LENDLEASE GROUP — Capital/Financing Update 2008

Jul 3, 2008

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ASX Release

4 July 2008

MARKET UPDATE

Babcock & Brown Communities (ASX: BBC), Australia’s leading integrated owner, operator and developer of senior living communities, notes that Lend Lease Corporation has overnight increased its stake in BBC to 7.27%.

The change in shareholding by Lend Lease Corporation has not impacted on the BBC strategic review announced to the market on 19 June 2008. The review by independent advisor ABN AMRO is progressing and is focused on reducing the gap between the underlying asset values and BBC’s current market trading.

Prior to the appointment of ABN AMRO, in line with the review of BBC’s distribution policy, BBC had been considering and progressing a number of other initiatives to strengthen the balance sheet and reduce gearing. A number of non-core assets and land sites have been identified for sale and will be executed over the coming months. To accelerate our degearing programme some sales have been concluded including the divestment of the 7.1% investment in Aevum Limited. This investment was purchased by our joint venture partner (a member of the Babcock & Brown Group) who regard the total stake of 14.4% as strategic in the current market.

The Board remains focused on maximising the value of these investments for all BBC shareholders.

ENDS

Further Information:

Gregor Dixon Investor Relations Babcock & Brown Communities +61 3 8699 3300

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About Babcock & Brown Communities Limited

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