BDO Australian Listed Property Trust Survey 2006

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Introduction

Dear Colleagues, In tradition with previous years, BDO Corporate Finance is happy to present the twelfth edition of the BDO Listed Property Trust Survey (the Survey or 2006 Edition). Our in depth knowledge of and interest in the Australian listed and unlisted property trust sectors has established us as leading independent advisers to the industry. We remain committed to following and analysing the trends in both the Australian LPT sector and the growing global listed property market. This years Survey has the largest population in 12 years with a total of 48 entities included. The 2006 year has identified some interesting trends in the LPT Sector, notably some outstanding investment returns, sizeable revaluations of property assets and the continued increase in average gearing levels of trusts. The 2006 Edition has been improved where necessary to adapt to the impact of the new International Financial Reporting Standards and ensure that the Survey provides relevant insights into the performance and comparability across participants. This year we are also pleased to provide commentary and statistics on key global Real Estate Investment Trust (REIT) markets from BDOs International Property Experts. The development of some of these international markets regulatory and reporting requirements compared to the Australian LPT sector is still not at a stage where comparisons can be easily made across all regions. However, we have summarised key facts from international markets that provide food for thought on the potential impact of the development on the international REIT markets on Australian LPTs ability to continue to source international property assets. On behalf of our national Corporate Finance team, we hope you find this years report to be a valuable tool for benchmarking performance and stimulating your thinking about the future of the LPT sector in Australia. Best Regards,

Sebastian Stevens National Director Corporate Finance

BDO Global strength

BDO International is the worlds 5th largest accounting and advisory firm, with a presence in over 100 countries and more than 600 offices worldwide.

Our Corporate Finance team has established itself as an expert within the property sector (both listed and unlisted) and has provided services on over $15 billion worth of property transactions in the last five years. Beyond this, our national Corporate Finance team (of over 50 team members) provide an extensive range of services to the corporate sector and the investment community. These services include:

Independent expert reports Independent accountants reports Acquisition and vendor due diligence Corporate advisory Financial analysis and modelling Valuation services
Our corporate finance expertise has been recognised through our appointment onto various national valuation panels and advisory committees.

Index
1 2006 Top performers
Overall rankings Top performances by category Sector rankings Biggest movers

5
7 8 9 9

Qualification and criteria

The contenders Criteria and scoring summary Survey period Changes to the 2006 Edition Newcomers Small cap exclusions Other exclusions

11
12 13 13 14 15 15 15

General findings
Summary of performance measures and benchmarks LPT sector performance 2006 Year Financial criteria Investment criteria Gearing Weighted average interest rates Revaluations during year Weighted average lease expiry Location of assets The rise of stapled securities The final word on AIFRS for now Coming in 2007

17
18 19 20 21 22 23 23 24 25 26 27 27

4 5 6 7

International ReIT markets - BDOs global perspective Full rankings Detailed survey results explanation of criteria and ranking
Financial criteria Investment criteria Method of ranking

29 33 37 55
56 57 58

8 9

BDO Corporate Finance property expertise Disclaimer

Sources of information

61 64
64

2006 Top performers

2006 Top performers

Winners
Macquarie Leisure Trust Group two years in a row!
For the second consecutive year Macquarie Leisure Trust Group achieved the highest overall result in the Survey. Macquarie Leisure Trust Groups consistent performance in both the financial (2nd placing) and investment categories (4th placing) of the Survey contributed to its overall 1st placing. Macquarie Leisure Trust Group owns and operates a portfolio of entertainment assets including the Dreamworld theme park, the dAlbora Marinas and the AMF Bowling and Kingpin bowling centres. Several additional bowling centres were acquired during the year, with the group now operating a total of 50 bowling centres throughout Australia and New Zealand. The Groups performance highlights over the 2006 year included a 42% increase in the value of its key property asset, Dreamworld on the Gold Coast, based partly on the improved operational performance of the theme park. Dreamworld is now valued at $226 million, up from $159 million at 30 June 2005.

Macquarie Goodman Group outstanding investment returns!

Macquarie Goodman Group has improved on its 4th placing in the 2005 Survey to achieve 2nd place in the 2006 Survey. Macquarie Goodman was the top performer in the investment criteria of the Survey with a total rate of return in the year of 55.4% and a three year total return of 40.4%. In its first full financial year since the stapled Group was formed following the merger of Macquarie Goodman Management Limited and Macquarie Goodman Industrial Trust in February 2005, the Groups performance highlights included a substantial increase in profit after tax from $68 million to $500 million.

Babcock & Brown Japan Property Trust debuting at number three!

In its first year in the Survey, Babcock & Brown Japan Property Trust achieved top 10 placings in both the financial and investment categories, helping it to 3rd place overall. Babcock & Brown Japan Property Trust listed on the ASX in April 2005 with the Trust holding interests in a diversified portfolio of 12 office and retail properties located in central and greater Tokyo. During the year the Trust also undertook a substantial capital raising to fund the acquisition of interests in 20 further properties located throughout Japan.

BDO LISTED PROPERTY TRuST SuRvEY

Top 10
Rank
1 2 3 4 5 6 7 8 9 10

entity
Macquarie Leisure Trust Group Macquarie Goodman Group Babcock & Brown Japan Property Trust Aspen Group ING Real Estate Community Living Fund Centro Properties Group Charter Hall Group Australian Education Trust Rabinov Diversified Property Trust ALE Property Group

Sector
Hotel & leisure Industrial Diversified Diversified Commercial Retail Diversified Commercial Diversified Retail

Gross assets1 $m
458 6,753 1,142 352 550 5,162 505 255 238 754

1 Gross assets as at 30 June 2006.

The overall top 10 performers for the 30 June 2006 year include trusts from all five sectors and cover a range of sizes. The top 10 also includes two trusts making their debut in the 2006 Survey. Six of the trusts that achieved a top 10 result in 2005 make the top 10 again in 2006.

2006 Top performers

Category winners
Overall top three
Overall Macquarie Leisure Trust Group Macquarie Goodman Group Babcock & Brown Japan Property Trust 1 2 3

Ranking
Financial 2 11 7 Investment 4 1 2

Financial top three

1 2 3 Rubicon America Trust Macquarie Leisure Trust Group Rabinov Diversified Property Trust

Investment top three

1 2 3 Macquarie Goodman Group Babcock & Brown Japan Property Trust ING Real Estate Community Living Fund

BDO LISTED PROPERTY TRuST SuRvEY

Sector rankings
Commercial
1 2 3 ING Real Estate Community Living Fund Australian Education Trust Rubicon America Trust

Diversified
1 2 3 Babcock & Brown Japan Property Trust Aspen Group Charter Hall Group

Hotel & leisure

1 2 3 Macquarie Leisure Trust Group ING Real Estate Entertainment Trust Grand Hotel Group

Retail
1 2 3 Centro Properties Group ALE Property Group APN European Retail

Industrial
1 2 3 Macquarie Goodman Group Macquarie Prologis Trust ING Industrial Fund

Biggest movers
ING Real Estate Community Living Fund recorded the biggest rise in ranking during the year of those trusts included in the 2005 Survey. The Fund moved from 32nd placing in 2005 to 5th place in 2006, recording a 59% total return over the year and a 21% increase in net tangible assets per unit. Australian Education Trust also performed well, moving from 27th placing in 2005 to 8th place in 2006, on the back of a strong performance in the financial rankings including an operating cash yield of 13% and an increase in net tangible assets per unit of 35%.

