PFA3447 Investor Upd Ed4.Indd

PROPERTY FUNDS AUSTRALIA EDITION No. 5 JUNE 2006 Investor Update New Acquisition New Capital Raising A new product disclosure statement financial year. This equates to an The Trust has entered into an unconditional (“PDS No. 4”) to invest in the PFA annualised distribution rate of 8.83% per contract to purchase a hotel property located Diversified Property Trust has just annum* when calculated on the Offer at 270 Flinders Street, Melbourne for $34.0M. been released. This latest offer is an Price of $1.11 per Unit. opportunity for current Unitholders to • 68%** of the forecast distributions are The property is a 182 room four star hotel further invest in the Trust. Key features expected to be Tax Deferred in the which is centrally located on Flinders Street of the offer include:- financial year 2005/2006 and 57%** in between Elizabeth Street and Swanston the financial year 2006/07. Walk, directly across the road from Flinders • Minimum investment is $5,000 and then Street Station. in multiples of $1,000. • Nil entry fees The hotel was totally redeveloped from its • Forecast distributions are 9.80 cents per • A $374 million property portfolio of previous use as an office building in 2002/03 Unit per annum* during the 2006/07 quality investment grade property including and it possesses a contemporary fitout. The the acquisition of the Citigate Melbourne hotel is only 100 metres from Federation property. The addition of this property to Square and within walking distance to the the Trust’s portfolio enhances its diversity, Melbourne retail and commercial heart security and lease expiry profile. as well as major sporting, shopping and • The proceeds of this Offer will be used entertainment venues such as Crown Casino. to provide cash reserves to enable fund of future property acquisitions. This hotel property is currently known as a Ramada. However, following the acquisition * The forecast distributions and related underlying by the Trust, the hotel will be leased to assumptions are set out in detail in section 6.2 of the PDS. Citigate Melbourne Pty Ltd for 10 years and ** For further information in relation to the tax deferred managed for that company by Mirvac Hotels percentage please see section 6.2 Note 12 of the PDS. Pty Limited under its Citigate brand. Continued Page 2 Left: Exterior balcony, the Citigate Melbourne. Rights Issue Entitlement For Current Unitholders As a special offer, Current Unitholders (i.e. • You do not need to accept in respect those registered as at 14 June 2006) are being of all of your entitlement, partial offered a one (1) for seven (7) entitlement acceptances can occur. under a Rights Issue at $1.09 per Unit, a • You will also be entitled to apply for discount of 2¢ per Unit to the General additional Units over and above your Offer price under the PDS. Rights Issue entitlement under the Rights Key features of the Rights Issue are:- Issue (to the extent of any shortfall not taken up). However, Units applied for • The forecast distribution rate for the under the General Offer will be at $1.11 Forecast Period, based on the Rights Issue per Unit. The first allotment of any Price of $1.09 per Unit is 8.99% per additional Units under the General Offer annum* per Unit with approximately will occur on or after 1 August 2006. 57%** of that forecast distribution expected to be Tax Deferred in the • The closing date for Rights Issue 2006/2007 financial year. entitlement acceptances is 5.00p.m. Citigate Melbourne (building at right of photo) shown as (AEST) on 25 July 2006. a Ramada. PFA DIVERSIFIED PROPERTY TRUST Geographical Diversification (by Gross Income) ACT - Regional 9% WA - Perth 13% NSW - Regional 4% VIC - Melbourne 11% NSW - Sydney 13% Key Data TAS - HobartLocation: 9% 270-272 Flinders New Property Acquisition Continued Street, Melbourne, Vic QLD - RegionalPrincipal 5% Use: Hotel QLD - Brisbane 36% Mirvac currently manages over 30 hotels which this hotel lies. Further, there are also Title: Freehold and resorts throughout Australia and New opportunities for improvement to this hotel Date to be June 2006 Acquired: Zealand. Some of Mirvac’s hotel brands through re-branding, intensive management Date Built: 1977 include Sebel, Quay Grand, Quay West, Sea and marketing.” Property Sectors (by % of Income) (redeveloped 2002) Temple and Citigate. Settlement of the Citigate Melbourne No. of Rooms: 182 Hotel 7% 2 Site Area: 594m Suburban GeographicalPFA Managing Diversification Director, (by Gross Mr Income) Chris Morton, property is expected to occur on 30 June Entertainment 3% said “We see the addition of a hotel property 2006. Following the completion of the Weighted Av. 10 years Retail 11% ACT - Regional 9% Bulky Goods 6% toWA -the Perth 13%Trust as a great opportunity to acquisition of this property, the Trust will Lease Expiry: Industrial 5% add another property sector to the Trust’sNSW - Regional 4% own a portfolio of 16 properties valued at Current Valuation InformationSuburban