DIRECT PROPERTY€¦ · centromcs direct property annual review 2010 centro mcs

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MCSDIRECTPROPERTYANNUAL REVIEW 2010

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UAL REVIEW 2010

MCS 2010 4pp Cover ART.indd 1 28/09/10 1:50 PM

CONTENTS

Syndicate Directory and Portfolio Summary 1

Property Portfolio Maps 2

Funds Management Report 4

Funds Management Team 11

Corporate Governance 12

Notes on the Individual Syndicate Reports 16

Individual Syndicate Reports 18

Glossary 80

Directory Inside Back Cover

DIRECTORY

Responsible EntityCPT Manager LimitedABN 37 054 494 307

Board of DirectorsPaul Cooper (Chairman)Robert Tsenin (Group Chief Executive Officer & Managing Director)Anna BudulsSusan OliverJim HallRob Wylie

Centro MCS 21Centro MCS 22Centro MCS 23Centro MCS 24Centro MCS 25Centro MCS 26Centro MCS 27Centro MCS 28Centro MCS 32Centro MCS 33

Centro MCS 4Centro MCS 5Centro MCS 6Centro MCS 8Centro MCS 9Centro MCS 10Centro MCS 11Centro MCS 12Centro MCS 14Centro MCS 15Centro MCS 16

Centro MCS 17Centro MCS 18Centro MCS 19 UTCentro MCS 19 NZ/ICentro MCS 20Centro MCS 34Centro MCS 35Centro MCS 36Centro MCS 37Centro MCS 38Woodlands

Responsible EntityCentro MCS Manager LimitedABN 69 051 908 984

Board of DirectorsW Peter Day (Chairman)Paul Cooper Jim HallMichael HumphrisFraser MacKenzieBill Bowness

Company SecretaryElizabeth HouriganDimitri Kiriacoulacos

Registered OfficeCorporate Offices, 3rd Floor Centro The Glen 235 Springvale Road Glen Waverley Victoria 3150 Telephone +61 3 8847 0000Facsimile +61 3 9886 1234Toll Free (AUS) 1800 802 400Toll Free (NZ) 0800 449 605Email [email protected] centromcs.com.au

Corporate SolicitorsFreehills101 Collins StreetMelbourne Victoria 3000

AuditorsMoore StephensLevel 10, 530 Collins StreetMelbourne Victoria 3000

Ernst & YoungErnst & Young Building8 Exhibition StreetMelbourne Victoria 3000

Centro MCS Direct Property – ANNUAL REVIEW 2010 1

SYNDICATE DIRECTORY AND PORTFOLIO SUMMARY

Syndicate Net Asset Backing (NAB) as at 30 June

2010(1)

Forecast Distribution Return on Original Equity

for 2011(2)

Forecast 2011 Distribution

Return on Current NAB

Forecast Tax Advantaged

Portion for 2011(3)

Gearing Ratio as at 30 June

2010

Page

Centro MCS 4 $2.00 Nil Nil 0.00% 66.7% 18

Centro MCS 5 $2.17 12.00% 5.53% 100% 43.8% 20

Centro MCS 6(4) $1.42 10.00% 7.04% 12.00% 43.6% 22

Centro MCS 8 $1.99 12.00% 6.03% 100% 35.5% 24


Centro MCS 10 $0.87 2.00% 2.30% 100% 51.6% 28

Centro MCS 11 $2.14 17.00% 7.94% 8.00% 36.4% 30

Centro MCS 12 $1.16 7.50% 6.47% 0.00% 53.7% 32

Centro MCS 14 $1.03 3.50% 3.40% 0.00% 31.6% 34

Centro MCS 15 $1.21 7.50% 6.20% 13.00% 13.2% 36


Centro MCS 17 $1.25 6.00% 4.80% 26.00% 29.3% 40

Centro MCS 18 $1.04 5.00% 4.81% 22.00% 16.9% 42

Centro MCS 19 NZ/I $1.00 4.00% 4.00% 0.00% 36.5% 44

Centro MCS 19 UT $1.06 4.75% 4.48% 0.00% 48.4% 46

Centro MCS 20 $0.94 8.00% 8.51% 15.00% 47.2% 48

Centro MCS 21 $1.71 1.50% 0.88% 0.00% 50.0% 50

Centro MCS 22 $2.12 33.00% 15.57% 10.00% 37.7% 52

Centro MCS 23(5) $0.70 35.00% 5.00% 0.00% 57.0% 54

Centro MCS 25 $1.64 5.00% 3.05% 0.00% 51.7% 56

Centro MCS 26 $1.68 9.00% 5.36% 0.00% 36.7% 58

Centro MCS 27 $1.10 2.50% 2.27% 45.00% 61.9% 60

Centro MCS 28 $0.76 2.00% 2.63% 36.00% 58.3% 62

Centro MCS 32 $0.52 1.70% 3.27% 4.00% 56.9% 64

Centro MCS 33 $0.71 3.00% 4.23% 90.00% 59.9% 66

Centro MCS 34 $0.79 2.00% 2.53% 0.00% 67.5% 68


Centro MCS 36 $0.24 1.70% 7.08% 23.00% 81.5% 72

Centro MCS 37 $0.56 4.00% 7.14% 100% 67.5% 74


Woodlands $1.69 8.00% 4.73% 23.00% 53.8% 78

(1) NetAssetBacking(NAB)basedontheoriginal$1.00investment.

(2) Netreturnforecasttobepaidtoinvestors(ie:thecashdistribution).Theforecastnetreturnisbasedontheoriginal$1.00investedatthecommencementoftheSyndicateunlessstatedotherwiseintheseExplanatoryNotes.

(3) Theforecasttaxadvantagedcomponentisbasedonthenetreturnforecasttobepaidtoinvestors.Forfurtherdetails,pleaserefertoPage16.

(4) Thenetreturnisbasedonalotvalueof$0.80followingthecapitalreturnof$0.20afterthesaleofBigTopShowroomsin1999.

(5) Thenetreturnisbasedonalotvalueof$0.10followingthe$0.90returnofcapitalin2005.

Centro MCS Direct Property – ANNUAL REVIEW 20102

PROPERTY PORTFOLIO MAPS

AUSTRALASIAN PROPERTIES

Adelaide

MelbourneAustralian Corporate Office

Perth

Hobart

Sydney

Auckland

Wellington

Christchurch

Brisbane

Darwin

Western AustraliaRegionalOffice:Perth

11Properties

South AustraliaRegionalOffice:Adelaide

8Properties

Victoria/TasmaniaRegionalOffice:Melbourne

16Properties

QueenslandRegionalOffice:Brisbane

17Properties

New Zealand

2Properties

New South WalesRegionalOffice:Sydney

17Properties


US PROPERTIES(TheUSPropertyPortfolioMapincludespropertiesheldbyCentroMCS32,35,36and38,whicharetheUSSyndicatesthatwereopentoretailinvestors)

West RegionRegionalOffice:SanDiego

17Properties

Central RegionRegionalOffice:Chicago

1Property

South RegionRegionalOffice:Orlando

1Property

Midwest RegionRegionalOffice:Detroit

2Properties

Southeast RegionRegionalOffice:Atlanta

10Properties

Northeast RegionRegionalOffice:Boston

14Properties

Mid Atlantic RegionRegionalOffice:Philadelphia

22Properties

Los Angeles

Orlando

Chicago

DetroitBoston

Philadelphia

New York CityUS Corporate Office

Atlanta


FUNDS MANAGEMENT REPORT

Australian Portfolio & Market ReviewAt30June2010,theCentroMCSAustralianportfoliocomprisedof72centresvaluedatA$2.8billion.Theportfoliovaluationdeclined$25.5million(or0.9%)betweenDecember2009andJune2010onacomparablebasis(excludingassetsales).Recentretailpropertytransactionshaveprovidedagreaterlevelofsupportandguidanceforvaluerswhichwaslackinginthelast18months.Someofthesingleassettransactionsandone-offportfoliodealshaveshownsignsofimprovinginvestmentmarketconditions.

TheportfolioperformedverywellinFY10despitethechallengingoperatingenvironment,recordingcomparablenetoperatingincome(NOI)growthof2.4%,whichwasaboveourexpectationsfrom12monthsago.Occupancyincreasedto99.5%,continuingthenearfullyleasedtrendevidentacrosstheportfoliooverrecentyears.

Oneofthekeydriversofoursolidperformancefortheyearisattributabletosolidleasingresultsincludingrentalincomegrowthonleaserenewalsof6.3%.Over600leasingdealshavebeenachievedfortheyearwithmostrecentdealsalsoincluding5.0%annualrentalupliftsundertheirleasereviewstructure.

TheAustralianbusinesshasalsobenefittedbymaximisingtheeconomiesofscaleofournationalportfoliothroughconsolidatedtenderingofmajorservicecontractssuchascleaningandsecurityoperations.Wehavealsoinstigatedaportfolio-widecostsavingsprogrammetomaintaincontrollablecostsatlowerthanCPI.ThebenefitsofthesesavingsshouldbecomemoreapparentinFY11.

ConsumerspendingwasreducedinthelastsixmonthsofFY10,partlyattributabletotheimpactofthegovernmentstimuluspackagesinthecomparableperiodlastyearandtotheincreasesininterestrates.Wecontinuetoseeasimilaramountoffoottrafficinourcentresbutconsumersappearmorecautionaryintheirspending,particularlyinthespecialtyretailcategories.

Discountdepartmentstoreshavealsobeennegativelyimpacted,whichishighlightedthroughourportfolio’sexposuretoBigWandKmart,astheyweresignificantbeneficiariesofthestimuluspackagelastyear.Balancingthis,supermarketsalesarestillshowinggrowth,withColesrecordingthehighestgrowth.Weexpectthisgrowthtocontinueintothenextperiodduetotheongoingroll-outofColes’storeupgradesforsomecentresintheCentroMCSportfoliocombinedwiththeaggressivemarketingcompetitionbetweenColesandWoolworths.

TheoutlookforretailsalesinthefirsthalfofFY11appearstobesimilar,withmostretailersnotexpectinganysignificantsalesincreasesuntillate2010intheleadintoChristmas.Someretailersarealsoexpressingcautiontousduetouncertaintyregardingtheglobaleconomy.

OurstrategyforFY11istobuildonthestrongfundamentalsoftheportfoliowhicharesustainablerentallevelsandhighoccupancy,andwewillcontinuetoimprovecostefficiencieswherepossibleinordertodrivepropertyincomegrowth.

US Portfolio & Market ReviewAt30June2010,theCentroMCSUSportfoliocomprisedof141centresvaluedatUS$2.3billion.TheportfoliovaluationdeclinedUS$39.1million(or1.7%)betweenDecember2009andJune2010onacomparablebasis.

SalestransactionsintheUSremainbelowaverage,withalimitednumberofsalesactuallyconsummated.However,thetransactionsthathaveoccurredshowthemarketisstartingtostabilise,asevidencedbyonlyaslightdecreaseinvaluesforthehalfyearwhencomparedwithpriorperiods.

OverallUStrendsindicateagradualimprovementinconsumersaleshowever,ameaningfulimprovementinrealestatefundamentalsisexpectedtolag.TheUSCentroMCSportfoliodemonstratedreasonableperformanceinthisenvironment,withleasingvolumesconsistentwithhistoricproductivity.Duringtheyear,over500leaseswerecompletedfor275,000squaremetresofretailspaceandtheportfolioconcludedtheyear89.6%leased,slightlyaboveJune2009.Continuedweaknessfromcreditdeprivedsmallshopretailersandamoderatingsupplyanddemandimbalancecontributedtorentalincomedecliningby3.7%andcomparableNOIdecliningby5.0%.

TheCentroMCSportfoliosize,withassetslocatedacross30statescontinuestoprovideretailerswiththeretailspacenecessarytoexpandtheirfootprintsorintroducenewstoreconcepts.Ourstrongretailerrelationshipsarevitalintoday’seconomyasretailersareseekingsecurityandeaseofexecutionintheirrealestatestrategies.Leasingproductivitywashealthyandreflectedthere-leasingofapproximately16,000squaremetresofbigboxspace(spacegreaterthan1,000squaremetres)rejectedinbankruptcyduringFY09.

WithintheUS,therearenoteworthydifferencesinthepaceofeconomicrecoveryandretailerandconsumertrends.Asithasbeenthroughouttherecession,performanceintheNortheastandMid-Atlanticcontinuestobeaboveaveragewithstronganchorleasingactivityandimprovingrentlevelsdrivenbyalackofnewdevelopmentandconsiderableprogressinleasingspacevacatedbybankruptcy.


TheMidwest,CentralandSoutheastmarketsarestillweak,withretailerinterestpredominantlyfromdiscountorientedretailers.

TheWestregionisshowingstrongoverallimprovementinpropertieslocatedindense,highbarriers-to-entrymarketssuchasLosAngelesandSanDiego.

Wearecautiouslyoptimisticaswelookaheadthrough2011.Despiteongoingemploymentconcernsandsluggishincomegrowth,overalltrendsindicateagradualimprovementinconsumersales.Calendaryear-to-date,storeclosingshavebeenfarmorebenignfornationalretailers,remainingatpre-recessionarylevels,whilelocalretailersarestillunderpressuregivenlimitedaccesstocapital.Whilstthereremainsalackofdepthinretailer’sgrowthplans,wedoexpecttoseesomeexpansionespeciallyfromvalueanddiscountorientedretailersgiventhemorefrugalUSconsumer.

FY11 Syndicate Distribution OutlookInFY11aroundhalfoftheAustraliansyndicates(13syndicates)areforecasttohaveincreasedorunchangeddistributionscomparedwiththebalanceforecastingdistributiondeclines.DistributionratesfortheUSsyndicatesareforecasttoremainunchanged(CentroMCS35andCentroMCS36)orreduced(CentroMCS32andCentroMCS38).

ThemainpositiveimpactonFY11distributionsrelatestocontinuingforecastnetpropertyincomegrowthforthevastmajorityofsyndicateassetscomparedwiththe2010financialyear.Aspropertymanagersweaimtopositivelyinfluencenetpropertyincome,retailerqualityandmix,occupancyandconditionofthepropertiesthrougheffectiveleasing,marketingandoperationalstrategies.Thismanagementfocusassistsinprotectingthevalueofsyndicatepropertieswhichultimatelyunderpinsthevalueofyoursyndicateinvestments.

Therearehowever,somecommonitemsthatcontinuetoimpactdistributionsforFY11including:

•Higher Cost of Debt–InterestratemarginschargedbylendersremainathistoricalhighswhichimpactsthosesyndicateswhererefinancinghasrecentlyoccurredorisduetooccurduringFY11.Ontopofthisimpact,interestratesincreased175basispointsoverthe12monthsto30June2010,increasingthedebtservicingcostonfloatingSyndicatedebt.

•Debt Principal Repayments–Insomecases,syndicategearingratios(calculatedastotalinterestbearingdebtovergrossassets)areoutsideourpreferredrange(of30%to50%)orcertainsyndicatedebttranchesincurhighinterestratemargins.Inmanyinstanceswearethereforeforecastingtomakedebtprincipalrepaymentsinordertoimprovethecapitalpositionofthesesyndicates.

• Capital Expenditure Funding –Wecontinuetofundcapitalexpenditureincludingleaseincentivesfromsyndicateearningsorprioryearcashreserves.Theextentoffundingrequiredreducestheamountofdistributableincomethatcanbepaidouttoinvestors.

• Retained Cash–Forthemajorityofsyndicateswenolongerpayout100%ofearningstoinvestors.Instead,aportionofearningsarepreservedas“retainedearnings”andwillbeusedtofundoperationalcapitalexpenditureand/orbuildupcashreservesinthesyndicatebankaccounts.

Syndicate Retail Sales ResultsAustralia

TheCentroMCSAustralianportfoliosalescontinuedtoshowsolidgrowthof4.6%forthe12monthsto30June2010.Salesgrowthbyretailercategorywas:

• SpecialtyStores: +7.1%

• MiniMajors: +5.9%

• DepartmentStores +4.5%

• Supermarkets: +2.8%

• DiscountDepartmentStores +2.2%

United States

Ingeneral,salesarenotreportedbyindividualretailersintheUS.TheUSCensusBureaureporteda7.5%increaseinoverallretailsalescomparedtothesameperiodayearagoinwhichoverallsalesdecreased11.1%.

SomeofthelargestgainsarereflectedintheindustrieshitthehardestbytheUSrecession,includingauto,electronics,andfurnituresalesalldisplayingpositivegrowthyearoveryear.Inaddition,healthandpersonalcare,aswellasgrocersalescontinuetoshowpositivegrowthforthesameperiod.


FUNDS MANAGEMENT REPORT (continued)

Syndicate Leasing UpdateTheCentroMCSPropertyManagementandLeasingteamshavecompletedover1,100specialtyleasingdealsacrosstheCentroMCSSyndicateportfolioforthe12monthstoJune2010,leveragingoffstrongnationalretailerrelationshipsinAustralasiaandtheUS.

Leasingresultsfortheperiodareshownbelow:

Category Australia/NZ US

NumberofSpecialtyDeals(excludingMajorRetailers)

669 450

RenewalRentalGrowthforSpecialtyRetailers

6.3% 0.5%

LeaseRenewalRateforSpecialtyRetailers

80.2% 68.9%

PortfolioOccupancy 99.5% 89.6%

LeaseExpiryProfile(weightedbyincome)

4.91years 4.52years

TheoccupancyoftheAustralasianportfoliohasimprovedslightlyfrom98.9%at31December2009to99.5%at30June2010,whichhasassistedusinachievingstrongrentalincomegrowthwhenrenewingretailerleases.TheoccupancyoftheUSportfoliohasincreasedfrom87.1%at31December2009to89.6%at30June2010primarilyonthestrengthofourabilitytore-letbigboxspacelosttobankruptcy.

Property Revaluations

Overview

EachpropertyintheCentroMCSportfolioisindependentlyvaluedonanannualbasis,alternatingbetweenIndependentandDirectors’valuationssixmonthly.PropertiesreceivingDirectors’valuationsat30June2010weregenerallyindependentlyvaluedat31December2009andviceversa.

Aspropertymanagers,ourgreatestinfluenceisonthepropertyincome,retailerqualityandmix,occupancyandconditionoftheproperties.Onadaytodaybasisourmanagementteamsconcentrateonleasing,marketingandmaintainingthepropertiestoahighstandardtodrivebothretailsalesandpropertyincome.ThismanagementfocusassistsinprotectingthevalueofSyndicatepropertieswhichinturnunderpinsthevalueoftheSyndicateinvestments.

Valuation Results

Australian Valuation Results

At30June2010,57%oftheAustralianSyndicatepropertyportfoliowasvaluedindependentlywithDirectors’valuationscompletedforallotherproperties.Onacomparativebasis

(excludingpropertiesthatweresoldduringtherelevantperiods–referAssetSalesUpdateonPage8)theAustralianportfoliovaluedecreasedby$25.5millionor0.9%overthesixmonthsto30June2010andby$35.4millionor1.2%overthe12monthsto30June2010.Theportfolioweightedaveragecapitalisationratesoftened(increased)by15basispointsfrom7.94%to8.09%forthesixmonthsto30June2010andby21basispointsfrom7.88%to8.09%forthe12monthsto30June2010.TheportfolioNOIgrowthwas2.4%,whichcomparestheNOIforthe12monthsto30June2010tothe12monthsto30June2009.

Thesofteningincapitalisationrates,whicharepredominantlydrivenbyexternalmarketfactors,isthemajorreasonforthepropertydevaluations.Weareseeingthatpropertyincomegrowthhaslimitedthefulleffectsofincreasesincapitalisationrates.

Recentretailpropertytransactionshaveprovidedgreaterlevelofsupportandguidanceforvaluerswhichhadbeenlackinginthelast18months.Someofthesingleassettransactionsandoneoffportfoliodealshaveshownpromisingsignsofarebound.Despitegreaterclaritythanpriorhalvesthemarketstillremainsthininsomesectorsduetocontinuedeconomicuncertaintyandthisissomethingthatwewillagainmonitorcloselyoverthenext12months.

FordetailsontheNZpropertyvaluationresultspleaserefertotheCentroMCS20SyndicatereportonPage48.

United States Valuation Results

At30June2010,47%oftheUSSyndicatepropertyportfoliowasvaluedindependentlywithDirectors’valuationscompletedforallotherproperties.Onacomparativebasis,theUSportfoliovaluedecreasedbyUS$39.1millionor1.7%overthesixmonthsto30June2010andbyUS$132.4millionor5.4%overthe12monthsto30June2010.Theportfolioweightedaveragecapitalisationratesoftened(increased)by4basispointsfrom8.52%to8.56%forthesixmonthsto30June2010andby30basispointsfrom8.26%to8.56%forthe12monthsto30June2010.TheportfolioNOIdeclinedby5.0%whichcomparestheNOIforthe12monthsto30June2010tothe12monthsto30June2009.ThisNOIdeclinewaslargelyduetotheimpactofvacanciesresultingfromretailerbankruptciesduring2008and2009combinedwithgenerallylowerrentallevelswherewehavebeenabletore-leasevacanttenancies.

Thesaletransactionsthathaveoccurredshowthemarketisstartingtostabilise,evidencedbyonlyaslightdecreaseinvaluesforthehalfyearwhencomparedwithpriorperiods.


Net Asset Backing (NAB) ImpactsTheweightedaverageAustralasianandUSNABsacrosstheSyndicateportfolioremainedunchangedfrom31December2009to30June2010,at$1.18and$0.27respectively.TheNABofeachSyndicateishighlightedinthetableonPage1,aswellasintheindividualSyndicatecommentaries.

Total Annual ReturnsTheaverageTotalAnnualReturnfortheAustralasianSyndicatesfortheyearto30June2010was5.7%(basedonanequalinvestmentineachSyndicate).Asillustratedbythechartbelow,thisisduetothedecreaseinpropertyvaluationsandtheresultantimpactonSyndicateNABs(whichismagnifiedbythelevelofgearingintheSyndicate).

Forthepastthreeandfivefinancialyears,theaverageTotalAnnualReturnfortheAustralasianSyndicateportfoliohasbeennegative6.7%andpositive6.1%perannumrespectively.

TheaverageTotalAnnualReturnfortheUSSyndicatesfortheyearto30June2010wasnegative16.4%(basedonanequalinvestmentineachSyndicate).ThisresultisalsoduetothedecreaseinpropertyvaluationsandtheresultantimpactonSyndicateNABs(whichismagnifiedbythelevelofgearingintheSyndicate)andalsoreflectstheimpactofUS$/A$foreignexchangeratemovementsovertheperiod.ThethreeyearaverageTotalAnnualReturnfortheUSSyndicateportfoliowasnegative28.4%.

TheaverageTotalAnnualReturnsreflectthecombinedreturnfromincomeandcapitalgrowth(ordecline)overagivenperiodandassumesthatdistributionincomereceivedduringtheperiodwasreinvestedatthesamereturnrate.

CapitalIncome

0.2%

1 Year

0%

3 Years 5 Years

-6.7% 6.1%

5.5%

5.7%

4.9%

-11.6% -1.1%

7.2%

CapitalIncome

4.2%

1 Year

0%

3 Years

-28.4%

-20.6%

-16.4%

4.5%

-32.8%Centro MCS Australasian Syndicate Performanceto 30 June 2010

Centro MCS US Syndicate Performanceto 30 June 2010

Source:Centro.BasedonnetreturnstoinvestorsfromanassetweightedinvestmentineachCentroMCSAustralasianSyndicatewithpublishedNABsfortheperiodofperformanceforoneyear,threeyearsandfiveyears.

