CHARTER HALL GROUP — Annual Report 2007

Aug 20, 2007

CHARTER HALL GROUP (CHC)

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FULL YEAR RESULTS FY07

21 AUGUST 2007

Sydney Brisbane Perth Auckland

CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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1

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Contents

• FY07 Review

• Charter Hall Property Trust Update

• Funds Update

• Financials

• Wrap-up

• Appendix

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

2

Highlights

• FY07 DPS at 10.44cps – 47% increase on FY06 DPS

• 118% TSR to CHC security holders – 30 June 06 to 30 June 07

• 2 new wholesale funds – CHOF 5 and CPIF, raised $650m of equity

• Unlisted equity commitments increased by $800m in FY07

• 26 investment assets acquired

• Crystallised profits for 3 development projects

• Funds continue to perform strongly

• Management is comfortable with consensus FY08 DPS forecast

• After fair-value adjustment

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

3

Exceeding Forecasts

	FY07 results		FY06		Variance
DPS	10.44cps		7.10cps		+47%
NPAT	$31.7m		$17.4m		+82%
Tax Deferred	51%		28%		+21%
Underlying EPS1	9.51cps		6.50cps		+46%
AUM2	$2.81bn		$1.35bn		+108%
Gearing	24.4%		27.7%		-3.3%

CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

1. Underlying EPS is after adding back AIFRS non cash expenses (mainly the share based remuneration expense and tax expense on the unrealised gain in the investment in Axiom Properties Limited).

2. Measured on a completed basis

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Key Events

	PROPERTY ACQUISITIONS / COMPLETED PROJECTS / LEASING DEALS	PROPERTY ACQUISITIONS / COMPLETED PROJECTS / LEASING DEALS	PROPERTY ACQUISITIONS / COMPLETED PROJECTS / LEASING DEALS	STRATEGIC INITIATIVES
	CPOF	CPIF		CPOF
JUL 07	34 Hunter Street, Sydney acquired for $41m.	772 Boundary Road, Richlands, Brisbane. Project initial outlay $6.9m (completion value $20m)	Northbank Plaza, Brisbane CBD. 50% acquired from CHOF 4. Taking interest to 100% of $180m completed value
	CPRF	DPF		CPRF
JUN 07	Foodtown, Auckland CBD acquired for $NZ28.0m CPOF	615-619 Maroondah Highway, Mitcham, Melbourne. Retail acquisition for $5.1m	CIP ACQ. & PLACEMENT Australia-wide Bunnings Portfolio and Bluewater Plaza, Redcliffe, Brisbane acquired for a total $197m
	Macquarie House, Sydney acquired for			50% investment in CIP for $40m. Funded
	$90.7m.			from proceeds of $133m capital raising.
		DPF		CHOF 5 CLOSE
MAY 07		Glover Street, Cremorne, Sydney acquired		Close of Charter Hall Opportunity Fund.
		for $10.3m.		Total committed equity of $300m.
	CHOF 4	DPF		CPIF LAUNCH
APR 07	275 George Street, Brisbane. Announce commencement of $550m office devpmnt.	Industrial Portfolio in Melbourne Airport Business Park. 3 Buildings acquired for $10.65m		First close of Core Plus Industrial Fund. $350m of equity commitments received.
				CPOF RE-UP
MAR 07				CPOF raises a further $125m for future
				acquisitions
	CPRF			CHUF
FEB 07	Harvey Norman, Dunedin, New Zealand.			CHC enters partnership to create Charter
	CHC’s first New Zealand acquisition			Hall Umbrella Fund
	CPRF	CPRF
JAN 07	Bunnings property Bendigo acquired for	Bunnings property Kalgoorlie acquired for
	$8.7m	$6.2m
CHARTER	HALL GROUP .FULL YEAR FY 07 RESULTS	5

