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CROMWELL GROUP (ASX:CMW) Small-Mid Caps HK Conference 1

Cromwell GroupAn opportunity to capitalise on the Australian Commercial Property Market

CROMWELL GROUP (ASX:CMW) Small-Mid Caps HK Conference

Important Information and Disclaimer

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Content

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Cromwell Group Overview …………………………………………………….……..4

Australian Focus …………………………………………………………….………….8

Cromwell’s Property Portfolio ………………………………………………………14

Strategy and Outlook ………………………………………………………………...17

Appendix - Core Properties …………………………………………………………22


Cromwell Group Overview

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Cromwell Group Overview

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Cromwell Group (ASX code: CMW) is an internally managed Australian Real Estate Investment Trust (A-REIT) with a funds management business that promotes and manages unlisted property investments.

Assets under management of approximately AUD $2 billion

AUD$1.5b in Group assets

AUD$0.4b in unlisted property funds managed by the Group for external investors

2011 Financial Year Guidance

Forecast AUD7.3 – 7.8 cents per security (cps) earnings in FY11, distributing AUD7.0–7.4 cps

Security price of $0.721 represents approximately 10% pa distribution yield

High level of tax deferral expected to continue

Cromwell intends to pursue opportunities for corporate activity which add to the quality of the Group’s earnings and medium term growth potential.

1] As at 14 October 2010


Property Portfolio Overview

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Defensive Australian portfolio with strong cash flow

No debt facilities expiring until March 2011

NTA per security of AUD$0.71, with valuations widely expected to have bottomed

Portfolio will benefit from continuing economic recovery

Brisbane

QLD 13%

VIC 32%

ACT 24%NSW 20%

SA 7%

WA 1%

TAS 3%

Adelaide

Melbourne

Canberra

Hobart

SydneyAlbury

Perth

* Map shows geographic diversification by gross income as at 30 Jun 2010


Management Overview

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David GippelDirector - Cromwell Capital

Responsible for Treasury and debt management

Paul WeightmanCEO / Executive Director

Since inception has actively managed the Group’s strategic direction

Daryl WilsonCFO / Executive Director

Primary responsibility for the finance and funds management functions

Noel WoodwardHead of Property Services

Provides strategic leadership for the effective operation of the property portfolio

Jodie ClarkDirector - Cromwell Property Services

Licensee for property management and transactions

Paul McDonnellNational Asset Manager

Responsible for maximising income from all properties


Australian Focus

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The Australian Economy

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Rich in natural resources – major exporter of minerals such as iron-ore and gold, and energy in the

form of liquefied natural gas and coal

Major exporter of agricultural products, particularly wheat and wool.

Fared better than many of the major world economies during past 3 years

High level of commodity exports

Continuing demand for its products due to close proximity to major Asian economies

Strong, well regulated financial sector

Unemployment rate only 5.1% (September 2010)


The Australian Commercial Property Cycle

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Valuations for quality property expected to have bottomed

Peak to trough fall of 23.1% reported by IPD

Opportunities to buy well below replacement cost

Source: BIS Shrapnel


The Australian Commercial Property Market

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Cap rates for office now slightly above long-term averages

Significant rental growth expected once limited supply is absorbed

Office vacancy peaking in most CBD markets

Source: IPD Research


Non Resident Taxation of Cromwell Group Investment

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As a stapled security, Cromwell Group is made up of Cromwell Corporation Limited (the Company) and Cromwell Diversified Property Trust (the Trust), each with different taxation treatments


Non Resident Taxation of Australian Property Investment

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Tax structuring vital to maximise after tax returns

For further details, refer to Cromwell’s Taxation Fact Sheet provided in the delegate packs


Cromwell’s Property Portfolio

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Portfolio Diversification

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No offshore assets

Strong office focus

Weighted towards Melbourne and Canberra office markets


Quality Income Stream

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Focus on quality tenants

52% of next rent reviews are fixed, with an average increase of 3.95%

27% of next rent reviews are CPI

Minimal future impact from softening rentals – only 17% subject to market reviews


Strategy & Outlook

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Long Term Focus

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Aim is to deliver outperformance through the cycle

Cromwell Group has significantly outperformed over short, medium and long term

Direct property outperformance independently verified by IPD

Property Securities Fund outperformance over all periods


Earnings and Distributions Guidance

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FY11 Operating Earnings

Expect operating earnings of AUD 7.3–7.8 cps

Assumes no further transactional income at low end of range

FY11 Distributions

Distributions of AUD 7.0–7.4 cps (paid quarterly)

Distribution policy of 90-95% of operating earnings

High level of tax deferral expected to continue

1] As at 14 September 2010. Source: Reuters Consensus Forecasts. 2] Source: IBES

FY12 and beyond

Return to EPS growth

Property earnings expected to continue to be resilient due to favorable lease expiry profile.

