ABACUS GROUP — Interim / Quarterly Report 2008

Feb 13, 2008

abacus property group

Agenda

==> picture [109 x 60] intentionally omitted <==

Highlights for the Half Year

First Half Financial Results Business Model and Strategy

Review of Businesses

• Principal Investment

• Funds Management

• Other Businesses

Highlights for the Half Year

==> picture [109 x 60] intentionally omitted <==

==> picture [9 x 10] intentionally omitted <==

Solid earnings underpinned by sound business model:

==> picture [9 x 9] intentionally omitted <==

Normalised net profit up 25% to $48m

==> picture [9 x 9] intentionally omitted <==

9% EPS growth and 8% DPS growth

==> picture [9 x 8] intentionally omitted <==

9% uplift in NTA to $1.44

==> picture [9 x 10] intentionally omitted <==

Admitted to S&P/ASX 200 Index

==> picture [9 x 10] intentionally omitted <==

New debt facility with 3.2yr term and overall 13bps reduction in spread

==> picture [9 x 10] intentionally omitted <==

88% swap coverage and effective ‘all in’ cost of debt 7.3%

==> picture [9 x 10] intentionally omitted <==

Announced an 8% increase in DPS from 1 Jan 08, now 3.5c per quarter

==> picture [9 x 10] intentionally omitted <==

Strong contributions across all businesses with circa 70% of revenue underpinned by

Agenda

==> picture [109 x 60] intentionally omitted <==

Highlights for the Half Year

Financial Update

Business Model and Strategy

Review of Businesses

• Principal Investment

• Funds Management

• Other Businesses

Financial Update – Results Summary

==> picture [109 x 60] intentionally omitted <==

	D 07
	Total Income	$90.2m ec				ec $80.8m		ange +17%
	Normalised Net Profit After Tax1		$48.1m			$38.3m		+25%
	Normalised Earnings Per Security1		7.77c			7.11c		+9%
	Distributions Per Security		6.5c			6.0c		+8%
	Interest Cover Ratio	4.3x				3.3x		+32%
	D 07
	Total Assets $1,558m ec					$ 1,270m une	+23% ange

Financial Update – Earnings Profile

==> picture [109 x 60] intentionally omitted <==

EBITDA by Business

EBITDA by Earnings Type

==> picture [600 x 130] intentionally omitted <==

----- Start of picture text -----

5%
Property Income 9%
33%
Recurring
Funds Management
Transactional
Finance
34% 52%
67%
Projects & Investments
----- End of picture text -----

Funds Management Earnings Mix

37%

Mgt Fees and Interest

Financial Update – Capital Management

==> picture [109 x 60] intentionally omitted <==

==> picture [11 x 11] intentionally omitted <==

Completed $100m institutional placement in July 07

==> picture [11 x 11] intentionally omitted <==

Securities on issue at 31 December were 642 million

==> picture [11 x 11] intentionally omitted <==

60% institutional ownership, with increasing interest from global property securities funds

==> picture [11 x 10] intentionally omitted <==

Realised cash earnings continue to exceed distributions, with $178m of retained earnings at 31 December

==> picture [11 x 10] intentionally omitted <==

Index weightings estimated by Macquarie to be:

==> picture [8 x 9] intentionally omitted <==

7bps S&P/ASX 200 Index

==> picture [8 x 8] intentionally omitted <==

Financial Update – New Debt Facilities

==> picture [109 x 60] intentionally omitted <==

==> picture [10 x 10] intentionally omitted <==

New $550m club facility to replace existing debt arrangements for principal property book

==> picture [10 x 11] intentionally omitted <==

Club banks are ANZ (as lead arranger), CBA and St George Bank

==> picture [10 x 11] intentionally omitted <==

Key features of the club facility include:

==> picture [8 x 9] intentionally omitted <==

Initially will be drawn to $380m

==> picture [8 x 8] intentionally omitted <==

Average term of drawn debt is 3.2 years, up from 1.7 years

==> picture [8 x 9] intentionally omitted <==

The “all in” margin has been reduced by 13bps

==> picture [10 x 11] intentionally omitted <==

Additional debt funding as at 31 December of $106m for $268m of assets being incubated on balance sheet for future funds management initiatives[1] .

