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Australian Securities Exchange - Company Announcements Platform

CENTURIA PROPERTY FUNDS LIMITED CENTURIA METROPOLITAN REIT Proposed Corporate Simplification

Wednesday, 15 February 2017

As outlined on 9 February 2017 in Centuria Metropolitan REIT’s ( CMA ) 1H17 Results Update, Centuria Funds Management Limited ( CPFL ) as Responsible Entity of CMA has been working on a proposal to simplify the corporate structure of CMA ( Simplification Proposal ).

CMA is currently structured as a stapled trust scheme, where securityholders own securities in each of Centuria Metropolitan REIT #1 ( CMR1 ) and Centuria Metropolitan REIT #2 ( CMR2 ).

The Simplification Proposal relates to de-stapling CMR1 and CMR2, and having CMR2 become a wholly-owned subsidiary of CMR1.

Attached is an Explanatory Memorandum and Notice of Meeting relating to the Simplification Proposal.

The extraordinary general meetings will be held at 10:00am on 15 March 2017 at the offices of Centuria Property Funds Limited, Level 39, 100 Miller Street Sydney.

- Ends -

For further information, please contact:

Nicholas Blake

Trust Manager – CMA

Shalome Ruiter

Investor Relations Manager

Centuria Metropolitan REIT Centuria Metropolitan REIT Phone: 02 8923 8923 Phone: 02 8923 8923 Email: [email protected] Email: [email protected]

Nicholas Collishaw

CEO – Listed Property

Carden Calder

Media Enquiries

Centuria Metropolitan REIT BlueChip Communication Phone: 02 8923 8923 Phone: 0404 333 904 Email: [email protected] Email: [email protected]

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About Centuria Metropolitan REIT

Centuria Property Funds Limited (CPFL) a wholly-owned subsidiary of Centuria Capital Group (CNI), is the Responsible Entity for the ASX listed Centuria Metropolitan REIT (CMA). CMA focusses on investing in real estate assets in metropolitan markets across Australia and holds a portfolio of assets valued at $417.5 million diversified across Sydney, Brisbane, Canberra and Adelaide.

Centuria Property Funds No. 2 Limited (CPF2L) is also a wholly-owned subsidiary of Centuria Capital Group and is the Responsible Entity for the ASX listed Centuria Urban REIT (CUA) and Centuria Industrial REIT (CIP).

CPFL and CPF2L, have approximately $2.9 billion of property funds under management in 18 unlisted property funds and 3 listed REITs.

CNI is an ASX listed specialist investment manager with $3.6 billion in total funds under management.

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CENTURIA PROPERTY FUNDS LIMITED ACN 086 553 639 AS RESPONSIBLE ENTITY FOR CENTURIA METROPOLITAN REIT

Notice of an Extraordinary General Meeting and

Explanatory Memorandum for the Simplification Proposal

THE DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOUR OF ALL SIMPLIFICATION RESOLUTIONS AND SUPPORT THE SIMPLIFICATION PROPOSAL

An Extraordinary General Meeting of Securityholders of Centuria Metropolitan REIT No. 1 ARSN 124 364 718 and Centuria Metropolitan REIT No. 2 ARSN 124 364 656 will be held at Level 39, 100 Miller Street, North Sydney NSW 2060, on Wednesday 15 March 2017 at 10.00 am

THIS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to how to act, you should consult your financial or legal adviser as soon as possible.

If you have any questions about the Simplification Proposal, please call the Simplification Proposal Information Line on 1300 651 367 (callers in Australia) or +61 3 9415 4282 (callers outside Australia) between 8.30 am and 5.00 pm (Sydney time) on Business Days.

Legal adviser

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IMPORTANT NOTICES

Purpose of this Explanatory Memorandum

This Explanatory Memorandum is dated 14 February 2017 and is issued by Centuria Property Funds Limited ACN 086 553 639 ( CPFL ) as responsible entity of Centuria Metropolitan REIT No. 1 ARSN 124 364 718 ( CMR1 ) and Centuria Metropolitan REIT No. 2 ARSN 124 364 656 ( CMR2 ).

Each unit in CMR1 is stapled to a unit in CMR2. CMR1 and CMR2 are listed on the Australian Securities Exchange ( ASX ) and the stapled securities are quoted under the ticker code CMA ( CMA ).

This Explanatory Memorandum has been prepared to assist the holders of CMA stapled securities ( CMA Securityholders ) in deciding whether to support a proposal to simplify the structure of CMA ( Simplification Proposal) .

No payment is required from CMA Securityholders in relation to the Simplification Proposal. It will not change the proportionate interest of any CMA Securityholder in the assets of CMA, except for a small number of foreign securityholders whose address in the unit register as at the Record Date is in a jurisdiction other than Australia or New Zealand ( Foreign Securityholders ).

The Simplification Proposal will be voted on at extraordinary general meetings of CMR1 and CMR2 (together the EGM ) which will be held concurrently at 10:00 am on Wednesday, 15 March 2017. This Explanatory Memorandum also includes a Notice of Meeting for the EGM.

ASIC and ASX

A copy of this Explanatory Memorandum has been lodged with ASIC and the ASX. Neither ASIC nor the ASX nor any of their officers takes any responsibility for the content of this Explanatory Memorandum.

Investment advice

The information in this Explanatory Memorandum is not financial product or investment advice nor a recommendation in respect of the CMA Stapled Securities. It is general information only, and does not take into account your individual investment objectives, financial situation or needs. Before deciding how to vote or act, CMA Securityholders should consider the appropriateness of the information in this Explanatory Memorandum having regard to their own objectives, financial situation and needs and seek legal, taxation and financial advice appropriate to their jurisdiction and circumstances.

Forward-looking statements

This Explanatory Memorandum contains certain forward-looking statements which are not based solely on historical facts, but are rather based on CPFL's current expectations about future events and results.

These forward-looking statements are subject to inherent risks, uncertainties and assumptions, and may be affected by a variety of known and unknown risks, variables and other factors, many of which are beyond the control of CPFL and which could cause actual events or results to differ materially from the expectations, events, results, values, performance or achievements expressed or implied in any forward-looking statement. Deviations are both normal and to be expected in such forward looking statements.

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The past performance of CMA is no guarantee of the future performance of CMA, CMR1 or CMR2.

Except to the extent required by law, none of CPFL, the CPFL Directors, any member of the group of Centuria companies ( Centuria Group ) or their respective officers or employees, any person named in this Explanatory Memorandum with their consent or any person involved in the preparation of this Explanatory Memorandum, makes any representation, warranty, assurance or guarantee (express or implied) as to the accuracy or likelihood of fulfilment of any forwardlooking statement, or any events, results, values, performance or achievements expressed or implied in any forward-looking statement. Accordingly, you are cautioned not to place undue reliance on any forward-looking statements. The forward-looking statements in this Explanatory Memorandum reflect views held only as at the date of this Explanatory Memorandum.

No guarantee of capital or investment returns

The CMR1 units to be issued under the Simplification Proposal are subject to investment risk including loss of income or principal invested. No person (including CPFL, the Centuria Group or any of their associates), gives any guarantee or assurance as to the performance of the CMR1 units, any return on the CMR1 units or the repayment of capital invested.

Up to date information

CPFL will issue or procure the issue of a supplementary document to this Explanatory Memorandum if CPFL becomes aware of any of the following between the date of this Explanatory Memorandum and the date the Simplification Proposal is implemented:

a material statement in this Explanatory Memorandum is misleading or deceptive;
a material omission from this Explanatory Memorandum;
a significant change affecting a matter included in this Explanatory Memorandum; or
a new circumstance has arisen which would have been required to be included in this Explanatory Memorandum if it had been known at the date of this Explanatory Memorandum.

However, if the change will not be materially adverse to CMA Securityholders, a supplementary document may not be issued. Updated information that is not materially adverse may change from time to time and will be made available to you on the Centuria website at http://centuria.com.au/. A paper copy of any updated information will be available free on request. You can also call the Simplification Proposal Information Line on 1300 651 367 (callers in Australia) or +61 3 9415 4282 (callers outside Australia) between 8.30 am and 5.00 pm (Sydney time) on Business Days.

Warning for New Zealand investors

The warning statement below is required under the Securities (Mutual Recognition of Securities Offerings - Australia) Regulations 2008 (New Zealand).

The Simplification Proposal and the contents of this Explanatory Memorandum are principally governed by Australian rather than New Zealand law.

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There are differences in how securities are regulated under Australian law. In the main, these are set out in the Corporations Act and Regulations. For example, the disclosure of fees for collective investment schemes is different under the Australian regime.

The rights, remedies and compensation arrangements available to New Zealand investors in Australian securities may differ from the rights, remedies, and compensation arrangements for New Zealand securities.

Both the Australian and New Zealand securities regulators may have enforcement responsibilities in relation to the Simplification Proposal. If you need to make a complaint about this Simplification Proposal, please contact the Financial Markets Authority, Wellington, New Zealand. The Australian and New Zealand regulators will work together to settle your complaint.

The taxation treatment of Australian securities is not the same as for New Zealand securities.

If you are uncertain about whether this investment is appropriate for you, you should seek the advice of an appropriately qualified financial adviser.

The currency for the CMR1 units is Australian dollars and not New Zealand dollars. The value of the CMR1 units in New Zealand dollars will go up or down according to changes in the exchange rate between Australian dollars and New Zealand dollars. These changes may be significant. If you expect the CMR1 units to pay any amounts in a currency that is not Australian dollars you may incur significant fees in having the funds converted to that currency, for example, in having the funds credited to a bank account in New Zealand in New Zealand dollars.

If you wish to trade the CMR1 units on the ASX, you will have to make arrangements for an ASX participant to sell the CMR1 units on your behalf. The way in which the ASX market operates, the regulation of participants in that market, and the information available to you about the securities markets that operate in Australia will be different than for the NZX.

The dispute resolution process described in this Explanatory Memorandum is only available in Australia and is not available in New Zealand.

The invitation to approve the Simplification Proposal is being made to New Zealand resident securityholders in reliance on the Securities Act (Overseas Companies) Exemption Notice 2013 (New Zealand). This Explanatory Memorandum has been prepared in compliance with Australian law and is not an investment statement, prospectus or product disclosure statement under New Zealand law and has not been registered, filed with, or approved by any New Zealand regulatory authority or under or in accordance with the New Zealand Securities Act 1978 , New Zealand Financial Markets Conduct Act 2013 or any other relevant law in New Zealand. It may not contain all the information that an investment statement, prospectus or product disclosure statement under New Zealand law is required to contain. It is a term of the Simplification Proposal that any offer of CMR1 units to the public in New Zealand is made in compliance with the laws of Australia and any code, rules and requirements relating to the offer that apply in Australia.

Defined terms

Unless otherwise indicated, all references to Sections are references to Sections of this Explanatory Memorandum.

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Capitalised terms and certain abbreviations used in this Explanatory Memorandum are defined in the Glossary in Section 13.

Unless the contrary intention appears, the context requires otherwise or words are defined in Section 13, words and phrases in this Explanatory Memorandum have the same meaning and interpretation as in the Corporations Act.

Enquiries

If you are in any doubt as to how to deal with this Explanatory Memorandum, you should consult your professional adviser. If you have any questions about the Simplification Proposal, please call the Simplification Proposal Information Line on 1300 651 367 (callers in Australia) or +61 3 9415 4282 (callers outside Australia) between 8.30 am and 5.00 pm (Sydney time) on Business Days.

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Important dates and what action you should take	Important dates and what action you should take	7
Chairman's letter		9
Overview of the Simplification Proposal		13
1.	CMA structure diagrams	21
2.	Implementation of the Simplification Proposal	22
3.	What are the advantages of the Simplification Proposal?	29
4.	What are the disadvantages of the Simplification Proposal?	31
5.	CMA's intentions	32
6.	Directors' recommendation	35
7.	Financial information	36
8.	Tax considerations	37
9.	CMA and CPFL	41
10.	Regulatory information	42
11.	Additional information	48
12.	CPFL Directors' statement	57
13.	Glossary	58
14.	Notice of Meeting	63
15.	Corporate Directory	68

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Important dates

Important dates

Latest date for return of proxies	Monday, 13 March 2017 at 10:00 am
Date and time to determine CMA Securityholders' eligibility to vote on the Simplification Resolutions at the EGM	Monday, 13 March 2017 at 7:00 pm
Extraordinary General Meeting (EGM)	Wednesday, 15 March 2017 at 10:00 am
Results of EGM lodged	Wednesday, 15 March 2017
Last day for trading in CMA Stapled Securities	Thursday, 16 March 2017
Deferred settlement trading commences in CMA Stapled Securities	Friday, 17 March 2017
Record Date for Simplification	Monday, 20 March 2017
Last day of trading of CMA Stapled Securities on a deferred settlement basis	Wednesday, 22 March 2017
Implementation date for Simplification	Wednesday, 22 March 2017
Completion of dispatch of holding statements	Wednesday, 22 March 2017
Commencement of normal trading of CMR1 Units	Thursday, 23 March 2017

Notes:

All dates in the above timetable are indicative only. Any changes to the above timetable will be announced through ASX and notified on Centuria's website at http://www.centuria.com.au/ listed-property-funds/home/ . All references to time in this Explanatory Memorandum are references to the time in Sydney. CPFL reserves the right to vary the dates and times set out above subject to the Corporations Act and other applicable laws.

What action you should take

CMA Securityholders should read this Explanatory Memorandum and the Notice of Meeting carefully before deciding how to vote on the Simplification Resolutions.

The Extraordinary General Meeting of CMA will be held at Level 39, 100 Miller Street, North Sydney NSW 2060, on Wednesday 15 March 2017 at 10.00 am.

A personalised Proxy Form is enclosed with this Explanatory Memorandum. This is to be used by CMA Securityholders if they wish to appoint a representative (a proxy) to vote in their place at the EGM. All CMA Securityholders are invited and encouraged to attend the EGM or, if they are unable to attend in person, sign and return the Proxy Form to CPFL in accordance with the proxy return instructions. Lodgement of a Proxy Form will not preclude a CMA Securityholder from attending the EGM in person.

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CMA Securityholders can vote by:

Attending the EGM; or
Completing and returning the Proxy Form included with this Explanatory Memorandum:

By mail to:

Computershare Investor Services Pty Limited: GPO Box 242, Melbourne Victoria 3001 (a reply paid envelope is enclosed)

In person to:

Yarra Falls, 452 Johnston Street, Abbotsford Victoria 3067

By facsimile to:

1800 783 447 (within Australia) (+61 3) 9473 2555 (outside Australia)

Online at:

www.investorvote.com.au

To use this facility please follow the instructions on your enclosed Proxy Form.

Online for Intermediary Online Users only at:

www.intermediaryonline.com

so as to be received before 10.00 am (Sydney time) on Monday, 13 March 2017.

If you are in any doubt as to how to deal with this Explanatory Memorandum, you should consult with your professional adviser. If you have any questions about the Simplification Proposal, please call the Simplification Proposal Information Line on 1300 651 367 (callers in Australia) or +61 3 9415 4282 (callers outside Australia) between 8.30 am and 5.00 pm (Sydney time) on Business Days.

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Dear Centuria Metropolitan REIT Securityholder,

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Simplification Proposal

On behalf of the Board of CPFL, I am pleased to invite you to consider a proposal to simplify the corporate structure of CMA from a listed stapled vehicle to a single listed fund.

