CHARTER HALL GROUP — Earnings Release 2008

Aug 24, 2008

ASX/MEDIA ANNOUNCEMENT

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CHARTER HALL DELIVERS STRONG PERFORMANCE WITH 34% EPS GROWTH

Monday, 25 August 2008

Highlights for the year ending 30 June 2008

• Net profit after tax of $67.5 million – a 56% increase over FY07

• Underlying earnings per security of 12.74cps – up 34% on last year

• Distribution of 12.60cps – an increase of 21%

• 39% increase in funds under management (FUM) to $3.9 billion

• Business platform extended with 2 new funds created this year;

  • Charter Hall Umbrella Fund (CHUF) and Core Plus Retail Fund (CPRF)

• Balance sheet capacity available to take advantage of property and corporate acquisition opportunities

FINANCIAL
RESULTS SUMMARY	FY08	FY07	Change
Revenue	$91.1m	$60.8m	Up 50%
NPAT (AIFRS)	$67.5m	$43.2m	Up 56%
Underlying NPAT*	$52.7m	$34.2m	Up 54%
EPS (AIFRS)	16.31cps	12.00cps	Up 36%
Underlying EPS*	12.74cps	9.51cps	Up 34%
DPS	12.60cps	10.44cps	Up 21%

• Underlying profit excludes fair value gains, gains on sale of property/investments and other non cash items.

	30 June 2008	30 June 2007	Change
NTA per stapled security	$1.19	$1.12	Up 6%
Gearing at CHC level	31%	21%	Up 10%
FUM	$3.9bn	$2.8bn	Up 39%

ASX/MEDIA ANNOUNCEMENT

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EARNINGS SUMMARY

Charter Hall Group (ASX: CHC) is pleased to report a 56% increase in net profit after tax (NPAT) to $67.5 million , compared with $43.2 million in the previous corresponding period (“PCP”). The underlying NPAT of $52.7 million represents an increase of 54% on $34.2 million last year. The table above highlights the key financial indicators compared to the PCP.

The following items contributed to the growth in earnings:

• higher funds management services fee income as a result of a 39% increase in FUM to $3.9 billion.

• a 46% increase in investment distribution income from CHPT’s co-investments in Core Plus Office Fund (CPOF), Core Plus Industrial Fund (CPIF), and Diversified Property Fund (DPF).

• direct property income increased to $31.8 million, up 61% on last year, driven principally by rental income from the CPRF seed portfolio owned 100% by CHPT during FY08.

• a $7.2 million NPAT contribution from the 50% owned CIP development business (acquired in July 2007).

The distribution for the 6 months to 30 June 2008, to be paid on 29 August 2008, is 6.30 cents per stapled security (cps) , bringing the total distribution for the year to 12.60cps, an increase of 21% PCP. This distribution is supported by underlying earnings per security (EPS) of 12.74cps.

BALANCE SHEET SUMMARY

Total assets owned by CHC increased 23% to $802 million at 30 June 2008 and net tangible assets per stapled CHC security (NTA) at 30 June 2008 was $1.19 compared with $1.12 at 30 June 2007.

Group gearing of 31% as at 30 June 2008, has since been reduced to 7.2% following the successful first close of the CPRF equity raising in July 2008.

PROPERTY REVALUATIONS

Despite capitalisation rate and discount rate expansion over the past 6 months, the Group recorded modest gains in CHPT’s co-investments in unlisted funds and other investments.

At 30 June 2008, independent valuations were obtained for 90% of the investment assets within both CHPT and the managed funds’ portfolios. The impact of capitalisation rate and discount rate expansion was mitigated by:

• a) fixed rental growth and “under-market” rents;

• b) asset management activity resulting in improvements in weighted average lease expiry (WALE) across the portfolio; and

• c) the work undertaken by Charter Hall’s in-house development team to generate development margins

ASX/MEDIA ANNOUNCEMENT

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These factors combined to deliver a like-for-like increase in portfolio valuations of approximately $40 million across all funds.

Overall, the Charter Hall aggregate property investment portfolio has a WALE by income of 8.7 years across the office, industrial and retail sectors. The portfolio’s top tenants include Telstra, American Express, Harvey Norman, St George Bank, Coles, Mercer, BHP and the Government.

FUND MANAGEMENT

Funds under management have grown by 39% to $3.9 billion. Two new funds have been established this year (the Charter Hall Umbrella Fund and the Charter Hall Core Plus Retail Fund), and the Group now manages 8 unlisted funds.

