centro mcs 34 - retail direct property · centro mcs 34 trust arsn 111 915 747 centro mcs 34 (new...

Responsible Entity: CPT Manager Limited

ABN 37 054 494 307 AFSL 238 454

December 2004

Centro MCS 34 Product Disclosure Statement & Prospectus

Centro MCS 34 Trust ARSN 111 915 747 Centro MCS 34 (New Zealand) Trust ARSN 109 043 674

Lismore CentralNew South Wales

Pirie PlazaSouth Australia

Coles MorwellVictoria

Pinelands PlazaQueensland

Woodcroft PlazaNew South Wales

Emerald VillageQueensland

Emerald Market Plaza Queensland

Centro MCS Manager Limited ABN 69 051 908 984

CPT Manager Limited Responsible Entity

ABN 37 054 494 307

Centro M

CS 34

Brian Healey (Non-executive Chairman)

A Director of Centro since 1993. Mr Healey was formerly Senior Vice President of Nabisco Inc., Senior Vice President of Sara Lee Corporation and Managing Director of Nicholas Kiwi Ltd. Mr Healey is currently a Director of Fosters Group Limited and Incitec Pivot Limited.

Andrew Scott (Chief Executive Officer)

A Director of Centro since 1997. Mr Scott joined the Group in March 1997 after 15 years with Coles Myer Limited in various senior property, finance and strategy positions. Prior to joining Centro Mr Scott was Director of Property for Coles Myer Ltd.

Graham Goldie (Non-executive Director)

A Director of Centro since 1994. Mr Goldie has a background in retail store management with over 15 years experience at a senior executive level for Target and Myer stores. Since 1991, Mr Goldie has operated his own consultancy service, consulting to a wide range of diverse interests. Mr Goldie is Chairman of the Advisory Board at the Australian Centre for Retail Studies (ACRS), a specialist centre within the Department of Marketing at Monash University.

David Graham (Non-executive Director)

A Director of Centro since 1985. Mr Graham is the principal of DDH Graham Limited, a corporate advisory and funds management firm based in Brisbane. He has a background in merchant banking and the securities industry. Mr Graham is also a Director of Stradbroke Ferries Limited.

Laurie Wilson(Non-executive Director)

A Director of Centro since 1993. Mr Wilson was formerly the Managing Director of Bowater Scott Australia (Group) Limited for 15 years and is a Director and Chairman of Forestry Tasmania.

Sam Kavourakis (Non-executive Director)

A Director of Centro since 2003. Mr Kavourakis was the Managing Director of National Mutual Funds Management and was responsible for all asset management functions within the National Mutual Group, both in Australia and offshore. Mr Kavourakis is currently a Director of a number of companies and associations including Ticor Limited, Rio Tinto Staff Superannuation Fund, Australand Wholesale Investments Limited, Collins House Financial Services and Traffic Technologies Limited.

Peter Wilkinson (Non-executive Director)

A Director of Centro since March 2004. Mr Wilkinson was Chief Executive and Managing Director of David Jones Limited. He had previously spent 18 years with Coles Myer Ltd, including positions as Managing Director of Target, Managing Director of Myer Grace Bros and Chief Operating Officer of the Coles Myer Group. Mr Wilkinson has also held numerous positions within the retail sector, including President of the Australian Retailers Association and is currently Managing Director of Australian Wool Services Limited (owners of the Woolmark company).

Directors of the Responsible Entity and Centro Properties Group

Centro MCS Manager Ltd and CPT Manager Limited (‘Centro MCS’), wholly owned subsidiaries of the Centro Properties Group (‘Centro’), are the Responsible Entities for syndicates. Centro MCS is managed by a Board of Directors who are accountable to syndicate investors. As the Responsible Entity, Centro MCS provides a comprehensive range of services including management and development of the underlying properties in Centro MCS direct property syndicates, accounting, interest rate and debt management, leasing, marketing, custodial services and registry management.

CENTRO MCS SYNDICATES CENTRO MCS DIRECTORYResponsible EntityCPT Manager LimitedABN 37 054 494 307Centro MCS Manager LimitedABN 69 051 908 984

Board of DirectorsBrian Healey (Chairman)Andrew Scott (Chief Executive Officer)Graham GoldieDavid GrahamLaurie WilsonSam KavourakisPeter Wilkinson

Company SecretaryDanielle Rowe

Registered OfficeCorporate Offices, 3rd FloorCentro The Glen235 Springvale RoadGlen Waverley Victoria 3150Telephone +61 3 8847 0000Facsimile +61 3 9886 1234

For more information on this offer please contact:Investor ServicesGeneral Enquiries Telephone 1800 802 400Telephone +61 3 8847 0000 (International)Facsimile +61 3 9886 1234Email [email protected]

Registry & Holdings Enquiries for Centro MCS 34Computershare Investor Services Pty LtdGPO Box 2975EEMelbourne Victoria 3001Telephone 1300 555 079 (Australia)

0800 540 172 (New Zealand)+61 3 9415 4000 (International)

Facsimile +61 3 9473 2500www.computershare.com.au

Directory

Syndicate Prefix Syndicate Also Known As

Centro MCS 2 MCS2 John Martin’s Car Park & Retail Plaza JA

Centro MCS 3 MCS3 Nepean Square Shopping Centre JA

Centro MCS 4 MCS4 The Hills Shopping Centre JA

Centro MCS 5 MCS5 Coles & Kmart Centres JA

Centro MCS 6 MCS6 Melbourne-Brisbane Retail & Bulky Goods JA

Centro MCS 8 MCS8 1998 Retail Portfolio JA

Centro MCS 9 MCS9 1998 National Retail Portfolio DPI & UT

Centro MCS 10 MCS10 1999 Retail No.1 Portfolio DPI & UT

Centro MCS 11 MCS11 Paradise Centre DPI & UT


Centro MCS 14 MCS14 DPI & UT


Centro MCS 16 MCS16 (Institutional/NZ) DPI & UT



Centro MCS 19 UT MCS19 Trust

Centro MCS 19 NZ/I MCS19 (NZ/Institutional) DPI

Centro MCS 20 MCS20 (International No.1) Trust

Centro MCS 21 Centro Property Syndicate No.1 (Roselands Syndicate)

Centro MCS 22 Centro Property Syndicate No.2 (Kidman Park Syndicate)

Centro MCS 23 Centro Property Syndicate No.3 (Prime Syndicate No.3)

Centro MCS 24 Centro Property Syndicate No.4 (Lake Macquarie Syndicate)

Centro MCS 25 Centro Property Syndicate No.5


Centro MCS 27 Centro Property Syndicate No.7 (Sunshine MarketPlace Syndicate)


Centro MCS 32 Centro MCS 32 – International No.2

Centro MCS 33 Centro MCS 33

Contents

Important Information 2

Chairman’s Letter 3

Investment at a Glance 4

Section 1 Key Benefits, Features and Risks 6

Section 2 Structure of this Investment 12

Section 3 Why Invest in Direct Property? 16

Section 4 The Properties 20

Section 5 Management 38

Section 6 Financial Information 42

Section 7 New Zealand Investors 52

Section 8 Keeping You Informed 60

Section 9 Additional Information and Fees Disclosure 62

Section 10 Glossary 74

Section 11 How to Invest 78

Application Forms 81

Directory Inside Back Cover

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Important Information

This PDS was lodged with ASIC on 23 December 2004. ASIC takes no responsibility for the contents of this PDS or the merits of the investment to which this PDS relates.

This PDS is issued in accordance with the provisions of the Corporations Act 2001 by CPT Manager Limited a wholly owned subsidiary of Centro as Responsible Entity of the Syndicate and the NZ Trust. In relation to the Exit Mechanism this PDS is also issued by Centro.

Neither the Manager, Centro or their associates or Directors guarantees the success of the Syndicate or the NZ Trust, the repayment of capital or any particular rate of capital or income return. An investment in the Syndicate or the NZ Trust is subject to investment and other risks.

This PDS contains important information and Investors should read it carefully. In preparing this document, the Manager did not take into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, Investors should consider whether the investment is appropriate to their needs, objectives and circumstances. Investors are encouraged to obtain independent financial advice before making an investment decision.

Applications for Units or Stapled Securities can only be submitted on the relevant original Application Form attached to and forming part of, or accompanying, this PDS or accompanied by an electronic version of this PDS. The Corporations Act 2001 prohibits any person from passing on to another person the Application Form unless it is accompanied by or attached to a paper copy of this PDS or the complete and unadulterated electronic version of this PDS.

Applications under this PDS will not be processed by the Manager until after the expiry of the exposure period. The exposure period is seven days from the date of lodgement of the PDS with ASIC which may be extended by ASIC to a period of 14 days. No preference will be conferred on persons who lodge applications before expiry of the exposure period.

The Manager authorises this PDS for use by persons investing through an ‘Administration Service’ and professional and institutional investors. When investing through an Administration Service, this PDS should be read in conjunction with the current disclosure statement for the relevant Administration Service and applications must be made on the application form supplied by the Administration Service operator. The current disclosure document for the relevant Administration Service may be obtained from the relevant Administration Service operator.

The offer to which the electronic version of this PDS relates is only available to Australian and New Zealand residents receiving the electronic version of this PDS in Australia and New Zealand. The electronic copy of this PDS is available online at www.centro.com.au/centromcs. Paper copies of this PDS, including the accompanying Application Forms, are available free of charge by telephoning 1800 802 400 (Australia), +61 3 8847 0000 (International), or emailing [email protected]

This PDS does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. No action has been taken to register or qualify the Units, the Stapled Securities or the Offer, or to otherwise permit a public offering of Units or Stapled Securities, in any jurisdiction outside Australia and New Zealand. The distribution of this PDS outside Australia and New Zealand may be restricted by law and persons who come into possession of this PDS outside Australia and New Zealand should seek advice on and observe such restrictions. Any failure to comply with these restrictions may constitute a violation of applicable securities laws.

You should read the whole of this PDS, and obtain your own professional advice.

CPT Manager Limited ABN 37 054 494 307 (‘the Manager’) brings you the opportunity to invest in the Centro MCS 34 Syndicate (‘the Syndicate’) or for New Zealand residents, Centro MCS 34 (New Zealand) (‘NZ Trust’) on the terms of this Product Disclosure Statement and Prospectus (‘PDS’).

At commencement of this Syndicate the role of Manager will be held by CPT Manager Limited, a wholly owned subsidiary of Centro, whose AFSL permits it to be the Responsible Entity of investments such as this. Centro MCS Manager Limited ABN 69 051 908 984, also a wholly owned subsidiary of Centro, has made an application to the Australian Securities and Investment Commission (‘ASIC’) for variation of its Australian Financial Services Licence (‘AFSL’) and when that variation has been granted, CPT Manager Limited will retire and Centro MCS Manager Limited will become Responsible Entity. From that time, this PDS will be deemed to have been issued by Centro MCS Manager Limited. The change of Manager will have no impact on Investors.

This PDS is dated 23 December 2004. The Offer under this PDS is available to Australian and New Zealand residents receiving the PDS within Australia and New Zealand and nothing in this PDS should be taken to indicate that the Offer is available to persons in any jurisdiction outside Australia and New Zealand. No application for Stapled Securities in the NZ Trust pursuant to this PDS will be accepted more than 13 months after the date of issue of this PDS.

If you wish to invest in the Syndicate or the NZ Trust, you must complete the relevant Application Form which accompanies this PDS.

Centro MCS 34Centro MCS 34 Trust ARSN 111 915 747

Centro MCS 34 (New Zealand) Trust ARSN 109 043 674

Emerald Market Plaza, Emerald, Queensland

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CPT Manager LimitedResponsible Entity

ABN 37 054 494 307


Corporate Offices 3rd FloorCentro The Glen235 Springvale RoadGlen Waverley Victoria 3150

Telephone (03) 8847 0000Facsimile (03) 9886 1234Email [email protected] www.centro.com.au

Chairman’s Letter

22 December 2004

Dear Investor

Centro MCS are pleased to offer you an exciting opportunity to become an Investor in Centro MCS 34, an unlisted property syndicate. This investment opportunity offers Investors significant diversification benefits with exposure to seven neighbourhood shopping centres located in four states and over 170 tenants, including national anchor tenants such as Coles, Woolworths and Kmart.

Investors should also benefit from exposure to retail property which has outperformed other sectors of the property market as well as all other major asset classes over a 19 year period, delivering an average total return of 13.3% per annum, with the lowest risk rating of any comparable asset class (see page 18).

Centro MCS has a proud history of delivering value growth to investors and believes that capital growth opportunities may be realised through value adding strategies identified across the Syndicate property portfolio.

The Syndicate will have an initial maximum term of seven years after which time Investors will have the opportunity, guaranteed by Centro, to exit their investment at the Current Unit Value at that time. The average distribution yield for the first three and a half years is forecast at 7.90% per annum with significant tax advantages. Further distribution growth is then expected as trust income continues to grow.

Centro MCS is Australia’s largest direct property syndicate manager and currently manages 30 unlisted retail property syndicates valued at over $2.8 billion, with interests in 91 shopping centres across Australia, New Zealand and California (USA).

Centro MCS direct property syndicates have an impressive performance record. An equal investment in every Centro MCS direct property syndicate (managed for more than one year) would have earned a total return of 17.0% for the year ended 30 June 2004. Over the long term, an equal investment in every Centro MCS direct property syndicate since 1993 (being the date of inception of Centro MCS) to 30 June 2004 would have earned 18.3% per annum.* Of this return 11.2% per annum was attributable to income distributions and 7.1% per annum to capital growth.

Centro, or entities it manages or controls, intends to maintain an investment of 25% to 50% in the Syndicate. The Manager believes that Centro’s significant co-investment in the Syndicate benefits Investors by aligning Centro’s interests with the interests of Investors.

We strongly recommend that you read this document carefully. If you have any questions, please contact your financial adviser or Centro MCS Investor Services on 1800 802 400 (Australia) or +61 3 8847 0000 (International). We encourage you to participate in this opportunity and lodge your Application Form early.

Yours sincerely

Brian HealeyChairman

*Investors should note that past performance is not an indication of future performance.

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Investment at a Glance

OVERVIEW

The Offer 37,884,293 ordinary Units at an issue price of $1.00 per Unit and 5,000,000 Equity Notes at an issue price of $1.00 per Equity Note.

Prized Retail Sector Retail property has outperformed all other asset classes including other sectors of the property market, with the lowest risk rating of any comparable asset class. Refer to Section 3 for further details.

Diversification Benefits An investment providing diversification benefits of seven properties and over 170 tenants spread across four states. Refer to Section 4 for further details.

Investment Objective To provide Investors with direct property exposure with strong and secure tax-advantaged returns, through an investment in seven quality retail properties.

Capital Growth Potential Centro MCS has a proven value adding track record and believes that capital growth opportunities should be available. Refer to Section 1.2 for further details.

Proven Manager Centro MCS currently manages 30 property syndicates and is Australia’s largest property syndicator with a proven track record of managing shopping centres and delivering strong total returns to Investors. Refer to Section 5 for further details.

Structure of Investment This Syndicate is a unit trust. Complying and self-managed superannuation funds may invest in the Syndicate. Refer to Section 2 for further details. NZ Investors refer to Section 7.

Minimum Investment AUD$10,000 with increments of AUD$1,000. Refer to Section 2 for further details. NZ Investors refer to Section 7.

Interest Hedging The interest rates on the Syndicate loan have been fully hedged for the seven year Syndicate term. Refer to Section 6.9 for further details.

Term of Investment The initial investment term is for a maximum period of seven years to 31 December 2011. Refer to Section 1 for further details.

Quarterly Distributions The first distribution payment will be for the period to 31 March 2005. Thereafter distributions will be paid quarterly. Refer to Section 2.4 for further details.

Centro Co-Investment Centro (or entities it manages or controls) intends to maintain an investment of 25% to 50% of the equity in the Syndicate of which approximately $5 million will be invested in the form of Equity Notes. Refer to Section 2.9 for further details.

Exit Mechanism Centro has agreed to provide an Exit Mechanism at the end of the Syndicate term. Refer to Section 2.6 for further details.

How to Invest Complete the relevant Application Form at the back of this PDS. Refer to Section 11 for further details.

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ESTIMATED RETURNS TO INVESTORS

Period Ending 30 June 2005(1) 2006 2007 2008

SYNDICATE RETURNS

Forecast Annual Cash Distribution 7.70% 7.80% 7.95% 8.05%

Forecast Tax-Advantaged 100.00% 100.00% 88.00% 74.00%

Forecast Equivalent Pre-Tax Yield (based on a 48.5% tax payer)(2)

14.95% 15.15% 14.54% 13.64%

(1) Part year from 1 January 2005 to 30 June 2005.

(2) This calculation does not take into account potential capital gains or losses on the investment or tax resulting from reductions in the capital gains tax cost base.

Full details of Syndicate returns and tax-advantaged calculations are set out in Section 6. For risk factors and key assumptions please refer to Section 1.4 and Section 6.4 respectively. Investors in the NZ Trust, please refer to Section 7 for estimated returns.

THE PROPERTIES AT A GLANCEAn investment in seven convenience based neighbourhood shopping centres.

Centre State Type Value ($m)(1)

Ownership Proportion

% of Portfolio Majors

Pinelands Plaza QLD Neighbourhood $25.6 100% 25.1% Coles

Woodcroft Plaza NSW Neighbourhood $18.5 100% 18.1% Coles

Lismore Central NSW Neighbourhood $17.5 100% 17.2% Woolworths

Pirie Plaza SA Neighbourhood $13.0 100% 12.7% Coles, Kmart

Coles Morwell VIC Neighbourhood $11.1 100% 10.9% Coles

Emerald Village QLD Neighbourhood $9.9 50% 9.6% Woolworths

Emerald Market Plaza QLD Neighbourhood $6.5 50% 6.4% Coles

TOTAL $102.1 100%

(1) These values are based on the independent valuations excluding normal acquisition costs as summarised in Section 4.3.

LOCATION OF PROPERTIES

Investment at a Glance

Perth

WesternAustralia

NorthernTerritory

SouthAustralia

Queensland

New South Wales

AustralianCapital

Territory

Victoria

Tasmania

Adelaide

Melbourne

Hobart

CanberraSydney

Brisbane

Darwin

PIRIE

EMERALD MARKET

MORWELL

LISMORE

WOODCROFT

PINELANDS

EMERALD VILLAGE

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Section 1 Key Benefits, Features and RisksColes Morwell, Morwell, Victoria

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Section 1 Key Benefits, Features and Risks

1.1 INVESTMENT OBJECTIVEThe objective of this investment is to provide Investors with strong and secure tax-advantaged returns for the term of the Syndicate by investing in a diverse portfolio of Australian shopping centres.

Unless otherwise stated this PDS analyses the investment from the point of view of an Investor in the Syndicate. Those Investors who wish to invest via the NZ Trust should also read Section 7 as applicable, for details of the differences that will apply to them.

1.2 KEY BENEFITSThe key benefits of this investment are:

Secure and Diversified Income

Nearly 45% of the property income in the first year is secured from Australia’s largest retailers – Coles Myer (26%) and Woolworths (17%). The portfolio of seven shopping centres, with a total value of over $100 million, spread across four states in Australia also provides significant geographic and economic diversification (see Section 4 for further details).

Strong Tax-Advantaged Returns

Syndicate forecast distributions average 7.90% per annum for the first three and a half years to 30 June 2008.

The returns from direct property are further improved significantly if Investors take into account the tax effectiveness of this investment. For example the Manager expects that 100% of the income for the year ending 30 June 2006 will not be taxable in Investors’ hands in that year. This means a taxpayer on the top marginal rate of 48.5% would need to earn 15.15% per annum from a fully taxable investment to receive the same net annual distribution as the Syndicate.

Diversification Through Direct Property

The Manager believes that direct property is an essential part of any balanced investment portfolio. It is the only major asset class that has historically tended to move in different cycles to the other main asset classes of shares and bonds. This means that by including direct property in an investment portfolio, Investors benefit from the reduced risk that comes with diversification (see Section 3.1 for further details).

Centro Ownership Knowledge

All of the Syndicate properties were previously owned and managed by Centro. The depth of internal knowledge and consistency of ongoing management will

ensure a smooth property transfer into the Syndicate (see Section 5 for further details including the rationale of why Centro is selling the properties to the Syndicate).

Established Performing Properties

Each shopping centre is well located in an established trade area and is anchored by soundly performing national tenants. All centres are anchored by either a Coles or Woolworths supermarket with Pirie Plaza also anchored by a Kmart discount department store (see Section 4 for further details).

Capital Growth Potential

Centro MCS has a proud history of delivering value growth to investors and believes that capital growth opportunities may be realised through value adding strategies identified across the property portfolio. These strategies include:

• Renegotiation of new leases for majors at Pinelands Plaza, Lismore Central and Pirie Plaza over the next two years. Due to Centro MCS’s strong relationship with both Coles and Woolworths, Centro MCS will seek to enter into new long term leases at competitive rentals. Once leases are finalised, the improved lease expiry profile should assist in strengthening the property valuations;

• Potential expansion at Emerald Village to introduce a mini discount department store. Centro MCS is currently holding preliminary discussions with national operators;

• Acquisition of an adjoining tenanted property to Lismore Central. This excellent opportunity is underpinned by a strong long term lease and provides long term expansion potential;

• Leasing existing vacancies across the portfolio and tenancy remixing to improve the centre incomes. The Centro MCS leasing team has established strong relationships with national retailers and experienced leasing executives are located at all Centro state offices;

• Ongoing refurbishment opportunities to continually improve the presentation and customer facilities at the centres. Appropriate capital allowances have been made within the financial forecasts for this purpose.

Notwithstanding the above, the nature of retail property leases generally provide for annual rental increases. In addition some tenant rentals are tied to sales and as sales rise due to inflation or improved store performance rentals correspondingly increase. Frequently as rents increase the value of the property also goes up.

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Lower Transactional Costs

The structure of this sale and purchase transaction has enabled the Syndicate to save significant up front costs. Naturally a lower level of up front costs also enhances the potential for capital gains on the investment.

Non-Recourse Fully Hedged Finance

Borrowings for the Syndicate and the NZ Trust will be non-recourse to Investors. That means Investors are not at risk for any more than the equity subscribed by them on application plus any undistributed income. To reduce the interest rate exposure and further minimise risk, the Syndicate debt has fully hedged the Syndicate debt, fixing the rate for the total Syndicate term of seven years (see Section 6.9 for further details).

Prized Retail Sector

Retail property has outperformed all other asset classes including other sectors of the property market, as well as Listed Property Trusts (‘LPTs’). It has delivered an average total return of 13.3% per annum over the last 19 years, and importantly, has delivered this performance with the lowest risk rating of any comparable asset class (see Section 3.2 for further details).

Proven Manager with a Successful Track Record

Centro MCS is a proven and skilled manager of shopping centres with an impressive track record. Centro MCS is Australia’s largest direct property syndicate manager and currently has more than $2.8 billion of assets under management (see Section 5 for further details).

1.3 KEY FEATURES The key features of this investment are:

The Responsible Entity

The Responsible Entity of the Syndicate and the NZ Trust and the Issuer of this PDS is CPT Manager Limited (‘the Manager’), a wholly owned subsidiary of Centro (see Section 5). However, Centro MCS Manager Ltd has made an application to ASIC for variation of its AFSL to permit it to be the Responsible Entity of investments such as this, and when that variation has been granted, CPT Manager Limited will retire and Centro MCS Manager Ltd will become the Responsible Entity for both the Syndicate and the NZ Trust. CPT Manager Limited has obtained relief from ASIC to enable this to occur (see Section 5.6 for further details).

The Offer

The Syndicate will issue Australian Investors with units at an issue price of AUD$1.00 per Unit (‘Unit’).

The NZ Trust will participate in the Syndicate Offer by acquiring ordinary units and issue to NZ Investors Stapled Securities, comprising three ordinary units in the NZ Trust and two fully subordinated convertible unsecured notes (‘Unsecured Notes’) issued by the NZ Trust, permanently stapled together (‘Stapled Securities’) at an issue price of AUD$5.00 per Stapled Security (NZ Investors should see Section 7 for further details) .

How to Invest

Investors are requested to complete the relevant Application Form at the back of this PDS (see Section 11 for further details).

Minimum Investment

AUD$10,000 with increments of AUD$1,000. Refer to Section 2 for further details. NZ Investors should see Section 7.