Qualification and criteria

Qualification and criteria

The contenders
Size1
Abacus Property Group ALE Property Group APN/uKA European Retail Trust Aspen Group Australian Education Trust Babcock & Brown Japan Property Trust Bunnings Warehouse Property Trust Carindale Property Trust Centro Properties Group Centro Retail Trust CFS Retail Property Trust Challenger Wine Trust Charter Hall Group Commonwealth Property Office Fund DB RREEF Trust Galileo Shopping America Trust GPT Group Grand Hotel Group ING Industrial Fund ING Office Fund ING Real Estate Community Living Fund ING Real Estate Entertainment Fund Investa Property Group JF Meridian Trust Macquarie Countrywide Trust Macquarie DDR Trust Macquarie Goodman Group Macquarie Leisure Trust Group Macquarie Office Trust Macquarie Prologis Trust Mariner American Income Trust MFS Diversified Group Mirvac Group Mirvac Industrial Trust Rabinov Diversified Property Trust Reckson NY Property Trust Record Realty Rubicon America Trust Rubicon Europe Trust Group S8 Property Trust Stockland Trust Group Thakral Holdings Group Tishman Speyer Office Fund Trafalgar Corporate Group Trinity Consolidated valad Property Group Westfield Group Westpac Office Trust
1

Sector
Diversified Retail Retail Diversified Commercial Diversified Retail Retail Retail Retail Retail Industrial Diversified Commercial Diversified Retail Diversified Hotel & leisure Industrial Commercial Commercial Hotel & leisure Diversified Diversified Retail Retail Industrial Hotel & leisure Commercial Industrial Diversified Diversified Diversified Industrial Diversified Commercial Commercial Commercial Commercial Hotel & leisure Diversified Diversified Commercial Commercial Diversified Diversified Retail Commercial

1,163 754 1,005 352 255 1,142 732 373 5,162 2,326 5,324 296 505 2,890 8,288 1,185 12,275 554 2,855 2,575 550 262 5,901 1,094 3,062 1,383 6,753 458 4,052 1,219 326 314 6,055 995 238 226 790 1,212 732 115 9,599 1,094 1,118 342 235 1,053 46,233 1,144

Gross assets as at 30 June 2006.

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BDO LISTED PROPERTY TRuST SuRvEY

The 2006 Edition is based on the annual reports of Listed Property Trusts and Entities with balance dates up to and including 30 June 2006. Our source population for the 2006 Edition was taken from a review of all entities within the listed property trust sector of Australia as at 30 June 2006. Forty-eight entities with combined total assets of $147 billion have been included in the 2006 Edition. This compares to 34 entities with combined total assets of $113 billion in the 2005 Edition.

Criteria and scoring summary

Explanation of the criteria used in this Survey and methods of weighting and ranking is included at Section 7. A summary of the criteria for the 2006 Edition is as follows.
Total overall score of Survey Financial criteria Investment criteria Total overall Weighted score 2006 300 200 500

Survey period
The Survey only takes into account information disclosed in each entitys annual report for the year ended 30 June 2006. For those entities with 31 December year ends, half year reports to 30 June 2005 and 2006 have been used along with the annual report to 31 December 2005 to create comparable results for the year ended 30 June 2006.

13

Qualification and criteria

Changes to the 2006 Edition

In order to maintain relevance and comparability across all participants, we have made the following changes to the parameters of the Survey for 2006.

The increase in volatility to the income statements from a number of new accounting standards has meant the reported net income across the sector is not comparable without the need for significant adjustments. As a result, we have replaced our previous net income return measurement with an operating cash yield measurement. The operating cash yield measurements provide a guide as to how efficiently LPT managers are managing the entities assets and generating cash to fund distributions to unitholders. Full details of the operating cash yield measurement are included in Section 7. In the 2005 Survey we applied a weighting of 100 points to certain non-financial criteria including corporate governance and the quality and extent of information detailed on each trusts website. For the 2006 year we have excluded the non-financial criteria on the basis that there is now insufficient variance between each participants reported corporate governance measures and information published on the each trusts website to enable meaningful rankings for the non-financial criteria. We again reviewed each of these components for the 2006 year. Over 93% of the trusts surveyed now comply with all the ASX recommended Principles of Good Corporate Governance. 87% of the entities surveyed now also make a sufficient level of disclosure on their websites.

To ensure the Surveys weightings after the exclusion of non-financial criteria create a balanced distribution we have applied an increased weighting to the financial criteria components of the Survey (now 300 points vs. 200 points in 2005). Full details of weightings are included at Section 7.

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BDO LISTED PROPERTY TRuST SuRvEY

Newcomers
The following entities are newcomers into the 2006 Edition.

APN/uKA European Retail Trust Babcock and Brown Japan Property Trust Centro Retail Trust Charter Hall Group JF uS Industrial Trust Mariner American Income Trust MFS Diversified Group

Reckson New York Property Trust Record Realty S8 Property Trust Rubicon America Trust Rubicon Europe Trust Group Trafalgar Corporate Group Trinity Consolidated

The following trusts have changed names since the 2005 Survey.
Old name JF uS Industrial Trust CFS Gandel Retail Trust New name Mirvac Industrial Trust CFS Retail Property Trust Date of change September 2006 May 2006

Small cap exclusions

The market capitalisation criteria for inclusion in the Survey is entities greater than $50 million market capitalisation as at 30 June 2006. Accordingly entities with a market capitalisation of less than $50 million have been excluded from the 2006 Edition.

Other exclusions
The 2006 Edition also excludes other vehicles which are not structured in a manner comparable to traditional property trusts (e.g. direct ownership of property assets etc.) or stapled groups where the active development activities of the company are significantly greater than the stapled passive property trust. Each year the eligibility of participants for inclusion in the Survey is reassessed.

15

General findings

General findings

Summary of performance
Financial criteria Cash yield on weighted average net assets Distribution return on investment Tax advantaged distributions Movement in NTA Premium/(discount) to NTA High 14.95% 24.14% 100% 63.16% 141.26% Low -1.64% 4.28% 5.94% -19.53% -27.02% Median 7.39% 7.83% 46.6% 16.57% 12.84%

Investment criteria Total rate of return on investment (one year) Total rate of return on investment (three year) volume of trading on ASX

High 59.4% 58.20% 172.68%

Low -14.22% 0.68% 0.34%

Median 14.53% 17.3% 57.32%

Benchmark Gearing ratio Revaluation of opening property assets Weighted average interest rate on borrowings Average lease term to expiry

Average all participants 42.10% 7.10% 5.82% 7 years

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BDO LISTED PROPERTY TRuST SuRvEY

LPT sector performance 2006 year

The relative performance of the LPT sector (based on the S&P/ASX Property 200 index) compared to the ASX All Ordinaries for the year ended 30 June 2006 is set out below.
130 125 120 115

All Ordinaries against property trust index

Index

110 105 100 95 90 Jul 05 Aug 05 Sep 05 Oct 05 Nov 05 Dec 05 Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 S&P/ASX All Ordinaries S&P/ASX Property 200

The strong performance of the overall Australian share market throughout 2006, driven by exceptional performances by commodity stocks, has led to the differential between the LPT sector and All Ordinaries results from January 2006. This differential reached its peak in April 2006. The subsequent share market correction in May 2006 reduced this differential somewhat. Notwithstanding this differential, the LPT sector as a whole has continued to provide solid returns and growth for investors.

19

General findings

Financial criteria
The top performer in the financial criteria component of the Survey was Rubicon America Trust thanks mainly to a strong distribution return of 17%, an increase in net tangible assets per unit of 59% and a high tax advantaged component of distributions. Across the board there has been an improvement in the average results for the 2006 year compared to 2005 in the financial criteria. This has been supported by the significant increase in participants in the 2006 Survey and healthy revaluations and distribution increases.

Financial criteria Operating cash yield Distribution return on investment Tax advantaged distribution Movement in NTA Premium/(discount) to NTA

Average 2005 N/A 7.86% 49.93% 10.47% 17.07%

Average 2006 7.11% 8.25% 54.87% 17.08% 18.68%

Distribution of financial criteria scores

Lowest to highest rank

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BDO LISTED PROPERTY TRuST SuRvEY

Investment criteria
Macquarie Goodman Group was the stand out performer in the investment criteria component of the Survey recording a one year return of 54% and a three year return of 40%. ING Real Estate Community Living Fund, Charter Hall Group and Aspen Group also achieved one year returns of 59%, 53% and 52% respectively. Interestingly, the average one year returns for the 2006 Survey were slightly below 2005 results. Also average liquidity for 2006 was down from 2005 reflecting the greater number of capital raisings in the 2005. Given the number of new entities in the Survey over the last two years the three year return averages are not yet comparable.

