN 104 066 104 Abacus Trust Abacus Income Trust ARSN 096 572 128 ARSN 104 934 287 (Responsible Entity: Abacus Funds Management Limited ACN 007 415 590)

(together: Abacus Property Group)

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ORDINARY BUSINESS

1. Annual Financial Report

To receive and consider the annual financial report, directors’ report and auditor’s report of the Abacus Property Group and its controlled entities for the year ended 30 June 2007.

2. Remuneration Report

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

That the Remuneration Report for the year ended 30 June 2007 be adopted.

Please note that the vote on this resolution is advisory only and does not bind the directors or the Companies.

3. Election of directors

To consider and, if thought fit, to pass the following resolutions as ordinary resolutions:

• 3.1 That Dennis Bluth, who retires in accordance with the Constitutions, be re-elected as a director of Abacus Group Holdings Limited and Abacus Group Projects Limited.

SPECIAL BUSINESS

5. Issue of securities

To consider and, if thought fit, to pass the following resolution as a special resolution:

That the issue of 52,631,579 stapled securities at $1.90 per stapled security on 25 July 2007, in an institutional placement, be and is hereby ratified for all purposes.

Votes disregarded – For the purposes of ASX Listing Rule 7.1 and 7.4 approval and relief under ASIC Class Order 05/26, the Companies and the Trusts will disregard any votes cast on this resolution by any person, or any associates of any such person, who participated in the issue to which the resolution relates. However, the Companies and the Trusts need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form, to vote as the proxy decides.

BY ORDER OF THE BOARDS

• 3.2 That Malcolm Irving, who retires in accordance with the Constitutions, be re-elected as a director of Abacus Group Holdings Limited and Abacus Group Projects Limited.

• 3.3 That William Bartlett, being a director appointed since the last Annual General Meeting and who offers himself for election pursuant to the Constitutions, be elected as a director of Abacus Group Holdings Limited and Abacus Group Projects Limited.

Ellis Varejes Secretary Date: 10 October 2007

PROXIES

4. Non-Executive Directors’ Remuneration

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

That the yearly maximum sum available to non-executive directors of the Abacus Property Group as remuneration for their services be increased by $50,000 to $600,000, to be divided among them in a manner they may determine.

Votes disregarded – As required by the Listing Rules of the Australian Stock Exchange, the Companies and the Trusts will disregard any votes cast on this resolution by any director of the Abacus Property Group or any of his associates. However, the Companies and the Trusts need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or it is cast by a person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form, to vote as the proxy decides.

A securityholder entitled to attend and vote at the meetings is entitled to appoint a proxy. A securityholder entitled to cast two or more votes may appoint two proxies and may specify the proportion, or the number, of votes each proxy is appointed to exercise. A proxy need not be a securityholder of the Abacus Property Group. The Abacus Property Group must receive proxies at least 48 hours before the meetings. A form of proxy is provided with this Notice.

VOTING ENTITLEMENTS

In accordance with Corporations Regulations 7.11.37, the directors have determined that the security holding of each securityholder for the purposes of ascertaining the voting entitlements for the meetings will be as it appears in the Abacus Property Group Security Register at 7.00 pm (Sydney time) on Monday, 12 November 2007.

QUESTIONS AND COMMENTS BY SECURITYHOLDERS AT THE MEETINGS

The Chairman will allow a reasonable opportunity for securityholders as a whole at the meetings to ask questions about or make comments on the management of the Abacus Property Group.

Similarly, a reasonable opportunity will be given to securityholders as a whole at the meetings to ask the Group’s external auditor, Ernst & Young.

Any securityholder may also submit a written question directed to Ernst & Young if the question is relevant to the content of Ernst & Young’s audit report or the conduct of its audit of the Abacus Property Group Financial Report for the year ended 30 June 2007.

Explanatory Memorandum

Item 1: Receive and consider the Annual Financial Report and other reports

While securityholders are not required to vote on the Annual Financial Report and other reports for the most recent financial year, securityholders will have the opportunity to raise questions at the meeting on the reports. They will also be able to ask the auditor questions.