Term of Investment

The initial term of this investment is expected to be for a maximum of seven years and a minimum of five years.

Exit Mechanism

Centro has provided an exit mechanism at the end of the Syndicate term (i.e. 31 December 2011) ensuring liquidity and enabling Investors to exit their investment at the Current Unit Value at that time (see Section 2.6 for further details).

Structure of Investment

The Syndicate is a unit trust. Complying and self-managed superannuation funds may participate in the Syndicate Offer (see Section 2 for Syndicate Investors and Section 7 for New Zealand Investors).

Fees

The fees payable in relation to this investment are set out and explained to Investors in Section 9.5. NZ Investors should also see Section 7.6.

Allotment

Units will be issued progressively (usually within five business days of acceptance of applications) and will participate in distributions on a daily pro-rata basis from the date of issue for the respective quarter.

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Distributions

The first distribution to be paid will be for the period to 31 March 2005. Thereafter distributions will be paid quarterly. Investors who apply prior to 1 January 2005 will receive a fixed, pro-rata distribution at the rate as forecast for the period to 30 June 2005 from the date of allotment of the application (usually within five business days of receipt of the application. See Section 2.4 for further details).

Flexible Trust Structure

The Syndicate structure has been created to allow flexibility in its ongoing management and to enable the Syndicate to take advantage of strategic opportunities that arise. The Manager has the power under its constitution to acquire adjacent or related properties for the Syndicate if they become available, which will protect Syndicate properties from development threats. It will also allow those properties to be expanded if this is considered desirable for the Syndicate.

For the same reasons the Manager may sell Syndicate properties if it considers this to be in the best interests of Investors. Proceeds from such a sale will be used to retire debt or returned to Investors or a combination of both. The Syndicate structure also provides for a merger in the future with other Centro MCS Syndicates, provided that an independent expert’s report concludes that this will be in the best interests of Investors.

Centro Co-Investment

Centro (or entities it manages or controls) intends to maintain an investment of 25% to 50% of the equity in the Syndicate of which approximately $5 million will be invested in the form of Equity Notes which share certain characteristics with ordinary equity held by Investors (see Section 2.9 for further details). The Manager believes that Centro’s significant co-investment in the Syndicate benefits Investors by aligning Centro’s interests with the interests of Investors.

1.4 RISK FACTORSAs with most investments, the future performance of the Syndicate can be influenced by a number of factors which are outside the control of the Manager. The level of future distributions, the value of the Syndicate properties and the value of Investors’ interests may be influenced by any of these risk factors, which include, without limitation, the following:

Property Associated CostsPurchasing property generally carries with it significant acquisition costs. These include stamp duties, legal fees on acquisition and due diligence costs (to ensure that the property is sound and the income stream upon which a purchase has been made is soundly based). Fees on sale typically include agency fees, advertising and legal expenses and in the case of New South Wales properties a potential vendor tax liability.

This means that to preserve the capital invested in a property, the property must generally be sold at a price which is considerably more than the price at which it was purchased. This risk can be managed or offset by:

• Taking into consideration the cyclical nature of the property market when concluding the investment;

• Allowing a longer time frame for the investment. This spreads the acquisition costs over a longer period of time and reduces the amount of capital growth that needs to be achieved each year; and

• By adding value to the investment through skilled management.

The structure of the Syndicate purchase transaction has saved significant up-front property associated costs, therefore reducing the quantum of this risk factor.

Property MarketAn investment in the Syndicate should be viewed as a medium to long term investment. Property values can fall as well as rise, leading to capital losses or capital gains. There is no certainty as to the state of the Australian property market throughout the term of the Syndicate. This, of course, is a consideration when investing in any asset class.

General Risks of Retail PropertyThere are a number of risks associated with an investment in retail property. These include, without limitation:

• The level of tenancy vacancies may fluctuate with market forces;

• A downturn in the economy;

• A downturn in the value of property, or in the property market in general;

• Interest rate fluctuations outside the fixed interest rates assumed in the Syndicate’s forecast;

• Adverse consequences of amendments to statutes and regulations affecting the Syndicate including changes in the tax regime;

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• Pricing or competition policies of any competing properties or tenants;

• Increased competition from new or existing competing property;

• Changes in retail turnover and the consequential effect upon rental levels; and

• Longer term changes in consumer shopping habits.

Specific Tenancy Risks Property income depends upon tenants continuing to operate profitably and abiding by the terms and conditions of their tenancy arrangements. The ability to lease or re-lease to tenants upon expiry of their current leases, and the rent achieved, will depend upon prevailing market conditions at the relevant time, and these may be affected by economic conditions, competitive forces or other factors.

The most significant rental risk to the Syndicate is the risk of an anchor tenant defaulting on its rental obligations or vacating the centre at the expiration of the lease term. A lease expiry also provides an opportunity to renegotiate the lease on more favourable commercial terms.

Coles Myer and Woolworths represent the anchor tenants and are well established Australian retailers listed on the ASX. Both retailers are currently pursuing business growth opportunities resulting in the nationwide establishment of a number of new supermarkets and discount department stores in recent years.

Within the Syndicate, leases to Coles and Woolworths are due to expire within the next two years at Pinelands Plaza, Lismore Central and Pirie Plaza.

The leases of the Coles supermarket and Kmart at Pirie Plaza are due to expire in September 2005. Both leases contain an option to renew for a further term of five years at market rental. The Kmart is currently trading well above the Australian average for discount department stores and Coles’ sales level is substantial for a supermarket in a regional location. Both Coles and Kmart have indicated to Centro MCS that they wish to remain at the centre.

The Woolworths lease at Lismore Central is due to expire in December 2005. This lease also contains a five year option to market rental. Woolworths anchors this centre very strongly with the current turnover over 30% above the average for supermarkets in single supermarket centres. Woolworths have indicated they will commence negotiations closer to their lease expiry in late 2005.

The Coles lease at Pinelands Plaza expires in August 2006. Centro MCS is currently negotiating commercial terms with Coles who have expressed their intention to enter into a new lease. This supermarket has a solid sales performance above the average for major supermarkets across Australia.

Centro MCS believes that all of the major tenants will renew their leases at expiry. There can be no guarantee however, that any leases will be renewed or that the rent achieved will be in line with the Syndicate forecasts.

CompetitionA change in the competitive environment can impact on the trading performance of a shopping centre.

At Lismore Central an expansion is planned at the competing Lismore Shopping Square located approximately one kilometre east of Lismore Central. This development will add a new Big W and Woolworths supermarket from late 2005. The competitive impact is expected to progressively reduce the very strong sales of the Woolworths supermarket at Lismore Central during 2006 and 2007 to a level closer to the average for single supermarket based centres. Following this reduction, sales growth is again anticipated. The financial forecasts, the property valuation and the purchase price have accounted for this impact. The vendor has also provided additional security of $100,000 if required to maintain forecast distributions for the year ending 30 June 2007.

Capital ExpenditureThe need for unforeseen capital expenditure over the forecast period and the way in which the Syndicate funds this expenditure may also have an impact on the financial forecasts in this PDS. As part of Centro MCS’s management approach, an in house team of highly experienced and skilled fund and property managers will seek to minimise unforeseen capital expenditure as part of the property management process and leasing review strategy.

Debt FundingThis is an investment in income producing retail property, whose acquisition is funded partly by invested funds (equity) and partly of borrowed funds (debt). When a property investment is geared (i.e. purchased with debt) the potential for gains and losses is greater. Gearing also has the effect that acquisition costs, charges and fees represent a higher percentage of the equity in the purchase than they would if there was no mortgage and the property was purchased entirely with equity.


10 11

The Syndicate debt has been fully hedged for the seven year Syndicate term. If the Syndicate term is extended for a further term and the Syndicate’s debt needs to be refinanced, interest rates may well be higher. If they are, then returns to Investors could be affected accordingly. If interest rates rose substantially, then refinancing may not be possible. In such an event, the properties may have to be sold at short notice and in a market that may not be conducive to a quick sale.

As part of the Syndicate debt strategy, the Manager may take steps to manage this risk by further hedging interest rates beyond the scheduled expiry date of the Syndicate (i.e. 31 December 2011). If the Syndicate did not rollover or the properties were sold before the end of the Syndicate term, the Syndicate may incur hedging termination costs if interest rates have risen from the date they were hedged.

Details of borrowings are set out in Section 6.6 to 6.10. The lender has no obligation to roll over this funding at the end of the loan period and so there is no certainty that the borrowings will be able to be replaced as their terms expire. If there is a breach of conditions of the borrowings, the lender may enforce its security and, amongst other things, sell the properties.

Due Diligence and Use of ExpertsIn acquiring the properties, the Manager has engaged appropriate experts to investigate the environmental, operational, structural and legal aspects of each of the properties. The Manager believes that these investigations are appropriate and complete. However, despite such investigations, the Manager cannot guarantee the identification and mitigation of all risks associated with these properties.

InsuranceIn preparing the financial forecasts, the nature and cost of insurance has been based upon the best estimate of likely circumstances. However, various factors may influence premiums to a greater extent than those forecast, which may in turn have a negative impact on the net income.

LiquidityAn investment in the Syndicate should be considered illiquid as it is unlikely that there will be a secondary market for the Units. No Investor has the right to redeem Units during the Syndicate term. However, under the Exit Mechanism, Investors have the right to sell their investment at the end of the initial Syndicate term (i.e. 31 December 2011), based on the Current Unit Value at that time.

Exit MechanismThe Investors’ ‘put’ option under the Exit Mechanism described in Section 2.6 will cease to apply if the Manager (or another member of Centro) is no longer the Responsible Entity for the Syndicate. However, if this occurs, Centro will remain entitled to exercise its ‘call’ option and may require all Investors to sell some or all of their Units on the same basis as at the end of the initial term of the Syndicate (i.e. 31 December 2011).

Taxation The Syndicate currently enjoys significant tax-advantages as outlined in Section 6.5. However, as with all tax legislation, it is possible that the rules may change in the future.

The effect of taxation on Investors in the Syndicate is complex and the summary in Section 6.5 is general in nature and as the circumstances for each Investor may vary, Investors should seek professional taxation advice in relation to their own position.

Taxation implications for the NZ Trust are discussed in Section 7.5.

Other Risk Factors• Natural disasters and man made disasters may occur

which are beyond the control of the Manager; and

• Building and refurbishment works that occur at the Syndicate properties during the Syndicate term will be contracted to experienced consultants engaged by the Manager to ensure that the works are completed in accordance with specifications, on time and within budget. However, there are always risks attached to building works in the form of delays, cost overruns, changes to proposed tenancies and prospective tenancies and risks relating to the quality of work performed.


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Section 2 Structure of this InvestmentPinelands Plaza, Sunnybank Hills, Queensland

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Section 2 Structure of this Investment

2.1 OVERVIEWThis PDS offers Investors the opportunity to invest in the Syndicate, an unlisted property trust that has acquired an interest in the following seven shopping centres in Australia:

• Pinelands Plaza, Sunnybank Hills, Queensland

• Woodcroft Plaza, Woodcroft, New South Wales

• Lismore Central, Lismore, New South Wales

• Pirie Plaza, Port Pirie, South Australia

• Coles Morwell, Morwell, Victoria

• Emerald Village, Emerald, Queensland (50% ownership interest)(1)

• Emerald Market Plaza, Emerald, Queensland (50% ownership interest)(1)

(1) The remaining 50% is owned by the Centro MCS 25 Syndicate.

2.2 SYNDICATE STRUCTUREThe structure of the Syndicate is shown in the diagram below.

Total funding required by the Syndicate to acquire the properties and establish the Syndicate is approximately $109.8 million.

The Manager expects to arrange initial bank loan facilities (‘Loan’) for approximately $66.9 million to the Syndicate based on an initial loan to value ratio (‘LVR’) of approximately 65%. The Loan is secured on a non-recourse basis, (i.e., Investors are not at risk for any more than the equity subscribed by them on application plus any undistributed income).

In addition, operational capital and pre-leasing expenditure totalling $4.1 million has been forecast to be spent during the Syndicate’s initial seven year term and financed through borrowings (see Sections 6.6-6.10 for further details of the finance arrangements for the Syndicate).

The Syndicate is now seeking to raise the balance of approximately $42.9 million from Investors.

Centro (or entities it manages or controls) intends to maintain an investment of 25% to 50% of the equity in the Syndicate, of which approximately $5.0 million will be invested in the form of Equity Notes which share certain characteristics with ordinary equity held by Investors (see Section 2.9 for further details).

(1) The Syndicate holds its interest in this property through wholly owned subsidiary trusts.

(2) The Syndicate holds its interest in this property as a 300 year lease.

(3) The Syndicate has a 50% ownership interest in this property. The remaining 50% of this property is owned by the Centro MCS 25 Syndicate.

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2.3 THE OFFERThe investment will be in the Syndicate, an unlisted property trust.

The Manager is offering approximately 37.9 million ordinary Units and 5.0 million Equity Notes in the Syndicate at the issue price of AUD$1.00 each.

This PDS will remain open to Investors subscribing for Units until the equity sought is fully subscribed. NZ Investors should see Section 7 for the structure of an investment in the NZ Trust. Applications for Stapled Securities from NZ Investors will be accepted until 13 months from the date of issue of this PDS.

As the properties have already been secured with funding provided by Centro, the Offer is not subject to receipt of any minimum level of applications. Investors are encouraged to apply early to avoid disappointment.

2.4 DISTRIBUTION POLICYThe forecast period commences at 1 January 2005 for the term of the Syndicate. The first distribution made to Investors will be for the period ending 31 March 2005. Investors who apply prior to 1 January 2005 will receive a fixed, pro-rata distribution at the rate as forecast for the period to 30 June 2005 from the date of allotment of the application (usually within five business days of receipt of the application).

Distributions will be made quarterly, as at the end of March, June, September and December, and will be paid to Investors within six weeks from the end of each distribution quarter.

Distributions will be based on the distributable income of the Syndicate and any additional return of capital as determined by the Manager.

2.5 SYNDICATE TERMINATION OR ROLLOVER

As Responsible Entity, it is the Manager’s intention to rollover (or extend) the Syndicate term at the end of the initial period of investment, provided that it is in the best interests of Investors at that time. Alternatively, the Manager may decide to restructure or terminate the Syndicate.

Details of any proposal to continue or restructure the Syndicate will be notified to Investors by no later than three months prior to the end of the Syndicate term. This will provide Investors who wish to exit the Syndicate sufficient opportunity to sell their Units to Centro via the Exit Mechanism.

2.6 EXIT MECHANISMCentro offers Investors the ability to exit their investment at the end of the initial term of the Syndicate (i.e. 31 December 2011) via the Exit Mechanism. This provides Investors with certainty in the planning of their financial affairs.

The Exit Mechanism works in the following way. At the end of the initial Syndicate term, Investors will have the right to sell (or ‘put’) their Units to Centro or its nominee at the Current Unit Value at that time. This value could be higher or lower than the issue price of the Units and will be based on an independent valuation of the properties as at the end of the Syndicate term. Centro, or its nominee(s), may choose, at Centro’s election, to pay for those Units with either cash, Centro Stapled Securities or a combination of both.

If Centro chooses to pay for the Units by issuing Centro Stapled Securities to Investors, those Centro Stapled Securities will be issued at a 0.5% discount to the weighted average ASX market price of all Centro Stapled Securities (adjusted for distribution differences) traded over the ten days prior to the date of issue of the Centro Stapled Securities, and application will be made for their quotation on the ASX within seven business days after the date of allotment or issue. The new Centro Stapled Securities will rank equally for distribution entitlements with existing Centro Stapled Securities then on issue.

If any Units are sold by Investors to Centro as outlined above, Centro may require that all Investors sell some or all of their Units on the same basis.

If Centro does not acquire some or all of the Units held by all Investors at the end of the Syndicate, Centro may decide that the Syndicate’s interest in the properties should be offered for sale on the open market. The net proceeds (after allowing for expenses) will be distributed to Investors in proportion to their Unitholdings.

Investors should note that an Investor’s ‘put’ option under the Exit Mechanism described above, will cease to apply if Centro MCS Manager Limited, CPT Manager Limited (or another member of Centro) ceases to be the Responsible Entity for the Syndicate. If this occurs, Centro will still remain entitled to require that all Investors sell some or all of their Units on the same basis at the end of the Syndicate term.

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2.7 NO REDEMPTION OF UNITSThe Syndicate should be considered illiquid as it is unlikely that there will be a ready secondary market for the Syndicate’s Units. It should be noted that the Manager is not able to redeem Investors’ Units, except in so far as required in relation to the acquisition of Pirie Plaza. Refer to Sectio 9.13 for further details. Investors wishing to dispose of their Units should approach their financial adviser prior to approaching the Manager with a view to finding a buyer for the Units. Although the Manager has no obligation to buy or find a buyer, it may (subject to complying with applicable regulatory requirements) attempt to facilitate a sale, or may itself buy Units from Investors. In particular, where possible, the Manager seeks to assist the executors of deceased estates.

2.8 SALE OR TRANSFER OF UNITS DURING THE TERM OF THE SYNDICATE

Investors in the Syndicate must comply with the provisions of the Syndicate Constitution and the Corporations Act 2001 if they wish to transfer any of their Units during the term of the Syndicate. A transfer of Units must be in writing, signed by both the transferor and transferee before it is lodged with the Manager for registration.

The Manager is entitled to receive a fee in respect of administration costs incurred in transferring Units. This fee will be a maximum of 1% of the value of the interest transferred, with a minimum fee of $100. This fee does not apply to the Exit Mechanism.

2.9 EQUITY NOTESCentro (or entities it manages or controls) intends to maintain an investment of 25% to 50% in the Syndicate, of which approximately $5.0 million will be invested in the form of Equity Notes which share certain characteristics with ordinary equity held by Investors. The Manager believes that Centro’s significant co-investment in the Syndicate benefits Investors by aligning Centro’s interests with the interests of Investors.

The Equity Notes comprise a partly paid ordinary unit (paid up to one cent) (‘PPU’) and an unsecured subordinated debt obligation (‘DO’) owed by the Syndicate to the holder (being Centro or entities it manages or controls). The issue price of each Equity Note is $1.00, with one cent allocated to the PPU and the balance to the DO. The terms of issue of Equity Notes are set out on page 71.

Interest on the Equity Notes will accrue and be paid on the same basis as Units. However, Equity Notes will be entitled to a margin of 0.30% per annum above the annual cash distribution yield paid to Investors.

Centro (or entities it manages or controls) intends to maintain its holding of Equity Notes for the term of the Syndicate.

As the holders of the DOs do not enjoy the same tax-advantaged position, the issuing of Equity Notes provides Investors who have subscribed for ordinary equity with the benefit of a higher tax-advantaged component of income distribution than would otherwise apply.

Emerald Village, Emerald, Queensland

Woodcroft Plaza, Woodcroft, New South Wales

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Section 3 Why Invest in Direct Property?Emerald Market Plaza, Emerald, Queensland

16 17

Section 3 Why Invest in Direct Property?

The direct property industry has expanded rapidly over the past five years as investors continue to fulfil their direct property investment needs through unlisted property funds. The growth in Centro MCS’s business reflects the strong demand from investors for quality, high yielding and tax effective retail direct property investments.

3.1 KEY BENEFITS OF INVESTING IN DIRECT PROPERTY

The Manager believes that the importance of direct property as an essential part of a well balanced investment portfolio continues to be reinforced for the following reasons:

Collective Investment

Direct property investment provides a way in which a number of investors, each investing different sums of money, can purchase quality property together as a group, which they may not have had the resources to secure or the expertise to manage on their own. The Manager considers that a direct property investment that offers co-investment with Centro, or entities it controls or manages is beneficial for Investors because it demonstrates a close alignment of Centro’s interests with Investors’ interests.

Tax Effective Returns

The performance of direct property is highlighted even further after taking into account the tax effectiveness of the investment. Tax plays a vital role in an Investor’s overall return. In a fully taxable investment, a 7.80% return to an Investor on the top marginal tax rate of 48.5% returns only 4.02% after tax. On the other hand, a 7.80% return which is 100% tax-advantaged is equivalent to an after-tax return of 7.80%. This equates to a pre-tax return of 15.15% in that year for Investors on the highest marginal tax rate in Australia.

The table below gives an example of an individual, in a tax-advantaged investment such as this, on the highest marginal tax rate of 48.5%.

Original Investment (for example) $100,000

Yield on Equity 7.80%

Distribution $7,800

Tax Advantaged Component 100%

Tax Advantaged Income $7,800

Taxable Income $0

Equivalent Pre-Tax Yield(1) 15.15%

(1) This calculation does not take into account potential capital gains or losses on the investment or tax resulting from reductions in the capital gains tax cost base.

Tax benefits flow from the tax deductions available from depreciation of buildings, plant and equipment and from the amortisation of establishment costs. Some of these benefits may reduce the cost base of the investment and accordingly attract capital gains tax when the Syndicate disposes of an asset or the Investor sells their investment. Even then, individuals may be entitled to a 50% exemption from capital gains tax, if the investment has been held for more than 12 months.

Hedge Against Inflation

Often, property rentals will increase in line with inflation. This means that rental income is keeping pace with rises in the cost of living and is therefore providing Investors with a natural hedge against inflation. Frequently, as rents increase, the value of the property goes up.

Diversification Benefits

It is possible to reduce risk by diversifying across investments. Direct property offers significant diversification benefits when it forms part of a balanced investment portfolio.

It is the only major asset class that actually delivers the fundamental goal that investors are trying to achieve through diversification – the increased safety that comes from owning assets that perform in different ways (i.e. in low or negative correlation) to shares and bonds. See chart entitled ‘Asset Class Comparison’ on the next page.

Pirie Plaza, Port Pirie, South Australia

18 19


Complements Investment in Other Asset ClassesDue to the counter-cyclical behaviour of different asset classes, direct property investment can assist in supporting overall income returns in investment portfolios by providing a less volatile income stream when other asset classes may be underperforming. Property is generally viewed as a long term investment and can complement assets with greater liquidity.

Importantly, the chart below demonstrates that direct property has outperformed the other asset classes at the most crucial time – when other asset classes were under pricing pressure.

Asset Class Comparison Rolling Annual Total Returns (December 1985 - June 2004)

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3.2 KEY BENEFITS OF INVESTING IN THE RETAIL PROPERTY SECTOR

OutperformanceRetail property has outperformed all other asset classes including other sectors of the property market as well as LPTs. It has provided consistently high and stable returns over the last 20 years (see chart on page 19).

From December 1984 to June 2004 retail property delivered an average total return of 13.3% per annum with the lowest risk rating of any comparable asset class(see chart on the right).

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Source: Property Council of Australia – Investment Performance Index June 2004

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The Manager believes that an investment in retail property offers significant benefits by way of superior returns with low volatility.

Stable and Secure Income Quality retail property provides relatively stable and secure income. This is for two main reasons:

• Income is derived from a large diversified base of tenants – a large proportion of the Syndicate income is provided by Coles and Woolworths and other national retailers; and

• The income is indirectly driven by consumer spending – the Syndicate properties have a convenience food based focus, which tends to be largely non-discretionary. They are therefore less likely to be impacted by a change in economic conditions.

Spread of Risk A well constructed retail property portfolio will offer a complementary mix of retail tenants. This minimises reliance on any single key tenant for rental income.

Pinelands Plaza, Sunnybank Hills, Queensland

20 21

Section 4 The Properties Lismore Central, Lismore, New South Wales

20 21

Section 4 The Properties

4.1 OVERVIEWThe Syndicate offers an investment in seven shopping centres located across four states, providing diversification benefits that come from a strong income stream with exposure to over 170 tenants.

This Offer contains a mixture of convenient neighbourhood shopping centres spread across Victoria, New South Wales, Queensland and South Australia.

Coles Myer, Australia’s largest retailer, is the Syndicate’s major tenant with five supermarkets and one Kmart discount department store, followed by Woolworths with two supermarkets in the portfolio.

The properties, ranked by the Syndicate’s asset value, from largest to smallest, are:

• Pinelands Plaza, Sunnybank Hills, Queensland

• Woodcroft Plaza, Woodcroft, New South Wales

• Lismore Central, Lismore, New South Wales

• Pirie Plaza, Port Pirie, South Australia

• Coles Morwell, Morwell, Victoria

• Emerald Village, Emerald, Queensland (50% ownership interest) (1)

• Emerald Market Plaza, Emerald, Queensland (50% ownership interest) (1)

(1) The remaining 50% is owned by the Centro MCS 25 Syndicate.

