CHARTER HALL GROUP — Interim / Quarterly Report 2012

Feb 22, 2012

Charter Hall Group

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2012 Half Year Results

23 February 2012

Contents

• 1[Results summary ]

2[Property investment ]

3[Property funds management ]

4[Development investment ]

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David Harrison Joint Managing Director

David Southon Joint Managing Director

5[Financials and capital management ]

• 6[Outlook and guidance ]

7[Annexures ]

2

Charter Hall Group

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01 Results summary

Half year highlights

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Earnings on track

• Statutory profit after tax of $19.6m (includes impact of mark to market valuations / derivatives and other non-cash items)

• Operating earnings (pre net CQO fee of ($0.3m) and organisational restructure cost of ($2.0m))[1] of $33.2m or 11.24 cps

• Operating earnings (post net CQO fee and organisational restructure cost) of $30.9m or 10.47 cps

• Distribution of 9.1cps

Property investment

• Investment portfolio income yield has improved to 7.0% (annualised) from 6.4% in FY11

Property funds management

• Funds under management (FUM) of $10.1bn

• Funds management EBITDA margin increased to 35.3%, up 2.4% on pcp of 32.9%[2 ]

• Implementation of organisational restructure to improve efficiency and “resize the business for predominantly Australian operations only”

• Secured $154m of wholesale capital inflows for the half,[4] being 92.5% of Charter Hall’s FY11 wholesale capital raising into Charter Hall managed funds

Development investment

• Development projects continue to progress with sales on completion to contribute to capital recycling program

• Development investment EBITDA of $1.3m, comprising $1.2m[3] from CIP and $0.1m from the CHOFs

• Pre net CQO fee associated with the CQO US portfolio disposal, costs associated with the closure of the US office, costs associated retaining the CQO management rights (“ net CQO fee ”) and organisational restructuring costs. On a full year basis, the net CQO fee and restructuring costs are expected to be equivalent to 2 cps

• Calculated excluding recoveries of $6.5m

• Based on CIP’s net profit before tax contained in note 6 of the Interim Financial Report. Development investment income shows net profit after tax from CIP as set out in slide 25 4. An additional $29m has been raised post 31 December 2011 in wholesale capital by Charter Hall managed funds

4

Key metrics

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Group Key Metrics	1HFY12	1HFY11	Change
**Statutory profit after tax1 **	$19.6m	$46.8m	(58.1%)
Operating earnings (pre net CQO fee and organisational restructure)	$33.2m	$30.8m	7.8%
Operating earnings (post net CQO fee and organisational restructure)	$30.9m	$30.8m	0.3%
Operating EPS (pre net CQO fee and organisational restructure)	11.24cps	10.54cps	6.6%
Operating EPS (post net CQO fee and organisational restructure)	10.47cps	10.54cps	(0.7%)
DPS	9.10cps	8.00cps	13.8%
**Divisional Key Metrics2 **	1HFY12	1HFY11	Change
Property Investment EBITDA	$20.1m	$18.0m	11.5%
**Funds Management EBITDA3 **	$13.5m	$10.6m	26.8%
Development Investment EBITDA	$1.3m	$2.3 m	(44.5%)
Balance Sheet	At 31 December 2011	At 30 June 2011	Change
**Funds under management5 **	$10.1bn	$10.7bn	(5.2%)
Total Group assets	$936m	$958m	(2.3%)
NAV (per security)	$2.53	$2.55	(0.8%)
NTA (per security)	$2.19	$2.21	(0.9%)
**Balance sheet gearing4 **	8.4%	8.1%	0.3%
Look through gearing	33.0%	36.6%	(3.6%)

1. The difference between the operating earnings (post net CQO Fee and the organisational restructure) of $30.9 million and the statutory profit of $19.6 million (equating to $11.3 million) is predominantly comprised of non-cash items. These include net fair value adjustments ($0.6 million), security based benefits expense ($1.3 million), income tax expense associated with the Group and managed funds ($4.0 million), gains / loss on sale of derivatives, investments and property ($2.1 million) and amortisation and other expenses ($3.3 million).

2. A reconciliation to note 6 of the Interim Financial Report is contained in Appendix M of this presentation

3. Excludes net CQO fee and organisational restructuring costs of $2.3m

4. Calculated as total debt net of cash divided by total assets, consolidating DRF. On a net contribution basis (de-consolidated), Charter Hall has gearing of 1.4% 5. FUM has been adversely affected by CQO US asset sales of $0.5bn

5

Charter Hall Group strategic objectives

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 Charter Hall aims to grow investor wealth from delivering smart property outcomes  Focused on generating a higher return on equity via the following initiatives

	–	Recycling capital into higher return investments (>15.0% of Charter Hall’s NTA is targeted to be recycled
Co-investment		over the next 12 months)
optimisation	–	Optimise returns from Charter Hall capital invested in funds and partnerships
	–	Improve earnings yield from underlying co-investments
	–	Target FUM growth of 6 – 10% p.a. (post US asset sales)
Grow platform & increase	–	EBITDA margin expansion through scalability, operational excellence and cost control/margin efficiencies
efficiency	–	To be a top quartile manager relative to the benchmark
Reduce	–	Diversifying sources of debt
risk	–	Stagger and extend the Groups managed funds debt expiry profile
Demonstrating	–	Demonstrate strong market penetration through access to high quality asset transactions and multiple
capability &		sources of equity (third party capital)
high performance	–	Recruit, retain, develop and motivate a high performing and engaged team
Environmental, social and governance (ESG)	– – –	Integrate long term sustainability practices across the platform Best practice in governance Strengthening our corporate citizenship in the communities in which we operate

6

Charter Hall divisional strategies

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		Drive return enhancements from capital invested across Property Investments
Property Investment		Improve earnings quality, annual rental growth rates and capital growth prospects from
		Charter Hall property investments
		Target growth in development investment earnings with higher return on equity
Development Investment		Leverage off in-house development expertise at this point in the cycle by incubating new opportunities on balance sheet with appropriate partners to be sourced over time
		Access scale through partnering with external capital by way of segregated mandates or
		project by project partnerships
		Grow business through existing and new products that satisfy current investor appetite
		Improve return on equity through:
		– Continued strong relative performance
		– Achieving scale in each domestic sector
		– Delivering a more efficient service to managed funds
Property Funds Management		– Obtaining cost efficiencies across the platform – Rationalising number of funds under management – Accretive fund capital raisings
		– Further improve portfolio quality by increasing average asset size in portfolios
		Corporate governance review has been implemented
		Utilise in-house skills (investment management, development management, asset
		management and property management) to reposition existing assets and enhance property
		values

7

Functional organisation structure

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• Management has implemented a new organisation structure that categorises the business between Investment Management and Services Divisions

• Further operational efficiencies expected to be realised as a result of the new structure

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Services Divisions
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Head of Marketing & Communications

Head of Office / Industrial / Asset Management

Head of Retail Asset Management

Property Management Services / Head of Property Management

Property Management Services / Head of Property Management

Head of Development Services

Head of Advisory & Transactions National Leasing Director

Head of People

Chief Financial Officer

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DAVID HARRISON (JMD)
JMD’s
Investment Management
LISTED WHOLESALE DIRECT INVESTORS
CQR Head Head of Wholesale Head of Wholesale Head of Direct Head of Investor
CQO Head Investments Opportunistic Relations
Marketing & Communications, Sustainability
Office /Industrial (Asset Management, Leasing) CORPORATE
+ Corporate
Retail (Asset Management, Leasing, Facilities Management)
Finance / Strategy
+ Legal & Co. Sec.
Office and Industrial Property Management + Research
Retail Property Management
Development Management Services, Asset Services
Advisory and Transactions
Leasing Services
HR, Organisational Development and Learning and Development
Finance
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8

