ABACUS GROUP — AGM Information 2008

Oct 12, 2008

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13 October 2008

Dear Investor

I have pleasure in inviting you to the Annual General Meeting of Abacus Property Group to be held on Friday, 14 November 2008. 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 Wednesday, 12 November 2008. If you are attending the meeting, please bring your proxy form with you to assist with registration.

The meeting gives you an opportunity to ask questions about the Group’s performance in 2008 and our current activities. A review of our activities over the past year, including an overview of our 2008 financial results, is provided in the enclosed securityholder review.

If you want the 2008 concise annual report or the full financial accounts, these are available through our website. You will find them under Investor Information at www.abacusproperty.com.au or you can ask us to send a printed copy to you.

I hope to see you at the Annual General Meeting.

Yours faithfully

John Thame Chairman

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: Friday, 14 November 2008 Venue: Blaxland Room A 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 2008.

2. Remuneration Report

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

To adopt the Remuneration Report for the year ended 30 June 2008.

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

1. Election of directors

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

• 3.1 To re-elect John Thame as a director of Abacus Group Holdings Limited and Abacus Group Projects Limited.

• Abacus Trust Constitution Amendment to facilitate Abacus Property Group Executive Performance Award Plan To consider and, if thought fit, to pass the following resolution as a special resolution of the securityholders (as securityholders of Abacus Trust):

That the constitution of Abacus Trust be amended as set out in the supplemental deed tabled at the meeting and described in the Explanatory Memorandum.

1. Abacus Income Trust Constitution Amendment to facilitate Abacus Property Group Executive Performance Award Plan To consider and, if thought fit, to pass the following resolution as a special resolution of the securityholders (as securityholders of Abacus Income Trust):

That the constitution of Abacus Income Trust be amended as set out in the supplemental deed tabled at the meeting and described in the Explanatory Memorandum.

BY ORDER OF THE BOARDS

• 3.2 To re-elect David Bastian as a director of Abacus Group Holdings Limited and Abacus Group Projects Limited.

SPECIAL BUSINESS

4. Approval of the issue of Awards to Frank Wolf (Managing Director) under the Abacus Property Group Executive Performance Award Plan.

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

To approve the grant of 785,714 Performance Rights to Frank Wolf as described in the Explanatory Memorandum, in accordance with the provisions of the Abacus Property Group Executive Performance Award Plan.

Votes disregarded – As required by the ASX Listing Rules, the Companies and the Trusts will disregard any votes on this resolution by a director of the Abacus Property Group, except one who is ineligible to participate in any Group employee incentive scheme (including the Plan) and an associate of those persons. 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.

5. Approval of the issue of Awards to Len Lloyd (Executive Director) under the Abacus Property Group Executive Performance Award Plan.

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

To approve the grant of 214,285 Performance Rights to Len Lloyd as described in the Explanatory Memorandum, in accordance with the provisions of the Abacus Property Group Executive Performance Award Plan.

Votes disregarded: The Companies and the Trusts will disregard any votes on this resolution by a director of the Abacus Property Group, except one who is ineligible to participate in any Group employee incentive scheme (including the Plan) and an associate of those persons. 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.

6. Deed of Indemnity, Access and Insurance

To consider and, if thought fit, to pass the following resolution as an ordinary resolution of Abacus Group Holdings Limited:

To approve the execution by Abacus Group Holdings Limited of a deed of indemnity, access and insurance to indemnify directors and other officers of Abacus Property Group in relation to their performance of their role as officers of the Group in the form tabled at the meeting.

Ellis Varejes Secretary Date: 3 October 2008

PROXIES

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 Wednesday, 12 November 2008.

Explanatory Memorandum

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

As required by section 317 of the Corporations Act, the Annual Financial Report and other reports for the financial year ended 30 June 2008 will be laid before the meetings.

Securityholders will have the opportunity to raise questions on the reports and on the performance of the Abacus Property Group generally and may ask questions of the Group’s external auditor that are relevant to:

• (a) the conduct of the audit;

• (b) the preparation and content of the auditor’s report;

• (c) the accounting policies adopted by the Group in relation to the preparation of its financial statements; and

• (d) the independence of the auditor in relation to the conduct of the audit.