==> picture [10 x 11] intentionally omitted <==

Average ‘all in’ cost of debt will be 7.3% (cf 7.14% at 30 June 07)

Financial Update – Debt Facilities

==> picture [109 x 60] intentionally omitted <==

Club Facility	Incubated Total
$550m Facility Limit:	$106m $142m FM Assets2 88% 3yrs $486m $692m Debt 7.3% 5.8yrs 2.2yrs3
$380m Drawn to:
3.2yrs1 WAV Facility Term (drawn debt)
% Swap Coverage
WAV Swap Term
Average Cost of Debt

1. The club facility comprises a $400m Core Facility with a $250m tranche of 3 years duration and a $150m tranche of 4 years duration and a $150m Acquisition Facility of 1.5 years duration.

2. Incubated funds management assets include the $88m Abacus Small Properties Trust, the $80m Metcash Retail Trust, $50m in Self Storage assets and approximately $50m of other miscellaneous assets (including some New Zealand properties). In addition, a further $70m of assets will settle post 31 December, which will be geared to approximately 50%.

Agenda

==> picture [109 x 60] intentionally omitted <==

Highlights for the Half Year

First Half Financial Results

Business Model and Strategy

Review of Businesses

• Principal Investment

• Funds Management

• Other Businesses

Business model and strategy

==> picture [109 x 60] intentionally omitted <==

==> picture [10 x 9] intentionally omitted <==

We are a principal investor in core-plus assets

==> picture [10 x 10] intentionally omitted <==

We buy assets on balance sheet that offer significant capital growth potential, extract value from them over time and then crystalise gains through sale or syndication

==> picture [10 x 10] intentionally omitted <==

Sale/syndication proceeds are reinvested in the replenishment of principal investment pipeline or the growth of our funds management business

==> picture [10 x 10] intentionally omitted <==

We continue to grow our funds management business by offering our clients a selective mix of open-ended, core income funds and special opportunity, value add investment funds.

==> picture [10 x 10] intentionally omitted <==

Our joint venture business combines Abacus’ capital and property skills with the geographic and sector specific expertise of our partners

==> picture [10 x 10] intentionally omitted <==

Our property finance and joint venture businesses generate attractive returns, but also provide

Agenda

==> picture [109 x 60] intentionally omitted <==

Highlights for the Half Year First Half Financial Results Business Model and Strategy

Review of Businesses

• Principal Investment

• Funds Management

• Other Businesses

Principal Investment – Portfolio Overview

==> picture [109 x 60] intentionally omitted <==

==> picture [12 x 11] intentionally omitted <==

Strong portfolio performance for the half

Portfolio Overview – Investment Properties

==> picture [12 x 11] intentionally omitted <==

==> picture [12 x 12] intentionally omitted <==

Acquired $210 million of property assets during the half, with $90 million of additional acquisitions to settle post 31 December 2007

Sold 3 properties for a total of $70 million at average IRR of 25%

	Total asset value	$890m1
	NLA (sqm)	413,6232
	Weighted Average Cap Rate	7.5%3
	Occupancy	95%1
	Weighted Average Lease Expy	4.90yrs2