Group earnings and investment

overview

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 Charter Hall is a diversified property group with a vertically integrated business model

– 85.1% of Charter Hall’s EBITDA for the 6 months to 31 December 2011 is annuity style ($29.6m) comprising $20.1m from Property Investment and $9.6m[2] from Property Funds Management

Charter Hall Group (ASX:CHC)

Stapled Security

Charter Hall Property Trust (CHPT)

Charter Hall Limited (CHL)

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Property Investment Funds Management Development Investment
Total co-investments: $576m (75%) [1 ] Book Value: $100m (13%) [1] Total co-investments: $73m (10%) [1]
EBITDA: $20.1m (58%) EBITDA: $13.5m (39%) EBITDA: $1.3m (3%)
Yield: 7.0% [4 ] Yield: 27.0% [4 ] Yield: 3.6% [4 ]
$284m co-investment $100m book value (intangible) $27m investment
Listed Funds CIP
 Investment management
$5.2bn FUM 50% interest
 Asset management
$167m co-investment $37m co-investment
 Property management
Wholesale Unlisted Funds Wholesale Opportunistic
 Development management
$3.4bn FUM Investments in CHOF4 and CHOF5
 Leasing services
$125m co-investment $9m investment
 Transaction services
Retail Investor Funds 685 La Trobe
$1.5bn FUM 50% interest
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1. Divided by total group non-current assets of $767.1m, calculated on a DRF net contribution basis 2. Represents 71% of funds management EBITDA

2. The segment categories in this presentation do not match the categories used in Note 6 Segment Information of the Interim Financial report 4. Calculated on an annualised basis

3. Book value represents value of goodwill associated with the acquisition of the Macquarie Real Estate Funds Management business

9

Group EBITDA breakdown

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 Operating EBITDA for the 6 months to 31 December 2011 of $34.8m[1,2] , up 13% from $30.9m on pcp

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Property Investment
EBITDA
$20.07m (58%)
$20.07m
$18.00m
HY11
HY12
$13.47m
$10.62m
Funds Management
EBITDA
$13.47m (39%)
$2.27m Development Investment
$1.30m EBITDA
$1.30m (3%)
Property Investment Funds Management Development Investment
EBITDA EBITDA EBITDA
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1. DRF earnings included on a net contribution basis and CIP is shown pre-tax. Refer to Annexure J for more detail. 2. Prior to net CQO fee and organisational restructuring costs

10

Charter Hall Group

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02 Property investment

Property investment

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 Charter Hall has $575.7m co-invested in its managed funds[2 ]

• Half year revenue of $20.2m reflecting average gross annualised income yield of 7.0% with a weighted average rent review profile of 3.8%

• Significant improvement in property investment income yield from FY11 of 6.4% to 7.0% (annualised)

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Investments (by value) [1 ] Investment property income Sector diversity (by value)
Retail Investor Direct Property
Retail
Funds Retail Investor $0.3m (1.6%)
CQO Funds $194.4m (33.8%)
$125.0m (21.7%) CQO
$180.9m (31.4%) $5.1m (25.4%) $6.5m (32.3%)
Industrial
CQR CQR Office
$66.2m (11.5%)
Wholesale $102.9m (17.9%) Wholesale $3.7m (18.4%) $315.1m (54.7%)
Unlisted Funds Unlisted Funds
$166.9m (29.0%) $4.5m (22.2%)
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Calculated as a percentage of the total co-investments of $575.7m

12

1. Excludes Development investments

Property Investments portfolio metrics (ex CQO US)

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 Charter Hall managed properties weighted average market capitalisation rate of 8.1%

• Charter Hall managed properties weighted annual average rent reviews of 3.8%

• Weighted average lease expiry of 6.5 years

• 2,767 tenants across the portfolio

• 176 buildings and 1.9m sqm managed across the portfolio

Lease expiry profile[1 ] (31 December 2011)

Top 10 tenants (31 December 2011)

	Tenant	% Portfolio leased
		(by gross income)
	Australian Government2	9.7
	Woolworths	9.6
	Wesfarmers	8.7
	Telstra	5.8
	Westpac Group	3.1
	Macquarie Group	2.3
	Citigroup	1.4
	Volkswagen	1.3
	Mercer Human Resources	1.3
	Suncorp Metway	1.2
	Total	44.5

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(by gross income)
Australian Government [2 ] 9.7
Woolworths 9.6
Wesfarmers 8.7
Telstra 5.8
53.8% Westpac Group 3.1
Macquarie Group 2.3
Citigroup 1.4
Volkswagen 1.3
Mercer Human Resources 1.3
15.0%
9.3%
7.0% 7.8% Suncorp Metway 1.2
4.5%
2.6%
Total 44.5
VACANT FY12 FY13 FY14 FY15 FY16 FY17+
1. Shows Charter Hall’s position based on the lease expiry profile of individual Charter Hall managed funds and Charter Hall’s investment exposure in each fund (weighted on a passing gross
income basis). Excludes CQO’s US portfolio
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13

1. Includes Federal and State Governments and agencies

Property investment portfolio

Direct property and co-investments (31 December 2011)

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	Ownership	Charter Hall	1HFY12	Market cap	Discount	Minimum Rental
	Stake	investment	Charter Hall	rate	rate	reviews
			investment
			revenue
	(%)	($m)	($m)	(%)	(%)	(%)
Listed Funds
Charter Hall Office REIT (CQO)1,7	10.0%	180.9	6.5	7.79%	9.31%	3.85%
Charter Hall Retail REIT (CQR)1	10.0%	102.9	3.7	8.29%	9.26%	4.10%6
Wholesale Investment Funds
Core Plus Office Fund (CPOF)1	14.0%	112.9	3.0	7.83%	9.55%	3.95%
Core Plus Industrial Fund (CPIF)1	18.0%	53.9	1.5	8.20%	9.82%	3.16%
Retail Investor Funds
Direct Retail Fund (DRF)2	64.7%	62.1	3.0	8.48%	9.69%	3.34%
Diversified Property Fund (DPF)3	25.2%	12.0	0.7	8.18%	9.59%	3.95%
Charter Hall Umbrella Fund (CHUF)3	25.6%	40.4	1.1	8.07%	9.59%	3.58%
Charter Hall Direct Property Fund (CHDPF)3	3.7%	10.5	0.4	8.50%	9.44%	3.78%
Direct Property
Mentone Showrooms5	-	-	0.3	n/a	n/a	n/a
Total/weighted average	12.8%	575.7	20.2	8.10%	9.48%	3.75%

1. Charter Hall co-investments in CQO, CQR, CPOF and CPIF are equity accounted

2. Charter Hall consolidates DRF. For the purposes of this analysis DRF is equity accounted

3. Charter Hall co-investments in DPF, CHUF and CHDPF are fair valued accounted

4. Charter Hall has an ownership stake of 13% in CPOF and 16% in CPIF after adjusting for convertible notes that have been issued 5. Mentone Showrooms disposal was completed in October 2011

5. Based on Australian specialty leases only

6. CQO market cap rate, discount rate and minimum rental reviews relate to the Australian portfolio only

14

Charter Hall Group

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03 Property funds management

Property funds management

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 Funds under management decreased from $10.7bn to $10.1bn, driven by $0.7bn of divestments (predominantly CQO US asset sales of $0.5bn)

• Recent equity raisings have provided CPIF and CPOF with capacity to make additional acquisitions (CPOF raised $106m and CPIF raised $48m)[1 ]

• Post CQO US asset sales, Charter Hall is targeting FUM growth of 6% - 10% p.a.