Outline of the Simplification Proposal

Under the Simplification Proposal the units in CMR1 which are currently stapled to the units in CMR2 will be Unstapled. CPFL as responsible entity for CMR1 will acquire all of the units in CMR2 from CMR2 unitholders in exchange for the issue of units by CMR1 to those unitholders on a pro rata basis. The consideration for the issue of CMR1 units will be 0.80 CMR1 unit for each CMR2 unit acquired.

To prevent a dilution in value of CMR1 units, CMR1 units will be consolidated on a 1.80:1 basis so that the number of CMR1 units on issue after the consolidation will be the same as the number of CMR1 units that were on issue prior to the Simplification.

Following the acquisition of the CMR2 units, CMR2 will be delisted from the ASX and ultimately deregistered as a managed investment scheme.

For technical reasons, in order to avoid a merging of trusts between CMR1 and CMR2, CMR2 will issue one non-voting, non-participating, unit to Centuria Capital No. 2 Fund ( CCF2 ) simultaneously with the Simplification. Following implementation of the Simplification Proposal, CMR1 will hold all of the units in CMR2 other than the non-voting, non-participating, unit issued to CCF2.

A small number of Foreign Securityholders will not receive new units in CMR1, but will instead have their new CMR1 units sold by a sale nominee and the proceeds of that sale remitted to them in cash.

Reasons for proposing the Simplification Proposal

The key benefits of the Simplification Proposal are described in Section 3 of this Explanatory Memorandum and include that the Simplification Proposal:

will simplify financial reporting requirements leading to annual cost savings. Currently each of CMR1 and CMR2 are required to prepare audited financial statements. Under the Simplification Proposal, as CMR2 will be wholly-owned by CMR1, a single set of audited financial statements will be required;
will create a simplified corporate structure which is more transparent and easier to explain to current and potential investors. The complexity of the stapled structure currently gives rise to investor confusion, especially in the context of tax components of distributions from each of CMR1 and CMR2. The Simplification Proposal will provide a simpler corporate structure without the need for the splitting of distributions between each of CMR1 and CMR2. A simplified corporate structure will also result in efficiencies in managing the structure and responding to investor enquiries;
will generate ongoing cost savings through a reduction in head office costs, which includes accounting, legal, secretarial, tax and other recurring fees;

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will result in simpler distributions as only a single distribution will be made to investors going forward. This minimises complexity and cost, including from a tax perspective ;
will reduce costs associated with any future acquisitions. CMA has stated its intention to pursue growth through both direct property acquisitions and corporate transactions, as demonstrated by the recent proposal to acquire GPT Metro Office Fund and its acquisition of a strategic unitholding in Centuria Urban REIT ( CUA ) (previously called 360 Capital Office Fund). Due to the stapled structure of CMA, CPFL may incur additional costs in regards to structuring and implementing any potential acquisitions. Under the Simplification Proposal, as CMR2 will be wholly-owned by CMR1, there is expected to be a reduction in professional services costs associated with pursuing and implementing future acquisitions; and
may facilitate any future acquisitions. A simplified structure may facilitate the future acquisition as:
a more streamlined structure may be more easily understood by, and be more attractive to, unitholders in the fund being acquired; and
the ATO may be more likely to grant rulings in respect of roll-over relief to such unitholders. Any rulings in respect of roll-over relief which are granted by the ATO will be for the benefit of unitholders in the funds acquired by CMA and will not be for the benefit of CMA Securityholders.

The half-yearly results of CMA and CUA have been announced. CPFL currently intends to re-engage in merger discussions with CUA and expects that it will propose a merger of CMA and CUA based on the financial positions of CMA and CUA as disclosed in their half-yearly results. However, there can be no guarantee that a merger will be proposed or, if proposed, that it will be successful. Should any merger proposal eventuate, CPFL will comply with all legal requirements in relation to the merger proposal, including its disclosure requirements. Please refer to Section 5 for further details.

The Simplification Proposal does not create any additional risk for CMA Securityholders. It merely involves a transition from a listed stapled structure to a single listed fund. CMA will continue to hold the same assets and liabilities before and after the Simplification. The general business risks facing CMA will remain the same irrespective of whether or not the Simplification Proposal is implemented.

CPFL management had been considering the Simplification Proposal for some time but the costs of implementation had made it unattractive to proceed earlier. Recently CPFL received advice that will allow the Simplification Proposal to be implemented at a reduced cost to CMA. In addition, given the potential for near term fund acquisitions by CMA, the CPFL board considers it beneficial for CMA to take steps to improve the attractiveness of any CMA offer to unitholders in such funds by presenting a simplified CMA structure.

Disadvantages of the Simplification Proposal

The primary disadvantage is the once-off costs in implementing the Simplification Proposal. These are estimated to be $450,000, of which approximately $100,000 has already been incurred in putting the Simplification Proposal to CMA Securityholders. These costs will be paid for out of CMA's cash reserves.

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CMA Securityholders may potentially have to pay capital gains tax ( CGT ) in respect of the disposal of their unit holdings in CMR2 (refer to Sections 8.4.1, 8.4.2 and 8.4.3 for further details). CPFL is applying for a Class Ruling from the ATO to confirm that the CGT scrip for scrip rollover is available to CMA Securityholders to defer any potential capital gain. The Simplification Proposal is conditional on CPFL receiving this Class Ruling. CMA Securityholders must elect to rely on the CGT scrip for scrip rollover in their tax returns (assuming that CPFL receives a Class Ruling from the ATO confirming that such relief is available).

Issue of CMR1 units to existing CMA Securityholders in exchange for the transfer of each CMR2 unit held by that CMA Securityholder

You will be issued 0.80 CMR1 units as consideration for the transfer of each CMR2 unit you hold to CPFL as responsible entity for CMR1. Following the implementation of the Simplification Proposal you will only hold units in CMR1, and CMR1 will hold all of the units in CMR2 which you previously held.

Since the issue of CMR1 units will be made on a pro rata basis to all CMR2 unitholders, there will be no increase in the proportionate CMR1 holding of a CMA Securityholder from the proportionate CMA holding of that CMA Securityholder prior to the Simplification (except with respect to a small number of Foreign Securityholders).

You do not need to pay any money for the CMR1 units that you receive and, if the Simplification Proposal is approved, you do not need to take any action in order to receive your CMR1 units. As part of the Simplification Proposal, the CMR1 units will be consolidated so that you (with the exception of certain Foreign Securityholders) will hold the same number of CMR1 units before and after the Simplification Proposal.

No change to underlying business

Since CMR1 will hold all of the units in CMR2 (other than the non-voting, non-participating unit issued to CCF2 ( Non-voting Unit )) following implementation of the Simplification Proposal, the existing CMA business and operations and your interest in them will not change as a result of the Simplification Proposal (other than in respect of the Non-voting Unit).

Extraordinary general meeting to consider approving the Simplification Proposal

The Simplification Proposal will be put before CMA Securityholders for approval at an extraordinary general meeting ( EGM ) to be held on Wednesday, 15 March 2017 at 10.00 am (Sydney time).

This Explanatory Memorandum contains important information and should be read prior to voting on the Simplification Proposal at the EGM. The EGM will be held at Level 39, 100 Miller Street, North Sydney NSW 2060, on Wednesday, 15 March 2017 at 10.00 am.

Recommendation

Your directors unanimously recommend that you support the Simplification Proposal by voting in favour of all of the Simplification Resolutions .

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Alternative to Simplification Proposal

The alternative to the Simplification Proposal is that CMA continues to hold its property investments through its stapled structure (that is, no change is made to the existing structure).

Please contact the Simplification Proposal Information Line on 1300 651 367 (callers in Australia) or +61 3 9415 4282 (callers outside Australia) between 8.30 am and 5.00 pm (Sydney time) during business hours if you have any questions in relation to the Simplification Proposal.

Yours sincerely,

Peter Done Chairman - Centuria Property Funds Limited as responsible entity of the Centuria Metropolitan REIT

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Overview of the Simplification Proposal

An overview of the Simplification Proposal is set out below.

Topic		Summary
Who is the issuer of this	CPFL	in its capacity as responsible entity of CMR1 (CMR1 RE)
Explanatory	and CMR2 (CMR2 RE).
Memorandum?
What is the	Under the Simplification Proposal, the CMA corporate structure
Simplification	will be simplified from two ASX-listed funds, whose units are
Proposal?	stapled together on a one-for-one basis, to a single ASX-listed
	fund.
	TheSimplification Proposalhas four main elements:
	•	theUnstapling- each unit in CMR1 will be Unstapled
		from the unit to which it is currently stapled in CMR2.
		Following the cessation of Stapling, the units in CMR1 will
		be able to be dealt with separately from the units in
		CMR2;
	•	theCMR2 unit acquisition- all of the units on issue in
		CMR2 which are held by CMA Securityholders will be
		transferred to CMR1 RE in exchange for the issue of
		additional units in CMR1 to the CMA Securityholders;
	•	theCMR1 Unit Consolidation- following the CMR2 unit
		acquisition, each CMA Securityholder (other than certain
		Foreign Securityholders) will hold 1.80 CMR1 units for
		each CMA Stapled Security which they previously held.
		The 1.80 CMR1 units will be consolidated back to 1
		CMR1 unit. This means there will be the same number of
		CMR1 units on issue post Simplification as CMA Stapled
		Securities on issue prior to Simplification.
	•	thedelisting and deregistration- following completion
		of the CMR2 unit acquisition, CMR2 will be delisted from
		the ASX as there is no need for its continued listing as
		investors will have exposure to the property investments
		held by CMA through their unitholdings in CMR1. CMR2
		will also be deregistered as a managed investment
		scheme.
	For a more detailed explanation of the steps required to carry out
	the Simplification Proposal, please refer to Section 2.1.

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Topic	Summary
What are CMA's future	On 9 January 2017 CPFL, as responsible entity for CMA,
plans?	announced it had completed the acquisition of a strategic interest
	of 6,423,084 units (representing 8.76% of the units on issue) in
	Centuria Urban REIT (CUA) (previously called 360 Capital Office
	Fund and previously with the ASX code TOF).
	CUA’s property portfolio is complementary to CMA’s property
	portfolio. Accordingly, the acquisition of the 8.76% interest in
	CUA represents an investment by CMA in, and exposure to,
	assets that are similar to the underlying assets of CMA.
	On 9 January 2017, Centuria also announced it had completed
	the acquisition of the responsible entity of CUA, Centuria Property
	Funds No. 2 Limited (CPF2L) (previously called 360 Capital
	Investment Management Limited) and that it had also acquired a
	19.99% interest in CUA.
	CPFL currently intends to re-engage in merger discussions with
	CUA and expects that it will propose a merger of CMA and CUA
	based on the financial positions of CMA and CUA as disclosed in
	their half-yearly accounts. However, there can be no guarantee
	that a merger will be proposed or, if proposed, that it will be
	successful. Should any merger proposal eventuate, CPFL will
	comply with all legal requirements in relation to the merger
	proposal, including its disclosure requirements.
	For further details see Section 5.
Foreign Securityholders	CPFL will procure that the new CMR1 units to which a small
	number of Foreign Securityholders (excluding New Zealand CMA
	Securityholders) would otherwise become entitled under the
	Simplification Proposal are issued to a Sale Nominee appointed
	by CPFL.
	The Sale Nominee will sell those new CMR1 units and pay to the
	Foreign Securityholder the applicable pro-rata proportion of the
	aggregate proceeds received.
	Foreign Securityholders will find that they hold fewer quoted
	securities after the implementation of the Simplification Proposal.
	Please refer to Section 2.2 for further details.

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Topic		Summary
What are the	The key benefits of the Simplification Proposal are described in
advantages of the	Section 3 and include that the Simplification Proposal:
Simplification Proposal?	•	will simplify financial reporting requirementsleading to annual cost savings. Currently each of CMR1 and
		CMR2 are required to prepare audited financial
		statements. Under the Simplification Proposal, as CMR2
		will be wholly-owned by CMR1, a single set of audited
		financial statements will be required;
	•	will create a simplified corporate structurewhich is
		more transparent and easier to explain to current and
		potential investors. The complexity of the stapled
		structure currently gives rise to investor confusion,
		especially in the context of tax components of
		distributions from each of CMR1 and CMR2. The
		Simplification Proposal will result in a simpler corporate
		structure without the need for the splitting of distributions
		between each of CMR1 and CMR2. A simplified corporate
		structure will also result in efficiencies in managing the
		structure and responding to investor enquiries;
	•	will generate ongoing cost savingsthrough a reduction
		in head office costs, which includes accounting, legal,
		secretarial, tax and other recurring fees. The current CMA
		stapled structure is unnecessarily complex and costly to
		maintain. The ongoing costs payable for accounting,
		taxation, secretarial, legal and general compliance work
		are higher than they would otherwise be if a simpler
		structure were adopted. Estimated annual cost savings if
		the Simplification Proposal is implemented are expected
		to be $41,200;
	•	will result in simpler distributionsas only a single
		distribution will be made to investors going forward. This
		minimises complexity and cost, including from a tax
		perspective;
	•	will reduce costs associated with any future
		acquisitions. CMA has stated its intention to pursue
		growth through both direct property acquisitions and
		corporate transactions, as demonstrated by the recent
		proposal to acquire GPT Metro Office Fund. Due to the
		stapled structure of CMA, CPFL may incur additional
		costs in regards to structuring and implementing any
		potential acquisitions. Under the Simplification Proposal,
		as CMR2 will be wholly-owned by CMR1, there is
		expected to be a reduction in professional services costs
		associated with pursuing and implementing future
		acquisitions; and

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Topic	Summary
	• may facilitate any future acquisitions.A simplified
	structure may facilitate the future acquisition of funds as:
	- a more streamlined structure may be more easily
	understood by, and be more attractive to,
	unitholders in the fund being acquired; and
	- the ATO may be more likely to grant rulings in
	respect of roll-over relief to such unitholders. Any
	rulings in respect of roll-over relief which are
	granted by the ATO will be for the benefit of
	unitholders in the funds acquired by CMA and will
	not be for the benefit of CMA Securityholders.
	Conversely, the Simplification Proposal does not create any
	additional risks for CMA Securityholders. The general business
	risks of an investment in CMA securities will remain the same
	before and after the Simplification Proposal is implemented.
What are the	One-off costs
disadvantages of the
Simplification Proposal?	There are one-off costs in implementing the Simplification Proposal. These are estimated to be $450,000 comprising:
	• estimated stamp duty of approximately $310,000; and
	• estimated transaction costs of $140,000 consisting of fees
	for legal, tax and stamp duty advice, printing and other
	related costs.
	These costs will be paid for out of CMA's cash reserves.
	The proposed one-off costs are expected to be recouped from the
	ongoing cost savings (both internal and external) realised through
	implementation of the Simplification Proposal over a period of 10
	years.
	Taxation consequences
	If the CGT scrip for scrip rollover does not apply, CGT Event A1
	will happen in respect of CMA Securityholder’s units in CMR2
	(refer to Sections 8.4.1, 8.4.2 and 8.4.3 for further details). CPFL
	is applying for a Class Ruling from the ATO to confirm that the
	CGT scrip for scrip rollover is available to CMA Securityholders to
	defer any potential capital gain. The Simplification Proposal is
	conditional on CPFL receiving this Class Ruling. CMA
	Securityholders must elect to rely on the CGT scrip for scrip
	rollover in their tax returns (assuming that CPFL receives a Class
	Ruling from the ATO confirming that relief is available).