Key Events

PROPERTY ACQUISITIONS / COMPLETED PROJECTS / LEASING DEALS

STRATEGIC INITIATIVES

	CPOF	CPIF	CPOF / CHOF 4
	275 George St, Brisbane CBD, 50% acquired. $370m project end value	Pinkenba Brisbane, acquired for $10.4m	275 George St / Northbank Plaza, Brisbane CBD. 10-year, 50,000sqm lease to Telstra
	CPOF	CPOF	CPOF / CHOF 4
DEC 06	Northbank Plaza, Brisbane CBD, 50%	331 George St, Sydney CBD acquired for	Northbank Plaza, Brisbane CBD. 8-year,
	acquired. $180m project end value	$7.5m	5,800sqm lease to Parsons Brinckerhoff
	CPIF	CPIF
	Wesfarmers Geebung Brisbane, acquired for $7.5m	Toll, Brisbane Airport, acquired for $9.5m
	CHOF 4	PDP 3	PDP 3	CHL INVESTMENT
NOV 06	Home HQ North Shore Sydney, Bulky goods centre, $135m project end value	151 Pirie St, Adelaide CBD sold for $61m realising 48% equity IRR	Home HQ Nunawading, commenced trading	$5m investment in Axiom Properties Ltd
	CPOF	CPIF & DPF	CPOF
SEP 06	225 St Georges Tce, Perth CBD. 50% of	Coles Myer Dist. Centre, Perth Airport	St George Bank HQ, Kogarah Sydney.
	office tower acquired for $61.5m	acquired for $155m (CPIF 75% / DPF 25%)	Office building acquired for $126m
	CHPT	CPOF	CPOF	CPOF 2ND CLOSE
AUG 06	Key tenants secured for Nunawading: JB HiFi, Howard's Storage	Hatch, Perth CBD fringe. Office building acquired for $36.5m	333 George St, Sydney CBD. Office tower acquired for $69m	$500m of equity commitments raised
	CHOF 4	CHOF 4	CHPT
	275 George St, Brisbane CBD. DA lodged	Mounts Bay Rd, Perth CBD. Office tower,	Key tenant secured for Nunawading:
	for $370m office tower	$144m project end value (JV)	The Good Guys
JUL 06	PDP 3		CHOF 4
	Sites 6&7 Sydney Olympic Park site sold		420 George St, Brisbane on-sold for
	for $8m+		$17.4m realising 97% equity IRR
CHARTER	HALL GROUP .FULL YEAR FY 07 RESULTS	6

CIP Acquisition

• In June 07 CHC acquired 50% of Commercial & Industrial Property (CIP), a national private industrial development group based on a multiple of 4.76 x PBT over FY07-09

• CIP FY07 PBT exceeded expectations

• FY08 WIP and profit expectations are “on track”

• CIP has continued expansion with new resources and further projects

• Richlands acquisition and JV between CIP and Core Plus Industrial Fund (CPIF) increases AUM originated for CHC managed funds by CIP to $250m over last 2 years*

• Demonstrates the new investment opportunities expected to arise from the CIP investment

• CHC has an option to acquire the remaining 50% after 3 years at a price equivalent to 4.76 x annual PBT weighted 20% FY08, 40% FY09 & 40% FY10

• On a completed basis

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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CIP Structure

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CIP Vendors CHC
50% 50%
CIP JV partner
Long term lease Investment pipeline
Customer Project CPIF
Management and co-investment
Relationship
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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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CHC Security Price

• 98% out-performance of ASX/S&P Property Trusts 300 on a total return basis

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$3.30
CHC
S&P/ASX LPT 300 (rebased)
$2.80
$2.30
$1.80
$1.30
$0.80
Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07
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Closing Price 20 August 07		$2.82		Total Return since 30 June 06		116.3%
Closing Price 30 June 06		$1.35		Market Cap 20 August 07		$1,231.5m

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Product Spectrum

• A range of products covering entire risk/return spectrum targeting all investor market segments

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Return
18%+ OPPORTUNISTIC
CHOF 4, CHOF 5
15-17%
ENHANCED
11-14% CORE PLUS
CPOF, CPIF, CPRF
9-11% CORE
CHUF, DPF, CHPT, CHIF 2-6
Lower Risk Higher Risk
CRITERIA Core investments 70% core, 30% enhanced Development opportunities
INVESTORS Institutional, HNW, Retail Wholesale Wholesale
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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Established Track Record

FUND	Target CHC %		# Assets		Asset Capacity		Equity Committed	Equity Committed	Allocated		Year Est.		Status
CHARTER HALL OPPORTUNITY FUND 5 (CHOF 5)	17%		0		$1,000m		$300m		0%		07		Closed Ended
CHARTER HALL OPPORTUNITY FUND 4 (CHOF 4)	3%		5		$500m		$165m		82%		05		Closed Ended
CORE PLUS OFFICE FUND (CPOF)	23%		12		$1,250m		$625m		62%		06		Open Ended
CORE PLUS INDUSTRIAL FUND (CPIF)	20%		7		$700m		$350m		40%		07		Open Ended
CORE PLUS RETAIL FUND (CPRF)*	20%		14		$700m		$350m*		50%		08		Open Ended
CHARTER HALL UMBRELLA FUND (CHUF)*	0-20%		Multiple		$100m		$100m*		TBA		07		Open Ended
DIVERSIFIED PROPERTY FUND (DPF)	0-20%		11		$150m		$53m		100%		05		Open Ended
CHARTER HALL INVESTMENT FUNDS 2-6 (CHIF 2-6)	0%		10		$124m		$70m		100%		96-05		Closed Ended
CHARTER HALL PROPERTY TRUST (CHPT)*	100%		3		$750m		$460m**		100%		05
TOTALpost current raisings			62		$5,274m		$2,453m
			* Subject to successful capital raising for CHUF and						CPRF
CHARTER HALL GROUP .FULL YEAR FY 07 RESULTS	11		** Accounts for $380m of assets being sold down into CPRF