Perth

WesternAustralia

NorthernTerritory

SouthAustralia

Queensland

New South Wales

AustralianCapital

Territory

Victoria

Tasmania

Adelaide

Melbourne

Hobart

CanberraSydney

Brisbane

Darwin

PIRIE

EMERALD MARKET

MORWELL

LISMORE

WOODCROFT

PINELANDS

EMERALD VILLAGE

4.2 PORTFOLIO ANALYSIS

Major tenants occupy 65% of the GLA of the properties. Major tenants account for 43% of the total Syndicate portfolio rental.

Majors65.1%

SpecialtyTenants28.1%

Non-Retail / Services6.8% Majors

42.6%


Non-Retail / Services11.8%

Tenant Mix by Gross IncomeTenant Mix by Gross Lettable Area

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Non-Retail / Services6.8% Majors

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Tenant Mix by Gross IncomeTenant Mix by Gross Lettable Area

The portfolio is well diversified with 41% of the Syndicate’s property interests (by value) in Queensland, 35% in New South Wales, 13% in South Australia and 11% in Victoria.

The portfolio is further diversified with 43% of the Syndicate’s property interests (by value) in metropolitan locations and 57% in regional locations.

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4.3 SUMMARY PROPERTY INFORMATION


Pinelands Plaza Woodcroft Plaza Lismore Central

Location Sunnybank Hills Woodcroft Lismore

State Queensland New South Wales New South Wales

Asset Type Neighbourhood Neighbourhood Neighbourhood

Purchase Price $25,800,000 $18,500,000 $18,000,000

Purchase Price Including Actual Acquisition Costs(1)

$25,930,000 $18,625,000 $18,125,000

Valuation Summary

Valuation (100%) $25,630,000 $18,500,000 $17,500,000

Valuation Including Normal Acquisition Costs (100%)(2)

$27,700,000 $19,600,000 $18,550,000

Valuation Firm Jones Lang LaSalle FPDSavills FPDSavills

Valuation Date 31 December 2004 31 December 2004 31 December 2004

Capitalisation Rate 7.50% 7.25% 8.50%

Discount Rate 9.25% 9.75% 10.25%

Syndicate Interest 100% 100% 100%

Site Area 18,270m2 13,540m2 8,293m2

Majors % of GLA 36.04% 56.76% 59.46%

Majors % of Passing Gross Rental

15.87% 28.31% 48.57%

Car Spaces 262 183 202

GLA 5,913m² 4,662m² 6,878m²

Occupancy Rate 96.93% 100.00% 98.87%

Major Tenants Coles Coles Woolworths

No. of Specialty Tenants 42 plus 1 ATM 24 plus 1 kiosk and 2 ATMs 22 plus 2 ATMs

Major Leases Coles Coles Woolworths

Term: 10 years (option) 15 years 20 years

Expiry Date: 23 August 2006 24 October 2008 3 December 2005

Options: Nil 2 x 5 years 2 x 5 years

Term:

Expiry Date:

Options:

(1) Includes acquisition costs and stamp duty as set out in Section 6.2. The structure of the purchase transaction has enabled the Manager to save significant up front costs.

(2) Includes estimates of normal acquisition costs including stamp duty, legal fees and due diligence costs incurred on purchase.

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Pirie Plaza Coles Morwell Emerald Village Emerald Market Plaza

Port Pirie Morwell Emerald Emerald

South Australia Victoria Queensland Queensland

Neighbourhood Neighbourhood Neighbourhood Neighbourhood

$13,000,000 $11,100,000 $9,850,000 (50% of the property)

$6,650,000 (50% of the property)

$13,125,000 $11,225,000 $9,975,000(50% of the property)

$6,979,168(50% of the property)

$13,000,000 $11,100,000 $19,700,000 $13,000,000

$13,750,000 $11,700,000 $20,500,000 $13,600,000

FPDSavills m3property CB Richard Ellis CB Richard Ellis

31 December 2004 31 December 2004 31 December 2004 31 December 2004

8.25% 7.50% 7.75% 7.75%

9.50% 8.25% 9.75% 9.75%

100% 100% 50% 50%

33,590m2 11,114m2 24,400m2 20,970m2

88.72% 90.29% 57.65% 46.20%

69.55% 94.09% 44.30% 35.01%

640 259 362 321

8,640m² 5,267m² 7,285m² 6,493m²

98.42% 94.65% 100.00% 98.46%

Coles, Kmart Coles Woolworths Coles

13 plus 1 kiosk 7 25 plus 1 pad site 20 plus 1 mini major and 1 kiosk

Coles Coles Woolworths Coles

25 years 25 years 15 years 20 years

8 September 2005 14 June 2013 2 October 2011 26 October 2017

2 x 5 years Nil 2 x 5 years 4 x 5 years

Kmart

25 years

8 September 2005

2 x 5 years

24 25

Pinelands Plaza, Sunnybank Hills, Queensland

LocationSunnybank Hills is a well established residential suburb, located approximately 18 kilometres south-east of the Brisbane CBD.

Pinelands Plaza is situated on a prominent corner site at the intersection of Pinelands Road and Beenleigh Road.

The centre enjoys a high level of exposure with easy accessibility to the surrounding region. The site is also ideally positioned on the left hand side to serve homeward-bound traffic off Pinelands Road, and therefore the centre is extremely attractive for convenience food and grocery shopping.

Centre and its TenantsPinelands Plaza first opened in 1976 and was expanded and renovated in 1988 increasing the gross lettable area to 5,913m2. The centre comprises a single level retail facility with a Coles supermarket and 42 specialty tenancies all at ground level with open car parking for 262 vehicles. Car parking is easily accessible, with entry and exit points off both Pinelands Road and Beenleigh Road.

The shopping centre layout contains an external mall facing Pinelands Road with the Coles supermarket located at the southern end and specialty tenancies located to both the north and south. The overall standard of the centre is excellent, including a strong offer of both retail and non-retail tenancies. The non-retail tenancies such as banks, professional and medical offices, Australia Post and real estate agents create important destination points for Pinelands Plaza. There are presently three vacancies at the centre and Centro MCS is concentrating on securing new key retailers for these sites.

The Coles supermarket with an area of 2,131m2 trades strongly with sales turnover in excess of the industry benchmark. The Coles lease is due to expire in August 2006 and Centro MCS is confident, given Coles’ trading performance, that a new long term lease will be achieved. Coles has recently instigated negotiations with Centro MCS for a further term. These negotiations provide Centro MCS with an opportunity to potentially negotiate a higher rent than forecast in the Syndicate projections.

Centre sales at Pinelands Plaza are projected to show strong average sales growth of 4.3% per annum up to 2008.

Trade AreaThe Pinelands Plaza trade area has a population estimated at 46,390 including approximately 18,000 people in the main trade area. The main trade area encompasses the suburbs of Sunnybank Hills, Sunnybank, Runcorn, and Acacia Ridge with the customer profile described as cosmopolitan, including a high proportion of Asian born residents.

Demographics show that the average age of residents is slightly younger than the comparable Brisbane average, with income levels higher on a per household basis. The household structure typically comprises of couples with dependant children.

The trade area growth is typical of an established outer-suburban area although there is some new residential housing being constructed. Following strong population growth from 1996 to 2004 moderate growth of 0.7% per annum is now forecast over the next ten years.

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CompetitionThe competition for Pinelands Plaza consists of a number of established shopping centres, providing a relatively stable competitive environment.

Westfield Garden City is one of the largest retail facilities in Brisbane with a total lettable area of approximately 78,000m2 and is located over five kilometres from Pinelands Plaza. Due to the large size of this centre it is a destination for both food and non-food shopping for residents throughout the surrounding region, including throughout the defined Pinelands Plaza trade area.

Other competing centres include Sunnybank Plaza, Sunnybank Hills Shoppingtown and Runcorn Plaza. Sunnybank Plaza is located approximately two kilometres north of Pinelands Plaza and is anchored by a Kmart discount department store and a Coles supermarket. Sunnybank Hills Shoppingtown is located three kilometres south of Pinelands Plaza and is anchored by a Pick ‘n’ Pay superstore and Woolworths supermarket. Runcorn Plaza is located approximately three kilometres east of Pinelands Plaza and is anchored by a Bi-Lo supermarket.

Centro MCS are not aware of any other significant shopping centre developments within the trade area that are planned or that compete directly with Pinelands Plaza.

Strategy for the Centre The short term strategy for Pinelands Plaza is to finalise the lease renewal for the Coles supermarket prior to lease expiry in August 2006. Discussions are already underway with Coles who have indicated their intention to enter into a new long term lease agreement.

The centre contains three vacancies and Centro MCS will be concentrating on securing new retailers to improve the property tenancy mix. Appropriate leasing up allowances and incentives have been budgeted to achieve these targets.

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Oxley

SunnybankHills

PINELANDS PLAZA

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1

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BRISBANE

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LocationWoodcroft is a recently developed suburb located some 38 kilometres west of the Sydney CBD. Blacktown is located approximately four kilometres to the south-east with Mt Druitt located approximately nine kilometres to the west.

The centre is located on the south-eastern corner of Richmond Road and Woodcroft Drive. Richmond Road is a major four-lane arterial road, connecting the satellite townships of Richmond and Windsor (to the north-east of Sydney) with the metropolitan area. Consequently, the centre has high exposure to a large number of vehicles travelling along this major arterial route.

Centre and its TenantsConstructed in 1993 Woodcroft Plaza is a modern neighbourhood shopping centre with a gross lettable area of 4,662m2. The centre is anchored by a Coles supermarket of 2,646m2 with an external Liquorland outlet. Coles and Liquorland are supported by 11 internal and 12 externally facing specialty stores, a kiosk and two ATM’s. In addition to the main retail centre, there are also adjacent peripheral retail facilities, which are not part of the centre ownership, including a modern BP service station and McDonalds restaurant. These outlets provide compatible uses which draw patrons indirectly to the centre.

Woodcroft Plaza is designed around a main internal north-south retail mall, with car parking for 183 vehicles provided on the northern and western sides of the centre, directly accessible off Woodcroft Drive. The overall high standard of the centre reflects current expectations of a modern convenience shopping centre in an outer suburban area.

The Coles supermarket trades strongly, above the average for major supermarkets throughout Australia and reflects the low provision of supermarket floor space in the surrounding region. Supermarket sales over the next decade are projected to grow strongly at an average rate of around 3.8% per annum.

Specialty tenants include a pharmacy, newsagency and a number of fashion and food retailers typically found in a neighbourhood shopping centre. The centre also includes a large portion of non-retail space such as real estate agents, a medical and dental centre, supporting and reinforcing the centre’s community focus.

Trade AreaThe trade area served by Woodcroft Plaza includes in its primary sector the suburbs of Woodcroft and Doonside with secondary sectors further to the north and west. The existing population is estimated at 39,000 people including 21,000 in the main trade area. The total population grew at approximately 2% per annum from 1996 to 2004, with the majority of growth recorded in the main trade area.

There are some further pockets of residential development occurring throughout the region especially to the north and north-west of the defined Woodcroft Plaza trade area which will accommodate a large proportion of Sydney’s future residential growth. This region, generally known as the North-West or Marsden Park region, is currently being reviewed by the Department of Infrastructure, Planning and Natural Resources to potentially accommodate an additional 300,000 residents.

The Woodcroft trade area is typical of a rapidly growing outer-suburban area comprising a large number of young families. The trade area population also has a high proportion of Asian born residents. This provides further opportunities to modify the retail mix to suit the local demographic base.

CompetitionWoodcroft Plaza is one of two key food and grocery shopping centres within the defined trade area, with Quakers Court being the other. Quakers Court is located one kilometre to the north of Woodcroft Plaza and is anchored by a Woolworths supermarket and includes 20 specialty shops. The region served by these two supermarket centres is separated from other competing supermarket centres by a number of natural and man made barriers such as railway lines, major roads and Eastern Creek.

Woodcroft Plaza, Woodcroft, New South Wales

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The other competing shopping centres are the large regional and sub-regional shopping centres at Westpoint Blacktown, four kilometres south-east, and Plumpton Marketplace, approximately five kilometres west of Woodcroft Plaza.

Additional supermarket competition is likely in the future as a result of a major redevelopment underway at Westpoint Blacktown which will see an expansion of the 50,000m2 centre to around 90,000m2. This expansion will include a new Coles supermarket, as well as the relocation and expansion of several major retailers including Myer, Target, Woolworths, Big W, Franklins and a Hoyts cinema complex. The number of specialty shops at the centre will increase from 154 to more than 280. There is also the possibility of an additional second major supermarket at Plumpton. Centro MCS does not expect that these projects will significantly impact on Woodcroft Plaza which acts as a convenience neighbourhood shopping centre, providing for both the weekly and top-up shopping needs of surrounding residents.

Strategy for the Centre The strategy for Woodcroft Plaza is to concentrate on opportunities to improve the overall retail mix at

the centre. A greater number of national chains could be incorporated at the site, including non-retail tenants such as banks and Australia Post. These types of tenants will continue to be targeted to add to the community friendly focus of the centre.

As there is a high proportion of Asian born residents within the Woodcroft trade area the leasing strategy will also target some further Asian style stores to attract resident spending from throughout the region. Remixing and improving the existing specialty stores should improve the centre’s market share and profitability.

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Parramatta

Blacktown Ryde

WOODCROFT PLAZA

44

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28 29

Lismore Central, Lismore, New South Wales

LocationLismore is a major township located 80 kilometres south of Coolangatta/Tweed Heads in northern New South Wales.

Lismore Central is located in the centre of Lismore’s shopping precinct in close proximity to the main shopping area of Molesworth and Conway Streets, and is easily accessible for the majority of local residents. The centre also serves residents from throughout the broader region with direct access from the Bruxner Highway, a major east-west carriageway which runs a short distance south of the centre extending from Tenterfield in the west through to the Pacific Highway, near Ballina, in the east. The exposure of the centre is prominent to traffic on all street frontages.

Centre and its TenantsLismore Central is an enclosed neighbourhood shopping centre constructed in 1985 over two levels with a gross lettable area of 6,878m2. It includes a Woolworths supermarket of 4,090m2, 22 specialty shops, and two ATMs. Undercover car parking for 202 vehicles is provided at the northern end of the centre and on-street car parking is available on the surrounding streets.

The Woolworths supermarket is located on the upper level, together with the majority of the specialty stores. The lower level comprises a small internal mall including fresh food retailers, food caterers and a large Rivers apparel store. Travelators are located at the southern end of the centre, providing access between the two retail levels. The property has been well maintained, but refurbishment opportunities exist to enhance the appearance and improve specialty tenancy trading.

Lismore Central functions well as the main centre used for supermarket shopping by residents throughout the Lismore region. Woolworths anchors the centre with strong annual sales in excess of 30% above the average for single supermarket based centres in Australia.

The Woolworths lease which expires in December 2005, contains two five year term options. The option clause requires the rental to be reviewed to market and this may provide an opportunity for Centro MCS to negotiate a rental at a level above that contained within the financial forecasts.

Centro MCS believes there is also an opportunity to increase specialty rental levels over time given that

the average specialty rentals for the centre are below the Australian average.

Trade AreaLismore Central serves a broad area throughout the region of northern New South Wales extending more than 70 kilometres to the west of Lismore.

The current trade area population for Lismore Central is estimated at 78,200 including 45,000 residents in the primary catchment. There is a particularly high proportion of residents aged between 15 and 30 years in the primary sector reflecting the location of a Southern Cross University within the town. Having remained relatively stable over the period between 1996 and 2001, the Lismore population is currently growing by around 200 residents per annum. This growth is mainly occurring around Goonellabah in the east of the catchment and the Lismore town centre is likely to be a key destination for these new residents.

CompetitionLismore Central currently provides the only Woolworths supermarket in the trade area. The other significant competing retail centre is Lismore Shopping Square which is located approximately one kilometre east of the town centre. Lismore Shopping Square is anchored by a Kmart discount department store and a Coles supermarket and is in the early stages of a redevelopment. Once completed the centre will include a new Woolworths supermarket and Big W discount department store. It is expected that the new Woolworths supermarket will progressively reduce the very strong sales of the Woolworths supermarket at Lismore Central during 2006 and 2007 to a level closer to the average for single supermarket centres. Following this reduction sales growth is again anticipated.

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28 29

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The financial forecasts for the Syndicate and the purchase price for Lismore Central have accounted for this known future competitive impact. In addition the vendor has provided additional security of $100,000 during the financial year ending 30 June 2007, if required to maintain forecast distributions.

Strategy for the Centre The focus during 2005 is to successfully negotiate a new long term lease with Woolworths, or if Woolworths exercise their five year option, to maximise the market rental received for the new option term. Centro MCS considers this as an excellent opportunity to achieve a higher market rent than forecast in the Syndicate financial projections. It is also likely that if a longer term lease can be negotiated with Woolworths the capital value of the centre should appreciate due to the improved lease expiry tenure.

An opportunity to purchase an adjoining property with a strong long term lease covenant is also being considered. The potential purchase will only be completed as long as it does not adversely impact the Syndicate forecasts, can be debt funded and comply with existing financier loan covenants. The potential purchase would add further value to the Syndicate and provide increased development flexibility due to its strategic location.

Centro MCS will concentrate on improving the quality of existing shop fit-outs and the overall presentation of the centre in order to attract increased customers. Allowances have been made within the capital expenditure budget for ongoing improvement works in order to achieve this goal.

Additional national retailers will be targeted in order to continually improve the tenant mix and increase specialty rentals.

The centre is in a strong position to reinforce itself as the primary centre for food and convenience shopping within the Lismore region.

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LISMORE CENTRAL

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LocationThe regional town of Port Pirie is located at the northern end of the Yorke Peninsula, approximately 200 kilometres north of Adelaide. Port Pirie is home to the world’s largest lead smelter and together with Port Augusta, 81 kilometres to the north, and Whyalla, 48 kilometres to the west, forms part of the ‘Iron Triangle’ mining region of South Australia.

The major sources of employment for the area is provided from the smelting industry and surrounding agriculture.

Pirie Plaza is located one kilometre south of the centre of town and is situated on the southern side of Grey Terrace directly opposite the Phoenix Park Racecourse and central to the bulk of Port Pirie’s residential catchment.

Centre and its TenantsPirie Plaza is an enclosed single-level neighbourhood shopping centre constructed in 1980 with a gross lettable area of 8,640m2. The centre is anchored by a Kmart discount department store and a Coles supermarket and also incorporates 13 specialty shops and one kiosk. Pirie Plaza has an ample provision of easily accessible at grade car parking comprising 640 spaces accessed off Grey Terrace.

Pirie Plaza has a simple layout, with the centre’s anchor tenants, Coles and Kmart, located at either end of a short mall. The Kmart and Coles stores account for 89% of the centre’s total floor space, as well as 70% of the total income. The high percentage of income attributable to a publicly listed retailer significantly adds to the value of the centre and security of the Syndicate’s income.

The Kmart discount department store with an area of 5,160m2 is currently trading well above the benchmark average for discount department stores. The performance of the Coles supermarket is not quite as strong but is still substantial for a supermarket in a regional town, particularly given the store’s smaller size of 2,505m2.

The Coles and Kmart leases both expire in September 2005 and have two five year option terms. Preliminary discussions have commenced with Coles and Kmart who have both indicated that they wish to renew their leases with the intention being to negotiate a new longer term lease. If acceptable commercial terms can not be agreed then under the terms of the option, the rent will revert

to the market rent. Both Kmart and Coles have also indicated they plan to undertake refurbishment works within their respective stores in the short term.

The centre offers a broad range of specialty shops and commercial services, including a Bakers Delight, Wendy’s, BWS liquor store, pharmacy and newsagency. Two tenancies are currently vacant. The specialties at Pirie Plaza are recording above average sales levels and rent costs are well below industry benchmarks indicating that some potential exists for future rental growth at the centre. Centro MCS believes that rental growth is also possible via a remixing of the centre’s specialty composition and through the leasing of the two vacant shops.

Trade AreaThe location of Pirie Plaza and its accessibility to the surrounding population base is a key strength of the centre. The centre also contains the only discount department store available in the surrounding region and as a result draws custom from a wide trade area.

The main trade area includes Port Pirie and the immediate surrounding population. A secondary trade area extends around 50 kilometres to the north, east and south of Port Pirie, and includes the smaller townships of Port Germein, Jamestown, Crystal Brook and Port Broughton.

The population of approximately 25,000 in the main trade area is almost entirely Australian born, with growth predicted to be flat over the forecast period. Future sales growth, which accounts for inflation over the forecast period is projected at approximately 2.7% per annum.

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CompetitionWithin Port Pirie and the surrounding region, Pirie Plaza is clearly at the top of the retail hierarchy, given that it is the only retail facility in the area that incorporates a discount department store. The only other major retail facilities include a Cheap as Chips discount variety warehouse and in the nearby town centre, there is an assortment of shops including a small Woolworths supermarket and adjacent retail complex of 12 mainly external shops.

Discussions with Port Pirie Council indicate that no significant changes to the existing competitive retail framework within the region are expected over the medium term, given the existing retail facilities and the projected population growth.

Beyond the main trade area, the nearest major retail facilities are located in the larger townships of Port Augusta, some 81 kilometres to the north, and Whyalla, 48 kilometres to the west across the Spencer Gulf. At Port Augusta, a new small format Big W discount department store of approximately 4,000m2 is expected to open mid 2005, to occupy the majority of a proposed small centre named Wharflands Plaza. It is likely that this development will only draw a small proportion of the retail expenditure from the northern trade catchment and will therefore have minimal impact on the trading results of Pirie Plaza.

Strategy for the Centre Centro MCS will focus on successfully concluding the major lease negotiations in 2005 with both Coles and Kmart. This provides an opportunity to potentially secure both a longer lease term and a higher rental than forecast within the Syndicate projections.

Potential also exists to upgrade the internal fit-out and the external presentation of the centre to attract more customers to the centre. To achieve this, operational expenditure has been budgeted for these areas.

Centro MCS will concentrate on completing tenancy remixing where appropriate, securing new tenants for the existing two vacant shops and over time realising the potential to increase specialty rentals.

G R E Y T E R R A C E

KMART COLES

MAJOR TENANTS SPECIALTY TENANTS

Pirie Plaza

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LocationColes Morwell is located in the Gippsland region of Victoria approximately 135 kilometres east of Melbourne. The town of Morwell is one of three main townships within the Latrobe Valley, together with Traralgon and Moe and is a major focal point for retail, commercial and service uses within the region. The town is also the centre of Victoria’s brown coal mining and electricity production industries, which are major sources of employment.

Coles Morwell is readily accessible to the surrounding population, located on George Street, in the commercial heart of the town centre. The Coles supermarket has excellent exposure to traffic travelling in both an easterly and westerly direction.

Centre and its TenantsColes Morwell is essentially a large Coles supermarket of 4,756m2 including a Liquorland outlet, with an additional seven specialty shops attached. The single level shopping complex has a total gross lettable area of 5,267m2 and was originally constructed in the 1970’s and extended to the rear in 1988. The centre provides on site car parking for approximately 259 vehicles. The majority of car parking is open grade with a portion of this beneath the rear section of the supermarket. Additional car parking is available on adjoining streets.

The Coles supermarket is trading at a level above the Coles supermarket national benchmark. Coles is now considering an internal refurbishment of the supermarket which should underpin further sales growth. Coles have a long term lease in place which expires in June 2013 and accounts for 94% of the gross income of the centre.

There are seven specialty shops, of which four are currently vacant. Although representing a small portion of the overall centre income, Centro MCS will continue to focus on securing tenants for these shops to enhance the Syndicate returns.

Trade AreaThe main trade area for Coles Morwell includes the township of Morwell and an area extending ten kilometres to the north of the town. A secondary trade area extends around 20 kilometres south of Morwell, bounded by the Princes Highway, and includes the townships of Churchill and Boolarra. The trade area has a population of 23,730 and is predominantly Australian born, however also contains a higher than average proportion of European born residents.

Population growth is projected at 0.2% per annum over the forecast period with analysis indicating the annual growth in retail spending including inflation should average 3.7% over the next decade.

