Charter Hall Long WALE REIT

Transcription

1 Charter Hall WALE Limited ABN Charter Hall Long WALE REIT Product Disclosure Statement In relation to an offer of million Securities in Charter Hall Long WALE REIT Co-Managers Legal adviser Joint Lead Managers

2 PDS / Important Information and Disclaimer Important Information and Disclaimer Offer The Offer contained in this product disclosure statement ( PDS ) is an offer by Charter Hall WALE Limited (ABN , Australian Financial Services Licence Number ) ( Responsible Entity ) as responsible entity of each of LWR Finance Trust (ARSN ) ( Finance Trust ) of fully paid units in Finance Trust, Charter Hall Direct Industrial Fund (ARSN ) ( DIF ) of fully paid units in DIF, Canning Vale Logistics Trust No.1 (ARSN ) ( CVLT1 ) of fully paid units in CVLT1, 218 Bannister Road Trust (ARSN ) ( 218 BRT ) of fully paid units in 218 BRT, CPOF Kogarah Holding Trust (ARSN ) ( CPOF KHT ) of fully paid units in CPOF KHT, Franklin Street Property Trust (ARSN ) ( FSPT ) of fully paid units in FSPT and CHPT Dandenong Trust (ARSN ) ( CHPTDT ) of fully paid units in CHPTDT which will be stapled together and trade as Stapled Securities of Long WALE REIT ( Securities ). This PDS has been prepared by Charter Hall WALE Limited as responsible entity of Finance Trust, DIF, CVLT1, 218 BRT, CPOF KHT, FSPT and CHPTDT (each a Stapled Trust and together being the Long WALE REIT (the REIT )). This PDS is a product disclosure statement for the purposes of Part 7.9 of the Corporations Act. The Responsible Entity takes full responsibility for this PDS. References to the REIT or Long WALE REIT Long WALE REIT will be formed as a result of the Restructure, which will be undertaken in connection with the Offer. If the Offer is successful, Securities will only be able to be traded either after the Restructure has completed or conditional on the Restructure completing. Unless otherwise specified, this PDS has been prepared as if the Restructure has completed. References to the REIT or Long WALE REIT throughout this PDS are references to the group that will exist following implementation of the Restructure. No Securities will be issued under this PDS unless the Restructure has occurred or will occur. Further details about the Restructure are set out in Section Lodgement and Listing This PDS is dated 27 September 2016 ( PDS Date ) and a copy was lodged with the Australian Securities and Investments Commission ( ASIC ) on that day ( PDS Lodgement ). The Responsible Entity will apply to ASX Limited ( ASX ) within seven days after the PDS Date for admission of the Stapled Trusts to the Official List and quotation of the Securities on the ASX. None of ASIC, the ASX or their officers take any responsibility for the content of this PDS or for the merits of the investment to which this PDS relates. The fact that the ASX may admit the Stapled Trusts to the Official List and quote Securities is not to be taken in any way as an indication of the merits of the REIT. The Responsible Entity disclaims all liability, whether in negligence or otherwise, to persons who trade Securities before receiving their holding statement. The ASX reserves the right (but without limiting its absolute discretion) to remove one or more entities with Units from the Official List if any of their securities cease to be stapled together, or any equity securities are issued by one entity which are not stapled to equivalent securities in the other entity or entities. Not investment advice The information in this PDS is not financial product advice and does not take into account your investment objectives, financial situation or particular needs. It is important that you read this PDS carefully and in its entirety before deciding whether to invest in the REIT. In particular, you should consider the risk factors that could affect the performance of the REIT. You should carefully consider these risks in light of your personal circumstances (including financial and tax issues) and seek professional guidance from your stockbroker, solicitor, accountant or other independent professional adviser before deciding whether to invest in Securities. Some of the key risk factors that should be considered by prospective investors are set out in Section 12. There may be risk factors in addition to these that should be considered in light of your personal circumstances. No person is authorised to give any information or to make any representation in connection with the Offer described in this PDS which is not contained in this PDS. Any information not so contained may not be relied upon as having been authorised by the REIT, the Joint Lead Managers or any other person in connection with the Offer. You should rely only on information in this PDS. Rights and liabilities attached to the Units All Securities will rank equally in all respects from the date the Securities under the Offer are issued. Details of the rights and liabilities attached to each Security are set out in Section 14.3 and in the Constitutions, copies of which will be made available for inspection at the registered office of the Responsible Entity within normal trading hours. Financial information presentation The Pro Forma Consolidated Statement of Financial Position included in this PDS has been prepared and presented in accordance with the recognition and measurement principles prescribed in the Australian Accounting Standards, except where otherwise stated. The Forecast Financial Information included in this PDS is unaudited and is based on the best estimate assumptions of the Directors. The basis of preparation and presentation of the Forecast Financial Information is, to the extent applicable, consistent with the basis of preparation and presentation of the Pro Forma Consolidated Statement of Financial Position. The Forecast Financial Information and the Pro Forma Consolidated Statement of Financial Position contained in this PDS should be read in conjunction with, and are qualified by reference to, the information contained in Section 7. Forward looking statements This PDS contains forward looking statements which are identified by words such as may, could, believes, estimates, expects, intends and other similar words that involve risks and uncertainties. In addition, consistent with customary market practice in offerings in Australia, Forecast Financial Information has been prepared and included in this PDS in Section 7. The REIT has no intention to update or revise forward looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this PDS, except where required by law. Any forward looking statements are subject to various risk factors that could cause the REIT s actual results to differ materially from the results expressed, implied or anticipated in these statements. The Forecast Financial Information and other forward looking statements should be read in conjunction with, and are qualified by reference to, the risk factors set out in Section 12, the general and specific assumptions set out in Section and 7.5.2, the sensitivity analysis set out in Section 7.6 and other information in the PDS. This PDS contains market data, industry forecasts and projections. The REIT has obtained portions of this information from market research prepared by third parties. There is no assurance that any of the forecasts or projections contained in the reports, surveys and research of third parties which are referred to in this PDS will be achieved. The REIT has not independently verified this information. Estimates, forecasts and projections involve risks and uncertainties and are subject to change based on various factors, including those discussed in the risk factors set out in Section 12. Independent Valuations This PDS contains information regarding the Independent Valuation of the Initial Portfolio. Valuations are an opinion of a fair price payable by a willing buyer, not a guarantee of current or future market value. By necessity, valuations require the valuer to make subjective judgements that, even if logical and appropriate, may differ from those made by a purchaser or another valuer. Historically it has been considered that valuers may properly reach conclusions within a range of possible values. Independent Valuations are subject to a number of assumptions and conditions including, but not limited to:

3 Charter Hall Long WALE REIT / 1 Important Information and Disclaimer (continued) that all properties are held with good and marketable title, free and clear of any or all liens, encumbrances, restrictions or other impediments of an onerous nature and that utilisation of the land is within the boundaries of property lines with no trespass or encroachment; responsible ownership and competent property management; absence of any defects in engineering or presence of any hazardous waste and/or toxic material; compliance with all applicable federal, state and local environmental regulations and laws and all applicable zoning and use regulations and restrictions; and absence of any latent or unhidden conditions or defects on a building s subsoil or structures. Property values can change substantially, even over short periods of time, and an independent valuer s opinion of value could differ significantly if the date of valuation were to change. A high degree of volatility in the market may lead to fluctuations in values over a short period of time. No offering where offering would not be lawful This PDS does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. No action has been taken to register or qualify the Securities or the Offer, or to otherwise permit a public offering of the Securities in any jurisdiction outside Australia and New Zealand. The Offer is not being extended to any investor outside Australia and New Zealand, other than to certain Institutional Investors in select eligible jurisdictions. This PDS does not constitute an offer or invitation to potential investors to whom it would not be lawful to make such an offer or invitation. The distribution of this PDS outside Australia and New Zealand may be restricted by law and persons who come into possession of this PDS outside Australia and New Zealand should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. For details of selling restrictions that apply to the Securities in certain jurisdictions outside of Australia and New Zealand, please refer to Section 8. This PDS may not be distributed to, or relied upon by, persons in the United States. The Securities have not been, and will not be, registered under the US Securities Act or the securities laws of any state of the United States, and may not be offered or sold in the United States, or to or for the account or benefit of any person in the United States, except in a transaction exempt from the registration requirements of the US Securities Act and applicable United States state securities laws. Unless otherwise agreed with the REIT, any person subscribing for Securities in the Offer shall by virtue of such subscription be deemed to represent that they are not in a jurisdiction which does not permit the making of an offer or invitation as detailed in this PDS, and are not acting for the account or benefit of a person within such jurisdiction. None of the REIT, the Joint Lead Managers, nor any of their respective directors, officers, employees, consultants, agents, partners or advisers accepts any liability or responsibility to determine whether a person is able to participate in the Offer. Exposure Period The Corporations Act 2001 (Cth) prohibits the REIT from processing Applications in the seven day period after the date of PDS Lodgement ( Exposure Period ). The Exposure Period may be extended by ASIC by up to a further seven days. The purpose of the Exposure Period is to enable the PDS to be examined by market participants prior to the raising of funds. Applications received during the Exposure Period will not be processed until after the expiry of the Exposure Period. No preference will be conferred on any Applications received during the Exposure Period. Obtaining a copy of this PDS A paper copy of the PDS is available free of charge to any person in Australia and New Zealand by calling the Long WALE REIT Offer Information Line on (within Australia) or (outside Australia) from 8:30am until 5:30pm (Sydney time) Monday to Friday. This PDS is also available to Australian and New Zealand resident investors in electronic form at the Offer Website, The Offer constituted by this PDS in electronic form is available only to Australian and New Zealand residents accessing the Website from Australia and New Zealand. It is not available to persons in any other jurisdiction (including the United States). Persons who access the electronic version of this PDS should ensure that they download and read the entire PDS. The Responsible Entity, with the consent of the Joint Lead Managers, reserves the right to extend the Offer, close the Offer Period early or withdraw the Offer, in each case without notice. Applications Applications may only be made during the Offer Period on the appropriate Application Form attached to, or accompanying, this PDS in its paper copy form, or in its electronic form which must be downloaded in its entirety from By making an Application, you represent and warrant that you were given access to the PDS, together with an Application Form. The Corporations Act 2001 (Cth) prohibits any person from passing the Application Form onto another person unless it is attached to, or accompanied by, this PDS in its paper copy form or the complete and unaltered electronic version of this PDS. No cooling-off rights Cooling-off rights do not apply to an investment in the Securities issued under the PDS. This means that, in most circumstances, you cannot withdraw your Application. Defined terms and abbreviations Defined terms and abbreviations used in this PDS are explained in the Glossary in Section 16. Unless otherwise stated or implied, references to times in this PDS are to Sydney time and references to dates or years are calendar year references. All financial amounts contained in this PDS are expressed in Australian dollars unless otherwise stated. Any discrepancies between totals and sums and components in tables contained in this PDS are due to rounding. There are references within this document to the Board performing certain activities which do not specify whether the activities are performed by the Board of the Responsible Entity or the board of directors of any wholly owned entity of each. Each of those boards will have separate responsibilities (as relevant) and will undertake the necessary activities to provide proper corporate governance frameworks for that relevant entity. Photographs and diagrams Photographs and diagrams in this PDS do not necessarily depict properties owned or used by the REIT, and are for illustration only and should not be interpreted to mean that any person shown in them endorses this PDS or its contents. Diagrams used in the PDS are illustrative only and may not be drawn to scale. Unless otherwise stated, all data contained in charts, graphs and tables is based on information available at the PDS Date. Privacy By completing an Application Form, you are providing personal information to the REIT and the Registry, which is contracted by the REIT to manage Applications. The REIT, and the Registry on its behalf, collect, hold and use that personal information to process your Application, service your needs as a holder of Securities, provide facilities and services that you request and carry out appropriate administration. Once you become a Securityholder, the Corporations Act 2001 (Cth) and Australian taxation legislation requires information about you (including your name, address and details of the Securities you hold) to be included in the Register. The information must continue to be included in the Register if you cease to be a Securityholder. If you do not provide all the information requested, your Application Form may not be able to be processed. The REIT and the Registry may disclose your personal information for purposes related to your investment to their agents and service providers including those listed below or as otherwise authorised under the Privacy Act 1988 (Cth): the Registry for ongoing administration of the Register; the Joint Lead Managers in order to assess your Application; a regulatory agency in compliance or purported compliance with regulatory obligations; printers and other companies for the purpose of preparation and distribution of documents and for handling mail;

4 2 / PDS / Important Information and Disclaimer Important Information and Disclaimer (continued) market research companies for the purpose of analysing the REIT s Securityholder base and for product development and planning; and legal and accounting firms, auditors, management consultants and other advisers for the purpose of administering, and advising on, the Securities and for associated actions. You may request access to your personal information held by or on behalf of the REIT. You can request access to your personal information or obtain further information about the REIT s privacy practices by contacting the Registry. You may be required to pay a reasonable charge to the Registry in order to access your personal information. The Responsible Entity will aim to ensure that the personal information it retains about you is accurate, complete and up-to-date. To assist with this, please contact the Registry if any of the details you have provided change. In accordance with the requirements of the Corporations Act, information on the Register will be accessible by members of the public. Please contact us by calling the Long WALE REIT Offer Information Line on (within Australia) or (outside Australia) if you do not consent to the Responsible Entity using or disclosing your personal information in these ways. It is important that you contact the Responsible Entity because, by investing in the Securities, you will be taken to have consented to these uses and disclosures. Up-to-date information Information regarding the Offer may need to be updated from time to time. Any updated information about the Offer that is not considered materially adverse will be made available on the REIT s Website at The REIT will provide a copy of the updated information free of charge to any recipient of this PDS or Applicant who requests a copy by contacting their broker or the Long WALE REIT Offer Information Line on (within Australia) or (outside Australia) from 8:30am until 5:30pm (Sydney time) Monday to Friday. Underwriting and Offer management J.P. Morgan and UBS AG, Australia Branch have been appointed by the REIT as Joint Lead Managers to the Offer, subject to certain terms and conditions stipulated within the Offer Management Agreement. The Offer Management Agreement sets out a number of circumstances where the Joint Lead Managers may terminate their obligations. For further information on the terms and conditions of the Offer Management Agreement, you should refer to Section Disclaimer This document is important and should be read in its entirety. No person is authorised to give any information, or to make any representation, in connection with the Offer that is not contained in this PDS. Any information or representation that is not in this PDS may not be relied on as having been authorised by the Responsible Entity in connection with the Offer. Except as required by law, and only to the extent so required, neither the Responsible Entity, nor any other person, warrants or guarantees the future performance of the REIT, the repayment of capital, or any return on any investment made pursuant to this information. The Joint Lead Managers have not authorised, permitted or caused the issue, lodgement, submission, dispatch or provision of this PDS and do not make or purport to make any statement in this PDS and there is no statement in this PDS which is based on any statement by the Joint Lead Managers. The Joint Lead Managers and their affiliates, officers and employees, to the maximum extent permitted by law, expressly disclaim all liabilities in respect of, make no representations regarding, and take no responsibility for, any part of this PDS and make no representation or warranty as to the currency, accuracy, reliability or completeness of this PDS. This Offer and the content of this PDS are principally governed by Australian rather than New Zealand law. In the main, the Corporations Act 2001 (Cth) and the regulations made under that Act set out how the Offer must be made. There are differences in how financial products are regulated under Australian law. For example, the disclosure of fees for managed investment schemes is different under the Australian regime. The rights, remedies, and compensation arrangements available to New Zealand investors in Australian financial products may differ from the rights, remedies, and compensation arrangements for New Zealand financial products. Both the Australian and New Zealand financial markets regulators have enforcement responsibilities in relation to this offer. If you need to make a complaint about this offer, please contact the Financial Markets Authority, New Zealand ( The Australian and New Zealand regulators will work together to settle your complaint. The taxation treatment of Australian financial products is not the same as for New Zealand financial products. If you are uncertain about whether this investment is appropriate for you, you should seek the advice of an appropriately qualified financial adviser. The Offer may involve a currency exchange risk. The currency for the financial products is not New Zealand dollars. The value of the financial products will go up or down according to changes in the exchange rate between that currency and New Zealand dollars. These changes may be significant. All Distributions are calculated in Australian dollars. Distributions for Australian Investors will only be paid in Australian dollars directly into a bank account or other account with a financial institution where there is a branch in Australia. New Zealand Investors may elect to have their Distributions paid in New Zealand dollars to a New Zealand bank account, with the Australian dollar distribution converted to New Zealand dollars at a spot exchange rate. If you expect the financial products to pay any amounts in a currency that is not New Zealand dollars, you may incur significant fees in having the funds credited to a bank account in New Zealand and converted to another currency. If the financial products are able to be traded on a financial product market and you wish to trade the financial products through that market, you will have to make arrangements for a participant in that market to sell the financial products on your behalf. If the financial product market does not operate in New Zealand, the way in which the market operates, the regulation of participants in that market, and the information available to you about the financial products and trading may differ from financial product markets that operate in New Zealand. The dispute resolution process described in this PDS is available only in Australia and is not available in New Zealand. Important information for New Zealand Investors This Offer to New Zealand investors is a regulated offer made under Australian and New Zealand law. In Australia, this is Chapter 8 of the Corporations Act 2001 (Cth) and regulations made under that Act. In New Zealand, this is subpart 6 of Part 9 of the Financial Markets Conduct Act 2013 and Part 9 of the Financial Markets Conduct Regulations 2014.

5 Charter Hall Long WALE REIT / 3 Table of Contents Important Information and Disclaimer IFC Table of Contents 3 Key Offer Information 4 Letter to Investors 6 1. Investment Overview 8 2. Overview of the REIT Portfolio Overview Real Estate Market Overview Charter Hall Group Board and Management Financial Information Details of the Offer Investigating Accountant s Report Summary of Valuation Reports Taxation Risks Fees and Other Costs Summary of Important Documents Additional Information Glossary Corporate Directory 216

6 4 / PDS / Key Offer Information Key Offer Information Key Offer statistics at Allotment Offer Price per Security $4.00 Number of Securities to be issued under the Offer million Total number of Securities on issue following Allotment million Market capitalisation at the Offer Price $1,120.6 million Forecast FY17 annualised Operating Earnings Yield per Security 1 5.3% Forecast 1H FY18 annualised Operating Earnings Yield per Security 2 5.4% Forecast FY17 annualised Distribution Yield per Security 3 5.3% Forecast 1H FY18 annualised Distribution Yield per Security 4 5.4% NTA per Security $3.88 Offer Price premium to NTA value per Security 3.1% Balance Sheet Gearing Net cash Look Through Gearing 11.3% Key Initial Portfolio statistics 5 Number of Properties 66 Independent Valuation 6 $1,253 million Weighted Average Capitalisation Rate ( WACR ) 7 6.4% Occupancy % Weighted Average Lease Expiry ( WALE ) years Proportion of income subject to fixed rental increases 9 58% Weighted Average Rental Review ( WARR ) % 1 Forecast Operating Earnings per Security of 21.2 cents (annualised) for the period from Allotment until 30 June Forecast Operating Earnings per Security of 21.6 cents (annualised) for 1H FY18. Noting that certain leases are rent reviewed in the second half of the financial year and these reviews are not captured in this 1H FY18 annualised number. 3 Forecast Distributions per Security of 21.2 cents (annualised) for the period from Allotment until 30 June Forecast Distributions per Security of 21.6 cents (annualised) for 1H FY18. Noting that certain leases are rent reviewed in the second half of the financial year and these reviews are not captured in this 1H FY18 annualised number. 5 Initial Portfolio metrics include Woolworths Distribution Centre, Dandenong at lease commencement. 6 Independent Valuation as at 30 June 2016 except Woolworths Distribution Centre, Dandenong which is as at 17 December 2015 on a lease commencement basis and Coles Distribution Centre, Truganina which is as at 5 July 2016 (REIT ownership interest). 7 Weighted by Independent Valuation (REIT ownership interest). 8 As at 30 June 2016, weighted by gross passing income (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 9 By gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 10 WARR weighted by gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. CPI is assumed at 2% over the Forecast Period (see Sections and 16 for more information on CPI).

7 Charter Hall Long WALE REIT / 5 Key Offer Information (continued) Important dates 2016 PDS Date Reinvestment Offer, Broker Firm Offer and Charter Hall Group Offer opens Broker Firm Offer and Charter Hall Group Offer closes Reinvestment Offer Closes (if applying for additional Stapled Securities) Reinvestment Offer Closes (if not applying for additional Stapled Securities) Record Date (for determining the entitlement of DIF unitholders to participate in the Reinvestment Offer) Institutional Offer conducted Commencement of trading on the ASX (conditional and deferred settlement basis) Settlement Issue and Allotment of Securities Unconditional and deferred settlement basis trading Dispatch of holding statements Payment of Capital Distribution and Redemption proceeds to Reinvestment Offer Investors who have elected to take cash Commencement of trading on a normal settlement basis 27 September 5 October 14 October 14 October 17 October 17 October 18 October 19 October 26 October 27 October 28 October 28 October 28 October 31 October The timetable above is indicative only and may change without notice. The Responsible Entity, with the consent of the Joint Lead Managers, reserves the right to amend any or all of these dates and times subject to the Listing Rules, the Corporations Act 2001 (Cth) and other applicable laws, including closing the Offer early, extending the Offer or accepting late Applications, either generally or in particular cases, without notification. How to invest Applications for Securities can only be made by completing and lodging the Application Form attached to or accompanying this PDS. Instructions on how to apply for Securities are set out in Section 8 and on the Application Form. If you require a replacement Application Form please contact the Offer Information Line on (within Australia) or (outside Australia) between 8:30am and 5:30pm (Sydney time) Monday to Friday during the Offer Period.

8 6 / PDS / Letter to Investors Letter to Investors Dear Investor, On behalf of the Board of Directors, I am pleased to introduce you to Charter Hall Long WALE REIT ( Long WALE REIT or the REIT ) and invite you to become an investor in the REIT. Long WALE REIT will be an Australian Real Estate Investment Trust ( REIT ) listed on the ASX and will seek to invest in high quality Australasian properties that are predominantly leased to corporate and government tenants on long-term leases. The REIT will comprise an Initial Portfolio 1 of 66 Properties independently valued at $1,253 million 2 with a weighted average capitalisation rate ( WACR ) of 6.4% 3, a weighted average lease expiry ( WALE ) of 12.5 years 4 and 100% occupancy 4. The Initial Portfolio will be diversified by geography and real estate sector containing office, industrial and retail 5 properties located in six Australian states. Long WALE REIT will offer Investors a forecast Distribution Yield of 5.3% annualised for the period from Allotment to 30 June 2017 and 5.4% annualised for 1H FY18 6. Approximately 65% of the forecast Distributions for the period from Allotment until 30 June 2017 and approximately 34% of the forecast Distributions for 1H FY18 are expected to be tax deferred. The REIT will target the distribution of 100% of its Operating Earnings and expects to provide Securityholders with quarterly Distributions. Growth in Distributions is expected to be underpinned by a combination of fixed rental increases and CPI linked rental reviews. Approximately 58% of the gross income from the Initial Portfolio is subject to fixed rental increases 7 at a weighted average rental review ( WARR ) of 3.4% 8. The balance of the Initial Portfolio, approximately 42%, is subject to rental reviews linked to CPI. The weighted average rental review across the Initial Portfolio is estimated to be 2.8% 9. Long WALE REIT will maintain a conservative capital structure. At Allotment the REIT is expected to have a net cash Balance Sheet Gearing position and Look Through Gearing of 11.3% 10. The REIT will target a Balance Sheet Gearing range of 25% to 35%. At Allotment the REIT will be below the target range, providing the opportunity for the REIT to enhance returns to Securityholders through further acquisitions. The REIT s objective is to provide Investors with stable and secure income and the potential for both income and capital growth through an exposure to a portfolio with a long WALE. The REIT will be actively managed to grow the Portfolio through direct and indirect investments across multiple real estate sectors. The REIT will focus on assets that are predominantly leased to tenants with strong covenants on long-term leases. Long WALE REIT will be managed by Charter Hall Group, one of Australia s leading fully integrated property groups, with over 25 years experience managing high quality real estate on behalf of institutional, wholesale and retail clients. Charter Hall has $17.5 billion of funds under management and manages 296 properties across the office, retail and industrial sectors 11. Charter Hall s interests are strongly aligned with the REIT s management and performance. Charter Hall will maintain an investment in the REIT and following Allotment will hold up to approximately 22% of Securities on issue. The REIT will also benefit from access to Charter Hall s proven track record in sourcing investment opportunities for its funds, with $12.6 billion of transactions executed over the last five years, including $9.3 billion of acquisitions and $3.3 billion of divestments.

9 Charter Hall Long WALE REIT / 7 Letter to Investors (continued) The Responsible Entity is seeking to raise $1,120.6 million through the issue of approximately million Securities at an Offer Price of $4.00 per Security (the Offer). The Offer comprises a Reinvestment Offer, Broker Firm Offer, Institutional Offer and a Charter Hall Group Offer. An application has been made by the Responsible Entity for the admission of the REIT to the Official List of the ASX and quotation of Securities on the ASX. This PDS contains important and detailed information regarding the Offer. I encourage you to read it carefully and in its entirety, including Section 12 which sets out the risks associated with an investment in the REIT and Section 13 which sets out the fees and other costs associated with investing in Long WALE REIT. If you have any questions, you should seek relevant professional advice before making an investment decision. On behalf of the Board of Directors, I thank you for considering this opportunity to invest in Long WALE REIT and I look forward to welcoming you as an investor in the REIT. Peeyush Gupta, Independent Chairman Charter Hall WALE Limited 1 Initial Portfolio metrics include Woolworths Distribution Centre, Dandenong at lease commencement. 2 Independent Valuation as at 30 June 2016 except Woolworths Distribution Centre, Dandenong which is as at 17 December 2015 on a lease commencement basis and Coles Distribution Centre, Truganina which is as at 5 July 2016 (REIT ownership interest). 3 Weighted by Independent Valuation (REIT ownership interest). 4 As at 30 June 2016, weighted by gross passing income (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 5 Assets leased to ALH Group. 6 The REIT is forecasting Distributions per Security of 21.2 cents (annualised) for the period from Allotment until 30 June 2017 and 21.6 cents (annualised) for 1H FY18. Noting that certain leases are rent reviewed in the second half of the financial year and these reviews are not captured in this 1H FY18 annualised number. This information is based on the Forecast Financial Information set out in this PDS and is subject to risks (including those set out in Section 12) and assumptions (set out in Section 7.5). 7 By gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 8 Based on fixed rental reviews weighted by gross passing income (REIT ownership interest). Approximately 58% of gross passing income of the Initial Portfolio is subject to annual fixed rental increases with the remaining leases linked to CPI. 9 WARR weighted by gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. CPI is assumed at 2% over the Forecast Period (see Sections and 16 for more information on CPI). 10 Calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets less cash, based on the non-ifrs proportionate pro forma consolidated statement of financial position (as set out in Section 7.8.2), which adjusts for the REIT s share of the debt, assets and cash held in equity accounted investments. 11 As at 30 June 2016.

10 8 / PDS / Investment Overview Investment Overview 1 Australian Taxation Office, Adelaide, SA

11 Charter Hall Long WALE REIT / 9 1. Investment Overview 1.1. Introduction Topic Summary Reference What is the Long WALE REIT? Long WALE REIT will be an Australian Real Estate Investment Trust ( REIT ) listed on the ASX and will seek to invest in high quality Australasian real estate assets that are predominantly leased to corporate and government tenants on long term leases. Section 2.1 What is the REIT s investment objective and strategy? What is the REIT s policy for acquiring and divesting properties? The REIT will comprise an Initial Portfolio of 66 Properties Independently Valued at $1,253 million 1 with a weighted average lease expiry profile ( WALE ) of 12.5 years 2. The Initial Portfolio will be diversified by geography and real estate sector, containing office, industrial and retail 3 properties located in six Australian states. The REIT s objective is to provide Investors with stable and secure income and the potential for both income and capital growth through an exposure to a portfolio with a long WALE. The REIT will be actively managed to grow the Portfolio through direct and indirect investments across multiple real estate sectors. The REIT will focus on assets that are predominantly leased to tenants with strong covenants on long-term leases. The REIT will continually evaluate acquisition (including joint venture) opportunities across multiple real estate sectors including those outside the Initial Portfolio. Section 2.2 Section 2.2 Will the REIT take on material development risk? Will the REIT invest in properties overseas? Future acquisitions may be sourced from third parties or members of the Charter Hall Group. Charter Hall will actively manage the Portfolio, including through acquiring and divesting assets in line with the REIT s investment objectives to maintain and enhance the quality of the Portfolio. The strategy of the REIT is to minimise development risk, with a focus on sustainable income returns. The REIT will not undertake speculative development. The REIT may undertake development in circumstances when income risk can be substantially mitigated. The REIT may develop or redevelop existing Properties to maximise returns to Securityholders. The REIT will be focused on investment opportunities in Australasia. While the Initial Portfolio comprises properties located across six Australian states, the REIT will evaluate investment opportunities located in both Australia and New Zealand that satisfy its investment objectives. Section 2.2 Section 2.2 The REIT will not invest in properties located outside of Australasia. 1 Independent Valuation as at 30 June 2016 except Woolworths Distribution Centre, Dandenong, which is as at 17 December 2015 on a lease commencement basis and Coles Distribution Centre, Truganina, which is as at 5 July 2016 (REIT ownership interest). 2 As at 30 June 2016, weighted by gross passing income (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 3 Assets leased to ALH Group.

12 10 / PDS / Investment Overview 1. Investment Overview (continued) 1.2. Benefits and risks Topic Summary Reference What are the benefits associated with an investment in the REIT? Attractive financial metrics with conservative capital structure Section 2.3 forecast Operating Earnings Yield of 5.3% for the period from Allotment to 30 June 2017 (annualised), growing to 5.4% for 1H FY18 (annualised) forecast Distribution Yield of 5.3% for the period from Allotment to 30 June 2017 (annualised), growing to 5.4% for 1H FY18 (annualised) quarterly Distributions with a target payout ratio of 100% of Operating Earnings net cash Balance Sheet Gearing position and Look Through Gearing of 11.3% 1 at Allotment with a target Balance Sheet Gearing range of 25% to 35% Offer Price of $4.00 per Security represents a premium to NTA of 3.1% as at Allotment Quality, diversified property portfolio the Initial Portfolio 2 will be diversified by geography and real estate sector, containing office (29%), industrial (47%) and retail (24%) properties 3 located in six Australian states Opportunity for value enhancement the REIT will have a net cash Balance Sheet Gearing position and Look Through Gearing of 11.3% 1 at Allotment, providing the opportunity to enhance returns to Securityholders through further acquisitions Charter Hall has a proven track record sourcing investment opportunities for its funds, with $12.6 billion of transactions executed over the last five years, including $9.3 billion of acquisitions and $3.3 billion of divestments the growth trajectory of Long WALE REIT will be assisted through access to Charter Hall s pipeline of investment opportunities Quality of rental income supported by long leases to high quality tenants and structured rental growth approximately 80% of the Initial Portfolio 4 is leased to investment grade tenants 5 including Woolworths Limited (28% 6 ), Commonwealth of Australia (24% 7 ), Wesfarmers Limited (15% 8 ) and Westpac Banking Corporation (7%) quality of rental income of the Initial Portfolio is supported through: a portfolio WALE of 12.5 years 9 ; a broad distribution of lease expiry dates, ensuring that future lease expiries are staggered over time; structured rental growth, with 58% of leases 10 subject to fixed rent reviews with a fixed WARR of 3.4% 11 ; and a portfolio WARR of 2.8% Calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets less cash, based on the non-ifrs proportionate pro forma consolidated statement of financial position (as set out in Section 7.8.2), which adjusts for the REIT s share of the debt, assets and cash held in equity accounted investments. 2 Initial Portfolio metrics include Woolworths Distribution Centre, Dandenong at lease commencement. 3 Percentages by Independent Valuation (REIT ownership interest) include Woolworths Distribution Centre, Dandenong at lease commencement. 4 By gross passing income (REIT ownership interest), includes 6% from other minor tenants with investment grade credit ratings including AB Electrolux (BBB+, 3%) and the Government of Japan (A+) which holds an 80.5% interest in Toll Holdings Limited (3%) through Japan Post Holdings Co. Ratings refer to the latest published Standard & Poor s credit rating as at 23 September In some instances, the tenant is a related entity and/or subsidiary of the parent group. See Section for more information. 6 Assets leased to ALH Group and Woolworths Limited (including as guarantor to Shellbelt Pty Ltd). 7 Assets leased to Commonwealth of Australia (Australian Taxation Office) and Australian Postal Corporation. 8 Assets leased to Coles Group Limited, a wholly owned subsidiary of Wesfarmers Limited. 9 As at 30 June 2016, weighted by gross passing income (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 10 By gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 11 Fixed WARR based on fixed rental reviews weighted by gross passing income (REIT ownership interest). Approximately 58% of gross passing income of the Initial Portfolio is subject to annual fixed rental increases with the remaining leases linked to CPI. 12 WARR, weighted by gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. CPI is assumed at 2% over the Forecast Period (see Sections and 16 for more information on CPI).

13 Charter Hall Long WALE REIT / Investment Overview (continued) Topic Summary Reference What are the benefits associated with an investment in the REIT? (continued) What are the key risks associated with an investment in the REIT? Managed by Charter Hall Group which has proven property expertise the Manager is a wholly owned subsidiary of Charter Hall Group (ASX:CHC). Wholly owned subsidiaries of Charter Hall may also provide property and development management services to the REIT Charter Hall is one of Australia s leading fully integrated property groups, with over 25 years experience managing high quality real estate on behalf of institutional, wholesale and retail clients Charter Hall has $17.5 billion of funds under management and manages 296 properties across the office, retail and industrial sectors 1 Charter Hall s interests are aligned with the REIT through maintaining an investment in the REIT which, following Allotment, will be up to approximately 22% of Securities on issue Experienced, majority independent board with an independent Chairman the Board is comprised of five members, with a majority of independent members, including an independent Chairman the Board is experienced and capable with an average of over 30 years of business, industry and corporate governance experience There are a number of risks associated with investing in the REIT which are set Section 12 out in further detail in Section 12 of this PDS. Key risks specific to an investment in the REIT include: Rental income and expenses risk Distributions made by the REIT are largely dependent on the rents received from tenants across the Portfolio and expenses incurred during operations, which may be affected by a number of factors, including overall economic conditions and property market conditions. Property valuation risk The value of each property held by the REIT may fluctuate due to a number of factors affecting both the property market generally or the REIT s properties in particular. A reduction in the value of any property may adversely affect the value of Securities. Property liquidity By their nature, investments in real property assets are illiquid investments. There is a risk that should the REIT be required to realise property assets, it may not be able to do so in a short period of time, or may not be able to realise a property asset for the amount at which it has been valued. This may adversely affect the REIT s NTA and the value of Securities. Tenant concentration The majority of the properties comprised in the Initial Portfolio are single tenanted. This exposes the value and performance of each property to the ability of those tenants to continue to meet their obligations under the respective lease agreements. In aggregate, 89% of the gross property income is generated from the top five tenants 2. Re-leasing and vacancy risk The Portfolio s leases will come up for renewal on a periodic basis. There is a risk that the REIT may not be able to negotiate suitable lease renewals. This may result in periods of vacancy, a reduction in the REIT s profits and Distributions and a reduction in the value of the assets of the REIT. 1 As at 30 June In some instances, the tenant is a related entity and/or subsidiary of the parent group. See Section for more information.

14 12 / PDS / Investment Overview 1. Investment Overview (continued) 1.3. Initial Portfolio Topic Summary Reference What are the key metrics of the Initial Portfolio? Key Initial Portfolio statistics 1 Number of Properties 66 Independent Valuation 2 $1,253 million Weighted Average Capitalisation Rate ( WACR ) 3 6.4% Occupancy 4 100% Weighted Average Lease Expiry ( WALE ) years Proportion of income subject to fixed rental increases 5 58% Weighted Average Rental Review ( WARR ) 6 2.8% Section 2.1 What real estate sectors will comprise the Initial Portfolio? A summary of the assets in the Initial Portfolio by real estate sector is below, with further detail of each Property provided in Section 3. Sections and 3 Sector Number of Independent Properties Valuation 2 WACR 3 WARR 6 WALE 4 Occupancy 4 Who are the top tenants of the Initial Portfolio of the REIT by gross passing income? ($m) (%) (%) (yrs) (%) Office 2 $ % 3.4% % Industrial 10 $ % 2.8% % Retail 54 $ % CPI % Total/ Wtd. Average 66 $1, % 2.8% % Metrics above include Woolworths Distribution Centre, Dandenong at lease commencement. The top tenants 7 of the Initial Portfolio of the REIT are: 11% 7% 28% Woolworths Limited 28% Commonwealth of Australia 24% Metcash Limited 15% Wesfarmers Limited 15% Sections and % Westpac Banking Corporation 7% Other 11% 15% 24% 1 Initial Portfolio metrics include Woolworths Distribution Centre, Dandenong at lease commencement. 2 Independent Valuation as at 30 June 2016 except Woolworths Distribution Centre, Dandenong which is as at 17 December 2015 on a lease commencement basis and Coles Distribution Centre, Truganina which is as at 5 July 2016 (REIT ownership interest). 3 Weighted by Independent Valuation (REIT ownership interest). 4 As at 30 June 2016, weighted by gross passing income (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 5 By gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 6 WARR weighted by gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. CPI is assumed at 2% over the Forecast Period (see Sections and 16 for more information on CPI). 7 In some instances, the tenant is a related entity and/or subsidiary of the parent group. See Section for more information.

15 Charter Hall Long WALE REIT / Investment Overview (continued) Topic Summary Reference What is the REIT s valuation policy? The Responsible Entity expects to conduct an investment property valuation process on a semi-annual basis. Each property must be independently valued by a professionally qualified independent valuer on an as is basis at least once every 12 months (unless the property is deemed to be held for development or subject to a sale process) and otherwise will be subject to a directors valuation at least every six months. For a property with an independent valuation less than 12 months old an assessment is made as to whether it is likely to have had a substantial increase or decrease in value (i.e. greater than 5%) relative to the book value reported at the last reporting period to determine whether it should be valued independently or whether a directors valuation is applicable. Section Responsible Entity, governance, Board and management Topic Summary Reference How will the REIT be structured? The REIT is a stapled property group comprising the Stapled Trusts 1 and their wholly owned entities. The Initial Portfolio will comprise some Properties which are wholly owned by the REIT and some Properties in which the REIT has a less than 100% ownership interest. Structure and initial Securityholders of the REIT 2 Sections 2.4, 15.3, 15.5 Charter Hall Group Other LWR Securityholders Up to approx. 22% Approx. 78% 100% Long WALE REIT Stapled Trusts LWR RE Charter Hall WALE Limited (Responsible Entity) DIF CVLT1 a 218 BRT a CPOF KHT 100% 50% 50% 50.1% 25% 6 1 c 1 1 Acquired Assets LWIP 45.0% 24.9% Perth RDC FSPT CHPT DT b LWR FT 100% 26% 50% Asset category key: 2 10 Office Industrial 54 1 c 54 Retail Note: (a) Combined represents a 100% interest in Metcash Distribution Centre, Canning Vale. (b) CHPTDT holds a 26% interest in Woolworths Distribution Centre, Dandenong and a 50% interest in Coles Distribution Centre, Truganina. (c) Refers to one asset, the 24.9% acquisition of Perth RDC Trust will increase DIF s interest in Coles Distribution Centre, Perth to 49.9%. The Responsible Entity of each of the Stapled Trusts is Charter Hall WALE Limited, a wholly owned member of the Charter Hall Group. 1 Stapled Trusts refer to each of Charter Hall Direct Industrial Fund ( DIF ), Canning Vale Logistics Trust No. 1 ( CVLT1 ), 218 Bannister Road Trust ( 218 BRT ), CPOF Kogarah Holding Trust ( CPOF KHT ), Franklin Street Property Trust ( FSPT ), CHPT Dandenong Trust ( CHPTDT ) and LWR Finance Trust ( Finance Trust ) collectively and each of them separately as the context requires. 2 Not all assets are wholly owned by the REIT. Refer to Section 3 for more information. Reflects Charter Hall Group s ownership interest in the REIT following Allotment.

16 14 / PDS / Investment Overview 1. Investment Overview (continued) Topic Summary Reference Who will manage the REIT? The REIT will be externally managed by a wholly owned subsidiary of Charter Hall Group. The Responsible Entity will appoint the Manager to manage the REIT. The Manager will have the support, and access to the resources of, Charter Hall Group, in managing the REIT. Sections and 14.5 Who are the Directors of the Responsible Entity? The Responsible Entity will also appoint the Manager to provide property management, leasing, marketing, and day-to-day management of the REIT s assets. The Responsible Entity may also appoint members of the Charter Hall Group to provide other management services including but not limited to development, acquisitions, divestments and associated marketing of the REIT s assets. The Directors of the Responsible Entity are: Peeyush Gupta, Independent Non-Executive Chairman Peeyush has over 30 years experience in finance and investment management. Peeyush currently holds several Non-Executive Directorships including National Australia Bank Limited, Special Broadcasting Service ( SBS ), BNZ Life, and Insurance & Care (NSW). He is also Chairman of MLC RE and IDPS Board and Charter Hall Direct Property Management Limited. Glenn Fraser, Independent Non-Executive Director Glenn has over 30 years experience in finance, infrastructure and property. Glenn was a member of the Transfield Holdings Advisory Board from and a non-executive director of Charter Hall from On joining Transfield Holdings in 1996, Glenn was General Manager Finance Project Development, and was appointed Chief Financial Officer in Ceinwen Kirk-Lennox, Independent Non-Executive Director Ceinwen has over 31 years experience in many aspects of property including agency, property development, project and construction management, and community development. Ceinwen s executive career includes 26 years at Lendlease Corporation, where she held executive roles, running business units, client accounts and functions across the Lendlease Group. Ceinwen is a National Director of the Property Industry Foundation, and an Advisory member of the Western Sydney Institute of TAFE. David Harrison, Executive Director David has 29 years of global property market experience across office, retail and industrial sectors in multiple geographies. As Charter Hall Managing Director and Group CEO, David is responsible for all aspects of the Charter Hall business, with specific focus on strategy and continuing the momentum from building a $17.5 billion investment management business recognised as a multi-core sector market leader. Adrian Taylor, Executive Director Adrian Taylor has 24 years experience in real estate management and is Charter Hall s Head of Office. He is a member of Charter Hall s Executive Leadership Group and Chairs the Corporate Responsibility and Sustainability Committee. Adrian currently leads the office platform including setting the strategy and objectives of the wholesale office funds in conjunction with the Charter Hall fund managers and wholesale investors and guides the asset management, property management, technical service and development teams. Section 6.1

17 Charter Hall Long WALE REIT / Investment Overview (continued) Topic Summary Reference Who are the key members of management? The Responsible Entity is supported by a management team with significant experience in asset and funds management. The key members of the management team are as follows: Avi Anger, Fund Manager - Long WALE REIT Avi joined Charter Hall in 2003 and has worked across a number of areas of the business including transactions, advisory, investment management and development. Prior to his current role as Fund Manager - Long WALE REIT, Avi was Head of Transactions & Advisory and was responsible for all property transactions of the Group and its managed funds. Avi headed up the Transactions & Advisory division since March 2009 and played a key role in the growth of the Group s funds under management from approximately $3 billion in 2009 to $17.5 billion as at 30 June Prior to joining Charter Hall, Avi worked at Terrace Tower Group and at Ernst & Young in the Corporate Advisory division. Avi holds a Bachelor of Commerce and a Masters of Commerce degree from the University of New South Wales. Ben Ellis, Deputy Fund Manager - Long WALE REIT Ben has over 18 years experience in retail property and is a member of Charter Hall s Retail Leadership Team. Ben has extensive experience as Fund Manager for Charter Hall s wholesale funds across the retail sector spanning shopping centres, long WALE hardware and retail assets including the ALH leased LWIP portfolio. Prior to this, Ben was the Head of Portfolio Operations (Europe) for Charter Hall, managing Charter Hall Retail REIT s ( CQR ) European shopping centre portfolio before returning to Australia in 2014 to take up his existing role. Ben holds a Bachelor of Applied Science (Property Economics) from Queensland University of Technology. Tracey Jordan, Company Secretary Tracey has more than 25 years experience in real estate and funds management, with extensive knowledge of real estate transactions, structuring, funds management, compliance and corporate governance. Prior to joining Charter Hall, Tracey was National Manager, Unlisted Property Funds, and Senior Legal Counsel at Stockland. Tracey holds a Bachelor of Arts and Bachelor of Laws from the University of Sydney. Kerri Leech, Head of Long WALE REIT and Industrial Finance Kerri is a member of both of Charter Hall s Finance and Industrial Leadership Groups and oversees the financial management of 87 industrial assets owned by a number of Charter Hall wholesale and retail funds with combined funds under management of $4.5 billion. Kerri was previously the Corporate Controller for the Charter Hall Group and prior to joining Charter Hall, she was a Director in the Assurance division of PricewaterhouseCoopers. Kerri has both listed and unlisted experience working across a broad range of industries in Australia, the United States and Canada. Kerri is a Chartered Accountant and holds a Bachelor of Business from the University of Alberta, Canada. Section 6.2

18 16 / PDS / Investment Overview 1. Investment Overview (continued) Topic Summary Reference What are the management arrangements of the REIT? The Responsible Entity has appointed a wholly owned subsidiary of Charter Hall as the Manager of the REIT. The Manager is entitled to receive a management fee for acting as the Manager of the REIT equal to 0.45% of the REIT s Gross Asset Value ( GAV ). The Responsible Entity will also reimburse the Manager for costs and expenses as described in Section 13. Sections 13 and 14.5 Who is Charter Hall? What will be the relationship between the REIT and Charter Hall going forward? Will Securityholders be able to appoint the Directors of the Board? What will be the governance arrangements for the REIT? Can the Responsible Entity be removed? In addition to the Management Fee payable to the Manager, the Manager is entitled to receive a fee of 1% of the acquisition or disposal price of any transaction undertaken by the REIT as set out in Section 13. In addition, other fees and costs may be payable by the REIT to members of the Charter Hall Group for services provided to the REIT including fees under the Property Management Agreement and Asset Services Agreement. These fees and costs are summarised in Section 13. Charter Hall Group (ASX:CHC) is one of Australia s leading fully integrated property groups, with over 25 years experience managing high quality property on behalf of institutional, wholesale and retail clients. Charter Hall has $17.5 billion of funds under management and manages 296 properties across the office, retail and industrial sectors. The Group has offices in Sydney, Melbourne, Brisbane, Adelaide and Perth 1. Charter Hall will maintain an ongoing relationship with the REIT with regard to the following: the Responsible Entity is a member of the Charter Hall Group; the Manager is a member of the Charter Hall Group; an entity of the Charter Hall Group will provide asset management services for each of the Assets held by the Stapled Trusts; an entity of the Charter Hall Group may provide property management services for properties held by the REIT; Charter Hall will maintain an investment in the REIT and following Allotment will have an investment of up to approximately 22% of Securities on issue. At Allotment, Charter Hall will have a co-ownership interest in LWIP Trust, and funds managed by Charter Hall may also co-invest in assets alongside the REIT. As the Responsible Entity is a member of the Charter Hall Group, the Directors are appointed by Charter Hall Group. Charter Hall has a well-established and robust governance structure, having operated for 25 years including 11 years as a listed entity. The Board has established governance arrangements to ensure that the REIT will be effectively managed in a manner that is properly focused on its investment objectives and the interests of the Securityholders, as well as conforming to regulatory and ethical requirements. Directors will be required to submit for re-election every three years. Securityholder votes on director re-election are not binding on the Responsible Entity or Charter Hall but the outcome of any such vote is a matter to which Charter Hall will have regard in considering the continuation of a director appointment. Yes, by an ordinary resolution of Securityholders once the REIT is listed. Section 5 Section 6 Section 6.3 Section As at 30 June 2016.

19 Charter Hall Long WALE REIT / Investment Overview (continued) Topic Summary Reference What would be the consequences of removing the Responsible Entity? 1.5. Financial information If Charter Hall WALE Limited is removed or retires as responsible entity of the REIT: the REIT will cease to have full access to the expertise and resources of Charter Hall Group to manage the operations of the REIT and the Directors will no longer be involved in the management of the REIT; where the Responsible Entity is not replaced with a related body corporate, a change of control event will be triggered under the co-ownership agreements, which will give other co-owners a right to acquire the REIT s interests in those trusts at the relevant default interest value (see Section 14.8 for a detailed summary of the other co-owners rights to acquire the REIT s interests); a review event would occur under the Debt Facility which would entitle Westpac Banking Corporation to review and renegotiate the terms of the Debt Facility and if these negotiations are not successful it may result in the funds lent to the borrower under the Debt Facility being repayable; where the replacement responsible entity is not a member of the Charter Hall Group, it will be required to terminate the Asset Services Agreement and the REIT will cease to have access to the services, expertise and resources of the Manager under that agreement; and where the replacement responsible entity is not a member of the Charter Hall Group, the Property Management Agreement will terminate 12 months after the responsible entity is retired or removed or earlier termination by the Manager, and the REIT will cease to have access to the services, expertise and resources of the Manager under that agreement. Sections 14.5, 14.6 and 14.8 Topic Summary Reference What is the REIT s expected Operating Earnings and Distribution Yield? The REIT is forecast to have an Operating Earnings Yield (based on the Offer Price) of: 5.3% (annualised) for the period from Allotment to 30 June ; and 5.4% (annualised) for 1H FY18 2. Sections and 7.3 What is the REIT s distribution policy? The REIT is forecast to have a Distribution Yield (based on the Offer Price) of: 5.3% (annualised) for the period from Allotment to 30 June ; and 5.4% (annualised) for 1H FY18 4. The Responsible Entity will target the distribution of 100% of the REIT s Operating Earnings. The Board of the Responsible Entity retains the discretion to amend the distribution policy. Section 2.6 Are Distributions guaranteed? Distributions are intended to be paid quarterly with Securityholders to receive Distributions within two months following the end of each distribution period, being the quarters ending 31 March, 30 June, 30 September and 31 December each year. Distributions are not guaranteed. Section Forecast Operating Earnings per Security of 21.2 cents (annualised) for the period from Allotment until 30 June Forecast Operating Earnings per Security of 21.6 cents (annualised) for 1H FY18. Noting that certain leases are rent reviewed in the second half of the financial year and these reviews are not captured in this 1H FY18 annualised number. 3 Forecast Distributions per Security of 21.2 cents (annualised) for the period from Allotment until 30 June Forecast Distributions per Security of 21.6 cents (annualised) for 1H FY18. Noting that certain leases are rent reviewed in the second half of the financial year and these reviews are not captured in this 1H FY18 annualised number.

20 18 / PDS / Investment Overview 1. Investment Overview (continued) Topic Summary Reference What portion of the Distributions will be tax deferred for Australian tax purposes? What is the pro forma NTA per Security? What will be the gearing of the REIT? Approximately 65% of the Distributions from Allotment until 30 June 2017 and approximately 34% of the forecast Distributions for 1H FY18 are expected to be tax deferred. Section 7.3 The REIT is expected to have an NTA of $3.88 per Security at Allotment. Section 7.4 At Allotment, the REIT is expected to have a net cash Balance Sheet Gearing position and Look Through Gearing of 11.3% 1, providing the opportunity to enhance returns to Securityholders through further acquisitions. Section 7.4 What is the REIT s hedging policy? The REIT will target a Balance Sheet Gearing range of 25% to 35%. The Responsible Entity is targeting to maintain hedging contracts in respect of at least 50% of the REIT s rolling one year Debt 2. The REIT will review this policy on an ongoing basis in the context of any future indebtedness and the prevailing market conditions. The Responsible Entity will continue to monitor the appropriateness of this policy to ensure that it meets the ongoing objectives of the REIT and is in the best interest of investors. Section Overview of the Offer Topic Summary Reference What is the Offer? Who is the issuer of the PDS? The Offer is an initial public offering of approximately million Securities in the REIT at an Offer Price of $4.00 per Security, and is expected to raise $1,120.6 million. The Securities will be issued by the Responsible Entity. The Offer will consist of: a Broker Firm Offer that is open to Retail Investors who have received a firm allocation through their Broker; an Institutional Offer which is an invitation to certain institutional investors in Australia, New Zealand and certain other overseas jurisdictions (excluding the United States); a Charter Hall Group Offer, which is an offer to certain investors invited to participate; and a Reinvestment Offer is being made to holders of units in DIF who have a registered address in Australia or New Zealand. Under the Reinvestment Offer, Eligible DIF Unitholders will be given the opportunity to elect not to have their DIF units redeemed for cash and to instead receive Securities under the Restructure. Eligible DIF Unitholders will also have an opportunity to apply for additional Securities to the extent that there is a shortfall under the Reinvestment Offer. Members of the public wishing to subscribe for Securities under the Offer must do so through a Broker with a firm allocation. Charter Hall WALE Limited as Responsible Entity of each of the Stapled Trusts. Section 8 Important Information Is the Offer underwritten? The Offer is not underwritten. Section 14.2 Who are the Joint Lead J.P. Morgan Australia Limited and UBS AG, Australia Branch. Section 8 Managers? 1 Calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets less cash, based on the non-ifrs proportionate pro forma consolidated statement of financial position (as set out in Section 7.8.2), which adjusts for the REIT s share of the debt, assets and cash held in equity accounted investments. 2 Total debt including value of debt attributable to the REIT through its interest in equity accounted investments (see the Glossary in Section 16).

21 Charter Hall Long WALE REIT / Investment Overview (continued) Topic Summary Reference How will the proceeds of the The Offer proceeds will be used to: Section 8.2 Offer be used? fund the redemption and purchase of Units held by unitholders of the Stapled Trusts; acquire ownership interests in the assets the subject of the Acquisitions; refinance existing bank debt facilities of the Stapled Trusts; pay for the costs associated with the Restructure and the Offer; and provide the REIT with working capital on completion of the Restructure. How will the proceeds of the Offer be used? (continued) Sources of Funds $m Uses of Funds $m Proceeds from the Offer 1,120.6 Redemption and purchase of Units held by unitholders of the Stapled Trusts 1 Payment for Acquired Assets Re-payment of Stapled Trusts existing debt Payment of Stapled Trusts accrued 23.7 liabilities, and the close-out of derivatives Transaction costs related to Offer (see Section 13.5) Payment for other assets 18.2 Working capital 53.2 Total sources 1,120.6 Total uses 1,120.6 Section 8.2 Can the Offer be withdrawn? Who can participate in the Offer? Where do I find an Application Form? Yes, the Responsible Entity reserves the right not to proceed with the Offer or any part of it and to withdraw the Offer at any time before the Allotment of Securities. If the Offer, or any part of it, does not proceed, all relevant Application Monies will be refunded in full without interest. The Broker Firm Offer is open to Retail Investors in Australia or New Zealand who have received a firm allocation from their Broker. Institutional Investors in Australia, New Zealand and certain other jurisdictions will be invited to participate in the Institutional Offer. The Charter Hall Group Offer is only open to those investors invited to participate who have a residential address in Australia and New Zealand as at the date of this PDS. Broker Firm Offer Applicants An Application Form accompanies this PDS or can be obtained from your Broker. To apply under the Broker Firm Offer, you must lodge your Application Form and Application Monies in accordance with your Broker s directions in order to receive your firm allocation. Institutional Offer Applicants The Joint Lead Managers will separately advise Institutional Investors of the Application procedures for the Institutional Offer. Section 8.12 Section 8 Application Form and Section Total amount used to purchase all units held by Stapled Trust unitholders, including units held by DIF investors participating in the Reinvestment Offer. 2 Assuming 50% of DIF Unitholders elect to participate in the Reinvestment Offer.

22 20 / PDS / Investment Overview 1. Investment Overview (continued) Topic Summary Reference Where do I find an Application Form? (continued) Charter Hall Group Offer Applicants The Charter Hall Group Offer is only open to investors invited to participate. To apply under the Charter Hall Group Offer, eligible investors must complete the relevant Application Form and pay any applicable Application Monies in accordance with the instructions on the relevant Application Form. Reinvestment Offer Applicants When do I apply? Eligible DIF Unitholders who wish to participate in the Reinvestment Offer will need to complete a Reinvestment Offer Election Form and return it to their adviser or the Registry in accordance with the instructions on that form. Key dates for the Offer are set out in Section 8, the Details of the Offer Section. Applications under the Broker Firm Offer and Charter Hall Group Offer will only be accepted during the Broker Firm Offer period, which is open from 9.00am (Sydney time) 5 October 2016 to 5.00pm (Sydney time) 14 October (unless a later application is expressly permitted by the REIT). Section 8 When will I know my Application has been accepted? Is there a cooling-off period? What are the minimum and maximum Application amounts? All times and dates referred to in this PDS are subject to change and as such if you wish to participate in the Offer, you are encouraged to submit your Application Form as soon as possible after the Broker Firm Offer Opening Date. Holding statements confirming your allocation under the Offer are expected to be dispatched on 28 October Cooling-off rights do not apply to Applications. Once you lodge an Application, you cannot withdraw it (other than in certain limited circumstances permitted by law). For Applicants under the Broker Firm Offer and Charter Hall Group Offer, the minimum Application amount is $5,000 and in increments of at least $500 thereafter. Section 8.13 Section 8.11 Sections 8.7 and 8.8 Applicants under the Institutional Offer will be provided further information regarding the Institutional Offer from the Joint Lead Managers. There is no maximum Application amount, however, you may be subject to scale-back. What is the allocation policy? The allocation of Securities between the Broker Firm Offer, Institutional Offer and Charter Hall Group Offer will be determined by Charter Hall in consultation with the Joint Lead Managers. No scale-back will apply to applications made by existing DIF unitholders under the Reinvestment Offer. Sections 8.7 and 8.8 Will the Securities be quoted? For Broker Firm Offer Applicants, it will be a matter for the Brokers how they allocate firm stock among their eligible retail clients. However, Charter Hall, in consultation with the Joint Lead Managers, reserves the right to reject or scaleback Applications in the Broker Firm Offer. The Responsible Entity will apply to the ASX within seven days of the date on which a copy of the PDS is lodged with ASIC, for admission to the Official List and quotation of Securities on the ASX (which is expected to be under the code CLW ). It is anticipated that quotation will initially be on a conditional and deferred settlement basis. Section 8.13 When can I sell my Securities on the ASX? Offer Completion is conditional on the ASX approving this application. If approval is not given within three months after such application is made (or any longer period permitted by law), the Offer will be withdrawn and all Application Monies received will be refunded (without interest) as soon as practicable in accordance with the requirements of the Corporations Act 2001 (Cth). It is expected that, subject to receipt of the required approvals from the ASX, trading of Securities will commence on or about 19 October 2016 initially on a conditional and deferred settlement basis until the Responsible Entity has advised Section 8.14

23 Charter Hall Long WALE REIT / Investment Overview (continued) Topic Summary Reference When can I sell my Securities on the ASX? (continued) the ASX that holding statements have been dispatched to Investors. Normal settlement trading is expected to commence on or about 31 October What is conditional and deferred settlement trading? It is the responsibility of each person who trades in Securities to confirm their holding before trading in Securities. If Applicants seek to sell Securities before receiving a holding statement, they do so at their own risk. The period of conditional and deferred settlement trading allows for Securities to trade on the ASX prior to satisfaction of the conditions of conditional trading, including completion of the Restructure in accordance with the Merger Implementation Agreement and settlement of the Offer. In the event the conditions to conditional trading are not satisfied by the end of the conditional trading period, the Offer will not proceed. If this were to occur, all trades conducted during the conditional and deferred settlement trading period will be invalid and will not settle. All Application Monies received will be returned to Applicants. No interest will be paid on any Application Monies refunded as a result of the conditions to conditional trading in Securities not being satisfied. Section Taxation Topic Summary Reference What are the tax implications of the Offer? 1.8. Transaction costs There may be tax implications arising from Applications for Securities. These implications will differ depending on the individual circumstances of the Applicant. Applicants should obtain their own professional taxation advice about the consequences of investing. Section 11 Topic Summary Reference What are the transaction costs associated with the Offer? Is there any broker commission or stamp duty payable by Applicants? 1.9. Further information Total transaction costs are expected to be approximately $36.2 million. Transaction costs will be paid by the REIT from the proceeds of the Offer. No brokerage, commission or stamp duty is payable by Applicants who apply for Securities using an Application Form. Post Listing, if you buy or sell Securities on the ASX, you may have to pay brokerage and other transaction costs. Under current law, no stamp duty will be payable by an investor on any subsequent trading of Securities in the REIT on the ASX on the basis that an investor does not acquire (whether alone or together with associates) 90% or more of the Securities in the REIT. Sections 7 and 13.5 Section 8.15 Topic Summary Reference Where can I find out further information about the Offer? If you have further enquiries or questions relating to aspects of this PDS or about the Offer, please contact the Offer Information Line on (toll free within Australia) or (outside Australia) between 8:30am and 5:30pm (Sydney time) Monday to Friday (excluding public holidays) during the Offer Period. If you are unclear in relation to any matter or are uncertain as to whether the REIT is a suitable investment, you should seek professional advice from your accountant, stockbroker, lawyer, or other professional adviser before deciding to invest. Section 8.19

24 22 / PDS / Overview of the REIT Overview of the REIT 2 Westpac Building, Kogarah, NSW

25 2. Overview of the REIT 2.1. Overview of the REIT Charter Hall Long WALE REIT / 23 The REIT will be an Australian Real Estate Investment Trust ( REIT ) listed on the ASX and will seek to invest in high quality Australasian properties that are predominantly leased to corporate and government tenants on long-term leases. The REIT will comprise an Initial Portfolio 1 of 66 Properties independently valued at $1,253 million 2 with a weighted average lease expiry profile ( WALE ) of 12.5 years 3 and 100% occupancy 3. The Initial Portfolio will be diversified by geography and real estate sector, containing office, industrial and retail 4 properties located in six Australian states. A summary of the Initial Portfolio key statistics is below, with further detail of each Property provided in Section 3. Key Initial Portfolio statistics 1 Number of Properties 66 Independent Valuation 2 $1,253 million Weighted Average Capitalisation Rate ( WACR ) 5 6.4% Occupancy 3 100% Weighted Average Lease Expiry ( WALE ) years Proportion of income subject to fixed rental increases 6 58% Weighted Average Rental Review ( WARR ) 7 2.8% The REIT will be managed by a wholly owned subsidiary of the Charter Hall Group, which is one of Australia s leading fully integrated property groups, with over 25 years experience managing high quality real estate on behalf of institutional, wholesale and retail clients. Charter Hall has $17.5 billion of funds under management and manages 296 properties across the office, retail and industrial sectors Objectives and strategy of the REIT The REIT s objective is to provide Investors with stable and secure income and the potential for both income and capital growth through an exposure to a portfolio with a long WALE. The REIT will be actively managed to achieve its investment objective and will aim to: to grow the Portfolio through direct and indirect investments across multiple real estate sectors; focus on assets that are predominantly leased to tenants with strong covenants on long term leases; diversify the Portfolio across multiple real estate sectors, geographies and tenants; maintain a conservative capital structure with a targeted Balance Sheet Gearing range of 25% to 35%; target the distribution of 100% of its Operating Earnings; and supplement its growth through pro-actively managing lease duration and tenant relationships. The REIT intends to acquire additional Australasian real estate assets in the future that satisfy its investment objectives and strategy to provide further diversification and enhance the performance of the Portfolio for investors. The REIT will not invest in assets located outside of Australasia. The REIT will continually evaluate acquisition (including joint venture) opportunities across multiple real estate sectors including those outside the Initial Portfolio. Future acquisitions may be sourced from third parties or members of the Charter Hall Group. Charter Hall will actively manage the Portfolio, including through acquiring and divesting assets from time to time, to maintain and enhance the quality of the Portfolio. The strategy of the REIT is to minimise development risk, with a focus on sustainable income returns. The REIT will not undertake speculative development. The REIT may undertake development in circumstances when income risk can be substantially mitigated. The REIT may develop or redevelop existing properties to maximise returns to Securityholders. 1 Initial Portfolio metrics include Woolworths Distribution Centre, Dandenong at lease commencement. 2 Independent Valuation as at 30 June 2016 except Woolworths Distribution Centre, Dandenong, which is as at 17 December 2015 on a lease commencement basis and Coles Distribution Centre, Truganina, which is as at 5 July 2016 (REIT ownership interest). 3 As at 30 June 2016, weighted by gross passing income (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 4 Assets leased to ALH Group. 5 Weighted by Independent Valuation (REIT ownership interest). 6 By gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 7 WARR weighted by gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. CPI is assumed at 2% over the Forecast Period (see Sections and 16 for more information on CPI). 8 As at 30 June 2016.