Investment criteria One year return Liquidity

Average 2005 24.84% 107.25%

Average 2006 17.84% 63.57%

Distribution of investment criteria scores

Lowest to highest rank

21

General findings

Gearing
As in previous years surveys, we continue to track the gearing trends across the LPT sector. The 2006 Surveys average gearing across participants is 42.1%, an increase from 38.6% on the 2005 Survey and continuing the trend over previous years of increased gearing levels. This increase in gearing is despite revaluations of property assets across all sectors during the year. Accordingly, actual borrowings by LPTs have increased during the year by a greater percentage than the increase in gearing levels indicate. The average gearing across those trusts that listed during the year was 44%, confirming the increased appetite for borrowing that trusts currently have. We also observe that the more traditional property trusts generally have higher borrowings than the stapled groups and non-traditional property trusts and groups.

Total survey entities average gearing

50% 40% 30% 20% 10% 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year ended 30 June
19.23% 24.17% 26.76% 29.79% 29.95% 30.94% 38.57% 32.52% 42.10%

Gearing ratio by sector

46% 45% 44% 43% 42% 41% 40% 39% 38% 37% Overall average Retail Diversified Commercial Hotel & leisure Industrial

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BDO LISTED PROPERTY TRuST SuRvEY

Weighted average interest rates

The weighted average interest rate on borrowings reflects a number of factors including the lenders assessment of the borrowers risk and of the quality and location of assets securing the borrowings, and the borrowers gearing and interest coverage. The Hotel & leisure sector has the highest average interest rate on borrowings of the five sectors at 7%, perhaps reflecting the non-traditional property assets held in this sector, which may be viewed as more risky than the traditional property assets. In comparison the Retail sector, which has more traditional property assets, has an average interest rate on borrowings of 5%.
8% 7% 6% 5% 4% 3% 2% 1% 0% Overall average Retail Diversified Commercial Hotel & leisure Industrial

Weighted average interest rates by sector

Revaluations during year

Strong revaluations of property assets were recorded across the LPT market during the year ended 30 June 2006. All but four of the LPTs surveyed recorded increases in the value of their property assets held at 30 June 2005, with an average revaluation of property assets across the trusts surveyed of 7.1%. Our measure of revaluation was the increase in value of those properties that were owned by the respective trust at 30 June 2005. We have excluded where possible revaluations on properties purchased by the Trusts during the year ending 30 June 2006. The strongest performing sector in relation to revaluations was the Industrial sector which recorded average revaluations of 10%.
12% 10% 8% 6% 4% 2% 0%

Revaluation of opening property assets by sector

Overall average

Retail

Diversified

Commercial

Hotel & leisure

Industrial

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General findings

Weighted average lease expiry

The weighted average term to expiry for leases is a measure of the security and stability of future tenure and income; however a shorter term to expiry in some situations may be viewed as a positive as it allows for earlier rental re-negotiations to take advantage of any market movements. The Retail and Commercial sectors have the highest average terms to expiry, of 7.7 years, including several trusts with expiry terms of over 10 years, while the Industrial and Diversified sectors have average expiry terms of 5.2 and 5.3 years respectively. Given the nature of the property assets that make up the Hotel & leisure sector (including serviced apartments and hotels), the term to expiry calculation is not applicable.

Average lease expiry by sector

Years

9 8 7 6 5 4 3 2 1 0 Overall average Retail Diversified Commercial

N/A Hotel & leisure Industrial

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BDO LISTED PROPERTY TRuST SuRvEY

Location of assets
With almost 70% of investment grade properties in Australia held by institutions, traditional LPTs and stapled securities are looking offshore for quality assets to provide returns. As a result, the level of offshore assets held within Australian LPTs continues to grow. The 48 trusts surveyed have a combined total of $41 billion in property assets offshore. However, given the substantial increase in the value of Australian held property assets over the year (which is mostly attributable to property revaluations) the portion of total property asset values held in offshore investments has only increased from 35% to 36%. While American property assets have increased in dollar value from $27.4 billion to $32.7 billion since 30 June 2005, its portion of total property asset values has fallen from 28.8% to 28.1%. This is notwithstanding several new listings during the year of trusts specialising in American property investments. The American assets of Westfield account for approximately 57% of all Australian LPT American property assets, compared to 63% at 30 June 2005. At 30 June 2006 European property assets accounted for 4.7% of total property assets within the LPT sector, compared with 3.6% at 30 June 2005, reflecting the listings during 2005 of Rubicon Europe Trust Group and APN/uKA European Retail Trust. The increase in Asian property assets held by Australian LPTs from 0.1% at 30 June 2005 to 0.8% at 30 June 2006 is attributable to the listing of Babcock & Brown Japan Property Trust.

Location of property assets as at June 2005

Location of property assets as at June 2006

Australia 65%

uSA 29%

Australia 64%

uSA 28%

Europe 4% New Zealand 2% Asia 0%

Europe 5% New Zealand 2% Asia 1%

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General findings

The rise of stapled securities

Much has been written about the changes in the LPT sector over recent years, especially the rise of stapled securities. Stapled securities provide investors an interest in both property assets (trust units) as well as exposure to funds management and/or property development activities (company shares). Investment in the LPT sector is now more than a direct property investment. A number of stapled securities have a large exposure to property development activities which, whilst potentially being able to deliver greater returns, also carry a higher risk. Although we exclude any stapled security that generates the majority of income from development activity (such as Multiplex and Australand) the presence of stapled securities with significant fund management and property management activities continues to grow. A summary of the rise of stapled securities is shown below.

1988

1997

2000

2004

2006

Stockland Group becomes first stapled security on ASX

The manager and Trust of Centro Properties are stapled, starting a new trend amongst LPTs

Operations of companies stapled to property trusts now include funds management and property development

11 out of 44 entries in the 2004 LPT Survey are stapled

22 out of 48 entries in the 2006 LPT Survey are stapled

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BDO LISTED PROPERTY TRuST SuRvEY

The final word on AIFRS for now

The 30 June 2006 financial year saw the first complete year of reporting under the new Australian equivalents to International Financial Reporting Standards (AIFRS). As foreshadowed in our December 2005 half year Survey AIFRS has impacted the LPT sector primarily in the following key areas:

Accounting for revaluations through the income statement. Straight-lining of rental income over lease term for fixed rental increases. Changes to accounting for lease incentives. Classification of investment property vs. property, plant and equipment for operational assets (such as hotels etc.). Accounting for derivative investments. Deferred tax accounting treatment. Classification of trust units as debt or equity.

The AASB has released an Exposure Draft 150 Proposed Amendments to AASB 132 that is proposing unitholders funds of limited life entities be classified as equity, provided that they are part of the most subordinated class of equity. This could lead to the situation where trusts who are currently reflecting unitholders funds as debt, may in the future restate their comparatives to present it as equity.

So what has been the impact?

Six out of 48 trusts classified units as debt. Forty-four out of 48 trusts revalued properties during the year. volatility bought into reported earnings from impact of non-cash accounting adjustments.

Coming in 2007
A snapshot of those entities that have listed after 1 April 2006, and may be included in the 2007 Edition, is provided below.
entity Date of listing Sector Forecast distribution yield (annualised) 8.4% 10% 7.75% 8.75% Total assets at listing $mil 45.2 45.3 734.5 642.5 NTA per security at listing 0.97 2.35 0.80 0.96 Forecast tax advantaged % 85% Not disclosed 100% 50%

ING Real Estate Healthcare Fund Cheviot Kirribilly vineyard Property Group Multiplex Acumen Prime Property Fund Challenger Diversified Property Group

15 May 2006 18 May 2006

Commercial Industrial

15 September 2006 Commercial 23 October 2006 Diversified

Source: Relevant Product Disclosure Statements.

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BDOs global perspective

BDOs global perspective

International REIT markets

United Kingdom
We now have the long awaited UK-REIT, available from 1 January 2007, providing an alternative tax efficient vehicle to stimulate our market. At BDO, in addition to the listed companies preparing to convert to REIT status, we are working with a number of investors preparing to launch new opportunities.
Lynette Lackey, Partner, BDO Stoy Hayward

Given the development of Real Estate Investment Trust (REIT)/LPT markets globally, we are pleased to provide some key facts and commentary on various international markets. This gives some indication as to the global significance of the REIT/LPT markets and also enables some interesting comparisons with the Australian LPT market. Australia is the highest securitised property market internationally with almost 70% of investment grade properties held in the property trusts (listed and unlisted). This compares to 12% in the uS market and only 3% in Europe. As such there are significant growth opportunities in the international REIT markets.