Page 16

Topic	Summary
Are there any	The alternative to the Simplification Proposal is to make no
alternatives to the	change to the existing CMA structure.
Simplification
Proposal?	If the Simplification Proposal does not proceed:
	• CMA will continue to be structured and to operate as it
	currently does;
	• the CMA Stapled Securities will continue to trade on the
	ASX;
	• CMA will have incurred costs in connection with the
	Simplification Proposal, which are expect to be
	approximately $100,000 (reflecting legal, tax, valuation
	and financial advisory fees and expenses) and which will
	be borne by CMA; and
	• the rights of CMA Securityholders will remain unchanged.
	The Centuria Directors believe that this alternative is not
	attractive:
	• as there are numerous significant commercial benefits in
	implementing the Simplification Proposal (see Section 3);
	and
	• conversely the disadvantages are few and considered
	small (see Section 11.2).
How will CMA be	The Simplification Proposal will not change the existing CMA
structured if the	business of investing in metropolitan property which meets
Simplification Proposal	CPFL's rigorous investment criteria.
proceeds?
	Following Simplification, you will hold your investment in CMA
	through a single listed fund as opposed to a listed stapled
	structure.
	Structure diagrams for CMA before and after the Simplification
	Proposal are set out in Section 1.

Page 17

Topic	Summary
How will I receive CMR1	Under the Simplification Proposal each CMA Securityholder
Units?	(other than certain Foreign Securityholders) will receive 0.80
	CMR1 units as consideration for the transfer of each CMR2 unit
	that they hold to CMR1 RE. CMA Securityholders do not need to
	make any payment for the CMR1 units that will be issued to them.
	The Simplification Proposal, once approved by CMA
	Securityholders, will not require any individual CMA
	Securityholders to take any action in order for them to receive the
	CMR1 units as consideration for the transfer of their CMR2 units
	to CMR1 RE.
	Holding statements for the CMR1 units will be issued to CMR1
	unitholders following implementation of the Simplification
	Proposal.
Will CPFL continue to	If Simplification proceeds, CPFL will continue to be the
be responsible entity for	responsible entity for CMR1.
CMR1 and CMR2 after
Simplification is	CPFL will also continue to be the responsible entity for CMR2 at
implemented?	least until CMR2 is deregistered as a managed investment
	scheme, after which CPFL will become the trustee of CMR2.
Is there an independent	The CPFL directors have decided not to obtain an independent
expert report?	expert report opining on whether the consideration of 0.80 CMR1
	unit for each CMR2 unit is 'fair and reasonable' because the
	Simplification Proposal will not:
	• change the pro rata interests of CMA Securityholders
	(other than certain Foreign Securityholders) in the
	underlying assets of CMA;
	• involve the introduction of any new securityholders; or
	• result in any diminution or loss of the business or any
	assets of CMA.
What approvals are	The implementation of the Simplification Proposal is dependent
required?	upon approval at the Extraordinary General Meeting to be held at
	10:00 am (Sydney time) on Wednesday, 15 March 2017 (EGM)
	of:
	(a) an ordinary resolution of CMR2 unitholders to
	approve the acquisition by CMR1 of 100% of the
	CMR2 units on issue;

Page 18

Topic	Summary
	(b) a special resolution of CMR1 unitholders to
	approve amendments to the constitution of CMR1
	permitting CPFL to issue CMR1 units in exchange
	for the CMR2 units; and
	(c) a special resolution of CMR2 unitholders to
	approve amendments to the constitution of CMR2
	to give effect to the transfer of CMR2 units in
	accordance with the Simplification Proposal.
	The CPFL Directors unanimously recommend that CMA
	Securityholders vote in favour of all of the Simplification
	Resolutions and support the Simplification Proposal.
	See the Notice of Meeting for the text of the Simplification
	Resolutions being proposed at the EGM.
	The Simplification Proposal is also subject to CPFL receiving a
	Class Ruling from the ATO confirming certain taxation
	implications for CMA Securityholders (see below "What are the
	tax implications of the Simplification Proposal?").
How do I vote?	CMA Securityholders can vote by:
	• Attending the EGM; or
	• Completing and returning the Proxy Form included with
	this Explanatory Memorandum:

By mail to: Computershare Investor Services Pty Limited: GPO Box 242 Melbourne Victoria 3001 (a reply paid envelope is enclosed) In person to: Yarra Falls, 452 Johnston Street, Abbotsford Victoria 3067 By facsimile to:

1800 783 447 (within Australia) (+61 3) 9473 2555 (outside Australia) Online at:

www.investorvote.com.au

To use this facility please follow the instructions on your enclosed Proxy Form.

Page 19

Topic	Summary
	Online for Intermediary Online Users only at:
	www.intermediaryonline.com
	so as to be received before 10.00 am (Sydney time) on Monday,
	13 March 2017.
What are the tax	Ernst & Young has provided a general summary of the Australian
implications of the	tax implications for CMA Securityholders regarding the
Simplification	Simplification Proposal in Section 8.
Proposal?
	CPFL is also seeking a Class Ruling from the ATO confirming
	certain taxation implications for CMA Securityholders, including
	confirmation that CGT roll-over relief is available in respect of the
	transfer of units in CMR2 as consideration for the issue of
	additional units in CMR1.
Is there a cooling-off	There is no cooling-off period for CMA Securityholders.
period?
	If the Simplification Proposal proceeds, all CMA Securityholders
	will receive CMR1 units regardless of whether they voted on the
	Simplification Proposal and if they did vote, regardless of whether
	they voted for or against the Simplification Proposal.
Will CMA's financing	Under CMA's financing arrangements, CMA must obtain the
arrangements be	consent of its financiers in order to implement the Simplification
affected by the	Proposal. CMA has obtained all relevant consents on terms which
Simplification	CMA considers can be fulfilled. There are not expected to be any
Proposal?	material changes to the financing arrangements as a result of the
	Simplification.

Page 20

1. CMA structure diagrams

A diagram of the current structure of CMA is set out in summary form below:

CURRENT STRUCTURE

==> picture [467 x 222] intentionally omitted <==

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

CMA Securityholders
Stapled (one CMR1 Unit to one CMR2 Unit)
CMR1 CMR2
49.99% 49.99%
Responsible CMPT Responsible
Entity Entity
100%
Centuria
Centuria
Property Funds
Property Funds
Limited Property
Limited
Investments
----- End of picture text -----

Note that the net asset values of CMR1 and CMR2 are not the same.

** This is the same entity, i.e. Centuria Property Funds Limited is the responsible entity for both CMR1 and CMR2.

The proposed structure for CMA after the Stapling Proposal has been implemented is set out in summary form below:

PROPOSED SIMPLIFIED STRUCTURE

==> picture [437 x 262] intentionally omitted <==

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

CMR1 Unitholders
Responsible Centuria
Entity Property Funds
CMR1
Limited
49.99% 100%
49.99%
CMR2
CMPT
100%
1 non-voting, non-participating unit in
CMR2 will be held by CCF2.
Property
Investments
Page 21
----- End of picture text -----*

2. Implementation of the Simplification Proposal

2.1 Elements of the Simplification Proposal

There are four key steps required to implement the Simplification Proposal:

(a) Step 1 - Unstapling of each ordinary unit in CMR1 from each ordinary unit in CMR2

Each ordinary unit in CMR1 is currently stapled to an ordinary unit in CMR2 thereby forming a CMA Stapled Security. Each unit in CMR1 cannot be dealt with separately from the corresponding unit in CMR2. Once each unit in CMR1 is Unstapled from each unit in CMR2, the units will be able to be dealt with separately to facilitate the transfer of CMR2 units to CMR1 RE and the issue of the additional CMR1 units (as described in Section 2.1(b) below).

Pursuant to clause 34.9(c) of each constitution of CMR1 and CMR2, CPFL may declare that the Stapling of CMR1 and CMR2 units cease to apply immediately or upon a stated date. The Unstapling of the CMA Stapled Securities will be implemented by CPFL in accordance with the relevant provisions of the constitutions of CMR1 and CMR2. If the Simplification Resolutions are passed CPFL intends to declare that the Stapling of CMR1 and CMR2 units will cease on the Implementation Date.

(b) Step 2 - CMR1 RE acquires the CMR2 units as consideration for the issue of additional CMR1 units

After the Unstapling of CMA Stapled Securities noted in Section 2.1(a), CMR1 RE will acquire all of the units in CMR2 which are quoted on ASX from CMA Securityholders as at the Record Date (currently expected to be Monday, 20 March 2017) in exchange for the issue of CMR1 units to those CMA Securityholders (or the Sale Nominee if required). Specifically, each CMA Securityholder (other than certain Foreign Securityholders) will receive 0.80 CMR1 units for each CMR2 unit held.

The number of CMR1 units to be issued for the acquisition of units in CMR2 is calculated based on the net asset value of each of CMR1 and CMR2 as at 31 December 2016. The ratio reflects the fact CMR1 units have a greater net asset value backing than CMR2 units. However, the number of CMR1 units to be issued pursuant to this step will not cause CMA Securityholders to have a different economic interest in CMA once the Simplification Proposal is implemented as their proportionate holding in CMR1 will be the same as their proportionate holding in CMA prior to the Simplification (except with respect to certain Foreign Securityholders).

The acquisition of the CMR2 units will occur pursuant to the Trust Scheme. The Trust Scheme is an arrangement under which all of the CMR2 units are transferred to CMR1 RE, and will be facilitated by additional provisions being introduced into the CMR2 constitution which will have the effect of each CMR2 unitholder appointing CMR2 RE as its attorney and agent solely for the purpose of effecting the transfer of CMR2 units to CMR1 RE. As part of this step, CMR2

Page 22

RE in its capacity as attorney and agent of CMR2 unitholders will execute a master unit transfer form to transfer all of the units in CMR2 to CMR1 RE, and enter CMR1 RE in the register as the registered holder of all of the CMR2 units.

For technical reasons, in order to prevent a "Trust Merger" between CMR1 and CMR2, a non-participating, non-voting unit in CMR2 ( Non-Voting Unit ) will be issued to CCF2 before these transfers occur and which will not form part of the transfers to CMR1. A Trust Merger may result as the sole legal owner of the assets of CMR2 (being CPFL as responsible entity of CMR1) would also (without the issue of the Non-Voting Unit) be the sole beneficial owner. If a Trust Merger occurred, this would mean that CMR2 would cease to exist as a trust and CPFL would become an absolute owner of the assets held by CMR2.

The Non-Voting Unit will have the following rights:

it will be non-voting - the holder will not be entitled to vote the unit on any resolutions in respect of CMR2; and
it will be non-participating - the holder will not be entitled to any distribution rights, income or capital, other than the payment of $1 on the winding up of CMR2.

CMR2 RE will have the power to redeem the Non-Voting Unit at any time for a price of $1. Accordingly the rights of the ordinary CMA Securityholders will not be impacted by the issue of the Non-Voting Unit.

Given the lack of voting rights, non-participation in distribution of income and capital (other than the right to receive $1 on winding up) and the redemption right of CPFL in relation to the Non-Voting Unit, the Non-Voting Unit is of nominal value only. It will be issued at an issue of price of $10, which is in excess of its value (the $1 at which it can be redeemed at any time).

CPFL will not request or obtain the approval of CMA Securityholders in respect of the issue of the Non-Voting Unit to a related party of CPFL. This is because CPFL believes that the Non-Voting Unit does not confer any financial benefit on CCF2 (the related party) or, if it does, the terms on which the Non-Voting Unit is issued are less favourable to it than those that would be reached if the parties were dealing at arm's length.

Given that the issue of the Non-Voting Unit is being undertaken to prevent a Trust Merger and the limited rights of the holder of the Non-Voting Unit, CPFL believes the issue of the Non-Voting Unit is clearly in the best interests of CMA Securityholders.

The proportionate interests of ordinary CMA Securityholders in the assets of CMA will be unaffected given the capital contribution of the holder of the NonVoting Unit ($10) compared to the entitlement to redemption proceeds of $1. In any event, the issue of a single Non-Voting Unit compared to the total number of issued units being 119,407,764 ordinary units is clearly insignificant.

Page 23

CMA Securityholders will not pay nor receive any cash consideration in connection with this step. The implementation of this step will result in CMR1 holding all of the units in CMR2 other than the Non-Voting Unit issued to CCF2. CMA Securityholders will still beneficially have an interest in CMR2 and its assets through ownership of CMR1 units.

The Simplification Proposal, once approved by CMA Securityholders, will not require any individual CMA Securityholders to take any action in order for them to receive the CMR1 units as consideration for the transfer of their CMR2 units to CMR1 RE.

The above steps will only take place if the Simplification Resolutions are approved by CMA Securityholders.

(c) Step 3 - CMR1 Unit Consolidation

Following the CMR2 unit acquisition, each CMA Securityholder (other than certain Foreign Securityholders) will have 1.80 CMR1 units for each CMA Stapled Security which they previously held. In order to prevent a dilution in the value of CMR1 units, the 1.80 CMR1 units will be consolidated back to 1 CMR1 unit on a 1.80:1 basis. This means there will be the same number of CMR1 units on issue post Simplification as CMA Stapled Securities on issue prior to Simplification.

The CMR1 Unit Consolidation will ensure that, all other things being equal, the unit price for each CMR1 unit post Simplification will be equal to the security price for each CMA Stapled Security prior to Simplification.

(d) Step 4 - delisting and deregistration

Following completion of the CMR2 unit acquisition, CMR2 will be delisted from the ASX. Following this, CMR2 will be deregistered as a managed investment scheme with ASIC. At that point the Directors will consider whether there is any commercial use for CMR2 or whether it would be preferable to terminate the trust in accordance with its constitution.

2.2 Foreign Securityholders

Unless CPFL is satisfied that it is lawful (under the laws of the relevant foreign jurisdiction) and not unduly onerous to issue a Foreign Securityholder with new CMR1 units, CPFL will procure that the new CMR1 units to which that Foreign Securityholder would otherwise become entitled under the Simplification Proposal are issued to a Sale Nominee appointed by CPFL.

The Sale Nominee will sell those new CMR1 units and pay to the Foreign Securityholder the applicable pro-rata proportion of the aggregate proceeds received.

Foreign Securityholders may find that they hold fewer quoted securities after the implementation of the Simplification Proposal. In particular, the Simplification Proposal involves:

Page 24

Foreign Securityholders (along with all other CMA Securityholders) disposing of their CMR2 units but retaining their CMR1 units ( Retained Units );
an issue of new CMR1 units ( New Units ) to all CMA Securityholders other than certain Foreign Securityholders (as the New Units due to those Foreign Securityholders will be issued to the Sale Nominee); and
the immediate consolidation of all CMR1 units (i.e. Retained Units as well as New Units).

A consequence of the above steps is that certain Foreign Securityholders will have fewer quoted securities after the Simplification Proposal compared to prior to the Simplification Proposal (due to the consolidation of their Retained Units). This may result in some Foreign Securityholders being left with unmarketable parcels.

This potential reduction in the number of quoted securities held should be kept in mind by CMA Securityholders with an address outside Australia or New Zealand as it may affect trading by such CMA Securityholders between the date of the meeting and the date that the Simplification Proposal is implemented.

2.3 Substantial holders and issued capital

Currently there are 119,407,764 CMA Stapled Securities on issue held by CMA Securityholders.

Following the Simplification, there will be 119,407,764 units in CMR1 on issue held by CMA Securityholders. In other words, after the Simplification Proposal has been completed the number of securities on issue in CMA will remain unchanged.