26 24 / PDS / Overview of the REIT 2. Overview of the REIT (continued) 2.3. Benefits of an investment in the REIT Attractive financial metrics with conservative capital structure The REIT is forecast to have an Operating Earnings Yield (based on the Offer Price) of: 5.3% (annualised) for the period from Allotment to 30 June ; and 5.4% (annualised) for 1H FY18 2. The REIT is forecast to have a Distribution Yield (based on the Offer Price) of: 5.3% (annualised) for the period from Allotment to 30 June ; and 5.4% (annualised) for 1H FY18 4. Growth in Operating Earnings and Distributions will be underpinned by fixed rental reviews and the long lease expiry profile of the REIT, with the first major expiry occurring in FY21: approximately 58% of the income from the Initial Portfolio 5 is subject to annual fixed rental increases at a WARR of 3.4% 6 ; and Portfolio WARR of 2.8% 7. The REIT expects to pay quarterly Distributions to Securityholders and will target the distribution of 100% of Operating Earnings. The Offer Price of $4.00 per Security represents a premium to NTA of 3.1% as at Allotment. The REIT intends to have a conservative capital structure with a net cash Balance Sheet Gearing position and Look Through Gearing of 11.3% 8 at Allotment. The REIT will target a Balance Sheet Gearing range of 25% to 35%. Balance Sheet Gearing at Allotment will be below the target range in order to provide capacity to fund the REIT s proportion of costs to complete the Woolworths Distribution Centre, Dandenong property and providing the opportunity to enhance returns to Securityholders through further acquisitions consistent with the strategy of the REIT (see Section 2.2). Gearing may be higher if the Responsible Entity considers that circumstances warrant a short-term increase beyond the target Balance Sheet Gearing range and it is prudent to do so Quality, diversified property portfolio The Initial Portfolio 9 will be diversified by geography and real estate sector, containing office, industrial and retail properties located in six Australian states. The Initial Portfolio will include: Office interests in two office properties, which are currently leased to the Commonwealth of Australia 10 and Westpac Banking Corporation; 1 Forecast Operating Earnings per Security of 21.2 cents (annualised) for the period from Allotment until 30 June Forecast Operating Earnings per Security of 21.6 cents (annualised) for 1H FY18. Noting that certain leases are rent reviewed in the second half of the financial year and these reviews are not captured in this 1H FY18 annualised number. 3 Forecast Distributions per Security of 21.2 cents (annualised) for the period from Allotment until 30 June Forecast Distributions per Security of 21.6 cents (annualised) for 1H FY18. Noting that certain leases are rent reviewed in the second half of the financial year and these reviews are not captured in this 1H FY18 annualised number. 5 By gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 6 Fixed WARR based on fixed rental reviews weighted by gross passing income (REIT ownership interest). Approximately 58% of the gross passing income of the Initial Portfolio is subject to annual fixed rental increases with the remaining leases linked to CPI. 7 WARR weighted by gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. CPI is assumed at 2% over the Forecast Period (see Sections and 16 for more information on CPI). 8 Calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets less cash, based on the non-ifrs proportionate pro forma consolidated statement of financial position (as set out in Section 7.8.2), which adjusts for the REIT s share of the debt, assets and cash held in equity accounted investments. 9 Initial Portfolio metrics include Woolworths Distribution Centre, Dandenong at lease commencement. 10 Assets leased to Commonwealth of Australia (Australian Taxation Office) and Australian Postal Corporation.

27 Charter Hall Long WALE REIT / Overview of the REIT (continued) Industrial interests in 10 industrial distribution/logistics centres, which are currently leased to Australian and multinational companies 1 including Wesfarmers Limited 2, Woolworths Limited 3, Commonwealth of Australia 4, Metcash Limited 5, Japan Post 6 and AB Electrolux 7 ; and Retail interests in 54 retail properties (comprised of freehold hotel and liquor store properties) which are leased to Australian Leisure & Hospitality Group Limited ( ALH Group ). ALH Group is owned by Woolworths Limited (75%) and the Mathieson Group (25%). A breakdown of the Initial Portfolio by real estate sector is below, with further detail of each Property provided in Section 3. Sector Number of Properties Independent Valuation 8 WACR 9 WARR 10 WALE 11 Occupancy ($m) (%) (%) (yrs) (%) Office 2 $ % 3.4% % Industrial 10 $ % 2.8% % Retail 54 $ % CPI % Total / Wtd. average 66 $1, % 2.8% % Geographic diversity 8 Sector diversity 8 1% 10% 14% 26% WA 26% SA 25% VIC 24% 24% 29% Office 29% Industrial 47% Retail 24% QLD 14% 24% NSW 10% TAS 1% 25% Initial Portfolio metrics include Woolworths Distribution Centre, Dandenong at lease commencement. 47% Opportunity for value enhancement The REIT will have a net cash Balance Sheet Gearing position and Look Through Gearing of 11.3% 12 at Allotment. The REIT expects to have a newly established $350 million debt facility which can be drawn to fund future return enhancing acquisitions 13. The REIT is able to acquire assets across multiple real estate sectors, broadening the range of potential acquisitions. Charter Hall has a proven track record sourcing investment opportunities for its funds, with $12.6 billion of transactions executed over the last five years, including $9.3 billion in acquisitions and $3.3 billion in divestments. The Manager s ability to acquire and develop long WALE assets will assist the growth trajectory of Long WALE REIT. 1 In some instances, the tenant is a related entity and/or subsidiary of the parent group. See Section for more information. 2 Assets leased to Coles Group Limited, a wholly owned subsidiary of Wesfarmers Limited. 3 Assets leased to or guarenteed by Woolworths Limited. 4 Assets leased to Australian Postal Corporation. 5 Assets leased to IGA Distribution (WA) Pty Limited, a wholly owned subsidiary of Metcash Limited. 6 Assets leased to Toll. The Government of Japan holds an 80.5% interest in Toll Holdings Limited through Japan Post Holdings Co. 7 Assets leased to Electrolux, a wholly owned subsidiary of AB Electrolux (Sweden). 8 Independent Valuation as at 30 June 2016 except Woolworths Distribution Centre, Dandenong, which is as at 17 December 2015 on a lease commencement basis and Coles Distribution Centre, Truganina, which is as at 5 July 2016 (REIT ownership interest). 9 Weighted by Independent Valuation (REIT ownership interest). 10 WARR weighted by gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. CPI is assumed at 2% over the Forecast Period (see Sections and 16 for more information on CPI). 11 As at 30 June 2016, weighted by gross passing income (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 12 Calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets less cash, based on the non-ifrs proportionate pro forma consolidated statement of financial position (as set out in Section 7.8.2), which adjusts for the REIT s share of the debt, assets and cash held in equity accounted investments. 13 This amount excludes reserves, committed capital expenditure and cash which is required to be set aside under the Woolworths Distribution Centre, Dandenong Development Agreement. See Section 7.10 for more information.

28 26 / PDS / Overview of the REIT 2. Overview of the REIT (continued) Quality of rental income supported by long leases to high quality tenants and rental growth Approximately 80% of the Initial Portfolio 1 is leased to investment grade tenants (or subsidiaries thereof) including Woolworths (BBB, 28%) 2, Commonwealth of Australia (AAA, 24%) 3, Wesfarmers (A-, 15%) 4 and Westpac Banking Corporation (AA-, 7%). Quality of rental income is supported through: a Portfolio WALE of 12.5 years; a broad distribution of lease expiry dates, diversifying future lease expiries over time; rental growth with 58% of leases 5 subject to fixed rent reviews with a fixed WARR of 3.4% 6 ; and a Portfolio WARR of 2.8%. 7 Tenant credit rating 5 Not rated 20% AAA 24% BBB 28% BBB+ 3% AA 0.3% AA- 7% A+ 3% A- 15% Portfolio tenant lease expiry profile % 27.0% 18.1% 4.5% 0.2% 0.2% 0.1% 1.7% 3.3% 4.7% 3.5% 2.4% 3.4% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 1 By gross passing income (REIT ownership interest, includes 6% from other minor tenants with investment grade credit ratings including AB Electrolux (BBB+, 3%) and the Government of Japan (A+) which holds an 80.5% interest in Toll Holdings Limited (3%) through Japan Post Holdings Co. Ratings refer to the latest published Standard & Poor s credit rating as at 23 September Assets leased to ALH Group and Woolworths Limited (including as guarantor to Shellbelt Pty Ltd). 3 Assets leased to Commonwealth of Australia (Australian Taxation Office) and Australian Postal Corporation. 4 Assets leased to Coles Group Limited, a wholly owned subsidiary of Wesfarmers Limited. 5 By gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. For the Tenant credit rating chart, the credit rating relates to the parent group of the tenant. Totals may not equal 100% due to rounding. 6 Fixed WARR based on fixed rental reviews weighted by gross passing income (REIT ownership interest). Approximately 58% of the gross passing income from the Initial Portfolio is subject to annual fixed rental increases with the remaining leases linked to CPI. 7 WARR weighted by gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. CPI is assumed at 2% over the Forecast Period (see Sections and 16 for more information on CPI).

29 Charter Hall Long WALE REIT / Overview of the REIT (continued) Major tenants 1 Tenant rent reviews structure 1 11% 7% 28% Woolworths Limited 28% Commonwealth of Australia 24% 58% Fixed 58% CPI 42% Metcash Limited 15% 15% 15% 24% Wesfarmers Limited 15% Westpac Banking Corporation 7% Other 11% 42% Description of major tenants 2 Parent 3 Tenant Description Woolworths Limited Market capitalisation $29.9 billion Woolworths Limited 4 Woolworths Limited is a multi-branded retail group which operates Australia s largest supermarket chain, petrol stations, liquor stores, hotels and discount department stores. Woolworths operates 961 supermarkets across Australia. Credit rating BBB ALH Group 5 ALH is Australia s largest hotels operator with approximately 320 licensed venues and more than 530 retail liquor outlets operating under the BWS and Dan Murphy s brands. The group is owned by Woolworths Limited (75%) and the Mathieson Group (25%). Commonwealth of Australia Credit rating AAA Metcash Limited Market capitalisation $2.0 billion Commonwealth of Australia (Australian Taxation Office) Australian Postal Corporation Metcash Limited 6 The Australian Taxation Office (ATO) is a non-corporate Federal Government agency and is the Australian Government s main revenue collection agency. Australian Postal Corporation is the Australian Government owned entity responsible for providing postal services in Australia and its overseas territories. It trades under the brands Australia Post and StarTrack. In FY16, it derived revenues of A$6.6 billion and profit before tax of A$41 million. Australian Postal Corporation has a AA- credit rating. Metcash is an ASX listed wholesale distribution company which specialises in grocery, liquor, hardware and other fast moving consumer goods. Metcash are the major distributor of groceries to IGA stores. There are 265 IGA supermarkets in Western Australia, making IGA the second largest supermarket operator in Western Australia behind Woolworths. 1 By gross passing income (REIT ownership interest) including Woolworths Distribution Centre, Dandenong at lease commencement. For the Major tenants chart, in some instances, the tenant is a related entity and/or subsidiary of the parent group. 2 Market capitalisation as at close 23 September 2016 (Sydney Time). 3 The parent entity does not guarantee the tenant under the leases unless otherwise noted as a tenant or guarantor. See Section 3 and individual asset summary pages for details. 4 The tenant on the lease for Woolworths Distribution Centre, Hoppers Crossing is Shellbelt Pty Limited with Woolworths Limited as guarantor. 5 Woolworths Limited is required to provide a five year guarantee in the event of a change of control and the incoming party has net assets less than those of ALH Group. 6 The tenant on the lease is IGA Distribution (WA) Pty Limited, a wholly owned subsidiary of Metcash Limited.

30 28 / PDS / Overview of the REIT 2. Overview of the REIT (continued) Description of major tenants 1 Parent 2 Tenant Description Wesfarmers Limited Coles Group Limited Market capitalisation $49.6 billion Credit rating A- Westpac Banking Corporation Market capitalisation $101.5 billion Credit rating AA- Westpac Banking Corporation Wesfarmers is an ASX-listed conglomerate operating supermarkets, department stores, home improvement and office supplies, resources, chemicals, energy and fertilisers, and industrials and safety products. Coles Group Limited is a wholly owned subsidiary of Wesfarmers Limited. Coles is a multi-branded retail group which operates approximately 2,400 retail outlets nationally, including more than 770 supermarkets. Coles represented approximately 60% of the revenue of Wesfarmers in FY16. Westpac is one of four major banking organisations in Australia, providing a broad range of banking and financial services, including consumer, business and institutional banking and wealth management services. For 2016, Relbank ranked Westpac as the 11th largest bank in the world and the second largest bank in Australia by market capitalisation Managed by Charter Hall Group which has proven property expertise The Manager is a wholly owned subsidiary of Charter Hall Group (ASX: CHC). Wholly owned subsidiaries of Charter Hall may also provide property and development management services to the REIT. Charter Hall is one of Australia s leading fully integrated property groups, with over 25 years experience managing high quality real estate on behalf of institutional, wholesale and retail clients. Charter Hall has $17.5 billion of funds under management and manages 296 properties across the office, retail and industrial sectors 3. The Group has offices in Sydney, Melbourne, Brisbane, Adelaide and Perth. Charter Hall Group FUM by real estate sector 3 Industrial 25% $17.5b FUM Office 47% Retail 28% 1 Market capitalisation as at close 23 September 2016 (Sydney Time). 2 The parent entity does not guarantee the tenant under the leases unless otherwise noted as a tenant or guarantor. See Section 3 and individual asset summary pages for details. 3 As at 30 June 2016.

31 Charter Hall Long WALE REIT / Overview of the REIT (continued) The REIT will have the benefit of Charter Hall s asset and investment expertise. The Group has significant experience in deploying capital, having been involved in $12.6 billion worth of transactions over the past five years ($9.3 billion in acquisitions, $3.3 billion in divestments). Charter Hall has experience managing listed funds as manager of Charter Hall Retail REIT (ASX: CQR) with retail assets of $2.5 billion and a market capitalisation of $1.7 billion 1. In addition, Charter Hall has significant experience managing $15 billion of unlisted property funds diversified across sectors. Charter Hall s interests are strongly aligned with the REIT s management and performance. Charter Hall will maintain an investment in the REIT and following Allotment will hold up to approximately 22% of Securities on issue. The REIT will have no performance fees. The Responsible Entity has appointed a wholly owned subsidiary of Charter Hall as the Manager of the REIT. The Manager is entitled to receive a management fee for acting as the Manager of the REIT equal to 0.45% of GAV of the REIT, calculated in accordance with the Constitution and paid monthly. The Responsible Entity will also reimburse the Manager for costs and expenses as described in Section 13. In addition to the Management Fee payable to the Manager, the Manager is entitled to receive a fee in connection with the acquisition or disposal of assets by the REIT as set out in Section 13. In addition, other fees and costs may be payable by the REIT to members of the Charter Hall Group for services provided to the REIT including fees under the Property Management Agreement and Asset Services Agreement. These fees and costs are summarised in Section Experienced, majority independent board with an independent Chairman The Board of the Responsible Entity is comprised of five members, the majority of whom are independent of Charter Hall, being the Chairman, Peeyush Gupta, and two non-executive directors, Glenn Fraser and Ceinwen Kirk-Lennox. David Harrison, the Managing Director and Group CEO of Charter Hall, and Adrian Taylor, the Head of Office for Charter Hall, are also on the Board of the Responsible Entity. The Board is experienced and capable with an average of over 30 years of business, industry and corporate governance experience. For further detail refer to Section Structure of the REIT The REIT is a stapled property group comprising the Stapled Trusts and their wholly owned entities. The REIT will be externally managed and the Responsible Entity of each of the Stapled Trusts is Charter Hall WALE Limited, a wholly owned member of the Charter Hall Group. The Responsible Entity has appointed members of the Charter Hall Group to provide services including but not limited to property management, leasing, development, marketing, acquisitions, divestments and asset management of the REIT s assets. The Initial Portfolio will comprise some Properties that are wholly owned by the REIT and some Properties in which the REIT has a less than 100% ownership interest. 1 Market capitalisation as at close 23 September 2016 (Sydney Time).

32 30 / PDS / Overview of the REIT 2. Overview of the REIT (continued) Structure and initial Securityholders of the REIT 1, 2 Charter Hall Group Other LWR Securityholders Up to approx. 22% Approx. 78% Long WALE REIT Stapled Trusts 100% LWR RE Charter Hall WALE Limited (Responsible Entity) DIF CVLT1 (a) 218 BRT (a) CPOF KHT FSPT CHPT DT (b) 100% 50% 50% 50.1% 100% 26% 25% 6 1 (c) LWR FT 50% Acquired Assets LWIP 45.0% 24.9% Perth RDC Asset category key: 2 Office 10 Industrial 54 Retail 54 1 (c) Note: (a) Combined represents a 100% interest in Metcash Distribution Centre, Canning Vale. (b) CHPTDT holds a 26% interest in Woolworths Distribution Centre, Dandenong and a 50% interest in Coles Distribution Centre, Truganina. (c) Refers to one asset, the 24.9% acquisition of Perth RDC Trust will increase DIF s interest in Coles Distribution Centre, Perth to 49.9%. For further information regarding the establishment of the REIT, refer to Section Financing arrangements The REIT will use a combination of debt and equity to finance its activities. The REIT intends to have a conservative capital structure with a net cash Balance Sheet Gearing position and Look Through Gearing of 11.3% 3 at Allotment. The REIT will target Balance Sheet Gearing in the range of 25% to 35%. This may be higher if the Responsible Entity considers the circumstances warrant a short-term increase beyond the target Balance Sheet Gearing range and it is prudent to do so. Balance Sheet Gearing at Allotment will be below the target Balance Sheet Gearing range to provide capacity to fund the REIT s proportion of costs to complete the Woolworths Distribution Centre, Dandenong property and to enable the REIT to pursue acquisition opportunities consistent with the strategy of the REIT (see Section 2.2). The REIT s financing and liquidity arrangements are subject to reserves, committed capital expenditure and cash which is required to be set aside under the Woolworths Distribution Centre, Dandenong Development Agreement. See Sections 7.10 and 14.4 for more information. 1 Not all assets are wholly owned by the REIT. Refer to Section 3 for more information. 2 Stapled Trusts refer to each of Charter Hall Direct Industrial Fund ( DIF ), Canning Vale Logistics Trust No. 1 ( CVLT1 ), 218 Bannister Road Trust ( 218 BRT ), CPOF Kogarah Holding Trust ( CPOF KHT ), Franklin Street Property Trust ( FSPT ), CHPT Dandenong Trust ( CHPTDT ) and LWR Finance Trust ( Finance Trust ) collectively and each of them separately as the context requires. 3 Calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets less cash, based on the non-ifrs proportionate pro forma consolidated statement of financial position (as set out in Section 7.8.2), which adjusts for the REIT s share of the debt, assets and cash held in equity accounted investments.

33 Charter Hall Long WALE REIT / Overview of the REIT (continued) Debt facility The Manager has received credit approval for an unsecured revolving debt facility from Westpac Banking Corporation totalling $350 million, with a maturity of five years from Allotment. The commitment received from Westpac Banking Corporation is subject to Allotment occurring prior to 31 December The debt facility may be drawn by the REIT to fund: the refinance of existing debt facilities of the Stapled Trusts; payments for Woolworths Distribution Centre, Dandenong; future acquisitions; capital expenditure; and general corporate purposes. The debt facility has a number of financial covenants and terms and conditions including: gearing ratio 1 (total liabilities divided by total tangible assets): must be less than or equal to 50%; interest cover ratio (earnings before interest and tax divided by interest expense in any 12 month period): greater than or equal to 2.00x; priority indebtedness for recourse debt (recourse 2 debt divided by total tangible assets): must not exceed 5%; priority indebtedness for non-recourse debt (non-recourse debt divided by total tangible assets): must not exceed 22.5%; and unencumbered assets ratio (unencumbered debt divided by unencumbered properties): must not exceed 60%. Note: All covenants are calculated on a look through basis Interest rate hedging policy To manage the risk arising from the fluctuation of interest rates, the REIT will enter into fixed rate borrowings or interest rate swaps to convert floating interest rate borrowings to fixed interest rates. The Responsible Entity is targeting to maintain hedging contracts in respect of at least 50% of the REIT s rolling one year Debt. The REIT will review this policy on an ongoing basis in the context of any future indebtedness and the prevailing market conditions. The Responsible Entity will continue to monitor the appropriateness of this policy to ensure that it meets the ongoing objectives of the REIT and is in the best interest of Investors Distribution policy The Responsible Entity will target the distribution of 100% of the REIT s Operating Earnings. The Board of the Responsible Entity retains the discretion to amend the distribution policy. Operating Earnings is a financial measure which represents the profit / (loss) under Australian Accounting Standards adjusted for net fair value movements, non-cash accounting adjustments such as straightlining of rental income, amortisation and other unrealised or one-off items. Operating Earnings also aligns to Funds from Operations as defined by the Property Council of Australia ( PCA FFO ). Operating Earnings will be used by the Directors to make strategic decisions and represents the Board s view of cash generally available for distribution. The REIT s distribution payout ratio will be formulated with regard to a range of factors including: general business and financial conditions; the certainty of the REIT s cash flow and adequacy of forecast liquidity; capital expenditure requirements and acquisitions; covenants and undertakings under any Debt facilities; taxation considerations; working capital requirements; and other factors that the Responsible Entity considers relevant. The Responsible Entity intends to pay Distributions quarterly and for Securityholders to receive Distributions within two months following the end of each distribution period, being the quarters ending 31 March, 30 June, 30 September and 31 December each year. Once listed, the REIT s first Distribution is expected to be for the period from Allotment to 31 December Thereafter, Distributions will be paid quarterly. The first quarterly distribution period will commence on 1 January 2017 and end on 31 March Total liabilities and total tangible assets are calculated net of cash and exclude derivatives. 2 Excludes Westpac Banking Corporation debt facility and all facilities that rank pari passu with that facility.

34 32 / PDS / Overview of the REIT 2. Overview of the REIT (continued) 2.6. Distribution policy (continued) The Responsible Entity can provide no guarantee as to the extent of future Distributions and these will depend on the future Operating Earnings of the REIT and its financial position at that time. The Responsible Entity will continue to monitor the appropriateness of the Distribution policy to ensure that it meets the ongoing objectives of the REIT and is in the best interests of Securityholders Valuation policy The Responsible Entity expects to conduct an investment property valuation process on a semi-annual basis. All valuations will be either an independent valuation or a directors valuation Valuation of properties Each property must be independently valued by a professionally qualified independent valuer on an as is basis at least once every 12 months (unless the property is deemed to be held for development or subject to a sale process) and otherwise will be subject to a directors valuation at least every six months. For a property with an independent valuation less than 12 months old, an assessment is made as to whether it is likely to have had a substantial increase or decrease in value (i.e. greater than 5%) relative to the book value reported at the last reporting period to determine whether it should be valued independently or whether a directors valuation is applicable Valuation of pre-leased properties under construction At the commencement of a pre-leased property under construction, an estimated valuation on completion is obtained and the capitalised costs during the project are monitored against this initial valuation. Within 12 months of completion, the property is independently valued with a full formal report and thereafter the stabilised asset valuation process applies Reporting For accounting and reporting purposes, the REIT will report on a 30 June financial year basis. Formal reporting will be provided to Securityholders as at 30 June (full year) and 31 December (interim) each year. These reports will include: a statement of comprehensive income, statement of financial position, statement of changes in equity and a statement of cash flow; a reconciliation of net profit to Operating Earnings; the amount of Distributions paid and payable for the period; significant activities undertaken for the period; and any portfolio updates the Responsible Entity deems relevant. An annual financial report will be provided to Securityholders in accordance with the Corporations Act 2001 (Cth). The annual report will be audited whilst the interim financial report will be subject to review by the auditor. The Manager will establish a Website that will provide information on the REIT, including access to half-yearly and annual reports, and Distribution information.

35 Charter Hall Long WALE REIT / 33 Portfolio Overview Coles Distribution Centre, Perth, WA 3

36 34 / PDS / Portfolio Overview 3. Portfolio Overview 3.1. Introduction The REIT s Initial Portfolio 1 has been independently valued at $1,253 million 2, reflecting a Weighted Average Capitalisation Rate ( WACR ) of 6.4% 3. It has a Weighted Average Lease Expiry ( WALE ) of 12.5 years 4, occupancy of 100% 4 and is diversified by geography and real estate sector, containing office, industrial and retail properties located in six Australian states. A summary of the Initial Portfolio by sector is included below: Portfolio summary Sector Assets Valuation 2 rate 3 Cap Initial Yield 3 WARR 5 WALE 4 Occupancy 4 Area 6 Gross passing income (#) ($m) (%) (%) (%) (years) (%) (sqm) (%) Office 2 $ % 6.3% 3.4% % 68,526 29% Industrial 10 $ % 6.8% 2.8% % 434,355 51% Retail 54 $ % 6.1% CPI % 562,950 20% Total / weighted average 66 $1, % 6.5% 2.8% % 100% Geographic diversity 2 Sector diversity 2 1% 10% 14% 26% WA 26% SA 25% VIC 24% 24% 29% Office 29% Industrial 47% Retail 24% QLD 14% 24% NSW 10% TAS 1% 25% 47% Tenant lease expiry profile % 27.0% 18.1% 4.5% 0.2% 0.2% 0.1% 1.7% 3.3% 4.7% 3.5% 2.4% 3.4% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 1 Initial Portfolio metrics include Woolworths Distribution Centre, Dandenong at lease commencement. 2 Independent Valuation as at 30 June 2016 except Woolworths Distribution Centre, Dandenong, which is as at 17 December 2015 on a lease commencement basis and Coles Distribution Centre, Truganina, which is as at 5 July 2016 (REIT ownership interest). 3 Weighted by Independent Valuation (REIT ownership interest). See definition in the Glossary (Section 16). 4 As at 30 June 2016, weighted by gross passing income (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 5 WARR weighted by gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. CPI is assumed at 2% over the Forecast Period (see Sections and 16 for more information on CPI). 6 Office based on NLA, industrial based on GLA and retail based on site area. Area is shown on a 100% basis. 7 By gross passing income (REIT ownership interest) including Woolworths Distribution Centre, Dandenong at lease commencement. Totals may not equal 100% due to rounding.

37 Charter Hall Long WALE REIT / Portfolio Overview (continued) Major tenants 1 Tenant rent review structure 2 11% 7% 28% Woolworths Limited 28% Commonwealth of Australia 24% 58% Fixed 58% CPI 42% Metcash Limited 15% 15% 15% 24% Wesfarmers Limited 15% Westpac Banking Corporation 7% Other 11% 42% Portfolio geographic diversification 2 Legend Office (2 properties) Industrial (10 properties) Brisbane 2 Industrial 11 Retail Retail (54 properties) Perth 2 Industrial 8 Retail 10 1 WA 26% Adelaide Office Industrial Retail SA 25% 7 1 VIC 24% TAS 1% QLD 14% NSW 10% Sydney 1 1 Office 1 1 Industrial Melbourne 4 Industrial 16 Retail Victoria 20 properties Office 0 Industrial 4 Retail 16 Queensland 19 properties Office 0 Industrial 2 Retail 17 Western Australia 11 properties Office 0 Industrial 2 Retail 9 South Australia 8 properties Office 1 Industrial 1 Retail 6 New South Wales 5 properties Office 1 Industrial 1 Retail 3 Tasmania 3 properties Office 0 Industrial 0 Retail 3 1 By gross passing income (REIT ownership interest) including Woolworths Distribution Centre, Dandenong at lease commencement. For the Major tenants chart, in some instances, the tenant is a related entity and/or subsidiary of the parent group. See Section for more information. 2 Percentages per state refer to Independent Valuation as at 30 June 2016 except Woolworths Distribution Centre, Dandenong, which is as at 17 December 2015 on a lease commencement basis and Coles Distribution Centre, Truganina, which is as at 5 July 2016 (REIT ownership interest).

38 36 / PDS / Portfolio Overview 3. Portfolio Overview (continued) 3.2. Office Portfolio A summary of the office assets included in the Initial Portfolio is summarised below: Portfolio summary 1 Asset State REIT interest Valuation 2 Cap rate 3 Initial Yield 3 WALE 4 Occupancy 4 NLA 5 WARR 6 Gross passing Income 7 (%) ($m) (%) (%) (years) (%) (sqm) (%/CPI) (%) Australian Taxation Office, SA 100% % 6.4% % 36, % 22% Adelaide Westpac Building, NSW 50.1% % 5.9% % 31,724 CPI 7% Kogarah Total/Weighted average % 6.3% % 68, % 29% Geographic diversity 8 Tenant rent review structure 9 26% 74% SA 74% NSW 26% 23% 77% Fixed 77% CPI 23% Tenant lease expiry profile % 22.5% 6.1% 0.8% 0.6% 0.3% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 1 Valuation and income based on ownership interest, lettable area shown on a 100% basis. 2 Independent Valuation as at 30 June 2016 (REIT ownership interest). 3 Weighted by Independent Valuation (REIT ownership interest). See definitions in the Glossary (Section 16). 4 As at 30 June 2016, weighted by gross passing income (REIT ownership interest). 5 Office NLA shown on a 100% basis. 6 WARR weighted by gross passing income as at 30 June 2016 (REIT ownership interest). CPI is assumed at 2% over the Forecast Period (see Sections and 16 for more information on CPI). 7 Gross passing income as a percentage of the total gross passing income of the REIT. 8 By Independent Valuation (REIT ownership interest). 9 By gross passing income (REIT ownership interest). Totals may not equal 100% due to rounding.

39 Charter Hall Long WALE REIT / Portfolio Overview (continued) Major tenants 1 Commonwealth of Australia 76% 1% 23% 76% Westpac Banking Corporation 23% Other 1% Description of major tenants Parent 2 Tenant Description Commonwealth of Australia Commonwealth of Australia (Australian See Section Taxation Office) Australian Postal Corporation See Section Westpac Banking Corporation Westpac Banking Corporation See Section By gross passing income (REIT ownership interest). In some instances, the tenant is a related entity and/or subsidiary of the parent group. See Section for more information. 2 The parent entity does not guarantee the tenant under the leases unless otherwise noted as a tenant or guarantor. See individual asset summary pages for details.

40 38 / PDS / Portfolio Overview 3. Portfolio Overview (continued) Australian Taxation Office, Adelaide Franklin Street, Adelaide SA Photo Description The Australian Taxation Office Adelaide is a modern, A-grade CBD high rise office tower, constructed in The building comprises 17 levels of office space and basement parking for 114 vehicles. The building has been certified with a 5 Star Green Star Office As Built v3 rating and a base building 5 Star NABERS Energy rating. The property is located within the core office precinct of the Adelaide CBD and forms part of the City Central precinct, a redevelopment that includes the existing GPO building. Property details Ownership interest % Title Freehold Location Adelaide Grade A WALE years Occupancy 100% NLA 4 36,802 sqm Car spaces Completion 2012 Independent Valuation Valuer JLL Valuation date 30 June 2016 Valuation (100% basis) $263.5m Valuation (REIT ownership Interest) $263.5m Value per square metre $7,160 Capitalisation rate 6.00% Discount rate 7.25% Passing yield 6.41% The building is fully leased to four tenants including the major tenant, the Commonwealth of Australia (represented by the Australian Taxation Office), which that occupies 84% of the Net Lettable Area, with the other significant tenant being Australia Post occupying another 14%. Lease expiry profile 1 1% 1% 8% 90% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 Key tenants Tenant NLA Expiry Gross passing income Review (sqm) (%) (date) ($m) (%/CPI) Commonwealth 30,979 84% Oct-27 $ % 5 Government (ATO) Australia Post 5,291 14% Feb-23 $ % Public Caffé % Oct-17 $ % SA Government (SA Lotteries) 277 1% Jan-19 $ % By gross passing income. Ownership interest held through Franklin Street Property Trust ( FSPT ). As at 30 June 2016, by gross passing income (REIT ownership interest). Shown on a 100% basis. Effective market rent reviews apply at the rental review due in November of 2017 and 2022, subject to a 10% cap and collar. Since 30 June 2016, Public Caffé has entered into a lease extension taking the expiry date to October 2022.

41 Charter Hall Long WALE REIT / Portfolio Overview (continued) Westpac Building, Kogarah 4-16 Montgomery Street, Kogarah NSW Photo Description The property is an A-grade commercial office building, constructed in 1990 and comprising five levels of office space and parking for 597 vehicles. The property is currently leased to Westpac Banking Corporation, which occupies 100% of the property on a long-term 20 year lease with approximately 18 years remaining. The building underwent an extensive refurbishment in 2015, which included base building works, upgrades to plant and equipment and tenant fitout works. The building has a target 4.5 Star NABERS Energy rating. Property details Ownership interest % Title Freehold Location Sydney Grade A WALE years Occupancy 100% NLA 4 31,724 sqm Car spaces Last refurbishment 2015 Independent Valuation Valuer Savills Valuation date 30 June 2016 Valuation (100% basis) $187.0m Valuation (REIT ownership Interest) $93.7m Value per square metre $5,895 Capitalisation rate 6.00% Discount rate 7.50% Passing yield 5.92% Lease expiry profile 1 Vacant 1% 99% FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 Key tenants 5 Tenant NLA Expiry Gross passing income Review (sqm) (%) (date) ($m) (%/CPI) Westpac 31,354 99% Sep-34 $5.9 CPI 6 Westpac 370 1% Sep-21 $0.1 CPI 6 (Branch) 1 By gross passing income. 2 Ownership interest held through Core Plus Office Fund Kogarah Holding Trust ( CPOF KHT ). 3 As at 30 June 2016, by gross passing income (REIT ownership interest). 4 Shown on a 100% basis. 5 NLA shown on a 100% basis, gross passing income based on REIT ownership interest. 6 Annual CPI reviews subject to a ratchet and an annual cap of 5% (see Sections and 16 for more information on CPI).

42 40 / PDS / Portfolio Overview 3. Portfolio Overview (continued) 3.3. Industrial Portfolio A summary of the industrial assets included in the Initial Portfolio is summarised below: Portfolio summary 1 Property State REIT Cap interest Valuation 2 rate 3 Initial Yield 3 WALE 4 Occupancy 4 GLA 5 WARR 6 Gross passing income 7 (%) ($m) (%) (%) (years) (%) (sqm) (%/CPI) (%) Metcash Distribution Centre, WA 100% % 7.1% % 98,295 CPI 15% Canning Vale Coles Distribution Centre, WA 49.9% % 6.5% % 81, % 11% Perth Coles Distribution Centre VIC 50.0% % 5.4% % 69, % 3% Truganina Woolworths Distribution VIC 100% % 7.8% % 52, % 4% Centre, Hoppers Crossing Grace Worldwide, Willawong QLD 100% % 7.6% % 22, % 4% Electrolux, Beverley SA 100% % 7.5% % 25, % 3% Toll, Altona North VIC 100% % 7.2% % 6, % 3% Coates Hire, Kingston QLD 100% % 6.5% % 1, % 2% Australia Post, Kingsgrove NSW 100% % 7.2% % 6, % 2% Total / Weighted average % 6.9% % 363, % 47% (completed assets) Woolworths Distribution VIC 26.0% % 5.4% % 70, % 3% Centre, Dandenong Total / Weighted average % 6.8% % 434, % 51% Geographic diversity 2 Tenant rent review structure 8 4% 6% 11% 48% WA 48% VIC 31% QLD 11% 29% 71% Fixed 71% CPI 29% SA 6% 31% NSW 4% 1 Valuation and gross passing income based on REIT ownership interest, Gross Lettable Area shown on a 100% basis. Unless otherwise stated, metrics include Woolworths Distribution Centre, Dandenong at lease commencement. 2 Independent Valuation as at 30 June 2016 except Woolworths Distribution Centre, Dandenong which is as at 17 December 2015 on a lease commencement basis and Coles Distribution Centre, Truganina which is as at 5 July 2016 (REIT ownership interest). 3 Weighted by Independent Valuation (REIT ownership interest). See definition of Initial Yield in the Glossary (Section 16). 4 As at 30 June 2016, weighted by gross passing income (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. 5 Industrial GLA shown on a 100% basis. 6 WARR weighted by gross passing income as at 30 June 2016 (REIT ownership interest) except Woolworths Distribution Centre, Dandenong which is at lease commencement. CPI is assumed at 2% over the Forecast Period (see Sections and 16 for more information). 7 Gross passing income as a percentage of the total gross passing income of the REIT. 8 By gross passing income (REIT ownership interest) including Woolworths Distribution Centre, Dandenong at lease commencement. Totals may not equal 100% due to rounding.

43 Charter Hall Long WALE REIT / Portfolio Overview (continued) Tenant lease expiry profile % 21.8% 8.8% 6.4% 9.3% 6.8% 4.6% 6.6% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 FY39 Major tenants 2 14% 6% 7% 29% Metcash Limited 29% Wesfarmers Limited 29% Woolworths Limited 15% Grace Worldwide 7% AB Electrolux (Sweden) 6% Other 14% 15% 29% Description of major tenants 3 Parent 4 Tenant Description Metcash Limited Metcash Limited 5 See Section Wesfarmers Limited Coles Group Limited See Section Woolworths Limited Woolworths Limited 6 See Section Grace Worldwide Grace Worldwide Grace Worldwide is one of the largest record management, removals and storage companies in Australasia with more than 40 branches throughout Australia and New Zealand. Grace is a privately owned company and has been operating for over 100 years. AB Electrolux (Sweden) Market capitalisation A$10.0 billion Credit rating BBB+ Electrolux Home Products Pty Limited AB Electrolux is a multinational appliance manufacturer, headquartered in Stockholm, Sweden. It is the second largest appliance maker in the world by units sold. Australia is the group s fourth largest market accounting for 5% of revenue in In Australia, AB Electrolux is the market leader with 40% market share in core appliances under the brands Electrolux, Simpson and Westinghouse. 1 By gross passing income (REIT ownership interest) including Woolworths Distribution Centre, Dandenong at lease commencement. Totals may not equal 100% due to rounding. 2 By gross passing income (REIT ownership interest) including Woolworths Distribution Centre, Dandenong at lease commencement. In some instances, the tenant is a related entity and/or subsidiary of the parent group. See Section for more information. 3 Market capitalisation as at close 23 September 2016 (Sydney Time), converted to Australian dollars at the prevailing spot rate. 4 The parent entity does not guarantee the tenant under the leases unless otherwise noted as a tenant or guarantor. See individual asset summary pages for details. 5 The tenant on the lease is IGA Distribution (WA) Pty Limited, a wholly owned subsidiary of Metcash Limited. 6 The tenant on the lease for Woolworths Distribution Centre, Hoppers Crossing is Shellbelt Pty Limited, with Woolworths Limited as guarantor.

44 42 / PDS / Portfolio Overview 3. Portfolio Overview (continued) Metcash Distribution Centre, Canning Vale 218 Bannister Road, Perth WA Photo Description The property incorporates a purpose built logistics facility 100% occupied by Metcash, having a Gross Lettable Area of 98,295 sqm located within the land constrained core industrial precinct of Canning Vale approximately 14 km south-east of the Perth CBD. Located on the site are six primary buildings, five of which were constructed in the 1990 s, with the sixth most recent building, a meat processing facility, having been constructed in The improvements are situated on a large land holding of 20.9 hectares with the ability to provide multi-tenant accommodation and possible future expansion. Property details Ownership interest % Title Freehold Location Perth Type Logistics WALE years Occupancy 100% GLA 4 98,295 sqm 5 Office content (% GLA) 4% Site area 208,712 sqm Site coverage 47% Last refurbishment/extension 1996/2010 Lease expiry profile 1 100% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 Independent Valuation Valuer Savills Valuation date 30 June 2016 Valuation (100% basis) $164.5m Valuation (REIT ownership Interest) $164.5m Value per square metre $1,674 Capitalisation rate 7.25% Discount rate 8.25% Passing yield 7.13% Key tenants Tenant GLA Expiry Gross passing income Review (sqm) (%) (date) ($m) (%/CPI) Metcash 6 98, % Jan-24 $13.4 CPI 7 1 By gross passing income. 2 Ownership interest held equally through both 218 Bannister Road Trust ( 218 BRT ) and Canning Vale Logistics Trust No.1 ( CVLT1 ). 3 As at 30 June 2016, by gross passing income (REIT ownership interest). 4 Shown on a 100% basis. 5 The meat processing facility comprising a GLA of 2,397 sqm was constructed, and is owned by the tenant. 6 The tenant on the lease is IGA Distribution (WA) Pty Limited a wholly owned subsidiary of Metcash Limited. 7 A mid-term market rent review applies on 19 December 2018 and is subject to a ratchet clause (see Sections and 16 for more information on CPI).

45 Charter Hall Long WALE REIT / Portfolio Overview (continued) Coles Distribution Centre, Perth 136 Horrie Miller Drive, Perth WA Photo Description The property is a logistics facility with a GLA of 81,647 sqm purpose built for Coles and is located on a 25.0 hectare site strategically situated within Perth Airport, 10 km east of the Perth CBD. Perth Airport is one of the major logistics hubs in Western Australia, with tenants including Woolworths, Toll, Electrolux and Linfox. The facility comprises a combination of ambient, temperature controlled and freezer facilities together with an administration office and amenities. The property operates as a regional distribution centre for Coles servicing the whole of Western Australia from this location. Property details Ownership interest % Title 3 Leasehold Location Perth Type Logistics WALE years Occupancy 100% GLA 5 81,647 sqm Office content (% GLA) 8% Site area 250,033 sqm Site coverage 32% Completion 2008 Lease expiry profile 1 100% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 Independent Valuation Valuer Savills Valuation date 30 June 2016 Valuation (100% basis) $240.0m Valuation (REIT ownership Interest) $119.8m Value per square metre $2,939 Capitalisation rate 6.50% Discount rate 8.00% Passing yield 6.53% Key tenants 6 Tenant GLA Expiry Gross passing income Review (sqm) (%) (date) ($m) (%/CPI) Coles 81, % May-28 $ % 1 By gross passing income. 2 Ownership interest held through DIF. 3 Ground lease term of 80 years remaining as at 30 June 2016 (consisting of an initial term of 40 years, three months and one day, which commenced on 31 March 2007 and an option term of 49 years less one day commencing 1 July 2047 and expiring 29 June 2096). There is no ongoing additional rental, with the rent being paid by an initial upfront rental payment. 4 As at 30 June 2016, by gross passing income (REIT ownership interest). 5 Shown on a 100% basis. 6 GLA shown on a 100% basis, gross passing income based on REIT ownership interest.

46 44 / PDS / Portfolio Overview 3. Portfolio Overview (continued) Coles Distribution Centre, Truganina 485 Dohertys Road, Truganina VIC Photo Description A purpose built Coles distribution centre completed in The building provides 69,074 sqm of GLA, of which 2,559 sqm is ambient temperature controlled. Ancillary improvements include canopies of 10,217 sqm, two weighbridges, a turnstile entrance, an outdoor canteen, a truck parking area and an onsite staff car parking for 502 cars. There is expansion capacity for circa 10,000 sqm of GLA on 1.6 hectares of land to the west of the existing improvements. Property details Ownership interest % Title Freehold Location Melbourne Type Logistics WALE years Occupancy 100% GLA 4 69,074 sqm Office content (% GLA) 6% Site area 159,000 sqm Site coverage 43% Completion 2012 Truganina is situated approximately 20 km west of the Melbourne CBD and is set to benefit from a number of proposed infrastructure projects including the Western Distributor, the M80 Ring Road Upgrade, the Palmers Road Corridor and the Western Interstate Freight Terminal. Lease expiry profile 1 100% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 Independent Valuation Valuer Savills Valuation date 5 July 2016 Valuation (100% basis) $102.5m Valuation (REIT ownership Interest) $51.3m Value per square metre $1,484 Capitalisation rate 5.37% Discount rate 7.25% Passing yield 5.39% Key tenants 5 Tenant GLA Expiry Gross passing income Review (sqm) (%) (date) ($m) (%/CPI) Coles 69, % Jun-32 $ % 1 By gross passing income. 2 Ownership interest held through CHPT Dandenong Trust. 3 As at 30 June 2016, by gross passing income (REIT ownership interest). 4 Shown on a 100% basis. 5 GLA shown on a 100% basis, gross passing income based on REIT ownership interest.

47 Charter Hall Long WALE REIT / Portfolio Overview (continued) Woolworths Distribution Centre, Hoppers Crossing Old Geelong Road, Melbourne VIC Photo Description The property comprises a logistics facility situated on a site of 14.5 hectares in the established industrial locality of Hoppers Crossing, approximately 21 km south-west of Melbourne CBD. The facility comprises 52,364 sqm GLA with canopies, loading docks of a further 5,354 sqm and expansion land of approximately 27,000 sqm. Property details Ownership interest % Title Freehold Location Melbourne Type Logistics WALE years Occupancy 100% GLA 4 52,364 sqm Office content (% GLA) 3% Site area 145,100 sqm Site coverage 36% Completion / last refurbishment 1990 / 2010 Lease expiry profile 1 100% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 Independent Valuation Valuer JLL Valuation date 30 June 2016 Valuation (100% basis) $45.5m Valuation (REIT ownership Interest) $45.5m Value per square metre $869 Capitalisation rate 8.00% Discount rate 8.00% Passing yield 7.81% Key tenants Tenant GLA Expiry Gross passing income Review (sqm) (%) (date) ($m) (%/CPI) Woolworths 5 52, % Dec-20 $ % 1 By gross passing income. 2 Ownership interest held through DIF. 3 As at 30 June 2016, by gross passing income (REIT ownership interest). 4 Shown on a 100% basis. 5 The tenant on the lease is Shellbelt Pty Limited with Woolworths Limited as guarantor.

48 46 / PDS / Portfolio Overview 3. Portfolio Overview (continued) Grace Worldwide, Willawong 420 Sherbrooke Road, Brisbane QLD Photo Description The property is a modern warehouse facility located at Willawong, 15 km south of Brisbane s CBD with easy access and egress to the Logan Motorway, the Ipswich Motorway and the Brisbane CBD. The facility comprises an area of 22,108 sqm of generic warehousing and is situated on a site of 3.9 hectares. Grace Worldwide is one of the largest record management, removals and storage companies in Australasia. Property details Ownership interest % Title Freehold Location Brisbane Type Logistics WALE years Occupancy 100% GLA 4 22,108 sqm Office content (% GLA) 7% Site area 38,860 sqm Site coverage 57% Completion 2011 Lease expiry profile 1 100% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 Independent Valuation Valuer Knight Frank Valuation date 30 June 2016 Valuation (100% basis) $38.6m Valuation (REIT ownership Interest) $38.6m Value per square metre $1,746 Capitalisation rate 7.00% Discount rate 7.25% Passing yield 7.60% Key tenants 5 Tenant GLA Expiry Grace Worldwide Gross passing income Review (sqm) (%) (date) ($m) (%/CPI) 22, % Jul-23 $ % 1 By gross passing income. 2 Ownership interest held through DIF. 3 As at 30 June 2016, by gross passing income (REIT ownership interest). 4 Shown on a 100% basis. 5 GLA shown on a 100% basis, gross passing income based on REIT ownership interest.

49 Charter Hall Long WALE REIT / Portfolio Overview (continued) Electrolux, Beverley Howards Road, Adelaide SA Photo Description The property is a modern logistics facility incorporating a high clearance warehouse with attached air conditioned offices and showroom that has a combined Gross Lettable Area of 25,562 sqm. The facility was completed in December 2012 and was purpose built for Electrolux. The property is situated on a site of 3.9 hectares in the inner ring suburb of Beverley, approximately 6 km north-west of the Adelaide CBD in an established industrial precinct, with good access to major arterial roads and in close proximity to the Adelaide Airport and Port of Adelaide. Property details Ownership interest % Title Freehold Location Adelaide Type Logistics WALE years Occupancy 100% GLA 4 25,562 sqm Office content (% GLA) 5% Site area 39,946 sqm Site coverage 64% Completion 2012 Lease expiry profile 1 100% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 Independent Valuation Valuer JLL Valuation date 30 June 2016 Valuation (100% basis) $33.3m Valuation (REIT ownership Interest) $33.3m Value per square metre $1,303 Capitalisation rate 7.50% Discount rate 8.75% Passing yield 7.46% Key tenants Tenant GLA Expiry Gross passing income Review (sqm) (%) (date) ($m) (%/CPI) Electrolux 25, % Dec-24 $ % 1 By gross passing income. 2 Ownership interest held through DIF. 3 As at 30 June 2016, by gross passing income (REIT ownership interest). 4 Shown on a 100% basis.

50 48 / PDS / Portfolio Overview 3. Portfolio Overview (continued) Toll, Altona North Horsburgh Drive, Melbourne VIC Photo Description A modern logistics facility of 6,310 sqm that is situated on a site of 4.9 hectares. Constructed in 2010, the property is located in Altona North, 14 km west of Melbourne s CBD with direct access to the West Gate Freeway, the Port of Melbourne and Melbourne Airport. The property provides an extensive auto storage hardstand area that occupies the majority of the site and consists of truck parking areas, car storage, pull up and car parking. Property details Ownership interest % Title Freehold Location Melbourne Type Logistics WALE years Occupancy 100% GLA 4 6,310 sqm Office content (% GLA) 42% Site area 49,515 sqm Site coverage 13% Completion 2010 Lease expiry profile 1 100% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 Independent Valuation Valuer Savills Valuation date 30 June 2016 Valuation (100% basis) $33.1m Valuation (REIT ownership Interest) $33.1m Value per square metre $5,246 Capitalisation rate 6.00% Discount rate 8.00% Passing yield 7.17% Key tenants Tenant GLA Expiry Gross passing income Review (sqm) (%) (date) ($m) (%/CPI) Toll 5 6, % Nov-25 $ % 1 By gross passing income. 2 Ownership interest held through DIF. 3 As at 30 June 2016, by gross passing income (REIT ownership interest). 4 Shown on a 100% basis. 5 The tenant on the lease is Toll Transport Pty Ltd with Toll Holdings Limited as guarantor. The Government of Japan holds an 80.5% interest in Toll Holdings Limited through Japan Post Holdings Co.

51 Charter Hall Long WALE REIT / Portfolio Overview (continued) Coates Hire, Kingston Mudgee Street, Kingston, Brisbane QLD Photo Description The property was purpose built in 2012 for Coates Hire and is situated on a site with a usable area of 5.9 hectares located in the established industrial locality of Kingston, approximately 24 km south-east of the Brisbane CBD. The property features extensive hardstand used for the storage of rental equipment and has significant exposure to the Logan Motorway, one of South-East Queensland s busiest transport routes. Property details Ownership interest % Title Freehold Location Brisbane Type Logistics WALE years Occupancy 100% GLA 4 1,835 sqm Office content (% GLA) 33% Site area 96,840 sqm Site coverage 2% Completion 2013 Lease expiry profile 1 100% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 Independent Valuation Valuer Knight Frank Valuation date 30 June 2016 Valuation (100% basis) $28.0m Valuation (REIT ownership Interest) $28.0m Value per square metre $15,259 Capitalisation rate 6.50% Discount rate 8.25% Passing yield 6.52% Key tenants Tenant GLA Expiry Gross passing income Review (sqm) (%) (date) ($m) (%/CPI) Coates Hire 5 1, % Feb-33 $ % 6 1 By gross passing income. 2 Ownership interest held through DIF. 3 As at 30 June 2016, by gross passing income (REIT ownership interest). 4 Shown on a 100% basis. 5 The tenant on the lease is Coates Hire Operations Pty, Ltd with Coates Group Holdings Pty Ltd as guarantor. 6 Annual review subject to the greater of CPI or 4.0%; mid-term market rent reviews apply on 1 March 2017, 1 March 2022 and 1 March 2027 and are subject to the greater of market (as determined by a valuer), CPI or 4% (see Sections and 16 for more information on CPI).

52 50 / PDS / Portfolio Overview 3. Portfolio Overview (continued) Australia Post, Kingsgrove Australia Post Business Hub, Kingsgrove, Sydney NSW Photo Description The property comprises a modern office and warehouse facility of 6,729 sqm situated on a site of 1.4 hectares fully leased to Australia Post. The property was purpose built for Australia Post and has been configured to comprise ground floor post bike storage, post office, mail sorting area and rear warehousing together with first floor offices. The property is located within the Kingsgrove industrial precinct, some 13 km south-west of the Sydney CBD and features convenient access to the M5 Motorway, Sydney Airport and Port Botany. Property details Ownership interest % Title Freehold Location Sydney Type Logistics WALE years Occupancy 100% GLA 4 6,729 sqm Office content (% GLA) 18% Site area 13,810 sqm Site coverage 44% Completion 2011 Lease expiry profile 1 100% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 Independent Valuation Valuer Knight Frank Valuation date 30 June 2016 Valuation (100% basis) $20.7m Valuation (REIT ownership Interest) $20.7m Value per square metre $3,076 Capitalisation rate 6.00% Discount rate 7.75% Passing yield 7.17% Key tenants Tenant GLA Expiry Gross passing income Review (sqm) (%) (date) ($m) (%/CPI) Australia Post 6, % Jun-26 $ % 5 1 By gross passing income. 2 Ownership interest held through DIF. 3 As at 30 June 2016, by gross passing income (REIT ownership interest). 4 Shown on a 100% basis. 5 A mid-term market rent review applies on 24 June 2021 and is subject to a cap of 5% and a collar of 2%.

53 Charter Hall Long WALE REIT / Portfolio Overview (continued) Woolworths Distribution Centre, Dandenong Glasscocks Road, Dandenong, VIC Artists Impression Property details (at lease commencement) Ownership interest % Title Freehold 4 Location Melbourne Type Logistics WALE years Occupancy 100% GLA 6 70,431 sqm Office content (% GLA) 2% Site area 159,200 sqm Site coverage 52% Completion (estimated) 2018 Independent Valuation Valuer m3 Properties Valuation date 17 December 2015 Valuation (at lease $215.8m 8 commencement, 100% basis) Valuation (at lease commencement), $56.1m 8 REIT ownership Interest) Value per square metre $3,064 Capitalisation rate 5.50% Discount rate 7.00% Passing yield 5.44% Description Upon completion in 2018 the property will comprise a state of the art distribution centre of approximately 70,431 sqm, purpose built for Woolworths on a site of approximately 15.9 hectares. The warehouse will be partitioned into various storage components and will feature three varying clearance heights from approximately 6 metres to 45 metres. The warehouse will have extensive loading facilities, hardstand and truck parking. Woolworths will invest a significant amount of capital in the internal fitout of the facility including extensive automation systems. The warehouse will be located within the Portlink Estate adjacent to a proposed inland port which will provide direct access to the Port of Melbourne. The estate is located in Dandenong South, approximately 36 km south-east of the Melbourne CBD. Woolworths Distribution Centre, Dandenong is the subject of the Woolworths Distribution Centre, Dandenong Development Agreement which is summarised in Section Lease expiry profile 2 100% Vacant FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY38 Key tenants 7 Tenant GLA Expiry Gross passing income Review (sqm) (%) (date) ($m) (%/CPI) Woolworths 70, % Mar-38 $ % 1 All metrics for Woolworths Dandenong DC are presented on a forecast as completed basis. 2 By gross passing income. 3 Ownership interest held through CHPT Dandenong Trust. 4 The current title is a 299 year leasehold which will convert to freehold title upon completion and registration of the subdivision. 5 As at lease commencement, by gross passing income (REIT ownership interest). 6 Shown on a 100% basis. 7 GLA shown on a 100% basis, gross passing income based on REIT ownership interest. 8 Valuation as at 17 December 2015 assuming lease commencement and estimating landlord payments under the development agreement. At 30 June 2016, a 26% share of the partially completed Woolworths Distribution Centre, Dandenong is valued at $4.6 million based on costs to-date. To develop the asset to lease commencement (expected to occur in March 2018), the REIT expects to make $51.6 million of capital contributions under the Woolworths Distribution Centre, Dandenong Development Agreement and to fund other costs. At lease commencement, the REIT s 26% interest is expected to be valued at $56.1million, representing a $51.5 million increase on the current value. Other costs of $0.1 million are associated with acquisition and project management of the development.

