Macquarie Direct Property. Welcome to the February 2003 edition of the Macquarie Direct Property Newsletter

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1 February 2003 Macquarie Direct Property newsletter Welcome to the February 2003 edition of the Macquarie Direct Property Newsletter Since the last Newsletter, Macquarie Direct has completed its largest ever raising to establish the Macquarie Martin Place Trust. MMPT owns a 50% share of the office building and car park at No.1 Martin Place, Sydney. Macquarie Direct s funds under management has now grown to over $538 million, with properties in the major markets of Sydney, Melbourne and Brisbane. Macquarie Direct continues to focus on acquiring quality assets for investors. What s Inside New Product to be launched by Macquarie Direct 2 FAQs 2 MMPT 3 How to sell MMPT units 3 MDP No.9 3 NB Direct 4 BM Direct 4 NS Direct 4 WP Direct 4 PH Direct 5 JJ Direct 5 VC Direct 5 EC Direct 5 Other Property Trusts managed by Macquarie and its Associates 6 Contacts 6 We value your feedback and any enquiries you may have, so please feel free to contact us by either ing us at propfunds@macquarie.com.au or by phoning our Ask Macquarie Investor Services Team on (local call cost). For any queries regarding your unitholding, please contact our Unit Registry, Computershare Investor Services on (02) or services@computershare.com.au.

2 New product to be launched by Macquarie Direct Macquarie Direct Property Management Limited is currently working on a new product for retail investors, the Macquarie Property Income Fund (MPIF). newsletter The fund will be a geared investment into property-related investments (initially the Macquarie Property Securities Fund) and will seek to provide investors with a consistent level of highly tax-efficient distributions as well as potential for capital growth. The fund will be open-ended with internal gearing making it an eligible investment for super funds and the offer of daily redemptions will provide investors with liquidity. Units in MPIF will only be available pursuant to a Product Disclosure Statement (PDS) which is expected to be available from the Manager at the end of March Investors should consult the PDS for further information on the fund before deciding whether to apply. FAQs Q. How do I sell my units? A. There is currently no buy-back or redemption facility available for nine of the 10 trusts, MMPT being the exception (refer page 3). However, units may be transferred during the life of the investment to another investor. From time to time the Manager receives enquiries from Unitholders looking to buy or sell units in one of the Direct syndicates. Although the Manager is unable to conduct a market with these units, we are able to introduce prospective buyers and sellers of which we become aware. For information on how to transfer your units, please contact your adviser or the Manager. Q. How often does the value of my units change? A. As the units are not listed on the Australian Stock Exchange, changes to the value of units will generally occur only with the revaluation of the property or properties. Q. How often are distributions paid? A. Distributions are paid quarterly, approximately 4 6 weeks after the period end (June, September, December and March). Q. Will I receive a tax statement? A. Yes. You will receive a tax statement around mid-august each year. Your statement should be retained to assist in the preparation of your tax return. Q. How do I advise my TFN number, change my address or bank account details? A. To update your details, please contact the Unit Registry, Computershare Investor Services. Q. Can my distributions be directly deposited into my bank account? A. Yes, they can. Please contact the Unit Registry to obtain a direct credit form. Q. How do I receive prospectuses for new syndicates? A. If you have an adviser, please contact them for information. If you do not have an adviser, please or call the Manager and request to be placed on the mailing list. 2