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30 June 2011 31 December 2011
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30	June 2011
Wholesale Unlisted Funds $3.6bn (33%)		Retail Investor
		Funds
		$1.5bn (14%)
Listed Funds $5.6bn (52%) FUM Split (sector)	FY11 ($bn)	FY11(%)
Office	6.8	63.4
Retail	2.5	23.3
Industrial	0.7	6.5
Residential	0.5	4.9
Other	0.2	1.9
Total	10.7	100%

Listed Funds $5.2bn (51%) Wholesale Unlisted Funds $3.4bn (34%) FUM Split (sector)	1HFY12 ($bn)	Retail Investor Funds $1.5bn (15%) 1HFY12 (%)
Office	6.5	64.0
Retail	2.4	24.0
Industrial	0.6	6.0
Residential	0.4	4.1
Other	0.2	1.9
Total	10.1	100%

1. An additional $29m has been raised post 31 December 2011 in wholesale capital by Charter Hall managed funds

16

Funds under management reconciliation

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 Reduction in FUM primarily due to divestment of the CQO US platform

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+$67m ($698m)
+$34m
+$40m
$10,700m
$10,143m [1 ]
30-Jun-11 Revaluation Acquisitions Divestments FX Movement2 31-Dec-11
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1. FUM includes assets currently under management and is not adjusted for the CQO $1.3bn US sale which are contracted but not yet settled 2. Reflects FX movement of A$:US$ from 1.07 to 1.02 and A$:EUR movement from 0.74 to 0.79 as at 31 Dec 2011

17

Funds management income

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• 71% of funds management revenue annuity style[1]

• Average of 76bps of FUM on an annualised basis (39bps investment management and 37bps from other services)[1 ]

• Implementation of organisational review expected to provide further EBITDA margin expansion

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Annuity style revenue Funds Management EBITDA ($m)7 1HFY11 1HFY12
Revenue [6 ] 32.2 38.2
$19.4m $19.6m
Expenses [5 ] (21.6) (24.7)
Funds Management EBITDA 10.6 13.5
EBITDA Margin on revenue 32.9% 35.3%
FM Revenue (%AUM) [8 ] 0.62% 0.76%
1HY11 1HY12
$5.6m
$5.1m
$4.1m
$4.0m $3.8m $3.7m
$2.6m $2.4m
nil nil
2 3 4
Investment Management Property Management Development Management Transaction Services Leasing Services Performance Fees
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1. Includes recoveries of $6.5m

2. Investment Management excludes cost recoveries for accounting and marketing

3. Property management excludes property management recoveries

4. Development management include development services and technical services income

5. For category reporting purposes, recoverable expenses have been excluded

6. For category reporting purposes, revenue excludes cost recoveries

7. Exclude the impact of net CQO fee and organisational restructuring costs

8. FM revenue as a %AUM including cost recoveries for 1HFY11, 1HFY12 are 0.72% and 0.88%

18

Investment management revenue

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1HFY11 - $19.4m [4 ]
Wholesale Unlisted
Funds
$5.0m (26%)
Retail Investor
Funds
$3.2m (16%)
Listed Funds
$11.2m (58%)
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1HFY12 - $19.6m [4 ]
Wholesale Unlisted
Funds
$6.0m (31%)
Retail Investor
Funds
$3.6m (18%)
Listed Funds
$10.0m (51%)
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1. Listed Funds refers to CQO and CQR

2. Wholesale Unlisted Funds refers to CPOF, CPIF, CHOF4 and CHOF5 3. Retail Investor Funds refers to CHDPF, DPF, DRF, CHUF and CHIFs 4. Excludes recoveries of $5.1m in H1FY11 and $6.5m in H1FY12

19

Property management and leasing

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• Charter Hall provides leasing, property management and asset management services across the platform

• Charter Hall managed funds generated $321.3m of gross rental income during the half year across its Australian portfolio

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Property management [1 ] Leasing [1 ]
755,336sqm
Office 126,279sqm
HY Gross Income - $194.6m
603,540sqm
Retail 24,824sqm
HY Gross Income - $102.1m
403,398sqm
Industrial 22,672sqm
HY Gross Income - $24.6m
1,762,294sqm
Total 173,775sqm
HY Gross Income - $321.3m
Charter Hall 1HFY12 income
$5.6m [2 ] $4.8m
received
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1. Australian portfolio only 2. Excludes property management recoveries

20

Development management services

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 Revenue of $3.5m over the half year[4 ]

• Current projects across Office, Retail, Residential and Industrial

 Active development book of $1.4bn across range of managed funds

• 13 active projects across platform

• Total development book of $1.8bn[2] (active projects and captive pipeline)

• Charter Hall has commenced undertaking development management services for third party clients

	Wholesale and	Wholesale	Listed	3rd Party	Total
	Retail Investor	Opportunity	Funds	**Clients2 **
	Funds ($m)	**Funds ($m)3 **	($m)	($m)	($m)
1HFY12 development services revenue	0.2	2.1	0.9	0.3	3.5
Development book
Active projects - current book value	8	400	210	-	618
Active projects - estimated on-completion value	70	874	408	-	1,352
Captive pipeline - current book value	257	9	207	-	4721
Total development book	327	883	615	-	1,825

1. Potential estimated on completion value of $1.4bn

2. On-completion values exclude third party client on-completion values

3. Charter Hall has previously received performance fees totaling $14m from CHOF4, of which a component of this total amount may be subject to a clawback at the time of the ultimate termination of the Fund. This is detailed in note 5 of the Interim Financial report. No other performance fees that have been received by Charter Hall are subject to a clawback.

4. Excludes technical services ($0.6m)

21

Trends and initiatives

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		Sector Trends			Charter Hall Initiatives
		Preference for geographic specific funds
Listed Funds		Focus on capital management – Debt refinancing and buy backs		 	Complete reweighting of portfolios to Australia Focus on quality of earnings and earnings growth
		NTA discount remains significant issue
		Increased investor demand for core plus
Wholesale Unlisted Funds		product to generate higher returns Larger funds focus on direct investment and separate mandate / partnership / club		 	CPOF and CPIF have recently finalised capital raisings of $200m and $150m respectively Continue to grow separate mandate business
		transactions
					Leverage off Charter Hall development expertise to
Wholesale					establish separate mandates and partnerships to
Opportunistic		Separate mandate / partnerships			pursue development opportunities
Funds					– Incubation of 685 La Trobe Street on the Charter
					Hall balance sheet
		Investor focus on stable managers with a			Continue fundraising for DIF and CHDPF
		strong reputation / capability			Rationalise smaller non-core funds that lack scale
Retail Investor		Demand for products in line with investor			Consider acquisition opportunities as sector
Funds		preferences			consolidates
		Vehicles with conservative gearing and			Create new single asset syndicates of high quality
		defined liquidity provisions			assets with long term stable cash flows

 Detailed fund strategies set out in Annexures H – I

22

Charter Hall Group

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04 Development investment

Investments in Development

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 $46.0m[1] of development co-investments (book value), diversified across eight projects

 Projected equity multiple of 1.3x from existing development investments

Developments ($m – CHC share)	Current value of investment	Further equity	Expected equity	Expected realisation date
		Required	value on completion
CHOF4 (CHC share – 3%)
Home HQ North Shore, Artarmon	0.7	-	0.7	Dec-12
CHOF5 (CHC share – 15%)
40 Creek St, Brisbane	5.1	0.7	5.8	Jul-12
Home HQ Hastings, New Zealand2	1.8	-	1.8	Jun-13
Lacrosse Stage 1, Melbourne	5.1	-	8.1	Dec-12
Aquilo, Oak Avenue, Mentone3	2.4	-	3.7	Nov-12
WorkZone, 202 Pier St, Perth	6.3	2.9	10.8	Sep-13
Little Bay Cove, Sydney	11.3	-	16.0	Jun-14
On balance sheet
WorkZone, 202 Pier St, Perth, preferred equity4	-	5.5	6.5	Sep-13
685 La Trobe Street, Melbourne5	8.7	4.1	22.16	Jul-14
Total/weighted average	**41.47 **	13.2	75.5	Sep-13

