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Commercial Real Estate DebtInvesting in times of uncertainty

Andrew Schwartz – Group Managing Directorand Co-Founder of the Qualitas Group

2May 2020 2

Agenda

1 Role and market opportunity for alternative lenders and why do borrowers use them?

2 What are the risks and opportunities for investing in CRE debt during market uncertainty?

3 About Qualitas and the Qualitas Real Estate Income Fund (ASX:QRI)

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CRE Debt and the Alternative Credit Market

4May 2020 4

What is CRE Debt?

• Commercial real estate (CRE) debt is where loans are made to commercial borrowers who require funding for real estate purposes.

• Loans may be used to purchase improved, developable and vacant land, or for property buildings, both completed and under construction.

• Land or property is mortgage collateral for the loan, and investors derive income from the fees and ongoing interest paid on the loan.

• Sourcing lending opportunities• Assessing loans• Active loan management• Portfolio Management

Investors provide equity capital

Investor

Distributions

Capital is loaned to borrowers

CRE debt fund / LIT

Income

Uses loan for financing property investments

Borrower

Interest/Fees

Investment Manager

5May 2020 5

CRE Debt and Market OpportunityWhat is the role and market opportunity for alternative lenders?

Bank WithdrawalIncreased regulation (APRA, Basel III), rigid lending, Banking Royal Commission scrutiny, increasing the “gap”.

Alternative Lenders

~ $22Bn (7%)

Banks$295Bn (93%)

Senior loans

Mezzanine loans

GAP

Market GrowthCRE debt market grows year on year, +3.1% p.a. to Dec-19Senior loans represent deepest pool of opportunities

Supportive Macroeconomics & Real Estate MarketPopulation growth ~371k (1.5% p.a.)2, driven by eastern seaboardLow interest rate environment, supports demand for credit

Private Debt Market Opportunity: Alternative Lenders 1. CRE debt provides risk adjusted returns to investors2. Borrowers will pay a premium to access more flexible forms of finance

AUSTRALIAN COMMERCIAL REAL ESTATE (CRE) DEBT MARKET1

1 APRA Quarterly Authorised Deposit-taking Property Exposures December 2019 (released 10 March 2020), YOY growth December 2018– December 2019; RBA Financial Stability Review October 2019; 2 3101.0 - Australian Demographic Statistics, September quarter 2019.

6May 2020 6

• Banks have reduced their exposures to certain sectors, i.e. retail, residential development, selective geographies.

• This has resulted in a shortage of debt capital available to borrowers/sponsors which causes gaps in the capital structure.

• Increased flexibility to negotiate on terms.

• Bespoke covenants.

• Ability to move quickly on transactions.

• Ability to provide debt at various capital structure levels, for example, alternative lenders can provide stretch senior and mezzanine loans.

Flexibility

Banks tightening credit

CRE Debt and Market OpportunityWhy do borrowers use alternative lenders?

7May 2020 7

Why invest in CRE Debt?

1. Predictable and regular income

• The loan interest and fees are agreed upfront, so this “fixed income” is known for the duration of the loan.

• Stable cash flows from regular interest payments.

• Interest reserves supports certainty of loan servicing.

2. Capital preservation with portfolio diversification via property

• The loan value does not fluctuate like property values

• CRE debt ranks ahead of equity, meaning it is repaid first.

• CRE debt has the benefit of security, i.e. mortgages over a physical property which can be sold to meet repayment of the loan.

• Equity buffer provides downside protection - depending on the loan-to-value (LVR) ratio, property values will need to fall to a certain level before the loan is at risk of not being fully repaid.

• For example, the weighted average portfolio LVR of QRI as at 31 April 2020 is 64%, which means that gross asset values would need to fall by c36% before the net tangible value (NTA) of the fund would be at risk.