3 MMPT 10th Syndicate Closes Oversubscribed! During the second half of 2002, Macquarie Direct successfully completed the largest syndication ever undertaken in Australia. The Macquarie Martin Place Trust raised $102 million and owns a 50% share of the office building and car park at No.1 Martin Place, with the other 50% owned by Macquarie Office Trust. The average yield forecast in the Prospectus was 8.33% pa and 100% of distributions are expected to be tax sheltered over the forecast period to 30 June No.1 Martin Place features: prime landmark property constructed in 1999 as part of the award winning GPO redevelopment; fully let building, tenants including Macquarie Bank Limited and the Australian Securities and Investments Commission; 382 space car park, leased to Secure Parking; and central Sydney CBD location. How do I sell my MMPT units? A limited liquidity facility exists for Unitholders in MMPT. As detailed in the Prospectus, Macquarie Office Trust has agreed to purchase up to one million MMPT units per calendar quarter on a first come, first served basis. The purchase price will be calculated on the last audited net tangible asset value per MMPT unit less transaction costs (including any stamp duty). For more information on how to apply to sell your MMPT units under the facility, please contact the Manager. MDP No. 9 Forecast 2002/2003 Annual Distribution: 8.8% Establishment Date: March 2002 No. of Unitholders: 547 Property: 456 Lonsdale Street, Melbourne MDP No. 9 was Macquarie Direct s ninth syndicate and owns a commercial office building centrally located within the Melbourne CBD. The lifts within the building are currently undergoing a major refurbishment with one new lift already in service. The lift refurbishment is replacing out-dated technology and updating interiors. There are currently two vacant floors within the property, and the Manager is continuing to seek new tenants for this space. 3

4 NB Direct Forecast 2002/2003 Annual Distribution: 9.1% Establishment Date: December 2001 No. of Unitholders: 1,468 Properties: 300 Adelaide Street, Brisbane 165 Walker Street, North Sydney The eighth syndicate, NB Direct, closed heavily oversubscribed in late December The trust comprises two commercial office buildings in prominent CBD locations in North Sydney and Brisbane. The Brisbane property has undergone recent works to the air conditioning including replacement of the chiller. The current vacancy rate of 22% for the Brisbane property includes 17% covered by a rental guarantee from the vendor, in place until A joint marketing campaign with the vendor is underway to lease the vacant space. The North Sydney property has one small suite vacant (330m 2 ) and the trust continues to perform in line with forecasts. BM Direct Forecast 2002/2003 Annual Distribution: 9.12% Establishment Date: August 2001 No. of Unitholders: 534 Property: 461 Bourke Street, Melbourne The seventh syndicate, BM Direct, comprises a centrally positioned commercial office building within the Melbourne CBD. Extensive refurbishment on the property has commenced, with renovation works to the forecourt completed. The replacement of lifts within the building continues on schedule with four out of seven lifts completed, providing tenants with significantly improved services. Vacancies (7%) are being actively marketed by the Manager. Overall, the trust is performing to prospectus forecasts, however the Melbourne leasing market is showing signs of weakening. NS Direct Forecast 2002/2003 Annual Distribution: 9.15% Establishment Date: December 2000 No. of Unitholders: 862 Properties: 54 Miller Street, North Sydney 407 Pacific Hwy, Artarmon NS Direct comprises two North Shore commercial office buildings in Sydney. This syndicate, the sixth by Macquarie Direct, is continuing to perform to expectations. Facade works have been completed on 54 Miller Street. The current vacancy level of 9% is being closely monitored and the Manager is in discussions with a number of tenants, including Yahoo, regarding their lease renewals. Computer Associates, who occupy the entire premises at 407 Pacific Hwy, have entered into a new lease for five years from February The access control system in the building has been extended and the smoke detection system and building automation system upgrades are well underway. A major lift refurbishment will commence in March WP Direct Forecast 2002/2003 Annual Distribution: 9.99% Establishment Date: June 2000 No. of Unitholders: 678 Property: Wallsend Plaza, Wallsend The fifth syndicate, WP Direct, comprises a fully enclosed air conditioned shopping centre with 44 specialty shops and two anchor tenants, Coles and Aldi. Of the total shops, two remain vacant. Customer count for the centre rose substantially following the opening of Aldi in March During 2002 growth in customer count slowed but continues to moderately increase. This increase in customer numbers has resulted in consistent sales growth for the period. Building works have commenced on several shops to accommodate new and existing tenants. The trust continues to perform in line with prospectus forecasts. 4

