LENDLEASE GROUP — Capital/Financing Update 2008

Nov 23, 2008

Stock Exchange Announcement

Babcock & Brown Communities Transaction Progress

24 November 2008

Lend Lease Corporation Limited (“Lend Lease”) announced today that the proposed Babcock & Brown Communities (“BBC”) transaction has been amended since the announcement of the proposal on 1 October 2008, following due diligence and the completion of negotiations with the existing lending syndicate.

The major changes to the proposal are:

• A reduced price for the acquisition from Babcock & Brown of their 12.5% stake in BBC from 58 cents to 29 cents per stapled security

• A reduced price for the $170 million placement from 68 cents to 60 cents per share (283.3 million stapled securities, subject to a successful security holder vote at an Extraordinary General Meeting (the “Vote”))

• A further cash injection by Lend Lease of $25 million in BBC through the issue of 100 million convertible notes of 25 cents each thereby increasing the total injection to $195 million

• Lend Lease’s overall cash outlay remains the same

• The BBC management rights will be acquired from Babcock & Brown for $17.5 million, with $5 million to be paid immediately and the second instalment of $12.5 million, to be paid following a successful Vote

• Stage 1 of the transaction, which involves Lend Lease increasing its holding to 17.8%, will now be conditional on a successful Vote (unless Lend Lease decides to waive this condition)

• Lend Lease's stake in BBC, once approved by security holders, will be 43.2%

The transaction is progressing with BBC agreeing to acquire a number of Retirement by Design villages for $133.4 million, subject to security holder approval. The necessary consents required under BBC’s finance arrangements have also been obtained for the revised proposal on terms which are acceptable to Lend Lease. One of the conditions to this consent is that the management rights are novated to Lend Lease.

Lend Lease Group CEO, Greg Clarke said: “The Babcock & Brown Communities transaction is progressing well and we look forward to their securityholder vote in December. As previously stated, we believe the retirement sector provides a number of strategic benefits for Lend Lease and this transaction provides us with management of, and investment in, one of Australia’s leading pure play operators.”

Further detail on the proposed amendments is attached.

ENDS

For more information contact:

Mark Gell Lend Lease Corporation Tel: 02 9237 5447 / 0419 440 533

Lend Lease Corporation Limited Telephone +612 9236 6111 ABN 32 000 226 228 Facsimile +612 9252 21921 Level 4, 30 The Bond www.lendlease.com 30 Hickson Road Millers Point NSW 2000 Australia

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ASX Release

24 November 2008

LEND LEASE PROPOSAL UPDATE

Bank consents obtained

Amendments to Proposal terms

Successful conclusion of Retirement by Design due diligence

Babcock & Brown Communities Group ( “BBC” ) and Lend Lease Corporation Limited ( “Lend Lease” ) announced today that BBC and Lend Lease have signed an amendment to the Lend Lease recapitalisation proposal ( “the Revised Lend Lease Proposal” ). The revised terms recognise the change in market conditions since the announcement of the Lend Lease Proposal on 1 October 2008.

The following amendments have been made to the original Lend Lease Proposal:

1. Capital raising: The agreed cash injection of $170m will now be made through the issue of 283.3m new stapled securities at $0.60 per stapled security to Lend Lease. This represents a 66% premium to the 3 month VWAP of BBC stapled securities.

2. Injection of further capital: Lend Lease will inject a further $25m of cash through the issue of 100m convertible notes by BBC at $0.25 each (the Second Notes ).

The effect of the amendments will increase the amount of the capital injected into BBC from $170m to $195m and result in Lend Lease having a 43.2% securityholding in BBC.

The proceeds from the issuance of the new stapled securities and Second Notes will be partly used to reduce the debt of BBC and provide capital to maintain current operations and provide funding for future growth.

BBC Chairman, Judith Sloan commented, “ In light of current market conditions, the Board believes the revised Lend Lease Proposal is the optimal way to maximise securityholder value, provides additional capital and ensures the future growth of BBC. ”

Agreement with Babcock & Brown (“B&B”)

The management agreement will be acquired from B&B for $17.5m, with $5m paid to B&B on transfer of the management rights. The payment of the residual

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$12.5m will be deferred until after the Annual General Meeting ( “AGM” ) and will only be payable if certain conditions are met.

B&B’s 12.5% stake in BBC (85,044,042 stapled securities) will now be acquired by Lend Lease at $0.29 per stapled security, conditional on BBC securityholder approval of the second stage transactions at the AGM.

Finance party consent

Lend Lease has advised BBC that the necessary consents required under BBC’s finance arrangements to the Revised Lend Lease Proposal have been obtained on terms which are acceptable to Lend Lease. One of the conditions to this consent is that the management rights are novated to Lend Lease.

No superior proposal

BBC securityholders were advised on 3 November 2008 that BBC, together with Lend Lease and Babcock & Brown International Pty Ltd ( “BNBI” ), had provided undertakings to the Takeovers Panel that, until 5pm on 17 November 2008, they would not implement the following transactions:

• issue to Lend Lease the First Notes or the BBC Notes;

• consent to the novation of the Management Agreements to Lend Lease;

• agree to terminate the Internalisation Agreement;

• � issue securities to Lend Lease under any application referred to in clause 4.1(f) of the Implementation Agreement; and

• acquire the Initial B&B Parcel.