Item 2: Adoption of Remuneration Report

The Remuneration Report forms part of the Directors’ Report set out in the 2007 Abacus Property Group concise annual financial report. The Remuneration Report includes:

• an explanation of the Group’s policy for determining the remuneration of directors and executives;

• a discussion the relationship between the policy and the Group’s performance; and

• details of the performance conditions associated with the remuneration of the directors and executives.

The directors recommend that securityholders vote in favour of this resolution.

Item 3: Election of Directors

Dennis holds a Bachelor of Arts, Bachelor of Law and Master of Law degrees and has practised as a solicitor for over 25 years, principally in the area of property law. Dennis is a partner of Home, Wilkinson Lowry, Solicitors and is a member of a number of Law Society and Law Council Committees. He became a Fellow of the Australian Property Institute in 2004. He has held no other listed company directorships during the past three financial years.

3.2 Re-election of Malcolm Irving AM

Malcolm Irving was appointed a non-executive director of the Abacus Property Group in September 2002. He is Chairman of the Audit Committee and a Member of the Remuneration & Nomination Committee.

Malcolm holds a Bachelor of Commerce degree and is a Certified Practising Accountant. Mr Irving has over 40 years’ experience in company management, including 12 years as Managing Director of CIBC Australia Limited. Mr Irving is Chairman of Australian Industry Development Corporation and the Australian River Company Limited. He was a director of Keycorp Limited (2001 to 2007). He is also a director of O’Connell Street Associates Pty Ltd, Thales Australia Limited and Resimac Limited.

3.2 Election of William Bartlett

William Bartlett was appointed as a director of the Abacus Property Group on 14 February 2007. He is Chairman of the Remuneration & Nomination Committee and a Member of the Audit Committee.

William is a Chartered Accountant and has strong accounting, financial and corporate credentials. During his 23 year career with Ernst & Young, he held the roles of Chairman of Worldwide Insurance Practice, National Director of Australian Financial Services Practice and Chairman of the Client Service Board. Mr Bartlett is a director of Suncorp-Metway Limited, Peptech Limited, GWA Limited, Moneyswitch Limited, Reinsurance Group of America Inc and RGA Reinsurance Company of Australia Limited. Mr Bartlett was a director of Retail Cube Limited (2004 to 2006). He is also a director of the Bradman Foundation and Museum.

The Boards (other than the director who is the subject of the relevant resolution) recommend that securityholders vote in favour of these resolutions.

3.1 Re-election of Dennis Bluth

Dennis Bluth was appointed a non-executive director of the Abacus Property Group in September 2002. He is Chairman of the Credit Committee and Chairman of the Due Diligence Committee.

Item 4: Non-Executive Directors’ Remuneration

Under the constitutions of the Companies, securityholders approve a fixed sum that may be paid in each financial year as directors’ fees. These fees are for the remuneration of non-executive directors of the Companies for their ordinary services as directors (whether or not executive or other paid work is undertaken) of the Companies and, if applicable, any wholly-owned subsidiaries. The directors determine how much of the approved amount will be paid out to non-executive directors for their services. The division of that amount among the non-executive directors is determined by the directors (or, in default of determination, equally).

The Abacus Property Group policy is to remunerate nonexecutive directors at market rates for comparable companies for the time commitment and responsibilities involved. Where considered appropriate, external advice on market rates is taken.

The aggregate maximum sum that presently may be paid to non-executive directors of the Abacus Property Group as a whole as remuneration for their ordinary services is $550,000 per financial year. It is proposed that this maximum aggregate sum be increased by $50,000 to $600,000 per financial year.

The proposed increase in directors’ fees reflects the increase in the number of non-executive directors and allows remuneration over time to reflect market movements, increasing workloads and changing responsibilities.

As the resolution relates directly to them, the non-executive directors do not make a recommendation to securityholders on this resolution.

Item 5: Issue of securities

Under ASX Listing Rule 7.1, listed entities are entitled to issue up to 15% of their issued capital in any 12 month period without securityholder approval. Further, ASIC Class Order 05/26 provides relief under section 601QA(1)(a) and (b) of the Corporations Act so that units in a trust can be issued without unitholder approval at a price determined by the responsible entity provided the issue, together with any issues of units up to one year previously, would not comprise more than 15% of the units of the same class on issue after the issue is included. The issue of securities referred to in this resolution did not require approval under either ASX Listing Rule 7.1 or ASIC Class Order 05/26.

