Investa Diversified Office Fund

Project1

28/6/04

1:08 PM

Page 1

AUSTRALIAN

Level 6, 33 York Street Sydney NSW 2000 Australia Locked Bag 7 Australia Square Sydney NSW 1215 Phone 61 2 8296 1100 Fax 61 2 9299 3777 ABN 72 085 293 910 www.aer.com.au

PROPERTY ANALYSIS

Investa Diversified Office Fund

April 2005 Institutional Grade Return Underpinned by CBD Office Towers

Investa Diversified Office Fund April 2005

Contents 1.

Summary

3

2.

Management

5

3.

Property

12

4.

Finance

20

5.

Exit Strategy

26

IMPORTANT NOTICE Aegis has been commissioned to produce this report. Disclaimer & Disclosure of Interests This publication has been prepared by Aegis Equities Research Pty Limited (ACN 085 293 910)(Aegis), an Australian Financial Services Licensee. Aegis has been commissioned to prepare this independent research report (the Report) and will receive fees for its preparation. The company specified in the Report (the Participant) has provided Aegis with information about its activities. Whilst the information contained in this publication has been prepared with all reasonable care from sources that Aegis believes are reliable, no responsibility or liability is accepted by Aegis for any errors, omissions or misstatements however caused. Any opinions, forecasts or recommendations reflects the judgement and assumptions of Aegis as at the date of publication and may change without notice. Aegis and the Participant, their officers, agents and employees exclude all liability whatsoever, in negligence or otherwise, for any loss or damage relating to this document to the full extent permitted by law. This publication is not and should not be construed as, an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Any opinion contained in the Report is unsolicited general information only. Neither Aegis nor the Participant are aware that any recipient intends to rely on this Report or of the manner in which a recipient intends to use it. In preparing our information, it is not possible to take into consideration the investment objectives, financial situation or particular needs of any individual recipient. Investors should obtain individual financial advice from their investment advisor to determine whether opinions or recommendations (if any) contained in this publication are appropriate to their investment objectives, financial situation or particular needs before acting on such opinions or recommendations. This publication is not for public circulation or reproduction whether in whole or in part and is not to be disclosed to any person other than the intended recipient, without obtaining the prior written consent of Aegis. Aegis and/or the Participant, their officers, employees or its related bodies corporate may, from time to time hold positions in any securities included in this report and may buy or sell such securities or engage in other transactions involving such securities. Aegis and the Participant, their directors and associates declare that from time to time they may hold interests in and/or earn brokerage, fees or other benefits from the securities mentioned in this publication. Aegis, its officers, employees and its related bodies corporate have not and will not receive, whether directly or indirectly, any commission, fee, benefit or advantage, whether pecuniary or otherwise in connection with making any statements and/or recommendation (if any), contained in this Report. Aegis discloses that from time to time it or its officers, employees and related bodies corporate may have an interest in the securities, directly or indirectly, which are the subject of these statements and/or recommendations (if any) and may buy or sell securities in the companies mentioned in this publication; may effect transactions which may not be consistent with the statements and/or recommendations (if any) in this publication; may have directorships in the companies mentioned in this publication; and/or may perform paid services for the companies that are the subject of such statements and/or recommendations (if any). However, under no circumstances has Aegis been influenced, either directly or indirectly, in making any statements and/or recommendations (if any) contained in this Report. The information contained in this publication must be read in conjunction with the Legal Notice, which can be located at http://www.aer.com.au.

page 2 of 28

Copyright © 2005 Aegis Equities Holdings Pty Limited. All Rights Reserved.

Investa Diversified Office Fund April 2005

Investa Diversified Office Fund Aegis Ratings 85.6 out of 100

Assessed Investment Term 10 years to 2015

Inception 1st June 2005

Aegis Commentary

Not Recommended

Recommended

Status Unlisted Open Ended

Exchange Symbol

$10,000

N/A

Highly Recommended

Portfolio Profile 0

65

85

100

Offer Overview Investa Diversified Office Fund (the Fund) is Highly Recommended. The Fund attracts a high initial rating due to the institutional calibre and operational structure of Investa Properties Limited (IPL or the RE), the Responsible Entity, and their ASX listed parent, Investa Property Group (IPG or Investa). The Fund’s five and ten year forecast IRRs exceed the property portfolio’s weighted average capitalisation and discount rate. The Fund has little inherent income volatility and is exposed to CBD commercial markets that have very favourable fundamentals. Investment Strategy The Fund’s investment criteria is to be driven by a strategic plan (underdevelopment), rather than predetermined investment criteria, a process the RE already incorporates in its wholesale fund. Broadly, the Fund will acquire commercial property in CBD and major regional centres, a sector in which IPG has core skills in commercial asset selection and management. Further: 1. No one property can exceed 50% of the value of the Fund’s portfolio; 2. Gearing (debt/gross assets) cannot exceed 65%; and 3. Valuations will be carried out every three years. There are no income and capital growth targets, although the Fund’s performance fee is based upon it earning 30% of any excess total return above 10%. This provides an indicative benchmark. Portfolio The Fund holds an initial portfolio of A grade (85% by income) and B grade (14% by income) CBD commercial assets. In all there are ten assets, of which five are held directly and the remainder through two existing IPG syndicates. The Fund also holds a small car park interest. The portfolio is dominated by government and blue chip tenants of which the top five account for 64% of the Fund, by area. Property fundamentals in each of the Fund’s commercial property market are sound to robust, providing confidence in the prospect of capital growth. Management IPL is a well-regarded institutional property fund manager. It has considerable property management skill. IPL’s parent, IPG, will be an active co-investor in the Fund. Its interest is expected to range from 0% to 30%, depending on retail investor demand at any one time. The previous performance of IPL’s unlisted property funds is strong, notwithstanding the underperformance of two single asset funds. Finance The Fund provides an exceptionally robust five and ten year IRR (net after all fees), that exceeds the ten year capitalisation and discount rate benchmarks. The investment breakeven is strong at just over two years. The debt facility has a short duration of 3 years. It will have to be refinanced at the end of this period to ensure funding of the portfolio’s capital expenditure program, thereby exposing the Fund to refinancing risk.