Simplification will not change the number of CMA Stapled Securities nor the proportionate holding of any CMA Securityholder, (other than certain Foreign Securityholders). CMA Securityholders (other than certain Foreign Securityholders) will have the same voting power in CMA immediately following the Simplification as they had in CMA prior to Simplification. There will be no fractional entitlements because the Simplification will occur on a 1:1 basis.

Information regarding the substantial holders of CMA is available from the substantial holder notices provided by CMA and available on the ASX website. In addition, information regarding the top 20 holders of CMA Stapled Securities as at 31 July 2016 is set out in CMA's 2016 Annual Report.

2.4 Options and other securities issued by CMA

As has been disclosed to the market, no director holds a right or option over interests in CMA. No options over any issued or unissued CMA Stapled Securities have been issued to any Director of CPFL and this will not change following completion of the Simplification.

Page 25

The total number of performance rights on issue to directors and executives of Centuria Capital Group as at the date of this Explanatory Memorandum is 5,103,963 and this will not change following completion of the Simplification.

There are no contracts to which any Director is a party to under which a Director is entitled to a benefit and/or confers a right to call for or be delivered interests in CMA.

2.5 CMA Securityholder approval

For the Simplification Proposal to proceed, CMA Securityholders must approve at the EGM:

by special resolution, the amendments to the CMR1 constitution and CMR2 constitution to facilitate, among other things, the transfer of units in CMR2 and the issue of units in CMR1; and
by ordinary resolution, the acquisition by CMR1 of 100% of the units in CMR2.

The Simplification Proposal will only proceed if all of the Simplification Resolutions are approved by the requisite majorities of CMA Securityholders. The Simplification Resolutions are set out in the Notice of Meeting in Section 14. The Simplification Resolutions will be voted on at the EGM to be held on Wednesday, 15 March 2017 at 10:00 am.

CPFL will announce to the ASX the outcome of the vote on the Simplification Resolutions, in accordance with its continuous disclosure obligations.

If CMA Securityholders pass the Simplification Resolutions, the CPFL Board may resolve not to proceed should market conditions or other factors impacting on the Simplification Proposal cause the directors to believe that proceeding with the Simplification Proposal would not be in the best interests of the CMA Securityholders.

2.6 Simplification Resolutions

Set out below is a summary of the Simplification Resolutions that will be considered by CMA Securityholders at the EGM. The full form of the Simplification Resolutions is set out in the Notice of Meeting in Section 14.

For the Simplification to be implemented, each of the Simplification Resolutions described below must be passed by the requisite majorities of CMA Securityholders. Each Simplification Resolution is inter-conditional with each other Simplification Resolution, and if any one of the Simplification Resolutions is not passed by the requisite majorities of CMA Securityholders, Simplification will not be implemented.

CMA Securityholders should note that if the Simplification Resolutions are approved, Simplification (when implemented) will be binding on all CMA Securityholders, irrespective of whether they voted in favour of the Simplification Resolutions.

Page 26

(a) Constitutional Amendment Resolutions for each of CMR1 and CMR2

The Constitutional Amendment Resolutions propose a number of amendments to the constitutions of CMR1 and CMR2. For details of the amendments see Section 10.4. In summary under the amendments:

Amendments to CMR1 constitution

It is proposed that the CMR1 constitution be amended to:

permit CMR1 RE to issue 0.80 CMR1 units in exchange for the transfer of each CMR2 unit to CMR1 RE; and
make minor "tidy up" changes.
Amendments to CMR2 constitution

It is proposed that the CMR2 constitution be amended to:

give effect to the Trust Scheme by appointing CMR2 RE as the attorney of the holders of CMA Stapled Securities to sign a transfer of their CMR2 units to CMR1 RE;
include provisions relating to the issue and redemption of the Non-Voting Unit; and
make minor "tidy up" changes.

Each Constitutional Amendment Resolution must be approved by special resolution passed by at least 75% of the votes cast by CMA Securityholders present in person or by proxy and entitled to vote on the resolution.

The proposed amendments to the CMR1 and CMR2 constitutions are set out in the Supplemental Deed Polls and Section 10.4 contains a summary of the changes made to the CMR2 constitution to facilitate the Trust Scheme. Following approval of the Simplification Resolutions, CPFL as responsible entity will be authorised to execute the Supplemental Deed Polls and lodge a copy with ASIC.

Full copies of the proposed amended constitutions of each of CMR1 and CMR2 are available free upon request by contacting CPFL.

(b) Acquisition Resolution for CMR2

Under the Acquisition Resolution, CMR2 unitholders will be asked to approve the acquisition by CMR1 RE of all the CMR2 ordinary units pursuant to the Trust Scheme under item 7 of section 611 of the Corporations Act.

The Acquisition Resolution must be approved as an ordinary resolution passed by more than 50% of the total votes cast by CMR2 unitholders present in person or by proxy and entitled to vote on the resolution.

Page 27

2.7 Following Simplification

Following implementation of the Simplification Proposal:

CPFL will continue to be the responsible entity for CMR1. CPFL will also continue to be the responsible entity of CMR2 until CMR2 is deregistered as a managed investment scheme with ASIC, after which CPFL will be the trustee of CMR2; and
CMR2 units will cease to be quoted on the ASX.

Page 28

What are the advantages of the Simplification Proposal?

The key benefits of the Simplification Proposal are discussed below.

3.1 Simplified financial reporting requirements

Currently each of CMR1 and CMR2 are required to prepare audited financial statements. Under the Simplification Proposal, as CMR2 will be wholly-owned by CMR1, a single set of audited financial statements will be required. This will give rise to estimated annual internal and external cost savings of approximately $40,000.

3.2 A simplified corporate structure

The Simplification Proposal will create a simplified corporate structure which is more transparent and easier to explain to current and potential investors. The complexity of the stapled structure currently gives rise to investor confusion, especially in the context of tax components of distributions from each of CMR1 and CMR2. The Simplification Proposal will create a simpler corporate structure without the need for splitting distributions between each of CMR1 and CMR2. This will also result in efficiencies in managing the structure and responding to investor enquiries

3.3 Ongoing cost savings

The Simplification Proposal will generate ongoing cost savings through a reduction in head office costs, which includes accounting, legal, secretarial, tax and other recurring fees. Estimated annual cost savings if the Simplification Proposal is implemented are expected to be $41,200.

CMR1 and CMR2 are currently maintained as registered managed investment schemes. The Simplification Proposal will negate the need for CMR2 to continue to be a registered managed investment scheme. It is also noted that additional management time is currently expended in maintaining two registered managed investment schemes.

In addition, the current structure gives rise to duplication of certain compliance matters and requires additional management time and expense in considering the appropriate structure for new acquisitions.

3.4 Simpler distributions

The Simplification Proposal will result in simpler distributions as only a single distribution will be made to investors going forward. This minimises complexity and cost, including from a tax perspective.

Page 29

3.5 Reduction in costs associated with any future acquisitions

The Simplification Proposal will reduce costs associated with any future acquisitions. CMA has stated its intention to pursue growth through both direct property acquisitions and corporate transactions, as demonstrated by the recent proposal to acquire GPT Metro Office Fund and its acquisition of a strategic unitholding in CUA. Due to the stapled structure of CMA, CPFL may incur additional costs in regards to structuring and implementing any potential acquisitions. Under the Simplification Proposal, as CMR2 will be wholly-owned by CMR1, there is expected to be a reduction in professional services costs associated with pursuing and implementing future acquisitions.

3.6 Attractiveness of any future acquisitions

A simplified structure may facilitate future acquisitions of other funds as:

a more streamlined structure may be more easily understood by, and be more attractive to, unitholders in the fund being acquired; and
the ATO may be more likely to grant rulings in respect of roll-over relief to such unitholders. Any rulings in respect of roll-over relief which are granted by the ATO will be for the benefit of unitholders in the funds acquired by CMA and will not be for the benefit of CMA Securityholders.

In general, the roll-over relief may be available to a unitholder in a target fund which exchanges its interest in a fixed trust for a similar interest in another fixed trust (such as CMA). The roll-over is only available if the exchange is a consequence of an arrangement that results in the acquiring entity (i.e. CMA) becoming the owner of 80% or more of the original trust. For trusts an arrangement may qualify if:

all owners of trust voting interests in the original entity ( target unitholders ) or, where there are no voting interests, all owners of units or other fixed interests can participate, or
it includes a takeover bid that does not contravene the Corporations Act .

The rollover allows the target unitholder to disregard the capital gain made from the original units. The unitholder is taken to have acquired the replacement units for the cost base of the original interest.

The target unitholder will only be eligible for partial rollover if it exchanges units for similar interests in another entity (replacement interest) plus something else, usually cash.

The half-yearly results of CMA and CUA have been announced. CPFL currently intends to re-engage in merger discussions with CUA and expects that it will propose a merger of CMA and CUA based on the financial positions of CMA and CUA as disclosed in their half-yearly accounts. However, there can be no guarantee that a merger will be proposed or, if proposed, that it will be successful. Should any merger proposal eventuate, CPFL will comply with all legal requirements in relation to the merger proposal, including its disclosure requirements. Please refer to Section 5 for further details.

Page 30

4. What are the disadvantages of the Simplification Proposal?

4.1 CGT considerations

If the CGT scrip for scrip rollover does not apply, CGT Event A1 will happen in respect of CMA Securityholders' units in CMR2 (refer to Sections 8.4.1, 8.4.2 and 8.4.3 for further details). CPFL is applying for a Class Ruling from the ATO to confirm that the CGT scrip for scrip rollover is available to CMA Securityholders to defer any potential capital gain. The Simplification Proposal is conditional on CPFL receiving this Class Ruling. CMA Securityholders must elect to rely on the CGT scrip for scrip rollover in their tax returns should CPFL receive a Class Ruling from the ATO confirming that it is available.

4.2 One off costs

There are one-off costs in implementing the Simplification Proposal. These are estimated to be $450,000, of which approximately $100,000 has already been incurred. These costs will be paid for out of CMA's cash reserves.

The proposed one-off costs are expected to be recouped from the ongoing cost savings (both internal and external) realised through implementation of the Simplification Proposal over a period of 10 years.

4.3 Other risks

If the Simplification Proposal is implemented, the proportionate economic interest of each CMA Securityholder (other than certain Foreign Securityholders) in the underlying assets of CMA will not change.

The Simplification Proposal is essentially a corporate restructuring. It will not create any additional material liquidity, solvency, credit or other financial or legal risks which are not already in existence prior to the proposed Simplification

Page 31

CMA's intentions

5.1 Background

On 23 November 2016, 360 Capital Group announced that it had entered into a Unit Sale Deed with Centuria Capital No. 2 Office Fund ( CC2OF ) and CMR1 pursuant to which it proposed to sell its holding of 21,071,706 units in CUA for $2.25 per unit, a total value of approximately $47.4 million, divided between CC2OF and CMR1 as follows:

CC2OF acquired 14,648,622 units, representing 19.99% of the units in CUA; and
CMR1 acquired 6,423,084 units, representing 8.76% of the units in CUA.

In addition, 360 Capital Group and Centuria Group announced that they had entered into a Share Sale Agreement pursuant to which it was proposed that Centuria would acquire the shares in 360 CIML/CPF2L, 360 Capital Group's property funds management platform, and its co-investment stakes in a number of 360 CIML/CPF2L managed investment trusts, including:

the 360 Capital Industrial Fund ( TIX );
the 360 Capital 441 Murray Street Property Trust;
the 360 Capital Havelock House Property Trust;
the 360 Capital 111 St George's Terrace Property Trust; and
the 360 Capital Retail Fund No. 1.

When 360 Capital Group commenced discussions with Centuria in August 2016 in connection with the transactions contemplated by the Share Sale Agreement, it was also proposed that 360 CIML/CPF2L and CPFL investigate a potential merger (whether by takeover bid or a "trust scheme") on an NTA-for-NTA basis and in the interests of both CMA and CUA securityholders. It was not proposed that the sale of management rights and co-investment interests under the Share Sale Agreement be conditional on any such merger proposal being approved by securityholders and no proposal has ever existed for such a merger in the absence of the broader Centuria Group acquisition of 360 Capital Group's property funds management platform.

360 CIML/CPF2L and CPFL explored the potential merger initially with the intent that the proposed terms be announced at the same time as the Share Sale Agreement was announced. CUA and CMA considered alternatives based on the consideration to be offered to be predominantly scrip and reflective of the respective NTA value of the underlying property portfolios.

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However, there was no agreement as to terms on which a proposal would be put to members of CUA and discussions ceased. There were a number of reasons why 360 CIML/CPF2L and CPFL were unable to reach agreement about the terms of any proposed merger. Those reasons included uncertainty regarding a number of factors including the following:

whether CUA securityholder approval would be obtained for the acquisition of a 28.8% stake by Centuria and CMA (without which the merger would not proceed);
a degree of uncertainty about the composition of the portfolios of CUA and CMA (given their then intended asset acquisition and disposal plans);
the impact of significant leasing initiatives being undertaken by CMA and CUA on the value of certain assets;
the inability to complete due diligence and obtain required revenue rulings within the necessary timeframes; and
the volatility of the financial markets, the negative investor sentiment regarding REITs and the unknown financial market impact of the US election result.

On 9 January 2017 CPFL as responsible entity for CMA announced it had completed the acquisition of a strategic interest of 6,423,084 units (representing 8.76% of the units on issue) in CUA for $2.25 per unit from 360 Capital Group and its subsidiaries.

On the same day Centuria also announced it had completed the acquisition of the responsible entity of CUA, namely 360 CIML/CPF2L, as well as a 19.99% interest in CUA units (excluding the units acquired by CMA) as part of a broader transaction between 360 Capital Group and Centuria Group.

5.2 CMA's intentions

CMA's interest in CUA represents an investment of approximately $14.5 million. CUA’s property portfolio is complementary to CMA’s property portfolio. Accordingly, the acquisition of the 8.76% interest in CUA represents an investment in, and exposure to, similar underlying assets for CMA Securityholders.

CMR1’s current intentions in relation to its 8.76% interest in CUA are as follows:

to maintain the investment as a long term strategic investment;
to maximise the return on CMA’s investment through supporting active asset management and strategic initiatives;
to vote the 8.76% interest in CUA in, and having regard solely to, the best interests of CMA Securityholders if a corporate action was to arise; and

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to support the on-going management of CUA by CPF2L. CMR1 expects that it will generally (but not necessarily always) agree with the decisions of CPF2L.

The half-yearly results of CMA and CUA have been announced. CPFL currently intends to re-engage in merger discussions with CUA and expects that it will propose a merger of CMA and CUA based on the financial positions of CMA and CUA as disclosed in their half-yearly accounts. However, there can be no guarantee that a merger will be proposed or, if proposed, that it will be successful. Should any merger proposal eventuate, CPFL will comply with all legal requirements in relation to the merger proposal, including its disclosure requirements. Please refer to Section 5 for further details.

There are a number of factors which will be considered in determining what terms may apply to any future merger proposal, the timing of any such proposal and indeed whether any merger will proceed at all. Any future transaction would be determined by a number of matters including consideration and analysis of:

the respective property portfolios of CMA and CUA;
the financial position of CMA and CUA;
market volatility, particularly In the REIT sector; and
broader economic conditions, including the impact of the US election and interest rate movements domestically and internationally.

CPFL will put in place appropriate corporate governance arrangements to ensure that the interests of the CUA securityholders and CMA Securityholders are independently considered and promoted in relation to any merger proposal. The responsible entities of CMA and CUA must respectively act in the best interests of the CMA Securityholders and the CUA securityholders. Should any merger proposal eventuate, CMA Securityholders will be provided with all relevant information at that time.

