CROMWELL PROPERTY GROUP — Annual Report 2007

Aug 27, 2007

ASX Announcement August 28, 2007

==> picture [108 x 36] intentionally omitted <==

CROMWELL GROUP CONSOLIDATES WITH RECORD EARNINGS

HIGHLIGHTS – 12 MONTHS TO 30 JUNE, 2007

• Record full year NPAT of $113.9 million

• Operating profit (excluding significant items) of $37.6 million exceeds forecast

• Completed Merger and Stapling to create the Cromwell Group

• Reached Assets Under Management (AUM) of $1.64 billion, up 20 per cent

• NTA per security of 96 cents, up from 78 cents at half-year

• Boosted senior management to reflect increased AUM and provide a platform for future growth

• • Forecast FY08 operating earnings and distributions of 10.0 cents per security

Property and funds manager Cromwell Group (ASX: CMW) today released its results for the year to 30 June, 2007, with another record performance as the Group continues to consolidate opportunities outlined as part of its transition to a Stapled entity in late 2006.

The Group’s operating profit (excluding significant items and non-cash adjustments) for the year was $37.6 million. Net Profit After Tax (NPAT) of $113.9 million included net property revaluations of $69.8 million recognised for the period after stapling. Net Tangible Assets (NTA) increased by 23% in the second half from 78 cents per security at the end of December to 96 cents per security at 30 June.

Operating earnings of $37.6 million compared to $36.3 million forecast in the Explanatory Memorandum (EM) issued last year as part of the Group’s Merger and Stapling proposals. This result was achieved despite the later than anticipated Stapling date reducing the period of contribution of property income. The transaction, which was completed in December, involved the merging of 5 Cromwell-managed syndicates with the Cromwell Diversified Property Trust (CDPT) followed by a Stapling of units in the consolidated CDPT to ordinary shares in Cromwell Corporation Limited to create the new Cromwell Group.

In the period following the Merger and Stapling to the end of the year the Group paid two interim distributions of 1.5 cents per stapled security. The Group has previously advised it will pay a final distribution/dividend of 2.25 cents per stapled security on 31 August, bringing total distributions/dividends for the period since the stapling to 5.25 cents per stapled security.

Cromwell Executive Chairman Paul Weightman said, “The last year has been one of significant change and development for Cromwell but we are now starting to see the full advantage of our Stapled structure and expect to continue reaping the benefits for the foreseeable future.”

“We have delivered on the financial forecasts outlined within the Explanatory Memorandum and are continuing to see the results of the strategic benefits outlined to unitholders and shareholders. We believe a focus on delivering securityholders and investors the opportunity for a stable and secure income, combined with the potential for capital growth, will ensure our continued success.”

Cromwell Corporation Limited ABN 44 001 056 980

Cromwell Property Securities Limited ABN 11 079 147 809 AFSL 238052 as responsible entity for Cromwell Diversified Property Trust ABN 30 074 537 051 ARSN 102 982 598

Level 19, 200 Mary Street, GPO Box 1093, Brisbane QLD 4001 Telephone 07 3225 7777 Facsimile 07 3225 7788 Email cromwell@cromwell.com.au Internet www.cromwell.com.au

==> picture [108 x 36] intentionally omitted <==

PROPERTY INVESTMENT

The Group’s property investment activities continue to drive stable and secure earnings for securityholders with investment properties at the end of the year, net of disposals, valued at approximately $1.0 billion, including investment property held through equity accounted investments. When combined with the unlisted Cromwell Property Fund (CPF), total AUM at the end of the year was over $1.6 billion.

During the year the Cromwell Diversified Property Trust continued to focus on maintaining a diverse portfolio spread across a range of sectors and geographic locations. At the end of the year approximately 71 per cent of rental was generated from Government and listed company tenants. There have also been a number of asset sales confirmed recently, in line with the Group’s strategy to rebalance the portfolio which was announced earlier this year.

“Current market conditions predicate a need to constantly review the portfolio and we have taken the opportunity of strong markets around the country to dispose of a number of non-core assets,” Mr Weightman said.