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Min Investment

No. of properties

10 2.0%

Vacancy (including rent guarantee) (%) Average lease term (yr)

5.8 2

Total net lettable area (m )

41,111

Financial Forecasts IRR (pre-tax) (%)

10.9

IRR Benchmark (%)

7.7

NTA / Breakeven ($) NTA / Breakeven (years)

$0.94 2.5

Avg. Yield (%) Tax Adv. (%)

8.4 100

Distribution Frequency

quarterly

Distribution Year

(%)

Growth (%)

Tax Adv’d (%)

2005*

8.25

0.0

100.0

2006

8.30

0.6

100.0

* Annualised Capitalisation

$M

Equity ($M) Debt ($M)

62.7 94.0

Total ($M)

156.7

Property (gross) ($M)

152.1

Gearing (total assets) (%)

60.0

Debt Hedging/Total Assets (%)

100

Legal Structure This is an open-ended unlisted unit trust that pools money on behalf of individual investors, to acquire an initial property portfolio and to acquire additional property during the Trust’s term. Investors will not own direct property, instead they will be allocated units at an issue price of $1.00. The value of units will be tied to the performance of the properties. Therefore, the price of units may rise or fall over time. Operations Responsible Entity IPG funds Under Management

Investa Property Limited $5B+

Custodian

N/A

Responsible Entity's parent reviewed by Aegis

Yes

Copyright © 2005 Aegis Equities Holdings Pty Limited. All Rights Reserved.

Investa Diversified Office Fund April 2005

Exit

Fees (avg’d over Fund term)

In 2015, unit holders will elect whether to continue with the Fund or proceed with its winding up. From 1 July 2008, the RE is providing a limited liquidity facility. IPG will acquire units at NTA, as long as its interest does not exceed $50M or 30% of the aggregate units. Unit holders that do sell will also incur stamp duty and an administration charge. Investors need to be aware that the RE does not intend to list on any secondary exchange and therefore investment in this Fund is illiquid. Further, there may be periods in which no limited liquidity facility is available. Investors’ investment timetables must be considered to be long term.

Total assts (%)

Ind avg (%)

Mgt Est.

4.83%

4.37%

Mgt Ongoing

0.39%

0.62%

Mgt Sale

2.22%

2.94%

MER Avg pa Total (Est, MER, Sales)

0.45%

1.00%

7.50%

8.30%

Advisor Broker Fees (%) Up to 4%

Upfront

Nil

Ongoing (trailing) Note: Brokerage fees may be rebated Establishment fee includes brokerage.

Income Sources Industry (by income)

Tenants (by income) 7% 7%

6%

7%

Property Grade (by income)

5% 2%

14%

9%

4%2% 2%

1% 14%

7%

36%

Location (by income)

35%

9%

35% Other Telstra Dept of Employ't & Workplace Rel's Boeing RTA United KPFW

15%

Telecoms Gov't - Federal Finance

Other Gov't - State Travel Agency

78%

85%

20%

Commercial - A Grade Commercial- B Grade Premium Car Park

Sydney CBD Brisbane CBD Parramatta CBD

Canberra CBD Adelaide CBD

SWOT Strengths

Opportunities

Weaknesses

IPL and its ASX listed parent Investa Property Group are institutional property fund managers and a co-investor in the Fund. A strong forecast IRR return over five and ten years that exceeds the weighted average capitalisation rate and discount rate of the direct portfolio. Further, investment breakeven is a short 2.5 years. Strong Government and blue chip tenantship dominate the portfolio.

The initial investment criteria is broad and as such it is difficult to express how the composition of the Fund may change until the Fund’s strategic plan is finalised. However no acquisitions will be made until this is finalised. The Fund has a large exposure to Sydney, although the Sydney commercial property market has firming fundamentals.

The RE offers a limited liquidity facility.

To grow the Fund organically as existing Investa property funds expire, and through acquisition in the open market. To achieve performance levels that fulfill its performance fee hurdle targets i.e. 30% of realised and unrealised gains beyond 10% total return.

Threats The long-term performance of the portfolio will be tied to underlying property markets in which the Fund invests and the success of the RE’s investment strategy. Unit holder returns therefore, may rise or fall.

Each of the property markets in which the Fund is invested have sound to robust fundamentals, providing opportunities for income and capital growth.

Investment Opinion This report has been commissioned and as such, Aegis Equities Research (Aegis) have received a fee for its publication. However, under no circumstances has Aegis been influenced, either directly or indirectly, in making any statements and/or recommendations contained in this report. Investa Diversified Office Fund is seeking to raise equity via a public unit offer. The Product Disclosure Statement (PDS) is dated 8 April 2004. The offer of the securities will be made in, or accompanied by, a copy of the PDS, and anyone wishing to acquire the securities will need to complete the application form that will be in, or will accompany, the PDS. The PDS can be downloaded at www.investa.com.au or call 1800 635 323.

page 4 of 28

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Investa Diversified Office Fund April 2005

2. Management The Aegis rating system designates a management weighting of 35%. Management is integral to trust performance and broadly covers asset selection, asset management and funds management. With the exception of the analysis of previous investment performance, the assessment of management is largely qualitative. Capable and experienced management, a well-aligned trust constitution and rigorous and proactive compliance are vital to the success of the trust and the protection of unit holders’ interests. Executive Summary We have given the Fund a Management rating of 30 out of a possible 35. IPG is a well-regarded institutional property fund manager. It has considerable property management skill. IPG will be an active co-investor in the Fund. It’s interest is expected to range from 0% to 30% depending on the retail investor demand at any one time. The Fund’s investment criteria is to be driven by a strategic plan (under-development), rather than predetermined investment criteria, a process the RE incorporates for it’s wholesale fund. Broadly, the Fund will acquire commercial property in CBD and major regional centres, a sector in which IPG has core skills in commercial asset selection and management. Further: 1. No one property can exceed 50% of the value (gross/net assets) of the Fund’s portfolio; 2.

Gearing (debt/gross assets) cannot exceed 65%; and

3.

Valuations will be carried out every three years.

The RE has a stated policy that it is not able to issue new units at a discount to the Fund’s NTA plus issue costs. This means that new units will not dilute existing unit holders’ interests. The previous performance of IPL’s other funds is strong, notwithstanding the underperformance of two single asset funds. The RE’s response has been proactive towards the property and unit holders, as it has the internal capacity to manage the problem. The Responsible Entity The RE is Investa Properties Limited (IPL) (ABN 54 084 407 241, AFS 252704). IPL is wholly owned by the ASX listed, Investa Property Group (ASX code: IPG). IPG is a fully integrated property investment company engaged in property investment, management and development across the core property sectors in Australia. It currently has funds under management of some $5B, comprising the group's investment portfolio of $3.7B, and funds managed on behalf of retail and wholesale investors. IPG is the largest listed office trust with an internalised management structure. It is expanding to become a highly focused and fully integrated property investment organisation. Property investment earnings contribute around 90% of IPG’s earnings and the rest is generated from its other divisions. IPG manages the accommodation requirements of Westpac and Suncorp across Australia, through their Corporate Property Services business, focusing on the office property sector. The opportunity to deliver returns from a broader range of activities other than pure property investment sets IPG apart from other commercial property trusts. This difference will become more pronounced, as IPG’s business services income becomes a more significant contributor to results. The objective is to grow development and services income to 20%-25% of total group earnings. IPG gearing is around 33% and broadly in-line with the office sub-sector average. Standard and Poors have affirmed a BBB+/A-2 credit rating with a stable outlook. The average fixed interest rate is around 6.2% (inclusive of margin) with a debt maturity profile of around 4 years. This is relatively high when compared with its peers.

page 5 of 28

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Investa Diversified Office Fund April 2005

Management The Investa property team consists of 250 people, of which unlisted comprises 8. The senior management team report to the RE’s Board of Directors, which comprises one IPG executive director and six non-executive directors. Key staff associated with IDOF are highlighted in Figure 1: Figure 1. Key Staff Name

Title

Role / Responsibilities

William Grounds

General Manager – Investa Unlisted funds

Bill is responsible for the management of IPL’s 8 unlisted funds and 2 wholesale funds.