54 52 / PDS / Portfolio Overview 3. Portfolio Overview (continued) 3.4. Retail Portfolio The Initial Portfolio includes a 45% interest 1 in 54 retail assets, each with a WALE of 18.3 years. All retail assets are leased to ALH Group 2 on triple net 3 lease structures with all maintenance capital expenditure paid by the tenant. Rent under the ALH Group leases is increased annually by reference to CPI 4. The ALH Group leases include a Dan Murphy s rent for 18 of the 54 properties in the retail Portfolio. The Dan Murphy s rent is comprised of base rent and turnover rent 5. A summary of the retail Portfolio is included to the right: Income diversity 12 19% Geographic diversity 12 3% 3% 7% 11% 81% 39% 37% Hotel rent 81% Dan Murphy s rent 19% VIC 39% QLD 37% WA 11% SA 7% NSW 3% TAS 3% 1 Ownership interest held through DIF. 2 The tenant on the lease is Australian Leisure and Hospitality Group Pty Limited with ALH Group Pty Ltd as guarantor. 3 The responsibility for structural maintenance, repair, insurance and payment of most rates, taxes, charges and utilities is passed through to the tenant. There is also no abatement of rent/ outgoings in circumstances of damage/destruction to the property. Management fees and costs are not recoverable. 4 The leases contain a ratchet clause so that at each review date the Rent cannot be less than the Rent payable in the immediately preceding lease year. 5 The base rent is reviewed every five years and increases by the average of the immediately preceding three years of turnover rent. 6 Gross passing income based on ownership interest, site area shown on a 100% basis. 7 Independent Valuation as at 30 June Weighted by Independent Valuation (REIT ownership interest). See definitions in the Glossary (Section 16). 9 Site area and site coverage shown on a 100% basis. 10 WARR weighted by gross passing income as at 30 June 2016 (REIT ownership interest). CPI is assumed at 2% over the Forecast Period (see Sections and 16 for more information on CPI). 11 Gross passing income based on ownership interest as a percentage of the total gross passing income of the REIT. Total may not equal 20% due to rounding. 12 By gross passing income (REIT ownership interest). Portfolio summary 6 State Location Excelsior Hotel VIC Thomastown Manhattan Hotel VIC Ringwood Waltzing Matilda Hotel VIC Springvale First & Last Hotel VIC Hadfield Moreland Hotel VIC Brunswick St Albans Hotel VIC St Albans Cherry Hill Tavern VIC Doncaster Glengala Hotel VIC Sunshine Balaclava Hotel VIC St Kilda East Albion Charles Hotel VIC Northcote Croxton Park Hotel VIC Thornbury Oakleigh Junction Hotel VIC Oakleigh Palace Hotel VIC Camberwell Monash Hotel VIC Clayton Coolaroo Hotel VIC Coolaroo Preston Hotel VIC Preston Harvey Road Tavern QLD Gladstone Kawana Waters Hotel QLD Kawana Waters Villa Noosa Hotel QLD Noosaville Hinterland Hotel Motel QLD Nerang Federal Hotel - QLD QLD Toowoomba Glenmore Tavern QLD North Rockhampton Buderim Tavern QLD Buderim Redbank Plains Tavern QLD Redbank Plains Dog and Parrot Hotel QLD Robina Allenstown Hotel QLD Rockhampton Parkwood Tavern QLD Parkwood Royal Beenleigh Hotel QLD Beenleigh Capalaba Tavern QLD Capalaba Highfields Tavern QLD Highfields Russell Tavern QLD Dalby Waterfront Hotel QLD Diddilibah Commercial Hotel QLD Nerang Greenwood Hotel WA Greenwood Hyde Park Hotel WA West Perth Belmont Tavern WA Cloverdale Highway Hotel WA Bunbury Lakers Tavern WA Thornlie Dunsborough Hotel WA Dunsborough Peel Alehouse WA Halls Head Bull Creek Tavern WA Bull Creek Herdsman Lake Tavern WA Wembley Findon Hotel SA Findon Slug N Lettuce British Pub SA Parafield Gardens Norwood Hotel SA Norwood Victoria Hotel SA O Halloran Hill Royal Oak SA North Adelaide Federal Hotel - SA SA Mt Gambier Westower Tavern NSW West Ballina Greenhouse Tavern NSW Coffs Harbour Boomerang Hotel NSW Lavington Gateway Inn Hotel TAS Devonport Carlyle Hotel TAS Derwent Park Riverside Hotel Motel TAS Riverside Total/Weighted average

55 Charter Hall Group / 53 Valuation Valuation (REIT (100% basis) 7 ownership interest) 7 Cap rate 8 Initial Yield 8 Occupancy Site area 9 WARR 10 Gross passing income 11 ($m) ($m) (%) (%) (%) (sqm) (% / CPI) ($m) (%) % 6.2% 100% 33,000 CPI % % 6.1% 100% 37,400 CPI % % 6.2% 100% 23,240 CPI % % 6.3% 100% 5,383 CPI % % 6.0% 100% 4,045 CPI % % 6.3% 100% 14,440 CPI % % 6.2% 100% 9,113 CPI % % 6.3% 100% 18,158 CPI % % 5.7% 100% 765 CPI % % 5.8% 100% 3,466 CPI % % 5.7% 100% 9,581 CPI % % 5.7% 100% 1,025 CPI % % 5.5% 100% 1,924 CPI % % 6.2% 100% 11,525 CPI % % 6.2% 100% 21,542 CPI % % 5.7% 100% 4,018 CPI % % 6.5% 100% 11,320 CPI % % 6.0% 100% 17,970 CPI % % 6.0% 100% 15,148 CPI % % 6.1% 100% 28,421 CPI % % 6.0% 100% 11,810 CPI % % 6.5% 100% 7,789 CPI % % 6.2% 100% 9,568 CPI % % 6.1% 100% 16,909 CPI % % 6.1% 100% 10,680 CPI % % 6.2% 100% 7,711 CPI % % 6.1% 100% 10,390 CPI % % 6.0% 100% 8,838 CPI % % 6.2% 100% 15,945 CPI % % 6.3% 100% 8,626 CPI % % 6.3% 100% 1,585 CPI % % 6.0% 100% 28,340 CPI % % 6.0% 100% 4,124 CPI % % 5.8% 100% 9,509 CPI % % 5.8% 100% 5,973 CPI % % 5.8% 100% 2,218 CPI % % 6.1% 100% 9,767 CPI % % 5.8% 100% 3,928 CPI % % 6.5% 100% 7,248 CPI % % 6.3% 100% 4,681 CPI % % 5.7% 100% 4,412 CPI % % 5.0% 100% 6,555 CPI % % 6.5% 100% 12,400 CPI % % 6.5% 100% 10,880 CPI % % 5.9% 100% 6,594 CPI % % 6.7% 100% 6,454 CPI % % 6.1% 100% 1,774 CPI % % 5.9% 100% 4,921 CPI % % 6.2% 100% 6,653 CPI % % 6.6% 100% 6,030 CPI % % 6.6% 100% 13,420 CPI % % 7.0% 100% 6,733 CPI % % 6.8% 100% 5,290 CPI % % 7.0% 100% 13,711 CPI % % 6.1% 100% 562,950 CPI %

56 54 / PDS / Portfolio Overview Norwood Hotel, Adelaide Federal Hotel, Toowoomba Albion Charles Hotel, Melbourne Villa Noosa, Noosa

57 Charter Hall Long WALE REIT / 55 Hyde Park Hotel, Perth Allenstowns Hotel, Rockhampton Kawana Waters Hotel, Kawana

58 56 / PDS / Real estate market overview Real estate market overview 4 Norwood Hotel, Norwood, SA

59 Charter Hall Long WALE REIT / Real Estate Market Overview September 2016 Independent Market Report Australian Commercial Real Estate Investment Markets Prepared for: Charter Hall

60 58 / PDS / Real estate market overview 4. Real Estate Market Overview (continued) Table of Contents 1 Executive Summary 2 2 Economic Overview 3 3 Strong Transaction Activity 5 4 Market Fundamentals 6 5 Supportive Investment Market Drivers 9 Page 1

61 Charter Hall Long WALE REIT / Real Estate Market Overview (continued) 1 Executive Summary Economic growth stable: Australian GDP grew by 3.1% in the 12 months to March 2016 after recording stronger than anticipated 1Q16 growth of 1.1%. The annual growth rate is on par with trend growth and is reflective of the relatively stable economic fundamentals. The Australian economy has now recorded 25 years of successive economic growth. The key drivers of growth in 1Q16, as over the past 12 months, were household consumption, dwelling construction, and exports. The decline in the exchange rate against the USD and major AP currencies since mid-2013 is supportive of future growth and capital investment flows into Australia. Robust real estate investment markets: Capital markets remain strong, with high investment volumes, highly liquid markets, positive investor sentiment, and a diversified and growing buyer cohort. Transaction volumes surpassed the 2007 peak in 2012, and in the subsequent years of 2013, 2014 and High volumes reflect the high level of liquidity in the Australian commercial real estate market. In 2016, transaction volumes reached AUD 10.8 billion in the first half of the year, comprising AUD 6.3 billion in the office sector, AUD 2.6 billion in the retail sector, and AUD 1.9 billion in the industrial sector. Foreign groups now make up a large proportion of investors, accounting for 40% of total acquisitions in Widening spreads: Historically low interest rates have been a significant driver of yield compression in this cycle. And while both real bond rates and property yields have tightened, bond rates have compressed by more, resulting in a wider than average spread to property yields. These wide spreads attract investors to real estate and provide a degree of support under a scenario where interest rates and inflation start to rise. Solid long term demand drivers: Australian real estate yields remain relatively high in a global context, and given the greater growth in Australia relative to comparable mature markets globally, there may be scope for more yield compression. This will be supported by expected structurally lower funding costs, relatively high population and employment growth, and continuing growth in the domestic superannuation sector that currently comprises AUD 2.0 trillion. Market fundamentals: Market occupier conditions have been mixed, reflecting the transition of the economy from mining to services and business investment. Nationally, office net absorption has been stronger than the historical average, and while rental conditions in the retail and industrial sectors remain subdued, disciplined supply pipelines and relatively low vacancy rates are providing the basis for continuing yield compression. Page 2

62 60 / PDS / Real estate market overview 4. Real Estate Market Overview (continued) 2 Economic Overview Australian GDP grew by a faster than anticipated 1.1% in 1Q16. This is the strongest quarterly growth rate since 1Q12 and supports an annual growth rate of 3.1%. The Australian economy has now recorded 25 years of successive economic growth (Figure 1). The key drivers of growth in 1Q16 have also largely underpinned growth over the last 12 months, with household consumption, dwelling construction and exports the major contributors to economic growth over this period. Figure 1: Australian GDP growth, 1980 to 2016* 10.0% 8.0% Annual % 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% *As at 1Q16 Source: ABS, JLL Research Real (inflation-adjusted) household consumption growth has been steadily accelerating, rising from 1.1% p.a. in 1Q13 to 3.0% p.a. in 1Q16. Household consumption growth is now close to the long-run (20-year) average of 3.4% p.a.. The consumption breakdown shows that the key contributors were: food; rent; recreation, and; insurance (measured in chain volume terms). Strong growth in dwelling construction activity was largely underpinned by the solid residential housing market, with this sector growing by 7.0% in the 12 months to 1Q16. This rate of growth is approximately double its historical trend pace. However, the largest contributor to economic output in 1Q16 was the export sector. This growth was largely driven by the transition of the mining sector from the investment to the production phase. Export volumes are expected to continue to grow over the next few years. The wind-down in mining investment, which has been a drag on headline GDP growth, is now nearing its end. Investment in non-mining (business) sectors of the economy remains subdued, with non-dwelling construction falling by 19.6% year-on-year to 1Q16 and machinery and equipment investment by 7.7%. Nonetheless, labour market conditions have been improving (Table 1). The unemployment rate decreased by 0.6 percentage points over the 12 months to July 2016 to 5.7%. Employment growth rose to 1.9% over the same period, having generally trended upwards since February 2014.The number of people in employment is currently at a record high of 12.0 million people. Table 1: Key economic indicators Indicator 2Q15 2Q16 GDP (%, qtr / ann) 0.9 / / 3.1* Unemployment rate (%) CPI (%, qtr / ann) 0.7 / / year real bond rate (%) Source: ABS, JLL Research *As at 1Q16 Page 3

63 Charter Hall Long WALE REIT / Real Estate Market Overview (continued) Expansionary monetary policy should also support domestic drivers of demand, and provide a further boost to exports through a lower AUD. The Reserve Bank of Australia (RBA) has confirmed its easing bias, with the central bank cutting the official cash rate from 1.75% to a record low of 1.50% in August. The cash rate has been exceptionally low for an extended period, remaining below 3.00% over the past three years. The RBA s expansionary policy stance is reflective of sluggish domestic demand and low price and wage growth in the economy. Consumer Price Index (CPI) of just 1.0% p.a. was recorded in June 2016 (below the average 2.6% p.a. between 1996 and 2015). Nonetheless, the quarterly headline CPI figure can be volatile. Over the past 20 years, there have only been six instances when CPI has been at or below this level. Excluding volatile items, a measure to which the RBA attributes greater importance, the annual inflation rate to Jun-16 was 1.6%. This inflation figure is well below the RBA s target band of 2-3%, potentially providing scope of further cuts to the cash rate. The RBA aims to achieve inflation within this target band over the course of the cycle. Thus, while CPI is currently below this range, seeking to achieve this rate, on average, provides discipline for monetary policy decision-making, and serves as an anchor for private-sector inflation expectations. Page 4

64 62 / PDS / Real estate market overview 4. Real Estate Market Overview (continued) 3 Strong Transaction Activity Investment markets remain strong across all sectors. After record investment activity in both 2014 and 2015, transactions volumes (by value) reached AUD 10.8 billion in 2016 (as at 2Q16). Transactions in the office sector totalled AUD 6.3 billion (58% of total transactions), while retail and industrial transaction volumes reached AUD 2.6 billion (24%) and AUD 1.9 billion (18%) respectively. While investment activity in 2016 is expected to remain robust, volumes across all sectors are unlikely to reach the record levels achieved in 2015 (AUD 33.1 billion). A distinct lack of investment opportunity in the core market, as well as relatively fewer large portfolios offered to the market is expected to result in lower total transactional activity this year. However, despite expectations of reduced investment volumes, investment markets are predicted to continue to perform strongly. Robust investor sentiment persists, liquidity remains high, and new capital sources continue to emerge, providing diversity in the investor profile, particularly as offshore investors seek greater exposure to Australia. As Figure 2 shows, foreign direct investment into Australian commercial property markets has been gradually rising over the past 10 years, reaching a peak of AUD 13.4 billion in This equated to an all-time high of 40% of total transaction volumes, well above the long term historical average of around 25%. This influx of foreign capital has been accompanied by the emergence of new sources of capital, particularly from Asia. Chinese investors in particular have risen in prominence, accounting for a 30% share of total foreign direct commercial real estate investment, by far the largest source of foreign capital in Australia is a beneficiary of two major investment themes which will underpin the demand for assets. A number of investors are increasing their allocation to real assets, including real estate. Furthermore, the long term potential of Asia Pacific has resulted in many investors increasing their geographical weighting to the region. Figure 2: National transaction volumes (by value), 2007 to 2016* $35 $30 $25 $20 $15 $10 $5 50% 40% 30% 20% 10% $ * Office Retail Industrial Foreign Investment (%) [RHS] 0% *As at 2Q16 Source: JLL Research Page 5

65 Charter Hall Long WALE REIT / Real Estate Market Overview (continued) 4 Market Fundamentals OFFICE The Australian office sector has a diverse tenant profile, with strong representation from the finance and insurance, professional service, and public administration sectors. The diversity in the tenant base provides a level of stability in the occupier market. JLL recorded net absorption of 196,900 sqm p.a. across CBD office markets between 1996 and Looking ahead, JLL projects that net absorption across the CBD markets will average 192,200 sqm p.a. between 2016 and The long term outlook for the office sector is dependent on white collar employment growth and workspace ratios. We have provided a summary of long Weighted Average Lease Expiry (WALE) assets that have traded recently across the relevant asset classes (Table 2). Assets with long WALEs can offer more secure and stable income streams. As a result, such assets typically trade at relatively tighter yields. Many foreign investors in particular have targeted assets with long WALEs, seeking stable income streams through the cycle. Table 2: Office transactions Building name Address State Sector Woolworths National Headquarters 1 Woolworths Way, Bella Vista Price (AUD, million) Sale date Building area (sqm) Equivalent yield Passing yield WALE (by income) NSW Office Jan-16 44, % 6.07% 15.8 Louisa Lawson Building 25 Cowlishaw Street, Greenway ACT Office Dec-15 26, % 5.86% 15.5 Box Hill ATO 913 Whitehorse Road, Box Hill VIC Office Sep-15* 19, % 6.01% 14.4 *Settlement date Source: JLL Research INDUSTRIAL Between 2006 and 2015, national industrial gross take-up has averaged around 1.9 million sqm p.a.. At the current rate thus far in 2016, annual gross take-up is unlikely to reach this historical average, with only 819,900 sqm of take-up recorded in the first half of the year. Nonetheless, over the medium term, take-up is expected to increase in-line with an expected uplift in the supply cycle. This will increase the delivery of new modern product with (potentially) long WALEs, a key investment criteria for core industrial sector investors in this stage of the investment cycle. The national weighted average prime yield continued its broad downward trajectory. This yield compression is being driven by demand for functional, modern, assets with long WALEs and strong lease covenants, and situated in core industrial locations. In particular, new large scale distribution facilities with secure income profiles and long WALEs have traded at strong pricing metrics in recent years. Such assets have traded at levels below average prime yields, which is reflective of their defensive characteristics. This is illustrated in Table 3, where we have also included the GIC/Australand industrial portfolio transaction to highlight the firm demand for prime grade logistics facilities. Page 6

66 64 / PDS / Real estate market overview 4. Real Estate Market Overview (continued) Table 3: Industrial transactions Building name Address State Sector GIC/Australand Portfolio 26 assets NSW, VIC, QLD, WA Price (AUD, million) Sale date Building area (sqm) Equivalent yield Passing yield WALE (by income) Industrial 1,073.0 Nov , % 5.86% 5.6 Coles D.C. 3 Roberts Road, Eastern Creek NSW Industrial Jun-15 55, % 5.78% 19.0 Red Cross Building 17 O'Riordan Street, Alexandria NSW Industrial (hightech) Jul-16 12, % 5.35% 14.6 Patrick Autocare Cherry Lane, Laverton North VIC Industrial 35.5 May , % 6.03% 10.0 Source: JLL Research RETAIL Similarly, the national regional retail yield (weighted by retail turnover) has compressed significantly over the period. The lack of regional shopping centre transaction evidence remains a key issue for benchmarking yields in this sub-sector. Nonetheless, yields continue to compress, with the national regional yield tightening to 5.52% in June Broadly, yield compression in the regional sector is being underpinned by pent-up demand for defensive core assets, relativities to other market sectors and offshore investor demand. Given the defensive characteristics of this asset class, the pool of capital within this investment sector is expected to remain engaged. Retail vacancy rates have historically been very low over the past 10 years. Between 2006 and 2015, regional vacancy has averaged 1.1%, sub-regional 2.6%, while neighbourhood and CBD vacancy has averaged a slightly higher 4.3% and 4.5% over this period. Broadly underpinning retailer demand has been improving retail turnover growth, strong population and employment growth, a solid residential housing market that underwrites household balance sheets, and a historically low cash rate. Population growth and a structurally lower cash rate in particular are expected to support positive underlying retail market fundamentals in the medium to long term. Table 4: Retail transactions Building name Address State Sector Bunnings Eastgardens Denison Street, Hillsdale Price (AUD, million) Sale date Building area (sqm) Passing yield WALE (by income) NSW Retail 56.0 Sep-15 14, % 12.0 Bunnings Joondalup Joondalup Drive & Sunder Rise, Joondalup WA Retail 43.5 Mar-16 17, %* 12.0 Bunnings Springfield 1 Main Street, Springfield QLD Retail 40.1 Nov-15 15, % 12.0 Masters Everton Park 752 Stafford Road, Everton Park QLD Retail 36.5 Jan-16 13, % 15.0 Page 7

67 Charter Hall Long WALE REIT / Real Estate Market Overview (continued) Building name Address State Sector Pakington Strand Bunnings Coffs Harbour Pakington Street & Waratah Street, Geelong West Pacific Highway & Cook Drive, Coffs Harbour Price (AUD, million) Sale date Building area (sqm) VIC Retail 31.8 Sep-16 6,076 Passing yield 5.00% (approx.) WALE (by income) 14.7 NSW Retail 30.6 Jul-16 14, % 10.0 Monier Village Monier Road, Darra QLD Retail 23.9 Jul-16 5, % 4.3 Bunnings Evanston 6 Tulloch Road, Evanston SA Retail 13.0 Oct-15 5, % 10.0 Bunnings Swan Hill 74 Nyah Road, Swan Hill VIC Retail 10.9 Aug-15 16, % 12.0 Officeworks Woolloongabba 176 Ipswich Road, Woolloongabba QLD Retail 8.2 Oct-15 2, % 10.0 *Equivalent yield Source: JLL Research Page 8

68 66 / PDS / Real estate market overview 4. Real Estate Market Overview (continued) 5 Supportive Investment Market Drivers This stage of the cycle has been underpinned by sustained yield compression in bond markets (Figure 3). The impact of lower bond rates and a widening spread to prime real estate yields is supportive of continuing capital allocation to real estate. Figure 3: Bond rates, 1982 to % year nominal bonds Inflation-indexed bonds Source: RBA, JLL Research Corporate bond rates have fallen significantly in recent years, with a 2.78% yield (July) for an A-rated bond with a three year target tenor (compared to a monthly average of around 5.30% over the past 10 years), while BBB-rated bond rates compressed to 3.95% (compared to an historical average of around 6.30% over the past 10 years). Access to relatively lower funding costs will increase investment demand for real estate assets, or indeed, any institutional grade asset class. However, in a low growth world, where many investors seek stable and consistent returns, investment demand for high yield-low growth assets, such as real estate, will be relatively greater. Broadly, Australian direct commercial real estate generally delivers higher yields relative to other asset classes. It is also a low beta market, attractive to investors looking for a safe haven against expensive bond markets and volatile equity markets. Figure 4: Yield spread to the real bond rate, 2005 to 2016* *As at 2Q16 Source: RBA, JLL Research Office (CBDs) Retail (Regional) Industrial (Selected precincts) In addition to lower funding costs, the spread between property yields and bond rates has widened significantly in recent years. Australian real estate yields are typically benchmarked against the 10-year inflation-indexed Page 9

69 Charter Hall Long WALE REIT / Real Estate Market Overview (continued) government bond rate (that is, the risk free rate). And with the risk free rate trending down to historically low levels (0.8% in 2Q16 compared to an approximate 2.8% 20-year historical average), the spread between property yields and bond rates are at historically wide levels (Figure 4). The unusually wide spread implies that either the market is taking a conservative approach to real estate asset pricing, reflected in a long-term larger risk premium, or there is temporary mispricing in the bond and/or real estate markets. In the latter case there is scope for real bond yields to rise, or for property yields to fall, or some combination of both adjustments. In addition to lower bond yields, other significant long term investment demand drivers are likely to be underpinned by the expanding domestic superannuation sector and relatively strong population growth. The superannuation industry (unconsolidated assets) has grown by 9.0% p.a. over the past 10 years to AUD 2.0 trillion (as at June 2016), and growth above the pace of GDP growth is expected to continue. Consequently, we expect superannuation funds to impact the real estate sector on two main fronts: 1) a greater absolute capital allocation to real estate, and; 2) a higher capital weighting to real estate. The absolute impact of rising superannuation capital is obvious - more funds under management means greater investment across most asset classes. However, the impact on the real estate sector may be greater, with potentially higher capital allocations to real assets. Higher allocation to real estate may be supported by: movement towards defensive asset classes as the population ages; a hedge against increasingly volatile equity markets and greater exposure to more stable low beta markets; and the increasing globalisation of real estate markets, encouraging further investment. Supporting superannuation growth is strong population growth. Australia s population has increased by 1.7% p.a. over the past 10 years (Australian Bureau of Statistics, December 2015 (latest available)), and this broad growth trend is predicted to continue in the long term. The latest Australian Bureau of Statistics projections estimates the population to increase by an annual average of 1.6% between 2016 and This is a relatively high level of growth when compared to other mature markets globally, and the age profile of Australia is favourable compared with most G20 countries. This is potentially supportive of further foreign investment, with the Australian market striking a balance between increasing total market capitalisation (through both asset creation (to service the growing population) and rising values) and market stability and transparency. Page 10

70 68 / PDS / Real estate market overview 4. Real Estate Market Overview (continued) Disclaimer 1. Jones Lang LaSalle (NSW) Pty Ltd ACN (the Company ) nor any of its related bodies corporate (as that term is defined in the Corporations Act 2001 (Cth)) and affiliates, nor their respective businesses, directors, officers, employees, consultants, lenders, agents or advisors make any representation or warranty, express or implied, as to the accuracy, reliability or completeness of the information contained in this Initial Public Offering or any other written or oral information made available to you or your representatives during or in connection with the Initial Public Offering (collectively referred to as Information ) and do not accept: (a) any responsibility arising in any way for any errors in or omissions from the Information or for any lack of truth, accuracy, completeness, currency or reliability of the Information; (b) any responsibility for any interpretation that the recipient of the Information or any other person may place on the Information or for any opinion or conclusion that the recipient of the Information or any other person may form as a result of examining the Information; and (c) any liability (whether direct or indirect or consequential) for any loss, damage, cost, expense, outgoing, interest, loss of profits or loss of any kind (Losses) suffered or incurred by any person (whether foreseeable or not) as a result of or by reason of or in connection with the provision or use of the Information, or you or your representatives or advisers acting on or relying on any Information, whether the Losses arise in connection with any negligence, default or lack of care on the part of the Company or any other cause. 2. The Information is not based on any actual or implied knowledge or consideration of the investment objectives, financial situation, legal or taxation position or any other needs or requirements of the recipient of the Information and should not be construed in any way as a recommendation to participate in the transaction. 3. Any forecasts included in the Information or any other written or oral forecasts of the Company made available to you or your representative as part of the Initial Public Offering are not to be taken to be representations as to future matters. These forecasts are based on a large number of assumptions and are subject to significant uncertainties, vagaries and contingencies, some, if not all, of which are outside the control of the Company. 4. No representation is made that any forecast will be achieved. Actual future events may vary significantly from forecasts. You should make and must rely on your own business judgment, enquiries and investigations regarding the assumptions, uncertainties and contingencies included in the Information. 5. By accepting the Information, you acknowledge, agree and represent that: (a) (b) you and your representatives and advisors have not and will not rely on the Information and will rely entirely upon your own assessment and independent advice and investigations in deciding whether to participate in the transaction; and you release and indemnify the Company from and against all claims, actions, damages, remedies or other matters, whether in tort, contract or under law or otherwise, arising from or which may arise from or in connection with the provision of the Information to or any purported reliance by you or your representatives and advisors on the Information, and you covenant that no claim or allegation will be made against the Company in relation to the Information. 6. For the avoidance of doubt, the Information is based on data reasonably available to the Company as at August The Company is not operating under an Australian Financial Services Licence in providing the Information. 8. Acceptance of the Information will be taken to be acceptance by you that you will only be relying on your own independent judgment, enquiries, investigations and advice. David Rees Regional Director Head of Research Australia L25, 420 George Street Sydney NSW (2) David.Rees@ap.jll.com Peter Guevarra Associate Director Forecast Analyst Australia L25, 420 George Street Sydney NSW (2) Peter.Guevarra@ap.jll.com Page 11

71 Charter Hall Long WALE REIT / 69 Charter Hall Group Australian Taxation Office, Adelaide, SA 5

72 70 / PDS / Charter Hall Group 5. Charter Hall Group 5.1. Overview of Charter Hall Group Charter Hall is one of Australia s leading fully integrated property groups, with over 25 years experience managing high quality property on behalf of institutional, wholesale and retail clients. Charter Hall has $17.5 billion of funds under management and manages 296 properties across the office, retail and industrial sectors 1. The Group has offices in Sydney, Melbourne, Brisbane, Adelaide and Perth. Property Funds Management Platform $17.5 billion 1 Investment management Transaction services Capital management FUM $17.5 billion 1 No. of properties 296 Gross income $1.3 billion Asset management Property management Development management Technical services Property Investment (Balance sheet) $1.1 billion co-investments Office $348m (32% of portfolio) Industrial $265m (24% of portfolio) Retail $485m (44% of portfolio) The Group s success is underpinned by a highly skilled and motivated team with diverse expertise across property sectors and risk-return profiles. Sustainability is a key element of its business approach, and by ensuring its actions are commercially sound and make a difference to its people, customers and the environment, Charter Hall can make a positive impact for its investors and the community. Charter Hall adds value for investors through its: 1. asset, property and development management activities that extend across the risk/return spectrum; 2. co-investments in our property funds; 3. deal sourcing of investment opportunities; 4. consistent track record of performance through market cycles; 5. focus on securing long lease assets and portfolios; 6. strong corporate governance principles, as evidenced by the Group s 25 year history in managing capital for many of Australia s leading superannuation funds; and 7. property funds management and in-house property services capabilities. The business is focused on two key earnings streams, Property Investment income generated from co-investing alongside our capital partners in our property funds and partnerships and the earnings generated from the services provided by the Group s integrated Property Funds Management platform. 1. As at 30 June 2016.

73 Charter Hall Long WALE REIT / Charter Hall Group (continued) 5.2. Charter Hall Group strategy The Group s strategy revolves around accessing, deploying, managing and investing capital 1. Access Deploy Manage Invest Access to multiple equity sources Creating value through attractive investment opportunities Property funds management, asset management, leasing and development services Investing alongside our capital partners 1 YEAR $1.5b Gross equity raised $3.7b transactions $3.0b acquisitions $0.7b divestments $17.5b FUM 296 properties 2,550 tenants 545 leasing deals $1.1bn of property investments across 21 Charter Hall managed funds 2 5 YEARS $6.8b Gross equity raised $12.6b transactions $9.3b acquisitions $3.3b divestments $9.0b FUM growth 98 additional properties WALE increased by 2.3yrs to 8.8yrs 5.3. Charter Hall integrated Property Funds Management platform Charter Hall has a funds management platform that is well diversified across both equity source and real estate sectors. Portfolio value ($bn) Portfolio size (m sqm) No. of properties No. of tenants Gross income ($m) WALE 3 (years) Occupancy (%) WACR 4 (%) Jun ,550 1, Dec ,440 1, Jun ,289 1, FUM by equity source (30 June 2016) FUM by real estate sector (30 June 2016) FUM WALE by sector Retail Equity $2.5b 14% Listed Fund 2.5b 15% Industrial 25% Office 47% $17.5b FUM $17.5b FUM 6.4 Wholesale Equity $12.5b 71% Retail 28% Office Retail Industrial 1. As at 30 June Excluding funds in wind-up and Charter Hall Group s interest in Woolworths Distribution Centre, Dandenong. 3. WALE for the Property Funds Management portfolio which is measured by all tenants remaining leases in years, weighted by each tenant s gross income as a proportion of the total gross income. 4. The WACR for the Property Funds Management portfolio is weighted by proportion of total property assets.

74 72 / PDS / Charter Hall Group 5. Charter Hall Group (continued) The platform has deep expertise across key real estate and investment management disciplines including: investment management; transaction services; capital management; asset management; property management; development management; and technical services 5.4. Charter Hall Property Investment Charter Hall co-invests in a number of funds it manages, with this co-investment generating over 60% of the Group s Operating Earnings. This substantial co-investment provides a key point of difference, by providing true alignment of interest with its investors Charter Hall Group s Executive Leadership Group The Charter Hall Group Executive Leadership Group is responsible for the management and strategic direction of all aspects of the business. David Harrison MD & Group CEO Sean McMahon CIO Adrian Taylor Head of Office Paul Ford Head of Industrial Greg Chubb Head of Retail Paul Altschwager CFO Richard Stacker Global Head of Investor Relations Natalie Devlin People, Brand & Community Aidan Coleman CTO Avi Anger Fund Manager - Long WALE REIT Tracey Jordan Group General Counsel & Company Secretary Scott Dundas Fund Manager - CQR Nick Kelly Head of Direct

75 Charter Hall Long WALE REIT / 73 Board and Management *Woolworths Distribution Centre, Dandenong, VIC 6 *Artist s impression

76 74 / PDS / Board and Management 6. Board and Management 6.1. Board of the Responsible Entity Charter Hall WALE Limited is the Responsible Entity of the REIT. The Responsible Entity has three independent Directors including an independent Chairman. As at the date of this PDS, the Directors are as follows. Director / Position Experience, qualifications and expertise Peeyush is the independent Chairman of Charter Hall WALE Limited and was appointed to the Board on 6 May Peeyush was the co-founder and the inaugural Chief Executive Officer of Ipac Securities Limited, a pre-eminent wealth management firm. He has experience in starting and growing businesses, acquisitions and divestments, roll-ups and integration, general management, investment management and corporate governance. He is a Non-Executive Director of National Australia Bank Limited, Special Broadcasting Service ( SBS ), BNZ Life, and Insurance & Care (NSW). Peeyush Gupta Independent Non-Executive Chairman He is also currently the Chair of Charter Hall Direct Property Management Limited, Chair of MLC RE and IDPS Board and serves in a pro bono capacity as a trustee of Western Sydney University, and the Australian School of Business Dean s Advisory Committee. Peeyush holds a Master of Business Administration in Finance from the Australian Graduate School of Management and a Bachelor of Arts in Computing Studies from the University of Canberra. Peeyush is also a Fellow of the Australian Institute of Company Directors. Glenn joined the board of Charter Hall WALE Limited on 6 May 2016 and has been a professional non-executive director since Glenn specialises in finance, infrastructure and property. He was a member of Transfield Holdings Advisory Board from 1999 to He was instrumental in Transfield Holdings acquisition of a 50% interest in Charter Hall and its subsequent expansion and listing in Previously, Glenn was a Non-Executive Director of the Charter Hall Group from 6 April 2005 to 15 August Glenn Fraser Independent Non-Executive Director Joining Transfield Holdings in 1996, Glenn was General Manager Finance Project Development, where he was responsible for the financial elements of Transfield Holdings infrastructure and property projects. Glenn was appointed Chief Financial Officer in 1999 of Transfield Holdings, which at that time had turnover in excess of $1 billion per annum, and over 8,000 staff. Glenn was a principal and director of a project finance advisory business, Perry Development Finance Pty Limited from 1985, which was sold to Hambros Corporate Finance Limited in Glenn holds a Bachelor of Commerce, and is a member of the Institute of Chartered Accountants and a graduate of the Australian Institute of Company Directors. Ceinwen has over 31 years experience in many aspects of property including agency, property development, project and construction management, and community development. Her executive career includes 26 years at Lendlease Corporation, where she held executive roles, running business units, client accounts and functions across the Lendlease Group. Ceinwen now runs her own consultancy, with clients across both private and public sectors. Ceinwen holds a Bachelor of Business (Land Economy) from the University of Western Sydney, and is a graduate of the Australian Institute of Company Directors. Ceinwen Kirk-Lennox Independent Non-Executive Director Ceinwen brings 17 years experience as an executive and non-executive director serving on a number of boards including both for-profit and not-for-profit companies. Ceinwen is a National Director of the Property Industry Foundation, and an Advisory Member of the Western Sydney Institute of TAFE.

77 Charter Hall Long WALE REIT / Board and Management (continued) David has 29 years of global property market experience across office, retail and industrial sectors. As Charter Hall Managing Director and Group CEO, David is responsible for all aspects of the Charter Hall business, with specific focus on strategy and continuing the momentum from building a $17.5 billion investment management business recognised as a multi-core sector market leader. David Harrison Executive Director Adrian Taylor Executive Director David is an executive member of various fund boards and partnership investment committees and Chair of the Executive Property Valuation Committee and Executive Leadership Group. David has overseen the growth of Charter Hall Group from $500 million to $17.5 billion of assets under management in 12 years. David has been principally responsible for transactions exceeding $25 billion of commercial, retail and industrial property assets over the past 27 years. David holds a Bachelor of Business (Land Economy) from the University of Western Sydney, is a Fellow of the Australian Property Institute ( FAPI ) and holds a Graduate Diploma in Applied Finance from the Financial Services Institute of Australasia. Adrian Taylor is Charter Hall s Head of Office. He is a member of Charter Hall s Executive Leadership Group and Chairs the Corporate Responsibility and Sustainability Committee. Adrian leads the office platform including setting the strategy and objectives for the wholesale office funds in conjunction with the Charter Hall fund managers and wholesale investors, and guides the asset management, property management, technical service and development teams. He has extensive capital transaction and capital management experience including debt and equity raising and deep joint venture experience in Australia and the US. He spent 15 years in listed REIT markets as General Manager, Chief Investment Officer and Chief Executive Officer of the Charter Hall Office REIT prior to its privatisation. In his prior role as Head of Wholesale Investment, he ran the investment management functions across office, retail and industrial sectors. Adrian graduated with a Bachelor of Business from Monash University, is a Certified Practising Accountant, a Fellow of the Financial Services Institute of Australasia, a Fellow Of the Royal Institute of Chartered Surveyors and is involved in numerous property industry groups including being Deputy Chair of the ICMD Division Council of the Property Council of Australia.

78 76 / PDS / Board and Management 6. Board and Management (continued) 6.2. Long WALE REIT management team The Responsible Entity is supported by a management team with significant experience in asset and funds management. The key members of the management team are as follows: Management / Position Experience, qualifications and expertise Avi joined Charter Hall in 2003 and has worked across a number of areas of the business including transactions, advisory, development and investment management. Prior to his current role as Fund Manager - Long WALE REIT, Avi was Head of Transactions and Advisory and was responsible for all property transactions of the Group and its managed funds. Avi headed up the Transactions and Advisory division from March 2009 and played a key role in the growth of the Group s funds under management from approximately $3 billion in 2009 to $17.5 billion at 30 June Avi Anger Fund Manager - Long WALE REIT Prior to joining Charter Hall, Avi worked at Terrace Tower Group and at Ernst & Young in the Corporate Advisory division. Avi holds a Bachelor of Commerce and a Master of Commerce degrees from the University of New South Wales. Ben has over 18 years experience in retail property and is a member of Charter Hall s Retail Leadership Team. Ben has extensive experience as Fund Manager for Charter Hall s wholesale funds across the retail sector spanning shopping centres, long WALE hardware and retail assets including the ALH leased LWIP portfolio. Ben Ellis Deputy Fund Manager - Long WALE REIT Prior to this, Ben was the Head of Portfolio Operations (Europe) for Charter Hall, managing Charter Hall Retail REIT s ( CQR ) European shopping centre portfolio before returning to Australia in 2014 to take up his existing role. Ben holds a Bachelor of Applied Science (Property Economics) from Queensland University of Technology. Tracey was appointed Company Secretary of the Charter Hall Group on 19 December Tracey has more than 25 years experience in real estate and funds management, with extensive knowledge of real estate transactions, structuring, funds management, compliance and corporate governance. Prior to joining Charter Hall, Tracey was National Manager, Unlisted Property Funds, and Senior Legal Counsel at Stockland. Tracey was also a Senior Associate for King & Wood Mallesons in its Canberra office in the Property and Projects division from 1999 to October Tracey Jordan Company Secretary Tracey is a Solicitor of the Supreme Court of New South Wales, and has been admitted to the Supreme Court of the Australian Capital Territory and the High Court of Australia. She holds a Bachelor of Arts and a Bachelor of Laws from the University of Sydney. Kerri is a member of Charter Hall s Finance and Industrial Leadership Groups and oversees the financial management of 87 industrial assets owned by a number of Charter Hall wholesale and retail funds with combined funds under management of $4.5 billion. Kerri was previously the Corporate Controller for the Charter Hall Group and, prior to joining Charter Hall, she was a Director in the Assurance division of PricewaterhouseCoopers. Kerri has both listed and unlisted experience working across a broad range of industries in Australia, the United States and Canada. Kerri Leech Head of Long WALE REIT and Industrial Finance Kerri is a Chartered Accountant and holds a Bachelor of Business from the University of Alberta, Canada.

79 Charter Hall Long WALE REIT / Board and Management (continued) 6.3. Corporate governance The Responsible Entity recognises the importance of strong corporate governance and is committed to a high standard of compliance. This will be achieved through the Responsible Entity determining appropriate governance arrangements for the REIT and continually monitoring those arrangements. Listed entities are required to disclose in their annual reports the extent of their compliance with the Corporate Governance Principles and Recommendations (3rd Edition) (the ASX Guidelines ), released by the ASX Corporate Governance Council. They must also explain why they have not adopted a particular standard, if they consider it inappropriate in their particular circumstances. The ASX Guidelines encompass matters such as Board composition, committees and compliance procedures and are designed to maximise corporate performance and accountability in the interests of investors and the broader economy. This Section 6.3 identifies identifies those ASX Guidelines that are not appropriate for the REIT given its externally managed structure. The Responsible Entity has five Board members, the majority of whom are independent, including an independent Chairman. The key elements of the REIT s governance framework are set out below Board role and responsibilities Under the Board charter, it is the function of the Responsible Entity to ensure that the REIT is managed in a manner which protects and enhances the interests of its Securityholders. The Responsible Entity has overall responsibility for corporate governance, including setting the strategic direction for the REIT, establishing goals for management, and monitoring the achievement of these goals. Key responsibilities include: providing strategic direction and deciding upon the REIT s business strategies and objectives; monitoring the operational and financial position and performance of the REIT; overseeing risk management, including determining the level of risk exposure that is considered acceptable in pursuit of the REIT s objectives, and reviewing and approving the risk management policy and systems; ensuring that the REIT s financial and other reporting mechanisms result in adequate, accurate and timely information being provided to the Responsible Entity; ensuring that Securityholders and the market are fully informed of all material developments; and overseeing and evaluating the performance of the Fund Manager for Long WALE REIT and other senior executives in the context of the REIT s strategies and objectives. In protecting the rights and interests of Securityholders, the Responsible Entity s responsibilities include ensuring that the Responsible Entity: acts honestly; acts in the best interests of Securityholders; treats Securityholders who hold Securities of the same class equally; and complies with the compliance plans of each of the Stapled Trusts Board Committees The Responsible Entity will establish formally constituted committees and may delegate any of its powers to a committee or committees. Audit, Risk and Compliance Committee The Responsible Entity has established an Audit, Risk and Compliance Committee to assist the Responsible Entity in overseeing the integrity of the REIT s financial reporting, accounting, auditing and compliance responsibilities and the external audit function including the independence of external auditors. The Audit, Risk and Compliance Committee will comply with the ASX Guidelines, and will monitor compliance with the Corporations Act, the AFSL of the Responsible Entity, and the compliance plans of each of the Stapled Trusts. The Audit, Risk and Compliance Committee will report to the Responsible Entity on all matters relevant to the Audit, Risk and Compliance Committee s role and responsibilities. The key roles and responsibilities of the Audit, Risk and Compliance Committee include oversight of: the integrity of the REIT s external financial reporting and financial statements; recommendations from management for the appointment or removal of the external auditor to recommend to the Responsible Entity; the approval of external audit plans and monitoring any change in scope; the quality and scope of the services provided by the external auditors; the review and adoption of the Charter Hall Group Auditor Independence Policy, which sets out procedures and policies relating to the oversight of the external auditor s independence, including but not limited to the required rotation of the external audit engagement partner, and the process for approval of audit and non-audit engagement fees; the effectiveness of the REIT s system of risk management and internal controls;

80 78 / PDS / Board and Management 6. Board and Management (continued) ensuring that the Responsible Entity s internal accounting and control processes are consistent with compliance plans of each of the Stapled Trusts; and monitoring the REIT s systems and procedures for compliance with the compliance plans of each of the Stapled Trusts, and applicable legal and regulatory requirements. All members of the Audit, Risk and Compliance Committee must be non-executive Directors, with a majority being independent Directors. The Chair will be a non-executive independent Director appointed by the Responsible Entity who is not Chair of the Responsible Entity. The Audit, Risk and Compliance Committee will meet with the external auditor where appropriate from time to time to review the audit plan, discuss audit results and consider the implications of external audit findings. The Audit, Risk and Compliance Committee has adopted a formal charter which satisfies the recommendations in the ASX Guidelines. A copy of the Audit, Risk and Compliance Committee charter is available on the REIT s Website, accessible at Nomination Committee Whilst the ASX Guidelines recommend the establishment of a nomination committee, the Board does not consider it necessary or appropriate to constitute a nomination committee for the Responsible Entity, given that the Responsible Entity is a subsidiary of Charter Hall. The Board of Charter Hall (utilising a sub-committee of its Nominations Committee), together with an independent director of the Responsible Entity is responsible for overseeing the appointment of Directors to the Responsible Entity of the REIT. However, the Board of the Responsible Entity sets the composition and membership criteria as well as the guidelines for director selection and nominates candidates to the Board of Charter Hall for approval. The following Board composition and membership criteria have been adopted by the Board of the Responsible Entity: the Board is to comprise a minimum of three and a maximum of 10 directors; directors nominated for election require approval by the Charter Hall Board via its Nomination Committee; a majority of the directors must be independent; the Board is to comprise directors with an appropriate range of qualifications and expertise; the Chairman of the Board will be appointed by the Charter Hall Board via its Nomination Committee; and Directors will be required to submit for re-election every three years. Securityholder votes on director re-election are not binding on the Responsible Entity or Charter Hall, but the outcome of any such vote is a matter to which Charter Hall will have regard in considering the continuation of a director appointment. In addition, the following guidelines apply to director selection and nomination by the Board: integrity; particular expertise (sector and functional) and the degree to which they complement the skill set of the existing Board members; reputation and standing in the market; and in the case of prospective independent directors, actual and perceived independence from Charter Hall Corporate governance policies The ASX Guidelines recommend the establishment of a remuneration committee and board nomination committee. However, as the Responsible Entity is a member of Charter Hall Group, and as the REIT will be managed externally by Charter Hall Group, the appointment and remuneration of the Directors of the Responsible Entity and senior management will be the responsibility of Charter Hall Group. Directors of the Responsible Entity will be appointed in accordance with the Responsible Entity s Constitution and the Corporations Act 2001 (Cth), and senior executives will be appointed in accordance with Charter Hall Group s employment policies. The Responsible Entity does not intend to establish a remuneration committee. Accordingly, the ASX Guidelines relating to remuneration are not relevant for the REIT. Conflicts of Interest and Related Party Transactions Policy The Responsible Entity maintains and complies with a written policy on related party transactions, including the assessment and approval process for such transactions and arrangements to manage conflicts of interest. All transactions in which the Responsible Entity may have, or may be perceived to have, a conflict of interest will be conducted in accordance with the Responsible Entity s Conflicts of Interest and Related Party Transactions Policy. Under this policy, potential conflict situations will be monitored, assessed and evaluated by the Head of Risk and Compliance for Charter Hall Group and, if considered necessary, the matter will be referred to the Responsible Entity s Board and steps taken to ensure that the conflict is managed in an appropriate manner. For more detail on the Responsible Entity s policy and procedures for related party transactions, please contact the Responsible Entity. The Chairman of the Responsible Entity, Peeyush Gupta, is also a director of Charter Hall Direct Property Management Limited, which is the responsible entity of other funds managed by Charter Hall. Charter Hall Direct Property Management Limited was the responsible entity of DIF and was replaced with the Responsible Entity in connection with the Offer. Any potential conflicts that arise between his duties as a director of Charter Hall Direct Property Management Limited and his role as Chairman of the Responsible Entity will be managed in accordance with the Conflicts of Interest and Related Party Transactions Policy and the law.

81 Charter Hall Long WALE REIT / Board and Management (continued) Diversity and Inclusion Policy The Responsible Entity and Charter Hall Group have developed and adopted a Diversity and Inclusion Policy which sets out the REIT s commitment to diversity and inclusion in the workplace. The Diversity and Inclusion Policy provides a framework to achieve the REIT s diversity goals and underpins its commitment to creating a diverse work environment. Code of Conduct In addition to Charter Hall Group s Diversity and Inclusion Policy, the Responsible Entity has adopted the Charter Hall Group s Employee Code of Conduct, and a separate Directors Code of Conduct related to the Responsible Entity s role in managing the REIT. These policies set out the Responsible Entity s values, commitments and policies in managing the REIT and outline the standard of conduct expected of the Responsible Entity and its representatives, taking into account the Responsible Entity s legal and other obligations to Securityholders of the REIT. The Codes of Conduct are available on the REIT s Website, accessible at Risk Management Policy The Responsible Entity has adopted a Risk Management Policy which assists the Responsible Entity to achieve the REIT s objectives through thorough and competent strategic decision making. In addition, the REIT is developing a comprehensive Risk Appetite Statement which will detail the approach taken to set its risk appetite, tolerance and limits; as well as define roles and responsibilities, reporting mechanisms and review processes. The Risk Appetite Statement will be reviewed and updated at least annually to ensure that it remains aligned to the REIT s strategy. This policy, and its underlying risk management framework and internal control system, incorporates the guidelines described in the International Standard on Risk Management (ISO 31000: 2009). The Responsible Entity has ultimate responsibility for overseeing, approving and monitoring compliance with the Risk Management Policy. Continuous Disclosure and Communications Policy The Responsible Entity is committed to communicating relevant material information about the REIT to Securityholders and must comply with the REIT s continuous disclosure obligations to the market pursuant to the Listing Rules and the Corporations Act. The Responsible Entity and Charter Hall Group have developed and adopted a Continuous Disclosure and Communications Policy to assist the Responsible Entity in fulfilling the REIT s continuous disclosure obligations in a timely and efficient manner. In accordance with the policy, the Board will: consider information that potentially requires disclosure and determine what information needs to be disclosed; approve the form of the information to be disclosed; oversee the distribution of continuous disclosure notices to the ASX and the publishing of announcements on the REIT s Website; and take steps to ensure that Securityholders are encouraged to attend any Securityholder briefings held by the REIT. The Responsible Entity will use the REIT s Website to assist it in keeping Securityholders fully informed on important matters concerning the REIT. The REIT s Continuous Disclosure and Communications Policy is available on the REIT s Website, accessible at Securities Trading Policy The Responsible Entity and Charter Hall Group have developed and adopted a Securities Trading Policy to regulate dealings in Securities by the Responsible Entity and those executives and employees of Charter Hall Group that are responsible for the management of the REIT. The policy aims to assist in maintaining market confidence in the integrity of dealings in the REIT s Securities. The REIT s Securities Trading Policy is available on the REIT s Website, accessible at Further information on the Responsible Entity s risk management policy is available on the REIT s Website, accessible at

82 80 / PDS / Financial Information Financial Information 7 Australia Post, Kingsgrove, NSW

83 7. Financial Information 7.1. Introduction The summary financial information for the REIT contained in this Section has been prepared by the Responsible Entity and comprises: the pro forma forecast consolidated income statements for the period from Allotment to 30 June 2017 and for the six months ending 31 December 2017 ( 1H FY18 ) (together the Forecast Period ) as set out in Section (the Pro Forma Forecast Consolidated Income Statements ); the statutory forecast consolidated income statements for the year ending 30 June 2017 ( FY17 ) and for 1H FY18 as set out in Section (the Statutory Forecast Consolidated Income Statements ); (together the Forecast Financial Information ); and the pro forma consolidated statement of financial position at Allotment as set out in Section 7.4 (the Pro Forma Consolidated Statement of Financial Position ). The Forecast Financial Information and Pro Forma Consolidated Statement of Financial Position are collectively referred to as the Financial Information. Also summarised in this Section are: the basis of preparation and presentation of the Financial Information, including a description of non-ifrs financial measures and disclosure included in this PDS, as set out in Section 7.2; the pro forma forecast consolidated distribution statements for the period from Allotment to 30 June 2017 and for 1H FY18 ( Pro Forma Forecast Consolidated Distribution Statements ) as set out in Section 7.3.2; the Directors best estimate general and specific assumptions underlying the Forecast Financial Information, as set out in Section 7.5; the key sensitivities in respect of the Forecast Financial Information, as set out in Section 7.6; a reconciliation between the consolidated statement of financial position of DIF as at 30 June 2016 and the Pro Forma Consolidated Statement of Financial Position as set out in Section 7.7; additional unaudited non-ifrs financial disclosure containing the REIT s pro forma forecast proportionately consolidated income statements and the REIT s pro forma proportionately consolidated statement of financial position, as set out in Section 7.8; a description of the REIT s significant accounting policies, as set out in Section 7.9; and information on the REIT s working capital in Section The Pro Forma Forecast Consolidated Income Statements (as set out in Section 7.3.1), the Statutory Forecast Consolidated Charter Hall Long WALE REIT / 81 Income Statements (as set out in Section 7.3.3) and the Pro Forma Consolidated Statement of Financial Position (as set out in Section 7.4) have been reviewed by KPMG Financial Advisory Services (Australia) Pty Ltd ( KPMG Transaction Services ) in accordance with the Australian Standard on Assurance Engagements ( ASAE ) 3450 Assurance Engagements involving Corporate Fundraisings and/or Prospective Financial Information, as stated in its Investigating Accountant s Report in Section 9. Investors should note the scope and limitations of the Investigating Accountant s Report in Section 9. The REIT will operate on a financial year ending 30 June. All amounts disclosed in Section 7 are presented in Australian dollars, and unless otherwise noted are rounded to the nearest $0.1 million. Rounding in the Financial Information may result in some discrepancies between the sum of components and the totals outlined within the tables and percentage calculations. The Financial Information provided in this Section should also be read in conjunction with the sensitivity analysis set out in Section 7.6, the risk factors set out in Section 12 and the other information provided in this PDS Basis of preparation and presentation of the Financial Information The following sub-sections outline the basis of preparation and presentation of the Pro Forma Consolidated Statement of Financial Position, the Forecast Financial Information and an explanation of the non-ifrs financial measures and disclosure included in this PDS Overview The Directors of the Responsible Entity are responsible for the preparation and presentation of the Financial Information. The Financial Information in this PDS is intended to present Investors with information to assist them in understanding the Pro Forma Consolidated Statement of Financial Position together with the Forecast Financial Information. The Financial Information has been prepared and presented in accordance with the recognition and measurement principles prescribed in the Australian Accounting Standards ( AAS ) adopted by the Australian Accounting Standards Board ( AASB ) and the significant accounting policies adopted by the REIT as set out in Section 7.9. The Financial Information is presented in an abbreviated form and does not contain all of the presentation and disclosures, statements or comparative information as required by AAS applicable to annual financial reports prepared in accordance with the Corporations Act.

84 82 / PDS / Financial Information 7. Financial Information (continued) Preparation of the Pro Forma Consolidated Statement of Financial Position The unaudited Pro Forma Consolidated Statement of Financial Position has been prepared solely for inclusion in this PDS. The Pro Forma Consolidated Statement of Financial Position of the REIT as at Allotment is based on the historical financial information of DIF, the other Stapled Trusts (being, CVLT1, 218 BRT, CPOF KHT, FSPT, CHPTDT and Finance Trust) and the pro forma transactions and adjustments to reflect the pro forma consolidation of the Stapled Trusts, the impact of the Offer and Acquisitions. The pro forma consolidation and other pro forma adjustments include: the stapling of the Stapled Trusts; the Acquisitions, in accordance with the Merger Implementation Agreement (as set out in Section 14.1); and the Offer, including payment of cash consideration to Existing Unitholders which elected to receive cash for their units, the refinancing of existing bank debt in the Stapled Trusts, drawdown of debt under the Debt Facility and payment of Offer costs. Refer to Section 7.7 for details of the pro forma adjustments. To account for the stapling of the Stapled Trusts, AAS requires an acquirer to be identified and for the stapling to be accounted for as a business combination. The Directors of the Responsible Entity deem DIF to be the acquirer of the other Stapled Trusts for accounting purposes and therefore the other Stapled Trusts are consolidated into DIF s financial report. There is no goodwill recorded from the acquisitions on the basis that the assets and liabilities of the acquired entities are at fair value and the estimated consideration approximates that fair value. As DIF has been identified as the parent entity in relation to the stapling, the consolidated financial statements of the REIT will be prepared as a continuation of the consolidated financial statements of DIF. DIF, as the deemed acquirer, will acquisition account for the other Stapled Trusts as at Allotment. The consolidated statement of financial position of DIF as at 30 June 2016 has been extracted from the financial statements of DIF for the year ended 30 June 2016, which have been audited in accordance with AAS by the REIT s external auditor, with an unqualified audit opinion issued. The statements of financial position as at 30 June 2016 have been extracted from the audited financial statements of FSPT and LWIP for the year ended 30 June 2016 and the unaudited financial statements of CVLT1, 218 BRT, CPOF KHT, CHPTDT and Perth RDC for the year ended 30 June The financial statements of FSPT and LWIP were audited by the REIT s external auditor in accordance with AAS and unqualified audit opinions were issued. Finance Trust was established on 30 August 2016 and registered as a managed investment scheme on 22 September Finance Trust was established to act as the borrower under the REIT s Debt Facility. Finance Trust currently has no material assets or liabilities. No consolidated historical financial statements for the REIT exist as the Stapled Trusts will only be Stapled to form the REIT on the Implementation Date. The value of the investment properties in the Initial Portfolio is based on the Independent Valuations described in Section 10. The Woolworths Distribution Centre, Dandenong development will reach lease commencement post Allotment with outstanding development payments funded through debt. The Pro Forma Consolidated Statement of Financial Position is provided for illustrative purposes only and is not represented as being necessarily indicative of the REIT s future financial position Preparation of the Forecast Financial Information The Forecast Financial Information has been prepared solely for inclusion in this PDS on the basis that the Proposed Transaction is implemented on Allotment, expected to be on 27 October The Forecast Financial Information has been prepared by the Directors of the Responsible Entity with due care and attention, having regard to an assessment of present economic and operating conditions and a number of best estimate general and specific assumptions regarding future events as set out in Section 7.5. The Directors consider the best estimate assumptions, when taken as a whole, to be reasonable at the time of preparing this PDS. However, this information is not fact and Investors are cautioned not to place undue reliance on the Forecast Financial Information. The Forecast Financial Information is intended to assist Investors in assessing the reasonableness and likelihood of the assumptions occurring and is not intended to be a representation that the assumptions will occur. Investors should be aware that the timing of actual events and the magnitude of their impact might differ from that assumed in preparing the Forecast Financial Information and that any deviation in the assumptions on which the Forecast Financial Information is based may have a material positive or negative effect on the REIT s actual financial performance or financial position. The forecast consolidated income statements have been presented on both a pro forma and statutory basis. The Pro Forma Forecast Consolidated Income Statements reflect operations of the REIT for the period from Allotment to 30 June 2017 and 1H FY18. The Statutory Forecast Consolidated Income Statements reflect FY17 and 1H FY18. The principal differences between the Pro Forma Forecast Consolidated Income Statement for the period from Allotment to 30 June 2017 and the Statutory Forecast Consolidated Income Statement for FY17 relate to the earnings for the period from 1 July 2016 to Allotment, during which the standalone statutory results of DIF will be reported prior to the stapling of the other Stapled Trusts (as outlined above), and one-off transaction costs associated with the Offer which are not reflected in the Pro Forma Forecast Consolidated Income Statement.

85 Charter Hall Long WALE REIT / Financial Information (continued) The Statutory Forecast Consolidated Income Statement for FY17 presented in Section is the best estimate of the financial performance that the Directors of the Responsible Entity expect to report in the REIT s first statutory consolidated financial report following Allotment. There are no differences between the pro forma and statutory forecasts for 1H FY18. Investors are advised to review the best estimate assumptions set out in Section 7.5 in conjunction with the sensitivity analysis set out in Section 7.6, the risk factors set out in Section 12 and other information included in this PDS. The Forecast Financial Information does not account for any potential fair value adjustments to investment property, derivative financial instruments or other financial assets which may be recognised in the income statement on the basis that such adjustments cannot be reliably determined in the Forecast Period Non-IFRS financial measures and disclosure Certain financial measures included in this PDS are not recognised under AAS. These measures are collectively referred to as non-ifrs financial measures. The principal non-ifrs financial measures that are referred to in this PDS are discussed below: Section 7.8 also includes additional unaudited non-ifrs financial disclosure. This includes the pro forma forecast proportionately consolidated income statements which details the revenue and expenses related to the REIT s share of net profit from equity accounted investments and the pro forma proportionately consolidated statement of financial position which details the various component line items relating to the REIT s share of equity accounted investments. Although the Directors believe these non-ifrs financial measures and disclosure provide useful information about the financial performance of the REIT, they should be considered as a supplementary measure of operating performance to that included in the income statements that have been presented in Section 7.3 and not as a replacement for them. Because these non-ifrs financial measures and disclosure are not based on AAS, they do not have standard definitions and the way that the REIT calculates these measures may differ from similarly titled measures by other reporting entities. Investors should therefore not place undue reliance on these non-ifrs financial measures and disclosure. Operating Earnings which represents net profit (before transaction costs) adjusted for net fair value movements, non-cash accounting adjustments such as straightlining of rental income and amortisation of lease incentives, other unrealised and one-off items; Operating Earnings Yield which represents the rate of return derived by dividing the Operating Earnings per Security by the Offer Price of $4.00; and Distribution Yield which represents the rate of return derived by dividing the Distribution per Security by the Offer Price of $4.00.

86 84 / PDS / Financial Information 7. Financial Information (continued) 7.3. Forecast Financial Information Section 7.3 contains the Pro Forma Forecast Consolidated Income Statements, Pro Forma Forecast Consolidated Distribution Statements and the Statutory Forecast Consolidated Income Statements of the REIT. Section 7.3 should be considered in conjunction with the basis of preparation and presentation of the Financial Information set out in Section Pro Forma Forecast Consolidated Income Statements The table below sets out the Pro Forma Forecast Consolidated Income Statements of the REIT. ($m) Pro Forma Allotment to 30 June Pro Forma Six months ending 31 December 2017 Gross rental income Straightlining of rental income Share of net profit from equity accounted investments Interest income Total revenue Property operating expenses (5.9) (4.4) Management fees (3.7) (2.8) Other operating expenses (1.5) (1.0) Interest expense 3 (2.3) (1.8) Total expenses (13.4) (10.0) Net profit Notes: 1. The Pro Forma Forecast Consolidated Income Statements have been prepared on the basis that the Proposed Transaction has been implemented and Allotment occurs on 27 October Share of net profit from equity accounted investments relate to the REIT s 45.0% interest in LWIP, 49.9% interest in Perth RDC, 50.1% interest in CPOF KHT and 26.0% of CH DC Fund. The share of net profit from equity accounted investments is represented on a pro forma basis and excludes fair value adjustments. 3. Includes margin on drawn amounts, line fees and amortisation of capitalised borrowing costs. Refer to Section 2.5 for further details regarding the REIT s financing arrangements. 4. The Pro Forma Forecast Consolidated Income Statements do not account for any potential fair value adjustments of investment properties, derivative financial instruments or other financial assets as the Directors of the Responsible Entity do not believe such movements can be reliably estimated. No material tax expense is expected to arise for the REIT in the Forecast Period. For further detail on the REITs share of net profit from equity accounted investments, refer to Section for the REIT s pro forma forecast proportionately consolidated income statements Pro Forma Forecast Consolidated Distribution Statements The Pro Forma Forecast Consolidated Distribution Statements have been derived by adjusting net profit (before transaction costs) from the Pro Forma Forecast Consolidated Income Statements for non-cash accounting adjustments such as straight-lining of rental income, amortisation and other unrealised or one-off items. The resulting measure is termed Operating Earnings, being the Directors measure of the REIT s profitability and providing Investors with the same basis that is used internally for evaluating performance, making strategic decisions and determining Distributions during the year. It is intended that Distributions are paid quarterly. The first Distribution is for the period from Allotment to December 2016, and is expected to be paid within two months from 31 December The REIT will target to distribute 100% of Operating Earnings. The Directors of the Responsible Entity retain the discretion to amend the distribution policy. The Directors of the Responsible Entity will have regard to the amount of cash available in determining the REIT s distribution payout ratio and may change the distribution payout ratio in the future. As outlined in the table below, the REIT forecasts a Distribution of 14.4 cents per Security for the period from Allotment to 30 June 2017, and 10.8 cents per Security for 1H FY18.

87 Charter Hall Long WALE REIT / Financial Information (continued) ($m) Pro Forma Allotment to 30 June Pro Forma 1H FY18 (six months) Net profit (before transaction costs) Straightlining of rental income (1.3) (1.2) Straightlining of rental income within equity accounted investments (0.3) (0.1) Other income Operating Earnings Distribution Operating Earnings per Security (cents) Distribution per Security (cents) Annualised Operating Earnings Yield on Offer Price (%) 5 5.3% 5.4% Annualised Distribution Yield on Offer Price (%) 5 5.3% 5.4% Payout ratio (Distribution / Operating Earnings) 100% 100% Tax deferred component of Distribution (%) 6 65% 34% Notes: 1. The Pro Forma Forecast Consolidated Distribution Statements have been prepared on the basis that the Proposed Transaction has been implemented and Allotment occurs on 27 October Transaction costs will be funded by the proceeds of the Offer and do not affect the operating cash flow of the REIT 3. Other Income comprises cash receipts received under the ATO Income Support arrangements. Refer to Section for further details on these arrangements. 4. Distribution per Security is based on the Directors forecast that the Distribution will be 100% of Operating Earnings for each respective period during the Forecast Period. 5. Annualised Operating Earnings and Distribution Yields are calculated by grossing up Operating Earnings Yield and Distribution Yield for the period from Allotment to 30 June 2017 for 12 months and grossing up 1H FY18 for 12 months. 6. The estimated tax deferred component of forecast Distributions is determined in accordance with the prevailing tax legislation at the time of preparing the PDS. The actual tax deferred component may differ from the estimate above due to timing of revenue, expenses and post IPO acquisition activity Statutory Forecast Consolidated Income Statements The table below sets out the Statutory Forecast Consolidated Income Statements of the REIT. Column A+B presents the statutory consolidated income statement that the Directors of the Responsible Entity expect to present in the first annual statutory consolidated financial report for the REIT for the financial year ended 30 June The Directors consider it meaningful to Investors to disclose the forecast results of the REIT for FY17 between the periods prior to and post Allotment. Column A represents the statutory forecast income statement for the period from 1 July 2016 to Allotment. This reflects the standalone forecast results of DIF for the period prior to the REIT completing the Proposed Transaction. Column B represents the statutory forecast income statement of the REIT for the period from Allotment to 30 June 2017 which will consist of all properties in the Initial Portfolio and the new corporate and capital structure that will be in place post Allotment. This information is provided to give an estimate of the financial performance that the Directors expect to report in the REIT s first annual statutory consolidated financial report for FY17. However, given the differences in asset composition, capital structure and management arrangements, column A and column A+B are not considered meaningful in assessing an incoming Securityholder s entitlement to income of the REIT in FY17. There are no differences between the pro forma and statutory forecasts for 1H FY18.

88 86 / PDS / Financial Information 7. Financial Information (continued) ($m) 1 July 2016 to Allotment 1 (A) Allotment to 30 June (B) FY17 (12 months) (A+B) 1H FY18 (six months) Gross rental income Straightlining of rental income Share of net profit from equity accounted investments Interest income Total revenue Property operating expenses (0.8) (5.9) (6.6) (4.4) Management fees (0.5) (3.7) (4.2) (2.8) Other operating expenses (0.1) (1.5) (1.6) (1.0) Interest expense 3 (1.0) (2.3) (3.3) (1.8) Total expenses (2.4) (13.4) (15.8) (10.0) Net profit (before transaction costs) Transaction costs 5 (5.2) (13.1) (18.3) - Net profit (after transaction costs) (0.9) Notes: 1. The Pro Forma Forecast Consolidated Income Statements have been prepared on the basis that the Proposed Transaction has been implemented and Allotment occurs on 27 October Share of net profit from equity accounted investments in Column (A) relates to DIF s 25.0% interest in Perth RDC. Share of net profit from equity accounted investments in Column (B) relate to the REIT s 45.0% interest in LWIP, 49.9% interest in Perth RDC, 50.1% interest in CPOF KHT, and 26.0% interest in CH DC Fund. The share of net profit from equity accounted investments is represented on a pro forma basis and excludes fair value adjustments. 3. Interest expense in Column (A) relates to interest expense and line fees arising from DIF s existing financing arrangements, including interest rate swaps. As part of the Proposed Transaction, these existing financing arrangements will be fully repaid from the proceeds of the Offer and closed. Interest expenses in Column (B) comprise interest expense and line fees arising from the REIT s financing arrangements (and amortisation of capitalised borrowing costs). Refer to Section 2.5 for further details regarding the REIT s financing arrangements. 4. The Statutory Forecast Consolidated Income Statements do not account for any potential fair value adjustments of investment properties and derivative financial instruments or other financial assets. No material tax expense is expected to arise for the REIT for FY17 and 1H FY Transaction costs of $5.2 million in Column (A) relate to provisions made by DIF for disposal fees if the Proposed Transaction proceeds. Transaction costs of $13.1 million in Column (B) relate to stamp duty on consolidated properties, acquisition fees paid to Charter Hall Group, the impairment of existing capitalised debt establishment costs (non-cash transaction cost), financing costs, legal costs, property valuations and due diligence, IPO insurance, accounting and taxation consultation costs, prospectus and roadshow costs, registry costs, ASX listing fees, and underwriting fees to be expensed through the statutory income statement. See Section for more information on the treatment of transaction costs.

89 Charter Hall Long WALE REIT / Financial Information (continued) 7.4. Pro Forma Consolidated Statement of Financial Position The table below sets out the Pro Forma Consolidated Statement of Financial Position of the REIT at Allotment and should be considered in conjunction with the basis of preparation and presentation of the Financial Information set out in Section 7.2. Refer to Section 7.7 for a reconciliation of the consolidated statement of financial position of DIF as at 30 June 2016 to the Pro Forma Consolidated Statement of Financial Position of the REIT, including disclosure of the assumptions and pro forma adjustments. ($m) At Allotment ASSETS Cash and cash equivalents Investment properties Equity accounted investments 3, Other assets Total assets 1,087.1 LIABILITIES Interest bearing liabilities 5,6 (1.9) Trade and other creditors 2.4 Total liabilities 0.5 NET ASSETS 1,086.6 TOTAL EQUITY 1,086.6 Securities on issue (m) NTA per Security ($) 3.88 Balance Sheet Gearing (%) 7 Net cash Look Through Gearing (%) % Notes: 1. Cash and cash equivalents includes cash retained in the Stapled Trusts as well as $53.2 million of cash raised from the Offer for working capital purposes and to pursue the objectives and strategy of the REIT (refer to Section 2.2). 2. Investment properties are based on the Independent Property Valuations described in Section Equity accounted investments are based on the purchase price of the REIT s 45% interest in LWIP, 49.9% interest in Perth RDC, 50.1% interest in CPOF KHT, and 26.0% interest in CH DC Fund. Stamp duty and other acquisition costs relating to the Acquisitions have been capitalised to the value of equity accounted investments. 4. Other Assets includes $17.0 million for the net present value of the expected cash flows to be received under the ATO Income Support. 5. Interest bearing liabilities comprise $1.9 million of capitalised debt establishment costs relating to the REIT s financing arrangements. Refer to Section 2.5 for further details regarding the REIT s financing arrangements. The REIT s debt facility will be undrawn at Allotment. 6. Up until lease commencement of the Woolworths Distribution Centre, Dandenong development in March 2018, in which the REIT holds 26.0% interest, the value of the REIT s equity accounted investments is expected to increase by $51.5m (the REIT s share of the investment property valuation at lease commencement of $56.1m, less the book valuation at Allotment of $4.6 million), with an aggregate increase in borrowings of $51.6 million to make capital contributions under the Woolworths Distribution Centre, Dandenong Development Agreement and to fund other costs. Other costs associated with acquisition and project management of the development of $0.1 million are written off assuming no change in valuation. This will result in pro forma Look Through Gearing of 14.9%. 7. Balance Sheet Gearing calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets, less cash. 8. Look Through Gearing calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets, less cash, based on the non-ifrs pro forma proportionately consolidated statement of financial position, which adjusts for the REIT s share of the debt, assets and cash held in equity accounted investments. For further detail on the REITs equity accounted investments, refer to Section for the REIT s pro forma proportionately consolidated statement of financial position as at Allotment.

90 88 / PDS / Financial Information 7. Financial Information (continued) 7.5. Forecast assumptions The Directors key best estimate general and specific assumptions relating to the preparation of the Forecast Financial Information are set out below General assumptions In preparing the Forecast Financial Information, the key best estimate general assumptions include: the Proposed Transaction is implemented on Allotment, expected to be on 27 October 2016; the Proposed Transaction and Offer proceed in accordance with the timetable set out in this PDS; no significant change in the economic conditions (including property market and financial market stability) in which the REIT operates; no significant change in the competitive environment in which the REIT operates; no significant changes to the statutory, legal or regulatory environment which would be detrimental to the REIT in any of the jurisdictions in which it operates; no material changes in the credit markets; no material changes in current Australian tax legislation; no material changes in applicable AAS, other mandatory professional reporting requirements or the Corporations Act 2001 (Cth) that would have a material impact on the REIT s consolidated financial performance, cash flows, financial position, accounting policies, financial reporting or disclosures; the REIT will consistently apply the key accounting policies over the Forecast Period; no significant change in the REIT s capital structure, other than as disclosed in the PDS; no material litigation or dispute to which the REIT is a party; no acquisitions or disposals of investment properties other than those involved in the Proposed Transaction; no material change in capital expenditure requirements from those included in the Forecast Financial Information and described in the specific assumptions detailed in Section caused by factors outside the REIT s control; average CPI rate of 2.0% in the Forecast Period; no significant amendment to any material contract relating to the REIT s business; all leases are enforceable and are performed in accordance with their terms; and no underlying movement in the fair value of the investment properties or other financial assets including any mark-tomarket movements in relation to the interest rate swaps taken in respect of the debt, as the Directors of the Responsible Entity do not believe such movements can be reliably estimated Specific assumptions The Forecast Financial Information has been prepared by the Directors of the Responsible Entity based on an assessment of each individual property in the REIT. In preparing the Forecast Financial Information, the Directors of the Responsible Entity have taken into account the leasing arrangements, historical performance metrics and future outlook for each individual property, the impact of the Proposed Transaction on fee arrangements and other costs, and the current market conditions as applicable to the REIT. The key best estimate specific assumptions applied in preparing the Forecast Financial Information are described below. Gross rental income Gross rental income comprises rental income including outgoings recoveries. Gross rental income does not include amounts receivable under the ATO Income Support arrangements. Rental income has been forecast on a property-by-property basis based on existing leases and management s best estimate assumptions for future occupancy rates, tenant retention and market rentals. Rental receipts are assumed to increase according to the relevant underlying leases. The Portfolio has fixed, market and CPI rental reviews. Some leases also have turnover based rental payments and for these leases turnover (sales) is assumed to grow by CPI annually from the last reported sales figures during the Forecast Period. Rental income will be received by the REIT from the date the acquisition of each Portfolio property completes. It is anticipated, and the Forecast Financial Information assumes, all portfolio properties are acquired from the respective vendors on or prior to Allotment. The Woolworths Distribution Centre, Dandenong development asset is assumed to reach lease commencement on 31 March 2018 with rental income received after this date. Woolworths Distribution Centre, Dandenong Woolworths Distribution Centre, Dandenong is an investment property under development in which the REIT has a 26% interest through its investment in CH DC Fund (see section for more details). Under the Woolworths Distribution Centre, Dandenong Development Management Agreement, CH Dandenong Trust (a wholly owned subsidiary of CH DC Fund) is obligated to make capital contributions towards the construction of this property and is entitled to receive development rebate income from the developer equal to 5.5% per annum (payable monthly) on the cumulative capital contributed towards the property up until the date of lease commencement (forecast to be 31 March 2018). The REIT s look-through obligation and entitlement amounts equate to 26% of CH DC Fund s amounts.