Source:Centro.BasedonnetreturnstoinvestorsfromanassetweightedinvestmentineachCentroMCSUSSyndicatewithpublishedNABsfortheperiodofperformanceforoneyearandthreeyears.



Asset Sales Update Overthelast12monthswehavesoldnineAustralianshoppingcentres,10hotelsandonesmalllandholdingforacombinedvalueof$356.71millionasdetailedinthetablebelow.

WehavenotsoldanyshoppingcentresinourretailUSSyndicates(CentroMCS32,35,36or38)duringtheyear.

Property Syndicate Sale Price ($m) Sale Date Reason for Sale

CentroWarringal CentroMCS14 $30.60 September2009 Toassistrefinancing

SamuelVillageShoppingCentre CentroMCS37 $6.20 September2009 TolowerSyndicatedebt

AliceSpringsLand CentroMCS10 $0.70 September2009 Toassistrefinancing

CentroRosebud CentroMCS18 $13.15 September2009 Toassistrefinancing

NewnhamHotel,SandsTavern,BrownsPlainsHotel,AspleyHotel,MorayfieldTavern

CentroMCS17 $31.75 November/December2009

Toassistrefinancing

DavidJonesPerth CentroMCS28 $114.50 January2010 TolowerSyndicatedebt

KoalaTavern CentroMCS17 $8.00 March2010 Toassistrefinancing

CentroMeadowHeights CentroMCS18 $12.30 May2010 Toassistrefinancing

KmartAliceSprings CentroMCS10 $15.85 June2010 Toreducedebtandfunddevelopmentworks

CentroCroydon CentroMCS8 $31.50 June2010 Tofundproposedunitredemption

BurleighTavern,RoyalMailTingalpa,TheClubHotel

CentroMCS8 $19.05 June2010 Tofundproposedunitredemption

CentroLakeMacquarie,MountHutton

CentroMCS24 $66.00 July2010 Syndicatewindup

MansfieldTavern CentroMCS8 $7.11 September2010 Tofundproposedunitredemption

Total $356.71

Financial Borrowings and DebtTheSyndicatesaregearedbetween13%and95%,withthemajoritylessthan60%.Wefeelthatgearinginthe30–50%rangeismostappropriateinthecurrentenvironment.DecreasingpropertyvalueshavepushedthegearingforseveralSyndicateshigherthanthisrange.Inthesecases,wearepursuingwaystoreducegearing,whichmayincludesellingassets.

Distributionsmayalsobereducedorsuspendedsothatearningscanbeusedtoreducedebtlevelsorfundcapitalexpenditure.Weworkproactivelywithourfinancierswhengearinglevelsapproachorexceedthemaximumgearinglevelsasassetsalesmaynotprovidethebestoutcomeforthefinanciersandinvestors.

EachSyndicatehasitsownexternalseniordebtfacilities,andaspreviouslyadvised,someSyndicateshavesubordinatedloansfromCentro.FordetailsregardingeachSyndicate’sdebtprofile,pleaserefertotheindividualSyndicatecommentariesinthisreport.

Securingnewdebtandevenachievingextensionsofexistingdebtfacilitiesremainsparticularlychallengingovertheshorttomediumterm.Thisisbecauselowliquidityindebtmarketsmeansthatmortgagefinancingisinshortsupply,resultinginhigherloanfacilitymargins(ontopofofficialinterestrates).ItisexpectedthathigherfinancingcostswillcontinuetoimpactSyndicatesthathavedebtfacilitiesmaturingduring2010and2011.


RisksSyndicatesarenotimmunefromrisksincludingpotentialimpactsfrommaturingdebtandotherriskfactorssuchasthosehighlightedintheProductDisclosureStatement(PDS)foreachSyndicate.

HedgingManyoftheCentroMCSSyndicateshistoricallyenteredintohedgingcontractswithCentrobecauseCentrowasabletosourcehedgesfromtheexternalmarketatratesmorefavourablethanthosewhichcouldhavebeenachievedbyindividualSyndicates.Thesehedgeshaveincludedinterestrateandforeigncurrency(FX)exposuresforbothincomefrominvestments(incomehedges)andequityinpropertiesorfunds(equityhedges).

SyndicatesthatnolongerhaveanyinterestratehedgesorfixedratedebtandareexposedtofluctuationsinvariableinterestratesincludeCentroMCS4,5,6,8,11,12,14,15,19NZ,19UT,20,28and33.AllUSSyndicatesnolongerhaveFXincomehedges,andCentroMCS32,36and38nolongerhaveFXequityhedges.

Regulatory Guide 46 – Improving Disclosure for Unlisted Property Schemes

InSeptember2008,theAustralianSecurities&InvestmentsCommission(ASIC)releasedRegulatoryGuide46(RG46)settingouteightprinciplesforimproveddisclosuretohelpretailinvestorscomparerisksandreturnsacrossinvestmentsintheunlistedpropertysector.

CentroMCSwillcontinuetouseitswebsite(centromcs.com.au)toprovidethisdisclosuretoinvestors.PagesdetailingRG46disclosureforeachSyndicatewillbeupdatedontheCentroMCSwebsitebasedon30June2010information.Inaddition,manyoftheitemsarediscussedintheCentroMCShalfyearlyandannualreviews,investorcorrespondenceandtheInvestor Newsnewsletter.

Inparticular,theguidecoversthefollowingdisclosurerequirements:

•Disclosure Principle 1–GearingRatio–indicatestheextenttowhichaSyndicate’sassetsarefundedbyexternalliabilities.OngoingdisclosurewillcontinuetobeprovidedintheindividualSyndicatecommentaryinthehalfyearandannualreviews.

•Disclosure Principle 2–InterestCover–indicatestheSyndicate’sabilitytomeetinterestpaymentsfromearnings.ThisdisclosureiscoveredintheindividualSyndicatecommentaryinthehalfyearandannualreviews.

• Disclosure Principle 3–SyndicateBorrowing–providesinformationontheSyndicate’sborrowing,maturityandanyassociatedrisksincludingbreachesofloancovenants.ThisinformationwillcontinuetobeprovidedinthefinancialaccountswithrelevantdisclosureininvestorlettersandintheindividualSyndicatecommentaryinthehalfyearandannualreviews.

• Disclosure Principle 4–PortfolioDiversification–addressestheSyndicate’sinvestmentpracticesandportfoliorisks.VariousportfoliometricsareincludedinthehalfyearandannualSyndicatereports.RelevantportfoliorisksarecoveredintheSyndicateprospectusorsubsequentExplanatoryMemorandaorthroughongoinginvestorcommunication.

• Disclosure Principle 5–ValuationPolicy–assessesthereliabilityofthevaluations.TheCentroMCSvaluationpolicycoveringpropertyandSyndicateNABvaluationsiscontainedontheCentroMCSwebsite.SyndicateportfoliovaluationcommentaryisprovidedonPage6ofthisreportandintheindividualSyndicatereports.

• Disclosure Principle 6–RelatedPartyTransactions–fortheSyndicates,arelatedpartytransactionreferstotransactionssuchasinvestments,loans,feeagreementsorguaranteeswithotherCentroentities.ThisinformationwillbeprovidedintheRG46sectionoftheCentroMCSwebsite.

• Disclosure Principle 7–DistributionPractices–discloseswhetherdistributionshavebeenmadesolelyfromrealisedincomeorfromacombinationofrealisedincomeandareturnofcapitalfundedbyborrowingsorretainedearningsfromapriorfinancialyear.TheSeptember2010editionofInvestor NewsprovidedsignificantdisclosureoneachSyndicate’sdistributions.TheexistingCentroMCSdistributionmethodologyisthatdistributionswillgenerallynotbesupplementedwithareturnofcapitalcomponentfundedbycashreservesornewdebtfunding.

• Disclosure Principle 8–WithdrawalArrangements–discloseswhetheraSyndicatehaswithdrawalrights.Ifapplicable,theserightsaredisclosedinthePDS,prospectusorsubsequentExplanatoryMemorandacontainedontheCentroMCSwebsite.FurtherdisclosureonSyndicatewithdrawalarrangementswillbeprovidedintheRG46sectionoftheCentroMCSwebsite.

CentroMCSfullysupportsthedisclosurerequirementsunderthisguidewhichwebelievewillprovideongoingandmeaningfulinformationforinvestors.


Investor CommunicationThroughitsvariouspublicationsandwebsite(centromcs.com.au),CentroMCScontinuestokeepinvestorsinformedabouttheperformanceoftheirinvestmentsandhowtheyarebeingimpactedbybroaderpropertyandfinancialmarketdevelopments.Investorsmayalsoreceivecorrespondenceonspecificmattersrelatingtotheirinvestmentssuchasrollovers,assetsales,developmentupdatesorotherstrategicproposals.

Investor Services TeamOurInvestorServicesTeamisavailabletoanswerquestionsinvestorsmayhaveabouttheirCentroMCSinvestments.

PleasecallthetollfreenumberduringbusinesshourstospeaktooneofourCentroMCSInvestorServicesOfficersoralternativelyyoucanaccessinformationfromthewebsite.

Centro Investor Services

Adviser Services TeamTheCentroAdviserServicesTeamisavailabletoanswerqueriesfromFinancialPlannersandAuthorisedRepresentativesthroughadedicatedphoneandemailserviceinadditiontoprovidingtimelyandvaluableinformationupdatesandclientreports.TheCentroAdviserServicesTeamcanbecontactedduringAustralianbusinesshours.

Centro Adviser Services

TollFree(Australia)1800 802 400

TollFree(NewZealand)0800 449 605

Telephone+61 3 8847 1802

Facsimile+61 3 8847 1868

Email:[email protected]

TollFree(Australia)1800 103 080

Telephone+61 3 8847 1806

Facsimile+61 3 8847 1871

Email:[email protected]



FUNDS MANAGEMENT TEAM

Centro MCS – The TeamTheCentroMCSSyndicateFundsManagementteamisresponsiblefortheongoingmanagementof34retailpropertysyndicates.

WithAustralasianfundsundermanagementof$2.8billionandUSfundsundermanagementofUS$2.3billion,theteamoverseesatotalof212shoppingcentresacrossallthesyndicates.

Expertisewithintheteamcoversabroadspectrumincludingacquisitions,centremanagement,development,investmentmanagement,accountingandvaluations.

Theteamitself,whichincludesthreeexecutivesfromtheoriginalMCSPropertybusiness,hasover60yearsofcombinedpropertyexperience.

Gerard Condon BBus(Prop), GradDipAppFin/InvGeneral Manager – Syndicate Funds Management.

Gerardhas20yearsexperienceinthepropertyindustry.Gerard’sroleastheteam’sGeneralManagerseeshimbearingultimateresponsibilityforall34syndicates.Gerardoverseesthesyndicate,retaildistributionandinvestorservicesteams.

GerardwaspreviouslymanageroftheSyndicateFundsManagementteamandcommencedwithCentroin2003followingfiveyearswithMCSProperty.GerardhadnineyearsexperienceinvaluationspriortojoiningMCSProperty.

Andrew Lamont BBus (Prop Mgmt & Val), ANZIV Syndicate Fund Manager – Syndicates 4, 6, 10, 15, 18, 20, 28 & Woodlands

Andrewisresponsiblefortheday-to-daymanagementoftheteaminadditiontomanagingtheabovesyndicates.

HefirstjoinedMCSPropertyasanAssetManagerin2001beforegoingontoundertakevariousseniormanagementroleswithinCentro.Hispropertyindustryexperiencespans16years,someofthemabroad.

Alastair McIntosh BEng, BSc, MAppFinSyndicate Portfolio Manager – Syndicates 9, 19 NZ/I, 19 UT, 23, 32 & 35

AlastairjoinedtheCentroMCSteaminJuly2006.PriortothishespenttwoyearswithCarsonGroup.There,hewasaProjectManagerservingthebuildingandpropertyindustries.

Chris Brockett BBus(Acc & Bus Law), CA, SA FinSyndicate Portfolio Manager – Syndicates 8, 14, 21, 22, 25, 34 & 36

ChrisspenttwoyearsinLondonasaderivativesspecialistbeforejoiningCentroinDecember2005asaSeniorFinancialAccountant.HethenwentontojointheCentroMCSteaminDecember2006.

Warren Taylor BComm, GradDipAppFin/Inv, CPA, SA FinSyndicate Portfolio Manager – Syndicates 11, 12, 16, 17, 26, 33 & 38

Warren’sexperienceinportfoliomanagementstemsfromathreeyearroleasDevelopmentAnalystwithColonialFirstStatePropertyManagement.HejoinedtheCentroMCSteaminJanuary2007.

Vanessa VisenjouxB Bus (Acc), CPA Syndicate Portfolio Manager – Syndicates 5, 27, 37, 39 & 40

VanessafirstjoinedtheCentroMCSteamasaSyndicateAccountantin1999.BeforegoingontoundertaketheroleofManager-FinancialAccountant-Syndicates,shewasresponsibleforthemanagementandstatutoryreportingforallCentroMCSSyndicates.

VanessajoinedtheSyndicateFundsManagementteaminSeptember2009afterherreturnfrommaternityleave.

Centro Properties Group Executive CommitteeRobert Tsenin,ChiefExecutiveOfficer

Chris Nunn,GroupChiefFinancialOfficer

Mark Wilson,GeneralManagerPropertyOperations–Australia

Dimitri Kiriacoulacos,GroupGeneralCounsel

Gerard Condon,GeneralManagerSyndicateFundsManagement

Paul Belcher,GeneralManager–Finance

Michael Benett,GeneralManager–ListedFundsManagement

Sue Smith,GroupGeneralManagerHumanResources


CORPORATE GOVERNANCE

TheBoardsofCPTManagerLimitedandCentroMCSManagerLimited,themanagersofthesyndicates,operateunderasetofwell-establishedcorporategovernancepolicieswhichcomplywiththeprinciplesandrequirementsoftheCorporationsAct(Act).TheBoardsreviewandasnecessary,updatetheircorporategovernancepoliciestoensuretheyaccordwithbestpractice,havingregardtorecentdevelopmentsbothinAustraliaandoverseas.Thisstatementoutlinesthemaincorporategovernancepracticesinplacethroughouttheyear.

AnumberofchartersandpoliciesareavailableinthecorporategovernancesectionoftheCentroMCSwebsiteatwww.centromcs.com.au.

EachoftheCentroMCSSyndicatesisaregisteredManagedInvestmentSchemeundertheAct.

Responsible EntitiesCPTManagerLimitedandCentroMCSManagerLimitedarewholly-ownedsubsidiariesofCentroPropertiesLimited(CentroortheGroup),whichformspartofthelistedentity,CentroPropertiesGroup.CPTManagerLimitedandCentroMCSManagerLimitedaretheresponsibleentities(theResponsibleEntities)oftheManagedInvestmentSchemesregisteredundertheActthatconstituteeachsyndicate(theSchemes).

EachResponsibleEntityismanagedbyaBoardofDirectors,accountabletothemembersoftheSchemes.TheResponsibleEntitiesareresponsiblefortheoverallCorporateGovernanceoftheSchemes,includingtheprotectionofmembers’interests,developingstrategicdirection,establishinggoalsformanagementandmonitoringtheachievementofthesegoals.TheResponsibleEntitieshavealsoestablishedaframeworkforthemanagementoftheSchemes,includingasystemofinternalcontrols,abusinessriskmanagementprocessandtheestablishmentofappropriateethicalstandards.

Primary Duties and ObligationsTheprimarydutiesandobligationsoftheResponsibleEntitiesinclude:

•ExercisingallduediligenceandvigilanceincarryingouttheirdutiesandinprotectingtherightsandinterestsofSchememembers,andinperformingtheirfunctionsandexercisingtheirpowersundertheSchemes’constitutionsinthebestinterestsofallmembers.

•Keepingorcausingtobekeptproperbooksofaccount,ensuringthefinancialreportsareauditedannuallybyanindependentregisteredauditorandsendingafinancialreportandacopyoftheauditors’reporttothoseSchemememberswhohavesorequestedeachyear.

•EnsuringthattheaffairsoftheResponsibleEntitiesarecarriedonandconductedinaproperandefficientmanner.

UndertheSchemes’constitutions,theResponsibleEntitiesarealsoresponsiblefortheday-to-dayoperationsoftheSchemesincluding:

•Ongoingmanagement,researchandselectionofpropertyinvestmentsanddisposals.

•Preparingallnoticesandreportstobeissuedtomembers.

Board Composition and MembershipBoardcompositionandtheindependenceofdirectorsisdeterminedusingtheprinciplesadoptedintheBoardCharter.

TheBoardssupporttheappointmentofindependentdirectorswhobringarangeofbusinessskillsandrelevantexperiencetotheResponsibleEntities.

CPT Manager Limited

TheBoardisresponsiblefortheoverallCorporateGovernanceofCPTManagerLimited.TheBoardmeetsataminimumonamonthlybasis,andisrequiredtodiscusspertinentbusinessdevelopmentsandissuesandreviewtheoperationsandperformanceoftheSchemes.

Overthereportingperiod,theBoardconsistedofsixDirectors.Until30September2009,theseDirectorswerePaulCooper(Chair),GrahamGoldie,JimHall,SamKavourakis,PeterWilkinson,andRobWylie.

On30September2009,GrahamGoldie,SamKavourakisandPeterWilkinsonretired.ThreenewDirectors,beingAnnaBuduls,SusanOliverandRobertTsenin,wereappointedtoreplacethemfrom1October2009.TheBoardincludesamajorityofindependentnon-executivedirectors,andtheChairoftheBoard,PaulCooper,isanindependentnon-executivedirector.FollowinghisappointmentasCentroGroupChiefExecutiveOfficerfrom1March2010,RobertTseninistheonlyexecutiveDirectoroftheBoardandisthereforenotconsideredtobeanindependentDirector(priortothattime,RobertTseninwasanon-executiveDirectorandwasconsideredtobeanindependentDirectorduringthatperiod).


Centro MCS Manager Limited

TheBoardisresponsiblefortheoverallCorporateGovernanceofCentroMCSManagerLimited.ThisBoardalsomeetsataminimumonamonthlybasis,andisrequiredtodiscusspertinentbusinessdevelopmentsandissuesandreviewtheoperationsandperformanceoftheSchemes.

OverthereportingperiodtheBoardconsistedofamaximumofsixDirectors.Until30September2009,theseDirectorswerePaulCooper(Chair),GrahamGoldie,JimHall,SamKavourakis,andPeterWilkinson.

On30September2009,GrahamGoldie,SamKavourakisandPeterWilkinsonretired.ThreenewDirectors,beingPeterDay,MichaelHumphrisandFraserMacKenzie,wereappointedtoreplacethemfrom1October2009,andafourth,BillBownesswasappointedon6October2009.TheBoardwaschairedbyMrPaulCooperuntilOctober2009,andbyMrPeterDaysincethatdate.AllDirectors,includingtheChair,areindependentnon-executiveDirectors.

Board CommitteesTheResponsibleEntitieshaveestablishedanumberofcommitteestoassistwiththeimplementationoftheirCorporateGovernancepractices,including:

•AuditCommittee

•FinanceCommittee

•ManagedInvestmentsComplianceCommittee

•NominationCommittee

•RiskCommittee

Thesecommitteesareoutlinedbelowandhavewrittenchartersandoperatingproceduresthatarereviewedonaregularbasis.Theeffectivenessofeachcommitteeisalsoconstantlymonitored.

Audit CommitteesTheAuditCommitteeforCPTManagerLimitedconsistsofthreeofthenon-executiveDirectorsoftheBoard,beingJimHall,AnnaBudulsandRobWylie.TheCommitteewaschairedbyMrHallduringthereportingperiod.

TheCommitteeforCentroMCSManagerLimitedconsistsofthreeofthenon-executiveDirectorsoftheBoard,beingFraserMacKenzie,JimHallandMichaelHumphris.Duringthereportingperiod,thisCommitteewaschairedbyMrHalluntilOctober2009,andbyMrMacKenziesincethatdate.

TheChiefExecutiveOfficer,ChiefFinancialOfficer,GroupFinancialAccountingManager,ComplianceOfficer,Group

InternalAuditManagerandExternalAuditoralsoattendcommitteemeetingsbyinvitation.ThecommitteeregularlyreportstotheBoardsinrespectofmatterswithinitsresponsibilities.

TheBoardshaveadoptedanAuditCommitteeCharterwhichsetsouttheobjectives,responsibilitiesandfunctionsofthecommitteeinrelationtoauditmattersandidentifyingandmanagingcommercialrisks.TheCharteralsosetsouttheproceduresfortheselectionandappointmentoftheexternalauditorandfortherotationoftheexternalauditmanagingpartner.

TheChiefExecutiveOfficerandChiefFinancialOfficerhavereportedtotheBoardsthattheResponsibleEntities’riskmanagementandinternalcomplianceandcontrolsystemisoperatingefficientlyandeffectivelyinallmaterialrespects.

Finance CommitteesTheFinanceCommitteeforCPTManagerLimitedwasestablishedon1October2009withtheappointmentofnewBoardmembers.TheCommitteeconsistsofthreemembers,beingRobWylie,JimHallandSusanOliver.MrWyliealsochairstheCommittee.

TheFinanceCommitteeforCentroMCSManagerLimitedwasestablishedon1October2009withtheappointmentofnewBoardmembers.TheCommitteeconsistsofthreemembers,beingMichaelHumphris,JimHallandFraserMacKenzie.MrHumphrisalsochairstheCommittee.

AFinanceCommitteeCharterhasbeenadoptedwhichsetsoutthepurposeandpowersoftheCommittee.

Managed Investments Compliance CommitteesTheResponsibleEntitieshaveadoptedacomplianceplan,lodgedwiththeAustralianSecuritiesandInvestmentsCommission(ASIC),whichsetsouttheproceduresandsystemsusedtoensuretheResponsibleEntitiescompliancewithitsobligationsundertheActandtheSchemes’constitutions.TheResponsibleEntitiesmustoperateinaccordancewiththeCompliancePlanwhichismonitoredbybothaspeciallyconstitutedManagedInvestmentsComplianceCommitteeandtheCompliancePlanauditor.

TheCommitteeisresponsibleforensuringtheResponsibleEntity’scompliancewiththeCompliancePlan.

Until30September,theCommitteeforCPTManagerLimitedconsistedoffouroftheGroup’sDirectors,beingMessrsGrahamGoldie,PeterWilkinson,JimHallandRobWylie,andwaschairedbyMrGoldie.From1October2009,


CORPORATE GOVERNANCE (Continued)

theCommitteeforCPTManagerLimitedconsistedofthreeoftheGroup’sDirectors,beingAnnaBuduls,whoalsochairstheCommittee,SusanOliver,andRobertTseninuntilhisappointmentasGroupChiefExecutiveOfficer.PaulCooperhasnowbeenappointedinMrTsenin’splace.

Until30September,theCommitteeforCentroMCSManagerLimitedconsistedofthreeDirectors,beingMessrsGrahamGoldie,PeterWilkinsonandJimHall,andwaschairedbyMrGoldie.FromOctober2009,theCommitteeforCentroMCSManagerLimitedconsistedofthreeDirectors,beingBillBowness,whoalsochairstheCommittee,PaulCooperandMichaelHumphris.

Throughmaintainingaseparatecommittee,Directorsacknowledgetheimportanceofthefinancialservicesindustry’sregulatoryregimeandtheirresponsibilitiesinprotectingtheinterestsofInvestors.

TheComplianceCommitteemeetsatleastquarterlytomonitorcomplianceandreviewtheadequacyofthecomplianceplan.Inaddition,theGroup’sComplianceOfficerisrequiredtoconfirmmonthlytotheChairoftheComplianceCommitteethatnomaterialbreacheshaveoccurredthatcouldcausefinancialdisadvantagetoanyinvestor.

