CHARTER HALL GROUP — Annual Report 2012

Aug 27, 2012

28 August 2012

Charter Hall Group 2012 Full Year Results 12 months to 30 June 2012

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David Harrison David Southon Paul Altschwager Joint Managing Joint Managing Chief Financial Director Director Officer 1 Results summar and Grou overview y p 2 O erational erformance p p 3 Financial erformance p 4 Strate outlook and uidance gy, g 5 Additional Information 1

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01 Results summary and Group overview

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Results Summary

Key achievements FY12

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• Increase in operating earnings before specific items to 21.5cps, up 4.4%

• Increase in property and property co-investment yield to 7.1% , up from 6.4%

• Growth in Australian FUM platform of 11% pa over the past 2 years, 4% since June 2011

• Secured over $1billion in equity during FY12 and an additional $319m since June 2012

• Realised $68m (11% NTA) of property co-investment portfolio

• Resized business for a domestic scalable platform

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3
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Results Summary

Full year summary

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Increase in operating earnings before specific items[1] to 21.5cps, up 4.4% on pcp

• Statutory profit after tax of $16.7m, down 68% on pcp

• Net operating earnings after specific items of $54.8m or 18.6cps, down 9.7% on pcp

• Distribution of 18.2cps, up 10.3% on pcp

• NTA per security is $2.13, down from $2.21 as at 30 June 2011

Growth in Australian FUM platform of 11%pa over the past 2 years, 4%pa since 30 June 2011

• Reweighted FUM platform to predominantly Australian managed portfolio with the sale of $2.4bn offshore assets

• Secured over $1bn[2 ] of equity during the year for unlisted wholesale and retail funds, further $319m secured since year end

• Property funds management EBITDA margin for FY12 is 32% , up from 28% in pcp

Proactive capital management has improved returns for investors

• Realised $68m of capital and recycled $41m into higher returning investments

• Refinanced $3bn of debt and extended maturity to 3.1 years within managed funds, weighted average cost of debt lowered to 6.2%, from 7.4%

Development investments impact on NTA

• Clawback of performance fees on CHOF4 of $14.2m or 4.8cps

• Impairment of investment in CHOF5 of $5.8m or 2.0cps

• Resized development operations

• Specific items in FY12 include net CQO US transaction fee, restructuring costs, and CHOF4 performance fee clawback provision 2. Includes external capital secured for CHOT privatisation

4

Results Summary

Solid securityholder returns

Total securityholder return FY12: 14.6%

Solid performance over 1 and 3 years to 31 July 2012[1]

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S&P/ASX 200 S&P/ASX 200 Property Charter Hall
40% Accumulation Index Accumulation Index Securityholders
35% 33.5
30% 3 yr return
25.6
25% 1 yr return
20.8
20%
15% 13.4
10%
5% 4.6
1.3
0%
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1. UBS and S&P/ASX 2. FY12 OEPS pre-specific items 5

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Distribution per security growth

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18.20
16.50
12.55
FY10 FY11 FY12
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Earnings per security growth[2]

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21.51
20.60
16.44
FY10 FY11 FY12
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Group Overview Our strategy

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Our strategy is to access, deploy and manage equity that is invested into core Australian real estate sectors to create value and provide growing income and capital returns for investors.

Access to multiple equity sources including listed, pooled wholesale, ACCESS partnership wholesale and direct retail Investing alongside our clients to create value through identifying attractive DEPLOY acquisition opportunities MANAGE Specialist teams in property funds management, asset management, leasing and development services to actively manage those assets to create value

6

Group Overview

Investment strategy

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Our investment strategy, focusing on core property asset sectors, will endure macroeconomic cycles and generate growing income and capital returns, consistent with the investment appetite of investors in the real estate asset class.

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RETAIL
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Carnes Hill Marketplace, Horningsea Park, NSW (wholesale partnership with CQR)

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Renmark Plaza, SA (CQR)

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OFFICE
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171 Collins Street, Melbourne, VIC (CHOT)

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Brisbane Square, Brisbane, QLD (CPOF)

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INDUSTRIAL
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Volkswagen, 24 Muir Road, Chullora, NSW (CPIF)

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Coles Logistics Centre, Perth Airport, WA (CPIF/DIF)

7

Group Overview

Australian focused property platform

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Today, Charter Hall manages a $9.4bn property portfolio

NO. OF PROPERTIES	NO. OF TENANTS	LETTABLE AREA (SQM)	TOTAL ASSETS ($M)	GROSS INCOME ($M)
184	2,968	2.3m	9,3811	817

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Diversification by equity source Diversification by asset type
August 2012 August 2012
Other
Industrial $0.4bn (4%)
Wholesale Unlisted Funds, Retail Investor Funds
$0.8bn (9%)
Mandates, Partnerships $1.9bn (20%)
$5.5bn (59%)
Office
Retail $5.5bn (59%)
$2.7bn (28%)
Listed Fund
$2.0bn (21%)
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1. FUM as at 30 June 2012 is $8.9bn. A further net $500m FUM has been sourced since year end

8

Group Overview

Expertise across risk/return spectrum

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Charter Hall Funds [1] Risk vs. Return Profile
Return
20% + $0.5bn
$0.5bn Real Estate Sectors
Development Retail
15 - 17%
Office
11 – 14% $0.7bn $1.5bn Industrial
Wholesale Diversified
Pooled
9 – 11% $2.0bn $2.8bn $1.9bn
Listed Retail Investor
Wholesale
(CQR) Funds
Partnerships
CORE CORE ACTIVE VALUE ADD OPPORTUNISTIC
Institutional Investors / Institutional Investors Institutional Investors / Institutional Investors /
Pension Funds / Individuals / Pension Funds Pension Funds Pension Funds
1. FUM as at August 2012
9
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02
Operational performance
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Operational Performance

Improved quality of earnings

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EBITDA of $65.2m[1] , up 5.4% from $61.9m

89% of earnings generated from annuity style income

97% of earnings from core sector property investments and property funds management

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$39.9m
$37.4m
FY11
FY12
$23.3m
$20.7m
$3.8m
$2.0m
Property Investment Property Funds Development
Management Investment
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Property Investment
61%
Property Funds
Management
36%
Development Investment
3%
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1. Before specific items and excluding non-cash and fair value adjustments, DRF NOI included on a net contribution basis

11

Property Investment

Property Investment portfolio

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• $530m[1] equity invested into Charter Hall co-investment portfolio

• Represents 14% of the total Group FUM in which Charter Hall is a co-investor

• Delivering full year EBITDA of $39.9m[1] , 61% total Charter Hall Group EBITDA

• Yield of 7.1%, improvement from active management of property assets and refinancing of debt facilities

Investments by Equity Source

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Investments by Equity Source Investments by Sector
Retail Funds Listed Retail
$115m (21.7%) $101m (19.1%) $157m (29.7%)
Office Industrial
$301m (56.7%) $72m (13.6%)
Wholesale Funds
$314m (59.2%)
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1. Excludes development investments, specific items, non-cash items and fair value adjustments