91 Charter Hall Long WALE REIT / Financial Information (continued) Straightline lease adjustment to rental income In accordance with AAS, a straightline lease adjustment is provided in relation to future fixed rental increases to ensure rental income is recognised on a straightline basis over the term of the lease. Share of net profit from equity accounted investments The REIT s share of net profit from equity accounted investments is forecast based on the REIT s share of the forecast net profit of each equity accounted investment. The net profit of each underlying investment is forecast based on general and specific assumptions consistent with those outlined in this Section. Interest income The REIT is assumed to earn interest income of 1.50% per annum on any cash balances during the Forecast Period, equivalent to the current RBA cash rate. Property operating expenses Property operating expenses have been forecast on a propertyby-property basis having regard to current property operating expenses on the completed properties in the Portfolio. Property operating expenses typically include land tax, council rates, building insurance, property management costs, water rates, repairs and maintenance amongst other things. Property operating expenses are forecast to increase in line with known increases (for agreed contracts) or CPI. Management fees and expenses The Manager (Charter Hall Holdings Pty Ltd) is entitled to receive a Management Fee of 0.45% per annum of the GAV of the REIT. Management fees will be paid monthly. In addition, the Responsible Entity will reimburse the Manager for costs and expenses as described in Section 13. Other operating expenses Other operating expenses include non-executive directors fees, audit and assurance services and tax compliance costs, custodian fees and registry fees. These other expenses have been forecast based on relevant agreements and quotes from external parties. Treatment of transaction costs Offset against contributed equity Expensed in Statutory Forecast Consolidated Income Statement Capitalised to asset or liability Total cash transaction costs Impairment of existing unamortised debt establishment costs Total transaction costs Interest expense The REIT s borrowings under the Debt Facility will incur an average interest rate of 3.2% for the period from Allotment until 30 June 2017, and 3.3% over the 1H FY18 period on drawn amounts inclusive of line fees and forecast hedging arrangements. Additional line fees on undrawn amounts of $2.0 million for the period from Allotment to 30 June 2017 and $1.5 million for 1H FY18 have been assumed. The costs of establishment of the Debt Facility of $1.9 million have been capitalised against the debt balance at Allotment Date and will be amortised over the term of the Debt Facility. Tax expense The REIT is treated as a trust for Australian tax purposes. Under current Australian income tax legislation, the REIT is not liable for Australian income tax, including capital gains tax, provided that Securityholders are presently entitled to the income of the REIT as determined in accordance with the REIT Constitution. Accordingly, no allowance for income tax has been made. Expected goods and services tax recoveries in respect of transaction costs and ongoing operations which are appropriate to the activities of the entities have been forecast. Transaction costs Portfolio acquisition and transaction costs include stamp duty, offer management fees, advisers fees, legal fees, listing fees, printing and other expenses associated with the Proposed Transaction and Offer. At the date of this PDS, cash transaction costs have been estimated at $36.2 million based on existing agreements and quotes, and applicable stamp duty rates. Of the total estimated cash transaction costs, $12.4 million will be directly offset against contributed equity, $1.9 million of borrowing costs will be offset against borrowings, $6.6 million of stamp duty and $3.1 million of acquisition fees will be capitalised to the value of equity accounted investments, with the remaining $12.2 million (which includes $0.3 million of stamp duty) expensed to the FY17 Statutory Forecast Consolidated Income Statement. In addition to cash transaction costs, $0.9 million of non-cash transaction costs relating to the impairment of existing unamortised debt establishment costs in the Stapled Trusts is expensed to the FY17 Statutory Forecast Consolidated Income Statement. The below table summarises the treatment of transaction costs: Cost $12.4m $12.2m $11.6m $36.2m $0.9m $37.1m

92 90 / PDS / Financial Information 7. Financial Information (continued) ATO Income Support As part of the Proposed Transaction and Offer, the REIT will be required to deposit $17 million into an escrow account with that amount to be used to compensate the REIT for potential reductions in income and costs incurred relating to the building at Franklin Street, Adelaide. Any residual amounts remaining in the escrow account on the scheduled expiry of the Australian Taxation Office s lease in October 2027 will be paid to the Existing Unitholders in FSPT. These payments are to compensate the REIT for any potential reduction of rental income from the Australian Taxation Office lease which may eventuate as a result of scheduled market rent reviews in November 2017 and November Each year on the first of November, if the Net Operating Income received by the REIT from the Franklin Street, Adelaide Property is lower than the Net Operating Income that would have been received by the REIT in respect of the property if the Net Operating Income received by the REIT grew at 3.25% per annum, the REIT will receive a cash payment for the difference in Net Operating Income. Amounts can also be drawn to compensate the REIT for: a vacancy in respect of the Property arising; any incentives payable to a tenant at the Property; any leasing costs payable in connection with a tenancy at the Property; any increase in property outgoings and repair and maintenance expenses; and any other operating or capital costs relating to the Property. The above payments cannot exceed an aggregate amount of $17 million plus accrued interest. The present value of cash flows expected to be received from this income support arrangement has been capitalised to the REIT s Pro Forma Consolidated Statement of Financial Position as at Allotment. ATO income receipts are reflected in the REIT s Operating Earnings and Distribution as they are receivable. Maintenance capital expenditure Allowances for maintenance capital expenditure have been made on a property to property basis for refurbishment and maintenance capital expenditure of approximately $1.7 million in the period from Allotment to 30 June 2017 and $0.5 million for 1H FY18. Distributions Forecast Distributions are based on the REIT s target distribution policy of 100% of Operating Earnings. Distributions are to be made quarterly with the first Distribution for the period from Allotment to December 2016 expected to be paid within two months from 31 December The Directors of the Responsible Entity will review and assess the appropriateness of the REIT s distribution policy on a quarterly basis Sensitivity analysis The Forecast Financial Information set out in Section 7.3 is based on a number of key best estimate assumptions which have been outlined above. These best estimates and assumptions are subject to business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the REIT, the Directors and management of the Responsible Entity, and are based upon assumptions with respect to future business decisions or actions which are subject to change. The Forecast Financial Information is also subject to a number of risks as outlined in Section 12. Investors should be aware that future events cannot be predicted with certainty and, as a result, deviations from the figures forecast in this PDS are to be expected. To assist Investors in assessing the impact of these assumptions on the Forecast Financial Information, the table below sets out the sensitivity of the REIT s Operating Earnings forecasts to changes in certain key best estimate assumptions. The sensitivity analysis is intended to provide a guide only and variations in actual performance could exceed the ranges shown. $m Allotment to 30 June H FY18 (6 months) Cents per Security $m Cents per Security Operating Earnings Incremental impact of change from assumption 25 basis point change in average annual interest rate (+ / -) basis point change in CPI (+ / -) basis point change in CPI (+ / -) % change in the REIT s other operating expenses (+ / -) Care should be taken in interpreting these sensitivities. The estimated impact of changes in each of the variables has been calculated in isolation in order to illustrate the impact on the Operating Earnings forecasts. In practice, changes in variables may offset each other or may be cumulative.

93 Charter Hall Long WALE REIT / Financial Information (continued) 7.7. Reconciliation between the consolidated statement of financial position of DIF at 30 June 2016 to the Pro Forma Consolidated Statement of Financial Position of the REIT The table below sets out the reconciliation between the consolidated statement of financial position of DIF as at 30 June 2016 and the Pro Forma Consolidated Statement of Financial Position of the REIT as at Allotment. The Pro Forma Consolidated Statement of Financial Position is prepared in accordance with the basis of preparation set out in Section 7.2. The Pro Forma Consolidated Statement of Financial Position reflects the provisional accounting permitted for business combinations in accordance with AASB 3 Business Combinations. The Pro Forma Consolidated Statement of Financial Position is provided for illustrative purposes only and is not represented as being necessarily indicative of the REIT s actual or future financial position. ($m) DIF Other Stapled Trusts Total of Stapled Trusts Offer and other adjustments (A) Acquisitions (B) Allotment ASSETS Cash and cash equivalents (45.5) 57.2 Investment properties Equity accounted investments Other assets Total assets ,087.1 LIABILITIES Interest bearing liabilities (213.2) (1.9) Trade and other creditors (23.7) 2.4 Total liabilities (236.9) 0.5 NET ASSETS ,086.6 TOTAL EQUITY ,086.6 The financial information presented in the column titled Total of Stapled Trusts comprises the pro forma consolidation of the consolidated statements of financial position of DIF and the other Stapled Trusts as at 30 June 2016, all of which are currently managed by Charter Hall Group. A. Offer and other adjustments Reconciliation of the impact of the Offer and other adjustments on the Pro Forma Consolidated Statement of Financial Position are as follows: Cash and cash equivalents $98.7 million: receipt of $ million relating to the issue of new Securities as part of the Offer; payment of $589.5 million relating to the redemption of Existing Unitholders (including funds which will be used to purchase all units held by Existing Unitholders including Units held by DIF investors participating in the Reinvestment Offer); payment of $26.6 million in transaction costs, being $12.4 million directly offset against contributed equity, $12.2 million expensed to the Statutory Forecast Consolidated Income Statement (excludes $0.9 million non-cash impairment of existing unamortised debt establishment costs in the Statutory Forecast Consolidated Income Statement) and $1.9 million of debt establishment costs in relation to the REIT s new debt facility; $1.2 million in GST paid on transaction costs refundable from the ATO subsequent to Allotment; repayment of $212.1 million of existing debt facilities within the Stapled Trusts; close-out of existing derivative financial liabilities within the Stapled Trusts for $8.3 million; payment of Distributions payable from the Stapled Trusts of $4.8 million; payment of performance and disposal fees relating to DIF of $10.6 million; and payment of $17.0 million for ATO Income Support receivable in relation to the FSPT acquisition (ATO Adelaide building). 1. Total proceeds of the Offer consists of $968.9 million relating to the issue of new Securities as part of the Offer, and $151.8 million relating to the issue of new Securities as consideration for part of the Acquired Assets, totalling $1,120.6 million. This includes funds which will be used to purchase all Units held by Existing Unitholders including Units held by DIF investors participating in the Reinvestment Offer.

94 92 / PDS / Financial Information 7. Financial Information (continued) Other assets $18.2 million: recognition of a $17.0 million ATO Income Support receivable in relation to the FSPT acquisition (ATO Adelaide building); and recognition of a $1.2 million GST receivable related to GST paid on transaction costs refundable from the ATO subsequent to Allotment. Interest bearing liabilities ($213.2) million: repayment of $212.1 million of existing debt facilities within the Stapled Trusts prior to Allotment; impairment of $0.9 million of existing unamortised debt establishment costs from the Stapled Trusts; and capitalisation of $1.9 million in debt establishment costs in relation to the REIT s new debt facility. Refer to Section 2.5 for further details regarding the REIT s financing arrangements. Trade and other creditors ($23.7) million: close-out of $8.3 million of existing derivative financial liabilities within the Stapled Trusts prior to Allotment; payment of Distributions payable from the Stapled Trusts of $4.8 million; and payment of performance and disposal fees relating to DIF of $10.6 million. Equity accounted investments $197.3 million: the acquisition of a 45% interest in LWIP for $151.8 million 1 in exchange for issuance of new Securities; the acquisition of a 24.9% interest in Perth RDC for $35.9 million, funded with cash; capitalisation of $6.6 million of stamp duty and $3.1 million of acquisition fees related to the Acquisitions Additional non-ifrs financial disclosure As the REIT has investments in joint ventures which are accounted for using the equity method per AAS, the Directors consider it useful to provide unaudited non-ifrs pro forma proportionately consolidated income statements and a pro forma proportionately consolidated statement of financial position as these statements will be used by the Directors internally for evaluating performance and making strategic decisions. The following tables have not been prepared in accordance with AAS and have not been audited or reviewed. They have been provided for illustrative purposes only. B. Acquisitions Reconciliation of the impact of the Acquisitions on the Pro Forma Consolidated Statement of Financial Position captions are as follows: Cash and cash equivalents ($45.5) million: payment of $35.9 million to acquire a 24.9% interest in Perth RDC; and payment of $6.6 million of stamp duty and $3.1 million of acquisition fees related to the Acquisitions. 1. Total proceeds of the Offer consists of $968.9 million relating to the issue of new Securities as part of the Offer, and $151.8 million relating to the issue of new Securities as consideration for part of the Acquired Assets, totalling $1,120.6 million. This includes funds which will be used to purchase all Units held by Existing Unitholders including Units held by DIF investors participating in the Reinvestment Offer.

95 Charter Hall Long WALE REIT / Financial Information (continued) Pro forma forecast proportionately consolidated income statements The REIT s non-ifrs unaudited pro forma forecast proportionately consolidated income statements are shown in the table below. These statements break out the revenue and expenses component line items which relate to the REIT s share of net profit from equity accounted investments from the REIT s Pro Forma Forecast Consolidated Income Statements in Section In addition to the departure from AAS requirement to present the REIT s share of net profits from equity accounted investments as a single line item, this information is presented in an abbreviated form insofar as it does not include all the disclosure, statements or comparative information as requested by AAS applicable to annual financial reports prepared in accordance with the Corporations Act. ($m) Pro Forma Allotment to 30 June Pro Forma 1H FY18 (six months) Gross rental income Straightlining of rental income Other income Interest income Total revenue Property operating expenses (10.2) (7.7) Management fees (3.7) (2.8) Other expenses (1.6) (1.0) Interest expense 2 (8.4) (6.3) Total expenses (23.9) (17.8) Net profit Notes 1. The pro forma forecast consolidated income statements have been prepared on the basis that the Proposed Transaction has been implemented and Allotment occurs on 27 October Includes margin on drawn amounts, line fees and amortisation of capitalised borrowing costs. The REIT s borrowings under the Debt Facility will incur an average interest rate of 3.2% for the period from Allotment until 30 June 2017, and 3.3% over the 1H FY18 period on drawn amounts (additional line fees of $2.0 million on undrawn debt amounts for the period from Allotment to 30 June 2017 and $1.5 million for 1H FY18 have been assumed). Refer to Section 2.5 for further details regarding the REIT s financing arrangements. The average interest rate of borrowings under the LWIP and Perth RDC debt facilities are 5.2% and 4.3% respectively for the period from Allotment to 30 June 2017, and 4.7% and 3.9% respectively for 1H FY18 (annualised). 3. The pro forma forecast proportionately consolidated income statements do not account for any potential fair value adjustments of investment properties, derivative financial instruments or other financial assets, as the Directors do not believe such movements can be reliably estimated. No material tax expense is expected to arise for the REIT in the Forecast Period.

96 94 / PDS / Financial Information 7. Financial Information (continued) Pro forma proportionately consolidated statement of financial position The REIT s non-ifrs pro forma proportionately consolidated statement of financial position is shown in the table below. This statement breaks out the various component line items which relate to the REIT s share of equity accounted investments from the REIT s Pro Forma Consolidated Statement of Financial Position in Section 7.4. In addition to the departure from AAS requirement to present the REIT s interest in equity accounted investments as a single line item, this information is presented in an abbreviated form insofar as it does not include all the disclosure, statements or comparative information as required by AAS applicable to annual financial reports prepared in accordance with the Corporations Act. ($m) Pro Forma Consolidated Statement of Financial Position Proportionately consolidated share of equity accounted investments 1 Eliminations Pro forma proportionately consolidated statement of financial position ASSETS Cash Investment properties ,215.5 Equity accounted investments (331.3) - Other assets Total assets 1, (331.3) 1,295.5 LIABILITIES Interest bearing liabilities 6 (1.9) Trade and other creditors Total liabilities NET ASSETS 1, (331.3) 1,086.6 TOTAL EQUITY 1, (331.3) 1,086.6 Securities on issue (m) NTA per Security ($) Look Through Gearing (%) % 11.3% Notes: 1. Equity accounted investments are based on the purchase price of the REIT s 45% interest in LWIP, 49.9% interest in Perth RDC, 50.1% interest in CPOF KHT, and 26.0% interest in CH DC Fund. 2. Cash and cash equivalents includes cash retained in the Stapled Trusts, the REIT s share of cash and cash equivalents from equity accounted investments as well as $53.2 million of cash raised from the Offer for working capital purposes and to pursue the objectives and strategy of the REIT (refer to Section 2.2). 3. Investment Properties on the Pro Forma Consolidated Statement of Financial Position are based on the Independent Property Valuations described in Section 10 and include $4.6 million relating to the current value of the Woolworths Distribution Centre, Dandenong development asset. The value of this Investment Property at lease commencement is equal to $56.1 million. 4. Investment Properties within equity accounted investments are based on the Independent Property Valuations described in Section 10 and include an additional $13.6 million relating to costs incurred in acquiring the underlying equity accounted investments 5. Other Assets includes $17.0 million for the net present value of the expected cash flows to be received under the ATO Income Support arrangements. Refer to Section for further details on these arrangements. 6. Interest bearing liabilities balance represents $198.2 million of drawn debt (drawn debt in LWIP of $150.4 million relative to a facility limit of $152.9 million and drawn debt in Perth RDC of $48.5 million relative to a facility limit of $49.2 million) less unamortised establishment costs of $1.9 million relating to the Debt Facility, and $0.7 million relating to unamortised establishment fees within the Equity Accounted Investments. 7. Look Through Gearing calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets, less cash, based on the non-ifrs pro forma proportionately consolidated statement of financial position, which adjusts for the REIT s share of the debt, assets and cash held in equity accounted investments.

97 Charter Hall Long WALE REIT / Financial Information (continued) 7.9. Significant accounting policies The principal accounting policies adopted in the preparation and presentation of the Financial Information are set out below. The preparation of the Financial Information requires estimates, judgements and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Revisions to estimates are recognised in the period in which the estimate is revised and in any future period affected. The significant accounting policies below apply estimates, judgements and assumptions which could materially affect the financial results or financial position reported in future periods. Consolidation and group accounting The Stapled Trusts remain separate legal entities in accordance with the Corporations Act 2001 (Cth), and are each required to comply with the reporting and disclosure requirements of Accounting Standards and the Corporations Act 2001 (Cth). DIF has been identified as the parent entity in relation to the stapling. Accordingly, the consolidated financial statements of the REIT will be prepared as a continuation of the consolidated financial statements of DIF. DIF, as the deemed acquirer, will acquisition account for the Stapled Trusts as at 27 October The consolidated financial report of the REIT will comprise DIF, the Stapled Trusts and their respective controlled entities. The results and equity, not directly owned by DIF, of the Stapled Trusts will be treated and disclosed as non-controlling interests in the consolidated financial statements of the REIT. Whilst the results and equity of the Stapled Trusts are disclosed as noncontrolling interests, the securityholders of DIF are the same as the Securityholders of the Stapled Trusts. A controlled entity is any entity over which DIF or the Stapled Trusts have the power to control the financial and operating policies so as to obtain benefits from its activities. All controlled entities have a 30 June balance date. All inter-entity balances and transactions between entities in the REIT, including any unrealised profits or losses, are eliminated on consolidation. Accounting policies of the controlled entities have been changed where necessary to ensure consistency with those policies adopted by the REIT. Business combinations Business combinations occur where an acquirer obtains control over one or more businesses. A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions). All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial instrument, are recognised as expenses in profit or loss when incurred. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase. Goodwill is carried at cost less accumulated impairment losses. Property rental income Property rental income represents income earned from the rental of properties (inclusive of outgoings recovered from tenants) and is recognised on a straight-line basis over the lease term. Lease incentives and the portion of rental income relating to fixed increases in operating lease rentals in future years are recognised as a separate component of investment properties. Investment property Investment properties comprise investment interests in land and buildings (including integral plant and equipment) held for the purpose of producing rental income, including properties that are under construction for future use as investment properties. Initially, investment properties are measured at cost including transaction costs. Subsequent to initial recognition, the investment properties are stated at fair value. Fair value of investment property is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The best evidence of fair value is given by current prices in an active market for similar property in the same location and condition. Gains and losses arising from changes in the fair values of investment properties are included in the consolidated statement of comprehensive income in the year in which they arise. At each balance date, the fair values of the investment properties are assessed by the Responsible Entity with reference to independent valuation reports or through appropriate valuation techniques adopted by the Responsible Entity. Fair value is determined using a long term investment period. Specific circumstances of the owner are not taken into account. The fair value measurement of investment property takes into account the REIT s ability to generate economic benefits by using the asset in its highest and best use. The use of independent valuers is on a rotational basis at least once every 12 months, or earlier, where the Responsible Entity deems it appropriate or believes there may be a material change in the carrying value of the property. The carrying amount of investment properties recorded in the consolidated balance sheet takes into consideration components relating to lease incentives, leasing costs and assets relating to fixed increases in operating lease rentals in future years. Investment property under construction is measured at fair value less costs to complete if the fair value is considered reliably determinable. Investment property under construction for which the fair value cannot be determined reliably, but for which the REIT expects that the fair value of the investment property will

98 96 / PDS / Financial Information 7. Financial Information (continued) be reliably determinable when construction is completed, is measured at cost less impairment until the fair value becomes reliably determinable or construction is completed whichever is earlier. It may sometimes be difficult to determine reliably the fair value of investment property under construction. In order to evaluate whether the fair value of an investment property under construction can be determined reliably, management considers, among others, the stage of completion, the level of reliability of cash inflows after completion, the development risk specific to the property and the past experience with similar constructions. As the fair value method has been adopted for investment properties, the buildings and any component thereof (including plant and equipment) are not depreciated. Taxation allowances for the depreciation of buildings and plant and equipment are claimed by the REIT and contribute to the tax deferred component of Distributions. Joint arrangements a) Joint operations The REIT will recognise its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These will be incorporated in the financial statements under the appropriate headings. At Allotment, the following investments qualify as joint operations: Metcash Distribution Centre, Canning Vale (jointly owned by two of the Stapled Trusts; 100% owned by the REIT on consolidation) and Coles Distribution Centre, Truganina. b) Joint ventures Interests in joint ventures are accounted for using the equity method, with investments initially recognised at cost and adjusted thereafter to recognise the REIT s share of postacquisition profits or losses of the investee in profit or loss, and the REIT s share of movements in other comprehensive income of the investee in other comprehensive income. Distributions received or receivable from joint ventures are recognised as a reduction in the carrying amount of the investment. At Allotment, the following investments qualify as joint ventures: LWIP (54 retail assets), Coles RDC (Coles Distribution Centre, Perth), CPOF KHT (Westpac Building, Kogarah) and CH DC Fund (Woolworths Distribution Centre, Dandenong). Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the consolidated statement of comprehensive income over the period of the borrowing using the effective interest rate method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. If the facility has not been drawn down the fee is capitalised as a prepayment and amortised over the period of the facility to which it relates. Derivative financial instruments Derivative financial instruments held as financial assets or financial liabilities designated at fair value through profit or loss are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance date. The REIT does not apply hedge accounting therefore changes in the fair value of derivative contracts are recorded in the consolidated statement of comprehensive income. Income taxes The REIT is treated as a trust for Australian tax purposes. Under current Australian income tax legislation, the REIT is not liable for to pay income tax provided its income for the year, as determined under the REIT s constitution, is fully distributed to Securityholders, by way of cash or reinvestment. Management fees Management fees are recognised as the services are rendered. The services relate to property and fund management roles provided by the Manager. Management fees are charged in accordance with the management fee arrangements agreed with the REIT Working capital The Directors of the Responsible Entity are of the opinion that the REIT will have sufficient working capital to carry out its stated objectives. The REIT is expected to have $57.2 million in cash at bank at Allotment. In addition to this amount, the REIT is expected to have $350.0 million in undrawn debt available under the new financing arrangements, outlined in Section 2.5, at Allotment. Under the terms of the Woolworths Distribution Centre, Dandenong Development Management Agreement, the REIT is required to set aside $14.5 million of undrawn debt facilities as a bank guarantee until the lease commencement of the Woolworths Distribution Centre, Dandenong. It is forecast that the REIT will need to make capital contributions of $51.6 million towards this property s development ($37.1 million net of the $14.5 million set aside as a bank guarantee). The actual amount of the capital contribution will reflect the cost of development and may vary. See Section 14.4 for more information on the Woolworths Distribution Centre, Dandenong Development Management Agreement. In addition, approximately $25 million of the REIT s expected $350 million debt facility will be held in reserve and not drawn in order to provide liquidity where required in unforeseen circumstances. The REIT is expected to have combined cash and debt reserves of $407.2 million at Allotment. After allowing for $51.6 million of committed capital expenditure and $25 million for the REIT s liquidity reserve, the REIT will have $330.6 million of cash and debt reserves.

99 Charter Hall Long WALE REIT / 97 Details of the Offer Allenstown Hotel, Rockhampton, QLD 8

100 98 / PDS / Investment Overview 8. Details of the Offer 8.1. Overview of the Offer The Offer is an initial public offering of approximately million Securities in the REIT at an Offer Price of $4.00 per Security, and is expected to raise $1,120.6 million. Securities will be issued by the Responsible Entity. The Offer is made pursuant to the terms and conditions set out in this PDS Sources and uses The Offer proceeds will be used to: fund capital returns to and redemptions of Units held by unitholders of the Stapled Trusts; acquire ownership interests in the Initial Portfolio; refinance existing bank debt facilities of the Stapled Trusts; pay for the costs associated with the Acquisitions and the Offer; and provide the REIT with working capital at Allotment. Sources of Funds $m Uses of Funds $m Proceeds from the Offer 1,120.6 Redemption of Units held by unitholders of the Stapled Trusts 1 Payment for Acquired Assets Repayment of Stapled Trusts existing debt Payment of Stapled Trusts accrued liabilities, 23.7 and the close-out of derivatives Transaction costs related to Offer 36.2 (see Section 13.5) 2 Payment for other assets 18.2 Working capital 53.2 Total sources 1,120.6 Total uses 1, Charter Hall s investment Charter Hall intends to subscribe for up to 62.5 million Securities in the REIT, representing up to approximately 22% of total Securities on issue following Allotment Structure of the Offer The Offer is structured as follows: (a) the Reinvestment Offer, which is an offer to existing holders of units in DIF to participate in the Restructure by retaining their units in DIF and being issued new units in each of the other entities so that following the Restructure they will hold Securities. (b) the Public Offer, consisting of: the Broker Firm Offer, which is an offer to Retail Investors who receive an allocation from their Broker; the Institutional Offer, which is an invitation to certain institutional investors in Australia, New Zealand and certain other foreign jurisdictions to bid for Securities; and the Charter Hall Group Offer, which is an offer to certain investors invited to participate. Any investor that is interested in this investment, but is not an Eligible DIF Unitholder or eligible under the Charter Hall Group Offer and has not received an invitation under the Institutional Offer, must apply for Securities via a Broker with an allocation. 1. Total amount used to purchase all units held by Stapled Trust unitholders, including units held by DIF investors participating in the Reinvestment Offer. 2. Assuming 50% of DIF Unitholders elect to participate in the Reinvestment Offer.

101 Charter Hall Long WALE REIT / Details of the Offer (continued) 8.5. Allocation policy The final allocation of Securities between the Reinvestment Offer, Broker Firm Offer, the Institutional Offer and the Charter Hall Group Offer will be determined by Charter Hall, in consultation with the Joint Lead Managers, having regard to the following factors: the desire to foster a stable Securityholder register over the long-term; the Responsible Entity s desire for an informed and active trading market on the ASX following the Offer; the overall level of demand for Securities between the Broker Firm Offer, Institutional Offer and Charter Hall Group Offer; the desire to have a wide spread of investors on the REIT s register; the likelihood the investor will be a long-term Securityholder in the REIT; and any other factors that Charter Hall, in consultation with the Joint Lead Managers, consider appropriate in their absolute discretion. The Responsible Entity expects to announce the final allocations between the Broker Firm Offer, Institutional Offer and Charter Hall Group Offer by 19 October It is expected that this information will be advertised in The Australian and The Australian Financial Review Reinvestment Offer What is the Reinvestment Offer? At a meeting held on 16 August 2016, DIF unitholders approved DIF s participation in the Restructure on terms where DIF unitholders would have the right to receive a capital distribution and have their units redeemed for an amount equal to DIF s net tangible asset value on the Implementation Date ( DIF Net Asset Value ) (the DIF Net Asset Value and therefore the aggregate amount of the capital distribution and redemption is expected to be $1.28 per DIF unit). For the purposes of calculating the DIF Net Asset Value, the value of DIF s portfolio will be equal to a 1% premium to the values determined by way of Independent Valuations as at 30 June 2016 other than in respect of DIF s interest in the property at Old Geelong Road, Hoppers Crossing, Victoria, which will be valued at $45.5 million. Under the Reinvestment Offer, DIF unitholders resident in Australia or New Zealand will have the opportunity to elect to forgo some or all of their right to have their DIF units redeemed (and to receive the capital distribution and redemption amount per unit) and to instead participate in the Restructure in respect of those DIF units as described in section Under the Reinvestment Offer, Eligible DIF Unitholders will receive a number of Securities which have a value (at the Offer Price) equal to the cash amount they would have received had their DIF units participating in the Reinvestment Offer been redeemed, rounded up to the nearest whole Security. DIF unitholders who participate in the Reinvestment Offer will retain their original DIF units (which will have been consolidated as described in section 15.3) and will have the capital return that would otherwise be paid to them under the Restructure steps described in section 15.3 compulsorily applied on their behalf toward a subscription for one unit in each of the other Stapled Trusts for each DIF unit they held prior to the issue such that following the issue they will hold an equal number of units in each of the Stapled Trusts. Those units will then be stapled together to form Securities. Example of participation in the Reinvestment Offer The number of Securities that each participating Eligible DIF Unitholder will receive under the Reinvestment Offer will be equal to the aggregate capital return amount and redemption amount (expected to be $1.28 per DIF unit), divided by the Offer Price ($4.00), multiplied by the number of DIF units that the participating DIF unitholder applied to have participate in the Reinvestment Offer, rounded up to the nearest whole Security. For example, if: a DIF unitholder holds 10,010 DIF units and elects to have half of that holding participate in the Reinvestment Offer; and the aggregate amount of the capital return and redemption payment that will be payable on the redemption of each DIF unit under the Restructure is $1.28, then following the implementation of the Restructure, the DIF unitholder would hold 1,602 Securities and would receive a cash payment of $6, Who can apply in the Reinvestment Offer The Reinvestment Offer is open to existing holders of DIF units on the Record Date with a registered address in Australia or New Zealand (i.e. Eligible DIF Unitholders) Right for Reinvestment Offer Applicants to apply for additional Securities under the Charter Hall Group Offer Applicants under the Reinvestment Offer will have a priority right to subscribe for additional Securities under the Charter Hall Group Offer in an aggregate amount up to the shortfall under the Reinvestment Offer. The shortfall under the Reinvestment Offer will be equal to the number of Securities not received by DIF unitholders under the Restructure either because they did not elect to participate in the Reinvestment Offer or were ineligible to do so ( Reinvestment Offer Shortfall ). If Applicants under the Reinvestment Offer apply for Securities under the Charter Hall Group Offer in excess of the Reinvestment Offer Shortfall, those applications may be scaled back at the discretion of the Responsible Entity as set out in the section on the Charter Hall Group Offer below.

102 100 / PDS / Details of the Offer 8. Details of the Offer (continued) Applicants under the Reinvestment Offer who wish to apply for additional Securities under the Charter Hall Group Offer must follow the instructions on their Reinvestment Offer Election Form. Applicants under the Reinvestment Offer who wish to apply for additional Securities under the Charter Hall Group Offer must ensure that payment is received by no later than 5:00pm Sydney time on 14 October Offer opening and Offer closing dates for the Reinvestment Offer The Reinvestment Offer will open on 5 October 2016 and close at 5:00pm Sydney time on 17 October 2016, subject to amendment by the Responsible Entity with the consent of the Joint Lead Managers. Applicants under the Reinvestment Offer who wish to apply for additional Securities under the Charter Hall Group Offer must ensure that payment is received by no later than 5:00pm Sydney time on 14 October Allocation policy under the Reinvestment Offer No scale-back will apply to the Reinvestment Offer. Provided the Offer completes, all Eligible DIF Unitholders who submit a valid Application under the Reinvestment Offer in respect of their DIF units will have that Application accepted in full How to apply under the Reinvestment Offer Eligible DIF Unitholders who wish to participate in the Reinvestment Offer will need to complete a Reinvestment Offer Election Form and return it to their advisor or the Registry in accordance with the instructions on that form. Alternatively you can complete the Reinvestment Offer Election Form online at You will need your reference number that has been provided to you. Returning a completed Reinvestment Offer Election Form or completing a form online will be taken to constitute a representation by the Applicant of the matters set out in Section The REIT does not pay any service fees, upfront or trail commissions or soft dollar benefits to financial advisers or advisory firms Australian tax implications of participating in the Reinvestment Offer The Australian tax implications of participating in the Reinvestment Offer are described in Section Broker Firm Offer Who can apply in the Broker Firm Offer The Broker Firm Offer is only open to Retail Investors who have a registered address in Australia or New Zealand and have received a firm allocation from their Broker. If you have been offered a firm allocation by a Broker will be treated as an Applicant under the Broker Firm Offer in respect of that allocation. You should contact your Broker to determine whether they may allocate Securities to you under the Broker Firm Offer. You should contact your broker to determine whether they may allocate Securities to you under the Broker Firm Offer How to apply in the Broker Firm Offer Step 1: The Broker Firm Offer is only open to Australian and New Zealand resident clients of a Broker who have received a firm allocation under the Broker Firm Offer. Step 2: Complete an Application Form attached to or accompanying this PDS in accordance with instructions given to you by your Broker and the instructions set out on the Application Form. Step 3: Lodge your Application Form with your Application Monies with your Broker in accordance with the Broker s direction in order to receive a firm allocation. The expected Offer Closing Date for the Broker Firm Offer is 15 October 2016; however, your Broker may require the Application Form and the Application Monies to be submitted earlier. Applications to acquire Securities under the Broker Firm Offer will only be accepted on the Application Form. The Application Form must be completed in accordance with the instructions given to Applicants by their Broker and the instructions set out on the Application Form. Applicants under the Broker Firm Offer must lodge their Application Form and Application Monies with the Broker from whom they received a firm allocation, in accordance with the relevant Broker s directions and within sufficient time to enable processing by the Offer Closing Date of the Broker Firm Offer. The Applicant s Broker will act as the Applicant s agent in processing the Application Form and providing Application details and Application Monies to the Registry. Applicants under the Broker Firm Offer must not send their Application Forms to the Registry. The Responsible Entity will accept payments of Application Monies from Brokers on behalf of Broker Firm Applicants on the Offer Closing Date or such later date as the Responsible Entity and the Joint Lead Managers agree. The REIT, the Responsible Entity, the Registry and the Joint Lead Managers take no responsibility for any acts or omissions in connection with your Application, Application Form or Application Monies.

103 Charter Hall Long WALE REIT / Details of the Offer (continued) Minimum and maximum Application size Applications under the Broker Firm Offer must be for a minimum value of $5,000 and in increments of $500 thereafter. There is no maximum Application amount under the Broker Firm Offer. Your Broker may impose a higher minimum Application amount. The Responsible Entity and the Joint Lead Managers reserve the right to reject or scale-back any Applications in the Broker Firm Offer. The Responsible Entity and the Joint Lead Managers also reserve the right to aggregate any Applications which they believe may be multiple Applications from the same person. The Responsible Entity may determine a person to be eligible to participate in the Broker Firm Offer, and may amend or waive the Broker Firm Offer Application procedures or requirements, in its discretion in compliance with applicable laws Offer opening and Offer closing dates for the Broker Firm Offer The Broker Firm Offer opens on 5 October 2016 and closes at 5:00pm Sydney time on 14 October 2016, subject to amendment by the Responsible Entity with consent of the Joint Lead Managers. Your Broker may impose an earlier Offer Closing Date. Applicants are therefore encouraged to submit their Application Forms with their Application Monies as soon as possible Payment methods Applicants under the Broker Firm Offer must pay their Application Monies in accordance with instructions from their Broker Allocation Policy under the Broker Firm Offer The allocation of firm stock to Brokers will be determined by the Responsible Entity in consultation with the Joint Lead Managers. Securities which are allocated to Brokers for allocation to their Australian or New Zealand retail clients will be issued or transferred to the Applicants who have received a firm allocation of Securities from those Brokers. It will be a matter for the Brokers to determine how they allocate Securities among their eligible retail clients, and they (and not the Responsible Entity or the Joint Lead Managers) will be responsible for ensuring that eligible retail clients who have received a firm allocation from them receive the relevant Securities Application Monies Application Monies for Securities offered under this PDS will be held on trust for Applicants until the issue of Securities to successful Applicants. Application Monies will be fully or partially refunded where an Application is rejected or accepted in part only, the Offer is withdrawn and/or cancelled, or the ASX does not grant permission for Securities to be quoted within three months after the date of this PDS. No interest will be paid on the Application Monies Responsible Entity may accept or reject Applications The Responsible Entity, on behalf of the REIT, reserves the right to reject any Application which is not correctly completed or which is submitted by a person whom they believe may be an ineligible Applicant. The Responsible Entity also reserves the right to waive or correct any errors in any Application Form, and to reject any Application in whole or in part for any other reason Institutional Offer Invitations to bid The Institutional Offer will comprise an invitation to certain Australia and New Zealand resident Institutional Investors and Institutional Investors in certain other overseas jurisdictions (excluding the United States) to bid for Securities. The Joint Lead Managers will separately advise Institutional Investors of the Application procedures under the Institutional Offer Allocation policy under the Institutional Offer The allocation of Securities among bidders in the Institutional Offer will be determined by the Responsible Entity in consultation with the Joint Lead Managers, in accordance with Section 8.5 above, and who will have absolute discretion regarding the basis of allocation of Securities Charter Hall Group Offer Who can participate in the Charter Hall Group Offer The Charter Hall Group Offer is only open to those investors invited to participate who have a residential address in Australia or New Zealand at the date of this PDS including the Existing Unitholders and the vendors under the Acquisitions 1. The Charter Hall Group Offer is also open to the current unit holders in FSPT and CHPTDT who wish to apply to reinvest the proceeds of the redemption and capital return payable on their units in FSPT or CHPTDT into Securities and also to the current unit holders in LWIP who are selling their units in LWIP under the Asset Acquisitions and wish to apply to reinvest those proceeds into the Securities How to apply under the Charter Hall Group Offer If you are invited to participate in the Charter Hall Group Offer, you must complete the Application Form and pay the relevant Application Monies to Charter Hall Group in accordance with the instructions on the Application Form. Application Monies must be in Australian dollars paid via BPay only unless expressly permitted by the REIT. 1. The Responsible Entity has the discretion to extend the Charter Hall Group Offer to selected persons in certain other jurisdictions (outside the United States) if the Responsible Entity is satisfied that they are able to do so without breaching Australian or foreign laws.

104 102 / PDS / Details of the Offer 8. Details of the Offer (continued) How to apply online If you are applying online, you must complete the Application Form online by visiting the Offer Website at and follow the instructions. You will need the password that has been provided to you. You must also pay your Application Monies via BPAY only. You should check your daily transaction limit with your bank, credit union or building society to ensure your Application Monies can be paid via BPAY, and ensure that you leave enough time for your payment to be processed by 5.00pm on the Offer Closing Date Minimum and maximum Application amounts Applications under the Charter Hall Group Offer must be for a minimum value of $5,000 and in increments of $500 thereafter. There is no maximum Application amount under the Charter Hall Group Offer Allocation policy under the Charter Hall Group Offer The Charter Hall Group Offer is not a priority offer, other than in respect of the Reinvestment Offer Shortfall referred to below, and the allocation of Securities between the Charter Hall Group Offer, Broker Firm Offer and Institutional Offer will be determined in accordance with Section 8.5 above. It will be a matter for Charter Hall how it will allocate Securities to investors invited to participate, including discretionary scale-back of Applications and refund of Application Monies in circumstances where aggregate Applications for the Charter Hall Group Offer exceed the amount allocated to the Charter Hall Group Offer. The Responsible Entity will be responsible for ensuring that eligible investors invited to participate who have applied for Securities receive the relevant number of Securities under that Application (after taking into account any scale-back). Applicants under the Reinvestment Offer will have a priority right to subscribe for additional Securities under the Charter Hall Group Offer in an aggregate amount up to the Reinvestment Offer Shortfall as described in Section Any scale-back of Applications in excess of the Reinvestment Offer Shortfall will be determined by Charter Hall in its discretion Application Form By making an Application under an Application Form, an Applicant declares that they were given access to this PDS, together with an Application Form. The Corporations Act 2001 (Cth) prohibits any person from passing an Application Form to another person unless it is attached to, or accompanied by, a hard copy of this PDS or a complete and unaltered electronic copy of this PDS. An Application under an Application Form is an offer by the Applicant to the REIT to subscribe for or purchase Securities for all or any of the Application Monies specified in and accompanying the Application Form, at the Offer Price (or, in the case of the Reinvestment Offer, to subscribe for the units comprising a Security other than DIF units pursuant to the Restructure). An Application is made by an Applicant on the terms and conditions set out in this PDS including any supplementary or replacement PDS and the Application Form (including the conditions regarding quotation on the ASX). To the extent permitted by law, an Application to invest is an irrevocable application by the Applicant to the REIT to subscribe for the Securities specified in the Application Form, on the terms and conditions set out in the Application Form. Returning a completed Application Form will be taken to constitute a representation by the Applicant that they: (a) have received a printed or electronic copy of the PDS (and any supplementary or replacement document) accompanying the Application Form and have read them all in full; (b) agree that their Application is completed and lodged in accordance with this PDS and subject to the declarations and statements on the Application Form; (c) declare that all details and statements in the Application Form are complete and accurate; (d) acknowledge that once the Application Form is returned it may not be withdrawn; (e) agree to being issued the number of Securities referable to the value they apply for (or a lower number issued in accordance with this PDS); (f) if natural persons, are at least 18 years old and do not suffer from any legal disability preventing them from applying for Securities; and (g) authorise the REIT, the Responsible Entity and the Joint Lead Managers and their officers or agents, to do anything on their behalf necessary for Securities to be issued to them, including to act on instructions received by the Registry using the contact details in the Application Form No cooling-off Applicants should note there will not be a cooling-off period in relation to Applications, because an application will be made to the ASX for listing of the REIT and quotation of the Securities. Once an Application has been lodged, it cannot be withdrawn. Should quotation of the Securities be granted by the ASX, Securityholders will have the opportunity to sell their Securities at the prevailing market price, which may be different to the Offer Price.

105 Charter Hall Long WALE REIT / Details of the Offer (continued) Discretion regarding the Offer The Responsible Entity reserves the right to: close the Offer or any part of it early; extend the Offer or any part of it; accept late Applications either generally or in particular cases; reject any Application; allocate any Applicant fewer Securities than their Application; and not proceed with the Offer or any part of it and to withdraw the Offer at any time before Allotment of Securities to Applicants. If the Offer, or any part of it, does not proceed, all relevant Application Monies will be refunded (without interest) ASX listing Trading of Securities on the ASX The REIT will apply for admission to the Official List of the ASX and the official quotation of the Securities on the ASX within seven days of the date of this PDS. The REIT s ASX Code is expected to be CLW. It is expected that the Securities will be issued to successful Applicants under the Offer on the Allotment Date, which is expected to be on or about 27 October If the required approvals from the ASX are not given within three months after the date of this PDS (or any longer period permitted by law), the Offer will be withdrawn and all Application Monies will be refunded without interest as soon as practicable in accordance with the requirements of the Corporations Act. The ASX takes no responsibility for the content of this PDS or for the investment in the REIT. The fact that the ASX may admit the REIT to the Official List should not to be taken as an endorsement by the ASX of the merits of the REIT or any investment in Securities ASX admission and quotation Following the issue of Securities under the Offer (expected to occur on the Allotment Date on or about 27 October 2016), the Registry will send successful Applicants a holding statement detailing the number of Securities issued to them under the Offer. It is expected that holding statements will be dispatched on or about 28 October It is the responsibility of Applicants to confirm their allocation of Securities prior to trading in Securities. Applicants can confirm their allocation of Securities by contacting their Broker or calling the Offer Information Line on (toll free within Australia) or (outside Australia) between 8:30am and 5:30pm (Sydney time) Monday to Friday during the Offer Period. A Securityholder who sells Securities before they receive their holding statement does so at their own risk Issue of Securities The issue of Securities to Applicants will occur as soon as possible after the Offer is closed in accordance with the timetable. The Responsible Entity reserves the right to issue Securities to Applicants in full or to issue a lesser number of Securities than those for which an Application has been made. Where no allocation is made to a particular Applicant or the number of Securities allocated is less than the number applied for by the Applicant, surplus Application Monies will be returned to that Applicant. No interest will be paid on the Application Monies CHESS The Responsible Entity will apply for the Securities to participate in CHESS, in accordance with the Listing Rules and the ASX Settlement Rules. CHESS is an automated transfer and settlement system for transactions in Securities quoted on the ASX under which transfers are effected in a paperless form. The Responsible Entity will also, in accordance with the Listing Rules and the ASX Settlement Rules, maintain an electronic CHESS sub register (for Securityholders who are participants in CHESS or sponsored by such a participant) and an electronic issuer sponsored sub register (for all other Securityholders). These two sub registers will together make up the Responsible Entity s principal register of Securityholders. Following allocation and transfer of the Securities to successful Applicants, Securityholders will be sent an initial statement of holding that sets out the number of Securities that have been allocated and the Securityholder s Holder Identification Number, or in the case of issuer sponsored holders, the Securityholder Reference Number. Securityholders will subsequently receive statements showing any changes to their holding of Securities. Certificates will not be issued for Securities Conditional and deferred settlement trading and selling Securities on market It is expected that trading of the Securities on the ASX on a conditional and deferred settlement basis will commence on or about 19 October The contracts formed on acceptance of Applications and any trades made before Settlement and Offer Completion will be conditional on Settlement and Completion. Conditional trading will continue until the Responsible Entity has advised the ASX that: Completion of the Restructure has occurred; and the Responsible Entity has issued Securities to successful Applicants under the Offer, which is expected to occur on or around 27 October 2016.

106 104 / PDS / Details of the Offer 8. Details of the Offer (continued) Trading will then be on an unconditional but deferred settlement basis until the Responsible Entity has advised the ASX that the dispatch of holding statements for all Securities issued to successful Applicants under the Offer has been completed, which is expected to be on or around 28 October Normal settlement basis trading is expected to commence on or about 31 October If Settlement has not occurred within 14 days (or such longer period as the ASX allows) after the day Securities are first quoted on the ASX, the Offer and all contracts arising from acceptance of the Offer will be cancelled and of no further effect and all Application Monies will be refunded (without interest). In these circumstances, all purchases and sales made through the ASX participating organisations during the conditional trading period will be cancelled and of no effect. It is the responsibility of each person who trades in Securities to confirm their holding before trading in Securities. If Applicants seek to sell Securities before receiving a holding statement, they do so at their own risk. The REIT, the Directors, the Joint Lead Managers and the Registry disclaim all liability whether in negligence or otherwise, if a Securityholder sells Securities before receiving a holding statement, even if the Securityholder obtained details of their holding from the Offer Information Line or confirmed their firm allocation through a Broker Brokerage, commission and stamp duty No brokerage, commission or stamp duty is payable by Applicants who apply for Securities under the Institutional Offer. The REIT does not pay any service fees, upfront or trail commissions or soft dollar benefits to financial advisers or advisory firms. Investors who buy or sell Securities on the ASX may be subject to brokerage and other transaction costs. Under current law, no stamp duty will be payable by an investor on any subsequent trading of Securities in the REIT on the ASX, provided the investor does not acquire (whether alone or together with associates) 90% or more of the Securities in the REIT Foreign selling restrictions This document does not constitute an offer of Securities in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the Securities may not be offered or sold, in any country outside Australia and New Zealand except to the extent permitted below. Hong Kong WARNING: This document has not been, and will not be, authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (the SFO ). No action has been taken in Hong Kong to authorise this document or to permit the distribution of this document or any documents issued in connection with it. Accordingly, the Securities have not been and will not be offered or sold in Hong Kong other than to professional investors (as defined in the SFO). No advertisement, invitation or document relating to the Securities has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the Securities which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors as defined in the SFO and any rules made under that ordinance. The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the Offer. If you are in doubt about any contents of this document, you should obtain independent professional advice. Netherlands The offer of Securities is exclusively restricted to qualified investors ( Qualified Investors, gekwalificeerde beleggers, as defined in Article 1:1 of the Dutch Act on Financial Markets Supervision (Wet op het financieel toezicht, DFSA ) and as defined in Article 2 of Directive 2003/71/EC of the European Parliament and of the Council, and amendments thereto (including those resulting from Directive 2010/73/EU) (the Prospectus Directive ), including (for the avoidance of doubt) investors who have successfully elected to be treated as professional investors ( Professional Investors ), professionele beleggers, as defined in Article 1:1 DFSA in accordance with Directive 2004/39/EC. Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten) and no prospectus (within the meaning of the DFSA) has been published or is intended to be published in respect of the Securities.

107 Charter Hall Long WALE REIT / Details of the Offer (continued) Singapore This document has not been registered as a prospectus with the Monetary Authority of Singapore ( MAS ) and, accordingly, statutory liability under the Securities and Futures Act, Chapter 289 (the SFA ) in relation to the content of prospectuses does not apply, and you should consider carefully whether the investment is suitable for you. The issuer is not authorised or recognised by the MAS and the Securities are not allowed to be offered to the retail public. This document and any other document or material in connection with the Offer or sale, or invitation for subscription or purchase of the Securities may not be circulated or distributed, nor may the Securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except to institutional investors (as defined in the SFA), or otherwise pursuant to, and in accordance with the conditions of, any other applicable provisions of the SFA. This document has been given to you on the basis that you are an institutional investor (as defined under the SFA). In the event that you are not an institutional investor, please return this document immediately. You may not forward or circulate this document to any other person in Singapore. The Offer is not made to you with a view to the Securities being subsequently offered for sale to any other party. You are advised to acquaint yourself with the SFA provisions relating to resale restrictions in Singapore and comply accordingly. Switzerland The Securities may not be distributed in Switzerland and will not be listed on the SIX Swiss Exchange ( SIX ) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the Securities may be publicly distributed or otherwise made publicly available in Switzerland. Neither this document nor any other offering or marketing material relating to the Securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the Offer will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA), and the Offer of Securities has not been and will not be authorised under the Swiss Federal Act on Collective Investment Schemes ( CISA ). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of Securities. This document is personal to the recipient only and not for general circulation in Switzerland. United Arab Emirates This document has not been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates ( UAE ), the UAE Securities and Commodities Authority (the SCA ) or any other authority in the UAE. The Responsible Entity has not received authorisation or licensing from the Central Bank of the UAE, the SCA or any other authority in the UAE to market or sell Securities within the UAE. Nothing in connection with the Offer, including the receipt of applications and/or the allotment of Securities, have been or will be rendered within the UAE by the Responsible Entity. Nothing contained in this document is intended to constitute UAE investment, legal, tax, accounting or other professional advice. Prospective investors should consult with an appropriate professional for specific advice rendered on the basis of their situation. The Securities may only be offered and sold to UAE legal entities: that are federal or local governments or governmental authorities; whose primary purpose is to invest in securities and that are acquiring the Securities for their own account and not on behalf of clients; or that are investment managers who have authority to make investment decisions on behalf of clients. United Kingdom Neither the information in this document nor any other document relating to the Offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of Section 85 of the Financial Services and Markets Act 2000, as amended ( FSMA )) has been published or is intended to be published in respect of the Securities. This document is issued on a confidential basis to professional investors (within the meaning of the Alternative Investment Fund Managers Directive) who are also qualified investors (within the meaning of Section 86(7) of the FSMA) in the United Kingdom. The Securities may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to Section 86(1) of the FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom. Any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received in connection with the issue or sale of the Securities has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of the FSMA does not apply to the Responsible Entity of the REIT.

108 106 / PDS / Details of the Offer 8. Details of the Offer (continued) In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) ( investment professionals ) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005, as amended ( FPO ) and (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together relevant persons ). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. The Securities are being marketed in the United Kingdom in compliance with the National Private Placement Regime Taxation issues A summary of Australian tax consequences of investing in the REIT is contained in Section 11. However, the summary provides general information only. Applicants should seek appropriate independent professional advice that considers the taxation implications in respect of their own specific circumstances Offer timetable The Offer timetable is indicative only. The Responsible Entity and the Joint Lead Managers reserve the right to amend any or all of these dates and times subject to the Corporations Act 2001 (Cth), the Listing Rules and other applicable laws, including closing the Offer early, extending the Offer, deferring the Allotment Date or accepting late Applications either generally or in particular cases, or to withdraw the Offer, without prior notice. The quotation and commencement of trading of the Securities is subject to confirmation from the ASX Further enquiries If you have further enquiries or questions relating to aspects of this PDS or about the Offer, please contact the Offer Information Line on (toll free within Australia) or (outside Australia) between 8:30am and 5.30pm (Sydney time) Monday to Friday (excluding public holidays) during the Offer Period. If you are unclear in relation to any matter or are uncertain as to whether the REIT is a suitable investment, you should also seek professional advice from your accountant, stockbroker, lawyer, or other professional adviser before deciding to invest. Members of the public wishing to subscribe for Securities under the Offer must do so through a Broker with a firm allocation. The Responsible Entity reserves the right to not proceed with the Offer at any time before the issue of Securities to Successful Applicants.

109 Charter Hall Long WALE REIT / 107 Investigating Accountant s report Toll, Altona North, VIC 9

110 108 / PDS / Investigating Accountant s Report 9. Investigating Accountant s Report ABCD KPMG Transaction Services ABN: A division of KPMG Financial Advisory Services Telephone: (Australia) Pty Ltd Facsimile: Australian Financial Services Licence No DX: 1056 Sydney 300 Barangaroo Avenue Sydney NSW 2000 PO Box H67 Australia Square 1213 Australia The Directors Charter Hall WALE Limited as the Responsible Entity of each of the trusts comprising the Long WALE REIT Level 20, No.1 Martin Place, Sydney, NSW, September 2016 Dear Directors Limited Assurance Investigating Accountant s Report and Financial Services Guide Investigating Accountant s Report Introduction Our client is Charter Hall WALE Limited ( LWR RE or Client or Issuer ) as the proposed responsible entity of the various trusts ( Stapled Trusts ) to be listed on the Australian Securities Exchange ( ASX ) as the Long WALE REIT (the REIT ) under the initial public offer ( IPO ). KPMG Financial Advisory Services (Australia) Pty Ltd (of which KPMG Transaction Services is a division) ( KPMG Transaction Services ) has been engaged by the Client, to prepare this report for inclusion in the Product Disclosure Statement ( PDS ) to be dated on or around 27 September 2016, and to be issued by LWR RE, in respect of the proposed IPO of stapled securities and listing on the ASX of the REIT (the Transaction ). Expressions defined in the PDS have the same meaning in this report. Scope You have requested KPMG Transaction Services to perform a limited assurance engagement in relation to the pro forma consolidated statement of financial position and forecast financial information described below and disclosed in the PDS. The pro forma consolidated statement of financial position and forecast financial information is presented in the PDS in an abbreviated form, insofar as it does not include all of the presentation and disclosures required by Australian Accounting Standards and other mandatory professional reporting requirements applicable to general purpose financial reports prepared in accordance with the Corporations Act KPMG Financial Advisory Services (Australia) Pty Ltd is affiliated with KPMG. KPMG is an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity.