Graham Monk

Chief Financial officer Investa Property Group

Graham is responsible for treasury, risk management, accounting, and taxation functions.

Brian McGarry

Company Secretary – Investa Property Group

Brian is responsible for Group secretarial, compliance and human resource management.

Andrew Junor

General Manager – Investa Asset Management

Andrew’s division provides Group asset, property and facilities management.

Product Development Investa Unlisted funds

Scott is responsible for product development.

Tina Raftopoulos

Portfolio Manager Investa Unlisted funds

Tina is responsible for the daily management of four IPL property syndicates.

Tim Jarvis

Analyst - Investa Unlisted funds

Tim is responsible for forecasting and performance monitoring of IPL’s funds.

Brian Lang

Company Secretary Investa Unlisted funds

Brian is responsible for compliance risk management and governance.

Scott Morgan

Source: Investa

Each property has an in-house Investa asset manager, facility manager and building manager. Staff are remunerated against IPG’s overall financial performance, as well as specific portfolio and asset performance targets. This is based on exceeding relevant benchmarks and key performance indicators (the KPIs). Approximately one-third of management remuneration is performance based. Business support is also provided in compliance, finance, accounting and through team assistance. Style Fund The investment objective, will be driven by the Fund’s strategic plan (under development) although in the first instance the Fund is expected to invest in a diversified portfolio of direct commercial property and unlisted property vehicles. The initial portfolio reflects this. At present, there is no criteria regarding tenancy mix, building grade, vacancy, lease profile or location, although: 1. IPG is an institutional fund manager; and 2. IPG and related entities will co-invest in the Fund. It is anticipated that this Fund will be the main driver of Investa’s currently unlisted commercial property activities. Overall the style of the RE is reflective of IPG.

page 6 of 28

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Investa Diversified Office Fund April 2005

Group IPG will be an active co-investor in the Fund. Its interest is expected to range from 0% to 30% depending on the retail investor demand at any one time. In effect, its role will be as a “defacto” underwriter. IPG views that its stapled security structure strengthens the alignment of interest between unit holders in its managed investment funds and the RE. This is because management is internalised and therefore equally focused and incentivised to expand all parts of the group, e.g. the acquisition and debt arrangement power of each trust is enhanced with a single internal entity negotiating equally on behalf of the smaller components of the group. Information dissemination is viewed as a key strength. Asset Managers are located on the same floor as fund managers. Joint meetings are carried out so that all the sub-property groups in Investa are aware of key market and tenant issues. Aegis regards this as a important attribute along with the joint ownership of the Fund’s properties with other members of IPG. The organisational structure also mitigates key person risk, as many senior management staff are endowed with the same information. The RE does not outsource core investment management activities, although it does engage leading external companies for the provision of specialist valuation, legal, accounting, building and due diligence services. IPG see the common practice of outsourcing property management and facilities management as detrimental to bestpractice in property funds management. IPG believe that internalised property management and facilities management ensure closer relations with existing tenants, thereby strengthening the prospects of retention of tenants upon expiry. In-house facilities management can use economies of scale across IPG to achieve significant cost savings in outgoings, from the adoption of single state or national contracts. In addition, cost savings accrue to Investa on gross leases, providing it with a competitive advantage, while those tenants with net leases benefit from lower outgoings, increasing the prospects of tenant retention. The ability to produce cost savings also increases the acquisition firepower of IPG, as competitive bids incorporating expected cost savings can be made. Concurrent with the above, is pro-active tenant management. Strong, proactive and personal relationships are necessary tangible attributes that add depth in ensuring reliable tenant data of their intentions and needs, with end objectives of having higher retention rates. Within the wholesale funds industry, Investa was first to secure a Sustainable Energy Development Authority (SEDA) rating for its portfolio. This has contributed to the organisation being rated number one in Australia, two years in a row, in Sustainable Asset Management. SEDA requirements are met, as are National Safety Council of Australia (NASC) guidelines. These qualifications are increasingly necessary to attract sustainable investment from wholesale investors. Investors and tenants are increasingly aligning their investments and tenancy with those organisations that apply recognisable energy, environmental and socially responsible practices. Organisations that are proactive in achieving such qualifications are likely to develop a competitive edge.

page 7 of 28

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Investa Diversified Office Fund April 2005

Research Research at the macro level is drawn from external providers including Jones Lang LaSalle Research, Colliers International and other property market commentators including Property Council of Australia (PCA), Westpac Economics Department, ABS and BIS Shrapnel. This research is focused on the main drivers of each property investment sector such as GDP, inflation, bond rates, retail sales and the level of employment. Sector and geographic benchmarks are derived by the comparison of PCA and Mercer weightings and performance projections for the various sectors, with the outcome of the macro research findings. This highlights the opportunities for mis-pricing across the various property markets. Sector and geographic targets are set and compared with the existing portfolio. This process provides a buy/sell framework for the future. Bottom up evaluation of properties located in the “buy area markets” commences using both internal modeling and external valuation to support recommendations to the client board. Portfolio Construction No future acquisitions are to be made until the RE has finalised its strategic plan. This would incorporate detail on how the RE expects to position and potentially maximise the value of the Fund over a three year period. The strength of a strategic plan is that it allows the Fund to evolve its investment criteria as it progresses through the property cycle. The RE is regarded as possessing core skills in commercial asset selection and management. Initial investment guidelines are: 1. No one property can exceed 50% of the value (gross/net assets) of the Fund’s portfolio; 2. Gearing (debt/gross assets) cannot exceed 65%; and 3. Valuations will be carried out every three years. There is a “defacto” income and capital total return performance target through the Fund’s performance fee that rewards the RE when returns exceed 10%. Investment Management When investment opportunities are identified by IPG, a preliminary investment proposal must be prepared with sufficient detail about the asset to enable the separate portfolio managers to decide whether or not to pursue the purchase. This investment proposal would include such information as: 1. Forecast IRR%

7. Development exposure

2. Passing yield

8. Location

3. Lease expiry profile

9. Type

4. Market commentary

10. Size ($/m2)

5. Year on year income

11. Likely due diligence costs

6. Risks

12. Special issues e.g. unit swap preference

After receiving the preliminary investment proposal, each portfolio manager must promptly advise the Managing Director of IPL if they intend to pursue with the acquisition of that asset. If more than one portfolio wishes to proceed, then the asset can be pursued on one of the following basis: 1.