12

Property Investment

Property Investment portfolio

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		OWNERSHIP	CHARTER	CHARTER	PROPORTION	MARKET	DISCOUNT	MINIMUM	CHARTER HALL
		STAKE	HALL	HALL	OF CHARTER	CAP RATE	RATE	RENTAL	INVESTMENT
			INVESTMENT	INVESTMENT	HALL			REVIEWS	YIELD3
				INCOME	INVESTMENT
					PORTFOLIO
		(%)	($M)	($M)	(%)	(%)	(%)	(%)	(%)
	Listed Fund (CQR)	10.0%	101.3	8.2	19.1%	8.3%	9.3%	4.1%	8.3%
	Wholesale Investment Funds
	(CHOT, CPOF, and CPIF)	15.1%	313.6	21.8	59.2%	7.9%	9.4%	3.9%	6.4%
	Retail Investor Funds (DPF, CHUF, CHDPF and DIF)	21.6%	62.1	4.0	11.7%	8.2%	9.6%	3.7%	5.9%
	Direct Property (DRF1 and Mentone2)	65.9%	53.1	5.9	10.0%	8.6%	9.8%	3.6%	9.9%
	Total/weighted average	14.1%	530.1	39.9	100%	8.1%	9.5%	3.9%	7.1%

1. Charter Hall consolidates DRF. For the purposes of this analysis DRF is included on a net contribution basis 2. Mentone Showrooms disposal was completed in October 2011 3. Calculated based on FY12 Income divided by monthly average investment

13

Property Investment

Strong Property Investment portfolio metrics

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Lease expiry profile[1 ] (30 June 2012)

Top 10 tenants (30 June 2012)

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44.2%
18.0%
12.2%
9.4%
6.8% 7.3%
2.1%
VACANT FY13 FY14 FY15 FY16 FY17 FY18+
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	TENANT	% PORTFOLIO LEASED
		(BY GROSS INCOME)
	Australian Government	10.0
	Wesfarmers	8.1
	Woolworths	7.2
	Telstra	5.7
	Macquarie Group	3.0
	Westpac Group	2.6
	BHP Billiton	2.0
	Citigroup	1.8
	Metcash	1.2
	Wilson Parking	1.1
	Total	42.7

1. Shows Charter Hall’s position based on the lease expiry profile of Charter Hall managed funds and investment exposure in each fund (weighted on a passing gross income basis).

14

Property Funds Management

Australian FUM platform growth

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• Group FUM $9.4bn today

• Australian property FUM has grown to $8.9bn today, from $7.2bn at June 2010

• Offshore property FUM has reduced to $0.5bn, from $3.0bn at June 2010

• In line with strategy to refocus on the Australian platform

Total Group FUM

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12
$10.7bn
$10.2bn
10 $9.4bn
$8.9bn
$8.5bn
8 $7.2bn
6
4
2
0
June 2009 June 2010 June 2011 Today
Offshore FUM
Australian Macquarie acquired FUM
Australian FUM (excluding acq from Macquarie)
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Australian FUM by Equity Source

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12
10
11% CAGR over 2 years 4% growth
since June 2011
8
6
4
2
0
June 2010 June 2011 Today
Retail Listed Wholesale
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15

Property Funds Management

Positive equity inflows

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• Secured over $1billion in equity during FY12 and an additional $319m since 30 June 2012

	EQUITY SECURED DURING FY12 ($M)	EQUITY SECURED SINCE BALANCE DATE ($M)
Wholesale pooled funds	176	8
Wholesale partnerships	8002	78
Direct funds	52	2331
Total	1,028	319

• Investor base broadened throughout the year to include new offshore investors

• Includes $185m secured as part of the PFA platform 2. Includes Charter Hall Office Trust

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Property Funds Management

Property funds management

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$M FY10 FY11 FY12
 Full year funds management EBITDA of $23.3m
Revenue 38.3 74.9 73.4
 Average of 78bps of FUM on an annualised basis [1]
Net Operating Expenses [3] (30.5) (54.2) (50.1)
Annuity style revenue
Property Funds Management EBITDA 7.8 20.7 23.3
$38.8m
$37.9m
EBITDA Margin on revenue 20.4% 27.6% 31.8%
EBITDA Margin on cost 25.6% 38.2% 46.6%
$12.8m $12.7m FY11 FY12
$8.7m $8.6m $9.4m
$5.4m $6.6m
$5.0m
$1.1m $1.3m
Investment Management Property & Facilities Leasing Services (excl Development & Project Transaction Services Project leasing
Management project leasing) Management and Performance fees 2
1. Excludes FUM and US based expenses relating to the CQO US portfolio
2. Excludes CQO US sale fees in FY12
3. Excludes non-cash LTI share based expense (treated as a non-operating item)
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17
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Property Funds Management

Another active year

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Investment management

• Secured over $1bn equity and acquired $0.5bn of property assets

Property management and leasing services

• Managed fund portfolio comprising 2.3m sqm of lettable area

• Portfolio generates gross rental income of $817m

• Leased and renewed 245,834 sqm across the managed fund portfolio during the year

• Active management has driven an improvement in occupancy / like-for-like income growth during the year

Transaction services and performance fees

• $2.6bn of transactions throughout the year ($2.1bn of divestments and $0.5bn of acquisitions)

Development management services

• Development book and pipeline within core funds of around $800m across 14 projects

• Development book within CHOF5 of $540m across 5 projects

• Total development book and pipeline of $1.3bn

18

Development Investment

Focused on realising investor and group equity

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• $5.8m of CHOF impairments, predominantly from the Little Bay project and currently in dispute with development alliance partner

• $42.8m expected to be realised and repatriated to the Group in the next 2 years

	DEVELOPMENTS ($M – CHC SHARE)	CARRYING VALUE OF	STATUS	TARGET
		INVESTMENT		REALISATION DATE
	CHOF4 (CHC share – 3%)
	Home HQ North Shore, Artarmon	0.5	Held for sale	FY13
	CHOF5 (CHC share – 15%)
	40 Creek St, Brisbane	5.1	Contracted for sale	FY13
	Lacrosse Stage 1, Melbourne	6.0	95% sold, 81% settled	FY13
	Aquilo, Oak Avenue, Mentone3	2.2	92% sold, 41% settled	FY13
	Home HQ Hastings, New Zealand	1.3	Held for sale	FY13
	WorkZone, 202 Pier St, Perth	9.0	76% pre-leased, 35% complete	FY14
	Little Bay Cove, Sydney3	4.7	Estate works 62% complete	FY14
	On balance sheet
	WorkZone, 202 Pier St, Perth, preferred equity1	4.5	76% pre-leased, 35% complete	FY14
	685 La Trobe Street, Melbourne2	9.5	Pre-leasing	FY14
	Total/weighted average	42.8

1. Charter Hall has committed to provide a total of up to $9m in preferred equity. A further $1m was drawn in July 2012.

2. Charter Hall’s investment into 685 La Trobe Street, Melbourne to date (50% interest). Assumes sell down of Charter Hall’s 50% interest to managed fund or third party

3. Currently in dispute with alliance partner ,TA Global, in relation to the separation allocation of lots post scheduled completion of estate works. Negotiations are underway with the financier following receipt of a draft revaluation of the estate land.