Risk CommitteesTheRiskCommitteeforCPTManagerLimitedwasestablishedon1October2009andconsistsofthreeofthenon-executiveDirectorsoftheBoard,beingSusanOliver,AnnaBudulsandJimHall.TheCommitteewaschairedbyMsOliverduringthereportingperiod.TheChiefExecutiveOfficer,GroupChiefFinancialOfficer,GroupRiskandInternalAuditManageralsoattendcommitteemeetingsbyinvitation.TheCommitteeregularlyreportstotheBoardsinrespectofmatterswithinitsresponsibilities.

TheRiskCommitteeforCentroMCSManagerLimitedwasestablishedinOctober2009andconsistsofthreeofthenon-executiveDirectorsoftheBoard,beingJimHall,FraserMacKenzieandBillBowness.TheCommitteewaschairedbyMrHallduringthereportingperiod.TheChiefExecutiveOfficer,GroupChiefFinancialOfficer,GroupRiskManagerandGroupRiskandInternalAuditManageralsoattendcommitteemeetingsbyinvitation.TheCommitteeregularlyreportstotheBoardsinrespectofmatterswithinitsresponsibilities.

TheBoardshaveadoptedaRiskCommitteeCharterwhichsetsouttheobjectives,responsibilitiesandfunctionsofthecommitteeinrelationtoriskmanagementmatters,andidentifyingandmanagingmaterialbusinessrisksbothin

AustraliaandtheUnitedStates.TheCommitteeoverseestheRiskManagementandInternalControlFrameworkandreviewsitseffectiveness.

Internal Control FrameworkTheBoardsandmanagementrecognisethateffectiveriskmanagementandinternalcontrolsareanintegralpartofsoundmanagementpracticeandgoodcorporategovernanceastheyimprovedecisionmakingandenhanceoutcomesandaccountability.

TheBoardsareresponsiblefortheoverallRiskManagementandInternalControlFrameworkoftheResponsibleEntitieswhichincludesthefollowingactivities:

• Material Risks Register

TheBoardsandmanagementrecognisethattheResponsibleEntitiesmusthavearobustRiskManagementFrameworkinwhichmaterialrisksareproactivelyidentified,communicatedandmanaged.TheMaterialRiskRegisterisaneffectivemanagementtoolthatisusedtoidentifyandcommunicatematerialrisks.ItisupdatedonaquarterlybasisandisreportedtotheExecutiveCommitteeandtheBoardsviatheRiskCommittee.Itisalsousedtomonitormaterialrisksandriskmitigationstrategies.Itcoversbroadriskcategoriesincludingbusinesscontinuity,strategicobjectives,financial,peopleandoccupationalhealthandsafety,reputation,infrastructure,assetsandsystems,legalandregulatory.ManagementhasreportedtotheBoardsastotheeffectivenessofthecompany’smanagementofitsmaterialbusinessrisks.

• Internal Audit

TheInternalAuditfunctionprovidesindependentobjectiveassuranceandmakesrecommendationstoassisttheResponsibleEntitiesimprovetheirRiskManagementandInternalControlFramework.Italsotestscompliancewithinternalcontrols.TheAuditCommitteeandRiskCommitteereviewandapprovetheriskbasedStrategicInternalAuditProgrameachfinancialyear.TheCommitteesalsoreviewtheoutcomesofInternalAuditsperformedtoensurethatappropriateactionsaretakentomitigateidentifiedrisks.

• Compliance Plan

TheCompliancePlanappliestoalloftheregisteredmanagedinvestmentschemesintheGroup,andprovidesaframeworktoreviewandmonitortheinvestmentriskforinvestorsinthoseschemes.TheComplianceOfficerisresponsibleforperformingperiodicreviewsoftheGroup’scompliancewiththeprovisionsoftheCompliancePlan.


• Continuous Disclosure

TheResponsibleEntitieshaveapolicythatallSchememembershaveequalaccesstotherelevantScheme’sinformation.AllmaterialinformationispostedtotheCentroMCSwebsite.

• Financial Reporting

ThereisacomprehensivebudgetingsystemwithanannualbudgetapprovedbytheDirectorsoftheResponsibleEntities.Monthlyactualresultsarereportedagainstbudgetandrevisedforecastsfortheyeararepreparedregularly.TheResponsibleEntitiesreporttoSchemememberssix-monthly.

• Personnel Quality & Integrity

TheResponsibleEntitiespoliciesaredetailedinaPoliciesandProceduresManual.Formalappraisalsareconductedatleastannuallyforallemployees.Inaddition,CentrohasinaplaceCodeofConductwhichsetsoutthestandardsofbehaviourexpectedfromallemployees.

Conflicts of InterestInaccordancewiththeAct,thecomplianceplansoftheSchemesandtheconstitutionsoftheResponsibleEntitiesandtheSchemes,DirectorsoftheResponsibleEntitiesmustkeeptheBoardsadvised,onanongoingbasis,ofanyinterestthatcouldpotentiallyconflictwiththoseoftheResponsibleEntities.TheResponsibleEntitieshaveadoptedaRelatedPartyTransactionsandConflictsofInterestPolicytoassistDirectorstodisclosepotentialconflictsofinterest.

Director EducationTheResponsibleEntitieshaveadoptedaprocesstoeducateDirectorsaboutthenatureoftheResponsibleEntities’business,currentissues,thecorporatestrategyandtheexpectationsoftheResponsibleEntitiesconcerningtheDirectors’performance.DirectorsoftheResponsibleEntitiesalsohavetheopportunitytovisitthesyndicatepropertiesandmeetwithmanagementtogainabetterunderstandingofbusinessoperations.

Independent Professional AdviceEachDirectorhastherighttoseekindependentprofessionaladviceattheexpenseoftheResponsibleEntities.However,priorapprovaloftherespectiveChairisrequired,whichisnottobeunreasonablywithheld.

Ethical StandardsAllDirectors,managersandemployeesofCentroareexpectedtoactwiththeutmostintegrityandobjectivity,andtoendeavouratalltimestoenhancethereputationandperformanceoftheResponsibleEntities.Centro’sCodeofConductsetsoutthestandardsofbehaviourexpectedfromallemployees.

Complaints Process

TheResponsibleEntitieshaveimplementedaComplaintsHandlingPolicythathasbeenpreparedinaccordancewithAustralianStandard.Inaddition,theResponsibleEntitiesremainmembersofanexternalComplaintsResolutionScheme.TheComplianceCommitteemonitorscompliancewiththeResponsibleEntities’ComplaintsHandlingPolicy.

Company SecretaryTheCompanySecretaryisMsElizabethHourigan,LLB.ElizabethisalsotheComplianceOfficerandSeniorLegalCounseloftheGroup.ElizabethjoinedCentroin2003andwasappointedtothepositionofCompanySecretaryinNovember2005.

MrDimitriKiriacoulacoswasappointedaCompanySecretaryon1April2010andMrPaulFlanigancontinuesasAssistantCompanySecretary.


NOTES ON THE INDIVIDUAL SYNDICATE REPORTS

•Net Asset Backing (NAB) Policy–ForafullcopyoftheCentroMCSNABpolicy,pleaserefertotheCentroMCSwebsite(centromcs.com.au).

•Total Annual Returns (since inception)–Reflectthecombinedreturnfromincomeandcapitalgrowthoveragivenperiodandassumesthatdividendincomereceivedduringtheperiodwasreinvestedatthesamereturnrate.TotalAnnualReturnsareonlyprovidedforthosesyndicatesthathavebeeninexistenceformorethanthreeyears.

• FY11 Distribution Forecast –InvestorsshouldbeawarethatwhileitisCentroMCS’scurrentexpectationthattheincomeofsyndicateswillbesufficienttomeettheforecasts,changesineconomicandtradingconditionsmayinfluencetheseexpectations.ForUSsyndicates,changestotheforeigncurrencyexchangeratesmayincreasevolatilityindistributionrates.

• Distribution Return on Initial Equity / Distribution Return on the original $1.00 invested–Unlessotherwisespecified,thisdistributionrateisbasedontheoriginal$1.00investedatcommencementofthesyndicate.

•Distribution Return on Net Asset Backing (NAB)–TheDistributionReturnonNABisbasedonthecurrent30June2010NABoftheSyndicate.

•Tax Advantaged Portion–TheTaxAdvantagedPortionreportedisonlyanindicationofinvestors’forecasttaxadvantagedpositioninrelationtotheircashdistribution.Wheretheinvestmentinasyndicatehasborrowingsassociatedwithit(andtheborrowingsaremanagedoninvestors’behalfbytheResponsibleEntity),theTaxAdvantagedPortionquotedinthisreportreferstotheeffectivenontaxableamountofthecashdistributionreceivedbyinvestorseachyear(afterclaiminginterestdeductions).

Investorsshouldnotethattheactualtaxadvantagedportioncanvaryfromtheforecastprovidedduetoanumberoffactorsthatmaychangeduringtheforecastperiod,includingbutnotlimitedto:

•Thesaleofproperty

•Varianceincapitalexpenditure

•Varianceinsyndicateearnings

•Varianceinforecastdistributions

•Varianceininterestrepaymentsoninvestorloans

•Rolloverorterminationfees

Itisalsoimportantthatinvestorsunderstandthatthisisnottheamount(ortherate)thatshouldbeusedtodeterminethereductiontotheCapitalGainsTax(CGT)costbase.ThereductiontoyourCGTcostbaseisadvisedonyourAnnualTaxationStatementundertheheading‘TaxDeferredIncome’.InvestorsshouldrefertotheCentroMCSDirectPropertyAnnualTaxReturnGuideontheCentroMCSwebsite(centromcs.com.au).InvestorswhohavequeriesinrelationtothisinformationshouldcontactCentro’sInvestorServicesTeamorspeaktotheirtaxaccountant.

• Equivalent Pre-tax Return on Initial Equity / Equivalent Pre-tax Return on the Original $1.00 Invested–Theequivalentpre-taxreturnisbasedona46.5%marginalrate.

•NAB per Unit (based on the remaining units only) –AtjointmeetingsofnoteholdersandunitholdersforinvestorsinCentroMCS35,36and38heldinOctober2009,noteholdersvotedinfavourofcancellingtheunsecurednotesfromthesyndicateinvestmentstructurewitheffectfrom1July2009.TheNABperUnitreflectsthecurrentvalueoftheremainingunitsonly,followingthisnotecancellation.

• Syndicate Review Date –Thisdateorrangeofdatesisthemaximumpermittedtermofthesyndicateasgovernedbytheindividualsyndicateconstitutions.

• Top Retailers –Disclosurehasbeenprovidedforanysyndicatetenantsthatcontribute5%ormoreofnetpropertyincome.

•Property Portfolio Statistics –Wehaveincludedhistoricalannualportfolioresultsasat30June2007,2008,2009and2010.

• Gearing Ratio–ThegearingratiohasbeencalculatedinaccordancewithASICRG46whichstatesthatentitiesshoulddiscloseagearingratiofortheschemecalculatedusingthefollowingformula:

Totalinterestbearingliabilities

Totalassets

Investorsshouldnotethatexternalfinanciergearingratiocovenantsaregenerallybasedontheexternalfinancierdrawndebtasaproportionofthelatestindependentvaluationforthesecuredpropertyassets.

GearingRatio=


•Interest Cover Ratio–TheinterestcoverratiohasbeencalculatedforthefinancialyearinaccordancewithASICRG46whichstatesthattheschemesinterestcovershouldbedisclosedandcalculatedusingthefollowingformula:

EBITDA–unrealisedgains+unrealisedlosses

Interestexpense

EBITDA=earningsbeforeinterest,tax,depreciationandamortisation.

Investorsshouldnotethatexternalfinancierinterestcovercovenantsaregenerallybasedontheaboveformulaalthoughthereareanumberofexceptionsundercertainexternalsyndicateloanse.g.completingacalculationbasedonnetpropertyincomeinsteadofEBITDAandcompletinga6or12monthtestataparticularpointintime.

AdditionaltermsaredefinedintheGlossarystartingonPage80ofthisreport.

•Debt Maturity Profile–ThissectionprovidesdisclosureonexternalfinancierandCentroPropertyTrustrelatedpartyloanterms,averageinterestratesasat30June2010andinterestratehedgingprofilesforsyndicateswithinterestratehedgesinplace.

InterestCover=


CENTRO MCS 4

SYNDICATE UPDATE

KEY SYNDICATE STATISTICSYear Ending 30 June Actual 2007 Actual 2008 Actual 2009 Actual 2010 Forecast 2011

Distribution Return on Initial Equity 21.25% 21.75% 6.75% 7.00% Nil

Distribution Return on Net Asset Backing (NAB) 4.56% 4.99% 3.18% 3.50% Nil

Tax Advantaged Portion 34.13% 100% 100% 100% 0.00%

Equivalent Pre-tax Return on Initial Equity 24.94% 40.65% 12.62% 13.08% Nil

NAB $4.66 $4.36 $2.12 $2.00 -

Syndicate Commencement Date May 1996, rollovers occurred March 2002 and August 2007

Syndicate Review Date September 2012 – August 2014

PROPERTY PORTFOLIO STATISTICS Property State Centre Sales

Growth Occupancy

Rate (by area)

30 June 2010 Valuation

30 June 2010 Capitalisation

Rate

% Valuation Change

(from 30 June 2009)

Weighted Average Lease Expiry (by income)

Centro Seven Hills NSW 5.1% 100% $93,000,000(1) 8.25% 0.00% 5.97 years

CSIF-A Investment(2) Various 5.0% 99.4% $9,315,231 8.37% -16.83% 5.12 years

TOTAL 5.1% 99.7% $102,315,231 8.26% -1.81% 5.56 years

FY09 TOTAL 1.8% 99.6% $104,200,000 8.02% -23.9% 5.88 years

FY08 TOTAL (3) 1.5% 98.0% $114,000,000 6.25% -1.26% 6.02 years

FY07 TOTAL (3) 2.5% 98.7% $115,450,000 6.25% 19.51% 6.73 years

(1)IndependentvaluationundertakenbyColliersInternational.(2)EquityinvestmentintoCentroSyndicateInvestmentFund(CSIF-A).ForfurtherinformationonCSIF-ArefertotheFactSheetontheCentroMCSwebsiteunderSyndicate

Portfolio&RG46DisclosuresforCentroMCS4.(3)HistoricalstatisticsareforCentroSevenHillsonly.

NAB Change

Jun ‘10 $2.00

Dec ‘09 $2.00

Jun ‘09 $2.12

•Nil Distribution Forecast for FY11–Syndicatedebtservicingcostsareforecasttoincreaseby$880,000inFY11duetohigherfloatinginterestratesanda65basispointincreaseintheloanfacilitymarginfromMay2010.AdditionallynodistributionsareforecasttobereceivedfromtheSyndicate’sinvestmentintheCentroMCSInvestmentFund(CSIF-A)duetothehigh(77%)gearinginthisfund.ThecombinationofthesefactorsisplacingpressureontheSyndicate’sinterestcovercovenantunderitsexternaldebtfacilityandthereforenodistributionsareforecastforFY11.Intheeventthatabreachoftheinterestcovercovenantoccurs,theSyndicatemaysellitsCSIF-Ainvestment;agreeonawaiverofthebreachwiththeSyndicate’sexternalfinanciers;orelecttosellCentroSevenHillsandwinduptheSyndicate.

• Syndicate NAB Remains at $2.00–ComparedtoDecember2009,thevaluationofCentroSevenHillsremainedunchangedat$93.0millionandtheSyndicate’sCSIF-Ainvestmentdeclinedmarginallyby0.5%to$9.3millionduetopropertydevaluations.AccountingforotherminorSyndicatebalancesheetmovementsthe30June2010NABhasbeenmaintainedat$2.00.

• Seven Hills Fully Leased–CentroSevenHillsremainedfullyleasedwith22leasingdealscompletedforthe12monthstoJune2010contributingtonetpropertyincomegrowthof1.7%fortheyear.Retailsalesgrowthwasalsostrongwithanannualincreaserecordedof5.1%.WecontinuetoexpectsolidoperatingmetricsforFY11withnetpropertyincomegrowthof3.9%forecast.TheproposalfromColestoassigntheirsupermarketleasetoFoodWorkslastyeardidnotproceedandColescontinuestotradefromitsexistingtenancy.

• CSIF-A Portfolio Performance–TheCSIF-Aportfoliodevaluationwaslargelyduetothevaluationcapitalisationratesofteningfrom8.32%to8.37%overthesixmonthperiod.However,theportfoliooccupancyrateimprovedfrom99.1%to99.4%.DuetoCSIF-A’shigh77%gearingratioasatJune2010,allearningsarebeingredirectedtowardsdebtrepaymentandasaresult,nodistributionisforecastduringFY11.

FY11 Distribution Forecaston Initial Equity: Nil

Total Annual Return

since Inception: 17.13%


CM

CS 4

DEBT INFORMATIONAllSyndicatedebtat30June2010wasatavariable(floating)interestrateof7.22%p.a.(includingweightedaveragemargin).

Period Ending 30 June 2008 30 June 2009 30 June 2010

Gearing Ratio (1) 43.7% 65.7% 66.7%

Interest Cover Ratio 1.7 times 1.4 times 1.6 times

(1)Forexternalfinancierdebtloancovenantpurposes,CentroPropertyTrustdebtisnotincluded.Asat30June2010,theSyndicatewaswithinitsLVRcovenant.

DEBT MATURITY PROFILE

Financier Loan Facility Amount Undrawn Amount Loan Maturity (1)

External Financier $39.77 million Nil 15 December 2011

Centro Property Trust $29.65 million Nil Payable at reasonable notice

TOTAL $69.42 million Nil 1.26 years

(1)CentroPropertyTrustloancalculatedat12monthsloanmaturity.

Woolworths18.3%

Other73.1%

Coles8.6%

TOP RETAILERSTotal % of Income 26.9%


CENTRO MCS 5

SYNDICATE UPDATE


Distribution Return on Initial Equity 15.75% 15.75% 12.00% 15.50% 12.00%

Distribution Return on Net Asset Backing (NAB) 6.08% 5.65% 5.71% 7.17% 5.53%

Tax Advantaged Portion 9.37% 0.34% 32.95% 0.00% 100%

Equivalent Pre-tax Return on Initial Equity 16.71% 15.80% 15.44% 15.50% 22.43%

NAB $2.59 $2.79 $2.10 $2.17 -

Syndicate Commencement Date December 1996, rollover occurred October 2003

Syndicate Review Date 31 October 2010


Growth Occupancy

Rate (by area)

30 June 2010 Valuation (1)


Rate

% Valuation Change

(from 30 June 2009)

Weighted Average

Lease Expiry (by income)

Belmont Shopping Village VIC 1.6% 100% $37,000,000 7.75% 3.64% 2.16 years

Centro Launceston TAS 12.6% 100% $27,200,000 9.00% 1.87% 1.71 years

Centro Kurralta SA 4.3% 100% $27,090,000 7.50% 3.00% 1.06 years

Centro New Town TAS 11.2% 97.6% $21,000,000 9.00% -4.98% 1.65 years

TOTAL 7.3% 99.4% $112,290,000 8.23% 1.34% 1.66 years

NAB Change

Jun ‘10 $2.17

Dec ‘09 $2.15

Jun ‘09 $2.10

•Increase in NAB–ThevaluationsofallfourpropertiesremainedunchangedfromDecember2009.NotwithstandingthistheNABhasincreasedbytwocentsto$2.17duetootherpositivebalancesheetmovementsincludinganimprovementintheSyndicate’s30June2010cashposition.

•Syndicate End of Term–TheSyndicateisapproachingtheendofitssecondterm.Aletterwasmailedon23July2010informinginvestorsofourintentiontowinduptheSyndicate.However,priorto31October2010,additionalinformationwillbeprovidedonourfinalstrategywhichcouldinvolveafurtherproposaltoinvestors.

•Higher Debt Costs Impact Distribution –Forecastincreasesindebtservicingcostsof$910,000perannumhasresultedinareductiontotheforecastannualdistributionratefrom15.5%to12.0%.TheincreaseindebtservicingcostsisduetoahighermarginontheloanfacilityandanincreaseinthefloatinginterestratecomparedwithFY10.TheSyndicateforecastspaying$1.4millionforcapitalexpenditure(largelyforairconditioningworksatCentroKurralta)outofFY11earningsandprioryearcashreserves.

•Mixed Property Sales Results –PositiveannualsalesresultswererecordedforallSyndicateproperties.CentroLauncestonrecorded12.6%salesgrowthfortheyear,underpinnedbyColesandKmartsalesincreasesof11.2%and13.3%respectively.CentroNewTownsalesgrew11.2%bolsteredbyaverystrongperformancebyKmartwhichrecordedannualsalesgrowthof18.1%.CentroKurraltasaleswereup4.3%whileCentroBelmontrecordedmoderatesalesgrowthof1.6%duetoincreasedcompetitionfromtwonewColessupermarketsatWestfieldBayCityPlazaandManifoldHeights,andanewBigWatWestfieldBayCityPlaza.

• Occupancy–TheSyndicateis99.4%leasedwithonlyonevacancyacrosstheportfolio.Duringtheyear,19leaserenewalsandtwonewleaseswerecompletedatanaveragerental3%abovebudget.Over70%oftheSyndicateincomeissecuredbyWesfarmersthroughtheirColessupermarketandKmartdiscountdepartmentstorebusinesses.

FY11 Distribution Forecaston Initial Equity: 12.00%

Total Annual Return



CM

CS 5

PROPERTY PORTFOLIO STATISTICS (continued)Property State Centre Sales

Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


FY09 TOTAL 0.5% 100% $110,800,000 8.02% -15.55%(2) 2.22 years

FY08 TOTAL 3.1% 100% $131,200,000 6.97% 5.47%(2) 3.16 years

FY07 TOTAL 0.6% 100% $124,400,000 6.91% 5.87%(2) 3.88 years

(1)Directors’Valuations.(2)Valuationchangefrompriorperiod.



Gearing Ratio (1) 36.0% 44.2% 43.8%










Kmart43.1%

Other26.7%

Coles30.2%


CENTRO MCS 6

SYNDICATE UPDATE


Distribution Return on Initial Equity(1) 13.30% 13.30% 9.50% 12.00% 10.00%


Tax Advantaged Portion 31.85% 27.19% 50.55% 13.02% 12.00%


NAB $2.07 $2.05 $1.41 $1.42 -

Syndicate Commencement Date June 1997, rollover occurred August 2004

Syndicate Review Date August 2009 – August 2011

(1)Theannualdistributionreturnisbasedontheremainingoriginalequityof$0.80followingthecapitalreturnof$0.20afterthesaleofBigTopShowroomsin1999.


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Brandon Park VIC 4.0% 100% $103,000,000 8.00% 2.59% 3.57 years

FY09 TOTAL -1.4% 100% $100,400,000 7.75% -19.49% 3.79 years

FY08 TOTAL 6.7% 100% $124,700,000 6.50% 1.30% 3.80 years

FY07 TOTAL 0.2% 99.6% $123,100,000 6.50% 11.00% 4.34 years

(1)Directors’valuation.

NAB Change

Jun ‘10 $1.42

Dec ‘09 $1.45

Jun ‘09 $1.41

• FY11 Distribution Forecast at 10.0%–TheFY11distributionrateforecastof10.0%hasbeenreducedfrom12.0%inFY10.Thisispredominantlyduetoincreasedforecastdebtservicingcostsof$780,000resultingfromhigherfloatinginterestratesanda65basispointincreaseintheloanfacilitymarginfromMay2010.TheFY11distributionratehowever,representsaforecast7.0%incomereturnonthe30June2010NABof$1.42.