United States
The REIT market in the United States has witnessed a strong period of growth over the past year. The REIT market has also been subject to an unusual amount of merger and acquisition activity. Providing inflationary risks remain controlled, expectations for the US REIT over the following year continue to be positive.
Stuart Eisenberg, Partner, BDO Seidman
Country Name Year of introduction Listed/unlisted Legal structure Australia LPT 1985 Either unit trust Belgium SICAFI 1995 Listed Limited liability company or limited partnership Effectively exempt Exempt up to 15% France SIIC 2003 Listed Limited liability company or limited partnership Exempt Generally exempt up to 25%

entity tax treatment Property income entity tax treatment Capital gain entity tax treatment Withholding tax

Exempt Exempt up to 48.5%

Germany
After years of intensive discussion finally the German REIT comes to life. As of January 2007 a new bill will make it possible to create publicly traded real estate investment trusts. As BDO has a vast experience in servicing property companies in Germany we will support our clients in the area of REITS as well.
Wolfram Bartuschka, Partner, BDO DWT AG

Conversion cost

N/A

Latent gains taxed at 16.995% 50% limited

Latent gains taxed at 16.5% unlimited, new thin capitalisation rules to apply as from 1 January 2007 Income and gains taxable Broadly taxable 85% of income and 50% of gains Most listed property companies have converted to SIICs

Gearing (typical)

unlimited but thin capitalisation rules may apply Income and capital gains taxed at 30% Income taxable, 50% discount for gains 100% net of any tax

Netherlands
Netherlands is looking forward to high investor demand in its REIT market (BI) over the next year and beyond. The major issue facing the BI is the lack of quality product, particularly office buildings. We are looking forward to the arrival of the REIT markets in the UK and Germany which is likely to lead to increased investor interest in our sector.
Hans Noordermeer, Partner, BDO CampsObers 30
BDO LISTED PROPERTY TRuST SuRvEY

Local investor tax treatment Corporate Local investor tax treatment Individual Distribution requirements

Income and gains taxable Generally exempt 80% of net income profit Subject to strict supervision

Comments

Less efficient for overseas investors

Our BDO Global Property and Real Estate experts have provided us with their views of their respective markets and likely developments over the coming year. We have also provided a comparison of the key investment attributes of the developing international REIT markets. As these markets develop and comparable data becomes available our BDO International Offices will produce similar local surveys to BDOs Australian Listed Property Trust Survey and will enable more meaningful international comparisons with our Survey in future years.

Japan J-REIC 2000 Either Special purpose company Exempt Exempt 020% (depending on the investors) N/A

Netherlands BI 1969 Either Limited liability company or unit trust Taxed at 0% Exempt 25% (subject to treaty)

UK uK-REIT 2007 Listed Limited company

USA REIT 1960 Either Any domestic corporation Taxed on retained income only Taxed on retained gains only

Hong Kong H-REIT 2003 Listed unit trust

Singapore S-REIT 2002 Listed unit trust or mutual fund Effectively exempt if income distributed Exempt Generally exempt

Exempt Exempt

Subject to property tax Exempt Exempt

22% (subject to treaty) 35% on gains; <31% or 0% (certain uK gross on interest and rents funds) (subject to treaty) 2% of gross market value Maximum fixed by 1.25:1 rental income over interest Generally taxable Generally taxable 90% of taxable rental income only excluding gains Latent gains taxable but may be deferred

Latent gains taxed in full 60% of real estate assets, 20% other

N/A

N/A

unlimited, but only for qualified lenders

unlimited by regulation 35% of gross asset but typically 4060% value

35% of gross asset value unless A credit rating Income taxed at 20% Generally exempt 90% net of any tax

Taxable Taxable 90% or more of distributable income Subject to strict supervision

Income and gains taxable Generally taxable on deemed income 100% of taxable profit

Generally taxable Generally taxable 90% of taxable income

Income tax exempt Generally exempt 90% net of any tax

Relatively lightly Introduced by Finance regulated in real estate Bill 2006, launch date market 1 January 2007

Real estate investment portfolios increasingly international

Sector still in development phase

Minimum asset size of S$20m to list

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Full rankings

Full rankings

34

BDO LISTED PROPERTY TRuST SuRvEY

2006 Placing
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

2005 Placing
1 4 N/A 2 32 5 N/A 27 9 8 N/A N/A 28 21 25 N/A N/A 15 N/A N/A 13 23 26 12 10 22 N/A 20 17 24 7 16 3 N/A 19 33 34 29 11 18 31 14 N/A 6 N/A N/A 30 N/A Macquarie Leisure Trust Group Macquarie Goodman Group Babcock & Brown Japan Property Trust Aspen Group ING Real Estate Community Living Fund Centro Properties Group Charter Hall Group Australian Education Trust Rabinov Diversified Property Trust ALE Property Group Rubicon America Trust APN/uKA European Retail Property Trust Mirvac Group Macquarie Office Trust GPT Group MFS Diversified Group Rubicon Europe Trust Group Stockland Trust Group Centro Retail Trust Reckson NY Property Trust Abacus Property Group Thakral Holdings Group Tishman Speyer Office Fund DB RREEF Trust Macquarie Prologis Trust ING Office Fund Trinity Consolidated Commonwealth Property Office Fund Macquarie DDR Trust ING Real Estate Entertainment Fund Westfield Group ING Industrial Fund valad Property Group JF uS Industrial Trust CFS Retail Property Trust Carindale Property Trust Westpac Office Trust Investa Property Group Galileo Shopping America Trust Macquarie Countrywide Trust Grand Hotel Group Bunnings Warehouse Property Trust Mariner American Income Trust JF Meridian Trust S8 Property Trust Record Realty Challenger Wine Trust Trafalgar Corporate Group

Financial Ranking
2 11 7 4 19 8 18 5 3 13 1 10 24 12 30 23 21 44 20 39 22 9 40 27 14 28 47 33 25 15 17 31 38 16 37 41 6 43 42 26 29 34 36 32 46 48 35 45

Investment Ranking
4 1 2 6 3 9 5 27 32 11 43 17 10 29 12 15 20 7 24 13 22 41 14 21 33 23 8 18 31 38 34 30 26 40 28 19 46 16 25 36 39 35 42 45 44 37 48 47

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Detailed survey results

Detailed survey results

Operating cash yield

Result
Abacus Property Group ALE Property Group APN/uKA European Retail Trust Aspen Group Australian Education Trust Babcock & Brown Japan Property Trust Bunnings Warehouse Property Trust Carindale Property Trust Centro Properties Group Centro Retail Trust CFS Retail Property Trust Challenger Wine Trust Charter Hall Group Commonwealth Property Office Fund DB RREEF Trust Galileo Shopping America Trust GPT Group Grand Hotel Group ING Industrial Fund ING Office Fund ING Real Estate Community Living Fund ING Real Estate Entertainment Fund Investa Property Group JF Meridian Trust JF uS Industrial Trust Macquarie Countrywide Trust Macquarie DDR Trust Macquarie Goodman Group Macquarie Leisure Trust Group Macquarie Office Trust Macquarie Prologis Trust Mariner American Income Trust MFS Diversified Group Mirvac Group Rabinov Diversified Property Trust Reckson NY Property Trust Record Realty Rubicon America Trust Rubicon Europe Trust Group S8 Property Trust Stockland Trust Group Thakral Holdings Group Tishman Speyer Office Fund Trafalgar Corporate Group Trinity Consolidated valad Property Group Westfield Group Westpac Office Trust 10% 8% 8% 13% 13% 7% 8% 6% 8% 6% 7% 9% 9% 7% 8% 3% 7% 7% 6% 8% 5% 9% 6% 7% 11% 8% 8% 8% 15% 10% 9% 4% 0% 9% 12% 1% -2% 7% 7% 4% 2% 14% 5% 1% 2% 4% 7% 7%