Questions directed to the auditor may be submitted in writing to Company Secretary, Abacus Property Group, Level 34 Australia Square, 264-278 George Street, Sydney NSW 2000, but must be received by no later than 5.00 pm on 7 November 2008. If written questions are received, the question list will be made available to securityholders attending the meetings. The auditor may answer the questions at the meetings or table written answers. If written answers are tabled, they will be made available to securityholders after the meetings.

There is no vote on this resolution.

Resolution 2: Adoption of Remuneration Report

The Remuneration Report forms part of the Directors’ Report set out in the 2008 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 of 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.

Securityholders will have the opportunity to ask questions about, or make comments on, the Remuneration Report.

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

Resolution 3: Election of Directors

Resolution 3.1: Re-election of John Thame

John Thame retires by rotation in accordance with the constitutions of the Companies and, being eligible, offers himself for re-election. John was appointed non-executive Chairman of the Abacus Property Group on 25 October 2002. He was last elected to the Board of Abacus Group Holdings Limited at the 2005 meeting and elected to the Board of Abacus Group Projects Limited in 2006. He is a member of the Audit Committee and of the Remuneration and Nomination Committee.

John has over 30 years’ experience in the retail financial services industry in senior management positions. His 26-year career with Advance Bank included 10 years as managing director until the Bank’s merger with St George Bank Limited in 1997. Mr Thame is a director of Reckon Limited and The Village Building Co Limited. He was formerly the chairman of St George Bank Limited and St George Life Limited (2004 to 2008) and a director of St George Bank Limited (1997 to 2004). He has held no other listed company directorships during the past three financial years.

Resolution 3.2: Re-election of David Bastian

David Bastian retires by rotation in accordance with the Constitutions of the Companies and, being eligible, offers himself for re-election. David has been a member of the Boards since the Companies were formed, first as executive director and, since 2006, as non-executive director. He is a member of the Credit Committee, the Due Diligence Committee and the Remuneration and Nomination Committee.

David has almost 40 years’ experience in the property and financial services industry. In conjunction with Frank Wolf, David formed Abacus in 1996 and served as managing director of the Group for ten years. He was previously managing director of the Canberra Building Society for 20 years and an executive director of Godfrey Pembroke Financial Services Pty Limited for 7 years. The directors (other than the director who is the subject of the relevant resolution) recommend that securityholders vote in favour of these resolutions.

Resolutions 4 and 5: Executive director participation in the Abacus Property Group Executive Performance Award Plan

The Group seeks securityholder approval to issue awards (Awards) under the Abacus Property Group Executive Performance Award Plan (the Plan) to two executive directors, namely Frank Wolf and Len Lloyd, in accordance with the terms of the Plan that was approved by securityholders at the Annual General Meeting in 2006. Awards under the Plan can comprise either ‘options’ (with an exercise price set by reference to the Group’s security trading price) or ‘Performance Rights’ (which generally have a zero exercise price).

Determination of remuneration

The Abacus Property Group Remuneration and Nomination Committee comprises a majority of independent directors and determines remuneration for executive directors and other senior executives. Executive remuneration comprises base remuneration, short term incentives and long term incentives. The Plan provides appropriate long-term incentive and reward.

Awards

Under resolutions 4 and 5, the Awards for which approval is sought are as follows:

• Dr Frank Wolf: 785,714 Performance Rights.

• Mr Len Lloyd: 214,285 Performance Rights.

The value of Performance Rights to be granted has been calculated in accordance with the requirements of the applicable accounting standards at their fair value. The values derived are discounted to take into account the probability of achievement of the performance hurdle.

These Performance Rights are the long-term incentive components of the remuneration packages for Dr Wolf and Mr Lloyd. The value of these long-term incentives and other at-risk components of their remuneration packages represent approximately 50% of Dr Wolf’s total remuneration package and approximately 40% of Mr Lloyd’s total remuneration package.