All managed funds continue to outperform their target IRRs which augurs well for continued support for Charter Hall’s managed funds and the generation of performance fees for the Group over time. In particular:

• CHOF 4/5 forecast gross IRR of 42.0%

• CPOF gross IRR to date of 19.2%

• CPIF gross IRR to date of 16.1%

• DPF gross IRR to date of 25.5%

DEVELOPMENT

Charter Hall Opportunity Funds

Charter Hall opportunity funds (CHOFs) continue to perform strongly, delivering a realised IRR over 12 years of 30%. CHOF4 and CHOF5 combined have a projected weighted average equity IRR of 42% across its realised projects and its current activities. CHOF4 equity of $165 million has now been fully allocated and $165 million of CHOF5’s $300 million equity commitments has been allocated to projects.

CIP

Charter Hall’s 50% interest in CIP delivered NPAT of $7.2 million. CIP completed 175,000m[2] of projects during FY08 and currently has 210,000m[2] of projects under construction.

EPS AND DPS OUTLOOK

For financial year 2009, Charter Hall has budgeted underlying EPS growth of approximately 5%.

The Board’s current intention is to maintain FY09 total DPS at approximately 12.6cps, provided it is supported by underlying earnings.

ASX/MEDIA ANNOUNCEMENT

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NUMBER OF SECURITIES ON ISSUE

On 13 August 2008 the Group updated the market in regards to the Executive Loan Security Plan (ELSP) and the number of securities on issue. In that announcement the Group advised that there were 419 million securities on issue for the purposes of calculating EPS/DPS/NTA. This balance included 5 million vested securities under the ESLP and excluded 18.5 million non vested ELSP securities.

During the FY08 audit process, and following the ASX release mentioned above, the Group’s auditors, PricewaterhouseCoopers advised the Group that all ELSP securities should be excluded from securities on issue in accordance with AASB2 Share Based Payments , because ELSP securities are treated like options and to be only recognised once they are exercised (i.e. when the loan is repaid and the securities exit the ELSP share plan).

The FY08 Group financial statements have been prepared in accordance with AASB2 and the vested securities are excluded along with the loan receivable and interest income. At 30 June 2008 the number of securities on issue for accounting purposes is therefore 414 million, and not 419 million as previously announced. Impact on EPS, DPS and NTA is negligible, due to the interest income on the ELSP loans no longer being recognised.

The table below sets out the total securities on issue compared to securities on issue for accounting purposes utilised in calculating EPS/DPS/NTA.

Stapled securities (millions)	At 30 June 2008	At 7 August 2008	At 29 August 2008
ELSP securities on issue	23.5	38.8*	38.8
Non ELSP securities on issue	414.0	414.0	446.5^^
Actual securities on issue	437.5	452.8**	485.3
Less: ELSP securities^	(23.5)	(38.8)	(38.8)
Securities on issue for	414.0	414.0	446.5
EPS/DPS/NTA calculation

• Following the issue of a further 15.3 million securities under the ELSP

** Equals the total securities on issue per the latest Appendix 3B lodged with ASX on 7 August 2008 following issue of 15.3 million securities under the ELSP.

^ Per AASB 2 Share Based Payments ELSP securities, whether vested or non vested, are treated like options for accounting purposes. Like options, LTI securities are only recognised when they are exercised (ie when the loan is repaid). Hence these securities are derecognised for accounting purposes and for EPS/DPS/NTA calculations.

^^ Following the issue of 32.5 million securities under the DRP.

ASX/MEDIA ANNOUNCEMENT

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FURTHER INFORMATION

Please refer to the detailed results presentation and Group financial statements for further information on the Group’s results and managed funds.

Charter Hall will hold a webcast of its results presentation at 3.30pm on Monday 25 August. To access the presentation slides with live audio log onto http://www.brr.com.au/event/48501?popup=true

ENDS

For more information or for a media interview, please contact Charter Hall Group:

David Harrison David Southon Peter Roberts Joint Managing Director Joint Managing Director Chief Financial Officer +61 2 8908 4033 +61 2 8908 4025 +61 2 8908 4047 davidh@charterhall.com.au davids@charterhall.com.au peterr@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 and Auckland. Established in 1991 and listed on the ASX in 2005 as a stapled security under the code CHC, Charter Hall Group combines Charter Hall Limited with Charter Hall Property Trust. The Group currently has funds under management of $3.9 billion. The Charter Hall Group has achieved a solid track record across its activities demonstrating a 10 year history of managing wholesale capital, making it one of Australia’s leading property fund managers. Charter Hall’s success has been underpinned by a highly skilled, incentivised and motivated management team with diverse expertise across property sectors and risk-return profiles. www.charterhall.com.au

Charter Hall Limited ABN 57 113 531 150 Charter Hall Funds Management Limited ABN 31 082 991 786 Sydney Melbourne Brisbane Perth Adelaide Auckland

Level 11 | 333 George Street | SYDNEY | NSW 2000 GPO Box 2704 | SYDNEY NSW 2001 Ph: +61 2 8908 4000 | Fax: +61 2 8908 4040