1. Includes $4.6m of ‘other’ net assets related to CHOF4 and CHOF5 co-investments 2. Converted at AUD / NZD 1.31

2. Including contribution from CHOF4

3. Charter Hall has committed to provide a total of up to $9m in preferred equity, however it is expected to reach a maximum of $5.5m

4. Reflects Charter Hall’s investment into 685 La Trobe Street, Melbourne to date (50% interest) and 2x equity multiple is the forecast for equity investors in the project 6. Assumes sell down of 50% of Charter Hall’s 50% interest in 685 La Trobe street, Melbourne to third party investors 7. Excludes $4.6m of ‘other’ net assets related to CHOF4 and CHOF5 co-investments

24

Investment in CIP

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• Charter Hall owns 50% of industrial pre-lease developer (CIP)[1 ]

• The current economic climate has made it a challenging first half for CIP

• Earnings are expected to be weighted to the second half of FY12

• Providing a pipeline of quality assets to Charter Hall managed funds

CIP Income statement	1HFY12 ($m)	1HFY11 ($m)
Total revenue	72.2	59.9
Project expenses	(64.7)	(50.7)
Overheads	(5.1)	(4.8)
Total expenses	(69.8)	(55.5)
Net profit before tax	2.4	4.4
Income tax	(0.6)	(1.2)
Net profit after tax	1.8	3.2
CHC Profit share (50%)	0.9	1.6

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Volkswagen, Chullora, NSW (Artist Impression)

Australian Head Office distribution center with a 13 year pre-committed lease to Volkswagen Group Australia (VW) completed in October 2011

1. Acquired 50% of Commercial and Industrial Property Pty Ltd on 5 June 2007

25

Case study – 685 La Trobe

• In May 2011, Charter Hall acquired 50% of office development 685 La Trobe Street, Melbourne

• Charter Hall is developing a prime grade 38,000sqm, 12 level office building in the Docklands precinct

• Will include over 1,000sqm in retail space and 151 car parks

• – Large floor plates of approximately 3,200sqm to suit tenant demand

• Targeting a 5 Green Star As - Built Rating and 4.5 star NABERS Energy rating

• Strategy to incubate development on balance sheet with a view to raising third party capital to partner on delivery of the project

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685 La Trobe Street, Melbourne Artist impression

• Creation of prime office building with the potential to consider long term hold strategies

26

Charter Hall Group

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05

Financials and capital management

Income statement

	1HFY12	1HFY12	1HFY11
	(DRF	(DRF net	(DRF net
Direct net property income	consolidated) 7.4	contribution basis) 0.3	contribution basis) 0.1	
Indirect property income	16.9	19.9	18.2
**Property investment income1 **	24.2	20.2	18.3
Investment management fees Property management fees Development management fees	19.6 5.6 4.1	19.6 5.6 4.1	19.4 4.0 3.8	
Transaction fees	3.7	3.7	2.6
Leasing fees	5.1	5.1	2.4
Funds management	38.2	38.2	32.2
**Development investment income2 **	1.0	1.0	2.3
Recoveries	6.5	6.5	5.1
Total income	69.8	65.8	57.9
Operating expenses	(31.6)	(31.4)	(27.1)
**EBITDA4 **	38.2	34.5	30.9
Depreciation	(0.6)	(0.6)	(0.5)
**EBIT4 **	37.6	33.9	30.4
Net interest expense	(3.2)	(0.7)	0.5
Non-controlling interest	(1.3)	-	-
Operating earnings(pre org. restructure and net CQO fee)	33.2	33.2	30.8
Weighted number of securities (‘000s)3	295,414	295,414	292,759
Operating EPS (cps)(pre org. restructure and net CQO fee)	11.24	11.24	10.54
Organisational restructure	(2.0)	(2.0)	-
Net CQO fee	(0.3)	(0.3)	-
Operating earnings	30.9	30.9	30.8
Operating EPS (cps)	10.47	10.47	10.54

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Statutory profit after tax of $19.6m

• 1HFY12 operating earnings of $33.2m (excluding net CQO fee and organisational restructure)

  • Property income from coinvestments has increased, reflecting lower cost of debt, increased occupancy and fixed rent reviews

  • Leasing fees have increased reflecting active leasing across the portfolio

  • Transaction fees have also increased

• Includes income from co-investments and net income contribution from DRF. Refer to Annexure H for more detail. 2. Includes income from CHOF4, CHOF5 and CIP. Excludes non-operating items in CHOF4 and CHOF5. 3. Excludes ELSP securities.

• Includes CIP tax (equating to $0.3m in 1HFY12)

28

Reconciliation to statutory profit

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 Charter Hall’s statutory profit after tax has been adversely impacted by non-cash items

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----- Start of picture text -----

($2.0m)
($0.3m) ($0.6m)
($2.1m)
($1.3m)
($4.0m)
($3.3m)
$33.2m
$30.9m
$19.6m
Operating Organisational Net CQO fee Operating Net Fair Value Gains/loss on Security based Income Tax Amortisation & AIFRS profit
earnings pre net Restructure Earnings Adjustments3 sale 2 benefit expense Expense other non cash
CQO fee and items
1
org. restructure
----- End of picture text -----

1. Prior to the net CQO fee and organisational restructuring costs

2. Gains/loss on sale includes sale of derivatives and investment property

3. Fair value adjustments includes adjustments to derivatives and gains on re-measurement of equity accounted investments, investments in funds and investment property

29

Balance sheet

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$m	31-Dec-11 (DRF consolidated)	31-Dec-11 (DRF on net contribution **basis)1 **	30-Jun-11 (DRF on net contribution basis)
Cash	24.9	21.4	23.9
Property investments2	676.6	575.7	593.5
Development investments	72.9	72.9	68.8
Other tangible assets	61.1	60.2	65.8
Intangibles	100.0	100.0	100.0
Total assets	935.6	830.2	852.0
Borrowings	101.6	32.3	32.4
Other liabilities	53.6	50.4	69.8
Total liabilities	155.2	82.7	102.2
Net assets attributable to non-controlling interest	(32.9)	-
Total equity post non-controlling interest	747.5	747.5	749.8
Total securities on issue (000s)	295,470	295,470	293,755
Net tangible assets per security	2.19	2.19	2.21
**Look through gearing (non-recourse debt)3 **	33.0%	33.0%	36.6%
**Balance sheet gearing4 **	8.4%	1.4%	1.0%

1. See Annexure K for a summary of DRF adjustments

2. Investments includes financial assets at fair value, investments in controlled entities and equity accounted investments. Investments also includes net contribution from DRF of $62.1m in balance sheet with DRF shown as net contribution

3. Calculated by incorporating Charter Hall’s proportional share of total assets (net of cash) and debt (net of cash) of the funds in which it co-invests. 4. Calculated as debt net of cash divided by total assets net of cash.