Issue price of Awards of Performance Rights

Awards of Performance Rights will be issued to Frank Wolf and Len Lloyd under the Plan for no monetary consideration. Performance Rights have a zero exercise price, that is, no amount is payable upon vesting. This gives Performance Rights a higher value than an equivalent number of options with an exercise price. Fewer Performance Rights are therefore needed to deliver a particular amount of value. Both are useful remuneration tools as they tend to reward and therefore drive different but complementary behaviours. With options, the reward is achieved only if the market price exceeds the exercise price. Performance Rights have value irrespective of market price. Of course, in both cases, vesting only occurs if performance hurdles are satisfied or otherwise in accordance with the Plan.

Vesting of Awards

Awards will not vest until three years have elapsed, and then only if the performance requirements (see below) are met, or otherwise in accordance with the Plan.

That is, the Awards approved in 2008 will vest in 2011 if the performance hurdle for that allocation of Awards is met. There is no subsequent retesting if the performance requirements are not met. In the event of a takeover or other special circumstances, Awards that have been granted will vest and become exercisable. Even after such vesting, certain disposal restrictions or forfeiture may continue to apply.

Performance Requirements

The Group uses a relative Total Securityholder Return (TSR) as the ‘performance requirement’ or hurdle for the Plan. The TSR reflects the return to securityholders provided by security price appreciation plus reinvested distributions. Relative TSR was selected because it ensures an alignment between comparative securityholder return and reward for executives.

In assessing whether the performance hurdles for each grant have been met, the Group compares its TSR growth from the commencement of each grant and that of the pre-selected peer group. The peer group chosen for comparison is the S&P/ASX200 A-REIT. This peer group reflects the Group’s competitors for capital transactions and talent.

Under ASX Listing Rule 10.14, no director may acquire securities under an employee incentive scheme without securityholder approval. Frank Wolf and Len Lloyd are the only persons referred to in ASX Listing Rule 10.14 entitled to participate in the Plan. The following information includes that required to be provided under ASX Listing Rule 10.15.

The Group’s performance against the hurdle is determined according to the Group’s ranking against the peer group TSR over the performance period in accordance with the following scale:

Abacus TSR Rank	Percentage of award that vests
Below the 50thpercentile	Nil
50thpercentile	50%
Between 50th percentile and 75thpercentile	50% plus an additional 2% for each additionalpercentile increase above the 50th
75thpercentile and above	100%

No Performance Rights to be issued after 12 months

No Performance Rights will be issued to Frank Wolf or Len Lloyd under the Plan later than 12 months after the date of the meeting convened by this notice (unless fresh approval under ASX Listing Rule 10.14 is obtained).

Previous issues

At the Annual General Meeting in 2006, securityholders approved Awards for Frank Wolf of up to 15,000,000 options and for Len Lloyd of up to 5,000,000 options over a period of 3 years. The following table shows the actual number of options issued under the Plan.

Frank Wolf:

Frank Wolf:
Date of issue	Options	Performance rights	Price
31 August 2007	2,403,846	–	$2.010
12 April 2007	1,343,284	–	$1.485
Len Lloyd:
Date of issue	Options	Performance rights	Price
31 August 2007	721,154	–	$2.010
12 April 2007	447,761	–	$1.485

No further Awards are proposed to be made under that approval assuming resolutions 4 and 5 are passed.

Loans

No loans are being provided for any acquisition of securities by Frank Wolf or Len Lloyd under this Notice of Meeting.

Additional persons

Any additional persons (for whom securityholder approval is required) who become entitled to participate in the Plan and who are not named in this Notice of Meeting will not participate in the Plan until approval is obtained under ASX Listing Rule 10.14.

Other

In order to issue Performance Rights (as they have a zero exercise price) an amendment is needed to the constitutions of the Trusts. This will allow the Trusts, as part of the Group, to do what the Companies are already allowed to do under the Corporations Act, being to issue securities for no cash consideration where there is a sound business reason (such as incentivising executives) to do so. Even assuming this amendment is approved by securityholders, the Remuneration Committee may decide to amend the Plan Rules to allow Awards to be satisfied by way of a transfer of stapled securities (typically purchased on market by the Group), rather than only by way of new issue of stapled securities.