111 Charter Hall Long WALE REIT / Investigating Accountant s Report (continued) Charter Hall WALE Limited Limited Assurance Investigating Accountant s Report and Financial Services Guide 26 September 2016 Pro Forma Consolidated Statement of Financial Position You have requested KPMG Transaction Services to perform limited assurance procedures in relation to the pro forma consolidated statement of financial position of the REIT included in the PDS. The pro forma consolidated statement of financial position has been derived from the historical financial information of DIF, the other Stapled Trusts (being, CVLT1, 218 BRT, CPOF KHT, FSPT, CHPT DT and Finance Trust) and the pro forma adjustments described in Section 7.7 of the PDS, including the Acquisitions of the Acquired Assets. The pro forma consolidated statement of financial position consists of the REIT s unaudited pro forma consolidated statement of financial position as at Allotment as set out in Section 7.4 of the PDS (the Pro Forma Consolidated Statement of Financial Position ). The stated basis of preparation is the recognition and measurement principles contained in Australian Accounting Standards applied to the historical financial information and the event(s) or transaction(s) to which the pro forma adjustments relate, as described in Section 7.2 of the PDS. Due to its nature, the Pro Forma Consolidated Statement of Financial Position does not represent the company s actual or prospective financial position. The Pro Forma Consolidated Statement of Financial Position has been compiled by the Issuer to illustrate the impact of the event(s) or transaction(s) on the REIT s financial position as at Allotment. As part of this process, information about the REIT s financial position has been extracted by the Issuer from DIF and the other Stapled Trusts financial statements and financial records for the year ended 30 June The financial statements of DIF, FSPT and LWIP for the year ended 30 June 2016 were audited by the REIT s external auditor in accordance with Australian Auditing Standards. The audit opinions issued to the members of the REIT relating to those financial statements were unqualified. For the purposes of preparing this report we have performed limited assurance procedures in relation to the Pro Forma Consolidated Statement of Financial Position in order to state whether, on the basis of the procedures described, anything comes to our attention that would cause us to believe that the Pro Forma Consolidated Statement of Financial Position is not prepared, in all material respects, by the directors in accordance with the stated basis of preparation. As stated in Section 7.2 of the PDS, the stated basis of preparation is: the extraction of the statement of financial position from the audited financial statements of DIF for the year ended 30 June 2016, the extraction of the statements of financial position of the other Stapled Trusts from the audited financial statements of FSPT for the year ended 30 June 2016, and the unaudited financial statements of CVLT1, 218 BRT, CPOF KHT and CHPT DT for the year ended 30 June 2016, (together, the Historical Statements of Financial Position ); the application of pro forma adjustments, including the Acquisition of the Acquired Assets, determined in accordance with Australian Accounting Standards and the REIT s accounting policies, to the Historical Statements of Financial Position to illustrate the effects of the Transaction on the REIT, described in Section 7.7 of the PDS. 2

112 110 / PDS / Investigating Accountant s Report 9. Investigating Accountant s Report (continued) Charter Hall WALE Limited Limited Assurance Investigating Accountant s Report and Financial Services Guide 26 September 2016 We have conducted our engagement in accordance with the Standard on Assurance Engagements ASAE 3450 Assurance Engagements involving Corporate Fundraisings and/or Prospective Financial Information. The procedures we performed were based on our professional judgement and included: consideration of work papers, accounting records and other documents; consideration of the pro forma adjustments described in the PDS; enquiry of directors, management, personnel and advisors; the performance of analytical procedures applied to the Pro Forma Consolidated Statement of Financial Position; and a review of accounting policies for consistency of application. The procedures performed in a limited assurance engagement vary in nature from, and are less in extent than for, an audit. As a result, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had we performed an audit. Accordingly, we do not express an audit opinion about whether the Pro Forma Consolidated Statement of Financial Position is prepared, in all material respects, by the directors in accordance with the stated basis of preparation. Forecast Financial Information and directors best-estimate assumptions You have requested KPMG Transaction Services to perform limited assurance procedures in relation to the forecast financial information of the REIT, comprising the pro forma forecast consolidated income statements for the period from Allotment to 30 June 2017 and for the six months ending 31 December 2017 (the Pro Forma Forecast Consolidated Income Statements ) and the statutory forecast consolidated income statements for the year ending 30 June 2017 and for the six months ending 31 December 2017 (the Statutory Forecast Consolidated Income Statements ) (together, the Forecast Financial Information ), as described in Section 7.2 of the PDS. The directors best-estimate assumptions underlying the Forecast Financial Information are described in Section 7.5 of the PDS. As stated in Section 7.2 of the PDS, the basis of preparation of the Forecast Financial Information is the recognition and measurement principles contained in Australian Accounting Standards and the REIT s accounting policies. We have performed limited assurance procedures in relation to the Forecast Financial Information, set out in Section and Section of the PDS, and the directors bestestimate assumptions underlying it in order to state whether, on the basis of the procedures described, anything has come to our attention that causes us to believe that: the directors best-estimate assumptions do not provide reasonable grounds for the Forecast Financial Information; in all material respects the Forecast Financial Information is not: prepared on the basis of the directors best-estimate assumptions as described in the PDS; and 3

113 Charter Hall Long WALE REIT / Investigating Accountant s Report (continued) Charter Hall WALE Limited Limited Assurance Investigating Accountant s Report and Financial Services Guide 26 September 2016 presented fairly in accordance with the recognition and measurement principles contained in Australian Accounting Standards and the REIT s accounting policies; the Forecast Financial Information itself is unreasonable. We have conducted our engagement in accordance with the Standard on Assurance Engagements ASAE 3450 Assurance Engagements involving Corporate Fundraisings and/or Prospective Financial Information. Our limited assurance procedures consisted primarily of: comparison and analytical review procedures; discussions with management and directors of the Issuer of the factors considered in determining their assumptions; and examination, on a test basis, of evidence supporting: the assumptions and amounts in the Forecast Financial Information; and the evaluation of accounting policies used in the Forecast Financial Information. The procedures performed in a limited assurance engagement vary in nature from, and are less in extent than for, an audit. As a result, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had we performed an audit. Accordingly, we do not express an audit opinion. Directors responsibilities The directors of the Issuer are responsible for the preparation of: the Pro Forma Consolidated Statement of Financial Position, including the selection and determination of the pro forma transactions and/or adjustments made to the historical financial information and included in the Pro Forma Consolidated Statement of Financial Position; the Forecast Financial Information, including the directors best-estimate assumptions on which the Forecast Financial Information is based and the sensitivity of the Forecast Financial Information to changes in key assumptions. The directors responsibility includes establishing and maintaining such internal controls as the directors determine are necessary to enable the preparation of financial information that is free from material misstatement, whether due to fraud or error. Conclusions Review statement on the Pro Forma Consolidated Statement of Financial Position Based on our procedures, which are not an audit, nothing has come to our attention that causes us to believe that the Pro Forma Consolidated Statement of Financial Position, as set out in Section 7.4 of the PDS, is not prepared or presented fairly, in all material respects, on the basis of the pro forma adjustments described in Section 7.7 of the PDS, and in accordance with the recognition and measurement principles prescribed in Australian Accounting Standards, and the REIT s accounting policies. 4

114 112 / PDS / Investigating Accountant s Report 9. Investigating Accountant s Report (continued) Charter Hall WALE Limited Limited Assurance Investigating Accountant s Report and Financial Services Guide 26 September 2016 Forecast Financial Information and the directors best-estimate assumptions Based on our procedures, which are not an audit, nothing has come to our attention which causes us to believe that: the directors best-estimate assumptions used in the preparation of the Forecast Financial Information do not provide reasonable grounds for the Forecast Financial Information; and in all material respects, the Forecast Financial Information: is not prepared on the basis of the directors best-estimate assumptions as described in Section 7.5 of the PDS; and is not presented fairly in accordance with the recognition and measurement principles contained in Australian Accounting Standards, and the REIT s accounting policies; and the Forecast Financial Information itself is unreasonable. The Forecast Financial Information has been prepared by the management of the Issuer and adopted and disclosed by the directors in order to provide prospective investors with a guide to the potential financial performance of the REIT for the period from Allotment to 30 June 2017 and for the six months ending 31 December There is a considerable degree of subjective judgement involved in preparing forecasts since they relate to event(s) and transaction(s) that have not yet occurred and may not occur. Actual results are likely to be different from the Forecast Financial Information since anticipated event(s) or transaction(s) frequently do not occur as expected and the variation may be material. The directors best-estimate assumptions on which the Forecast Financial Information is based relate to future event(s) and/or transaction(s) that management expect to occur and actions that management expect to take and are also subject to uncertainties and contingencies, which are often outside the control of the REIT. Evidence may be available to support the directors bestestimate assumptions on which the Forecast Financial Information is based however such evidence is generally future-oriented and therefore speculative in nature. We are therefore not in a position to express a reasonable assurance conclusion on those best-estimate assumptions, and accordingly, provide a lesser level of assurance on the reasonableness of the directors bestestimate assumptions. The limited assurance conclusion expressed in this report has been formed on the above basis. Prospective investors should be aware of the material risks and uncertainties in relation to an investment in the REIT, which are detailed in the PDS, and the inherent uncertainty relating to the Forecast Financial Information. Accordingly, prospective investors should have regard to the investment risks and sensitivities as described in Section 12 of the PDS. The sensitivity analysis described in Section 7.6 of the PDS demonstrates the impact on the Forecast Financial Information of changes in key best-estimate assumptions. We express no opinion as to whether the Forecast Financial Information will be achieved. We have assumed, and relied on representations from certain members of management of the Issuer, that all material information concerning the prospects and proposed operations of the REIT has been disclosed to us and that the information provided to us for the purpose of our work is true, complete and accurate in all respects. We have no reason to believe that those representations are false. 5

115 Charter Hall Long WALE REIT / Investigating Accountant s Report (continued) Charter Hall WALE Limited Limited Assurance Investigating Accountant s Report and Financial Services Guide 26 September 2016 Independence KPMG Transaction Services does not have any interest in the outcome of the Transaction, other than in connection with the preparation of this report and participation in due diligence procedures for which normal professional fees will be received. General advice warning This report has been prepared, and included in the PDS, to provide investors with general information only and does not take into account the objectives, financial situation or needs of any specific investor. It is not intended to take the place of professional advice and investors should not make specific investment decisions in reliance on the information contained in this report. Before acting or relying on any information, an investor should consider whether it is appropriate for their circumstances having regard to their objectives, financial situation or needs. Restriction on use Without modifying our conclusions, we draw attention to Section 7 of the PDS, which describes the purpose of the financial information, being for inclusion in the PDS. As a result, the financial information may not be suitable for use for another purpose. We disclaim any assumption of responsibility for any reliance on this report, or on the financial information to which it relates, for any purpose other than that for which it was prepared. KPMG Transaction Services has consented to the inclusion of this Investigating Accountant s Report in the PDS in the form and context in which it is so included, but has not authorised the issue of the PDS. Accordingly, KPMG Transaction Services makes no representation regarding, and takes no responsibility for, any other statements, or material in, or omissions from, the PDS. Yours faithfully Craig Mennie Authorised Representative 6

116 114 / PDS / Investigating Accountant s Report 9. Investigating Accountant s Report (continued) Charter Hall WALE Limited Limited Assurance Investigating Accountant s Report and Financial Services Guide 26 September 2016 Financial Services Guide Dated 26 September 2016 What is a Financial Services Guide (FSG)? This FSG is designed to help you to decide whether to use any of the general financial product advice provided by KPMG Financial Advisory Services (Australia) Pty Ltd ABN , Australian Financial Services Licence Number (of which KPMG Transaction Services is a division) ( KPMG Transaction Services ), and Craig Mennie as an authorised representative of KPMG Transaction Services, authorised representative number (Authorised Representative). This FSG includes information about: KPMG Transaction Services and its Authorised Representative and how they can be contacted; the services KPMG Transaction Services and its Authorised Representative are authorised to provide; how KPMG Transaction Services and its Authorised Representative are paid; any relevant associations or relationships of KPMG Transaction Services and its Authorised Representative; how complaints are dealt with as well as information about internal and external dispute resolution systems and how you can access them; and the compensation arrangements that KPMG Transaction Services has in place. The distribution of this FSG by the Authorised Representative has been authorised by KPMG Transaction Services. This FSG forms part of an Investigating Accountant s Report (Report) which has been prepared for inclusion in a Product Disclosure Statement (PDS). The purpose of the PDS is to help you make an informed decision in relation to a financial product. The contents of the PDS will include details such as the risks, benefits and costs of acquiring the particular financial product. Financial services that KPMG Transaction Services and the Authorised Representative are authorised to provide KPMG Transaction Services holds an Australian Financial Services Licence, which authorises it to provide, amongst other services, financial product advice for the following classes of financial products: deposit and non-cash payment products; derivatives; foreign exchange contracts; government debentures, stocks or bonds; interests in managed investments schemes including investor directed portfolio services; securities; superannuation; carbon units; Australian carbon credit units; and eligible international emissions units, to retail and wholesale clients. We provide financial product advice when engaged to prepare a report in relation to a transaction relating to one of these types of financial products. The Authorised Representative is authorised by KPMG Transaction Services to provide financial product advice on KPMG Transaction Services' behalf. KPMG Transaction Services and the Authorised Representative's responsibility to you KPMG Transaction Services has been engaged by Charter Hall WALE Limited ( LWR RE ) (the Issuer or Client ) to 7

117 Charter Hall Long WALE REIT / Investigating Accountant s Report (continued) Charter Hall WALE Limited Limited Assurance Investigating Accountant s Report and Financial Services Guide 26 September 2016 provide general financial product advice in the form of a Report to be included in the PDS prepared by the Issuer in relation to the IPO of Long WALE REIT (the REIT ) (the Transaction ). You have not engaged KPMG Transaction Services or the Authorised Representative directly but have received a copy of the Report because you have been provided with a copy of the Document. Neither KPMG Transaction Services nor the Authorised Representative are acting for any person other than LWR RE. KPMG Transaction Services and the Authorised Representative are responsible and accountable to you for ensuring that there is a reasonable basis for the conclusions in the Report. General Advice As KPMG Transaction Services has been engaged by the Issuer, the Report only contains general advice as it has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the appropriateness of the general advice in the Report having regard to your circumstances before you act on the general advice contained in the Report. You should also consider the other parts of the PDS before making any decision in relation to the Transaction. Fees KPMG Transaction Services may receive and remuneration or other benefits received by our representatives KPMG Transaction Services charges fees for preparing reports. These fees will usually be agreed with, and paid by, the client. Fees are agreed on either a fixed fee or a time cost basis. In this instance, the Issuer have agreed to pay KPMG Transaction Services $425,000 for preparing the Report. KPMG Transaction Services and its officers, representatives, related entities and associates will not receive any other fee or benefit in connection with the provision of the Report. KPMG Transaction Services officers and representatives (including the Authorised Representative) receive a salary or a partnership distribution from KPMG s Australian professional advisory and accounting practice (the KPMG Partnership). KPMG Transaction Services representatives (including the Authorised Representative) are eligible for bonuses based on overall productivity. Bonuses and other remuneration and benefits are not provided directly in connection with any engagement for the provision of general financial product advice in the Report. Further details may be provided on request. Referrals Neither KPMG Transaction Services nor the Authorised Representative pay commissions or provide any other benefits to any person for referring customers to them in connection with a Report. Associations and relationships Through a variety of corporate and trust structures KPMG Transaction Services is controlled by and operates as part of the KPMG Partnership. KPMG Transaction Services directors and Authorised Representatives may be partners in the KPMG Partnership. The Authorised Representative is a partner in the KPMG Partnership. The financial product advice in the Report is provided by KPMG Transaction Services and the Authorised Representative and not by the KPMG Partnership. From time to time KPMG Transaction Services, the KPMG Partnership and related entities (KPMG entities) may provide professional services, including audit, tax and financial advisory services, to companies and issuer of financial products in the ordinary course of their businesses. KPMG entities have provided, and continue to provide, a range of tax and advisory services to the Charter Hall Group for which professional fees are received. Over the past two years professional fees of approximately $60,000 have been received from the Charter Hall Group. None of those services have related to the transaction or alternatives to the transaction. No individual involved in the preparation of this Report holds a substantial interest in, or is a substantial creditor of, the Issuer or the REIT or has other material financial interests in the transaction. Complaints resolution Internal complaints resolution process If you have a complaint, please let either KPMG Transaction Services or the Authorised Representative know. Formal complaints should be sent in writing to The 8

118 116 / PDS / Investigating Accountant s Report 9. Investigating Accountant s Report (continued) Charter Hall WALE Limited Limited Assurance Investigating Accountant s Report and Financial Services Guide 26 September 2016 Complaints Officer, KPMG, PO Box H67, Australia Square, Sydney NSW If you have difficulty in putting your complaint in writing, please telephone the Complaints Officer on and they will assist you in documenting your complaint. Written complaints are recorded, acknowledged within 5 days and investigated. As soon as practical, and not more than 45 days after receiving the written complaint, the response to your complaint will be advised in writing. External complaints resolution process If KPMG Transaction Services or the Authorised Representative cannot resolve your complaint to your satisfaction within 45 days, you can refer the matter to the Financial Ombudsman Service (FOS). FOS is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry. Further details about FOS are available at the FOS website or by contacting them directly at: Contact Details You may contact KPMG Transaction Services or the Authorised Representative using the contact details: KPMG Transaction Services A division of KPMG Financial Advisory Services (Australia) Pty Ltd 300 Barangaroo Avenue Sydney NSW 2000 PO Box H67 Australia Square NSW 1213 Telephone: (02) Facsimile: (02) Craig Mennie C/O KPMG PO Box H67 Australia Square NSW 1213 Telephone: (02) Facsimile: (02) Address: Financial Ombudsman Service Limited, GPO Box 3, Melbourne Victoria 3001 Telephone: Facsimile: (03) info@fos.org.au. The Australian Securities and Investments Commission also has a freecall infoline on which you may use to obtain information about your rights. Compensation arrangements KPMG Transaction Services has professional indemnity insurance cover as required by the Corporations Act 2001(Cth). 9

119 Charter Hall Long WALE REIT / 117 Summary of Valuation Reports Woolworths Distribution Centre, Hoppers Crossing, VIC 10

120 118 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports 30 June 2016 Our Ref: The Directors; Charter Hall WALE Limited as the Responsible Entity of each of the Trusts comprising the Long WALE REIT Level 20, 1 Martin Place Sydney NSW 2000 Savills Valuations Pty Ltd ABN E: rsmillie@savills.com.au DL: Level 25, 140 William Street Melbourne VIC 3000 T: F: savills.com.au Dear Directors, Re: Valuation Summary Letter for Charter Hall WALE Limited We refer to your instructions requesting Market Valuations of the five properties listed below for acquisition, Product Disclosure Statement ( Offer Document ), financial reporting and first mortgage security purposes as at 30 June 2016 (Coles DC is as at 5 July 2016). The addresses of the subject properties and inspection dates are as follows: St George House, 4-16 Montgomery Street, Kogarah, NSW inspected 22 nd April 2016; Coles DC, 136 Horrie Miller Drive, Perth Airport, WA inspected 17 th June 2016; Metcash DC, 218 Bannister Road, Canning Vale, WA inspected 13 th June 2016; Toll Fleet & Toll Auto Logistics, Horsburgh Drive, Altona North, VIC inspected 1 st June 2016; and Coles DC, 485 Dohertys Road, Truganina, VIC inspected 5 th July The following is a summary of the reports prepared for Charter Hall Direct Property Management Limited, Charter Hall Funds Management Limited and Charter Hall WALE Limited in connection with Charter Hall Direct Industrial Fund, Canning Vale Logistics Trust No. 1, 218 Bannister Road Trust, CPOF Kogarah Holding Trust and CHPT Dandenong Trust which form part of the Long WALE REIT ( LWR ) (collectively Charter Hall ). Parties seeking detailed information of our valuations should refer to the full valuation reports held by Charter Hall. We confirm our valuation was prepared in accordance with the Corporations Act and the Australian Property Institute s guidelines. 1 Basis of Valuation We have assessed the market value of each individual asset in accordance with the definition of Market Value. Market Value as defined by the International Valuation Standards Council and as adopted by the Australian Property Institute is as follows: Market Value is the estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm s length transaction, after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion. Included in the amount of our valuations are normal fixtures and fittings. Excluded from the amount of our valuations are items of furniture and furnishings, and tenant s fixtures and fittings. Our valuations are determined on the basis that the property s, the title s thereto and their use is not affected by any matter other than that mentioned in our reports. Page 1 Savills Valuations Pty Ltd ABN Cover of Excellence and Cover of Excellence and Star Device are registered Trade Marks of the NSW Professional Standards Council.

121 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) 2 Scope of Work and Approach In undertaking our valuations our approach in each instance has generally comprised the following: Securing relevant individual property information from Charter Hall including but not limited to title particulars, building particulars, leases, outgoings, capital expenditure and incentive particulars; A physical inspection of each property; Market research with local and active real estate agents and other market participants in addition to with relevant authorities; and Use of Savills proprietary valuation computer model to compare our analysis and conclusions. In assessing the values of the subject properties we have generally considered two bases of valuation being:- 1. Capitalisation Approach; and 2. Discounted Cash Flow Analysis ( DCF ). In a number of instances where the DCF approach was not considered relevant (i.e. lower priced properties or land value components), we have utilised Direct Comparison approach methodology. Attachments (including valuation executive summaries) should be read in conjunction with our full valuation reports dated 30 June 2016 and 5 th July 2016 (the full valuation report ). We note that this letter does not contain all the necessary information and assumptions which are detailed in the full valuation reports. The full valuation reports form an integral part of our advice and provide descriptive commentaries on the individual properties characteristics in addition to the local market dynamics and any general, specific and special assumptions under which each valuation has been prepared. 3 Property Descriptions St George House 4-16 Montgomery Street, Kogarah, NSW The property comprises a circa 1990 A Grade commercial building which provides office accommodation over ground, lower ground & four upper levels. The main entry foyer is accessed from Montgomery Street & adjacent is a retail banking chamber. Car parking for 597 spaces is provided over the basement & lower ground levels. The building recently underwent an extensive refurbishment which included base building construction & upgrades & tenant fitout works and will target a 4.5 star NABERS Energy Rating. Coles DC, 136 Horrie Miller Drive, Perth Airport, WA The property comprises a large 25ha landholding improved with a modern, purpose built distribution facility situated within the Perth Airport Precinct approximately 13 km from the Perth CBD. The Perth Airport is a popular location for major distribution facilities including occupiers such as Coles Group Ltd, Woolworths Limited and Australian Postal Corporation. Improvements on the site total 81,647m² and were constructed for the Coles Group Ltd in Facilities comprise a main ambient distribution centre, adjoining temperature controlled chiller and freezer facilities, together with a main administration office and amenities building. Ancillary improvements include satellite offices, gate house and ancillary buildings. The property therefore constitutes a state of the art major distribution facility ideally suited to the current occupier s business. Metcash DC, 218 Bannister Road, Canning Vale, WA The Metcash facility was originally constructed in the 1990 s with the oldest improvements being approximately years old. There are six primary building structures, five of which are lessor s improvements with the sixth and most recent building construction, the meat processing facility, being constructed at the lessee s expense on excess land, occupied as part of the tenancy agreement. Toll Fleet & Toll Auto Logistics, Horsburgh Drive, Altona North, VIC The property provides an extensive automotive storage hardstand area, in addition to recently constructed improvements comprising a free standing office block, an auto workshop with a front office and an onsite car wash, which total 6,310m² of gross lettable area. The auto storage hardstand area occupies the majority of the site and consists of truck parking areas, car storage, pull up and car parking. Page 2

122 120 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) Coles DC, 485 Dohertys Road, Truganina, VIC The property comprises a circa 2012 built generic logistics facility that is used by Coles as a regional distribution centre. The main building is divided into three components including two separate office/amenity areas located to the north and south of the central warehouse component. Extensive canopy coverage is provided to all at grade loading areas. A number of ancillary buildings are located on site including a gatehouse, a reception, turnstile entrance and a pump house. The property includes a staff and visitors car park to the south of the site and expansion land to its western side 4 Tenures St George House 4-16 Montgomery Street, Kogarah, NSW The property represents freehold asset known as Lot 100 in Deposited Plan at Kogarah, Local Government Area of Kogarah, Parish of St George and County of Cumberland. Coles DC, 136 Horrie Miller Drive, Perth Airport, WA The majority of the property is owned by Commonwealth of Australia with a small portion being owned by the State of Western Australia. Both parties have entered into broadly similar lease agreements with the Perth Airport Pty Ltd (formally Westralia Airports Corporation Pty Ltd) who in turn initially sub leased each portion of the subject land to Bieson Pty Ltd on a ground lease (Sub Leases) basis. It is these Sub Leases originally granted to Bieson Pty Ltd that are the subject of our valuation. The Bieson Pty Ltd Sub Leases have been granted for an initial terms of 40 years and 3 months and 1 day commencing 31 March 2007 and expiring 30 June 2047 with a further option of 49 years less one day expiring 29 June This is at no ongoing additional rental with the rental being paid by an initial up front rental payment. The ground lease from the Commonwealth of Australia land relates to a portion of the following freehold lots: Lot 1 on Diagram being part Volume 387 Folio 79A Lots 2 and 3 on Diagram being part Volume 367 Folio 80A Lot 2 on Diagram being part Volume 1352 Folio 688 Lot 548 on Diagram 5986 being part Volume 612 Folio 26A Lot 853 on Plan 3709 being part Volume 1324 Folio 454 Lot 854 on Plan 3709 being part Volume 1147 Folio 912 Lot 855 on Plan 3709 being part Volume 1111 Folio 584 Lot 864 on Plan 3709 being part Volume 1068 Folio 691 Lot 865 and part of Lot 866 on Plan 3709 being part Volume 2116 Folio 674 Lots 867and 868 on Plan 3709 being part Volume 1068 Folio 640 Lot 869 on Plan 3709 being part Volume 901 Folio 193 Lot 870 on Plan 3709 being part Volume 1100 Folio 137 Lot 8681 in Deposited Plan being part Volume 1352 Folio 684 Lot on Deposited Plan being part Volume 1670 Folio 552 Lot on Deposited Plan being part Volume 1650 Folio 612 Lot on Deposited Plan being part Volume 1977 Folio 3 Metcash DC, 218 Bannister Road, Canning Vale, WA The subject property is legally described as an estate in fee simple being Lot 204 on Plan 16045, being the whole of the land contained within Certificates of Title in ½ Shares Volume 2789 Folio 99 and Volume 2789 Folio 100. Toll Fleet & Toll Auto Logistics, Horsburgh Drive, Altona North, VIC The property represents freehold asset known as Lot 3 on Plan of Subdivision C within Certificate of Title Folio 361. Coles DC, 485 Dohertys Road, Truganina, VIC The property represents freehold asset known as Lot 2 on Plan of Subdivision U within Certificate of Title Folio 951. Page 3

123 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) 5 Tenancy Overviews We have summarised the leases to each property as follows: Address St George House 4-16 Montgomery Street, Kogarah, NSW Coles DC, 136 Horrie Miller Drive, Perth Airport, WA Metcash DC, 218 Bannister Road, Canning Vale, WA Toll Fleet & Toll Auto Logistics, Horsburgh Drive, Altona North, VIC Tenant St George Bank Limited now Westpac Banking Corporation St George Bank Limited now Westpac Banking Corporation Comm. Date Term Current Rental Sep years $138,991 Sep years $9,981,333 Coles Group Ltd May years $15,787,954 IGA Distribution (WA) Pty Ltd Dec years $11,729,553 Toll Holdings Limited (Toll Fleet) Nov years $1,161,557 Toll Holdings Limited (Toll Auto Logistics) Nov years $1,212,628 Coles DC, 485 Dohertys Road, Truganina, VIC Coles Group Ltd Jun years $5,370, Market and Sales Commentary Market and sales commentary, along with the most recent sales and leasing evidence is summarised in our valuation reports dated 30 June 2016 and 5 July (Coles DC, VIC) held by Charter Hall WALE Limited. 6 Valuation Methodology Each asset has been assessed utilising both the capitalisation of income and discounted cash flow valuation approaches. Each valuation approach is briefly summarised as follows: Capitalisation Approach The capitalisation of income approach involves the assessment of the current annual market rental value of the property. Our assessment of current annual market rental value has been based on an analysis of comparable rental evidence. The current market rental has then been capitalised at a rate derived from establishing a relationship between rental returns and the sale prices of comparable investment properties. Where the passing rental is below (above) the market rental value, a deduction (or an addition) is made for the rental shortfall (surplus) until the next market rent review opportunity. Discounted Cash Flow (DCF) Approach A discounted cash flow analysis has been prepared taking into account the ability of the property to generate income over a 10-year period based on certain assumptions. Provision is made for leasing up periods upon the expiry of the various leases throughout the 10-year time horizon. Each year s net operating income during the period is discounted to arrive at the present value of expected future cash flows. The property's anticipated sale value at the end of the period (i.e. its terminal or reversionary value) is also discounted to its present value and added to the discounted income stream to arrive at the total present Market Value of the property. In line with market convention, the DCF assumes a holding period of 10 years. The adopted terminal value assumes market conditions commensurate to those being experienced as at the date of valuation, whilst acknowledging that the property will be 10 years older, but well maintained. Page 4

124 122 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) 7 Pecuniary Interest Savills Valuations Pty Ltd has received fees of $61,250 (exclusive of GST) in connection with the preparation of our Valuations and this summary. This fee is not in any way linked to nor influenced the opinion of value noted. We hereby certify that the Valuers and valuation firm do not have any direct, indirect or financial interest in the property or clients described herein that would conflict with the proper Valuation of the property. The Valuers have at least five years of continuous experience in the valuation of property of a similar type to the subject and is authorised by law to practise as valuers in their respective states. 8 Summary of Asset Valuations Property St Georges House, Kogarah, NSW Coles DC, Perth Airport, WA Metcash DC, Canning Vale, WA Toll Fleet & Toll Auto Logistics, Altona, VIC Coles DC, Truganina, VIC Net Passing Income Net Market Income Adopted Capitalisation Rate Adopted Discount Rate Adopted Value Building Passing Rate on Yield GLA ($m²) $11,211,777 $11,211, % 7.50% $187,000,000 $5, % 7.63% $15,669,271 $15,669, % 8.00% $240,000,000 $2, % 8.04% $12,141,598 $11,729, % 8.25% $164,500,000 $1, % 8.24% $2,374,185 $1,751, % 8.00% $33,100,000 $5, % 7.90% $5,528,855 $5,370, % 7.25% $102,500,000 $1, % 5.42% IRR Page 5

125 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) 9 Liability Disclaimer Savills Valuations Pty Ltd has prepared this letter and the full valuation based upon information made available to us at the date of valuation. We believe that this information is accurate and complete; however, we have not independently verified all such information. Savills Valuations Pty Ltd is not providing advice about a financial product, nor the suitability of the investment set out in the Offer Document. Such an opinion can only be provided by a person who holds an Australian Financial Services Licence. Savills does not, nor does the Valuer, hold an Australian Financial Services Licence and is not operating under such a licence in providing its opinion as to the value of the property detailed in this valuation summary letter. Savills Valuations Pty Ltd has prepared this summary for inclusion in the Offer Document and has only been involved in the preparation of this summary and the valuation referred to therein. Savills Valuations Pty Ltd consents to this summary being included in the Offer Document. Savills Valuations Pty Ltd specifically disclaims liability to any person in the event of any omission from, or false or misleading statements included in, the Offer Document, other than in respect of the valuation and this summary. This letter has been countersigned to verify the letter is issued by this company. Any reliance upon this letter should therefore be based upon the actual possession or sighting of an original document duly signed and countersigned in the before-mentioned manner. This valuation is current at the date of valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period of time (including as a result of general market movements or factors specific to the particular property). Liability for losses arising from such subsequent changes in value are excluded as is liability where the valuation is relied upon after the date of the valuation. Savills Valuations Pty Ltd liability is limited by a scheme approved under Professional Standards Legislation. Yours sincerely Ross Smillie Director Valuation & Advisory Page 6 Savills Valuations Pty Ltd ABN Cover of Excellence and Cover of Excellence and Star Device are registered Trade Marks of the NSW Professional Standards Council.

126 124 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) Jones Lang LaSalle Advisory Services Pty Limited ABN GPO Box 3140 Melbourne VIC 3001 Level Collins Street Melbourne VIC 3000 tel fax June 2016 Private & Confidential The Directors Charter Hall WALE Limited as the Responsible Entity of each of the trusts Comprising Long WALE REIT Level 20, 1 Martin Place SYDNEY NSW 2000 PROPERTY VALUATIONS Properties forming part of the Long WALE REIT 1. Instructions In accordance with instructions issued in May 2016, Jones Lang LaSalle Advisory Services Pty Limited ( JLL ) has undertaken a valuation of the Properties as at 30 June We provide this summary letter for inclusion in a Product Disclosure Statement (Offer Document). For further information, we refer the reader to our full valuation reports held by Charter Hall Direct Property Management Limited, Charter Hall Funds Management Limited and Charter Hall WALE Limited in connection with Charter Hall Direct Industrial Fund and Franklin Street Property Trust which form part of the Long WALE REIT ( LWR ) ( together Charter Hall ) 2. Properties JLL has undertaken valuations of the following ( Properties ) in accordance with our instructions. Address Old Geelong Road, Hoppers Crossing VIC Franklin Street, Adelaide S.A Howards Road, Beverley S.A. State Liability limited by a scheme approved under Professional Standards Legislation.

127 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) 3. Reliance on this Letter This letter summarises our full valuation reports. This letter alone does not contain all of the data and supporting information which is included in our reports. For further information, we recommend the reader review the contents of the complete, self-contained reports held by Charter Hall. 4. Basis of Valuation The purpose of the valuations was to assess the market value of the individual properties as that term is defined by the International Valuation Standards Committee (IVSC) and endorsed by the Australian Property Institute (API): Market Value is the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction after proper marketing where the parties had each acted knowledgeably, prudently and without compulsion. We confirm our valuations have had regard to the requirements of the Australian Accounting Standards Board under AIFRS standards and in particular; AASB 140 Investment Property, which adopts the definition of fair value being: Fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm s length transaction. AASB 13 Fair Value Measurement, which adopts the following definition of fair value specific to non-financial assets of: a fair value measurement of a non-financial asset takes into account a market participant s ability to generate economic benefits by using the asset in its highest and best uses or by selling it to another market participant that would use the asset in its highest and best use Included in our valuations are lessor-owned building fixtures, fittings, plant and equipment. Movable equipment, furniture, furnishings and tenant owned fit-out and improvements are excluded. Our valuations are current as at the date of inspection / valuation only. The values as assessed may change significantly and unexpectedly over a relatively short period of time (including as a result of general market movements or factors specific to the Property). We do not accept liability for losses arising from such subsequent changes in values. Without limiting the generality of that statement, we do not assume any responsibility or accept any liability in circumstances where the valuations are relied upon more than 90 days from the date of valuation, or such earlier date if you become aware of any factors that have any effect on the valuations. However, it should be recognised that the Properties values are not assured for that 90 day period; our valuations always remain a valuation at the date of valuation only. Property Valuations Properties forming part of the Long WALE REIT Page 1

128 126 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) 5. Brief Property Description We provide a brief description of the properties as follows; Old Geelong Road, Hoppers Crossing, VIC Franklin Street, Adelaide, S.A. The property is situated on the north-western corner of the Princes Highway /Forsyth Road interchange in the suburb of Hoppers Crossing, approximately 21 radial kilometres south-west of the Melbourne Central Business District. Improvements comprise a warehouse and distribution facility of 52,364 square metres originally constructed circa 1990, containing 2,322 square metres of offices and amenities at various locations throughout the complex and 49,586 square metres of warehouse accommodation which has a minimum clearance of 9.5 metres. Loading provisions include on grade access, finger and recessed docks, with generous canopies over. Expansion land of approximately 27,000 square metres is situated to the southern boundary of the Property. Ancillary site improvements include a 6,774 sqm container rated hardstand area fire pump house, gatehouse, perimeter fencing with security gates, mature landscaped gardens and segregated staff and visitor parking for approximately 325 vehicles. The Property is currently leased to Shellbent Pty Ltd / Woolworths Limited ( Masters ) with a remaining term of 4.50 years. Refer to our report for comments in respect of Masters. The property provides a high rise CBD office tower, constructed in 2012, which comprises basement, ground floor, mezzanine and 17 upper levels of office space. Carparking for 114 vehicles is provided within the basement and on Levels 1 and 2. The property is located within the core office precinct of the Adelaide CBD. The Property forms part of the City Central precinct, a redevelopment of land bounded by the streets of King William, Franklin, Bentham and Waymouth, including a refurbishment of the existing GPO building (yet to be undertaken). The City Central precinct has produced three office buildings, known as Tower 1 (ANZ House), Tower 2 (Ernst and Young Building) and Tower 8 (the latter being the Subject). The building has been certified with a 5 Star Green Star Office As Built v3 rating (as at 6 February 2014) with the base building having a 5 Star NABERS Energy rating. The building is fully leased to four tenants including the Australian Taxation Office (ATO), State Government, Australia Post and a cafe (Public Caffe) and has a weighted average lease expiry (by income) of 10.8 years as at the date of valuation. Property Valuations Properties forming part of the Long WALE REIT Page 2

129 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) Howards Road, Beverley, S.A. The Subject Property comprises a modern, purpose built office warehouse development configured to provide a distribution centre of some 25,562 square metres, equating to a total site coverage of 65%. The Property more particularly provides modern office accommodation over two separate areas, high clearance warehousing plus three, high clearance and sprinklered canopies. The Subject Property is located some seven kilometres north-west of the Adelaide CBD within the well-known, inner industrial precinct of Beverley. The Property is more particularly located at the southernmost point of Howards Road some 700 metres south of its intersection with Port Road. At the date of valuation the Property was leased to Electrolux Home Products for a year term commencing December Providing a passing income of $2,484,422 per annum, the lessee is responsible for the payment of all outgoings including land tax with annual reviews to 3.50% per annum and to market at lease renewal (minimum 3.50% increase). 6. Market Commentary Owing to the differing market segments and geographic locations of the Properties, we refer to the detailed market commentary contained within individual valuation reports. The reader of this letter should refer to the individual valuation reports held by Charter Hall for this information. 7. Rental and Sales Evidence Summary The inclusion of all the sales and rental evidence considered for each individual property valued is not practical in this Summary Letter. Analysis and application of market derived evidence considered for the Properties is as contained within the individual valuation reports. The reader of this letter should refer to the individual valuation reports held by Charter Hall for this information. 8. Critical Assumptions Our valuations are subject to Critical Assumptions, Conditions and Limitations as contained within and throughout the respective reports. The reader of this letter should refer to the individual valuation reports held by Charter Hall for this information. 9. Valuation Rationale In assessing the market value of the properties, we conducted various investigations including analysing available market evidence, and we applied that analysis to the capitalisation of income and discounted cash flow approaches. In relation to the latter approach, we stress that the estimating of future rentals and values is a very problematic exercise, which at best should be regarded as an indicative assessment of possibilities rather than absolute certainties. The process of making forward projections of key elements includes assumptions regarding a considerable number of variables which are acutely sensitive to changing conditions, variation in any of which may significantly affect value. Property Valuations Properties forming part of the Long WALE REIT Page 3

130 128 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) 10. Valuation Summary We provide a summary of each Property s valuation parameters as follows: Address Old Geelong Rd, Hoppers Crossing Franklin Street, Adelaide Howards Road, Beverley Valuation (30 June 2016) $45,500,000 $263,500,000 $33,300,000 Lettable Area (GLA / NLA) 52,364 36,802 25,562 Capitalisation Rate (Market) 8.00% 6.00% 7.50% Target Internal Rate of Return (IRR) 8.00% 7.25% 8.75% Terminal Capitalisation Rate 8.00% 6.50% 8.00% Initial Yield 7.81% 6.41% 7.46% Resultant IRR 8.00% 7.21% 8.92% Weighted Average Lease Term (Income) 4.5 Years 10.8 Years 8.42 Years Value $/sqm (GLA / NLA) $869 $7,160 $1, Qualification JLL has been engaged by Charter Hall to provide valuations of the properties. We consent to the inclusion of this summary letter in the Offer Document on the following conditions: This letter is a summary of the valuations only and has not been prepared for the purpose of assessing the Properties as an investment opportunity; JLL consents to the inclusion of this summary letter in the Offer Document, however has not been involved in the preparation of the Offer Document nor have we had regard to any material contained in the Offer Document. This letter does not take into account any matters concerning the investment opportunity contained in the Offer Document; JLL has not operated under an Australian financial services licence in providing this letter and makes no representation or recommendation to a prospective investor in relation to the valuation of the properties or the investment opportunity contained in the Offer Document; The formal valuations and this letter are strictly limited to the matters contained within them, and are not to be read as extending, by implication or otherwise, to any other matter in the Offer Document. Without limitation to the above, no liability is accepted for any loss, harm, cost or damage (including special, consequential or economic harm or loss) suffered as a consequence of fluctuations in the real estate market subsequent to the date of valuation; Neither this letter nor the full valuation reports may be reproduced in whole or in part without the prior written approval of JLL; JLL has prepared this letter solely in reliance upon the financial and other information (including market information and third party information) provided by the instructing party and has assumed that information is accurate, reliable and complete. We confirm that we have not tested the information in that respect; This summary letter is to be read in conjunction with our formal valuation reports of 30 June 2016 and is subject to the assumptions, limitations and disclaimers contained therein. We refer the reader to Charter Hall to obtain a copy of the full reports; JLL has received a fee of $26,250 exc. GST from Charter Hall for the preparation of the valuation reports and this summary letter; and Property Valuations Properties forming part of the Long WALE REIT Page 4

131 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) JLL are participants in the Australian Property Institute (API) limited liability scheme. This scheme has been approved under Professional Standards legislation and is compulsory for all API members. 12. Valuer s Experience and Interest The valuer who prepared the valuation report for the respective properties, and their valuation experience is summarised below. Address State Valuer Years of Experience Old Geelong Road, Hoppers Crossing VIC Peter Fay Franklin Street, Adelaide S.A. Brendan Harrison Howards Road, Beverley S.A. Paul McKay 12 Each Valuer is authorised under the requirements of the Australian Property Institute to practise as a valuer in the State the valuation was undertaken. Neither of the above named Valuers has a pecuniary interest that could reasonably be regarded as being capable of affecting that person s ability to give an unbiased opinion of the Properties value or that could conflict with a proper valuation of the Properties. 13. Liability Disclaimer This letter has been prepared subject to the conditions referred to in Section 11 of the letter. Neither JLL nor any of its directors makes any representation in relation to the Offer Document nor accepts responsibility for any information or representation made in the Offer Document, other than this summary letter. JLL was involved only in the preparation of this summary letter and the valuation reports referred to herein, and specifically disclaims any liability to any person in the event of any omission from, or false or misleading statement included in, the Offer Document, other than in respect of the valuation report and this summary letter. Yours faithfully Jones Lang LaSalle Advisory Services Pty Limited Peter Fay AAPI National Director Institutional & Middle Markets - Victoria Valuations & Advisory Liability limited by a scheme approved under Professional Standards Legislation. Property Valuations Properties forming part of the Long WALE REIT Page 5

132 130 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) 30 June 2016 The Directors Charter Hall WALE Limited as the Responsible Entity of each of the Trusts comprising the Long WALE REIT Level 20, 1 Martin Place SYDNEY NSW 2000 Dear Directors, RE: SUMMARY OF VALUATIONS FOR PRODUCT DISCLOSURE STATEMENT - Coates Hire, Mudgee Street, Kingston, City of Logan, Queensland - Grace Worldwide, 420 Sherbrooke Road, Willawong, Brisbane, Queensland Richland Street, Kingsgrove, New South Wales We refer to the instructions requesting Knight Frank Valuations to prepare market valuations of the freehold interest of the abovementioned properties (collectively referred to as the Properties ) by Charter Hall Direct Property Management Limited, Charter Hall Funds Management Limited and Charter Hall WALE Limited (the Instructing Parties ) Charter Hall Direct Industrial Fund which forms part of the Long WALE REIT ( LWR ) to advise the Market Value of the Properties for inclusion in a Product Disclosure Statement ( Offer Document ) for an Initial Public Offering ( IPO ) of units in the LWR. This summary letter is subject to the comments within our respective full valuation reports dated 30 June 2016 which contain details of the considerations and assumptions/conditions/qualifications impacting on value and referenced as: 1. Coates, Mudgee Street, Kingston, Queensland: Reference Grace Worldwide, 420 Sherbrooke Road, Willawong, Queensland: Reference Richland Street, Kingsgrove, New South Wales: Reference S9177 The respective valuation reports which can be inspected at the office of Charter Hall during normal business hours. This correspondence is subject to and should be read in conjunction with all qualifications, assumptions, conditions and disclaimers contained within the valuation reports. Market Value The respective valuations of each property have been completed under the Market Value definition as follows. Market Value as defined by the International Valuation Standards Committee (IVSC) and endorsed by the Australian Property Institute (API) and embodied within the current Corporations Law, is as follows: The estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. Level 22 Angel Place, 123 Pitt Street, Sydney NSW 2000 T+61 (0) F+61 (0) GPO Box 187, Sydney NSW Valuations Services (NSW) Pty Ltd ABN: , trading under licence as Knight Frank Valuations, is independently owned and operated, is not a member of and does not act as agent for the Knight Frank Group. TM Trade mark of the Knight Frank Group used under licence.

133 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) Charter Hall WALE Limited as the Responsible Entity of each of the Trusts Comprising the Long WALE REIT 30 June 2016 Brief Description of the Properties Coates, Mudgee Street, Kingston, Queensland Property Type Constructed Framing Internal Clearances Access Doors Awnings Sprinkler System GLA Modern, dedicated open storage facility - Office, Warehouse Main and Secondary Buildings, Workshop. On a staged basis between 2010 and 2013 for the specific occupational requirements of the Lessee. Concrete tilt panel and metal clad elevations. Between 8.0 and 9.0 metres (laser measured). Various Yes No 1,835m² (excluding awnings and hardstand areas) The Property comprises a modern, dedicated open storage facility with a small component of structural improvements providing a Gross Lettable Area ( GLA ) of approximately 1,835m² developed on a 96,840m² lot within Kingston, approximately 24 radial kilometres south-east of the Brisbane GPO. The Net Developable Area ( NDA ) of the total site area is approximately 58,800m² (excluding the low portion of the site and the detention basin located in the formed land. The improvements comprises office areas totalling 605m², warehouse areas totalling 1,230m² and awning areas totalling 1,906m². Ancillary improvements include secure perimeter fencing, gravel sealed hardstand areas of approximately 32,350m², concrete sealed hardstand areas of approximately 18,950m², driveways, B-Double drive around access, off street car parking provisions and basic landscaping. Page 2

134 132 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) Charter Hall WALE Limited as the Responsible Entity of each of the Trusts Comprising the Long WALE REIT 30 June 2016 Grace Worldwide, 420 Sherbrooke Road, Willawong, Queensland Property Type Constructed Framing Internal Clearances Access Doors Awnings Sprinkler System GLA Modern, freestanding industrial warehouse - Office, Warehouse Mezzanine, Removals, Records During 2011 for the specific occupational requirements of the Lessee. Concrete tilt panel and metal clad elevations. Between 8.0 and 9.0 metres (laser measured). 10 roller doors providing clearway of 6.5m wide by 5.5m high. Yes Yes 22,108m² (excluding awnings and hardstand areas) The Property comprises a modern freestanding industrial warehouse facility providing a Gross Lettable Area ( GLA ) of approximately 22,108m² developed on a 38,860m² lot within Willawong, approximately 15 radial kilometres south of the Brisbane GPO. The improvements comprise a building envelope providing a total GLA of 22,108m² plus awnings. The improvements comprise a 5,053m² "removalist's" warehouse which includes a 311m² mezzanine storage level, a separated 15,111m² "records" warehouse, 1,633m² of single level office/amenities plus 850m² of awnings. Ancillary improvements also comprise secure perimeter fencing, concrete hardstand and driveways providing B-Double drive around access off street car parking provisions and basic landscaping. The Property was completed in 2011 for the specific occupational requirements of the Lessee. Page 3

135 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) Charter Hall WALE Limited as the Responsible Entity of each of the Trusts Comprising the Long WALE REIT 30 June Richland Street, Kingsgrove, New South Wales Property Type Industrial premises with two levels of office, post office, mail sorting and warehouse areas. Constructed Circa Framing Steel portal frame with one row of internal supporting columns. Internal Clearances 8 10 metres Access Doors A total of 5 at grade roller shutter doors service the warehouse and bike store. Awnings A recessed awning provides covered loading to 2 at grade roller shutter doors. Sprinkler System No we are advised that the central party wall within the warehouse negates the need for a sprinkler system (refer Critical Conditions). Parking 166 on-grade spaces (1:41m² of GLA). Office Elements Over ground and first floors at the south-eastern corner of the building. GLA Bike Store 628m² (9.3% of GLA) Office: 1,200m² (17.8% of GLA) Warehouse: 4,901m² (72.9% of GLA) Total: 6,729m² Erected upon the land, circa 2011, is an industrial office / warehouse building comprising ground and first floor office accommodation with rear high clearance warehousing. The property was purpose built for Australia Post and has been configured to comprise ground floor post bike storage, post office, mail sorting area and rear warehousing together with first floor offices. Internal clearances in the warehouse range between 8 10 metres and the warehouse is not sprinklered. The site cover is 44% with approximately 166 car parking spaces provided on grade. Page 4

136 134 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) Charter Hall WALE Limited as the Responsible Entity of each of the Trusts Comprising the Long WALE REIT 30 June 2016 Tenancy Overview At the date of valuation all properties were fully leased. A detailed tenancy overview of each property is contained within the respective valuation reports dated 30 June 2016 held by Charter Hall WALE Limited as the Responsible Entity of each of the Trusts Comprising the Long WALE REIT. Income Profile We have assessed the net passing income for the properties as at the date of valuation to be as follows. Property Address Net passing Income Mudgee Street, Kingston, City of Logan, QLD $1,826, Sherbrook Road, Willawong, Brisbane, QLD $2,934, Richland Street, Kingsgrove NSW $1,483,769 The passing income is based on our review and analysis of the tenancy information provided. We note that should any of the information provided be found erroneous or has varied, we reserve the right to review and if necessary, amend our valuation. Market Commentary Market Commentary along with the most relevant recent sales and leasing evidence is summarised in our respective valuation reports dated 30 June 2016 held by Charter Hall WALE Limited as the Responsible Entity of each of the Trusts Comprising the Long WALE REIT. Valuation Methodology The valuation has been determined via reconciliation between the capitalisation and discounted cash flow (10 year) methods of valuation, with support from direct comparison methodology. Under the capitalisation approach, the assessed net face market income as at the date of valuation is capitalised at an appropriate market yield to establish the property s market value fully leased. Appropriate capital adjustments are then made where necessary to reflect the specific cash flow profile and the general characteristics of the property. The discounted cashflow approach incorporates the estimation of future annual cash flows over a 10 year investment horizon from the valuation date by reference to expected rental growth rates, ongoing capital expenditure, terminal sale value and acquisition and disposal costs. The present value of future cash flows is then determined by the application of an appropriate discount rate (target IRR) to derive a net present value for the property as at the valuation date. Page 5

137 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) Charter Hall WALE Limited as the Responsible Entity of each of the Trusts Comprising the Long WALE REIT 30 June 2016 Valuation Summary A summary of the individual Market Values and investment parameters adopted for each property as at 30 June 2016 are as follows: Property Address Mudgee Street Kingston, City of Logan QLD 420 Sherbrook Road Willawong, Brisbane, QLD Richland Street Kingsgrove NSW Aggregate Market Value Net Market Core Market Rate/m² IRR Income Yield GLA WALE Market Value $1,826, % 8.23% $15,259/m² yrs $28,000,000 (GST Exclusive) $2,542, % 7.29% $1,746/m² 7.08 yrs $38,600,000 (GST Exclusive) $1,103, % 7.78% $3,076/m² yrs $20,700,000 (GST Exclusive) $87,300,000 (GST Exclusive) The content prepared by Knight Frank Valuations for the Offer Documents is limited to this summary letter. Knight Frank Valuations has not been involved in the preparation of any other part of the Offer Documents and has not approved or expressed any opinion contained within the Offer Documents other than this letter. Qualifications & Disclaimers Knight Frank Valuations have prepared this summary which appears in the Offer Document for Charter Hall WALE Limited as Responsible Entity for each of the trusts comprising LWR. Knight Frank Valuations were involved only in the preparation of this summary and the valuations referred to therein, and specifically disclaim liability to any party in the event of any omission from, or false or misleading statement included in the Offer Document or other document other than in respect of our valuations and this letter. Knight Frank Valuations has consented to this summary being included in the Offer Document, but Knight Frank Valuations is not providing advice about a financial product, nor the suitability of the investment set out in the Offer Document. Such an opinion can only be provided by a person that holds an Australian Financial Services Licence. Knight Frank Valuations does not hold such a licence and is not operating under any such licence in providing its opinions of value as detailed in this summary and our valuation reports. Any forecasts, including but not limited to, financial cash flow projections or terminal value projections noted within the valuations are a valuation tool only, undertaken for the purpose of assisting to determine the market value. No party may rely upon any financial projections or forecasts within this report on the understanding that they are undertaken for the specific purpose of determining market value only and therefore should not be represented in any way as providing an indication of likely future profit or realisable cash flow. The valuations are current at the date of valuation only. The values assessed herein may change significantly and unexpectedly over a relatively short period (including as a result of general market movements or factors specific to the particular property). We do not accept liability for losses arising from such subsequent changes in value and we can give no guarantee that the properties or the valuations has not altered since the date of valuation. Page 6

138 136 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) Charter Hall WALE Limited as the Responsible Entity of each of the Trusts Comprising the Long WALE REIT 30 June 2016 Without limiting the generality of the above comment, we do not assume any responsibility or accept any liability where the valuations are relied upon after the expiration of three (3) months from the date of valuation, or such earlier date if you become aware of any factors that have any effect on the valuations. Knight Frank Valuations has prepared this letter based upon information provided. We have no reason to believe that the information is not fair and reasonable or that material facts have been withheld and for the purpose of the valuations we have assumed that the information is correct. These valuations do not purport to be a site or structural survey of the improvements, nor was any such survey undertaken. Overall, we have assumed that detailed reports with respect to the structure and service installation of the improvements both would not reveal any defects or inadequacies requiring significant capital expenditure. Knight Frank Valuations has received fees of $16,000 (inclusive of GST) in connection with the preparation of our valuations and this summary. The fee is not in any way linked to nor has it influenced the opinion of value noted and Knight Frank Valuations does not have any pecuniary interest in LWR and has provided this letter solely in its capacity as independent professional advisor. Yours sincerely KNIGHT FRANK VALUATIONS TIM UHR JAMES COX MATTHEW RUSSELL Director Associate Director National Director Liability limited by a scheme approved under Professional Standards Legislation. Page 7

139 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) GL:cm / June 2016 PRIVATE AND CONFIDENTIAL The Directors Charter Hall WALE Limited As the Responsible Entity of the Long WALE REIT Level 20 1 Martin Place Sydney NSW 2000 RE: WOOLWORTHS DISTRIBUTION CENTRE, 225 GLASSCOCKS ROAD, DANDENONG SOUTH INSTRUCTIONS We refer to the instructions requesting m3property to prepare a market valuation of the freehold interest of the abovementioned Woolworths Distribution Centre, 225 Glasscocks Road, Dandenong South ( Property ) by Charter Hall Funds Management Limited and Charter Hall WALE Limited (the Instructing Parties ) which forms part of the Long WALE REIT ( LWR ) to advise the Market Value of the Property for inclusion in a Product Disclosure Statement ( Offer Document ) for an Initial Public Offering ( IPO ) of units in the LWR. RELIANCE ON THIS LETTER This summary letter is subject to the comments within our full valuation report dated 17 December 2015 which contains details of the considerations and assumptions/conditions/qualifications impacting on value. The valuation report can be inspected at the office of Charter Hall during normal business hours. This correspondence is subject to and should be read in conjunction with all qualifications, assumptions, conditions and disclaimers contained within the valuation report. Liability limited by a scheme approved under Professional Standards Legislation m3property (Vic) Pty. Ltd. ABN Level 29/600 Bourke Street Melbourne Vic 3000 DX 548 Melbourne Telephone Facsimile info@m3property.com.au

140 138 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) BASIS OF VALUATION The purpose of the valuation was to assess the Market Value of the Property. The term Market Value is defined by the International Valuation Standards Committee (IVSC) and endorsed by the Australian Property Institute (API): Market Value is the estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction, after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion. We confirm our valuation has had regard to the requirements of the Australian Accounting Standards Board under AIFRS standards and in particular; AASB 140 Investment Property, which adopts the definition of fair value being: Fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm s length transaction. AASB 13 Fair Value Measurement, which adopts the following definition of fair value specific to nonfinancial assets of: A fair value measurement of a non-financial asset takes into account a market participant s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. Included in the amount of this valuation are items of building fixtures, fittings, together with all building plant and equipment. Our valuation is current as at the date of valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period of time (including as a result of general market movements and factors specific to the particular property). We do not accept responsibility of liability for losses arising from such subsequent changes in value. Without limiting the generality of the above comment, we do not assume responsibility or accept liability where the valuation is relied upon after the expiration of 90 days from the date of the valuation or such earlier date if you become aware of any factors that have an effect on the valuation.

141 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) BRIEF PROPERTY DESCRIPTION The warehouse will be located within Salta s Portlink Estate adjacent to a proposed inland port which will provide direct rail access to the Port of Melbourne. The estate is located in Dandenong South, approximately 35 kilometres south east of the Melbourne CBD. Upon completion the Property will comprise a large distribution centre, purpose built for Woolworths Limited. The warehouse will be partitioned into various storage components and will feature three varying clearance heights from approximately 6 metres to 45 metres. The warehouse will have extensive loading facilities, hardstand and truck parking. The total site area is hectares. Upon completion the Property will be leased to Woolworths Limited for 20 years at a commencing rent with fixed annual increases of 2.8% (excluding GST). The commencing rent payable by Woolworths at the Commencement Date will be equal to the sum of the aggregate of the amounts paid in respect of the acquisition and development of the Property which meet the agreed criteria under the Development Deed multiplied by 5.5% per annum. As a result, the rent and value on completion may change as a result of this. This valuation assumes a commencing rent of $11,867,503 per annum. VALUATION RATIONALE In assessing the Market Value of the Property, we conducted various investigations including analysis available market evidence, and we applied that analysis to the capitalisation of income and discounted cash flow approaches. It is noted that in the case of advice provided in the valuation report which is of a projected nature, we must emphasise that specific assumptions have been made which appear reasonable based upon current market sentiment and forecasts. It follows that any one of the associated assumptions may change over time and no responsibility can be accepted in this event. Accordingly, the indicated figures should not be viewed as absolute certainty. MARKET COMMENTARY We refer to the detailed market commentary contained within the valuation report. The reader of this summary letter should refer to the valuation report held by Charter Hall for this information.

142 140 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) RENTAL AND SALES EVIDENCE SUMMARY Analysis and application of market derived evidence considered for the Property is as contained within the valuation report. The reader of this summary letter should refer to the valuation report held by Charter Hall for this information. CRITICAL ASSUMPTIONS Our valuation is subject to the Critical Assumptions, Conditions and Limitations as contained within and throughout the valuation report. The reader of this summary letter should refer to the valuation report held by Charter Hall for this information. VALUATION SUMMARY We provide a summary of the valuation parameters as follows: Valuation Summary Value $215,775,000 Capitalisation Rate 5.50% Passing Yield 5.44% Discount Rate 7.00% IRR 7.15% Rate /m² GLA $3,064

143 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) QUALIFICATION m3property has been engaged by Charter Hall to provide a valuation of the Property. We consent the inclusion of this summary letter in the Offer Document on the following conditions: This letter is a summary of the valuation only and has not been prepared for the purpose of assessing the property as an investment opportunity. m3property consents to the inclusion of this summary letter in the Offer Document, however has not been involved in the preparation of the Offer Document nor have we had regard to any material contained in the Offer Document. This letter does not take into account any matters concerning the investment opportunity contained in the Offer Document. m3property has not operated under an Australian financial services licence in providing this letter and makes no representation or recommendation to a prospective investor in relation to the valuation of the Property or the investment opportunity contained in the Offer Document. The formal valuation and this letter are strictly limited to the matters contained within them, and are not to be read as extending, by implication or otherwise, to any other matter in the Offer Document. Without limitation to the above, no liability is accepted for any loss, harm, cost or damage (including special, consequential or economic harm or loss) suffered as a consequence of fluctuations in the real estate market subsequent to the date of valuation. Neither this letter nor the full valuation report may be reproduced in whole or in part without the prior written approval of m3property. m3property has prepared this letter solely in reliance upon the financial and other information (including market information and third party information) provided by the instructing party and has assumed that information is accurate, reliable and complete. We confirm that we have not tested the information in that respect. This summary letter is to be read in conjunction with our formal valuation report dated 17 December 2015 and is subject to the assumptions, limitations and disclaimers contained therein. We refer the read to Charter Hall to obtain a copy of the full report. m3property has received a fee of $27,700 exclusive of GST from Charter Hall for the preparation of the valuation report and this summary letter. m3property are participants in the Australian Property Institute (API) limited liability scheme. This scheme has been approved under Professional Standards legislation and is compulsory for all API members.

144 142 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) VALUER S EXPERIENCE AND INTEREST The valuer who prepared the valuation report for the Property and their valuation experience is summarised below: Property State Valuer Years of Experience 225 Glasscocks Road, Dandenong South Victoria Gary Longden 35 The valuer is authorised under the requirements of the Australian Property Institute to practise as a valuer in the State the valuation was undertaken. Neither the valuer nor m3property (Vic) Pty Ltd has any pecuniary interest giving rise to a conflict of interest in valuing the Property. LIABILITY DISCLAIMER This letter has been prepared subject to the conditions referred to in this letter. Neither m3property nor any of its directors makes any representation in relation to the Offer Document nor accepts any responsibility for any information or representation made in the Offer Document, other than this summary letter. m3property was involved only in the preparation of this summary letter and the valuation report referred to herein, and specifically disclaims any liability to any person in the event of any omission from, or false or misleading statement included in the Offer Document, other than in respect of the valuation report and this summary letter. Yours sincerely m3property Gary Longden Director gary.longden@m3property.com.au

145 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) V A L U A T I O N & A D V I S O R Y S E R V I C E S CBRE Valuations Pty Limited ABN June 2016 The Directors Charter Hall WALE Limited as the Responsible Entity for each of the trusts comprising the Long WALE REIT Level 20, 1 Martin Place Sydney NSW 2000 Level 3, Waterfront Place 1 Eagle Street Brisbane QLD 4000 T F Copy to: Robert Seymour and Lucas Forbes Dear Directors, RE: Summary of Valuations for the Offer Document (Properties) Instructions CBRE Valuations Pty Limited ( CBRE ) accepted instructions dated 13 May 2016 to prepare a market Valuation for the interest in 54 hotels owned by Charter Hall Wholesale Management Limited (collectively referred to as the Properties ), listed overleaf, on behalf of Charter Hall Wholesale Management Limited as trustee for LWIP Trust, Charter Hall Property Trust, Charter Hall Funds Management Limited and Charter Hall WALE Limited (collectively Charter Hall ). Valuation is to be relied upon for use in the Product Disclosure Statement ( Offer Document ) and is specifically addressed for use and reliance upon by the parties named above. The Valuation is prepared in accordance with the Australian Property Institute Australia and New Zealand Valuation and Property Standards January 2012, having regard to ANZVGN 8, Valuations for use in Offer Documents. The instructions specifically request us to provide our opinion of the market value of the property as at 30 June 2016 on the following basis: 1. Freehold interest subject to the existing lease agreements. CBRE has been instructed to provide a full Valuation Report in addition to this Summary Letter which is included in the Offer Document. In accordance with ANZVGN 8, our Valuation Report draws attention to the key issues and considerations impacting value and provides a detailed Property Risk Assessment and SWOT Analysis, plus the report details our Critical Assumptions, Assumptions, Disclaimers, Limitations and Qualifications and our Recommendations. As commercial investments of this nature are inherently complex and the market conditions have changed and/or have been uncertain in recent times, it is considered prudent to consider the entire contents of our Valuation Report. Therefore, we recommend that this Summary Letter is to be read and considered together with the Valuation Report. We accept no responsibility for reliance upon the Summary Letter. We refer the reader to Charter Hall to obtain a copy of our Valuation Report. Brief Description of the Properties A summary of the properties which comprise the valuation portfolio are shown overleaf. Liability limited by a scheme approved under Professional Standards Legislation

146 144 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) V A L U A T I O N & A D V I S O R Y S E R V I C E S P RO P ERT Y ADDRESS Q ueensland Allenstown Hotel 8/14 Upper Dawson Road, Rockhampton Buderim Tavern 81 Burnett Street, Buderim Capalaba Tavern 30 Old Cleveland Road, Capalaba Commercial Hotel Corner Ferry and Price Streets, Nerang Dog and Parrot Hotel 2 Scottsdale Drive, Robina Federal Hotel 111 James Street, Toowoomba Glenmore Tavern 500 Yaamba Street, Rockhampton Harvey Road Tavern 1 Harvey Road, Clinton Highfields Tavern Corner O'Brien and Highfields Road, Highfields Hinterland Hotel Motel 53 Station Street, Nerang Kawana Waters Hotel Nicklin Way, Kawana Waters Parkwood Tavern Corner Olsen and Wintergreen Avenues, Parkwood Redbank Plains Tavern 339 Redbank Plains Road, Redbank Plains Royal Beenleigh Hotel 85 George Street, Beenleigh Russell Tavern Corner Cunningham and Roche Streets, Dalby Villa Noosa Hotel Mary Street, Noosaville Waterfront Hotel 2/46 David Low Way, Diddillibah Victoria Albion Charles Hotel 2 Charles Street, Northcote Balaclava Hotel 123 Carlisle Street, St Kilda East Cherry Hill Tavern 189 Reynolds Road, Doncaster Coolaroo Hotel Corner Barry Road and Maffra Street, Coolaroo Croxton Park Hotel 607 High Street, Thornbury Excelsior Hotel 82 Mahoney's Road, Thomastown First & Last Hotel 1141 Sydney Road, Hadfield Glengala Hotel 214 Glengala Road, Sunshine Manhattan Hotel Corner Heatherdale and Canterbury Roads, Ringwood Monash Hotel 2077 Dandenong Road, Clayton Moreland Hotel Corner Sydney Road and Moreland Road, Brunswick Oakleigh Junction Hotel 1 Portman Street, Oakleigh Palace Hotel 893 Burke Road, Camberwell Preston Hotel 635 High Street, Preston St Albans Hotel 5 McKechnie Street, St Albans Waltzing Matilda Hotel Heatherton Road, Springvale T asmania Carlyle Hotel 232 Main Rd, Derwent Park Gateway Inn Hotel 16 Fenton St, Devonport Riverside Hotel Motel 407 West Tamar Hwy, Riverside New South Wales Boomerang Hotel Wagga Road, Lavington Greenhouse Tavern Corner Pacific Highway and Bray Street, Coffs Harbour Westower Tavern Kalinga Street, West Ballina Western Australia Belmont Tavern 174 Wright Street, Cloverdale Bull Creek Tavern 52 Benningfield Road, Bull Creek Dunsborough Hotel 536 Naturaliste Terrace, Dunsborough Greenwood Hotel 349 Warwick Road, Greenwood Herdsman Lake Tavern 33 Herdsman Parade, Wembley Highway Hotel Forrest Avenue (Corner Spencer Street), Bunbury Hyde Park Hotel 331 Bulwer Street, West Perth Lakers Tavern 119 Murdoch Road, Thornlie Peel Alehouse 8 Guava Way, Halls Head South Australia Federal Hotel 112 Commercial Street East, Mt Gambier Findon Hotel 261 Grange Road, Findon Norwood Hotel 97 The Parade, Norwood Royal Oak 123 O Connell Street, North Adelaide Slug N Lettuce British Pub 130 Martins Road, Parafield Gardens Victoria Hotel Main South Road, O'Halloran Hill Liability limited by a scheme approved under Professional Standards Legislation Page 2 of 10

147 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) V A L U A T I O N & A D V I S O R Y S E R V I C E S Market Value The respective valuations of each property have been completed in accordance with the International Valuation Standard, the definition of Market Value is: The estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing where the parties had each acted knowledgeably, prudently, and without compulsion. Market Movement The valuation referred to above represents the value of the property as at the date of valuation only. The value assessed may change significantly and unexpectedly over a relatively short period of time (including as a result of general market movements or factors specific to the particular property or particular property sector). CBRE is not liable for losses arising from any subsequent changes in value. Critical Assumptions and Reliance on Information Provided A summary of select Critical Assumptions noted in the full Valuation Report are noted as follows: Our valuation calculations include rental growth assumptions throughout a defined cash flow period. These assumptions have been based on prevailing economic and market conditions as at the date of valuation. Market conditions will change over time influenced by internal and external factors against which a review of the assumptions may be warranted. Therefore reliance upon these projections must be made with full acceptance of their limited reliability and with due consideration of the commercial risks related to such forecasts. The Discounted Cashflow method of valuation referred to in the Valuation Report has been undertaken for the purpose of assisting in the determination of the current market value of the interest in the property and we make no guarantees or warranty as to the accuracy of future rental income stream projections, as these can be impacted by a combination of unforseen circumstances. We have relied upon information provided by Charter Hall. Our valuation is based upon the most current information available at the time the valuation was prepared. CBRE accepts no responsibility for subsequent changes in information as to income, expenses or market conditions. Any subsequent change in lease terms may also have a corresponding change to the value. Report Content Our Valuation Report s, in addition to the content noted earlier, contains detailed information and descriptions pertaining to; Instructions, Use and Reliance, Site Details including Location, Legal, Environmental and Town Planning; and Building Improvements along with analysis of the asset s Occupational and Financial attributes. This is followed by a comprehensive Economic and Investment Market Overview and details of the sales evidence regarded, along with our Investment Considerations. Finally, the reports consider the value and marketability of the properties. We again refer the reader of this letter to our Valuation Report s for detail in respect of the above items. Liability limited by a scheme approved under Professional Standards Legislation Page 3 of 10

148 146 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) V A L U A T I O N & A D V I S O R Y S E R V I C E S Market Commentary A summary of the market commentary included in the Valuation Report s is as follows. Usually, the most commonly transacted hotel category is on a going concern basis, forming the freehold property and business components, with lessee s interest and freehold interest sales occurring more infrequently. The emergence of property trusts/funds and major retail chains as purchasers, over the past 10 to 15 years, led to increased activity in the separate freehold property and business components. Over the past four to five years there has been a significant volume of sales transactions of freehold only interests. A range of factors have influenced the yields achieved including lease terms, rental growth prospects over the longer term, triple net lease structure, ownership of the liquor and gaming licenses and gaming operating authorities, an increase in the availability of stock on the market, price points, underlying land value, capital expenditure requirements, future business ownership and redevelopment potential. Purchaser profiles for freehold investment hotels have primarily been of two types, the first seeking long term passive investments to blue chip tenants, with the second group comprising experienced publicans seeking assets with distressed tenants, either due to funding issues, above market rentals or trading difficulties, with a future view to amalgamating the business and property interests and owner operating, or alternatively property investors/developers with a view to future redevelopment. In addition, major hotel groups have also continued to acquire strategic assets as part of their overall portfolio management strategy. From our discussions with active hotel brokers, we understand that there remains continued demand for hotels. Whilst the majority of this demand is targeted in high population and growth areas such as State capitals and regions such as Southeast Queensland, other areas such as major regional centres with good growth prospects remain of interest. Potential purchasers are generally seeking good quality offerings, however, are also cognisant of the sustainability of earnings in certain markets. The most active markets for freehold investments are Victoria and Queensland. Victoria has always had a widely based freehold/leasehold ownership structure while Queensland held the most attraction for the retail supermarket chains of Coles and Woolworths and therefore saw the most of portfolio amalgamation. NSW has been dominated by the freehold going concern ownership structure through private individual and in more recent years private group ownership although the restructure of a number of these groups into a freehold/leasehold structure has been touted. The smaller states have a mix of ownership structures however their markets are less active. Large, good quality hotels and taverns operating on a profitable basis remain reasonably tightly held, with few offerings to the market. The major retail groups, ALH (Woolworths) and Coles have a dominant market share in many major metropolitan areas, and together with secondary hotel owning groups and larger, well capitalised traditional private hotel owners, the potential availability of these properties for acquisition is likely to remain low in the foreseeable future. As a result, the marketability of quality hotel investments is seen as quite strong. Indications are that there is a more subdued level of interest in regional assets. Regional hotels fall into two categories, those in areas dominated by rural activities have shown little attraction for investors while others have experienced unprecedented trading periods due to mining booms and infrastructure projects and have attracted strong investment interest. Liability limited by a scheme approved under Professional Standards Legislation Page 4 of 10