CPFL will, if eligible, vote its 8.76% interest in CUA solely for CMA’s benefit.

CMR1 has no current intention:

of making any significant changes to the existing business of CUA;
to inject further capital into CUA;
to significantly change the financial or dividend policies of CUA;
of making changes regarding the future employment of CUA’s present employees;
that any property will be transferred between CUA and itself or any person associated with it; and
to otherwise redeploy the fixed assets of CUA.

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Directors' recommendation

6.1 CPFL Directors' recommendation and intentions

The CPFL Directors unanimously recommend that CMA Securityholders vote in favour of all of the Simplification Resolutions and that they support the Simplification Proposal.

The CPFL Directors will be voting the CMA Stapled Securities they own or control in favour of the Simplification Proposal where permitted by the Corporations Act and the ASX Listing Rules.

6.2 CPFL Directors' reasons for recommending the Simplification Proposal

The CPFL Directors believe that there are numerous significant benefits in implementing the Simplification Proposal (see Section 3).

Conversely they consider that the disadvantages are few and relatively small compared to the advantages in undertaking the Simplification Proposal (see Section 4).

Accordingly, the CPFL Directors recommend you vote in favour of the Simplification Resolutions so that Centuria can realise the advantages of the Simplification Proposal provided in Section 3.

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Financial information

7.1 Costs of implementing the Simplification Proposal

The costs of implementing the Simplification Proposal are expected to amount to approximately $450,000 comprising:

estimated stamp duty of approximately $310,000; and
estimated transaction costs of $140,000 consisting of fees for legal, tax and stamp duty advice, printing and other related costs.

7.2 Financing

Under the Simplification Proposal, all of the CMR2 units on issue will be transferred to CMR1 RE in exchange for the issue of additional units in CMR1 to CMA Securityholders. Therefore no consideration will be payable by CMA Securityholders pursuant to the Simplification Proposal. No debt financing is required by CMR1 RE to finance the acquisition of the CMR2 units.

CPFL has obtained all necessary consents from its lenders in order for the Simplification Proposal to proceed. There is not expected to be any material change to CMA's financing arrangements as a result of the Simplification Proposal.

The Simplification Proposal is not expected to result in a change to CMA's corporate investment grade credit rating or its senior secured debt rating.

7.3 CMA Financial Statements

A copy of CMA's reviewed Interim Financial Report for the half year ended 31 December 2016 was lodged with the ASX on 9 February 2017 and is available on Centuria's website at: http://centuria.com.au/listed-property-funds/shareholdercentre.

So far as is known by the Board of CPFL, there have been no material changes to the financial position of CMA since 31 December 2016 other than changes arising in the normal course of business.

CPFL does not expect that the Simplification Proposal will have a material impact on:

its consolidated financial position or NTA;
its profit attributable to CMA Securityholders;
distribution guidance or policy as currently advised to the market; and
the presentation of its consolidated financial report or the entities/operations that are in the consolidated financial report (other than reducing their complexity).

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Tax considerations

8.1 General

The comments below provide a general outline of Australian tax issues for Australian tax resident CMA Securityholders who hold their CMA Stapled Securities on capital account for Australian income tax purposes.

The categories of CMA Securityholders considered in this summary are limited to individuals, companies (other than life insurance companies), trusts, partnerships and complying superannuation funds that hold their CMA Stapled Securities on capital account.

This summary does not consider the consequences for foreign resident CMA Securityholders holding more than 10% of the total number of CMA Stapled Securities on issue, insurance companies, banks, CMA Securityholders that hold their CMA Stapled Securities on revenue account or carry on a business of trading in shares, CMA Securityholders who are exempt from Australian tax, or CMA Securityholders who are subject to the Taxation of Financial Arrangements rules contained in Division 230 of the Income Tax Assessment Act 1997 (Cth) .

The summary below is general in nature and is not exhaustive of all Australian tax consequences that could apply in all circumstances of any given CMA Securityholders. The individual circumstances of each CMA Securityholder may affect the taxation implications of the investment of the CMA Securityholder.

It is recommended that all CMA Securityholders consult their own independent tax advisers regarding the income tax (including capital gains tax), stamp duty and GST consequences of acquiring, owning and disposing of CMA Stapled Securities, CMR1 Units, and CMR2 Units, having regard to their specific circumstances.

The summary below is based on the relevant Australian tax law in force, established interpretations of that law and understanding of the practice of the relevant tax authority at the time of issue of this Explanatory Memorandum. The summary does not take into account the tax law of countries other than Australia.

Tax laws are complex and subject to ongoing change. The tax consequences discussed in this summary does not take into account or anticipate any changes in law (by legislation or judicial decision) or any changes in the administrative practice or interpretation by the relevant authorities. If there is a change, including a change having retrospective effect, the income tax, stamp duty and GST consequences should be reconsidered by CMA Securityholders in light of the changes. The precise implications of ownership or disposal of the CMA Stapled Securities, CMR1 Units and CMR2 Units will depend upon each CMA Securityholder’s and CMR1 Unitholder's specific circumstances.

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8.2 Class ruling

Centuria is applying for a class ruling for the benefit of CMA Securityholders. The class ruling requests confirmation from the ATO concerning the income tax treatment outlined in Sections 8.3 and that the CGT Scrip for Scrip roll-over relief outlined in Sections 8.4.4 and 8.4.5 is available.

The Class Ruling, when issued will be made available via the ATO website at www.ato.gov.au .

8.3 Unstapling

The Simplification Proposal will be implemented by way of an Unstapling of CMR1 Units from CMR2 Units, and an exchange by CMA Securityholders of their CMR2 Units for newly issued CMR1 Units as outlined in Section 2.1 above.

The Unstapling of CMR1 Units from CMR2 Units should not give rise to a capital gains tax ( CGT ) event to CMA Securityholders. As the CMR1 Units and CMR2 Units are treated as separate assets for capital gains tax purposes, the Unstapling will not give rise to any adjustment in the existing tax cost bases a CMA Securityholder holds in either their CMR1 Units or CMR2 Units.

8.4 Taxation implications for CMA Securityholders disposing of CMR2 Units

8.4.1 Capital Gains Tax (CGT) consequences

If the Simplification is implemented, the disposal of CMR2 Units by an Australian resident CMA Securityholder will constitute a CGT event (being CGT Event A1). The time of the CGT event should be the Record Date.

8.4.2 Capital gain or loss on disposal of CMR2 Units

If CMA Securityholders do not choose to apply the scrip for scrip CGT roll-over relief (outlined below at Section 8.4.4), they may make a capital gain if the capital proceeds received from the disposal of their CMR2 units are more than the cost base of their CMR2 units. Alternatively CMA Securityholders may make a capital loss if those capital proceeds are less than the reduced cost base of their CMR2 Units.

The capital proceeds received on disposal of CMR2 units should be equal to the market value of the 0.8 CMR1 Units received for each unit in CMR2.

Where scrip for scrip rollover relief is not available or not chosen, the first element of the CGT cost base of the new CMR1 Units will be their market value at the Record Date.

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8.4.3 Discount capital gains concession

If a CMA Securityholder, who is an individual, trustee of a trust or a complying superannuation entity, derives a capital gain on the disposal of their CMR2 Units, they may be eligible to claim the discount capital gains concession provided the CMA Securityholder had held their units in CMR2 for at least 12 months prior to the CGT event.

For individuals, the CGT discount concession is 50% and for complying superannuation funds 33.3%. Please note the discount capital gains concession is not available for companies.

8.4.4 CGT Scrip for Scrip rollover relief

Where CMA Securityholders make a capital gain in respect of their units in CMR2 and choose for the scrip for scrip rollover relief from CGT to apply, scrip for scrip rollover should be available, as detailed below.

8.4.5 Claiming Scrip for Scrip rollover relief

Broadly, the consequences for CMA Securityholders who choose to apply scrip for scrip rollover relief are as follows:

The capital gain made on disposal of CMR2 Units will be disregarded, i.e. CMA Securityholders do not include the capital gain in their assessable income.
The cost base of the CRM1 Units received will be equal to the cost base of the CMR2 Units disposed of.
The CMA Securityholders will be deemed for CGT purposes to have acquired the CMR1 units at the time they originally acquired their CMR2 Units. This may become relevant when determining the application of the discount capital gains concession in respect to the subsequent disposal of the CRM1 Units.

8.4.6 Unit consolidation

As outlined at Section 2.1(b), following the CMR2 Unit acquisition, each CMA Securityholder will have 1.80 CMR1 Units for each CMA Stapled Security which they previously held. In order to prevent a dilution in the value of CMR1 Units, the 1.80 CMR1 Units will be consolidated back to 1 CMR1 Unit on a 1.80:1 basis. This means there will be the same number of CMR1 Units on issue post Simplification as CMA Stapled Securities on issue prior to Simplification.

The consolidation of CMR1 Units should not give rise to a CGT event to CMA Securityholders. The consolidation of Units should give rise to an aggregation of the cost bases of the CMR1 Units held, i.e. the cost base that each CMA Securityholder has in its original CMR1 Unit and its replacement CMR1 Unit (being the 0.80 CMR1 Unit received for each CMR2 Unit disposed of) will be aggregated to provide the cost base of each consolidated CMR1 Unit.

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8.4.7 GST

No GST should be payable in respect of the disposal of the CMR2 Units or the acquisition of the CMR2 Units pursuant to the Simplification.

8.4.8 Stamp duty

No stamp duty should be payable in respect of the disposal of the CMR2 Units or the acquisition of the CMR2 Units pursuant to the Simplification.

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9. CMA and CPFL

9.1 Information on CMA

CMA:

was formed through the stapling of the units in CMR1 to the units in CMR2 on a one-for-one basis. CMR1 was established by a constitution executed on 9 March 2000, which has subsequently been amended by a number of supplemental deeds. CMR2 was established by a constitution executed on 27 November 2000, which has subsequently been amended by a number of supplemental deeds;
is a stapled Australian Real Estate Investment Trust which trades on the ASX under the ticker code CMA;
consists of two managed investment schemes under the Corporations Act;
has as its responsible entity CPFL; and
currently has 119,407,764 Stapled Securities on issue.

9.2 Information on CPFL

CPFL:

was registered as a public company limited by shares under the Corporations Act on 4 March 1999;
has issued capital of $1,000.00 being 1,000 fully paid ordinary shares, which are registered in the name of, and beneficially owned by, Centuria;

was granted an Australian financial services licence on 3 September 2003 authorising it to act as the responsible entity of CMR1 and CMR2; and

satisfies its capital adequacy requirements under its Australian financial services licence by a deposit with a bank and has no liabilities.

9.3 Board of CPFL

The Board of CPFL is presently comprised of:

Peter Done - Non-Executive Chairman
Darren Collins - Non-Executive Director
Matthew Hardy - Non-Executive Director
Jason Huljich - Executive Director

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10. Regulatory information

10.1 Overview of regulation of the Simplification Proposal

From a legal perspective, the Simplification Proposal is regulated as follows:

Corporations Act:
CMR1 and CMR2 are registered managed investment schemes and so will need to comply with the requirements for such schemes subject to any ASIC relief granted under the Corporations Act (see Section 10.2);
the acquisition by CMR1 RE of all of the CMR2 units on issue constitutes the acquisition of a relevant interest prohibited under section 606 of the Corporations Act unless an ordinary resolution of unitholders approves the acquisition in accordance with the exception in item 7 of section 611; and
the amendments of the CMR1 and CMR2 constitutions will require approval by CMA Securityholders by a special resolution; and
Listing Rules:
As CMR1 and CMR2 are admitted to the official list of the ASX, they are subject to the ASX Listing Rules. In order to effect the issue of CMR1 units as consideration for the transfer of the CMR2 units, relief from the requirements of specific Listing Rules was requested from the ASX - please refer to Section 10.5 for additional detail.

10.2 Regulation as a managed investment scheme and ASIC relief

As CMR1 and CMR2 are registered managed investment schemes, CPFL must ensure that both of CMR1 and CMR2 comply with the requirements of Chapter 5C of the Corporations Act.

To facilitate the Simplification Proposal, CPFL has applied for and ASIC has granted or indicated it will grant, the following modifications to and exemptions from the operation of the Corporations Act as it applies to CMR1 and CMR2:

Product Disclosure Statement relief (section 1012B) - relief from the requirement to prepare a Product Disclosure Statement in respect of the issue of CMR1 units ;
On-sale relief (section 1012C(6)) - relief from the requirement to prepare a Product Disclosure Statement in respect of the potential on-sale or transfer of CMR1 units in the 12 months following the date of the implementation of the Simplification Proposal;

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Financial Services Guide relief (section 941A) - relief from the requirement to prepare a Financial Services Guide and give it to CMA Securityholders who are retail clients;
Unsolicited offer provisions relief (Division 5A of Part 7.8) - relief from the prohibition on making an unsolicited offer to CMA Securityholders in respect of the issue of the CMR1 units as consideration for the transfer of the CMR2 units;
Item 7 of section 611 of the Corporations Act - a modification of this Item 7 to allow CMA Securityholders to vote on the Acquisition Resolutions in connection with the Trust Scheme set out in resolution 3 of the Notice of Meeting and further described in Section 2.6(b). This is standard technical relief required for trust schemes; and
Equal treatment relief - an exemption from section 601FC(1)(d) to enable CPFL to issue the CMR1 units to all CMA Securityholders except certain Foreign Securityholders.

10.3 CMR1 constitution amendments

In order for the Simplification Proposal to proceed, the CMR1 constitution must be amended to incorporate the Simplification provisions which will facilitate the issue of the CMR1 units as consideration for the transfer of the CMR2 units.

Pursuant to the Corporations Act, the CMR1 constitution can be amended by a special resolution of CMR1 unitholders. A special resolution is passed if at least 75% of the votes cast by CMR1 unitholders present and eligible to vote are in favour of the resolution.

A copy of the CMR1 constitution including the Supplemental Deed Poll incorporating the Simplification provisions is available free of charge from CMR1 RE on request and a copy will be available at the EGM for CMA Securityholders to inspect.

In summary those amendments provide as follows:

Power to give effect to the Trust Scheme - CMR1 RE has power to give effect to the Trust Scheme including power to do all things which it considers necessary, desirable or reasonably incidental to give effect to the Trust Scheme;
Implementation of Trust Scheme - CMR1 RE must:
(i) do all things and execute all documents as CMR1 RE considers necessary or desirable to give full effect to the Trust Scheme and the transactions contemplated by it;
(ii) before midnight on the Implementation Date, issue CMR1 units to CMR2 unitholders (or to the Sale Nominee if required) in exchange for the transfer to CMR1 RE of their CMR2 units at an issue price equivalent to 0.80 CMR1 unit for each CMR2 unit acquired and update the CMR1 unit register to reflect the issue of CMR1 units pursuant to the Trust Scheme.

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Limitation of liability - CMR1 RE will not be liable to CMR1 unitholders for any acts or omissions in connection with the implementation of the Trust Scheme to any greater extent than the extent to which CMR1 is entitled to be, and is actually indemnified out of, the property of CMR1.
Reimbursement of CMR1 RE's expenses - all expenses and liabilities incurred by CMR1 RE in connection with the Trust Scheme or its implementation are payable or reimbursable out of the property of CMR1 on a full indemnity basis.