Assuming the constitution and Plan amendments are made, the Awards the subject of Resolutions 4 and 5 will be able to be satisfied via either issue or purchase of securities.

The directors (other than the two affected directors) recommend that securityholders vote in favour of these resolutions.

Resolution 6: Deed of Indemnity, Access and Insurance

This resolution is to approve the adoption by Abacus Group Holdings Limited (AGHL) of a deed of indemnity, access and insurance (AGHL Deed). As a consequence of the merger with the Abacus Diversified Income Fund in March 2006, the current indemnity deed does not cover all Group entities appropriately. In particular, it does not extend to Abacus Group Projects Limited and its subsidiaries. Adoption of the AGHL Deed will remedy this and assist the Group in recruiting and retaining officers of an appropriate standard.

The AGHL Deed will indemnify each beneficiary, being named persons who are or have been directors, secretaries, executives or employees of AGHL and/or of Group entities and other persons invited by AGHL to become beneficiaries, with respect to all losses, costs and expenses caused by or arising from any act or omission by the beneficiary in the performance of that person’s role as an officer of the Group.

The AGHL Deed will indemnify beneficiaries (and provide loan funds to pay legal costs) for all indemnified liabilities after the date of the merger with Abacus Diversified Income Fund on 31 March 2006. That will ensure that beneficiaries who previously had the benefit of indemnities will continue to be entitled to rely on those indemnities in respect of liabilities against which they were indemnified that were incurred before that date. There are a number of exclusions from indemnity, for example, if the relevant loss arises from the wilful misconduct, bad faith or wrongful actions of the beneficiary or if the beneficiary acted unreasonably in incurring costs or expense but the indemnity is not subject to any monetary cap.

The AGHL Deed also requires AGHL to use reasonable endeavours to ensure that each beneficiary is insured during the beneficiary’s term of office and for seven years after the beneficiary ceases to be an officer under a directors & officers policy issued by a reputable and solvent underwriter and to pay the insurance premiums. Such insurance also benefits AGHL if a claim is made, up to the limit and subject to the conditions of the cover and for so long as the cover is in place.

The AGHL Deed also requires AGHL to maintain Board papers for at least 10 years and makes provision for access and disposal of documents as well as the confidentiality and disclosure of information. The AGHL Deed continues to operate despite the resignation or removal of the beneficiary from any office of AGHL or any Group Entity.

The AGHL Deed:

• does not exceed the company officer indemnity restriction in, or otherwise contravene, section 199A of the Corporations Act; and

• does not exceed the company officer insurance premium restriction in, or otherwise contravene, section 199B of the Corporations Act.

A copy of the AGHL Deed is available for review on the Abacus Property Group website at www.abacusproperty.com.au.

As the resolution benefits all directors, the directors do not make a recommendation to securityholders on this resolution.

Resolution 7 and 8: Abacus Income Trust and Abacus Trust Constitution Amendments

These resolutions seek approval for the amendment of the two Trust constitutions to allow for unit issue prices which are consistent with the terms of the Abacus Property Group Executive Performance Award Plan. Awards under the Plan can comprise either ‘options’ (with an exercise price set by reference to the Group’s security trading price) or ‘Performance Rights’ (which generally have a zero exercise price).

Previously the exercise price for options was set by reference to a trading period in June each year. This is not the most common method of assessing the exercise price of options. The more common reference period is the week prior to issue of the option. The Group is proposing to move to this more common method for future option issues.

Accordingly approval is sought to amend the constitutions so they will allow:

• the issue of Performance Rights (and units upon satisfaction of relevant conditions) for zero cash consideration; and

• the issue options using a volume weighted price in the week prior to the issue of the option.

A copy of the proposed supplemental deeds amending the two Trust constitutions will be tabled at the meeting and are available for review on the Abacus Property Group website at www.abacusproperty.com.au. The directors recommend that securityholders vote in favour of these resolutions.

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securityholder review 2008

Abacus Property Group is a listed specialised property investor with over $2.4 billion property assets under management.