30

Capital management profile

• $3.6bn of drawn debt across platform with weighted average maturity of 2.4 years

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• $1.1bn of debt refinanced over 1HFY12

• Charter Hall on balance sheet gearing target of 0-10%

• Gearing

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----- Start of picture text -----

Balance sheet gearing
Gearing
Look-through gearing
42% 42%
39% 39%
33%
29%
26% 27% 27%
1%
CHC CQO CQR Wholesale Unlisted Funds Retail Investor Funds
Maturity (years) [[1 ]] 3.6
2.8
2.4
2.2
1.7
CHC CQO CQR Wholesale Unlisted Funds Retail Investor Funds
----- End of picture text -----

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----- Start of picture text -----

Maturity (years) [[1 ]]
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1. As at 31 December 2011

31

Charter Hall Group

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06 Outlook and guidance

Asset recycling strategy

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 Charter Hall is focused on recycling its co-investment capital into higher return investments

• At 30 June 2011, Charter Hall targeted to recycle $100m of capital (15% of NTA over 18 months)

• In 1HFY12, Charter Hall recycled $29.2m or 5% of 31 December 2011 NTA

• Over the next 12 months, Charter Hall is targeting to recycle approximately an additional 15% of NTA ($95.2m)

Expected equity recycling over the next 12	Expected equity recycling over the next 12	Targeted Recycling	MTM	Capital	31 Dec 11	Further
months		at 30 Jun 11	Movements	received	Book	Recycling $m
		$m 1	$m	$m	Value $m
Mentone Showrooms		16.7	-	16.7	-	-
Diversified Property Fund		27.0	(2.5)	12.5	12.0	12.0
Direct Retail Fund 5		42.7	0.5	-	43.2	43.2
Excess CQO special distribution (distribution
from CQO US sale proceeds less acquisition of		13.0	(0.3)	-	12.7	40.04
additional CQO units)	3
Total Proceeds		99.4	(2.3)	29.2	67.9	**95.24 **
% of CHC NTA		15%	-	**5%2 **	10%	15%

 Recycled equity will be redeployed in a range of initiatives (including capital management)

• Capital deployment will be determined at the time of sell down

• If Charter Hall is unable to sell down its interest in DRF, options to restructure DRF and / or divest the assets will be investigated

• Book value at 30 June 2011

• Based on 31 December 11 Group net tangible assets of $647m

• Assuming an exchange rate of AUD / USD of $1.07 (as noted in 30 June 2011 Charter Hall full year results presentation)

• The quantum of capital expected to be recycled out of CQO has significantly increased in the event that CQO is privatised and this reflects an approximate number 5. Assuming that Charter Hall sells down to an interest of 20% in DRF

33

Outlook and guidance

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Outlook

• Global economic environment remains challenging

• Continue to focus on growing FUM in Australia, in particular through raising capital

• Ongoing initiatives aimed at increasing efficiency across the platform and cost management

• Expect medium term NOI growth from property investment portfolio through reduced vacancies, rental growth and reduction in funding costs

• Charter Hall continues to receive flows of capital into its unlisted real estate products

• Increased allocation given volatility in listed markets

• Equity flows are expected continue as investors seek to deploy their real estate capital allocations

• Retail investor flows into Charter Hall funds expected to gain further momentum through new product launches

• FY12 earnings guidance  Subject to unforeseen events, we expect FY12 operating earnings to be approximately 24 cps

• Approximately 2 cps of FY12 operating earnings relates to:

• Net earnings associated with CQO US portfolio disposal, costs associated with closure of the US office and costs associated with retaining the CQO management rights

• Implementing the organisational restructure

34

Charter Hall Group

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Questions

Charter Hall Group

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07 Annexures

Annexures

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A Sustainability B Debt expiry profile C Property portfolio movement D – E Portfolio metrics F – G Funds management platform and intangibles H – I Fund strategies J – K DRF reconciliation L Cash flow reconciliation M Segment result reconciliation N Capital management O – S Unlisted property portfolios

37

Annexure A: Commitment to Sustainability

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• Charter Hall is integrating sustainability into its business practices across our funds and operations. We recognise the importance of sustainability in contributing to our success.

 We are focusing on:

Energy efficiency of our portfolio

• Benchmarking sustainability performance of all commercial and retail assets and establishing performance targets

• Improving the transparency of our sustainability performance disclosure

• Completing energy road maps for all asset classes where we have operational control

• Connecting with the communities where we operate

• Establishing a community involvement strategy for our employees

• Contributing to charities local to our new development projects

• Creating an engaging environment to develop and retain our people

• Fostering a culture of teamwork, flexibility and inclusiveness that supports our core values

• Creating Career and development opportunities for all employees

• Implementing targeted leadership development and talent management programs

• Focusing on diversity

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38

Annexure B – Look through debt expiry profile(by drawn amount) as at 31 December 11

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----- Start of picture text -----

Arranged $0.3bn of debt over 1HFY12 CHC
CQO
CQR
$1,400m
$1,330m
Wholesale Unlisted Funds
Retail Investor Funds
$1,200m
$1,000m
$800m
$677m
$654m
$598m
$600m
$400m $347m
$200m
$15m
$0m
FY12 FY13 FY14 FY15 FY16+ FY17+
----- End of picture text -----

 Arranged $0.3bn of debt over 1HFY12

39

Annexure C – Property portfolio movement

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31 December 11	Movement	30 June 2011
CHC stake (%) CHC investment ($m)	Other movements ($m)1 Acquisition / sale ($m)	CHC stake (%) CHC investment ($m)
Listed Funds
CQO 10% 180.9	(4.7) -	10% 185.6
CQR 10% 102.9	(1.4) 16.2	8% 88.1
Wholesale Investment 283.8
CPOF2 14% 112.9	2.5 -	16% 110.4
CPIF2 18% 53.9	0.7 -	21% 53.3
Retail Investor Funds 166.9
DRF2 65% 62.1	0.7 -	66% 61.3
DPF 25% 12.0	(2.5) (12.5)	36% 27.0
CHUF 26% 40.4	(0.2) -	25% 40.6
CHDPF 4% 10.5	0.1 -	4% 10.4
Direct Property 125.0
Mentone Showrooms - -	- (16.7)	100% 16.7
Total 12.8% 575.7	(4.9) (13.0)	13.2% 593.5

1. ‘Other movements’ refers to gain on sales and movement in unit price / NTA over the period

40

Annexure D – Portfolio metrics

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Weighted average rent reviews

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1
CQO 4.0%
2
CQR 4.1%
CPOF 4.0%
CPIF 3.2%
DRF 3.3%
CHUF 3.8%
DPF 4.0%
CHDPF 3.6%
CHPT 3.8%
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1. Australian portfolio only 2. Based on Australian specialty leases only

41

Annexure E - Portfolio metrics

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 Quality of earnings improving with proactive management of well diversified portfolio

Capitalisation rates

WALE (by income in years)[1 ]

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----- Start of picture text -----

CQO 4.5
CQO 7.8%
CQR 6.6
CQR 8.3%
CPOF 5.7
CPOF 7.8%
CPIF 12.0
CPIF 8.2%
DRF 6.2
DRF 8.5%
CHUF 7.9
CHUF 8.1%
DPF 8.2% DPF 6.6
CHDPF 8.5% CHDPF 4.2
CHPT 8.1% CHPT 6.5
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1. Shows Charter Hall’s position based on the WALEs of individual funds and CHPT’s investment exposure in each fund

42

Annexure F – Funds management platform

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 Funds under management (FUM) of $10.1bn

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----- Start of picture text -----

Listed Funds Wholesale Investor Funds Retail Investor Funds
$5.2bn $3.4bn $1.5bn
($284m co-invested) ($204m co-invested) ($125m co-invested)
Opportunistic Core Plus
CQO [2 ] CQR [2 ]
$0.9bn $2.5bn
$3.2bn $2.0bn
($181m / 10%) ($103m / 10%)
CHDPF
CHOF4 [2 ] CHOF5 [2 ] CPOF CPIF DPF CHUF
$0.1bn $0.8bn $1.4bn $0.5bn $0.1bn $0.1bn $0.5bn
Direct Property ($1m / 3%) ($36m / 15%) ($113m / 14%) ($54m / 18%) ($12m / 25%) ($40m / 26%) ($11m / 4%)
$8.7m
Wholesale DRF
CHIFs [3 ] DIF
685 mandates $0.2bn
$0.5bn $0.1bn
$0.6bn ($62m / 65%)
Latrobe [4 ]
$8.7m
----- End of picture text -----

