CHARTER HALL GROUP — Capital/Financing Update 2008

Aug 12, 2008

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13 August 2008

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

Dear Sir

CHC securities on issue & timetable

This announcement reconfirms that the relevant number of securities on issue for EPS and DPS calculation purposes is 419.0 million at 30 June 2008. In addition, we provide securityholders with a summary of the securities issued under the Charter Hall Group (the Group or CHC) Executive Loan Security Plan (ELSP).

The ELSP is a long term incentive plan aimed at creating a strong link between executive performance and their rewards, as well as increasing securityholder value by enabling plan participants to have a greater involvement with, and share in, the growth and profitability of the Group.

Under the ELSP senior executives are issued scrip at the market price as at 30 June each year (based on the previous 5 day Volume Weighted Average Price or VWAP). One third of these securities vest at 30 September each year in the 3 years post the date of issue, subject to the satisfaction of performance and service conditions. The performance condition is an average of 5% annual growth in like for like Underlying EPS over the 3 year vesting period.

ELSP participants are offered a 5 year limited recourse loan to acquire securities under the plan with interest charged equivalent to the CHC distribution.

Charter Hall Limited

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

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The following summary is provided for the purposes of calculating EPS and DPS, before and after the issue of 2H FY08 DRP securities and the expected vesting of additional ELSP securities on 30 September 2008.

Stapled securities (millions)	At 30 June 2008	At 29 August 2008	At 30 Sep 2008
ELSP securities on issue	38.8	38.8	38.8
Non ELSP securities on issue	414.0	414.0	446.5
Sub total	452.8*	452.8	485.3
Less: unvested ELSP securities	(33.8)	(33.8)	(26.8)^
DRP securities (to be issued 29 August 2008)	-	32.5	-
Securities on issue for EPS/DPS calculation	419.0**	451.5	458.5

• Equals the total securities on issue per the Appendix 3B lodged with ASX on 7 August 2008.

** Includes 5.0m vested ELSP securities

^ At 30 September 2008, a further 7.0m securities are expected to vest under the ELSP. Hence these securities will be recognised for EPS/DPS purposes, and bringing the total vested ELSP securities to 12.0m.

During the time in which securities are unvested they are not recognised as issued securities in accordance with AASB2 ‘Share Based Payments’. Hence these securities are treated like options and do not form part of the total number of securities for EPS/DPS calculations.

For the purposes of calculating EPS and DPS at 30 June 2008 there is a total of 419.0m securities, increasing on 29 August 2008 to 451.5m post the DRP issue, and 458.5m following the expected 30 September 2008 vesting of ELSP securities.

Including the most recent issue of 15.3m ELSP securities, there are currently 38.8m securities on issue under the ELSP, or 8.6% of the total CHG securities on issue. Of these securities, 33.8m, or 87%, have not vested and are not recognised for accounting/financial statements purposes and are not included when calculating EPS or DPS.

A total of 5.0m vested securities are treated as issued securities and equate to loans to CHG executives of $5.7m on which CHC earns interest equivalent to the CHC distribution yield. The interest charged on these loans is shown as interest income in CHC’s financial statements and forms part of CHC’s distributable earnings. As further securities vest they will be recognised as issued capital along with the corresponding loan to the executives.

Charter Hall Limited

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

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Vested ELSP securities are earnings neural to CHC.

Vested securities under the ELSP carry a loan equivalent to the market value of the securities at the time of issue. As the loans are non recourse, should an executive fail to repay the loan for a vested security within the 5 year period of the loan, the securities are forfeited and the securities and corresponding loan may be cancelled or retained in trust for future awards at CHC’s election.

The table below summarises the offers that have been made under the ELSP since inception in June 2005 and the issue price of each offer:

Date of offer	Issue price	No. of securities (million)
July 2005	$1.00	5.9
Between July 2005 to June 2006	$1.07	0.3
July 2006	$1.27	6.3
Between July 2006 to June 2007	$1.73 (average price)	1.4
July 2007	$2.76	10.0
Between July 2007 to June 2008	$1.51(average price)	0.8
July 2008	$1.04	15.3
Forfeited or vested and refinanced*		(1.2)*
**Total **		38.8

• If executives cease employment, unvested securities are forfeited and either sold on market with any outstanding loan repaid or both the securities and the corresponding loan are cancelled. Once securities do vest executives can refinance loans with a financier other than CHC. The majority of vested securities are still financed via loans provided by CHC.

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

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Timetable

Below is the timetable of events over the coming months:

Event	Date
Announcement of CHC annual results	25 August 2008
CHC distributions paid and DRP securities issued (expected)	29 August 2008
Annual General Meeting	10 November 2008 (2pm, Westin Hotel, 1 Martin Place, Sydney)

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

Yours faithfully

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Nathan Francis Deputy Chief Financial Officer/Company Secretary

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