CHARTER HALL GROUP — Capital/Financing Update 2013

Nov 21, 2013

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NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S PERSONS

Charter Hall ASX Media Release Retail Management Limited ACN 069 709 468 AFSL 246996 Responsible entity of Asset Acquisition and Equity Raising Charter Hall Retail REIT 22 November 2013 ABN 34 357 213 849 Level 11, 333 George Street Sydney NSW 2000 GPO Box 2704 Sydney NSW 2001 T +61 2 8908 4000 F +61 2 8908 4040 www.charterhall.com.au

Charter Hall Retail REIT (ASX:CQR) (the REIT) today announced that it has entered into an agreement to acquire Rosebud Plaza, a high quality sub-regional shopping centre located in Melbourne’s South (the Asset Acquisition).

Rosebud Plaza will be acquired for $100 million (excluding transaction costs). The Asset Acquisition is consistent with the REIT’s stated strategy of owning supermarket anchored shopping centres with a focus on nondiscretionary retail spending. The property is forecast to deliver a year one yield of 7.8% with additional potential for the REIT to add value through re-leasing opportunities and longer term redevelopment.

Fund Manager Scott Dundas said: “This acquisition reflects the REIT’s commitment to owning high quality subregional and neighbourhood retail assets anchored by national supermarket tenants. The property is a strongly performing sub-regional shopping centre and the transaction will result in improved gearing and liquidity, enabling us to take advantage of future acquisition opportunities. It further enhances our position as Australia’s leading owner of non-discretionary retail properties providing investors with a secure and growing income stream”.

Funding the Acquisition

The Asset Acquisition will be partially funded by an equity raise comprising a:

• Fully underwritten institutional placement of $80 million, and

• Conditional pro-rata placement to Charter Hall Group of $8 million, which is subject to CQR unitholder approval (together the Offer).

In addition to the Offer, a Unit Purchase Plan (UPP) will be offered to eligible Unitholders in Australia and New Zealand, providing retail investors with the opportunity to participate.

The Offer will be undertaken at a fixed price of $3.80[1] per unit, representing a 14.5% premium to the REIT’s 30 June 2013 NTA, a 1.0% discount to the REIT’s closing price on 21 November 2013 and a 3.6% discount to the five day volume weighted average price. At the offer price, the new units issued under the Offer are forecast to deliver a 7.8% and 7.2%[2] FY14 operating earnings per unit yield and FY14 distribution per unit yield respectively.

1 Offer price of units to be issued to Charter Hall Group will be reduced by the value of the REIT’s December 2013 half year distribution in cents per unit. Subject to 2 Based on midpoint of FY14 operating earnings and distribution guidance unitholder approval, these units will be allotted in February 2014 and will carry no entitlement to the December 2013 half year distribution

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Asset Overview

Rosebud Plaza is located in the heart of the Mornington Peninsula to Melbourne’s South and comprises a subregional shopping centre anchored by Coles, Kmart and Target with over 60 specialty stores, a freestanding Safeway, a freestanding Kmart Tyre & Auto and a smaller detached retail area. The centre benefits from:

• Strong competitive advantage with no other sub-regional centre within its main trade area

• Being uniquely positioned in the heart of a key tourism destination

• Solid trade area fundamentals with the primary trade area forecast to see five year annual population and real retail spending growth of 1.5%

• Long anchor WALE of 11.9 years with one anchor currently paying turnover rent.

The centre’s total GLA is 24,582 square metres, with on grade parking for approximately 1,070 vehicles.

Capital Management

In conjunction with the Asset Acquisition and the Offer, the REIT announced that it has secured a $50 million increase to its syndicated debt facility at existing pricing[1] . The combined transaction will increase the REIT’s liquidity by $30 million, to fund acquisition opportunities into 2014.

In addition, the REIT has secured a refinance of its Australian joint venture debt facility[1] , extending the term by one year to July 2017 with margin significantly improved. This saving will reduce the REIT’s Australian weighted average interest cost by 7 basis points[2] .

Impact on the REIT

The impact of the combined transaction is expected to be neutral to the REIT’s FY14 operating earnings, with operating earnings guidance of 29.5 to 30.0 cents per unit excluding German operations remaining unchanged. The distribution payout ratio of 90% to 95% of operating earnings also remains unchanged.

The Offer will be accretive to NTA, with pro-forma NTA increasing from $3.32 to $3.33 (post costs). Balance sheet gearing is forecast to reduce by 0.7%, from 32.4%[3] to 31.7% (post costs).

Additional Information

Additional information regarding Rosebud Plaza and the Offer is included in the investor presentation released to the ASX today. This presentation includes a timetable for the Offer and the expected timing of the UPP.

1 Credit approved, subject to documentation

2 Based on $600 million of Australian debt drawn at 30 June 2013

3 At 30 June 2013 restated for sale of Polish portfolio, Australian interest rate swap restructure, Secret Harbour and Southgate Plaza acquisition and sale of Home HQ Nunawading

About Charter Hall Retail REIT

Charter Hall Retail REIT is a leading listed real estate investment trust with a portfolio of predominantly high quality Australian supermarket anchored neighbourhood and sub-regional shopping centres.

Charter Hall Retail REIT is managed by Charter Hall Group (ASX:CHC), one of Australia’s leading fully integrated property groups, with over 22 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 and industrial sectors. The Group has offices in Sydney, Melbourne, Brisbane, Adelaide and Perth.

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

For further information, please contact:

For further information, please contact: For investor enquiries, please contact For media enquiries, please contact Scott Dundas Kylie Ramsden Rachel Mornington-West Fund Manager Head of Listed Investor Relations Head of Marketing and Communications Charter Hall Retail REIT Charter Hall Charter Hall T +61 2 8295 1009 T +61 8295 1016 T +61 8908 4093 scott.dundas@charterhall.com.au kylie.ramsden@charterhall.com.au rachel.morningtonwest@charterhall.com.au

Philip Schretzmeyer

Deputy Fund Manager Charter Hall Retail REIT T +61 2 8295 1023 philip.schretzmeyer@charterhall.com.au

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This press release does not constitute an offer of shares for sale in the United States, or to any person that is, or is acting for the account or benefit of, any U.S. person (as defined in Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”)) (“U.S. Person”), or in any other jurisdiction in which such an offer would be illegal. The shares have not been registered under the Securities Act, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. Persons unless the shares are registered under the Securities Act or an exemption from the registration requirements of the Securities Act is available.

This press release includes “forward-looking statements” within the meaning of securities laws of applicable jurisdictions. Forward-looking statements can generally be identified by the use of forward-looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, “continue”, “objectives”, “outlook”, “guidance” or other similar words, and include statements regarding certain plans, strategies and objectives of management and expected financial performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the REIT, and its officers, employees, agents or associate. Actual results, performance or achievements may vary materially from any projections and forward looking statements and the assumptions on which those statements are based. Readers are cautioned not to place undue reliance on forward-looking statements and the REIT assumes no obligation to update such information.

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