1. All numbers as at 31 December 2011

2. FUM definition includes on completion value for development assets

3. CHIF includes CHIFs, 1MPT and CHPSF

4. On completion value of Charter Hall’s 50% interest in 685 La Trobe Street, Melbourne is expected to be $122.6m

43

Annexure G – Intangibles

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• As a component of the consideration for the acquisition of the Macquarie platform, 70% of the offshore revenue generated above $21.4m is payable to Macquarie Group up to a maximum of $15m (earn out)

• $1.4m will be paid to Macquarie for revenue received in the 6 months to 31 December 2011

 Earn out expires in March 2013

• At expiry the total earn out amount will be the lesser of:

• $15m; and

• 70% of offshore revenue during the earn out period plus a multiple of 3x the forecast EBIT of the offshore platform in the following 12 month period following March 2013 less $15m

44

Annexure H - Fund strategies

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Fund Defined strategies Progress

CQO  CQO is currently subject to a proposal for the acquisition of all the units of CQO, except certain units held by the bidders or their $3.2bn associates. The proposal is scheduled to be voted on at a unitholder meeting on 15 March 2012 ($181m co-invested)

CQR $2.0bn ($103m co-invested)	 Invest in high quality retail properties in Australia	 Completed three acquisitions for over $90m1since 1 July 2011 to 31 December 2011
	 Focus on delivering strong and resilient operational performance from the Australian portfolio	 Same property NOI growth of 3.5% for 12 months to 31 December 2011  Solid occupancy at 98.7%
	 Realise remaining equity in offshore investments	 Completed majority of US asset sales, realising A$48m equity to reinvest in Australia  Australia now represents 91% of the REIT’s NTA
	 Maintain strong balance sheet and proactively manage debt maturities	 Refinanced Australian and Polish debt facilities  Cash and undrawn capacity of $103 million at 31 December 2011
	 Reduce NTA to unit price spread	 CQR outperformed AREIT ASX 200 Accumulation index by 8.6%2for the six month period to 31 December 2011

1. Calculated on a 100.0% ownership basis 2. Annualised total return, UBS Australia

45

Annexure I - Fund strategies

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Fund	Defined Strategies	Progress	Progress
Wholesale Investor Funds $3.4bn ($204m co-invested)	 Acquire new assets and redevelop existing portfolio with equity sourced from recent raising and/or recycling of property as appropriate	 Achieved final close for CPOF ($200) and CPIF ($150m) equity raising  DA to be lodged for office and retail redevelopment of 333 George Street, Sydney  Completion of new Woolworths facility (46,000sqm) due late February 2012  In due diligence with a preferred position on a large fully leased logistic asset  CPOF and CPIF outperformed the IPD / Mercer Wholesale Fund Index during the half year
	 Pursue capital partnership model to source equity for opportunistic projects	 Secured position in opportunistic project at 685 La Trobe Street, Melbourne
	 Grow third party wholesale mandate business	 Increasing FUM of Woolworths partnership with acquisition of new assets (one completed and one in due diligence)  Progressing initiatives with domestic and offshore strategic capital partners
Retail Investor Funds $1.5bn ($125m co-invested)	 Raising equity for new Direct Industrial Fund (DIF)		 Raised $66 million in equity to date. Fund has acquired a portfolio valued at $115 million at the balance date
	 Providing limited liquidity for Umbrella Fund (CHUF)		 A withdrawal offer of $5 million provided to investors in December 2011. Charter Hall Group will seek to participate in future withdrawal offers to realise its investment
	 Enhance Direct Property Fund (CHDPF) returns		 CHDPF has provided investors with a total return of 13.7% for the previous 12 months and the liquidity mechanism is being delivered as per the PDS
	 Review event for the Diversified Property Fund (DPF)		 Ahead of its October 2012 review event, DPF has sold $77 million of property in the past six months in order to reduce debt and provide capital returns to equity investors.

46

Annexure J – DRF reconciliation of

operating earnings

	1HFY12	1HFY12	1HFY12
	(DRF consolidated)	Adjustment	(DRF net contribution basis)
Direct net property income	7.4	(7.0)	0.3
Indirect property income1	16.9	3.0	19.9
Property investment income	24.2	(4.0)	20.2
Investment management fees	19.6	-	19.6
Property management fees	5.6	-	5.6
Development management fees	4.1	-	4.1
Transaction fees	3.7	-	3.7
Leasing fees	5.1	-	5.1
Performance fees	-	-	-
Funds management	38.2		38.2
Development investment income2,3	1.0		1.0
Recoveries	6.5		6.5
Total income	69.8		65.8
Operating expenses	(31.6)	0.3	(31.4)
**EBITDA3 **	38.2	-	34.5
Depreciation	(0.6)	-	(0.6)
**EBIT3 **	37.6	(3.7)	33.9
Net interest expense	(3.2)	2.4	(0.7)
Non-controlling interest	(1.3)	1.3	-
Operating earnings(pre org. restructure and net CQO fee)	33.2		33.2
Operating EPS (cps)(pre org.restructure and net CQO fee)	11.24		11.24
Organisational restructure	(2.0)	-	(2.0)
Net CQO fee	(0.3)	-	(0.3)
Operating earnings	30.9		30.9
Operating EPS (cps)	10.47		10.47

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• DRF investment management fees that would be recognised on full deconsolidation are added back to Charter Hall’s indirect property income

• Includes income from CHOF4, CHOF5 and CIP and WorkZone preferred equity. Excludes nonoperating items in CHOF4 and CHOF5

• Includes CIP tax of $0.3m in FY12

47

Annexure K – DRF reconciliation Balance Sheet

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$m	31 December 2011	31 December 2011	DRF equity accounted	31 December11
	(DRF consolidated)	DRF balance sheet	co-investment	(DRF on net contribution
				basis)
Cash	24.9	(3.6)	-	21.4
Property investments	676.6	(162.6)	62.1	575.7
Development investments	72.9	-	-	72.9
Other tangible assets	61.1	(1.4)	-	60.2
Intangibles	100.0	-	-	100.0
Total assets	935.6	(167.5)	62.1	830.2
Borrowings	101.6	(69.3)	-	32.3
Other liabilities	53.6	(3.2)	-	50.4
Total liabilities	155.2	(72.5)	-	82.7
Net assets attributable to non-controlling interest	(32.9)	32.9	-	-
Total equity post non-controlling interest	747.5	(62.1)	62.1	747.5
Total securities on issue (000s)	295,470	-	-	295,470
Net tangible assets per security	$2.19			$2.19
**Look through gearing (non-recourse debt)1 **	33.0%			33.0%
**Balance sheet gearing2 **	8.4%			1.4%

1. Calculated by incorporating CHC’s proportional share of assets (net of cash) and debt (net of cash) of the funds in which it co-invests 2. Calculated as debt net of cash divided by total assets net of cash

48

Annexure L - Cashflow reconciliation

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----- Start of picture text -----

11.24cps
($2.0m)
($0.3m) 10.47cps +$0.1m ($3.5m)
($5.0m
+$0.9m +$0.7m 8.16cps
$33.2m
$30.9m
$24.1m
Operating Restructure CQO Operating Change in Change in Change in Earnings vs Depreciation1 Operational
earnings pre Earnings trade payables FY11 STI Distribution and cashflow 2
net CQO fee receivables accrual received amortisation
and org.
restructure
----- End of picture text -----

1. ‘Other’ includes movement in other operating assets and liabilities

2. Excludes cash flows to non-controlling interests of $1.2m, operational cash including controlling interests is $25.3m

49

Annexure M – Reconciliation of segment note to presentation

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 The reconciliation of EBITDA performance in the results to the segment information contained in note 6(b) of the Interim Financial Report is set out below

	Property	Property Funds	Development	DRF	Combined Group
	Investment	Management	Investment	$000	$000
	$000	$000	$000
EBITDA in presentation	20,069	13,467	1,300	-	34,836
Adjustments:
DRF operating earnings excluding
non-controlling interest (from	(3,039)				(3,039)
segment note)
DRF EBITDA (100%)				6,758	6,758
Net CQO transaction fee and organisational restructure		(2,270)			(2,270)
CIP tax			(346)		(346)
EBITDA in segment note	17,030	11,197	954	6,758	35,939