(collectively the “Relevant Transactions” ).

BBC (together with Lend Lease and BNBI) further undertook to the Takeovers Panel that, if before 5pm on 17 November 2008, a superior proposal to the original Lend Lease Proposal was made or announced, BBC would amend the terms of the Implementation Agreement (and related documents) to require BBC securityholder approval before BBC took any steps to implement any of the Relevant Transactions.

In the opinion of the Independent Directors, no superior proposal to the original Lend Lease Proposal was made or announced by 5pm on 17 November 2008.

Proposed extension to period of application of undertakings

Notwithstanding this, and notwithstanding the fact that consent under BBC's finance arrangements to the Revised Lend Lease Proposal has now been obtained (subject to conditions as indicated above), BBC, Lend Lease and BNBI have collectively agreed not to implement any component of the Revised Lend Lease Proposal before 5pm on Tuesday 25 November 2008 to provide the market with a further opportunity to consider the Revised Lend Lease Proposal in more detail.

Implementation of the first stage of the Revised Lend Lease Proposal

Assuming no superior proposal is received prior to 5pm on 25 November 2008, BBC, Lend Lease and BNBI propose to implement the following transactions as soon as practicable following 5pm on 25 November 2008:

• BBC and BNBI will terminate the Internalisation Agreement;

• BBC will consent to the novation of the Management Agreements to Lend Lease; and

• the Management Agreements will be novated to Lend Lease.

BBC has agreed to issue to Lend Lease the First Notes for an aggregate price of $13.4m and the BBC Notes for an aggregate price of $21.5m and Lend Lease has agreed to acquire 42,522,022 stapled securities (the Initial B&B Parcel ) from B&B. Issue of the First Notes and BBC Notes and acquisition of the Initial B&B Parcel is conditional on securityholder approval of the second stage transactions at the AGM. Lend Lease may waive fulfilment of this condition in which case the First Notes and BBC Notes may be issued and the Initial B&B Parcel may be acquired by Lend Lease prior to the AGM or after the AGM notwithstanding that securityholder approval is not obtained to the second stage transactions.

Retirement by Design due diligence

BBC has concluded due diligence on the Retirement by Design business and has agreed to acquire seven existing Retirement by Design retirement villages and an aged care facility from Lend Lease for $133.4m (the " RBD Acquisition "). The acquisition will be funded through the issue to Lend Lease of 5 year redeemable convertible notes with a total value of $120.0m and a cash payment to Lend Lease of $13.4m. The convertible notes will have a conversion price of $0.60 per stapled security (if not redeemed for cash).

Implementation of the second stage of the Revised Lend Lease Proposal

It is expected that BBC securityholders will be provided with the AGM Notice of Meeting and an Explanatory Memorandum shortly. These documents explain in more detail the second stage of the Revised Lend Lease Proposal and the approvals that are being sought from securityholders. The Explanatory Memorandum will be accompanied by a full copy of an Independent Expert’s Report by Deloitte which reports on the terms of the RBD Acquisition and the issue and transfer of stapled securities and convertible notes.

BBC securityholders will be asked to approve the RBD Acquisition and the issue and transfer of the stapled securities and Second Notes to Lend Lease at the BBC AGM which is now expected be held on 30 December 2008 rather than 12 December 2008 as previously announced.

BBC Independent Directors continue to recommend that BBC securityholders REJECT the Prime Trust Offer and Vote in Favour of the Lend Lease Proposal

In light of the Revised Lend Lease Proposal, the Independent Directors of the BBC Board continue to recommend that BBC securityholders REJECT Prime Trust’s Offer and further recommend that BBC securityholders IGNORE any Prime Trust Resolution documents they have received. The Prime Trust Offer is not in the best interests of BBC securityholders and does not position BBC for future growth.

In the absence of a superior proposal, the BBC Independent Directors continue to recommend that BBC securityholders vote to approve the second stage of the Revised Lend Lease Proposal. The Revised Lend Lease Proposal provides BBC with a cash injection which is required for future growth, it increases BBC’s exposure to the Australian retirement living sector, and allows BBC to benefit from the experience of Lend Lease’s management.

ENDS

Further Information:

Gregor Dixon Babcock & Brown Communities +61 (0) 3 8699 3300

Ian Brown CHANNEL Financial Communication + 61 (0) 2 9221 0008

Mark Gell Lend Lease Corporation Limited + 61 (0) 2 9237 5447

Daniel Janes ABN AMRO - Investment Banking Group +61 (0) 2 8259 6722

Morgan Hill ABN AMRO - Investment Banking Group +61 (0) 2 8259 5109

About Babcock & Brown Communities Group

Babcock & Brown Communities Group ( BBC ) is an integrated owner, operator and developer of senior living communities listed on ASX. BBC owns and manages a portfolio of 56 retirement villages and 29 aged care facilities across Australia and New Zealand comprising approximately 10,000 retirement units and 2,200 residential aged care beds. Within the retirement portfolio, BBC has full exposure to the deferred management fees of approximately 6,800 units and receives management fees in relation to the remaining units.

BBC’s growth is supported by its development pipeline of approximately 2,200 retirement units and 344 aged care beds which is expected to be delivered over the next 6 years.

For further information please see our website: www.bbcommunities.com