ASPEN GROUP QUARTERLY INVESTOR UPDATE OCTOBER 2005 AA SPIRESPIRE AspenAspen ParksParks SecuresSecures NewNew PropertiesProperties

Aerial view over the Monkey Mia Dolphin Resort, ,WA

Proceeds from the capital raising will be utilised in reducing Group debt (reducing the Group’s gearing position to approximately 40%), further investment into the Aspen Parks Property Fund and Aspen Diversified Property Fund, and to provide short term funding support for Aspen’s funds management activities. The ability of Aspen to underwrite acquisitions for its managed funds provides each Fund Aspen Group is pleased to report strong with greater flexibility, and overcomes any potential mismatch financial results for 2005 between the timing of acquisitions and capital inflows. Aspen’s financial results were released to the ASX in early September, In conjunction with the capital raising we also announced some and we were delighted to report a net profit after tax of $7.45 exciting acquisitions for the Aspen Parks Property Fund. Four new million, an increase of 84% over the previous year. Our earnings per parks are under contract including a 50% stake in the well known security of 1.75 cents per stapled security was up on the 1.68 cents Monkey Mia Dolphin Resort in . The value of assets per security in 2004, and importantly in excess of the distribution in Aspen Parks following completion of settlement will be in excess of paid for the year of 1.67 cents per security. $80 million, well ahead of the forecast growth in the Fund, and leaving The positive financial performance, resulting from higher rental the Fund well placed to achieve its target asset size of $150 million income and increased funds management activities has strengthened within five years of commencing. the Group’s financial position. Total assets under management now Aspen has also acquired a second site for the newly launched Aspen exceed $300 million. Living Villages concept providing further long term growth for the Commencing the new financial year, Aspen has continued to pursue funds management division. its growth strategy by completing a capital raising of $40 million on It has been a strong start to the 2006 financial year and we look October 6. The placement of stapled securities, to institutional and forward to continuing this momentum in the months ahead. sophisticated investors, provides a significant increase in the Group’s market capitalisation and closer to Aspen’s inclusion in the ASX 300 index. The new securities were issued at $0.205, significantly, at a Angelo Del Borrello price above its recent average trading price. Managing Director Aspen Parks Location of properties owned by Aspen Parks

COOKE POINT

Cairns ISLAND GATEWAY expands across BALMORAL PILBARA AIRLIE BEACH PORT HEDLAND MACKAY the country EXMOUTH CAPE KARRATHA EXMOUTH Brisbane

It has been an exciting time in MONKEY MIA TUNCURRY WALLAMBA PERTH SHALIMAR recent months for the Aspen Parks Perth FREMANTLE Sydney COOGEE BEACH EDEN Property Fund with contracts ECHUCA TWOFOLD BAY WOODMAN POINT Melbourne YARRABY Location of properties owned being agreed for the acquisition by Aspen Parks Location of properties under of four properties. negotiation with Aspen Parks

View from the front of Monkey Mia Dolphin Resort, Shark Bay,WA River front accommodation at Wallamba,Tuncurry, NSW

Dolphin Lodge at Monkey Mia Dolphin Resort Feeding Dolphins at Monkey Mia Dolphin Resort Beachside accommodation at Monkey Mia Dolphin Resort

The acquisitions are: Monkey Mia Dolphin Resort Aspen Parks will acquire a 50% interest in the Monkey Mia 50% interest in Monkey Mia Dolphin Resort, Dolphin Resort at Shark Bay,Western Australia for $8 million. Shark Bay,WA $8.0m Monkey Mia is a World Heritage listed location attracting local, interstate and international visitors. Yarraby Holiday & Tourist Park, Echuca,Vic $9.2m The Monkey Mia Dolphin Resort enjoys an absolute beachfront position. Facilities comprise a self-contained resort with Wallamba Caravan Park, beachfront motel units, park homes, garden villas, backpackers’ Tuncurry, NSW $4.2m accommodation, 58 caravan sites, staff quarters, restaurant, swimming pool and shop. Shalimar Ski and Caravan Park, Tuncurry, NSW $3.7m The acquisition will be conditional on the granting of a 99 year lease from the and an increase in the resort land area from 3.7 hectares to 7 hectares, both subject to a The location of parks across three states provides further commitment by the owners to expand the resort over the diversification within the Fund, while also continuing to build next ten years. Aspen Parks will also acquire the management a chain of parks for travellers around Australia. rights to operate the resort under the terms of the acquisition. Due diligence has been completed on all properties Included with the acquisition is freehold title over a with settlement expected to occur within the next 205 hectare site which includes the Shark Bay , located two months. some 18 kms from the resort. The airport is of strategic importance for tourism, particularly international visitors, with Following completion of all the above acquisitions, the Fund commercial operators providing regular services to the resort. will have total assets of approximately $84 million, over halfway toward the original target of $150 million in funds In addition to being a high quality resort, Monkey Mia adds under management. A summary of each acquisition is strategic importance to the existing Western Australian assets provided below. of the Fund, being located approximately half way between the Fund’s existing holiday parks in Perth and Exmouth. Yarraby Holiday and Tourist Park Septimus The Yarraby Holiday and Tourist Park will be acquired for $9.25 million. Yarraby is located on the southern bank of the Murray River a short distance east of the town of Echuca in Roe Square the Central Murray Tourism Region of Victoria. The property occupies a total site of approximately 9.431 hectares and is improved with 187 permanent/annual News sites, 33 tourist sites, 6 ensuite sites, 33 cabins, 2 main residences, store/office, various amenities/facilities and other ancillary improvements. The property has some additional development potential with an area of approximately 15,000 square metres of the property undeveloped. Due to the large number of permanent and annual agreements at the property, a significant proportion of income is derived from this relatively secure income stream Echuca is the closest Murray River town to Melbourne being located approximately 200 kilometres to the north. Echuca has a population of approximately 11,000 people and is a popular tourism destination with major attractions being generally related to the Murray River. Information from Tourism Victoria indicates that the “Murray” Tourism Region attracted approximately 2.4 million overnight visitors for the 12 months to March 2005.

