countrywidenews MACQUARIE COUNTRYWIDE TRUST Newsletter January 2004 Welcome to the January 2004 Macquarie CountryWide Trust newsletter.

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1 What s Inside Acquisitions 2 Foreign Tax Credits 3 Development Update 4 Strong Turnover Growth in Australia and New Zealand 4 Nambour Plaza, Queensland 5 Leverage your MCW Units 5 Distribution Timetable 5 New Macquarie Trusts 6 Buy Trust units at a Discount 6 Contact Details 6 MACQUARIE COUNTRYWIDE TRUST Newsletter January 2004 countrywidenews Kylie Rampa Chief Executive Officer Welcome to the January 2004 Macquarie CountryWide Trust newsletter. CountryWide s niche investment strategy continues to deliver quality returns to unitholders and we start the new calendar year with total unitholder returns outperforming key market indices, a strong portfolio of 124 properties and $1.3 billion in total assets. five years in addition to hedging 100% of the capital value of the investments. CountryWide s current earnings as well as the value of the underlying properties has therefore been insulated from the recent appreciation of the A$ against the US$. Accumulated Total Return to Unitholders at 31 December year 3 years 5 years Macquarie CountryWide Trust UBS Retail 200 Index S&P/ASX 200 Property Accumulation Index Source: UBS The 2003 calendar year was marked by further expansion of the US portfolio, capitalising on value adding investment opportunities with joint venture partner, Regency Centers. Twelve properties were added to the US portfolio, (seven since July 2003) all anchored by strong supermarket tenants with a top three market position. CountryWide s strategy is to open up investment opportunities in offshore markets whilst protecting unitholder returns from adverse movements in exchange rates. Conservative FX Hedging Policy Protecting both Income and Property Values CountryWide s policy is to hedge 100% of the estimated net income from investments in the US for Food-based spending continues to grow strongly in retail centres in Australia, New Zealand and the US. We are therefore confident of achieving market consensus forecasts for a full year cash distribution of 14.3 cents per unit for the 2003/2004 financial year. Unitholders may also benefit from a tax advantaged component plus a foreign tax credit. Key objectives for this year will be to complete our development program in Australia, review assets across each portfolio for disposal and source value adding acquisition opportunities. We believe there are investment opportunities in all three markets in which CountryWide operates Australia, New Zealand and the US and we intend to assess these vigorously in accordance with our investment criteria. We encourage you to keep up-to-date with upcoming events and announcements by visiting our website at Best wishes to you and your family in 2004 and thank you for your continued support. Kylie Rampa Chief Executive Officer

2 02 Acquisitions CountryWide s portfolio consists of 124 properties, 81 located in Australia primarily anchored by Coles or Woolworths, 17 in New Zealand anchored by Progressive Enterprises, a fully owned subsidiary of Foodland Australia (FAL) and 26 in the US anchored by market leading national grocers such as Publix, Kroger, Albertsons and Winn Dixie. Each acquisition during 2003 had to meet key investment criteria which have underscored CountryWide s performance since listing in November In essence, an acquisition must add to income growth, increase portfolio diversity and provide secure income from recognised market leading grocery anchor tenants. Albertsons, Amerige, Orange County, CA Geographic Diversification (by Book Value) Australia 60% United States 32% New Zealand 8% Summary of Acquisitions Since July 2003 Property Region Gross Purchase Acquisition Acquisition Anchor Anchor Lettable Date Price Yield Tenants Lease Area m 2 Expiry Australia AU$ m Port Headland WA 14,854 Sep % Coles 2017 (100%)* US US$ m El Cerrito Oakland, CA 23,778 Sep % Albertsons** 2022 Amerige Orange County, CA 8,981 Sep % Albertsons 2027 Milford Cincinnati, OH 10,117 Sep % Kroger 2020 Bent Tree Plaza Raleigh, Durham, NC 7,386 Dec % Kroger 2019 Highland Square Jacksonville, FL 23,254 Dec % Publix, 2019 Winn Dixie Franklin Square Frankfort, KY 17,994 Dec % Kroger 2010 Palm Harbour Daytona Beach, FL 15,131 Dec % Publix 2011 * CountryWide s share represents 75%. ** Albertsons supermarket has not been acquired by the JV although it trades as part of the overall centre.