==> picture [12 x 11] intentionally omitted <==

The WAV portfolio cap rate is 7.5%

1. Excludes property plant and equipment, and Virginia Park

2. Excludes property plant and equipment, Virginia Park and development and storage assets

Principal Investment – Recent Acquisitions

==> picture [109 x 60] intentionally omitted <==

Asset Acquisition Rationale Alderley A large industrial property in Alderley Qld valued at $20.1 million, comprising two warehouses with 21,160 m[2] of NLA on a 4.67 ha site located five kms from the Brisbane CBD. This site also offers development potential in the near term. Varsity Lakes Two properties acquired in Varsity Lakes, Qld valued at $23 million, comprising 7,180sqm of office accommodation across two buildings on 2.2 ha of land. The properties offer significant potential for rental reversion and future Development. Campbellfield This 6.6 ha property with 26,000 m[2] of NLA is located on the Hume Highway (200m frontage) and is adjacent to a 2.1 ha property already owned by Abacus. It was acquired for $17.6m. This property offers the potential to create a near city business park with front and rear access on lease expiration.

Funds Management - Overview

==> picture [109 x 60] intentionally omitted <==

==> picture [10 x 10] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

==> picture [10 x 10] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

Strong performance of the Abacus Hospitality and Storage Funds

Launched ADIFII in July 2007

Approximately $268m of assets were acquired in the half, with an additional $70m acquired post 31 Dec, for release as new funds over the next 12-18 months

Fund inflow averaged $6.6 million per month for H108

==> picture [302 x 206] intentionally omitted <==

----- Start of picture text -----

$GAUM
2500
On Balance Sheet Off Balance Sheet
2000
971
925
1500
366
1000
356
1351
500 259 1034 1157
594
416
0
FY04 FY05 FY06 FY07 HY08
----- End of picture text -----

==> picture [10 x 10] intentionally omitted <==

Hospitality Fund listed on Macquarie Wrap and ADIFII listed on BT and Macquarie Wrap

Funds Management – Storage Fund

==> picture [109 x 60] intentionally omitted <==

Abacus’ involvement in the self storage industry typifies our approach to funds management

==> picture [10 x 11] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

==> picture [10 x 10] intentionally omitted <==

• Attractive industry fundamentals and sound property fundamentals

• Fund launched Nov 05 with $101.4m assets, requiring $60m equity at 8% yield

• $68m additional acquisitions post fund-launch

• $75m equity raised in 13 months under PDS

• Strong lift in operating performance through Abacus’ manage the manager approach

==> picture [300 x 167] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

Fund closed to new equity – maximising

Cleveland, Queensland

Funds Management – Storage Fund

Investors in the Fund have enjoyed very attractive returns:

==> picture [10 x 10] intentionally omitted <==

46% uplift in NTA in 20 months to June 2007

==> picture [11 x 11] intentionally omitted <==

Initial yield of 8% increased to 8.25%

==> picture [11 x 11] intentionally omitted <==

Strong YTD operating performance should underpin further capital growth

==> picture [11 x 11] intentionally omitted <==

Abacus is acquiring additional assets for a new storage fund and has approximately $53.5 million on balance sheet

==> picture [10 x 10] intentionally omitted <==

Abacus and the Fund are now one of the largest operators in Australasia

==> picture [10 x 11] intentionally omitted <==

==> picture [109 x 60] intentionally omitted <==

Funds Management – Hospitality Fund

==> picture [109 x 60] intentionally omitted <==

Abacus’ involvement in the hospitality industry is similar to self-storage

==> picture [11 x 11] intentionally omitted <==

Attractive industry fundamentals

==> picture [9 x 8] intentionally omitted <==

Low average daily rates by world standards

==> picture [9 x 9] intentionally omitted <==

Strong occupancies today and limited new supply forecast

==> picture [9 x 9] intentionally omitted <==

Continued demand growth of 3-5%pa will drive RevPar growth

==> picture [11 x 11] intentionally omitted <==

Sound property fundamentals

==> picture [9 x 8] intentionally omitted <==

Acquiring assets below replacement cost

==> picture [9 x 8] intentionally omitted <==

Waterfront and CBD locations, large land holdings

==> picture [9 x 9] intentionally omitted <==

Repositioning potential

==> picture [11 x 10] intentionally omitted <==

Assembled initial $134m tranche of 3 hotels on balance sheet, launched fund with $15m wholesale raising in Dec 06, generated significant origination fees