8May 2020 8

CRE Debt Market Outlook (pricing, sectors, competition)

Uncertainty in the market presents both risks and opportunities for CRE Debt

• More favourable pricing compared to 2019• Increased quality of the security package• Less competitive pressure

• Residential – over the longer term immigration will return and this asset class will continue to be considered defensive

• Industrial – WFH and increase in online shopping will redefine this asset class, triple net leases from strong sponsors will continue to do well

• Hospitality, leisure and retail will remain challenged in this environment• Office – the anticipated uptake of WFH implies less need for office space but this is likely to

be offset by social distancing requirements at least until a vaccine is found

Early pricing observations

Sector

• Potential for less competition in the supply of credit to borrowers:• Offshore capital expected to return to their home regions• Banks deleveraging and with an observed reduction in capital especially in the supply of

stretch senior loans means that there may be an increase in quality mezzanine opportunities

Competition

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Qualitas Real Estate Income Fund(ASX: QRI)

10May 2020 10

Summary of QRI

QRI (established in November 2018) provides exposure to the Australian real estate debt market in a liquid, regular income1 paying form with capital preservation characteristics. Each loan asset in the QRI portfolio is secured via a real property mortgage.

QRI is managed by Qualitas, an Australian real estate financier and investment manager.

QRI does not invest in listed high yield fixed income bonds / equities nor does it invest in unsecured corporate loans.

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1 The payment of monthly cash income is a goal of the Trust only and neither the Manager or the Responsible Entity provide any representation or warranty (whether express or implied) in relation to the payment of any monthly cash income.

11May 2020 11

Fundamentals of QRI

QRI is simple to understand:

• Comprises a diversified pool of loan investments1 on a look through basis to investments in underlying funds.

• Qualitas has direct relationships with each and every borrower and underlying secured property1.

• All investments are actively managed through regular dialogue with the borrower and incorporated into detailed written reports by the Manager.

• ~97% (by value) of the loan portfolio1 has a first mortgage.

• ~98% (by value) of the loan portfolio1 also benefits from a personal guarantee.

• QRI seeks to and historically has paid distributions monthly2.

All numerical disclosures are as at 31 April 2020 unless otherwise stated.1 Excludes AFWT notes.2 The payment of monthly cash income is a goal of the Trust only and neither the Manager or the Responsible Entity provide any representation or warranty (whether express or implied) in relation to the payment of any monthly cash income.

12May 2020 12

Portfolio diversification

Target 20-35% of Trust Capital in mezzanine loans (second mortgages)

~30 loans on look-through basis2

Diversified by LVR

Diversified loan maturities between 6 – 24 months2

Australia & New Zealand (20% cap), focusing on Qualitas’ core markets

Diversified borrower base of borrowers / sponsors

Predominantly invested in senior loans (first mortgages)

Diversified by Loan type

Diversified by Geography and Property Sector

1 All investments including direct loans are made by the Sub-Trust. The Sub-Trust is wholly owned by the Trust. Undeployed cash in Fund investments represents uninvested Trust capital amounts that have yet to be invested in direct loans by the underlying funds. 2 Represents total loans in the portfolio on a look through basis, via investments in direct loans and Qualitas wholesale funds. Excludes the AFWT loan portfolio. ~30 loans as per April 2020 however could vary month to month depending on current loan investments.

Diversified by Investment type1 Direct Loans Qualitas Fund investments AFWT notes(15% cap)

Diversified by Loan statistics

Diversified loan pricing / yields depending on loan type and risk

Diversified by Ranking

Land Residual stock Investment Construction

Retail Commercial Industrial Residential

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0%

25%

50%

75%

100%

0%

2%

4%

6%

8%

% D

eplo

ymen

t

Annu

alis

ed R

etur

n %

Deployment (%) RBA Cash Rate Net Return (% p.a.) Distribution (% p.a.)