3 03 Acquisitions (cont) The US portfolio experienced greater activity in 2003 and represents 32% of the Trust s total assets by book value. These recent acquisitions in the US have increased the diversity of the US portfolio, consolidating its presence in the strong Californian market and broadening its reach into new states such as North Carolina. Active management of our portfolios also means we may choose to sell properties and at the end of 2003 the US joint venture sold a property in Atlanta, Georgia for US$10.7 million, 17% above book value. Starbucks, El Cerritto, Oakland, CA Geographic spread across US states (by Book Value) 40% 35% 30% 25% 20% 15% 10% 5% 0% Alabama California Colorado Florida Georgia Kentucky Ohio Oregon South Carolina Texas Virginia Washington North Carolina Foreign Tax Credits In addition to cash distributions including a tax advantaged component, unitholders may also be entitled to a foreign tax credit in respect of any foreign taxes incurred by the Trust (such as US withholding tax). For the year ended 30 June 2003 this amounted to 0.12 cents per unit. The foreign tax credit that may be claimed by a unitholder in a particular income tax year is calculated as the lessor of; (a) The unitholder s share of the amount of foreign taxes paid by the Trust; and (b) the Australian tax payable on foreign income of the same class derived by the unitholder. In the event that a foreign tax credit cannot be used by a unitholder in a particular income tax year because the foreign tax paid exceeds the Australian tax payable, the excess may be carried forward for a period of five years to offset against future Australian tax payable on the foreign income of the same class. For further information, please contact your financial or taxation advisor.

4 04 Acquisitions Development Update CountryWide s property redevelopment pipeline for its Australian portfolio continues to roll out with six new projects identified and approved so far for CountryWide actively pursues redevelopment opportunities that add value to the portfolio in terms of investment returns, lengthening lease expiry terms and maintaining each individual property s competitive advantage and market dominance. Nambour Plaza, Nambour, QLD Projects Thirteen projects totalling $55.5 million are currently underway or have been recently completed. All projects are tracking in line with forecast projections and are forecast to return a year one development yield of 10.1% and 10 year total return of 15.6%. CountryWide style We have also introduced an effective generic styled logo for our developments which maintain a link with the local community using historically important names and a symbol characteristic of the local area. For CountryWide, it offers a subtle branding that each property is part of the Trust. Strong Turnover Growth in Australia and New Zealand up 5.2% Strong anchor sales growth continues to be achieved across the Australian and New Zealand portfolios. Comparable anchor tenant turnover growth for the year ended 30 September 2003 increased by 3.4% while anchor stores currently paying turnover rent reported turnover growth of 5.2%. Anchor stores paying turnover rent represent 76% of total anchor tenant rent across CountryWide s Australian and New Zealand portfolios. Anchor tenant sales growth is important to CountryWide as more than 70% of CountryWide s income across its Australian and New Zealand investments is derived from anchor tenants such as Coles, Woolworths and Progressive.