Assets Under Management

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$5,000m
CPOF, CPIF, CHOF & CPRF Remaining Acquisition Capacity
$4,000m $2,500m
Opportunistic Assets (completion value)
Core and Core Plus Assets
$3,000m
$692m $692m
$2,000m
$1,000m $458m $2,120m $2,120m
$645m
$568m $728m $833m
$273m $288m $333m $415m
$0m
2000 2001 2002 2003 2004 2005 2006 2007 2008+
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• $2.8 billion current AUM

• 53 property acquisitions deals totalling $2.6 billion completed in FY05-07 period (80% offmarket) across all property sectors nationally and New Zealand

• Deep property market penetration provides access to transaction flow

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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- Co Investment Model

CHARTER HALL GROUP (CHC)

			17%		3%	20%			20%					20%					100%				20%			20%
CHOF 5				CHOF 4		CPOF			CPIF					CPRF					CHPT				DPF			CHUF
		$ 1bn			$500m	$925m		→$1,250m	$270m →$700m					$480m →$700m					$590m →$120m				$125m			$100m
				Mounts Bay Road Perth WA, (50%)		Nortbank Plaza, Brisbane QLD, (100%)			Coles Myer Distribution Perth Airport WA, (75%)					Home HQ, Nunawading VIC					Home HQ, Nunawading VIC				Coles Myer Distribution Perth Airport WA, (25%)			CPOF
				Home HQ North Shore Sydney NSW		275 George Street Brisbane QLD, (50%)			MABP Cat, Tullamarine VIC					27-29/61 Nepean Hwy, Mentone VIC (50%)					27-29/61 Nepean Hwy, Mentone VIC (50%)				400 Kent St, Sydney NSW, (25%)			CPIF
				420 George Street Brisbane QLD		AMEX Atrium, Pyrmont Sydney NSW			Wesfarmers, Geebung QLD					25 Nepean Hwy, Mentone VIC					25 Nepean Hwy, Mentone VIC				385 St Pauls Tce, Brisbane QLD			CPRF
						333 & 331 George St, Sydney NSW			140-150 Robinson Rd Geebung QLD					Menai Central, Menai NSW					Menai Central, Menai NSW				181 St Georges Tce, Perth WA			CHOF 5
		Assets sourced from CH funds and CIP, off- market				Hatch, Stirling St, Perth WA			Pinkenba Brisbane QLD					Bunnings Bendigo VIC					Bunnings Bendigo VIC				420 Princess Hwy, Corio (Geelong) VIC			DPF
		Assets sourced off-market				225 St Georges Tce, Perth WA, (50%)			Myer, Kewdale WA					Bunnings Kalgoorlie WA					Bunnings Kalgoorlie WA				Compark Circuit, Mulgrave VIC			REIT /	LPT
		Assets sourced on-market				St George Bank, Kogarah NSW			Toll Brisbane Airport QLD					Bunnings Australia Portfolio (6 assets)					Bunnings Australia Portfolio (6 assets)				MABP Bax, Tullamarine VIC
		Seed assets for upcoming funds currently held on balance sheet				Bank SA, Adelaide SA			Richlands Brisbane					Foodtown	Auckland NZ				Foodtown Auckland NZ				EMI Cremorne
						34 Hunter Street Sydney								Harvey Norman NZ		Dunedin			Harvey Norman Dunedin NZ				Maroondah Hwy Mitcham
						167 Macquarie Street													570 Bourke St Melbourne
							Sydney												400 Kent Street Sydney
																			Volvo Chullora
		CHARTER HALL GROUP .FULL YEAR FY 07 RESULTS										13

PROPERTY TRUST UPDATE

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FULL YEAR FY07

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Charter Hall Property Trust (CHPT) Update

• In line with its strategy, CHC (via CHPT’s balance sheet) continues to seed new funds with assets and takes approx 20% co-investment stake in those managed funds

• Acquired 6 industrial assets, which subsequently seeded the March 07 launch of CPIF

• 12 retail assets acquired over the year with a total value of $300m, bringing total retail assets to $480m

• Core Plus Retail Fund (CPRF) assets expected to be sold down from CHPT balance sheet during FY08

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Charter Hall Property Trust (CHPT) Update