Abacus specialises in investing in property-based assets and actively managing those assets to enhance income and capital growth. Our four integrated property businesses and strategic focus on fundamental property investment criteria provide opportunities to create value throughout the business cycle.

Abacus builds investor value

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Target assets Active management Capital gains and
offering fundamental Acquire well to unlock unrealised earnings growth
real estate value value
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Diversified business model

Abacus has developed four integrated property businesses based on our core expertise in acquiring and managing property assets. Synergies across the business contribute to the overall success of the Group. Our activities include:

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

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

• a property financing business; and

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

results summary

2008 in review

By maintaining our focus on disciplined property investment, Abacus has delivered a strong performance in challenging market conditions and is looking to capitalise on opportunities that arise in the property market in the year ahead.

Our proven business model continues to generate a reliable distribution stream from a mix of recurrent earnings and transactional income while building capital value through selective acquisition and strategic management of assets.

Financial Highlights

• Normalised net profit up 15% to $92 million

• Normalised earnings per security up 2% to 14.7 cents

• Distributions per security up 8% to 13.5 cents

• Total assets up 30% to $1.65 billion

• Net tangible assets per security up 4% to $1.37

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John Thame Chairman Frank Wolf Managing Director
securityholder review 2008 1
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results summary

Net profit / normalised net profit over 4 years Shows continued steady growth of normalised net profit

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150
120 120.4
101.2
90 92.0
79.8
72.4
60
52.8 53.6
39.1
30
0
FY05 FY06 FY07 FY08
Net profit
Normalised net profit
$ million
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EPS/DPS

Shows EPS consistently exceeds DPS as both steadily increase

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15
14.4 14.7
13.5
12.9
12 12.4 12.5
11.8
11.4
9
6
3
0
FY05 FY06 FY07 FY08
EPS DPS
Cents
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Business growth

Expansion across all areas of the business increased total assets under Abacus management by 20% to $2.4 billion. Over $725 million of property transactions were completed during the year across the Group and our funds. Acquisitions of $610 million expanded our interests in the specialised property sectors of hospitality, storage and seniors accommodation, as well as building the Group’s principal property portfolio. Total assets of the Group increased 30% to $1.65 billion, while net tangible assets per security rose 4% to $1.37.

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Asset growth
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2500 $2.4b
$2.0b
2000
$1.65b
1500 $1.4b
$1.27b
$1.16b
1000 $0.95b
$0.59b
500
0
30 June 05 30 June 06 30 June 07 30 June 08
Total assets under management
Total APG assets
$ million
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NTA per security growth

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1.50
$1.37
$1.32
$1.22
1.20
$1.09
0.90
0.60
0.30
0.00
30 June 05 30 June 06 30 June 07 30 June 08
$
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securityholder review 2008

results summary

Business Highlights

• $725 million of property transactions completed

• Assets under management grew 20% to $2.4 billion

• New club $550 million debt facility negotiated

• Inclusion in S&P/ASX200 Index

• Three new investment funds launched

• Four investment funds realised

Financial position

During the year, total equity rose by 15% to $925 million, principally through a $100 million institutional placement completed in July 2007. Borrowings also grew to fund asset acquisitions, with gearing at 37.5% at year end. We are working on a number of initiatives to reduce gearing to within the range of 30-35%.

In February 2008, we entered into a new $550 million club debt facility with ANZ, CBA and St George Bank, providing certainty and flexibility for the Group’s funding requirements.

At 30 June 2008, total bank debt was $579 million with a weighted average loan term of 2.7 years. Over 75% of total bank debt facilities were subject to fixed rate arrangements through the use of interest rate swap contracts. The average interest rate (including bank margin) across the entire debt book was 7.69% pa. The interest cover ratio was 3.3 times.

Total securityholder equity

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1000
925
800
803
673
600
400
405
200
0
30 June 05 30 June 06 30 June 07 30 June 08
$ million
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results summary

Security price performance

Upheaval in the global credit and equity markets has caused dramatic price falls across all sectors, particularly the financial services and property sectors. While Abacus outperformed the Index for the period to 30 June 2008, we still experienced a significant decline in security price as a consequence of the market sell-off of A-REIT securities.