19

Capital Management

Asset recycling strategy

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• Charter Hall is focused on recycling its property and development investment capital into higher return investments – Over the past 12 months, $68m has been realised and $41m reinvested

• Over the next 2 years, a further $112m has been targeted for recycling

EQUITY RECYCLED OVER THE PAST 12 MONTHS $M

EQUITY TO BE RECYCLED OVER THE NEXT 24 MTHS $M

Equity realised Mentone Showrooms 16 Diversified Property Fund 14 Excess CQO special distribution1 38 Total proceeds realised FY12 68 Equity redeployed Further CQR investment 16 Bay Village (CHC 20% share) 20 PFA facilitation fee and co-investment 5 Total Redeployment 41	Equity to be realised
	Diversified Property Fund 12
	Direct Retail Fund 53
	CHOF4/CHOF5 35
	Excess CQO special distribution1 3
	685 La Trobe Street 9
	Total proceeds to be realised 112
	FY12 equity realised but yet to be deployed 28
	Total proceeds to be redeployed 140

• Further recycling will see capital redeployed into a range of initiatives to improve economic yield and quality of earnings

• Distribution from CQO US sale proceeds less acquisition of additional CQO units. $3.3m heldback and due as receivable in FY13.

20

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03
Financial performance
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Financial Performance

Key financial metrics

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	GROUP	FY12	FY11	CHANGE
	Statutory profit after tax	$16.7m	$52.3m	(68.1%)
	Operating earnings before specific items	$63.6m	$60.4m	5.3%
	Operating EPS before specific items	21.5cps	20.6cps	4.4%
	Operating earnings after specific items	$54.8m	$60.4m	(9.3%)
	Operating EPS after specific items	18.6cps	20.6cps	(9.7%)
	Distribution per security	18.2cps	16.5cps	10.3%
	BALANCE SHEET	AT 30 JUNE 2012	AT 30 JUNE 2011	CHANGE
	Funds under management – Total	$8.9bn	$10.7bn	(16.8%)
	Funds under management – Australian	$8.4bn	$8.5bn	(1.2%)
	Total Group assets	$878m	$958m	(8.4%)
	NAV per security	$2.46	$2.55	(3.5%)
	NTA per security	$2.13	$2.21	(3.6%)
	Balance sheet gearing1	1.4%	8.1%	(6.7%)
	Look through gearing	32.2%	36.6%	(4.4%)

1. Calculated as total debt net of cash divided by total assets, consolidating DRF. Charter Hall has no gearing on a net contribution basis.

22

Financial Performance

Operating Earnings

 OEPS before specific items growth of 4.4%

• Strong property investment growth of 6.7%

• 12.6% property funds management growth

• Partly offset by reduced contribution from CIP

• Specific items are a net loss of $8.7m in FY12

• CQO US portfolio disposal fee of $16m less costs of closing US office and retaining CQO management rights resulting in a net $9.1m profit

• Restructure costs of $3.9m

• CHOF4 net performance fee clawback of $13.9m

 Distribution per security growth of 10.3%

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	$M	FY12	FY11	GROWTH %
	Property Investment1	39.9	37.4	6.7%
	Property Funds Management	23.3	20.7	12.6%
	Development Investment	2.0	3.8	(47.4%)
	EBITDA2	65.2	61.9	5.3%
	Net Interest Expense and Depreciation	(1.6)	(1.5)
	Operating Earnings before specific items2	63.6	60.4	5.3%
	Specific items Operating Earnings after specific items2	(8.7) 54.8	- 60.4	(9.2%)
	OEPS before specific items	21.51	20.60	4.4%
	OEPS after specific items	18.55	20.60	(10.0%)
	DPS	18.20	16.50	10.3%
	Payout ratio (% of OEPS before specific items)	84.6%	80.1%

1. DRF on net contribution basis for segment purposes.

2. Excludes non-cash LTI share based expense (treated as a non-operating item)

23

Financial Performance

Operating Margin

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• Property funds management EBITDA improved by 12.6%

• Revenue growth decline of 2.0% attributable to high FY11 transactional revenue. On a like for like basis revenue growth is 6.5%

• Net expenses reduced by 7.6%

• Net operating expenses as a % of FUM has reduced from 0.59% to 0.53%

	$M	FY12	FY11	GROWTH %
	Annuity Style Revenue1	56.1	52.5	6.9%
	Development and Project Management	9.4	8.6	9.3%
	Transaction Services and Performance fees	6.6	12.6	(48.1%)
	Project leasing	1.3	1.1	15.4%
	Property Funds Management Revenue Net Operating Expenses3	73.4 (50.1)	74.9 (54.2)	(2.0%) (7.6%)
	Property Funds Management EBITDA	23.3	20.7	12.6%
	EBITDA margin on revenue	31.8%	27.6%
	Net Operating Expenses / Average FUM2	0.53%	0.59%

1. Annuity revenue includes investment management fees, property and facilities management fees and leasing fees (excluding project leasing) 2. Excludes net operating expenses and FUM relating to US CQO assets disposed in FY12

2. Net Operating Expenses as set out in Segment note 5(b) in Preliminary Financial Report. Excludes non-cash LTI share based expense (treated as a non-operating item)

24

Financial Performance

Resizing Platform for Growth

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• Ongoing review of cost structure

• Significant restructure in FY12 and August 2012 resulting in the removal of 20 permanent roles and replacement of a further 13 roles

• Ongoing focus in creating sustainable operating platform that is scalable for new FUM growth at higher incremental margins

• Integrated systems platform

• Streamlining business processes

• Leveraging group wide capabilities

	RESTRUCTURING IMPACT Restructure costs	Total $5.0m	FY12 $3.9m1	FY13 (estimate) $1.1m2
	Headcount
	- Total movement	33	25	8
	- Less roles replaced	13	13	-
	- Reduction in permanent roles	20	12	8
	Annualised Saving	$5.7m	$4.0m	$1.7m
	Reduction in Net Operating
	Expenses
	- FY12	$2.9m	$2.9m	-
	- FY13 (estimate)	$1.1m	$1.1m	- 2
	- FY14 (estimate)	$1.7m	-	$1.7m
	Total Savings	$5.7m	$4.0m	$1.7m

1. Specific Item in FY12

2. August 2012 restructure costs of $1.1m are offset by expense savings to be realised in FY13 resulting in no net earnings impact in FY13. Incremental savings to be realised in FY14.

25

Financial Performance

Reconciliation to statutory profit

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 Charter Hall’s statutory profit after tax has been adversely impacted by mainly non-cash items

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$13.9m
$5.9m ($9.1m)
$3.9m
$2.3m
$12.2m
$5.8m
$63.6m
$54.8m
$2.0m
$9.9m
$16.7m
Statutory profit MTM of Fair value Inventory Release of Share based Other Operating CQO US Restructuring CHOF4 net Operating
after tax financial adjustments on writedown FCTR expenses Earnings after disposal fee net costs performance Earnings before
derivatives investments specific items of costs fee clawback specific items
and property
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1. Other includes non-cash items including loss on sale of investments and property ($2.0m), amortisation of CHOT management rights ($1.3m), lease incentives ($0.5m) and borrowing costs ($0.4m)

26

Financial Performance

Balance sheet and NTA

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	$M	30-JUN-12	30-JUN-11
	Cash	39.3	26.3
	Property investments	614.0	695.2
	Development investments	66.7	68.8
	Other tangible assets	59.1	67.3
	Intangibles	98.7	100.0
	Total assets	877.8	957.6
	Borrowings	51.5	101.9
	Other liabilities	70.0	73.8
	Total liabilities	121.5	175.6
	Net assets attributable to non-controlling interest	(27.4)	(32.1)
	Total equity post non-controlling interest	728.9	749.8
	Total securities on issue (000s)	296,168	293,756
	Net tangible assets per security	2.13	2.21
	Look through gearing (non-recourse debt)1	32.2%	36.6%
	Balance sheet gearing	1.4%	8.1%

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(4.7c)
(3.4c)
(2.0c) 1.6c
$2.21
$2.13
NTA (30 June CHOF4 MTM of Inventory Other NTA (30 June
2011) performance financial Writedown 2012)
fee clawback derivatives
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1. Calculated by incorporating Charter Hall’s proportional share of total assets (net of cash) and debt (net of cash) of the funds in which it co-invests.