• Annual Property Valuation Increase of 2.6%–AlthoughtheCentroBrandonParkvaluationdeclinedby$1.0millioncomparedto31December2009,anannualvaluationincreaseof$2.6millionwasrecordedsince30June2009.Thisvaluationgainwaslargelyduetostrongpropertyincomegrowthof3.9%forFY10.TheSyndicateNABhasremainedwithinthe$1.41to$1.45rangeoverthelast12monthperiod.

• Steady Centre Results –CentroBrandonParkcontinuestoperformwellandremainsfullyleasedheadingintoFY11.Wecompleted21leasingdealsforthe12monthstoJune2010andrecordedannualretailsalesgrowthof4.0%.WecontinuetoforecaststeadycentreperformanceforFY11withnetpropertyincomegrowthof1.7%budgetedforthefinancialyear.


Total Annual Return



CM

CS 6



Gearing Ratio (1) 30.1% 43.0% 43.6%










Kmart13.4%

Other76.3%

Coles10.3%


CENTRO MCS 8

SYNDICATE UPDATE




Tax Advantaged Portion 14.22% 18.85% 29.39% 0.00% 100%


NAB $2.25 $2.34 $1.80 $1.99 -

Syndicate Commencement Date February 1998, rollover occurred May 2003

Syndicate Review Date May 2010

PROPERTY PORTFOLIO STATISTICS Property (1) State Centre Sales

Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Northgate WA 4.2% 100% $45,500,000 8.12% -1.09% 3.79 years

Centro Albany QLD 10.1% 100% $40,750,000 8.00% 1.90% 2.39 years

Four Hotels (1) QLD N/A 100% $7,110,000 7.63% 9.38% 7.37 years

TOTAL 6.9% 100% $93,360,000 8.03% 0.93% 3.82 years

FY09 TOTAL (3) 4.9% 99.8% $137,100,000 8.11% -13.68% 4.24 years

FY08 TOTAL (3) 8.0% 100% $158,835,000 7.17% 2.98% 4.49 years

FY07 TOTAL (3) 3.1% 100% $154,235,000 6.71% 16.55% 4.81 years

(1)CentroCroydonwassoldon21June2010for$31.5millionandthreeoftheFourHotelswerealsosoldinJune2010(BurleighTavern,TingalpaHotelandWaterfordTavern)foracombinedtotalof$19.05million.

(2)Directors’valuationsadoptedfrom31May2010independentvaluations.(3)AllhistoricalstatisticsincludeCentroCroydonaswellasthreeoftheFourHotels(BurleighTavern,TingalpaHotelandWaterfordTavern).

NAB Change

Jun ‘10 $1.99

Dec ‘09 $1.83

Jun ‘09 $1.80

•Sale of Croydon and Four Hotels–Asoutlinedinourlettertoinvestorson15June2010,CentroCroydonwassoldfor$31.5millionon21June2010,12.5%abovethe31December2009bookvalue.TheFourHotelsweresoldinJuneandSeptember2010foracollectivepriceof$26.16million,inlinewiththe31December2009bookvalue.Thesesaleswerenecessaryaspartofaproposedsyndicaterestructurestrategytoprovideliquiditytoredeemunitsfromthoseinvestorswhoelecttoexitthesyndicateviaaproposedredemptionmechanism.ThisrestructureproposalwillbesubjecttoasuccessfulinvestorvoteforwhichaMeetingofInvestorsisexpectedtobeheldinlateNovember2010.

•Leasing Leads to Income Growth and Full Occupancy–Leasingactivityinthe12monthsto30June2010hascontributedto9.0%incomegrowthacrosstheremainingportfolioandasaresulttheportfolioiscurrently100%occupied.Atotalof18leasenegotiationsweresuccessfullycompletedinFY10,includingtennewleasesandeightleaserenewals.

•Solid Sales Growth Continues–SalesgrowthatCentroNorthgateandCentroAlbanyremainsolidwithincreasesof4.2%and10.1%respectively.AtCentroNorthgate,thesalesgrowthwasattributedtoColes,TargetandEBGames,reportingincreasesof0.6%,0.7%and8.6%respectivelywhileatCentroAlbany,thesalesgrowthwasunderpinnedbyColes,AlbanyCreekNewsandLiquorland,up0.9%,5.8%and9.4%respectively.


Total Annual Return



CM

CS 8



Gearing Ratio(1) 35.5% 42.5% 35.5%










Target14.0%

Coles31.8%

Other54.2%


CENTRO MCS 9

SYNDICATE UPDATE


Distribution Return on Initial Equity 9.50% 9.50% Nil Nil Nil

Distribution Return on Net Asset Backing (NAB) 6.01% 6.21% Nil Nil Nil

Tax Advantaged Portion 100% 73.76% 0.00% 0.00% 0.00%

Equivalent Pre-tax Return on Initial Equity 12.80% 15.59% Nil Nil Nil

NAB $1.58 $1.53 $0.95 $1.01 -

Syndicate Commencement Date October 1998

Syndicate Review Date November 2010 – November 2011


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Hollywood SA 2.8% 97.2% $82,950,000 8.58% 0.30% 4.25 years

Centro Gympie QLD 1.8% 99.7% $59,900,000 7.75% 1.53% 7.54 years

Centro Dianella WA N/A(2) 99.2% $57,500,000 8.25% 6.48% 5.34 years

TOTAL 2.4% 98.4% $200,350,000 8.24% 2.38% 5.47 years

FY09 TOTAL 10.9% 99.0% $195,700,000 7.99% -17.04% 5.61 years

FY08 TOTAL(3) 12.9% 99.3% $295,000,000 6.96% 2.43% 6.18 years

FY07 TOTAL(3) 3.1% 99.1% $288,000,000 6.70% 23.34% 5.96 years

(1)Directors’valuations.(2)Non-comparablesalesduetothebankruptcyofGoodFurnitureinFY10.(3)AllhistoricalstatisticsincludeHamiltonCentralandRaintreesShoppingCentre,whichweresoldon19December2008for$17.25millionand22December2008for$29.00

millionrespectively.

NAB Change

Jun ‘10 $1.01

Dec ‘09 $1.00

Jun ‘09 $0.95

•Debt Facility Breach Resolved–Theexternalfinancierhasagreedtoreducetheinterestcoverratio(ICR)covenant,sothattheSyndicate’sexternaldebtfacilityisnolongerinbreach.TosecurethisagreementitwasnecessarytoagreetousetheSyndicate’sforecastearningsforFY11andFY12(afterthepaymentofcapitalexpenditure)toreducetheexternaldebtprincipal.Asaconsequence,theSyndicateisnotforecastingtopaydistributionstoinvestorsinFY11.

•End of Syndicate Term in November 2011 –InNovember2008,InvestorsapprovedathreeyearextensionoftheSyndicateterm,duetothedepressedstateoftheAustralianpropertyinvestmentmarket.

• Portfolio Revaluations Increase Syndicate NAB–The2.4%increaseinthepropertyportfoliovaluehasresultedintheSyndicateNABincreasingfrom$0.95at30June2009to$1.01at30June2010.

• Potential Land Sale at Centro Dianella–CentroDianellaislocatedintheCityofStirlingandthelocalCouncilhasrecentlyrezonedavacantlandparceladjoiningthecentretoresidential,increasingthevalueofthisland.Weareintheprocessofappointingagentstosellthislandasaresidentialdevelopmentopportunity,andthesaleproceedswillthenlikelybeallocatedforcapitalexpenditureandpartialretirementofdebt.


Total Annual Return



CM

CS 9

DEBT INFORMATIONTheaverageinterestrateforallSyndicatedebt(includingweightedaveragemargin)at30June2010was9.56%p.a.


Gearing Ratio(1) 57.9% 61.9% 59.5%

Interest Cover Ratio(2) 1.6 times 1.4 times 1.3 times

(1)Forexternalfinancierdebtloancovenantpurposes,CentroPropertyTrustdebtisnotincluded.Asat30June2010,theSyndicatewaswithinitsLVRcovenant.(2)Asat31December2009theSyndicatewasinbreachofitsICRcovenant.



External Financier $114.23 million $2.47 million 15 December 2011

Centro Property Trust $17.19 million(2) Nil Payable at reasonable notice

TOTAL $131.42 million $2.47 million 1.40 years

(1)CentroPropertyTrustloancalculatedat12monthsloanmaturity.(2)Includes$2.88millionofinterestbearingtradedebt.

FIXED INTEREST RATE HEDGE SUMMARY


Averag

eFixed

Rate

(%)

(A$ Millions)

Current Debt

Fixed InterestRate Hedging

Average Fixed RateExcluding Margin

103% 103% 103% 103% 103% 103% 103%

83%

Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13

Percentage Hedged

0

20

40

60

80

100

120

140

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

Woolworths15.3%

Other78.2%

Target6.5%


CENTRO MCS 10

SYNDICATE UPDATE




Tax Advantaged Portion 49.81% 54.51% 45.99% 100% 100%


NAB $1.63 $1.50 $0.99 $0.87 -

Syndicate Commencement Date April 1999, rollover occurred June 2006

Syndicate Review Date July 2011 – June 2013

PROPERTY PORTFOLIO STATISTICS Property (1) State Centre Sales

Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Lennox NSW 1.8% 97.8% $44,500,000 7.75% 4.71% 6.99 years

Maitland Hunter Mall NSW -4.8% 98.9% $12,000,000 11.00% -33.70% 1.00 years

TOTAL -0.5% 98.5% $56,500,000 8.44% -6.77% 4.81 years

FY09 TOTAL(3) 1.4% 99.4% $77,000,000 8.65% -18.43% 3.50 years

FY08 TOTAL(3) 3.9% 99.0% $94,400,000 7.39% -4.07% 4.27 years

FY07 TOTAL(3) -4.3% 98.8% $98,400,000 7.06% 5.77% 5.10 years

(1)KmartAliceSpringswassoldon15June2010for$15.85millionandadjoiningvacantlandwassoldon21September2009for$700,000.(2)IndependentvaluationsundertakenbyColliersInternationalatCentroLennoxandm3propertyatMaitlandHunterMall.(3)AllhistoricalstatisticsincludeKmartAliceSprings.

NAB Change

Jun ‘10 $0. 87

Dec ‘09 $1.00

Jun ‘09 $0.99

• Valuation Write Down at Maitland Hunter Mall Impacts NAB–TheMaitlandHunterMallvaluationdeclinedby$6.1millionovertheyear,to$12.0millionasat30June2010.ThevaluationdeclinewaslargelyduetolowermarketrentalforecastsatMaitlandHunterMallfortheFoodworkssupermarketandKmartdiscountdepartmentstorefromtheirNovember2010leaseexpiries,combinedwithanexpectationthatsignificantcapitalexpenditurewillberequiredinthemediumtermtosecurelongtermleasecommitmentsfromtheseanchorretailers.Ontheotherhand,thevaluationofCentroLennoxincreasedby$2.0millionoverthesame12monthperiod.Consequently,theSyndicateNABisnow$0.87,significantlylowerthanthe31December2009NABof$1.00.

• FY11 Distribution Forecast Reduced–TheSyndicatedistributionforecasthasbeenreducedfrom5.0%inFY10to2.0%forFY11,largelyduetothelowerpropertyincomeforecastatMaitlandHunterMall.Otherfactorsimpactingonthedistributionforecastinclude

anexpectationthat$1.3millionofcapitalexpenditurewillberequiredandfundedfromacombinationofSyndicateearningsandprioryearcashreserves.PartofthiscapitalexpenditurerelatestoasaleconditionforKmartAliceSpringswherewearerequiredtorebuildanexternalsandstonewallthatwasstormdamagedearlierintheyear.

• Asset Management Update–Asadvisedinourletterdated23June2010,KmartAliceSpringswassoldfor$15.85millioninJune2010,inlinewiththe31December2009bookvaluation.ThesaleproceedswerepredominantlyusedtoretireSyndicatedebt,howevertheSyndicatefinanciersagreedthat$3.1millionoftheproceedscanbereinvestedintotheSyndicateportfolioinordertocompleteaWoolworthssupermarketexpansionatCentroLennox.TheWoolworthssupermarkethastradedstronglyandthisexpansionof750squaremetresto3,600squaremetresisforecasttoaddfurthervaluetoCentroLennox.Developmentworkshavenowcommencedwiththeexpansionanticipatedtobecompletedbyearly2011.


Total Annual Return



CM

CS 10



Gearing Ratio 46.1% 56.6% 51.6%



Financier Loan Facility Amount Undrawn Amount Loan Maturity




132%132%132%132%132%132%132%132% 132%

67%

Averag

eFixed

Rate

(%)

(A$ Millions)

Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13

Percentage Hedged

0

5

10

15

20

25

30

35

40

45

50

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

Current Debt



Kmart29.2%

Other40.1%

Aldi5.3%

Woolworths16.3%

FoodWorks9.1%


CENTRO MCS 11

SYNDICATE UPDATE






NAB $2.90 $2.99 $2.53 $2.14 -

Syndicate Commencement Date March 2000

Syndicate Review Date March 2010 (proposal March 2012)(1)

(1)SubjecttoapprovalatinvestormeetingplannedforNovember2010.


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)


Centro Surfers Paradise QLD -0.9% 99.7% $185,100,000 8.25% -11.18% 5.07 years

FY09 TOTAL 8.7% 98.3% $208,400,000 7.50% -9.39% 3.74 years

FY08 TOTAL 13.7% 100% $230,000,000 6.50% 1.10% 3.46 years

FY07 TOTAL 6.4% 96.4% $227,500,000 6.25% 30.30% 3.65 years

(1)Directors’valuation.

NAB Change

Jun ‘10 $2.14

Dec ‘09 $2.42

Jun ‘09 $2.53

•�Syndicate Term Extension –�As�previously�advised,�despite�an�extensive�domestic�and�international�sales�campaign�we�were�unable�to�secure�an�acceptable�sale�price�for�Centro�Surfers�Paradise.�While�there�was�buyer�interest�in�the�Centre,�low�offers�reflected�the�limited�financing�and�liquidity�available�in�the�current�economic�climate�for�assets�valued�in�excess�of�$150�million.��We�will�be�recommending�to�investors�that�the�Syndicate�term�be�extended�for�up�to�a�further�two�years�to�enable�a�sale�at�a�time�when�market�conditions�may�have�improved.�Investors�will�receive�information�about�the�extension�shortly�with�an�investor�meeting�planned�for�November�2010.

•�Valuation Decline Impacts NAB –�Centro�Surfers�Paradise�has�been�valued�at�$185.1�million�at�30�June�2010,�a�11.2%�valuation�decline�from�30�June�2009.�Income�at�the�Centre�has�not�fallen,�however�the�capitalisation�rate�which�buyers�will�pay�for�this�income��has�softened.�We�believe�this�represents�a�fair�value�for�Centro�Surfers�Paradise�given�current�economic�conditions�and�the�valuation�is�in�line�with�initial�offers�

received�for�the�Centre.�The�drop�in�the�30�June�2010�valuation�has�led�to�an�11.6%�fall�in�the�Syndicate�NAB�since�31�December�2009.�The�unit�price�remains�much�higher�compared�to�what�investors�would�have�received�if�the�highest�final�offer�for�the�Centre�during�the�sales�process�was�accepted.�

•�Strong Leasing Results Despite Competition�–�Despite�marketing�Centro�Surfers�Paradise�for�sale,��we�have�continued�to�actively�manage�the�Centre�including�completing�23�lease�deals�with�income�10%�above�prior�year�rental�levels�and�an�increased�occupancy�rate�of�99.7%.

•�Participation in Gold Coast Foreshore Works�–�We�recently�agreed�to�the�Gold�Coast�City�Council’s�request�to�remove�an�old�pedestrian�bridge�linking�the�Centre�to�the�foreshore.�The�bridge,�which�was�rarely�used,�was�demolished�at�the�Council’s�cost�and�now�opens�important�sight�lines�to�our�Centre�from�the�foreshore.�The�Gold�Coast�City�Council’s�$20�million�redevelopment�of�the�precinct�will�assist�us�in�increasing�rents�at�the�foreshore�end�of�the�Centre.


Total Annual Return



CM

CS 11



Gearing Ratio (1) 29.2% 32.7% 36.4%










Timezone9.0%

Other79.9%

Surfers Paradise Tavern5.8%

Secure Parking5.3%


CENTRO MCS 12

SYNDICATE UPDATE






NAB $1.56 $1.54 $1.06 $1.16 -

Syndicate Commencement Date April 2000

Syndicate Review Date April 2010(1)

(1)InitialSyndicatetermended14April2010.AninvestormeetingwillbeheldinDecembertovoteonaproposaltorollovertheSyndicateforanothertermofbetweenfivetosixyearswhileallowingthoseinvestorswhowishtoexitnowtodoso.


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Oakleigh VIC N/A(1) 99.3% $37,500,000 8.75% 3.88% 6.87 years

Centro St Agnes SA 8.0% 99.0% $30,675,000 8.50% 2.25% 3.45 years

Centro Glenorchy TAS 1.4% 100% $18,500,000 8.75% Nil 9.59 years

TOTAL 5.1% 99.4% $86,675,000 8.66% 2.45% 6.27 years

FY09 TOTAL 6.9% 99.9% $84,600,000 8.55% -15.23% 5.78 years

FY08 TOTAL 4.2% 98.1% $99,800,000 7.15% 5.72% 2.77 years

FY07 TOTAL 4.5% 99.6% $94,400,000 7.00% 9.26% 3.28 years

(1)SalesgrowthforCentroOakleighisnotcomparableduetorecentdevelopment.(2)IndependentvaluationsundertakenbySavillsatCentroOakleighandCBRichardEllisatCentroGlenorchy.Directors’valuationundertakenatCentroStAgnesduetothe

propertybeingmarketedforsale.

NAB Change

Jun ‘10 $1.16

Dec ‘09 $1.12

Jun ‘09 $1.06

•Sale of Centro St Agnes–AspreviouslyadvisedweplacedCentroStAgnesonthemarketforsale.WereceivedseveralreasonableoffersfortheCentreandwecurrentlyhaveonepartycompletingexclusiveduediligence.WehopetohaveanunconditionalofferforCentroStAgnesduringOctober2010.

• Rollover Progress–WearecurrentlypreparingaproposalforinvestorstocontinuetheSyndicateforafurthertermprovidinginvestorswhoelectedtoremainintheSyndicatetheopportunitytodosowhilstaccommodatingthoseinvestorswhoelectedtoexit.ThisproposalisreliantonsellingCentroStAgnesandwillrequireinvestorapproval,withaninvestormeetingplannedforDecember2010.IfthesaleofCentroStAgnesdoesnotproceedorifthevoteontherestructureproposalisunsuccessful,thentheremainingpropertiesbeingCentroOakleighandCentroGlenorchywillbeplacedonthemarketforsaleandtheSyndicatewillbewoundup.

•Successful Leasing Drives Income Growth–DuringFY10,28leasingdealswerecompletedacrossthepropertyportfoliowithincomeonthesedeals11.4%aboveprioryearrentallevels.Thepropertyportfoliois99.4%occupiedwithalongweightedaverageleaseexpiryof6.27years.

• Centro Oakleigh Continues to Impress–SalesatbothColesandWoolworthsatCentroOakleighcontinuetogrowbeyondexpectation,withColessalesincreasingdespiteanewfulllineWoolworthsbeingintroducedaspartoftherecentredevelopment.Overallsupermarketsalesaremuchhigherpostredevelopment,whichhasenabledustoattractnewandhigherpayingspecialtyretailerstoCentroOakleigh.


Total Annual Return



CM

CS 12



Gearing Ratio(1) 44.3% 55.1% 53.7%










Other47.5%

Coles29.7%

Woolworths22.8%


CENTRO MCS 14

SYNDICATE UPDATE




Tax Advantaged Portion 58.93% 100% 0.00% 57.42% 0.00%


NAB $1.59 $1.61 $1.01 $1.03 -

Syndicate Commencement Date January 2001, rollover occurred August 2007

Syndicate Review Date September 2012 – August 2014


Growth Occupancy

Rate (by area)

30 June 2010 Valuation(1)


Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Stirlings WA 26.7% 98.3% $27,400,000 8.25% -1.62% 4.42 years

Centro Kalamunda WA 0.9% 100% $21,700,000 8.50% 3.33% 3.53 years

CSIF-A Investment(2) Various 5.0% 99.4% $2,608,265 8.37% -16.83% 5.12 years

Chapman Way WA N/A 100% $1,600,000 N/A -11.11% 0.00 years

TOTAL 4.3% 99.4% $53,308,265 8.36% -0.89% 4.95 years

FY09 TOTAL(3) 8.5% 99.6% $84,286,000 8.01% -17.96% 3.53 years

FY08 TOTAL(3) (4) 12.5% 98.0% $126,540,000 6.96% 6.24% 3.97 years

FY07 TOTAL(3) (4) 3.7% 97.9% $113,045,000 6.75% 17.15% 3.65 years

(1)Directors’valuation.(2)EquityinvestmentintoCentroSyndicateInvestmentFund(CSIF-A).ForfurtherinformationonCSIF-ArefertotheFactSheetontheCentroMCSwebsiteunderSyndicate

Portfolio&RG46DisclosuresforCentroMCS14.(3)HistoricalstatisticsincludeCentroKincumberandCentroWarringalwhichweresoldinJune2009for$21.4millionandinSeptember2009for$30.6millionrespectively.(4)HistoricalstatisticsexcludeCSIF-Ainvestment.

NAB Change

Jun ‘10 $1.03

Dec ‘09 $0.99

Jun ‘09 $1.01

•Strong Sales Growth at Stirlings–SalesgrowthatCentroStirlingscontinuestoremainstrong.ThisgrowthisunderpinnedbyWoolworths(+8.9%)aswellasthespecialtyretailerswhichcollectivelycontributedtowardsthesalesgrowth.

•Competition Impacts Coles at Kalamunda–AtCentroKalamunda,salesgrowthof0.9%forFY10waslargelyunderpinnedbythestrongperformanceofFlightCentre(+19.7%)andRedDotStore(+2.5%).However,thesestrongresultswereoffsetbytheperformanceofColes(-4.5%)asaresultofincreasedcompetitionfromarecentlyrefurbishedWoolworthssupermarketonekilometreaway.Tocombatthiscompetition,wehaveforecastcapitalexpenditureoverthecomingfinancialyearsonvariousrefurbishmentprojectstoenhancethepresentationoftheCentre.

•Increased Capital Expenditure Reduces Distribution–ForecastFY11earningsareexpectedtoincreaseby$250,000comparedtoFY10duetoareductionininterestcostandfundexpenses.However,anincreaseincapitalexpenditureof$780,000forecastinFY11tobefundedfromtheSyndicate’searnings,hasresultedinadecreaseintheannualdistributionrateto3.50%.ThemajorityofFY11’scapitalexpenditurewillbeallocatedforthereplacementoftheairconditioningsystematCentroStirlingsaswellasnecessaryrefurbishmentworksatCentroKalamunda.Thisongoingcapitalexpenditureisimportantformaintainingasafeenvironment,ahighoccupancyrateandensuringapleasantshoppingexperienceforourcustomers.

•Successful Refinancing–TheSyndicate’sseniordebtfacilitywasrecentlyextendedwiththeexistingfinancierforafurther12monthsfrom30September2010to30September2011.