The effect of securityholder approval of this resolution would be that this issue of securities would not be counted in determining whether any further issues of securities would breach the 15% limit under ASX Listing Rule 7.1 or ASIC Class Order 05/26. In other words, the limits under ASX Listing Rule 7.1 and ASIC Class Order 05/26 would be refreshed to the extent of the approval and Abacus Property Group would not be required to count the issue referred to in this resolution if making an issue of securities in the next 12 months without securityholder approval.

ASX Listing Rules only require the approval to be given by an ordinary resolution of securityholders. However, ASIC Class Order 05/26 requires that approval be given by a special resolution where unitholders who hold at least 25% of the total value of all the units entitled to vote on the question vote on the question at the meeting (whether in person or by proxy). Only securityholders who did not participate in the placement are entitled to vote.

The directors recommend that securityholders vote in favour of this resolution.

This resolution is to ratify of the issue of 52,631,579 securities in an institutional placement at $1.90 per security on 25 July 2007 for the purposes of the Corporations Act and ASX Listing Rule 7.4. The new securities ranked equally with existing securities from the date of issue.

The $100 million raised from the issue was used to partially to fund the settlement of $200 million in property acquisitions, including $170 million of acquisitions made by Funds managed by the Abacus Property Group. It also reduced the gearing of the Abacus Property Group and provided additional capacity for further acquisitions. The issue was by way of an institutional placement managed by Macquarie Equity Capital Markets and Tricom Equities Limited. The entities that acquired the securities were professional investors within the meaning of section 9 of the Corporations Act. The Group, its directors and associates did not participate in the issue.

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securityholder review 2007

group overview

Abacus Property Group is a specialist property investor, funds manager and financier listed on the Australian Stock Exchange with over $2 billion property assets under management.

Our objective

Abacus’s objective is to provide our securityholders with reliable and increasing returns.

Our distributions are:

Our business today

Abacus’s diversified business model enables securityholders to participate in the income and capital growth from a diversified portfolio of property-based assets. Our activities include:

• fully funded by current earnings;

• growing at a faster rate than inflation; and

• underpinned by recurring, diversified revenue streams.

We build securityholder equity by:

• acquiring assets with strong property fundamentals and prospects for capital growth;

• actively managing assets to achieve capital growth; and

• selling assets at appropriate points in the cycle and recycling the proceeds into higher returning investments.

• an investment portfolio of commercial, retail and industrial properties across Australia;

• a funds management business, syndicating propertybased investment opportunities for retail and professional clients of our financial planning network;

• a property financing business; and

• joint venture partnerships and projects with property investment and development groups.

Our history

Abacus was formed in 1996 as a specialist property syndicator, providing property-based investment opportunities to retail investors. In 2001, Abacus merged eight single asset property syndicates to form a diversified property investment group. In late 2002, Abacus internalised the manager and listed on the Australian Stock Exchange. At the time of listing in November 2002, Abacus had gross assets under management of $450 million and a market capitalisation of $300 million.

In the period since listing, Abacus has grown its market capitalisation to approximately $1.2 billion, placing it in the ASX top 200 companies by size, with gross assets under management of $2 billion. During this period, Abacus has delivered year on year distribution growth of close to 5% and a total return of 20% pa.

2007 highlights

Abacus Property Group performed strongly in 2007, posting a record profit and significant business growth.

This 2007 Securityholder Review provides a summary of our financial results for the year and an overview of each of our key business units.

Highlights of 2007 included:

• normalised profit grew 49% to $79.8 million

• total securityholder returns for the year were 34%

• assets under management grew 49% to exceed $2 billion

• $900 million of property transactions were completed

• three new investment funds were established

• Abacus was included in the S&P/ASX 300 Index.

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securityholder review 2007

1

results summary

2007 was a year of record profits

Abacus Property Group reported another exceptional result for the 2007 financial year with record profits, significant expansion of the business and continued growth in securityholder returns.

