LENDLEASE GROUP — Capital/Financing Update 2009

Aug 13, 2009

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14 August 2009

• Prime Trust sells non‐core facilities

• Significant reduction in debt

• Option to manage core Retirement Villages

Over recent months the Board of the Responsible Entity of the Prime Retirement and Aged Care Property Trust (“Prime Trust”) has conducted a strategic review of all of its operations with a view to reducing debt, lowering costs, simplifying operations and ceasing new development expenditure.

Following that review, the Board determined to sell certain non‐core facilities and is now advise of the sale of thirteen non‐core rental facilities to Lend Lease Corporation Limited for $76.75m.

The salient points of the sales are as follows;

• Selling price of $76.75m (approximately 20% discount to book value)

• Seven settlements (totalling $39.55m) to occur within 10 days

• Six settlements are expected to settle within 90 days following satisfaction of conditions including the government department approval of the transfer of bed licences on some Aged Care facilities

• The funds received will be primarily used for debt reduction of circa $72.75m

• The group debt will be reduced from circa $423m to $350m (a 17% reduction)

• Approximately $4.0m will be retained for working capital and selling costs

The Board also announces two other significant developments:

1. Settlement of all legal and operational disputes with Lend Lease Primelife (“LLP”), the manager of Prime Trust’s 12 core retirement village assets. As a result of this settlement there will be greater certainty and improvement of cash flow to the Trust.

2. LLP has granted an option to Prime Trust to acquire the management rights for Prime Trust’s 12 core retirement village assets for an amount between $42.5m and $45m. This option is exercisable by 30 June 2010 and, if exercised, will deliver management of these villages to Prime Trust.

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The Managing Director of Prime Trust, Philip Powell said. “ These three developments provide a very strong foundation for Prime Trust to re‐emerge from its recent financial constraints. They tick all the strategic boxes. Together, they generate cash, repay debt, improve cash flow from our core assets and provide the basis for a recapitalised property business .”

Mr Powell said, “ The settlement of our legal and operational disputes with LLP provides a robust platform for a better working relationship. Significantly it will provide certainty of cash flow from the core Retirement Villages. In addition, if Prime Trust exercises its option to acquire the management rights to the Retirement Villages it will be able to directly manage its core assets and this represents a very significant and positive outcome.”

In order to exercise this option, the Trust will most likely need to restructure before 30 June 2010 to enable it to raise the necessary funds and to directly undertake management activities. This may hasten a merger (possibly via a stapling) of the Responsible Entity and the Trust. The Board will also consider other options ‐ but these developments provides the foundation for the Trust to deliver on its strategic objectives.

Media contact – Philip Powell 0416 043 007