A pre-agreed share ownership basis with another portfolio; or

2.

Full ownership.

The portfolio manager will be responsible for the due diligence process and the costs of due diligence shall be borne by the portfolio(s) pursuing the opportunity.

page 8 of 28

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Investa Diversified Office Fund April 2005

Risk Management Conflicts of interest. The group has a Resolution of Conflict Strategy document that identifies conflicts of interest and the resolution process within each fund, and across funds. IPG recognises that it will be faced with potential conflict in meeting its separate responsibilities to each of its existing and future mandates, in areas such as: 1.

The purchase of property investment opportunities and its ownership across portfolios;

2.

The sale of a property of any of the portfolios;

3.

Leasing deals in any market, whereby more than one of the clients owns lettable premises or occupies lettable space;

4.

The sale of a development project to an external fund of which IPL is the RE; and

5.

Other cases, dependant on the facts.

The conflict strategy is reviewed annually and is managed by the Group’s Company Secretary, Mr Brian McGarry. Each portfolio manager has the right to pursue the acquisition of any asset, which meets the investment objectives of their portfolio. Each managed portfolio has equal rights of acquisition of each opportunity obtained by IPG. Conflict strategy guidelines must be certified by the company secretary and approved by the IPG Board as a condition precedent.

page 9 of 28

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Investa Diversified Office Fund April 2005

Previous Performance Figure 2. Previous Performance Fund

Sector

PDS/IM Investor date base

Size ($m)

FY 01 (¢)

FY 02 (¢)

FY 03 (¢)

FY 04 (¢)

NTA at Offer ($)

9.50*

9.66

9.70

8.25

0.88

0.67

F

Dec-04 Note NTA ($)

Collins Property Trust

Office

Oct 2000

Retail

44

Investa Brisbane Commercial Trust

Office

May 2001

Retail

54

10.00

10.50

10.75

0.89

0.90

A/C

Investa North Sydney Office Trust

Office

June 2001

Retail

45

9.00

8.00

8.25

0.84

0.69

B/F

Retail

53

9.50*

9.75

10.00

0.91

0.92

C

6.60

7.10

1.00

1.01

C

Investa First Industrial Trust

Ind

Feb 2002

Investa Commercial Property Fund

Office

Mar 2002

Wholesale

Martin Place Trust

Office

Mar 2002

W’sale

94

7.20

7.52

1.00

1.09

C

Investa Second Industrial Trust

Ind

June 2002

Retail

62

9.25

9.50

0.92

0.92

C

Investa Fourth Commercial Trust

Office

Dec 2002

Retail

61

11.20* 10.00

0.91

0.91

D

Investa Fifth Commercial Trust

Office

May 2003

Retail

90

11.80

0.93

0.93

D

Investa Sixth Commercial Trust

Office

Nov 2003

Retail

95

9.20*

0.93

0.92

D/E

Total

Office

9.24

0.95

253

852

9.50

9.55

8.71

0.94

Notes to the above: * Annualised A. Post recent Boeing lease deal NTA is at $1.01. B. C. D. E. F.

Structured product - NTA after 12% capital return. Rebased NTA $0.81 (i.e. excluding capital return). Increased property values ensure NTA in December 2004 equals or exceeds NTA at Offer. The Fourth, Fifth and Sixth Commercial Trusts are being valued for the first time since syndicate commencement in December 2005, May 2006 and September 2006 respectively. Investa’s Sixth Commercial Trust has reverted to $0.92 because of additional set up costs being absorbed in the first half of financial year 2005. Two syndicates have under-performed, Collins Property Trust and Investa North Sydney Office Trust. Investa has taken a very pro-active stance in the management of each syndicate, which has also incorporated parent support. There is never a guarantee that forecasts will be achieved, however, when this occurs unit holders and Aegis look towards the RE to apply resources to rectify the issue. Based on discussions with the RE, Aegis is satisfied in the scope of Investa’s response, canidid communication to unit holders and the subsequent reduction in management fees.

Source: Investa

page 10 of 28

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Investa Diversified Office Fund April 2005

Compliance By analysing the compliance regime, Aegis seeks to ensure the RE’s asset selection; asset management and funds management procedures are rigorous and will remain so, regardless of changes in management or structure. Protection of unit holders’ interests is an important factor in our assessment. The legislative regime for compliance (as set out under Part 5C.2 of the Corporations Act 2001 (the Act)), is extensive and onerous. The directors of the RE are responsible for the design, documentation, operation and monitoring of the Compliance Plan, and the adequacy of the compliance measures contained within the Compliance Plan. These include relevant control systems, policies and procedures. The legislative regime is regulated by the Australian Securities and Investments Commission (ASIC). ASIC is required, under the Act, to be notified of any variances or breaches of the Compliance Plan. The RE has advised Aegis that there have been no significant breaches of the Compliance Plan. The Compliance Committee reports to the Board of Directors, and comprises three members, two of whom are external.

page 11 of 28

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Investa Diversified Office Fund April 2005

3. Property The Aegis rating system designates a property weighting of 15%. This lower level of weighting is due to the financial assessment of property being incorporated in the finance rating (35% weighting). Our focus is to understand the positioning of the property within its market, and the underlying drivers and threats to forecast property income and capital value. Executive Strategy We have given the Fund a Property rating of 13 out of a possible 15. The Fund holds an initial portfolio of A grade (85% by income) and B grade (14% by income) CBD commercial assets. In all there are ten assets, of which five are held directly, and the remaining five through existing Investa property syndicates. The Fund also holds a small car park interest. The portfolio is dominated by government and blue chip tenants of whom the top five account for 64% of the Fund, by area. Property fundamentals in each of the Fund’s commercial property markets are robust, providing confidence in the prospect of capital growth. Fund Property Strategy 310 Pitt Street is undergoing an extensive refurbishment predominately funded by Telstra. This is a significant investment by the tenant and highlights a long-term commitment to reside in this building. The RE proactively manages this property, reflected in the lower than average outgoings for the building. 64 Northbourne Ave. There are no immediate asset management issues affecting the performance of this property. The property has recently undergone a $5M upgrade to common areas, including lobby, tenant amenities and lifts. Centennial Plaza comprises three architecturally identical towers (although each is a different height). Asset management issues extend to the retaining and renting of current vacancies, namely Tower B & C (see Lease Expiry). There are no significant facility management issues. Properties held in other Investa unlisted syndicates namely Brisbane Commercial Trust (363 Adelaide Street, Brisbane & 45 Charlotte Street, Brisbane) and Investa Sixth Commercial Trust (241 Adelaide Street, Brisbane; Boeing House, Brisbane; 60 Martin Place, Sydney; and 32 Phillip Street, Parramatta), are managed by the asset managers of those respective syndicates. Therefore, asset management is passive. There are, however, no asset management issues to highlight.

