STOCKLAND — Capital/Financing Update 2013

Oct 29, 2013

==> picture [193 x 89] intentionally omitted <==

ASX / Media Release

30 October 2013

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

FKP Property Group successfully Completes Institutional Component of Entitlement Offer Sale of securities by Stockland (ASX:SGP)

FKP Property Group (“FKP”) (ASX:FKP) today announced the successful completion of the institutional component of its underwritten accelerated non-renounceable pro-rata entitlement offer (“ Entitlement Offer ”) which opened on Monday, 28 October 2013.

The Entitlement Offer invited eligible stapled Securityholders to acquire 5 new stapled securities (“ New Stapled Securities ”) for every 9 existing stapled securities held as at 7.00pm (AEDT) on Thursday, 31 October 2013 (“ Record Date ”) at a price of $1.30 per New Stapled Security (“ Offer Price ”).

The institutional component of the Entitlement Offer (“ Institutional Entitlement Offer ”) closed on Tuesday, 29 October 2013. New Stapled Securities in respect of institutional entitlements not subscribed for and the right to subscribe for New Stapled Securities which would otherwise have been offered to ineligible stapled Securityholders were placed into the institutional bookbuild, which was completed on Tuesday, 29 October 2013.

The Institutional Entitlement Offer (together with the institutional bookbuild) raised gross proceeds of A$173.906 million for FKP, with 99.2% of FKP’s eligible institutional stapled Securityholders (including Stockland (ASX:SGP)) subscribing to take up their entitlements.

Settlement of the Institutional Entitlement Offer (along with early applications under the retail component of the Entitlement Offer (“ Retail Entitlement Offer ”)[1] is expected to be completed on Monday, 11 November 2013 and accordingly the new Stapled Securities issued under the Institutional Entitlement Offer (and to early applicants under the Retail Entitlement Offer) are expected to be issued and commence trading on the Australian Securities Exchange (“ASX”) on Tuesday, 12 November 2013.[2] New Stapled Securities issued under the Entitlement Offer will rank equally with existing stapled securities in FKP.

The net proceeds of the Entitlement Offer will be used to de-lever and extinguish substantially all short-term debt maturities, thereby improving FKP’s capital position. The raising will enable FKP to accelerate its implementation of the stated strategy of being a pure retirement developer, manager and owner.

Following yesterday’s announcement, FKP has further been notified by Goldman Sachs that it has placed 58.1m stapled securities held by Stockland (including those subscribed for under the Entitlement Offer) to institutional investors at a price of $1.78 per stapled security. The right of first

1 Eligible retail Securityholders have the opportunity to be issued New Stapled Securities at the same time as eligible institutional Securityholders if they take up all or part of their entitlement and make payment of the requisite application monies no later than 5.00pm AEDT Friday, 8 November 2013

2 A portion of the New Stapled Securities subscribed for by Mulpha International BHD and/or one or more of its wholly-owned subsidiaries may be settled and issued on the settlement and allotment dates, respectively, of the Retail Entitlement Offer

Page 1 of 3

refusal held by Stockland over FKP's retirement assets has now also been terminated for no consideration.

Chief Executive Officer of FKP, Mr Geoff Grady said: “We are delighted by these developments. We appreciate the strong support shown by our institutional Securityholders both for the offer and FKP’s pure play retirement strategy. We’re also pleased that Stockland has now executed on its intention to sell its stake and relinquished its right of first refusal over our retirement assets. This has not only opened up an exciting opportunity for new investors encouraged by our strategic direction, but resolves Stockland’s exit from our group in a very clear way.”

Following close of the offer FKP will be geared at 19.3%[3] and its debt levels will be further reduced as it progresses with sales of its $767m[4] of non-retirement assets.

The Retail Entitlement Offer is expected to open on Monday, 4 November 2013 and close at 5.00pm (AEDT) on Wednesday, 27 November 2013, with New Stapled Securities offered at the same Offer Price as in the Institutional Entitlement Offer. Eligible retail stapled Securityholders may also apply for New Stapled Securities in excess of their existing entitlements (“ Additional New Stapled Securities ”) at the Offer Price up to an additional amount of A$100,000. Additional New Stapled Securities will only be allocated to eligible retail stapled Securityholders if available. FKP may apply any scale back to applications for Additional New Stapled Securities in its absolute discretion. Entitlements are non-renounceable and will not be tradeable on ASX or otherwise transferable. Eligible retail stapled Securityholders who do not take up their entitlements in full will not receive any value in respect of those entitlements they do not take up.

Further to the Appendix 3B lodged with ASX on 28 October 2013, FKP confirms that final settlement of the Retail Entitlement Offer is expected to be completed on Thursday, 5 December 2013 and that the New Stapled Securities to be issued as a result under the Retail Entitlement Offer are expected to be issued on Friday, 6 December 2013.

Eligible retail stapled Securityholders wishing to participate in the Retail Entitlement Offer should carefully read the Retail Entitlement Offer Booklet and the accompanying personalised entitlement and acceptance form that will be distributed to them on or about Monday, 4 November 2013.

FKP expects ASX to lift the trading halt and FKP securities to recommence trading on ASX on an ex-entitlements basis from market open today.

ENDS

For further information contact:

Lisa Godfrey. Group Company Secretary, Corporate P: 02 9270 6100

About FKP

With more than 30 years experience in the Australian property industry, FKP Property Group (FKP) is one of Australia’s leading diversified property and investment companies. FKP successfully operates an integrated business model which includes retirement, property investment and funds management, land development, property development (incorporating residential, retail, industrial and commercial) and construction across Australia and New Zealand.

Issued by FKP Property Group (ASX: FKP) comprising FKP Limited ABN 28 010 729 950 and FKP Funds Management Limited ABN 17 089 800 082, AFSL No. 222273 as Responsible Entity for the FKP Property Trust ARSN 099 648 754.

