Online Stockmarket Trading Update

Charter Hall Group (CHC) is pleased to announce that it has agreed to acquire the majority of Macquarie Group Limited’s core real estate management platform. This transaction involves Charter Hall acquiring the management business associated with two listed and three unlisted real estate funds for $108 million and the majority of Macquarie’s holding in three of these funds for $189 million. The acquisition positions Charter Hall as one of the largest specialist real estate fund managers in Australia, with assets under management in excess of $10 billion across listed, wholesale and unlisted retail equity sources. The Platform complements Charter Hall’s existing operations, enhancing the current vertically integrated business, resourced by an additional 155 property executives increasing total Charter Hall staff to 220 personnel. Charter Hall will be investing in and providing management services across the full spectrum of real estate investment and development activities.

Commenting on the Acquisition, Charter Hall’s Chairman, Kerry Roxburgh, said “We are very excited about the Acquisition and believe that the Platform represents a strong strategic fit with our existing business. This Acquisition is expected to be earnings accretive in FY11 and provides an excellent basis to grow and develop Charter Hall.” David Southon, Joint Managing Director of Charter Hall said “The Acquisition of a vertically integrated platform complements the existing business, providing substantial scale and significant growth potential. The combination of Charter Hall’s capabilities and the continuity of Macquarie’s management team will provide an enhanced offering to investors.” David Harrison, Joint Managing Director of Charter Hall added “The Acquisition of this well- resourced Platform enables Charter Hall to diversify its equity sources further without losing focus on our unlisted wholesale and retail business. The outlook for real estate has improved substantially and we believe the Acquisition of the Platform at an attractive point in the real estate cycle will deliver long term value for security holders, provide one of the largest specialist property teams in Australia across the risk/return spectrum and exploit the growth opportunities available in a recovering property market.”

As partial consideration for the management business, Macquarie will receive an $85 million placement at $0.70 per security, representing a 10% strategic interest in Charter Hall. In addition, the Gandel Group, an existing strategic investor in Charter Hall, has committed to be issued with up to $68 million under the Offer and will at a minimum maintain their 12.2% interest in Charter Hall. Charter Hall has agreed to purchase the majority of Macquarie’s core real estate management platform which comprises of the management of two listed and three unlisted real estate funds — Co-investment holdings in Macquarie Office Trust, Macquarie CountryWide Trust and Macquarie Direct Property Fund Real estate management business. Charter Hall is acquiring a well-resourced platform with employment offers being made to over 95% of Macquarie real estate executives involved in the management business.  The purchase price of $108 million for the funds management business represents an FY11 EBIT multiple of 7.7x and 1.5% of assets under management. In addition, a further $15 million may be payable subject to an earn-out. The Acquisition will provide immediate scale which will complement organic growth of Charter Hall’s funds management business. Benefits include positioning Charter Hall as one of Australia’s largest specialist real estate fund managers, with assets under management increasing to over $10 billion. It will diversify Charter Hall’s equity sources – along with providing access to listed equity and significantly increases exposure to core funds, etc.

Charter Hall Group is a property funds management and development company, based in Sydney with offices in Melbourne, Brisbane, Perth and Auckland.  It combines Charter Hall Limited with Charter Hall Property Trust, which will now own and/or manage over $10 billion in real estate assets.

www.charterhall.com.au