FY08 Total Return: ABP v XPJAI

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1.20
1.00
0.80
0.60
XPJAI ABP
0.40
0.20
0.00
2/7/07 2/8/07 2/9/07 2/10/07 2/11/07 2/12/07 2/1/08 2/2/08 2/3/08 2/4/08 2/5/08 2/6/08
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Outlook

While it is not Abacus practice to provide specific guidance for profits in the year ahead, our robust business model places the Group in the best possible position to manage challenging market conditions and continue to deliver returns to our securityholders.

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The Board. From left to right: John Thame, Len Lloyd, David Bastian, Frank Wolf, Bill Bartlett and Malcolm Irving. Absent: Dennis Bluth
4 securityholder review 2008
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results summary

Income and distribution statement extract

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2008 2007 Change
$ million $ million
Total revenue (includes AIFRS adjustments) 138.4 181.8 24%
Net profit after tax (includes AIFRS 72.4 120.4 40%
adjustments)
Minority interests (1.0) (1.6)
AIFRS adjustments 19.6 (39.0)
Normalised profit 92.0 79.8 15%
Normalised earnings per security 14.7 cents 14.4 cents 2%
Distributions per security 13.5 cents 12.5 cents 8%
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Normalised profit and earnings exclude AIFRS ‘fair value’ adjustments (namely revaluations of property, derivatives and other financial instruments as well as share-based payments).

Balance sheet extract

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30 June 2008 30 June 2008 Change
$ million $ million
Property assets [1] 1,089.7 834.5 31%
Funds management 243.9 133.1 83%
Property finance 144.7 120.5 20%
Projects and investments 77.3 70.2 10%
Cash and other assets 91.6 111.1 18%
Total assets 1,647.2 1269.4 30%
Interest bearing liabilities (644.6) (393.7) 64%
Other liabilities (77.6) (72.5) 7%
Net assets / Total equity 925.0 803.2 15%
NTA per security $1.37 $1.32 4%
Gearing 37.5% 30.0% 8%
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1 Independent valuation of each investment property is conducted annually, either in December or June each year. 63% of properties were valued as at June 2008.

A full copy of the Group’s 2008 financial statements is available from our website.

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business overview

The Abacus business model has been built on our core competence of successful real estate investment. We seek property assets that offer compelling real estate fundamentals that we can acquire well. Over time, we seek to enhance the value of our assets through active management.

We partner with various sources of capital to grow our asset base, including our securityholders for principal investments, our financial planning network and their clients for our funds management investments and professional property investors and developers for our joint venture and property finance businesses.

This partnership of our real estate investment expertise with investor capital has contributed to another successful year in 2008.

Diversification of principal property portfolio

Sector diversity

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n[Industrial (18%)] n[Other (6%)] n[Office (33%)] n[Retail (33%)] n[Storage (10%)]

Property investment

Abacus seeks assets that offer fundamental real estate value that we can acquire well, receive an attractive rental yield and then enhance returns through active management. Active management may include refurbishment, restructuring tenancies, cost containment, income optimisation, expansion of lettable area, redevelopment or conversion to an alternative use.

During the year, Abacus completed over $725 million of property transactions, including $610 million of acquisitions for the principal property book, funds management initiatives and joint venture investments, and disposals of $115 million.

At year end, Abacus owned a diversified portfolio of direct property assets, primarily in the Australian retail, office and industrial sectors, with a combined value of over $932 million. Rental income from the property portfolio is the major contributor to the Group’s earnings and increased 18% in 2008.

Geographic diversity

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n[NSW (42%)] n[QLD (20%)] n[NZ (2%)] n[SA (9%)] n[VIC (12%)] n[ACT (14%)] n[WA (1%)]

Occupancy: 94%

Weighted average lease expiry by income: 5.49 years

Weighted average lease expiry by area: 4.74 years

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securityholder review 2008

property investment

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Redevelopment and repositioning of Aspley Village

Abacus is undertaking a complete redevelopment of Aspley Village Shopping Centre to optimise utilisation of its large 19,430 square metre site and increase lettable area to 12,230 square metres to provide for a full line Coles Supermarket and 28 specialty shops plus medical and childcare centres. Construction commenced in September 2007 and is scheduled for completion in December 2008. In March, Abacus sold a two-thirds interest in the property to Allianz Australia Limited for $42 million.

