QUARTERLY UPDATE PERIOD ENDING 31 DECEMBER 2018

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1 REAL ESTATE MARKET UPDATE Retail Over the course of 2018, consumer sentiment levels remained cautiously optimistic 1 as a result of a stronger Australian economic outlook. Positive indicators that have supported consumers include persistently low interest rates, an improving labour market and historically low unemployment, and a decline in petrol prices with the cost of fuel falling approximately since November. Australian retail turnover growth accelerated over the half to December 2018, with the most prolific growth witnessed in the major categories of food, household goods, and clothing and footwear. The latest retail category growth trends indicate that all categories will converge at around 3. moving forward into Food categories (including restaurants/takeaway and home consumption) continued to outperform, primarily driven by the growth in supermarket spending and the propensity of younger generations to spend a significantly higher proportion of disposable income on dining out. 2 Where feasible, the management team will continue to incorporate food and beverage uses into asset strategies in order to benefit from the potential growth in this category. As sales in discretionary categories remain subdued, we will continue to deleverage from such uses that are likely to hinder future performance. Rental growth across sub-regional and neighbourhood shopping centres remained stable over the quarter, with Sydney and Melbourne recording the strongest growth at approximately 1.. Appropriate tenant mixing remains the key to driving positive rental growth and minimising the risk of vacancy across the portfolio, particularly as the retail sector moves through a phase of transition. Transaction volumes of retail assets reached record highs in 2018, with a total of $8.1 billion in retail assets transacted over the course of the year. Yield compression in the sector has resulted in substantially more stock being divested, as investors seek to capitalise on improving demand and healthy pricing. Neighbourhood yields have dropped to a historically low average of 6.2%, following several transactions within the range. The trend of neighbourhood yields being lower than that of many larger sub-regional assets is significant, as it demonstrates the fundamental shift in the risk profile and retail hierarchy. KEILOR CENTRAL SHOPPING CENTRE ACQUIRED BY FUND IV DURING THE QUARTER AT A YIELD OF 6.3%. Office Despite lead indicators for the office sector trending downwards over the quarter, 3 the office sector has continued to outperform. Total net absorption of 373,000 sqm over 2018 was the strongest year on record since 2010, with Sydney CBD being the key contributor to the decline in national office vacancies. Forecasts for the labour market remain positive, with the ABS reporting employment growth of 2. year over year (y.o.y) for November. 4 Demand for office space in the sub-markets of Sydney also remained robust over Q4 2018, particularly in South Sydney where the value proposition in comparison to the CBD was attractive to tenants. Vacancy in the area increased marginally over the quarter to 1.1% due to tenant relocations, however, contiguous vacant space has continued to attract high demand as overall supply in the Sydney market remains at record lows. A low supply and low vacancy environment has supported 10 consecutive quarters of rental growth in the South Sydney market. 5 Furthermore, the downward trajectory of prime incentives has further catalysed strong gross effective rental growth. The supply pipeline for South Sydney is forecast to be spread over 2020 to 2023 and, due to the limited supply over the short term, further moderate rental growth and compression of incentives is forecast. The prime yield range for South Sydney remained stable at , whilst the secondary market witnessed a compression of yields by 25 basis points. Investor demand for office assets has remained robust, with global capital also still prevalent in the market attracted to office assets that provide defensive cashflows and opportunities for rental growth. Modest yield decompression is forecast over the medium term 6 as the economic cycle progresses. Industrial The industrial sector remained an attractive asset class to investors during 2018, primarily driven by the growth and demand of online retailing. The strongest performing industrial regions are located on the eastern seaboard of Australia, where vacancy rates have been declining and speculative development supply is being absorbed by tenant demand. Melbourne recorded the lowest vacancy rate at 2., followed by Sydney and Brisbane at 3. and 4.2% respectively. 7 The national prime average-weighted net face rent grew 1. over Q4 2018, with y.o.y growth achieving 3.9% largely witnessed in Sydney, Adelaide and Melbourne and driven by leasing activity. Adelaide s occupier activity grew at an accelerated rate over the quarter, as demand for pre-lease and design and construct spaces increased. Yields for the industrial asset class are forecast to remain stable during 2019 and are believed to have reached a trough in the compression cycle. Demand for quality assets in locations with strong underlying economic fundamentals is a trend that is expected to continue into the next year. INVESTMENT TEAM MEMBERS David Rogers Director, Investments Jason Hay Director, Asset Management Richard Hunt Chairman, Fort Street Real Estate Capital Notes: 1 Westpac (2018). 2 JLL (2018). 3 NAB (2018). 4 ABS (2018). 5 JLL (2018). 6 JLL (2018). 7 Urbis (2018) 1 FORT STREET REAL ESTATE CAPITAL FUND SERIES