Rank
7 15 18 4 3 28 19 33 16 34 32 13 9 25 22 42 31 27 35 21 38 11 36 30 6 20 17 14 1 8 12 40 47 10 5 45 48 26 24 41 43 2 37 46 44 39 29 23

38

BDO LISTED PROPERTY TRuST SuRvEY

Macquarie Leisure Trust Group Thakral Holdings Group Australian Education Trust Aspen Group Rabinov Diversified Property Trust JF US Industrial Trust Abacus Property Group Macquarie Office Trust Charter Hall Group Mirvac Group ING Real Estate Entertainment Fund Macquarie Prologis Trust Challenger Wine Trust Macquarie Goodman Group ALE Property Group Centro Properties Group Macquarie DDR Trust APN/UKA European Retail Bunnings Warehouse Property Trust Macquarie Countrywide Trust ING Office Fund DB RREEF Trust Westpac Office Trust Rubicon Europe Trust Group Commonwealth Property Office Fund Rubicon America Trust Grand Hotel Group Babcock & Brown Japan Property Trust Westfield Group JF Meridian Trust GPT Group CFS Retail Property Trust Carindale Property Trust Centro Retail Trust ING Industrial Fund Investa Property Group Tishman Speyer Office Fund ING Real Estate Community Living Fund Valad Property Group Mariner American Income Trust S8 Property Trust Galileo Shopping America Trust Stockland Trust Group Trinity Consolidated Reckson NY Property Trust Trafalgar Corporate Group MFS Diversified Group Record Realty
-4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0%

39

Detailed survey results

Distribution return on investment

Result
Abacus Property Group ALE Property Group APN/uKA European Retail Trust Aspen Group Australian Education Trust Babcock & Brown Japan Property Trust Bunnings Warehouse Property Trust Carindale Property Trust Centro Properties Group Centro Retail Trust CFS Retail Property Trust Challenger Wine Trust Charter Hall Group Commonwealth Property Office Fund DB RREEF Trust Galileo Shopping America Trust GPT Group Grand Hotel Group ING Industrial Fund ING Office Fund ING Real Estate Community Living Fund ING Real Estate Entertainment Fund Investa Property Group JF Meridian Trust JF uS Industrial Trust Macquarie Countrywide Trust Macquarie DDR Trust Macquarie Goodman Group Macquarie Leisure Trust Group Macquarie Office Trust Macquarie Prologis Trust Mariner American Income Trust MFS Diversified Group Mirvac Group Rabinov Diversified Property Trust Reckson NY Property Trust Record Realty Rubicon America Trust Rubicon Europe Trust Group S8 Property Trust Stockland Trust Group Thakral Holdings Group Tishman Speyer Office Fund Trafalgar Corporate Group Trinity Consolidated valad Property Group Westfield Group Westpac Office Trust 8% 7% 8% 8% 9% 6% 6% 7% 14% 8% 6% 11% 8% 7% 8% 9% 7% 5% 7% 8% 9% 8% 8% 8% 7% 8% 9% 6% 6% 8% 9% 10% 24% 8% 8% 4% 12% 17% 5% 9% 6% 8% 8% 10% 5% 8% 6% 7%

Rank
19 34 14 17 10 42 40 37 3 26 43 5 27 31 25 11 35 47 33 28 13 20 22 21 32 23 12 44 41 15 8 7 1 29 16 48 4 2 46 9 38 18 24 6 45 30 39 36

40

BDO LISTED PROPERTY TRuST SuRvEY

MFS Diversified Group Rubicon America Trust Centro Properties Group Record Realty Challenger Wine Trust Trafalgar Corporate Group Mariner American Income Trust Macquarie Prologis Trust S8 Property Trust Australian Education Trust Galileo Shopping America Trust Macquarie DDR Trust ING Real Estate Community Living Fund APN/UKA European Retail Trust Macquarie Office Trust Rabinov Diversified Property Trust Aspen Group Thakral Holdings Group Abacus Property Group ING Real Estate Entertainment Fund JF Meridian Trust Investa Property Group Macquarie Countrywide Trust Tishman Speyer Office Fund DB RREEF Trust Centro Retail Trust Charter Hall Group ING Office Fund Mirvac Group Valad Property Group Commonwealth Property Office Fund JF US Industrial Trust ING Industrial Fund ALE Property Group GPT Group Westpac Office Trust Carindale Property Trust Stockland Trust Group Westfield Group Bunnings Warehouse Property Trust Macquarie Leisure Trust Group Babcock & Brown Japan Property Trust CFS Retail Property Trust Macquarie Goodman Group Trinity Consolidated Rubicon Europe Trust Group Grand Hotel Group Reckson NY Property Trust
0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

41

Detailed survey results

Tax advantaged distributions

Result
Abacus Property Group ALe Property Group APN/uKA European Retail Trust Aspen Group Australian Education Trust Babcock & Brown Japan Property Trust Bunnings Warehouse Property Trust Carindale Property Trust Centro Properties Group Centro Retail Trust CFS Retail Property Trust Challenger Wine Trust Charter Hall Group Commonwealth Property Office Fund DB RREEF Trust Galileo Shopping America Trust GPT Group Grand Hotel Group ING Industrial Fund ING Office Fund ING Real estate Community Living Fund ING Real Estate Entertainment Fund Investa Property Group JF Meridian Trust JF uS Industrial Trust Macquarie Countrywide Trust Macquarie DDR Trust Macquarie Goodman Group Macquarie Leisure Trust Group Macquarie Office Trust Macquarie Prologis Trust Mariner American Income Trust MFS Diversified Group Mirvac Group Rabinov Diversified Property Trust Reckson NY Property Trust Record Realty Rubicon America Trust Rubicon europe Trust Group S8 Property Trust Stockland Trust Group Thakral Holdings Group Tishman Speyer Office Fund Trafalgar Corporate Group Trinity Consolidated valad Property Group Westfield Group Westpac Office Trust 6% 100% 87% 47% 25% 100% 24% 31% 35% 87% 43% 28% 39% 42% 51% 45% N/A 100% 44% 44% 100% 70% 17% 60% 46% 54% 55% 24% 35% 58% 33% 100% 36% 18% 85% 96% 47% 98% 100% 47% 26% 48% 72% 79% N/A 30% 31% 100%

Rank
48 1 10 26 43 1 44 39 35 11 31 41 33 32 20 28 24 1 30 29 1 15 47 16 27 19 18 45 36 17 37 1 34 46 12 9 22 8 1 22 42 21 14 13 24 40 38 1

42

BDO LISTED PROPERTY TRuST SuRvEY

Westpac Office Trust Rubicon Europe Trust Group Mariner American Income Trust ING Real Estate Community Living Fund Grand Hotel Group Babcock & Brown Japan Property Trust ALE Property Group Rubicon America Trust Reckson NY Property Trust APN/UKA European Retail Trust Centro Retail Trust Rabinov Diversified Property Trust Trafalgar Corporate Group Tishman Speyer Office Fund ING Real Estate Entertainment Fund JF Meridian Trust Macquarie Office Trust Macquarie DDR Trust Macquarie Countrywide Trust DB RREEF Trust Thakral Holdings Group S8 Property Trust Record Realty Trinity Consolidated GPT Group Aspen Group JF US Industrial Trust Galileo Shopping America Trust ING Office Fund ING Industrial Fund CFS Retail Property Trust Commonwealth Property Office Fund Charter Hall Group MFS Diversified Group Centro Properties Group Macquarie Leisure Trust Group Macquarie Prologis Trust Westfield Group Carindale Property Trust Valad Property Group Challenger Wine Trust Stockland Trust Group Australian Education Trust Bunnings Warehouse Property Trust Macquarie Goodman Group Mirvac Group Investa Property Group Abacus Property Group
0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%