page 12 of 28

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Investa Diversified Office Fund April 2005

Figure 3. Australian location map

Northern Territory 241 Adelaide Street Brisbane

Queensland

Western Australia South Australia

115 Grenfell Street Adelaide

Boeing House Brisbane

New South Wales 60 Martin Place, Sydney

Victoria 32 Philip Street Parramatta

310 Pitt Street, Sydney Centennial Plaza (A, B & C), Sydney

64 Northbourne Ave Canberra

Source: www.ga.gov.au

Figure 4. Property Grade by income

Commercial- B Grade 14%

Premium Car Park 1%

Commercial - A Grade 85%

Source: Investa

page 13 of 28

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Investa Diversified Office Fund April 2005

Figure 5. Property Location by Income Adelaide CBD 2%

Brisbane CBD 4%

Parramatta CBD 2%

Canberra CBD 14%

Sydney CBD 78% Source: Investa

Figure 6. Property Review Pros

Cons

A Grade Commercial

2

Centennial Plaza (260-300 Elizabeth Street), Sydney (19.99% interest)

Large floor plates (1,300+m ) on each building with uninterrupted 360o views of the city and surrounding suburbs. Central railway station is adjacently situated. Each of the three properties is on a separate title. 75% of the tenants are government. Rent reviews are predominately fixed, with either ratchets or collars on market review. The outgoings are low when benchmarked, but supportable. Three leasing proposals are expected to be accepted, thereby improving the buildings leasing profile and expiry profile, as the property will be fully leased.

20% interest only. The Plaza dominates this precinct of Sydney’s southern commercial precinct. The passing rent of the RTA (25.8% of Centennial Plaza income) will not increase until 21 March 2007. There is new supply in the Southern precinct following the completion of Civic Tower and Latitude at World Square. The preferred area of the southern precinct is the western side (not eastern) of Central Station. The Department of Veteran Affairs lease expiries in October 2006 and National Australia Bank in October 2005.

60 Martin Place, Sydney (2.5% interest)

Investa undertakes all management. Fully leased to Westpac

Do not have direct management control. Minority interest. Westpac is likely to leave on lease expiry in 2008.

Located in central position in Parramatta CBD. The property has a strong lease profile to AGC until November 2009.

Strong competition from competing commercial office parks. Parramatta Council has restricted city car parking, although building has sound car parking ratios.

(Held in Investa Sixth Commercial Trust) 32 Phillip Street, Parramatta (19.94% interest) (Held in Investa Sixth Commercial Trust)

page 14 of 28

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Investa Diversified Office Fund April 2005

Adelaide property fundamentals improving Short-term lease expiries position the building to benefit from current robust market fundamentals. Its rents are at $350m2 gross compared to market of $400m2 gross. Just under 1,000m2 floor plates

Major tenant KPMG is vacating. Adelaide is a smaller commercial market and therefore potentially more volatile.

310 Pitt Street, Sydney (50% interest)

Strong institutional demand for properties with 310 Pitt Street’s leasing profile, which is 100%, leased to Telstra until October 2010. Telstra must provide 12 months notice to vacate, otherwise they must occupy the building for a further nine months. The rent reviews are ratcheted / structured. Telstra is currently undertaking an extensive upgrade of the building. The building’s medium and higher floors have natural light on all side and uninterruptible views of Hyde Park and Sydney Harbour.

The building has no car parking, although Town Hall train station is located one block away. Buses also extensively service the area. Make good expenses are borne by the landlord. At lease expiry the building will be aged and aesthetically obsolete and therefore the building grade may fall.

64 Northbourne Ave, Canberra (100% interest)

Strong investment market for properties of this calibre. Good natural light on each floor. Ample car parking. Recently refurbished building. Well located on street corner. Strong tenants with long term leases.

New supply coming onto the market in 2006/7. The Department of Employment and Work Place Relations lease has no ‘make good’ clauses. The mezzanine level is poorly located.

Located in central position within Brisbane’s prime office precinct. It is close to railway station and Queen St Mall. Easy dividable floor plates. Low vacancy rate. Manageable lease profile.

Small floor plates (580m2). Older building requires intensive management. Does not have a strong street presence

The property sits in a prime location of the Riverside Precinct. The property has a high car park ratio of 1 space per 90m2. The largest tenant Boeing (100% by area) has renewed their lease for a period of ten years. Parent guarantee on lease

Older building, but well maintained. Exposed to one tenant, although tenantship is sound

Operated by Kings Parking, one of Australia’s largest car park operators. Long term lease until 2014. Brisbane council has a policy of reducing car park ratios and construction of new car park stations. A low level of outgoings is required to maintain the building.

Only 325 car parking spaces (strata titled) held of 381.

115 Grenfell Street, Adelaide (19.94% interest)

B Grade Commercial

A Grade Commercial

(Held in Investa Sixth Commercial Trust)

241 Adelaide Street, Brisbane also called Brisbane Club Tower (19.94% interest) (Held in Investa Sixth Commercial Trust)

363 Adelaide Street, Brisbane (20% interest)

Car Park

(Held in Investa Brisbane Commercial Trust)

Festival Carpark 45 Charlotte Street, Brisbane (19.94% interest) (Held in Investa Brisbane Commercial Trust)

Source: Investa & Valuation Reports

page 15 of 28

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Investa Diversified Office Fund April 2005

Figure 7. Property Income by Industry Finance 5%

Travel Agency 2%

Gov't - State 7% Aviation 7%

Telecoms 35%

Manufacturing 9%

Gov't - Federal 15%

Other 20%

Source: Investa

Figure 8. Five Largest Tenants (by area)

RTA 7%

United KPFW 6%

Boeing 7%

Other 36%

Dept of Employ't & Workplace Rel's 9%

Telstra 35% Source: Investa

Figures 7 & 8 highlight a portfolio diversified by tenants and industry. Valuation The valuations have been done on a capitalisation, discounted cash flow and direct comparison basis for first mortgage purposes. The weighted average capitalisation, terminal and discount rates of the direct portfolio are 7.7%, 8.1% and 9.4%, respectively. Each property was acquired at its valuation although there is an agreed payment of $6.1M plus GST ($3.05 plus GST, Fund share) to Telstra at 310 Pitt St. This arises from a variation in lease whereby IPL no longer has to maintain the building at A grade standard and the method of calculation of annual lease payments has also altered, although without any adverse impact. The valuations are within market benchmarks as identified by the property valuers. Although we highlight Centennial Tower B, 115 Grenfell Street, 241 Adelaide Street and 60 Martin Place as being at the low end of market benchmarks highlighting capital growth prospects on revaluation. This is highlighted in Figure 9.

page 16 of 28

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Investa Diversified Office Fund April 2005