2 QUARTERLY UPDATE FOR PERIOD ENDING 31 DECEMBER 2018 SERIES OVERVIEW DISTRIBUTIONS ANNOUNCED (LAST 12 MONTHS) FUND I FUND II FUND III FUND IV December cents per unit 2.10 cents per unit 1.90 cents per unit N/A September cents per unit 2.10 cents per unit 1.90 cents per unit N/A June cents per unit 2.10 cents per unit 2.14 cents per unit N/A March cents per unit 2.10 cents per unit 2.14 cents per unit N/A QUARTER HIGHLIGHTS NTA per unit (unaudited estimate) $1.59 $1.62 $1.44 $1.55 Gross assets (unaudited estimate) $260.6 million $181.7 million $230.2 million $122.9 million Weighted lease expiry 5.4 years 5.8 years 4.2 years 5.0 years Gearing ratio (based on unaudited estimates) 37.1% 37.8% 33.1 % 37.5% KEY FUND DETAILS Inception June 2013 June 2014 December 2016 June 2018 Structure Unlisted unit trust Unlisted unit trust Unlisted unit trust Unlisted unit trust Sector Australian commercial property Australian commercial property Australian commercial property Australian commercial property Currency AUD (unhedged) AUD (unhedged) AUD (unhedged) AUD (unhedged) ONGOING FEES Fund management fee 0.87% pa 0.87% pa 0.87% pa 0.87% pa Property manager fee Performance fee 1 of the out-performance against the AREIT Accumulation Index with hurdle rate of 1 pa with hurdle rate of 8% pa with hurdle rate of 8% pa GEOGRAPHIC DIVERSIFICATION (BY CURRENT VALUE) 13% 11% NSW VIC QLD SA 15% 72% 47% 42% SECTOR DIVERSIFICATION (BY CURRENT VALUE) 13% 37% Retail Office 87% 63% 10 10

3 FUND I PORTFOLIO SUMMARY PURCHASE DATE OCCUPANCY (%) COST (INCL. CAPEX) ($m) VALUE ($m) Oxford Village, NSW Oct-13 97% Windsor Riverview, NSW Jul-14 99% Lynbrook Village, VIC Nov-13 97% Noosa Village, QLD Nov-14 97% Lake Innes Village, NSW Nov Total 98% Note all figures are unaudited estimates, as at quarter end. PORTFOLIO UPDATE Distribution of $ per unit Portfolio occupancy remained strong at 98% The Fund's weighted average lease expiry (WALE) is 5.4 years Asset management Oxford Village maintained a strong occupancy level at 97%. During the quarter, Aldi undertook a refurbishment of its store to introduce its latest concept and bring the store in line with its fleet standard. The new Aldi fitout complements the ambience upgrades and new tenant fitouts that have already been completed at the centre. The asset management team is continuing to work on the delivery of the upgraded entry statements on Oxford and Pelican Streets which, once completed, will improve the external aesthetic of the asset. At Lake Innes, occupancy remained robust at 10 for the quarter. The asset continues to outperform, driven by the growth in the neighbouring university, hospital and residential precincts. As a result, Coles has witnessed a substantial increase in sales momentum and is now exceeding its national benchmarks. The juice bar operator completed its fitout and opened for trade last month, and is expected to be well received by the local student community. Since opening in November, the Thai restaurant has also been performing well, introducing a contemporary takeaway offer to the centre that has been popular with both hospital employees and students. Occupancy at Lynbrook Village improved marginally over the quarter to 97%. During the period, the asset management team designed and delivered a speculative fitout, which subsequently led to a lease being secured with a local barber to occupy the space. The charcoal chicken operator completed a refurbishment of its tenancy to deliver a new, highspecification fitout. The management team is actively working to improve the presentation and vibrancy of the centre. The key initiative behind this is the laneway rejuvenation project, which will endeavour to create a lively food precinct to attract new and exciting food catering operators to the centre. This in turn will drive foot traffic through the laneway and improve dwell time at the centre. At Windsor Riverview, occupancy remained steady at 98% over the quarter. A new deal was executed with a Turkish food operator to occupy a unit in the food court, with the tenant scheduled to install a new, contemporary fitout. This is an excellent result for the asset and complements the food court ambience upgrade works that have been completed over the past year. During