Net profit & normalised net profit over 3 years

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120
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Our normalised profit[1] of $79.8 million represented an increase of 49% over 2006 and reflected a strong performance from all business units and the continuing successful execution of our business strategy.

1. Normalised profit is calculated by removing AIFRS adjustments to net profit by eliminating the impact of revaluations of property, derivatives and other financial instruments and share based payments.

Continued expansion of the business Abacus was also able to grow its business significantly during the year, with:

• total assets under management up 49% to $2 billion; and

• ASX market capitalisation up 38% to $1.15 billion.

Since year end, market capitalisation has increased to over $1.2 billion.

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Assets under management
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Market capitalisation

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securityholder review 2007

results summary

Continued growth in securityholder returns

Abacus reported steady growth in earnings, distributions and NTA per security, reflecting our continued focus on increasing returns to our securityholders.

The total return to Abacus Property Group securityholders for the 2007 financial year was more than 34%, comprising the full year distribution of 12.5 cents per security and growth in the security price. This compared favourably with the S&P/ASX 200 Property Trust Accumulation Index, which produced a total return of 19% for the year.

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EPS/DPS NTA per security
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12 1.2
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EPS DPS
$
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Strong financial position provides platform for continuing growth

Abacus improved it financial strength over the year:

• total securityholder equity increased by 19% to $803 million

• retained earnings grew by 53% to $148 million

• gearing reduced to 29.5%

Since year end, Abacus has further strengthened the balance sheet by raising $100 million through an institutional placement completed in July.

With this solid financial base, Abacus is well-positioned to take advantage of future opportunities for continued growth.

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Total securityholder equity
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www.abacusproperty.com.au

results summary

By the end of the 2007 financial year, Abacus had grown to become one of the largest 200 groups listed on the ASX, with a very strong balance sheet that has it well positioned for future growth.

The 2007 record profit was driven by a number of items, including:

• the launch of the Abacus Hospitality Fund;

• the acquisition, leasing and sale of the Rendezvous Hotel in Auckland;

• the re-leasing of 50 Miller St, North Sydney and its subsequent syndication; and

• significant uplift in the valuation of a number of Abacus’ investment properties.

Balance sheet summary as at 30 June 2007

2007 profit and loss summary

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$ million $ million
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$ million	$ million
Property portfolio Funds management Property fnance Projects & investments Cash, receivables & other assets 834.5 133.2 120.5 70.2 111.9 6% 86% 13% 12% Total assets 1,270.3 9% Interest bearing liabilities Other liabilities (394.2) (72.8) 9% Net assets/Total equity 803.3 19% NTA per security $1.31 7% Gearing 29.5% ➔ ➔ ➔ ➔ ➔ ➔ ➔ ➔	Total revenue Operating expense 187.9 (41.1) 43% ➔
	EBIT Finance/tax/minorities 146.8 (28.0)
	Net proft AIFRS adjustments 118.8 (39.0) 17% ➔
	Normalised proft 79.8 49% ➔
	Earnings per security Distribution per security 14.4 12.5 12% 6% ➔ ➔

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securityholder review 2007

abacus business model

Four integrated property businesses

Each of our four cornerstone businesses is based on our core expertise in acquiring property and actively managing it to realise its full value. Synergies across the businesses contribute to the overall success of the Group.

As a principal property investor, we look to acquire assets which provide recurring rental income and opportunities for capital growth. We target assets with underlying real estate value that we can enhance over time through active management. As this value is crystallised, assets are either moved into our managed funds or sold into the market, and the proceeds are recycled into the continued expansion of our principal investment activities.

Our funds management business provides property investment opportunities to a network of over 1,500 financial planners and more than 12,000 retail investors who want regular and reliable income, preservation of capital and capital growth. We offer core income funds across a number of property sectors, plus a number of special opportunity funds for higher net worth clients and professional investors.

In addition to our principal investment activities, Abacus participates in a range of property projects and investments by combining our capital and

property expertise with the regional or sector specific expertise of our business partners. Our partnerships offer Abacus equity participation in an array of property projects, lending opportunities for our property finance business, assets for funds management initiatives and principal investment opportunities on completion of development activities.