Some impact from rising interest rates and refinancing but less severe than most peers

Funds management and development opportunities provide potential for future growth


Cromwell Group Strategy

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Short Term (FY11)

Continue to focus internally on re- leasing and portfolio improvement opportunities

Renegotiate FY11 and FY12 debt expiries and extend debt expiry profile

Launch next generation of funds management products

Continue to consider opportunities for corporate or property portfolio transactions

Focus on opportunities which protect or enhance EPS and NTA per security Will continue to divest smaller/non-core assets

Medium Term

Improve liquidity – targeting inclusion in ASX 200 A-REIT index

Diversify debt sources and reduce gearing level as portfolio grows and valuations improve

Target additional assets with core plus attributes in attractive markets as economy recovers

Focus funds management business on targeting recurring rather than transactional income


An Attractive Play on a Recovering Economy

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Solid earnings base

Recurring earnings currently >95%

WALT of 6 years, quality tenant base

Minimal lease expiries in next 5 years

Targeting 4% growth in annual net property income

Focus on cash flow

DPS yield of 9.9 – 10.4%1 based on guidance range

Simple balance sheet and minimal development exposure allows for high payout ratio

Targeting growth in NTA and EPS over medium term

Have continued to expand AUM over last 3 years

Will benefit from improving valuations

History of outperformance over peers

Will continue disciplined approach to transactional activity

Ability to leverage existing skills over a much larger asset base

1] Based on closing price of $0.72 on 14 October 2010.


Appendix: Core Properties (valued over $50m)

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Tuggeranong Office Park, Greenway ACT

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Address Athllon Drive, Tuggeranong ACTSector CommercialLand Area 80,780 sqmLettable Area 30,757 sqmAcquisition Date Jun-08External Valuation $167.5m (June 2010)Book Value $167.5mOccupancy 100%Cap Rate 8.88%WALT 6.44 yearsMajor Tenants Govt Department of Families, Housing,

Community Service & Indigenous Affairs.

The property comprises five individual buildings of up to three stories linked by enclosed walkways. The basement area includes both service areas and 291 car parks with a further 469 open car parks on-site. It is fully leased to the Commonwealth Government until 2016.


700 Collins Street, Melbourne VIC

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The property comprises 12 levels of office accommodation, 3 levels of car parking and various retail areas. 700 Collins Street is located in the Docklands Precinct at the western end of the Melbourne CBD. Tenants enjoy uninterrupted views and direct access to the city.

Address 700 Collins Street, Melbourne VIC 3008

Sector CommercialLand area 4,836 sqmLettable area 33,835 sqmAcquisition date Dec-04External valuation $156.0 million (Nov 2009)Book value $160.0 millionOccupancy 99.80%Cap rate 8.00%WALT 5.02 yearsMajor tenants Bureau of Meteorology and Medibank

Private


475 Victoria Avenue, Chatswood NSW

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The complex comprises two 13-level office buildings complete with ground floor retail and 3 levels of basement car parking. There is also a freestanding annexe building and well maintained gardens separating the 2 office towers. Office space in the complex comprises a net lettable area of 24,131 sqm while the retail space covers an area of approximately 832 sqm.

Address 475-501 Victoria Ave, Chatswood NSWSector CommercialLand area 6,030 sqmLettable area 24,963 sqmAcquisition date Mar-06External valuation $127.5million (June 2010)Book value $127.5 millionOccupancy 98.32%Cap rate 8.00%WALT 5.31 yearsMajor tenants Reed Elsevier Australia, Evans & Peck

and Leighton Contractors


AWB Building, Melbourne VIC

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The La Trobe Street property is a modern A grade office complex with approximately 22,000 sqm of office accommodation. The 18 level building has 2 separate foyers fronting La Trobe Street providing a separate entry point for the major tenant AWB, who solely occupy the upper portion of the building.

