Major Retail Development Site in Hastings

MEDIA RELEASE

Charter Hall Secures Major Retail Development Site in Hastings, New Zealand for NZ$18.6 Million

Tuesday, 18 September 2007

Charter Hall Group announced today it has secured the acquisition and development of an offmarket large format retail centre for NZ$18.6 million from Hastings District Council (HDC). The property was acquired by Charter Hall on behalf of Australia’s largest opportunity fund, Charter Hall Opportunity Fund No. 5 (CHOF5).

The site located at Nelson Park, Hastings covers approximately 5.1 hectares and for the last 70 years has been the home to the Nelson Park Athletics Track and Facility.

The unique site became available after the HDC recognised the retail needs of the community were not being met, primarily due to the lack of appropriately zoned and suitably sized retail sites.

To ensure the future and long term viability of the Hastings CBD, the HDC developed a strategy to create space for large format retailing, as close as possible to the CBD and overcome the issue of retailers looking for sites to accommodate their needs outside the Hasting’s CBD.

In November 2006, the HDC held a public referendum on the decision to sell Nelson Park and the adjoining part of Caroline Road for a large format retail development, with the result being a 62 percent vote in favour of the proposal.

The original intention was for HDC to develop the site and on-sell to multiple owners, however this course of action was reconsidered after an approach was made by Charter Hall to acquire the entire site and undertake the proposed development of a large format retail centre comprising approximately 18,800m2 (GLA), with parking for 773 cars.

Chief Executive of Hastings District Council Murray Gilbertson said the commercial deal the Council has struck meets all of the obligations of the public referendum held in September 2006, including the relocation of the upgraded athletic track facility to the proposed regional sports and recreation park as well as all the appropriate roading and traffic upgrading that is an essential part of the infrastructure for the LFR zone.

“The deal also includes allowance for the $3million to provide additional greenspace in the Central Business District. The Council throughout the commercial negotiations has had clear, independent advice on the value of this site,” said Mr Gilbertson.

$11.3 million from the sale, as outlined in the Council’s LTCCP, is allocated for the construction of the athletic track. On Thursday, 20 September the Hastings District Council will decide whether to go ahead with construction of the athletic track in October this year. Construction at the Nelson Park site is scheduled to begin in April 2008.

The proposal satisfied the HDC’s financial and planning objectives without the need for the HDC to be exposed to further development risk. In addition, Charter Hall’s vision aligned closely with that of the HDC, incorporating and integrating the large format retail centre with that of the CBD shopping centre.

The Charter Hall Group has an extensive and solid track record in property development with over $2 billion of development projects either completed or under construction. The Group also has experience in developing large format retail centres which includes; Home HQ Nunawading, Home HQ North Shore and Style at Home and sees this development as an exciting opportunity for large tenant retailers in the Hastings area.

Neil Berryman, General Manager for Charter Hall’s New Zealand operations said: “Charter Hall has excellent relationships with major national and Australian retailers and looks forward to working with the Council to ensure the community is provided with a quality development that improves the retail amenity offering for Hastings and the Hawkes Bay Region”.

Charter Hall’s Development Director and Fund Manager for CHOF5, Michael Winnem said: “The acquisition and development of the Nelson Park site is the first development project for CHOF5 and meets the Funds mandate to invest up to 20 percent of the A$1 billion (end value) fund in New Zealand”. The Nelson Park acquisition follows on from other acquisitions secured by Charter Hall in New Zealand this year, with the Harvey Norman complex in Dunedin and the Foodtown supermarket in Quay Street, Auckland.

Charter Hall’s Joint Managing Director, David Southon said: “The property reinforces Charter Hall’s ability to source off-market transactions and offers CHOF5 the opportunity to acquire additional assets in New Zealand”.

ENDS

About the Charter Hall Group:

Charter Hall Group is a property funds management and development company, based in Sydney with offices in Brisbane, Perth and Auckland. Established in 1991 and listed on the ASX in 2005 as a stapled security under the code CHC, Charter Hall Group combines Charter Hall Limited with Charter Hall Property Trust. The Group currently has funds under management in excess of $2.8 billion and a market cap of over $1.2 billion. The Charter Hall Group has achieved a solid track record across its activities demonstrating a 16 year history of managing wholesale capital, making it one of Australia’s leading property fund managers. Charter Hall’s success has been underpinned by a highly skilled, incentivised and motivated management team with diverse expertise across property sectors and risk-return profiles.

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