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Greenacre site consolidation Abacus Storage Fund 204-220 Hume Highway & 16-22 Anzac Street
Through a series of transactions, Abacus has
acquired adjacent properties with a total area
of 35,386 square metres and significant frontage
to the Hume Highway in Greenacre, 17 kilometres
south-west of the Sydney CBD. Currently comprising
car showrooms, offices, warehouses and storage
facilities, the properties are fully leased and provide 17-21 Anzac Street
a 8.5% rental yield while Abacus explores the
strategic options for the large site.
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Acquisition of 51 Allara Street, Canberra

Abacus acquired this high quality office building in the Canberra CBD for $53.6 million in January 2008. The well-located property provides net lettable area of 11,760 square metres fully leased to Ernst & Young, the Australian Taxation Office and the Murray Darling Basin Commission as well as 168 parking spaces in the four level basement. The property offers potential for rental growth.

7

www.abacusproperty.com.au

funds management

Our funds management business continues to be an important source of earnings for the Group, contributing $38 million to the 2008 profit result.

We have built a funds management platform with over $950 million of assets under management, comprising a mix of large core funds in specific property sectors, supplemented by our special opportunity funds.

2008 saw the suite of core funds increase to three with the launch of the Abacus Diversified Income Fund II in July 2007. This fund holds a diversified portfolio of investment properties and other property-based assets with a focus on commercial investment properties valued at less than $25 million.

The Abacus Hospitality Fund, which owns and operates a portfolio of hotel properties, grew strongly during the year with the acquisition of four hotels for $152 million, bringing total fund assets to $340 million.

Two new special opportunity funds were also launched during the year: the Abacus Fern Bay Fund owns and operates a relocatable homes park on a 26 hectare coastal site close to Newcastle in NSW, while the Abacus Jigsaw Trust holds a 50% interest in a corporate childcare business.

Four funds were realised during the year, including the Abacus Mariners Cove Equity Trust, Abacus Crows Nest Property Trust, Abacus Retirement Living Trust and the Abacus Portfolio Service, which was one of the very first investments offered by Abacus. Abacus earned a total $6.4 million in performance fees from these transactions while investors received attractive investment returns.

More information on Abacus funds is provided in the 2008 Fund Review, available through the website.

The Abacus Storage Fund performed strongly with a 24% increase in store profit underpinning a 12% increase in the fund’s net asset value per security.

Abacus Hospitality Fund

Abacus Hospitality Fund owns a portfolio of hotel properties located in Australia and New Zealand. Specialist hotel management groups such as Accor, Rydges and Swissôtel, undertake the day-to-day management of the hotels.

Since its initial launch in November 2006, the Fund has expanded its portfolio to eight hotels: five located in Queensland and one in each of Sydney, Canberra and Christchurch. During the year, the refurbishment of the Novotel Twin Waters Resort was largely completed, with $9 million spent on room refurbishment and upgrading the restaurant and bar areas.

Fund size $340 million

Portfolio 8 hotels

FY09 yield 8.0%

FY08 Tax-deferral 100%

Distributions Quarterly

Novotel Twin Waters Resort

8

securityholder review 2008

funds management

Core Income Abacus Hospitality Fund Abacus Storage Fund ADIFII Funds $340 million $226 million $219 million Special Miller Street Fund Wodonga Fund Fern Bay Fund Jigsaw Trust Opportunity $73 million $71 million $20 million $9 million Funds

Fern Bay Fund Jigsaw Trust Hobart Fund $20 million $9 million $6 million

Abacus Storage Fund

Abacus Storage Fund has grown to become one of the largest participants in the Australasian self-storage industry with a portfolio of 30 facilities and total assets of $226 million.

The Fund’s storage facilities are located in Victoria, New South Wales, Queensland and New Zealand. Day-to-day management of the facilities is outsourced to Storage King, Australasia’s largest self storage operator.