QRI Historical Performance and Portfolio CompositionAs at 30 April 2020

QRI Historical Performance1

1 Mth2 3 Mth3 6 Mth3 12 Mth3 Inception4

Net Return (%) 0.55% 1.49% 3.09% 6.00% -

Net Return (% p.a.) 6.67% 6.04% 6.22% 6.00% 5.20%

Distribution (¢/unit) 0.8405 2.3933 4.9161 9.6958 11.3875

1 As at 30 April 2020. 2 Net return calculated based on weighted average NAV.3 Net return calculated based on average month end NAV. 4 Since IPO 27 November 2018. Annualised return is based on average month end NAV.5 All investments including direct loans are made by the Sub-Trust. The Sub-Trust is wholly owned by the Trust.

Portfolio Composition5

Please refer to the ASX announcements on the QRI website for the latest performance report for the Trust at https://www.qualitas.com.au/listed-investments/qri-performance-updates/#announcements

Fund Commitments 6%

AFWT notes 7%

Investment Loans19%

Construction Loans15%

Pre-development Loans37%

Trust Loan Receivable3%

Cash 13%

*Past performance is not a reliable indicator of future performance.

14May 2020 14

Examples of Investments

Loans within the Trust Portfolio1:

Arch Finance Warehouse Trust

note program

Exposure to portfolio of ~200 senior first mortgage loans

originated by Arch Finance, a wholly owned

subsidiary of Qualitas

CAP OF 15% OF TRUST CAPITAL

1 As at 30 April 2020.

Altona, VICSenior Investment

LVR 60%

24 months

Homebush, NSWSenior Land

LVR 55%

18 months

Neutral Bay, NSWSenior Construction

LVR 61%LTC 73%

18 months

Fitzroy, VICMezzanine

Construction

LVR 79%LTC 87%

27 months

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About Qualitas

16May 2020 16

132Debt deals

Qualitas Group

1 ‘Since inception’ refers to the inception of the Qualitas Group in 2008. Track Record as of 31 December 2019. Track record 1 July 2019 to 31 December 2019 is subject to completion of independent external verification.2 Gross value is the aggregated value of the real estate asset as at the date of the investment, across both debt and equity investments.3 Represents committed capital in which the Qualitas Group provides investment management services to deploy into investments. Committed Capital as of 30 April 2020. 4 There is a risk that invested capital may result in loss from investments. Past performance is not a reliable indicator of future performance.

Gross Asset Value of Investments:A$ 12.3 billion2

161Invested Transactions

Total Invested Capital: A$3.2 billion

12th year of

Operation

VALUE PROPOSITION

Specialised in property investing across the entire capital structure, both debt and equity

Offers investors access to real estate debt and equity investment opportunities

Australian owned, on-ground investment manager, local knowledge

Historical Track Record Since Inception in 20081

$2.6 BnCommitted Capital managed3

10Active managed fund strategies

350+Wholesale Investors:

Global Institutional and High Net Worth

ZeroLosses of capital in Qualitas operating

history4

17May 2020 17

Management Team

Deal origination & asset management> 22 professionals

Deal origination & asset management> 22 professionals

* Andrew is not related to Alan and Carol Schwartz. Alan and Carol Schwartz are married. Note: Accurate as at date of this ASX release.

Deal origination & asset management> 22 professionals

Deal origination & asset management> 22 professionals

Strategy, Finance, Operations, PR, HR, IT, AdminPortfolio Management Corporate Services & Legal

Risk ManagementDeal Origination & Asset Management Investor Client Coverage

ChairmanMichael Schoenfeld

Group MD & CIOAndrew Schwartz*

Non-ExecutiveElana Rubin

Non-ExecutiveCarol Schwartz*

Non-ExecutiveAlanSchwartz*

Non-ExecutiveDavid Krasnostein

Arch Finance

Andrew Fairley Lewis Bearman

Independent Qualitas Advisory BoardIndependent Directors ofQualitas Trustee Board

Qualitas Group Subsidiaries

Peer Estate

Gerd MayerChief Risk Officer

30 years experience

Andrew Schwartz Group Managing Director &Co-Founder

32 years experience

Tim Johansen Global Head of Capital

30 years experience

Mark Fischer Global Head of Real Estate

16 years experience

Kathleen YeungGlobal Head of Strategy

19 years experience

Philip DowmanChief Financial Officer

30 years experience

~25 years of real estate investment experience across the senior executive team, on average 50+ investment and fiduciary

professionals. 18 dedicated Investment Team members

18May 2020 18

Qualitas Advisory Board

• Over 32 years experience in financial services with an extensive track record across real estate investments.

