CHARTER HALL GROUP — Capital/Financing Update 2011

Dec 4, 2011

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ASX/MEDIA ANNOUNCEMENT

CQO UPDATE & RESTRUCTURE OF UNIT TRANSFER AGREEMENT

Monday, 5 December 2011

Charter Hall Group (ASX:CHC) refers to the announcement today by the Independent Directors of Charter Hall Office Management Limited (CHOML), as responsible entity of Charter Hall Office REIT (ASX:CQO) (CQO), stating that in response to a revised offer for CQO they have “unanimously recommended the Proposal, in the absence of a superior proposal and subject to the Independent Expert finding the Proposal to be in the best interests of CQO unitholders, other than Charter Hall and its subsidiaries”.

Charter Hall confirms that, following confirmation that the CQO Independent Directors are recommending the revised offer, it has entered into an agreement (Consortium Agreement) with Public Sector Pension Investment Board (PSP) and an entity owned by the Government of Singapore Investment Corporation (GIC). The Consortium Agreement provides that subject to final documentation being agreed and executed, in the absence of a superior proposal, Charter Hall will join the consortium with GIC and PSP.

As part of the final terms, Charter Hall will continue to manage CQO on an unlisted basis with a similar fee structure and quantum had CQO remained a listed AREIT. Charter Hall will have an initial investment of 15% of total consortium equity (approximately $141 million), allowing Charter Hall to reduce its co-investment by retaining approximately A$39 million, following receipt of CQO’s special distribution(s) from the sale of its US portfolio[1] . This additional balance sheet capital will be available for debt reduction or re-investment by Charter Hall Group.

In the event this transaction is completed, Charter Hall will be reviewing the carrying value of the management rights of CQO.

Fir Tree Unit Transfer Agreement

Charter Hall also advises it has agreed with Fir Tree Partners (Fir Tree) to amend the Unit Transfer Agreement (UTA) in respect of their 3.3% interest (16.3 million units) in CQO.

1 Assumes an exchange rate of AUD:USD of $1.00 and Charter Hall receiving $57.5m from the proceeds of the CQO US portfolio sale.

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Under the amended UTA, Charter Hall may acquire the 3.3% interest in CQO from Fir Tree in the event that the CQO IDC does not put a trust scheme proposal to CQO unitholders; or in the event that such a proposal is put but is ultimately rejected by CQO unitholders or withdrawn by the CQO IDC. In either event, Fir Tree has the option to put their interest in CQO to Charter Hall.

The material changes to the UTA are:

• Fir Tree now has a put option to Charter Hall in the event that all of the following conditions are satisfied:

  • CQO unitholders vote at a meeting of unitholders to reject the trust scheme of arrangement; the IDC of CHOML decides not to put the proposal to CQO unitholders; or the trust scheme resolutions are withdrawn;

  • Completion of the sale by CQO of assets in the US portfolio representing 80% or more of the book value of the US portfolio as at 30 June 2011; and

  • The payment by CQO of one or more capital returns to its unitholders of 95% or more of the net proceeds received by CQO from the completed US asset sales referred to above.

All of these conditions must be satisfied by 31 May 2012 (or such later date as the parties might agree in writing).

• The CQO unit price payable by Charter Hall to Fir Tree under this put option is the lower of: o $2.48; or

  • where the trust scheme of arrangement is considered by CQO unitholders but is rejected or if the trust scheme resolutions are withdrawn, the final bid price under the CQO trust scheme of arrangement.

The agreement continues to provide that if CQO still holds assets in the US portfolio when Fir Tree’s units are sold under the put option (or has not fully distributed the net sale proceeds from the sale of the US portfolio), the unit price payable to Fir Tree under the put option will be adjusted upwards to account for the fact that assets in the US portfolio (or some of the proceeds) are retained by CQO.

• Under the amended UTA, Charter Hall ceases to have any rights to control, or to direct, how Fir Tree votes in respect of its interest in CQO.

In the event that Charter Hall acquires the units in CQO from Fir Tree, the purchase will be funded from the special distribution from CQO from the sale of its US portfolio.

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For further information, please contact:

David Harrison

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

David Southon

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

Investor enquiries:

Kylie Ramsden

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

Media enquiries:

Rachel Mornington-West

Head of Marketing and Communications Tel: +61 28908 4093 rachelm@charterhall.com.au

About the Charter Hall Group:

Charter Hall Group (ASX:CHC) is one of Australia’s leading fully integrated property groups, with 20 years’ experience managing high quality property on behalf of institutional, wholesale and retail clients. Charter Hall has over $10 billion of funds under management across the office, retail, industrial and residential sectors. The Group has offices in Sydney, Melbourne, Brisbane, Adelaide, Perth, Warsaw and Chicago.

The Group’s success is underpinned by a highly skilled and motivated team with diverse expertise across property sectors and risk-return profiles. Sustainability is a key element of its business approach and by ensuring its actions are commercially sound and make a difference to its people, customers and the environment, Charter Hall can make a positive impact for its investors, the community and the Group.

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