We also provide property financing solutions to property development groups which generate interest and fee income for Abacus, opportunities for co-investment and a pipeline of potential transactions for other parts of our business. We have strict lending criteria that we apply to these transactions and only participate in projects where the underlying real estate fundamentals are sound.

Rental income and capital growth from the property portfolio is enhanced by fee income, interest income and profit participation from the other businesses to provide a blended return to securityholders.

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Property Investment Funds Management
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Property Finance Projects & Investments
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www.abacusproperty.com.au

property investment

At year end, Abacus owned a diversified portfolio of property assets, primarily in the retail, office and industrial sectors, with a combined value of over $834 million.

Rental income from the property portfolio is the major contributor to earnings. Abacus seeks assets that offer underlying real estate value, including location, large land holdings, under-utilised land, purchase price below replacement cost, development potential and repositioning potential through active management.

During the year, Abacus signed a 10 year lease with NAB over all of the office space. In June 2007, Abacus sold 70% of its interest in the property to wholesale investors through a special opportunity fund, based on an independent valuation for the property of $70 million.

Active management may include restructuring tenancies, refurbishing assets, cost containment and income optimisation.

Key achievements for the year included:

50 Miller Street, North Sydney

The syndication of this asset enabled Abacus to crystallise the value it had created by fixing the lease profile while generating current and future funds management fees. In addition, by retaining a 30% interest in the syndicate, Abacus continues to participate in the property’s future capital growth.

Abacus acquired this office building in December 2004 for $36.4 million because it was well located with large floor plates, the initial passing yield was 11%, the purchase price represented a substantial discount to replacement cost and the cost per square metre of office space would enable us to be competitive in the leasing market when the lease to the sole office tennant expired in October 2007.

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securityholder review 2007

Rendezvous Hotel, Auckland

Abacus acquired Auckland’s premier hotel, then known as the Carlton Hotel, in June 2006 for NZ$96 million. The property was acquired because of its prime CBD location, the purchase price reflected a substantial discount to replacement cost, opportunities existed to improve the hotel’s operating performance and vacant possession enabled us to appoint a new manager to improve the hotel’s trading performance.

Abacus negotiated a 10 year lease with Rendezvous Hotels (NZ) Limited which significantly improved of the property’s value, and subsequently accepted an offer to sell the property for NZ$113 million.

Aspley Village Shopping Centre redevelopment

Abacus acquired the Aspley Village Shopping Centre in February 2006 for $16.5 million because of the large land holding, its location 12 kilometres north of the Brisbane CBD and the zoning allowed additional development.

Since acquiring the property, Abacus has obtained development consent to build a new shopping centre on the site, obtained vacant possession, negotiated a number of key leases and commenced construction.

On completion, scheduled for December 2008, Aspley Village will have gross floor area of approximately 12,990m2 and comprise a full line Coles Supermarket, 34 specialty shops, restaurants and cafés, two freestanding childcare centres and a medical centre. Undercover parking for approximately 450 vehicles will improve access and safety.

Other Property Achievements

Abacus completed over $900 million of property transactions during the year, comprising

• $550 million of property acquisitions, primarily to seed funds management initiatives; and

• $350 million of property disposals, returning an average internal rate of return of 30%.

Other key achievements included:

• 50% of the portfolio was revalued during the year, generating revaluation gains of $33.3 million;

• good progress was made with the re-leasing of the Santos space at Westpac House, culminating recently in a new lease to the South Australian Government for approximately two-thirds of this space; and

• renewing the lease to Waco Kwikform at our Rydalmere industrial property for a further ten year term.

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www.abacusproperty.com.au

7

funds management

Funds management is an important source of earnings growth for Abacus. Total assets under external Abacus management increased to $925 million by year end, highlighted by the launch of the Abacus Hospitality Fund and the Abacus Miller Street Trust. The Abacus Diversified Income Fund II was launched in July 2007.

Abacus’s superior track record in funds management over our 11 year history has enabled us to build effective distribution channels through close relationships with over 1500 financial advisers and contribute to the investment objectives of more than 12,000 clients. Since formation in 1996, Abacus has established 35 property-based investment opportunities for our clients and raised more than $550 million equity for our unlisted funds.