• Andrew is responsible for overseeing the group, setting the strategic direction of the business and transaction origination.

• Previously held positions as the Head of Asia Pacific Real Estate at investment firm Babcock & Brown, Director of Risk at AIDC and Senior Manager at Bank of America.

Andrew SchwartzGroup Managing Director

Founding Member

• David held various senior executive roles including CEO of MLC Private Equity, Chief General Counsel of National Australia Bank, General Counsel of Telstra, Attorney at the Wall Street law firm Sullivan & Cromwell and a partner of the Chicago law firm Sidley Austin.

• He has been an advisor to the World Bank (IFC) for investing in Emerging Markets.

David Krasnostein AMNon-Executive

Since August 2011

• Carol has extensive experience across a range of industries with a particular focus on property and is currently a Member of the Reserve Bank of Australia Board.

• Carol was made an Officer of the Order of Australia (AO) in the 2019 Queen’s Birthday Honours for her contribution to business, social justice advocacy and distinguished service to the community as a supporter of women in leadership roles.

• In 2016 Carol became the first woman to be inducted into the Australian Property Hall of Fame as well as being made an honorary life member of the Property Council of Australia.

Carol Schwartz AONon-Executive

Founding Member

• Over the past 30 years, Alan has built, managed and sold a number of successful businesses.

• Alan is the MD of the Trawalla Group, co-founder of Armitage Associates, Non-Executive Director of ALI Group and Non-Executive Director of BagTrans Pty Ltd.

• Alan was awarded a Centenary Medal in 2003, followed by an Order of Australia in 2007.

Alan Schwartz AMNon-Executive

Founding Member

• Elana is a Director of Mirvac Group, AfterPay Touch Group, Slater and Gordon, Victorian Funds Management Corporation and several unlisted and/or public-sector organisations in financial services, infrastructure and insurance sectors.

• Elana was previously Chair of AustralianSuper and WorkSafe Victoria. Previous roles include Director of MLC Life, TAL and TAC, and a member of Infrastructure Australia and the Climate Change Authority.

Elana RubinNon-Executive

Since June 2013

• Michael is a Chartered Accountant for over 38 years and is a member and fellow of Chartered Accountants Australia and New Zealand.

• He commenced his accounting career in 1970 before establishing his own practice which was ultimately sold to a publicly listed accounting practice.

• Industry experience centred on real estate developers, construction, manufacturing, telecommunications and financial services businesses.

Michael SchoenfeldChairman

Since April 2012

19May 2020 19

Stakeholder Engagement and Communication

Shareholder Engagement

Regular unitholder emails Investor presentations Website Media

Monthly NAV Monthly, semi and annual financial results

Industry Conferences Independent Research

Research Coverage

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SYDNEY OFFICELevel 23, 1 Farrer Place,Governor Macquarie Tower,Sydney NSW 2000

MELBOURNE OFFICELevel 38, 120 Collins Street, Melbourne VIC 3000

Email: qri@qualitas.com.au

Manager Website: www.qualitas.com.au

Trust Website: www.qualitas.com.au/listed-investments/QRI

Important Information

This document includes “forward looking statements”. Such forward- looking statements are notguarantees of future performance and involve known and unknown risks, uncertainties and otherfactors, many of which are beyond the control of the Relevant Parties and their officers, employees,agents or associates that may cause actual results to differ materially from those expressed orimplied in such statement. Actual results, performance or achievements may vary materially fromany projections and forward looking statements and the assumptions on which those statementsare based. Past performance is not a reliable indicator of future performance. The Relevant Partiesassume no obligation to update such information.