27

Financial Performance

Cashflow reconciliation

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$13.5m
($1.1m) ($6.6m) $6.5m
25.70cps
($13.9m)
21.51cps
$9.1m
18.55cps 18.20cps
($3.9m)
$63.6m
$76.0m $53.8m
$54.8m
Operating Net CQO Restructuring CHOF4 Operating Change in tradeChange in trade Earnings Other 1 Operating 2 Distribution
Earnings after transaction fee costs performance Earnings before receivables payables versus cashflow
specific items fee provision specific items distribution
(net) received
1. ‘Other’ includes movement in other operating assets and liabilities
2. Excludes cash flows to non-controlling interests of $3.0m, operational cash including controlling interests is $79.0m
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28
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Financial Peformance

Debt management

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• Across fund platform, $3.0bn of debt refinanced in FY12

• Weighted average maturity increased to 3.1 years, from 2.7 years at 30 June 2011

• Weighted average cost of debt reduced to 6.2%, from 7.4%

• $3.5bn of drawn debt across platform with $0.7bn available undrawn capacity from existing facilities

• CHC balance sheet gearing is 1.4%, and look through gearing has reduced 4.4%, to 32.2% at 30 June 2012

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Gearing Balance sheet gearing
40% 44% 40% 39% Look-through gearing
36%
32% 32%
1.8 years [1] 3.4 years [1] 3.7 years [1] 1.7 years [1]
1%
CHC CQR Wholesale Unlisted Funds Retail Investor Funds
1. Weighted average debt maturity
29
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04
Strategy, outlook and guidance
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Strategy FY13 strategic objectives

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• Source equity to invest into core real estate sectors targetting growth in the Australian FUM platform by 6-10% pa

• ACCESS  Realise and recycle a further $112m of capital in property and development investments over the next 2 years

• Enhance return on equity through disciplined recycling strategy

• DEPLOY  Drive further growth in property investment portfolio yield and capital value  Diversify sources of debt funding for the managed funds platform

• MANAGE  Continue to capitalise scalable operating platform to service FUM growth

31

Strategy

FY13 year to date activity

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Since balance date Charter Hall has:

• Completed the DIF equity raising oversubscribed at $119.5m

• Established a new unlisted wholesale partnership established to acquire Bay Village Shopping Centre for $164m, Charter Hall’s investment is $19.5m (20% stake)

• Investors voted for Charter Hall to be appointed Responsible Entity and manager of PFA Diversified Property Trust comprising $422m of predominantly Australian office assets

• Equity raising of $32m completed for $55m 144 Stirling Street Trust, less than 3 months after launch

32

Outlook

FY13 earnings guidance

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Subject to unforeseen events, we expect :

• FY13 operating earnings to be in the range of 22.5 to 23.0 cps, representing 5% to 7% growth over FY12

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33

Further information

David Southon Joint Managing Director +61 2 8908 4025 david.southon@charterhall.com.au

David Harrison

Joint Managing Director +61 2 8908 4033 david.harrison@charterhall.com.au

Kylie Ramsden Head of Listed Investor Relations +61 2 8295 1016 kylie.ramsden@charterhall.com.au

Paul Altschwager Chief Financial Officer +61 2 8295 1004 paul.altschwager@charterhall.com.au

34

28 August 2012

Charter Hall Group Additional Information

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	1 Additional Information 1 Group overview 2 2 Property funds management 3 3 Property investment highlights 5 4 Financial information 10 5 Development 17 6 Capital management & funding 20

Group overview

Group overview

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Charter Hall Group (ASX:CHC) Stapled Security

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Charter Hall Property Trust (CHPT) Charter Hall Limited (CHL)
Property Investment Funds Management Development Investment
Total co-investments: $530m (67%) [1] Book Value: $99m (12%) [1] Total co-investments: $67m (8%) [1]
EBITDA: $39.9m (61%) EBITDA: $23.3m (36%) EBITDA: $2.0m (3%)
$101m co-investment $99m book value (intangible) [2] $28m investment
Listed Fund CIP
$2.0bn FUM  Investment management 50% interest
$314m co-investment  Asset management
$29m co-investment
Wholesale Unlisted Funds  Property management Wholesale Opportunistic
$5.5bn FUM
 Development management
Investments in CHOF4 and CHOF5
$115m co-investment  Leasing services
$10m investment
Retail Investor Funds  Transaction services 685 La Trobe
$1.9bn FUM 50% interest
1. Divided by total group non-current assets of $794m, calculated on a DRF net contribution basis
2. Book value represents value of goodwill associated with the acquisition of the Macquarie Real Estate Funds Management business
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2

Property funds management

Property funds management

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Listed Fund Wholesale Funds, Mandates, Partnerships Retail Investor Funds
$2.0bn $5.5bn $1.9bn
($101m co-invested) ($314m co-invested) ($115m co-invested)
Opportunistic Investment
$0.5bn $5.0bn
CQR [1] CHOF5 [1] CHOT CPOF CHDPF
PFA CHIFs [2]
$2.0bn $0.4bn $2.0bn $1.5bn $0.5bn
$0.4bn $0.4bn
($101m / 10%) ($28m / 15%) ($146m / 15%) ($113m / 14%) ($11m / 4%)
CHUF
CHOF4 [1] CPIF Wholesale DRF
$0.1bn $0.7bn mandates DIF $0.2bn $0.1bn
$0.2bn ($40m/26
($1m / 3%) ($55m / 18%) $0.6bn ($53m / 66%)
%)
DPF
Bay Village
$0.1bn
$0.2bn
($12m / 25%)
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1. FUM definition includes on completion value for development assets 2. CHIF includes CHIFs, 1MPT and CHPSF