==> picture [11 x 10] intentionally omitted <==

==> picture [11 x 11] intentionally omitted <==

==> picture [11 x 10] intentionally omitted <==

==> picture [109 x 60] intentionally omitted <==

Funds Management – Hospitality Fund

Since fund launch, a further 5 hotels have been acquired for $163m

==> picture [195 x 279] intentionally omitted <==

Supplementary PDS issued Oct 07, seeking an additional $63m equity

Strong lift in operating performance through Abacus’ manage the manager approach

==> picture [342 x 143] intentionally omitted <==

----- Start of picture text -----

Hotel Acquisition EBIDA
Date Improve’t
Esplanade, Cairns Jan 05 120%
Tradewinds, Cairns Mar 06 80%
Twin Waters, Sunshine Coast Jun 06 18%
Townsville, QLD Jul 07 14%
Chateau on the Park, NZ May 06 13%
----- End of picture text -----

==> picture [10 x 10] intentionally omitted <==

==> picture [10 x 10] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

Funds Management – ADIFII

• Diversified property fund launched July 2007

• Tailored to meet platform requirements (eg unit pricing, redemption facility, asset diversification)

• Listed on BT and Macquarie Wrap from 1 February 2008

• GAUM has grown $42m during the half

Initial yield 7%, high tax deferral

==> picture [109 x 60] intentionally omitted <==

==> picture [282 x 212] intentionally omitted <==

Jetstream Business Park, Brisbane

Funds Management – Fund Performance

==> picture [109 x 60] intentionally omitted <==

Funds Management – Fund Performance	Funds Management – Fund Performance	Funds Management – Fund Performance
A number of special opportunity funds have recently been, or are about to be realised, including:
Investment (Date realised)	Term	Annualised Return
Abacus Crows Nest Property Trust (Feb, 2008)	7 years	14.2%
Abacus Portfolio Service, Burnie Hospital (Sept, 2007)	11 years	15.5%
Blue on Blue Pre Sales Agreement (Nov, 2007)	20-24 months	28%
Royal Domain Pre Sales Agreement (June, 2007)	24-30 months	28%

Other Businesses – Property Finance

==> picture [109 x 60] intentionally omitted <==

2007 saw significant competition in this
market, with Abacus taking a conservative	Portfolio Overview	Dec 07
position as market rates became mis-aligned	Current Loan Book	$125m
with underlying risk
	No of loans	23
70% of the portfolio is first mortgage security	Avge Interest rate (excl	12.1%
Earnings comprise a mix of interest income	fees)
and upfront, monitoring and exit/performance
fees

Other Businesses – Projects and Investments

==> picture [109 x 60] intentionally omitted <==

New Retirement Joint Venture

During the half, Abacus established a new joint venture relationship with Sanctuary Residences (NZ) to develop and manage retirement villages in Australia.

==> picture [8 x 8] intentionally omitted <==

• Sanctuary Residences is a joint venture business between Cliff Cook (one of the founding shareholders in Metlife Care) and Equity International (a real estate private equity firm affiliated with Sam Zell’s Equity Group Investments).

==> picture [8 x 8] intentionally omitted <==

• The joint venture will focus on developing luxury, well situated retirement living solutions for the elderly, utilising Sanctuary’s long history in this sector and Abacus’ Australian property expertise to create a secure, recurring DMF income stream