Address 380-390 LaTrobe St, Melbourne VIC 3000Sector CommercialLand area 2,899 sqmLettable area 21,983 sqmAcquisition date Dec-05External valuation $94.5 million (June 2010)Book value $94.5 millionOccupancy 100%Cap rate 8.50%WALT 4.26 yearsMajor tenants AWB Services Limited and Australian Taxation

Office


200 Mary Street, Brisbane QLD

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Cromwell House at 200 Mary Street is strategically located in Brisbane’s CBD, just 125 metres from the GPO and in an area known as Brisbane’s Golden Triangle. The 19 level office tower serves as the head office of Cromwell Group. Parts of the building enjoy views over the Brisbane River to Moreton Bay as well as Brisbane’s hinterland.

Address 200 Mary Street, Brisbane QLD 4000Sector CommercialLand area 1,834 sqmLettable area 13,841 sqmAcquisition date Jun-01External valuation $85.5 million (June 2010)Book value $85.5 millionOccupancy 98.14%Cap rate 8.50%WALT 3.60 yearsMajor tenants Queensland Department of Public Works,

Commonwealth Government, QER Pty Ltd


Synergy, Kelvin Grove QLD

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Synergy, completed in November 2008, is located within Kelvin Grove Urban Village, Brisbane’s newest master- planned inner-city precinct merging business, technology, education and the arts. It is a state of the art A-grade building which has been awarded a 5 Star Green Star As designed Rating under the Green Building Council of Australia’s (GBCA) Green Star rating system. A 5 Star rating recognises and rewards “Australian Excellence” in building design.

Address 76-88 Musk Ave, Kelvin Grove QLDSector OfficeLand area 3,878 sqmLettable area 14,144 sqmAcquisition date Jun-07External valuation $82.0 million (Nov 2009)Book value $78.0 millionOccupancy 71.78%Cap rate 7.75%WALT 6.39 yearsMajor tenants Queensland University of Technology


TGA Complex, Symonston ACT

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The Therapeutic Goods Administration (TGA) complex at Symonston consists of 2 separate buildings on a 17.35 hectare site approximately 8 kilometres from the Canberra CBD. The main building is a world class office and laboratory facility which is leased to the TGA until 2017. There is scope for significant expansion of the existing facilities.

Address 136 Narrabundah Lane, Symonston ACT

Sector CommercialLand area 173,500 sqmLettable area 18,524 sqmAcquisition date Jun-02External valuation $75.0 million (Mar 2010)Book value $75.0 millionOccupancy 100%Cap rate 8.50%WALT 6.77 yearsMajor tenants Therapeutic Goods Administration


Qantas Global Headquarters- Sydney

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Address 203 Coward Street, Mascot NSW

Sector Commercial

Land Area 27,160 sqm

Lettable Area 46,546 sqm

Acquisition Date August 2010

External Valuation $169.1 million (May 2010)

Occupancy 100%

Cap Rate 8.30%

WALT 10.49 years

Major Tenant Qantas Airlines Limited

Superbly positioned within immediate proximity of Mascot- Kingsford Smith International and Domestic Airports a modern campus style business park comprising three multi-level office buildings and an office warehouse building, all with extensive basement parking.


Exhibition Property, Melbourne VIC

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The property will be refurbished over the next 12 months, and will provide significant exposure to the improving Melbourne CBD commercial market

Address 321 Exhibition Street, Melbourne VICSector CommercialLand area 2,914 sqmLettable area 30,915 sqmAcquisition Date July 2010External valuation $155.0m (Mar 2010)on completion of

refurbishmentBook value $90.2 millionOccupancy Currently Vacant ( 78% under Heads of

Agreement)Cap rate 8.00%WALT 11.1 years (includes Origin lease effective 1 Aug

2011)Major tenants Origin Energy pre-committed to lease 78 % of

Building post refurbishment.


Thank you for your time

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David GippelDirector Cromwell Capital Limited

Paul WeightmanCEO / Executive DirectorCromwell Group

Jodie ClarkDirector Cromwell Property Services

To book a meeting with Cromwell, speak to one of the ASX staff or visit the Registration Desk

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