3

Property funds management

Property funds management

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TOTAL PROPERTY ASSETS ($M) SECTOR EQUITY SOURCE NO. OF PROPERTIES LETTABLE AREA (SQM) OCCUPANCY WEIGHTED AVERAGE RENT REVIEW WALE (BY INCOME IN YEARS) WEIGHTED AVERAGE CAP RATES	TOTAL PROPERTY ASSETS ($M) SECTOR EQUITY SOURCE NO. OF PROPERTIES LETTABLE AREA (SQM) OCCUPANCY WEIGHTED AVERAGE RENT REVIEW WALE (BY INCOME IN YEARS) WEIGHTED AVERAGE CAP RATES	TOTAL PROPERTY ASSETS ($M) SECTOR EQUITY SOURCE NO. OF PROPERTIES LETTABLE AREA (SQM) OCCUPANCY WEIGHTED AVERAGE RENT REVIEW WALE (BY INCOME IN YEARS) WEIGHTED AVERAGE CAP RATES	TOTAL PROPERTY ASSETS ($M) SECTOR EQUITY SOURCE NO. OF PROPERTIES LETTABLE AREA (SQM) OCCUPANCY WEIGHTED AVERAGE RENT REVIEW WALE (BY INCOME IN YEARS) WEIGHTED AVERAGE CAP RATES	TOTAL PROPERTY ASSETS ($M) SECTOR EQUITY SOURCE NO. OF PROPERTIES LETTABLE AREA (SQM) OCCUPANCY WEIGHTED AVERAGE RENT REVIEW WALE (BY INCOME IN YEARS) WEIGHTED AVERAGE CAP RATES	TOTAL PROPERTY ASSETS ($M) SECTOR EQUITY SOURCE NO. OF PROPERTIES LETTABLE AREA (SQM) OCCUPANCY WEIGHTED AVERAGE RENT REVIEW WALE (BY INCOME IN YEARS) WEIGHTED AVERAGE CAP RATES	TOTAL PROPERTY ASSETS ($M) SECTOR EQUITY SOURCE NO. OF PROPERTIES LETTABLE AREA (SQM) OCCUPANCY WEIGHTED AVERAGE RENT REVIEW WALE (BY INCOME IN YEARS) WEIGHTED AVERAGE CAP RATES	TOTAL PROPERTY ASSETS ($M) SECTOR EQUITY SOURCE NO. OF PROPERTIES LETTABLE AREA (SQM) OCCUPANCY WEIGHTED AVERAGE RENT REVIEW WALE (BY INCOME IN YEARS) WEIGHTED AVERAGE CAP RATES	TOTAL PROPERTY ASSETS ($M) SECTOR EQUITY SOURCE NO. OF PROPERTIES LETTABLE AREA (SQM) OCCUPANCY WEIGHTED AVERAGE RENT REVIEW WALE (BY INCOME IN YEARS) WEIGHTED AVERAGE CAP RATES	TOTAL PROPERTY ASSETS ($M) SECTOR EQUITY SOURCE NO. OF PROPERTIES LETTABLE AREA (SQM) OCCUPANCY WEIGHTED AVERAGE RENT REVIEW WALE (BY INCOME IN YEARS) WEIGHTED AVERAGE CAP RATES
Top 5 Managed Funds
CQR	1,980	Retail	Listed	91	678,773	98.6%	4.1%1	6.5	8.3%
CHOT	1,968	Office	Wholesale	18	323,952	97.6%	4.0%	4.3	7.8%
CPOF	1,536	Office	Wholesale	13	254,088	97.8%	4.0%	5.5	7.9%
CPIF	658	Industrial	Wholesale	18	385,723	97.7%	3.2%	11.6	8.2%
CHDPF	503	Diversified	Retail	9	100,294	97.2%	3.7%	4.3	8.4%
Other Funds
Retail Funds (CHIF’s, DPF, CHUF, PSF, DIF,1MPT,DRF)	974	Office / Retail / Industrial	Retail	20	266,465	97.7%	3.6%	6.0	7.9%
Development Funds (CHOF 4&5)	529	Residential / Office / Retail	Wholesale	-	-	-	-	-	-
3rd party Mandates2	636	Office / Retail	Wholesale	1	120,335	99.2%	4.0%	9.4	7.5%
Direct Property (685 La Trobe)	10	Office	Direct	-	-	-	-	-	-
Total / Weighted Average -30/06/12	8,794			170	2,129,630	98.0%	3.9%	6.2	8.0%
Bay Village	164	Retail	Wholesale	1	29,154	94.5%	4.7%	4.6	8.1%
PFA	422	Office / Retail	Retail	13	144,761	93.9%	3.1%	3.8	8.9%
Total / Weighted Average - Today	9,381			184	2,303,545	97.7%	3.9%	6.0	8.0%

1. Based on Australian specialty leases only 2. Includes 50% interest in 275 George St and Brisbane Square (co-owned with CPOF), 50% of CQR/Telstra JV and Riverside. No. of properties excludes properties already in CPOF and CQR

4

Property investment highlights

Property investment highlights

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		OWNERSHIP	CHARTER HALL	CHARTER HALL	PROPORTION OF	MARKET CAP	DISCOUNT	MINIMUM RENTAL	CHARTER
		STAKE	INVESTMENT	INVESTMENT	CHARTER HALL	RATE	RATE	REVIEWS	HALL
				INCOME	INVESTMENT				INVESTMENT
		(%)	($M)	($M)	PORTFOLIO (%)	(%)	(%)	(%)	YIELD (%)
	Listed Fund		101.3		19.1
	Charter Hall Retail REIT (CQR)	10.0%	101.3	8.2	19.1	8.29%	9.28%	4.10%6	8.3%
	Wholesale Investment Funds		313.6		59.2
	Charter Hall Office Trust (CHOT)	15.0%	145.7	11.5	27.5	7.79%	9.31%	4.02%	6.5%
	Core Plus Office Fund (CPOF)	13.9%	113.0	7.0	21.3	7.86%	9.41%	4.04%	6.3%
	Core Plus Industrial Fund (CPIF)	18.0%	54.9	3.3	10.4	8.21%	9.85%	3.17%	6.2%
	Retail Investor Funds		62.2		21.7
	Diversified Property Fund (DPF)	25.2%	11.7	1.0	2.2	8.39%	9.53%	3.96%	6.4%
	Charter Hall Umbrella Fund (CHUF)	25.6%	39.5	2.2	7.5	8.12%	9.63%	3.63%	5.4%
	Charter Hall Direct Property Fund (CHDPF)	3.8%	10.8	0.7	2.0	8.35%	9.61%	3.72%	6.8%
	Direct Industrial Fund (DIF)	0.2%	0.2	0.0	0.0	8.08%	9.87%	3.11%	8.0%
	Direct Property		53.1		10.0
	Direct Retail Fund (DRF)1	65.9%	53.1	6.1	10.0	8.55%	9.80%	3.55%	9.9%
	Mentone Showrooms2	-	-	0.3	-	n/a	n/a	n/a	n/a
	Total/weighted average	14.1%	530.1	40.3	100%	8.07%	9.47%	3.87%	7.1%
	Investment Trust costs			(0.4)
	Property Investment EBITDA3			39.9

1. Charter Hall consolidates DRF. For the purposes of this analysis DRF is based on a net contribution 2. Mentone Showrooms disposal was completed in October 2011 3. Excludes Development Investments

5

Property investment highlights

Property investment highlights Core Plus Office Fund (CPOF)

KEY EVENTS DURING FY12

• Strongest performing wholesale office fund in Australia over the 2 years to 30 June 2012 according to IPD/Mercer Wholesale Property Funds Index (total funds)

• Closed $200m equity raising from Australian and overseas institutional investors and pension funds

• Acquired remaining 50% of 225 St. Georges Terrace, Perth for $96m, independently revalued to $100m

• Independently re-valued 570 Bourke Street, Melbourne to $176m, now 16% above total acquisition cost (50% acquired 2008 and 50% in 2010)