149 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) V A L U A T I O N & A D V I S O R Y S E R V I C E S The sustainability of trading conditions in these environments needs to be considered on a case by case basis. Large well performing hotels and taverns operating on a profitable basis should remain in demand provided the underlying economic fundamentals for a locality remain sustainable. The prevailing yield profile for the various types of hotel interests reflect the status of the market for each of the asset sub-classes i.e. Prime initial yields for Freehold Investment Hotels are in the order of 5.75% to 7%, Freehold Going Concern Hotel generally range from 10.0%+ and long term Leasehold yields to range upward from 14.0%+ as long as the base fundamentals are within industry parameters with regard to rent as a percentage of EBITDAR. The outlook for hotel yields is varied and depends on the quality and market position of each type. Freehold investments secured by corporate leases (ALH and Coles) will likely see yields remain firm and continue to sharpen as the yield spread to the cost of funding remains very attractive. Yields for other non-corporate secured leased freehold hotels should also remain firm for this reason depending on an array of external economic and market factors, including global economic conditions, consumer and business confidence, availability of credit and the individual characteristics of each property. Zagame Portfolio The Zagame Portfolio comprised three hotels (two in Victoria and one in Qld) sold in one line to Charter Hall, an existing hotel investor for a total price of $73,000,000 in March The properties were sold subject to new 20 year lease agreements to ALH, the sale concluded with new terms agreed to align with the existing Charter Hall portfolio, with lease reviews to CPI and the Dan Murphy s liquor stores reviewed to base rental plus previous turnover. The properties are summarised as follows: Seaford Hotel in Melbourne includes public and sports bars, a Dan Murphy s liquor store, bistro with seating capacity for 300 patrons, 90 gaming machines, and on-site accommodation in the form of 16 motel rooms. The property is situated on a 2.4 hectare site, and ranks as a top 20 gaming venue in Victoria. Royal Ferntree Gully Hotel is a refurbished venue on the outskirts of Melbourne comprising two bars, bistro with seating capacity for 200 patrons and 70 gaming machines, situated on a 4,530 square metre site. The property is a top 100 gaming venue in Victoria. The Kondari Hotel is located in the Hervey Bay region of Queensland. It comprises a sports bar, 35 gaming machines, bistro, drive through BWS and accommodation in the form of a 68 room resort. The Kondari Hotel is situated on a large 6.1 hectare site, however, additional development land is not leased to ALH. While the price allocation between the venues is not known, CBRE understand the yields for the individual venues are 6.2% for the Seaford Hotel, 6.3% for the Royal Ferntree Gully Hotel, and 6.6% for the Kondari Hotel (excluding development land). Liability limited by a scheme approved under Professional Standards Legislation Page 5 of 10

150 148 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) V A L U A T I O N & A D V I S O R Y S E R V I C E S Sales Evidence In arriving at our opinion of market value, we have considered a broad range of sales evidence including but not limited to commercial, industrial and retail investment sales. The following licensed premises sales evidence have been considered with regard to each property. Queensland Hotel Sale Price Sale Date Years Remaining Yield Blue Pacific Hotel, Bribie Island $8,100,000 Mar % Magnum s Hotel, Airlie Beach $17,500,000 Nov % Beenleigh Tavern, Eagleby $9,900,000 Oct % Albion Hotel, Albion $7,975,000 Sep % Redcliffe Tavern, Redcliffe $11,500,000 Sep % Hotel HQ, Underwood $18,100,000 Aug % Old Bundy Tavern, Bundaberg $7,700,000 Apr % Royal English Hotel, Nundah $7,750,000 Dec % Currimundi Hotel, Battery Hill $5,800,000 Dec % Austral Hotel & Dan Murphy s, Mackay $19,000,000 Jun % Victoria The following properties included gaming machines. Hotel Sale Price Sale Date Years Remaining Yield Rafferty s Tavern, Warrnambool $5,700,000 May % Marine Hotel, Brighton $13,000,000 Apr % Royal Oak Hotel, Cheltenham $11,000,000 Jan % Millers Inn, Altona North $23,299,000 Dec % West Waters Hotel, Caroline Springs $25,000,000 May % McCartin s Hotel, Leongatha $2,401,000 Dec % Berwick Springs Hotel, Berwick $29,000,000 Nov % Goulbum Valley Hotel, Shepparton $10,050,000 Sep % The following properties did not have gaming machines. Hotel Sale Price Sale Date Years Remaining Yield Metropolitan Hotel, Melbourne $8,610,000 Apr % Bridie O Reilly s, Brunswick $6,030,000 Oct % The Hawthorn, Hawthorn $7,500,000 Sep % Prince Alfred Hotel, Port Melbourne $2,890,000 Aug % Portsea Hotel, Portsea $17,100,000 Jul % Elephant & Wheelbarrow, St Kilda $8,525,000 Jul % Dan O Connell Hotel, Carlton $2,860,000 Jul % Laird Hotel, Abbotsford $2,660,000 Jun % Imperial Hotel, Melbourne $11,450,000 May % Castle Hotel, North Melbourne $3,100,000 Apr % Bay Hotel, Mornington $6,100,000 Feb % Grand Hotel, Richmond $3,625,000 May % North Fitzroy Arms Hotel, Fitzroy North $1,910,000 Oct % Geebung Polo Club, Hawthorn $6,000,000 Aug % A number of the non-gaming (investment) sales include future development potential. Liability limited by a scheme approved under Professional Standards Legislation Page 6 of 10

151 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) V A L U A T I O N & A D V I S O R Y S E R V I C E S New South Wales Hotel Sale Price Sale Date Years Remaining Yield North Lakes Tavern, Central Coast $10,600,000 Oct % Golden Sheaf, Double Bay $41,250,000 Dec % Western Australia Hotel Sale Price Sale Date Years Remaining Yield First Choice Liquor, Baldivis $7,900,000 Dec % Liquorland, Warnbro $3,400,000 Oct % Liquorland, High Wycombe $7,075,000 Sep % First Choice Liquor, Clarkson $5,424,000 Jul % The Victoria Park Hotel, Victoria Park $5,525,000 Apr % First Choice Liquor, Duncraig $7,010,000 Apr % South Australia Hotel Sale Price Sale Date Years Remaining Yield Archer Hotel, North Adelaide $8,375,000 Jan % Royal Hotel, Kent Town $5,000,000 Nov % Eagles Club $3,000,000 May % Broadway Hotel $6,100,000 Mar % Seaford Hotel, Seaford $10,300,000 Feb % German Arms Hotel, Hahndorf $4,000,000 Dec % Crown Hotel, Victor Harbor $5,400,000 Nov % Valuation Rationale In arriving at our opinion of market value in accordance with the instructions, we have placed primary emphasis on the capitalisation of market net income approach and where appropriate had regard for the discounted cashflow analysis. A detailed explanation of the assets investment credentials and the application of the discounted cashflow and capitalisation of passing income methodology is provided in the Valuation Report s. Valuation Summary In accordance with the instructions, we summarise our valuation conclusions for the properties as at 30 June 2016 overleaf. Liability limited by a scheme approved under Professional Standards Legislation Page 7 of 10

152 150 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) V A L U A T I O N & A D V I S O R Y S E R V I C E S HOTEL TOTAL RENT CAP RATE CAP VALUE TERMINAL YIELD DISCOUNT RATE DCF VALUE VALUE EFFECTIVE YIELD Q ueensland Allenstown Hotel* 865, % 13,895, % 7.75% 13,050,000 13,900, % Buderim Tavern 994, % 15,915, % 7.75% 15,750,000 15,925, % Capalaba Tavern 651, % 10,426, % 7.75% 10,550,000 10,500, % Commercial Hotel 339, % 5,650, % 7.75% 5,500,000 5,650, % Dog and Parrot Hotel* 861, % 14,143, % 7.75% 13,550,000 14,150, % Federal Hotel* 1,062, % 17,972, % 8.25% 17,550,000 17,850, % Glenmore Tavern 1,116, % 17,177, % 8.00% 17,350,000 17,300, % Harvey Road Tavern* 1,755, % 27,001, % 8.00% 26,050,000 27,000, % Highfields Tavern 428, % 6,853, % 8.00% 6,800,000 6,850, % Hinterland Hotel Motel* 1,223, % 19,961, % 7.75% 19,000,000 19,950, % Kawana Waters Hotel* 1,471, % 24,425, % 7.75% 23,600,000 24,450, % Parkwood Tavern* 788, % 12,874, % 7.75% 12,250,000 12,875, % Redbank Plains Tavern* 972, % 15,954, % 7.75% 15,850,000 15,900, % Royal Beenleigh Hotel* 697, % 11,572, % 7.75% 11,400,000 11,550, % Russell Tavern 410, % 6,561, % 8.00% 6,500,000 6,550, % Villa Noosa Hotel* 1,293, % 21,441, % 7.75% 20,250,000 21,450, % Waterfront Hotel 384, % 6,411, % 8.00% 6,100,000 6,400, % Victoria Albion Charles Hotel 731, % 12,727, % 7.25% 12,700,000 12,700, % Balaclava Hotel 819, % 14,245, % 7.50% 12,850,000 14,250, % Cherry Hill Tavern 1,020, % 16,321, % 7.75% 16,700,000 16,500, % Coolaroo Hotel 611, % 9,776, % 7.75% 9,800,000 9,800, % Croxton Park Hotel 678, % 11,792, % 7.25% 11,800,000 11,800, % Excelsior Hotel* 2,259, % 36,579, % 7.75% 36,850,000 36,700, % First & Last Hotel 1,251, % 20,024, % 7.75% 20,100,000 20,000, % Glengala Hotel 901, % 14,421, % 7.75% 14,450,000 14,400, % Manhattan Hotel* 1,618, % 26,512, % 7.75% 26,350,000 26,400, % Monash Hotel 678, % 10,848, % 7.75% 11,100,000 11,000, % Moreland Hotel 1,155, % 19,251, % 7.25% 19,200,000 19,250, % Oakleigh Junction Hotel 665, % 11,580, % 7.25% 11,550,000 11,600, % Palace Hotel 636, % 11,571, % 7.00% 11,550,000 11,550, % Preston Hotel 505, % 8,791, % 7.25% 8,600,000 8,800, % St Albans Hotel 1,065, % 17,052, % 7.75% 17,100,000 17,050, % Waltzing Matilda Hotel 1,435, % 22,964, % 7.75% 23,050,000 23,000, % T asmania Carlyle Hotel 324, % 4,812, % 8.50% 4,750,000 4,800, % Gateway Inn Hotel 722, % 10,324, % 8.50% 10,400,000 10,300, % Riverside Hotel Motel 260, % 3,726, % 8.50% 3,800,000 3,750, % New South Wales Boomerang Hotel 393, % 6,058, % 8.25% 5,950,000 6,000, % Greenhouse Tavern 499, % 7,683, % 8.25% 7,550,000 7,600, % Westower Tavern* 620, % 9,986, % 8.00% 9,950,000 10,000, % Western Australia Belmont Tavern 663, % 11,544, % 7.75% 11,200,000 11,400, % Bull Creek Tavern* 334, % 6,647, % 7.25% 6,750,000 6,700, % Dunsborough Hotel 452, % 6,964, % 8.00% 7,050,000 7,000, % Greenwood Hotel 691, % 12,021, % 7.50% 11,850,000 12,000, % Herdsman Lake Tavern 141, % 2,821, % 7.00% 2,700,000 2,800, % Highway Hotel* 538, % 8,980, % 7.50% 8,750,000 8,900, % Hyde Park Hotel* 665, % 11,565, % 7.00% 11,350,000 11,500, % Lakers Tavern 504, % 8,773, % 7.75% 8,500,000 8,650, % Peel Alehouse 434, % 6,950, % 8.00% 6,900,000 6,950, % South Australia Federal Hotel* 246, % 4,068, % 8.50% 4,300,000 4,200, % Findon Hotel 755, % 11,618, % 8.00% 11,450,000 11,550, % Norwood Hotel* 505, % 8,741, % 6.75% 8,400,000 8,600, % Royal Oak 335, % 5,599, % 7.00% 5,450,000 5,500, % Slug N Lettuce British Pub 640, % 9,853, % 8.00% 9,700,000 9,800, % Victoria Hotel 514, % 7,624, % 8.25% 7,700,000 7,650, % Liability limited by a scheme approved under Professional Standards Legislation Page 8 of 10

153 Charter Hall Long WALE REIT / Summary of Valuation Reports (continued) V A L U A T I O N & A D V I S O R Y S E R V I C E S *We note the properties highlighted with an asterisk may include an adjustment due to an additional change in valuation outcomes associated with the turnover rent generated through Dan Murphy s liquor stores. Consent CBRE provides it consent for the inclusion of this Summary Letter within the Offer Document for an Initial Public Offering ( IPO ) of securities in the Long WALE REIT, subject to Charter Hall making recipients of the Offer Document aware of the following liability disclaimers. Liability Disclaimer (a) (b) (c) (d) (e) (f) CBRE is not operating under an Australian Financial Services Licence when providing the full Valuation Report or this Summary Letter and those documents do not constitute financial product advice. Investors should consider obtaining independent advice from their financial advisor before making any decision to invest. CBRE disclaims any liability to any person in the event of an omission from, or false and misleading statements included in the Offer Document, other than in respect to this Summary Letter and the full Valuation Report. The Valuation Report and this Summary Letter are strictly limited to the matters contained within those documents, and are not to be read as extending, by implication or otherwise, to any other matter in the Offer Document. Without limitation to the above, no liability is accepted for any loss, harm, cost or damage (including special, consequential or economic harm or loss) suffered as a consequence of fluctuations in the real estate market subsequent to the date of valuation. CBRE has prepared the full Valuation Report and this Summary Letter relying on and referring to information provided by third parties in including financial and market information ( Information ). CBRE assumes that the Information is accurate, reliable and complete and it has not tested the information in that respect. References to the Property s value within this Summary Letter or the Offer Document have been extracted from CBRE s Valuation Report. The Valuation Report draws attention to the key issues and considerations impacting value and provides a detailed assessment and analysis (which includes important tenant turnover analysis) as well as key critical assumptions, assumptions, disclaimers, limitations and qualifications and recommendations. As commercial investments of this nature are inherently complex and the market conditions have changed and/or have been uncertain in recent times, CBRE recommends that this Summary Letter and any references to value within the Offer Document must be read and considered together with the Valuation Report. This Summary Letter is to be read in conjunction with our full Valuation Report dated 30 June 2016 and is subject to the Assumptions, Limitations, Disclaimers and Qualifications contained therein. We refer the reader to Charter Hall to obtain a copy of the full report. No responsibility is accepted for any loss or damage arising as a result of reliance upon this Summary Letter. Liability limited by a scheme approved under Professional Standards Legislation Page 9 of 10

154 152 / PDS / Summary of Valuation Reports 10. Summary of Valuation Reports (continued) V A L U A T I O N & A D V I S O R Y S E R V I C E S (g) (h) (i) (j) Neither this Summary Letter nor the full Valuation Report may be reproduced in whole or in part without prior written approval of CBRE. CBRE charges a professional fee for producing valuation reports, and the fee paid by Charter Hall for the Valuation Report and this Summary Letter was $198,700 inclusive of GST. We confirm that the valuer does not have a pecuniary interest that would conflict with a proper valuation of the interest in the property. This document is for the sole use of persons directly provided with it by CBRE. Use by, or reliance upon this document by anyone other than those parties named above is not authorised by CBRE and CBRE is not liable for any loss arising from such unauthorised use or reliance. Yours sincerely CBRE Valuations Pty Limited Cameron Harris Director Valuation & Advisory Services Liability limited by a scheme approved under Professional Standards Legislation Page 10 of 10

155 Charter Hall Long WALE REIT / 153 Taxation Villa Noosa Hotel, Noosaville, QLD 11

156 154 / PDS / Taxation 11. Taxation The Directors Charter Hall WALE Limited as Responsible Entity for the trusts comprising the Charter Hall Long WALE REIT Level 20, No.1 Martin Place SYDNEY NSW September 2016 Charter Hall Long WALE REIT (LWR) Taxation Report Dear Directors, We have prepared this letter to provide a broad summary of the Australian income tax considerations for Stapled Securityholders in LWR for the purpose of inclusion in the Product Disclosure Statement (PDS) to be dated on or about 27 September The comments in this letter are based on the relevant taxation laws in the Income Tax Assessment Act 1936, the Income Tax Assessment Act 1997, the Income Tax Rates Act 1986, A New Tax System (Goods & Services Tax) Act 1990, the Taxation Administration Act 1953 and relevant stamp duty legislation (referred to collectively herein as the Australian Tax Act ) as at the date of this PDS and the associated administrative instruments, except where otherwise indicated. The taxation information provided below is intended only as a brief guide. The information applies only to Australian tax resident individual and non-resident Stapled Securityholders who hold their Stapled Securities in LWR on capital account. This letter does not cover the taxation implications for Stapled Securityholders who hold their investments on revenue account or as trading stock, or who are exempt from Australian income tax, or are subject to the Taxation of Financial Arrangements (TOFA) rules in Division 230 of the Australian Tax Act. In addition, the stapling of the existing trusts will be implemented via a series of steps and will impact on existing unitholders in the various trusts that ultimately make up the stapled vehicle. The Australian income tax consequences arising for existing unitholders from the steps are not covered in this letter. We understand that separate advice will be provided to existing unitholders advising them of the taxation consequences arising from the series of steps in order to arrive to the stapled structure. The information below is based on existing tax law and established interpretations as at the date of this letter. The taxation of companies and unit trusts such as those that make up LWR can be complex and may change over time. Accordingly, Stapled Securityholders are recommended to seek professional taxation advice in relation to their own position. Australia is in the process of major taxation reform. It is possible that future legislation or changes made to the administration interpretation of the existing law will affect the matters considered in this summary. PricewaterhouseCoopers, ABN Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 T: , F: , Liability limited by a scheme approved under Professional Standards Legislation.

157 Charter Hall Long WALE REIT / Taxation (continued) The information contained in this letter does not constitute "financial product advice" within the meaning of the Corporations Act 2001 (Cth) (Corporations Act). The PricewaterhouseCoopers Partnership, which is providing this letter, is not licensed to provide financial product advice under the Corporations Act. To the extent that this letter contains any information about a "financial product", within the meaning of the Corporations Act, taxation is only one of the matters that must be considered when making a decision about the relevant financial product. This summary has been prepared for general circulation and does not take into account the objectives, financial situation or needs of any recipient of the PDS. Accordingly, any recipient should, before acting on this material, consider taking independent financial advice from a person who is licensed to provide financial product advice under the Corporations Act. Defined terms used in this letter have the same meaning as they do in the PDS. Taxation of LWR General Each Stapled Security consists of one unit in each of Charter Hall Direct Industrial Fund (DIF), Canning Vale Logistics No.1 Trust, 218 Bannister Road Trust, CHPT Dandenong Trust, CPOF Kogarah Holding Trust, LWR Franklin Street Holding Trust and LWR Finance Trust, collectively referred to as the Trusts in this summary. For tax purposes the Trusts are treated as separate entities. Note that LWR Finance Trust s only activity is to hold all the shares in LWR Finance Co Pty Limited (Finance Co) which will be the financing entity for LWR. The tax treatment of the Trusts and Finance Co is considered separately below. Taxation of the Trusts Tax treatment of the Trusts A trust may be liable for income tax in any year where the requirements to be classed as a public trading trust under Division 6C of the Australian Tax Act are satisfied for that year. Based on the information in this PDS regarding the proposed activities of the Trusts and the intentions of the Responsible Entity (RE) as expressed to us, the Trusts should not be regarded as public trading trusts. We note that the requirements for a public trading trust are ongoing so that the tax position of the Trusts in any year will depend on the actual operations in that year. On the basis that Division 6C does not apply, the Trusts should be flow through entities for tax purposes such that the net income of the Trusts will be taxable in the hands of the Stapled Securityholders. If one of the Trusts have taxable income, Stapled Securityholders will generally be liable for tax on their share of the respective Trust s taxable income at their own applicable tax rates. Provided the Trusts continue to fall outside the public trading trust rules in Division 6C, the Trusts should not be liable to tax in their own right. 2

158 156 / PDS / Taxation 11. Taxation (continued) It is important to note that on 5 May 2016, the Tax Laws Amendment (New Tax System for Managed Investment Trusts) Act 2016 received Royal Assent. Under this new law, certain managed investment trusts (MITs) may be able to elect to apply the Attribution MIT (AMIT) tax regime with effect from 1 July Where a trust elects into the AMIT regime, then the trust will not be subject to the existing present entitlement rules in Division 6 of the Australian Tax Act but instead will be subject to the specific attribution rules contained in the AMIT regime. We understand that a decision on whether the Trusts will elect into the AMIT regime has not yet been made and that the RE for the Trusts will consider whether the Trusts should elect into the AMIT regime from 1 July 2017 and will advise Stapled Securityholders of the implications should the RE choose to make the relevant election for a Trust. MIT aspects The Trusts are expected to qualify as MITs for Australian tax purposes. For the Trusts to qualify as MITs in relation to an income year, the Trusts must satisfy a number of conditions including conditions relating to being widely held by Investors. The trustee believes the Trusts will satisfy the conditions for the Trusts to be MITs including the widely held conditions. A MIT has certain tax advantages which may be categorised as the ability to make a capital account election and reduced withholding tax on distributions to certain non-resident investors. MITs may elect to treat eligible investments (such as shares, securities and real property) on capital account, which provides certainty on the tax treatment of disposals of these assets in that they will always be dealt with under the capital gains tax (CGT) rules, rather than the ordinary income rules. The remainder of this summary assumes the Trusts (and all sub-trusts) will qualify as MITs and have made a valid capital account election. Tax losses Where a revenue loss or net capital loss is incurred by any of the Trusts, the loss must be quarantined within the Trust and cannot be passed to Stapled Securityholders for tax purposes. Instead, revenue tax losses will be carried forward and offset against assessable income derived by the relevant Trust in future years subject to satisfying the relevant trust loss recoupment tests. Any net capital losses will be carried forward and offset against future capital gains derived by the relevant Trust. There are no restrictions on utilising carried forward net capital losses incurred by a trust. Taxation of Finance Co General As mentioned above, Finance Co will be the financing entity for LWR. Finance Co will be wholly owned by LWR Finance Trust. Finance Co is a separate taxable entity from LWR Finance Trust and will be liable to Australian income tax at the corporate rate (currently 30%) on its taxable income. 3

159 Charter Hall Long WALE REIT / Taxation (continued) Tax losses Where a revenue loss or net capital loss is incurred by Finance Co, the loss must be quarantined within Finance Co and cannot be passed on to LWR Finance Trust for tax purposes. Instead, revenue tax losses will be carried forward by Finance Co and offset against assessable income derived in future years subject to satisfying the relevant company loss recoupment rules. Any net capital losses will be carried forward and offset against future capital gains derived by Finance Co subject to satisfying the relevant company loss recoupment rules. Taxation Implication of participating in the Reinvestment Offer The tax implications for DIF unitholders who apply under the Reinvestment Offer will depend on whether or not they instruct the Responsible Entity to redeem a certain number of their DIF units and to pay some or all of the capital return and redemption proceeds in respect of those DIF units to their nominated adviser as a fee for financial advice or advice services the adviser may provide. For those DIF unitholders who do not give such an instruction, the steps involved in implementing the Restructure are such that existing DIF unitholders who obtain Stapled Securities under the Reinvestment Offer should not realise any capital gain as a result of making an election to participate in the Reinvestment Offer. This is because under the implementation steps, existing DIF unitholders will not dispose of any of their original DIF units but will rather receive a capital return (which is less than their existing tax cost base) which will be compulsorily applied toward the acquisition of units in the other Stapled Trusts in order to form Stapled Securities. For those DIF unitholders who do give such an instruction, then those DIF unitholders will make a capital gain in respect of the DIF units redeemed. For the DIF units that are not redeemed, the existing DIF unitholders should not realise any capital gain as a result of making an election to participate in the Reinvestment Offer. This is because under the implementation steps, existing DIF unitholders will not dispose of that portion of their original DIF units but will rather receive a capital return (which is less than their existing tax cost base) which will be compulsorily applied toward the acquisition of units in the other Stapled Trusts in order to form Stapled Securities. The fee paid to the nominated adviser as a fee for financial advice or advice services the adviser may provide should be added to the cost base of the Stapled Securities. Subsequent disposal of Stapled Securities The subsequent disposal of Stapled Securities by the DIF unitholders will, subject to two key differences, give rise to the same tax outcomes as the Taxation on disposal of Stapled Securities described below. The first difference is that the CGT cost base of the Stapled Securities must be allocated to the units in each Stapled Trust. For the components that are acquired under the Reinvestment Offer, the cost base will be based upon the consideration paid to acquire that component. For the original DIF units, the cost base will be equal to the DIF unitholder s existing cost base reduced by the return of capital amount. The Responsible Entity will advise DIF unitholders of the amount paid for the component s acquired under the Reinvestment Offer and the return of capital amount upon completion of the Reinvestment Offer. 4

160 158 / PDS / Taxation 11. Taxation (continued) The second difference is that for the purpose of the CGT discount concession (refer below), the treatment will also be different for the DIF units in the Fund and the new interests acquired under the Reinvestment Offer. For the DIF units, the 12 month period will be calculated from the original acquisition date whereas for the new interests acquired under the Reinvestment Offer, the 12 month period will be calculated from the date of acquisition of those interests, and not from the date of acquisition of the DIF units. Taxation of Australian Tax Resident Investors Taxation of distributions from the Trusts (other than Finance Trust) General Stapled Securityholders are liable to pay tax on the full amount of their share of the taxable income of the Trusts in an income year to which it relates. A Stapled Securityholder s share of the taxable income of the Trusts for the year ended 30 June must therefore be included as assessable income for the financial year ended on that date. This applies irrespective of whether distributions from the Trusts are paid in a subsequent year. Distributions from the Trusts may include various components, the taxation treatment of which may differ. For example, a distribution may include a tax deferred component, a CGT concession component, as well as net capital gains. Tax deferred distributions (i.e. where the cash distribution exceeds the taxable amount) are usually attributable to returns of capital, building allowances, tax depreciation and other tax timing differences. It is the current general practice of the Commissioner of Taxation that tax deferred distributions are not assessable when received unless and until the total tax deferred amounts received by a Stapled Securityholder exceed the cost base of the units in the trust. For CGT purposes, amounts of tax deferred distributions received reduce the cost base of the units for the Stapled Securityholder and therefore affect the Stapled Securityholder s capital gain/loss on disposal of the units. A Stapled Securityholder will make an immediate capital gain to the extent a tax deferred distribution is more than the Stapled Securityholder s cost base of the units in the trust. We note that the ATO has previously expressed a view that tax deferred amounts should be brought to account as assessable income under the general assessment provisions by a range of beneficiaries and in particular those beneficiaries who hold their Stapled Securities on revenue account or as trading stock. The AMIT rules however clarify that tax deferred distributions paid by an AMIT should result only in a reduction of the tax base of the units, even if the units are held by a Stapled Securityholder on revenue account. Disposal of assets by the Trusts Where an asset that is owned by a Trust for at least 12 months is disposed of, the Trust will receive a 50% discount on the capital gain realised. The CGT concession component of a distribution represents the CGT discount claimed by a trust in respect of asset sales. The CGT concession component is not assessable when received by Stapled Securityholders. Where a trust distribution includes a CGT concession component, there will be no reduction to the cost base of the units held by a Stapled Securityholder for that component. 5

161 Charter Hall Long WALE REIT / Taxation (continued) The capital gain component of a trust distribution must be included in the Stapled Securityholder s calculation of their net capital gain. Where the distributed capital gain includes a discounted capital gain component, the Stapled Securityholder is required to gross up that amount by the discount applied by the Trust (i.e. 50%). The nominal capital gain (i.e. the whole amount of the gain prior to discounting) is then included in the calculation of the Stapled Securityholder s net capital gain. The Stapled Securityholder may be entitled in their own right to a CGT discount as an individual. Taxation of dividends from Finance Co (via LWR Finance Trust) It is not presently intended that Finance Co will pay any dividends and therefore there is unlikely to be distributions made by LWR Finance Trust. All distributions are expected to be made by the Trusts other than LWR Finance Trust. For completeness, to the extent that dividends distributed by LWR Finance Trust to Stapled Securityholders are franked, then (subject to a number of measures that may affect the ability of a Stapled Securityholder to use franking credits distributed, including the 45 day holding period rule), the grossed up amount (i.e. the dividend plus the attached franking credit) is included in the Stapled Securityholder s assessable income. The Stapled Securityholder is then generally allowed a franking offset equal to the franking credit. Taxation on disposal of Stapled Securities For CGT purposes, the disposal of a Stapled Security involves the disposal of seven separate assets, being a unit in each of the Trusts (the Component Securities). Broadly, the Stapled Securityholder must include any realised capital gain or loss on the disposal of their Stapled Security in the calculation of their net capital gain or loss for the year. The tax consequences must be worked out separately for each Component Security. A Stapled Securityholder will derive a capital gain on the disposal of the Component Securities to the extent that the capital proceeds on disposal exceed the CGT cost base of the Component Securities. A Stapled Securityholder will incur a capital loss on the disposal of the Component Securities to the extent that the capital proceeds on disposal are less than the CGT reduced cost base of the Component Securities. The capital proceeds received on the disposal of a Stapled Security must be apportioned between the Component Securities on a reasonable basis. The CGT cost base of each Component Security will include the amount paid to acquire the Stapled Securities, together with any capital costs of acquisition or disposal, allocated to each Component Security on a reasonable basis. The cost base of each Component Security will be reduced by any tax deferred distributions or returns of capital made by LWR in respect of that particular Component Security. Note that if a Trust has elected into the AMIT regime for an income year, then to the extent that a Stapled Securityholder receives a distribution that is less than the Stapled Securityholder s attributed share of the net income of a Trust, this will result in an upward adjustment of the Stapled Securityholder s cost base in that unit for CGT purposes. For the purposes of allocating capital proceeds and CGT cost base to each Component Security, one basis of apportionment is to use the relative net asset value (NAV) of each entity. 6

162 160 / PDS / Taxation 11. Taxation (continued) All capital gains and capital losses arising in a year, including distributions of capital gains, are added together to determine whether a Stapled Securityholder has derived a net capital gain or incurred a net capital loss in that year. If a Stapled Securityholder derives a net capital gain in a year, this amount is, subject to the comments below, included in the Stapled Securityholder s assessable income. If a Stapled Securityholder incurs a net capital loss in a year, this amount is carried forward and is available to offset capital gains derived in subsequent years. If the Stapled Securityholder (being an individual) has held the Stapled Securities for 12 months or more at the time of disposal (ignoring the day of acquisition and the day of disposal) and there is a net capital gain, a discount factor of 50% may be available to that individual. Taxation of Non-resident Investors Taxation of distributions from the Trusts On the basis that the Trusts are MITs, distributions that they make that qualify as fund payments (a defined term) will be subject to specific withholding tax rules. A fund payment is any payment by the trustee from the net taxable income of the Trust to Stapled Securityholders reduced by the amount of any dividend, interest or royalties included in the amount. In practice a fund payment will represent the net rental income from properties held by the Trusts (directly or indirectly) and capital gains (ignoring the CGT concession component) on disposal of those properties. The trustee will generally be required to withhold from distributions to non-resident Stapled Securityholders in respect of Australian sourced income (other than dividends, royalties and interest) as follows: For Stapled Securityholders that provide an address or place of payment for the distribution in an information exchange country, the trustee will withhold tax at 15% from fund payments. For Stapled Securityholders that provide addresses in non-information exchange countries, the rate of withholding applied will be 30%. Where Stapled Securityholders are tax resident in a country other than the information exchange country address provided to the trustee, further Australian tax obligations may arise for that Stapled Securityholder. Non-Australian tax resident Stapled Securityholders should not be required to lodge an Australian tax return in respect of a trust distribution that is subject to MIT withholding tax. This is due to the MIT withholding tax being a final tax for Australian taxation purposes. An information exchange country is a country specified as such in regulations issued under the tax law. We note that for non-resident investors that are trusts, further liability to MIT withholding tax may arise at the level of the beneficiaries of those trusts if a beneficiary is resident of a country that is not an information exchange country. Note that the AMIT rules should not affect the concessional MIT withholding tax rates for nonresident Stapled Securityholders. 7

163 Charter Hall Long WALE REIT / Taxation (continued) Distribution components that are comprised of interest will generally be subject to a 10% final withholding tax. Taxation of dividends from Finance Co (via LWR Finance Trust) As mentioned above, it is not presently intended that Finance Co will pay any dividends and therefore there is unlikely to be distributions made by LWR Finance Trust. For completeness, franked dividends distributed by LWR Finance Trust to non-resident investors should not be subject to dividend withholding tax. Unfranked dividends should however be subject to dividend withholding tax at 30% unless a lower rate applies under a tax treaty. Taxation on disposal of Stapled Securities Non-resident investors would generally be subject to the CGT rules on disposal of the Stapled Securities. A discounting factor is not available for non-resident investors. However, no Australian tax should be payable on capital gains made by non-resident investors from the disposal of their Stapled Securities where their Stapled Securityholding (together with associates) is less than 10% of the relevant trust (either at the time of the CGT event or in any 12 month period in the 24 months prior to the CGT event). We note that on 25 February 2016, Tax and Superannuation Laws Amendment (2015 Measures No 6) Act 2015 became law, introducing a new 10 per cent non-final withholding tax on the acquisition of certain taxable Australian property from foreign residents. The obligation applies to a transaction involving, for example, the acquisition of an indirect Australian real property interest, such as a membership interest in a land-rich company or trust. On-market transactions however are excluded from the withholding regime and therefore should not apply to the disposal of Stapled Securities by investors via the Australian Securities Exchange. Tax File Numbers and Australian Business Numbers A Stapled Securityholder need not quote a Tax File Number (TFN) when applying for Stapled Securities in LWR. However, if a TFN is not quoted, or no appropriate TFN exemption information is provided, tax is required to be deducted from any income distribution entitlement at the highest marginal tax rate plus Medicare levy (currently 49 per cent). Stapled Securityholders that hold their Stapled Securities as part of their business may quote their Australian Business Number instead of their TFN. Goods and Services Tax (GST) The acquisition and/or disposal of Stapled Securities is not subject to GST. Generally, GST incurred on costs relating to the issue, acquisition or disposal of Stapled Securities should not be recoverable in full. However, Stapled Securityholders are recommended to seek professional taxation advice in relation to their own position. 8

164 162 / PDS / Taxation 11. Taxation (continued) Stamp duty No stamp duty should be payable by Stapled Securityholders on the issue of units in the Trusts. Under the current stamp duty legislation, in the ordinary course no stamp duty should be payable on any subsequent transfer of the units in the Trusts. Simplification Proposal If following its consideration, the Responsible Entity resolves to implement a simplification proposal, the taxation implications for LWR and the Stapled Securityholders will be separately advised. Yours faithfully, Joshua Cardwell Partner PricewaterhouseCoopers 9

165 Charter Hall Long WALE REIT / 163 Risks Electrolux, Beverley, SA 12

166 164 / PDS / Risks 12. Risks The REIT s business activities are subject to risks that are both specific to its business operations in the property industry and to those of a general nature. Many of these risks are outside the control of the Responsible Entity and if they were to eventuate, may adversely affect the future operating performance of, and the value of an investment in, the REIT. The following Section describes what the Responsible Entity currently believes to be the key risks associated with an investment in the REIT. It does not purport to be an exhaustive list of risks that may be associated with an investment in the REIT now or in the future. Before deciding on whether to make an investment in the REIT, prospective investors should have a sufficient understanding of the risks described in this Section in conjunction with other information provided in this PDS. Investors should carefully consider whether an investment in the REIT is a suitable investment having regard to their own investment objectives, financial circumstances and taxation position. If you do not understand any part of the PDS or are in any doubt as to whether to invest in Securities, you should seek advice from your broker, solicitor, accountant, tax adviser or other independent and qualified professional adviser before deciding whether to invest Risks specific to an investment in the REIT Rental income Distributions made by the REIT are largely dependent on the rents received from tenants across the Portfolio and expenses incurred during operations, which may be affected by a number of factors, including: overall economic conditions; the financial circumstances of tenants (on the Allotment Date and in the future); the ability to negotiate lease extensions or replace outgoing tenants with new tenants; the occurrence of rental arrears or any vacancy periods; reliance on a tenant which leases a material portion of the Portfolio 1 ; an increase in unrecoverable outgoings; and supply and demand in the property market. Any negative impact on rental income (including as a result of a failure of existing tenants to perform existing leases in accordance with their terms) has the potential to decrease the value of the REIT and have an adverse impact on Distributions or the value of Securities or both. Re-leasing and vacancy risk Although the Initial Portfolio is currently fully leased and has no major forecast lease expiries prior to FY21, in the longer term, the Portfolio s leases will come up for renewal on a periodic basis. There is a risk that the REIT may not be able to negotiate suitable lease renewals with existing tenants, maintain existing lease terms, or replace outgoing tenants with new tenants. This may result in a reduction in the REIT s Operating Earnings and Distributions and a reduction in the value of the assets of the REIT. Property valuation risk The value of each Property held by the REIT, and those it may hold in the future, may fluctuate due to a number of factors affecting both the property market generally or the REIT s Properties in particular. These factors include, but are not limited to: changes in market rental rates; changes in property yields; fluctuating occupancy levels; tenants defaulting; supply and demand in the relevant property market; increased competition from new or existing properties; a downturn in the property market generally; pricing or competition policies of any competing properties or tenants; and general economic conditions, such as interest rates. These factors may change for a variety of reasons including those set out above in respect of these particular risks. A reduction in the value of any Property may adversely affect the value of Securities in the REIT. It may also impact the REIT s financing arrangements (refer to Funding risk). Property values may fall if the underlying assumptions on which the property valuations outlined in this PDS are based change in the future. As changes in valuations of investment properties are recorded in the statutory income statement, any decreases in value will have a negative impact on the statutory income of the REIT. As property values fluctuate, so too may returns from property assets. Rental and occupancy levels may change as a result of changes in the property market and this may affect the Distributions paid by the REIT and the market price of Securities. The REIT will have its properties independently revalued regularly in accordance with its valuation policy. The independent valuations of the properties, including the Independent Valuations included in this PDS, are the best estimates of the independent valuers at the time of undertaking the valuation and may not reflect the actual price a property would realise if sold. Independent valuations are subject to a number of assumptions which may prove to be inaccurate. 1. In aggregate 89% of the gross property income is generated from the top five tenants.

167 Charter Hall Long WALE REIT / Risks (continued) Property liquidity By their nature, investments in real property assets are illiquid investments, and there is a risk that should the REIT be required to realise property assets, it may not be able to do so in a short period of time, or may not be able to realise a property asset for the amount at which it has been valued. This may adversely affect the REIT s NTA and the value of Securities in the REIT. Tenant concentration The majority of the Properties comprising the Initial Portfolio are single tenanted. This exposes the value and performance of each Property to the ability of those tenants to continue to meet their obligations under the respective lease agreements. In aggregate, 89% of the gross property income is generated from the top five tenants 1. There is a risk that if one or more of the major tenants cease to be a tenant, the REIT may not be able to find replacement tenants on lease terms that are at least as favourable as the current terms. Should replacement tenants lease the Property on less favourable terms, this will adversely impact the returns and the overall performance of the REIT and value of the Properties. The Responsible Entity of the REIT actively manages the tenant selection process to manage this risk. Currently, the majority of income of the REIT is derived from entities related to Wesfarmers, Woolworths and The Commonwealth of Australia (see Section 2.3.3). Development risk The strategy of the REIT is to minimise development risk, with a focus on sustainable income returns. The REIT will not undertake speculative development. The REIT may undertake development in circumstances when income risk can be substantially mitigated. The REIT may develop or redevelop existing Properties to maximise returns to Securityholders. No guarantee of Distribution or capital return No guarantee can be given as to the amount of any income or capital return from the Securities or the performance of the REIT, nor can the repayment of capital from the REIT be guaranteed. Management performance The REIT will be reliant on the expertise, experience, and strategies of the key executive directors and management of Charter Hall Group. As a result, the loss or unavailability of key personnel at Charter Hall Group could have an adverse impact on the management and financial performance of the REIT and therefore returns to Securityholders. Capital expenditure The REIT will be responsible for capital expenditure that may arise. The forecast capital expenditure represents the Responsible Entity s current best estimate of the associated costs to maintain the Portfolio over the Forecast Period. There is a risk that the actual required capital expenditure may exceed the current forecasts which could lead to increased funding costs and impact Distributions. Additionally, any requirement for unforeseen material capital expenditure on the Properties could impact the performance of the REIT. Acquisitions In addition to acquiring the assets in connection with Initial Portfolio, the REIT will continue to identify new investment opportunities for potential acquisition. The REIT will endeavour to conduct all reasonable and appropriate due diligence on potential investment opportunities. There is a risk that the REIT will be unable to identify suitable investment opportunities that meet the REIT s investment objectives. Even if such opportunities are identified, they may not be able to be secured on appropriate terms. These factors may restrict the REIT s ability to add investments to its Initial Portfolio and this may adversely impact growth and returns to Securityholders. Reliance on third parties The Responsible Entity may engage third party service providers in respect of a part or the whole of the Portfolio, being Charter Hall Group or third parties outside the Charter Hall Group. These services will be subject to contractual arrangements between the Responsible Entity and the relevant third parties. A failure of third parties to discharge their agreed responsibilities may adversely affect the management and financial performance of the REIT and therefore also adversely impact returns to investors. Conflicts The REIT may engage Charter Hall Holdings Pty Limited, a wholly owned subsidiary of Charter Hall Group, to provide property management and facilities management services in respect of various Properties in the REIT. The Responsible Entity and Charter Hall Holdings Pty Limited also have two common executive directors. This may create a conflict of interest. Related party transactions also carry a risk that they could be assessed and monitored less rigorously than transactions with unrelated third parties. The REIT will mitigate these risks through the Conflicts of Interest and Related Party Policy that governs the way the REIT manages such conflicts or transactions. See Section 6.3 for more information in relation to this policy. 1. In some instances, the tenant is a related entity and/or subsidiary of the parent group. See Section for more information.

168 166 / PDS / Risks 12. Risks (continued) Funding risk The Responsible Entity may fund future refinancing, capital expenditure and acquisitions from either debt or equity markets. The REIT s ability to raise funds from either market on favourable terms is dependent on a number of factors including: the general economic and political climate; the state of debt and equity capital markets; the performance, reputation and financial strength of the REIT; and the value of the Properties. Changes to any of these or other factors could lead to an increased cost of funding, limited access to capital, increased refinancing risk for the REIT and/or an inability to expand operations or purchase assets in a manner that may benefit the REIT and its Securityholders. Extension and refinancing The REIT s ability to refinance or repay its debts as they fall due will be impacted by market conditions, the financial status of the REIT, the value of the REIT s Properties, and prevailing economic conditions, including interest rates, at the time of maturity or refinancing. There is a risk that the REIT may not be able to extend or refinance its debts before maturity. Possible increases in the interest rate, the cost of interest rate hedges and the level of financial covenants required by lenders may also adversely impact the operating and financial performance of the REIT, the Distributions of the REIT and the REIT s ability to raise equity and/or enter into new debt facilities. In these circumstances, the REIT may need to raise further equity, dispose of assets for a lower market value than could otherwise have been realised, or enter into new debt facilities on less favourable terms. There is also a risk that the REIT may be unable to hedge future borrowings to mitigate future interest rate risk, or that the terms of such hedging are less favourable than the existing terms. Debt Facility undertakings and covenants Under the Debt Facility, the REIT is subject to a number of undertakings and covenants, including in relation to gearing ratio and Interest Cover Ratio. An event of default would occur if the REIT fails to maintain these financial covenants. This may be caused by amongst other factors, unfavourable movements in interest rates (to the extent that interest rates are not hedged) or deterioration in the income or the value of the Portfolio. In the event that an event of default occurs, the lender may require immediate repayment of the Debt Facility. The REIT may need to dispose of some or all of its Properties for less than their book value, raise additional equity, or reduce or suspend Distributions in order to repay the Debt Facility. The financial ratios to be included in the Debt Facility are set out in Section Gearing The REIT s expected gearing is provided in Section 7.4. The level of gearing exposes the REIT to any changes in interest rates and increases the REIT s exposure to movements in the value of the Portfolio or performance measures. Higher gearing will increase the effect. If the level of gearing increases over the term of the REIT s debt financing, this may create refinancing risk on the REIT s debts as it approaches expiry. Should the REIT s gearing during the Forecast Period differ from that assumed in the Forecast Financial Information provided in this PDS, then Forecast Distributions may vary. Interest rates To the extent that interest rates are not hedged, unfavourable movements in interest rates relating to the Debt Facility could lead to increased interest expense. This could impact the level of Distributions available to Securityholders. The Responsible Entity is aiming to maintain hedging contracts in respect of at least 50% of the REIT s rolling one year Debt. As at Allotment, the REIT intends to have hedging contracts in place in respect of 50% of drawn Debt. Derivatives The REIT will use derivative instruments to hedge the REIT s exposure to interest rates. The mark-to-market valuation of derivative instruments could change quickly and significantly. Such movements may have an adverse effect on the financial performance and financial position of the REIT. In entering into derivative contracts, the REIT will be exposed to the risk that a party to the contract become insolvent or otherwise default on its contractual obligations. The Responsible Entity will seek to manage this risk by only entering into hedging arrangements with reputable counterparties. Insurance Insurance coverage is maintained in respect of each Property (including insurance for destruction or damage to the Property and public risk liability) where that coverage is available on commercial terms. Insurance coverage will include differing levels of cover for material loss or damage items such as accidental damage, flood and demolition and removal of debris. Some risks are not able to be insured at acceptable premiums. Examples of losses that are generally not insured against include war or acts of terrorism and natural phenomena such as earthquakes or hurricanes. Any losses incurred due to uninsured risks, or loss in excess of the insured amounts, may adversely affect the performance of the REIT, and could lead to a loss of some of the capital invested by the REIT. Increases in insurance premiums may affect the performance of the REIT to the extent they are not recoverable from the tenant under their leases. Any failure by the company or companies providing insurance (or any reinsurance) may adversely affect the REIT s right of recovery under its insurance.

169 Charter Hall Long WALE REIT / Risks (continued) Insolvency In the event of any liquidation or winding up of the REIT, the claims of the REIT s creditors, including any counterparty under any hedging or other derivative arrangements, will rank ahead of those of its Securityholders. Under such circumstances, the REIT will first repay or discharge all claims of its creditors. Any surplus assets will then be distributed to the REIT s Securityholders. All Securityholders will rank equally in their claim and will be entitled to an equal share per Security. Compliance The REIT is a managed investment scheme, which means that the Responsible Entity is subject to strict regulatory and compliance arrangements under the Corporations Act 2001 (Cth) and its Australian Financial Services Licence. If the Responsible Entity fails to comply with the conditions of its Australian Financial Services Licence, then ASIC may take action to suspend or revoke the licence, which in turn could adversely impact the REIT. Forecast Financial Information The forward looking statements, opinions and estimates provided in this PDS, including the Forecast Financial Information provided, rely on various contingencies and assumptions, some of which are described in Section 7.5. Various factors and risks, both known and unknown, many of which are outside the control of the REIT, may impact upon the performance of the REIT and cause actual performance to vary significantly from expected results. There can be no guarantee that the REIT will achieve its stated objectives or that forward looking statements or forecasts will eventuate. Disposal of assets and capital gains tax implications The REIT will comprise a number of existing trusts, being the Stapled Trusts. In addition, the REIT will acquire an interest in two existing trusts, the Acquired Assets, being LWIP and Perth RDC. Through the Transaction, the REIT will inherit the CGT cost base of the property assets held by these trusts which is below the purchase price under the Proposed Transaction. That is, an inherent capital gain exists across the Portfolio which may adversely impact the after-tax returns of Securityholders. Upon Completion, the aggregate CGT cost base of the Properties held by the REIT will be approximately $914.2 million, compared to the purchase price under the Proposed Transaction of $1,211.3 million 1. If the REIT disposes of any of these property assets that are currently held by the Stapled Trusts or LWIP or Perth RDC dispose of any property assets, the taxable gain or loss will be calculated with reference to the difference between the sale price of those property assets and the relevant vendor s CGT cost base in those property assets as adjusted for additions and reductions to cost base from Completion. Presently, the REIT has no intention of disposing of any assets in the Initial Portfolio, although Investors should note that a number of the REIT s interests are in co-owned trusts which the REIT does not control. Grace Worldwide (Australia) Pty Limited, the tenant at the Willawong property (details of which are at 3.3.5), has a right to acquire that property exercisable between 30 January and 30 April 2018 and again (if not exercised in 2018) between 30 January 2023 and 30 April In each case, the price would be an amount equal to the fair market value of the property (as agreed between the parties) or failing agreement as determined by a valuer. In determining the market value, the independent valuer will assume that there is a minimum of 4 years remaining and that the tenant will be the tenant for the remainder of that term. Where the market value is determined by a valuer, it can be no less than the amount that would result from applying a capitalisation rate of 8.5%. Environmental As with any property, there is a risk that one or more of the Properties in the Portfolio may be contaminated now or in the future. Government environmental authorities may require such contamination be remediated. There is always a residual risk that the REIT may be required to undertake any such remediation at its own cost. Such an event would adversely impact the REIT s financial performance. Environmental laws impose penalties for environmental damage and contamination which can be material in size. In addition, if any remediation required to be undertaken on a Property is not completed properly, this may adversely affect the REIT s ability to sell the relevant Property or to use it as collateral for future borrowings. Should new or more stringent environmental laws or regulations be introduced in the future, any remediation costs required to be incurred by the REIT may increase materially in order to comply with the new laws or regulations. Exposure to a hazardous substance at a Property within the Portfolio could result in personal injury claims. Such a claim could prove greater than the value of the contaminated Property. An environmental issue may also result in interruptions to the operations of a Property, including the closure or re-lease of the Property. Occupational health and safety There is a risk that liability arising from occupational health and safety matters at a Property may be attributable to the REIT as the landlord instead of, or as well as, the tenant. To the extent that any liabilities may be borne by the REIT, this may impact the financial performance of the REIT (to the extent not covered by insurance). In addition, penalties may be imposed upon the REIT which may have an adverse impact on the REIT. 1. Subject to Completion adjustments.

170 168 / PDS / Risks 12. Risks (continued) Disputes and litigation The REIT may in the ordinary course of business be involved in possible litigation and disputes (for example, tenancy disputes, occupational health and safety claims or third party claims). Whilst the extent of any disputes and litigation cannot be ascertained at this time, any dispute or litigation may be costly and may adversely affect the operational and financial results of the REIT. Pre-emptive rights and other risks associated with joint-ownership agreements The joint-ownership agreements to which the REIT (or a subtrust of the REIT) is a party contain pre-emptive rights which restrict the REIT s dealings in respect of its interest in the co-owned trust or the co-owned property. In particular, where the REIT wishes to deal with its interests in a co-owned trust or property, each other co-owner will have a pre-emptive right over the REIT s interests, other than in limited circumstances (for example, by way of a permitted transfer to a member of the REIT s Securityholder or owner group). A number of joint-ownership agreements also contain: tag-along options, pursuant to which the REIT may be required to take reasonable steps, if it wishes to sell its interest in a co-owned trust or co-owned property, to cause one or more of the other co-owners interests to be acquired on substantively the same terms; drag along rights, pursuant to which a co-owner may require the REIT to sell its interests in a co-owned trust if the co-owner wishes to sell its interest and the REIT has not exercised its pre-emptive; and provisions under which a default sale process may be triggered on a change of control event, including where the Responsible Entity is replaced with an entity that is not a related body corporate of the Responsible Entity, with the default sale process giving the other co-owners a right to acquire the REIT s interests at the relevant default interest value (see Section 14.8 for a detailed summary of the other co-owners rights to acquire the REIT s interests). Additionally, disputes may arise between co-owners and, where a dispute cannot be resolved, a number of joint-ownership agreements provide for the sale of the relevant property in circumstances where a co-owner does not acquire the other co-owners interests. For more information, refer to Section Operator risk While the REIT is not an operator of any retail assets in the Initial Portfolio, the valuation and yield of these assets could be materially adversely affected by a number of operational risks of the tenants of those properties. In particular, the REIT may be affected by: Competition increased competition in the pub, gaming, retail liquor markets and other speciality stores in the regions of Australia in which its tenants operate. The REIT s tenants compete for customers with a wide variety of other hotel assets, hotel operator companies, retail liquor outlets, gaming companies and other speciality stores, some of which could be, or could become, better equipped and could have access to greater financial resources than the REIT s tenants. Competitor actions could be difficult to predict and may adversely impact on the profitability of the tenants. Regulation of operators changes in legislation and government policies that regulate liquor and gaming venues or gaming laws may adversely impact the profitability of the tenants. By way of example, reductions in the number of gaming machines, restrictions on trading hours, increases in taxes and levies imposed on gaming machines, smoking restrictions and advertising restrictions may negatively impact the profitability of venues. Conversely, the reduction or removal of regulatory barriers to entry into the industry may also negatively impact the profitability of the hotels through increased competition. As the retail assets in the Initial Portfolio are used as hotels and gaming venues, changes in liquor and gaming laws or their interpretation may affect the trading and performance of the operators and thereby the value of the hotel assets, the ability of such tenants to perform their obligations and therefore the value of, and returns from, an investment in Securities General risks of investing in listed securities There are risks associated with any stock market investment. These include, but are not limited to: Dilution risk as the REIT issues Securities to new Investors, existing Securityholders proportional beneficial ownership in the underlying assets of the REIT may be reduced. For example, if you do not participate in a future entitlement offer or choose not to reinvest your Distributions pursuant to any future distribution reinvestment plan, then your beneficial ownership in the REIT may be diluted. The Responsible Entity will only raise equity if it believes that the benefit of acquiring the relevant assets or reducing gearing is in the interests of the Securityholders. Pricing risk Securities may trade on the ASX at, above or below the Offer Price or NTA per Security. The price of the Securities can fall as well as rise and, as the Securities have not previously been listed, there is no trading history for the Securities and therefore no indication of how the Securities will perform on the ASX. The price at which Securities trade on the ASX may be affected by a range of factors including: movements and volatility in international and local share markets; general economic conditions in Australia and offshore including inflation, interest rates and exchange rates; recommendations by brokers; changes in government, fiscal, monetary and regulatory policies; changes to laws (particularly taxation laws); inclusion or removal from market indices; and changes in the supply and demand of listed property securities. Changes in the stock market rating of Securities relative to other listed securities, especially other listed property trusts, may also affect prices at which Securities trade.

171 Charter Hall Long WALE REIT / Risks (continued) Liquidity risk there can be no assurance that an active trading market will develop for the Securities. Liquidity of the Securities will be dependent on the relative volume of the buyers and sellers in the market at any given time. Changes in liquidity may affect the price at which Securityholders are able to sell their Securities. Significant blocks of Securities held by individual investors may reduce liquidity in the trading of Securities. Macro-economic Changes in the general economic outlook both in Australia and globally may impact the performance of the REIT and its Portfolio. Examples include (whether individually or in combination): changes in economic conditions and outlook in Australia and internationally; changes in Australian government, industrial, fiscal, monetary regulatory policies or changes to laws (e.g. taxation laws); changes in interest rates, exchange rates or rates of inflation; investor sentiment for particular sectors and real estate sectors over the economic cycle; the impact of international conflicts or acts of terrorism; performance of comparable listed entities and projects; changes in the general level of prices in local and international share markets and general investor sentiment in these markets; and significant industrial, contractual or political disturbances impacting the REIT or the continuity of its business. Tax The REIT s Operating Earnings may be affected by changes in taxation law, including changes in income tax, GST or stamp duty legislation, particularly if they relate to property investment. Taxation law may change as a result of legislation, case law in Australia, rulings and determinations issued by the Australian Commissioner of Taxation or other practices of tax authorities. The tax treatment of Distributions in the hands of the REIT s Securityholders may also be affected by changes to the tax regime applicable to the REIT, or the REIT s ability to make tax deferred Distributions. Tax considerations may differ between investors, therefore prospective investors are encouraged to seek professional tax advice in connection with any investment in Securities. Offshore investors in managed investment trusts are governed by particular taxation rules. An offshore investor should obtain their own taxation advice in relation to those rules. Accounting standards The Australian Accounting Standards to which the REIT adheres are set by the Australian Accounting Standards Board ( AASB ). Changes to accounting standards issued by AASB or changes to the commonly held views on the application of those standards could materially adversely affect the financial performance and position reported in the REIT s financial statements. Consequently, the trading price of Securities may be influenced by factors non-specific to the REIT and out of the REIT s ability to control. No assurances can be made that the performance of the Securities will not be adversely affected by such market fluctuations or factors. Neither the REIT or the Directors or any other person guarantees the performance of the Securities. Changes in laws, regulation and policy Changes in laws, regulations and government policy may affect the REIT or the tenants and the attractiveness of an investment in the REIT. Further, the impact of actions by governments may affect the REIT s activities including such matters as compliance with environmental regulations and taxation.

172 170 / PDS / Fees and Other Costs Fees and Other Costs 13 Coles Distribution Centre, Perth, WA

173 13. Fees and Other Costs Overview Charter Hall Long WALE REIT / 171 The Corporations Act 2001 (Cth) requires Charter Hall WALE Limited, as Responsible Entity of the REIT to include the following standard consumer advisory warning. The information in the consumer advisory warning is standard across product disclosure statements and is not specific to information on fees and costs in the REIT. Unless otherwise stated, all fees in this Section are exclusive of GST. For additional information in relation to the taxation implications of an investment in the REIT, please see Section Consumer advisory warning DID YOU KNOW? Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns. For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. Your employer may be able to negotiate to pay lower administration fees. Ask the fund or your financial adviser. TO FIND OUT MORE If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) Website ( has a managed investment fee calculator to help you check out different fee options Fees and other costs The following table shows fees and other costs you may be charged. These fees and costs may be deducted from your money, from the returns on your investment or from the assets of the REIT as a whole. Taxes and insurance costs are set out in another part of this PDS. You should read all the information about fees and costs because it is important to understand their impact on your investment. Type of fee or cost Amount 1 How and when paid Fees when your money moves in or out of the REIT Establishment fee The fee to open your investment Contribution fee The fee on each amount contributed to your investment either by you or your employer Withdrawal fee The fee on each amount you take out of your investment Exit fee The fee to close your investment Nil Nil Nil Nil Not applicable Not applicable Not applicable Not applicable 1. Including GST, less any reduced input tax credits.

174 172 / PDS / Fees and Other Costs 13. Fees and Other Costs (continued) Type of fee or cost Amount 1 How and when paid Management costs The fees and costs for managing your investment Other expenses The Responsible Entity is entitled to receive a management fee for acting as the responsible entity of the REIT equal to 0.45% of GAV of the REIT. The Responsible Entity will be entitled to be reimbursed for expenses relating to the proper performance of its duties as responsible entity of the Stapled Trusts. These costs are estimated to be approximately 0.15% p.a. of GAV 2. To be paid monthly from the income or assets of the REIT. Expenses are reimbursable to the Responsible Entity from the REIT s income or assets as and when incurred. Performance fees Nil Not applicable Acquisition fees The Responsible Entity is entitled to receive an acquisition fee of 1.0% of the value of any interest in a real estate asset acquired directly or indirectly by the REIT (which will include the REIT entering an arrangement which provides the REIT with substantially the same economic return as an interest in a real estate asset) which is implied by the gross purchase price of the interest without deducting any liabilities such as debt funding assumed by the REIT, whether directly or indirectly, and including all development and related costs associated with the interest in the real estate asset but excluding any stamp duty, tax and other such acquisition costs (this fee will be paid to the Manager under the Asset Services Agreement). The Responsible Entity is also entitled to receive an acquisition fee of 1.0% of the purchase price of any other asset acquired as an investment by the REIT. To be paid from the income or assets of the REIT when the REIT makes an acquisition of a property or an interest in a property. Disposal fee The Responsible Entity is entitled to receive a disposal fee equal to 1.0% of the value of any interest in a real estate asset disposed directly or indirectly by the REIT (which will include the redemption or cancellation of an arrangement which provided the REIT with substantially the same economic return as an interest in a real estate asset) which is implied by the gross sale price of the interest without deducting any liabilities such as debt funding assumed by the purchaser. The Responsible Entity is also entitled to receive a disposal fee of 1.0% of the sale price of any other asset that was held as an investment by the REIT. If a scheme or other arrangement occurs which results in 80% or more of all holders of Units in a Stapled Trust disposing of their Units in that Stapled Trust, the Responsible Entity will be entitled to a disposal fee equal to 1% of the value of all of the real estate assets of that Stapled Trust and any other asset held by that Stapled Trust as an investment, whether held directly or indirectly (which will include an arrangement pursuant to which the REIT receives substantially the same economic returns as an interest in a real estate asset), the value of which will be the value implied by the consideration offered under the scheme or other arrangement and without deducting any liabilities such as debt funding or any liabilities of any sub-trust or subsidiary in which the Stapled Trust has an interest. To be paid from the income or assets of the REIT when the REIT disposes of a property or an interest in a property or if 80% of more of all Unit holders of a Stapled Trust dispose of their Units in that Stapled Trust. While the REIT is listed, this fee is not payable in connection with a scheme or other arrangement in respect of the REIT as a whole which results in 80% or more of all Securityholders disposing of their Securities as a whole or where the Units in a Stapled Trust are sold to another of the Stapled Trusts. 1. Including GST, less any reduced input tax credits. 2. Based on GAV including Woolworths Distribution Centre, Dandenong at lease commencement.

175 Charter Hall Long WALE REIT / Fees and Other Costs (continued) Type of fee or cost Amount 1 How and when paid Service fees Investment switching fee The fee for changing investment options Nil Not applicable The Responsible Entity has appointed the Manager to manage the REIT under the Asset Services Agreement summarised in Section Under the Asset Services Agreement, the Manager will be entitled to a fee equal to the management, acquisition and disposal fees payable to the Responsible Entity as referred to in the table above. The Manager will receive these fees in consideration for providing the asset management services and managing the REIT pursuant to the Asset Services Agreement. The Responsible Entity will waive its entitlement to the management, acquisition or disposal fees referred to in the table above for so long as they are paid to the Manager under the Asset Services Agreement. In addition to the fees referred to above, the Manager will be entitled to reimbursement of all costs and expenses properly incurred by or on behalf of the Manager in respect of its management of the REIT. The Manager will also be entitled to recover costs for the provision of services including but not limited to legal work undertaken by employees of the Manager, the preparation of monthly management accounts, half-yearly and annual financial statements, quarterly Distribution calculations (including tax components) and annual tax returns, processing rental receipts and supplier invoices, making payments for borrowings and derivatives, liaising with external registry and insurers and monitoring compliance with Charter Hall s policies and procedures. In addition to the fees above, under the DIF Constitution, a related body corporate of the Responsible Entity, Charter Hall Direct Property Management Limited is entitled to receive a disposal fee of approximately $5.2 million and a performance fee of approximately $5.3 million on the Implementation Date. These fees will not be paid directly by Investors under the Offer and will instead effectively be paid by the existing holders of DIF units through a reduction in the capital return amount and redemption proceeds that would otherwise have been payable to them in connection with the Restructure. These fees were disclosed to the existing holders of DIF units in the Notice of Meeting pursuant to which they approved DIF s participation in the Restructure Example of annual fees and costs The following table gives an example of how the fees and costs in relation to the REIT can affect your investment over a one year period 2. You should use this table to compare this product with other managed investment products. All amounts are exclusive of GST. Example Amount Balance of $50,000 with total contributions of $5,000 Contribution Fees Nil Not applicable PLUS Management costs For every $50,000 you have in the REIT, you will be charged the following amounts each year: Management fees 0.45% p.a. of GAV For every $50,000 you have in the REIT you will be charged $255 each year Operating expenses 0.15% p.a. of GAV For every $50,000 you have in the REIT you will be charged $87 each year EQUALS Cost of REIT If you had an investment of $50,000, and put in an additional $5,000 at the beginning of the year, then for that year you will be charged fees of $ Fees and costs associated with the Offer The description and table below set out the fees and costs expected to be incurred in connection with the Offer. These costs are one-off in nature. Stamp duty costs Stamp duty of approximately $6.9 million is payable in connection with the Offer. 1. Including GST, less any reduced input tax credits. 2. For the period from Allotment to 30 June 2017 (annualised) in accordance with the assumptions as outlined in Section 7.5.