the quarter, the florist also completed a refurbishment of its tenancy, which now exceeds the standards of the asset management strategy to improve presentation throughout the centre. Investigations into creating additional income from the asset are ongoing. The management team is working closely with consultants to explore opportunities to unlock value in the car park and create additional retail tenancies. Noosa Village saw a marginal decline in occupancy, down to 97%. Despite this, the centre continues to perform well supported by strong underlying demographics and the influx of holiday visitors over the summer holiday period. As part of its lease renewal in the previous quarter, the bakery completed an upgrade to its fitout, improving the overall aesthetic of the offer. Following the commencement of the marketing plan, the management team has contracted works for the upgrade of the car park. The fundamental objective of this project is to improve access and egress to the centre and ensure that Noosa Village remains a convenient shopping destination for local customers. The installation of solar panels was completed in November, meaning that the centre now has a fully operational 250 kilowatt solar electricity system that will generate clean energy and provide additional benefits to tenants through the embedded network. Furthermore, it also allows the opportunity to increase income from the asset, driving returns for investors. The Fund announced a distribution of $ per unit during the fourth quarter (Q4), representing an annualised distribution yield on invested capital of 6.33%. TOP TENANTS Coles Group Ltd 18% Study Group Australia 15% Fitness First Australia 6% Woolworths Group Ltd 4% 3 FORT STREET REAL ESTATE CAPITAL FUND SERIES

4 FUND II PORTFOLIO SUMMARY PORTFOLIO UPDATE Distribution of $ per unit Portfolio occupancy remained strong 98% The Fund s Weighted Average Lease Expiry ( WALE ) is 5.75 years Asset management PURCHASE DATE OCCUPANCY (%) COST (INCL. CAPEX) ($m) VALUE ($m) Birkdale Fair, QLD Mar-15 98% Hilton Plaza, SA Aug-16 95% 21.1* 20.1 Marketfair, NSW Aug-16 99% Newtown Central, NSW Apr-15 96% Northpoint, QLD Sep-14 97% Total 98% *Includes capital expenditure incurred in the June 2018 financial year of $0.7 million, not reflected in the asset value on invested capital. Note all figures are unaudited estimates, as at quarter end. Occupancy at Marketfair Campbelltown declined marginally to 99%, following the exit of the café operator. The management and leasing teams have been proactive in addressing this, and have promptly secured a replacement operator that commenced fitout works over the quarter. This operator is highly experienced and will introduce a contemporary café offering to the centre. Given that the centre is virtually fully leased, the focus for the quarter has been to reach a conclusion in the car park efficiency strategy. This is now close to being finalised with a view to alleviate the current pressue placed on the car park. As per the previous quarter, the management team has also continued to work collaboratively with local stakeholders in relation to the broader master plan for the area. Newtown Central maintained strong occupancy at 96%. The highlight for the asset over the quarter was the commencement of the external ambience upgrade works, which has been largely centred around a façade refresh. The management team commissioned a piece of feature artwork from Australian artist Anthony Lister which has been painted on the façade of the building. The artwork aids in drawing attention to the centre, giving it a contemporary edge that will appeal to the trendy nature of the local community. Furthermore, it will assist in delivering the leasing strategy for the asset by attracting tenants and driving leasing momentum on the available units. Upgrade works have been continuing on the Fitness First tenancy in order to introduce its 24 hour concept. It is thought that this will attract additional patrons to the gym and consequently increase customer visitations to the centre. Occupancy at Northpoint remained broadly in line with the previous quarter at 97%. The massage operator opened for trade during quarter, and the pathology services provider excersised its option to occupy for an additional term. Both operators bolster the service offering at the centre, which drives customer footfall to support the retail tenants. Aside from usual leasing and management tasks, the team has been exploring opportunities to derive additional income by potentially leveraging underutilised land at the rear of the asset. Birkdale Fair maintained steady occupancy for the quarter at 98%. The deal of note over the quarter was agreed with the liqour operator, which exercised its option to renew its lease for an additional five-year term. In line with our portfolio strategy, work commenced on the installation of a 300 kilowatt solar energy system on the roof of the asset. The installation