10.4 CMR2 constitution amendments

In order for the Simplification Proposal to proceed, the CMR2 constitution must be amended to incorporate the Simplification provisions which will facilitate the transfer of all of the CMR2 units to CMR1 RE in exchange for the issue of units in CMR1.

Pursuant to the Corporations Act, the CMR2 constitution can be amended by a special resolution of CMR2 unitholders. A special resolution is passed if at least 75% of the votes cast by CMR2 unitholders present and eligible to vote are in favour of the resolution.

A copy of the CMR2 constitution including the Supplemental Deed Poll incorporating the Simplification provisions is available free of charge from CMR2 RE on request and a copy will be available at the EGM for CMA Securityholders to inspect.

In summary those amendments provide as follows:

Power to give effect to the Trust Scheme - CMR2 RE has power to give effect to the Trust Scheme including power to do all things which it considers necessary, desirable or reasonably incidental to give effect to the Trust Scheme;
Implementation of Trust Scheme - each CMR2 unitholder and the CMR2 RE must do all things and execute all documents as CMR2 RE considers necessary or desirable to give full effect to the Trust Scheme;
Provision of CMR1 units as consideration for the transfer of the CMR2 units - before midnight on the Implementation Date, CMR2 RE must procure CMR1 RE to:
(i) issue to each CMR2 unitholder (or to the Sale Nominee if required) 0.80 CMR1 unit for each CMR2 unit held by that CMR2 unitholder on the Record Date; and
(ii) enter the CMR2 unitholder (or the Sale Nominee if required) and the number of CMR1 units issued to that CMR2 unitholder (or the Sale Nominee if required) in the CMR1 unit register;

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Transfer of CMR2 units - Subject to the provision of CMR1 units as consideration, on the Implementation Date:
(i) all CMR2 units with all rights and entitlements attaching to them will be transferred to CMR1 RE by CMR2 RE as attorney and agent for each CMR2 unitholder;
(ii) CMR2 RE as attorney and agent for all CMR2 unitholders will deliver to CMR1 RE transfer forms (which may include a master transfer form) for all CMR2 units as at the Record Date, executed as transferor on behalf of each CMR2 unitholder as at the Record Date;
(iii) CMR1 RE must execute the transfer forms as transferee and deliver the transfer forms to CMR2 RE for registration; and
(iv) following receipt of the transfer forms from CMR1 RE, CMR2 RE must enter CMR1 RE (or its custodian) in the CMR2 unit register as the holder of all the CMR2 units on issue as at the Record Date;
Dealings in CMR2 units:
(i) in determining the persons who are CMR2 unitholders and the number of CMR2 units held by them, CMR2 RE will only recognise the persons shown in the CMR2 unit register on the Record Date;
(ii) CMR2 unitholders must not dispose of or deal with in any way, including agree to dispose of, any CMR2 units or any interest in them after the Record Date and CMR2 RE will not accept for registration any attempt to do so;
(iii) other than in respect of the CMR2 units transferred to CMR1 RE in accordance with the Trust Scheme, all certificates and holding statements for CMR2 units will cease to have effect after the Record Date as documents of title in respect of those units except as evidence of entitlement to consideration for the transfer of the CMR2 unitholder's CMR2 units;
CMA Securityholders' covenants and undertakings - each CMA Securityholder:
(i) acknowledges that the Trust Scheme binds CMR2 RE and all of the CMA Securityholders, including those who did not attend the EGM, did not vote at that meeting, or voted against the Simplification Resolutions;
(ii) agrees to the transfer of the CMR2 units which they hold as at the Record Date together with all rights and entitlements attaching to those units in accordance with the Trust Scheme.

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(iii) agrees to the variation, cancellation or modification of the rights attached to their CMR2 units constituted by or resulting from the Trust Scheme or the transactions contemplated by it;
(iv) consents to CMR1 RE and CMR2 RE doing all things and executing all documents necessary or desirable to give full effect to the Trust Scheme and the transactions contemplated by it;
(v) is deemed to have warranted to CMR2 RE in its own right and on behalf of CMR1 RE, that all the CMR2 units they transfer to CMR1 under the Trust Scheme (including any rights and entitlements attaching to those units) will, at the time of transfer to CMR1 RE, be fully paid and free from all mortgages, charges, liens, encumbrances and adverse interests of any nature and that they have full power and capacity to sell and to transfer the legal and beneficial ownership in those units to CMR1 RE together with any rights attaching to those units; and
(vi) agrees to provide CMR2 RE with any information reasonably required by CMR2 RE to comply with any law in respect of the Trust Scheme and the transactions contemplated by it.
Authority given to CMR2 RE - CMR2 RE and its directors and officers are appointed by each CMR2 unitholder as its attorney and agent for the purpose of doing all things and executing all documents necessary or desirable to give effect to the Trust Scheme and the transactions contemplated by it. CMR2 RE may sub-delegate these functions, authorities or powers to all or any of its directors, officers and employees. Each CMR2 unitholder indemnifies CMR2 RE and each of its directors, officers and employees for any loss, damage, expense or other liabilities incurred in properly performing or exercising any powers as attorney and agent;
Issue of Non-Voting Unit - the CMR2 RE will be authorised to issue the Non-Voting Unit which will be non-voting and non-participating (other than the right to be paid $1 on the winding up of CMR2);
Removal from the official list of ASX - following implementation of the Trust Scheme, CMR2 RE must apply to ASX for removal of CMR2 from the official list of ASX with effect from the Business Day immediately following the Implementation Date or such later date determined by CMR1 RE;
Stamp duty - any stamp duty payable on the transfer of CMR2 units to CMR1 RE pursuant to the Trust Scheme will be payable by CMR1;
Limitation of liability - CMR2 RE will not be liable to CMR2 unitholders for any acts or omissions in connection with the implementation of the Trust Scheme to any greater extent than the extent to which CMR2 is entitled to be, and is actually indemnified out of, the property of CMR2.

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Reimbursement of CMR2 RE's expenses - all expenses and liabilities incurred by CMR2 RE in connection with the Trust Scheme or its implementation are payable or reimbursable out of the property of CMR2 on a full indemnity basis.

10.5 ASX Waivers and confirmations

As a listed entity, CMA is required to comply with the ASX Listing Rules in relation to the Simplification Proposal, subject to the following waivers granted by the ASX:

ASX Listing Rule 7.1 - a waiver to allow CMR1 RE to issue CMR1 Units as consideration for the transfer of all of the units in CMR2 to it without CMA Securityholder approval;
ASX Listing Rule 10.11 - a waiver from the requirement to obtain CMA Securityholder approval for the issue of CMR1 units as consideration under the Trust Scheme to existing CMA Securityholders who may be related parties of CMR1 (such as the directors of CPFL) and from the requirement to obtain CMA Securityholder approval for the issue of the nominal, Non-Voting Unit as part of the mechanics of implementing the Trust Scheme to CCF2 (a wholly-owned sub-trust of Centuria Capital Fund which is a trust the units of which are stapled to shares in Centuria); and
ASX Listing Rule 7.40 - a confirmation that the proposed Simplification timetable set out on page 7 of this Explanatory Memorandum is in accordance with Listing Rule 7.40.

10.6 Lodgement with ASIC

CPFL has lodged with ASIC a copy of this Explanatory Memorandum and Notice of Meeting.

10.7 Foreign Securityholders

Foreign Securityholders should be aware that the distribution of the Explanatory Memorandum (including an electronic copy) in jurisdictions outside Australia may be restricted by law. If you come into possession of this Explanatory Memorandum in jurisdictions outside Australia, then you should seek advice on, and observe any such restrictions. If you fail to comply with such restrictions, that failure may constitute a violation of applicable securities laws. CMA and CPFL disclaim all liabilities to such persons. This Explanatory Memorandum and CMA Stapled Securities have not been registered in any jurisdiction other than Australia. You should seek advice before receiving or selling CMA Stapled Securities in any country outside Australia. Please refer to Section 2.2 for further details.

The references to Foreign Securityholders made above refer to all CMA Securityholders with an address outside Australia or New Zealand. The invitation to approve the Simplification Proposal is being made to New Zealand resident securityholders in reliance on the Securities Act (Overseas Companies) Exemption Notice 2013 (New Zealand). Please refer to page 3 of this Explanatory Memorandum for the warning statement for New Zealand investors.

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11. Additional information

11.1 CPFL is a disclosing entity

CPFL is a disclosing entity for the purposes of the Corporations Act and, therefore, it is subject to regular reporting and disclosure obligations.

Specifically, as the responsible entity for a listed trust, CPFL is required to continuously disclose to the market any information of which it is aware that a reasonable person would expect to have a material effect on the price or the value of CMA Stapled Securities.

Copies of documents lodged with ASIC in relation to CPFL (not being documents referred to in section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, an ASIC office.

CPFL will provide a copy of each of the following documents, free of charge, to any person on request prior to the Implementation Date:

the most recent annual financial statements lodged with ASIC by CPFL for the year ended 30 June 2016;
the half year financial report for the six months to 31 December 2016 lodged with ASIC after the lodgement of the above annual report and before the date of this Explanatory Memorandum; and
all continuous disclosure notices given by CPFL after the lodgement of its annual financial statements with ASIC for the year ended 30 June 2016.

Requests for free copies of these documents may be made by contacting the Simplification Proposal Information Line on 1300 651 367 (callers in Australia) or +61 3 9415 4282 (callers outside Australia) between 8.30 am and 5.00 pm (Sydney time) on Business Days.

In addition, copies of all documents lodged with the ASX in relation to CMA can be inspected at the registered office of CMA during normal business hours. Centuria Group's website at www.centuria.com.au/listed-property-

funds/home/ also includes a wide range of information on CMA (including copies of the above documents) and its activities.

11.2 If the Simplification Proposal does not proceed

If the Simplification Proposal does not proceed:

CMA will continue to be structured and to operate as it currently does;
the CMA Stapled Securities will continue to trade on the ASX;

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CMA will have incurred costs in connection with the Simplification Proposal, which are expect to be approximately $100,000 (reflecting legal, tax, valuation and financial advisory fees and expenses) and which will be borne by CMA; and
the rights of CMA Securityholders will remain unchanged.

11.3 CHESS and holding statements

CPFL, in accordance with the ASX Listing Rules and the ASX Settlement Operating Rules, maintains an electronic issuer sponsored sub register and an electronic CHESS sub register.

Following the implementation of the Simplification Proposal, CMR1 unitholders will receive an initial statement of holding (similar to a bank account statement) that sets out the number of CMR1 units that they hold.

This statement will also provide details of a CMA Securityholder's Holder Identification Number ( HIN ) in the case of a holding on the CHESS sub register, or Securityholder Reference Number ( SRN ) in the case of a holding on the issuer sponsored sub register. CMA Securityholders will be required to quote their HIN or SRN, as appropriate, in all dealings with a stockbroker or the Registry.

CMA Securityholders will receive subsequent statements during the first week of the following month if there has been a change to their holding on the register and as otherwise required under the ASX Listing Rules and the Corporations Act. Additional statements may be requested at any other time either directly through the CMA Securityholder's sponsoring broker, in the case of a holding on the CHESS sub register, or through the Registry in the case of a holding on the issuer sponsored sub register. CPFL or the Registry may charge a fee for these additional issuer sponsored statements.

11.4 Litigation and claims

As far as the CPFL Board is aware, there are no current or threatened civil litigation, arbitration proceedings or administrative appeals, or criminal or governmental prosecutions of a material nature in which CMA or the Centuria Group is directly or indirectly concerned which are likely to have a material adverse effect on the business or financial position of CMA or the Centuria Group.

11.5 Interests of Centuria Directors, CPFL Directors, experts and advisers

The CPFL Directors intend to vote any CMA Stapled Securities that they hold in favour of all of the Simplification Resolutions on which they are entitled to vote.

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The table below shows the CMA Stapled Securities held by the CPFL Directors as at the date of the Notice of Meeting.

Director	Stapled Securities held
Jason Huljich	3,000
Peter Done	75,000
Matthew Hardy	17,000
Darren Collins	20,000

As stated in Section 2.4, no options over any issued or unissued CMA Stapled Securities have been issued to any CPFL Director.

CPFL has appointed legal, accounting, tax and financial advisers to assist it in connection with the Simplification Proposal. Each adviser is entitled to receive their professional fees in accordance with either a time-based or fixed fee retainer.

Other than as set out below or elsewhere in this Explanatory Memorandum, no:

CPFL Director;
person named in this Explanatory Memorandum as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Explanatory Memorandum; or
promoter of CMA,

in relation to the Simplification Proposal, has, or had within 2 years before the date of this Explanatory Memorandum, any interest in:

the formation or promotion of CMA;
any property acquired or proposed to be acquired by CMA in connection with its formation or promotion or in connection with the Simplification Proposal; or
the issue of additional CMR1 units in exchange for the transfer of all of the CMR2 units; and

no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of those persons as an inducement to become, or to qualify as, a CPFL Director or otherwise for services rendered by him or her in connection with the formation or promotion of CMA or the Simplification Proposal.

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CPFL has engaged the following professional advisers in relation to the Simplification Proposal:

Ernst & Young has provided taxation advice to CPFL. CPFL has agreed to pay approximately $55,000 (plus GST) for these services to the date of this Explanatory Memorandum. Further amounts may be paid to Ernst & Young in accordance with its agreed fee arrangements; and
HWL Ebsworth has acted as legal advisor to CPFL in connection with the Simplification Proposal (excluding the matters advised on by Ernst & Young referred to above). CPFL has paid or agreed to pay approximately $65,000 (plus GST) for these services to the date of this Explanatory Memorandum. Further amounts may be paid to HWL Ebsworth in accordance with its agreed fee arrangements.

11.6 Consents

Each of the parties named in the table below as a consenting party:

has given and has not, before the date of this Explanatory Memorandum, withdrawn its written consent to be named in this Explanatory Memorandum in the form and context in which it is named;
has given and has not, before the date of this Explanatory Memorandum, withdrawn its written consent to the inclusion of their respective statements and reports (where applicable) noted next to their names below, and the references to those statements and reports in the form and context in which they are included in this Explanatory Memorandum;
does not make, or purport to make, any statement in this Explanatory Memorandum other than those statements referred to below in respect of that party’s name (and consented to by that party); and
to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any statements in or omissions from this Explanatory Memorandum.

Consenting party	Named as	Statement
Ernst & Young	Taxation advisor in Section 8.	Section 8 provides information in respect of the tax consequences of the Simplification Proposal.
HWL Ebsworth (HWLE)	Named in the Corporate Directory as legal advisor to Centuria.	HWLE makes no statements in this Explanatory Memorandum and no statement is included in this Explanatory Memorandum based on any statement made by HWLE.

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Consenting party	Named as	Statement
KPMG	CPFL's auditor.	KPMG makes no statements in this Explanatory Memorandum and no statement is included in this Explanatory Memorandum based on any statement made by KPMG (other than references to financial statements having been audited or reviewed).
Computershare	Named in the Corporate Directory as the stapled security registry for CMA.	Computershare has had no involvement in the preparation of this Explanatory Memorandum or in relation to the Simplification Proposal other than consenting to being named as Registrar.

Other than as disclosed above, none of these firms and companies has caused or authorised the issue of this Explanatory Memorandum or have in any way been involved in the implementation of the Simplification Proposal.

11.7 Related party transactions

The Simplification Proposal and the ongoing management of CMA's assets may involve a number of related party transactions.

