CHARTER HALL GROUP — Capital/Financing Update 2010

May 10, 2010

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ASX/MEDIA ANNOUNCEMENT

CHARTER HALL ANNOUNCES CORE PLUS RETAIL FUND RESTRUCTURE

11 May 2010

Charter Hall Group (ASX: CHC) announces a number of new initiatives relating to its wholesale Core Plus Retail Fund (CPRF) including its restructure to become the unlisted Core Retail Fund (CRF) for investment by retail investors, as well as several asset transactions. More detail on these new initiatives follow:

• CPRF will be restructured into the unlisted Core Retail Fund (CRF) offering retail investors an opportunity to invest in a portfolio of investment grade retail assets targeting a greater than 50% allocation to supermarket and discount department store anchored shopping centre assets, with the balance allocated to integrated bulky retail assets anchored by major retailers. CHC, as the majority investor in CPRF, has entered into arrangements with other CPRF investors providing the ability for CHC to complete the proposed restructure.

• Consistent with this strategy, CPRF has acquired a 50% interest in a sub regional shopping centre from a Centro managed syndicate for $33 million reflecting an initial year one yield of 8.75%. The equity requirement for CPRF will be $18 million upon settlement of the transaction expected in July 2010. The asset was acquired from a Centro syndicate following discussions with both the manager and its bank financier, who has provided a new 3 year stand alone debt facility for the property to CRF and the joint purchaser, Charter Hall Retail REIT (ASX: CQR).

• CPRF has also committed to purchase an investment property for $11.2 million which, together with the CPRF-owned adjoining Bunnings Stafford property, will form a 5.5 hectare long term retail redevelopment opportunity. The property has an existing 9 year lease to a subsidiary of John Wiley & Sons, a multinational publishing corporation listed on the New York Stock Exchange. This property is due to settle in July 2010 and will reflect an initial yield of 8.6%.

• CPRF will fund these acquisitions from cash proceeds resulting from the previously announced sale of the Redcliffe shopping centre, due to settle in June 2010 for a price of $45 million. The residual cash proceeds will be used to reduce the CPRF drawn debt balance to approximately $75 million, reflecting a property loan to value ratio of approximately 33%.

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• CHC also advises that an exclusive due diligence period has been granted to Charter Hall Retail REIT (ASX: CQR) for the possible sale of Nunawading and Stafford CPRF properties, following a process undertaken to determine which CPRF assets would fit CQR’s strategy to expand into the bulky retail sub sector. Any transaction would require the approval from CQR’s independent directors. Commercial details will be announced in the event binding agreements are executed.

Charter Hall Group Joint Managing Director, David Harrison said “The newly created Core Retail Fund (CRF) will provide an attractive, stable retail investment product with quality tenants and long average lease terms, and is expected to have strong appeal with retail investors and their financial advisers. Fixed annual rent increases of at least 3.1% are expected to provide stable income growth. With early signs that “cap rates” on asset valuations have started to compress for good quality, long term leased assets, Charter Hall believe this fund will offer bottom of the cycle acquisition opportunities for investors as equity inflows allow CRF to grow.”

It is not expected that the CPRF restructure will require further equity investment by Charter Hall, given the relatively low gearing of the fund post completion of these transactions. CPRF will cease to be consolidated in the Group’s financial statements once Charter Hall’s stake falls below 50%.

For further information, please contact:

David Harrison David Southon Joint Managing Director Joint Managing Director 0412 259 751 0418 479 155 davidh@charterhall.com.au davids@charterhall.com.au

Kylie Ramsden

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

About the Charter Hall Group:

Charter Hall Group is a property funds management and development company, based in Sydney with offices in Melbourne, Brisbane, Perth, Adelaide, Auckland and Chicago. Established in 1991 and listed on the ASX in 2005 as a stapled security, Charter Hall Group combines Charter Hall Limited with Charter Hall Property Trust, which will now own and/or manage over $10 billion in real estate assets. The Charter Hall Group has achieved a solid track record across its activities demonstrating a 19 year history of managing wholesale and retail capital, making it one of Australia's leading property fund managers. Charter Hall's success has been underpinned by a highly skilled and motivated management team with diverse expertise across property sectors and risk-return profiles.

For further information on Charter Hall Group and Charter Hall Retail REIT go to www.charterhall.com.au