Disclosures regarding forward-looking statements

This announcement contains certain 'forward-looking statements'. Forward-looking statements include those containing words such as: 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 'intend', 'should', 'could', 'may', 'target', 'plan', 'consider', 'foresee', 'aim', 'will' and other similar expressions. Any forward-looking statements, opinions and estimates provided in this announcement are based on assumptions and contingencies which are subject to change without notice and involve known and unknown risks and

3 Pro-forma net-debt post entitlement offer

4 Represents the book value of non-retirement assets at 30 June 2013. There is no guarantee that any sale of assets will realise proceeds equal to book value

Page 2 of 3

uncertainties and other factors which are beyond the control of FKP, including the risks and uncertainties described in the ‘Key risks’ section in the investor presentation given to ASX by FKP on 28 October 2013 (“Investor Presentation”). This includes any statements about market and industry trends, which are based on interpretations of current market conditions.

Forward-looking statements may include indications, projections, forecasts and guidance on sales, earnings, dividends, distributions and other estimates. Forward-looking statements are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Actual results, performance or achievements may differ materially from those expressed or implied in such statements and any projections and assumptions on which those statements are based. These statements may assume the success of FKP Property Group's business strategies. The success of any of these strategies is subject to uncertainties and contingencies beyond FKP Property Group's control, and no assurance can be given that any of the strategies will be effective or that the anticipated benefits from the strategies will be realised in the period for which the forward-looking statement may have been prepared or otherwise. Readers are cautioned not to place undue reliance on forward-looking statements and except as required by law or regulation, FKP assumes no obligation to update these forward-looking statements. To the maximum extent permitted by law, FKP, its directors, the underwriter and any of its related bodies corporate and affiliates, and their officers, partners, employees, agents, associates and advisers disclaim any obligations or undertaking to release any updates or revisions to the information in this announcement to reflect any change in expectations or assumptions, do not make any representation or warranty, express or implied, as to the accuracy, reliability or completeness of such information, or likelihood of fulfilment of any forward-looking statement or any event or results expressed or implied in any forward-looking statement, and disclaim all responsibility and liability for these forwardlooking statements (including, without limitation, liability for negligence).

Not an offer

This announcement is not and should not be considered as an offer or an invitation to acquire New Stapled Securities or any other financial product and does not and will not form any part of any contract for the acquisition of New Stapled Securities.

The Entitlement Offer does not constitute an offer in any jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer. No action has been taken to register or qualify the Entitlement Offer, the entitlements or the New Stapled Securities, or otherwise permit a public offering of the New Stapled Securities, in any jurisdiction outside of Australia, New Zealand and the jurisdictions referred to in Appendix i ('Selling Restrictions') of the Investor Presentation.

This announcement and any material accompanying it may not be released or distributed in the United States. This announcement and any material accompanying it does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The entitlements and the New Stapled Securities and the Additional New Stapled Securities have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States. The entitlements may not be taken up by persons in the United States and the New Stapled Securities and the Additional New Stapled Securities may not be offered or sold in the United States, except in transactions exempt from, or not subject to the registration requirements of the U.S. Securities Act of 1933 ("Securities Act") and the applicable securities laws of any state or other jurisdiction of the United States. The New Stapled Securities and the Additional New Stapled Securities to be offered and sold in the Entitlement Offer may only be offered and sold outside the United States in 'offshore transactions' (as defined in Rule 902(h) under the Securities Act) in compliance with Regulation S under the Securities Act.

Disclosure

The underwriter, together with its affiliates, is a full service financial institution engaged in various activities, which may include trading, financing, financial advisory, investment management, investment research, principal investment, hedging, market making, margin ‐ lending, brokerage and other financial and non financial activities and services including for which they have received or may receive customary fees and expenses. The underwriter, in conjunction with its affiliates, is acting as a sole lead manager, bookrunner and underwriter to the pro-rata, accelerated and non-renounceable entitlement offer of stapled securities by FKP Property Group. Goldman Sachs and/ or its affiliates may receive fees and customary expenses for acting in this capacity. As at 28 October 2013, an affiliate(s) of the underwriter holds an interest, as principal, in the 8.00 per cent guaranteed convertible notes due 2016, issued by FKP Property Group (“Existing Notes”) and, if some or all of its Existing Notes are redeemed it will benefit from the proceeds of the Offer, which will be used in part to repay amounts due under the Existing Notes.

In the ordinary course of its various business activities, the underwriter and its affiliates may purchase, sell or hold a broad array of investments and actively trade or effect transactions in equity, debt and other securities, derivatives, loans, commodities, currencies, credit default swaps and/ or other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/ or instruments of FKP Property Group, its related entities and/or persons and entities with relationships with FKP Property Group and/ or its related entities. The underwriter and/ or its affiliates, or their respective officers, employees, consultants or agents may, from time to time, have long or short positions in, buy or sell (on a principal basis or otherwise), and may act as market makers in, the securities or derivatives, or serve as a director of any entities mentioned herein. The underwriter and/ or its affiliates currently hold, and may continue to hold, equity, debt and/ or related derivative securities of FKP Property Group and/ or its related entities.

None of the underwriter nor any of its related bodies corporate and affiliates, nor any of their respective directors, officers, partners, employees, representatives or agents make any recommendations as to whether you or your related parties should participate in the Entitlement Offer, nor do they make any representations or warranties to you (or other statements upon which you may rely) concerning this Entitlement Offer or any such information. The engagement of the underwriter by FKP Property Group is not intended to and does not create any agency, custodial, fiduciary or other legal relationship between the underwriter and any securityholder or other investor.

Page 3 of 3