• Independently re-valued Brisbane Square, Brisbane to $400m (100% value), $100m above original acquisition price (acquired 2010)

• Continued strategy to sell smaller non-core smaller holdings with the sale of 150 Queen Street, Melbourne and 144 Stirling Street, Perth

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PORTFOLIO CHARACTERISTICS KEY METRICS	PORTFOLIO CHARACTERISTICS KEY METRICS
Grossproperty assets	$1.54 billion
Total debt	$583 million
Gearing (look-through)	37.7%
Number of assets	13
Occupancy	98%
Weighted average lease expiry	5.5years
CBD assets	90%
Primegrade assets	90%
Weighted average caprate	7.86%
Weighted average rent review (next 12 months)	4.04%
Rent reviews (FY13)	81% fixed, 18% CPI, 1% market
Charter Hall co-investment	$113.0 m / 13.9%

CPOF Debt Expiry Profile (by facility limit)

• Leased 14,429 sqm with weighted average new lease term of 7.1 years

• Closed new syndicated debt facility with WBC, NAB, CBA and ANZ for $750m, providing uncalled debt capacity for acquisitions and repositioning investment.

• Significant value enhancement potential via three expansion /redevelopment strategies under review in Sydney, Melbourne and Perth CBD’s

• Top tenants include Government, Telstra, Westpac, BHP, Mercer, Suncorp , QLD Gas, Secure, Parsons Brinckerhoff , Gresham, ANZ

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$600m
$500m
$400m
$300m
$200m
$100m
$0m
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20+
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6

Property investment highlights

Property investment highlights Core Plus Industrial Fund (CPIF)

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KEY EVENTS DURING FY12

• Outperformed the Industrial component of the IPD/Mercer Wholesale Property Funds Index (total funds) over all time periods to 30 June 2012 (+2.1% pa excess return over 5 years)

• Closed $150m equity raising from Australian and overseas institutional investors and pension funds

• Acquired Metcash Canning Vale, Perth ($64.6m) in addition to 14 hectares of landbank holdings for pre-committed developments in Berrinba ($7.8m) and Willawong ($10.05m), Brisbane

• Recent land acquisitions provide for an additional $100m of assets to be added to portfolio (following lease pre-commitment) under risk mitigated development agreement’s

• Leased 49,000 sqm with weighted average new lease term of 5.7 years and WARR of 3.8%

• Secured key tenants Australia Post (Chullora, Sydney), Chevron (Kewdale, Perth) and Thales Group (Eagle Farm, Brisbane) to mitigate vacancy risks out to FY15

• Closed new syndicated debt facility with NAB and ANZ for $200m, providing uncalled debt capacity for acquisitions and pre-committed construction investment

• Top tenants include Coles, Woolworths, Metcash, Volkswagen, Fastline, Volvo, Australian Steel, Schenker and Chevron.

PORTFOLIO CHARACTERISTIC KEY METRICS	PORTFOLIO CHARACTERISTIC KEY METRICS
Grosspropertyassets1	$658 million
Total debt	$206 million
Gearing (look-through)	34.3%
Number of assets	18
Occupancy	98%
Weighted average lease expiry	11.6 years
Core assets	90%
Logistics assets	90%
Weighted average caprate	8.21%
Weighted average rent review (next 12 months)	3.17%
Rent Reviews(FY13)	100% fixed
Charter Hall co-investment	$54.9m / 18%

CPIF Debt Expiry Profile (by facility limit)

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$600m
$500m
$400m
$300m
$200m
$100m
$0m
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20+
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1. CPIF assets include 100% of Metcash Canning Vale, Perth. As at 30 June 2012 50% of the asset had physically been purchased, with 50% under option and yet to be purchased.

7

Property investment highlights

Property investment highlights Charter Hall Office Trust (CHOT)

KEY EVENTS DURING FY12

• Completed transition from listed REIT to wholesale unlisted partnership

• Australia Portfolio occupancy increased from 96% to 98%

• Total leasing of 64,854 sqm for the year (19% of portfolio)

• Sale of US portfolio completed in March 2012

• Charter Hall Group co-investment increased from 10% to 15% (post privatisation)

• New $1bn debt facility secured in April 2012 with term to maturity of 3.8 years.

• Top tenants include Government, Macquarie, Telstra, Citigroup, Allianz, Wilson Parking and Gilbert and Tobin.

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PORTFOLIO CHARACTERISTICS KEY METRICS	PORTFOLIO CHARACTERISTICS KEY METRICS
Grosspropertyassets	$1.97 billion
Total debt	$911 million
Gearing (look-through)	43.8%
Number of assets	18
Occupancy	98%
Weighted average lease expiry	4.3years
CBD assets	79%
Primegrade assets	93%
Weighted average caprate	7.8%
Weighted average rent review (next 12 months)	4.0%
Rent reviews(FY13)	74% fixed
Charter Hall co-investment	$145.7m / 15.0%

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CHOT Debt Expiry Profile (by facility limit)
$600m
$500m
$400m
$300m
$200m
$100m
$0m
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20+
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8

Property investment highlights

Property investment highlights Wholesale Mandates

KEY EVENTS DURING FY12

• Brisbane Square, Brisbane – asset independently re-valued to $400m (original 2010 purchase price $300m). CPOF 50% and mandate client 50%.

• Retail Partnership No.1 – Acquired two additional assets located at Gladstone QLD ($17m) and Wanneroo, Perth $69.9m (CQR 50% and Mandate Client 50%)

• Retail Partnership No.2 Bay Village acquisition – Acquired Bay Village Shopping Centre in Bateau Bay, Central Coast NSW for $164m, reflecting an 8% cap rate (20% Charter Hall Group, 80% mandate client). The asset is a 29,162 square metre modern sub-regional shopping centre anchored by Woolworths, Coles, Kmart and Aldi.

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PORTFOLIO CHARACTERISTICS KEY METRICS	PORTFOLIO CHARACTERISTICS KEY METRICS
Charter Hall mandates Gross AUM 30 June 12	$636 million
Charter Hall Mandates Gross AUM current	$800 million
Number of assets	14
Number of mandates	4
Charter Hall’s direct co-investment	CPOF, CQR and $19.5m invested in Bay Village

• Charter Hall continues to source, analyse, transact and manage prime grade investment assets for its existing and prospective mandate clients.

9

Financial information

Property investment highlights Charter Hall Retail REIT (CQR)

KEY EVENTS DURING FY12

• Acquired four properties for $160m (100% value) at an average yield of 8.5%.

• Continued to expand investor partnerships with joint acquisition of Wanneroo Central and Gladstone

• Five wholly owned US properties sold during the year realising majority of remaining equity in the US portfolio

• Australian portfolio represents 91% of the REIT’s NTA

• Strong Australian portfolio performance - occupancy steady at 98.6% , same property NOI growth of 3.5%, specialty rent growth of 4.9% achieved on 110 renewals and 131 new leases

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PORTFOLIO CHARACTERISTICS KEY METRICS	PORTFOLIO CHARACTERISTICS KEY METRICS
Grosspropertyassets	$1.98 billion
Total debt	$763 million
Gearingbalance sheet	40.4%
Total number of Assets	91
Number of Australian Assets	74
Occupancy1	99%
Anchor weighted average lease expiry 1	10.8years
Weighted average caprate	8.31%
SamepropertyNOI FY121	3.5%
Specialtyrentgrowth FY12 1	4.9%
Charter Hall co-investment	$101.3m / 10.0%

• Refinanced and restructured $678m of Australian debt facilities

CQR Debt Expiry Profile(by facility limit)

• Refinanced Euro 81m German debt facility in challenging credit environment

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$400.0m
$350.0m
$300.0m
$250.0m
$200.0m
$150.0m
$100.0m
$50.0m
$0.0m
FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20+
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1. Statistics are for Australian portfolio only.