• CHPT’s investments in Core Plus funds now comprise majority of CHPT investment assets

• Remaining $130m of direct CHPT investment assets provide further inventory for managed funds

• Mentone Harvey Norman Centre construction expected to commence in FY08

• CHPT WALE of 9.0 years (post sell-down of CPRF assets), excellent geographic and sector diversification provide high quality, low risk property portfolio, with spread of fixed and market rent reviews

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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- CHPT Portfolio: Pre Sell down into CPRF

ASSET DIVERSIFICATION

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By Value
CPOF, 25.7%
DPF, 1.9%
CPIF, 9.7%
Chullora, 2.0%
Menai, 4.2%
Bourke, 7.0%
Kent, 2.7%
Nunawading, 8.5%
Redcliffe, 7.7%
HN Mentone, 6.5%
Harvey Norman,
Mentone Show,
Dunedin, 1.7%
2.9%
Bunnings Australia
Foodtown,
Portfolio, 14.8%
Auckland, 2.9%
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WEIGHTED AVERAGE LEASE EXPIRIES

By Income

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Harvey Norman, 4.4
Foodtown, Auckland 11.5
Bunnings Australia 11.5
Bun. Kalgoorlie 9.0
Bun. Bendigo 9.0
Mentone Show 5.6
HN Mentone 10.3
Nunawading 6.5
Menai 3.3
CPIF 14.1
DPF 10.3
CPOF 9.6
Chullora 3.4
Bourke 3.0
Kent 9.2
WALE 8.4
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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

GEOGRAPHIC DIVERSIFICATION

By Value

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WA, 15.79%
SA, 0.53%
NZ, 0.75%
QLD, 19.29%
NSW & ACT
31.61%
VIC, 27.30%
SECTOR DIVERSIFICATION
Retail / Bulky
Goods Retail
Industrial
54.6%
12.7%
Office
31.5%
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SECTOR DIVERSIFICATION By Income

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- CHPT Portfolio: Post Sell down into CPRF

ASSET DIVERSIFICATION

By Value

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Chullora, 3.4%
CPOF, 43.4%
Bourke, 11.8%
Kent, 4.6%
DPF, 3.2%
CPRF, 17.2%
CPIF, 16.5%
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WEIGHTED AVERAGE LEASE EXPIRIES

By Income

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CPRF 8.8
CPIF 14.1
DPF 10.3
CPOF 9.6
Chullora 3.4
Bourke 3.0
Kent 9.2
WALE 9.0
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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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GEOGRAPHIC DIVERSIFICATION
By Value
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WA, 19.26%
NZ, 1.93%
SA, 0.89%
QLD, 21.50% NSW & ACT,
26.09%
VIC, 22.35%
SECTOR DIVERSIFICATION
By Income
Industrial
21.9%
Retail / Bulky
Goods Retail
22.4%
Office
53.9%
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FUNDS UPDATE

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FULL YEAR FY07

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Wholesale Overview

• Largest Core Plus fund manager in Australia - $975 million total equity raised to date

• Provider of sector choice for wholesale investors - Office, Industrial, Retail

• Skill and track record to deliver development margins essential to equity value growth for investors

• Substantial Equity commitments provide opportunity to exploit opportunities that emerge from global credit volatility

• Upcoming launch of a Core Plus Retail Fund (CPRF) to complement the Core-Plus series

• $500m initial portfolio of quality Australian and NZ retail and bulky goods properties

• Looking to raise up to $350m equity in an initial offer

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Wholesale Overview

• Largest Opportunistic fund manager in Australia - $734m equity raised to date

• 5[th] fund in the successful series of Charter Hall’s Opportunity Funds

• Total committed equity of $300m, with capacity for $1 billion of project value

• Heavily over-subscribed

• 74% of funds committed from repeat investors

• New Clients and Repeat business

• Multitude of new clients added to Charter Hall stable of wholesale funds including many market leading Australian superannuation funds, Government funds, foundations, investment institutions and offshore investors

• Repeat Business: Strong positive reaction to CHOF 5 and CPIF initial raisings, in addition to CPOF Re-Up, from Charter Hall’s existing wholesale client base

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Retail Overview

• Charter Hall to further penetrate the retail funds management market

• Diversified Property Fund rapidly expanding

• Increasing equity in-flows from major and boutique financial planning groups

• 156% increase in AUM for FY07

• FY08 Launch of Charter Hall Umbrella Fund (CHUF)

• To be established with $100m+ of equity

• Enables retail investors a diversified unlisted property exposure across Charter Hall’s suite of property funds, with daily unit pricing and liquidity

• Positive feedback from major financial planning groups and research houses

• Will provide scale and efficient access to fast growing retail and self managed super fund investor market

