ASPEN GROUP — Capital/Financing Update 2019

Jun 24, 2019

==> picture [198 x 80] intentionally omitted <==

Aspen Group Limited ABN 50 004 160 927 Aspen Property Trust ARSN 104 807 767 21 Oxford Street Bondi Junction NSW 2000 Telephone: 02 9151 7500 Email: homemail@aspengroup.com.au

ASX ANNOUNCEMENT 25 June 2019

Investor Update – New Acquisition in Lindfield, Sydney

Aspen Group (which comprises Aspen Group Limited and the Aspen Property Trust) (ASX: APZ) (Aspen) is pleased to announce that it has entered into contracts to acquire two apartment buildings at Lindfield, about 14kms north of the Sydney CBD (Lindfield Apartments). The expected settlement date is late August 2019.

The properties are located in close proximity to each other on Treatts Road and Pacific Highway Lindfield and are about 700-800m from Lindfield train station and retail precinct. The buildings comprise 42 studio and 1-bedroom apartments that are currently occupied under a mix of Retirement Village and standard Residential leases. Aspen’s fully integrated platform enables it to provide quality services to both customer types and to improve the value of the properties over time through refurbishment and redevelopment. Both properties are highly suitable for the provision of affordable accommodation in this highly attractive suburb in Sydney. The Treatts Road property is located in a low-density heritage conservation area and it would be very difficult to replicate its built scale in this locality. The Pacific Highway property is located in a major transport thoroughfare, is zoned for high-density residential and significantly more floorspace is allowed on the site.

The Lindfield Apartments are being acquired for $8.65m pre transaction costs ($206k per unit) from a not-for-profit provider of aged care and retirement services. The expected first year yield is around 3%. The current average weekly rents are $112 for the Retirement Village tenants and $326 for the Residential tenants. The median sales price of a 1-bedroom apartment in Lindfield is over $650k (Realestate.com.au) and only two apartments sold for less than $400k over the past 12 months (CoreLogic).

The acquisition is expected to be funded with debt and FY20 guidance remains unchanged for underlying earnings per security of 6.75-7.00 cents and distribution per security of 6.00 cents.

Please refer to the attached presentation for more information.

END

For further information, please contact: David Dixon John Carter Joint Chief Executive Officer Joint Chief Executive Officer Phone: (+61) 2 9151 7584 Phone: (+61) 2 9151 7586 Email: davidd@aspengroup.com.au Email: johnc@aspengroup.com.au

Aspen is a leading provider of affordable accommodation in the Retirement, Residential and Short Stay sectors, with a fully integrated platform across operations, asset management, development and capital management. Aspen provides a broad spectrum of products and services to its customers under different ownership and regulatory schemes: Rentals – Shared Equity – Sales.

Acquisition - Lindfield Apartments, Sydney

==> picture [188 x 82] intentionally omitted <==

==> picture [120 x 15] intentionally omitted <==

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

25 June 2019
----- End of picture text -----

Foreground: Chatswood. Background: Sydney CBD

Acquisition Summary

Overview

• Two residential apartment buildings located at Treatts Road and Pacific Highway Lindfield - 14km north of Sydney CBD and 700-800m from Lindfield train station and retail precinct

• Vendor is a not-for-profit provider of aged care services

• 37 studio and 5 1-bedroom apartments

• Purchase price of $8.65m - $206k per unit and expected yield of 3.0% (pre transaction costs)

• Valuer General’s unimproved land value of $7m is about 80% of purchase price

• Current residents have a mix of Retirement Village (RV) contracts at an average weekly rent of $112 and standard Residential leases at an average weekly rent of $326

• RV residents are on leases - not traditional DMF model

• Highly affordable and competitive accommodation product in the Lindfield locality

• 88 apartments sold in Lindfield over the past 12 months – only two sold for less than $400k (CoreLogic)

• RV residents have been exiting over time and replaced with standard residential residents

• Majority of RV rents are contracted to increase by 5% per annum from the low base

• Opportunity to refurbish the Treatts Road property (already well over its plot ratio) and redevelop the Pacific Highway property (currently under its plot ratio) into a modern affordable accommodation facility in future

==> picture [357 x 361] intentionally omitted <==

Comparable Transactions	Comparable Transactions
Property	Purchase Date	State	Price ($m)	Site Area (m2)	Units	Unit Size sqm	Value per Unit ($k)	Value per sqm of Land ($)	Yield
16 Treatts Road Lindfield	June-19	NSW	4.12	1,929	20	42	206	2,135	3.00%
466 Pacific Highway Lindfield	June-19	NSW	4.53	1,560	22	36	206	2,903	3.00%
2 Beaconsfield Pde Lindfield	Mar-18	NSW	4.65	556	11	36	423	8,363	VP
5 Roseville Avenue Roseville	Sep-16	NSW	4.45	927	12	38	371	4,800	VP
VP = Vacant Possession

2

Lindfield Apartments

466 Pacific Highway Lindfield

Ground Floor

16 Treatts Road Lindfield

Ground Floor

==> picture [100 x 44] intentionally omitted <==

3

Lindfield Urban Renewal - Village Green and Community Hub

The Lindfield Village Green (LVG) project is to deliver a vibrant, safe and meaningful civic space for Lindfield residents, business people, commuters, shoppers and visitors as part of Ku-ring-gai Council’s ‘Activate Lindfield’ initiative.

The initiative incorporates two projects – LVG and the Lindfield Community Hub. The LVG project incorporates about 2,700m² of public open space, a basement car park and a pavilion building including cafe floor space and public amenities.

The site is located 50m east of Lindfield train station. The area surrounding the site is subject to urban renewal with a number of major redevelopments being proposed or recently completed.

Following the call for tenders, construction is scheduled to begin later this year or early 2020.

View towards Water Feature from Kochia Lane

==> picture [362 x 211] intentionally omitted <==

The Village Green

==> picture [368 x 195] intentionally omitted <==

Cafe Pavilion viewed from Kochia Lane

==> picture [362 x 195] intentionally omitted <==

4

Disclaimer

This presentation has been prepared by Aspen Group Limited on behalf of Aspen Group Limited and Aspen Property Trust (“Aspen”) and should not be considered in any way to be an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security, and neither this document nor anything in it shall form the basis of any contract or commitment. Prospective investors should make their own independent evaluation of an investment in Aspen. Nothing in this presentation constitutes investment, legal, tax or other advice. The information in this presentation does not take into account your investment objectives, financial situation or particular needs. The information does not purport to constitute all of the information that a potential investor may require in making an investment decision.

Aspen has prepared this presentation based on information available to it. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Aspen, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

This presentation contains forward looking information. Indications of, and guidance on, future earnings, distributions and financial position and performance are forward looking statements. Forward looking statements are based on Aspen’s current intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties and other factors which could cause actual results to differ materially. Aspen and its related bodies corporate and their respective directors, officers, employees, agents, and advisers do not give any assurance or guarantee that the occurrence of any forward-looking information, view or intention referred to in this presentation will actually occur as contemplated. All references to dollar amounts are in Australian currency.

==> picture [140 x 61] intentionally omitted <==