CompetitionThe main competition for Coles Morwell is the Mid Valley Shopping Centre, the largest enclosed shopping centre in the Latrobe Valley. Mid Valley is located on the eastern edge of the Morwell urban area approximately three kilometres from Coles Morwell. The centre underwent an expansion in mid 2003 with the introduction of a Bi-Lo supermarket. It is now anchored by Safeway and Bi-Lo supermarkets, Target and Big W discount department stores as well as an eight screen cinema complex and Bunnings Warehouse. Research indicates that no further expansion or upgrade of Mid Valley Shopping Centre is proposed over the medium term.

Aldi supermarkets are understood to be seeking locations in the Latrobe Valley. The vacant former IGA supermarket site is currently for sale directly opposite Coles Morwell which could provide a site for Aldi. If Aldi moved here, analysis shows there would be an initial reduction in retail sales projected from 3.7% per annum to 3.0% per annum in that year, before returning to the underlying annual market growth of 3.7% per annum. Centro MCS believes that an Aldi supermarket in the Morwell town centre opposite Coles Morwell may have a positive impact by consolidating the supermarket offer in this part of town and strengthening the area as a retail destination.

Coles Morwell, Morwell, Victoria

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Strategy for the Centre The immediate focus for the centre will be to lease the vacant shops to quality tenants to increase the property income return. Centro MCS has allocated an incentives budget to secure new tenants and improve shop fitouts.

Centre improvements will continue to be made with capital expenditure forecast for such items as air conditioning replacement in the Coles tenancy. The Coles supermarket is also likely to undergo some internal refurbishment in the short term. This outcome would assist sales growth for the store and will be encouraged by Centro MCS in discussions with Coles Myer.

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EMERALD VILLAGE

EMERALD MARKET PLAZA

Emerald Market Plaza & Emerald Village, Emerald, Queensland

LocationEmerald is situated at the intersection of the Capricorn Highway and the Gregory Highway, approximately 300 kilometres west of Rockhampton and 660 kilometres north-west of Brisbane in the central highlands region of Northern Queensland.

The town was originally established around 1880 as a base for the building of the Western Railway out to Longreach and Mount Isa. In the late 1970’s, the first coal mines opened in the region known as the ‘Bowen Basin’ and coal mining still forms one of the major employers and key drivers of the Emerald economy. Further coal mines are now planned throughout the region, contributing to a stable economic environment. At this stage there does not appear to be any foreseeable factors which will impact on coal mining demand throughout the world.

Emerald is now a vibrant thriving township with strong demand for offices, retail outlets and tourist activity within the Central Highlands region of Queensland. Other key industries within the region include cotton production, cattle farming, cereal grain production, the citrus industry, gem mining, tourism and supporting service businesses.

Trade AreaThe trade area servicing both Emerald Market Plaza and Emerald Village comprises a primary sector encompassing the township of Emerald and surrounding townships within 50 to 150 kilometres such as Tieri, Anakie and Rollestone. The secondary trade area extends further to both the north and east.

The existing population is estimated at 32,070 including 18,190 in the primary sector. The population in the trade area is expected to stabilise in the future, with continued solid growth within the primary sector around Emerald and some population declines forecast in the secondary sectors. The increasing population level within the Emerald township has led to increased demand for housing within this region, coupled with increased demand for rental accommodation from mine workers. This built-up demand for housing has led to a sharp rise in both property prices and rental rates within the Emerald region. The high property values are adding to the wealth of local owners and this appears to be flowing through to increased retail spending.

Comparisons of the resident profile against the non-metropolitan Queensland average are positive, with the average age being much younger and the per capita income significantly higher. This reflects the large number of young workers earning high wages in the mining industry and contributes to the overall resident spending being some 4.4% above the comparable average.

Resulting from the above factors as well as inflationary pressures, annual retail sales growth of 3.5% is forecast to continue over the period to 2016.

CompetitionThe focus for retail activity within the main trade area is largely provided by Emerald Market Plaza and Emerald Village Shopping Centre. The remaining strip retail facilities include a small IGA Everyday supermarket and The Warehouse discount variety store.

The competitive locations of retail facilities within the surrounding Emerald region include supermarket based facilities at Blackwater, Tieri, Clermont, Middlemount and Dysart, up to 100 kilometres away from Emerald. Each of these retail centres service the food and convenience needs of residents within what are primarily mining townships. There are very few if any non-food shopping facilities in these towns. The major non-food shopping facilities throughout the Emerald region are provided at Emerald itself, and over 270 kilometres away at the major township of Rockhampton.

Ownership of both retail facilities in town provides an opportunity for Centro MCS to manage the centres in a complementary fashion and potentially reduce running costs.

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Emerald Village Shopping CentreEmerald Village is located on the south-western corner of Hospital Road and Curt Street in Emerald, on the northern side of the township.

The property is a fully enclosed single level neighbourhood shopping centre constructed during 1980 and periodically refurbished, with the most recent upgrade being completed in 1996. The centre is anchored by a full line Woolworths supermarket and 26 specialties including a freestanding KFC outlet and Chain Reaction store. The total gross lettable area is 7,285m2 and on site car parking is provided for approximately 362 vehicles.

The centre has a simple T-shape design with the Woolworths supermarket having significant frontage to the main retail mall. Access to individual retail tenancies is easy and direct with all specialty shops benefiting from the traffic flows generated by Woolworths.

The Woolworths supermarket is a large 4,200m2 store recording a very strong sales level 18% above the typical sales volume achieved by supermarkets in Australian supermarket based centres. It is the most successful supermarket facility in the trade area and analysis indicates positive future sales growth to continue over the next decade.

Reflecting the strong performance of the Woolworths supermarket, the centre includes an excellent provision of retail and non-retail specialty stores including national tenants such as Commonwealth Bank, Rockmans, Loot Homewares, Lenards Poultry, Just Jeans and Flight Centre. The average occupancy cost ratios for retail specialty stores are relatively low compared with single

supermarket based centres in Australia and therefore current rentals should be sustainable and possible increases may be achievable in the future.

Strategy for the Centre Given the strong performance of Emerald Village, it is likely that the centre will continue to trade strongly with no major competitors likely to impact on the sales performance. Notwithstanding this, Centro MCS will continue to focus on improving the current specialty mix by replacing under performing retailers with new quality tenants as well as maintaining the centre’s 100% occupancy rate.

Further market share increases at the centre would be achieved through the addition of a major non-food trader such as a mini discount department store. Management has held preliminary discussions with national operators to establish a store at Emerald Village. This opportunity will continue to be pursued by the Centro MCS development team.

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Emerald Market PlazaEmerald Market Plaza is located on the north-western corner of Clermont Street and Max Gorlick Drive, at the southern end of the Emerald town centre. The modern simply designed centre has a gross lettable area of 6,493m2 and was constructed in 1997. It incorporates a Coles supermarket, Target Country store and 21 specialties. The overall quality of accommodation is of a high standard with good quality shopfronts and fitouts throughout the centre. On site car parking is provided for 321 vehicles.

The Coles supermarket of 3,000m2 records a moderate sales volume. The store however, has been recording solid sales increases over the past year showing double digit sales growth. Sales are forecast to grow strongly over the next decade at an average rate of 5.2% per annum.

The small Target Country store with an area of 902m2 is one of the only two major non-food traders within the Emerald region and subsequently records very solid sales. Target Country has expressed interest in expanding their store and Centro MCS are currently in discussions to try and satisfy their space requirements.

Overall total centre sales at Emerald Market Plaza are projected to show continuous sales growth of 5.6% per annum to 2008.

Strategy for the CentreCentro MCS will focus on opportunities to remix the specialty tenancies at the centre, by replacing some of the poorly performing tenants with new quality retailers. In particular, the centre could include a greater number of food retail and food catering stores with these types of usages being targeted for the existing vacancy. Shoppers would also benefit from the introduction of additional national apparel specialty chains. This type of remixing would add to the already strongly trading newsagency, pharmacy, optometrist and butcher operating at the centre and should lead to incremental market share increases. Occupancy costs at the centre should be sustainable at current levels and there may be opportunities for further specialty rental growth in the future.

The current successful trading level achieved by Target Country also indicates the potential for a larger sized non-food trader as an additional anchor to the centre. Discussions will continue to be held with Target regarding a potential store expansion.


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Section 5 ManagementEmerald Village, Emerald, Queensland

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Section 5 Management

5.1 CENTRO MCSCentro MCS is a division of Centro. Centro is a listed property trust vehicle specialising in the ownership, management and development of retail properties throughout Australia, New Zealand and the United States. Today Centro has a market capitalisation of over $3.8 billion and over $6.4 billion of funds under management.

Centro MCS is Australia’s largest property syndicate manager. The group currently manages 30 syndicate portfolios valued at over $2.8 billion. The chart below shows Centro MCS’s prominent position in the syndicate market.

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5.2 KEY BENEFITS OF INVESTING WITH CENTRO MCS

• Experienced Retail Property Specialist – Centro MCS specialises in the management of retail property. Centro MCS manages shopping centres as a business and has developed the required expert skills to effectively manage, remix and redevelop shopping centres to enhance the capacity to generate optimum returns.

• Property Management and Leasing Expertise – Centro MCS’s policy of managing each property directly, as opposed to outsourcing the function to an agent, provides a competitive advantage in maximising the performance of the properties and returns to Investors. Centro MCS’s intensive ‘hands on’ management of each asset has enabled it to develop significant resources and expertise in the area of centre management and redevelopment.

• Proven Performance History – Centro MCS direct property syndicates have an impressive performance record. An equal investment in every Centro MCS direct property syndicate (managed for more than one year) would have earned a total return including income and capital growth of 17.0% for the year ended 30 June 2004. Over the long term, an equal investment in every Centro MCS direct property syndicate since inception to 30 June 2004 would have earned 18.3% per annum. (Investors should note that past performance is not an indication of future performance.)

• Australia’s Largest Direct Retail Manager – Centro MCS currently manages 30 retail portfolios valued at over $2.8 billion. This translates into substantial savings across investment portfolios through utilising economies of scale and provides the necessary resources to ensure that all centres are managed to their full capacity. Centro MCS has developed significant relationships with major anchor and national tenants and is currently the largest landlord to two of Australia’s largest supermarket chains, Coles and Woolworths.

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Centro Executive Committee


5.3 CENTRO PROPERTIES GROUPCentro is a listed property investment group specialising in the ownership, management and development of retail properties.

Centro, as a retail property specialist, owns and manages 132 retail properties across Australia, New Zealand and California (USA), worth over $6.4 billion and produces retail sales turnover of $8.3 billion.

Centro is an ASX100 listed entity with a market capitalisation which has grown from $220 million seven years ago to over $3.8 billion today. Centro’s value adding has delivered to its shareholders the highest return of any ASX200 listed property trust over five and ten years with an average five year total return of 19.6% to July 2004.

Centro Properties Group is managed by a Board of Directors who are profiled on the inside cover of this PDS.

5.4 MANAGEMENT OF THE PORTFOLIO

Centro MCS has in-house property management, development and leasing resources, combined with a network of regional offices to ensure that on site operational staff have the local support they require to properly manage the properties in their care. Centro MCS believes that its combination of funds management and operational management skills within the same organisation is a particular strength offered by it, to both existing and new Investors in managing the performance of the retail assets and returns to Investors.

Centro MCS believes that property, particularly retail property, needs to be continually reviewed, upgraded and redeveloped, so as to maximise its value and retain its competitive position. This approach provides Centro MCS with the opportunity to take advantage of market changes as they occur. Centro MCS has the in-house resources to investigate development alternatives and manage the construction, leasing and launch phases of a redevelopment to ensure the best possible delivery.

Additionally, it is Centro’s preference to own a part of the properties or investment products that it manages and as such Centro (or entities it manages or controls) intends to maintain an investment of 25% to 50% in this Syndicate. This is a significant factor which Centro MCS believes ensures a close alignment of Centro’s interests with Investors’ interests in Centro MCS syndicates.

5.5 WHY IS CENTRO SELLING THE PROPERTIES TO THE SYNDICATE?

The transaction benefits both Centro and Centro MCS Investors in a number of ways:

• Centro MCS has gained access to a portfolio of quality retail shopping centres which are currently hard to find in the Australian market.

• By acquiring this property portfolio Centro MCS is able to meet Investor appetite for quality direct retail property Syndicates.

• The property portfolio was originally largely owned by the Prime Retail Group (Prime), a listed property trust managed by Centro. Centro merged with Prime on 8 October 2004 and Centro indicated at that time that a number of the Prime assets would be syndicated.

Syndicate Funds Management Team

The Syndicate Funds Management Team is responsible for the ongoing management of existing syndicates and the delivery of new syndicate products to meet Investor requirements.

Centro’s Executive Committee is a highly experienced senior management team, managing the overall strategy and operations of the Centro Group.

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• Centro was willing to sell these properties to the Syndicate as this portfolio of convenience neighbourhood shopping centres did not generally fit Centro’s general investment mandate, which is to invest in larger regional and sub-regional shopping centres. The portfolio on offer consists of smaller convenience neighbourhood shopping centres which have been very popular with Syndicate Investors. Centro will maintain a significant interest in the properties by being a major co-investor in the Syndicate, thereby aligning Centro’s interest with Syndicate Investor’s interests.

• The property portfolio was sold on an arms length basis, supported by independent valuations with minimised sale and purchase transaction costs.

• Each property was assessed prior to purchase by Centro MCS as being suitable for syndication due to their inherent convenience food based characteristics.

5.6 RESPONSIBLE ENTITYAt commencement of the Syndicate, the Responsible Entity of both the Syndicate and the NZ Trust, is CPT Manager Ltd. However, it is proposed that Centro MCS Manager Ltd will become the Responsible Entity of both the Syndicate and the NZ Trust.

Centro MCS Manager Ltd and CPT Manager Ltd are both wholly owned subsidiaries of Centro. They have the same Board of Directors, corporate governance policies, dispute resolution systems, portfolio managers, compliance committee members, employees and resources. Centro MCS Manager Ltd was established in 1993 and has been promoting and managing property syndicates since that time. It is the Responsible Entity of 27 managed investment schemes that invest in direct retail property. Centro MCS Manager Ltd is currently Centro’s preferred Responsible Entity for syndicates, and supports Centro’s current business structure; it is on this basis that Centro seeks to alter the Responsible Entity.

CPT Manager Ltd holds AFSL 238 454 which permits it to be the Responsible Entity of schemes such as Centro MCS 34. Centro MCS Manager Ltd holds AFSL 238 775 which although similar to the AFSL of CPT Manager Ltd, requires a variation to enable it to be the Responsible Entity of schemes such as Centro MCS 34, where scheme assets are held through sub-trusts. Centro MCS Manager Ltd has applied to ASIC for its AFSL to be varied in this way, and expects that the variation will be granted.

At that time, CPT Manager Ltd will retire and Centro MCS Manager Ltd will be appointed as Responsible Entity of Centro MCS 34. This PDS will be deemed to have been issued by Centro MCS Manager Ltd from that time. If Centro MCS Manager’s AFSL is not varied as sought, CPT Manager Limited will remain as Responsible Entity.

By making an application for investment in the Syndicate or the NZ Trust, Investors are deemed to have approved the replacement of CPT Manager Ltd by Centro MCS Manager Ltd as Responsible Entity.

The change of Responsible Entity will have no impact on Investors; after the change of Responsible Entity, the Syndicate will continue to be operated in the same manner.



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Section 6 Financial InformationWoodcroft Plaza, Woodcroft, New South Wales

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Section 6 Financial Information

This forecast financial information in this Section includes:

• Forecast distributions of the Syndicate (including key accounting policies and key assumptions);

• Sources and application of funds associated with the Offer; and

• Taxation implications for Investors.

Please refer to Section 7 for financial projections for the New Zealand Trust.

Due care and attention has been given to the preparation of the forecasts. However, forecasts by their very nature are subject to uncertainties and contingencies, many of which are outside the control of the Manager.

6.1 FORECAST DISTRIBUTIONSSet out below are the distribution forecasts for the six month period ending 30 June 2005 and the three financial years ending 30 June 2006, 2007 and 2008. The assumptions on which the forecasts are based are set out in Section 6.4.

Year Ended 30 June Notes 2005(1)

$’0002006$’000

2007$’000

2008$’000

Net Property Income

Pinelands Plaza 953 1,991 2,033 2,092

Woodcroft Plaza 700 1,415 1,486 1,554

Lismore Central 1 804 1,519 1,530 1,537

Pirie Plaza 561 1,198 1,223 1,247

Coles Morwell 393 808 839 869

Emerald Village 385 770 801 829

Emerald Market Plaza 244 470 483 495

Syndicate Net Property Income 2 4,040 8,171 8,395 8,623

Interest Income 3 4 11 10 13

Total Syndicate Income 4,044 8,182 8,405 8,636

Interest Expense 4 2,050 4,194 4,251 4,299

Management Fee 5 262 478 557 696

Other Expenses 6 79 160 165 171

Total Expenses 2,391 4,832 4,973 5,166

Net Operating Income 1,653 3,350 3,432 3,470

Interest paid to Equity Noteholders 7 198 404 412 419

Net Profit 1,455 2,946 3,020 3,051

Transfer from / (to) Distribution Equalisation Fund 8 (8) 9 (8) (1)

Distribution to Investors 1,447 2,955 3,012 3,050

Forecast Distribution Yield

Distribution as a Percentage of Equity 9 7.70% 7.80% 7.95% 8.05%

Tax Advantaged Portion 100.00% 100.00% 88.00% 74.00%

Forecast Equivalent Pre-Tax Yield(based on a 48.5% taxpayer)

10 14.95% 15.15% 14.54% 13.64%


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Note 1 – Income (Lismore Central) The Lismore Central 2007 financial forecast year contains a vendor guarantee of $100,000 if required to maintain forecast distributions.

Note 2 – Syndicate Net Property IncomeIn forecasting net income from the properties, the current rental and rent review provisions in respect of each tenancy were analysed and adjustments made to the passing rents to reflect anticipated variations upon rent review. Where leases provide for a CPI increase the key assumptions noted in Section 6.4 have been applied. Fixed percentage increases have been applied as per the lease, and market reviews are based on the Manager’s estimate of market rentals.

Centro MCS assumes that all existing leases renew upon expiry of the existing lease terms and rental reviews required at those dates have been adjusted to the Manager’s consideration of the market in accordance with the policy referred to above. Major lease expiries within the forecast period at Pinelands Plaza, Lismore Central and Pirie Plaza have had regard to valuation estimates at lease renewal and projected sales for the tenancies.

The property forecasts include an allowance for vacancies at each of the centres should existing tenants not renew.

Recoverable operating expenses, including items such as rates, insurance, gardening, cleaning, repairs and maintenance, fire protection and property management fees have been indexed at the applicable annual CPI forecast. Recoveries of operating expenses have been calculated in accordance with the relevant lease provisions of applicable tenants.

Non-recoverable expenses have been indexed at the applicable annual CPI forecast.

Note 3 – Interest IncomeInterest on surplus funds held, pending distribution, has been calculated at 4.50% per annum.

Note 4 – Interest ExpenseInterest on the Loan (including the bank’s lending margin and Centro’s hedge margin) has been calculated using the following rates for the first three and a half years of the Syndicate term:

30 June 2005(1)

30 June 2006

30 June 2007

30 June 2008

6.35% 6.35% 6.35% 6.35%


The Manager has arranged a hedge (see Section 6.9), which has fixed the interest rate on $67 million of borrowings for a term of seven years to December 2011.

Note 5 – Management FeeThe Manager is entitled to Syndicate management fees of 0.35% of the Gross Value of Assets and up to 4.0% of the total annual Syndicate income. The Manager will charge a fee of 0.35% of the Gross Value of Assets and 3.5% of the annual total Syndicate income for the initial term of the Syndicate. The fee is payable quarterly in arrears. If the Syndicate is rolled over or extended for a further period then this fee will increase to 0.425% of the Gross Value of Assets and 4.25% of the annual total Syndicate income (see Section 9.5 for further details).

The Manager has deferred a total of $360,000 of this fee over the first two years of the Syndicate. The Manager may waive or defer all or part of this fee in any particular year. In the event that available cash exceeds forecast in any subsequent year, the Manager will be entitled to recover any deferred fees that have not been waived out of such excess, failing which the Manager will be entitled to recover the balance of those deferred fees that have not been waived at the end of the period of investment or earlier sale of the properties or on each rollover of the Syndicate. However, no part of such deferred fees will be payable if, after payment of such part, the amount then repayable to each Investor would be less than the capital subscribed by such Investor.


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Note 6 – Other ExpensesIncludes the Manager’s estimate of costs (payable on the basis set out in Section 9.5) associated with accounting, registry, travel and audit fees (escalated over the forecast period by the CPI assumptions) and custodian fees.

Note 7 – Interest Paid to Equity NoteholdersThe Equity Noteholders will receive quarterly interest payments, on the same dates as distributions are paid on Units. The first payment will be from the period that the application is allotted to 31 March 2005. Subsequent payments will be made quarterly. Interest paid to Equity Noteholders will rank equally with distributions to Investors but will include a margin of 0.30% per annum above the annual cash distribution yield paid to Investors. (Refer to Section 2.9 for further details.)

Note 8 – Distribution Equalisation FundAmounts available for distribution and not paid in the current period are credited or debited to a distribution equalisation fund. The balance of this fund will be utilised in later years.

Note 9 – Distributions to InvestorsCash available for distribution has been shown as a percentage return on equity invested. The distributions will consist of the surplus cash from the investment in the properties after providing for all allowances, expenses and interest on borrowings. Investors who apply prior to 1 January 2005 will receive a fixed pro-rata distribution at the rate of 7.70% per annum from the date of allotment of the application (usually within five business days of receipt of the application) to 31 December 2004.

Note 10 – Forecast Equivalent Pre-Tax YieldThe forecast equivalent pre-tax yield is the distribution yield on a fully taxable distribution that an Investor on the top marginal tax rate would need to receive to obtain the same annual after-tax rate return in that year.

This calculation does not take into account potential capital gains or losses on the investment or tax resulting from reductions in the capital gains tax cost base.



Coles Morwell, Morwell, Victoria

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6.2 SOURCE AND APPLICATION OF FUNDSThe following table shows the Source and Application of Funds for the Syndicate.

Purchase Price of Properties $’000 $’000

Pinelands Plaza 25,800

Woodcroft Plaza 18,500

Lismore Central 18,000

Pirie Plaza 13,000

Coles Morwell 11,100

Emerald Village 9,850

Emerald Market Plaza 6,650

Total Purchase Price 102,900

Stamp Duty 204

Acquisition Costs(1) 880

Syndicate Establishment and Equity Raising Fee(2) 5,145

Syndicate Establishment Costs(3) 640

Total Application of Funds 109,769

Funded By

Equity from Investors (including Centro or entities it manages or controls) AUD $1.00 per unit

37,884

Equity Notes 5,000

Loan from Financier 66,885

Total Source of Funds 109,769

Net Tangible Assets (NTA) per Unit (4) $0.87

(1) Includes the costs to provide legal, structural, mechanical, fire, electrical, environmental, valuations, demographics, depreciation and accounting services in the property investigations including Centro due diligence costs of approximately $370,000.

(2) Payable to the Manager for establishment of the Syndicate, including business structure, equity raising and arranging the Syndicate finance. Finance costs are estimated at approximately $500,000.

(3) Includes fees, costs and disbursements paid to consultants and service providers relating to work conducted in respect of legal, PDS production, accounting, tax and registration of the Syndicate.

(4) The NTA calculation is: (Total Purchase Price + Acquisition Costs + Stamp Duty) - Loan from Financier Equity from Investors + Equity Notes


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6.3 KEY ACCOUNTING POLICIESThis financial information has been prepared in accordance with the accrual basis of accounting, Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board (AASB), Urgent Issues Group Consensus Views, the requirements of the Syndicate Constitutions, and the Corporations Act 2001. The principal policies are described below:

InvestmentsThe Syndicate’s investment in the properties will be initially brought to account at cost which includes the costs of acquisition. Costs of acquisition include the Manager’s estimate of fees and costs for professional services incurred by the Syndicate.

The costs of any subsequent developments and refurbishments of the properties, including financing charges incurred during the period of development or refurbishment will be capitalised.

It is intended that the properties in the Syndicate be independently revalued at 31 December 2005 and at least every two years with updates every year. Revaluations will be conducted more frequently if in the view of the Manager there has been a material movement. The revaluation of the properties will not take account of any potential capital gains tax.