is progressing well and is expected to be completed in the early part of 2019, generating approximately 468,000 kilowatt hours per annum of clean energy to offset general usage. At Hilton Plaza, occupancy declined marginally to 95% after the office suite occupied by the previous owner becoming available. Local office leasing agents have been appointed to back-fill the space with an alternative office tenant. This is a positive result for the retailers in the centre and deomstrates the convenient nature of the asset for local customers. The ambience upgrades have been progressing in the centre, with the new furniture and litterbins now installed. Moving forward, the focus will be on improving the external façade of the building and the internal bulkhead cladding which, once complete, will mark a successful refurbishment project. During the period, the Fund announced a distribution of $ per unit representing a 5.3% annualised yield TOP TENANTS Woolworths Group Ltd 21% Coles Group Ltd 9% Fitness First Australia 6% TJX Australia 5% Aldi Group 4% 4 FORT STREET REAL ESTATE CAPITAL FUND SERIES

5 FUND III PORTFOLIO SUMMARY PORTFOLIO UPDATE Distribution of $ per unit Portfolio occupancy ended the quarter at 99% The Fund s weighted average lease expiry (WALE) is 4.21 years Asset management Occupancy at 241 O Riordan Street remained robust at 10 over the quarter. The management team has continued to roll out the National Australia Built Environment Rating System (NABERS) upgrade during the period. Parts of the upgrade have now reached practical completion, with the Building Management System (BMS) upgrade, water submetering and efficiency measures, and LED lighting all now installed at the asset. Tasks still in progress include the installation of solar PV panels, the air handling unit (AHU), air conditioning upgrades and mechanical upgrades. To further enhance the rating of the asset, the management team is also investigating additional water-saving measures. Having a favourable NABERS rating is an important tenant attraction and retention tool particularly for the NSW Government, which is guided by policy when it comes to occupying energy efficient buildings. At Toormina Gardens, occupancy remained consistent with the previous quarter at 98%. During the quarter, the mini-major tenant Best & Less exercised its option to renew for an additional seven years. A new fitout was negotiated as part of the deal and consequently brings the quality of the store up to the national standard for the retailer. KFC also exercised its option to renew during the period, agreeing to an additional term of five years. These tenant renewals demonstrate the confidence that national retailers have in the future performance of the centre. Several community PURCHASE DATE OCCUPANCY (%) COST (INCL. CAPEX) ($m) VALUE ($m) 241 O Riordan Street, Mascot, NSW May Toormina Gardens, Coffs Harbour, NSW Jan-18 98% Total 99% Note all figures are unaudited estimates, as at quarter end. events have been hosted at the centre to date, including a pop-up playground for children, a free school holiday craft club, a Toy Swap day to support Plastic Free July in the area, and a donation drive for droughtaffected farmers. Going forward, the management team will continue to implement the stabilisation strategy for the asset by driving lease renewals, introducing new tenants (particularly local hero operators), and enhancing the community atmosphere of the centre wherever possible. During the period, the Fund announced a distribution of $ per unit, representing a 4.8% annualised yield on invested capital. TOORMINA GARDENS SHOPPING CENTRE TOP TENANTS NSW Government 24% AbbVie 1 Woolworths Group Ltd 7% Landis & Gyr 6% Coles Group Ltd 6% 5 FORT STREET REAL ESTATE CAPITAL FUND SERIES

6 FUND IV Investment horizon Fund maturity Distribution frequency 7 10 years Up to 10 years Quarterly Acquired major convenience-based shopping centre in Melbourne for $113 million Established a $45.2 million debt facility with National Australia Bank (NAB) The Fund s occupancy is 99% with a weighted average lease expiry (WALE) of 5.00 years Fund update Walsh & Company Investments Limited (Walsh & Co), as responsible entity for Fort Street Real Estate Capital Fund IV (Fund), is pleased to announce it has acquired Keilor Central Shopping Centre a major convenience-based subregional centre in the Victorian suburb of Keilor Downs. The Fund acquired the centre for $113 million on an initial yield of 6.3% in December The acquisition was completed by utilising the available equity in the Fund in conjunction with a facility agreed with NAB. The shopping centre is located in an established suburb of Melbourne 17 kilometres west of the CBD, and can be found at the intersection of two arterial roads in Keilor Downs. The asset fulfils the role of the local community centre being near public transport links, several schools and the St Albans Leisure Centre. Keilor Central has a