176 174 / PDS / Fees and Other Costs 13. Fees and Other Costs (continued) Transaction costs Transaction costs are estimated to be approximately $36.2 million and include underwriting and Offer management fees and costs, advisers and consultants fees, printing, marketing and debt establishment costs, stamp duty and the fees payable to the Manager referred to below. See a breakdown of transaction costs provided in the table below and refer to Section for more information. On the Implementation Date, the Manager will be entitled to receive the following fees in connection with the implementation of the Restructure: 1% of the value of the real estate assets of LWIP multiplied by the proportion of LWIP being acquired by the REIT (i.e. 45%) (approximately $3.4 million inclusive of GST); and 1% of the value of the real estate assets of CHPTDT on an as completed basis (approximately $1.2 million inclusive of GST). Type of fee or cost Underwriting and Offer management fees and costs 1 Advisers and consultants fees Fees payable to the Manager Other Transaction costs 2 Total fees and costs Expected total $17.1 million $5.5 million $4.6 million $9.0 million $36.2 million From the underwriting and Offer management fees, the Joint Lead Managers may pay sub-underwriting fees. If you apply for Securities through an adviser, that adviser may require you to pay a handling fee. You will need to contact your adviser to determine the cost of that handling fee Additional explanation of fees and costs Operating costs To the extent permitted by the Corporations Act, the Responsible Entity is entitled to recover all costs and expenses it incurs in the proper performance of its duties as responsible entity of the REIT, including in relation to: costs of the REIT s external advisers, including the REIT s auditors and lawyers; the fees and costs of the independent Directors (including directors fees and professional indemnity insurance premiums); the cost of a compliance officer employed to carry out compliance duties under the REIT s compliance plan, in so far as the allocation of the compliance officer s time is attributable to matters connected with the REIT; fees associated with taxes, government levies and bank charges; fees payable to the Registry; fees payable to the REIT s Custodian; and the amounts payable to the members of the Charter Hall Group under the Property Management Agreement and any future development management agreements (these amounts are described below). The Responsible Entity estimates that in its capacity as responsible entity of the Stapled Trusts it will incur costs of managing and administering the Stapled Trusts of approximately $2.0 million per annum which is equal to 0.15% of GAV. This excludes amounts payable under the Property Management Agreement and any development management agreements which are set out separately below. This is an estimate only and the actual expenses incurred by the Responsible Entity may differ Fees to related parties under other arrangements Certain fees and expenses may be paid from the income or assets of the REIT to members of the Charter Hall Group including pursuant to the Property Management Agreement and potential future development management agreements. These amounts are consistent with market rates and are not included in the above tables as management costs. The major categories of these fees are summarised in the table below. Members of Charter Hall Group may also earn additional fees in relation to services which the REIT engages them to undertake on an arm s-length basis. 1. As described in Section 13.5, assuming 50% of DIF Unitholders elect to participate in the Reinvestment Offer. 2. Other transaction costs include stamp duty of $6.9 million, and debt establishment costs payable in connection with the Offer.

177 Charter Hall Long WALE REIT / Fees and Other Costs (continued) The fees summarised below are not fixed and will be subject to benchmarking from time to time as agreed between the Responsible Entity and the Property Manager. For example, the Property Manager is entitled to submit, on an annual basis, a proposal to the Responsible Entity for the fees to be revised in line with market (if it thinks any fees payable to it are not in line with market), and either party is entitled to call for a review of the fees at the fifth anniversary of the initial 10 year term. Property Management Agreement Property management fee 1 Under the Property Management Agreement, Charter Hall is entitled to the following fees for property management services: Leasing fees for office properties, up to a maximum of 2.00% of Gross Income to be determined by agreement between the Board and the Property Managers; and for industrial and retail properties, up to a maximum of 3.00% of Gross Income to be determined by agreement between the Board and the Property Manager. Under the Property Management Agreement, Charter Hall is entitled to receive a leasing fee for new leases with prospective tenants and renewals or increases in leased area of leases by existing tenants. The leasing fee ranges are outlined below. Office and industrial properties Base leasing fees for office and industrial properties are calculated as a percentage of gross average annual face rent over the lease term (excluding the effect of any incentives provided by the Landlords) in accordance with the table below: Lease term Leasing fee 3 years or less 10% 3 to 4 years 11% 4 to 5 years 12% In excess of 5 years 12% plus 1% for each additional year of lease term over 7 years (or part thereof) up to a maximum of 17% The base leasing fee is payable in full in respect of the grant of a new lease. The Base Leasing Fee is also payable where subleases are converted into direct leases calculated for the period that extends beyond the original lease term. If another property agent or agents have been appointed to provide leasing services in respect of the relevant property, the leasing fee paid to all agents will be equal to 150% of the Base Leasing Fee and split as agreed amongst the agents. In all circumstances where an external agent or agents is appointed and the leasing is not conducted by Charter Hall will receive 25% of the fee scale outlined in the table above. The lease fee payable to Charter Hall in the event of a lease renewal or an exercise of option being negotiated with an existing tenant is 50% of the fee scale in the above table. If another property agent or agents have been appointed to provide leasing services in respect of the relevant property, the leasing fee payable to Charter Hall in relation to the renewal or exercise of option will be 25% of the fee scale outlined in the table above. Should an existing tenant expand into vacant space, the fee scale above will apply. However, should the expansion take place within 12 months of lease commencement, then the fee would be 50% of the above scale. For office and industrial properties, a market rent review fee of 10% of the increase in the Gross Income 1 payable in the first year following the market rent review date under the lease will be payable. A market rent review includes any mid-term market review. 1. Gross Income means all rents, licence or other fees, or contributions towards or reimbursement of outgoings received or receivable in respect of Properties (excluding the effect of any fitout incentive provided by the landlord under a lease but including the rent that would have been received but for the impact of any rent free periods and abatements).

178 176 / PDS / Fees and Other Costs 13. Fees and Other Costs (continued) Leasing Fees (continued) Retail properties 1 The base leasing fee for retail properties is 15% of the gross rent for the first year of the new lease. The base leasing fee is payable in full in respect of the grant of a new lease. In addition, leasing fees for retail properties will be payable to Charter Hall: for lease renewals and market rent review negotiations: 7.5% of the gross rent for the first year of the renewed lease or first year after the market review date (as applicable); where a tenant has exercised an option to renew: 5% of the gross rent for the first year of the option lease; and for re-locating an existing lessee or negotiating a change of space for an existing lessee: 10% of the gross rent payable in the first year of the new lease, excluding relocations of anchor tenants,. If another property agent or agents have been appointed to provide leasing services in respect of the relevant retail property, the leasing fee payable to Charter Hall will be 25% of the fee scale outlined above. Fees under potential future development management agreements Development management Fees may be payable to the Manager under future development management agreements. These fees will vary according to the nature of the project being undertaken. In addition, the Fund may, in limited circumstances 2, directly appoint third party service providers in connection with the property management services from time to time. Fees payable to those parties will be at market rates and in addition to those payable to Charter Hall Adviser remuneration The REIT does not pay any service fees, upfront or trail commissions or soft dollar benefits to financial advisers or advisory firms. However, you may agree to pay your adviser a fee for financial advice or advice services they may provide you Taxes Information relating to the Australian taxation implications associated with an investment in the REIT has been outlined in Section How fees and costs may change The Responsible Entity may not increase the management fees payable to it as set out in the Constitution without a special resolution of Securityholders first having varied the Constitution. A special resolution requires 75% of the votes cast by those Securityholders entitled to vote on the resolution (by value). 1. References to gross rent in this paragraph mean all rents, licence or other fees, or contributions towards or reimbursement of outgoings received or receivable in respect of Properties (excluding the effect of any fitout incentive provided by the landlord under a lease but including the rent that would have been received but for the impact of any rent free periods and abatements). 2. Where required in order to comply with law, or if the Property Manager requests or permits.

179 Charter Hall Long WALE REIT / 177 Summary of Important Documents Westpac Building, Kogarah, NSW 14

180 178 / PDS / Summary of Important Documents 14. Summary of Important Documents Merger Implementation Agreement The Responsible Entity, the Stapled Trusts, CPOF, the vendors of the Acquired Assets and Charter Hall have entered into a Merger Implementation Agreement pursuant to which the parties agreed to enter into the Restructure involving the stapling of units in the Stapled Trusts to create the REIT and the offering of Securities pursuant to the Offer. The steps to implement the Restructure which are prescribed in the Merger Implementation Agreement are described in Section 14.1 and The Merger Implementation Agreement sets out the parties obligations in connection with the Offer and the implementation of the Restructure. A summary of the key elements of the Merger Implementation Agreement is set out below. Implementation obligation The parties are obliged to use their best endeavours to satisfy the conditions to a listing of the REIT and to implement the Restructure in accordance with the steps which are described in Section 15.2 and 15.3 if those conditions are satisfied. The Merger Implementation Agreement also sets out the implementation steps that are required to be completed in order to complete the Restructure. Scheme consideration The Merger Implementation Agreement sets out the consideration that the Existing Unitholders in the Stapled Trusts will receive on the redemption of their Units in the relevant Stapled Trust (and in the case of DIF unitholders, their right to receive Securities in lieu of having their DIF units redeemed for cash including the capital return paid in connection with the Restructure). The capital return and the consideration payable to redeem the Units in each of the Stapled Trusts will be priced off the net asset value of the relevant trust as at the Implementation Date. For the purposes of this calculation, the following will apply: DIF The value of DIF s portfolio will be equal to a 1% premium to the values determined by way of Independent Valuations as at 30 June 2016 other than in respect of DIF s interest in the property at Old Geelong Road, Hoppers Crossing, Victoria, which will be valued at $45.5 million for the purposes of this calculation. CVLT1 and 218BRT The value of the Metcash Distribution Centre in Canning Vale, WA is $164,500,000. CPOF KHT The value of CPOF KHT s portfolio will be equal to a 1% premium to the value determined by way of Independent Valuations as at 30 June FSPT The value of FSPT s portfolio is equal to a 1% premium to the value of the Franklin Street property determined by way of Independent Valuation as at 30 June 2016 plus an amount expected to be $747, in respect of the stamp duty that the FSPT unitholders will be required to pay in connection with the transfer of certain development assets out of FSPT prior to completion of the Restructure which are not part of the REIT s Portfolio. CHPTDT The value of CHPTDT s portfolio, in respect of the asset at Dandenong, Victoria the value of which will be equal to a 1% premium to the aggregate of $4,599,131 and any amounts paid by CHPTDT to subscribe for additional units in the CH DC Fund which holds Dandenong, Victoria from 31 August 2016 to the Implementation Date and in respect of 485 Dohertys Road, Truganina the value of which will be equal to the purchase price paid by CHPTDT for that asset plus $2,895,119 in respect of stamp duty and acquisition costs paid by CHPTDT in connection with the acquisition of that asset. In addition to the redemption and capital return amounts described above, the Stapled Trusts will distribute to the Existing Unitholders in those Stapled Trusts all accrued but undistributed income for the period from the end of the relevant Stapled Trust s last distribution period to the Implementation Date. Conduct of business The Merger Implementation Agreement contains standard provisions requiring the Stapled Trusts and the vendors under the Acquisitions to conduct their business in the ordinary course in the period prior to the Restructure. Priority offer The current DIF unitholders are being offered the opportunity to receive Securities rather than cash under the Restructure. The Merger Implementation Agreement requires the REIT to give those DIF unitholders who elect to receive Securities a priority right to subscribe for additional Securities under the Offer in an amount up to the number of Securities not taken up by other DIF unitholders under the Restructure. Costs sharing In connection with the negotiation and implementation of the Restructure, the Existing Unitholders of the Stapled Trusts appointed their own advisers who are separate to the advisers of the Responsible Entity. Under the Merger Implementation Agreement, the Existing Unitholders of the Stapled Trusts are responsible for paying the costs of their advisers incurred prior to the Restructure (with those costs to be paid by the Stapled Trusts prior to the Restructure and in respect of any unpaid amounts, there will be a corresponding reduction in the redemption payment due to the Existing Unitholders in the Stapled Trusts). Representations and warranties Under the Merger Implementation Agreement, the parties have given representations and warranties to each other which are considered to be normal for an arrangement of this kind.

181 Charter Hall Long WALE REIT / Summary of Important Documents (continued) Termination The Responsible Entity or Charter Hall Group may: terminate the participation of any Stapled Trust or vendor under the Acquisitions in the Restructure at any time if any necessary co-owner or regulatory approval required by that party is not obtained or waived by 31 October 2016; and terminate the Offer and the Restructure in its entirety at any time for any reason. The other parties have limited rights to terminate the Merger Implementation Agreement. They can essentially only do so if: another party becomes insolvent and the Responsible Entity or Charter Hall Group doesn t terminate that insolvent party s participation in the Restructure; or the REIT has not listed by 31 October Offer Management Agreement The Responsible Entity, Charter Hall Limited and the Joint Lead Managers have entered into an Offer Management Agreement dated on or about the date of this PDS. Under the Offer Management Agreements the Responsible Entity on behalf of each of the Stapled Trusts appoints J.P. Morgan and UBS AG, Australia Branch (being the Joint Lead Managers) as lead managers for the Offer, and the Joint Lead Managers agree to arrange and manage the Offer, including the institutional bookbuild, and to provide settlement support for the settlement obligations of Applicants who are allocated Securities under the Institutional Offer or the Broker Firm Offer. The following is a summary of the principal provisions of the Offer Management Agreement. Fees and expenses On the Settlement Date, the Responsible Entity must pay the Joint Lead Managers, in equal proportions, a management fee equal to 2.50% of the aggregate of: (a) the amount of the Offer Price multiplied by the number of Securities issued under the Institutional Offer and the Broker Firm Offer; and (b) the amount of the proceeds from the Charter Hall Group Offer in excess of $100 million (not including the proceeds from the Reinvestment Offer Shortfall or from participation in the Charter Hall Group Offer by Existing Unitholders or from Charter Hall Group). The Responsible Entity must also pay or reimburse the Joint Lead Managers for the reasonable costs of and incidental to the Offer incurred by them. The Joint Lead Managers are liable for the payment of any commissions and fees due to any Brokers appointed under the Offer Management Agreement. Termination events not limited by materiality Each Joint Lead Manager may terminate its obligations under the Offer Management Agreement on or before 2:00pm (Sydney Time) on the date of Settlement, or at any other time specified below, on the occurrence of any of the following termination events: (a) (disclosures) a statement in any document issued or published by, or on behalf of, and with the prior approval of, the Responsible Entity in respect of the Offer, and in a form approved by the Joint Lead Managers (for example, this PDS, any Application Form and any marketing or investor presentation) ( Offer Document ) or any public and other media statements made by, or on behalf and with the knowledge and consent of the Responsible Entity in relation to the business or affairs of the REIT or the Offer ( Public Information ) is or becomes misleading or deceptive in a material respect or is likely to mislead or deceive (including by omission) in a material respect, or a material matter required to be included is omitted from an Offer Document; (b) (Supplementary PDS) the Responsible Entity lodges a Supplementary PDS without consent of the Joint Lead Managers or fails to lodge a Supplementary PDS to comply with section 1016E of the Corporations Act in a form acceptable to the Joint Lead Managers; (c) (market fall) at any time, either the S&P/ASX 200 or the S&P/ASX 200 A-REIT Index, falls to a level that is 90% or less of the level as at 5.00pm on the Business Day immediately preceding the date of the Offer Management Agreement and is at or below that level: (A) at the close of trading for 3 consecutive Business Days during any time after the date of the Offer Management Agreement; (B) on the Business Day immediately prior to the close of the Bookbuild; or (C) on the Business Day immediately prior to the Settlement Date; (d) (fraud) the Responsible Entity or any of its respective directors or officers (as those terms are defined in the Corporations Act) are engaging in, or have engaged, in any fraudulent conduct or activity whether or not in connection with the Offer; (e) (listing and quotation) approval is refused or not granted, or approval is granted subject to conditions other than customary conditions, to: (i) the Stapled Trusts admission to the official list of ASX on or before the Listing Approval Date; or (ii) the quotation of the Securities on ASX or for the Securities to be settled through CHESS on or before the Quotation Date, or if granted, the approval is subsequently withdrawn, qualified (other than by customary conditions) or withheld or ASX indicates to the Responsible Entity that approval is likely to be withdrawn, qualified (other than by customary conditions) or withheld; (f) (mutual recognition) the Responsible Entity fails to comply with the requirements of the NZ Mutual Recognition Regime to enable the Offer to proceed on the basis of the PDS, under those regulations; (g) (notifications) any of the following notifications are made in respect of the Offer: (i) ASIC issues an order (including an interim order) under section 1020E of the Corporations Act;

182 180 / PDS / Summary of Important Documents 14. Summary of Important Documents (continued) (ii) ASIC holds a hearing under section 1020E(4) of the Corporations Act; (iii) an application is made by ASIC for an order under Part 9.5 of the Corporations Act in relation to the Offer or Offer Documents, or ASIC commences any investigation or hearing under Part 3 of the Australian Securities and Investments Commission Act 2001 (Cth) in relation to the Offer or an Offer Document and such application, investigation or hearing becomes public or is not withdrawn within 3 Business Days of when it is made, or if it is made within 3 Business Days of the Settlement Date, it has not been withdrawn by the Settlement Date; or (iv) any person (other than the Joint Lead Managers) who has previously consented to the inclusion of its name in any Offer Document withdraws that consent; (h) (certificate not provided) the Responsible Entity does not provide a closing certificate as and when required by the Offer Management Agreement; (i) (material contracts) if any of the obligations of the relevant parties under any of the specified material contracts are not capable of being performed in accordance with their terms (in the reasonable opinion of the terminating Joint Lead Manager) or if all or any part of any such contract is terminated or ceases to have effect, otherwise than in accordance with its terms; (j) (withdrawal) the Responsible Entity withdraws the PDS, the Offer or indicates that it does not intend to proceed with the Offer or any part of it; (k) (insolvency events) any of the Responsible Entity, the Stapled Trusts or their subsidiaries becomes insolvent, or there is an act or omission which is likely to result in any of them becoming insolvent; (l) (Lodgement): the Responsible Entity fails to lodge the PDS on the Lodgement Date; (m) (Timetable) an event specified in the timetable (set out the Offer Management Agreement) up to and including the Settlement Date is delayed by more than 1 Business Day (other than any delay agreed between the Responsible Entity and the Joint Lead Managers); (n) (vendor offer) the Joint Lead Managers have formed the view, acting reasonably, that all Securities to be issued to Eligible DIF Unitholders under the Reinvestment Offer and all Securities to be issued to Existing Unitholders on reinvestment of their capital return and redemption proceeds and to be issued to the vendors under the Acquisitions on reinvestment of their sale proceeds will not be issued in accordance with the timetable; (o) (debt facilities): (i) the Responsible Entity breaches, or defaults under, any provision, undertaking, covenant or ratio of a material debt or financing arrangement or any related documentation to which that entity is a party which has, or may have, a material adverse effect (as defined in the Offer Management Agreement) on the Responsible Entity, the Stapled Trusts or any of the subsidiary of the Responsible Entity or the Stapled Trusts; or (ii) there occurs an event of default, a review event which gives a lender or financier the right to accelerate or requirement repayment of the debt or financing or other similar event, under or with respect to any such debt or financing arrangement or related documentation; (p) (Debt Facility Commitment) the Debt Facility Commitment is amended without the consent of the Joint Lead Managers or any part of the Debt Facility Commitment is terminated and that part of the commitment is not provided by another bank by no later than 5.00pm on the Business Day prior to the Settlement Date; (q) (unable to issue Securities) the Responsible Entity is (in circumstances which are not resolved within 1 Business Day) prevented from allotting and issuing the Securities within the time required by the PDS, the Listing Rules, by applicable laws, an order of a court of competent jurisdiction or a governmental authority; (r) (unauthorised alterations to capital) except as disclosed in the PDS or as required to effect the Restructure, the Responsible Entity: (i) alters the issued capital of the Stapled Trusts or the Responsible Entity or any of their subsidiaries; or (ii) disposes or attempts to dispose of a substantial part (directly or indirectly) of the business or property of the Stapled Trusts or the Responsible Entity or any of their subsidiaries, without the prior written consent of the Joint Lead Managers; (s) (regulatory approvals) if a regulatory body withdraws, revokes or amends any regulatory approvals required for the Responsible Entity to perform its obligations under the Offer Management Agreement or to carry out the transactions contemplated by the Offer Documents; (t) (force majeure) there is an event or occurrence, including any statute, order, rule, regulation, directive or request (including one compliance with which is in accordance with the general practice of persons to whom the directive or request is addressed) of any governmental agency which makes it illegal for the Joint Lead Managers to satisfy an obligation under the Offer Management Agreement, or to market, promote or settle the Offer; (u) (change in responsible entity) the Responsible Entity is replaced as the responsible entity of any Stapled Trust; (v) (prosecution) any of the following occur: (i) director or proposed director named in the PDS, or the Chief Executive Officer or Chief Financial Officer and Property Manager, is charged with an indictable offence; (ii) any governmental agency charges or commences any court proceedings or public action against the Responsible Entity or any of its directors or announces that it intends to take action; or (iii) any director of the Responsible Entity is disqualified from managing a corporation under Part 2D.6; and (w) (Constitution) a Constitution is varied without the prior written consent of the Joint Lead Managers;

183 Charter Hall Long WALE REIT / Summary of Important Documents (continued) Termination events limited by materiality If any of the following events occurs on or before 2.00pm (Sydney Time) on the date of Settlement, each Joint Lead Manager may terminate their obligations under the Offer Management Agreement if that Joint Lead Manager has reasonable and bona fide grounds to believe, and does believe, that the event: (a) has or is likely to have a materially adverse effect on the success, settlement or marketing of the Offer or on the ability of the Joint Lead Managers to market, promote or settle the Offer, or on the likely price at which the Securities will trade on ASX, or the willingness of investors to subscribe for the Securities under the Offer; or (b) will, or is likely to, give rise to a liability of the Joint Lead Manager under, or result in, a contravention by the Joint Lead Manager or its affiliates of, or the Joint Lead Manager or its affiliates being involved in a contravention of, any applicable law: (x) (new circumstances) there occurs a new circumstance that arises after the PDS is lodged that would have been required to be included in the PDS if it had arisen before lodgement. (y) (material contracts) if any of the obligations of the relevant parties under any of the specified material contracts are not capable of being performed in accordance with their terms (in the reasonable opinion of the terminating Joint Lead Manager) or if all or any part of any of such contracts: (i) is amended or varied without the consent of the Joint Lead Managers; (ii) is breached; or (iii) is or becomes void, voidable, illegal, invalid or unenforceable or of limited force or effect (other than by reason only of a party waiving any of its rights) or capable of being terminated, rescinded or avoided, or its performance is or becomes illegal; (z) (change in management) a change in the board of directors of the Responsible Entity or a change in the senior management the Property Manager occurs or a specified person (as set out in the Offer Management Agreement) vacates his office without the written consent of the Joint Lead Manager; (aa) (disclosures in the Due Diligence Report and any other information) the Due Diligence Report or verification material or any other information supplied by or on behalf of the Responsible Entity to the Joint Lead Managers in relation to the REIT, the Offer is (or is likely to), or becomes (or becomes likely to be), misleading or deceptive, including by way of omission; (ab) (forecasts) there are not, or there cease to be, reasonable grounds in the reasonable opinion of the terminating Joint Lead Manager for any statement or estimate in the Offer Documents which relate to a future matter or any statement or estimate in the Offer Documents which relate to a future matter is, in the reasonable opinion of the terminating Joint Lead Manager, unlikely to be met in the projected timeframe (including in each case financial forecasts); (ac) (adverse change) any adverse change occurs in the assets, liabilities, financial position or performance, profits, losses or prospects of the Stapled Trusts, the Responsible Entity or any of their subsidiaries (insofar as that entity affects the overall position of the Stapled Trusts), including any adverse change in the assets, liabilities, financial position or performance, profits, losses or prospects of the Stapled Trusts, the Responsible Entity or any of their subsidiaries from those respectively disclosed in any Offer Document or the Public Information; (ad) (change of law) there is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia, New Zealand, the United Kingdom, Hong Kong or any member state of the European Union or any State or Territory of Australia a new law, or the Reserve Bank of Australia or New Zealand, or any Commonwealth or State authority, including ASIC, adopts or announces a proposal to adopt a new policy (other than a law or policy which has been announced before the date of the Offer Management Agreement); (ae) (licence) any Australian financial services licence, or other licence, approval or permit required by the Responsible Entity to perform its business as responsible entity of each Stapled Trust is terminated, rescinded or withdrawn or otherwise amended or varied in manner that impedes the Responsible Entity s ability to discharge its obligations under the Offer Management Agreement and/or to any Stapled Trust; (af) (representations and warranties) a representation, warranty or undertaking or obligation contained in the Offer Management Agreement on the part of the Responsible Entity or the Responsible Entity is breached, becomes not true or correct or is not performed; (ag) (breach) the Responsible Entity defaults on any of its obligations under the Offer Management Agreement; (ah) (Constitution) a Constitution is varied without the prior written consent of the Joint Lead Managers; (ai) (hostilities) hostilities not presently existing commence (whether war has been declared or not) or an escalation in existing hostilities occurs (whether war has been declared or not) involving any one or more of Australia, China, Indonesia, Hong Kong, New Zealand, Singapore, the United Kingdom, North Korea, South Korea, any member state of the European Union or the United States, or a major terrorist act is perpetrated on any of those countries or any diplomatic, military, commercial or political establishment of any of those countries; (aj) (certificate incorrect) a statement in any closing certificate is false, misleading, inaccurate or untrue or incorrect; and (ak) (disruption in financial markets) any of the following occurs: (i) a general moratorium on commercial banking activities in Australia, Hong Kong, China, Japan, Singapore, the United Kingdom, a member state of the European Union or the United States is declared by the relevant central banking authority in those countries, or there is a disruption in commercial banking or security settlement or clearance services in any of those countries;

184 182 / PDS / Summary of Important Documents 14. Summary of Important Documents (continued) (ii) any adverse effect on the financial markets in Australia, Japan, China, Singapore, Hong Kong, a member state of the European Union, the United Kingdom or the United States, or in foreign exchange rates or any development involving a prospective change in political, financial or economic conditions in any of those countries; or (iii) trading in all securities quoted or listed on ASX, New York Stock Exchange the London Stock Exchange, Tokyo Stock Exchange or Hong Kong Stock Exchange is suspended or limited in a material respect for at least 1 day on which that exchange is open for trading Effect of termination If a Joint Lead Manager validly terminates its obligations under the Offer Management Agreement, that Joint Lead Manager will be relieved of its obligations under the Offer Management Agreement and the other Joint Lead Manager may, within two business days, elect to also terminate its obligations under the Offer Management Agreement or assume the obligations of the terminating Joint Lead Manager under the Offer Management Agreement. Representations, warranties and undertakings The Responsible Entity gives various representations, warranties and undertakings to the Joint Lead Managers under the Offer Management Agreement which are standard for an agreement of this nature. These representations, warranties and undertakings relate to matters such as power and authorisations, compliance with applicable laws and the Listing Rules, financial information, information contained in this PDS, the conduct of the Offer and the due diligence process, litigation, material contracts, liabilities, encumbrances, licences, insurance, distributions, title to property, environmental matters, internal controls and tax. The Responsible Entity has agreed that, other than pursuant to the Offer and subject to certain other limited exceptions, between the date of the Offer Management Agreement and the date that is 90 days after completion of the Offer, it will not, without the prior written consent of the Joint Lead Managers (such consent not to be unreasonably withheld or delayed), issue, transfer or allot, or agree to issue, transfer or allot any units or other securities that are convertible or exchangeable into equity, or that represent the right to receive equity of the Stapled Trusts or the Responsible Entity or any of their subsidiaries or enter into any swap or other arrangement that transfers to another, in whole or in part any of the economic consequences of ownership of securities of that type however settled, (or indicate in any way that it will or may do any of the foregoing) Summary of the Constitutions Stapling Provisions The rights and liabilities attaching to ownership of Securities arise from a combination of the Constitutions to determine if and when the Stapling Provisions will take effect. A cross stapling of units in the Stapled Trusts to form the Securities will occur as part of the Restructure, as described in Section The Constitutions are designed to provide for the operation of a single stapled trust. The Constitutions each contain provisions to ensure that each Stapled Security (one fully paid ordinary Unit in each of the Stapled Trusts) is treated as one security to the extent permitted by law ( Stapling Provisions ). The Stapling Provisions are substantially consistent across the seven Constitutions, and the Constitutions are to be read subject to the Stapling Provisions. The Stapling Provisions essentially provide the following: as far as the law permits, a Stapled Security will be treated as one security; the number of Units in a Stapled Trust on issue at any time must be equal to the number of units in each of the other Stapled Trusts on issue; no transfer of a Unit in a Stapled Trust is to occur without a Unit in each of the other Stapled Trusts being transferred at the same time from the same transferor to the same transferee and vice versa; and no Unit in a Stapled Trust is to be issued unless a Unit in each of the other Stapled Trusts is issued at the same time to the same person. Cessation of Stapling Provisions Subject to the Corporations Act 2001 (Cth) and the Listing Rules, the Responsible Entity may determine that one or more of the Securities be unstapled without Securityholder approval and must do so if there has been a special resolution of Securityholders in each case so long as the ASX approves the unstapling and each other issuer has agreed to the unstapling and the unstapling of the relevant Securities is not contrary to the interests of Securityholders as a whole. If the determination is made to unstaple the Securities, the Stapling Provisions will cease to apply in respect of each Stapled Security which is to be unstapled. The Responsible Entity also has the power to enter into a reorganisation of the Stapled Trust such as an exchange of Stapled Securities for other securities, although Stapled Securityholder approval by ordinary resolution would be required in some circumstances. See below in Section below for a summary of the reorganisation provisions. Ranking of Securities and Distributions Each Security will be issued fully paid. From the date of issue or transfer, the Securities will rank equally with all other Securities on issue.

185 Charter Hall Long WALE REIT / Summary of Important Documents (continued) Stapled Trust Constitutions Each Stapled Trust has been separately constituted and has adopted a Constitution that sets out the rights of their respective unitholders and binds the Responsible Entity and the unitholders of the relevant Stapled Trust. A general summary of some of the important features and rights attaching to the units issued by each of the Stapled Trusts (and collectively comprising Securities) is set out below. Income and Distribution to unitholders Subject to the terms of issue of particular units, unitholders are generally entitled to share in Distributions in proportion to the number of units they hold. The Constitutions require distributable income, if any, to be paid within three months of the last day of each financial year and any other dates as the Responsible Entity designates. As set out in Section 2.6, the Responsible Entity intends to pay Distributions quarterly and for Securityholders to receive Distributions within two months following the end of each distribution period, being the quarters ending 31 March, 30 June, 30 September and 31 December each year. If the Responsible Entity approves, unitholders may choose to reinvest some or all of a Distribution by acquiring additional units in the Stapled Trust. The Responsible Entity may also distribute any amount of capital to unitholders pro rata at any time. Pro rata Distributions may be in the form of cash or in the form of other assets. The Responsible Entity may undertake a capital reallocation by distributing capital to other Stapled Trusts as an additional capital payment in respect of the relevant Stapled Security. Transfer of units Subject to the Corporations Act 2001 (Cth) and the Listing Rules, while the units are quoted for trading on the ASX, they may be transferred by any method permitted by the operating rules of the ASX s clearing and settlement facility, the Corporations Act, the ASX or ASIC. However, Restricted Securities (as defined in the Listing Rules) may not be transferred. Withdrawals Units may not be redeemed while the Stapled Trust is listed except by way of an on-market or off-market buy-back or withdrawal offer. Powers and delegation The Responsible Entity has powers to invest, borrow, grant all types of security, enter into an underwriting arrangement and generally manage the Stapled Trust. The Responsible Entity has the power to staple units to any other security without the prior approval of unitholders. The Responsible Entity may amend the Constitution by deed, but must have the changes approved by special resolution of unitholders if the Corporations Act 2001 (Cth) requires. Meetings While the Stapled Trust is a registered managed investment scheme, unitholders rights to requisition, attend and vote at meetings are as prescribed by the Corporations Act. However, the Responsible Entity may determine that at any general meeting or class meeting, a unitholder who is entitled to attend and vote on a resolution at that meeting is entitled to a direct vote in respect of that resolution. A direct vote includes a vote delivered to the Responsible Entity by post, fax or other electronic means approved by the Responsible Entity. Rights and limitation of liability of the Responsible Entity The Responsible Entity may hold units in the Stapled Trust and deal with itself as trustee of the Stapled Trust in another capacity, subject to the Corporations Act 2001 (Cth). The Responsible Entity is not liable in contract, tort or otherwise to unitholders for any loss suffered in any way relating to the Stapled Trust except to the extent that the Corporations Act 2001 (Cth) imposes such liability. The Responsible Entity has a right of indemnity out of the assets of the Stapled Trust in respect of any liability incurred by it in properly performing or exercising any of its powers or duties in relation to the Stapled Trust. This indemnity continues after the Responsible Entity retires or is removed as Responsible Entity of the Stapled Trust and is subject to the Corporations Act 2001 (Cth). Unitholders liability A unitholder s liability is limited to the amount, if any, which remains unpaid in relation to their units, except where the Responsible Entity is entitled to be indemnified by the unitholder for tax or costs which are incurred as a result of, amongst other things, a unitholder s action or inaction. A unitholder need not indemnify the Responsible Entity if there is a deficiency in the assets of the Stapled Trust or meet the claim of any creditor of the Responsible Entity in respect of the Stapled Trust s assets. The Responsible Entity s fees and expenses The Constitution entitles the Responsible Entity to be paid management fees from the assets of the Stapled Trust at a rate of 0.45% per annum of the gross value of assets of the Stapled Trust. The Constitution also entitles the Responsible Entity to receive an acquisition fee of 1.0% of the value of any interest in a real estate asset acquired directly or indirectly by the REIT which is implied by the gross purchase price of the interest without deducting any liabilities such as debt funding assumed by the REIT (this fee will be paid to the Manager under the Asset Services Agreement). The Responsible Entity is also entitled to receive a disposal fee equal to 1.0% of the value of any interest in a real estate asset disposed of directly or indirectly by the REIT which is implied by the gross sale price of the interest without deducting any liabilities such as debt funding assumed by the purchaser.

186 184 / PDS / Summary of Important Documents 14. Summary of Important Documents (continued) As noted in Section 13.3, the Responsible Entity has appointed the Manager to manage the REIT under the Asset Services Agreement summarised in Section and under that agreement, the management, acquisition and disposal fees to which the Responsible Entity is entitled as referred to above will be paid to the Manager out of the assets of the Stapled Trust. If a scheme or other arrangement occurs which results in 80% or more of all unitholders in the relevant Stapled Trust disposing of their units in that Stapled Trust, the Responsible Entity will be entitled to a disposal fee equal to 1% of the value of all of the real estate assets of the Stapled Trust, whether held directly or indirectly, the value of which will be the value implied by the consideration offered under the scheme or other arrangement and without deducting any liabilities such as debt funding or any liabilities of any sub-trust or subsidiary in which a Stapled Trust has an interest. While the REIT is listed, this fee is not payable in connection with a scheme or other arrangement in respect of the REIT as a whole which results in 80% or more of all Securityholders disposing of their Securities as a whole or where the units in a Stapled Trust are sold to another of the Stapled Trusts. The Responsible Entity is also entitled to be paid or reimbursed from the assets of the Stapled Trust for its costs and expenses in connection with all aspects of performing the role of responsible entity. The Responsible Entity may decide not to seek reimbursement of all costs and expenses. The Responsible Entity is entitled to be indemnified out of the Stapled Trust s assets for the types of costs and expenses listed in the Constitution and any other expenses incurred in the proper performance of its duties in relation to the Stapled Trust. Winding up On winding up, each unitholder is entitled to receive a share of the value of the Stapled Trust s assets, after meeting all liabilities and expenses, proportionate to the number of units held. The Trust continues until the earlier of: the date specified by the Responsible Entity in a notice to unitholders; or the date on which the Stapled Trust terminates in accordance with its Constitution or by law. No Units may be issued or redeemed after the 80th anniversary of the day before the day the Stapled Trust commenced unless that issue or redemption would not offend the rule against perpetuities or any other rule of law or equity. Small holdings While the units are quoted on the ASX, the Responsible Entity may sell or redeem units without the request of a unitholder where the units comprise less than a marketable parcel. The Responsible Entity may only sell or redeem units once every 12 months after giving the unitholder written notice and at least six weeks from the date of that notice to notify the Responsible Entity that the unitholder wishes to retain the units. Reorganisations Under the Constitutions, the Responsible Entity has specific powers to carry out certain types of reorganisation proposals in the future. A reorganisation proposal may include: consolidating or dividing units in the relevant Stapled Trust; stapling and unstapling units in the relevant Stapled Trust to other units or securities; a simplification proposal involving either: the relevant Stapled Trust acquiring all of the securities in one or more of the other entities stapled to the Stapled Trust on terms where the consideration per security is compulsorily applied on behalf of the former holder as an additional capital contribution on the corresponding unit in the relevant Stapled Trust to which the acquired unit was previously stapled; or one of the other entities to which the relevant Stapled Trust is stapled acquiring all of the units in the relevant Stapled Trust on terms where the consideration per unit is compulsorily applied on behalf the former holder as an additional capital contribution on the corresponding security to which the acquired unit was previously stapled; and with the approval of an ordinary resolution of members, undertaking various other strategies to restructure the relevant Stapled Trust, for example, exchanging units in the relevant Stapled Trust for units in another trust or entity. The Constitutions provide that each unitholder in the relevant trust appoints the Responsible Entity as their agent and attorney to do all things the Responsible Entity considers necessary, desirable or reasonably incidental to give effect to the reorganisation proposal. The Responsible Entity will be required to act in accordance with its duty to act in the best interests of members when approving and carrying out any reorganisation proposal. Restructure provisions The Constitutions include provisions which provide the Responsible Entity with the power to implement the Restructure by carrying out and giving effect to the steps set out in Section Woolworths Distribution Centre, Dandenong Development Management Agreement The REIT has a 26% interest in the site of a proposed Woolworths distribution centre located in Dandenong South, Victoria through its interest in the CH Dandenong DC Trust ( CHDC ). CHDC has contracted to purchase the Property. Settlement of the purchase is subject to a number of settlement conditions. A number of these have been satisfied, and the key outstanding condition is registration of the plan of subdivision that will create the lot to be purchased.

187 Charter Hall Long WALE REIT / Summary of Important Documents (continued) Pending completion of the sale, CHDC s interest in the Dandenong property is a ground lease with approximately 298 years remaining on the term ( Ground Lease ). To facilitate the development of the distribution centre, CHDC entered into a development deed with Fabcot Pty Limited ( Fabcot ) and Woolworths Limited ( Woolworths ) ( Development Deed ), pursuant to which Fabcot (a wholly owned subsidiary of Woolworths) will procure and carry out the construction of the distribution centre, including landlord works (at CHDC s cost). The total cost in respect of the acquisition and the development is currently estimated to be approximately $215,777, Of this amount, $16.1 million has been paid to date and approximately $14.7 million is expected to be paid in the December quarter of Under the Development Deed CHDC is not expected to pay any further amounts to Fabcot until the later of practical completion of the works the subject of the Development Deed and the commencement of the Woolworths lease at the property ( Woolworths Lease ). The Woolworths Lease will commence on the later of the date which is 27 months after substantial commencement and practical completion (Commencement Date). The Woolworths Lease is for a term of 20 years, with nine options to renew. The rent payable by Woolworths at the Commencement Date will be equal to the sum of the aggregate of the amounts paid by CHDC in respect of the acquisition and development of the Property which meet the agreed criteria under the Development Deed multiplied by 5.5% per annum. Currently it is expected that the total acquisition and development costs referred to above will meet such agreed criteria. If Fabcot does not complete the development within the agreed timeframes, the Development Deed can be terminated in these circumstances, Fabcot must reimburse CHDC the amount paid by CHDC to Fabcot under the Development Deed and the land will be transferred to Fabcot under a call option. If CHDC defaults in paying amounts due under the Development Deed, Fabcot is entitled to issue a default notice, requiring CHDC to pay outstanding amounts within three Business Days and, if CHDC fails to pay the amount the subject of a default notice on repeated occasions, Woolworths and Fabcot may exercise step-in rights, terminate the Development Deed, recover their losses and purchase back the property Management agreements The REIT will be externally managed. The Responsible Entity, a wholly owned member of the Charter Hall Group, is ultimately responsible for the management of the REIT. The Responsible Entity has appointed: the Manager, pursuant to the Asset Services Agreement, to provide investment and asset management services including, but not limited to acquisitions, divestment and day-to-day management of the REIT and the Portfolio; and the Property Manager, pursuant to the Property Management Agreement, to provide property management services (including general property management, leasing and where necessary facilities management) in respect of Properties owned (directly or indirectly) by the REIT. It is anticipated that the Responsible Entity will appoint a member of the Charter Hall Group to perform development management services on a case by case basis during the life of the REIT. The terms of such agreements would be negotiated at the relevant time, such negotiation being in accordance with the Conflicts of Interest and Related Party Transactions policy. In addition, there will be an Asset Management Agreement in place with respect to LWIP pursuant to which Charter Hall Wholesale Management Limited as trustee for LWIP appoints the Manager to perform or procure the performance of certain investment management, asset management, property management, acquisition and other services for LWIP ( LWIP Management Agreement ) as well as a Fee Deed which will govern the payment of management fees by the REIT in connection with LWIP. The Fee Deed will clarify that the REIT will pay for any property management services provided under the LWIP Management Agreement at the rates payable under the Property Management Agreement (with respect to the REIT s proportionate interest only). The REIT s proportionate interest in any fees payable to the Manager under the LWIP Management Agreement for asset management services will be off-set against the fees payable to the Manager by the REIT under the Asset Services Agreement. The practical effect of these arrangements is that the net fees payable directly or indirectly by the REIT in respect of LWIP will be limited to the fees payable by the REIT under Asset Services Agreement and fees for property management services at rates equivalent to those contained in the Property Management Agreement. A general summary of some of the important features of the Asset Services Agreement and the Property Management Agreement is set out below Asset Services Agreement The Responsible Entity has entered into the Asset Services Agreement under which the Responsible Entity has appointed the Manager to perform or procure the performance of certain asset management and other services. The key terms of the Asset Services Agreement are set out below. This is not intended to be an exhaustive summary. Management services Under the Asset Services Agreement, the Manager is engaged to perform a number of services including (but not limited to): (reporting) providing all information necessary for the Responsible Entity to report to Investors; 1. This amount relates to the purchase price under the sale contract and the estimate of development costs payable under the Development Deed. However, it does not include acquisition costs (including the acquisition fee paid to a member of the Charter Hall Group) and an oversight project management fee payable during construction to a member of the Charter Hall Group. The current estimate of development costs payable under the Development Deed may vary as the project progresses to completion based on the cost to complete the development.

188 186 / PDS / Summary of Important Documents 14. Summary of Important Documents (continued) (fund management) preparing and issuing notices of meeting and all associated reports, agendas etc., maintaining the unit registers for the Stapled Trusts and assisting with the payment of Distributions; (Securityholder management) liaising with existing and potential Investors and assisting in the resolution of complaints of and disputes with Investors; (engaging consultants) engagement and supervision of all necessary accounting, financial, legal and other technical advisers; (general) providing all services necessary to allow the servicing of Securityholders during the life of the REIT and services the Responsible Entity reasonably requires to discharge its function in relation to the REIT. The Responsible Entity may engage the Manager (or its associates) to provide other specialised services from time to time (e.g. development management services and debt arrangement services). Where engaged, the Manager (or associate) will be entitled to receive fees for such services which are calculated on an arm s-length commercial basis. Fees and expenses The Manager is entitled to receive the fees and expenses set out in Section Termination Unless terminated, the Asset Services Agreement will continue for an initial term of 10 years and then on a rolling five year basis until each of the Stapled Trusts are terminated in accordance with their Constitutions. The Responsible Entity is entitled to terminate the Manager s appointment: by giving 30 days notice, for material non-compliance by the Manager which has or is likely to cause material loss to the REIT (if not remedied within 21 days); immediately by written notice if an insolvency event occurs in respect of the Manager or if a change of control of the Manager occurs without the approval of the Responsible Entity; or at any time after the initial term by giving 12 months written notice to the Manager. Further, the Responsible Entity must terminate the Manager s appointment if the Responsible Entity is validly terminated as the responsible entity of the REIT in accordance with the Constitution (and not replaced as responsible entity by another entity within the Charter Hall Group), such termination to be effective 30 days after the date that the Responsible Entity s appointment is terminated. The Manager can terminate the Asset Services Agreement: by giving 30 days notice, for material non-compliance by the Responsible Entity (if the non-compliance is not capable of remedy or not remedied within 30 days); or immediately if the Responsible Entity suffers an insolvency event and has not, within three months of the insolvency event, been replaced by a new trustee or responsible entity which has assumed all of the Responsible Entity s rights and obligations under the Asset Services Agreement. The Manager can retire as manager under the Asset Services Agreement with the Responsible Entity s prior consent. If the Manager s appointment is terminated by the Responsible Entity, it is entitled to payment and/or reimbursement of all accrued fees and costs under the Asset Services Agreement up to the date the appointment is terminated. Indemnity The Asset Services Agreement contains mutual indemnities, such that: the Responsible Entity indemnifies the Manager against all claims and costs suffered or incurred by the Manager as a result of undertaking its obligations under the Asset Services Agreement, except to the extent that such claim or cost is caused by negligence, misconduct or fraud of the Manager (or its employees, officers, agents or delegates); and the Manager indemnifies the Responsible Entity against all claims and costs suffered or incurred by the Responsible Entity as a result of a breach by the Manager of any obligations imposed on it under the Asset Services Agreement or through the negligence, misconduct or fraud of the Manager (or its employees, officers, agents or delegates) Property Management Agreement The Responsible Entity has entered into the Property Management Agreement under which the Responsible Entity has appointed the Property Manager to manage properties owned by the REIT. At the time of Listing, this agreement relates to all properties in the Initial Portfolio, with the exception of the ATO Adelaide Building, Franklin Street, Adelaide (which is currently managed by CBRE) and the properties owned by LWIP. As stated above, there is an Asset Management Agreement in place for the LWIP Trust, which includes property management services. If the REIT acquires a direct or indirect ownership interest in any additional properties, the Manager will be entitled to manage such properties provided that if the property is co-owned, the REIT has effective control of the property, the appointment of the Manager would not contravene any co-ownership arrangements and there is not an existing property management agreement which continues following the REIT s acquisition of the property. If the Property Manager elects to manage new properties they will fall within the scope of the Property Management Agreement, and the Property Manager will be automatically appointed to carry out property management services in respect of those properties. The key terms of the Property Management Agreement are set out below. This is not intended to be an exhaustive summary.

189 Charter Hall Long WALE REIT / Summary of Important Documents (continued) Management Services Under the Property Management Agreement the Property Manager is engaged to perform the Property Management Services which include (but are not limited to): (portfolio management) financial management and lease administration, preparing operating and capital budgets, collecting income and arranging payment of rents, insurance premiums and other operating expenses, maintaining management accounts and records (including usual tenancy files and schedules); (physical surveillance) negotiating and formalising consultancy agreements and utility and other service contracts, ensuring the continual repair and maintenance of the land, buildings and plant and liaising with occupants; (periodic reporting) preparing and providing statements to the Responsible Entity, relating to key property matters including financial statements (including gross income, net income, itemised capital expenditure), vacancy reports, debtor reports and statements of anticipated capital expenditure, recoverable outgoings and outgoings; (facilities management supervision) engage, manage and supervise any contractor engaged to perform facilities management services. Fees and expenses The Property Manager is entitled to receive the fees and expenses set out in Section Termination Unless terminated, the Property Management Agreement will continue for an initial term of ten years and then on a rolling five year basis until the REIT is wound up or all the properties the subject of the agreement are sold. The Responsible Entity is entitled to terminate the Property Manager s appointment immediately on written notice if: the Property Manager suffers an Insolvency Event; or a cause event occurs with respect to some or all properties the subject of the Property Management agreement. Cause events include matters such as the Property Manager committing fraud and the Property Manager committing repeated material breaches of the Property Management Agreement, which are either not capable of remedy or if capable of remedy not remedied within appropriate timeframes; or a change of control of the Property Manager occurs (so that it is no longer a member of the Charter Hall Group) without the approval of the Responsible Entity. at any time after the initial term by giving 12 months written notice to the Property Manager. The Property Manager can terminate the Property Management Agreement if: the Responsible Entity suffers an insolvency event and within three months of that event, the Responsible Entity has not been replaced by another entity as responsible entity and that replacement entity has not assumed all the rights and obligation of the Responsible Entity under the Property Management Agreement; or the Responsible Entity is in material breach of the Property Management Agreement and that breach is not capable of remedy or where it is capable of remedy, the Responsible Entity has not remedied the breach within 60 days of receiving written notice from the Manger to remedy the breach, (together LWR Default Event ). If the Manager s appointment is terminated, it is entitled to payment and/or reimbursement of all accrued fees and costs under the Property Management Agreement up to the date the appointment is terminated. In addition, if the Property Management Agreement is terminated due to a LWR Default Event, the Property Manager will be entitled to a termination fee equal to the property management fee payable to the Property Manager under the Property Management Agreement for the 12 months immediately prior to the date of termination. If the Responsible Entity is terminated as responsible entity of the Fund in accordance with the Constitution, the Property Management Agreement will terminate either: 12 months after the date the Responsible Entity is terminated; or if the Property Manager so elects, immediately; but in these circumstances, the Property Manager will be entitled to a termination fee equal to the property management fee payable to the Property Manager under the Property Management Agreement for the 12 months immediately prior to the date of termination Debt Facility Westpac Banking Corporation has provided a binding commitment letter to provide the Responsible Entity with a multi-option facility with a revolving cash advance facility and a revolving multi-option facility which includes a bank guarantee / letter of credit facility under the Debt Facility. The Debt Facility will have an aggregate facility limit of $350 million across three tranches. The Debt Facility may be used by the Responsible Entity to fund: the refinancing of existing debt facilities of the Stapled Trusts; the payments to completion for Woolworths Distribution Centre, Dandenong; future acquisitions; capital expenditure; and general corporate expenses. Fees are payable before or on the signing of the facility agreement for the Debt Facility. Margins are not payable until initial drawdown under each relevant tranche.

190 188 / PDS / Summary of Important Documents 14. Summary of Important Documents (continued) Summary of conditions precedent The availability of funds will be subject to a number of conditions precedent which the Responsible Entity and the Stapled Trusts consider are customary and usual for financing of this nature, including: providing Westpac Banking Corporation with legal and tax due diligence reports; legal sign-off from Westpac Banking Corporation s legal advisers as to the enforceability of the finance documents; providing valuations satisfactory to Westpac Banking Corporation for each Property; providing Westpac Banking Corporation with a verification certificate with the usual attachments, including trust deeds, specimen signatures, usual matters of solvency and evidence of no event of default subsisting; providing Westpac Banking Corporation with copies of all material documents, including trust deeds, implementation agreements, custody agreements and an organisational structure chart; all necessary corporate and regulatory approvals and consents having been obtained and remaining in full force and effect; evidence of the payment of the establishment fee; and any other conditions precedent required by Westpac Banking Corporation or its legal advisers for a facility of this nature Undertakings, representations and warranties The Debt Facility will contain a number of undertakings, representations and warranties. The Responsible Entity considers the undertakings, representations and warranties are customary and usual for financing of this nature. In addition, the Debt Facility will contain the following financial covenants: gearing ratio 1 (total liabilities divided by total tangible assets): must be less than or equal to 50%; Interest Cover Ratio (earnings before interest and tax divided by interest expense in any 12 month period): greater than or equal to 2.00x; priority indebtedness for recourse debt (recourse 2 debt divided by total tangible assets): must not exceed 5%; priority indebtedness for non-recourse debt (non-recourse debt divided by total tangible assets): must not exceed 22.5%; and unencumbered assets ratio (unencumbered debt divided by unencumbered properties): must not exceed 60%. Note: All covenants are calculated on a look through basis Events of default The Debt Facility will be subject to certain events of default which the Responsible Entity considers are customary and usual for a financing of this nature, including: failure to pay; insolvency, administration or enforcement against assets; breach of any covenants or undertakings (subject to cure periods); breach of any representations and warranties (subject to cure periods); material adverse change; misrepresentation; cross default in respect of any financial indebtedness in excess of $20 million; ceasing of business; and such other events of default that Westpac Banking Corporation considers usual and customary for a facility of this type Review events The Debt Facility will contain a number of review events which would entitle Westpac Banking Corporation to review and renegotiate the terms of the Debt Facility. If these negotiations are not successful, it may result in the funds lent to the Responsible Entity under the Debt Facility being repayable. The Responsible Entity considers the review events to be customary and usual for financing of this nature. The review events include: a change of control of the Responsible Entity; and the Stapled Securities cease to be traded on the ASX Stapling Deed The Responsible Entity of each of the Stapled Trusts has entered into a stapling deed to set out the terms of the relationship between each of the Stapled Trusts ( Stapling Deed ). The key terms of the Stapling Deed include: Stapling The Securities will remain stapled unless the parties agree to destaple one or more Securities, a special resolution of holders of the relevant Stapled Securities approves destapling, if stapling becomes unlawful or prohibited by the Listing Rules, or a winding up is commenced in respect of any of the respective Stapled Trusts. Co-operation and consultation The parties to the stapling deed agree to share accounting and other information, and to co-operate in operating their respective stapled groups, including in relation to providing information to investors, valuing assets, preparing accounts, holding meetings, issuing securities, acquiring investments and making dividends and distributions. 1. Total liabilities and total tangible assets are calculated net of cash and exclude derivatives. 2. Excludes Westpac Banking Corporation Debt Facility and all facilities that rank pari passu with that facility.

191 Charter Hall Long WALE REIT / Summary of Important Documents (continued) Financial benefits The parties to the Stapling Deed agree to give financial benefits to the other entities in the Stapled Trusts including by lending money and providing guarantees. Any such benefits must only be given if they are in the interests of the Securityholders as a whole. Dealings in Stapled Securities The relevant components of the Stapled Securities may only be issued or transferred as part of Stapled Securities. Each of the parties to the Stapling Deed must not cancel, buy-back, redeem or reorganise Units, unless at the same time there is a corresponding cancellation, buy-back, redemption or reorganisation of the Securities of each other Stapled Trust. Each of the parties to the stapling deed may maintain or procure the maintenance of a register of Stapled Securities. This includes the appointment of a common registrar. All details of Stapled Securities and dealings in those securities must be entered in the register. Although separate registers may be kept, the registers must be kept entirely consistent with one another. Duties When exercising any power or discretion, each of the parties to the Stapling Deed may consider the interests of holders of the Stapled Securities as a whole, not only the interests of members of each Stapled Trust separately. Dispute resolution If there are disagreements arising from the Stapling Deed, each of the parties to the Stapling Deed must use their best endeavours to resolve them and negotiate in good faith before instituting proceedings. Allocation of issue price Each of the parties to the Stapling Deed must agree from time to time what part of the amount payable for the issue, redemption or buy-back of a Stapled Security is to represent the price of shares or units in each of the Stapled Trusts. The allocation is to be based on the methodology set out in the stapling provisions in the Constitutions (unless agreed otherwise in the case of an issue or redemption) or fair values of the shares or units (in the case of a buy-back). If the parties are unable to agree, an independent accountant must be appointed to determine what part of the amount payable is to represent the price of the constituent securities Joint Ownership Agreements Perth RDC Trust Following the implementation of the Restructure, the ownership structure of Perth RDC Trust will be as follows: DIF DIF 2 DIF 3 CPIF 100% (Through wholly owned sub-trusts) 100% (Through wholly owned sub-trusts) 100% CHDIF Perth DIF2 Perth DIF3 Perth 0.1% 25% 25% 49.9% Perth RDC Trust 100% Coles Distribution Centre, Perth Airport The trustee or responsible entity of Perth RDC Trust, CPIF, CHDIF Perth Airport Trust (in this Section, CHDIF Perth ), CHDIF2 Perth Airport Trust (in this Section, DIF2 Perth ) and CHDIF3 Perth Airport Trust (in this Section, DIF3 Perth ) and custodians of CPIF, CHDIF Perth, DIF2 Perth and DIF3 Perth have entered into a joint ownership agreement in relation to the co-ownership arrangements for the Perth RDC Trust (in this Section, the Perth JOA ). The Perth JOA will become effective on the date of completion of the acquisition by CHDIF Perth of approximately 24.9% of units in Perth RDC Trust held by CPIF.

192 190 / PDS / Summary of Important Documents 14. Summary of Important Documents (continued) The Perth JOA sets out the governing arrangements of the Perth RDC Trust and, in particular, allows the co-owners to assume day-to-day control of the Perth RDC Trust via the establishment of a joint unitholders committee representing each of CHDIF Perth, DIF2 Perth and DIF3 Perth (each a co-owner for the purposes of the Perth JOA). Until CPIF acquires a 25% interest in the Perth RDC Trust, it will have no rights to be represented on the joint unitholders committee. A summary of the Perth JOA is set out below. This summary is not intended to be exhaustive. A joint unitholders committee must be established and each unitholder which holds at least 25% of the units in Perth RDC Trust may appoint one member. Meetings of the joint unitholders committee must be held in accordance with the Perth JOA. The joint unitholders committee must make decisions in relation to various material issues (such as the sale of the property held by the Perth RDC Trust (in this Section, the Perth Property ) or entering into material leases) by unanimous resolution. All other matters will be determined by ordinary resolution of the joint unitholders committee. The trustee of Perth RDC Trust is bound by, and must give effect to, any recommendation given by the joint unitholders committee and is restricted from doing anything in respect of various matters without a unanimous resolution of the joint unitholders committee. The Perth JOA contains a number of provisions which impact on the sale of units in the Perth RDC Trust or the Perth Property. For example: Where a unitholder holds less than 50% of the units in Perth RDC Trust, the unitholder may only dispose of its entire interest in the Perth RDC Trust. If a unitholder wishes to dispose of its entire interest in the Perth RDC Trust (in this Section, the Proposing Transferor ), other than in limited circumstances (for example, by way of a permitted transfer to a member of that unitholder s group), each other unitholder will have a pre-emptive right over those units and a tag along option in respect of its own Perth RDC Trust units. If a Proposing Transferor has complied with the pre-emptive rights procedure set out in the Perth JOA and the Proposing Transferor s entire interest in the Perth RDC Trust has not been sold, the Proposing Transferor may offer the interest to a third party without complying with the pre-emptive rights procedure, provided the interest is offered to the third party at a price no less than and on terms no more favourable than those offered to the other unitholders. During the period between 1 July 2017 and the date on which there are only 10 years remaining on the Coles Group Limited s subleases in respect of the Perth Property (in this section, the Perth Lease ) (currently expected to be 29 May 2018; however, this may be later if the lease is extended by the tenant), together with its own interest, CHDIF Perth has the ability to force a sale of CPIF s interest, DIF2 Perth has the ability to force a sale of DIF3 Perth s interest and DIF3 Perth has the ability to force a sale of DIF2 Perth s interest where they have sought to sell their units under the pre-emptive right process and no other unitholder has acquired their units or exercised a tag-along option. This assumes that each of CHDIF Perth, DIF2 Perth and DIF3 Perth hold at least a 25% interest in the Perth RDC Trust and CPIF holds less than a 25% interest in Perth RDC Trust. In such circumstances, the price of the units will be at least the current market value based on a valuation of the Perth Property which is no more than six months old. After the date on which there are only 10 years remaining on the Perth Lease (currently expected to be 1 May 2018; however, this may be later if the lease is extended by the tenant), any unitholder or any unitholders who collectively hold at least 25% of the units in the Perth RDC Trust have the ability to force a sale of all the units in the Perth RDC Trust to a third party where they have sought to sell their units under the pre-emptive right process and no other unitholder has acquired their units or exercised a tag along option. In such circumstances, the price of the units will be at least the current market value based on a valuation of the Perth Property which is no more than six months old. If CHDIF Perth acquires any units by way of permitted transfer or on exercise of its pre-emptive rights, it must offer to purchase CPIF s holding of 0.1% of issued units in the Perth RDC Trust at the same price and on substantively the same terms. Where CHDIF Perth sells its units to a third party and CPIF exercises its tag-along option, CHDIF Perth must also cause CPIF s holding of 0.1% of issued units in Perth RDC Trust to be acquired by the third party on substantively the same price and terms. Where a unitholder is in default under the Perth JOA (for example, due to a material unremedied breach or an insolvency event) or a change of control event arises in relation to the unitholder (in this Section, the Defaulting Unitholder ), the other unitholders will have the right to acquire the units held by the Defaulting Unitholder at an amount equal to: in respect of a material unremedied breach or a change of control event, 90% of the proceeds of sale (after deduction of sale costs) of the Perth Property as determined by the appointed valuer or umpire and adjusted for the Defaulting Unitholder s proportional interest in the Perth RDC trust; or in respect of a default under any mortgage or an insolvency event, the proceeds of sale (after deduction of sale costs) of the Perth Property as determined by the appointed valuer or umpire and adjusted for the Defaulting Unitholder s proportional interest in the Perth RDC trust. A change of control event in respect of a unitholder includes the following events applying to the unitholder, the unitholder s holding trust or the unitholder s head trust (as relevant), except where the event takes place with the prior consent of the other unitholders:

193 Charter Hall Long WALE REIT / Summary of Important Documents (continued) a dealing of shares and an agreement to issue or the issue of new shares in the unitholder, except where all persons acquiring an interest in the shares being dealt with or issued are members of the unitholder s group or the agreement to issue is entered into with members of the unitholder s group; if a person acquires a relevant interest in 50% or more of the units in CPIF, DIF, DIF2 or DIF3 (as relevant), except where the person acquiring the relevant interest is a member of the unitholder s group; if the units in CPIF, DIF, DIF2 or DIF3 (as relevant) are admitted to quotation on a stock exchange, a takeover bid is made for some or all of those units and the directors of the relevant trust recommend acceptance of the takeover bid, except where the bidder is a member of the unitholder s group; if the current responsible entity (or a related body corporate of the current responsible entity) of CPIF, DIF, DIF2 or DIF3 (as relevant) ceases to be responsible entity of the relevant fund; if a Charter Hall entity is no longer the trustee or responsible entity of CHDIF Perth, the holding trust of CHDIF Perth, DIF2 Perth, the holding trust of DIF2 Perth or DIF3 Perth; and if DIF (or a related body corporate) ceases to control 50% or more of the units in CHDIF Perth; DIF2 (or a related body corporate) ceases to control 50% or more of the units in DIF2 Perth; or DIF3 (or a related body corporate) ceases to control 50% or more of the units in DIF3 Perth. Where a change of control event occurs, a non- Defaulting Unitholder may force a sale of its units to the Defaulting Unitholder. In the event of a dispute that cannot be resolved, the Perth JOA provides for the sale of the Perth Property in circumstances where a unitholder does not acquire the other unitholders units Kogarah Trust Following the implementation of the Restructure, the ownership structure of Kogarah Trust will be as follows: CPOF KHT CHDOF 100% 100% CPOF KT DOFK 50.1% 49.9% Kogorah Trust 100% Westpac Building, Kogarah The trustee of Kogarah Trust, the manager of Kogarah Trust, the trustee of each of the DOF Kogarah Trust (in this Section, DOFK ) and CPOF Kogarah Trust (in this Section, CPOF KT ) and custodians of DOFK and CPOF KT have entered into a joint ownership agreement in relation to the co-ownership arrangements for the Kogarah Trust (in this Section, the Kogarah JOA ). The Kogarah JOA will become effective on the date of first issue of units in CPOF KHT under the initial public offering of Stapled Securities. The Kogarah JOA sets out the governing arrangements of the Kogarah Trust and in particular, allows the co-owners to assume day-to-day control of the Kogarah Trust via the establishment of a joint unitholders committee representing each of DOFK and CPOF KT (each a co-owner for the purposes of the Kogarah JOA). A summary of the Kogarah JOA is set out below. This summary is not intended to be exhaustive. A joint unitholders committee must be established and each unitholder in Kogarah Trust may appoint one member. Meetings of the joint unitholders committee must be held in accordance with the Kogarah JOA. The joint unitholders committee must make decisions in relation to various material issues (such as the sale of the property held by the Kogarah Trust (in this Section, the Kogarah Property ) or entering into material leases) by unanimous resolution.