By utilising the skills and market presence of our property specialists to identify appropriate assets for syndication and leveraging our balance sheet capacity to provide working capital to acquire assets ahead of the receipt of funds from investors, Abacus is able to provide a range of high quality investment opportunities to suit the needs of different investors.

Abacus presently has three core income funds as well as a number of special opportunity funds. New retail and wholesale funds management initiatives are under consideration as we seek to continue the strong growth of our funds management business.

Abacus regularly co-invests in new funds in order to align our interests with those of our investors and to participate in the income and growth potential that we believe our funds offer investors.

Abacus Storage Fund

Abacus Storage Fund performed strongly during the year. The initial capital raising of $75 million was completed in December 2006 and the Fund ended the year with 30 properties under full ownership, with an additional property under contract. This Fund is paying its original investors a yield of 8.25% pa.

Strong operating performance at the store level drove a significant increase in Fund profit and, at year end, the property portfolio was revalued by more than $20 million, contributing to an increase in the Fund’s asset backing per security from 85 cents to $1.20, an increase of 41%.

The Fund is now one of the largest participants in the Australasian self-storage industry.

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Abacus Storage Fund summary
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Fund size	$200 million
Properties	30
FY08yield	8.0%pa
Tax-deferral	90%+
Distributions	Quarterly
Gearing	44%
Net asset backing	$1.20
Issueprice	The fund is closed

Based on the 2007 audited accounts.

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8

securityholder review 2007

This Fund is currently open for investment

Abacus Hospitality Fund

Abacus Hospitality Fund was open for launched in December 2006 with investment a $15 million offer to wholesale investors, followed by the retail offer, which opened in March 2007. Since its launch, Abacus has acquired an additional four hotel properties valued at over $132 million and grown the Fund’s gross assets to $300 million.

The current portfolio comprises seven hotel properties with over 1,420 rooms – located in Queensland, Sydney, Canberra and Christchurch. Specialist hotel management groups undertake day-to-day operation of the hotels. Our management focus is to optimise and grow earnings by increasing occupancy, improving average room rates and reducing costs.

The Fund provides investors with an 8% yield that is 90% tax deferred, as well as discounted accommodation at the Australasian hotels of the Fund’s external hotel managers (Rydges, Accor, Swissôtel).

	Abacus Hospitality Fund summary	Abacus Hospitality Fund summary
	Fund size Properties	$300 million 7
	FY08 yield Tax-deferral Distributions	8.0% pa 90%+ Quarterly
	Gearing NTA per security	58% $0.94
	Issueprice	$1.00

Based on the pro forma balance sheet included in the supplementary offer document issued 10 October 2007.

Abacus Diversified Income Fund II This Fund is currently Abacus launched its new flagship fund – open for investment the Abacus Diversified Income Fund II (ADIFII) – in July 2007 with $190 million of assets.

Based on the positive experience that many Abacus investors enjoyed with the first ADIF – an unlisted property fund that specialised in the ownership of smaller commercial properties – we created ADIFII with a similar investment strategy. ADIFII has a diversified portfolio of small properties offering strong real estate fundamentals, along with exposure to other property sectors through property funds and listed property securities.

ADIFII offers investors a diversified property exposure with a 7% yield, high tax deferral and significant growth potential. It has been designed to sit on wrap and master trust platforms.

	ADIFII summary
	Fund size Properties Other assets	$190 million 19 managed funds & LPTs
	FY08 yield Tax-deferral Distributions	7.0% pa 90%+ Quarterly
	Gearing NTA per unit	44% $0.87
	Issueprice	$1.00

Based on the pro forma balance sheet included in the Product Disclosure Statement issued 26 July 2007.

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property finance

Abacus provides financing solutions for development projects and other property-based investment projects. For appropriate projects with suitable partners, Abacus will participate in joint venture arrangements or contribute capital on a preferred equity basis.

Our property finance business is an important source of earnings enhancement for the Group and provides opportunities for our funds management and joint venture businesses.

Abacus is a highly selective lender with all loans secured by real property assets assessed against the same criteria as our principal property investments.