Increments arising from the revaluation of the Syndicate’s investment in the properties will be transferred directly to an asset revaluation reserve, except to the extent that the increments reverse a revaluation decrement previously recognised as an expense in the profit and loss account, in which case they will be recognised as revenue in the profit and loss account for the period. Decrements from revaluations will be brought to account in calculating the operating profit or loss for the period and then transferred to an asset revaluation reserve before arriving at a distributable amount, except to the extent that the revaluation decrement reverses a previous increment in which case the decrement will be taken directly to an asset revaluation reserve.

The Syndicate does not charge depreciation on buildings and integral plant and equipment nor does it amortise capital lease incentives. The interests in buildings, plant and equipment are held by the Syndicate as an investment property, and so are continually maintained.

Syndicate Establishment CostsSyndicate establishment costs (including the Syndicate establishment and equity raising fee) will be recognised directly as a reduction from the proceeds of the issue of Units.

Adoption of International Financial StandardsThe AASB is adopting International Financial Reporting Standards (IFRS) for application to reporting periods beginning on or after 1 January 2005. The adoption of Australian equivalents to IFRS will be first reflected in the Syndicate’s financial statements for the half year ending 31 December 2005 and the year ending 30 June 2006.

Adoption of Australian equivalents to IFRS may result in changes to accounting policies that have significant impacts on the reported financial position and financial performance of the Syndicate.

Changes identified to date that will be required to the Syndicate’s existing accounting policies, that are expected to arise from adopting Australian equivalents to IFRS include the following:

(i) Investment Properties – If investment properties are measured at fair value, gains or losses arising from changes in fair value are to be recognised in the statement of financial performance in the period in which they arise;

(ii) Financial Instruments – Financial assets held by the Syndicate will be subject to classification as either held for trading, held to maturity, available for sale or loans and receivables and, depending upon classification, measured at fair value or amortised cost; and

(iii) Interest Rate Risk Management Derivatives – All derivatives must be recognised in the Statement of Financial Position at fair value. All derivatives will be revalued to fair value at each balance date with any fair value movements taken either to the Statement of Financial Performance or equity depending on the nature and effectiveness of the hedge. There are strict rules regarding the designation of derivatives as hedges and each hedge is required to be tested each reporting period for effectiveness to maintain its hedge status.

The adoption of IFRS will have no impact on distributions to Investors.


48 49

6.4 KEY ASSUMPTIONSThe financial forecasts have been prepared based on various assumptions. Investors should appreciate that many factors which affect results may be outside the control of the Manager and experts who have provided information on which forecasts are based, or may not be capable of being foreseen or accurately predicted. As such, actual results may differ from the forecasts. The following assumptions represent the Manager’s best estimates of anticipated future transactions and events, based on information and documentation currently available.

Distribution PolicyUnits will participate in distributions pro-rata from the date of issue. For each financial year after the Syndicate is fully subscribed, the distribution per Unit will be determined by dividing the total distribution for the given period by the number of Units eligible for distribution on the last day of the accrual period.

Income TaxUnder current tax legislation, the Syndicate is not liable for income tax provided Investors are presently entitled to all the taxable income of the Syndicate each year.

Interim FundingThe acquisition of the properties has been funded by the provision of a loan from Centro and/or its associates. The portion of this interim funding loan from Centro is to be replaced by bank loan facilities of approximately $71.0 million. Initial borrowings will amount to approximately $66.9 million for the purpose of acquiring the ownership interest in the properties. The interim funding loan will bear the equivalent rate of interest including margin as disclosed in Section 6.1, Note 4. The balance will bear interest at a rate equivalent to the distribution yield payable on Units and will be progressively repaid as Units are issued to Investors. The financial forecasts assume full subscription to Units offered under this PDS.

Goods and Services Tax (GST)An opportunity to review a number of leases will arise during the term of the Syndicate. The financial forecasts have been prepared on the basis that the Manager will be able to successfully recover GST from tenants where these opportunities to review arise.

All financial information relating to the Syndicate has been stated at the cost to the Syndicate. Where GST has been

paid or is payable and a refund is to be obtained, the expense has been shown net of GST. Where a full refund is not available, the expense includes the non-recoverable GST.

Capital Works FundingCapital works of $4.1 million (comprising the proposed $2.5 million to be spent on capital improvements to the properties and $1.6 million on pre-leasing expenses), are not to be funded by cash flow from operations. Instead, these will be financed by loan facilities described in Section 6.6. Interest on these amounts progressively spent over the term of the Syndicate has been provided for in the financial forecasts.

Performance Fee to Responsible EntityAt the end of the initial period of investment or earlier sale of the properties or on rollover of the Syndicate, the Manager is entitled to a fee of 2.5% of the Syndicate’s share of the Gross Value of Assets under management (or sale price of the properties, as the case may be) provided that no part of such fee is payable if, after payment of such part, the amount then repayable to each Investor would be less than the capital subscribed by each Investor. This fee represents a fee payable to the Responsible Entity for the successful management of the Syndicate.

At the end of the initial period of investment or earlier sale of the property or rollover of the Syndicate and in the event that the value of the real estate and the Syndicate is such that it would result in a premium on the capital subscribed of up to 20% by each Investor, the Manager is entitled to a performance fee of 10% of such premium, provided that no part of such fee is payable, if after payment of such part, the amount then repayable to each Investor would be less than the capital subscribed. If the value of the real estate and the Syndicate is such that it would result in a premium on the capital subscribed of over 20% by each Investor, the Manager is entitled to a performance fee of 20% of such premium.

The above fees will also apply at the end of any subsequent period of investment after the initial period of investment, however, in that case will only be payable if and to the extent that the value of Investors’ holdings (Current Unit Value) exceeds the Current Unit Value at the commencement of that period of investment.

If the Manager retires, or is removed as Responsible Entity and is replaced by a new Responsible Entity, the Manager will be entitled to a fee of 3% of the Gross Value of Assets. If this fee is applied then the above performance fee is no longer payable to a new Responsible Entity.


48 49

Management Expense Ratio (MER) The MER calculates the total fees and charges paid or payable by the Syndicate, including management fees, custodian fees and other expenses chargeable to the Syndicate, as a percentage of the average gross Syndicate property value.

Year MER (without deferral of

Management Fee)

MER (with deferral of

Management Fee)

2005(1) 0.77% 0.65%

2006 0.77% 0.60%

2007 0.75% 0.65%

2008 0.76% 0.76%


The Manager has deferred management fees totalling $360,000 over the first two full years of the Syndicate.

Taxation Assumptions Key assumptions in calculating the tax-advantaged portion of forecast distributions are as follows:

• Syndicate establishment and equity raising fees and costs are amortised over a five year period to the extent that this expenditure is not included in the cost of either the depreciating asset or that it is not deductible under another provision of the income tax law;

• Borrowing expenses are amortised over the term of the loan or five years, whichever is shorter;

• For the purpose of these financial forecasts, the Manager has adopted a conservative approach and amortised plant and equipment over each item’s expected life using the prime cost method or diminishing value method, as appropriate;

• Building allowances are calculated on a straight line basis, at the prescribed rates of 2.5% per annum and 4% per annum;

• The Manager has provided for other adjustments as required to taxable income; and

• There are no material changes in the indirect and direct tax regime;

Other AssumptionsOther assumptions made in preparing the financial forecasts include:

• There are no changes in the property holdings during the Syndicate term;

• There are no changes to regulations and legislation that would have a material impact on the Syndicate; and

• There is no material change in the competitive environment in which the centres operate other than identified in the Syndicate forecast.

Where allowances and estimates are used these are based on the Manager’s knowledge and experience.


6.5 TAX IMPLICATIONS FOR INVESTORS IN THE SYNDICATEInvestors in the Syndicate will receive a distribution on their Units after payment of Syndicate expenses and interest on funds borrowed by the Syndicate. The table below shows the estimated gross distribution and amount of the tax-advantaged portion of the distribution per Unit in the forecast period.

Forecast Tax-Advantaged Portion of Distributions

Year Ending 30 June

2005(1) 2006 2007 2008

Distribution to Investor 7.70% 7.80% 7.95% 8.05%

Tax-Advantaged Portion 7.70% 7.80% 7.00% 5.95%

Assessable Income 0.00% 0.00% 0.95% 2.10%

Forecast Proportion of Distributions Tax-Advantaged 100.00% 100.00% 88.00% 74.00%


50

Where Investors hold their investment on capital account, the commencing cost base for capital gains tax purposes will be approximately $1.00 per Unit. Where an individual Investor or a trust Investor wishes to dispose of their Units (during the Syndicate term or under the Exit Mechanism) or where the Syndicate is terminated, the current tax legislation provides that where an investment is held by an individual for more than 12 months, they will only be subject to tax on 50% of the capital gain (with no indexation applying to the cost base). Where the Investor is a superannuation fund, they will be entitled to a discount of 33.3% of the capital gain (with no indexation applying to the cost base) where the Units are held for more than 12 months. Where the Investor is a company the capital gain will not be eligible to be discounted.

The underlying property will be subject to depreciation benefits and building allowances, which will result in a portion of the income distributed to Investors being tax-advantaged (refer to the forecast on the previous page) and this will reduce the cost base. Where the Syndicate subsequently disposes of underlying property that it has owned for more than 12 months, the Syndicate can pass on the 50% discount on capital gains to individual Investors. This distribution to individual Investors of the 50% discount on capital gains will not result in any cost base adjustments.

6.6 LOAN Borrowings are to be used to partly finance the funds required by the Syndicate and to improve the return on Investors’ equity.

The Manager expects to arrange a bank loan limited to $71.0 million (‘Loan’) which equates to an initial loan to value ratio (‘LVR’) of approximately 65%. Initial borrowings will amount to approximately $66.9 million and will be used for the purpose of acquiring the properties. In addition, future operational capital expenditure totalling $4.1 million has been forecast to be spent during the Syndicate term.

6.7 NON-RECOURSE LOANThe Bank’s recourse in the event of a default will be limited to the assets of the Syndicate including any money in the Syndicate to which Investors are entitled. This means Investors are not at risk for any more than the equity subscribed by them on application (plus any undistributed income).

Specifically, the Loan will be secured by:

(a) a charge over all the assets of the Syndicate; and

(b) a mortgage over each of the properties owned by the Syndicate.

6.8 TERM OF THE LOANThe Loan is expected to be for a term of five years, reflective of general bank financing terms. An extension will be negotiated by the Manager closer to expiry of the finance facility.

6.9 INTEREST RATESIn order to stabilise the income stream and reduce interest rate risk, the Syndicate has entered into a fixed term hedge for $67 million for seven years to December 2011, through an interest rate swap.

The Constitution allows the Manager to hedge interest rates for periods extending beyond the scheduled Syndicate expiry date. To date all Centro MCS Syndicates that have been subject to rollover have received overwhelming investor approval to continue. Given this, and although hedging termination costs may be incurred in the event that a rollover did not happen, the Manager believes it is not appropriate to restrict the performance of the Syndicate by planning only for the initial term of the investment.

6.10 REPAYMENT OF THE LOANThe Loan will be on an interest only basis. This means that the principal is not due to be repaid until the Loan term has expired. Interest on the Loan will be met from income generated by the properties.



Right: Pinelands Plaza, Sunnybank Hills, Queensland

50

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52 53


Section 7 New Zealand Investors

52 53

The NZ Trust is an Australian constituted and registered trust for NZ Investors who do not wish to invest directly in the Syndicate.

At commencement of this NZ Trust the role of Manager will be held by CPT Manager Limited, a wholly owned subsidiary of Centro, whose AFSL permits it to be the Responsible Entity of investments such as this. Centro MCS Manager Limited, also a wholly owned subsidiary of Centro has made an application to the Australian Securities and Investment Commission (‘ASIC’) for variation of its Australian Financial Services Licence (‘AFSL’) and when that variation has been granted, CPT Manager Limited will retire and Centro MCS Manager Limited will become Responsible Entity. From that time, this PDS will be deemed to have been issued by Centro MCS Manager Limited. Refer to Section 5.6.

The NZ Trust will only invest in the Syndicate. Its only assets therefore will be Units in the Syndicate and any funds resulting from the holding of those Units.

The ways in which the NZ Trust differs from the Syndicate are set out in this Section. Unless otherwise stated, the rights of NZ Investors and the obligations of the Responsible Entity in relation to the NZ Trust are the same as those in relation to the Syndicate, with all necessary changes being made to comply with the context and the Corporations Act 2001.

The Manager has the right to not accept any investments into the NZ Trust if the total combined investment within four months from the date of issue of this PDS does not exceed AUD$2.5 million. In that case Investors’ funds will be returned with bank interest earned.

7.1 STRUCTURE OF INVESTMENTNZ Investors may invest in the NZ Trust by subscribing for stapled securities, comprising three ordinary units in the NZ Trust (NZ Units) and two fully subordinated convertible unsecured notes (Unsecured Notes), permanently stapled together (Stapled Securities), issued at an issue price of AUD$5.00 per Stapled Security.

The NZ Trust will use the subscription proceeds from the issue of the Stapled Securities to acquire Units in the Syndicate on the terms of this PDS.

The relative proportions of NZ Units and Unsecured Notes comprising the Stapled Security will be 60% and 40% respectively. In other words, for each AUD$100 invested, a NZ Investor will subscribe for AUD$60

of NZ Units and AUD$40 of Unsecured Notes.

The Unsecured Notes will be fully subordinated convertible debt obligations of the NZ Trust. Quarterly payments to NZ Investors will be in the form of income distributions on NZ Units, interest on Unsecured Notes plus (at the Manager’s discretion) repayment of Unsecured Notes principal.

The principal rights attaching to the NZ Units, the terms of the Unsecured Notes and the terms of the trust deed which govern the Unsecured Notes are summarised in Section 7.6.

A summary of the current Australian and New Zealand income tax consequences of resident NZ Investors investing in the NZ Trust is contained in Section 7.5. As the circumstances for each NZ Investor may vary, NZ Investors should seek professional taxation advice in relation to their own position.

The diagram below shows the structure of the NZ Trust investment.


��

��

��


54 55

Quarterly distributions to NZ Investors will be in the form of distributions on NZ Units. Interest will also be paid quarterly on Unsecured Notes plus (at the Manager’s discretion) repayment of Unsecured Notes principal.

Entitlement to distributions and interest for the relevant period is calculated based on the number of Units held on the last day of the distribution period, being 31 March, 30 June, 30 September and 31 December. The Manager will pay distributable income and interest

shortly after the anticipated receipt date of underlying distributions from the Syndicate, which are expected to be paid within six weeks from the end of each distribution quarter.

Interest is payable on the principal amount of Unsecured Notes outstanding at the rates shown in the table below. Further, the Manager has the right (but not the obligation) to repay any amount of principal at any time. An indicative repayment schedule is also shown in the table.


Period Interest Indicative Repayment of Principal(per AUD$100 invested in Units)

Period to 30/6/2005(1) 6.50% $2.51

Year to 30/6/2006 6.80% $5.15

Year to 30/6/2007 7.30% $5.49

Year to 30/6/2008 7.70% $5.88


7.3 MINIMUM APPLICATIONAs with the Syndicate, the minimum subscription in the NZ Trust is AUD$10,000 with increments of AUD$1,000.

7.4 EXIT MECHANISM Centro offers NZ Investors an Exit Mechanism from the NZ Trust. This will assist NZ Investors in the planning of their financial affairs. The Exit Mechanism is the same as for the Syndicate (see Section 2.6), except that the price to be applied to Stapled Securities will be made up of the Net Asset Backing per Unit applicable at the time and (in the case of Unsecured Notes) the amount of principal outstanding.

7.5 TAX This Section sets out the Australian and New Zealand income tax consequences relevant to resident individual NZ Investors who invest in the NZ Trust on capital account. All NZ Investors should however, seek their own independent income tax advice.

Australian Taxation of the NZ Trust Under current Australian tax law, an investment trust such as the NZ Trust is not taxed on its income where NZ Investors are presently entitled to the trust income. Where the NZ Investors are presently entitled to the trust income, the taxable income flows to NZ Investors in proportion to their NZ Unitholding in the NZ Trust.

7.2 FORECAST DISTRIBUTIONSThe income of the NZ Trust comes solely from its investment in the Syndicate. Accordingly, the following forecasts of payments to NZ Investors assume the rate of return of the Syndicate as set out on page 5 and Section 6.1.

Year 1 Year 2 Year 3 Year 4

Forecast Distribution from Syndicate 7.70%(1) 7.80% 7.95% 8.05%

LESS:

Estimated expenses of NZ Trust 0.10% 0.10% 0.10% 0.10%

Payment to NZ Investors 7.60% 7.70% 7.85% 7.95%

COMPOSED OF:

Repayment of Unsecured Notes Principal 5.02% 5.15% 5.49% 5.88%

Interest on Unsecured Notes 2.58% 2.55% 2.36% 2.07%


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If the Manager disposes of an asset of the NZ Trust, any capital gain arising on the disposal will be included in the calculation of the NZ Trust’s net capital gain. The net capital gain of the NZ Trust is distributed to NZ Investors as part of the NZ Investors’ share of the NZ Trust’s taxable income for the year (in proportion to the NZ Investors’ percentage interest in the NZ Trust). Where the asset disposed by the NZ Trust was owned by it for a period greater than 12 months at the time of its disposal, the capital gain derived by the NZ Trust on the disposal of that asset would potentially be reduced by 50% for the purposes of calculating the net capital gain of the NZ Trust.

In calculating its Australian taxable income, the NZ Trust will be entitled to claim a tax deduction for interest expense incurred on the Unsecured Notes issued by the NZ Trust to NZ Investors, providing it has withheld interest withholding tax in accordance with the law on interest payments made with respect to the Unsecured Notes.

Under Australian tax legislation current at the date of this PDS, unit trusts such as the NZ Trust cannot distribute to NZ Investors any taxable losses incurred by the NZ Trust in an income year (i.e. where the NZ Trust’s assessable income is less than its allowable deductions). The benefit of such tax losses is not lost but may be claimed by the NZ Trust against its assessable income in a subsequent year provided certain tests are satisfied.

Where the NZ Trust derives a capital loss on the disposal of an asset, the capital loss will be retained by the NZ Trust and will be available to offset any future capital gains that may arise in the NZ Trust. Capital losses of the NZ Trust cannot be distributed to NZ Investors.

Australian Taxation of Resident NZ InvestorsResident NZ Investors will, as a general rule, be subject to Australian tax on Australian sourced income and capital gains.

The Manager will withhold tax on distributions from the NZ Trust at the applicable Australian non-resident tax rates. However, where a resident NZ Investor does not supply an Australian Tax File Number (‘TFN’) or an Australian Business Number (‘ABN’) to the Manager, the Manager is required, under Australian tax laws, to deduct tax from distributions of trust income (if any) at the tax rate of 48.5%.

Australian interest withholding tax at the rate of 10% will be applied to payments of interest by the NZ Trust to NZ Investors, irrespective of whether an Australian TFN has been provided to the Manager. Interest withholding tax is a final tax. The repayment of principal on the Unsecured Notes or conversion into Units should not be taxable, provided the amount of repayment, or the value of the Units received on conversion, does not exceed the cost of the Unsecured Notes repaid or converted.

NZ Investors who hold their securities on capital account will only be liable to pay Australian capital gains tax on disposal of their units in the NZ Trust where they, together with their associates, held a 10% or greater interest in the NZ Trust at any time in the five years prior to the disposal of their units.

Any repayments of NZ Trust capital to NZ Investors will not give rise to an Australian taxable capital gain to NZ Investors, provided the amount distributed is less than the NZ Investors’ cost base in the units from time to time. Any distributions of capital that exceed a NZ Investor’s cost base in their investment will generate a taxable capital gain for the NZ Investor where the NZ Investor holds a greater than 10% interest in the NZ Trust.

From 1 July 2003, new Australian withholding tax rules were introduced that will apply to certain payments to foreign residents. The nature of the payments that will be subject to these new rules will be set out in tax regulations that are yet to be released. Accordingly, at this time, it is not possible to advise the exact nature of the payments that will be covered by these new regulations.

New Zealand Income Tax Consequences for NZ InvestorsThese comments are relevant to NZ Investors holding securities in the NZ Trust on capital account and meeting the requirements of a ‘cash basis person’ for the New Zealand accrual rules. Whether NZ Investors are ‘cash basis persons’ depends on their personal circumstances and investments other than in the NZ Trust. However, a NZ Investor will not be a ‘cash basis person’ if the absolute value of their income and expenditure from financial arrangements in aggregate exceeds NZ$100,000, or if the absolute value of all of their financial arrangements exceeds NZ$1,000,000. The cash basis person status does not extend to non-individuals or individuals acting in their capacity as a trustee. If NZ Investors are in any doubt as to whether they are cash basis persons, they should seek their own tax advice as to their tax status.


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NZ Investors holding securities on revenue account (e.g. trading assets, or assets acquired for sale), individuals not meeting the cash basis person requirements, and all non-individual resident NZ Investors should seek their own tax advice.

Interest received by a NZ Investor on their Unsecured Notes will be subject to New Zealand income tax. Similarly, distributions from the NZ Trust in relation to the NZ Units will be taxable as dividends for New Zealand income tax purposes.

Amounts received by NZ Investors from the sale or transfer of their NZ Units should not be taxable in New Zealand. NZ Trust distributions to NZ Investors on the cancellation of NZ Units, representing a return of available subscribed capital on the NZ Units, should not be taxable upon receipt to NZ Investors, assuming the New Zealand Commissioner of Inland Revenue is satisfied that such distributions have not been made in substitution for the payment of dividends by the NZ Trust. Available subscribed capital returned on the cancellation of NZ Units should be equal to the cost of the NZ Units cancelled assuming the NZ Trust meets the definition of an ‘unlisted widely-held unit trust’ otherwise the available subscribed capital could be nil.

The repayment of principal on the Unsecured Notes or conversion into NZ Units should not be taxable, provided the amount of repayment, or the value of the NZ Units received on conversion, does not exceed the cost of the Unsecured Notes repaid or converted (all amounts being determined in New Zealand dollars). Any gain resulting from exchange rate differences will be taxable.

NZ Investors will be eligible to claim a tax credit in New Zealand for Australian withholding tax in accordance with New Zealand foreign tax credit rules. Such a tax credit can be offset against New Zealand tax payable on the income from the NZ Trust to which the Australian tax relates. If Australian tax exceeds the New Zealand tax, the tax credit will be limited to the amount of New Zealand tax payable on the income to which the credit relates.

As the income received from the NZ Trust will not be subject to New Zealand withholding taxes, NZ Investors may be required to file a New Zealand income tax return, even if they were not required to do so prior to investment in the NZ Trust.

The comments above are based on the law as it stands at the time of drafting. The New Zealand Government has signalled an intention to amend the tax rules applying to Australian unit trusts in certain contexts. Until legislation

is enacted, it is not possible to determine the effect, if any, such amendments may have on the NZ Trust.

Australian Goods and Services Tax (GST) The NZ Trust may not be entitled to full input tax credits on the acquisition of services from the Manager relating directly to the provision of management services to the NZ Trust. Where a full input tax credit is not available, the NZ Trust is likely to be entitled to a reduced input tax credit of 75% of the GST.

GST is not payable on the purchase or sale of Units in the NZ Trust, either by the NZ Trust on issue or redemption or any sale by Investors.

Seek Professional Tax Advice Investing and dealing with investments has tax (and often social security) implications that can be complex, and which are particular to NZ Investors’ circumstances. The Manager does not give tax advice. Further, the information in this PDS does not take into account NZ Investors’ personal circumstances or needs. This taxation analysis provides a broad summary of the Australian and New Zealand taxation consequences for NZ Investors holding Units in the NZ Trust.

Centro MCS recommends that NZ Investors seek professional advice prior to investing or dealing with your investment in the NZ Trust.

7.6 ADDITIONAL INFORMATIONApart from the information set out in this Section 7.6 the additional information set out in Section 9 pertains to both the NZ Trust and the Syndicate.

The ConstitutionThe Constitution for the NZ Trust is dated 7 May 2004 (‘NZ Constitution’) as amended from time to time. The NZ Constitution (and any amendments) has been lodged with ASIC.

The NZ Constitution of the Syndicate governs the rights and obligations of NZ Investors as Investors in the NZ Trust. Briefly, the NZ Constitution covers details relating to the fees of the Responsible Entity, certain rights of NZ Investors, and the Responsible Entity’s duties and powers.