194 192 / PDS / Summary of Important Documents 14. Summary of Important Documents (continued) The manager and the trustee of Kogarah Trust are bound by, and must give effect to, any recommendation given by the joint unitholders committee and are restricted from doing anything in respect of various matters without a unanimous resolution of the joint unitholders committee. The Kogarah JOA contains a number of provisions which impact on the sale of units in the Kogarah Trust or the Kogarah Property. For example: A unitholder in the Kogarah Trust may only dispose of its entire interest in the Kogarah Trust. If a unitholder wishes to dispose of its entire interest in the Kogarah Trust (in this Section, the Proposing Transferor ), other than in limited circumstances (for example, by way of a permitted transfer to a member of that unitholder s group), the other unitholder will have a pre-emptive right over those units. If a Proposing Transferor has complied with the preemptive rights procedure set out in the Kogarah JOA and the Proposing Transferor s entire interest in the Kogarah Trust has not been sold, the Proposing Transferor may offer the interest to a third party without complying with the preemptive rights procedure, provided the interest is offered to the third party at a price no less than and on terms no more favourable than those offered to the other unitholder. Where DOFK wishes to dispose of its units to a third party, it may force CPOF KT to transfer to a third party such number of units on the same terms as DOFK so that the total number of units to be acquired by the third party represents 50% of the total number of units on issue. Under the current unitholding arrangements, this means that where DOFK wishes to dispose of its units to a third party, CPOF KT will be required to transfer 0.1% of its units in Kogarah Trust to the third party on the same terms as DOFK. Where a unitholder is in default under the Kogarah JOA (for example, due to a material unremedied breach or an insolvency event) or a change of control event arises in relation to the unitholder (in this Section, the Defaulting Unitholder ), the other unitholder will have the right to acquire the units held by the Defaulting Unitholder at an amount equal to the proceeds of sale (after deduction of sale costs) of the Kogarah Property as determined by the appointed valuer or umpire and adjusted for the Defaulting Unitholder s proportional interest in the Kogarah trust. A change of control event in respect of a unitholder includes the following events applying to the unitholder, the unitholder s holding trust or the unitholder s head trust (as relevant), except where the event takes place with the prior consent of the other unitholder: a dealing of shares, an agreement to issue or the issue of new shares in the unitholder, except where all persons acquiring an interest in the shares being dealt with or issued are members of the unitholder s group or the agreement to issue is entered into with members of the unitholder s group; if a person acquires a relevant interest in 50% or more of the units in CHDOF or CPOF KHT (as relevant), except where the person acquiring the relevant interest is a member of the unitholder s group; if the units in CHDOF or CPOF KHT (as relevant) are admitted to quotation on a stock exchange, a takeover bid is made for some or all of those units and the directors of the relevant trust recommend acceptance of the takeover bid, except where the bidder is a member of the unitholder s group; if the current responsible entity (or a related body corporate of the current responsible entity) of CHDOF or CPOF KHT (as relevant) ceases to be responsible entity of the relevant fund; if a Charter Hall entity is no longer the trustee or responsible entity of CPOF KT, the holding trust of CPOF KT, DOFK or the holding trust of DOFK; and if CPOF KHT (or a related body corporate) ceases to control 50% or more of the units in CPOF KT; or CHDOF (or a related body corporate) ceases to control 50% or more of the units in DOFK. Where a change of control event occurs, the non-defaulting Unitholder may force a sale of its units to the Defaulting Unitholder. In the event of a dispute that cannot be resolved, the Kogarah JOA provides for the sale of the Kogarah Property in circumstances where a unitholder does not acquire the other unitholder s units.

195 Charter Hall Long WALE REIT / Summary of Important Documents (continued) CH DC Fund Following the implementation of the Restructure, the ownership structure of the CH DC Fund will be as follows: CPIF DIF3 CHPTDT 48% 26% 26% CH DC Fund 100% (Through wholly owned sub-trusts) Woolworths Distribution Centre, Dandenong The trustee or responsible entity of CH DC Fund, CPIF, DIF3 and CHPTDT and the custodians of CPIF, DIF3 and CHPTDT have entered into a joint ownership agreement in relation to the coownership arrangements for the CH DC Fund (in this Section, the CHDC JOA ). The CHDC JOA will become effective on the date of first issue of units in CHPTDT under the initial public offering of Stapled Securities. The CHDC JOA sets out the governing arrangements of the CH DC Fund and in particular, allows the co-owners to assume day-to-day control of the CH DC Fund via the establishment of a joint unitholders committee representing each of CPIF, DIF3 and CHPTDT (each a co-owner for the purposes of the CHDC JOA). A summary of the CHDC JOA is set out below. This summary is not intended to be exhaustive. A joint unitholders committee must be established and each unitholder may appoint one member. Meetings of the joint unitholders committee must be held in accordance with the CHDC JOA. The joint unitholders committee must make decisions in relation to various material issues (such as the sale of the property held by the CH DC Fund (in this Section, the CHDC Property ) or entering into material leases) by unanimous resolution. All other matters will be determined by ordinary resolution of the joint unitholders committee. The trustee of CH DC Fund is bound by, and must give effect to, any recommendation given by the joint unitholders committee and is restricted from doing anything in respect of various matters without a unanimous resolution of the joint unitholders committee. The CHDC JOA contains a number of provisions which impact on the sale of units in the CH DC Fund and the CHDC Property. For example: A unitholder in the CH DC Fund may only dispose of its entire interest in the CH DC Fund. If a unitholder wishes to dispose of its entire interest in the CH DC Fund (in this Section, the Proposing Transferor ), other than in limited circumstances (for example, by way of a permitted transfer to a member of that unitholder s group), each other unitholder will have a pre-emptive right over those units and a tag along option in respect of its own CH DC Fund units. If a Proposing Transferor has complied with the preemptive rights procedure set out in the CHDC JOA and the Proposing Transferor s entire interest in the CH DC Fund has not been sold, the Proposing Transferor may offer the interest to a third party without complying with the pre-emptive rights procedure, provided the interest is offered to the third party at a price no less than and on terms no more favourable than those offered to the other unitholders. Where CPIF wishes to dispose of its units to a third party and it has sought to sell its units under the pre-emptive right process and no other unitholder has acquired CPIF s units or exercised the unitholder s tag-along option, CPIF may force the other unitholders to transfer to a third party on the same terms as CPIF such number of units so that the total number of units to be acquired by the third party represents 50% of the total number of units on issue. Under the current unitholding arrangements, this means in these circumstances, CPIF will be able to require DIF3 and CHPTDT to transfer a total of 2% of units in CH DC Fund to the third party. Where DIF3 or CHPTDT wishes to dispose of its units to a third party and it has sought to sell its units under the pre-emptive right process and no other unitholder has acquired DIF3 or CHPTDT s units (as relevant) or exercised the unitholder s tag-along option, CPIF may require DIF3 or CHPTDT (as relevant) to sell, or DIF3 or CHPTDT (as relevant) may require CPIF to buy, such number of units on the same terms as DIF3 or CHPTDT (as relevant) so that the total number of units to be

196 194 / PDS / Summary of Important Documents 14. Summary of Important Documents (continued) acquired by the third party represents 25% of the total number of units on issue. Under the current unitholding arrangements, this means that in these circumstances, either DIF3 or CHPTDT (as relevant) will be required to transfer a total of 1% of units in CH DC Fund to CPIF. At any time after five years from the date of lease commencement (being the date which is the later of: (i) 27 months after substantial commencement; and (ii) practical completion under the development deed in respect of the CHDC Property, neither of which have occurred), any unitholder or any unitholders who collectively hold at least 48% of the units in the CH DC Fund has the ability to force a sale of all the units in the CH DC Fund to a third party where it has sought to sell its units under the pre-emptive right process and no other unitholder has acquired its units or exercised a tag-along option (in this section, the Exit Event ). In such circumstances, the price of the units will be at least the current market value based on a valuation of the CHDC Property which is no more than six months old. In circumstances where DIF3 and CHPTDT each hold 26% of units in CHDC Fund, where DIF3 proposes to force a sale of units, it may require CHPTDT to join in its proposal (and vice versa) such that DIF3 and CHPTDT will each be able to trigger the Exit Event by collectively holding at least 48% of the units in CH DC Fund. Where a unitholder is in default under the CHDC JOA (for example, due to a material unremedied breach or an insolvency event) or a change of control event arises in relation to the unitholder (in this section, the Defaulting Unitholder ), the other unitholders will have the right to acquire the units held by the Defaulting Unitholder at an amount equal to the proceeds of sale (after deduction of sale costs) of the CHDC Property as determined by the appointed valuer or umpire and adjusted for the Defaulting Unitholder s proportional interest in the CH DC Fund. A change of control event in respect of a unitholder includes the following events applying to the unitholder, except where the event takes place with the prior consent of the other unitholders: a dealing of shares, an agreement to issue or the issue of new shares in the unitholder, except where all persons acquiring an interest in the shares being dealt with or issued are members of the unitholder s group or the agreement to issue is entered into with members of the unitholder s group; if a person acquires a relevant interest in 50% or more of the units in CPIF, DIF3 or CHPTDT (as relevant), except where the person acquiring the relevant interest is a member of the unitholder s group; if the units in CPIF, DIF3 or CHPTDT (as relevant) are admitted to quotation on a stock exchange, a takeover bid is made for some or all of those units and the directors of the relevant trust recommend acceptance of the takeover bid, except where the bidder is a member of the unitholder s group; and if the current responsible entity (or a related body corporate of the current responsible entity) of CPIF, DIF3 or CHPTDT (as relevant) ceases to be responsible entity of the relevant fund. Where a change of control event occurs, a non- Defaulting Unitholder may force a sale of its units to the Defaulting Unitholder. In the event of a dispute that cannot be resolved, the CHDC JOA provides for the sale of the CHDC Property in circumstances where a unitholder does not acquire the other unitholders units.

197 Charter Hall Long WALE REIT / Summary of Important Documents (continued) LWIP Trust Following the implementation of the Restructure, the ownership structure of the LWIP Trust will be as follows: HOSTPLUS DIF CHPT 100% (Through wholly owned sub-trusts) 50% 5% LWR Sub 45% LWIP Trust 100% 54 retail assets The trustee or responsible entity of LWIP Trust, subtrusts of LWIP Trust, Charter Hall Property Trust (in this section CHPT ), HOSTPLUS Pooled Superannuation Trust (in this Section, Hostplus ), LWR LWIP Investment Trust (in this Section, the LWR Sub ) and the custodian of LWR Sub have entered into a joint ownership agreement in relation to the co-ownership arrangements for the LWIP Trust (in this Section, the Initial LWIP JOA ). The Initial LWIP JOA will become effective on the date of completion of the acquisition by LWR Sub of approximately 45% of units in LWIP Trust held by CHPT. The terms of the Initial LWIP JOA is amended by the Side Deed (Linked Investments) LWIP1 Trust and LWIP2 1 Trust dated on or about the date of the Initial LWIP JOA (in this Section, the Side Deed ) and the Initial LWIP JOA will apply to the unitholders, as amended by the Side Deed (in this Section, the LWIP JOA ). The LWIP JOA sets out the governing arrangements of the LWIP Trust and in particular, allows the co-owners to review, consider and make recommendations to the trustee on substantive issues in connection with the ownership and management of LWIP Trust and its assets via the establishment of a joint unitholders committee representing each of Hostplus and LWR Sub (each a co-owner for the purposes of the LWIP JOA). A summary of the LWIP JOA is set out below. This summary is not intended to be exhaustive. A joint unitholders committee must be established. LWR Sub or Hostplus may only appoint a member to the joint unitholders committee for so long as, in the case of LWR Sub, LWR Sub and CHPT together hold, or in the case of Hostplus, Hostplus holds, a minimum of 20% of the combined units in the LWIP Trust and the LWIP2 1 Trust. CHPT has no rights to be represented on the joint unitholders committee. Meetings of the joint unitholders committee must be held in accordance with the LWIP JOA. The joint unitholders committee must make decisions in relation to various material issues (such as the investment strategy of the LWIP Trust or entering into material leases with regard to any property held by the LWIP Trust (in this Section, the LWIP Property )) by unanimous resolution. The trustee of LWIP Trust is bound by, and must give effect to, any recommendation given by the joint unitholders committee and is restricted from doing anything in respect of various matters without a unanimous resolution of the joint unitholders committee. The LWIP JOA contains a number of provisions which impact on the sale of units in the LWIP Trust and the LWIP Property. For example: A unitholder in the LWIP Trust may dispose of some or all of its interest in the LWIP Trust. If a unitholder wishes to dispose of some or all of its interest in the LWIP Trust (in this Section, the Proposing Transferor ), other than in limited circumstances (for example, by way of a permitted transfer to a member of that unitholder s group), each other unitholder will have a pre-emptive right over those units. If a Proposing Transferor has complied with the pre-emptive rights procedure set out in the LWIP JOA and the other unitholders have not elected to acquire the Proposing Transferor s interest, the Proposing Transferor may offer the interest to a third party without complying with the pre-emptive rights procedure, provided the interest is

198 196 / PDS / Summary of Important Documents 14. Summary of Important Documents (continued) offered to the third party at a price no less than and on terms no more favourable than those offered to the other unitholders. At any time after 27 February 2024, a unitholder (in this Section, the Initiating Unitholder ) may trigger a procedure giving each other unitholder (in this Section, the Receiving Unitholders ) a pre-emptive right over the Initiating Unitholder s units in LWIP Trust, subject to the units proposed to be sold representing at least 10% of the total units in LWIP Trust. The price of the units will be determined based on the net tangible asset value of the LWIP Trust based on a valuation report of the LWIP Property which is no more than six months old, less 1% of the gross asset value of the LWIP Trust and adjusted for the unitholder s proportional interest in the LWIP Trust (in this Section, the Sale Price ). If no Receiving Unitholder exercises its pre-emptive rights, the Receiving Unitholders must nominate a number of properties held by the LWIP Trust which have a value (based on the latest valuation report of the LWIP Property) of at least the amount that would be required to redeem all the units at the Sale Price, use reasonable endeavours to sell the properties and apply the proceeds to redeem the Initiating Unitholder s units. Where a unitholder is in default under the LWIP JOA or the unitholders agreement in respect of the LWIP2 1 Trust (for example, due to a default under any mortgage or an insolvency event) (in this Section, the Defaulting Unitholder ), the other unitholders will have the right to acquire the units held by the Defaulting Unitholder at an amount equal to the then current market value of the units based on a valuation of the LWIP Property by an appointed valuer or umpire (in this Section, the Default Sale Price ). If the units of the Defaulting Unitholder are not acquired by the other unitholders, the trustee (as agent for the Defaulting Unitholder) may sell the Defaulting Unitholder s units to a third party at a price no less than the Default Sale Price. If: Charter Hall Group or an entity controlled by Charter Hall Group ceases to hold at least 5% of the total units in LWIP Trust; or a cause event occurs under the LWIP Asset Management Agreement or the asset management agreement in respect of the LWIP2 1 Trust (for example, due to the relevant asset manager committing a material unremedied breach, fraud or wilful misconduct in connection with the relevant asset management agreement); Hostplus will have the right to purchase the LWIP units held by CHPT at 99% of the net tangible asset value per unit. Charter Hall and LWR Sub have also entered into an agreement (separate from the LWIP JOA) under which Charter Hall will have the right to acquire all the LWIP units held by LWR Sub at the proceeds of sale (after deduction of sale costs) where a change of control event occurs in respect of LWR Sub. A change of control event in respect of LWR Sub includes the following events applying to LWR Sub or LWR, except where the event takes place with the prior consent of Charter Hall or as a result of the conduct of Charter Hall: if a person acquires a relevant interest in 50% or more of the units in DIF, except where the person acquiring the relevant interest is a member of LWR Sub s unitholder group; if the units in DIF are admitted to quotation on a stock exchange, a takeover bid is made for some or all of those units and the directors of DIF recommend acceptance of the takeover bid, except where the bidder is a member of LWR Sub s unitholder s group; if the current responsible entity (or a related body corporate of the current responsible entity) of DIF ceases to be responsible entity of DIF; and if DIF (or a related body corporate) ceases to control 50% or more of the units in LWR Sub. 1. LWIP2 Trust is a Charter Hall managed trust in which CHPT holds units. The REIT does not hold any units in LWIP2 Trust.

199 Charter Hall Long WALE REIT / Summary of Important Documents (continued) Dohertys Road, Truganina Following the implementation of the Restructure, the ownership structure of the Truganina Property will be as follows: CPIF CHPTDT 100% 100% CPIF Dohertys Road Logistics Trust LWR Truganina Logistics Trust 50% 50% Coles Distribution Centre, Truganina The trustee of LWR Truganina Logistics Trust (in this Section, LWR Truganina ) and CPIF Dohertys Road Logistics Trust (in this Section, CPIF Dohertys ) and the custodians of LWR Truganina and CPIF Dohertys have entered into a Joint Ownership Agreement in relation to the co-ownership for the property (in this Section, the Truganina Property ) located at 485 Dohertys Road, Truganina, Victoria (in this Section, the Truganina JOA ). The Truganina JOA will become effective on the date on which each of the parties signs the agreement. The Truganina JOA sets out the governing arrangements of the Truganina Property and in particular, allows the co-owners to regulate their rights and obligations in respect of the ownership of the Truganina Property and ensure that the terms of any leases over the Truganina Property are complied with, via the establishment of a joint owners committee representing each of LWR Truganina and CPIF Dohertys (each a co-owner for the purposes of the Truganina JOA). A summary of the Truganina JOA is set out below. This summary is not intended to be exhaustive. A joint owners committee must be established and each owner may appoint one member. Meetings of the joint owners committee must be held in accordance with the Truganina JOA. The joint owners committee must make decisions in relation to various material issues (such as the sale of the Truganina Property or entering into material leases) by unanimous resolution. The joint owners are bound by, and must give effect to, any decision made by the joint owners committee and are restricted from doing anything in respect of various matters without a unanimous resolution of the joint owners committee. The Truganina JOA contains a number of provisions which impact on the sale of an interest in the Truganina Property. For example: An owner may only dispose of its entire interest in the Truganina Property. If an owner wishes to dispose of its entire interest in the Truganina Property (in this Section, the Proposing Transferor ), other than in limited circumstances (for example, by way of a permitted transfer to a member of that owner s group), the other owner will have a preemptive right over that interest and a tag along option in respect of its own interest in the Truganina Property. If a Proposing Transferor has complied with the pre-emptive rights procedure set out in the Truganina JOA and the Proposing Transferor s entire interest in the Truganina Property has not been sold, the Proposing Transferor may offer the interest to a third party without complying with the pre-emptive rights procedure, provided that the interest is sold to the third party at a price no less than and on terms no more favourable than those offered to the other owner.

200 198 / PDS / Summary of Important Documents 14. Summary of Important Documents (continued) Where an owner is in default under the Truganina JOA (for example, due to a material unremedied breach or an insolvency event) or a change of control event arises in relation to the owner (in this Section, the Defaulting Owner ), the other owner will have the right to acquire the interest in the Truganina Property held by the Defaulting Owner at an amount equal to the proceeds of sale (after deduction of sale costs) of the Truganina Property as determined by the appointed valuer or umpire and adjusted for the Defaulting Owner s proportional interest in the Truganina Property. A change of control event in respect of an owner includes the following events applying to the owner, except where the event takes place with the prior consent of the other owner: a dealing of shares, an agreement to issue or the issue of new shares in the owner, except where all persons acquiring an interest in the shares being dealt with or issued are members of the owner s group or the agreement to issue is entered into with members of the owner s group; if a person acquires a relevant interest in 50% or more of the units in CPIF or CHPTDT (as relevant), except where the person acquiring the relevant interest is a member of the owner s group; if the units in CPIF or CHPTDT (as relevant) are admitted to quotation on a stock exchange, a takeover bid is made for some or all of those units and the directors of the relevant trust recommend acceptance of the takeover bid, except where the bidder is a member of the owner s group; if the current responsible entity (or a related body corporate of the current responsible entity) of CPIF or CHPTDT (as relevant) ceases to be responsible entity of the relevant fund; if a Charter Hall entity is no longer the trustee or responsible entity of LWR Truganina, the holding trust of LWR Truganina, CPIF Dohertys or the holding trust of CPIF Dohertys; and if CPIF (or a related body corporate) ceases to control 50% or more of the units in CPIF Dohertys; or CHPTDT (or a related body corporate) ceases to control 50% or more of the units in LWR Truganina. Where a change of control event occurs, a non- Defaulting Owner may force a sale of its units to the Defaulting Owners.

201 Charter Hall Long WALE REIT / 199 Additional Information Grace Worldwide, Willawong, QLD 15

202 200 / PDS / Additional Information 15. Additional Information History of the Stapled Trusts The REIT will be formed by stapling together all of the units in the Stapled Trusts, all of which are listed below: Charter Hall Direct Industrial Fund (ARSN ) ( DIF ) DIF was established on 11 June 2010 and registered as a managed investment scheme on 25 June In 2010, Charter Hall Direct Management Limited, as the then responsible entity of DIF, offered units in DIF to the retail and institutional investors in Australia under a product disclosure statement dated 13 July DIF owns 6 industrial properties located in NSW, SA, Victoria and Queensland and a 25% interest in the Coles Distribution Centre in Perth, WA with an aggregate value of $259.2 million. Pursuant to the Acquisitions, DIF will acquire a further 24.9% in the Coles Distribution Centre in Perth, WA and a 45% in the LWIP Trust. Canning Vale Logistics Trust No.1 (ARSN ) ( CVLT1 ) CVLT1 was established on 1 March 2012 and registered as a managed investment scheme on 22 September CVLT1 is currently a wholly owned subtrust of the Charter Hall Prime Industrial Fund. CVLT1 owns a 50% interest in the Metcash Distribution Centre in Canning Vale, WA valued at approximately $164.5 million (on a 100% basis) (with the other 50% owned by 218 BRT). 218 Bannister Road Trust (ARSN ) ( 218 BRT ) 218 BRT was established on 25 January 2013 and registered as a managed investment scheme on 22 September BRT is currently a wholly owned sub-trust of the Charter Hall Core Logistics Partnerships trust. 218 BRT owns a 50% interest in the Metcash Distribution Centre in Canning Vale, WA valued at approximately $164.5 million (on a 100% basis) (with the other 50% owned by CVLT1). CPOF Kogarah Holding Trust (ARSN ) ( CPOF KHT ) CPOF KHT was established on 22 April 2016 and registered as a managed investment scheme on 22 September CPOF KHT is currently a wholly owned sub-trust of the Charter Hall Prime Office Fund. CPOF KHT indirectly owns a 50.1% interest in the St George House, Kogarah, NSW valued at approximately $93.7 million (on a 50.1% basis). The other 49.9% of this asset is owned by another Charter Hall managed fund. Prior to the establishment of CPOF KHT, the Charter Hall Prime Office Fund owned its 50.1% interest in St George House, Kogarah directly. CHPT Dandenong Trust (ARSN ) ( CHPTDT ) CHPTDT was established on 9 November 2015 and registered as a managed investment scheme on 22 September CHPTDT is currently a wholly owned sub-trust of the Charter Hall Property Trust. CPOF KHT indirectly owns a 26% interest in a yet to be completed Distribution Centre in Dandenong, Victoria which is being built for Woolworths and will be valued at approximately $56.1 million (on a 26% interest as complete basis). The other 74% of this asset is owned by other Charter Hall managed funds. In addition, CHPTDT owns 100% of the Coles Distribution Centre in Truganina, Victoria valued at approximately $51.3 million. Franklin Street Property Trust (ARSN ) ( FSPT ) FSPT was established on 13 October 2010 and registered as a managed investment scheme on 22 September FSPT is currently 50/50 co-owned by a another Charter Hall managed fund and a third party investor. FSPT owns the ATO Adelaide building in Adelaide, SA valued at approximately $263.5 million. LWR Finance Trust (ARSN ) ( Finance Trust ) Finance Trust was established on 30 August 2016 and registered as a managed investment scheme on 22 September Finance Trust was established to wholly own Charter Hall LWR Limited who will act as the borrower under the REIT s Debt Facility. Finance Trust currently has no material assets or liabilities Establishment of the REIT It is proposed that each of the Stapled Trusts will be admitted to the Official List of the ASX and have their units stapled and quoted on the ASX as Securities. As set out in Section 15.3, Eligible DIF Unitholders who participate in the Reinvestment Offer will receive units in the other Stapled Trusts such that they hold an equal number of units in each Stapled Trust. The units in each of the Stapled Trusts will then be stapled together to form Securities. Each of the Stapled Trusts will then issue new Securities to new investors under this Offer. Following the issue of Securities under the Offer, a sub-trust wholly owned by DIF will acquire the following interests in existing property holding trusts ( Acquisitions ): 45% of LWIP Trust ( LWIP ); and 24.9% of Perth RDC Trust Restructure In connection with the Offer, each of the Stapled Trusts and the vendors under the Acquisitions are undertaking the Restructure in order to form the REIT and create the Securities that are being offered under the Offer. The Restructure is being undertaken in accordance with the terms of the Merger Implementation Agreement, which is summarised in Section If the conditions to the Restructure are satisfied or waived, the Restructure will involve: (a) each of the Stapled Trusts undertaking an equal capital reduction in favour of their existing unit holders; (b) the existing units in each of the Stapled Trusts being consolidated or sub-divided in order to provide for the agreed value allocation between the various Stapled Trusts; (c) each of the Stapled Trusts will issue their units on a 1-for-1 basis to successful Applicants under the Public Offer; (d) the pre-existing units in each of the Stapled Trusts will be redeemed other than those DIF units held by Eligible DIF Unitholders who elected to have those DIF units participate in the Reinvestment Offer;

203 Charter Hall Long WALE REIT / Additional Information (continued) (e) Eligible DIF Unitholders who elected to participate in the Reinvestment Offer will retain their original DIF units that they elected to have participate in the Reinvestment Offer (which will have been consolidated under paragraph (c)) and will have the capital return referred to in paragraph (a) compulsorily applied on their behalf toward a subscription for one unit in each of the other Stapled Trusts for each unit in DIF held prior to the issue such that following the issue they will hold an equal number of units in each of the Stapled Trusts; (f) all of the units in the Stapled Trusts will be stapled together to form Securities; and (g) DIF will complete the Acquisitions in exchange for cash or procuring an issue of Securities to the vendors under the Acquisitions. The fees payable in connection with the Restructure are summarised in Section 13. Following the above steps, the REIT may undertake a capital reallocation involving a distribution being made by one or more of the Stapled Trusts to its unitholders on terms where that distribution must be compulsorily applied by the Responsible Entity on behalf of those unitholders as an additional capital contribution on the corresponding unit in one or more of the other Stapled Trusts held by those same unitholders. Any such capital reallocation will not have any impact on the net asset value of the Securities or the REIT. Whether a capital reallocation is implemented and, if so, the quantum, will be determined by the Responsible Entity on the Implementation Date in its absolute discretion, and any such amount determined by the Responsible Entity will be disclosed to the ASX. Upon completion of the Restructure described in the steps above, the REIT will have been formed and will own the Initial Portfolio and all of the conditions to the ordinary trading of Securities on the ASX will have been satisfied, and trading on the ASX will commence on an ordinary settlement basis. In connection with the implementation of the Restructure, the Stapled Trusts will declare a Distribution of all distributable income of the respective Stapled Trust from the end of the most recent distribution period to the Implementation Date with such Distributions to be paid to the Existing Unitholders. Following the implementation of the Restructure, the structure of the REIT will be as set out below 1. Charter Hall Group Other LWR Securityholders Up to approx. 22% Approx. 78% Long WALE REIT Stapled Trusts 100% LWR RE Charter Hall WALE Limited (responsible entity) DIF 100% 25% CVLT1 a 218 BRT a CPOF KHT 50% 50% 50.1% FSPT 100% 26% CHPT DT b 6 1 c LWR FT 50% Acquired Assets LWIP 45.0% 24.9% Perth RDC Asset category key: 2 Office 10 Industrial 54 1 c 54 Retail Note: (a) Combined represents a 100% interest in Metcash Distribution Centre, Canning Vale. (b) CHPTDT holds a 26% interest in Woolworths Distribution Centre, Dandenong and a 50% interest in Coles Distribution Centre, Truganina. (c) Refers to one asset, the 24.9% acquistion of Perth RDC Trust will increase DIF s interest in Coles Distribution Centre, Perth to 49.9% It is proposed that following the implementation of the Restructure, DIF (the Charter Hall Direct Industrial Fund) will change its name to LWR Trust. 1. Not all assets are wholly owned by the REIT. Refer to Section 3 for more information.

204 202 / PDS / Additional Information 15. Additional Information (continued) Possible future structural simplification Following the initial public offering, the REIT intends to consider options to simplify its structure. Any simplification proposal will be conditional on the REIT obtaining the requisite approvals, reliefs, waivers and rulings and there is no guarantee that it will be implemented. It is intended that any simplification proposal will not change the underlying businesses of the REIT and holders of Securities will continue to own the REIT and directly or indirectly own 100% of the assets of each of the Stapled Trusts Child entities Entity Child entities (on completion of the Restructure) Real estate asset (REIT s % interest) DIF CHDIF Kingsgrove Trust Australia Post, Kingsgrove (100%) CHDIF Beverley Holding Trust, which owns Electrolux, Beverley (100%) 100% of the units in the CHDIF Beverley Trust CHDIF Kingston Holding Trust, which owns Coates Hire, Kingston (100%) 100% of the units in the CHDIF Kingston Trust CHDIF Willawong Trust Grace Worldwide, Willawong (100%) CHDIF Altona North Trust Toll, Altona North (100%) CHDIF Hoppers Crossing Trust Woolworths Distribution Centre, Hopper s Crossing (100%) CHDIF Perth Holding Trust, which owns 100% of the units in CHDIF Perth Airport Trust CHDIF Perth Airport Trust owns 25% of the units in Perth RDC Trust and will acquire a further 24.9% of the units in Perth RDC Trust in connection with the Restructure. LWR LWIP Holding Trust, which owns 100% of the units in LWR LWIP Investment Trust Perth RDC Trust owns 100% of the Coles Distribution Centre, Perth Airport LWR LWIP Investment Trust will acquire 45% of the units in LWIP in connection with the Restructure. CHPTDT 26% of units in CH DC Fund, which owns 100% of the units in CH Dandenong DC Trust LWIP owns 100% of the units in LWIP Subtrust1 and LWIP Subtrust 2, which own the 54 retail assets described in Section 3.4. Woolworths Distribution Centre, Dandenong (26%) LWR Truganina Logistics Trust Coles Distribution Centre, Truganina (50%) CPOF KHT CPOF Kogarah Trust CPOF Kogarah Trust owns 50.1% of the units in Kogarah Trust Kogarah Trust owns a 100% interest in St George House, Kogarah. FSPT Nil ATO, Adelaide (100%) CVLT1 Nil Metcash Distribution Centre, Canning Vale (50%) 218 BRT Nil Metcash Distribution Centre, Canning Vale (50%) Finance Trust Charter Hall LWR Limited Nil

205 Charter Hall Long WALE REIT / Additional Information (continued) Existing and proposed capital structure of the Stapled Trusts Trust Category of Security Number of Securities (rounded) Class of Security DIF Units currently on issue 120,445,047 Fully paid ordinary units CHPTDT Units currently on issue (all are to be redeemed via 100 Fully paid ordinary units the Restructure) CPOF KHT Units currently on issue (all are to be redeemed via 100 Fully paid ordinary units the Restructure) FSPT Units currently on issue (all are to be redeemed via 34,620,202 Fully paid ordinary units the Restructure) 20 B class units CVLT1 Units currently on issue (all are to be redeemed via 66,266,651 Fully paid ordinary units the Restructure) 218 BRT Units currently on issue (all are to be redeemed via 67,725,823 Fully paid ordinary units the Restructure) LWR FT Units currently on issue (all are to be redeemed via 100 Fully paid ordinary units the Restructure) All Stapled Trusts Options currently on issue Nil N/A Units proposed to be issued between date of Nil N/A application and Listing Options proposed to be issued between date of Nil N/A application and Listing Units proposed to be on issue on Listing Approximately million 1 Fully paid ordinary units in each Stapled Trust (each as a component of a Stapled Security) Options proposed to be on issue on Listing Nil N/A 1. Of the approximately million Securities that will be on issue on Listing, approximately 37.9 million are expected to be issued to the vendors under the Acquitions.

206 204 / PDS / Additional Information 15. Additional Information (continued) ASX waivers and confirmations The REIT has applied for waivers/confirmations from/of a number of Listing Rules Confirmations and approvals (a) confirmation that the Stapled Trusts are appropriate for listing on the ASX, in accordance with condition 1 of Listing Rule 1.1 which provides that the entity s structure and operations must be appropriate for a listed entity; (b) confirmation that the Constitution of each of the Stapled Trusts is consistent with the Listing Rules for the purpose of Listing Rule 1.1, Condition 2; (c) confirmation that the terms applying to the Securities are appropriate and equitable for the purpose of Listing Rule 2.1, Condition 1 and Listing Rule 6.1; (d) confirmation that the proposed constitutions of the specified entities are appropriate and equitable for the purpose of Listing Rule having regard to the provisions that permit the redemption of units held by unitholders other than those Eligible DIF Unitholders that apply to receive Securities under the Reinvestment Offer; (e) confirmation that for the purpose of calculating how many Securities the REIT may issue under Listing Rule 7.1 following Allotment of the Offer, the REIT may take the number of Securities on issue immediately after Allotment of the Offer as the number taken to be on issue 12 months prior to those issues; (f) confirmation that disclosure by one Stapled Trust in the REIT will satisfy the disclosure obligations of the other Stapled Trusts in the REIT in respect of the other components of the Securities in relation to the same matter for the purpose of Guidance Note 2; and (g) confirmation that the Securities may be quoted on a conditional and deferred settlement basis under ASX Operating Rule Waivers (a) waiver so that the Responsible Entity is permitted to be under an obligation to allow participating unitholders of the relevant trust to withdraw from the trust in accordance with the Offer for the purpose of Listing Rule 1.1, Condition 5; and (b) waiver for the purposes of Securities being issued to members of the Stapled Trusts and successful applicants under the Offer (and to Directors of the Responsible Entity and other related parties insofar as they participate in the Offer) for the purpose of Listing Rule 7.1 and Listing Rule Standard stapled entity / trust waivers (a) a waiver from Listing Rule 1.1, Condition 7 to the extent necessary, to permit the value of individual components of the Securities to be lower than A$2,000 for the purposes of a parcel of those securities to be counted toward the required 400 parcels, on the basis that the value of a parcel of Securities will be greater than or equal to A$2,000. (b) a waiver from Listing Rule 1.1, Condition 8 to the extent necessary, on the basis that the REIT as a whole will comply with the assets test even though the Stapled Trusts may not individually comply with the assets test as separate entities; (c) a waiver from the requirements of Listing Rule 2.1, Condition 2 on the condition that a Security has a value of at least A$0.20; (d) a waiver from Listing Rule 6.24 and clause 1 of Appendix 6A to the extent that the rates and amount of a distribution announced by the REIT need not be announced to the ASX on that date or on the record date on the condition that an estimated distribution rate is advised to the ASX on that date and the actual distribution rate is advised to the ASX as soon as it becomes known; (e) a waiver from Listing Rule 8.10 to the extent necessary to permit Stapled Trusts each Stapled Trust to refuse to register a transfer of a particular component of Stapled Securities if not accompanied by a corresponding transfer of all other components of the Stapled Securities; and (f) a waiver from Listing Rule 10.1 to the extent necessary to allow the transfer of assets between the Stapled Trusts and between wholly-owned members of the REIT ASIC relief The REIT has applied for certain relief from, and modifications to, certain provisions of the Corporations Act Relief required to conduct the Offer (a) Takeover provisions (section 606) - relief from the takeovers provisions to allow Charter Hall Group to acquire greater than 20% of the REIT under the Offer without making a takeover bid under Chapter 6 of the Corporations Act. (b) Redemption relief (Part 5C.6) relief to allow the Stapled Trusts to redeem units in the Stapled Trusts held by Existing Unitholders in connection with the Restructure. (c) Treatment of Securityholders (section 601FC(1)(d)) relief is required to allow the responsible entity of DIF to treat any ineligible foreign Securityholders in DIF differently on the basis that they will not receive the Reinvestment Offer. (d) Distribution of PDS (section 1015C) exemption to permit the PDS to be sent to Securityholders using the addresses as shown on the Charter Hall Register. (e) Short selling provisions (section 1020B(2)) relief so that the sale of Securities during the conditional and deferred settlement period is exempt from the operation of the short selling restrictions in the Corporations Act. (f) Financial reporting (section 323D(5)) relief to allow each Stapled Trust (other than DIF) to end its initial reporting period and its first financial half year on 31 December 2016, instead of within 7 days of the date which is 6 months from the date of its registration as a managed investment scheme.

207 Charter Hall Long WALE REIT / Additional Information (continued) Standard stapled entity / trust relief (a) Interests of Securityholders as a whole (Sections 601FC, 601FD and 601FE) - relief required to enable the Responsible Entity s officers to act in the best interests of the Securityholders collectively rather than the interests of unit holders in a particular Stapled Trust and use information acquired for the benefit of Securityholders collectively rather than the separate interests of unitholders in a particular Stapled Trust. (b) Financial benefits (Part 5C.7) modification or exemption to allow the Responsible Entity to provide financial benefits out of scheme property of a Stapled Trust to other Stapled Trusts (and their controlled entities). (c) Distribution reinvestment plan (Section 1012D(3)) - relief to permit the offer of Securities of the REIT under a future distribution reinvestment plan without having to issue an additional product disclosure statement Litigation and claims The Responsible Entity (in its personal capacity and as trustee of any trust) is, from time to time, party to various disputes and legal proceedings incidental to the conduct of its business. As at the PDS Date, there are no legal proceedings to which the Responsible Entity (in its personal capacity and as trustee of any trust) is a party that it believes is likely to have a material adverse impact on its respective future financial results, and the Responsible Entity (in its personal capacity and as trustee of any trust) is not aware of any such legal proceedings that are pending or threatened Complaints and dispute resolution The compliance plans of each of the Stapled Trusts set out the procedures which the Responsible Entity must follow in operating the REIT to ensure compliance with the Corporations Act 2001 (Cth) and the Constitutions of the REIT. If you have a complaint about the REIT or the Responsible Entity in connection with your investment in the REIT, you can write to the Company Secretary at: Charter Hall WALE Limited Level 20, 1 Martin Place Sydney NSW 2000 The Company Secretary of the Responsible Entity will acknowledge your complaint as soon as practicable and in any event within 14 days of receipt, investigate it and report back to you as soon as practicable, and in any event, within 45 days the determination in relation to the complaint. If you are dissatisfied with the response or the complaint is not resolved within 45 days, you may raise the matter directly with the Financial Ombudsman Service Limited ( FOS ). The FOS s contact details are: Financial Ombudsman Service Limited GPO Box 3 Melbourne VIC 3001 Telephone: info@fos.org.au If you are seeking investment advice, you should contact your financial adviser Charter Hall managed funds rights of first refusal The REIT will continually evaluate acquisition (including joint venture) opportunities across multiple real estate sectors including those outside the Initial Portfolio. Future acquisitions may be sourced from third parties or members of the Charter Hall Group. Charter Hall will actively manage the Portfolio, including through acquiring and divesting assets, to maintain and enhance the quality of the Portfolio. As acquisition opportunities arise, Charter Hall may present those opportunities to its managed funds (including some funds which may have a first right over acquisition opportunities identified in certain real estate sectors) and manage those opportunities in accordance with the internal asset allocation and leasing protocol Consents Each of the parties listed in this Section (each a Consenting Party ), to the maximum extent permitted by law, expressly disclaims all liabilities in respect of, makes no representations regarding and takes no responsibility for any statements in or omissions from this PDS, other than the reference to its name in the form and context in which it is named and a statement or report included in this PDS with its consent as specified below. Each of the Consenting Parties listed below has given and has not, at the time of lodgement of this PDS with ASIC, withdrawn its written consent to the inclusion of statements in this PDS that are specified below in the form and context in which the statements appear: (a) Charter Hall Group has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as Charter Hall and to statements in this PDS attributable to Charter Hall. (b) J.P. Morgan Australia Limited has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as a Joint Lead Manager and Joint Bookrunner to the Offer. (c) UBS AG, Australia Branch has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as a Joint Lead Manager and Joint Bookrunner to the Offer.

208 206 / PDS / Additional Information 15. Additional Information (continued) (d) King & Wood Mallesons has given, and has not withdrawn prior to the date of this PDS, its consent to be named in this PDS as Australian legal adviser (other than in relation to taxation matters) to the REIT in relation to the Offer in the form and context in which it is named; (e) Crestone Wealth Management Limited has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as Co-Manager to the Offer. (f) National Australia Bank Limited has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as Co-Manager to the Offer. (g) Ord Minnett Limited has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as Co-Manager to the Offer. (h) KPMG Transaction Services has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as Investigating Accountant to the REIT in relation to the Financial Information in the form and context in which it is named and to the inclusion in this PDS of the Investigating Accountant s Report set out in Section 9 in the form and context in which it is included; (i) PricewaterhouseCoopers has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as tax adviser to the REIT in relation to the Offer in the form and context in which it is named and to the inclusion in this PDS of the Taxation report in Section 11 in the form and context in which it is included; (j) Link Market Services has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as the Security Registry in the form and context in which it is named. Link Market Services Limited has had no involvement in the preparation of any part of this PDS other than being named as Registry to the REIT. (k) CBRE Valuations Pty Limited, has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as an Independent Valuer in relation to certain Independent Valuations in the form and context in which it is named and to the inclusion in this PDS of any Valuation Summaries set out in Section 10 in the form and context in which they are included. (l) Jones Lang LaSalle Advisory Services Pty Ltd has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as an Independent Valuer in relation to certain Independent Valuations in the form and context in which it is named and to the inclusion in this PDS of any Valuation Summaries set out in Section 10 in the form and context in which they are included. (m) m3property Pty Ltd has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as an Independent Valuer in relation to certain Independent Valuations in the form and context in which it is named and to the inclusion in this PDS of any Valuation Summaries set out in Section 10 in the form and context in which they are included. (n) Savills Valuations Pty Ltd has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as an Independent Valuer in relation to certain Independent Valuations in the form and context in which it is named and to the inclusion in this PDS of any Valuation Summaries set out in Section 10 in the form and context in which they are included. (o) Valuation Services Pty Ltd in each respective state trading as Knight Frank Valuations has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS as an Independent Valuer in relation to certain Independent Valuations in the form and context in which it is named and to the inclusion in this PDS of any Valuation Summaries set out in Section 10 in the form and context in which they are included. (p) Jones Lang LaSalle (NSW) Pty Limited has given, and has not withdrawn prior to the PDS Date, its written consent to be named in this PDS, and to the inclusion in this PDS of the Independent Market Report set out in in Section 4. No Consenting Party referred to above in this Section has made any statement that is included in this PDS or any statement on which a statement made in this PDS is based, except as stated above. Each Consenting Party referred to above in this Section has not authorised or caused the issue of this PDS, does not make any offer of Securities and expressly disclaims and takes no responsibility for any statements in or omissions from this PDS except as stated above in this Section Copies of documents The Constitutions and compliance plans of each of the Stapled Trusts are available for inspection at the offices of the Responsible Entity between 8:30am and 5.00pm (Sydney time) on Business Days in Sydney, New South Wales. Alternatively, a copy of the Constitutions and compliance plans of each of the Stapled Trusts may be requested (to be provided free of charge) by contacting the Compliance Officer on : Following listing, the Responsible Entity will communicate with Securityholders through: (a) audited annual financial reports; (b) reviewed half-year financial reports; and (c) any continuous disclosure notices given by the Responsible Entity in relation to the REIT. The REIT s Website will provide information about the REIT, including access to the above documents and distribution statements. As a disclosing entity, the REIT will be subject to regular reporting and disclosure obligations. Copies of documents lodged with ASIC in relation to the REIT can be obtained from ASIC, or inspected at an ASIC office. In addition, copies of the documents referred to in (a) to (c) above in relation to DIF are available on request by contacting the Responsible Entity.

209 Charter Hall Long WALE REIT / Additional Information (continued) Anti-money laundering The Responsible Entity is bound by laws relating to the prevention of money laundering and the financing of terrorism, including the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 ( AML/CTF Laws ). By completing an Application Form, you agree that: you do not subscribe to the REIT under an assumed name; any money used by you to invest in Securities is not derived from or related to any criminal activities; any proceeds of your investment will not be used in relation to any criminal activities; if we ask, you will provide us with additional information we reasonably require for the purposes of AML/CTF Laws (including information about a holder of a Security, any beneficial interest in the Securities, or the source of funds used to invest); we may obtain information about you or any beneficial owner of a Security from third parties if we believe this is necessary to comply with AML/CTF Law; and in order to comply with AML/CTF Laws, we may be required to take action, including: delaying or refusing the processing of any application or withdrawal, or disclosing information that we hold about you or any beneficial owner of the Securities to our related bodies corporate or service providers, or relevant regulators of AML/CTF Laws (whether in or outside of Australia) Environmental and ethical considerations The Responsible Entity does not take into account labour standards or environmental, social or ethical considerations for the purpose of selecting, retaining or authorising investments for the REIT. Environmental factors are addressed as part of normal property due diligence Governing law This PDS and the contracts that arise from the acceptance of the Applications and bids under this PDS are governed by the laws applicable in New South Wales, and each Applicant under this PDS submits to the non-exclusive jurisdiction of the courts of New South Wales Statement of Directors This PDS is authorised by each Director, who consents to its lodgement with ASIC and its issue.

210 208 / PDS / Glossary Glossary 16 Kawana Waters Hotel, Kawana Waters, QLD

211 Charter Hall Long WALE REIT / Glossary Defined term Meaning $ or $A Australian dollars. 1H FY18 or 1H18 Six months ending 31 December BRT 218 Bannister Road Trust (ARSN ). AAS or Australian The Australian Accounting Standards and other authoritative announcements issued by the AASB. Accounting Standards AASB Australian Accounting Standards Board. ABN Australian Business Number. Acquired Assets Means: (a) 45.0% of LWIP; and (b) 24.9% of Perth RDC. Acquisitions The proposed acquisition by a wholly owned sub trust of DIF of the Acquired Assets on or about the date on which the Restructure is implemented and Listing occurs. AFSL Australian Financial Services Licence issued under the Corporations Act. ALH or ALH Group Refers to either Australian Leisure and Hospitality Group Pty Limited as tenant over 54 retail assets that comprise part of the Initial Portfolio, or ALH Group Pty Ltd who is guarantor under those leases. ALH Group Pty Ltd is owned by Woolworths Limited (75%) and Mathieson Group (25%). Allotment The allotment of Securities following acceptance of an Application. Allotment Date The date on which Allotment occurs, expected to be 27 October Applicant A person who submits a valid Application Form pursuant to this PDS. Application An application for Securities under the Offer as described in this PDS. Application Form The relevant form attached to, or accompanying this PDS pursuant to which Applicants apply for Securities and which includes an election form for applications under the Reinvestment Offer. Application Monies The money paid by an Applicant in respect of being transferred Securities under this PDS. ARSN Australian Registered Scheme Number. ASIC Australian Securities and Investments Commission. Asset Services Agreement The asset services agreement between the Responsible Entity and the Manager as described in Section Assets In respect of a Stapled Trust (other than Finance Trust), has the same meaning given to that term in the relevant Constitution. ASX Australian Securities Exchange. ASX Guidelines ASX Corporate Governance Principles and Recommendations as amended from time to time. ATO The Australian Taxation Office. ATO Income Support The amounts received under the income support payments relating to the Australian Taxation Office s tenancy at the ATO Adelaide Building (described in Section of this PDS). Auditor The auditor of the REIT from time to time, being at the date of this PDS, PricewaterhouseCoopers. Australasia Australia and New Zealand Australian Postal Corporation or Australia Post Balance Sheet Gearing Board Broker Broker Firm Offer Broker Firm Offer Closing Date The Australian Postal Corporation, trading as Australia Post, is an Australian government business enterprise incorporated and operated under the Australian Postal Corporation Act 1989 ( APC Act ). Calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets less cash, based on the Pro Forma Consolidated Statement of Financial Position (as set out in Section 7.4). The Board of Directors of the Responsible Entity. A broker appointed by the Joint Lead Managers to act as a participating broker to the Offer. The broker firm offer set out in Section 8.7 of this PDS. The date on which the Broker Firm Offer will close, expected to be 14 October 2016.

212 210 / PDS / Glossary 16. Glossary (continued) Defined term Broker Firm Offer Opening Date Business Day Capitalisation Rate Charter Hall or Charter Hall Group Charter Hall Group Offer CHDOF CHESS Meaning The date on which the Broker Firm Offer will open, expected to be 5 October A day on which the ASX is open for trading in securities and banks are open for general business in Sydney, New South Wales. The return of a property or portfolio of properties calculated by dividing the market level of Net Operating Income of that property or portfolio by the assessed Independent Valuation of that property or portfolio. Charter Hall Limited (ACN ) and Charter Hall Property Trust (ARSN ) and their controlled entities. The offer under the PDS to certain investors invited to participate. NB Direct Property Trust (ARSN ). Clearing House Electronic Subregister System, operated under the Corporations Act. CHPTDT CHPT Dandenong Trust (ARSN ). CISA Swiss Federal Act on Collective Investment Schemes. Closing Date The closing date of the Public Offer, expected to be at 5.00pm (Sydney time) on 14 October Coates or Coates Hire Refers to either Coates Hire Operations Pty Ltd as tenant over Coates Hire, Kingston, or Coates Group Holdings Pty Ltd who is guarantor under the lease. Coates Group Holdings Pty Ltd is owned by Seven Group Holdings and The Carlyle Group. Coles or Coles Group Coles Group Limited, a wholly owned subsidiary of Wesfarmers Limited. Co-manager Crestone Wealth Management Limited, National Australia Bank Limited and Ord Minnett Limited. Completion The Offer Completion and completion of the Restructure. Constitution or Constitutions The constitution of each of the Stapled Trusts. Corporations Act Corporations Act 2001 (Cth). CPI The All Groups Consumer Price Index, as issued by the Australian Bureau of Statistics as a general indicator of the rate of change in prices paid for consumer goods and services. CPI rental increases are based on the CPI of the eight capital cities other than for Coates Hire, Kingston for which the annual review is subject to the greater of CPI for the City of Brisbane alone or 4.0%. CPIF Charter Hall Prime Industrial Fund (ARSN ). CPOF Charter Hall Investment Management Limited in its capacity as responsible entity for Charter Hall Prime Industrial Fund and Charter Hall Prime Office Fund. CPOF KHT CPOF Kogarah Holding Trust (ARSN ). Custodian The Trust Company Limited and the Trust Company (Australia) Limited. CVLT1 Canning Vale Logistics Trust No. 1 (ARSN ). Debt Total debt including value of debt attributable to the REIT through its interest in equity accounted investments. Debt Facility The REIT s $350 million unsecured debt facility described in Sections 2.5 and 14.6 of this PDS. Debt Facility Commitment The debt facilities documented in the Mandate and Commitment Letter between the Financier and Charter Hall LWR Limited attaching detailed terms and conditions and facility agreement to be entered into by Charter Hall LWR Limited as the borrower. DFSA Dutch Act on Financial Markets Supervision. DIF Charter Hall Direct Industrial Fund (ARSN ). It is proposed that following the implementation of the Restructure, DIF will change its name to LWR Trust. DIF2 Charter Hall Direct Industrial Fund No. 2 (ARSN ). DIF3 Charter Hall Direct Industrial Fund No. 3 (ARSN ). DIF Net Asset Value $1.28, as described by the Notice of Meeting for the DIF meeting held on 16 August Director The directors of the Responsible Entity. Distributions The distributions made in relation to the Unit component of a Security.

213 Charter Hall Long WALE REIT / Glossary (continued) Defined term Distribution Yield Meaning The rate of return derived by dividing the Distribution per Unit by the Offer Price. Due Diligence Report The report of the Due Diligence Committee of the Responsible Entity in connection with the Offer, to the directors of the Issuer and each of the Due Diligence Committee members (including the Joint Lead Managers) and their representatives as described in the due diligence planning memorandum. Electrolux Electrolux Home Products Pty Limited, a wholly owned subsidiary of AB Electrolux (Sweden). Eligible DIF Unitholders Those existing holders of units in DIF on the Record Date who have a registered address in Australia or New Zealand. Existing Unitholders Those existing holders of Units in the Stapled Trusts who will have those Units redeemed under the Restructure or, in the case of DIF units, participate in the Restructure and the holders of the Units that represent the Acquired Assets. Exposure Period The seven day period after the date of lodgement of this PDS during which an Application must not be accepted. ASIC may extend this period to no more than 14 days after the date of lodgement of this PDS. Finance Debt The indebtedness (whether actual or contingent) in respect of money borrowed or raised or other financial accommodation. Finance Trust LWR Finance Trust (ARSN ). Financial Information Refers to the Pro Forma Consolidated Statement of Financial Position and the Forecast Financial Information. FINMA Financial Market Supervisory Authority. Forecast Financial Information Summary financial information for the REIT prepared by the Responsible Entity which includes the pro forma forecast consolidated income statements for the period from Allotment to 30 June 2017 and for the six months ending 31 December 2017 ( 1H FY18 ) (together the Forecast Period ) as set out in Section (the Pro Forma Forecast Consolidated Income Statements ) and the statutory forecast consolidated income statements for the year ending 30 June 2017 ( FY17 ) and for 1H FY18 as set out in Section (the Statutory Forecast Consolidated Income Statements ). Forecast Period The period from Allotment to 31 December FPO Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 FSMA Financial Services and Markets Act FSPT Franklin Street Property Trust (ARSN ). Future Acquisitions Additional properties that may be acquired by the REIT over time. FY17 12 months ending 30 June 2017 GAV Gross asset value, being the gross value of any direct or indirect interest in real estate assets or other assets or investments of the REIT without deducting any liabilities of the Responsible Entity, the Custodian, any Stapled Trust or entity in which a Stapled Trust has an ownership interest or trustee or responsible entity of one of them, such as debt funding and if a Stapled Trust or any subtrust or Custodian has entered into an arrangement pursuant to which it receives substantially the same economic return as if it held an interest in a real estate asset, the value of that arrangement will be the value of the interest in the real estate asset underlying the economic interest represented by that arrangement. GLA or Gross Lettable Area Total lettable floor area including common areas, in square metres. GST Goods and Services Tax. IASB International Accounting Standards Board. IFRS International Financial Reporting Standards. IGA Independent Grocers of Australia. Implementation Date The date that imlementation of the Restructure is completed, expected to be 27 October Independent Valuations The valuations by the Independent Valuers as set out in the Valuation Report.

214 212 / PDS / Glossary 16. Glossary (continued) Defined term Independent Valuer(s) Meaning Individually and collectively as the context requires: Initial Portfolio Initial Yield Institutional Investor Institutional Offer Interest Cover Ratio Investigating Accountant Investigating Accountant s Report Investor CBRE Valuations Pty Limited; Jones Lang LaSalle Advisory Services Pty Ltd; Valuation Services Pty Ltd in each respective state trading as Knight Frank Valuations; m3property Pty Ltd; and/or Savills Valuations Pty Ltd. The REIT s portfolio at Allotment comprising the assets as detailed in Section 3 of this PDS. Unless otherwise stated Initial Portfolio metrics include Woolworths Distribution Centre, Dandenong at lease commencement. The passing Net Operating Income of a property or portfolio of properties divided by the Independent Valuation of the property or portfolio of properties. A person to whom offers and issues of Securities may lawfully be made without the need for disclosure under Part 7.9 of the Corporations Act 2001 (Cth) or without any other lodgement, registration or approval with or by a government agency. The offer under the PDS to certain Institutional Investors to apply for Securities. In respect of any 12 month period, the ratio of EBIT for that period divided by the interest expense of the Group plus the Group s Look Through Share of the Interest Expense of any Joint Venture for that period. KPMG Transaction Services, a division of KPMG Financial Advisory Services (Australia) Pty Ltd. The Investigating Accountant s Report prepared by KPMG Transaction Services as set out in Section 9 of this PDS. A registered holder of Securities in the REIT. Joint Lead Managers J.P. Morgan Australia Limited (ABN ) and UBS AG, Australia Branch (ABN ). J.P. Morgan J.P. Morgan Australia Limited (ABN ). KPMG Transaction Services KPMG Financial Advisory Services (Australia) Pty Ltd. Listing Official quotation of the Securities on the ASX and commencement of deferred settlement trading of the Securities on the ASX. Listing Rules The official Listing Rules of the ASX from time to time as modified by an express written confirmation, waiver or exemption given by the ASX. Long WALE REIT, LWR or the REIT Look Through Gearing Look Through Share LWIP LWR Trust Management Fee Either the Stapled Trusts and their subsidiaries and sub-trusts or the Responsible Entity as the context requires. Calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets less cash, based on the non-ifrs Proportionate Pro Forma Consolidated Statement of Financial Position (as set out in Section 7.8.2), which adjusts for the REIT s share of the debt, assets and cash held in equity accounted investments. In relation to any person (the first person), the proportionate share that the first person has in the assets, liabilities, profit or loss of a second person, such share being based on the proportion of the first person s ownership of that second person. LWIP Trust. Refers to the proposed name for DIF (the Charter Hall Direct Industrial Fund) following the Restructure. The management fee which the Responsible Entity is entitled to receive in accordance with the Constitutions. Manager Charter Hall Holdings Pty Limited (ABN ). Mandate and Commitment Letter MAS The document entitled A$350,000,000 Syndicated Loan Facility Mandate & Commitment Letter dated 8 September 2016 between Charter Hall LWR Limited (as borrower) and Westpac Banking Corporation (as the mandated lead arranger and bookrunner). Monetary Authority of Singapore.

215 Charter Hall Long WALE REIT / Glossary (continued) Defined term Merger Implementation Agreement Metcash Net Operating Income NLA or Net Lettable Area NTA or Net Tangible Assets NZ Mutual Recognition Regime Occupancy Offer Offer Closing Date Offer Completion Offer Management Agreement Offer Period Offer Price Official List Operating Earnings Operating Earnings Yield PCA FFO or Property Council of Australia Funds from Operations PDS or Product Disclosure Statement PDS Date PDS Lodgement Perth RDC Portfolio Pro Forma Consolidated Statement of Financial Position Meaning The Supplementary Merger Implementation Agreement between the Responsible Entity, Stapled Trusts, CPOF, the vendors of the Acquired Assets and Charter Hall dated 1 September 2016 pursuant to which the Restructure will be undertaken, as described in Section 15.3 and which replaced an earlier merger implementation agreement dated 25 July Metcash Limited. The sum of rent payable by a tenant to the REIT under the terms of their lease less any direct property expenses and outgoings payable by the REIT. Total lettable floor area less common areas, in square metres. Equity minus intangible assets, adjusted for any minority interests. The regime for the trans-tasman mutual recognition of securities offering under subpart 6 of Part 9 of the NZ Financial Markets Conduct Act and under subpart 2 of Part 9 of the NZ Financial Markets Conduct Regulations. The proportion of total premises area that is subject to a tenancy agreement for a property or portfolio as at 30 June The proportion of total premises area that is subject to a tenancy agreement for a property or portfolio as at 30 June In this context, total premises area refers to net lettable area in respect of the office properties in the Portfolio, gross lettable area in respect of the industrial properties in the Portfolio and the site in respect of the retail properties in the Portfolio. The Public Offer and the Reinvestment Offer under (and as contemplated by) this PDS. The date on which the Offer is expected to close, being 17 October 2016 in respect of the Reinvestment Offer; 14 October 2016 in respect of the Broker Firm Offer; 14 October 2016 in respect of the Charter Hall Group Offer. These dates may be varied without prior notice. The allotment of Units to the successful Applicants under this PDS. The Offer Management Agreement between the Responsible Entity, Charter Hall Group and the Joint Lead Managers dated on or around 27 September 2016, summarised in Section The period between the Opening Date (5 October 2016) and the applicable Closing Date, being 14 October 2016 for the Broker Firm Offer and Charter Hall Group Offer. Fixed price of $4.00 per Security. The official list of entities that the ASX has admitted and not removed from listing. Operating Earnings is a financial measure which represents the profit/(loss) under Australian Accounting Standards adjusted for net fair value movements non-cash accounting adjustments such as straight-lining of rental income, amortisation and other unrealised or one-off items. Operating Earnings also aligns to the Funds from Operations as defined by the Property Council of Australia ( PCA FFO ). The percentage rate of return calculated by dividing the Operating Earnings per Security by the Offer Price. Property Council FFO is the organisation s underlying and recurring earnings from its operations. This is determined by adjusting statutory net profit (under AIFRS) for certain non-cash and other items. PCA FFO has been determined based on guidelines established by the Property Council of Australia and is intended as a supplementary measure of operating performance. This document, being a product disclosure statement for the purposes of Part 7.9 of the Corporations Act 2001 (Cth) (including the electronic form of this document) and any supplementary or replacement PDS (including any replacement PDS). The date of the PDS, being the date that the PDS was lodged with ASIC. The lodgement of this PDS with ASIC. Perth RDC Trust. All of the REIT s property assets or interests in property assets from time to time. The pro forma consolidated statement of financial position set out in Section 7.4 of this PDS.

216 214 / PDS / Glossary 16. Glossary (continued) Defined term Pro Forma Forecast Consolidated Income Statements Pro Forma Forecast Consolidated Distribution Statements Property Property Management Agreement Proposed Transaction Meaning The pro forma forecast distribution statements for the period from Allotment to 30 June 2017 and for the six months ending 31 December 2017 as set out in Section of this PDS. The pro forma consolidated distribution statements set out in Section of this PDS. An asset which forms part of the Portfolio from time to time. The property management agreement between the Responsible Entity and the Property Manager as summarised in Section Describes the transactions including the Acquisitions, Restructure, Offer and Listing as defined in this PDS. Prospectus Directive Directive 2003/71/EC. Public Offer The Broker Firm Offer, the Charter Hall Group Offer and the Institutional Offer. Record Date Means 7:00pm (Sydney time) on the date determined by the Responsible Entity as the date for determining the entitlement of DIF Unitholders to participate in the Reinvestment Offer, expected to be 17 October Register The registers of the Stapled Trusts. Registry Link Market Services Limited (ABN ), the Unit registrar for the REIT. Reinvestment Offer The Reinvestment Offer that is being made to Eligible DIF Unitholders to retain their units in DIF and be issued new Units in each of the other Stapled Trusts so that following the Restructure they will hold Securities. Reinvestment Offer Shortfall Reinvestment Offer Shortfall has the meaning given to it in Section REIT The Long WALE REIT or Real Estate Investment Trust as the context requires. Responsible Entity Charter Hall WALE Limited (ABN , Australian Financial Services Licence Number ). Restructure Retail Investor SCA Security or Stapled Security Securityholder or Stapled Securityholder Settlement Means the formation of Long WALE REIT as described in Section 2.4 involving the issue of Securities under this PDS and the conversion of units under the Reinvestment Offer into Securities, the redemption of Units in the Stapled Trusts held by the existing Stapled Trust Unitholders, the Stapling of Securities together and the completion of the Acquisitions. A person who is a resident of Australia and New Zealand and is not otherwise treated as an Institutional Investor. SCA means Securities and Commodities Authority of the United Arab Emirates. A stapled security in Long WALE REIT comprising one Unit in each of the Stapled Trusts which are Stapled together as described in Section A registered holder of a Stapled Security. The settlement in respect of the Securities the subject of the Offer under the Offer Management Agreement. Settlement Date The date of Settlement, which as at the date of the PDS is 26 October SFA Securities and Futures Act. SFO The Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong. SIX SIX Swiss Exchange. Stapling Deed Has the meeting given to it in Section Stapled Trust or Stapled Trusts Stapled Trusts refer to each of Charter Hall Direct Industrial Fund ( DIF ), Canning Vale Logistics Trust No. 1 ( CVLT1 ), 218 Bannister Road Trust ( 218 BRT ), CPOF Kogarah Holding Trust ( CPOF KHT ), Franklin Street Property Trust ( FSPT ), CHPT Dandenong Trust ( CHPTDT ) and LWR Finance Trust ( Finance Trust ) collectively and each of them separately as the context requires.

217 Charter Hall Long WALE REIT / Glossary (continued) Defined term Stapled / Stapling Statutory Forecast Consolidated Income Statements Supplementary PDS Sydney time Toll Total assets Total liabilities Meaning The linking together of securities so that one security may not be issued, transferred or otherwise dealt with without a corresponding and simultaneous issue, transfer or dealing of the other securities and which securities are quoted on the ASX jointly as a Stapled Security or such other terms as the ASX permits. The statutory forecast consolidated income statements set out in Section of this PDS. Means any supplementary or replacement PDS supplementary to or replacing any existing PDS prepared or required to be prepared and lodged by the Responsible Entity with ASIC in connection with the Offer in compliance with the Corporations Act 2001 (Cth). Time observed in Sydney, Australia. Refers to either Toll Transport Pty Ltd as tenant over Toll, Altona North, or Toll Holdings Limited who is guarantor under the lease. Toll Holdings Limited is a wholly owned subsidiary of Japan Post Holdings Co., Ltd. The Government of Japan owns an 80.5% interest in Japan Post Holdings Co., Ltd. Total assets of the REIT adjusted for the REIT s share of the assets held in equity accounted investments. Total liabilities of the REIT adjusted for the REIT s share of the liabilities held in equity accounted investments. Means the Restructure and the Acquisitions. United Arab Emirates. Transaction UAE UBS UBS AG, Australia Branch (ABN ). Unit or Units WACR or Weighted Average Capitalisation Rate WALE or Weighted Average Lease Expiry WARR or Weighted Average Rent Review Woolworths Woolworths Distribution Centre, Dandenong Development Management Agreement Refers to existing units in a Stapled Trust or Stapled Trusts collectively and each of them separately as the context requires. The average capitalisation rate across the Portfolio or group of properties, weighted by Independent Valuation. The average lease term remaining to expiry across the Portfolio or a property or group of properties, weighted by gross passing income. The average rent review across the Portfolio or a property or group of properties, weighted by gross passing income. Woolworths Limited. The development management agreement summarised in Section 14.4 of this PDS.

218 216 / PDS / Corporate Directory Corporate Directory 17 Hyde Park Hotel, West Peth, WA