2008 was a very successful year for the Fund with operating earnings increasing 24% and net asset value per security backing growing 12%.

Fund size $226 million

Portfolio 30 facilities

FY09 yield 8.25%

FY08 Tax-deferral 94%

Distributions Quarterly

Abacus Diversified Income Fund II

Abacus Diversified Income Fund II is an unlisted openended fund which provides investors with exposure to a diversified portfolio of investment properties and other property-based assets.

Commercial investment properties valued at less than $25 million are the core focus of the Fund. The current portfolio of assets includes 22 properties diversified across sectors and locations valued at over $183 million and also holds investments in listed and unlisted property trusts.

Fund size $219 million

Portfolio 22 properties plus investments in listed and unlisted property trusts

FY09 yield 8.5%

FY09 Tax-deferral 100%

Distributions Quarterly

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22-28 Edgeworth Avenue, Hornsby NSW www.abacusproperty.com.au 9

property finance

Abacus provides a range of property financing solutions for development projects and other property investment which generate interest and fee income for Abacus, opportunities for co-investment and a pipeline of potential transactions for other parts of our business.

Strict lending criteria apply at all times, with all loans secured by real property assets assessed against the same criteria as our principal property investments. For appropriate projects with suitable partners, Abacus may contribute equity on a preferred basis. At year end, Abacus had a portfolio of 22 loans with a total value of $148 million.

Projects and investments

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 pipeline of joint venture projects generates ongoing earnings from fees and profit participation and also provides lending opportunities for our property finance business, assets for funds management initiatives and principal investment opportunities upon completion of development activities.

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provides lending opportunities for our property finance business, assets for funds management initiatives and
principal investment opportunities upon completion of development activities.
At year end, Abacus had $77 million invested in a range of joint venture projects with an end value of
approximately $800 million, including interests in:
• seniors accommodation Joint venture assets
• land subdivision projects n [Seniors accommodation (29%)]
• n [Land subdivision (15%)]
mixed use commercial projects
• n [Retail (22%)]
retail developments
n [Residential (14%)]
• residential developments. n [Commercial mixed use (20%)]
Hampton residential development
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securityholder review

2008

projects and investments

Seniors accommodation joint venture

Abacus Sanctuary Residences was established during the year to develop and manage luxury seniors accommodation solutions utilising the extensive experience of our partner Sanctuary Residences (Australia) Pty Limited, a specialist retirement living operator.

The joint venture acquired two properties during the year for development into luxury seniors living villages:

• a commercial property in Crows Nest, Sydney that will be converted to seniors accommodation; and

• a property in Brighton, Victoria, on which a new seniors living village will be built.

Both projects are in the planning approval phase, with construction expected to commence in 2009 for Brighton and 2010 for Crows Nest.

Colemans Road land subdivision

Abacus acquired this 36 hectare industrial site in 2007 in partnership with a Melbourne development group. The site is located 30 kilometres south-east of the Melbourne CBD in the prime South Dandenong industrial precinct. 23 hectares was sold during 2008 to Aldi, which is proposing to build a new distribution centre on the site. The remaining area will be sold down in a number of smaller lots on completion of the civil works (roads and drainage) in the coming 12-18 months.

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Crows Nest property Colemans Road property
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www.abacusproperty.com.au

11

abacus property group

Investment fundamentals

Experienced property team

• Stable board of directors with extensive experience across property and finance

• Skilled management team includes property valuers, project managers and specialist asset managers

• Proven track record of active management over 12 years

Disciplined approach to property investment

• Focus on fundamental real estate value

• Reliable recurring income

• Potential to enhance returns through active management

Diversified business model

• Property investment: $932 million diversified property portfolio

• Funds management: $1 billion funds management platform

• Property finance: $148 million loan book

• Projects and investments: $800 million pipeline of diversified projects

Sound financial position

• $1.65 billion assets based predominantly in Australia, with some exposure to New Zealand

• Prudent financial management

• Gearing 37.5%

• Platform for further growth

• Normalised earnings exceed distributions

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securityholder review 2008 12

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