==> picture [8 x 8] intentionally omitted <==

==> picture [241 x 256] intentionally omitted <==

Other Businesses – Projects and Investments

==> picture [109 x 60] intentionally omitted <==

		Project			Project Status		Project Realisation
		Colemans Rd, South Dandenong Victoria		A 36ha industrial land subdivision, where we are aiming to complete the sale of a master lot equivalent to 65% of the site area, ahead of the sale of the remaining lots. Minimal future capex requirements.			2008 - 2010
		Bay St, Brighton Victoria		A 5,420sqm retail development in one of Melbourne’s premier retail precincts. Development approval has been obtained for a 4200sqm Safeway supermarket and 15 specialties.			2010 - 2011
		Musselbrook, NSW		A 1200 lot subdivision in the upper-Hunter Valley NSW. 39 lots have been sold, with average prices attained exceeding feasibilty. The land has been fully equity funded.			2008 - 2015
		Main St,		A future retail development on 5.1 ha of land in central Pakenham, Victoria.
		Pakenham		Abacus and its partner are in discussions with the relevant planning authorities			2010 - 2012
		Victoria Pakenham Land Sub-division, Victoria		regar This partn sold	ding a mix of retail, bulky goods & commercial office on this site. 54ha site was sold to Delfin Lend Lease in 2007, and Abacus and its er will continue to receive a portion of the gross sales proceeds as lots are in the coming years. Initial sales are likely to commence early 2009.		2009 - 2012

Other Businesses – Projects and Investments

==> picture [109 x 60] intentionally omitted <==

Joint Venture Debt Facilities

Abacus takes a conservative position in respect of joint venture financing Small equity contributions are typically structured with a preferred return Projects are currently carried at the lower of cost or recoverable amount Projects are typically sold ahead of development

==> picture [10 x 10] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

==> picture [10 x 10] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

	Portfolio Summary at 31 Dec 07	Portfolio Summary at 31 Dec 07
	Number of projects	10
	Asset Value (50%)	$68.2m
	Debt (50%)	$29.5m
	Abacus Equity (50%)	$38.7m
	Gearing1	43%
	1. Net interest bearing debt divided by gross assets

==> picture [10 x 6] intentionally omitted <==

Agenda

==> picture [109 x 60] intentionally omitted <==

Highlights for the Half Year

First Half Financial Results Business Model and Strategy

Review of Businesses

• Principal Investment

• Funds Management

• Other Businesses

Attractive Investment Fundamentals

==> picture [109 x 60] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

Current market pricing[1] of ABP reflects:

==> picture [8 x 9] intentionally omitted <==

An annualised trading yield of 9.75% compared to LPT sector at 6.7%

==> picture [8 x 8] intentionally omitted <==

A 3% premium to NTA

==> picture [10 x 11] intentionally omitted <==

Business fundamentals remain sound

==> picture [8 x 9] intentionally omitted <==

Principal property book comprises assets offering strong growth prospects through active management

==> picture [8 x 9] intentionally omitted <==

WAV cap rate of principal property book at 7.5% is not aggressive

==> picture [8 x 9] intentionally omitted <==

$340m of assets on balance sheet underpins future FUM growth

==> picture [8 x 8] intentionally omitted <==

Gearing at conservative level of 32.5%, with WAV facility term of 3 years

==> picture [8 x 8] intentionally omitted <==

Joint ventures are measured, low risk approach to exploiting development opportunities

==> picture [8 x 9] intentionally omitted <==

Domestic focussed portfolio

Business Outlook

==> picture [109 x 60] intentionally omitted <==

==> picture [10 x 10] intentionally omitted <==

• Recent volatility in global debt and equity markets will impact Australian real estate markets this year

==> picture [10 x 11] intentionally omitted <==

• Abacus’ portfolio of “core plus” assets provide good prospects for growth through active management

==> picture [10 x 10] intentionally omitted <==

• Coupled with a portfolio cap rate of 7.5%, Abacus is relatively well positioned should cap rates soften

==> picture [10 x 11] intentionally omitted <==

• Volatile markets provide acquisition opportunities

==> picture [10 x 11] intentionally omitted <==

• Abacus’ new debt facilities, asset recycling, fund inflows and expected mortgage repayments will provide substantial cashflow to fund new acquisitions that meet our investment criteria

==> picture [10 x 11] intentionally omitted <==

More restrictive credit conditions will also create opportunities for our finance solutions

Business Outlook

==> picture [109 x 60] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

Abacus has recently appointed Cameron Laird, former Managing Director of Retail at Multiplex, to expand its developer joint venture partnerships

==> picture [10 x 10] intentionally omitted <==

Abacus is a very experienced real estate group, with diversified income streams of which circa 70% are recurring in nature.