Total Annual Return



CM

CS 14



Gearing Ratio(1) 53.7% 55.5% 31.6%




Financier Loan Facility Amount Undrawn Amount Loan Maturity(1)

External Financier $17.20 million Nil 30 September 2011




TOP RETAILERS

Total % of Income 48.4%

Other51.6%

Woolworths36.5%

Coles11.9%


CENTRO MCS 15

SYNDICATE UPDATE


Distribution Return on Initial Equity 10.00% 10.00% 11.88%(1) 7.50% 7.50%




NAB $1.83 $1.64 $1.19 $1.21 -


Syndicate Review Date April 2012

(1)Includesaspecialdistributionof2.375centsresultingfromthesaleofCentroRingwood.


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Meadow Mews TAS 6.9% 99.5% $33,800,000 8.50% 2.42% 3.85 years

FY09 TOTAL 7.0% 100% $33,000,000 8.25% -12.47% 3.87 years

FY08 TOTAL(2) 4.2% 100% $88,000,000 7.11% -2.98% 3.23 years

FY07 TOTAL(2) 4.8% 100% $90,700,000 6.75% 12.11% 4.53 years

(1)IndependentvaluationundertakenbyCBRichardEllis.(2)HistoricalstatisticsincludeCentroRingwoodwhichwassoldon27February2009for$39.0million.

NAB Change

Jun ‘10 $1.21

Dec ‘09 $1.19

Jun ‘09 $1.19

•Centro Meadow Mews Valuation Growth –TheCentroMeadowMewsvaluationimproved2.4%to$33.8millionoverthe12monthstoJune2010duetostrongannualpropertyincomegrowthof5.8%.Thiswaspartiallyoffsetbya25basispointsofteninginthecapitalisationrateto8.50%.TheSyndicateNABincreasedbytwocentsto$1.21.

•Syndicate Debt Refinancing Terms Agreed–CommercialtermshavebeenagreedtorefinancetheSyndicate’sdebtfacilityforathreeyearperiodfromOctober2010.AlthoughthisloanextensionisbeyondtheforecastSyndicateReviewDateofApril2012,thereareminimalearlyrepaymentfeesintheeventthattheSyndicateiswounduppriortotheloanexpirydate.Syndicatedistributionscontinuetobeforecastat7.5%oninitialequityforFY11,inlinewiththeactualdistributionrateachievedforFY10.

•Strong Centro Meadow Mews Results–CentroMeadowMewscontinuestoperformstronglywithannualsalesgrowthof6.9%andnearfulloccupancyat99.5%.Nineleasedealswerecompletedoverthe12monthperiodwithrentalgrowthforrenewedleasesof10.7%comparedtothepriorrentals.Thesepositiveleasingresultshavecontributedtoforecastpropertyincomegrowthof4.0%forFY11.


Total Annual Return



CM

CS 15



Gearing Ratio 45.8% 13.2% 13.2%





TOP RETAILERS


Other44.6%

Coles55.4%


CENTRO MCS 16

SYNDICATE UPDATE


Distribution Return on Initial Equity 12.00% 12.00% Nil Nil Nil

Distribution Return on Net Asset Backing (NAB) 8.51% 8.28% Nil Nil Nil

Tax Advantaged Portion 1.79% 100% 0.00% 0.00% 0.00%

Equivalent Pre-tax Return on Initial Equity 12.19% 22.43% Nil Nil Nil

NAB $1.41 $1.45 $0.80 $0.69 -

Syndicate Commencement Date May 2001

Syndicate Review Date May 2007 – May 2011


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Toormina NSW N/A(1) 99.4% $68,000,000 8.00% -4.23% 7.04 years

FY09 TOTAL N/A(1) 99.3% $71,000,000 7.50% 10.25% 7.93 years

FY08 TOTAL(3) N/A(1) N/A $64,251,000 6.75% 74.24% 7.30 years

FY07 TOTAL 4.5% 100% $36,875,000 6.75% 6.88% 2.68 years

(1)SalesgrowthforCentroToorminaisnotcomparableduetorecentdevelopment.(2)Directors’valuation.(3)OccupancyrateisnotavailableforFY08duringredevelopmentofCentre.

NAB Change

Jun ‘10 $0.69

Dec ‘09 $0.67

Jun ‘09 $0.80

•Impending Coles Lease Expiry–TheColessupermarketleaseatCentroToorminawillexpireinJune2011.WearecurrentlyinnegotiationwithColestosecurealongtermlease.ThenewleasewillsecureamajorportionofincomefortheCentreandassistinmaximisingthevalueoftheproperty.

•Distribution Update–DuetotheSyndicate’shighgearinglevelof82.1%andtheimpendingexpiryoftheColeslease,wehavedecidedtocontinuetosuspenddistributionpaymentsinFY11.SyndicateearningswillbeusedtorepayexternaldebtandreducethegearingratioorpayforcapitalexpenditureworksrequiredtosecureanewleasewithColes.

•Future Strategy of Syndicate –Wearecurrentlyconsideringoptionsthatareinthebestinterestsofinvestorsandwillprovideanupdatebytheendof2010toinvestors.OurfirstpriorityistosecurealongtermleasewithColesthatwillassistinmaximisingvalueforSyndicateinvestors.Dependingoninterestrates,incomefromtheColesleaseandthereforeourabilitytodistributetoinvestors,wemayconsidersellingCentroToorminaandwindinguptheSyndicate.


Total Annual Return



CM

CS 16



Gearing Ratio(1) 42.5% 80.0% 82.1%










Averag

eFixed

Rate

(%)

(A$ Millions)

25%

26% 26%

20%

Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec12 Mar 13 Jun 135.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

Percentage Hedged

0

10

20

30

40

50

60

Current Debt



TOP RETAILERS


Other41.0%

Coles26.9%

Woolworths12.3%

Kmart11.1%

Blooms The Chemist8.7%


CENTRO MCS 17

SYNDICATE UPDATE




Tax Advantaged Portion 49.00% 50.82% 49.18% Nil 26.00%


NAB $1.48 $1.46 $1.15 $1.25 -


Syndicate Review Date October 2007 – October 2011


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


2 Liquorland Outlets(2) QLD N/A 100% $24,700,000 8.13% 0.60% 5.61 years

Centro Townsville QLD -3.8% 98.9% $36,400,000 8.25% -0.55% 2.45 years

Centro Newcomb VIC 7.2% 100% $26,000,000 7.75% 1.56% 8.43 years

Centro Albion Park NSW 2.4% 100% $15,400,000 8.50% 5.48% 6.75 years

TOTAL 1.2% 99.6% $102,500,000 8.13% 1.13% 5.22 years

FY09 TOTAL(3) 7.2% 99.8% $137,800,000 7.91% -12.29% 6.08 years

FY08 TOTAL(3) 7.6% 99.4% $157,100,000 6.74% 3.08% 6.90 years

FY07 TOTAL(3) 0.3% 99.9% $152,412,856 6.65% 15.20% 6.29 years

(1)Independentvaluationsundertakenbym3propertyforLiquorlandOutlets,Directors’valuationsforremainderofassets.(2)The2Liquorlandoutletswerepreviously8Liquorlandoutlets.ThefollowingpropertiesweresoldduringFY10–AspleyHotel,BrownsPlainHotel,MoreyfieldTavern,Newham

Hotel,theSandsHotelandKoalaTavernforatotalof$39.7million.(3)Allhistoricalstatisticsincludethe8LiquorlandOutlets.

NAB Change

Jun ‘10 $1.25

Dec ‘09 $1.21

Jun ‘09 $1.15

•Sale of Liquorland Outlets –DuringFY10sixLiquorlandOutletsweresoldfor$39.7million,9.1%abovetheirbookvalue.TheremainingtwoLiquorlandOutlets(RunawayBayTavernandWallabyHotel)haverecentlybeenmarketedforsale.WecurrentlyhaveonepartycompletingexclusiveduediligenceonRunawayBayTavern.

•Debt Facility Update–ProceedsfrompreviousLiquorlandOutletsaleshavereducedtheexternaldebtfrom$64.2millionto$25.5million.CombinedwiththeproceedsfromapossiblesaleofRunawayBayTavern,weanticipatethatapproximately$10millionofexternaldebtwillneedtoberefinancedinFY11.Withthedebtmarketsstillconstrained,smalldebtswillbeeasiertofinanceandshouldattractlowerinterestratemargins.

•Mixed Sales Growth Across Property Portfolio –CentroNewcombcontinuestoperformstronglywiththenewAldi/Woolworthssupermarketcombinationprovidinga‘pointofdifference’forthelocalcommunity.CentroTownsvillesaleshaverecentlycomeunderpressure(3.8%drop)duetoacompetingcentrerecentlycompletingamajorredevelopment.

•Strong Leasing Results Drive Income–FY10sawthecompletionof15leasedeals,withincomefromthesedeals14.0%aboveprioryearrentallevels.Thequalityoftheseassetsissupportedbytheir99.6%occupancyrateandweightedaverageleaseexpiryofoverfiveyears.


Total Annual Return



CM

CS 17



Gearing Ratio (1) 40.3% 49.7% 29.3%










Averag

eFixed

Rate

(%)

(A$ Millions)

196% 196% 196% 196% 196% 196% 196% 196%

170%

Sep 10 Dec 10 Mar 11 Jun 11 Sep11 Dec 11 Mar 12 Jun 12 Sep 12 Dec12 Mar 13 Jun 13

Percentage Hedged

0

10

20

30

40

50

60

70

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

Current Debt



TOP RETAILERS


Other44.5%

Woolworths/Safeway16.5%

Kmart13.9%

Runaway Bay Hotel10.4%

Coles9.5%

Wallaby Hotel5.2%


CENTRO MCS 18

SYNDICATE UPDATE


Distribution Return on Initial Equity 8.00% 8.00% 6.50% 5.20%(1) 5.00%




NAB $1.25 $1.17 $1.00 $1.04 -

Syndicate Commencement Date March 2002

Syndicate Review Date April 2008 – March 2012

(1)Includesaspecialdistributionof1.20centsperunitfollowingthesaleofCentroMeadowHeights.

PROPERTY PORTFOLIO STATISTICS Property(1) State Centre Sales

Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


The Gateway Shopping Village VIC 14.9% 95.3% $26,000,000 8.50% 0.00% 2.81 years

Centro Hilton SA 14.9% 100% $16,750,000 7.50% 4.69% 5.67 years

TOTAL 14.9% 96.7% $42,750,000 8.11% 1.79% 3.84 years

FY09 TOTAL(3) 5.5% 99.7% $66,100,000 8.30% -9.70% 3.70 years

FY08 TOTAL(3) 3.3% 99.5% $73,200,000 7.49% -0.54% 3.59 years

FY07 TOTAL(3) 2.9% 99.8% $73,600,000 7.08% 16.83% 4.00 years

(1)CentroRosebudwassoldon21September2009for$13.15millionandCentroMeadowHeightswassoldon13May2010for$12.30million.(2)IndependentvaluationundertakenbySavillsatTheGatewayShoppingVillageandJonesLangLasalleatCentroHilton.(3)AllhistoricalstatisticsincludeCentroRosebudandCentroMeadowHeights.

NAB Change

Jun ‘10 $1.04

Dec ‘09 $1.00

Jun ‘09 $1.00

•Portfolio Sale Results–Asadvisedinourletterdated17May2010,thesaleofCentroMeadowHeightssuccessfullysettledon13May2010.Thesalepriceof$12.3millionwas2.5%abovethe31December2009bookvaluationof$12.0million.CentroRosebudwasalsosoldinSeptember2009for$13.15million,6.9%abovethe30June2009bookvaluationof$12.3million.SaleproceedsfrombothtransactionswereusedtoretireSyndicatedebtandreducedtheSyndicategearingratioto16.9%at30June2010.

•FY11 Distribution Forecast at 5.0%–Investorsareforecasttoreceivea5.0%distributionrateforFY11,supportedbyforecastpropertyincomegrowthatTheGatewayShoppingVillageandCentroHiltonof2.4%and1.2%respectively.Thiscomparestoafinaldistributionrateof5.2%forFY10,whichincludedaspecialdistributionof1.2centsperunitresultingfromthesaleofCentroMeadowHeights.

•Valuation Increases Improve NAB–TheportfoliovaluationforTheGatewayShoppingVillageandCentroHiltonincreasedby2.3%overthesixmonthsto30June2010and1.8%overthe12monthperiod.ThisresultedinaslightimprovementtotheSyndicateNABfrom$1.00to$1.04.

•Syndicate Debt Refinance Discussions Continue–TheSyndicate’sCommercialMortgageBackedSecurities(CMBS)debtfacilitymaturesinDecember2010,andweareinadvanceddiscussionswithnewlenderstorefinancethisfacility.Wewillinforminvestorsoncerefinancinghasbeencompleted.

•Portfolio Leasing and Performance Update–AspreviouslyreportedwewereplanningtointroduceasecondsupermarketoperatoratTheGatewayShoppingVillage.However,thisproposalisnolongerproceedingandwearenowworkingonalternativestrategiestoleasethevacantspace.Notwithstandingthis,eightleasedealswerecompletedattheCentreduringFY10contributingtostrongpropertyincomegrowthof6.8%.CentroHiltoncontinuestoperformstronglywithannualsalesgrowthof14.9%overtheyear,underpinnedbytheWoolworthssupermarketperformance(up4.7%).TheCentreremainsfullyleasedandrecorded7.3%incomegrowthcomparedtotheprioryear.


Total Annual Return



CM

CS 18



Gearing Ratio(1) 41.7% 48.0% 16.9%










Averag

eFixed

Rate

(%)

(A$ Millions)

337% 337% 337% 337% 337%

281%

Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec12 Mar 13 Jun 13

Percentage Hedged

0

5

10

15

20

25

30

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

Current Debt



TOP RETAILERS


Other59.0%

Coles20.2%

Woolworths15.6%

BP Express5.2%


CENTRO MCS 19 NZ/I

SYNDICATE UPDATE






NAB $1.38 $1.26 $1.00 $1.00 -

Syndicate Commencement Date November 2002

Syndicate Review Date July 2009 – July 2011


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Warners Bay (30%) NSW 6.7% 98.9% $6,960,000 8.25% -7.72% 6.71 years

Centro Cat & Fiddle (30%) TAS 0.3% 98.4% $8,100,000 8.50% 11.11% 3.27 years

Centro Gladstone (30%) QLD 2.3% 97.9% $4,818,000 8.50% -4.12% 3.43 years

TOTAL 3.71% 98.4% $19,878,000 8.41% 0.11% 4.39 years

FY09 TOTAL 0.2% 98.7% $19,857,000 8.34% -13.36% 3.55 years

FY08 TOTAL 5.2% 99.4% $22,920,000 7.55% -3.29% 4.00 years

FY07 TOTAL(2) 6.3% 98.7% $23,700,000 7.14% 6.90% 4.05 years

(1)IndependentvaluationsundertakenbyJonesLangLaSalleatCentroCatandFiddleandCentroWarnersBayandUrbisatCentroGladstone.(2)AllstatisticsexcludeCentroEverton(30%)whichwassoldon30June2006for$7.2m(30%of24.0million).

NAB Change

Jun ‘10 $1.00

Dec ‘09 $0.96

Jun ‘09 $1.00

•Syndicate Valuation Movement–Thevalueofthepropertyportfolioincreasedby0.1%overthetwelvemonthsto30June2010.The11.1%valuationincreaseforCentroCatandFiddlehasbeenoffsetbyvaluationdeclinesatCentroGladstoneandCentroWarnersBayof4.1%and7.7%respectively.Theminorportfoliovaluationmovement,hasresultedintheNABremainingat$1.00asitwasinJune2009,howevertheNABincreasedby4.2%from$0.96atDecember2009.

•Centro Cat & Fiddle Marketed for Sale–Aswestatedinourlettertoinvestorsdated8September2010,wehavemarketedCentroCat&Fiddleforsale.CentroMCS19UTownsa50%interestinElizabethPlazawhichisalsobeingmarketedforsale.GiventhestrategicimportanceofElizabethPlazatoCentroCat&Fiddle(theyareeffectivelyadjoiningbuildingsandprovideaseamlessshoppingexperiencetoTasmanians),webelievenowisanopportunetimetomarketbothpropertiestogetherasaninvestmentopportunity.

•Debt Refinancing Negotiations–TheSyndicate’sexternaldebtfacilitymatureson28December2010.Wehavecommencednegotiationswiththefinanciertoextendthedebtfacility.ShouldCentroCat&Fiddlesellatitscurrentvaluation,thesaleproceedswillbeusedtoretiredebt,reducingtheSyndicatedebttozero.

•End of Syndicate Term in November 2011–TheSyndicateisapproachingtheendofitsinitialtermandmusteitherbeextended,rolledoverorwoundup.WearecurrentlyworkingthroughtheoptionsavailablefortheSyndicateandwewillwritetoInvestorspriorto15May2011toadviseourproposedstrategy.


Total Annual Return



CM

CS 19 N

Z/I

DEBT INFORMATIONAlloftheSyndicatedebtat30June2010wasatavariable(floating)interestrateof5.12%p.a.(includingweightedaveragemargin).


Gearing Ratio(1) 31.5% 36.6% 36.5%






TOP RETAILERS


Other81.1%

Coles13.1%

Woolworths5.8%


CENTRO MCS 19 UT

SYNDICATE UPDATE






NAB $1.39 $1.22 $1.05 $1.06 -

Syndicate Commencement Date June 2002

Syndicate Review Date June 2010 – June 2011


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Melville Plaza Shopping Centre WA 0.3% 99.7% $22,780,000 8.25% -0.96% 3.82 years

Centro Kiama NSW 11.5% 100% $23,500,000 7.88% 2.93% 4.00 years

Centro Warners Bay (70%) NSW 6.7% 98.9% $16,240,000 8.25% -7.72% 6.71 years

Centro Cat & Fiddle (70%) TAS 0.3% 98.4% $18,900,000 8.50% 11.11% 3.27 years

NAB Change

Jun ‘10 $1.06

Dec ‘09 $1.01

Jun ‘09 $1.05

•Syndicate Valuation Movement–Thevalueofthepropertyportfolioincreasedby1.0%overthe12monthsto30June2010.TherewassomevolatilityacrosstheSyndicateportfolio,withthevalueofCentrepointShoppingCentredecliningby15.9%duetothecapitalisationrateincreasingby200basispoints,howeverthiswasoffsetbyincreasesforCentroCat&Fiddle(11.1%),ElizabethPlaza(11.5%)andAltoneParkShoppingCentre(13.3%).Theportfoliovaluationmovement,magnifiedbytheSyndicate’s48.4%gearingratio,hasresultedina1.0%increaseintheSyndicateNABfrom$1.05to$1.06forthe12monthperiod.

•IGA Supermarket Enters Altone Park–WehavesecuredanIGAsupermarkettotakeupthevacancyleftbythebankruptcyofAltoneContinentallastyear.TheIGAsupermarketoperatoriscurrentlyfittingoutthestorewhichisanticipatedtoopeninOctober2010.ThispositiveoutcomehasresultedintheoccupancylevelattheCentreincreasingfrom74.4%inDecember2009to100%atJune2010.

•Assets Marketed for Sale–Asstatedinourlettertoinvestorsdated8September2010,theSyndicate’s50%interestinElizabethPlazaisbeingjointlymarketedforsalewiththeRetirementBenefitsFund’s50%interest.GiventhestrategicimportanceofElizabethPlazatoCentroCat&Fiddle(theyareeffectivelyadjoining

buildingsandprovideaseamlessshoppingexperiencetoTasmanians),webelievethatitisanopportunetimetoalsomarketCentroCat&Fiddleforsale.WearealsolookingtosellCentrepointShoppingCentre,whichisasmallnon-coreassetlocatedinWarragul,Victoria.

•Debt Refinancing Negotiations–TheSyndicate’sexternaldebtfacilitymatureson28December2010.Wehavecommencednegotiationswiththefinanciertoextendthedebtfacility.ShouldCentroCat&Fiddle,ElizabethPlazaandCentrepointshoppingcentreallsellattheircurrentvaluations,andtheproceedsusedtoretiredebt,theforecastloantovalueratiowouldbereducedto30.0%.

•Sales Growth Across the Syndicate Portfolio–TheSyndicateportfoliorecordedsalesgrowthof5.0%overthe12monthsto30June2010.PleasingsalesgrowthwasachievedatCentroKiama(11.5%),ElizabethPlaza(10.7%),CentroWarnersBay(6.7%)andDeniliquinPlaza(5.2%).

•End of Syndicate Term in June 2011–TheSyndicateisapproachingtheendofitsinitialtermanditmusteitherbeextended,rolledoverorwoundup.WearecurrentlyworkingthroughtheavailableoptionsfortheSyndicateandwilladviseInvestorspriorto24March2011regardingourproposedcourseofaction.


Total Annual Return



CM

CS 19 U

T



Gearing Ratio(1) 45.8% 48.9% 48.4%







TOTAL $66.19 million $0.11 million 0.51 years


TOP RETAILERS



Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Altone Park Shopping Centre WA N/A(2) 100% $15,300,000 9.50% 13.33% 4.73 years

Centro Gladstone (70%) QLD 2.3% 97.9% $11,242,000 8.50% -4.12% 3.43 years

Centrepoint Shopping Centre VIC 3.4% 100% $9,500,000 9.75% -15.93% 4.71 years

Deniliquin Plaza Shopping Centre NSW 5.2% 100% $7,500,000 9.00% 0.00% 5.08 years

Elizabeth Plaza (50%) TAS 10.7% 100% $7,250,000 8.50% 11.54% 1.93 years

TOTAL 5.0% 99.4% $132,212,000 8.53% 0.95% 4.21 years

FY09 TOTAL 3.8% 99.1% $130,963,000 8.29% -9.61% 4.24 years

FY08 TOTAL 8.8% 99.6% $144,880,000 7.47% -2.27% 4.46 years

FY07 TOTAL(3) 5.7% 97.3% $148,250,000 7.05% 8.78% 4.55 years

(1)IndependentvaluationsundertakenbyJonesLangLaSalleatCentroCatandFiddle,ElizabethPlaza,CentroWarnersBayandDeniliquinPlaza,KnightFrankatCentroKiamaandCentrepoint,UrbisatCentroGladstone,AltoneParkandMevillePlaza.

(2)NoncomparablesalesduetothebankruptcyofAltoneContinentalsupermarketduringFY10.(3)AllstatisticsexcludeCentroEverton(70%)whichwassoldon30June2006,for$16.8m(70%of$24.0million).

Other60.6% Woolworths

19.3%

Coles20.1%


CENTRO MCS 20

SYNDICATE UPDATE


Distribution Return on Initial Equity 9.00% 9.00% 4.00% 9.50%(1) 8.00%




NAB $1.30 $1.00 $0.91 $0.94 -



(1)Includesaspecialdistributionof2.0centsperunitfollowinganequityhedgecloseoutinJuly2010.


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Porirua MegaCentre Stages 2, 3 & 4 NZ N/A(2) 98.6% $31,500,000 9.25% -1.87% 2.66 years

Kelston Shopping Centre NZ 4.5% 97.9% $22,100,000 9.00% 8.33% 8.69 years

TOTAL 4.5% 98.4% $53,600,000 9.15% 2.10% 5.22 years

FY09 TOTAL 4.5% 99.0% $52,500,000 9.44% -5.75% 2.70 years

FY08 TOTAL 5.0% 99.0% $55,700,000 8.10% -12.28% 2.75 years

FY07 TOTAL 0.1% 99.0% $63,500,000 7.73% 9.67% N/A

(1)Directorsvaluationsexpressedin$NZ.(2)SalesarenotreportedatPoriruaMegaCentre.