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Core Plus Office Fund (CPOF) Update

• Achieved strong inaugural financial year gross equity IRR of 19.1%

• Increased number of assets in portfolio from 3 to 12 during FY 07

• Continued high proportion of off-versus-on market acquisitions

• Equity commitments from Wholesale Investors increased from $500m to $625m

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Core Plus Office Fund (CPOF) Update

• Gross asset capacity increased from $1,000m to $1,250m

• 62% of total equity commitments drawn from Investors

• High quality, geographically diversified portfolio across WA, QLD, NSW and SA

• WALE of over 9.5 years

• Tenants include Telstra, American Express, St George Bank, Coles, BHP Billiton, Hatch

• Strategy on track to outperform target equity IRR of 12.0%pa net

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Core Plus Office Fund (CPOF) Property Portfolio

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Atrium (AMEX) Sydney $142.2m (100% Ownership)

333 & 331 George St Sydney $82.5m (100% Ownership)

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Stirling St Perth (Hatch) $36.5m (100% Ownership)

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Northbank Plaza (Telstra) Brisbane $183.0m (100% Ownership) 275 George St (Telstra) Brisbane $200.0m (50% Ownership)

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Core Plus Office Fund (CPOF) Property Portfolio

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225 St Georges Tce (BHP) Perth WA $76m (50% Ownership)

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Bank SA Adelaide $20.0m (100% Ownership)

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St George Bank HQ Sydney $133.0m (100% Ownership)

167 Macquarie St Sydney $90.7m (100% Ownership)

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34 Hunter St Sydney NSW $41m (100% Ownership)

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Core Plus Office Fund (CPOF) Portfolio

ASSET DIVERSIFICATION

By Value

GEOGRAPHIC DIVERSIFICATION

By Value

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225 St Georges
Northbank,
Tce, 6.3%
Adelaide, 2.0% 17.9%
Kogarah,
12.9% QLD, 33.9%
Stirling St,
Stage 2, 6.9% 275 George St,
16.0% NSW, 47.6%
Stirling St,
3.2%
SA, 2.0%
34 Hunter,
333 George St,
4.2%
7.1%
Atrium, 14.2% 167 Macquarie, WA, 16.5%
9.3%
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WEIGHTED AVERAGE LEASE EXPIRIES

By Income

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167 Macquarie 4.9
275 George St 11.9
Northbank 9.9
225 St Georges Tce 5.5
Adelaide 14.3
Kogarah 14.3
Stirling St, Stage 2 8.3
Stirling St 3.3
333 George St 2.9
Atrium 11.7
WALE 9.6
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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Core Plus Industrial Fund (CPIF) Update

• Fund established at 31 March 2007 with $350m in wholesale equity commitments

• Gross asset capacity of $700m within current equity raising. Scope to increase capacity at future equity raisings

• Unit Price Up-Lift at 30 June 2007 plus income yield provides 3.3% 1st quarter return

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Coles Regional Distribution Centre (85,000m[2] )[–] CIP Development

• Portfolio owns 7 quality warehouse / distribution facilities with a total value of $268m

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Core Plus Industrial Fund (CPIF) Update

• Portfolio diversified across WA, QLD and VIC with a WALE of 14 years

• Tenants include Coles Myer, Toll, Wesfarmers, Caterpillar, Kathmandu

• Future acquisition pipeline significantly enhanced via deal-flow from CIP group

• CPIF seed portfolio well positioned to achieve target equity IRR of 11%+

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Coles Regional Distribution Centre (85,000m[2] )[–] CIP Development

• Attracted both domestic and international investors

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Core Plus Industrial Fund (CPIF) Property Portfolio

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Subject Site
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Coles Myer Distribution Centre Perth WA End Value $133m (75% Ownership)

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Toll, Viola Place 123 Kewdale Road Brisbane QLD Kewdale, Perth WA $9.5m $32m (100% Ownership) (100% Ownership)

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Pinkenba, Brisbane QLD End value $24m (100% Ownership)

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Wesfarmers, Geebung Brisbane QLD $7.75m (100% Ownership)

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772 Boundary Road Richlands, Brisbane End value $20m (100% Ownership)

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Tullamarine, Melbourne VIC $24m (100% Ownership)

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140-150 Robinson Rd, Geebung Brisbane QLD $18m (100% Ownership)

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

30

Core Plus Industrial Fund (CPIF) Portfolio

ASSET DIVERSIFICATION

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

Coles,
By Value
19.0%
Toll, 1.4%
Geebung, 1.1%
Tullamarine, 3.5%
Pinkenba, 3.3%
Future,
Kewdale 4.6%
61.7%
Robinson, 2,6%
Richlands, 2.9%
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GEOGRAPHIC DIVERSIFICATION
By Value
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WA, 23.6%
Future,
61.7%
QLD, 11.3%
VIC, 3.5%
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WEIGHTED AVERAGE LEASE EXPIRIES