The deconsolidation of the Cromwell Property Fund during the second half, coupled with the sale of the Bourke Street, Melbourne investment property resulted in a significant reduction in gearing (net debt:total assets) as at 30 June 2007, to 44 per cent. The settlement of further asset sales subsequent to the end of the year is expected to reduce gearing even further to approximately 32 per cent, and will leave the Group with approximately $100 million in funds available to pursue acquisition opportunities.

FUNDS MANAGEMENT

Revenue from Funds Management activities, primarily derived from the CPF, was impacted by the Merger and Stapling proposal which absorbed internal resources and reduced total capital inflows to approximately $90 million.

Mr Weightman said the CPF capital raising had gained significant momentum in the second half once the Merger and Stapling had been completed. Funds management revenue is expected to increase significantly during the current year with the CPF now consistently raising approximately $3 million per week, or more than $150 million annualised.

“It is expected that this level should be maintained throughout the current year with potential to increase as the fundamentals of the CPF, including asset, geographic and tenant diversity, improve with the new property additions,” Mr Weightman said.

“The CPF has also acquired or contracted to acquire a number of new assets which will take total assets within the fund to approximately $445 million. Cromwell intends to maintain its co-investment in the CPF at between 15-20% of the issued equity in the Fund”.

Under the Product Disclosure Statement for CPF, Cromwell has deferred revenues on any additional asset acquisitions until the CPF reaches total equity raised of approximately $143 million. This effectively means approximately $5 million of fees related to assets already acquired by CPF at balance date have been deferred until FY08.

DEVELOPMENT AND PROJECT REVENUES

Development revenue was boosted by a $5.1 million profit from the sale of an industrial site at Pinkenba in Brisbane for $10.4 million. The EM had forecast a profit of $1.8 million.

Mr Weightman said the profit had been achieved through a combination of strategic asset identification and strong market conditions.

==> picture [108 x 36] intentionally omitted <==

MANAGEMENT

The year under review also included a number of changes to senior management. The changes and appointments included:

• David Usasz and Michelle McKellar as independent, non-executive Directors

• Finance Director Daryl Wilson as a Director of Cromwell Property Securities Limited

• Corporate Legal Counsel Suzanne Morgan as Company Secretary

• Paul Cronan AM as Chief Operations Officer

To ensure the application of skills and resources appropriate to its assets under management the Group intends to make two more senior appointments during the current financial year. As previously flagged the Group intends to appoint an independent, non-executive chairman to allow current Executive Chairman Paul Weightman to focus on the role of Chief Executive Officer. Whilst the group had previously flagged its intentions to make this appointment by June 2007, it is now expected an appointment will be made during the first half of FY08.

“We are committed to appointing an independent chairman that has the experience to guide the Group through the next few years and while the process has taken a little longer than expected we are confident of securing the right person in due course,” Mr Weightman said.

The Group also plans to consolidate its property asset, leasing and facilities management functions under a Head of Property. The newly created role will focus on overseeing all property management disciplines, while ensuring the smooth integration of additional assets as AUM grows. Cromwell is currently assessing a number of candidates for the position.

OUTLOOK

Mr Weightman said the Group would continue building on the success of the Merger and Stapling transaction by providing securityholders with a unique combination of secure earnings with low risk growth.

The Group expects to deliver an 85 per cent increase in operating earnings to approximately $70 million, or 10.0 cents per stapled security (security) for the year to 30 June, 2008. This is expected to occur off the back of increased funds management revenues, a full year of income and continuing low vacancy in the property portfolio, and earnings from the sale of the development property at Bundall on the Gold Coast.

The Group also expects to increase distributions/dividends for the year to 10.0 cents per security, effective from the first quarter to 30 September, 2007 in line with the Group’s policy of distributing a high percentage of operating earnings, excluding gains on asset sales. The first record date for the higher distribution/dividend is expected to be the end of September, with payment of 2.5 cents per security for the quarter being made in late November.

“We have already progressed a number of initiatives which will underpin earnings in the current year and will continue to investigate all opportunities to grow the business in the interests of securityholders,” Mr Weightman said.

ENDS: Media Enquiries to Paul Weightman on 0411 111 028.