NAB Change

Jun ‘10 $0.94

Dec ‘09 $0.94

Jun ‘09 $0.91

•FY11 Distribution Forecast at 8.0%–Investorsareforecasttoreceivean8.0%distributionrateforFY11(or8.5%onthecurrentSyndicateNAB).Thiscomparestoafinaldistributionrateof9.5%forFY10,whichincludedaspecialdistributionof2.0centsperunitresultingfromanequityhedgecloseoutinJuly2009.

•Static NAB Valuation–Apropertyportfoliovaluationincreaseof2.1%wasrecordedforthe12monthstoJune2010,althoughpropertyvaluationsremainedlargelyunchangedcomparedtoDecember2009.TheSyndicateNABwasmaintainedat$0.94.

•Property Portfolio Update–KelstonShoppingCentrecontinuestorecordpositivesalesgrowthof4.5%underpinnedbythere-brandedCountdownsupermarketwhichrecordedanannualsalesincreaseof2.7%.ThelongstandingvacancyatPoriruaMegaCentrehasnowbeenleasedtoanationalretailerGuthrieBowron,NewZealand’sleadinghomedecoratingspecialiststore.FollowingtheiranticipatedstoreopeninginOctober2010theCentrewillbefullyleased.


Total Annual Return



CM

CS 20



Gearing Ratio 52.5% 55.5% 47.2%




External Financier NZ$26.46 million Nil 15 December 2011

TOP RETAILERS


Other60.4%

Countdown18.9%

The Warehouse14.6%

Briscoes6.1%


CENTRO MCS 21

SYNDICATE UPDATE






NAB $2.19 $2.14 $1.62 $1.71 -

Syndicate Commencement Date July 1998, rollover occurred June 2004



Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Roselands (50% interest) NSW 3.5% 100% $152,500,000 7.25% 1.67% 4.86 years

FY09 TOTAL 1.4% 100% $150,000,000 7.00% -13.04% 4.94 years

FY08 TOTAL 8.2% 99.6% $172,500,000 6.00% -1.43% 5.36 years

FY07 TOTAL 1.4% 99.8% $175,000,000 6.00% 7.69% 5.31 years

(1)IndependentvaluationundertakenbySavills.

NAB Change

Jun ‘10 $1.71

Dec ‘09 $1.69

Jun ‘09 $1.62

•Higher Debt Costs Impacts Syndicate Earnings–AlthoughtheincomederivedfromCentroRoselandsisforecasttoincreaseinFY11,thecostofdebtisalsoforecasttoincreaseby$1.2millionduetoahigherinterestratemarginassociatedwiththedebtrefinancinginDecember2009.ThishasresultedinadecreaseintheSyndicate’searningsaswellasareductionintheFY11distributionrateto1.50%.

•Syndicate Nears End of Second Term–TheSyndicate’sendtermisapproachingandweareconsideringvariousstrategiesforinvestors.WewillwritetoinvestorspriortoJune2011outliningourproposedcourseofaction.

•Active Leasing Maintains Full Occupancy–Strongleasingactivityduringthe12monthsto30June2010resultedinthesuccessfulnegotiationof36leasedeals,including12newleasesand24leaserenewals.Thisleasingactivityhascontributedtomaintainingthe100%occupancyrateatCentroRoselands.

•Steady Growth in Centre Sales–CentroRoselands’retailersgenerallyreportedpositivesalesresultsforFY10,withtotalsalesincreasingby3.5%.Coles,FlightCentre,Sydney’sBestandTheRejectShopallrecordedstronggrowthof6.4%,8.3%,7.2%and2.8%respectively.Thisgrowthhowever,waspartlyoffsetbythesalesresultsofMyerandFoodforLess,bothofwhichrecordednegativesalesgrowthof4.4%and3.4%respectively.


Total Annual Return



CM

CS 21



Gearing Ratio(1) 42.4% 50.2% 50.0%











TOP RETAILERS


79% 79% 79% 79% 79%

69%


Percentage Hedged

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

0

10

20

30

40

50

60

70

80

Averag

eFixed

Rate

(%)

(A$ Millions)

Current Debt



Other75.2%

Myer12.7%

Target6.1%

Coles6.0%


CENTRO MCS 22

SYNDICATE UPDATE






NAB $2.14 $2.22 $2.07 $2.12 -

Syndicate Commencement Date April 1998, rollover occurred March 2005

Syndicate Review Date Mar 2010 – Mar 2012


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Kidman Park Distribution Centre SA N/A 100% $40,500,000 10.00% 1.00% 5.51 years

FY09 TOTAL N/A 100% $40,100,000 10.25% -6.74% 6.51 years

FY08 TOTAL N/A 100% $43,000,000 9.50% 2.38% 7.51 years

FY07 TOTAL N/A 100% $42,000,000 9.50% 6.33% 8.51 years

(1)IndependentvaluationundertakenbyCBRichardEllis.

NAB Change

Jun ‘10 $2.12

Dec ‘09 $2.01

Jun ‘09 $2.07

•Steady Annual Return–TheSyndicatecontinuestoprovidehealthyreturnstoinvestorswitha24.1%totalannualreturnfortheyearto30June2010.Thisreturntoinvestorscomprisedastrongincomecomponentof21.2%andamodestcapitalreturnof2.9%.SinceitscommencementtheSyndicatehasachievedanaveragetotalannualreturnof22.4%perannum.

•Metcash Strong Profit Results–Metcash,theSyndicate’ssingletenant,recentlyannounceditsfullyearprofitresultstoApril2010andachievedanincreaseinsalesturnoverof4.9%anda12.4%increaseinnetprofitaftertaxcomparedtothesameperiodlastyear.ThisisanothersolidperformanceforthenationalgroceryandliquordistributorandhasreaffirmedtheSyndicate’sabilitytosupportits33%forecastdistributionforFY11.


Total Annual Return



CM

CS 22



Gearing Ratio 36.0% 37.5% 37.7%






MetcashTrading100%

TOP RETAILERS

Total % of Income 100%

62% 62% 62% 62% 62% 62% 62% 62% 62%

53%


Percentage Hedged

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

0

2

4

6

8

10

12

14

16

18

Averag

eFixed

Rate

(%)

(A$ Millions)

Current Debt




CENTRO MCS 23

SYNDICATE UPDATE


Distribution Return on Initial Equity (1) 48.00% 49.00% 30.00% 35.00% 35.00%




NAB $0.99 $0.97 $0.76 $0.70 -

Syndicate Commencement Date May 1999, rollover occurred May 2005

Syndicate Review Date April 2010 – April 2011

(1)Theannualdistributionreturnisbasedontheremainingoriginalequityof$0.10followingthereturnofcapitalin2005of$0.90afterthesaleofWhitsundayShoppingCentre.


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Dubbo NSW 3.4% 100% $37,200,000 8.25% - 3.38% 3.07 years

FY09 TOTAL(2) 5.8% 100% $38,500,000 8.00% -10.26% 3.57 years

FY08 TOTAL(2) 6.7% 99.4% $42,900,000 7.00% -0.23% 4.06 years

FY07 TOTAL(2) -2.3% 100% $43,000,000 6.75% 11.69% 4.44 years

(1)Directors’valuation.(2)AllstatisticsexcludeWhitsundayShoppingCentrewhichwassoldin2005.

NAB Change

Jun ‘10 $0.70

Dec ‘09 $0.70

Jun ‘09 $0.76

•Syndicate NAB Declines–Overthe12monthsto30June2010,thevalueofCentroDubbodeclinedby3.4%duetothecapitalisationratesoftening25basispointsfrom8.0%to8.25%.ThevaluationdeclineandtheSyndicate’sgearingof57.0%hasresultedina7.9%reductionintheSyndicateNABto$0.70.

•Sales Growth at Centro Dubbo–CentroDubbohasexperienceda3.4%increaseinsalesoverthe12monthstoJune2009,withtheTargetstore’ssalesincreasingby2.1%,theColessupermarketsalesup3.4%andspecialtyretailersalesincreasingby3.1%.

•100% Occupancy Maintained–CentroDubboremains100%leased,withnineleasedealscompletedoverthepast12months,comprisingoffournewleasesandfiveleaserenewals.

•End of Syndicate Term in April 2011–TheSyndicateisapproachingtheendofitscurrenttermanditmusteitherbeextended,rolledoverorwoundup.WearecurrentlyworkingthroughthestrategicoptionsavailablefortheSyndicateandwilladviseInvestorspriortoFebruary2011regardingourproposedcourseofaction


Total Annual Return



CM

CS 23



Gearing Ratio (1) 49.4% 55.4% 57.0%







TOP RETAILERS


92% 92% 92% 92% 92%

81%

Averag

eFixed

Rate

(%)

(A$ Millions)


Percentage Hedged

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

0

5

10

15

20

25

Current Debt



Other49.6%

Target23.4%

Coles21.6%

Lawlers Family Pharmacy5.4%


CENTRO MCS 25

SYNDICATE UPDATE




Tax Advantaged Portion 100% 77.46% 100% 58.16% 0.00%


NAB $2.14 $2.12 $1.60 $1.64 -

Syndicate Commencement Date July 2001, rollover occurred June 2007



Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Karratha (50%) WA 5.0% 100% $43,250,000 7.75% 5.81% 7.15 years

Centro Raymond Terrace NSW 11.7% 96.4% $26,100,000 8.50% 2.35% 6.25 years

Centro Oxenford QLD 1.1% 100% $21,000,000 8.00% 1.94% 5.37 years

Centro Emerald Village (50%) QLD 7.5% 100% $12,000,000 8.50% -7.69% 2.28 years

CSIF-A Investment (2) Various 5.0% 99.4% $7,452,185 8.37% -16.83% 5.12 years

Centro Emerald Market (50%) QLD 8.7% 100% $7,250,000 8.75% -3.33% 4.60 years

TOTAL 5.7% 99.5% $117,052,185 8.14% 0.53% 5.98 years

NAB Change

Jun ‘10 $1.64

Dec ‘09 $1.55

Jun ‘09 $1.60

•Solid Syndicate Sales Growth–Salesperformanceremainsstrongwithannualgrowthacrosstheportfolioof5.3%.Syndicategrowthwashighlightedby:

•Annualsalesgrowthof11.7%atCentroRaymondTerraceduetostrongperformancesfromWoolworthsandGoLo,up6.9%and21.9%respectively.

•ColesandTargetCountryunderpinnedthegrowthatCentroEmeraldMarket,withannualsalesgrowthof10.1%and3.0%respectively.

•CentroEmeraldVillage’sannualsalesgrowthof7.5%waslargelyduetoWoolworthsandPharmacyFirst,up3.4%and38.2%respectively.

•CentroKarratha’ssalesgrowthof5.0%,attributabletothestrongperformancesofWoolworths,ColesandTargetCountry,allreportingincreasesof10.2%,6.3%and6.1%respectively.

•Leasing Activity Contributes to Income Growth –Inthe12monthsto30June2010atotalof31leasedealsweresuccessfullynegotiatedacrosstheportfolioincluding21newleasesand10leaserenewals.Collectively,theseleasedealscontributedto19.1%incomegrowthacrosstheportfolio.

•Emerald Retail Development Update –AsupdatedintheCentro MCS Direct Property Half Yearly Review December 2009,theSyndicatelodgedanobjectiontothedevelopmentofanewsub-regionalshoppingcentreinEmerald.ThisobjectionwasunsuccessfulinthePlanning&EnvironmentCourtofQueensland.AnappealwasthenlodgedagainstthisdecisionwiththeCourtofAppealbutthiswasalsounsuccessful.

Althoughwewereunabletoreversethedevelopmentapproval,ourobjectionshavedelayedconstructionandtheopeningdateofthenewdevelopmentbyovertwoyears.WeremainoftheviewthatthisdevelopmentwillhaveanimpactonCentroEmeraldVillageandCentroEmeraldMarket.


Total Annual Return



CM

CS 25

DEBT INFORMATIONTheaverageinterestrateforallSyndicatedebt(includingweightedaveragemargin)at31December2009was6.53%p.a.


Gearing Ratio (1) 45.5% 52.1% 51.7%










TOP RETAILERS


Averag

eFixed

Rate

(%)

(A$ Millions)

98% 98% 98% 98% 98%

66%


Percentage Hedged

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

0

10

20

30

40

50

60

70

Current Debt




Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


FY09 TOTAL 15.7% 99.7% $116,435,000 7.94% -13.17% 5.68 years

FY08 TOTAL(3) 12.0% 99.5% $134,100,000 7.23% 2.22% 5.96 years

FY07 TOTAL(3) 10.0% 99.6% $113,187,500 6.89% 14.16% 5.51 years

(1)IndependentvaluationundertakenbyCBRichardEllisatCentroRaymondTerrace,SavillsatCentroKarrathaandUrbisatCentroEmeraldVillage,CentroEmeraldMarketandCentroOxenford.

(2)EquityinvestmentintoCentroSyndicateInvestmentFund(CSIF-A).ForfurtherinformationonCSIF-ArefertotheFactSheetontheCentroMCSwebsiteundertheSyndicatePortfolio&RG46DisclosuresforCentroMCS25.

(3)HistoricalstatisticsexcludeCSIF-Ainvestment.

Other60.7%

Woolworths33.3%

Coles6.0%


CENTRO MCS 26

SYNDICATE UPDATE






NAB $1.85 $2.10 $1.61 $1.68 -

Syndicate Commencement Date February 2002, rollover occurred April 2008

Syndicate Review Date March 2013 – March 2015


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Maddington (76%) WA 14.2% 100% $65,135,080 8.25% -0.58% 2.23 years

Centro Indooroopilly QLD 11.1% 98.5% $44,200,000 8.25% -1.78% 4.00 years

Woolworths Tweed Heads NSW N/A(2) 100% $13,800,000 7.50% 11.29% 17.68 years

TOTAL 13.7% 99.5% $123,135,080 8.17% 0.18% 5.09 years

FY09 TOTAL 5.0% 99.7% $122,916,880 8.16% -15.49% 4.81 years

FY08 TOTAL 7.7% 100% $145,449,960 6.72% 7.99% 5.28 years

FY07 TOTAL 6.2% 100% $134,682,160 6.69% 11.60% 4.20 years

(1)Directors’valuations.(2)AnnualsalesgrowthforWoolworthsTweedHeadsisnotcomparableduetorecentdevelopment.

NAB Change

Jun ‘10 $1.68

Dec ‘09 $1.60

Jun ‘09 $1.61

•Strong Sales Growth Across Syndicate Portfolio–Animpressive13.7%salesgrowthwasrecordedacrosstheSyndicateportfolioforFY10.CentroMaddingtonsalesgrowthof14.2%waslargelyattributabletonewspecialtyretailersandColeswhousetheirCentroMaddingtonstoreasabaseforinternethomedeliveryservice.ThegrowthinColessalesassistedwitha44%increaseinFY10percentagerentforCentroMaddington.CentroIndooroopilly’ssalescontinuetogrowstronglyduetopopulationgrowthintheCentre’stradecatchmentareaandanumberofpastsuccessfultenancyreconfigurations.

•Major Lease Renewal Progressing Well at Centro Maddington–NegotiationscontinuewithKmartandweexpectasuccessfulrenewaloutcomepriortotheirleaseexpiryinDecember2010.Fivenewleasedealsand15leaserenewalswerecompletedacrosstheSyndicatepropertyportfolio,onaverage16%abovetheprioryearrentals.

• 5.0% Syndicate NAB Increase –TheoverallincreaseinvaluationscontributedtotheSyndicateNABimproving5.0%to$1.68inFY10.The11.3%riseinthevalueforWoolworthsTweedHeadsreflectsastrongincreaseindemandforsupermarket-onlyassetsbeingpurchasedbyprivateinvestors.

• 9.0% Distribution Maintained –Despitehighercapitalexpenditureandforecastdebtrepayments,anincreaseinincomewillenableustoagainforecasta9.0%distributionrateinFY11.Aspecialdistributionof0.23centswaspaidattheendofFY10duetoSyndicateearningsexceedingtaxableincome.


Total Annual Return



CM

CS 26



Gearing Ratio(1) 30.2% 37.0% 36.7%


(1)Forexternalfinancierdebtloancovenantpurposes,CentroPropertyTrustdebtisnotincluded.Asat30June2010,theSyndicatewaswithinitsLVRcovenant.GearingratioisforCMCS26Groupwhichincludes100%ofCentroMaddington.








TOP RETAILERS

Total % of Income 28.3%Averag

eFixed

Rate

(%)

(A$ Millions)

95% 95% 95% 95% 95%

83%


Percentage Hedged

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

0

10

20

30

40

50

60

Current Debt



Other71.7%

Woolworths19.5%

Kmart8.8%


CENTRO MCS 27

SYNDICATE UPDATE




Tax Advantaged Portion 100% 43.38% 15.19% 19.00% 45.00%


NAB $1.47 $1.55 $1.15 $1.10 -

Syndicate Commencement Date April 1999, rollover occurred April 2006

Syndicate Review Date May 2011 – April 2013


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Sunshine Marketplace VIC -4.8% 100% $87,000,000 8.00% -4.39% 5.81 years

FY09 TOTAL 10.5% 100% $91,000,000 7.75% -13.33%(2) 6.02 years

FY08 TOTAL 8.8% 100% $105,000,000 6.50% 2.94%(2) 6.37 years

FY07 TOTAL 4.6% 100% $102,000,000 6.50% 14.61%(2) 7.12 years

(1)IndependentvaluationundertakenbyCBRichardEllis.(2)Valuationchangefrompriorperiod.

NAB Change

Jun ‘10 $1.10

Dec ‘09 $1.15

Jun ‘09 $1.15

• Syndicate NAB Reduced–ThevaluationofSunshineMarketplacedeclinedby4.4%overtheyeartoJune2010.Thisvaluationmovement,magnifiedbytheSyndicate’s62.6%gearingratio,hasresultedina4.3%reductionintheSyndicateNABfrom$1.15to$1.10.

• Higher Debt Costs Impact Distribution–WeanticipateasubstantialincreaseinthecostofdebtfollowingtherequiredDecember2010refinancingofthisasset.Asaresult,thedistributionforecasthasdecreasedfrom5.5%to2.5%.Theforecastdistributionrateof2.5%isforthesixmonthstoDecember2010.Investorsshouldnotethatareviseddistributionratemaybeadvisedoncetherefinancehasbeenachieved.SunshineMarketplaceisbeingmarketedforsaleandifrefinancingcannotbesecuredatacceptablepricing,thepropertywillbesoldandtheSyndicatewillbewoundup.

• Property Performance Update –SunshineMarketplacewasimpactedbysometemporarystoreclosuresduetoraindamageearlierthisyearandthiscontributedtoadeclineof4.8%inannualsalesgrowth.ThenearbyWaterGardensShoppingCentreandtherecentlydevelopedneighbouringSunshinePlaza,hasalsoimpactedWoolworthsandBigWsales.Ontheotherhand,VillageCinemasexperiencedsubstantialsalesincreasefortheyear.TheCentreisfullyleased,with17leaserenewalsandsixnewdealscompletedduringtheyearatabovebudgetrental.


Total Annual Return



CM

CS 27



Gearing Ratio (1) 50.9% 59.5% 61.9%










TOP RETAILERS


eFixed

Rate

(%)

(A$ Millions)

95% 95% 95% 95%


Percentage Hedged

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

0

10

20

30

40

50

60

Current Debt



Other52.5%

Village Cinemas27.6%

Woolworths10.0%

Big W9.9%


CENTRO MCS 28

SYNDICATE UPDATE




Tax Advantaged Portion 100% 100% 100% 0.00% 36.00%


NAB $1.36 $1.30 $0.71 $0.76 -

Syndicate Commencement Date January 2003

Syndicate Review Date June 2012


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Bankstown (50%) NSW N/A(3) 99.9% $260,000,000 7.00% 0.97% 5.24 years

Perth City Central (50%) WA -6.5% 63.4% $27,100,000 8.50% -9.67% 5.56 years

TOTAL -6.5% 94.9% $287,100,000 7.14% -0.14% 5.27 years

FY09 TOTAL(4) 5.8% 95.7% $402,040,000 7.17% -16.15% 4.58 years

FY08 TOTAL(4) 7.5% 98.7% $482,869,077 6.25% 4.99% 4.79 years

FY07 TOTAL(4) 7.1% 100% $459,900,000 6.01% 11.67%(5) 4.19 years

(1)DavidJonesPerthwassoldon20January2010for$114.5million.(2)IndependentvaluationundertakenbySavillsatCentroBankstownandUrbisatPerthCityCentral.(3)SalesgrowthforCentroBankstownisnotcomparableduetopreviousdevelopment.(4)AllhistoricalstatisticsincludeDavidJonesPerth.(5)FY07valuationgrowthexcludesthepurchaseofthe50%interestinPerthCityCentreinFebruary2007.

NAB Change

Jun ‘10 $0.76

Dec ‘09 $0.73

Jun ‘09 $0.71

•Sale of David Jones Perth–Asadvisedinourletterof15February2010,DavidJonesPerthwassoldon20January2010for$114.5million.AllsaleproceedswereusedtoretireSyndicatedebtwhichhasreducedtheSyndicategearingratioto58%,substantiallylowerthanitsprevious71%gearingratioasatDecember2009.

•Portfolio Update –TheSyndicate’s50%shareofPerthCityCentralwasdevaluedby$2.9millionoverthe12monthstoJune2010largelyoffsetbya$2.5millionvaluationincreaseintheSyndicate’s50%shareofCentroBankstown.CentroBankstownisbenefittingfromnearfulloccupancywithstrong4.0%propertyincomegrowthbudgetedforFY11.PerthCityCentralhasbeenimpactedbytherecentdepartureoftheDepartmentofImmigration&Citizenshipfromitsupperlevelofficesandcurrentleasingprogresshasbeenslowtodate.Asaresult,weareforecastingareductioninFY11propertyincomeof$460,000comparedwithFY10.Investorsshouldnotehowever,thattheremainderoftheofficefloorsandretailcomponentoftheCentreremainfullyleased.

•FY11 Distributions Forecast at 2.0%–ThesaleofDavidJonesPerthprovidedadditionalcashflowbenefitstotheSyndicatethroughalowerloanfacilitymarginallowingdistributionstorecommencefromtheMarch2010quarter.WearenowforecastingFY11distributionsof2.0%,inlinewithdistributionspaidduringFY10.DistributionsremaincomparativelylowcomparedwithFY07andFY08mainlydueto:

•ReducedincomeforecastatPerthCityCentralresultingfromthecurrentlargeofficevacancy;and

•Portfoliocapitalexpenditureof$4.9millionforecasttobefundedfromSyndicateearningsandprioryearcashreserves.