By Income

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Richlands 8.8
Robinson 6.5
Kew 6.6
Pinkenba 8.2
Tullamarine 6.2
Geebung 9.8
Toll 10.0
Coles 21.2
WALE 14.1
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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

31

Core Plus Retail Fund (CPRF) Update

• Fund to be established in FY 08 with target $350m in wholesale equity commitments

• Scope to increase gross asset capacity at future equity raisings

• Same structure and fee profile as successful CPIF capital raising

• Seed portfolio of 14 retail assets with a focus on bulky goods outlets, showrooms and neighbourhood retail

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Bunnings Belconnen, part of the $130m Bunnings portfolio acquired in June 2006

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

32

Core Plus Retail Fund (CPRF) Update

• WALE of 9 years with asset diversity across Vic, NSW, QLD, WA and NZ

• Major tenant covenants include Bunnings, Harvey Norman, Woolworths, Bev Marks, JB Hi-Fi, Nick Scali, Good Guys and Subaru etc

• Strong management with Charter Hall bulky retail expertise

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Foodtown Retail Asset, New Zealand CPRF Acquisition

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Core Plus Retail Fund (CPRF) Property Portfolio

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Harvey Norman Mentone, Melbourne Vic $50m end value (50% Interest)

Menai Central Menai, Sydney NSW $36.5m (100% Interest)

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Mentone Showrooms Melbourne, Vic $22m (100% Interest)

Foodtown Auckland CBD, New Zealand $28m (100% Interest)

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Home HQ Nunawading, Blue Point Plaza Melbourne Vic Redcliffe, $68m Brisbane QLD (100% Interest) $67m (100% Interest)

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Harvey Norman Dunedin, New Zealand $18m (100% Interest)

Bunnings Penrith, Sydney NSW (100% Interest)

Bunnings Nerang, Gold Coast QLD (100% Interest)

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

34

Core Plus Retail Fund (CPRF) Property Portfolio

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Bunnings Box Hill, Melbourne Vic (100% Interest)

Bunnings Stafford, Brisbane QLD (100% Interest)

Bunnings Belconnen, Canberra ACT (100% Interest)

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SECTOR DIVERSIFICATION
By Value
Bulky
69.8%
Retail
30.2%
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Bunnings Kalgoorlie, Western Australia (100% Interest)

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Bunnings
Bendigo,
Victoria
(100% Interest)
TENANT SPLIT
By Value Specialty
22.9%
Bunnings
Nowra,
South Coast NSW
(100% Interest)
Anchor
77.1%
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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

35

Core Plus Retail Fund (CPRF) Property Portfolio

ASSET DIVERSIFICATION

GEOGRAPHIC DIVERSIFICATION

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

By Value
Nunawading,
HN Mentone,
15.5%
12.1%
100
Mentone Show,
Menai, 8.8% 5.1%
B Bendigo, 2.0% East
Harvey Norman, 50
Dunedin, 3.7% B Kalgoorlie, 1.4%
West
Foodtown,
Auckland, 5.8% 0
Redcliffe, 15.6%
North
1st 3rd
Qtr Bunnings Australia Qtr
Portfolio, 30.0%
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By Value ACT, 5.3%
NZ, 9.1%
WA, 1.4%
QLD, 27.7%
NSW, 17.3%
VIC, 39.2%
WEIGHTED AVERAGE LEASE EXPIRIES
By Income
Harvey Norman, Dunedin 4.4
Foodtown, Auckland 11.5
Bunnings Australia Portfolio 11.5
B Kalgoorlie 9.0
B Bendigo 9.0
Mentone Show 5.6
HN Mentone 10.3
Nunawading 6.5
Menai 3.3
WALE 8.8
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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Diversified Property Fund (DPF) Update

• 156% increase in AUM to $123m over FY07

• Significant enhancement in diversification as portfolio grows from 5 to 11 assets

• Significant positive feedback from major and boutique financial planning groups

• Average equity flows growing on a quarterly basis

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St. George’s Terrace, Perth

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Diversified Property Fund (DPF) Update

• Quality portfolio of ASX listed, national and government tenant exposure

• Portfolio has one of the longest WALE in the industry at 10.4yrs

• Strong 8% cash distribution yield

• On track to deliver on long term objective to outperform a 10 year equity IRR of 10%

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Mulgrave, Victoria

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Diversified Property Fund (DPF) Property Portfolio

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Subject Site
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Coles Myer Distribution Centre Perth WA $44.1m (25% Ownership, 75% CPIF)

