CHARTER HALL GROUP — Capital/Financing Update 2008

Dec 22, 2008

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23 December 2008

The Manager Company Notices Section Australian Securities Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000

Level 11, 333 George Street Sydney NSW 2000 GPO Box 2704 Sydney NSW 2001 Tel +61 2 8908 4000 Fax +61 2 8908 4040 www.charterhall.com.au Charter Hall Limited ABN 57 113 531 150 Charter Hall Funds Management Limited ABN 31 082 991 786

Dear Sir

APPENDIX 3B – ISSUE OF SECURITIES UNDER THE CHARTER HALL PERFORMANCE RIGHTS AND OPTIONS PLAN

The attached Appendix 3B relates to the issue of Performance Rights to executives under the Charter Hall Executive Performance Rights and Options Plan (PROP).

The Board, in consultation with independent remuneration consultants, resolved that long term incentives (LTI) for the 2009 year would be delivered through a combination of the existing Executive Loan Security Plan (ELSP) and the new PROP.

The Board has introduced the PROP as a key component of the Group’s broader strategy for rewarding and retaining key talent. The PROP is a long term incentive plan aimed at creating a stronger link between executive performance and reward and increasing securityholder value by enabling plan participants to have a greater involvement with, and share in, the future growth and profitability of the Group.

The Performance Rights are unquoted securities and conversion of Performance Rights to stapled securities, and vesting to executives, is subject to the same service and performance conditions as the ELSP.

The performance condition is based on the achievement of a 5% compound annual growth rate, over a 3 year period, above FY08 Underlying EPS of 12.74 cents per security (cps).

The total number of Performance Rights granted was 1,628,789. Of this total 858,173 Performance Rights were granted to the Executive Directors following securityholder approval at the November 2008 Annual General Meeting. The balance of Performance Rights relates to grants to senior executives of the Group.

In regards to the ELSP the issue prices range from $1.00 to $2.84 per security. ELSP participants are provided non-recourse loans based on the issue price and hence at the current CHC security price the securities have no value and would not be exercised (assuming vesting conditions were met).

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Number of securities on issue

The number of stapled securities on issue remains unchanged following the grant of Performance Rights.

As previously disclosed ELSP securities that have not been exercised must be excluded from securities on issue in accordance with AASB2 Share Based Payments . This is because ELSP securities are treated as options and are only recognised once they are exercised (i.e. when the loan is repaid and the securities exit the ELSP).

Accordingly under AASB2 Charter Hall Group is unable to recognise the equity, loans receivable or interest income relating to the ELSP securities.

We provide below a table outlining total securities on issue compared to securities on issue for accounting purposes and hence for calculating EPS/DPS/NTA.

	Number of stapledsecurities (millions)
ELSPsecurities on issue	50.3
Non ELSP securities on issue	446.5
Actual stapled securities onissue per Appendix 3B	496.8
Less: ELSPsecurities	(50.3)
Securities on issue forEPS/DPS/NTAcalculation	446.5

Please do not hesitate to contact the undersigned if you require further information.

Yours faithfully

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Nathan Francis Deputy CFO & Company Secretary