As explained in Section 2.1(b), in order to prevent a "Trust Merger" between CMR1 and CMR2, a nominal non-participating, non-voting unit ( Non-Voting Unit ) in CMR2 will be issued to CCF2. CPFL will not request or obtain the approval of CMA Securityholders in respect of the issue of the Non-Voting Unit despite the fact that it is a related party transaction.

Given the lack of voting rights, non-participation in distribution of income and capital and the redemption right of CPFL in relation to the Non-Voting Unit, the Non-Voting Unit is of nominal value only. It will be issued at an issue of price of $10, which is in excess of its value (the $1 at which it can be redeemed at any time).

CPFL will not request or obtain the approval of CMA Securityholders in respect of the issue of the Non-Voting Unit to a related party of CPFL. This is because CPFL believes that the Non-Voting Unit does not confer any financial benefit on CCF2 (the related party) or, if it does, that it is issued on terms that are less favourable to CCF2 than those that would be reached if the parties were dealing at arm's length.

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CPFL is a related party of Centuria Group for the purposes of Chapter 2E of the Corporations Act (as applicable and as modified by Part 5C.7 of the Corporations Act). CPFL, in its capacity as responsible entity of CMA, will have an ongoing relationship with a number of entities in the Centuria Group. There will be no change to existing arrangements in terms of how CMA is operated and run in the ordinary course of business.

11.8 FATCA

The Foreign Account Tax Compliance Act ( FATCA ) is a United States ( US ) tax law which was enacted in 2010 for the purpose of improving tax information reporting regarding US persons in respect of their offshore investments to the United States Internal Revenue Service ( IRS ).

On 28 April 2014, an Inter-Government Agreement ( IGA ) was signed between Australia and the US to facilitate the implementation of FATCA by Australian financial institutions. As a result, CMA has been registered with the IRS as a Reporting Australian Financial Institution for FATCA purposes.

In order to comply with FATCA requirements, CPFL:

may require investors to provide certain information regarding their identification and will undertake certain due diligence procedures with respect to investors of CMA to determine their status for FATCA reporting purposes. This information may be required at the time the Simplification Proposal is implemented (being the Implementation Date) or at any time following the implementation of the Simplification Proposal; and
will report annually to the IRS, via the ATO, in relation to relevant investors' financial information required by the ATO (if any) in respect of any investment in CMA.

Accordingly, by participating in the Simplification Proposal prospective CMA Securityholders agree to provide CPFL with certain identification and related information in order to enable it to comply with its obligations in connection with the FATCA.

Given that the additional CMR1 units are being issued to existing CMA Securityholders, CPFL already possesses the information required to comply with FATCA requirements.

11.9 AML and CTF

CPFL is bound by laws about the prevention of money laundering and the financing of terrorism, including the Anti-Money Laundering and CounterTerrorism Financing Act 2006 (Cth) ( AML/CTF Act ) or AML/CTF Rules. By participating in the Simplification Proposal you agree:

to provide to CPFL any information or documents which CPFL reasonably requests to be provided in order for CPFL to comply with the AML/CTF Act or AML/CTF Rules. Information requested may include, identification checks and procedures, including, in relation to an individual investor's name, address and date of birth and for an investor that is a company, details of its directors and beneficial shareholders; and

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to the extent permitted by law, if CPFL forms the view (in its reasonable opinion), that it is required to disclose information in order to comply with the AML/CTF Act or AML/CTF Rules, such disclosure will not be a breach of any obligation or duty CPFL owes to investors and CPFL will not incur any liability to any investor in respect to such disclosure.

11.10 Personal information

In participating in the Simplification Proposal, you are providing information to CPFL through the Registry that may be personal information for the purposes of the Privacy Act 1988 (Cth). CPFL and the Registry on its behalf, collect, hold, use and disclose that personal information in order to service your needs as an investor, provide facilities and services that you request, inform you about other products and services offered by CPFL or other entities in the Centuria Group, carry our appropriate administration and as otherwise required or authorised by law.

Your personal information may also be disclosed to and used by CPFL and other members of the Centuria Group for any of the above purposes.

If you do not consent to CPFL's use of your personal information, CPFL will not be able to administer your CMA Securityholding and/or inform you about other products and services offered by CPFL or other entities in the Centuria Group.

Your personal information may also be disclosed to CPFL's agents and service providers involved with the administration of CMA on the basis that they deal with such information in accordance with their respective privacy policies. These entities may be located outside Australia where your personal information may not receive the same level of protection as that afforded under Australian law. For this reason, CPFL will not take further steps to ensure that the overseas recipients do not breach the Australian Privacy Principles under the Privacy Act 1988 (Cth) in relation to any personal information disclosed to overseas recipients. The types of agents and service providers that may be provided with your personal information and the circumstances in which your personal information may be shared are:

printers and other companies for the purpose of preparation and distribution of statements and for handling mail;
market research companies for the purpose of analysing CMA's investor base and for product development and planning; and
legal and accounting firms, auditors, contractors, consultants and other advisers for the purpose of administering, and advising on, the CMA Securities and for associated actions.

Your personal information may also be disclosed to regulators or other government agencies (including ASIC and the ATO), and the public by way of public registers maintained by regulators or other bodies.

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Under the Privacy Act 1988 (Cth), you may request access to your personal information held by (or on behalf of) CPFL. You may be required to pay a reasonable charge to the Registry in order to access your personal information. You can request access to your personal information by contacting the Privacy Officer by email at [email protected] . If any of your information is not correct or has changed, you may request it to be corrected.

You may also make a complaint regarding the handling of your personal information by CPFL or the Registry. CPFL's privacy policy contains information regarding the exercise of such rights in relation to access, correction and complaints. It also contains information about how we deal with complaints. You can obtain a copy of CPFL's privacy policy on request.

11.11 Dispute resolution

Centuria Group and CPFL have in place a dispute resolution process to assess and respond to customer concerns as quickly and efficiently as possible.

If you have a complaint about a product or service offered by Centuria Group or CPFL, please contact the Centuria Investor Relations Team on +61 2 8923 8923. They will either try to resolve your complaint or put you in contact with someone who is better placed to resolve the complaint.

You may also write to Centuria Group or CPFL at:

Centuria Complaints Resolution Process Level 39 100 Miller Street North Sydney NSW 2060

Or email: [email protected]

Please provide the details and reason for your complaint. Centuria Group or CPFL will acknowledge the complaint in writing as soon as practicable and in any event within 14 days from receipt and report back to you as soon as practicable and in any event no more than 45 days after receipt.

The Financial Ombudsman Service Limited ( FOS ) provides an independent complaints resolution scheme approved by ASIC. If you are dissatisfied with Centuria Group or CPFL's response to your complaint, you may contact the FOS. The FOS's contact details are:

Financial Ombudsman Service Limited GPO Box 3 Melbourne VIC 3001 (Australia)

Telephone:

For consumers: 1800 367 287

For international callers: +61 3 9613 7366

Email: [email protected]

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Please note that a complaint must first be submitted to Centuria Group's and CPFL's complaints handling process before it can be referred to the FOS.

11.12 Further information

Further information about CMA and the Centuria Group is available in electronic form from the Centuria website: http://centuria.com.au.

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CPFL Directors' statement

Except as set out in this Explanatory Memorandum, so far as the CPFL Directors are aware, there is no other information material to the making of a decision on how to vote in relation to the Simplification Resolutions, being information that is within the knowledge of any CPFL Director which has not been previously disclosed to CMA Securityholders.

Signed for and on behalf of each of the CPFL Directors:

Peter Done Chairman Centuria Property Funds Limited as responsible entity for Centuria Metropolitan REIT

14 February 2017

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Glossary

In this Explanatory Memorandum, the following terms have the meanings shown.

360 Capital Group	the stapled entity comprising 360 Capital Group Limited
	ACN 113 569 136 and 360 Capital Investment Trust
	ARSN 104 552 598.
360 CIML	360 Capital Investment Management Limited ACN 133 363 185
	which was renamed "Centuria Property Funds No. 2 Limited"
	(CPF2L) on 9 January 2017.
Acquisition Resolution	the resolution to be considered and (if thought fit) passed by
	CMA Securityholders at the EGM to approve the acquisition
	of CMR2 units, being resolution 3 as set out in the Notice of
	Meeting and described in section 2.6(b)
ASIC	the Australian Securities and Investments Commission.
ASX	ASX Limited as operator of the Australian Securities
	Exchange or the Australian Securities Exchange, as the
	context requires.
ASX Listing Rules	the official Listing Rules of the ASX.
ATO	the Australian Taxation Office.
Business Day	a business day for the purposes of the ASX Listing Rules.
CCF2	Centuria Funds Management Limited ACN 607 153 588 in
	its capacity as trustee for the Centuria Capital No. 2 Fund
	established by a constitution dated 17 May 2016.
Centuria	Centuria Capital Limited ACN 095 454 336 and its controlled
	entities.
Centuria Group	the group of entities through which Centuria carries on its
	business of investment bonds and property funds
	management and investment.
CFML	Centuria Funds Management Limited ACN 607 153 588 in
	its capacity as trustee for the Centuria Capital No. 2 Fund
	established by a constitution dated 17 May 2016.

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CGT

Capital Gains Tax under the Income Tax Assessment Act 1997 (Cth) and applicable regulations.

Chairman

the chairman of the EGM being Mr Peter Done, chairman of the CPFL Board, or failing him, the person appointed to chair the EGM by the CPFL Board.

CHESS

Clearing House Electronic Sub-register System.

the stapled entity listed on the ASX formed by the Stapling of each unit in CMR1 to a unit in CMR2 or, if the Simplification Proposal is implemented, CMR1 as an ASX listed, managed investment scheme.

CMA the stapled entity listed on the ASX formed by the Stapling of each unit in CMR1 to a unit in CMR2 or, if the Simplification Proposal is implemented, CMR1 as an ASX listed, managed investment scheme. CMA Securityholder a registered holder of a security in CMA. CMA Stapled Security a stapled security in CMA comprising an ordinary unit in CMR1 and an ordinary unit in CMR2. CMR1 Centuria Metropolitan REIT No. 1 ARSN 124 364 718. CMR1 RE CPFL as responsible entity for CMR1. CMR2 Centuria Metropolitan REIT No. 2 ARSN 124 364 656. CMR2 RE CPFL as responsible entity for CMR2. Constitutional the resolutions to be considered and (if thought fit) passed Amendment by CMA Securityholders at the EGM to approve the Resolutions amendment of the constitutions of CMR1 and CMR2, being resolutions 1 and 2 as set out in the Notice of Meeting and described in Section 2.6(a) Corporations Act the Corporations Act 2001 (Cth) and Corporations Regulations 2001 (Cth). CPF2L Centuria Property Funds No. 2 Limited ACN 133 363 185 as responsible entity of CUA which was previously called "360 Capital Investment Management Limited".

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CPFL	Centuria Property Funds Limited ACN 086 553 639 in its
	capacity as responsible entity for CMR1 and/or CMR2 as the
	context requires.
CPFL Board	the board of directors of CPFL (see the Corporate Directory
	for a list of the current directors in Section 15).
CPFL Directors	the directors of CPFL.
CUA	Centuria Urban REIT ARSN 106 453 196 previously named
	"360 Capital Office Fund" was renamed on 20 January 2017.
	The ASX identification code for Centuria Urban REIT changed
	to CUA (previously it was TOF) from 23 January 2017.
Dollars or $	Australian dollars.
EGM	the Extraordinary General Meeting of CMA Securityholders
	convened to consider the Simplification Proposal and the
	Simplification Resolutions as detailed within the Notice of
	Meeting.
Explanatory	this Explanatory Memorandum.
Memorandum
Foreign Securityholder	a CMA Securityholder on the Record Date whose address in
	the relevant register is a jurisdiction other than Australia or
	New Zealand.
HIN	Holder Identification Number.
Implementation Date	the date on which CPFL declares by an announcement to
	the ASX that Simplification is to take effect, being the date
	on which the Trust Scheme is implemented.
Non-Voting Unit	the non-participating, non-voting unit in CMR2 that will be
	issued to CCF2 in order to prevent a Trust Merger, as
	detailed in Section 2.1(b).
Notice of Meeting	the Notice of Meeting included in Section 14.

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NTA the net tangible assets - calculated as the total assets of an entity, minus any intangible assets such as goodwill, patents and trademarks, less all liabilities. NZX the New Zealand securities exchange. Official List the Official List of the ASX. Proxy Form the Proxy Form enclosed with this Explanatory Memorandum that can be used by CMA Securityholders to appoint a proxy for the EGM.

NTA

Record Date the cut-off date nominated by CPFL in order to determine which CMA Securityholders are entitled to participate in the Trust Scheme.

REIT Real Estate Investment Trust. Registry Computershare Investor Services Pty Limited. Sale Nominee the entity nominated by CPFL for the purposes of receiving and then selling new CMR1 units that would otherwise be due to Foreign Securityholders, as described in Section 2.2. Section a section of this Explanatory Memorandum.

Share Sale Agreement the share sale agreement between, among others, 360 Capital Group and Centuria Capital Limited ACN 095 454 336 in relation to the acquisition by Centuria Group of 100% of the shares held by 360 Capital Group in 360 CIML/CPF2L.

Simplification the simplification of CMA's corporate structure by reducing the number of ASX-listed entities comprising CMA from two to one as detailed in this Explanatory Memorandum. Simplification the proposal to undertake the Simplification. Proposal Simplification means the information line available to CMA Securityholders

means the information line available to CMA Securityholders

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Proposal Information on 1300 651 367. Line Simplification the Acquisition Resolution and the Constitutional Resolutions Amendment Resolutions. Stapled/Stapling in the case of a CMR1 unit and CMR2 unit, the "stapling" of them together so that neither of them may be dealt with without the other being dealt with in an identical manner and at the same time and with such restriction on dealing being denoted on the register of each stapled entity in which the securities are on issue. Supplemental Deed the deed polls that will effect the amendments to each of the Polls CMR1 and CMR2 constitutions pursuant to the Simplification Resolutions (assuming they are passed). TOF 360 Capital Office Fund ARSN 106 453 196 which was re-named "Centuria Urban REIT" on 20 January 2017. The ASX identification code for Centuria Urban REIT changed to CUA (previously it was TOF) from 23 January 2017. Trust Merger the merging of the legal and equitable interests in CMR2 such that they are held by a single entity, namely CPFL as responsible entity of CMR1. If a trust merger occurred, this would mean that CMR2 would cease to exist as a trust and CPFL would become the absolute owner of the assets held by CMR2. Please refer to Section 2.1(b) for further details. Trust Scheme the arrangement under which CMR1 will acquire all of the ordinary units in CMR2 from CMA Securityholders, facilitated by amendments to the CMR2 constitution as set out in the Supplemental Deed Poll and described in Section 10.4, subject to the condition in Section 2.5 being satisfied. Unit a unit in CMR1 or CMR2 as applicable. Unit Consolidation the consolidation of all CMR1 units on a 1.80:1 basis if the Simplification Resolutions are passed. Unstapled/Unstapling a CMR1 unit is not Stapled to a CMR2 unit and vice versa.