50

Annexure N - Capital management

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($m)	CHC 1	CQO	CQR	CPOF	CPIF	DRF	CHUF	DPF	CHDPF	CHOF4	CHOF5
Asset values2	809	3,253	1,968	1,414	447	184	225	105	525	116	374
Net debt drawn2	11	1,254	831	439	93	86	71	54	230	66	116
Duration3 (years)	2.4	2.2	3.6	3.1	1.7	1.9	N/A	0.8	1.7	N/A	N/A
Gearing
Balance sheet	1.4%	26%	39%	29%	24%	42%	-	52%	43%	57%	31%
Look-through	33.0%	39%	42%	31%	21%	47%	32%	52%	44%	57%	31%
Target gearing4	0-10%	25-35%	30-40%	35-45%	35-45%	35-45%	-	50%	45%	N/A	N/A

1. DRF deconsolidated as per slide 47 - DRF net contribution basis balance sheet.

2. Total assets and debt values shown net of cash. Represent look through debt and book values. Differences with FUM figures used in this presentation compared to individual managed fund disclosures is due to use of on completion values and treatment of capital expenditure

3. Calculated on a weighted average basis.

4. Balance sheet gearing

51

Annexure O – Unlisted portfolio detail

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CORE PLUS OFFICE FUND (CPOF)	BOOK VALUE	INDEPENDENT	MKT CAP	MKT CAP	CAP RATE	VALUER’S	WALE	MIN. RENT
		VALUATION	RATE	RATE	CHANGE	DISCOUNT		REVIEW
		DATE	31 DEC 11	30 JUN 11		RATE/ IRR
	($m)		(%)	(%)	(%)	(%)	(YEARS)	(%)
331 & 333 George St, Sydney, NSW	73.6	31-Dec-11	7.88%	7.38%	0.50%	9.50%	1.5	3.80%
167 Macquarie St, Sydney, NSW	85.8	30-Jun-11	8.17%	7.92%	0.25%	9.50%	4.5	3.79%
St George Bank, Kogarah, NSW	118.0	30-Jun-11	8.25%	8.25%	-	9.25%	9.7	3.00%
Northbank Plaza, Brisbane, QLD	165.0	30-Jun-11	8.00%	8.00%	-	9.75%	5.4	4.55%
275 George St, Brisbane, QLD (50%)1	180.0	31-Dec-11	7.00%	7.00%	-	9.13%	7.5	4.45%
Hatch, 144 Stirling St, Perth, WA	52.5	31-Dec-11	8.50%	8.00%	0.50%	10.25%	8.2	3.83%
225 St Georges Tce, Perth, WA (50%)	91.5	30-Jun-11	8.25%	8.00%	0.25%	10.25%	3.1	5.14%
109 St Georges Tce, Perth, WA	67.0	31-Dec-11	9.50%	8.75%	0.75%	10.75%	2.5	3.78%
51 Pirie St, Adelaide, SA	14.5	30-Jun-11	9.50%	9.50%	-	10.50%	0.4	3.79%
Bank SA, Adelaide, SA	20.0	30-Jun-11	8.75%	8.75%	-	9.50%	9.7	3.00%
11 Exhibition St, Melbourne, VIC	173.7	30-Jun-11	7.25%	7.25%	-	9.25%	4.6	4.12%
570 Bourke St, Melbourne, VIC	168.0	30-Jun-11	8.00%	8.00%	-	9.75%	4.1	3.52%
Brisbane Square, Brisbane, QLD (50%)	200.0	31-Dec-11	7.25%	7.25%	-	9.13%	10.0	3.43%
Total / Average	1,409.6		7.83%	7.74%	0.09%	9.55%	5.7	3.95%

52

Annexure P – Unlisted portfolio detail

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CORE PLUS INDUSTRIAL FUND (CPIF)	BOOK	INDEPENDENT	MKT CAP	MKT CAP	CAP	VALUER’S	WALE	MIN. RENT
	VALUE	VALUATION	RATE	RATE	RATE	DISCOUNT RATE/		REVIEW
		DATE	31 DEC 11	30 JUN 11	CHANGE	IRR
		VALUE
	($m)	($m)	(%)	(%)	(%)	(%)	(YEARS)	(%)
372 Eastern Valley Way, Chatswood, NSW	31.6	30-Jun-11	8.25%	8.25%	-	9.50%	4.6	3.61%
56 Anzac Street, Chullora, NSW	18.3	31-Dec-11	8.75%	9.00%	(0.25%)	10.00%	4.1	2.60%
55-65 Sky Rd, MABP (Kathmandu), VIC	7.1	31-Dec-11	9.75%	9.25%	0.50%	10.25%	4.8	3.50%
130-138 Link Rd, MABP, VIC	14.4	31-Dec-11	10.00%	9.50%	0.50%	10.25%	2.5	3.50%
309 Fitzgerald Rd, Derrimut, VIC	28.8	31-Dec-11	7.75%	8.00%	(0.25%)	9.50%	15.9	3.50%
Schenker, MABP, VIC	11.6	30-Jun-11	9.25%	9.25%	-	10.00%	7.4	3.50%
Coles RDC, Perth Airport, WA (75%)	132.8	31-Dec-11	7.75%	7.88%	(0.13%)	10.00%	16.4	2.75%
123-135 Kewdale Rd Kewdale, WA	33.1	30-Jun-11	8.25%	8.25%	-	10.00%	3.1	4.00%
17 Sugarmill Rd, Meeandah, QLD	20.0	31-Dec-11	8.75%	9.00%	(0.25%)	9.75%	1.9	3.94%
140 -160 Robinson Rd, Geebung, QLD	27.0	31-Dec-11	8.75%	8.75%	-	10.00%	3.1	3.23%
Toll, 7 Viola Place, Brisbane Airport, QLD	8.5	31-Dec-11	9.67%	9.37%	0.30%	9.50%	5.2	3.25%
Smorgon, 30 Main Beach Rd, Pinkenba	26.2	30-Jun-11	8.00%	8.00%	-	9.75%	12.0	3.25%
QLD
Volkswagen, Chullora, NSW	64.0	31-Dec-11	7.75%	7.75%	-	9.50%	12.7	3.25%
Woolworths, Launceston, TAS1	70.0	30-Jun-11	8.25%	8.25%	-	9.75%	25.0	2.80%
200 Holt St, Pinkenba, QLD	9.8	31-Dec-11	N/A	N/A	N/A	N/A	12.7	3.25%
Total / Average	503.1		8.20%	8.24%	(0.04%)	9.82%	12.0	3.16%

Book value. On completion value is $70.0m

53

Annexure Q – Unlisted portfolio detail

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DIRECT RETAIL FUND (DRF)	BOOK	INDEPENDENT	MKT CAP	MKT CAP	CAP	VALUER’S	WALE	MIN.
	VALUE	VALUATION	RATE	RATE	RATE	DISCOUNT		RENT
		DATE	31 DEC 11	30 JUN 11	CHANGE	RATE/ IRR		REVIEW
	($m)		(%)	(%)	(%)	(%)	(YEARS)	(%)
Menai Central, Sydney, NSW	37.0	30-Jun-11	8.50%	8.50%	-	9.50%	5.6	3.77%
Home HQ, Whitehorse Rd, Nunawading, VIC (50%)	31.5	31-Dec-11	8.50%	8.50%	-	10.00%	5.3	4.50%
Bunnings, Stratford, QLD	19.3	31-Dec-11	7.50%	7.50%	-	9.00%	7.5	3.22%
Home HQ, 339 Brisbane St, Ipswich, QLD	26.4	31-Dec-11	8.75%	8.75%	-	10.00%	5.5	3.00%
Foodtown, Auckland, NZ (in $Am)1	18.1	31-Dec-11	9.25%	9.00%	0.25%	10.00%	7.5	4.00%
Wiley Group, Stafford, QLD	11.7	30-Jun-11	8.50%	8.50%	-	9.75%	7.5	4.47%
Lake Macquarie Shopping Centre (50%)	30.1	31-Dec-11	8.25%	8.25%	-	9.50%	7.2	4.30%
Mount Hutton Shopping Centre, NSW (50%)	5.2	31-Dec-11	9.00%	9.00%	-	10.00%	2.6	4.10%
Total / Average	179.3	-	8.48	8.46%	0.03%	9.69%	6.2	3.89%