43

Detailed survey results

Movement in NTA per unit

Result
Abacus Property Group ALE Property Group APN/uKA European Retail Trust Aspen Group Australian Education Trust Babcock & Brown Japan Property Trust Bunnings Warehouse Property Trust Carindale Property Trust Centro Properties Group Centro Retail Trust CFS Retail Property Trust Challenger Wine Trust Charter Hall Group Commonwealth Property Office Fund DB RREEF Trust Galileo Shopping America Trust GPT Group Grand Hotel Group ING Industrial Fund ING Office Fund ING Real Estate Community Living Fund ING Real Estate Entertainment Fund Investa Property Group JF Meridian Trust JF uS Industrial Trust Macquarie Countrywide Trust Macquarie DDR Trust Macquarie Goodman Group Macquarie Leisure Trust Group Macquarie Office Trust Macquarie Prologis Trust Mariner American Income Trust MFS Diversified Group Mirvac Group Rabinov Diversified Property Trust Reckson NY Property Trust Record Realty Rubicon America Trust Rubicon Europe Trust Group S8 Property Trust Stockland Trust Group Thakral Holdings Group Tishman Speyer Office Fund Trafalgar Corporate Group Trinity Consolidated valad Property Group Westfield Group Westpac Office Trust 12% 22% 27% 35% 23% 29% 8% 27% 1% 28% 13% 0% 15% 8% 19% 18% 13% 25% 19% 19% 22% 9% 2% 6% 9% 11% 9% -20% 37% 20% 21% 0% 20% 7% 45% 14% 24% 59% 21% -1% 14% 19% 8% 4% 0% 13% 25% 63%

Rank
31 14 8 5 13 6 36 9 43 7 30 44 25 37 23 24 28 10 21 22 15 33 42 40 35 32 34 48 4 18 16 46 19 39 3 26 12 2 17 47 27 20 38 41 44 29 11 1

44

BDO LISTED PROPERTY TRuST SuRvEY

Westpac Office Trust Rubicon America Trust Rabinov Diversified Property Trust Macquarie Leisure Trust Group Aspen Group Babcock & Brown Japan Property Trust Centro Retail Trust APN/UKA European Retail Trust Carindale Property Trust Grand Hotel Group Westfield Group Record Realty Australian Education Trust ALE Property Group ING Real Estate Community Living Fund Macquarie Prologis Trust Rubicon Europe Trust Group Macquarie Office Trust MFS Diversified Group Thakral Holdings Group ING Industrial Fund ING Office Fund DB RREEF Trust Galileo Shopping America Trust Charter Hall Group Reckson NY Property Trust Stockland Trust Group GPT Group Valad Property Group CFS Retail Property Trust Abacus Property Group Macquarie Countrywide Trust ING Real Estate Entertainment Fund Macquarie DDR Trust JF US Industrial Trust Bunnings Warehouse Property Trust Commonwealth Property Office Fund Tishman Speyer Office Fund Mirvac Group JF Meridian Trust Trafalgar Corporate Group Investa Property Group Centro Properties Group Challenger Wine Trust Trinity Consolidated Mariner American Income Trust S8 Property Trust Macquarie Goodman Group
-20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

45

Detailed survey results

Average market price vs. average NTA

(premium/discount)
Result
Abacus Property Group ALE Property Group APN/uKA European Retail Trust Aspen Group Australian Education Trust Babcock & Brown Japan Property Trust Bunnings Warehouse Property Trust Carindale Property Trust Centro Properties Group Centro Retail Trust CFS Retail Property Trust Challenger Wine Trust Charter Hall Group Commonwealth Property Office Fund DB RREEF Trust Galileo Shopping America Trust GPT Group Grand Hotel Group ING Industrial Fund ING Office Fund ING Real Estate Community Living Fund ING Real Estate Entertainment Fund Investa Property Group JF Meridian Trust JF uS Industrial Trust Macquarie Countrywide Trust Macquarie DDR Trust Macquarie Goodman Group Macquarie Leisure Trust Group Macquarie Office Trust Macquarie Prologis Trust Mariner American Income Trust MFS Diversified Group Mirvac Group Rabinov Diversified Property Trust Reckson NY Property Trust Record Realty Rubicon America Trust Rubicon Europe Trust Group S8 Property Trust Stockland Trust Group Thakral Holdings Group Tishman Speyer Office Fund Trafalgar Corporate Group Trinity Consolidated valad Property Group Westfield Group Westpac Office Trust 24% 0% 11% 26% 49% 55% 23% -14% 73% -9% 16% -11% 16% 10% 0% 16% 24% -27% 17% 6% 11% 11% 14% 5% 3% 7% -1% 141% 62% 17% 20% 8% -1% 26% 12% 51% -13% 19% -6% 8% 50% -12% -5% 9% 45% 47% 54% 14%

Rank
14 38 26 12 8 4 15 47 2 43 20 44 21 29 37 22 13 48 19 34 27 28 23 35 36 33 39 1 3 18 16 32 40 11 25 6 46 17 42 31 7 45 41 30 10 9 5 24

46

BDO LISTED PROPERTY TRuST SuRvEY

Macquarie Goodman Group Centro Properties Group Macquarie Leisure Trust Group Babcock & Brown Japan Property Trust Westfield Group Reckson NY Property Trust Stockland Trust Group Australian Education Trust Valad Property Group Trinity Consolidated Mirvac Group Aspen Group GPT Group Abacus Property Group Bunnings Warehouse Property Trust Macquarie Prologis Trust Rubicon America Trust Macquarie Office Trust ING Industrial Fund CFS Retail Property Trust Charter Hall Group Galileo Shopping America Trust Investa Property Group Westpac Office Trust Rabinov Diversified Property Trust APN/UKA European Retail Trust ING Real Estate Community Living Fund ING Real Estate Entertainment Fund Commonwealth Property Office Fund Trafalgar Corporate Group S8 Property Trust Mariner American Income Trust Macquarie Countrywide Trust ING Office Fund JF Meridian Trust JF US Industrial Trust DB RREEF Trust ALE Property Group Macquarie DDR Trust MFS Diversified Group Tishman Speyer Office Fund Rubicon Europe Trust Group Centro Retail Trust Challenger Wine Trust Thakral Holdings Group Record Realty Carindale Property Trust Grand Hotel Group
-40.0% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0%

47

Detailed survey results

One year total return

Result
Abacus Property Group ALE Property Group APN/uKA European Retail Trust Aspen Group Australian Education Trust Babcock & Brown Japan Property Trust Bunnings Warehouse Property Trust Carindale Property Trust Centro Properties Group Centro Retail Trust CFS Retail Property Trust Challenger Wine Trust Charter Hall Group Commonwealth Property Office Fund DB RREEF Trust Galileo Shopping America Trust GPT Group Grand Hotel Group ING Industrial Fund ING Office Fund ING Real estate Community Living Fund ING Real Estate Entertainment Fund Investa Property Group JF Meridian Trust JF uS Industrial Trust Macquarie Countrywide Trust Macquarie DDR Trust Macquarie Goodman Group Macquarie Leisure Trust Group Macquarie Office Trust Macquarie Prologis Trust Mariner American Income Trust MFS Diversified Group Mirvac Group Rabinov Diversified Property Trust Reckson NY Property Trust Record Realty Rubicon America Trust Rubicon Europe Trust Group S8 Property Trust Stockland Trust Group Thakral Holdings Group Tishman Speyer Office Fund Trafalgar Corporate Group Trinity Consolidated valad Property Group Westfield Group Westpac Office Trust 25% 39% 17% 52% 22% 49% 12% 28% 31% 15% 18% -14% 53% 18% 16% 7% 27% 8% 14% 19% 59% 13% 22% 4% 2% 3% 3% 55% 35% 14% 5% 7% 31% 31% 22% 25% 15% 1% 2% 8% 35% 6% 14% -14% 44% 10% 4% -10%

Rank
15 7 23 4 19 5 31 13 12 26 22 47 3 21 24 36 14 34 28 20 1 30 17 40 43 42 41 2 9 27 38 35 10 11 18 16 25 45 44 33 8 37 29 48 6 32 39 46