This document is not, and does not constitute, an offer to sell or the solicitation, invitation orrecommendation to purchase any securities and neither this document nor anything contained in itforms the basis of any contract or commitment.

Both the Manager and the Qualitas Group expressly disclaims, to the maximum extent permitted bylaw, all liabilities (however caused, including negligence) in respect of, make no representationsregarding, takes no responsibility for, the accuracy of, and does not endorse, confirm or express aview as to the currency, reliability or completeness of, any information, statements, opinions,conclusions or representations, that are contained in the research coverage published by theresearch ratings agencies. It does not make any representation of any forecasts and/orrecommendations which may be provided by any research published by the research ratingsagencies, and does not accept any liability for any error or omission in this report or for any resultingloss or damage suffered by the recipient or any other person, and readers of any of the materialshould obtain independent advice before making any financial and/or investment decisions.

BondAdviser has acted on information provided to it and the content of the research report is notintended to provide financial product advice and must not be relied upon as such. The statementsand/or recommendations in the research report are the opinions of BondAdviser only. Neither theaccuracy of the data nor the methodology used to produce the report can be guaranteed orwarranted. BondAdviser has taken all reasonable steps to ensure that any opinion orrecommendation in the content or the research reports is based on reasonable grounds, noting thatsome of the information in the content or the reports is based on information from third parties.Details regarding BondAdviser methodology and regulatory compliance are available athttp://bondadviser.com.au/documents-and-links. BondAdviser recommends investors read the fullresearch report and disclaimers therein.

The Independent investment research (IIR) research report should be read in its entirety including thedisclaimer and disclosure noted in the report. IIR recommends that you do not make any investmentdecision prior to consulting your wealth adviser about the contents of the IIR research report.

The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating(assigned 23 May 2019) referred to in this document is limited to “General Advice” (s766BCorporations Act 2001) for Wholesale clients only. This advice has been prepared without taking intoaccount the objectives, financial situation or needs of any individual and is subject to change at anytime without prior notice. It is not a specific recommendation to purchase, sell or hold the relevantproduct(s). Investors should seek independent financial advice before making an investmentdecision and should consider the appropriateness of this advice in light of their own objectives,financial situation and needs. Investors should obtain a copy of, and consider the PDS or offerdocument before making any decision and refer to the full Zenith Product Assessment available onthe Zenith website. Past performance is not an indication of future performance. Zenith usuallycharges the product issuer, fund manager or related party to conduct Product Assessments. Fulldetails regarding Zenith’s methodology, ratings definitions and regulatory compliance are availableon our Product Assessments and at http://www.zenithpartners. com.au/RegulatoryGuidelines.

This document has been prepared by QRI Manager Pty Ltd ACN 625 857 070 (Manager), theinvestment manager of the Trust. The Trust Company (RE Services) Limited ABN 45 003 278 831AFSL 235 150 (Perpetual) is the responsible entity of the Qualitas Real Estate Income Fund ARSN627 917 971 (Trust). QRI is a wholly owned member of the Qualitas Group and is an authorisedrepresentative of the Qualitas Securities Pty Ltd AFSL 342 242.

The information contained in this document is given without any liability whatsoever to QualitasProperty Partners Pty Ltd ACN 137 928 155 or any of its related entities (collectively Qualitas Group)or their respective directors or officers, and is not intended to constitute legal, tax or accountingadvice or opinion. No representation or warranty, expressed or implied, is made as to the accuracy,completeness or thoroughness of the content of the information. The recipient should consult withits own legal, tax or accounting advisers as to the accuracy and application of the info containedherein and should conduct its own due diligence and other enquiries in relation to such information.