Market conditions during the year were not conducive to the continued growth of this business, as the quality of development projects deteriorated, demand for new loans fell and a number of aggressive lenders chased business by discounting rates. Abacus maintained its highly selective approach to lending in this market, as we only provide loans where there is an appropriate reward for the inherent risk.

Expanded management team

The Abacus board was expanded with the appointment of Mr Bill Bartlett as an independent director in March. Bill brings a wealth of financial services experience to the Group. The appointment of David Bastian, our former managing director who retired in September last year, as a non-executive director was approved by securityholders at the AGM last November.

The management team was further strengthened with the appointment of a number of key personnel in funds management, property operations, hospitality, finance and investor relations.

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securityholder review 2007

projects and investments

Joint venture activities enable Abacus to participate in a range of property investments that leverage our property skills and capital base though a network of strategic business partners with specialised industry sector or local market expertise.

In recent years, Abacus has generated a pipeline of diversified projects that should provide ongoing earnings from fees and profit participation. The end value of the current pipeline is estimated at approximately $750 million.

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Residential 30%
Senior living 43%
Industrial 6%
Commercial 4% Retail 17%
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Diversification of current projects across property sector based on estimated end value.

New projects that were initiated during the year included:

Muswellbrook residential subdivision

Abacus acquired a 50% interest in the Eastbrook Links Estate residential subdivision, located in rapidly growing Muswellbrook in the Upper Hunter Valley, 285 kilometres north-west of Sydney and 130 kilometres from Newcastle. The master planned community development on 157 hectares will create a new residential suburb close to the town centre and railway station and opposite the Muswellbrook Golf Course.

Approximately 1,100 lots will be released over several stages for total realisable value of over $140 million. Abacus’ partner in this exciting project is Monarch Investments Group, one of the largest private land development groups in Australia.

Colemans Road, Dandenong South

During the year Abacus acquired this 36 hectare parcel of industrial land in partnership with a Melbourne development group. The property is located approximately 30 kilometres south-east of the Melbourne CBD in a prime industrial precinct. Since acquiring the property, Abacus and its joint venture partner have progressed a sale of over 22 hectares to a major retail group for development of a new distribution centre. After completion of civil works (roads and drainage) during 2008, we will sell down the remaining area of approximately nine hectares via an industrial sub-division.

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looking forward

The diversified Abacus business model provides a stable platform from which we will continue to drive securityholder returns in 2008.

We will continue to acquire property assets that offer fundamental real estate value for both our principal book and managed funds. A number of new acquisitions have been completed already this year and we have many potential acquisitions under review.

Our existing property portfolio has inherent capital growth potential that we will look to realise through active management. These assets will then be recycled into funds management initiatives or sold into the market.

We now have a core funds management platform that is well-positioned for further growth in the year ahead, with further acquisitions targeted for Abacus Hospitality Fund and ADIFII. We will look to expand our range of products with new core funds and special opportunity funds.

We have made good progress on a number of our joint venture development projects and we will look to crystallise profits from this business in the year ahead.

Abacus enjoys exceptional transaction flow through our network of agents, joint venture partners and mortgage customers, enabling us to be highly selective in the assets and projects in which we invest securityholder funds.

By maintaining our focus on quality real estate investment opportunities, we believe that we will continue to deliver strong returns for our securityholders.

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securityholder review 2007

Corporate Directory

Abacus Property Group Abacus Group Holdings Limited ACN 080 604 619

Abacus Group Projects Limited ACN 104 066 104

Abacus Funds Management Limited ACN 007 415 590

Responsible Entity of Abacus Trust ARSN 096 572 128 Abacus Income Trust ARSN 104 934 287

Registered office

Level 34, Australia Square 264-278 George Street SYDNEY NSW 2000 Tel (02) 9253 8600 Fax (02) 9253 8616 Email enquiries@abacus.com.au Website www.abacusproperty.com.au

Registry

Computershare Investor Services Pty Ltd Level 3, 60 Carrington Street SYDNEY NSW 2000 Tel (02) 1800 635 323 Toll free Fax (02) 8234 5050

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Abacus Group Holdings Limited
Abacus Trust
Abacus Income Trust
Abacus Group Projects Limited
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www.abacusproperty.com.au