Total Annual Return



CM

CS 28



Gearing Ratio(1) 57.1% 68.0% 58.3%










TOP RETAILERS


eFixed

Rate

(%)

(A$ Millions)

72% 72% 72% 72% 72% 72% 72% 72%


Percentage Hedged

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

0

20

40

60

80

100

120

140

160

180

Current Debt



Other92.8%

Woolworths7.2%


CENTRO MCS 32

SYNDICATE UPDATE


Distribution Return on the Original $1.00 Invested 9.25% 9.25% 3.48% 2.52% 1.70%




NAB $1.32 $1.25 $0.58 $0.52 -


Syndicate Review Date October 2008 – October 2010

PROPERTY PORTFOLIO STATISTICS Property State Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Mira Mesa Mall California 99.3% $42,011,200 7.50% 3.33% 5.50 years

Gateway Plaza California 97.2% $32,912,000 7.00% 2.41% 3.69 years

The Esplanade Shopping Centre California 90.5% $33,790,871 7.25% 14.26% 4.02 years

Puente Hills Town Center East & West California 90.8% $24,006,400 8.50% -0.20% 3.23 years

Ocean View Plaza California 96.9% $22,844,800 7.50% 4.19% 4.12 years

Gateway Plaza, Santa Fe Springs California 100% $16,504,400 8.50% -1.73% 11.82 years

NAB Change

Jun ‘10 $0.52

Dec ‘09 $0.49

Jun ‘09 $0.58

•California Market Conditions–CaliforniacontinuestobeoneofthestatesthathasbeensignificantlyimpactedbytherecessionintheUS.Whilsthomeforeclosuresandunemploymentcontinuetoimpact,California’sdiverseregionaleconomyhascreatedanenvironmenttailoredforopportunisticretailers.Theseretailershavebeenabletotakeadvantageofthelargesupplyofbigboxretailspace,andlowerrents,toexpandormoveintomoredenseandmaturemarkets.Barrierstoentryhavehistoricallybeenhightobreakthroughinthesemarkets.ThecoastalandurbanregionsofCalifornia,wherethevastmajorityofCentroMCS32propertiesarelocated,havebeenthemostsoughtafterbyretailers.

•Leasing and Marketing–Inthe12monthsto30June2010,wehavesuccessfullysecured92newandrenewalleasesforover50,000squaremetresofspace,includingnearly9,300squaremetresof‘bigbox’space(spaces1,000squaremetresorgreater)vacatedduetopriorbankruptciesacrosstheportfolio.WithastrongmixofnationalandregionalretailerstakingadvantageofCalifornia’scurrentmarketconditions,occupancyintheCentroMCS32portfolioiswellabovetheCentroUSaveragewhichdemonstratestherelativestrengthoftheregion.

•Syndicate Review in October 2010–TheSyndicateisapproachingtheendofitsinitialtermanditmusteitherbeextended,rolledoverorwoundup.WearecurrentlyworkingthroughtheoptionsavailablefortheSyndicateandwewillwritetoinvestorsinduecoursetoadviseofourproposedstrategyandfuturecourseofaction.

•Debt Facility Refinance/Covenants–TheunsecuredUS$20.5milliondebtfacilitywasrecentlyextendedfor12monthsfrom31December2010to31December2011.Commencing1August2010,monthlydebtprincipalrepaymentsofUS$60,000willbemade.

Asat30June2010,the“NetWorth”covenantforthisfacilitywasclosetotheminimumrequirement.IftheREITPropertyvaluesweretofallby3.4%,thiscovenantwouldlikelybebreached.Ifabreachweretooccurandwewereunabletonegotiateawaiverwiththefinancier,thefacilitymaybecomedueandpayableandsomeREITPropertymayneedtobesoldtorepaytheloan.

FY11 Distribution Forecaston the Original $1.00 Invested:

Total Annual Return


1.70%


CM

CS 32

PROPERTY PORTFOLIO STATISTICS (continued)Property State Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Vallejo Corners California 89.6% $9,776,800 7.75% -13.86% 5.03 years

Pacoima Center California 100% $10,890,000 7.50% 2.27% 7.63 years

University Mall California 88.5% $11,374,000 6.25% 12.98% 4.57 years

California Oaks Center California 90.3% $9,728,400 7.50% 0.50% 3.41 years

Santa Paula Shopping Center California 100% $8,905,600 8.00% 0.55% 4.61 years

Lompoc Shopping Center California 86.6% $9,002,400 8.50% 3.33% 7.06 years

Felicita Plaza California 95.8% $7,356,800 7.50% 9.35% 5.80 years

San Bernardino Center California 100% $5,566,000 7.75% -4.17% 5.43 years

Country Hills Shopping Center California 87.2% $5,178,800 8.25% 20.22% 9.56 years

TOTAL 95.3% $249,848,471 7.59% 3.54% 5.24 years

FY09 TOTAL 92.9% $241,298,200 7.84% -23.17% 4.93 years

FY08 TOTAL 97.2% $316,971,750 6.13% -3.35% N/A

FY07 TOTAL 99.2% $327,957,000 5.85% 10.85% N/A

(1)IndependentvaluationsexpressedinUS$andincludinggroundleases(figuresreflect48.4%ownership)undertakenbyWeiserRealtyAdvisorsLLC(US).

DEBT INFORMATIONAlloftheSyndicate’sUS$debtwasataweightedaveragefixedinterestrateof4.95%p.a.(includingmargin)asat30June2010.


Gearing Ratio 44.3% 58.1% 56.9%



Financier Loan Facility Amount(1) Undrawn Amount Loan Maturity

External Financier US$68.97 million Nil 1 May 2011


External Financier US$14.52 million US$4.60 million 31 December 2011

US$ TOTAL US$149.07 million US$4.60 million 2.22 years

(1)TheUS$figuresreflect48.4%ownership.


CENTRO MCS 33

SYNDICATE UPDATE






NAB $1.23 $1.13 $0.80 $0.71 -

Syndicate Commencement Date June 2004

Syndicate Review Date June 2011


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Keilor VIC 2.0% 100% $59,350,000 8.25% -8.87% 3.77 years

Centro Arndale (50%) SA 4.9% 99.1% $48,000,000 8.50% -8.57% 3.38 years

Centro Lutwyche (50%) QLD N/A(2) 99.9% $30,000,000 7.75% -6.25% 5.42 years

Centro Burnie TAS 3.7% 99.7% $18,600,000 9.50% 2.20% 2.94 years

Centro Flinders WA -1.2% 100% $17,000,000 8.25% Nil 2.30 years

Centro Milton QLD -5.5% 100% $17,250,000 7.50% 4.55% 3.06 years

TOTAL 2.7% 99.6% $190,200,000 8.29% -5.53% 3.60 years

FY09 TOTAL 4.5% 98.8% $201,325,000 8.10% -16.57% 3.66 years

NAB Change

Jun ‘10 $0.71

Dec ‘09 $0.78

Jun ‘09 $0.80

•Syndicate Valuation Declines Impact NAB –Thevaluationofthepropertyportfoliodeclined5.5%overtheyearto30June2010.Thisvaluationmovement,magnifiedbytheSyndicates60%gearinglevel,hasresultedinan11.3%dropintheSyndicateNABfrom$0.80to$0.71.The8.9%dropinCentroKeilor’svaluationreflectsincreasedcompetitioninitstradecatchmentandthe8.6%declineforCentroArndaleisaresultofincreasedcapitalexpenditureanticipatedtosecurenewleasesforWoolworthsandBigW.The6.3%fallinCentroLutwyche’svaluationisduetoweakeningdemandforofficespacewhichrepresentsamajorportionofthelettableareaatthiscentre.

•3.0% Distribution Rate Maintained in FY11–TheFY11distributionratewillbemaintainedat3.0%ascapitalexpenditureinFY11continuestobefundedfromearnings.TheSyndicate’sgearinglevelhasincreasedduetovaluationdeclinesandweconsideritprudenttocontinueusingSyndicateearningstopayforthisexpenditure.

•Major Capital Expenditure in FY11–TheSyndicateisforecasttoincur$3.5millionofcapitalexpenditureinFY11,someofwhichrelatestocarriedoverworksfromFY10.CentroArndalerequires$1.5mforanescalatorupgrade,airconditioningworksandleaseincentives.ThiscapitalexpenditureiscrucialtosecurelongtermleaseswithWoolworthsandBigW.CentroKeilorrequires$1.0millionofleaseincentivesandlessorworkstosecurenewtenantsandincreasesalesgrowth.

•Future Syndicate Strategy–TheSyndicatetermisduetoendinJune2011.WearecurrentlyconsideringstrategiesfortheSyndicate.FurtherinformationwillbeprovidedtoinvestorsinthesecondhalfofFY11.

•Successful Leasing Helps Drive Property Portfolio Sales –IntroducinganumberofkeytenantssuchasDickSmithatCentroArndaleandCottonOnatCentroBurniehashelpeddrivea2.7%increaseinsalesacrosstheSyndicateportfolio.DespitestronglocalcompetitionsalesatCentroKeiloralsoincreasedduringFY10.


Total Annual Return



CM

CS 33


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


FY08 TOTAL 4.7% 99.9% $241,300,000 6.85% 0.25% 3.84 years

FY07 TOTAL 1.9% 99.5% $240,700,000 6.63% 8.79% 4.09 years

(1)IndependentvaluationsundertakenbyCBREatCentroArndale,CentroKeilor,CentroFlindersandCentroBurnieandUrbisatCentroLutwycheandCentroMilton.(2)AnnualsalesgrowthforCentroLutwycheisnotcomparableduetorecentdevelopment.



Gearing Ratio(1) 46.9% 56.9% 59.9%








TOP RETAILERS


Averag

eFixed

Rate

(%)

(A$ Millions)

78% 78% 78% 78% 78%73%

46% 46%

1%


Percentage Hedged

0

20

40

60

80

100

120

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

Current Debt



Other70.1%

Kmart10.0%

Coles14.9%

Big W5.0%


CENTRO MCS 34

SYNDICATE UPDATE






NAB $1.34 $1.26 $0.76 $0.79 -

Syndicate Commencement Date December 2004

Syndicate Review Date December 2009 – December 2011


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Pinelands QLD 7.0% 100% $28,000,000 8.25% 2.18% 4.77 years

Centro Port Pirie SA N/A 97.4% $23,100,000 8.75% -1.70% 9.13 years

Centro Woodcroft NSW 8.4% 100% $19,700,000 8.25% -1.01% 3.28 years

Centro Lismore NSW 0.9% 96.7% $16,500,000 9.25% 3.13% 4.02 years

Centro Emerald Village (50%) QLD 7.5% 100% $12,000,000 8.50% -7.69% 2.28 years

Coles Morwell VIC 1.6% 100% $9,100,000 9.50% 2.25% 2.87 years

Centro Emerald Market (50%) QLD 8.7% 100% $7,250,000 8.75% -3.33% 4.60 years

NAB Change

Jun ‘10 $0.79

Dec ‘09 $0.75

Jun ‘09 $0.76

•Continued Sales Growth Across the Portfolio –Salesperformancehasremainedsolidwithannualgrowthacrosstheportfolioof5.2%.Syndicategrowthwashighlightedby:

•CentroWoodcroftannualsalesgrowthof8.4%duetostrongperformancesfromColesandLiquorland,up4.1%and5.5%respectively.

•ColesandTargetCountryunderpinnedthegrowthatCentroEmeraldMarket,withannualsalesgrowthof10.1%and3.0%respectively.

•CentroEmeraldVillage’sannualsalesgrowthof7.5%waslargelyasaresultofWoolworthsandPharmacyFirstincreasesinsalesof3.4%and38.2%respectively.

•AtCentroPinelands,theCentre’s7.0%salesgrowthwasunderpinnedbythespecialtyretailers.

•Update on Objection to Emerald Retail Development –AsupdatedintheCentro MCS Direct Property Half Yearly Review December 2009,theSyndicatelodgedanobjectiontothedevelopmentofanewsub-regionalshoppingcentreinEmerald.ThisobjectionwasunsuccessfulinthePlanning&EnvironmentCourtofQueensland.AnappealwasthenlodgedagainstthisdecisionwiththeCourtofAppealbutthiswasalsounsuccessful.

Althoughwewereunabletoreversethedevelopmentapproval,ourobjectionshavedelayedconstructionandtheopeningdateofthenewdevelopmentbyovertwoyears.WeremainoftheviewthatthisdevelopmentwillhaveanimpactonCentroEmeraldVillageandCentroEmeraldMarket.

•Debt Repayment Leads to Decrease in FY11 Distribution–InordertoreducetheSyndicate’shighgearingratio,weareforecastingtorepay$840,000ofdebtinFY11outofSyndicateearnings.ThiswillresultinadecreaseintheforecastFY11distributionrateto2.0%,howeveritwillassisttheSyndicateaheadofitsrequiredDecember2011refinance.


Total Annual Return



CM

CS 34



Gearing Ratio(1) 54.3% 68.4% 67.8%










TOP RETAILERS


Averag

eFixed

Rate

(%)

(A$ Millions)

83% 83% 83% 83% 83%

56%


Percentage Hedged

0

10

20

30

40

50

60

70

80

90

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

Current Debt




Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


TOTAL 5.2% 98.9% $115,650,000 8.65% -0.47% 4.79 years

FY09 TOTAL 11.2% 99.4% $116,200,000 8.49% -17.55% 4.45 years

FY08 TOTAL 6.9% 99.1% $140,927,510 7.17% 5.11% 3.07 years

FY07 TOTAL 0.2% 98.8% $134,075,000 6.96% 12.06% 3.42 years

(1)IndependentvaluationundertakenbyUrbisatCentroEmeraldVillageandCentroEmeraldMarket.Directors’valuationsforallotherproperties.

Other60.6%

Coles21.9%

Woolworths12.1%

Kmart5.4%


CENTRO MCS 35

SYNDICATE UPDATE


Distribution Return on the Original $1.00 Invested 8.55% 8.60% 5.72% Nil Nil

Distribution Return on NAB per Investment 7.31% 8.60% 17.33% Nil Nil


Equivalent Pre-tax Return on the Original $1.00 Invested 14.44% 14.32% 9.66% Nil Nil

NAB per Investment (based on the Original $1.00 Invested)(1) $1.17 $1.00 $0.33 $0.26 -

NAB per Unit (based on the remaining units only)(2) $2.32 $1.97 $0.66 $0.51 -


Syndicate Review Date April 2010 – April 2012

(1)TheNABperInvestment(basedontheoriginal$1.00invested)istheNABthatwehavealwaysreportedtoinvestors.Itreflectsthecurrentvalueofyouroriginal$1.00investmentintotheSyndicate(comprisingof$0.495unsecurednotesand$0.505units)e.g.$10,000originalinvestmentcomprisedof4,950unsecurednotesand5,050units.10,000x$0.26=$2,600,thecurrentvalueofyourinvestment.

(2)AtthejointmeetingofnoteholdersandunitholdersinCentroMCS35heldon30October2009,noteholdersvotedinfavourofcancellingtheunsecurednotesfromtheSyndicateinvestmentstructurewitheffectfrom1July2009.TheNABperUnitreflectsthecurrentvalueoftheunitse.g.ofthe$10,000originalinvestmentonlythe5,050Unitsremain.5,050unitsx$0.51=$2,600,thecurrentvalueofyourinvestment.

NAB Change

Jun ‘10 $0.26

Dec ‘09 $0.24

Jun ‘09 $0.33

•Georgia Market Conditions–GeorgiaisstillfeelingtheeffectsoftheUSrecessionevidentbythestate’sunemploymentrateof10.3%at30June2010,abovethenationalaverageof9.5%.MetroAtlanta,thesub-marketwheretheSyndicatepropertiesarelocatedhasanunemploymentrateof10.3%,consistentwiththestateofGeorgia.Subsequentlythereislittlechangeintheretailleasingmarketwithlargeinventoriesofvacant‘bigbox’space(1,000squaremetresorgreater),andfew‘bigbox’dealsinFY10.

•Metro Atlanta Big Box Retail Leasing Environment–Theongoingeconomicclimatecontinuestocontributetothedifficultretailleasingenvironmentandthelargesupplyof‘bigbox’spacevacanciesintheMetroAtlantasub-market.Inthe12monthsto30June2010,wehavebeensuccessfulinsecuringone‘bigbox’dealatBarrettPlacewithMichaels,anationalretailer,replacingLinensn’Thingswholeftduetobankruptcy.Thereremainsalargeinventoryof‘bigbox’spaceavailableintheMetroAtlantasubmarkethowever,therearenowsomeretailerswhoarelookingattakingadvantageoftheseopportunities.WearecontinuingtomoveclosertoleasinguptheremainingmajorvacanciesatbothVenturePointeandBarrettPlace.


Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Mansell Crossing Georgia 97.5% $46,560,000 8.00% -5.14% 4.13 years

Barrett Place Georgia 81.5% $17,654,000 9.00% -18.75% 2.83 years

Venture Pointe Georgia 46.4% $9,797,000 8.50% 4.12% 6.94 years

TOTAL 81.7% $74,011,000 8.30% -7.74% 4.05 years

FY09 TOTAL 93.1% $80,219,000 8.50% -27.58% 4.40 years

FY08 TOTAL 99.6% $110,774,000 6.83% -7.57% 4.15 years

FY07 TOTAL 99.4% $119,843,500 6.33% 11.11% 4.95 years

(1)IndependentvaluationsexpressedinUS$(figuresreflect97%ownership)undertakenbyWeiserRealtyAdvisorsLLC(US).


Total Annual Return

since Inception: -13.25%

Nil


CM

CS 35



Gearing Ratio(1) 58.1% 79.7% 84.9%


(1)Forexternalfinancierdebtloancovenantpurposes,CentroPropertyTrustdebtisnotincluded.Thereisnogearingorinterestcoverratiocovenantfortheseniordebt.



External Financier US$64.00 million Nil 1 April 2015

External Financier US$2.60 million Nil 1 February 2011

US$ TOTAL US$66.60 million Nil 4.59 years

(1)TheUS$figuresreflect97%ownership.

TOP RETAILERS


Other44.6%

Barnes & Noble7.1%

AMC Theatres14.1%

The Sports Authority11.4%Office Max8.0%

Best Buy7.7%

American Signature Home7.1%


CENTRO MCS 36

SYNDICATE UPDATE


Distribution Return on the Original $1.00 Invested 8.30% 5.60% 1.98% 1.70% 1.70%

Distribution Return on NAB per Investment 8.30% 6.75% 5.82% 7.08% 7.08%

Tax Advantaged Portion 79.61% 71.83% 0.00% 100% 23.00%

Equivalent Pre-tax Return on the Original $1.00 Invested 14.04% 9.10% 1.98% 3.18% 2.04%

NAB per Investment (based on the original $1.00 invested)(1) $1.00 $0.83 $0.34 $0.24 -

NAB per Unit (based on the remaining units only)(2) N/A N/A $0.53 $0.38 -

Syndicate Commencement Date August 2005


(1)TheNABperInvestment(basedontheoriginal$1.00invested)istheNABthatwehavealwaysreportedtoinvestors.Itreflectsthecurrentvalueofyouroriginal$1.00investmentintotheSyndicate(comprisingof$0.36unsecurednotesand$0.64units)e.g.$10,000originalinvestmentcomprisedof3,600unsecurednotesand6,400units.10,000x$0.24=$2,400,thecurrentvalueofyourinvestment.

(2)AtthejointmeetingofNoteholdersandUnitholdersinCentroMCS36heldon9October2009,NoteholdersvotedinfavourofcancellingtheunsecurednotesfromtheSyndicateinvestmentstructurewitheffectfrom1July2009.TheNABperUnitreflectsthecurrentvalueoftheunitse.g.Ofthe$10,000originalinvestmentonlythe6,400unitsremain.6,400unitsx$0.375=$2,400,thecurrentvalueofyourinvestment.

NAB Change

Jun ‘10 $0.24

Dec ‘09 $0.24

Jun ‘09 $0.34

•Regional Market Conditions–ThroughtheUSeconomicrecession,theNortheastandMidAtlanticregionshaveoutperformedtheUSaveragesintermsofbothunemploymentandhomeforeclosures.Thiscontinuedforthe12monthsending30June2010.ThesestrengthsarearesultofbothadenseandmaturemarketwheretheCentroMCS36portfolioisprimarilylocated.Despitetheportfolio’srelativestrengths,therehasbeennochangeinthelagtimeittakestobackfillvacant‘bigbox’spaces(shopsgreaterthan1,000squaremetres)andasaresultoccupancyhasdeclinedby3.3%inthesecondhalfofFY10duetomultiplebigboxvacancies.Manyofthesespacescurrentlyhavereplacementtenantslinedup.

•Leasing and Marketing–Inthe12monthsto30June2010,wehavebeensuccessfulinsecuring68newandrenewalleasestotalingover32,500squaremetresofretailspace.Inaddition,rentalrateswereupby2.2%inFY10onthestrengthofrenewalleasesexecuted.Thisfurtherillustratesthestrengthoftheportfolio’spropertiesandgeographicpositionasretailersarewillingtopayincreasedrentstomaintainapresenceinthemarket.

•Capital Works and Anchor Lease Enhances Bensalem Square–ThedecisiontospendapproximatelyUS$360,000oncapitalworksatBensalemSquarehasbeenvindicatedwiththesuccessfulleasenegotiationofRedner’sMarket(areputableregionalgrocer),adealthathasfilledalongtermvacancyleftbythepreviousgrocer.Asaresultofthisnewleasedeal,thecentreisnow97.7%occupied.


Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Park Hills Plaza Pennsylvania 94.3% $19,109,000 8.50% 1.03% 4.70 years

Whitemarsh Shopping Centre Pennsylvania 100% $12,707,000 8.00% 5.43% 7.19 years

Kline Plaza Pennsylvania 78.1% $11,446,000 8.75% -6.35% 6.18 years

County Line Plaza Pennsylvania 98.6% $10,573,000 8.75% -4.39% 4.29 years

Collegeville Shopping Centre Pennsylvania 88.7% $9,845,000 N/A -29.02% 3.26 years

North Penn Marketplace Pennsylvania 90.5% $8,148,000 8.75% -6.67% 4.35 years

Cherry Square Pennsylvania 96.9% $7,857,000 8.75% -4.71% 4.68 years


Total Annual Return


1.70%


CM

CS 36

DEBT INFORMATIONAlloftheSyndicate’s$USdebtwasataweightedaveragefixedinterestrateof5.88%p.a.(includingmargin)asat30June2010.


Gearing Ratio(1) 63.5% 80.7% 81.5%


(1)Forexternalfinancierdebtloancovenantpurposes,CentroPropertyTrustdebtisnotincluded.Asat31December2009,theSyndicatewaswithinitsLVRcovenant.



External Financier US$159.59 million Nil 1 January 2016




External Financier US$3.72 million Nil 1 June 2012

External Financier US$2.62 million Nil 1 April 2014


(1)TheUS$figuresreflect97%ownership.


Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Bensalem Square Pennsylvania 97.7% $6,741,500 8.00% -1.42% 12.70 years

Gilbertsville Shopping Centre Pennsylvania 91.8% $6,305,000 8.75% -3.70% 3.56 years

Woodbourne Square Pennsylvania 100% $5,650,250 8.75% -0.43% 3.34 years

Chalfont Village Pennsylvania 50.5% $4,462,000 9.00% 1.10% 3.65 years

69th Street Plaza Pennsylvania 96.9% $3,492,000 9.00% -2.70% 4.50 years

New Holland Shopping Center Pennsylvania 95.2% $3,055,500 9.00% -17.11% 1.42 years

Commerce Plaza Pennsylvania 100% $2,425,000 7.00% 3.09% 14.43 years

Mt Carmel Plaza Pennsylvania 28.0% $1,115,500 10.00% -9.80% 4.31 years

Highridge Plaza New York 92.5% $18,915,000 7.25% 8.33% 3.63 years

North Ridge Plaza New York 100% $11,640,000 8.00% 0.00% 4.07 years

A&P Mamaroneck New York 100% $3,104,000 6.50% 0.00% 0.75 years

Port Washington New York 100% $1,358,000 6.50% 75.01% 2.92 years

Christmas Tree Plaza Connecticut 86.4% $17,654,000 8.50% -12.08% 4.90 years

Killingly Plaza Connecticut 27.1% $5,529,000 9.25% -18.57% 1.57 years

Milford Center Connecticut 100% $1,527,750 N/A 14.55% 4.17 years

North Park Center Georgia 91.1% $10,936,750 9.00% 2.50% 2.76 years

Holcomb Bridge Crossing Georgia 80.9% $6,208,000 10.00% 5.35% 6.97 years

Park Plaza Georgia 82.4% $3,831,500 10.25% -22.93% 1.33 years

Rio Grande Plaza New Jersey 89.8% $12,125,000 9.00% -13.71% 3.69 years

Springfield Supermarket New Jersey 100% $4,365,000 7.50% 9.76% 12.76 years

Magnolia Plaza North Carolina 56.2% $2,376,500 13.00% -14.04% 1.60 years

East Main Center South Carolina 36.3% $1,474,400 10.25% -4.40% 4.80 years

Culpeper Town Square Virginia 98.4% $9,573,900 9.75% -5.10% 5.35 years

TOTAL 86.1% $223,551,050 8.60% -4.70% 4.78 years

FY09 TOTAL 88.2% $234,584,800 8.36% -22.39% 4.60 years

FY08 TOTAL 89.7% $302,252,000 7.09% -10.37% N/A

FY07 TOTAL 91.7% $337,225,350 7.02% 5.40% N/A

(1)IndependentvaluationsexpressedinUS$(figuresreflect97%ownership)undertakenbyCushman&Wakefield(US).