1. NZ value is NZ$23.8m

54

Annexure R – Unlisted portfolio detail

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DIVERSIFIED PROPERTY FUND (DPF)	BOOK	INDEPENDENT	MKT CAP	MKT CAP	CAP	VALUER’S	WALE	MIN. RENT
	VALUE	VALUATION	RATE	RATE	RATE	DISCOUNT		REVIEW
		DATE	31 DEC 11	30 JUN 11	CHANGE	RATE/ IRR		(%)
	($m)		(%)	(%)	(%)	(%)	(YEARS)
400 Kent St, Sydney, NSW (75%)	40.2	30-Jun-11	7.50%	7.50%	-	9.25%	9.8	3.80%
53 Berry St, North Sydney, NSW	20.0	31-Dec-10	8.50%	8.75%	(0.25%)	9.50%	2.8	3.70%
1-5 & 15 Jets Ct, Tullamarine VIC	4.2	31-Dec-11	9.75%	9.37%	0.38%	10.25%	2.5	3.60%
181 St Georges Tce, Perth, WA	26.0	31-Dec-10	8.50%	8.50%	-	10.00%	6.1	4.50%
95 South Centre Rd, Tullamarine	4.2	31-Dec-11	9.75%	N/A	N/A	10.25%	2.6	3.80%
Total / Average	94.5	-	8.18%	8.21%	(0.04%)	9.60%	6.6	3.96%

55

Annexure S – Unlisted portfolio detail

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DIRECT PROPERTY FUND (CHDPF)	BOOK	INDEPENDENT	MKT CAP	MKT CAP	CAP	VALUER’S	WALE	MIN. RENT
	VALUE	VALUATION	RATE	RATE	RATE	DISCOUNT		REVIEW
		DATE	31 DEC 11	30 JUN 11	CHANGE	RATE/ IRR		(%)
	($m)		(%)	(%)	(%)	(%)	(YEARS)
2 Wentworth St, Parramatta, NSW	36.0	30-Jun-11	9.70%	9.70%	-	9.50%	3.6	2.60%
68 Pitt St, Sydney, NSW	111.4	1-Apr-11	7.75%	7.75%	-	9.25%	5.1	3.70%
154 Pacific Hwy, St Leonards, NSW	23.8	31-Dec-10	9.75%	9.50%	0.25%	9.25%	3.1	3.70%
165 Walker St, North Sydney, NSW	24.9	30-Jun-11	9.00%	9.00%	-	9.50%	2.6	4.60%
504 Pacific Hwy, St Leonards, NSW	33.5	30-Jun-11	9.50%	9.50%	-	9.50%	1.8	4.10%
1 Nicholson St, Melbourne, VIC	66.1	30-Jun-11	8.00%	8.00%	-	9.50%	6.0	3.80%
71 Queens Rd, Melbourne, VIC	22.6	31-Dec-10	9.25%	9.50%	(0.25%)	9.75%	1.3	3.60%
200 Queen St, Melbourne, VIC	100.0	31-Dec-11	8.00%	8.00%	-	9.50%	4.3	3.70%
300 Adelaide St, Brisbane, QLD	55.0	31-Dec-11	9.00%	9.00%	-	9.50%	4.0	4.30%
Total / Average	473.3	-	8.49%	8.50%	0.01%	9.44%	4.2	3.77%

56

Disclaimer

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This presentation has been prepared by Charter Hall Group (Charter Hall Limited (ABN 57 113 531 150) and Charter Hall Funds Management Limited (ABN 31 082 991 786) (AFSL 262861) as the responsible entity for Charter Hall Property Trust (ARSN 113 339 147). It is a presentation of general background information about the Group’s activities as at 31 December 2011 unless otherwise stated. It is a summary and does not purport to be complete. It is to be read in conjunction with the Interim Charter Hall Consolidated Half Year Financial Report filed with the Australian Securities Exchange on 23 February 2012. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. A reader should, before making any decisions in relation to their investment or potential investment in the Charter Hall Group, seek their own professional advice. This presentation is not an offer or invitation for subscription or purchase of securities or other financial products.

Indications of, and guidance on, future earnings and financial position and performance are “forward-looking statements”. Due care and attention has been used in the preparation of forecast information. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Group, that may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements.

Charter Hall fund’s currently accepting investments

The responsible entity of Charter Hall Direct Industrial Fund (“DIF”), Charter Hall Direct Property Fund (“CHDPF”) and Charter Hall Direct Retail Fund (“DRF”) and Charter Hall Property Securities Fund (“CHPSF”) is Charter Hall Direct Property Management Limited (“CHDPML”) (ABN 56 073 623 784, AFSL 226849). CHDPML has issued a product disclosure statement (“PDS”) for DIF dated 13 July 2010. for CHDPF dated 20 December 2010 and DRF dated 22 December 2010 (with a supplementary PDS dated 16 November 2011) and for CHPSF dated 19 November 2010. The PDSs for all of the

aforementioned funds (“Funds”) set out the offer to apply for units in the Funds. If you are considering an investment in a Fund or Funds you should read the relevant PDS in its entirety and consider the information set out in the PDS in relation to the offer. You can request a copy of a Fund’s PDS, free of charge, by calling CHDPML on 1300 652 790.

This information has been made available to the recipient for information purposes only. It is not intended to be, and does not constitute a product disclosure statement, prospectus, short form prospectus or profile statement as those terms are defined in the Corporations Act. It does not constitute an offer for the issue, sale or purchase of any securities, or any recommendation in relation to investing in any asset. This document has been prepared without taking account of any particular investor’s objectives, financial situation or needs. For this reason, it is important that you consider the PDS for the offer and consider whether to seek appropriate professional advice before making any investment decision.

Entities within the Charter Hall Group may receive fees for managing the assets of, and providing resources to each Fund. For more detail on fees, see the relevant PDS.

All information herein is current as at 31 December 2011 unless otherwise stated. All references to dollars ($) or A$ are Australian Dollars unless otherwise status. Exchange rates in this presentation are A$1.00/US$1.02/€0.79/NZ$1.31

57

Fund Key

Listed Funds
CQO	Charter Hall Office REIT
CQR	Charter Hall Retail REIT
Wholesale Unlisted Funds
CPOF	Core Plus Office Fund
CPIF	Core Plus Industrial Fund
Wholesale Opportunistic Funds
CHOF4	Charter Hall Opportunity Fund 4
CHOF5	Charter Hall Opportunity Fund 5
Retail Investor Funds
DPF	Diversified Property Fund
CHUF	Charter Hall Umbrella Fund
CHIFs	Charter Hall Investment Funds
CHDPF	Charter Hall Direct Property Fund
1MPT	No1 Martin Place Trust
DRF	Direct Retail Fund
PSF	Charter Hall Property Securities Fund

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58

Further information

David Southon Joint Managing Director +61 2 8908 4025 david.southon@charterhall.com.au

David Harrison Joint Managing Director +61 2 8908 4033 david.harrison@charterhall.com.au

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

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charterhall.com.au

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