The valuer also considered whether the minority interest held by the Fund in Centennial Plaza necessitated a valuation discount. The valuer concluded no such discount is applicable. Aegis agrees with this on the basis the minority interest is held jointly with associated entities, which is applicable in this instance. Each property usage coincides with the “highest and best” use. Figure 9. Property Capital Value vs. Market

Source: Valuation Reports

Market Overview Figure 10. Commercial Market Overview Commercial Office Sydney

Parramatta

Brisbane

Adelaide

Canberra

Overall performance Effective Rents Yield

Vacancy

Supply

Source: Colliers International Market Indicators / Property Council of Australia

page 17 of 28

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Investa Diversified Office Fund April 2005

Sydney There has been a marked increase in leasing enquiries and activity, which is resulting in a gradual turnaround to positive growth after three years of negative net absorption. The premium office market is leading the turn-around supported by strong company profitability and increased white-collar employment. As leasing options in the premium end decline, activity is expected to be spurred in the A grade & B grade commercial markets. Market rents are edging up, while incentives are falling, however, vacancy remains high, being above 10%. This is now expected to reduce over 2005. Little new stock is available to the market, as institutions own almost half of the Sydney CBD investment grade stock. Parramatta The current vacancy rate is around 8.6%, with most of this being in B grade accommodation. Leasing activity was strong through 2004 with some 18,000m2 leased in the CBD, compared with 9,000m2 in 2003. Approximately 25,000m2 of new supply is expected to come available through 2005, which may cause a softening of the vacancy rate and limit rental growth. Further, incentives have been increasing and lie within the 10% to 15% range. While Parramatta is traditionally tenanted by a high portion of state government departments (some 30%), the Parramatta CBD is facing competition from the business park markets of Homebush Bay, Rhodes and Norwest. Brisbane There is limited stock available and a very strong investment market. Net absorption is positive. Apart from a short-term impact on vacancy rates after the completion of Riparian Plaza, high construction costs and a shortage of suitable sites may create potential future supply problems. Brisbane CBD is benefiting from robust local growth, Australia’s highest population growth rates and strong employment growth. There is downward pressure on incentives and the vacancy rate (averaging 7.41% over 7 years) is the lowest of all the major capitals. Adelaide Demand for prime office space (Prime, A grade & B grade) has been firm, dropping the CBD vacancy rate to a low of 6.8%. The reduction in the vacancy rate has resulted in yields remaining firm, a lowering of incentives (some as low as 5%) and the commencement of new construction. This is replacing older building stock that no longer completely meets tenants’ needs. Many tenants are also moving, due to the need to source more modern stock.

page 18 of 28

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Investa Diversified Office Fund April 2005

Canberra Strong market growth with net absorption of A grade space of 29,616m2 and B grade space 12,832m2. Demand has been focused on A & B grade space, while C grade had negative absorption of 879m2. Total absorption (A grade - D grade) was 41,687m2 Due to the above, vacancy for A grade space improved as at January 2005 to 3.6% (5.2% July 2005) and B grade space to 3.5% (4.9% July 2005). Overall vacancy (A grade – D grade) was 4%. There is a shortage of stock in Civic (only one building in the past few years), with the vacancy rate down to 1.9%, the lowest in 14 years. The shortage of stock will continue until the completion of several new developments over 2006/2007. The release of such developments is expected to significantly affect market demand at this time. Canberra’s property market is heavily influenced by political events.

page 19 of 28

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Investa Diversified Office Fund April 2005

4. Finance The Aegis Property Research rating system assigns a finance weighting of 35%. Key to our financial rating is: The identification of risk, and the analysis of the critical assumptions underlying that risk; and The need for unit holders to receive a return (combined income and capital) that is commensurate with the underlying portfolio. Executive Summary We have given the Fund a Finance rating of 31 out of a possible 35. The Fund provides an exceptionally robust five and ten year IRR (net after all fees) that exceeds the ten-year capitalisation and discount rate benchmarks. The direct portfolio is predominately leased to government and blue chip tenants. The lease expiry profile of 5.8 years is manageable. Investment breakeven is strong at just over two years. The debt facility has a short duration of three years. It will have to be refinanced at the end of this period to ensure a continuation of the portfolio’s capital expenditure program, thereby exposing the Fund to refinancing risk. Rent/Outgoings 64 Northbourne Ave: This is a multi-tenanted building to United KFPW (39% by area) and the Commonwealth Department of Employment and Workplace Relations (51% by area) Each tenant has a gross lease. Average gross rents of $301m2 are within market as highlighted in Figure 11. Generally, rent increases are at 3.5% pa, and are reviewed to market (with a 10% cap and collar) 19 months before lease expiry. Outgoings of $59m2 are at the higher end of the market range of $40.95m2 to $62.2m2. 310 Pitt St is solely tenanted by Telstra, who tenants the property under three leases over the lower / mid and high-rise. The leases are net and generally increase at 3% annually, with a ratcheted market review in year 7 capped at 10%, and open market review at lease expiry. Rents are regarded as being under market. Telstra has the ability to hand back 2,000m2 of space. The vendor has agreed to provide an income guarantee although considering Telstra’s capital expenditure on the building this event appears to be unlikely. Outgoings of $85.83m2 are under the PCA benchmark and are indicative of a well-managed property. 260 Centennial Plaza: This complex consists of three towers A, B & C. Tower A is fully leased to the RTA, while Tower B is predominately leased to the Commonwealth Department of Veterans Affairs (51% by area), Commonwealth Department of Employment & Workplace Relations (15% by area) and Australian Crime Commission (22% by area). Tower C is multi-tenanted with the largest tenants being the National Australia Bank (31% by area), Commonwealth Department of Immigration (18% by area) and Atlas Travel (19% by area). The Vendor will be providing a minimum two-year rental guarantee (until 30 June 2007) in relation to Tower B & C. Leases are net in Tower A and a mixture of net and gross in Towers B & C. Government tenants and major tenants generally, have net leases and smaller tenants gross leases. Rents generally increase at 3%pa with market reviews mid-way, and at the end of the lease term. Rents are within market for Centennial Plaza Towers A & B, although are considered above market for Tower C. This may result in some future reversionary risk, although market reviews may result in no rental increases, thereby reducing this risk. With the exception of Tower A, that has outgoings of $84.14m2, Towers B & C’s outgoings of $106.3m2 and $107.4m2 respectively, are regarded as being within market benchmarks of between $96.27m2 to $113.19m2. page 20 of 28

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Investa Diversified Office Fund April 2005

On a portfolio basis, excluding the Fund’s investments in the two Investa syndicates, 82.5% are net leases. Average rental portfolio growth is 3.4%pa, which is regarded as achievable based on current market fundamentals. Figure 11. Passing Rent vs. Current Rent (Gross Face) $500 $450 $400 $350 $300 $250 $200 $150 $100 62 Northbourne Avenue

