CHARTER HALL GROUP — Interim / Quarterly Report 2009

Feb 23, 2009

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ASX/MEDIA ANNOUNCEMENT

FIRST HALF FY09 RESULTS

Tuesday, 24 February 2009

KEY RESULTS - 1[ST] HALF FY09

• ♦ Underlying Earnings $20.9 million, representing an Underlying EPS of 4.80cps

• ♦ 1H distribution of $17.7 million representing 3.96cps

• ♦ Assets Under Management remains unchanged at $3.9 billion

• ♦ Net tangible assets of $1.09 per security

• ♦ Gearing of 11%

KEY FINANCIALS

	1H FY09	1H FY08
Revenue	$36m	$43m
AIFRS Profit/(loss) after tax	($16.6m)	$46.5m
Underlying Earnings1	$20.9m	$26.3m
Underlying EPS1	4.80cps	6.28cps
DPS	3.96cps	6.30cps
	31 Dec 08	30 Jun 08
NTA	$1.09	$1.19
Gearing2	11%	31%
Assets Under Management	$3.9bn	$3.9bn

1 Underlying Earnings and EPS are before fair value adjustments, gains on sale of investments and AIFRS non-cash expenses. Previously Underlying Earnings included an income tax benefit. Given the Group currently forecasts a noncash tax benefit, tax has been excluded from the calculation of Underlying Earnings. 2 Borrowings net of cash over total assets net of cash.

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EARNINGS

Despite the challenging market conditions Charter Hall Group has delivered Underlying Earnings for the period of $20.9 million (1H FY08: $26.2 million), equating to Underlying EPS of 4.80cps.

The earnings were generated from revenue of $36 million, down from $43 million in the previous corresponding period. The reduction in revenue was mainly due to reduced exposure to direct property, following the sell down of the Core Plus Retail Fund (CPRF), and a lower contribution from performance fees, transaction fees and development investment income.

A substantial increase in base fund management, development management and property management fees has partly offset the reduction in transactional revenue.

Proceeds from the sell-down of CPRF have been utilised to reduce Charter Hall’s debt balance. Interest expense for the period has therefore fallen substantially from $8.8 million (1H FY08) to $4.5 million (1H FY09).

The Group recorded a statutory (AIFRS) loss after tax of $16.6 million. This loss is after non-cash fair value adjustments of $42 million, comprising a $30 million decline in value of investments in Charter Hall managed funds, a $10 million decline in the valuation of the mark to market of financial derivatives and a $2 million decrease in the value of direct property and other investments. These non-cash movements do not impact the operating cash flow of the Group. The Group reported operating cash flow of $21.3 million for the period.

DISTRIBUTION

The distribution for the 6 month period, to be paid on 27 February 2009, is 3.96cps per stapled security, in line with the estimate made in December 2008. DPS is fully supported by 1H Underlying EPS of 4.80cps.

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BALANCE SHEET AND CAPITAL MANAGEMENT

Total Group assets decreased from $802 million at 30 June 2008 to $610 million largely as a result of the sell down and de-consolidation of CPRF in July 2008.

Net tangible assets per security (NTA) at 31 December 2008 was $1.09 compared to $1.19 at 30 June 2008. This movement was mainly due to downward revaluations of the Group’s investments in Charter Hall managed funds.

The Group used the proceeds from the sell down of CPRF assets to reduce its debt. The Group’s debt facility with NAB has accordingly been re-sized to $100 million from $350 million and extended to a three year term until July 2011.

As a result, headstock gearing was 11% at 31 December 2008, compared to 31% as at 30 June 2008. Look through gearing was 48.6% at 31 December 2008, reducing to 46.5% post the finalisation of the transfer of the Chullora and Mentone assets to the Core Plus Industrial Fund (CPIF) and CPRF respectively.

Charter Hall continually manages its refinancing and compliance risks for the headstock and the managed funds and renegotiated or refinanced approximately $1.4 billion of debt in the calendar year to December 2008. All debt facilities are compliant with their financial covenants.

As previously announced, the 31 December 2008 DRP take up was 35%. As a result of the DRP participation, $6.3 million of the $17.7 million half year distribution will be retained.

The DRP securities will be issued on the distribution payment date being Friday, 27 February 2009.

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PROPERTY AND INVESTMENT VALUATIONS

Over the 6 month period, independent valuations were obtained for 83% (by value) of the investment assets within both CHPT and the managed funds’ portfolios. In summary:

• A 38 basis point like-for-like expansion (63 basis points expansion over 12 months) in weighted average cap rate which continues to be partially offset by strong rental increases and development margin creation.

• A 31 basis point like-for-like expansion in the weighted average valuation discount rate/property IRR.

• Change in portfolio valuation was $28.4 million, excluding the effect of any sales and acquisitions over the period.

Charter Hall’s property portfolio comprises co-investments in 5 high quality unlisted property funds with a WALE of 8.8 years, a 99% occupancy level and a strong tenant list, dominated by Telstra, Bunnings, Mercer, Woolworths, Coles, Harvey Norman, BHP and Government or related entities.

Fixed annual increases across the portfolio average 3.6% per annum.

DEVELOPMENT

Charter Hall Opportunity Funds

Charter Hall Opportunity Fund No. 4 (CHOF4) equity commitments of $165 million have now been fully allocated and $187 million of Charter Hall Opportunity Fund No. 5’s (CHOF5) $300 million equity commitments has been allocated to projects. The average gross IRR delivered by Charter Hall opportunity funds over 12 years is 30%.

CIP (Commercial & Industrial Property Pty Ltd)

CIP, in which the Group has a 50% interest, delivered 1H NPAT of $2.6 million.

CIP is facing challenging market conditions with a higher fallout rate in pre-leases than previous years and uncertainty of pre-lease values are an impediment to finalising deals. However, the CIP business model is proving solid and management is implementing strategies to adapt to the changed conditions. CIP is, for example, expanding development management and construction services.

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EPS AND DPS OUTLOOK

Charter Hall has now excluded a non-cash income tax benefit from its previously provided Underlying EPS guidance of 9.73cps. This exclusion reduces Underlying EPS guidance to approximately 8.0cps for FY09.

In the current uncertain market conditions, Charter Hall withdraws previously provided DPS guidance of 8.0cps for FY09. The Group’s revised FY09 guidance is to distribute taxable income, estimated to be 5.0cps. Charter Hall believes that this updated distribution policy represents prudent capital management in the current environment.

Joint Managing Directors, David Southon and David Harrison said “Charter Hall continues to focus on maintaining high occupancy, long WALE investment portfolios which are expected to provide reliable income returns to investors during a period of uncertain asset values. The core asset and development skills of the Group will continue to be utilised to create and maintain equity value for investors”.

FURTHER INFORMATION

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

Charter Hall will hold a webcast of its results presentation at 9.30am on Tuesday, 24 February 2009. To access the presentation slides with live audio log onto http://www.brr.com.au/event/54939?popup=true

ENDS

For further enquiries, 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 Peter Roberts Jo Stiles Chief Financial Officer Marketing & Communications Manager 0414 266 485 0414 499 199 peterr@charterhall.com.au jos@charterhall.com.au

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About the Charter Hall Group:

Charter Hall Group is a property funds management and development company, based in Sydney with offices in Melbourne, Brisbane, Adelaide, Perth 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 13 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.

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 www.charterhall.com.au