BLACKWALL LIMITED — Capital/Financing Update 2011

Oct 17, 2011

SUPPLEMENTARY PROSPECTUS BLACKWALL PROPERTY FUNDS LIMITED ACN 146935131

IMPORTANT NOTES

BlackWal1 Property Funds Limited (Company) issued a supplementary prospectus dated 18 February 2011 (First Supplementary Prospectus), a supplementary prospectus dated 18 May 2011 (Second Supplementary Prospectus) and a replacement prospectus dated 19 November 2010, which replaced the replacement prospectus dated 17 November 2010 and the prospectus dated 9 November 2010 (Prospectus). The Prospectus was lodged with the Australian Securities and Investments Commission (ASIC), relating to an in-specie transfer of BlackWall Shares to shareholders in Pelorus Private Equity Limited (formerly known as Pelorus Property Group Limited) and an offer of up to 6 million BlackWall Shares at an issue price of \$0.50 per BlackWall Share.

This document is a supplementary prospectus (Third Supplementary Prospectus) and is supplemental to and is to be read together with the Prospectus. This Third Supplementary Prospectus is dated 18 August 2011 and was lodged with ASIC on that date. ASIC and ASX take no responsibility for the content of this Third Supplementary Prospectus.

This Third Supplementary Prospectus prevails in the event of any inconsistency with the Prospectus. Terms defined and used in the Third Supplementary Prospectus have, unless otherwise stated, the same meaning as in the Glossary in section 8 of the Prospectus.

REASONS FOR THIRD SUPPLEMENTARY PROSPECTUS

Pursuant to a relief instrument granted to the Company by ASIC on 18 May 2011 the Shares offered under the Prospectus were required to be admitted to quotation on ASX within 3 months of the date of the Second Supplementary Prospectus (Quotation Condition). As the Second Supplementary Prospectus is dated 18 May 2011, the Quotation Condition is required to be satisfied by 18 August 2011.

By declaration under section 741(1)(b) of the Corporations Act dated 11 August 2011 (ASIC Declaration), ASIC has granted the Company an extension of the time periods set out in section 723(3)(b) and 724(1)(b)(ii) of the Corporations Act.

The ASIC Declaration operates to extend the time by which the Company has to satisfy the Quotation Condition, so that the Quotation Condition must be satisfied within 3 months of the date of this Third Supplementary Prospectus.

The effect of the relief provided by the ASIC Declaration is as follows:

• (a) the time within which the BlackWall Shares must be admitted to quotation on the ASX has been extended to 3 months after the date of this Third Supplementary Prospectus; and
• (b) if the BlackWall Shares offered under the Prospectus and Third Supplementary Prospectus are not admitted to quotation on the ASX within 3 months after the date of the Third Supplementary Prospectus the Company will either repay the money received from applicants or give applicants a supplementary or replacement prospectus and one month to withdraw their applications and be repaid their application money.

This Third Supplementary Prospectus dated 18 August 2011 is intended to be read with the Second Supplementary Prospectus dated 18 May 2011, the First Supplementary Prospectus dated 18 February 2011 and the Replacement Prospectus dated 19 November 2010 relating to shares of Blacl<Wall Property Funds Limited.

RIGHT TO WITHDRAW

Pursuant to section 724(2) of the Corporations Act, the Company gives applicants who have lodged applications for BlackWall Shares under the Prospectus before the date of this Third Supplementary Prospectus the right to withdraw their application and have their application money repaid within 1 month of the date of this Third Supplementary Prospectus.

Applicants who choose to withdraw their application for BlackWall Shares under the Prospectus may do so, provided the applicant gives the Company written notice to the address set out in the Corporate Directory at the back of the Prospectus before 18 September 2011.

Applicants who do not wish to withdraw their application need not take any action.

REVISED OFFER

Under the Company's Prospectus, the Company made an offer of up to 6,000,000 Shares at an issue price of \$0.50 per Share to raise a minimum of \$3,000,000.

Upon the closing of that Offer, the Company issued and allotted 5,916,426 Shares at \$0.50 each.

In light of prevailing market conditions, the Company has resolved to re-open the Offer and to vary certain terms and conditions of the Offer, including reducing the offer price. Details of the revised Offer will be contained in a new prospectus which the Company will issue shortly.

The Company will make the revised Offer available to those applicants who have already lodged applications for Shares under the Prospectus, and who do not exercise their right to withdraw as set out in the paragraph headed: 'Right to Withdraw' (above). If those applicants choose to take up the revised Offer, their shareholdings in the Company will be adjusted to reflect the terms of the revised new Offer.

CONSENT

This Third Supplementary Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors in accordance with section 720 of the Corporations Act. Each Director has consented to the lodgement of this Third Supplementary Prospectus with ASIC.

Stuart Brown Director

This Third Supplementary Prospectus dated 18 August 2011 is intended to be read with the Second Supplementary Prospectus dated 18 May 2011, the First Supplementary Prospectus dated 18 Febmary 2011 and the Replacement Prospectus dated 19 November 2010 relating to shares of B1acl,Wall Property Fuuds Limited.