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Corio Retail Centre Geelong VIC $11.1m (100% Ownership)

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South Centre Road & Jets Court, Tullamarine VIC $10.7m (100% Ownership)

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400 Kent St Sydney NSW $13.2m (25% Ownership, 50% CHPT, 25% CHIF 6)

181 St Georges Tce Perth WA $16.1m (100% Ownership)

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Mulgrave VIC $5.7m (100% Ownership)

285 St Pauls Tce Brisbane QLD $5.5m (100% Ownership)

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98-100 Glover St Cremorne, NSW $10.3m (100% Ownership)

615-619 Maroondah Hwy Mitcham VIC $5.1m (100% Ownership)

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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Diversified Property Fund (DPF) Property Portfolio

ASSET DIVERSIFICATION

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By Acquisition Price
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St Georges
Tce, 12.4% Perth
Airport,
Mulgrave, 37.4%
4.8%
St Pauls
Tce, 4.0%
Corio, 9.4%
Tullamarine,
Kent Street,
9.0%
10.0%
Mitcham, Cremorne,
4.3% 8.8%
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SECTORAL DIVERSIFICATION

By Net Income

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Office
41.4%
Retail
13.4%
Industrial
45.2%
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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

GEOGRAPHICAL DIVERSIFICATION

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By Acquisition Price
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QLD
VIC
4.0%
27.5%
NSW
WA
18.8%
49.8%
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WEIGHTED AVERAGE LEASE EXPIRIES

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Mitcham 7.0
Cremorne 3.8
Tullamarine 5.5
Kent Street 9.2
St Georges Terrace 4
St Pauls Terrace 4.3
Mulgrave 5.3
Corio 2.9
Perth Airport 21.0
WEIGHTED AVERAGE 10.4
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40

Charter Hall Opportunity Fund (CHOF) Update

• FY 07 Deals Executed/Crystallised

• 151 Pirie Street, gross equity IRR >50%

• Northbank Plaza Brisbane, gross equity IRR >75%

• CHOF 4 ($165m equity, $500m GAV capacity) Performance Update

• On track to significantly outperform 20.0%pa gross equity IRR objective

• 81% of committed equity allocated with capacity for one more project

• CHOF 5 Fund Launch ($300m equity, $1000m GAV capacity)

• Closed over-subscribed at a self imposed cap of $300m in committed equity

• Charter Hall and Charter Hall managed funds co-invested $50m

• Strong support from a wide variety of Australian superannuation funds, Government funds and institutions

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

41

Current Charter Hall Opportunity Fund (CHOF) Projects

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275 George Street, Brisbane

New 40,000sqm A-grade, 30-level office tower, 1,500sqm retail space and 240 car spaces. 80% pre-leased to Telstra on a 10 year lease. Targeting 5 star Green Star rating and 4.5 star ABGR. Floor plate 1,280sqm. Completion value $400m, 50% JV with Charter Hall’s Core Plus Office Fund.

Northbank Plaza, Brisbane

Refurbished 26,300sqm A-grade, 22-level office tower, 400sqm retail space and 160 car spaces. 95% pre-leased to Telstra and Parsons Brinckerhoff on 10 and 8-year leases respectively. Targeting 4.5 star ABGR. Floor plate 1,200sqm. Completion value $181m, 50% JV with Charter Hall’s Core Plus Office Fund.

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Home HQ, North Shore, Sydney

Proposed 23,500sqm bulky goods retail development over 3 levels and 550 car spaces. Completion value $135m.

Sydney Wharf, Pyrmont, Sydney (PDP3)

104 luxury apartments, 55 marina berths and 220 car spaces. Completion value $320m, 50% JV with Babcock & Brown.

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Mounts Bay Road, Perth

New 21,000sqm A-grade, 20-level office tower and 96 car spaces. Floor plate 1,450sqm. DA obtained. Completion value $200m, 50% JV with Cape Bouvard Investments.

CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

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42

FINANCIALS

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FULL YEAR FY2007

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

43

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Income Statement: FY07 vs FY06

$ 000’s	1	FY07	FY06	Variance %
Direct property net income	2	19,825	17,069
Investment income	3	6,466	161
Corporate income	4	24,975	13,406
Total income		51,266	30,636	67%
Operating expenses	5	(14,146)	(9,129)
EBIT		37,120	21,507	73%
Interest income	6	2,737	1,533
Interest expense		(6,496)	(5,896)
NPBT		33,361	17,144	95%
Tax (pre Axiom fair value)		(834)	277
NPAT before fair value adjustments (pre Axiom tax)		32,527	17,421	87%
Tax expense on Axiom fair value gain	7	(852)	-
NPAT before fair value adjustments		31,675	17,421	82%
Fair value adjustments	8	11,493	170
NPAT after fair value adjustments		43,168	17,591	145%
Distribution		38,072	19,050	100%