10

Financial information

Detailed operating earnings

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Detailed operating earnings Financial information
($M)	FY12 1	FY11 1
Direct net property income	14.3	15.1
Indirect property income	34.0	31.6
Property investment income	48.3	46.7
Development investment income	2.0	3.8
Investment management fees	37.9	38.8
Property and facilities management fees	12.8	8.7
Leasing fees (excluding project leasing)	5.4	5.0
Development management fees	9.4	8.6
Transaction and performance fees	6.6	12.6
Project leasing fees	1.3	1.1
Funds and property management income	73.4	74.9
Total income	123.6	125.3
Operating expenses	(63.4)	(66.1)
Recovery of operating expenses	12.4	10.6
Net operating expenses	(51.0)	(55.5)
EBITDA	72.5	69.9
Depreciation	(0.7)	(1.5)
EBIT	71.4	68.3
Net interest expense	(5.7)	(5.6)
Non-controlling interest	(2.5)	(2.3)
Operating earnings before specific items	63.6	60.4
Weighted number of securities ('000s)	295,625	293,253
Operating EPS before specific items (cps)	21.51	20.60
Net CQO transaction fee	9.1	-
Restructuring costs	(3.9)	-
Provision against CHOF4 performance fee clawback	(13.9)	-
Operating earnings after specific items	54.8	60.4
EPS after specific items (cps)	18.55	20.60
DPS (cps)	18.20	16.50

1. DRF consolidated in Preliminary Financial Report

11

Financial information

EBITDA segment reconciliation – FY12

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 The reconciliation of EBITDA performance in the results to the segment information contained in note 5(b) of the Preliminary Financial Report is set out below

	PROPERTY	PROPERTY FUNDS	DEVELOPMENT	DRF	COMBINED GROUP
	INVESTMENT	MANAGEMENT	INVESTMENT	$000	$000
	$000	$000	$000
EBITDA in presentation	39,940	23,315	1,956	-	65,212
Adjustments:
DRF operating earnings excluding
non-controlling interest (from	(6,047)				(6,047)
segment note)
DRF EBITDA (100%)				13,380	13,380
Workzone preferred equity income (classified as interest income)			(13)		(13)
EBITDA in segment note	33,893	23,315	1,943	13,380	72,531

12

Financial information

EBITDA segment reconciliation – FY11

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 The reconciliation of EBITDA performance in the results to the segment information contained in note 5(b) of the Preliminary Financial Report is set out below

	PROPERTY	PROPERTY FUNDS	DEVELOPMENT	DRF	COMBINED GROUP
	INVESTMENT	MANAGEMENT	INVESTMENT	$000	$000
	$000	$000	$000
EBITDA in presentation	37,426	20,691	3,769	-	61,886
Adjustments:
DRF operating earnings excluding
non-controlling interest (from	(6,299)				(6,299)
segment note)
DRF EBITDA (100%)				14,256	14,256
EBITDA in segment note	31,127	20,691	3,769	14,256	69,843

13

Financial information

DRF reconciliation of balance sheet: 30 June 2012

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	$M	30 JUNE 2012	30 JUNE 2012	DRF ADJUSTMENTS	30 JUNE 12
		(DRF CONSOLIDATED)	DRF BALANCE SHEET		(DRF ON NET CONTRIBUTION BASIS)
	Cash	39.3	(1.3)	-	38.0
	Property investments	614.0	(137.0)	53.1	530.1
	Development investments	66.7	-	-	66.7
	Other tangible assets	59.1	(0.7)	2.4	60.8
	Intangibles	98.7	-	-	98.7
	Total assets	877.8	(139.0)	55.5	794.3
	Borrowings	51.5	(53.9)	2.4	-
	Other liabilities	70.0	(4.6)	-	65.4
	Total liabilities	121.4	(58.4)	2.4	65.4
	Net assets attributable to non-controlling interest	(27.4)	-	27.5	-
	Total equity post non-controlling interest	728.9	(80.5)	80.5	728.9
	Total securities on issue (000s)	296,168	-	-	296,168
	Net tangible assets per security	$2.13			$2.13
	Look through gearing (non-recourse debt)	32.2%			32.2%
	Balance sheet gearing	1.4%			0.0%

14

Financial information

Reconciliation of operating earnings to statutory profit after tax

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	FY12	FY11
	$000s	$000s
Operating earnings before specific items	63,586	60,422
Specific items	(8,741)	-
Operating earnings	54,845	60,422
Fair value adjustments on derivatives	(9,933)	2,141
Fair value adjustment on investments and property	(2,034)	14,239
Inventory Writedown	(5,814)	(664)
Transfer from reserves of cumulative FX losses on disposal of foreign investments	(12,176)	(871)
Impairment of management rights	-	(19,171)
Share based payments	(2,338)	(4,090)
Other1	(5,872)	332
Statutory profit after tax attributable to stapled securityholders	16,678	52,338

1. Other includes non-cash items including loss on sale of investments and property ($2.0m) amortisation, and of CHOT management rights ($1.3m),, lease incentives ($0.5m) and borrowing costs ($0.4m).

15

Financial information

Funds under management reconciliation

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Australia FUM (excluding Development Funds) $10.7bn ($0.3bn) $0.5bn ($2.1bn) FY11 Revaluation Acquisitions Disposals	$10.7bn	($0.3bn) $0.5bn ($2.1bn)	$0.0bn $8.9bn $0.6bn	FY12 ($BN) CURRENT ($BN) 7.8 7.8 ($0.1bn) $9.4bn Disposals Current
			FY10 ($BN) FY11 ($BN) 6.6 7.6 FX Movement FY12 Acquisitions
PFA			- -	- 0.4
Bay Village			- -	- 0.2
Development FUM			0.6 0.9	0.6 0.5
Total Australian FUM			7.2 8.5	8.4 8.9
Off-shore			3.0 2.2	0.5 0.5
Total FUM			10.2 10.7	8.9 9.4

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Development

Development investments

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	DEVELOPMENTS ($M – CHC SHARE)	VALUE OF INVESTMENT AT 30 JUNE 2011	IMPAIRMENT	CURRENT VALUE OF
		(INC. EQUITY INVESTED DURING FY12)		INVESTMENT
	CHOF4 (CHC share – 3%)
	Home HQ North Shore, Artarmon	0.9	(0.4)	0.5
	CHOF5 (CHC share – 15%)
	40 Creek St, Brisbane	4.7	0.4	5.1
	Lacrosse Stage 1, Melbourne	6.0	-	6.0
	Aquilo, Oak Avenue, Mentone	2.2	-	2.2
	Home HQ Hastings, New Zealand	1.7	(0.4)	1.3
	WorkZone, 202 Pier St, Perth	7.3	1.7	9.0
	Little Bay Cove, Sydney	11.8	(7.1)	4.7
	On balance sheet
	WorkZone, 202 Pier St, Perth, preferred equity	4.5	-	4.51
	685 La Trobe Street, Melbourne	9.5	-	9.5
	Total/weighted average	48.6	(5.8)	42.8

