Centuria 10 Spring Street Fund Brochure

Centuria 10 Spring Street Fund 10 Spring Street, Sydney CBD, NSW At a glance • Starting forecast distribution of 8.00% p.a. growing to 8.10% p.a. in year 2

• Recently refurbished building in the financial core of Sydney CBD • Strong tenancy profile • Opportunity to add value via leasing, minor refurbishment and retail repositioning • Clearly defined exit strategy • Experienced manager with a proven track record

10 Spring Street

Centuria Property Funds

Fund Summary

Centuria 10 Spring Street Fund

Centuria 10 Spring Street Fund (C10SSF) is a single asset, closed-end unlisted property fund.

C10SSF will invest in 10 Spring Street, Sydney CBD. The Property is centrally located in the financial core of Sydney’s CBD and has recently undergone a major refurbishment. The Fund is acquiring the Property for an acquisition price of $91,638,000.

Building Facts and Features “Central location in the financial core of the Sydney CBD”

Forecast Distributions* “Forecast distribution starting at 8.00% p.a. and growing to 8.10% p.a. in Year 2”

Tenants “Diverse tenant profile”

• Sector: Commercial

• NLA: 13,871 sqm

• Location: Centrally located on Spring Street between the intersections of Pitt and Gresham Streets

• WALE: 3.70 years as at 1 June 2013* (by income)

• Acquisition Price: $91.638 million

• Parking: 47 spaces

* Please read the PDS for further detailed information.

Year to June

2014

2015

Forecast Distribution*

8.00%

8.15%

Estimated Tax Deferral**

100.00%

73.82%

Gross Tax Effective Income Return^

14.86%

13.30%

* Forecast distributions are subject to a number of assumptions and risks that are detailed in the PDS. You should read a copy of the PDS before deciding to invest. Forecast distributions are not guaranteed. ** This is based on Centuria’s current estimate and is to be confirmed. Please refer to the PDS, for final figures. ^ Gross tax effective Return is the return an Investor (as a 46.5% tax payer) would need to earn from a competing investment with no taxation benefits e.g. a bank deposit to achieve a comparable return. Please note that tax deferrals will decrease an Investor’s cost base for CGT purposes and may result in an increased capital gains tax liability.

The property has a strong leasing profile. The major tenants are detailed below: % NLA

Expiry Date

Swire Group

22%

30 June 2018

NSW Attorney General

20%

30 June 2017

Universal Education

13%

30 June 2021

Macquarie University

7%

30 November 2014

7%

28 February 2015

Tenant

Bentleys

Investment Facts “Significantly tax deferred income”

Investment Type

Single asset unlisted property fund

Offer Opens

22 April 2013 (subject to change)

Offer Closes

13 June 2013 (subject to change)

Issue Price

$1.00 per unit

Minimum Investment

$100,000

Investment Term

The initial term of the Fund will be 5.5 years

Initial Gearing

45% Loan to Valuation Ratio

Target Equity Raising

$59,502,363

Taxation Benefits

Significantly tax deferred income

Centuria 10 Spring Street Fund

Investment Rationale

(a) Prime location in the financial core of the Sydney CBD

10 Spring Street boasts a prominent position within Sydney’s enviable core financial precinct. The traditional heart of the Sydney CBD, the financial core incorporates the majority of prime grade office buildings such as Chifley Tower, Governor Phillip & Macquarie Towers, 1 O’Connell Street and the newly completed 1 Bligh Street.

The area is well serviced by public transport with Wynyard railway station and bus interchange, Circular Quay railway station and ferry terminal, and Martin Place railway station all within close proximity.

10 Spring Street 1 2 3 4 5 6 7 8 9

1 O’Connell Street 1 Bligh Street Australia Square, 278 George Street Grosevnor Place, 225 George Street Gateway, 1 Macquarie Place Governor Phillip & Macquarie Towers, 1 Farrer Place Aurora Place, 88 Phillip Street Chifley Tower, 2 Chifley Square 10-20 Bond Street

5

6

4

6

10 Spring Street

1

7

2

9 3 8

(b) Counter-cyclical acquisition The acquisition metrics reflect the countercyclical nature of the acquisition based on two key indicators:

Sydney CBD Office Yields v Australian Nominal 10 Year Bond (1998-2013)

1. The yield spread between Sydney CBD Property and the risk free rate.

10% 9%

The adjacent graph depicts Sydney office yields versus Australian 10 year bond yields from 1998 to 2013. This illustrates the recent widening of the yield premium of Sydney CBD office investments.