portfolio further enhancing its diversification, $374 million. CBD Office 34% Office 30% VIC -as Melbourne is the 11% charter for the Trust. We areNSW very - Sydney 13% Valuation: $ 34.0 million positive about the growth prospects for The pie charts below demonstrate the Trust’s Value/Room: $ 186,819 TAS - Hobart 9% CBD Retail 4% room rates in the Australian hotel market, updated geographic and sector diversification Valuation Date: March 2006 QLDincluding - Regional 5% the Melbourne hotel market,QLD - Brisbane and 36% and the contribution (by income) of the top Valuer: Colliers International Consultancy and in particular the 4 star hotel category in 10 tenants of the portfolio. Valuation Pty Limited Top 10 Tenants (by % of Income) PropertySector Sectors (by % of Income) GeographicalGeographical Diversification Diversification (by Gross Income) Tenant Profile ACT - Regional 9% Hotel 7% WA - Perth 13% Suburban Entertainment 3% Balance of Portfolio 31% Retail 11% NSW - Regional 4% Government 33% Bulky Goods 6% Industrial 5% VIC - Melbourne 11% NSW - Sydney 13% Suburban National Australia Bank 3% CBD Office 34% Office 30% TAS - Hobart 9% Harvey Norman 3% Citigate Melbourne 7% Woolworths 3% QLD - Regional 5% QLD - Brisbane 36% PBL 5% Country Road 3% Suncorp Metway 4% CBD Retail 4% Energex 4% AAPT 4% Property Sectors (by % of Income) Two Properties DistributionsTop 10 Tenants (by % of Income) SetHotel 7% To Increase Suburban Entertainment 3% Retail 11% Revalued Up In the recently released product disclosure statement Bulky(“PDS”), Goods 6% the directors of PFA have forecast Industrial 5% an increaseBalance of Portfolio in 31the% Trust’s distribution amount to 9.80 cents per unit per annum for the 2006/07 As at 31 December 2005, two of the Trust’s financial year up from that previously paidGovernment of 33% 9.48 cents per unit per annum. Suburban property assets were revalued resulting in the CBD Office 34% Office 30% addition of $6.1M to the Trust’s property A monthly distribution policy and proposed calendar for distributions is announced to the Bendigo portfolio value. The relevant properties StockNational Exchange Australia Bank 3% (“BSX”) on a quarterly basis. Distribution policies are subject to review at all subject to valuation increases were:- Harvey Norman 3% Citigate CBD Retail 4% times and may change for any reason. As Melbournesuch, 7%it is expected that the forecast distribution increase Woolworths 3% PBL 5% Previous New will be Countannounced,ry Road 3% as a policy for the forthcoming quarter, in late June with the first payment at Suncorp Metway 4% Property Book Value Book Value Increase the proposedEnergex increased4% distribution rate toAAPT occur 4% on or about 21 August 2006. A personal notification will be sent to you when there is any variation to your distribution rate. Garden Square $31.3M $35.0M $3.7M Top 10 Tenants (by % of Income) Cairns Hypermart $17.0M $19.4M $2.4M Underlying the increases in valuations has Finance MarginsBalance of Portfolio 31% been the general firming in capitalisation Government 33% yields which have occurred in the Queensland Renegotiated Down commercial and retail property market National Australia Bank 3% since the date of the last valuation of these Harvey Norman 3% Citigate Melbourne 7% properties. These properties’ capital appreciation With the growth in the size and quality of the • ING:Woolworths 3% 1.38% down to 1.20% (for between PBL 5% Country Road 3% (particularly Garden Square) has also been the Trust’s portfolio and the increasing quality of 40% to 60% loan to valuationSuncorp Metwayratio) 4% the tenants’ covenants within it, PFA saw an Energex 4% AAPT 4% result of positive leasing campaigns resulting in opportunity to enter into discussions with the The fees paid to AMG for management of new leasing deals and rental growth. Trust’s financers with the object of achieving these facilities were also negotiated down. a reduction in the debt margins applicable to the Joint Finance Facility provided by CBA The term of the Finance Facility has and mortgage funds managed by ING. remained the same. The effect of these negotiations has resulted in a reduction in These discussions were successful and resulted in debt cost of approximately $345,000 p.a. to reductions of the Lenders’ margins as follows:- the Trust based on current debt levels. • CBA: 0.60% down to 0.45% (for up to These new arrangements took effect from 40% loan to valuation ratio) 1 February 2006. Garden Square, revalued up by $3.7M PFA DIVERSIFIED PROPERTY TRUST Leasing Update Manager Update raisings, mergers and acquisitions and property As at the time of the issue of PDS No. 4, the Change in Directors based funds management. She has had a vacancy rate for the Trust portfolio (based special focus and experience in property based on income and including rental support It was with regret, that on 16 January 2006 the projects and capital raising issues.

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