5 05 Development Update (cont) Nambour Plaza, Queensland The $23 million Nambour Plaza redevelopment is the largest redevelopment CountryWide has undertaken since it listed in The first stage of the redevelopment, which involved a full upgrade of the existing centre and expansion and refurbishment of the Woolworths supermarket, was successfully completed in December 2003 and fully operational for the busy Christmas trading period. Nambour Plaza, Nambour, QLD The second stage of the redevelopment, due to be opened by the end of April this year, includes the addition of a Big W discount department store and 1,250 sqm of extra specialty retail space, equating to 22 new specialty stores. Specialty store leasing has been strong with terms agreed on 90% of the new specialty area with the remaining area in the final stages of lease negotiations. More than 70% of the specialty area has been leased to national specialty retailers, a newsagency and pharmacy. The redevelopment has created approximately 250 short term construction jobs and will also generate around 300 long term jobs. The centre has continued trading throughout the upgrade, with works being undertaken outside normal trading hours to ensure minimal disruption to customers. CountryWide secured new 20 year leases from Woolworths Supermarkets and Big W, continuing the Trust s strategy of upgrading and improving long term lease arrangements with the nation s largest food retailers. Leverage your MCW Units If you want to increase your holding in MCW there is a way you can do this without any extra outlay of capital. Macquarie Margin Lending provides approved applicants with a line of credit against their share or managed fund portfolio, so they can purchase more investments. Currently, Macquarie Margin Lending lends up to 70% against the market value of MCW units. Your units then become the security for your margin loan so you can purchase additional approved shares or managed funds of your choice there are over 680 to choose from. The minimum loan amount is $20,000. For more information on how to leverage your MCW units, contact your financial adviser or Ask Macquarie on or Macquarie Margin Lending is offered by Macquarie Bank Limited ABN Full terms and conditions are set out in the relevant loan contracts. Fees, charges and government taxes apply. Macquarie has made all efforts to ensure that the information expressed above is accurate at time of printing but cannot guarantee its accuracy. Potential investors should seek their own professional, legal, taxation and investment advice regarding the suitability of any of the products mentioned to their own circumstances. Distribution Timetable 6 months ending 30 June months ending 30 December 2004 Units go ex-distribution 24 June December 2004 Record date 30 June December 2004 Distributions paid (approximately) 12 August February 2005 Reports mailed End September 2004 Mid March 2005

6 06 New Macquarie Trusts Macquarie has formed several successful US joint ventures, leading to the creation of two new listed property trusts: Macquarie ProLogis Trust and Macquarie DDR Trust. Macquarie ProLogis Trust is a joint venture between Macquarie and ProLogis (NYSE code: PLD), the world's largest provider of distribution facilities and services and the largest industrial real estate investment trust listed on the NYSE. Macquarie DDR Trust is a joint venture between Macquarie and Developers Diversified Corporation (NYSE code: DDR), a leading specialist in the acquisition, development and management of US community shopping centres. Macquarie ProLogis Trust (ASX Code: MPR) Macquarie DDR Trust (ASX Code: MDT) MPR invests in a diversified portfolio of high quality industrial properties in North America. The properties are distribution centres located near major markets that can be used for bulk storage, distribution of products and light manufacturing. No. of properties: 82 Share of total property assets: Approx US$810 million Forecast distribution yield*: 10.3% Website: *as at 23 January 2004 based on a unit price of $1.04 MDT invests in US community shopping centres which benefit from the shopping trend of consumers demanding greater value and convenience. US national tenants anchor the properties which are located in established trade areas. No. of properties: 11 Share of total property assets: Approx US$603 million Forecast distribution yield*: 8.9% (annualised) Website: *as at 23 January 2004 based on a unit price of $1.02 Buy Trust Units at a Discount By reinvesting your distributions through the Trust s Distribution Reinvestment Plan (DRP), you effectively buy units at a discount (currently 2.5%) to market price and pay no brokerage fees. The Trust s DRP has been active since June The participation rate is about 50%. To participate, simply contact the Unit Registry on , or download the form from their website Contact Details To find out more about MCW, please talk to your adviser, or contact us: propfunds@macquarie.com.au Website: Call: Fax: (02) To update your unitholding details (eg change of address, lodge TFN number), please contact ASX Perpetual Registrars: registrars@asxperpetual.com.au Website: Call: Macquarie CountryWide Management Limited (MCML) is not an authorised deposit-taking institution for the purposes of the Banking Act (Cth) 1959, and MCML s obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN (MBL). MBL provides a limited $5 million guarantee to the Australian Securities and Investments Commission in respect of MCML s Corporations Act obligations as a responsible entity of managed investment schemes. MBL does not otherwise provide assurance in respect of the obligations of MCML. This trust newsletter has been prepared by MCML and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. Past performance of the trust is not a reliable indication of future performance. Macquarie Group