Shalimar Ski and Caravan Park/ Wallamba Caravan Park The Shalimar Ski and Caravan Park in Tuncurry, New South Wales is to be acquired for $3.7 million, while the adjacent Wallamba Caravan Park will also be acquired for $4.2 million. The acquisition of both properties provides a sizeable acquisition on the mid north coast of New South Wales. In addition it provides an opportunity to reconfigure the parks, utilise additional capacity and derive economies of “...Recent demand for office scale from a staffing perspective. Shalimar is a freehold property comprising 11 hectares. space in the Perth CBD has Approval is held for 196 accommodation sites which comprise both long and short term with a combination of been at record levels, fuelled by cabins, park homes, caravans and camping. the strong economy Included in the Shalimar property is approximately four ...” hectares of vacant land on a separate title which has been acquired by the newly created Aspen Living Villages No 2 It has been a very positive period for Septimus Roe Square. Fund for $1 million. The proposed forecourt redevelopment is expected to Wallamba is a freehold property set on four hectares with commence within days and will provide an attractive and approval for 75 sites. Accommodation is similar to Shalimar, vibrant street frontage when finished in mid 2006. with both long and short term residents, and a mixture of Leasing activity has also been strong, with approximately cabins, caravans and camping facilities. There is also some 8% of the buildings net lettable area leased during the past surplus land which provides the opportunity for additional three months. We welcome to the building a number of cabin development. new tenants, including Volante Ltd, a company listed on the Both parks front the Wallamba River, providing a variety of ASX and one of Australia’s largest providers of services in recreational activities for tourists including sandy beaches information and communication technology. and boat launching facilities. Waterskiing is a popular sport Recent demand for office space in the Perth CBD has within the area. been at record levels, fuelled by the strong economy, and we are experiencing a high level of interest in the remaining vacant areas of the building, which is now under 10%. Vacancy rates accross the Perth CBD have also fallen to 9.5%, the lowest level in three years.

Aspen Living Villages New rating for launches second project Aspen Diversified Aspen Living Villages is a new funds management activity launched in June 2005, with the aim of creating residential accommodation Property Fund villages for early retirees, tourism and mining sectors. The Aspen Diversified Property Fund continues to be well received Aspen will derive fees from the establishment and management of amongst investors and financial advisers. The Fund remains open to each project. new investors as we seek to add new properties to the fund. The vacant land acquired in conjunction with the Shalimar Ski and We have recently received an upgraded research report on the Caravan Park, purchased by Aspen Parks, has been identified as an Fund to reflect acquisition of the Henderson industrial property ideal location for a residential accommodation village, particularly in Western Australia and the improved tenancy profile across suited to early retirees. The four hectare parcel of land will the Fund. commence the Aspen Living Villages Fund No 2. The independent group Property Investment Research produced a Aspen Living Villages is managing its first project in the north west rating of AA–, an increase from the original A+ rating. The Fund’s town of Karratha in Western Australia. A development plan will be weighted average lease profile has significantly improved following submitted at the next meeting with the relevant local authority in the acquisition of the Henderson property with its 12 year lease November. Further details will be provided in the next edition and renewals by Riseley Corporate Centre tenants ANZ Bank and of Aspire. Home Building Society for 5 years each. And greater access… As part of the marketing strategy for the Fund we are seeking to have Aspen Diversified included on a number of investment administration platforms. To date we have been successful with BT Investment Wrap, and Netwealth, while discussions are progressing with others.This increases the availability of the Fund to both investors and financial advisers who use these services to streamline their investment administration. A copy of the new research report and PDS are available from the Aspen Group or can be downloaded from the Aspen Group website. Foyer of 33 York Street, Sydney Aspen opens new Sydney office The new Aspen office at Level 5, 33 York Street, Sydney has opened for business.The new office confirms the Group’s commitment to Quarterly growing our presence across Australia. The Sydney office establishes a permanent base for Aspen from which the Group will continue to identify and manage property Outlook investment opportunities for both Aspen Group and funds Complete settlement of new properties managed by Aspen Group. • for Aspen Parks Mr Stuart Martin, Director of Property Funds Management heads the office while non-executive director Mr Andrew Martin is also Identify further property acquisitions based in Sydney.Their knowledge of property markets along the • eastern seaboard will be of great benefit to the Group through Annual General Meeting maximising the return from Aspen Group properties both • owned and managed, and in sourcing and “bedding down” new opportunities. Further information on Aspen Group and its activities can be obtained by contacting us using the following details: Address Level 8, 256 Adelaide Terrace Perth WA 6000 Postal PO Box Y3442 East St George’s Terrace, Perth WA 6832 E-mail [email protected] Phone 08 9220 8400 Fax 08 9220 8401 www.aspengroup.com.au Freecall 1800 220 840

Important Information: This document contains information of a general nature regarding Aspen Group and is believed to be accurate at the time of printing.This document is not intended to provide financial advice, and does not take into account any person’s financial situation, needs or objectives. Should you wish to invest in Aspen Group or any products issued by Aspen Group, please seek your own financial advice from a stockbroker or financial adviser.