INTERVIEW WITH LUKE PETHERBRIDGE, CHIEF EXECUTIVE OFFICER OF MACQUARIE DDR TRUST (MDT)

“Full Year Results”

http://www.brr.com.au/event/50462

FRIDAY, AUGUST 29, 2008, 10:30 AM.

            BRR    Today, Boardroom Radio speaks to Macquarie DDR Trust. The Macquarie DDR Trust is the leading listed property trust focused on attracting discount

10                    retailers, offering value and convenient  shopping in the United States. Talking with us today about the Group’s full year results to the 30th June 2008 is Macquarie DDR’s recently appointed Chief Executive Officer, Luke Petherbridge. Luke, thanks very much for joining us.

            MDT    You’re welcome.

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            BRR    Luke, firstly can you tell us about the Trust’s key highlights over the past 12 months, please?

            MDT    Absolutely, the key highlights have really been driven by leveraging of the solid underlying fundamentals of the Trust’s high quality portfolio. Net

20                    property income was $141 million, up 0.8%, year-on-year. Distributable earnings of $91.2 million, which resulted in 9.81 cents per unit, and that was really built up an overall Leased Rate of 96.7%. The income security is driven highly by the 7-year weighted average lease term.

25        BRR    Now Luke, could you also outline the key capital management activities undertaken by the Trust in the past 12 months?

            MDT    Absolutely. As pointed out in the half yearly results, we have really been focusing on securing the trust balancing. We’ve made good progress in this area, refinancing $340.5 million early. We’ve improved the Head Trust

30                    covenants from 60% to 65% which provides greater buffer. As we’ve outlined, we’re progressing with asset sales, which all in all has put the Trust on a stronger footing.

            BRR    And then could you provide us an overview, please, of the Trust portfolio

35                    performance.

            MDT    The performance has been good in the current environment. It reflects the high quality portfolio and the diversified tenant mix, with the focus towards discount retailers. The lease rate is down marginally to a healthy 96.7% and operations have been strong, releasing almost a million square feet, which is

40                    about 6% of the portfolio and receiving with that leasing and upward rental reversion of around 9.2% throughout the year.

            BRR    Is there any further news regarding Mervyns, and can you provide more details regarding the letter of credit?

45        MDT    Sure. Mervyns, as we announced, has entered Chapter 11 protection to restructure their business. To date, they are currently paying rent on all their locations and they’ve announced that they are looking to close potentially 26 out of their 176 stores, of which eight are included in the MDT portfolio, representing about 2% of their overall annual base rate. Part of the deal was we had a letter of credit for about $25 million which provides protection and potential support for retainers in costs.

            BRR    And finally, Luke, why is the Trust reviewing its distribution policy and what is

5                      the impact on future distribution payments?

            MDT    We review all our policies on a regular basis and that we believe it’s prudent in the current capital constrained environment to review the distribution policy and work off cash flow. We’ve set the distributions to a sustainable level that provides a platform for future growth.

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            BRR    Luke, thanks very much for spending the time and updating our listeners on the Macquarie DDR Trust. Good luck in your new role and we look forward to continue to further developments.

            MDT    Thank you very much for you time.

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            BRR    That’s been Luke Petherbridge, the Chief Executive Officer of Macquarie DDR Trust speaking to us on Boardroom Radio.

INTERVIEW CONCLUDED

Contact brr@brr.com.au for more information

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