The Responsible Entity may amend the NZ Constitution as specified in the NZ Constitution. The Responsible Entity cannot amend the NZ Constitution without the consent of NZ Investors (at a meeting convened in accordance with the Corporations Act 2001) unless the Responsible


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Entity reasonably believes that such amendment will not adversely affect the rights of NZ Investors.

The NZ Constitution includes provisions dealing with:

• Investments of the NZ Trust and valuation principles for assets;

• Payments to NZ Investors that are made by the NZ Trust;

• The obligations, duties and powers of the Responsible Entity and delegation of its functions;

• The duration of the NZ Trust including termination;

• Recoverable expenses, permitted borrowing and the limitation of liability and remuneration and indemnification of the Manager as the Responsible Entity; and

• Procedures for the convening and holding of meetings of NZ Investors.

Trust Deed – Unsecured NotesThe Unsecured Notes are issued by the Responsible Entity of the NZ Trust (Issuer) to Noteholders on the terms set out in the Unsecured Notes Trust Deed dated 31 May 2004 (‘Trust Deed’).

Sandhurst Trustees Limited (Note Trustee) is appointed Note Trustee under the Trust Deed and acts as Trustee under the Trust Deed for the benefit of the Noteholders.

In addition to setting out the terms of the Unsecured Notes, the Trust Deed also sets out the Unsecured Note issue procedure, the rights and obligations of the Issuer, the Note Trustee and the Noteholder and procedures for the maintenance of the register of Unsecured Notes and transfer of Unsecured Notes.

The Trust Deed provides that:

• Each Noteholder acknowledges that it has, independently and without reliance upon the Note Trustee or any other Noteholder and based on such documents and information it has deemed appropriate, made its own investigations into the affairs and financial conditions of the NZ Trust; and

• Each Noteholder must independently and without reliance upon the Note Trustee or any other Noteholder and based on such documents and information it deems appropriate make its own analysis and decision in relation to its rights and obligations under any document or agreement to which it and any other Noteholder or the NZ Trust is a party.

The Note Trustee is entitled to be indemnified under the Trust Deed in respect of all liabilities and expenses incurred by the Note Trustee in exercise of its powers or performance of its duties, except in the case of fraud, wilful breach of trust or gross negligence.

The Note Trustee holds its and the Noteholders’ rights and powers under the Trust Deed on trust for the benefit of the Noteholders subject to the terms of the Trust Deed.

The Trust Deed is executed for the benefit of the Noteholders who may not enforce their rights in respect of the Unsecured Notes independently from each other Noteholder. The rights of the Noteholders may only be enforced by the Note Trustee acting on instructions of the Noteholders.

The procedures for meetings of Noteholders are set out in the Trust Deed.

Terms of NZ UnitsThe NZ Trust is an Australian resident unit trust and registered managed investment scheme and as such, the rights and liabilities attaching to the NZ Units are set out in the NZ Trust’s Constitution and in the Corporations Act 2001. The main rights and liabilities attaching to the NZ Units are summarised below.

Voting RightsAt a meeting, and on a show of hands, each NZ Unitholder present in person or by proxy shall have one vote. On a poll, each NZ Unitholder will be entitled to one vote for each NZ Unit held.

NZ Unitholder MeetingsThe Manager may at any time summon a meeting of NZ Unitholders for such purposes as it sees fit. On the requisition in writing of at least 100 NZ Unitholders or at least 5% of NZ Unitholders in number, the Manager will convene a meeting of NZ Unitholders.

Rights on Winding UpOn a winding up, the net proceeds of realisation of the assets of the NZ Trust, after discharging or providing for all liabilities of the NZ Trust, must be distributed pro-rata to NZ Investors according to their NZ Unitholdings.


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Transfer of NZ UnitsA NZ Unitholder may only transfer NZ Units in such a manner as the Responsible Entity may prescribe from time to time.

The rights of NZ Investors will be governed by the Constitution of the NZ Trust and the Corporations Act 2001 and its regulations. The Constitution provides that the liability of each NZ Investor is limited to its investment in the NZ Trust. A NZ Investor is not required to indemnify the Responsible Entity or a creditor of the Responsible Entity against any liability of the Responsible Entity in respect of the NZ Trust. However, complete assurance cannot be given in this regard, as the ultimate liability of such Investors has not been finally determined by the Courts.

Terms of Unsecured NotesThe terms of the Unsecured Notes are set out in the Trust Deed.

The Unsecured Notes are unsecured and fully subordinated convertible debt obligations of the Issuer. The key terms of the Unsecured Notes are:

• The Unsecured Notes are stapled to the Units in the NZ Trust (that is, the Unsecured Notes and Units are linked together so that one may not be dealt with without the other). Two Unsecured Notes will be stapled to three Units;

• The Unsecured Notes bear interest on the principal amount outstanding at the rates per annum shown in the table in Section 7.2. Interest on the Unsecured Notes is payable quarterly in arrears;

• The Issuer has the right (but not the obligation) to repay some or the entire principal outstanding on the Unsecured Notes on any quarterly interest payment date;

• The Unsecured Notes are due for repayment in March 2012 (the Maturity Date) unless the Noteholder elects to convert its Unsecured Notes into fully paid up Units during the conversion period (which is defined as the period from and including ten business days before the maturity date to the maturity date). The number of Units issued on conversion is determined by dividing the outstanding principal amount of the Unsecured Notes (plus accrued but unpaid interest) by the Current Unit Value at that time;

• The Unsecured Notes provide both the Noteholders and the Issuer with rights under the Exit Mechanism (see Section 7.4); and

• If a Noteholder wishes to sell the Unsecured Notes it must first offer the Unsecured Notes to the Issuer (or the Issuer’s nominee) on the following terms:

1. The offer must be open for 30 days from the date the offer is received by the Issuer (or the Issuer’s nominee); and

2. The offer price for the Unsecured Notes must be the principal amount of the Unsecured Notes plus any accrued but unpaid interest.

Management Expense Ratio (MER)The MER calculates the total fees and charges paid or payable by the NZ Trust, including management fees of the NZ Trust, custodian fees, Note Trustee fees and other expenses chargeable to the Fund, as a percentage of the average gross asset value of the NZ Trust. The Manager estimates that the MER of the NZ Trust will not exceed 0.10% per annum. It should be noted that the NZ Trust invests exclusively in the Syndicate.

Expenses of the NZ TrustThe Manager is entitled to be reimbursed for all reasonable outgoings and disbursements in connection with the operation of the NZ Trust and the custody of the assets of the NZ Trust. These expenses, which are not expected to exceed 0.10% per annum of the average gross asset value of the NZ Trust typically include costs incurred in respect of unit registry, auditor’s fees, custody fees, compliance and Investor communications.

If the Manager becomes liable for any duty, tax or liability (including bank charges or bank account debits tax) which directly relates to a particular Investor, it is entitled to deduct the appropriate amount from any money, including income entitlements, payable or credited to that Investor.

Sale of the Scheme Assets/TerminationSale of the scheme assets and termination of the NZ Trust can occur only in conjunction with the termination of the Syndicate, or in accordance with the provisions of the Corporations Act 2001 in relation to winding up of the Syndicate.

Authorised InvestmentsOther than the purchase of Units in the Syndicate and money in the bank, there are no authorised investments of the NZ Trust.


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Fees and Other CostsThe fees outlined in this Section are in Australian dollars and stated exclusive of GST. The actual cost to the NZ Trust may be higher than the fees quoted, as the NZ Trust may not be entitled to a full input tax credit for the GST component of the relevant fee. Investors should also refer to Section 9.5 for Syndicate fees and other costs.


Type of Fee or Cost Amount $ How and When Paid

Fees when your money moves in or out of the fund

Entry Fee: This is the fee to set up your initial investment.

Nil. Nil. Not Applicable.

Contribution Fee: This is the fee for the initial and every subsequent investment you make (or that may be made on your behalf, e.g. by an employer).


Withdrawal Fee: This is the fee for each withdrawal you make (including any instalment payments and your final payment).

Nil. Nil. Not Applicable – Investors should note that this investment does not offer a withdrawal option.

Termination Fee: This is the fee when you finally close your investment.


Transfer Fee: This is the fee that is payable for administration costs incurred in transferring units.

1% of value of units transferred, with a minimum of $100.

For example, for a transfer of $50,000 of units, the fee would be $500.

Paid by the transferring Investor at the time of registration of the transfer.

Management/Administration Costs are the fees and costs for operating the fund. They include administration and other fees charged by the Responsible Entity, distribution costs and other expenses incurred in operating the Syndicate.

Responsible Entity Management Fee: This is the fee payable to the Manager for managing the NZ Trust.


Custodial Fee: This is a fee for holding property of the NZ Trust and dealing with such property in accordance with instructions from the Manager.


Other Expenses: This is an estimate of the costs associated with the out-of-pocket expenses the Responsible Entity is entitled to recover (escalated over the forecast period by the CPI assumptions).

Approximately $2,500 in the first full year.

$2,500 for the year ending 30 June 2006.

These costs are repayable to the Responsible Entity as they are incurred on an ongoing basis from the assets and income of the Syndicate.

Investment Costs: are the fees and costs for investing in the assets. They include fees charged by the Responsible Entity and other expenses incurred in investing in the assets (excluding the transaction acquisition costs which are set out in Section 6.2).

Establishment Fee: This fee compensates the Responsible Entity for the risks and expenses associated with establishing the NZ Trust.


Performance Fee: There is no performance fee payable in the NZ Trust as the NZ Trust invests solely in the Syndicate.


Retirement Fee: If the Manager retires, or is removed as Responsible Entity and is replaced by a new Responsible Entity then the Manager will be entitled to a fee.

3% of the Gross Value of Assets.

For example, for a Gross Value of Assets of $2,500,000 the fee would be $75,000.

Paid by the NZ Trust within three months of retirement or removal.

Additional Service Fees: There are no additional service fees applicable to this investment.

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Section 8 Keeping You InformedWoodcroft Plaza, Woodcroft, New South Wales

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Section 8 Keeping You Informed

Centro MCS seeks to ensure that Investors are kept fully informed on the status of their investment. Centro MCS is committed to providing you with information relating to your investment as follows:

8.1 INVESTOR ENQUIRIESInvestors can call Centro MCS Investor Services on the Centro MCS Freecall number 1800 802 400 (Australia) and +61 3 8847 0000 (International) during business hours.

Alternatively you may write to the Manager at the following address:Investor ServicesCentro MCSCorporate Offices3rd Floor, The Glen235 Springvale RoadGlen Waverley, Victoria 3150Email: [email protected]

8.2 CONFIRMATION OF INVESTMENTShortly after allotment of your investment Centro MCS will send you a statement confirming the amount of your investment, the date that Units, and NZ Units, as applicable, were issued and the details of that Unitholding. Please note that certificates will not be issued.

8.3 DISTRIBUTION STATEMENTSIn addition to the above, each Investor will also receive a quarterly distribution advice setting out income distribution entitlements. Distributions are paid directly into a nominated bank, building society or credit union account within six weeks from the end of the relevant distribution period. The first distribution will be paid on a pro-rata basis for the period to 31 March 2005 (see Section 2.4).

8.4 ANNUAL REPORTYou will receive an Annual Report including key financial information following the end of each financial year.

If you do not wish to receive printed reports please contact the Registrar to have your name removed from the mailing list.

8.5 HALF YEARLY REPORTA report summarising the financial results of the Syndicate for the half year and an overview of the operational performance of each property within the Syndicate will also be mailed to Investors.

8.6 ANNUAL TAXATION INFORMATION

You will receive an annual taxation statement and taxation guide that will assist you in completing your tax return. Please do not lodge tax returns until you have this information.

8.7 ADDITIONAL INFORMATIONInformation regarding Centro MCS 34 and additional information about Centro MCS is available on the Syndicate website: www.centro.com.au/centromcs

Information in relation to this PDS that is not materially adverse is subject to change from time to time and may be updated. This updated information will be set out on the Syndicate website. Investors will be given a paper copy of the updated information without charge on request.

8.8 THE REGISTRARInvestors seeking information on their holdings can contact:Computershare Investors Services Pty LtdGPO Box 2975EEMelbourne VIC 3001Investor Enquiries: 1300 555 079 (Australia)

0800 540 172 (New Zealand)Facsimile: +61 3 9473 2500Website: www.computershare.com.auEmail: [email protected]

8.9 DISPUTE RESOLUTIONIf you have a complaint about the administration or management of the Syndicate, please contact Centro MCS on 1800 802 400 (Australia) and +61 3 8847 0000 (International) during business hours.

If your complaint is not resolved to your satisfaction within ten business days you can refer the matter in writing to:

The Complaints Officer Centro MCSCorporate Offices3rd Floor, The Glen235 Springvale RoadGlen Waverley, Victoria 3150

In the event that you are not satisfied with the outcome of your complaint, you have the right to refer the matter to an external complaints resolution scheme. The Manager is a member of the Financial Industry Complaints Service Limited (‘FICS’). You can contact FICS on 1300 78 08 08 (within Australia) or +61 3 8623 2000 (International).

mailto:[email protected]

http://www.computershare.com.au


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Section 9 Additional Information and Fees DisclosureEmerald Market Plaza, Emerald, Queensland

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IntroductionThe information contained in this Section is based on the Constitution for the Syndicate and relevant provisions of the Corporations Act 2001 as at the date of issue of this PDS. However, not all provisions of the Constitution and the law which are relevant to the Syndicate are outlined here and those parts which are included have been summarised. Certain provisions of the Constitution are outlined in other Sections of the PDS and therefore may not be included here. Investors should seek their own independent professional advice on the suitability of this investment in their personal circumstances.

9.1 RESPONSIBLE ENTITYCPT Manager Limited as the Responsible Entity, is responsible for the management and administration of the Syndicate. The Responsible Entity holds an Australian Financial Services Licence (Licence number 238 454) that authorises it to act as the Responsible Entity of the Syndicate. The powers and duties of the Responsible Entity are set out in the Constitution, the Corporations Act 2001, and the general law. The duties of the Responsible Entity under the Corporations Act 2001 include:

• Acting honestly;

• Acting in the best interests of Investors and, if there is a conflict between Investors’ interests and those of the Responsible Entity, giving priority to Investors’ interests;

• Ensuring that the Syndicate’s assets are clearly identified as Syndicate assets and held separately from assets of the Responsible Entity and assets of any other fund and are valued at regular intervals;

• Ensuring that payments out of Syndicate assets are made in accordance with the Constitution and the Corporations Act 2001; and

• Reporting to ASIC any material breach of the Corporations Act 2001 in relation to the Syndicate, which has had, or is likely to have, a materially adverse effect on the interests of Investors as soon as possible, and in any case, within five days of becoming aware of the breach.

9.2 RETIREMENT OF THE RESPONSIBLE ENTITY

The Responsible Entity may retire as the Responsible Entity of the Syndicate by calling a meeting of Investors of the Syndicate to explain why the Responsible Entity wishes to retire and to enable Investors to choose a replacement Responsible Entity by voting on an extraordinary resolution. The Responsible Entity may also be removed from office by an extraordinary resolution passed at a meeting of Investors.

9.3 RIGHTS AND OBLIGATIONS OF INVESTORS IN THE SYNDICATE

The rights of Investors in the Syndicate will be governed by the Constitution of the Syndicate and the Corporations Act 2001 and its regulations. The Constitution provides that the liability of each Investor is limited to its investment in the Syndicate. An Investor is not required to indemnify the Responsible Entity or a creditor of the Responsible Entity against any liability of the Responsible Entity in respect of the Syndicate. However, complete assurance cannot be given in this regard, as the ultimate liability of an Investor has not been finally determined by the Courts.

9.4 SYNDICATE CONSTITUTIONThe Constitution of the Syndicate governs the rights and obligations of Investors as Investors in the Syndicate. CPT Manager Limited is the Responsible Entity for the Syndicate. The Constitution for the Syndicate is dated 16 July 1997. Briefly, the Constitution covers details relating to the fees of the Responsible Entity, certain rights of Investors, and the Responsible Entity’s duties and powers.

The Responsible Entity may amend the Constitution as specified in the Constitution. The Responsible Entity cannot amend the Constitution without the consent of Investors (at a meeting convened in accordance with the Corporations Act 2001) unless the Responsible Entity reasonably believes that such amendment will not adversely affect the rights of Investors.

The Constitution (and any amendments) has been lodged with ASIC and are incorporated into this PDS by reference. The Constitution includes provisions dealing with:

• Investments of the Syndicate and valuation principles for assets;

• The distribution of income and capital;

• The obligations, duties and powers of the Manager and delegation of its functions;

• The duration of the Syndicate including termination;

• Recoverable expenses, permitted borrowing and the limitation of liability and remuneration and indemnification of the Manager as the Responsible Entity; and

• Procedures for the convening and holding of meetings of Unitholders.

The initial units in the Syndicate, which are already on issue, are Foundation Units. It is the intention of the Manager to redeem all of those units progressively in accordance with the arrangement that has been reached to facilitate the acquisition of Pirie Plaza for Syndicate Investors. See section 9.13. All Units issued pursuant to this PDS will be ordinary Units, which will have the same rights and entitlements as Foundation Units, except they will not participate in the withdrawal and redemption offers that apply to Foundation Unitholders. When the existing Foundation Units have been redeemed, the class of Foundation Unitholders will cease.

The main rights and liabilities attaching to Units are summarised below:

Voting RightsAt a meeting, and on a show of hands, each Investor present in person or by proxy shall have one vote. On a poll, each Investor will be entitled to one vote for each Unit held.

Investor MeetingsThe Manager may at any time summon a meeting of Investors for such purposes as it sees fit. On the requisition in writing of at least 100 Investors or at least 5% of Investors, the Manager will convene a meeting of Investors.

Rights on Winding UpOn a winding up, the net proceeds of realisation of the assets of the Syndicate, after discharging or providing for all liabilities of the Syndicate, must be distributed pro-rata to Investors according to their Unitholdings.

Transfer of UnitsAn Investor may only transfer Units in such a manner as the Responsible Entity may prescribe from time to time.

Section 9 Additional Information and Fees Disclosure

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9.5 FEES AND OTHER COSTS This table shows fees and other costs that apply to this investment. Except for the Unit Transfer Fees, these fees and costs are deducted from the Syndicate assets as a whole, and so will already have been taken into account when distributions are made to Investors. The Unit Transfer Fees are payable by an Investor who transfers their investment. Tax information is set out in Section 6.5.

Investors should read all of this information about fees and costs, as it is important to understand their impact on the investment.


Fees when your money moves in or out of the fund

Entry Fee: This is the fee to set up your initial investment.


Contribution Fee: This is the fee for the initial and every subsequent investment you make (or that may be made on your behalf, e.g. by an employer).


Withdrawal Fee: This is the fee for each withdrawal you make (including any instalment payments and your final payment).

Nil. Nil. Not Applicable – Investors should note that this investment does not offer a withdrawal option.

Termination Fee: This is the fee when you finally close your investment.


Transfer Fee: This is the fee that is payable for administration costs incurred in transferring units.

1% of value of units transferred, with a minimum of $100.

For example, for a transfer of $50,000 of units, the fee would be $500.

Paid by the transferring Investor at the time of registration of the transfer.

Management/Administration Costs are the fees and costs for operating the fund. They include administration and other fees charged by the Responsible Entity, distribution costs and other expenses incurred in operating the Syndicate.

Responsible Entity Management Fee: This fee is payable to the Manager for managing the Syndicate. Under the Constitution, the Manager is entitled to a fee of 0.35% of the Gross Value of Assets and up to 4.0% of the total annual Syndicate income.

0.35% of the Gross Value of Assets and 3.5% of the annual total Syndicate income. If the Syndicate is rolled over or extended for a further period, then this fee will increase to 0.425% of the Gross Value of Assets and 4.25% of the annual total Syndicate income. See Section 6.1, Note 5.


Payable by the Syndicate quarterly in arrears.

Custodian Fee: This is a fee for holding property of the Syndicate and dealing with such property in accordance with instructions from the Manager.

0.05% of the Gross Value of Assets. See Section 6.1, Note 6.


Payable by the Syndicate quarterly in arrears.

Other Expenses: This is an estimate of the costs associated with the out-of-pocket expenses the Responsible Entity is entitled to recover (escalated over the forecast period by the CPI assumptions).

Approximately $108,000 in the first full year. See Section 6.1, Note 6.


These costs are repayable to the Responsible Entity as they are incurred on an ongoing basis from the assets and income of the Syndicate.


Pinelands Plaza, Sunnybank Hills, Queensland Emerald Market Plaza, Emerald, Queensland

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Investment Costs: are the fees and costs for investing in the assets. They include fees charged by the Responsible Entity and other expenses incurred in investing in the assets (excluding the transaction acquisition costs which are set out in Section 6.2).

Syndicate Establishment and Equity Raising Fee: This fee compensates the Responsible Entity for the risks and expenses associated with establishing the Syndicate and arranging the Syndicate finance. In addition, from this fee, the Responsible Entity will pay commissions in relation to subscriptions, as set out in Section 9.9. Under the Constitution, the Manager is entitled to take a fee of 5%.

5.0% of the Gross Value of Assets for Syndicate establishment out of which the Manager will pay Syndicate finance arrangement costs estimated at 0.50%.

$5,145,000 out of which the Manager will pay Syndicate finance arrangement costs estimated at $500,000.

Paid by the Syndicate on the Syndicate Closing Date.

Performance Fee: This fee rewards the Manager if, at the end of the Syndicate term or earlier sale of the properties or on each rollover of the Syndicate, the value of Investors’ equity has increased. This fee represents a fee payable to the Responsible Entity for the successful management of the Syndicate.

2.5% of the Gross Value of Assets and 10% of any increase in unit value up to 20% and 20% of any increase in unit value over 20%.

For example, for an end Gross Value of Assets of $125,000,000 and a NAB value before performance fees of $1.10 the performance fee would be $3,125,000 plus $429,000 totalling $3,554,000.

Paid by the Syndicate as soon as possible after termination or rollover, either from the proceeds of sale of the Syndicate assets in the event of termination, the earlier sale of the properties or the assets of the Syndicate in the event of a rollover.

Retirement Fee: If the Manager retires, or is removed as Responsible Entity and is replaced by a new Responsible Entity then the Manager will be entitled to a fee. If this fee is applied then the above performance fee is no longer payable to a new Responsible Entity.

3% of the Gross Value of Assets. For example, for a Gross Value of Assets of $125,000,000 the fee would be $3,750,000.

Paid by the Syndicate within three months of retirement or removal of the Manager.

Additional Service Fees: There are no additional service fees applicable to this investment.

Property Management and Development Fees The Manager will appoint staff members of Centro to conduct on-site management of the properties throughout the term of the Syndicate. In the event that a future development of a property is identified which is feasible and warranted, Centro will also provide resources to conduct development management services and associated project leasing. Fees for these services will be charged as follows:

Property Management:

• A maximum of 6% per annum of gross property income (initially property management fees range from 2% to 4.5% depending on the property).

Development Management:

• 5% of total development costs up to and including $2,000,000; plus

• 3% of total development costs exceeding $2,000,000 up to and including $10,000,000; plus

• 2% of total development costs exceeding $10,000,000.

9.6 FUTURE FUNDING REQUIREMENTS The Manager would only consider undertaking a significant redevelopment of a property if it believed that the development would be in the best interests of Investors. If the Manager considers it to be appropriate to undertake a redevelopment, it is likely that it would be funded through a combination of additional

debt and equity. If additional equity is required, Investors may be offered the opportunity to participate in the redevelopment through a pro-rata Unit issue. This may be partly or fully underwritten by Centro.

9.7 EFFECT OF THE EXIT MECHANISM ON CENTRO

The immediate effect of the Exit Mechanism offered to Investors is to create a contingent obligation on Centro to pay cash or to issue Centro Stapled Securities, or a combination of both, in exchange for Units in the Syndicate at 31 December 2011.

If Centro, through operation of the Exit Mechanism, elects to:

• Issue Centro Stapled Securities in exchange for Units in the Syndicate, the effect of the offer on Centro would be to increase the paid up capital of Centro. The number of additional Centro Stapled Securities to be issued will be determined at the time by reference to the value of the Units in the Syndicate and the market value of Centro Stapled Securities; or

• Pay cash to Investors in exchange for their Units in the Syndicate, the effect of the offer on Centro would be to require an outlay of funds to Investors. It is not possible to meaningfully predict the amount or the source of the funds required for this outlay as that will depend upon the circumstances existing at the time of the exchange.