1. A further $1m was drawn in July 2012

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Development

Investment in CIP

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• The current economic climate has made it a challenging year for CIP[1]

• Over the last 7 years CIP has provided a pipeline of $389m of quality industrial assets to CPIF and DIF

CIP INCOME STATEMENT	FY12 ($M)	FY11 ($M)
Total revenue	120.4	130.7
Project expenses	(107.1)	(110.5)
Overheads	(9.3)	(8.8)
Total expenses	(116.4)	(119.3)
Net profit before tax	4.0	11.4
Income tax	(0.9)	(3.4)
Net profit after tax	3.1	8.0
CHC Profit share (50%)	1.5	4.0

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Volkswagen, Chullora, NSW Australian Head Office distribution center with a 13 year pre-committed lease to Volkswagen Group Australia (VW) completed in October 2011

1. Charter Hall owns 50% of industrial pre-lease developer

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Development

Development book and pipeline

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					PROJECT VALUE
PROJECT		STATUS	FUND	SECTOR	($M)	COMPLETION DATE
Investment Funds
Woolworths DC, Tasmania		Completed	CPIF	Industrial	67	FY12
CQR projects		Active	CQR	Retail/CQR	80	FY13
171 Collins Street, Melbourne		Active	CHOT	Office	135	FY13
175 Eagle Street, Brisbane		Active	CHOT	Office	25	FY14
Total active developments (investment funds)					307
CQR future projects		Future	CQR	Retail/CQR	115	FY14/15
CPOF future projects		Future	CPOF	Office	375	FY15/16
Total future developments (investment funds)					490
Total developments (investment funds)					797
Opportunistic Funds
Lacrosse Stage 1, LaTrobe Street, Docklands		Active	CHOF5	Opportunistic	150	FY13
The Park Megacentre, Hastings		Active	CHOF5	Opportunistic	37	FY13
Aquilo, Mentone		Active	CHOF5	Opportunistic	70	FY13
Little Bay Cove		Active	CHOF5	Opportunistic	70	FY13
Workzone, 202 Pier Street, Perth		Active	CHOF5	Opportunistic	220	FY14
Total opportunistic developments					547
Total development book					1,347

1. CQR current projects include Singleton, Murwillumbah and Rockhampton. Future projects include South Headland, Mackay, Lansell Plaza and Carnes Hill.

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Capital management & funding

Property funds debt programmes

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	($m)	CHC 1	CHOT	CQR	CPOF	CPIF	DRF	CHUF	DPF	CHDPF	CHOF4	CHOF5
	Asset values2	756	1,938	2,011	1,545	602	180	282	100	508	105	317
	Net debt drawn2	(33.2)	849	880	583	206	65	100	51	216	66	108
	Duration3 (years)	1.8	3.8	3.4	4.0	2.6	1.4	N/A	0.7	3.2	1.8	0.9
	Gearing
	Balance sheet	1.4%	45%	40%	35%	36%	25%	-	52%	42%	63%	34%
	Look-through	32%	44%	44%	38%	34%	36%	35%	52%	42%	63%	34%
	Target gearing4	0-10%	40-45%	30-40%	35-45%	35-45%	35-45%	-	<65%	35-45%	N/A	N/A

1. DRF deconsolidated - DRF net contribution basis balance sheet.

2. Total assets and debt values shown net of cash. Represent look through debt and book values. Differences with FUM figures used in this presentation compared to individual managed fund disclosures is due to use of on completion values and treatment of capital expenditure

3. Calculated on a weighted average basis.

4. Balance sheet gearing

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Capital management & funding Look through debt expiry profile (by facility limit) as at 30 June 2012

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CHC
CQR
$1,400m
$1,271m $1,288m Wholesale Unlisted Funds
Retail Investor Funds
$1,200m
$1,000m
$800m $736m
$638m
$600m
$400m
$266m
$200m
$0m
FY13 FY14 FY15 FY16 FY17+
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Disclaimer

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This presentation has been prepared by Charter Hall Group (Charter Hall Limited (ABN 57 113 531 150) and Charter Hall Funds Management Limited (ABN 31 082 991 786) (AFSL 262861) as the responsible entity for Charter Hall Property Trust (ARSN 113 339 147). It is a presentation of general background information about the Group’s activities as at 30 June 2012 unless otherwise stated. It is a summary and does not purport to be complete. It is to be read in conjunction with the Charter Hall Consolidated Full Year Financial Report filed with the Australian Securities Exchange on 28 August 2012. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. A reader should, before making any decisions in relation to their investment or potential investment in the Charter Hall Group, seek their own professional advice. This presentation is not an offer or invitation for subscription or purchase of securities or other financial products.

Indications of, and guidance on, future earnings and financial position and performance are “forward-looking statements”. Due care and attention has been used in the preparation of forward looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Group, that may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements.

Charter Hall fund’s currently accepting investments

The responsible entity of Charter Hall Direct Property Fund (“CHDPF”) and Charter Hall Property Securities Fund (“CHPSF”) is Charter Hall Direct Property Management Limited (“CHDPML”) (ABN 56 073 623 784, AFSL 226849). CHDPML has issued a product disclosure statement (“PDS”) for CHDPF dated 20 December 2010 and for CHPSF dated 19 November 2010. The PDSs for the aforementioned funds (“Funds”) set out the offer to apply for units in the Funds. If you are considering an investment in a Fund you should read the relevant PDS in its entirety and consider the information set out in the PDS in relation to the offer. You can request a copy of a Fund’s PDS, free of charge, by calling CHDPML on 1300 652 790.

This information has been made available to the recipient for information purposes only. It is not intended to be, and does not constitute a product disclosure statement, prospectus, short form prospectus or profile statement as those terms are defined in the Corporations Act. It does not constitute an offer for the issue, sale or purchase of any securities, or any recommendation in relation to investing in any asset. This document has been prepared without taking account of any particular investor’s objectives, financial situation or needs. For this reason, it is important that you consider the PDS for the offer and consider whether to seek appropriate professional advice before making any investment decision. Entities within the Charter Hall Group may receive fees for managing the assets of, and providing resources to each Fund. For more detail on fees, see the relevant PDS.

All information herein is current as at 30 June 2012 unless otherwise stated. All references to dollars ($) or A$ are Australian Dollars unless otherwise stated. Exchange rates in this presentation are A$1.00/US$1.02/€0.81/NZ$1.28

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Further information

David Southon

Joint Managing Director +61 2 8908 4025 david.southon@charterhall.com.au

David Harrison

Joint Managing Director +61 2 8908 4033 david.harrison@charterhall.com.au

Kylie Ramsden

Head of Listed Investor Relations +61 2 8295 1016 kylie.ramsden@charterhall.com.au

Paul Altschwager

Chief Financial Officer +61 2 8295 1004 paul.altschwager@charterhall.com.au

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