310-322 Pitt street

Passing Rent

Centennial Plaza Tower A Market Rent - Low

Centennial Plaza Tower B

Centennial Plaza Tower C

Market Rent - High

Source: Valuation Reports

Lease Expiry The portfolio’s average lease expiry is 5.8 years. By property it is: 310 Pitt Street

7.9 years

64 Northbourne Ave.

5.5 years

Centennial Plaza Building A

4.2 years

Centennial Plaza Building B

1.2 years

Centennial Plaza Building C

4.9 years

Investa Brisbane Commercial Trust 9.5 years Investa Sixth Commercial Trust

3.8 years

The major concern lies with Centennial Plaza Tower B & C. The valuer has assumed the Department of Veteran Affairs will vacate in 2006, although the Fund has assumed the tenant will stay based on an incentive of 8 months rent-free. The RE has provided for this. Further new leases are being executed for Australian Crime Commission, considerably strengthening the lease profile of Tower B. Further the National Australia Bank is expected to vacate. A six-month allowance has been made. The Fund’s portfolio has no significant lease expiry issues at present that it is not adequately dealing with. Leases generally have ‘make good’ clauses although the application varies with each lease. As a minimum they tend to incorporate the repair of damage caused by the tenant on departure and to leave the premises clean, free from rubbish and in a good state of repair. It is not clear on the extent of ‘Notice to Renew’ clauses in each lease agreement, although it is Investa’s policy to actively engage major tenants 18 months before lease expiry, and minor tenants at 12 months, to ascertain their future objectives. The entire lease expiry of the Fund is manageable and is considered to not pose any adverse risk to distribution income.

page 21 of 28

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Investa Diversified Office Fund April 2005

Figure 12. Top Five Tenants Lease Expiry Profile (by area) Portfolio RTA United KPFW Boeing Dept of Employ't & Workplace Rel's Telstra (Years)

0

2

4

6

8

Remaining Lease Term

10

12

First Option

14

16

18

20

Second Option

Source: Investa

Capital Expenditure The RE has assumed capital expenditure of $44M over the life of the Fund i.e. to 30 June 2015, of which the Fund’s share is $15.96M. This excludes the RE’s assumptions for refurbishment, vacancy allowances and incentives. Capital expenditure is to be funded solely from additional borrowings. The valuer has adopted the capital expenditure costs, as outlined by WT Partnership. Debt The three year facility is non-recourse, interest only and is for a total of $98.7M. The Commonwealth Bank is providing this facility. Initially, $94M will be drawn with the balance applied against capital expenditure. The loan margin is 0.75% over the swap rate. There is also a commitment fee of 0.10%. Key covenants of the loan are: 1.

A minimum interest cover of 1.5 times;

2.

A minimum loan to value ratio of 75%;

3.

The Fund’s gearing ratio is not to exceed 65%; and

4.

The RE and IPG remaining solvent.

Interest rates are 100% hedged in the first year reducing to 90% thereafter. The Fund has hedged for a period of 5.5 years. The Fund’s forecast interest cover is 1.75 times and gearing ratio 60%. The refinancing of the facility in three years will be necessary to ensure the continuation of the forecast capital expenditure program, thereby exposing the Fund to refinancing risk.

page 22 of 28

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Investa Diversified Office Fund April 2005

Fund Fees Figure 13. Fund Fees Description Establishment

The RE is receiving an initial fee of $1.75M equal to 1.14% of total assets. It is entitled to a fee of 1% of the gross acquisition price of any asset acquired. The total establishment cost is $7.4M and is to pay brokerage, Trust establishment and property acquisition costs.

Management

The RE is charging a fee of 0.35% of gross assets, although this will reduce if initial forecasts are not met. After the two year forecast period the RE is able to charge a fee of 0.70% of gross assets on the proviso distributions exceed 8.5cpu, a level that is not expected to do for the first five years.

Custodian

There is no custodian.

Underwriting

Commsec is underwriting and is charging a fee of 5.5% of equity or $2.2M. This is being funded from the RE's Advisory and Equity Raising fee included in the establishment cost

Sales

The RE is entitled to receive 30% of the total return above 10%. This is based on combined income and capital and is calculated on realised and unrealised returns over a five year period. The initial five years is calculated from a base amount of $1.00 for the first five years on the Fund’s asset value plus the total amount of distributions of the previous five years.

Other

The RE is entitled to an Equity and Equity Raising Fee of 5.5% of equity subscribed upon capital raising.

Key Ratios

% Total Assets

Market Average

% of Property

Market Average

% of Gross Income

Market Average

Management

0.39%

0.62%

0.40%

0.66%

4.94%

7.06%

Custodian

0.00%

0.03%

0.00%

0.03%

0.00%

0.31%

% of Equity

Market Average

Establishment

4.83%

4.37%

4.98%

4.63%

11.04%

9.41%

Sales / Performance

2.22%

2.94%

2.29%

3.13%

N/A

N/A

MER

0.45%

1.00%

0.47%

1.05%

1.04%

1.78%

Total (Est/MER/Sale)

7.50%

8.30%

7.73%

8.95%

17.16%

14.19%

MER

The MER is less than half the industry average for open-ended funds, due to the 0.35% forecast management fee.

Total Fee

The total fee is in line with the industry average. The Establishment fee is higher than average, although of the $7.4M establishment cost, $1.75M accrues to the RE. As a percentage of equity the establishment fee represents 11.04%. This is very high. The performance fee is set above the discount rate hurdle and therefore, is a real performance fee. Further, the RE does not earn a fee until the Fund has achieved breakeven. This is a positive attribute.

Source: Investa

page 23 of 28

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Investa Diversified Office Fund April 2005

Application of Funds Figure 14. Application of Funds

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Purchase of Property Investments $0.92 Stamp Duty $0.01 Establishm't expenses (physical, survey, accounting, legal, financing, depreciat'n & valuat'n $0.01 RE Fee $0.01 Advisory, equity raising and syndicate costs $0.03 Cash $0.02 Source: Investa

Proforma Balance Sheet Figure 15. Balance Sheet Assets Cash Other Current Assets Property Other Non-Current Assets

$3,541,000 $1,074,000

2.3% 0.7%

$148,684,000

97.0%

$0

0.0%

$153,299,000

100.0%

Funded By Current Liabilities Current Borrowings Non-Current Borrowings Equity

$0 $0

0.0% 0.0%

$94,000,000

61.3%

$59,299,000

38.7%

$153,299,000

100.0%

Source: Investa

The proforma balance sheet is presented on an AGAAP basis. This provides an NTA per unit of $0.94. On an IFRS basis, the NTA would be $0.89 cents per unit. Figure 16. Indicative Breakeven $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 2005

2006

2007

2008

2009

2010

2011

2012

2013

Source: Investa

page 24 of 28

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Investa Diversified Office Fund April 2005