Right: Lismore Central, Lismore, New South Wales

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Centro is a disclosing entity and is subject to regular reporting and disclosure obligations. The Centro Stapled Securities are quoted on the Australian Stock Exchange. Copies of documents lodged with ASIC in relation to Centro may be obtained from, or inspected at an ASIC office. Copies of documents released by Centro to the Australian Stock Exchange are available at www.asx.com.au

This PDS does not contain more specific details regarding the effect that the contingent obligation under the Exit Mechanism might have on Centro as it is not possible to meaningfully forecast the circumstances which will exist at the time of the exchange. For instance, the effect of the offer on Centro will depend upon a number of factors at the time of the exchange, including:

• Centro’s financial position;

• The trading price of Centro Stapled Securities; and

• The value of the Syndicate’s portfolio.

In these circumstances, Centro believes that it has no reasonable basis for making such a forecast.

9.8 CENTRO STAPLED SECURITIESThe structure of Centro is as follows:

The two principal entities in Centro are a unit trust (referred to as ‘Centro Property Trust’) and Centro Properties Limited. Each Centro Stapled Security comprises one Unit in the Centro Property Trust ‘stapled’ to one share in Centro Properties Limited. Each Investor in Centro therefore owns an equal number of Units and shares. At a meeting, and on a show of hands, each Investor present in person or by proxy shall have one vote. On a poll, each Investor will be entitled to one vote for each Centro Stapled Security held.

The Units and shares are only able to be traded jointly as Centro Stapled Securities and cannot be traded, transferred or otherwise dealt with separately in any circumstances (including transfers effected ‘off market’).

Centro Stapled Security holders receive dividends from Centro Properties Limited as well as income distributions from Centro Property Trust. Distributions are paid to Centro Stapled Security holders half yearly no later than three months after the end of the relevant period.

The Responsible Entity of Centro Property Trust is CPT Manager Limited. The Constitution of Centro Property Trust requires that the whole of the taxable income of Centro Property Trust be distributed in each financial year. The Responsible Entity of Centro Property Trust intends to distribute the whole of the net accounting income of Centro Property Trust (if this is greater than the taxable income) in each financial year.

The Directors of Centro Properties Limited also intend to distribute all of the after tax profits of Centro Properties Limited. Where Centro Properties Limited declares dividends, it is intended that the payment of these coincide with Centro Property Trust distributions. Centro Property Trust distributions and Centro Properties Limited dividends are aggregated and paid by cheque or direct credit into an account with a financial institution nominated by the Centro Stapled Security holder.

9.9 COMMISSIONSThe Manager may pay commissions to persons in respect of subscriptions pursuant to this PDS.

The Manager will pay commissions from its own funds. The commissions may be structured as either a 3% upfront or trailing commissions of 0.25% per annum or a combination of both based on the equity subscribed. The Manager will pay commissions only to persons who either hold an Australian Financial Services Licence or are an Authorised Representative of the Manager.

9.10 CORPORATE GOVERNANCEThe corporate governance policy of the Responsible Entity states that ‘good Corporate Governance is the existence of an effective control environment to identify and manage business risks which arise from the implementation of business strategy’.

The full Corporate Governance policy can be viewed on Centro’s website at www.centro.com.au

9.11 COOLING OFFInvestors should note that because the Syndicate will invest in assets that are not liquid, there will not be a cooling off period in relation to applications. Consequently, by submitting payment, applicants will be deemed to have applied for the number of Units for which payment is made. Once an application has been lodged it cannot be withdrawn.

9.12 CUSTODIANThe Responsible Entity (or its wholly owned subsidiary, CPT Custodian Pty Limited) will act as custodian for the Syndicate. ASIC has established minimum standards which a custodian must meet.


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66 67

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Property Ownership Structure

9.13 MATERIAL CONTRACTS

The following agreements are material to a potential Investor in the Syndicate. Each of these documents is available for inspection on request.

COLES MORWELL

Effective Date 21 December 2004

Parties CPT Manager Limited (ABN 37 054 494 307) as trustee for Morwell Trust(Lessor)

CPT Custodian Pty Limited(ABN 67 077 870 243) as trustee for Morwell Holding Trust(Lessee)

Property 82 – 116 George Street, Morwell, Victoria, 3840

Title Particulars Certificate of Title Volume/Folio 5235/814, 8233/919, 8713/444, 8534/194, 8534/195, 8534/196, 8534/197, 8534/198, 8534/199, 8847/815, 8534/201, 8534/202, 8534/203, 4893/545, 4893/548, 4893/547, 8252/609, 9692/484, 7270/876, 8119/924

Price $11,100,000

EMERALD VILLAGE


Parties CPT Custodian Pty Limited(ABN 67 077 870 243) as Trustee for Emerald Village Acquisition Trust and Trustee for Emerald Village Trust

Property Corner Hospital Road & Curt Street, Emerald, Queensland, 4720

Title Particulars Lot 92 on Registered Plan 911164, Title Reference 50195746

Price $9,850,000

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69

EMERALD MARKET PLAZA


Parties CPT Manager Limited (ABN 37 054 494 307) as Responsible Entity for Centro Property Trust(Vendor)

CPT Custodian Pty Limited (ABN 67 077 870 243) as trustee for Emerald Holding Trust(Purchaser)

Property Corner Egerton & Clermont Streets, Emerald, Queensland, 4720

Title Particulars Lot 3 on Registered Plan 901712, Title References 50364102 and 50364103

Price $6,650,000

PINELANDS PLAZA


Parties Sandhurst Trustees Limited (ABN 16 004 030 737) as trustee for CMCS 34 Holding Trust 1(Issuer)

CPT Manager Limited (ABN 37 054 494 307) as Responsible Entity for Centro MCS 34 Trust (Applicant)

Property Corner Pinelands & Beenleigh Roads, Sunnybank Hills, Queensland, 4109

Title Particulars Lot 1 on Registered Plan 803076, Title Reference 18386004

Price $25,800,000

LISMORE CENTRAL




Property 44 Carrington Street, Lismore, New South Wales, 2480

Title Particulars Lot 1 on Deposited Plan 746262, Certificate of Title Volume 8612 Folio 96

Price $18,000,000

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WOODCROFT PLAZA




Property Corner Richmond Road & Woodcroft Drive, Woodcroft, New South Wales, 2767

Title Particulars Lot 3 on Deposited Plan 831495, Certificate of Title 3/831495

Price $18,500,000

PIRIE PLAZA1


Parties CPT Manager Limited (ABN 37 054 494 307) as Responsible Entity for Centro Property Trust(Unitholder)

CPT Manager Limited (ABN 37 054 494 307) as Responsible Entity for Centro MCS 34 Trust(Responsible Entity)

Property 91-95 Grey Terrace, Port Pirie, South Australia, 5540

Title Particulars Certificate of Title Volume 5529 Folio 601 being Allotment 4 Filed Plan 8121 in the area named Port Pirie South Hundred of Pirie

Price $13,000,000

1 The acquisition of Pirie Plaza by the Syndicate is by way of redemption of the units of Foundation Unitholders of the Centro MCS 34 Trust in accordance with the provisions of Part 5C.6 of the Corporations Act. Other than this, the Syndicate will remain an illiquid scheme. This redemption provides the consideration to the Foundation Unitholders for the acquisition of Pirie Plaza by the Syndicate.

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TERMS OF EQUITY NOTESEquity Notes comprise a partly paid ordinary unit (paid up to one cent) (‘PPU’) and an unsecured subordinated debt obligation (‘DO’) owed by the Syndicate to the holder (being Centro or entities it manages or controls).

As the holders of the DOs do not receive tax-advantaged distributions, but interest, which is fully taxable, Unitholders will benefit as there will be an increase in the tax-advantaged proportion of the income attributable to them.

Issue Price The issue price of each Equity Note is $1.00, one cent allocated to the PPU and the balance to the DO.

Total Amount Raised Approximately $5 million.

Interest Rate on the DOs A margin of 0.3% per annum above the distribution yield paid on Units.

Interest Payments on the DOs

Quarterly on the same dates as distributions are paid on Units. (The first payment will be from the period that the application is accepted to 31 March 2005).

Repayment of the DO Ten years after issue (or earlier under accelerated repayment described below).

Participation in Future Issues

PPUs will carry the right to participate in offers to Unitholders to subscribe for new units or to participate in any bonus or rights issues and returns of capital on the same terms as Unitholders.

Accelerated Repayment If Investors resolve to wind up the Syndicate, then DOs will be immediately repayable. In other circumstances, if a trigger event occurs, the DOs will, at the option of the holder, be immediately repayable. The trigger events are:

• Interest payment not paid within 20 business days of due date;

• A person becomes entitled to more than 50% of Units;

• A takeover bid is made for Units;

• A meeting of Investors is convened (other than by Centro or entities managed or controlled by Centro) to consider a resolution to remove the Responsible Entity; and

• A taxation event occurs (i.e. adverse change to the taxation treatment of either the Equity Notes or the Syndicate).

Voting Rights DOs do not carry voting rights. PPUs have no voting rights until fully paid.

Payment of PPUs The balance of the issue price of the PPUs (i.e. the price of Units on the same day the PPUs are issued, less the amount paid up on the PPUs) must be paid up in full by no later than the date for repayment of the DO but cannot be paid up in full until eight years after issue unless repayment of the DOs occurs before eight years after issue.

The Manager may choose to redeem PPUs at any time.

Distribution Entitlements on the PPUs

PPUs will not be entitled to distributions on their Units until the PPUs are fully paid.

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9.14 DISCLOSURE OF INTERESTS

Interests of the Manager and its Directors All of the properties in the Syndicate have been acquired from Centro. Otherwise, except as disclosed in this Section 9.14 or elsewhere in this PDS, at the date of issue of this PDS and throughout the preceding two year period, neither the Manager nor any of its Directors has or had any interest in the promotion of or in the properties of the Syndicate.

ExpertsExcept as set out in this PDS, no person named in the PDS as performing a function in a professional, advisory or other capacity in connection with the preparation of the PDS or distribution of the PDS, or a promoter of the Syndicate:

• Has any interest, or has had any interest during the last two years, in the formation or promotion of the Syndicate, or in property acquired or proposed to be acquired by the Syndicate in connection with the Syndicate’s formation or promotion, or the Offer; or

• Has been paid any amount or agreed to be paid and no benefit has been given or agreed to be given to any such person in connection with services provided by the person in connection with the formation or promotion of the Syndicate or the Offer.

Jones Lang LaSalle has acted as Independent Valuer and has prepared an Independent Valuation Report in respect of Pinelands Plaza. The Syndicate has paid or has agreed to pay approximately $7,000 (exclusive of GST) for these services.

FPDSavills has acted as Independent Valuer and has prepared an Independent Valuation Report in respect of Woodcroft Plaza, Lismore Central and Pirie Plaza. The Syndicate has paid or has agreed to pay approximately $33,500 (exclusive of GST) for these services.

m3property has acted as Independent Valuer and has prepared an Independent Valuation Report in respect of Coles Morwell. The Syndicate has paid or has agreed to pay approximately $7,000 (exclusive of GST) for these services.

CB Richard Ellis has acted as Independent Valuer and has prepared an Independent Valuation Report in respect of Emerald Village and Emerald Market Plaza. The Syndicate has paid or has agreed to pay approximately $20,000 (exclusive of GST) for these services.

9.15 CONSENTS AND DISCLAIMERSSandhurst Trustees Limited has given and has not, before issue of this PDS, withdrawn its written consent to be named as the Note Trustee.

Jones Lang LaSalle has given and has not, before issue of this PDS, withdrawn its written consent to the inclusion of the summary valuation results of Pinelands Plaza in Section 4.3 in the form and context in which they are included.

FPDSavills has given and has not, before issue of this PDS, withdrawn its written consent to the inclusion of the summary valuation results of Woodcroft Plaza, Lismore Central and Pirie Plaza in Section 4.3 in the form and context in which they are included.

m3property has given and has not, before issue of this PDS, withdrawn its written consent to the inclusion of the summary valuation results of Coles Morwell in Section 4.3 in the form and context in which it is included.

CB Richard Ellis has given and has not, before issue of this PDS, withdrawn its written consent to the inclusion of the summary valuation results of Emerald Village and Emerald Market Plaza in Section 4.3 in the form and context in which they are included.

Property Investment Research has given and has not, before the issue of this PDS, withdrawn its written consent to be named in the form and context in which it is named in this PDS.

Atchison Consultants has given and has not, before the issue of this PDS, withdrawn its written consent to be named in the form and context in which it is named in this PDS.

The Property Council of Australia has given and has not, before the issue of this PDS, withdrawn its written consent to be named in the form and context in which it is named in this PDS.

No one referred to above has made any statement that is included in this PDS or any statement on which a statement in this PDS is based, except as stated above. Each of the persons referred to above expressly disclaims and takes no responsibility for any statements in or omissions from this PDS. This applies to the maximum extent permitted by law and does not apply to any matter and to the extent to which consent is given above.

9.16 INSPECTION OF DOCUMENTSA true copy of the following documents will be available for inspection during normal business hours free of charge at the registered office of the Responsible Entity:

• The Constitution and Compliance Plan of the Syndicate;

• The Constitution and Compliance Plan of the NZ Trust;

• The Unsecured Notes Trust Deed in relation to the NZ Trust;

• The leases, terms of which are summarised in Section 4;

• The material agreements mentioned above;

• The full independent valuation reports as at 31 December 2004; and

• The consents mentioned above.

9.17 INVESTMENT THROUGH AN INVESTOR DIRECTED PORTFOLIO SERVICE

A person may invest indirectly in the Syndicate through an administration service or an Investor Directed Portfolio Service (‘IDPS’) such as a master fund or wrap account, or a nominee or a custody service, by directing the trustee or operator of the IDPS to acquire Units in the Syndicate on their behalf. Investors in an IDPS, master fund or wrap account, or a nominee or custody service may rely upon and are authorised to use the information contained in this PDS for the purpose of inviting and giving a direction to a trustee or operator of an IDPS, master fund, wrap account, or a nominee or custody service to invest in the Syndicate on their behalf.


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An indirect Investor does not become an Investor in the Syndicate. Accordingly, they do not acquire the rights of an Investor of the Syndicate or acquire any direct interest in the Syndicate. The operator or manager of the IDPS acquires these rights and can exercise, or decline to exercise them, on behalf of the Investor according to the arrangements governing the IDPS. A person who invests in the Syndicate through an IDPS should ignore information in this PDS that is relevant only for direct Investors. This includes information relating to:

Application FormA person investing in the Syndicate through an IDPS should not complete the application form attached to or accompanied by this PDS. An indirect Investor should complete the application form supplied by the operator of the IDPS.

InformationAn indirect Investor will receive no statements, tax information or other information directly from the Syndicate. An indirect Investor should receive equivalent information from the operator of the IDPS.

Redemption/ExitProvisions which relate to redemptions and exits will affect the operator of the IDPS and not the indirect Investor.

Fees and ExpensesFees and expenses applicable to the IDPS (and set out in the IDPS offer document or client agreement) are payable in addition to the fees and expenses stated in this PDS.

9.18 FINANCIAL SERVICES REFORM ACT 2001 (FSRA)

CPT Manager Limited and Centro MCS Manager Limited have obtained their Australian Financial Services Licences (being Licence No. 238 454 and 238 775 respectively) and are complying with the conditions of their licences.

9.19 ASX REPORTINGCentro is a disclosing entity, and as such is subject to regular reporting and disclosure obligations.

These obligations include compliance with the requirements of the listing rules concerning the notification of information to the ASX. The listing rules require Centro to notify the ASX immediately of any information concerning Centro of which it is or becomes aware and which a reasonable person would expect to have a material effect on the price or value of Centro Stapled Securities. There is an exception to this rule for certain confidential information.

Centro must also provide to the ASX a half yearly report and a preliminary final statement within 75 days and 90 days respectively of the end of Centro’s half year and full year accounting periods respectively.

9.20 AVAILABILITY OF DOCUMENTSDocuments lodged by Centro with ASIC may be obtained from, or inspected at, an office of ASIC.

A copy of each of the documents listed below will be provided by Centro free of charge, to any person who asks for them during the Offer period:

• The most current financial statements of Centro for the financial year ended 30 June;

• Any other financial statements lodged with ASIC between the date of lodgement of the statements referred to above and the date of issue of this PDS; and

• Any documents used to notify the ASX of information relating to Centro under the provisions of the Listing Rules between 30 June 2004 and the date of issue of this PDS.

Copies of documents released to the ASX by Centro are also freely available at www.asx.com.au

9.21 CONSENT BY DIRECTORSEach Director of the Manager and Centro has consented in writing to the issue of this PDS.

9.22 STATEMENT REGARDING LABOUR STANDARDS AND ENVIRONMENTAL, SOCIAL AND ETHICAL CONSIDERATIONS

The Manager does not, in the context of making decisions relating to the Syndicate, take into account labour standards or environmental, social or ethical considerations, except to the extent that the Manager considers these issues have the potential to materially impact on the merits of its decisions in relation to the Syndicate. This means that if the sustainability or value of the Syndicate is adversely affected due to unacceptable environmental, social or ethical factors, the Manager may choose not to invest further or to dispose of the investment.

9.23 ASIC RELIEF – TRANSACTION COSTSThe Responsible Entity of the Syndicate and NZ Trust has applied for and been granted relief by ASIC from the requirement to set out in the respective constitutions adequate provision for transaction costs associated with the acquisition of units in the Syndicate and Stapled Securities in the NZ Trust, where the Responsible Entity discloses the basis on which those costs are calculated in each PDS for units that is given to a person as a retail client while the respective constitutions do not make such provision.

Under this PDS, all Units in the Syndicate and the NZ Trust are issued at AUD$1.00 and there are no additional transaction costs.

The relief granted by ASIC also confirmed that the respective constitutions need not make adequate provision for the consideration to acquire an interest in the Syndicate or NZ Trust, or the proceeds payable on a withdrawal from the Syndicate (which will be limited to the circumstances described on page 15) to the extent the Responsible Entity reasonably believes the value of an asset cannot be objectively ascertained at the relevant time and the valuation methods and policies the Responsible Entity will apply in determining asset values are disclosed in each PDS that is given to a person as a retail client while the respective constitutions do not make such provision.

The Syndicate and NZ Trust constitutions provide that units issued prior to or pursuant to this PDS will be issued at AUD$1.00.

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Section 10 GlossaryEmerald Village, Emerald, Queensland

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ABNAustralian Business Number.

AFSLAustralian Financial Services Licence.

Administration ServiceInvestor directed portfolio services (IDPS) such as master trusts, master funds, wrap accounts and nominee or custody services.

AllotmentThe number of Units or Stapled Securities that are issued to each Investor in the Syndicate or NZ Trust (as applicable) following an application to take up the Units or Stapled Securities.

Application FormThe application forms attached to or accompanying this PDS.

ASICAustralian Securities & Investments Commission.

ASXAustralian Stock Exchange Limited (ABN 98 008 624 691).

Centro Centro Properties Group being Centro Properties Limited (ABN 45 078 590 682) and Centro Property Trust (ARSN 091 043 793) and all other entities controlled by each of them.

Centro MCSThe direct property division of Centro consisting of Centro MCS Manager Limited and CPT Manager Limited. Section 5.6 explains the relationship between Centro MCS Manager Limited and CPT Manager Limited.

Centro MCS 34Centro MCS 34 comprises the Syndicate and the NZ Trust.

Centro MCS Manager LimitedCentro MCS Manager Limited (ABN 69 051 908 984) will be the Manager and the Responsible Entity of the Syndicate and the NZ Trust after variation of its AFSL. See Section 5.6.

CPT Manager LimitedCPT Manager Limited (ABN 37 054 494 307) is the initial Manager and the Responsible Entity of the Syndicate. See Section 5.6.

Centro Stapled SecuritiesSecurities of Centro traded on the ASX which comprise one ordinary unit in the Centro Property Trust (ARSN 091 043 793) and one ordinary share in Centro Properties Limited (ABN 45 078 590 682).

Compliance Plan Compliance plan for Centro MCS 34 Trust dated 25 November 2004, compliance plan for Centro MCS 34 (New Zealand) Trust dated 7 May 2004, as appropriate.

ConstitutionConstitution for Centro MCS 34 Trust dated 16 July 1997 and constitution for Centro MCS 34 (New Zealand) Trust dated 7 May 2004, as appropriate.

CPIConsumer Price Index.

Current ValueOn any day, the aggregate market value of the assets of the Syndicate less all borrowings, unpaid costs, charges, expenses, outgoings, tax fees provisions and all other liabilities (including liabilities accrued but not yet paid) which the Responsible Entity decides should be taken into account, in determining the liabilities of the Syndicate in accordance with generally accepted accounting principles.

Current Unit ValueThe amount calculated by dividing the Current Value of the Syndicate by the number of Units on issue.

DOAn unsecured fully subordinated debt obligation owed by the Syndicate to the holder (being Centro or entities it manages or controls).

Equity NoteAn Equity Note comprises a PPU and a DO. Section 2.9 explains the Equity Notes and Section 9.13 sets out the terms of the Equity Notes.

Equity NoteholderCentro (or entities it manages or controls).

Equity SubscribedThe application monies paid by an Investor being AUD$1.00 per Unit, AUD$1.00 per Equity Note or AUD$5.00 per Stapled Security, whichever is applicable.

Section 10 Glossary

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Section 10 Glossary

Exit MechanismThe ‘put’ and ‘call’ option mechanism, details of which are summarised in Section 2.6.

GLAGross Lettable Area.

Gross Value of AssetsThe gross value of all assets of the Syndicate, including all investments and financial assets, such as debtors and distribution income receivable from investments.

Group Centro Properties Group being Centro Properties Limited (ABN 45 078 590 682) and Centro Property Trust (ARSN 091 043 793) and all other entities controlled by each of them.

GSTGoods and Services Tax.

IDPSInvestor Directed Portfolio Services. See ‘Administration Service’.

InvestorA person or entity holding an interest in the Syndicate or the NZ Trust.

Issue PriceFixed price at which an interest in the Syndicate is offered to the public. The issue price per Unit and per Equity Note is AUD$1.00. The issue price per Stapled Security is AUD$5.00.

IssuerCPT Manager Limited or Centro MCS Manager Limited as Responsible Entity of the NZ Trust is the Issuer of the Unsecured Notes. See Section 5.6.

LoanThe bank loan facilities that the Manager expects to arrange for the Syndicate, based on an initial LVR of approximately 65% as summarised in Section 6.6.

LPTListed Property Trust.

LVRLoan to Value Ratio.

Major TenantTypically a supermarket, department store or discount department store generally with an area greater than 1,000m2.

ManagerCPT Manager Limited (ABN 37 054 494 307) or Centro MCS Manager Limited (ABN 69 051 908 984) as the case may be. See Section 5.6.

MERManagement Expense Ratio which calculates the total fees and charges paid or payable by the Syndicate and the NZ Trust, as set out in Section 6.4 and Section 7.6, respectively.

NAB (Net Asset Backing)The Net Asset Backing of the Syndicate or the NZ Trust is its NTA adjusted for actual or likely property acquisition costs, structuring and establishment costs, exit and success fees and selling costs. The Manager believes that the NAB unit value more appropriately reflects the underlying value of the security by taking into account amortisation and accruals of set up costs and fees over the fixed term of the Syndicate or the NZ Trust (as applicable).

Neighbourhood CentreNeighbourhood centres typically have a supermarket anchor tenant. Most of the tenants usually serve day to day neighbourhood needs with a typical primary market area of approximately 1.5 to 3 kilometres. Neighbourhood centres are generally 4,500m2 to 10,000m2 in size.

NoteholderA person or entity that holds Unsecured Notes.

Note TrusteeSandhurst Trustees Limited (ABN 004 030 737).

NTA (Net Tangible Assets)The net tangible asset backing per Unit in the Syndicate (being its total assets, excluding intangible assets, minus its liabilities).

NZ InvestorsInvestors in the NZ Trust who can only be New Zealand residents.

NZ TrustThe trust named Centro MCS 34 (New Zealand) ARSN 109 043 674, established by constitution dated 7 May 2004.