CENTRO MCS 37

SYNDICATE UPDATE




Tax Advantaged Portion 100% 100% 100% 100% 100%


NAB $1.00 $0.92 $0.59 $0.56 -




Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)


Centro Albury NSW 0.4% 100% $50,400,000 8.00% 0.10% 3.35 years

Centro Newton SA -1.5% 100% $29,700,000 7.75% -4.50% 4.39 years

Centro Gladstone Home QLD 9.4% 100% $26,000,000 8.50% 0.00% 6.51 years

Centro Whites Hill QLD 3.6% 100% $15,550,000 8.00% 2.98% 9.84 years

Centro Monier Village QLD 1.3% 100% $12,500,000 8.25% -2.34% 6.61 years

TOTAL 1.8% 100% $134,150,000 8.10% -0.89%(3) 5.35 years

FY09 TOTAL(4) 4.8% 95.0% $141,550,000 7.88% -13.16% 4.78 Years

FY08 TOTAL(4) 6.1% 99.3% $163,000,000 6.90% -1.20% 5.35 years

FY07 TOTAL(4) 3.3% 99.3% $164,980,000 6.60% 10.95% 5.95 years

(1)IndependentvaluationsundertakenbySavillsatCentroAlbury,CBRichardEllisatCentroNewton,UrbisatWhitesHillShoppingCentreandMonierRoadShoppingVillageandColliersatCentroHomeGladstone.

(2)SamuelVillagewassoldinSeptember2009for$6.2m.(3)Valuation%basedonthefiveremainingpropertiesexcludingSamuelVillage.(4)AllhistoricalstatisticsincludeSamualVillage.

NAB Change

Jun ‘10 $0.56

Dec ‘09 $0.59

Jun ‘09 $0.71

•Mixed Portfolio Valuation Results–AlltheSyndicatepropertieswereindependentlyvaluedat30June2010.Theportfoliovaluationdeclineof0.89%wasmainlyduetotheimpactofsofteningcapitalisationrates,offsetbypropertyincomegrowth.Capitalisationratesareinfluencedbycurrentinvestmentmarketconditionsandcomparablesalestransactions,andtakeintoaccountcompetition,centrequalityandperformance.ThepropertyvaluationdeclineshavecontributedtoafallintheNABfrom$0.59to$0.56.

•Strong Sales Growth at Centro Gladstone Home–Syndicateportfoliosalesincreasedby1.8%forthe12monthsto30June2010underpinnedbysalesgrowthof9.4%and3.6%atCentroGladstoneHomeandCentroWhitesHillrespectively.Inparticular,arecenttenancyremixatGladstoneHometointroducenewstrongnationalandlocalbulkygoodretailersintothevacantshopshassuccessfullyincreasedfoottrafficandconsumerspending.

•Portfolio Occupancy at 100%–TheSyndicatepropertiesarenowfullyleasedreflectinga1.9%improvementinportfoliooccupancysinceDecember2009.Totalleasingactivityincluded12leaserenewalsand16newdealsatanaveragerentallevel6.8%abovebudget.NewretailersintroducedincludeCityPetWorldandPillowTalkatGladstoneHome,anewVeterinaryclinicatCentroMonierandDickSmithatCentroAlbury.ThenewDickSmithleaseatCentroAlburywillassistindrivingupCentresalesandshouldhelptomitigateanyimpactfromJBHiFiwhichrecentlyopenedanewstoreoppositeourCentre.

•Limited Exit Opportunity Available in FY11–TheLimitedExitOpportunitywillagainbeavailableforinvestorsinCentroMCS37.InvestorsshouldhavealreadyreceivedinformationregardingtheopportunitywhichwillcommencefromthepublishingofthefinalNAB(totheCentroMCSwebsiteon16September2010).InvestorshaveuntilmidOctobertoapplyfortheredemption.


Total Annual Return



CM

CS 37



Gearing Ratio(1) 59.6% 69.3% 67.5%


(1)Asat30June2010,theSyndicatewaswithinitsLVRcovenant.





TOP RETAILERS


eFixed

Rate

(%)

(A$ Millions)

103% 103% 103% 103% 103% 103% 103%

71%


Percentage Hedged

0

20

40

60

80

100

120

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

Current Debt



Other47.8%

Coles6.0%

Woolworths15.0%

Kmart10.1%

Foodland7.2%

Bunnings Warehouse7.1%

Target6.8%


CENTRO MCS 38

SYNDICATE UPDATE


Distribution Return on the Original $1.00 Invested 7.65% 7.75% 3.79% 0.70% Nil

Distribution Return on NAB per Investment N/A 8.33% 15.79% 3.88% Nil


Equivalent Pre-tax Return on the original $1.00 invested 14.30% 12.27% 7.04% 1.31% Nil

NAB per Investment (based on the Original $1.00 Invested)(1) N/A $0.93 $0.24 $0.18 -

NAB per Unit (based on the remaining units only)(2) N/A N/A $0.37 $0.28 -



(1)TheNABperInvestment(basedontheoriginal$1.00invested)istheNABthatwehavealwaysreportedtoinvestors.Itreflectsthecurrentvalueofyouroriginal$1.00investmentintotheSyndicate(comprisingof$0.35unsecurednotesand$0.65units).Forexample$10,000originalinvestmentcomprisedof3,500unsecurednotesand6,500units.10,000x$0.18=$1,800,thecurrentvalueofyourinvestment.

(2)AtthejointmeetingofnoteholdersandunitholdersinCentroMCS38heldon30October2009,noteholdersvotedinfavourofcancellingtheunsecurednotesfromtheSyndicateinvestmentstructurewitheffectfrom1July2009.TheNABperUnitreflectsthecurrentvalueoftheunits.Forexampleofthe$10,000originalinvestmentonlythe6,500Unitsremain.6,500unitsx$0.28=$1,800,thecurrentvalueofyourinvestment.

NAB Change

Jun ‘10 $0.18

Dec ‘09 $0.20

Jun ‘09 $0.24

•Distributions Suspended in FY11–DuetolowerincomefromthepropertyportfolioandacontinuinghighAustralianDollarwehavemadethedecisiontosuspenddistributionsinFY11.Distributableincome,whichisforecasttobelowerthanFY10,willbedivertedtorepaydebtandfundcapitalexpenditure.Whilstweunderstandthedifficultythisdecisionmaycause,webelievetherepaymentofdebtandfundingofcapitalexpenditurefromearningsisprudentgiventhehighSyndicategearinglevel.

•Lower Valuations Impact NAB–Overallvaluationsfell3.2%inFY10.Someindependentvaluationsformallassetsat30June2010actuallyincreased,whichhasbeenthefirstsignthatvaluationsoverallmayhavehittheirlowestpointintheUS.ThefallinvaluationshascontributedtoadropintheNABfrom$0.24atJune2009to$0.18atJune2010.

•Limited Exit Opportunity Available in FY11–TheLimitedExitOpportunitywillagainbeavailableforinvestorsinCentroMCS38.InvestorsshouldhavealreadyreceivedinformationregardingtheopportunitywhichwillcommencefromthepublishingofthefinalNAB(inmidSeptember).InvestorshaveuntilmidOctobertoapplyfortheredemption.

•Leasing and Market Conditions –AcrosstheCentroMCS38propertyportfoliowehavesuccessfullysecured75newandrenewalleasestotaling15,800squaremetresduringFY10.Occupancylevelsacrosstheportfoliohaveincreased,howeveradecreaseddemandforvacantspacehasreducedtheincomeonnewleaseswhichhasimpactednetpropertyincomeandthereforedistributableincome.LeasingvacantspaceinmallpropertiesisexpectedtocontinuetobetoughinFY11.


Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Enfield Square Connecticut 97.6% $45,182,399 10.00% -4.51% 6.49 years

Eagle Rock Plaza California 96.5% $42,770,197 10.25% 0.00% 3.47 years

Midway Mall Ohio 64.3% $44,069,075 8.50% 6.50% 3.53 years

Town Square New York 91.1% $37,110,800 8.50% -1.55% 4.18 years

Independence Mall North Carolina 84.9% $36,744,360 8.00% -1.68% 3.26 years

West Park Mall Missouri 75.1% $32,286,396 8.50% -10.77% 3.53 years

Lakewood Plaza New Jersey 91.7% $30,518,750 8.25% -7.82% 4.17 years


Total Annual Return


Nil


CM

CS 38



Gearing Ratio(1) 55.8% 87.5% 95.2%


(1)Forexternalfinancierdebtloancovenantpurposes,CentroPropertyTrustdebtisnotincluded.ThereisnoLVRorICRcovenantsforfacilitiesunderCentroMCS38.


Financier Loan Facility Amount(1) Undrawn Amount Loan Maturity(2)

External Financier US$340.90 million Nil 1 July 2016

External Financier US$38.40 million Nil 1 November 2016

External Financier US$18.50 million Nil 5 August 2011

External Financier US$10.40 million Nil 1 December 2027

External Financier US$9.80 million Nil 01 February 2012

Centro Property Trust US$3.90 million Nil Payable at reasonable notice


Centro Property Trust A$10.00 million Nil Payable at reasonable notice

A$ TOTAL A$10.00 million Nil 1 year

(1)TheUS$figuresreflect97.7%ownership.TheA$figuresreflect100%ownership.(2)CentroPropertyTrustloancalculatedat12monthsloanmaturity.


Rate (by area)30 June 2010

Valuation(1) 30 June 2010 Capitalisation

Rate

% Valuation Change (from 30 June 2009)

Weighted Average Lease

Expiry (by income)

Richland Mall Ohio 94.3% $26,568,094 8.50% -2.93% 3.74 years

Westland Town Center Colorado 95.5% $21,153,156 8.00% 6.65% 7.88 years

North Dover Delaware 100% $19,287,850 8.50% -1.73% 4.44 years

Parkway Plaza 1 New York 100% $16,602,200 8.75% 2.11% 7.14 years

Campus Plaza New York 97.2% $15,625,600 8.50% -3.00% 4.71 years

Century Plaza Florida 84.9% $13,184,100 9.50% -5.59% 2.53 years

Shoppes at Vestal New York 100% $12,695,800 8.75% 4.00% 1.98 years

Parkway Plaza Connecticut 87.9% $9,521,850 8.00% -9.72% 5.15 years

Village at Mableton Georgia 86.0% $6,958,275 10.50% -28.75% 3.59 years

Campus Village Maryland 91.4% $5,664,280 9.25% 3.57% 4.58 years

Plymouth Plaza Pennsylvania 100% $5,444,545 9.00% 7.21% 3.61 years

Pier One New York 100% $2,636,820 8.50% 12.50% 1.58 years

TOTAL 87.6% $424,024,547 8.84% -3.91% 4.34 years

FY09 TOTAL 84.1% $441,272,881 8.86% -35.14% 4.68 years

FY08 TOTAL 85.8% $680,327,881 7.11% -8.54% 4.98 years

FY07 TOTAL(2) 94.4% $743,881,110 6.77% 6.21% 5.33 years

(1)IndependentvaluationsexpressedinUS$(figuresreflect97.7%ownership)undertakenbyCushmanandWakefield(US).(2)HistoricalstatisticsexcludeMallatCrossCountywhichwassoldinDecember2007forUS$80million.


WOODLANDS

SYNDICATE UPDATE




Tax Advantaged Portion 38.37% 100% 100% 81.58% 23.00%


NAB $1.99 $2.15 $1.66 $1.69 -

Syndicate Commencement Date August 1995, rollover occurred August 2007

Syndicate Review Date August 2012 – August 2014


Growth Occupancy

Rate (by area)



Rate

% Valuation Change

(from 30 June 2009)

Weighted Average


Centro Woodlands QLD 6.0% 100% $17,000,000 8.00% 1.80% 4.22 years

FY09 TOTAL 9.7% 100% $16,700,000 8.00% -13.25% 4.85 years

FY08 TOTAL 18.4% 100% $19,250,000 7.00% 4.34% 5.71 years

FY07 TOTAL 14.0% 100% $18,450,000 6.75% 19.03% 6.16 years

(1)Independentvaluationundertakenbym3property.

NAB Change

Jun ‘10 $1.69

Dec ‘09 $1.66

Jun ‘09 $1.66

• Centro Woodlands Valuation Growth–TheCentroWoodlandsvaluationincreasedby1.8%to$17.0millionoverthe12monthstoJune2010,largelyduetopropertyincomegrowth.Thisvaluationincreasecombinedwiththereleaseofaprovisionforanticipatedlegalfeesrelatingtoanappealagainstaproposedcompetingdevelopment(seebelow),resultedinNABgrowthofthreecentsto$1.69.

•Appeal to Proposed Competing Development Settled–Werecentlysettledourappealagainstanapprovedsupermarketanddiscountdepartmentstoredevelopmentproposedforanadjoiningsite.ThesettlementpreventsanybuildingworksbeingcommencedpriortoJuly2011andnopartoftheproposeddevelopmentispermittedtobeopenforbusinessuntilatleastJuly2012.TheongoingprojectdelaywillgiveustheopportunitytosecuremorefavourableleasetermswithWoolworthsandkeyspecialtyretailersaheadoftheirFY11andFY12leaseexpiries.

•Syndicate Debt Refinancing Extension–CommercialtermshavebeenagreedtoextendtheSyndicate’sdebtfacilitywiththeexistingfinancierforafurthersixmonthsto31March2011.Wearecontinuingtopursueotherrefinanceopportunities,however,inthecurrentenvironmentthereisnoguaranteethatthedebtcanberefinancedorthatarefinanceproposalwillnecessarilybeininvestor’sbestinterests.IfthisoccursthenthepropertymayneedtobesoldandtheSyndicatewoundup.

• Performance Update and FY11 Distributions–AlthoughCentroWoodlandshasperformedwelloverthepast12monthswithannualsalesgrowthof6.0%andstrongpropertyincomegrowthof10.2%wearenowbudgetingforpropertyincometoreduceby3.2%overFY11,duetoincreasedcompetitionfromthenewWoolworthsanchoredStocklandsNorthShoredevelopment,expectedtoopenbyApril2011.Syndicatedebtservicingcostsarealsoanticipatedtoincreasebyaround$205,000perannumasaresultofhigherfloatinginterestrates,ahigherinterestratemarginandexpensesassociatedwiththeSeptember2010refinancing.Thesefactorshaveallcontributedtoaforecastdistributionreductionfrom11.0%inFY10to8.0%forFY11.


Total Annual Return

since Inception: N/A


WO

OD

LA

ND

S



Gearing Ratio 44.8% 55.3% 53.8%




External Financier $9.75 million Nil 30 September 2010

TOP RETAILERS


Woodlands Plus Petrol5.1%

Calanna Pharmacy5.4%

Woodlands Surgery5.1%

Woolworths46.4%

Woodlands Newsagency6.6%

Other31.4%


ABN–AustralianBusinessNumber.

A$–AustralianDollars.

Anchor Tenant–Typicallyaretailer(oftenasupermarket,departmentstoreordiscountdepartmentstore)withalettableareagreaterthan1,000m2.

ASIC–AustralianSecurities&InvestmentsCommission–ASICenforcesandregulatescompanyandfinancialserviceslawstoprotectconsumers,investorsandcreditors.

Assets–Theresourcesownedbyacompany,fundorperson.Assetscanbetangible,e.g.cash,investments,propertyandequipment,orintangible,forexamplegoodwill,patents.

Capitalisation Rate–Thecapitalisationrateisthepercentagenumberusedtodeterminethecurrentvalueofapropertybasedonassessedmarketnetoperatingincome.Thisisthereforetheinvestor’syieldontheirinvestment.

Centro (CNP)–CentroPropertiesGroupbeingCentroPropertiesLimited(ABN45078590682)andCentroPropertyTrust(ARSN091043793)andallotherentitiescontrolledbyeachofthem.

Centro MCS–ThedirectpropertydivisionofCentro,consistingofCentroMCSManagerLimited(ABN69051908984)andCPTManagerLimited(ABN37054494307).

CMBS–CommercialMortgageBackedSecurities.

Community Centre–AcommunitycentreprovidesawiderrangeofgoodsandservicesthanaNeighbourhoodCentre.Communitycentrestypicallyincludeasupermarket,juniordepartmentstore,varietystore,superpharmacyordiscountdepartmentstoresasanchortenants.

CSIF–CentroSyndicateInvestmentFund.

Distributions–IncomepaymentsmadebyCentro’smanagedfundstoinvestors.

Foreign Exchange (FX)–Systemoftradinginandconvertingthecurrencyofonecountryintothatofanother.

Gearing Ratio–Thegearingratioisgenerallyexpressedasapercentageandiscalculatedastheproportionoftotalfunddebttofundassets.

Hedge–Astrategyusedtooffsetfinancialriskssuchasmovementsininterestratesorforeigncurrencyexchange(FX)rates.CommonhedgingstrategiesadoptedbyCentroMCSincludetheuseofinterestrateswaps,FXrateforwardsandcrosscurrencyswaps,whichareeffectivelyusedtofixinterestratesorforeigncurrencyexchangeratesforthelifeoftheswap.Theseswapsaregenerallyindependentofthedebtfacilities,soaswapmaturitydatemaybedifferenttothetermofthedebtfacility.

ICR–InterestCoverageRatio–Aratiousedtodeterminehoweasilyanentitycanpayinterestonoutstandingdebt.

Theinterestcoverageratioiscalculatedbydividingtheentity’searningsbeforeinterestandtaxes(EBIT)ofoneperiodbytheentity’sinterestexpenseofthesameperiod.

Initial Syndicate Term–Thefirsttermofthesyndicate,usuallybeinganywherebetweensevenandtenyears.

LVR–LoantoValueRatio.

Major (tenant or retailer)–Generallyasupermarket,departmentstoreoradiscountdepartmentstoretenantwithalettableareagreaterthan1,000m2.

Mini Major –AretailerwithalargenationalchainthatoccupiesasmallerNetLettableAreathanthemajorstores.

NAB –TheNAB(orNetAssetBacking)isthemeasureusedtoreflectthefairvalueofasyndicateorfundinvestment.TheuseofaNABmethodologydifferssomewhatfromtheaccountingnormofaNetTangibleAssets(NTA)figure(NTAbeingsimplythetotaltangibleassetsofacompanyortrustonaperunitbasis).ThoughNABisquitecloselyalignedwithNTA,itisadjustedforseveralfactorssuchasactualorlikelypropertyacquisitioncosts,structuringandestablishmentcosts,exitandsuccessfeesandsellingcosts.AlloftheseadjustmentsensurethattheNABmeasureisbestabletoreflecttheilliquidfixedtermnatureofsyndicates.

Neighbourhood Centre–Aneighbourhoodcentrefeaturesasupermarketastheanchortenantinadditiontospecialtyretailersthatfocusontheday-to-dayneedsoftheimmediateneighbourhood.Thetypicalsizeofaneighbourhoodcentreis5,000-6,000m2.

NOI –NetOperatingIncome–Propertyrevenueslesspropertyexpenses,excludingdebtservice,depreciationandcapitalexpenditure.

Specialty Retailer–Typicallyaretailerwithalettableareaoflessthan1,000m2.

Subordinated Debt–Debtthatiseitherunsecuredorhasalowerprioritythanthatofanotherdebtclaimonthesameassetorproperty.

Syndicate–Adirectpropertyinvestmentvehiclewherebyinvestors’fundsarepooledoverasetgroupofpropertiesforafixedterm.Thisisnormallyadministeredbyaresponsibleentitywithownershipvestedwithacustodianonbehalfofinvestors.

Tax advantaged–Thenon-assessabledistributioncomponentreceivedbyinvestors.Thisamountgenerallydoesnotformpartofaninvestor’staxableincomeintheyearofreceipt.Itnormallycomprisesoftaxdeferredincomeattributabletodepreciationandcapitalallowancesthatwillreducetheinvestor’sCGTcostbaseintheunitsandtaxfreeamountsrelatingtothecapitalgainsdiscountthatwillnotaffecttheCGTcostbase.

US$–USDollars.

GLOSSARY

CONTENTS

Syndicate Directory and Portfolio Summary 1

Property Portfolio Maps 2

Funds Management Report 4

Funds Management Team 11

Corporate Governance 12

Notes on the Individual Syndicate Reports 16

Individual Syndicate Reports 18

Glossary 80

Directory Inside Back Cover

DIRECTORY

Responsible EntityCPT Manager LimitedABN 37 054 494 307

Board of DirectorsPaul Cooper (Chairman)Robert Tsenin (Group Chief Executive Officer & Managing Director)Anna BudulsSusan OliverJim HallRob Wylie

Centro MCS 21Centro MCS 22Centro MCS 23Centro MCS 24Centro MCS 25Centro MCS 26Centro MCS 27Centro MCS 28Centro MCS 32Centro MCS 33

Centro MCS 4Centro MCS 5Centro MCS 6Centro MCS 8Centro MCS 9Centro MCS 10Centro MCS 11Centro MCS 12Centro MCS 14Centro MCS 15Centro MCS 16

Centro MCS 17Centro MCS 18Centro MCS 19 UTCentro MCS 19 NZ/ICentro MCS 20Centro MCS 34Centro MCS 35Centro MCS 36Centro MCS 37Centro MCS 38Woodlands

Responsible EntityCentro MCS Manager LimitedABN 69 051 908 984

Board of DirectorsW Peter Day (Chairman)Paul Cooper Jim HallMichael HumphrisFraser MacKenzieBill Bowness

Company SecretaryElizabeth HouriganDimitri Kiriacoulacos

Registered OfficeCorporate Offices, 3rd Floor Centro The Glen 235 Springvale Road Glen Waverley Victoria 3150 Telephone +61 3 8847 0000Facsimile +61 3 9886 1234Toll Free (AUS) 1800 802 400Toll Free (NZ) 0800 449 605Email [email protected] centromcs.com.au

AuditorsMoore StephensLevel 10, 530 Collins StreetMelbourne Victoria 3000

Ernst & YoungErnst & Young Building8 Exhibition StreetMelbourne Victoria 3000

This information has been produced without taking into account any person’s objectives, financial situation or needs and because of that, you should, before acting on this information consider the appropriateness of the information having regard to your own objectives, financial situation and needs.

Past performance is not a reliable indicator of future performance.

CENTRO

MCSDIRECTPROPERTYANNUAL REVIEW 2010

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MCS 2010 4pp Cover ART.indd 1 28/09/10 1:50 PM

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DIRECT PROPERTY€¦ · centromcs direct property annual review 2010 centro mcs