We believe that Sydney CBD office property is historically mispriced and there is potential for this yield spread to narrow in the medium term.

8% 7% 6% 5% 4% 3%

2. 10 Spring Street relative to peer group.

2% 1%

Sydney CBD Office Yields

Jan - 13

Jan - 12

Jan - 11

Jan - 10

Jan - 09

Jan -08

Jan - 07

Jan - 06

Jan - 05

Jan - 04

Jan - 03

Jan - 02

Jan - 01

Jan - 00

Jan - 99

Jan - 98

0%

Australian 10 Year Bond Yield

10 Spring Street previous sale rate (July 1999) - 6.75% 10 Spring Street previous sale rate (August 2005) - 7.00% 10 Spring Street sale rate (June 2013) - 8.71% (fully leased yield)

Source: Knight Frank Research / CBRE

As is evident in this graph, 10 Spring St has historically traded at a yield in line with the average yield for Sydney CBD properties. The latest acquisition yield (8.71% on a fully leased basis) reflects a premium of 1.71% over the average. We believe this is as a result of the current leasing profile of the Property and the lack of buyers in the market. Centuria believes that via an improvement of the leasing profile and buyers returning to the market, the Property will again trade in line with its peer group.

Centuria 10 Spring Street Fund

Investment Rationale

(c) Strong existing tenancy profile with opportunities to add value via leasing, foyer refurbishment and retail repositioning 10 Spring Street is approximately 81% occupied. The recently published PCA Office Market Report reflected an occupancy rate for Sydney’s CBD at 92.8% (January 2013).

In our view, with careful management the current occupancy rate of the Property can be significantly improved in the short term. We have negotiated with the Vendor to have joint co-ordination of the leasing in the period leading up to settlement. Centuria has established a structured leasing strategy in conjunction with the appointed leasing agents aiming to lease as much of the vacant space as possible prior to completion of the transaction.

While the Vendor has implemented a commendable and detailed refurbishment program, Centuria has identified several initiatives which can be undertaken over the short and medium term to maximise the value of the Property. These initiatives include an upgrade of foyer finishes, repositioning the retail space and assessing redevelopment opportunities in the longer term. (d) Defined exit strategy The Fund has an initial term of 5.5 years*. Based on our Investment Rationale and forecast of market conditions, we believe this will be the optimal time to sell the Property and maximise the capital return to Investors.

About Centuria

Centuria Property Funds was formed in 1999 with a specific focus on the purchase of high-quality, growth-orientated commercial property assets. Centuria has a “Total Return” philosophy which means there is a commitment to achieving superior returns from a combination of capital growth and quarterly distributions.

Our experienced hands-on approach means that we’re able, with every purchase, to identify investments with a strong mix of income revenue, capital growth potential and tax benefits.

Centuria has over $1.1 billion of funds under management across 28 unlisted property funds. Centuria Property Funds is a wholly-owned subsidiary of Centuria Capital Limited, an ASX-listed diversified funds manager with $2 billion in funds under management.

For a copy of the Product Disclosure Statement or to discuss this investment opportunity please contact John Taylor at Centuria Property Funds on (02) 8923 8923, or john.taylor@centuria.com.au.

*The initial term may be extended by up to a further 2 year term by majority unitholder vote. Any further extension beyond 7.5 years can only be by unanimous unitholder vote.

Disclaimer: This document is issued by Centuria Property Funds Limited (Centuria) ABN 11 086 553 639 AFSL 231149.

Information in this document is accurate as at 23 April 2013. Centuria will act as the responsible entity of Centuria 10 Spring Street Fund and will be the issuer of the Product Disclosure Statement (PDS) and units in the Fund. We recommend that before an investment decision is made prospective investors consult their financial or other professional advisor. The information in this document is general information only and does not take into account the objectives, financial situation or particular needs of any person. You should consider whether this information is appropriate for you in light of your objectives, financial situation and needs. Centuria and its associates will receive fees in relation to an investment in the Fund as disclosed in the PDS. This document is not an offer to invest in the Fund. You should obtain and read a copy of the PDS before making a decision to invest. Investment in the Fund is subject to risk including possible delays in payment or loss of income and principal invested. Centuria does not guarantee the performance of the Fund.