NZ UnitsOrdinary Units in the NZ Trust.

OfferThe offer of approximately 37.9 million Units and 5.0 million Equity Notes in the Syndicate.

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Section 10 Glossary

PPUA partly paid ordinary unit (paid up to one cent) in the Syndicate.

Product Disclosure StatementThis point of sale document that sets out the significant features of the financial product, including its risks, benefits and costs.

Registry or RegistrarComputershare Investor Services Pty Ltd (ABN 48 078 279 277) being the company appointed by the Manager to manage the register of Investors in the Syndicate.

Responsible EntityCPT Manager Limited (ABN 37 054 494 307) or Centro MCS Manager Limited (ABN 69 051 908 984) as the case may be. See Section 5.6.

Stapled SecuritiesStapled Securities comprise three NZ Units and two Unsecured Notes, permanently stapled together.

SyndicateThe trust named Centro MCS 34 Trust (ARSN 111 915 747), established by constitution dated 16 July 1997.

Syndicate Closing DateThat date upon which the Offer is fully subscribed.

TFNTax File Number.

UnitA Unit in the Syndicate.

Unsecured NotesFully subordinated, convertible debt obligations of the NZ Trust, the terms of which are set out in Section 7.6.


Emerald Village, Emerald, Queensland


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Section 11 How to Invest Lismore Central, Lismore, New South Wales

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Completing the Application FormBefore completing the relevant Application Form you should read this PDS carefully.

Tax File NumbersCollection of tax file numbers is authorised by tax law and privacy legislation. You do not have to advise the Manager of your tax file number or exemption, but if you do not, tax must be taken out of quarterly distributions at the top personal marginal rate plus the Medicare levy.

Cheques and Application FormApplications will only be accepted on the relevant Application Form for the Syndicate or the NZ Trust attached to or accompanying this PDS.

The Manager reserves the right to allot less than the number of Units or Stapled Securities applied for or to decline to issue any at all. Cheques should be made payable as follows, and crossed ‘Not Negotiable’:

• For application for Units in the Syndicate to: ‘CPT Manager Limited – Centro MCS 34’;

• For Stapled Securities in the NZ Trust to:‘CPT Manager Limited – Centro MCS 34 (New Zealand)’;

The completed Application Form and cheques must be forwarded to:

Centro MCS 34Computershare Investor Services Pty LtdGPO Box 52Melbourne, Victoria 3001Investor Enquiries: 1300 555 079 (Australia)Email: [email protected]

Minimum InvestmentThe minimum investment is AUD$10,000 or more in increments of AUD$1,000. The minimum holding during the Syndicate term is 10,000 Units.

PaymentsSufficient cleared funds should be held in your account as dishonoured cheques may result in your application being rejected. Receipts for payment will not be issued.

Confirmation of InvestmentThe Manager will provide Investors with a written statement, similar to a bank statement, setting out the details of their investment, including the date, the number of Units or Stapled Securities issued, the amount paid and any other costs. Investment certificates will not be issued.

Units and Stapled Securities will be issued progressively (usually within five business days of receipt of applications) and will participate in distributions on a pro-rata basis from the date of issue.

The Manager’s Commitment to PrivacyThe Manager is committed to managing personal information in a way that complies with the principles outlined in the Privacy Amendment (Private Sector) Act 2000 and using any personal information provided in the attached application in a way that respects your privacy.

By completing any of the attached Application Forms, you are providing personal information to the Manager through the Unit Registrar, who has been contracted by the Manager to manage the applications for Units in the Syndicate and Stapled Securities in the NZ Trust.

The Manager will use your personal information only for the following purposes:

• To evaluate your application;

• To issue Units or Stapled Securities and maintain your interest in the Syndicate or the NZ Trust;

• To communicate with you in relation to your investment and all transactions relating to that investment;

• To advise you of your quarterly distribution entitlements;

• To report to you in relation to your investment including annual and half yearly reports, annual taxation information and other information; and

• To keep you informed of future investment opportunities, products and services of a similar type.

If you do not provide the information requested on the relevant Application Form, the Manager may not be able to process or accept your application.

Section 11 How to Invest


80

Personal information will be shared with the Unit Registrar to maintain your holding and may be disclosed to other entities within Centro, but only for the above purposes. The Manager may use the information collected on the Application Form to inform you of future investment opportunities from Centro.

Personal information may also be disclosed to any financial institution nominated by you and may be disclosed to your licensed financial adviser.

If you invest through an adviser or a broker, by signing the Application Form you authorise the Manager to disclose to the adviser or broker noted or whose stamp appears on your Application Form, information relating to your application for investment in this product. This authorisation specifically excludes the disclosure of any tax file numbers or any information in relation to them. This authority will continue unless revoked by you in writing.

If obliged to do so by law, the Manager will provide your personal information to other parties strictly in accordance with the relevant legal requirements.

Unit Registry’s Commitment to PrivacyComputershare Investor Services Pty Limited (ABN 48 078 279 277) (‘Computershare’) understands that your privacy is important to you.

In its capacity as registrar, Computershare collects personal information. Such information may include your name, address, Unitholding or investment balance, tax file number and bank account details. The primary purpose of collection of personal information is for the maintenance of the register of Investors, facilitating distribution payments and other corporate actions and communications. If you do not provide complete and accurate information, Computershare may not be able to effectively maintain your investment.

The Corporations Act 2001 and the Privacy Act 1988govern the collection, use and disclosure of your personal information.

In accordance with the Corporations Act 2001, and subject to compliance with the requirements of the Privacy Act 1988, you may be sent material (including marketing material) approved by the Manager in addition to general corporate communications. You may elect not to receive marketing material by indicating your election in the relevant box on the Application Form or by contacting Computershare on 1300 555 079 (within Australia).

Questions about Privacy If you have any complaints or queries about the privacy of your information please contact the Centro MCS Privacy Officer in writing at the address below:

Privacy Officer Centro MCSCorporate Offices3rd Floor The Glen235 Springvale RoadGlen Waverley, Victoria 3150

If your complaint is not resolved by the Manager to your satisfaction, you may write to the:

Privacy CommissionerGPO Box 5218, Sydney, New South Wales 2001

DisclaimerThis PDS contains important information and you should read it carefully. In preparing this document, the Manager did not take into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, Investors should consider whether the investment is appropriate to their needs, objectives and circumstances. Investors are encouraged to obtain independent financial advice before making an investment decision.

Section 11 How to Invest

80

Centro MCS 34 – Syndicate Application Form To meet with the requirements of the Corporations Act 2001, this Application Form must not be handed on unless attached to the PDS. Fill out this Application Form if you wish to apply for Units in the Syndicate.

Follow instructions overleaf to complete this Application Form. Print clearly in capital letters using black or blue ink. Lodge your Application Form as soon as possible. This Offer is open for a limited time.

Centro MCS Investor Number (Existing Investors)

Total Amount Subscribed I / We lodge full application monies: AUD$ , , .00

Full Name and Title(s)Individual / Company / Joint Applicant No. 1 - (refer overleaf for correct title(s))

Joint Applicant No. 2

<Account Designation> / Joint Applicant No. 3

Contact DetailsStreet Number / Street Name / PO Box

Suburb / Town State Postcode

Country Telephone No.

Contact Name Fax No.

Email Address (please print clearly) Mobile No.

Tax File Numbers / ABN Australian Resident Non-ResidentApplicant 1 / Company Applicant 2

Request for Direct Payment of DistributionName of Financial Institution BSB No.

Account Name Account No.

Personal Details Date of Birth – Individual / / Date of Birth – Joint Applicant No.2 / /

(Optional Details) Occupational Status Full Time Part Time Retired

How did you hear about Centro MCS 34?

I’m an Existing Investor of Centro/Centro MCS Financial Planner/Accountant Newspaper/Magazine Advertisement Friend/Colleague Website

Other (please specify)

Cheque Details Please fill out your cheque detailsName of Drawer Cheque No. BSB No. Account No. Amount AUD$

Marketing MaterialFrom time to time Centro MCS may use your details to promote and market other Centro MCS services or products which we consider may be of interest to you. Please tick this box if you do not wish this information to be sent to you.

DeclarationI/We acknowledge that Centro MCS will disclose my personal information to my/our financial adviser (whose stamp appears above) in relation to the investment described in this form. Centro MCS will cease to disclose this personal information, if I/we notify Centro MCS that the financial adviser no longer acts on my/our behalf.

Individual Joint 2 Joint 3

Sole Director & Sole Company Secretary Director/Secretary Director

Brokers Reference Stamp

All personal information provided on this application form will be dealt with in accordance with our privacy policy. See www.centro.com.au

Date / /

Centro MCS Adviser Code

A

9

1.

3.

4.

6.

5.

7.

9.

10.

8.

2.

Please use BLOCK LETTERS

1. Item 1: If you do not have a current investment in a Centro MCS Syndicate, please go directly to Item 2.

2. Item 2: Please enter the TOTAL AMOUNT of application monies payable. We accept a minimum of AUD$10,000, or more in increments of AUD$1,000.

3. Item 3: Please enter the FULL NAME(S) of all legal entities that are to be recorded as the registered holder(s). Up to three Joint Applicants may register. Please refer to the examples below for guidance on valid registrations.

4. Item 4: Please enter your CONTACT DETAILS. Please include your telephone number and contact name in case we need to contactyou in relation to your application.

5. Item 5: Please enter your TAX FILE NUMBER(S) or ABN, and, where applicable, please enter the TFN for each Joint Applicant. Collection of TFNs is authorised by taxation laws. It is not compulsory to provide your TFN and this will not affect your application. However, if you do not provide your TFN, tax may be deducted from quarterly payments at the top personal tax rate plus the Medicare levy. Your privacy regarding your TFN will be respected and your TFN will not be disclosed under any circumstances.

6. Item 6: Please complete this section in order to have your distribution paid directly into a nominated bank, credit union or building society account.

7. Item 8: Payment must be made in Australian currency. Cheques or bank drafts must be made payable to ‘CPT Manager Limited – Centro MCS 34’ and crossed Not Negotiable. Cheques not drawn properly may be rejected. Cheques will generally be deposited on the day of receipt.

8. Item 10: Each Applicant must sign this form. If your Units are to be held in joint names, all Applicants must sign. If you are signing as an attorney, the power of attorney must have been noted by Computershare Investor Services or a certified copy of it must accompanythis form.

Only duly authorised officer(s) can sign on behalf of a company. Please sign as directed, indicating the office held by the signatory; i.e. Director and Director, or Company Secretary and Director, or the Sole Director and Sole Company Secretary.

In signing this Application Form you agree:

1. That your application is made on the basis set out in Section 2 of the PDS;2. That you have read the PDS to which this Application Form is attached;3. That by signing this Form, you agree to be bound by the terms of the Constitution;4. That the Manager may accept your application in whole or in part;5. That you acknowledge that none of the Manager nor any other person or entity guarantees the value or performance

of this investment;

Forward your completed application together with the application monies to:

Centro MCS 34 or Centro MCS 34C/- Computershare Investor Services Pty Limited C/- Computershare Investor Services Pty LimitedGPO Box 52 Yarra Falls, 452 Johnson StreetMELBOURNE VIC 3001 ABBOTSFORD VIC 3067

Name StandardsOnly legal entities are allowed to hold interests in this investment. Applications must be in the name of a natural person or natural persons, company or other legal entity acceptable to Centro MCS. At least one full given name and the surname is required for each natural person.

Type of Investor Correct Form of Registration

Individual Mr John Alfred SmithUse given names in full, not initials

Company ABC Pty LtdUse the company’s full title, not abbreviations

Joint Holdings Mr Peter Robert Williams & Ms Louise Susan WilliamsUse full and complete names

Trusts Mrs Susan Jane Smith <Susan Jane Smith Family A/C>Use the trustee(s) personal or company name(s)not the name of the trust, and provide theTax File Number of the trust only

Deceased Estates Ms Jane Mary Smith & Mr Frank William SmithUse the executor(s) personal name(s) <Est John Smith A/C>

Minor (a person under the age of 18) Ms Jane Mary Smith & Mr Frank William SmithUse the name of a responsible adult <John Smith A/C>

Partnerships Mr John Robert Smith & Mr Michael John SmithUse the partners’ personal names

How to Complete the Application Form

Centro MCS 34 – NZ Trust Application Form To meet with the requirements of the Corporations Act 2001, this Application Form must not be handed on unless attached to the PDS. Fill out this Application Form if you wish to apply for Stapled Securities in Centro MCS 34 (New Zealand).

Follow instructions overleaf to complete this Application Form. Print clearly in capital letters using black or blue ink. Lodge your Application Form as soon as possible. This Offer is open for a limited time.

Centro MCS Investor Number (Existing Investors)

Total Amount Subscribed I / We lodge full application monies: AUD$ , , .00

Full Name and Title(s)Individual / Company / Joint Applicant No. 1 - (refer overleaf for correct title(s))

Joint Applicant No. 2

<Account Designation> / Joint Applicant No. 3

Contact DetailsStreet Number / Street Name / PO Box

Suburb / Town State Postcode

Country Telephone No.

Contact Name Fax No.

Email Address (please print clearly) Mobile No.

Tax File Numbers / ABN Australian Resident Non-ResidentApplicant 1 / Company Applicant 2

Request for Direct Payment of DistributionName of Financial Institution BSB No.

Account Name Account No.

Personal Details Date of Birth – Individual / / Date of Birth – Joint Applicant No.2 / /

(Optional Details) Occupational Status Full Time Part Time Retired

How did you hear about Centro MCS 34?

I’m an Existing Investor of Centro/Centro MCS Financial Planner/Accountant Newspaper/Magazine Advertisement Friend/Colleague Website

Other (please specify)

Cheque Details Please fill out your cheque detailsName of Drawer Cheque No. BSB No. Account No. Amount AUD$

Marketing MaterialFrom time to time Centro MCS may use your details to promote and market other Centro MCS services or products which we consider may be of interest to you. Please tick this box if you do not wish this information to be sent to you.

DeclarationI/We acknowledge that Centro MCS will disclose my personal information to my/our financial adviser (whose stamp appears above) in relation to the investment described in this form. Centro MCS will cease to disclose this personal information, if I/we notify Centro MCS that the financial adviser no longer acts on my/our behalf.

Individual Joint 2 Joint 3

Sole Director & Sole Company Secretary Director/Secretary Director

1.

3.

4.

6.

5.

7.

9.

10.

Brokers Reference Stamp

All personal information provided on this application form will be dealt with in accordance with our privacy policy. See www.centro.com.au

Date / /

8.

Centro MCS Adviser Code

A

9

2.

Please use BLOCK LETTERS

1. Item 1: If you do not have a current investment in a Centro MCS portfolio Syndicate, please go directly to Item 2.

2. Item 2: Please enter the TOTAL AMOUNT of application monies payable. We accept a minimum of AUD$10,000, or more in increments of AUD$1,000.

3. Item 3: Please enter the FULL NAME(S) of all legal entities that are to be recorded as the registered holder(s). Up to three Joint Applicants may register. Please refer to the examples below for guidance on valid registrations.

4. Item 4: Please enter your CONTACT DETAILS. Please include your telephone number and contact name in case we need to contactyou in relation to your application.

5. Item 5: Please enter your TAX FILE NUMBER(S) or ABN, and, where applicable, please enter the TFN for each Joint Applicant. Collection of TFNs is authorised by taxation laws. It is not compulsory to provide your TFN and this will not affect your application. However, if you do not provide your TFN, tax may be deducted from that portion (if any) of your quarterly distribution that is not interest or principal at the top personal tax rate plus the Medicare levy. Your privacy regarding your TFN will be respected and your TFN will not be disclosed under any circumstances.

6. Item 6: Please complete this section in order to have your distribution paid directly into a nominated bank, credit union or building society account.

7. Item 8: Payment must be made in Australian currency. Cheques or bank drafts must be made payable to ‘CPT Manager Limited – Centro MCS 34 (New Zealand)’ and crossed Not Negotiable. Cheques not drawn properly may be rejected. Cheques will generally be deposited on the day of receipt.

8. Item 10: Each Applicant must sign this form. If your Stapled Securities are to be held in joint names, all Applicants must sign. If you are signing as an attorney, the power of attorney must have been noted by Computershare Investor Services or a certified copy of it must accompany this form.

Only duly authorised officer(s) can sign on behalf of a company. Please sign as directed, indicating the office held by the signatory; i.e. Director and Director, or Company Secretary and Director, or the Sole Director and Sole Company Secretary.

In signing this Application Form you agree:

1. That your application is made on the basis set out in Section 2 and Section 7 of the PDS;2. That you have read the PDS to which this Application Form is attached;3. That by signing this Form, you agree to be bound by the terms of the Constitution;4. That the Manager may accept your application in whole or in part;5. That you acknowledge that none of the Manager nor any other person or entity guarantees the value or performance

of this investment;

Forward your completed application together with the application monies to:

Centro MCS 34 or Centro MCS 34C/- Computershare Investor Services Pty Limited C/- Computershare Investor Services Pty LimitedGPO Box 52 Yarra Falls, 452 Johnson StreetMELBOURNE VIC 3001 ABBOTSFORD VIC 3067

Name StandardsOnly legal entities are allowed to hold interests in this investment. Applications must be in the name of a natural person or natural persons, company or other legal entity acceptable to Centro MCS. At least one full given name and the surname is required for each natural person.

Type of Investor Correct Form of Registration

Individual Mr John Alfred SmithUse given names in full, not initials

Company ABC Pty LtdUse the company’s full title, not abbreviations

Joint Holdings Mr Peter Robert Williams & Ms Louise Susan WilliamsUse full and complete names

Trusts Mrs Susan Jane Smith <Susan Jane Smith Family A/C>Use the trustee(s) personal or company name(s)not the name of the trust, and provide theTax File Number of the trust only

Deceased Estates Ms Jane Mary Smith & Mr Frank William SmithUse the executor(s) personal name(s) <Est John Smith A/C>

Minor (a person under the age of 18) Ms Jane Mary Smith & Mr Frank William SmithUse the name of a responsible adult <John Smith A/C>

Partnerships Mr John Robert Smith & Mr Michael John SmithUse the partners’ personal names

How to Complete the Application Form

Brian Healey (Non-executive Chairman)

A Director of Centro since 1993. Mr Healey was formerly Senior Vice President of Nabisco Inc., Senior Vice President of Sara Lee Corporation and Managing Director of Nicholas Kiwi Ltd. Mr Healey is currently a Director of Fosters Group Limited and Incitec Pivot Limited.

Andrew Scott (Chief Executive Officer)

A Director of Centro since 1997. Mr Scott joined the Group in March 1997 after 15 years with Coles Myer Limited in various senior property, finance and strategy positions. Prior to joining Centro Mr Scott was Director of Property for Coles Myer Ltd.

Graham Goldie (Non-executive Director)

A Director of Centro since 1994. Mr Goldie has a background in retail store management with over 15 years experience at a senior executive level for Target and Myer stores. Since 1991, Mr Goldie has operated his own consultancy service, consulting to a wide range of diverse interests. Mr Goldie is Chairman of the Advisory Board at the Australian Centre for Retail Studies (ACRS), a specialist centre within the Department of Marketing at Monash University.

David Graham (Non-executive Director)

A Director of Centro since 1985. Mr Graham is the principal of DDH Graham Limited, a corporate advisory and funds management firm based in Brisbane. He has a background in merchant banking and the securities industry. Mr Graham is also a Director of Stradbroke Ferries Limited.

Laurie Wilson(Non-executive Director)

A Director of Centro since 1993. Mr Wilson was formerly the Managing Director of Bowater Scott Australia (Group) Limited for 15 years and is a Director and Chairman of Forestry Tasmania.

Sam Kavourakis (Non-executive Director)

A Director of Centro since 2003. Mr Kavourakis was the Managing Director of National Mutual Funds Management and was responsible for all asset management functions within the National Mutual Group, both in Australia and offshore. Mr Kavourakis is currently a Director of a number of companies and associations including Ticor Limited, Rio Tinto Staff Superannuation Fund, Australand Wholesale Investments Limited, Collins House Financial Services and Traffic Technologies Limited.

Peter Wilkinson (Non-executive Director)

A Director of Centro since March 2004. Mr Wilkinson was Chief Executive and Managing Director of David Jones Limited. He had previously spent 18 years with Coles Myer Ltd, including positions as Managing Director of Target, Managing Director of Myer Grace Bros and Chief Operating Officer of the Coles Myer Group. Mr Wilkinson has also held numerous positions within the retail sector, including President of the Australian Retailers Association and is currently Managing Director of Australian Wool Services Limited (owners of the Woolmark company).

Directors of the Responsible Entity and Centro Properties Group

Centro MCS Manager Ltd and CPT Manager Limited (‘Centro MCS’), wholly owned subsidiaries of the Centro Properties Group (‘Centro’), are the Responsible Entities for syndicates. Centro MCS is managed by a Board of Directors who are accountable to syndicate investors. As the Responsible Entity, Centro MCS provides a comprehensive range of services including management and development of the underlying properties in Centro MCS direct property syndicates, accounting, interest rate and debt management, leasing, marketing, custodial services and registry management.

CENTRO MCS SYNDICATES CENTRO MCS DIRECTORYResponsible EntityCPT Manager LimitedABN 37 054 494 307Centro MCS Manager LimitedABN 69 051 908 984

Board of DirectorsBrian Healey (Chairman)Andrew Scott (Chief Executive Officer)Graham GoldieDavid GrahamLaurie WilsonSam KavourakisPeter Wilkinson

Company SecretaryDanielle Rowe

Registered OfficeCorporate Offices, 3rd FloorCentro The Glen235 Springvale RoadGlen Waverley Victoria 3150Telephone +61 3 8847 0000Facsimile +61 3 9886 1234

For more information on this offer please contact:Investor ServicesGeneral Enquiries Telephone 1800 802 400Telephone +61 3 8847 0000 (International)Facsimile +61 3 9886 1234Email [email protected]

Registry & Holdings Enquiries for Centro MCS 34Computershare Investor Services Pty LtdGPO Box 2975EEMelbourne Victoria 3001Telephone 1300 555 079 (Australia)

0800 540 172 (New Zealand)+61 3 9415 4000 (International)

Facsimile +61 3 9473 2500www.computershare.com.au

Directory

Syndicate Prefix Syndicate Also Known As

Centro MCS 2 MCS2 John Martin’s Car Park & Retail Plaza JA

Centro MCS 3 MCS3 Nepean Square Shopping Centre JA

Centro MCS 4 MCS4 The Hills Shopping Centre JA

Centro MCS 5 MCS5 Coles & Kmart Centres JA

Centro MCS 6 MCS6 Melbourne-Brisbane Retail & Bulky Goods JA

Centro MCS 8 MCS8 1998 Retail Portfolio JA

Centro MCS 9 MCS9 1998 National Retail Portfolio DPI & UT


Centro MCS 11 MCS11 Paradise Centre DPI & UT




Centro MCS 16 MCS16 (Institutional/NZ) DPI & UT



Centro MCS 19 UT MCS19 Trust

Centro MCS 19 NZ/I MCS19 (NZ/Institutional) DPI

Centro MCS 20 MCS20 (International No.1) Trust

Centro MCS 21 Centro Property Syndicate No.1 (Roselands Syndicate)

Centro MCS 22 Centro Property Syndicate No.2 (Kidman Park Syndicate)

Centro MCS 23 Centro Property Syndicate No.3 (Prime Syndicate No.3)

Centro MCS 24 Centro Property Syndicate No.4 (Lake Macquarie Syndicate)



Centro MCS 27 Centro Property Syndicate No.7 (Sunshine MarketPlace Syndicate)


Centro MCS 32 Centro MCS 32 – International No.2

Centro MCS 33 Centro MCS 33

Responsible Entity: CPT Manager Limited

ABN 37 054 494 307 AFSL 238 454

December 2004

Centro MCS 34 Product Disclosure Statement & Prospectus

Centro MCS 34 Trust ARSN 111 915 747 Centro MCS 34 (New Zealand) Trust ARSN 109 043 674

Lismore CentralNew South Wales

Pirie PlazaSouth Australia

Coles MorwellVictoria

Pinelands PlazaQueensland

Woodcroft PlazaNew South Wales

Emerald VillageQueensland

Emerald Market Plaza Queensland


CPT Manager Limited Responsible Entity

ABN 37 054 494 307

Centro M

CS 34