5 PH Direct Forecast 2002/2003 Annual Distribution: 9.80% Establishment Date: December 1999 No. of Unitholders: 1,115 Property: 68 Pitt Street, Sydney PH Direct, the fourth syndicate, owns a commercial office building on the corner of Pitt and Hunter Streets in the Sydney CBD. Minor foyer refurbishment works have been tendered and are due to commence during ANZ have chosen to exercise their option to stay in the Banking Chamber premises until They have however, relinquished tenancies over three floors in the property, paying the compensation as required under their lease terms. Lee and Lyons have renewed their lease over Level 23 for a further five year term. The trust is performing to expectations, however overall vacancy in the property is likely to grow during JJ Direct Forecast 2002/2003 Annual Distribution: 10.37% Establishment Date: May 1999 No. of Unitholders: 551 Property: 154 Pacific Hwy, St Leonards The third syndicate, JJ Direct, owns a commercial office building on the North Shore of Sydney. The two main tenants, Teletech International and Ramsay Health Care, occupy eight of the 10 floors. Hothouse Interactive Pty Ltd have entered into a six year lease over Level 3. The remaining vacancy of one floor is continuing to be marketed for lease by the Manager. The trust is performing to prospectus forecasts however continued performance will be dependent on the Manager s ability to lease Level 1. VC Direct EC Direct Forecast 2002/2003 Annual Distribution: 10.88% Establishment Date: December 1998 No. of Unitholders: 587 Properties: Harvey Norman Centre, Campbelltown Bunnings Warehouse, Villawood VC Direct is the second syndicate offered by Macquarie Direct and comprises two bulky goods retail sites in Sydney. The Manager believes that Harvey Norman will not exercise their option to stay in the premises, as they have acquired a development site nearby and have submitted plans to the local council. A leasing campaign for the Harvey Norman space will commence in due course and in the meantime the Manager has initiated discussions with potential tenants. Forecast 2002/2003 Annual Distribution: 4.60% Establishment Date: August 1998 No. of Unitholders: 478 Property: Engadine Court, Engadine The first syndicate, EC Direct, owns a shopping centre located in a southern suburb of Sydney. The Manager continues to work closely with the new managing agent to minimise vacancies and to position the property for sale. Legal action against the former managing agent is progressing and Senior Counsel has been appointed to act on behalf of the trust. The performance of the trust continues to be disappointing although distributions were reinstated in January The second property, formerly a BBC Hardwarehouse, has been re-branded as a Bunnings Warehouse and continues to trade well. The trust is performing to expectations. 5

6 Other Property Trusts Managed by Macquarie and its Associates As at 31 December 2002 Macquarie CountryWide Trust MCW Retail No. of properties: 109 $1.0 billion Unit price: $1.64 Distribution yield: 8.3% Website: Macquarie Leisure Trust MLE Leisure No. of properties: 5 $157.0 million Unit price $0.70 Distribution yield: 10.3% Website: Macquarie Park Street Trust MORPA Office No. of properties: 1 $270.5 million Unit price: $ Distribution yield: 6.9% Website: Macquarie Goodman Industrial Trust MGI Industrial No. of properties: 66 $2.1 billion Unit price: $1.46 Distribution yield: 8.3% Website: Macquarie Office Trust MOF Office No. of properties: 22 $1.6 billion Unit price: $1.22 Distribution yield: 9.0% Website: Macquarie ProLogis Trust MPRCA Industrial (North American) No. of properties: 54 Share of total property assets: $831.8 million Unit price: $0.86 Distribution yield: 8.7% Website: Contacts The Manager Macquarie Direct Property Management Limited Level 13 No. 1 Martin Place Sydney NSW 2000 GPO Box 4294 Sydney NSW 1164 Telephone: Facsimile: (02) propfunds@macquarie.com.au Website: Unit Registry Computershare Investor Services Pty Ltd Level 3, 60 Carrington Street Sydney NSW 2000 GPO Box 7045 Sydney NSW 1115 Telephone: Facsimile: (02) sydney.services@computershare.com.au This newsletter has been prepared by Macquarie Direct Property Management Limited in its capacity as responsible entity for the various syndicates referred to herein. It has been prepared for general information purposes only, is not intended to constitute investment advice nor is it intended to be an offer for sale of, or investment in, units in any managed investment scheme. 6