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Notice of Meeting

CENTURIA PROPERTY FUNDS LIMITED ACN 086 553 639

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notice is hereby given that:

An extraordinary general meeting of the holders of ordinary units of Centuria Metropolitan REIT No. 1 ARSN 124 364 718 ( CMR1 ); and
An extraordinary general meeting of the holders of ordinary units of Centuria Metropolitan REIT No.2 ARSN 124 364 656 ( CMR2 )

(together, the EGM ) will be held concurrently at:

Place: Level 39, 100 Miller Street, North Sydney NSW 2060

Date: Wednesday, 15 March 2017

Time: 10.00 am

ITEMS OF BUSINESS

The business of the EGM is to consider and, if thought fit, to pass the following resolutions:

RESOLUTION 1: AMENDMENT TO CMR1 CONSTITUTION (in respect of CMR1 only)

As a special resolution:

"That, subject to the passing of each other Simplification Resolution, the Simplification is for all purposes approved, the constitution of CMR1 is amended in the manner described in the Explanatory Memorandum accompanying the Notice of Meeting convening this meeting and as set out in the Supplemental Deed Poll which has been submitted to the meeting (and is for the purpose of identification marked "Simplification Amendments" and signed by the Chairman of the meeting) and CPFL is authorised to execute and lodge with ASIC a copy of the Supplemental Deed Poll, with the Simplification to take effect on and from the Implementation Date (as defined in the notice convening this meeting)."

This item is subject to voting exclusions - see "Voting Exclusion Statement" below.

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RESOLUTION 2: AMENDMENT TO CMR2 CONSTITUTION (in respect of CMR2 only)

As a special resolution:

"That, subject to the passing of each other Simplification Resolution, the Simplification is for all purposes approved, the constitution of CMR2 is amended in the manner described in the Explanatory Memorandum accompanying the Notice of Meeting convening this meeting and as set out in the Supplemental Deed Poll which has been submitted to the meeting (and is for the purpose of identification marked "Simplification Amendments" and signed by the Chairman of the meeting) and CPFL is authorised to execute and lodge with ASIC a copy of the Supplemental Deed Poll, with the Simplification to take effect on and from the Implementation Date (as defined in the notice convening this meeting)."

This item is subject to voting exclusions - see "Voting Exclusion Statement" below.

RESOLUTION 3: ACQUISITION (in respect of CMR2 only)

As an ordinary resolution:

"That, subject to the passing of each other Simplification Resolution, the Trust Scheme (as described in the Explanatory Memorandum to the Notice of Meeting convening this meeting) be approved and, in particular, the acquisition by CMR1 RE of a relevant interest in all of the CMR2 units on issue as at the Record Date (other than the Non-Voting Unit) pursuant to the Trust Scheme be approved for the purposes of item 7 of section 611 of the Corporations Act."

This item is subject to voting exclusions - see "Voting Exclusion Statement" below.

IMPORTANT NOTES

REFER TO THE EXPLANATORY MEMORANDUM

This Notice of Meeting should be read in conjunction with the rest of this Explanatory Memorandum.

This Explanatory Memorandum contains an explanation of the Simplification Resolutions and detailed information about the Simplification Proposal. To enable you to make an informed decision as to how to vote on each of the Simplification Resolutions, please carefully read this Explanatory Memorandum. Please see Section 6.1 for the unanimous recommendation of the CPFL Directors that CMA Securityholders should vote in favour of all of the Simplification Resolutions.

This Explanatory Memorandum has been prepared to provide CMA Securityholders with sufficient information to assess the merits of the Simplification Proposal and the Simplification Resolutions. You should read the Explanatory Memorandum in full before making any decisions in relation to the Simplification Resolutions.

DEFINED TERMS AND THE GLOSSARY

Terms used in this Notice of Meeting which begin with an uppercase letter have the meaning given in the Glossary in Section 13.

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QUORUM

The CMR1 constitution and CMR2 constitution each provide that two unitholders present personally or by representative, attorney or proxy holding at least 10% by value of the respective units in issue shall be a quorum for the EGM.

REQUIRED VOTING THRESHOLDS

The vote on the Simplification Resolutions will be conducted by way of a poll. On a poll, CMA Securityholders have one vote for each CMA Stapled Security held.

Resolutions 1 and 2: are special resolutions and will be passed if at least 75% of the votes cast on the relevant resolution are in favour.

Resolution 3: is an ordinary resolution and will be passed if more than 50% of the votes cast on it are in favour.

VOTING EXCLUSION STATEMENT

In accordance with section 253A and item 7 of section 611 of the Corporations Act, CPFL (the responsible entity of CMR1 and CMR2) and CPFL's associates will not be entitled to vote their interest on the proposed resolutions in items 1, 2 and 3. Accordingly, CPFL will disregard any votes cast on those resolutions by it or its associates. However, CPFL will not disregard votes cast as proxies if the appointment specifies the way in which the proxy is to vote and the proxy votes in that way.

VOTING INSTRUCTIONS

Voting entitlement

Persons holding CMA Stapled Securities at 7:00 pm (Australian Eastern Standard Time) on Monday, 13 March 2017 will, for the purposes of determining voting entitlements at the EGM, be taken to be CMA Securityholders.

How to vote

CMA Securityholders may vote by attending the meeting in person, by proxy or by authorised representative.

Proxies and authorised representatives

A CMA Securityholder who is entitled to attend and vote at the EGM has the right to appoint a proxy to attend and vote for them. The proxy does not have to be a CMA Securityholder.

CMA Securityholders holding two or more CMA Stapled Securities can appoint either one or two proxies. Where two proxies are appointed, the appointing CMA Securityholder can specify the number of votes or the proportion of the CMA Securityholder’s votes they want each proxy to exercise. If no number or proportion is specified, each proxy may exercise half of the CMA Securityholder's votes. Neither proxy may vote on a show of hands.

Corporate CMA Securityholders must provide CPFL with satisfactory evidence of the appointment of any corporate representative, prior to the commencement of the EGM.

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A proxy can be either an individual or a body corporate. Should you appoint a body corporate as your proxy, that body corporate will need to ensure that it:

appoints an individual as its corporate representative to exercise its powers at meetings; and
provides CPFL with satisfactory evidence of the appointment of its corporate representative prior to commencement of the EGM.

The Chairman of the EGM is deemed to be appointed to act as proxy in respect of a signed proxy that is returned and which does not contain the name of a proxy. In addition, if you direct your proxy how to vote and your nominated proxy does not attend the EGM, or attends but does not vote, on a poll on a resolution, the Chairman of the EGM will act in place of the nominated proxy and vote in accordance with any instructions.

A proxy form and a reply paid envelope are enclosed with this Notice of Meeting. If you wish to appoint two proxies, please obtain an additional form from CPFL’s Stapled Security Registry ( Registry ) or make a photocopy of the enclosed proxy form. To be effective, a duly completed proxy form and the power of attorney (if any) under which the proxy form is signed or a certified copy of the relevant authority must be received at the Registry or at CPFL’s registered office at least 48 hours before the start of the EGM (being no later than 10.00 am (Australian Eastern Standard Time) on Monday, 13 March 2017.

Proxies may be returned as follows:

By mail or in person to:

Computershare Investor Services Pty Limited:

By mail:

GPO Box 242 Melbourne Victoria 3001 (a reply paid envelope is enclosed)

In person: Yarra Falls, 452 Johnston Street, Abbotsford Victoria 3067

By facsimile to:

1800 783 447 (within Australia) (+61 3) 9473 2555 (outside Australia)

Online at:

www.investorvote.com.au

To use this facility please follow the instructions on your enclosed proxy form.

Online for Intermediary Online Users only at:

www.intermediaryonline.com

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Undirected proxies

If you choose to appoint a proxy, you are encouraged to direct your proxy how to vote on each item by marking either “For”, “Against” or “Abstain” against each item of business on the Proxy Form. If in respect of any of the items of business against which you do not direct your proxy how to vote, you are authorising your proxy to vote as they decide.

If the Chairman of the EGM is your proxy, you can direct the Chairman how to vote on each item by marking either “For”, “Against” or “Abstain” against each item of business on the Proxy Form. However, if the Chairman is your proxy and you do not mark any of the boxes opposite the Simplification Resolutions, then by signing and returning the proxy form you will be expressly authorising the Chairman to vote as he sees fit in respect of the relevant Simplification Resolution. The Chairman intends to vote available undirected proxies in favour of all Simplification Resolutions.

How to vote

CMA Securityholders may vote by attending the meeting in person, by proxy or by authorised representative.

Voting of jointly held CMA Stapled Securities

In accordance with section 253D of the Corporations Act, if two or more joint holders purport to vote, the vote of the joint holder whose name appears first in the Register will be accepted, to the exclusion of the other joint holder or holders.

Attendance

If you plan to attend the EGM, we ask that you arrive at the venue at least 30 minutes prior to the time designated for the EGM so that we may check the number of your CMA Stapled Securities and register your attendance.

Appointment of Chairman

In accordance with section 252S of the Corporations Act, the Chairman of the CPFL Board (Mr Peter Done) is to be the Chairman of the EGM. Failing him, another person appointed by the CPFL Board of Directors will act as Chairman of the EGM.

By order of the CPFL Board of Directors.

==> picture [113 x 87] intentionally omitted <==

James Lonie Company Secretary 14 February 2017

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15. Corporate Directory

Directors

Peter Done - Non-Executive Chairman

Matthew Hardy - Non-Executive Director

Darren Collins - Non-Executive Director

Jason Huljich - Executive Director

Chief Executive Officer

Nicholas Collishaw

Chief Financial Officer

Simon Holt

Company Secretary

James Lonie

Principal and Registered Office

Level 39 100 Miller Street North Sydney NSW 2060

Tax adviser

Ernst & Young

Legal Adviser

HWL Ebsworth

Auditors

KPMG

Share Registrar

Computershare Investor Services Pty Ltd

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Centuria Metropolitan REIT Centuria Property Funds Limited ("CPFL") (ABN 11 086 553 639 AFSL 231149) as Responsible Entity of Centuria Metropolitan REIT No. 1 (ARSN 124 364 718) and Centuria Metropolitan REIT No. 2 (ARSN 124 364 656) (together Centuria Metropolitan REIT)

Lodge your vote:

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
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Online:

www.investorvote.com.au



By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

CMA

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 651 367 (outside Australia) +61 3 9415 4282

Proxy Form

Vote and view the Notice of Meeting online



Go to www.investorvote.com.au or scan the QR Code with your mobile device.
• Follow the instructions on the secure website to vote.

Your access information that you will need to vote:

Control Number: 999999 SRN/HIN: I9999999999 PIN: 99999 PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

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For your vote to be effective this proxy form must be received by 10:00am (AEDT) on Monday, 13 March 2017

How to Vote on the Item of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite the item of business. If you do not mark a box your proxy may vote or abstain as they choose (to the extent permitted by law). If you mark more than one box on the item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meetings and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Fund.

Signing Instructions for Postal Forms

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meetings

Bring a copy of this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meetings you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the help tab, "Printable Forms".

Comments & Questions: If you have any comments or questions for CPFL, please write them on a separate sheet of paper and return with this form.

GO ONLINE TO VOTE,  or turn over to complete the form

Samples/000001/000001/i12

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ‘ X ’) should advise your broker of any changes. I 9999999999

I ND

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Proxy Form

Please mark

to indicate your directions

Appoint a Proxy to Vote on Your Behalf

XX

I/We being a member/s of Centuria Metropolitan REIT No.1 (ARSN 124 364 718) and Centuria Metropolitan REIT No.2 (ARSN 124 364 656), comprising the entity known as Centuria Metropolitan REIT, hereby appoint

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the Chairman of the Meetings



PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meetings. Do not insert your own name(s).

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meetings, as my/our proxy to act generally at the Meetings on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, and to the extent permitted by law, as the proxy sees fit) at the Extraordinary General Meetings of Centuria Metropolitan REIT to be held at Level 39, 100 Miller Street, North Sydney NSW 2060, on Wednesday, 15 March 2017 at 10:00am (AEDT) and at any adjournment or postponement of those Meetings.

Item of Business  PLEASE NOTE: If you mark the Abstain box for this item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

Resolution 1 Amendment to CMR1 Constitution and approval of Simplification Proposal (in respect of CMR1 only) Resolution 2 Amendment to CMR2 Constitution and approval of Simplification Proposal (in respect of CMR2 only) Resolution 3 Acquisition of CMR2 units (in respect of CMR2 only)

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The Chairman of the Meetings intends to vote undirected proxies in favour of the item of business. In exceptional circumstances, the Chairman of the Meetings may change his/her voting intention on any resolution, in which case an ASX announcement will be made.

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SIGN
Signature of Securityholder(s) This section must be completed.
Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime / /
Name Telephone Date
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C M A

2 2 1 4 8 5 A

AI assistant

CENTURIA OFFICE REIT — Proxy Solicitation & Information Statement 2017

64683_rns_2017-02-14_05054396-6451-4c26-85e9-50eb244ca45d.pdf

Australian Securities Exchange - Company Announcements Platform

CENTURIA PROPERTY FUNDS LIMITED CENTURIA METROPOLITAN REIT Proposed Corporate Simplification

Wednesday, 15 February 2017

- Ends -

For further information, please contact:

Nicholas Blake

Shalome Ruiter

Nicholas Collishaw

Carden Calder

About Centuria Metropolitan REIT

CENTURIA PROPERTY FUNDS LIMITED ACN 086 553 639 AS RESPONSIBLE ENTITY FOR CENTURIA METROPOLITAN REIT

Notice of an Extraordinary General Meeting and

Explanatory Memorandum for the Simplification Proposal

IMPORTANT NOTICES

Purpose of this Explanatory Memorandum

ASIC and ASX

Investment advice

Forward-looking statements

No guarantee of capital or investment returns

Up to date information

Warning for New Zealand investors

Defined terms

Enquiries

TABLE OF CONTENTS

Important dates

Notes:

What action you should take

The Extraordinary General Meeting of CMA will be held at Level 39, 100 Miller Street, North Sydney NSW 2060, on Wednesday 15 March 2017 at 10.00 am.

In person to:

By facsimile to:

Online at:

www.investorvote.com.au

Online for Intermediary Online Users only at:

www.intermediaryonline.com

Simplification Proposal

Outline of the Simplification Proposal

Reasons for proposing the Simplification Proposal

Disadvantages of the Simplification Proposal

Issue of CMR1 units to existing CMA Securityholders in exchange for the transfer of each CMR2 unit held by that CMA Securityholder

No change to underlying business

Extraordinary general meeting to consider approving the Simplification Proposal

Recommendation

Alternative to Simplification Proposal

Overview of the Simplification Proposal

1. CMA structure diagrams

CURRENT STRUCTURE

PROPOSED SIMPLIFIED STRUCTURE

2. Implementation of the Simplification Proposal

2.1 Elements of the Simplification Proposal

(c) Step 3 - CMR1 Unit Consolidation

(d) Step 4 - delisting and deregistration

2.2 Foreign Securityholders

2.3 Substantial holders and issued capital

2.4 Options and other securities issued by CMA

2.5 CMA Securityholder approval

2.6 Simplification Resolutions

2.7 Following Simplification

3.1 Simplified financial reporting requirements

3.2 A simplified corporate structure

3.3 Ongoing cost savings

3.4 Simpler distributions

3.5 Reduction in costs associated with any future acquisitions

3.6 Attractiveness of any future acquisitions

4. What are the disadvantages of the Simplification Proposal?

4.1 CGT considerations

4.2 One off costs

4.3 Other risks

5.1 Background

5.2 CMA's intentions

6.1 CPFL Directors' recommendation and intentions

6.2 CPFL Directors' reasons for recommending the Simplification Proposal

7.1 Costs of implementing the Simplification Proposal

7.2 Financing

7.3 CMA Financial Statements

8.1 General

8.2 Class ruling

8.3 Unstapling

CENTURIA OFFICE REIT Proxy Solicitation & Information Statement 2017