Annual Report 2019 Contents

ANNUAL REPORT 2019 CONTENTS 04 150 Financial Highlights Corporate Governance Statement 06 169 Chair’s Report Securityholder Information 10 CEO’s Report 18 Annual Financial Report 20 Directors’ Report 68 Auditor’s Independence Declaration 70 Consolidated Income Statements 71 Consolidated Statements of Comprehensive Income 72 Consolidated Statements of Financial Position 73 Consolidated Statements of Changes in Equity 75 Consolidated Statements of Cash Flows 76 Notes to the Financial Statements 145 Directors’ Declaration 146 Independent Auditor’s Report 400 George Street, Brisbane 2 CROMWELL PROPERTY GROUP I 2019 ANNUAL REPORT Cromwell Property Group Cromwell Property Group (ASX:CMW) (Cromwell) is a Real Estate Investor and Manager with operations on three continents and a global investor base. As at 30 June 2019, Cromwell had a market capitalisation of A$3.0 billion, a direct property investment portfolio in Australia valued at A$2.5 billion and total assets under management of A$11.9 billion across Australia, New Zealand and Europe. Cromwell is included in the S&P/ASX200 and the FTSE EPRA/NAREIT Global Real Estate Index. Cromwell offers securityholders an attractive combination of stable long-term cash flows, demonstrated asset enhancement capabilities and transactional profits, and low risk exposure to International capital flows and European economic growth. Cromwell maintains a strong and secure balance sheet and long-dated Australian property portfolio which enable it to recycle assets and reinvest into its property investment and funds and asset management businesses. THIS DOCUMENT IS ISSUED BY Cromwell Property Group consisting of Cromwell Corporation Limited ABN 44 001 056 980 and Cromwell Diversified Property Trust ARSN 102 982 598 ABN 30 074 537 051 (the responsible entity of which is Cromwell Property Securities Limited AFSL 238052 ABN 11 079 147 809) Level 19, 200 Mary Street, Brisbane QLD 4000 Phone: +61 7 3225 7777 Fax: +61 7 3225 7788 Web: www.cromwellpropertygroup.com Email: [email protected] SECURITYHOLDER ENQUIRIES All enquiries and correspondence regarding your securityholding should be directed to Cromwell’s Investor Services Team on 1300 268 078. CROMWELL PROPERTY GROUP I 2019 ANNUAL REPORT 3 FINANCIAL HIGHLIGHTS Statutory profit of Operating profit up $159.9 Million 11.1% to $174.2 Million NTA of Number of securities on issue $0.97 2,236.6 Million Total Securityholder Return (TSR)1 350 300 250 200 150 100 50 0 30-Jun-07 30-Jun-08 30-Jun-09 30-Jun-10 30-Jun-11 30-Jun-12 30-Jun-13 30-Jun-14 30-Jun-15 30-Jun-16 30-Jun-17 30-Jun-18 30-Jun-19 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-09 31-Dec-10 31-Dec-11 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 Cromwell Property Group S&P/ASX 300 A-REIT Accumulation Index Gearing FY19 operating profit per security of 35% 8.21 cps Payout Ratio FY19 distributions per security met guidance at 90% 7.25 cps (1) Stapling event in December 2006 to 30 June 2019. 4 CROMWELL PROPERTY GROUP I 2019 ANNUAL REPORT Financial Results Summary FY19 FY18 Change Objective Statutory profit ($m) $159.9 $204.1 (21.7%) To provide security holders with Statutory profit (cents per security) 7.53 10.89 (30.9%) an attractive combination of stable long-term cash flows, Direct Property Investment 136.1 120.6 12.9% demonstrated asset enhancement Indirect Property Investment 45.4 23.3 94.9% capabilities and transactional profits, and low risk exposure to Funds and Asset Management 28.5 35.0 (18.6%) International capital flows and Total Segment Results 210.0 178.9 17.4% European economic growth. Operating profit ($m) $174.2 $156.8 11.1% Operating profit (cents per security) 8.21 8.36 (1.8%) Distributions ($m)1 $157.5 $157.1 0.2% FY20 Guidance Distributions (cents per security) 7.25 8.34 (13.1%) FY20 operating profit guidance of not Payout Ratio (%) 90% 100% (10.0%) less than 8.30 cents per security. FY20 distribution guidance of not less than 7.50 cents per security. Jun-19 Jun-18 Financial Position (Actual) ($M) (Actual) ($M) Total Assets 3,695.7 3,466.3 Total Liabilities (1,512.7) (1,564.8) Net assets 2,183.0 1,901.5 Securities on issue (‘000) 2,236.6 1,985.3 NTA per security $0.97 $0.96 (including interest rate swaps) Gearing2 35% 37% Gearing (look-through)2 42% 43% (1) Includes an amount of $392,000 for both Cromwell and the Trust in excess of the pro-rata entitlement for the quarterly distribution paid to those securityholders who acquired securities in February 2018 as part of the Security Purchase Plan. (2) Gearing calculated as (total borrowings less cash)/(total tangible assets less cash). Look through gearing adjusts for the 50% interest in Northpoint Tower and 35% of CEREIT. CROMWELL PROPERTY GROUP I 2019 ANNUAL REPORT 5 CHAIR’S REPORT Our ‘Invest to Manage’ strategy, which Paul Weightman details more extensively in his CEO report, is now 12 months into the plan. The strategy represents an exciting new growth stage in Cromwell’s journey and we are beginning to witness the fruits of the huge efforts from our dedicated team over the last year. Europe, where we have more than 200 people, remains the most liquid real estate market in the world for foreign capital. It is also substantially larger than Australia and there are 34 discrete markets, each with a minimum of 2 million sqm of office space. This is the equivalent to at least 34 office markets the same size, or bigger, than the local Brisbane or Canberra market. Paris on its own has more than twice the office space of Australia as a whole. Our local presence and expertise, alongside the knowledge of where to invest, when and why, means we are fast building a reputation as a manager for potential capital partners who consider European real estate exposure an attractive investment proposition. We are confident this will deliver value for our securityholders as we continue to leverage off our excellent European platform. Our values are hugely important to us, and as we inculcate them across our many different geographical teams, it continues to guide our purpose, which is ‘that we exist to look after people’. Based on feedback we have re-phrased the words to describe our values in a clearer, more distinctive way – Principled, Respectful and Responsible. Combining our values with a genuine care for people - be they an investor, securityholder or employee - and a clear understanding of what matters to each of them is what drives our success. Balancing the interests of all of these stakeholders is, and remains, of paramount importance and we are very conscious to treat everyone, no matter who they are, in exactly the same way. Cromwell also looks to contribute to the communities in which we work and live via causes or initiatives that can make a difference. The great work of the Cromwell Property Group Foundation, which donated over $250,000 this year, reflects this. The Foundation’s 2019 beneficiary event, ‘An Evening at the Circus’, was truly inspirational and great to be a part of. At Board level, we sadly bid Michelle McKellar farewell at the upcoming Annual General Meeting after 12 years of outstanding contribution to Cromwell. Her wisdom, experience and caring personality will be missed. On behalf of the Non-executive Directors, I would like to thank everyone at Cromwell for their dedication to delivering on our purpose. I would especially like to thank Paul and his Group Leadership Team for their tireless and extensive efforts. I am confident under their stewardship all stakeholders will benefit from a prosperous and successful year ahead. Geoffrey H. Levy, AO Chair Cromwell Property Group 6 CROMWELL PROPERTY GROUP I 2019 ANNUAL REPORT Principled We are principled. We set the standards and have the courage to do what is right, when we think it is right Respectful Responsible We are respectful of others. We are accountable to We are humble and our stakeholders. We are empathetic, working diligent and committed to collegiately to look after continuous improvement our stakeholders and building a sustainable and resilient business CROMWELL PROPERTY GROUP I 2019 ANNUAL REPORT 7 Cromwell Property Group Foundation donates $250,000 This year, at a gala ‘Evening at the circus’ event the fund our world class researchers to turn their ideas into Cromwell Property Group Foundation (Foundation) reality and to achieve our objective of finding a cure for announced Heart Research Australia, The Lady Australia’s leading cause of death.” Musgrave Trust and the MND and Me Foundation as beneficiaries of its FY19 fundraising activities. The Lady Musgrave Trust - $40,000 Established in 1885, The Lady Musgrave Trust is These causes, combined with Black Dog Ride, Pink Angels Queensland’s oldest charity, which provides life-saving and Royal Far West, the charities supported throughout services to vulnerable women and their children when the Rotary Club of Dubbo South’s Destination Outback, they are facing critical homeless situations as a result of take the Foundation’s total FY19 donations to a little over domestic violence, family breakdown and poverty. $250,000. The Foundation has provided $40,000 towards The Lady In a testament to a successful event an additional $58,227 Musgrave Trust’s ‘Ending Homelessness for Older was pledged on the night. A portion of the funds went Women’ project. This project will create a resource direct to the evenings three beneficiaries, while some was platform for at-risk and homeless women, so they are directed to the Foundation, where they will form part of its aware of where to go for help.

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