Aegis applies Net Asset Backing in its calculation of indicative breakeven. The purpose of analysing breakeven is to highlight when the initial investment of a Member (adjusted for the Fund’s establishment costs) grows to equal that Member’s original application money. The rate of growth is based on the valuers’ assumptions. The Fund is forecast to breakeven in 2007. This is a very strong growth profile. The appraised growth is 3.8%pa and is based on capitalising the income in year 10 at the valuers appraised terminal rate for each property and weighting accordingly. A straightline 10 year growth average is then calculated. IRR Aegis models its IRR utilising the XIRR function in Excel and applies this calculation over the duration of the expected investment period. Aegis has adopted the expected term of the Fund for ten years. The distribution levels are as forecast by the RE. The IRR is net of all disclosed fees, as outlined in the PDS. Aegis notes that the broader property market, general economic conditions and the performance of the properties prevailing at the time of sale will be the final arbiter of the final sale price. Aegis’ IRR is benchmarked against the weighted average capitalisation rate of 7.7% as applied by the valuer. This ensures that, at a financial level, the Fund is forecast to achieve a return that is commensurate with the underlying property. No growth is assumed, although we analysed and accepted: 1.

The RE’s assessed growth of the portfolio (benchmarked against the valuers analysis), and when the accumulated growth is able to equal the total amount of equity and debt capital raised (see Indicative Breakeven).

2.

The RE’s investment criteria and equity policy to understand how the Fund structure will facilitate growth (see Management).

The IRR is calculated to be 10.9%. This is 40.8% higher than the weighted average capitalisation rate and 16.5% premium to the weighted average discount rate of 9.35%. These are excellent premiums for an open-ended Fund. We also highlight the five year IRR of 10.6%. It is rare for an open-ended fund to provide strong forecast returns over a five year period that also beat the ten year capitalisation and discount rate benchmarks. We have applied a rating premium accordingly. On the basis there was a 10% movement in property values, and a one percentage point movement in interest rate, the corresponding IRRs would be: Figure 17. Sensitivity Analysis Property Values

Interest rates

10% / 1% higher

12.0%

9.5%

10% / 1% lower

9.7%

11.7%

Source: Investa / Aegis

IRRs under the weighted average capitalisation rate would not be acceptable.

page 25 of 28

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Investa Diversified Office Fund April 2005

5. Exit Strategy Under the Aegis rating system, Exit Strategy has a weighting of 15%. This major determinant focuses on the number of exit strategies and their related probabilities. The greater the potential number of sale probabilities, the greater the likelihood of forecast capital values being achieved. We have given the Fund an Exit rating of 11 out of a possible 15. The term of this Fund is expected to be ten years, i.e. to conclude in 2015. At this time, unit holders will elect whether to continue with the Fund or proceed with its winding up. The RE may selectively dispose of properties on the basis that it concludes each disposal is in the best interests of unit holders. The RE is providing, from 1 July 2008, a limited liquidity facility. IPG will acquire units at NTA, as long as its interest does not exceed $50M, or 30% of the aggregate units. Unit holders that do sell will incur stamp duty and an administrative fee to cover administration expenses. Note that investors who sell early, may do so at unit prices that are less than the application price. Investors need to be aware that the RE does not intend to list on any secondary exchange, and therefore, investment in this Fund is illiquid. Further, there may be period in which no limited liquidity facility is available. Investors’ investment timetables must be considered to be long term.

page 26 of 28

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Investa Diversified Office Fund April 2005

Peter Leodaritsis Managing Director Phone: 61 2 8296 1100 [email protected]

Ehab Dimitri Corporate Counsel Phone: 61 2 8296 1155 [email protected]

David Brownie Head of Business Development Phone: 61 2 8296 1108 [email protected]

TELECOMMUNICATIONS, MEDIA & TECHNOLOGY

FINANCIALS

Damien Klassen Head of Retail Equities Phone: 61 2 8296 1104 [email protected]

RESEARCH RESOURCES Peter Chapman Phone: 61 2 8296 1132 [email protected]

Rodney Lay Phone: 61 2 8296 1106 [email protected]

Chris Sabin Phone: 61 2 8296 1156 [email protected]

Shanaz Cassim Phone: 61 2 8296 1130 [email protected]

INDUSTRIALS MANAGED INVESTMENTS

Anne Barnett Phone: 61 2 8296 1100 [email protected]

Chris Boyd Phone: 61 2 8296 1107 [email protected]

Robert Gregory Phone: 61 2 8296 1119 [email protected]

Matthew Bullock Phone: 61 2 8296 1105 [email protected]

Anthony Farnham Phone: 61 2 8296 1150 [email protected]

DATA SERVICES Radek Zeleny Phone: 61 2 8296 1168 [email protected]

John Deniz Phone: 61 2 8296 1123 [email protected] Sharon Loaiza Phone: 61 2 8296 1131 [email protected]

Peter Rae Phone: 61 2 8296 1151 [email protected] Peter Leodaritsis Phone: 61 2 8296 1101 [email protected] Ravi Reddy Phone: 61 2 8296 1165 [email protected] David Ellis Phone: 61 2 8296 1115 [email protected] PROPERTY TRUSTS Paul Nielsen Phone: 61 2 8296 1113 [email protected] Dinesh Pillutla Phone: 61 2 8296 1163 [email protected] LIFE SCIENCES John Kessell Phone: 61 2 8296 1152 [email protected]

INFORMATION TECHNOLOGY & RESEARCH PRODUCTION Evan Ferris Phone: 61 2 8296 1116 [email protected]

Ian Kennedy Phone: 61 2 8296 1122 [email protected]

Renata Meleo Phone: 61 2 8296 1129 [email protected]

Aireen Silva Phone: 61 2 8296 1136 [email protected]

Andrew Halliday Phone: 61 2 8296 1135 [email protected]

SALES David Brownie Head of Business Development Phone: 61 2 8296 1108 [email protected]

Ian Gibson Business Development Manager Phone: 61 2 8296 1100 [email protected]

Felicity Peedom Client Service Manager Phone: 61 2 8296 1170 [email protected]

Julia Hall Business Development Manager Phone: 61 2 8296 1100 [email protected]

Ken Fleming Business Development Manager Phone: 61 2 8296 1100 [email protected]

Connie Sammut General Enquiries Phone: 61 2 8296 1100 [email protected]

page 27 of 28

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Project1

28/6/04

1:08 PM

Page 1

AUSTRALIAN

Level 6, 33 York Street Sydney NSW 2000 Australia Locked Bag 7 Australia Square Sydney NSW 1215 Phone 61 2 8296 1100 Fax 61 2 9299 3777 ABN 72 085 293 910 www.aer.com.au

PROPERTY ANALYSIS

Report Title sub title

Month 2005 Description text 1 Description text 2 DRAFT / FOR APPROVAL