==> picture [10 x 11] intentionally omitted <==

We are well placed to continue growing distributions out of cash earnings

==> picture [109 x 60] intentionally omitted <==

Appendices

2008 Half Year Results

HY08 – Profit & Loss

==> picture [109 x 60] intentionally omitted <==

	HY08 – Profit & Loss
	Profit and Loss Summary	HY08 $M		HY07 $M	Change
	Principal Investment/Property	31.8		21.9	+45%
	Funds Management	21.2		26.6	-20%
	Property Finance	5.0		5.9	-15%
	Operating revenue Projects and investments	92.3 3.0		58.0 0.3	+ 59.1% +900%
	Unrealised gains on investments	12.3		2.9	+324%
	Other Income	0.9		1.8	-50%
	EBIT	74.2		59.4	+25%
	Finance Costs	(7.3)		(14.7)	-50%
	Tax	1.1		(3.7)	-130%
	Minority Interests	(0.4)		0.1	-500%
	NPAT	67.6		41.1	+65%
	Less swap MTM Plus share based payments Less unrealised gains on investments Normalised NPAT	(7.7) 0.5 (12.3) 48.1		(2.2) 2.4 (2.9) 38.3	+250% +324% +25% -79%

HY08 – Balance Sheet

==> picture [109 x 60] intentionally omitted <==

	HY08 – Balance Sheet
	Balance Sheet as at 31 December	HY08 $M		FY07 $M	Change
	Property Portfolio	977.8		834.5	+17%
	Funds Management	251.5		133.2	+89%
	Property Finance	125.0		120.5	+4%
	Projects and Investments	75.4		70.2	+7%
	Cash, Receivables and Other Assets	139.3		111.9	+25%
	Total Assets	1,569.0		1,270.3	+24%
	Interest Bearing Liabilities	(530.2)		(394.2)	+23.5%
	Other Liabilities	(76.1)		(72.8)	+5%
	Net Assets	962.7		803.3	+20%
	Net Tangible Assets (NTA) Per Security Gearing Note: the property portfolio includes Abacus’ 50% interest in V projects and investments in the audited accounts due to the o	$1.44 32.5% irginia Park, V wnership struc		$1.32 30.0% IC, which is in ture of the as	+9% +8% cluded in set.

Funds Management – Debt Position

==> picture [109 x 60] intentionally omitted <==

	$330m Hospitality $215m ADIFII Gross asset value Fund Details
	$182m $93m Bank Debt
	55% 43% Gearing
	92% 3.8yrs 91% 2.8yrs Swap Coverage WAV Loan Term
	4.0yrs 5.4yrs WAV Swaps Term
	7.2% 7.1% Cost of Bank Debt
	8% 7% Fund Yield

Disclaimer

==> picture [109 x 60] intentionally omitted <==

The contents of this presentation are general only. It does not purport to contain all the information that an investor may require to evaluate an investment in the Abacus Property Group or any funds managed by Abacus Funds Management Limited. Before a person makes an investment decision on the basis of this information, they should determine for themselves or obtain professional advice as to whether any investment is appropriate for their particular needs, investment objectives and financial situation.

None of Abacus Property Group, its directors, employees or advisers make any representation or warranty as to the accuracy, reliability or completeness of the information contained in this presentation.

Any forecasts or other forward looking statements contained in this presentation are based on assumptions concerning future events and market conditions. Actual results may vary from forecasts and any variations may be materially positive or negative.

Statements made in this presentation are made as of the date of the presentation unless otherwise stated.