1. FY06 is a 12 month period to show like for like results. However the comparative period per the statutory accounts includes 25 days in June 2005

2. Net rental income from CHPT directly owned properties. Increase mainly due to additional properties acquired and rental growth in existing portfolio

3. Represents distribution income from co-investments. Increase is due to launch of CPOF/CPIF/CPRF/CHUF. FY06 represents DPF distributions only

4. Increase due to higher fund management, performance and development management fees

5. Corporate overheads increase due mainly to higher salaries expense due to higher staff numbers (38 to 53 – or 40% increase, most have been senior executive appointments)

6. Increase mainly due to cash temporarily held as a result of two equity raisings

7. Non cash tax expense on the unrealised gain on CHL’s investment in Axiom Properties Limited Relates to revaluations of the following: • direct properties • investments in unlisted funds • Axiom revaluation • Mark to market hedge

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

44

Reconciliation of Underlying EPS to DPS

FY07		Cps
Underlying EPS	1	9.51
Wyllie distribution	2	0.17
DPF valuation gain	3	0.04
Procurement fee (on IPO assets)	4	0.29
20% of CPOF/CPIF valuation gain	5	0.43
DPS		10.44

1. AIFRS EPS adjusted for AIFRS non cash expenses being mainly the share based remuneration expense and the tax expense on the unrealised gain in the investment in Axiom Properties Limited

2. 18m securities were issued to Wyllie Group on 11 December 2006. Wyllie received a distribution for the full 6 month period to 31 December 2006. Wyllie repaid (in February 2007) the proportion of the distribution relating to the period pre issue of the securities. This has been distributed in the 2H.

3. Represents the increase in value of CHPT’s investment in DPF.

4. As disclosed in the PDS forecasts the procurement fee on IPO assets has been spread over 2 years from June 2005 and distributed in FY06 and FY07. The fee has been fully recognised to 30 June 2007.

5. Represents 20% of the increase in value of CHPT’s investment in CPOF/CPIF. As new equity is issued in unlisted funds at a unit price that varies daily based on changes to asset values, CHC is distributing no more than 20% of the annual change in the value of these investments. As new equity is invested in such funds at the daily unit price, the potential to transfer such investments at the daily unit price exists. This strategy rewards CHC investors with a small portion of annual movement in value of investments held in CHC managed funds.

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

45

Balance Sheet: 30 June 2007 vs 31 December 2006

$ 000’s		30/6/07	31/12/06	Variance
Current assets	1	53,930	21,693	31,596
Non current assets	2	596,448	404,502	192,587
Total assets		650,378	426,195	224,183
Current liabilities		28,192	21,203	6,989
Non current liabilities	3	161,175	78,207	82,968
Total liabilities		189,367	99,410	89,957
Net assets	4	461,011	326,785	134,226

1. Increase mainly due to cash on hand as a result of placement proceeds (since utilised)

2. Increase due to direct property assets and investments (refer below for break-up)

3. Increase due to higher debt which increased $81m

4. Increase mainly due to the June 2007 placement – raised $133m (note 30 June 2007 distribution is a provision and hence decreases net assets)

5. Increase due additional CHPT assets -> eg. Bunnings portfolio and Dunedin less Tullamarine transferred to CPIF

KEY BALANCE SHEET ITEMS		30/6/07	31/12/06	Variance
Direct property ($m)	5	430.7	323.4	107.3
Investments ($m)	6	149.9	75.4	74.5
Borrowings ($m)		158.6	77.4	81.2
Gearing		24.4%	18.2%	6.2%
Securities on issue excluding LTI’s (m)	7	409.1	364.7	44.4
NTA per security ($)	8	1.12	0.90	0.22

1. Consists of investments in CPOF/CPIF/DPF/CHUF and Axiom

2. Increase due to issue of placement securities in June 2007

3. NTA calculated on securities less ELSP as per AASB2 ELSP as equity not recognised for accounting purposes

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

46

WRAP-UP

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FULL YEAR FY07

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

47

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FY 2007

• Strong ROE focus of CHC management rewarded with out performance of funds and significant new equity raisings

• Access to different sources of equity evidenced by c. 40% new investors in wholesale funds

• Increased focus on retail funds will further diversify sources of equity

• Additional investment from off shore institutions creates relationships overseas

• Equity commitments provide potential for CHC to exploit distressed selling of assets by under capitalised owners of real estate

• Positive outlook for new product creation and manufacture of investment grade assets

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CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS

48