48

BDO LISTED PROPERTY TRuST SuRvEY

ING Real Estate Community Living Fund Macquarie Goodman Group Charter Hall Group Aspen Group Babcock & Brown Japan Property Trust Trinity Consolidated ALE Property Group Stockland Trust Group Macquarie Leisure Trust Group MFS Diversified Group Mirvac Group Centro Properties Group Carindale Property Trust GPT Group Abacus Property Group Reckson NY Property Trust Investa Property Group Rabinov Diversified Property Trust Australian Education Trust ING Office Fund Commonwealth Property Office Fund CFS Retail Property Trust APN/UKA European Retail Trust DB RREEF Trust Record Realty Centro Retail Trust Macquarie Office Trust ING Industrial Fund Tishman Speyer Office Fund ING Real Estate Entertainment Fund Bunnings Warehouse Property Trust Valad Property Group S8 Property Trust Grand Hotel Group Mariner American Income Trust Galileo Shopping America Trust Thakral Holdings Group Macquarie Prologis Trust Westfield Group JF Meridian Trust Macquarie DDR Trust Macquarie Countrywide Trust JF US Industrial Trust Rubicon Europe Trust Group Rubicon America Trust Westpac Office Trust Challenger Wine Trust Trafalgar Corporate Group
-20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

49

Detailed survey results

Three year total return

Result
Abacus Property Group ALE Property Group APN/uKA European Retail Trust Aspen Group Australian Education Trust Babcock & Brown Japan Property Trust Bunnings Warehouse Property Trust Carindale Property Trust Centro Properties Group Centro Retail Trust CFS Retail Property Trust Challenger Wine Trust Charter Hall Group Commonwealth Property Office Fund DB RREEF Trust Galileo Shopping America Trust GPT Group Grand Hotel Group ING Industrial Fund ING Office Fund ING Real Estate Community Living Fund ING Real Estate Entertainment Fund Investa Property Group JF Meridian Trust JF uS Industrial Trust Macquarie Countrywide Trust Macquarie DDR Trust Macquarie Goodman Group Macquarie Leisure Trust Group Macquarie Office Trust Macquarie Prologis Trust Mariner American Income Trust MFS Diversified Group Mirvac Group Rabinov Diversified Property Trust Reckson NY Property Trust Record Realty Rubicon America Trust Rubicon Europe Trust Group S8 Property Trust Stockland Trust Group Thakral Holdings Group Tishman Speyer Office Fund Trafalgar Corporate Group Trinity Consolidated valad Property Group Westfield Group Westpac Office Trust 19% N/A N/A N/A N/A N/A 17% 22% 30% N/A 19% 1% N/A 13% N/A N/A 22% 28% 17% 16% N/A N/A 12% 13% N/A 12% N/A 40% 58% 16% 7% N/A N/A 7% N/A N/A 11% N/A N/A N/A 19% 20% N/A N/A N/A 20% N/A N/A

Rank
11 14 14 14 14 14 12 6 3 14 10 48 14 41 14 14 5 4 13 39 14 14 43 42 14 44 14 2 1 40 46 14 14 47 14 14 45 14 14 14 9 7 14 14 14 8 14 14

50

BDO LISTED PROPERTY TRuST SuRvEY

Macquarie Leisure Trust Group Macquarie Goodman Group Centro Properties Group Grand Hotel Group GPT Group Carindale Property Trust Thakral Holdings Group Valad Property Group Stockland Trust Group CFS Retail Property Trust Abacus Property Group Bunnings Warehouse Property Trust ING Industrial Fund Westpac Office Trust Westfield Group Trinity Consolidated Trafalgar Corporate Group Tishman Speyer Office Fund S8 Property Trust Rubicon Europe Trust Group Rubicon America Trust Reckson NY Property Trust Rabinov Diversified Property Trust MFS Diversified Trust Mariner American Income Trust Macquarie DDR Trust JF US Industrial Trust ING Real Estate Entertainment Fund ING Real Estate Community Living Fund Galileo Shopping America Trust DB RREEF Trust Charter Hall Group Centro Retail Trust Babcock & Brown Japan Property Trust Australian Education Trust Aspen Group APN European Retail ALE Property Group ING Office Fund Macquarie Office Trust Commonwealth Property Office Fund JF Meridian Trust Investa Property Group Macquarie Countrywide Trust Record Realty Macquarie Prologis Trust Mirvac Group Challenger Wine Trust
0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00%

51

Detailed survey results

Volume of trading on ASX (liquidity)

Result
Abacus Property Group ALE Property Group APN/uKA European Retail Trust Aspen Group Australian Education Trust Babcock & Brown Japan Property Trust Bunnings Warehouse Property Trust Carindale Property Trust Centro Properties Group Centro Retail Trust CFS Retail Property Trust Challenger Wine Trust Charter Hall Group Commonwealth Property Office Fund DB RREEF Trust Galileo Shopping America Trust GPT Group Grand Hotel Group ING Industrial Fund ING Office Fund ING Real Estate Community Living Fund ING Real Estate Entertainment Fund Investa Property Group JF Meridian Trust JF uS Industrial Trust Macquarie Countrywide Trust Macquarie DDR Trust Macquarie Goodman Group Macquarie Leisure Trust Group Macquarie Office Trust Macquarie Prologis Trust Mariner American Income Trust MFS Diversified Group Mirvac Group Rabinov Diversified Property Trust Reckson NY Property Trust Record Realty Rubicon America Trust Rubicon europe Trust Group S8 Property Trust Stockland Trust Group Thakral Holdings Group Tishman Speyer Office Fund Trafalgar Corporate Group Trinity Consolidated valad Property Group Westfield Group Westpac Office Trust 28% 26% 102% 35% 43% 108% 30% 12% 67% 89% 55% 25% 53% 98% 91% 132% 85% 19% 76% 69% 59% 18% 90% 13% 70% 98% 135% 55% 40% 82% 125% 20% 27% 115% 0% 94% 30% 53% 173% 1% 80% 23% 155% 26% 27% 108% 80% 12%

Rank
34 38 9 31 29 7 33 46 23 15 25 39 27 10 13 4 16 42 20 22 24 43 14 44 21 11 3 26 30 17 5 41 36 6 48 12 32 28 1 47 19 40 2 37 35 8 18 45

52

BDO LISTED PROPERTY TRuST SuRvEY

Rubicon Europe Trust Group Tishman Speyer Office Fund Macquarie DDR Trust Galileo Shopping America Trust Macquarie Prologis Trust Mirvac Group Babcock & Brown Japan Property Trust Valad Property Group APN European Retail Commonwealth Property Office Fund Macquarie Countrywide Trust Reckson NY Property Trust DB RREEF Trust Investa Property Group Centro Retail Trust GPT Group Macquarie Office Trust Westfield Group Stockland Trust Group ING Industrial Fund JF US Industrial Trust ING Office Fund Centro Properties Group ING Real Estate Community Living Fund CFS Retail Property Trust Macquarie Goodman Group Charter Hall Group Rubicon America Trust Australian Education Trust Macquarie Leisure Trust Group Aspen Group Record Realty Bunnings Warehouse Property Trust Abacus Property Group Trinity Consolidated MFS Diversified Group Trafalgar Corporate Group ALE Property Group Challenger Wine Trust Thakral Holdings Group Mariner American Income Trust Grand Hotel Group ING Real Estate Entertainment Fund JF Meridian Trust Westpac Office Trust Carindale Property Trust S8 Property Trust Rabinov Diversified Property Trust
0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0% 180.0%

53

Explanation of criteria and ranking

Explanation of criteria and ranking

Financial criteria
Operating cash yield
Calculated by dividing operating cashflow by the total of weighted average shareholders/unitholders funds and the simple average of reserves and any undistributed income. The financial year end of the entity has been used in all cases, except for 31 December entities where 30 June 2006 figures have been sourced from half year reports.

Distribution return on investment

Calculated by dividing the distribution per ordinary share/unit paid for the entitys financial year by the average of the market price of ordinary shares/units in the entity. The average market price calculated on a daily closing price basis with prices sourced from Bloomberg. Where accounts have been prepared for a period of less than one year, the distribution has been annualised.

Tax advantaged distribution component

The total percentage of the distribution from each entity which is tax deferred. Where this information was not disclosed in the annual report, BDO attempted to obtain the detail required from other sources.

Average market price vs. average Net Tangible Assets per security (premium/discount to NTA)
Calculated by subtracting the average net tangible assets per security from the average market price per security, and dividing this by the average Net Tangible Assets per security. We have ranked this criteria with entities trading at a premium to NTA as the highest ranking.