total lettable area of approximately 19,700 sqm, with a large on-grade car park and a site area of 9.1 hectares. The centre is anchored by Coles, Aldi and Kmart, and comprises primarily conveniencebased retailers, including two mini-majors, 59 specialty tenants and two padsites. The centre is 99% occupied, with a weighted average lease expiry (WALE) of 5.00 years by income. National retailers represent 72% of total income, including Commonwealth Bank, Australia Post, The Reject Shop, Vodafone, Specsavers, Hungry Jacks and KFC. The asset is performing strongly given its convenience-based retail offering and strategic location in a part of Melbourne with limited competition. Furthermore, the management team has identified several ways in which the value of the asset can be enhanced. The team has a strong track record of successfully repositioning assets through improving tenancy mix and unlocking value through long-term opportunities. The centre s convenience-based retail mix, national retailers, strong mix of services, and strategic location all contribute to its consistently strong sales performance. The acquisition of Keilor Central was funded by cash on deposit and a new $54.6 million debt facility established with NAB. The facility was initially drawn to $45.2 million resulting in Fund gearing of 37.5%. The Fund expects to announce an initial dividend to investors at the conclusion of the March quarter. KEILOR CENTRAL SHOPPING CENTRE TOP TENANTS Kmart 17% Coles Group Ltd 18% Aldi Group 6% Quality Pharmacy 4% The Reject Shop 3% 6 FORT STREET REAL ESTATE CAPITAL FUND SERIES

7 ABOUT FORT STREET REAL ESTATE CAPITAL Fort Street Real Estate Capital is an experienced specialist in property investment and asset management, with the ability to draw upon extensive networks to help access opportunities, as well as manage and reposition assets. The Fort Street Real Estate Capital executives have more than 50 years combined experience in real estate. Their extensive knowledge in this sector has assisted them to transact more than $2 billion of commercial property in recent years. Fort Street Real Estate Capital targets real estate opportunities with strong underlying rental income and the potential for long-term capital growth through value-add opportunities or repositioning potential. ABOUT WALSH & COMPANY Walsh & Company, part of the Evans Dixon Group, is a multibilliondollar global funds management firm founded in 2007, with assets under management across global equities, residential and commercial property, private equity, fixed income, and sustainable and social investments. It provides access to unique investment strategies not readily accessible to investors and focuses on building high-quality, diversified portfolios. KEILOR CENTRAL SHOPPING CENTRE FUND IV 241 O RIORDAN STREET FUND III IMPORTANT INFORMATION This report has been prepared by Fort Street Real Estate Capital Pty Limited (ACN ) (Investment Manager), a corporate authorised representative (CAR No ) of Walsh & Company Asset Management Pty Limited (ACN , AFSL ), and investment manager of Fort Street Real Estate Capital Fund I (ARSN ), Fort Street Real Estate Capital Fund II (ARSN ), Fort Street Real Estate Capital Fund III (ARSN ) and Fort Street Real Estate Capital Fund IV (ARSN ), together referred to as Funds. This report may contain general advice. Any general advice provided has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, you should consider the appropriateness of the advice with regard to your objectives, financial situation and needs. Past performance of the Funds is not a reliable indicator of the future performance of the Funds. This report may contain statements, opinions, projections, forecasts and other material (forwardlooking statements), based on various assumptions. Those assumptions may or may not prove to be correct. The Investment Manager and its advisers (including all of their respective directors, consultants and/ or employees, related bodies corporate and the directors, shareholders, managers, employees or agents of them) (Parties) do not make any FUND CONTACTS Adam Coughlan Head of Distribution T: (02) E: adam.coughlan@walshandco.com.au QLD/WA Emmanuel Vergara Key Account Manager T: (07) E: emmanuel.vergara@walshandco.com.au VIC/SA/TAS Charlie Wapshott Key Account Manager T: (03) E: charlie.wapshott@walshandco.com.au NSW Reuban Siva Business Development Manager T: (02) E: reuban.siva@walshandco.com.au representation as to the accuracy or likelihood of fulfilment of the forwardlooking statements or any of the assumptions upon which they are based. Actual results, performance or achievements may vary materially from any projections and forward-looking statements and the assumptions on which those statements are based. Readers are cautioned not to place undue reliance on forward-looking statements and the Parties assume no obligation to update that information. 7 FORT STREET REAL ESTATE CAPITAL FUND SERIES