56

BDO LISTED PROPERTY TRuST SuRvEY

Movement in Net Tangible Assets per security

Calculated by assessing the percentage increase (or decrease) in Net Tangible Assets (NTA) per security over the entities financial year by using the opening and closing figures for NTA per security. Where entities were listed during the year, BDO has assessed the opening NTA as being equal to the opening issue price. In all cases the financial year end of the entity has been used, except for 31 December year ends where we have used NTA per unit from the 30 June 2003 and 2006 half year reports.

Investment criteria
Total rate of return on investment
This measure, over both the one year and three years ended 30 June 2006, records both the income return (i.e. distributions) and capital appreciation (i.e. movement in market price). Information sourced from uBS and Bloomberg has been used to compile this criteria. Entities which have traded for less than three years have been awarded the median result for this measure and subsequently ranked accordingly.

Volume of trading on ASX (liquidity)

This liquidity measure is expressed as a percentage, and is calculated by dividing the total volume of units traded in each entity for the year ended 30 June 2006 by the weighted average total units on issue. This provides an indication of relative liquidity, irrespective of entity size.

57

Explanation of criteria and ranking

Method of ranking
A total score of 500 (maximum) has been used, comprising 300 points for all financial criteria and 200 points for all investment criteria. In determining the final rankings the scores on each component were aggregated (not the rankings) such that relative performances within each criterion are maintained in determining the overall rankings.

Financial criteria
The tests used in the financial criteria and assigned weightings are as follows.
Financial criteria Operating cash yield Distribution return on investment Tax advantaged distributions Average market price vs. NTA per unit Movement in NTA per security Perfect score Weighted score 2006 90 75 35 40 60 300

In each of the above tests the scores were scaled so that the top performer in each test received the maximum available score for that criterion. Ranks were then assigned based on the scaled scores.

58

BDO LISTED PROPERTY TRuST SuRvEY

Investment criteria
The tests used in the investment criteria and assigned weightings are as follows.
Investment criteria Total rate of return on investment (one year) Total rate of return on investment (three year) volume of trading on ASX Perfect score Weighted score 2006 100 50 50 200

In each of the above tests the scores were scaled so that the top performer in each test received the maximum available score for that criterion. Ranks were then assigned based on the scaled scores. In each of the tests the scores were scaled so that the top performer in each test received the maximum available score for that criterion. Ranks were then assigned based on the scaled scores.

Median Results
For an entity which could not be scored equitably in a particular criteria, due to its recent listing, the unique nature of an entitys activities, or lack of available information for the relevant criteria, that entity was allocated a median result for the purpose of ranking. This ranking was then weighted and scored as usual. For all such instances N/A appears in the result column for the individual criteria tables.

59

BDO Corporate Finance property expertise

BDO Corporate Finance property expertise

Listed property trust experience

Date Jun 2006 Apr 2006 Mar 2006 Feb 2006 Feb 2006 Dec 2005 Sept 2005 Aug 2005 July 2005 July 2005 June 2005 April 2005 April 2005 Nov 2004 Oct 2004 Sep 2004 June 2004 May 2004 Sep 2003 Sep 2003 Aug 2003 May 2003 Oct 2002 Aug 2002 July 2002 July 2002 July 2002 Sep 2001 June 2001 May 2001 Apr 2001 Nov 2000 Client Pelorus Property Investments Limited Lachlan Diversified Property Fund JF Meridian Management Limited McLaughlins Financial Services Telstra Stadium Austcorp TOWERS Trust Pelorus Pipes Bakehouse Fund MFS Diversified Trust Australand Property Group Australand Wholesale Property Trust #3, #4 Macquarie Bank/Medallist Joint venture Charter Hall Property Trust Macquarie Leisure Trust Group McLaughlins Financial Services Limited GPT Management Ltd FKP Limited Macquarie Goodman Funds Management Limited Australand Holdings Group Commonwealth Bank Limited Australand Wholesale Property Trust #1, #2 Commonwealth Property Office Fund Macquarie Leisure Trust valad Property Group Prime Retail Property Trust Colonial First State Property Trust Commonwealth Property Office Fund Gandel Retail Trust 2 Park Street Trust MTM Entertainment Trust Delfin Limited CT Retail Investment Trust Westpac Property Trust (renamed Investa) Transaction nature Capital raising Restructure Management fee restructure Acquisition of unlisted trusts by MFS Diversified valuation Hybrid security offering Restructure Preferred equity raising Further stapling Takeover valuation Stapling/internalisation/listing Management fee restructure Group restructure Takeover offer Stapling/restructure valuation all FuM rights Acquisition valuation all FuM rights Stapling/internalisation Acquisition Grosvenor Place Acquisition/stapling Stapling/internalisation/listing Capital restructure Acquisition Acquisition /management fee restructure Acquisition Acquisition 2 Park Street Takeover Scheme of arrangement Acquisition Stapling/internalisation

62

BDO LISTED PROPERTY TRuST SuRvEY

Unlisted property trust experience

Date Jun 2006 Jun 2006 May 2006 Apr 2006 Feb 2006 Dec 2005 Oct 2005 Sept 2005 Sept 2005 Aug 2005 June 2005 Feb 2005 Jan 2005 Dec 2004 Nov 2004 Nov 2004 Nov 2004 Oct 2004 Oct 2004 Oct 2004 Sept 2004 Feb 2004 Jan 2004 Nov 2003 July 2003 May 2003 Dec 2002 Nov 2002 Oct 2002 Jun 2002 Apr 2001 Nov 2000 Client Pelorus Storage Fund Lachlan Office Property Fund Trilogy Funds Management Hyperion Property Syndicate Limited MFS Diversified Trust Acquisition of 3 Trusts Toga Accommodation Fund Lachlan Office Property Fund Abacus Storage Funds Management Limited Macquarie Direct Property Stapling of seven unlisted Trusts Mariner Property Trust Miller Street Trust Grant Samuel Wholesale Funds Becton Property Group Eureka Funds Management Wholesale Funds Trilogy Capital Services Pty Limited Hyperion Property Syndicate Century Funds Management Merger with Bankminister Mariner Property Group Sydney Opera House Car Park James Fielding Group 4 Way Trust Merger Lachlan Office Property Fund Tankstream Capital Tankstream Property Investment Fund Investa Property Group Collins Property Trust Mariner Property Group Mariner Property Trust #1 Domaine Property Group Macquarie East Coast Portfolio Challenger Managed Investments Park Hyatt Sydney McLaughlin Financial Services Landmark Schemes Lachlan REIT Challenger Managed Investments Penrith Homemaker Westpac Family Restaurants Property Trust No.2 Pelorus Pipes Bakehouse Fund CT Retail Investment Trust Westpac Property Trust (renamed Investa) Transaction Nature Capital raising Capital raising Capital raising Capital raising Acquisition Capital raising Capital raising Capital raising Stapling Capital raising Capital raising Restructure Restructure Capital raising Capital raising Acquisition Capital raising Merger Capital raising Capital raising Capital raising Capital raising Capital raising Capital raising Capital raising Merger Capital raising Capital raising Capital raising Capital raising Acquisition Stapling/internalisation

63

Disclaimer

This Survey has been prepared by BDO Corporate Finance Pty Limited AFS Licence 244345 (BDO). Although BDO has taken due care to ensure the accuracy of this Survey, no warranties are given in relation to the statements and information contained herein.

Sources of information

Participant annual reports and half-year reports. Australian Stock Exchange. S&P uBS Property Accumulated Index Data return on investment data. Bloomberg. Other public data.

BDO disclaims all liability arising from any person acting on information and statements made herein. The contents of this Survey should not be treated as advice to acquire, hold or dispose of securities and readers are advised to obtain professional advice before making any investment decision based on information contained in this Survey. From time to time BDO partners and staff may hold relevant interests in securities issued by the Entities reported upon. BDO has not received any commission, brokerage or other undisclosed benefit as a result of any statements made. Liability limited by a scheme approved under Professional Standards Legislation. At all times, BDO is committed to protecting the privacy of our clients, contacts, and that of their staff. Any personal information held by BDO for financial or accounting purposes will only be used by BDO to support your relationship with us and to ensure you receive the most appropriate range of information and services. (BDOs Privacy Statement is available upon request).

64

BDO LISTED PROPERTY TRuST SuRvEY

BDO Corporate Finance

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