This document is intended only as a general overview of the Qualitas Real Estate Income Fund and isfor informational purposes only, should not be construed or relied upon as investment advice, and isbased on available market information. Information provided in this document is as of 30 April 2020unless otherwise indicated.

The information provided in this document is of a general nature only and has been prepared withouttaking into account your objectives, financial situation or needs. Before making an investmentdecision, you should consider this document carefully and in full and assess whether the Trust isappropriate given your objectives, financial situation or needs. If you require advice that takes intoaccount your personal circumstances, you should consult a licensed or authorised financial adviser.

Neither Perpetual nor the Manager guarantees repayment of capital or any particular rate of returnfrom the Trust. Neither Perpetual nor the Manager gives any representation or warranty as to thereliability, completeness or accuracy of the information contained in this document and prospectiveinvestors are cautioned not to place undue reliance on any forward looking statements, forecasts ortargets contained in this document. All opinions and estimates included in this document constitutejudgments of Qualitas as at the date of this document and are subject to change without notice.Past performance is not a reliable indicator of future performance.

The information contained in this document is not investment or financial product advice and is notintended to be used as the basis for making an investment decision. Please note that, in providingthis document, none of Perpetual, the Trust, the Manager nor any member of the Qualitas Group ofentities (together the Relevant Parties) have considered the objectives, financial position or needs ofany particular recipient. The Relevant Parties strongly suggests that investors consult a financialadvisor prior to making an investment decision.

This document may not be reproduced, disseminated, quoted or referred to, in whole or in part,without the express consent of the Relevant Parties.

No representation or warranty, express or implied, is made as to the fairness, accuracy,completeness or correctness of the information, opinions and conclusions contained in thisdocument. To the maximum extent permitted by law, none of Relevant Parties, their related bodiescorporate, shareholders or respective directors, officers, employees, agents or advisors, nor any otherperson accepts any liability, including, without limitation, any liability arising out of fault or negligencefor any loss arising from the use of information contained in this document.

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Appendix 1

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Key Fund Details

Investment Strategy The Manager seeks to invest the Trust’s capital in a portfolio of investments that provideUnitholders with exposure to predominantly Australian secured real estate loans.

Manager QRI Manager Pty Ltd

Responsible Entity The Trust Company (RE Services) Limited

Distributions Monthly1

NAV reporting Monthly

Management Fee2 1.50% p.a. (excl. GST) of the Trust’s Net Asset Value (NAV); or 1.54% p.a. (incl. GST, lessRITC) of the Trust’s NAV.

Performance Fee 20% of any outperformance over a return hurdle of 8.0% p.a.3

1 The payment of monthly cash income is a goal of the Trust only and neither the Manager or the Responsible Entity provide any representation or warranty (whether express or implied) in relation to the payment of any monthly cash income.2 Management Fees form part of the Management Costs of the Trust which is 1.89% - 2.05% of the Trust’s NAV. For more information, please refer to the most recent Product Disclosure Statement (PDS) dated 11 September 2019. 3 Calculated and accrued monthly based on average adjusted NAV over a performance calculation period of 3 years with aggregate accrued amounts paid annually in arrears. For more information, please refer to the most recent Product Disclosure Statement (PDS) dated 11 September 2019.

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Types of CRE Debt Loans

Land

Used for land that has been approved for development.

Construction

Investment

Provided to fund development and construction costs of real estate development projects.

Secured against real estate assets that are income generating.

Typical secured real estate loans across commercial real estate finance market include:

24May 2020 24

CRE Capital Structure

Where does CRE debt rank in the security and repayment waterfall?

Senior debt • First ranking security over property

• Repaid first from asset sale proceeds

Mezzanine debt• Second ranking security over property

• Same protections as senior debt but repayment / rights ranks second

Equity• Property ownership

• Repaid last, after debt

Ris

k /

Ret

urn

scal

eLowest

Highest

Qualitas does not invest in more than one part of the capital structure for the same transaction / real estate asset.

QRI

QRI

Last

2nd

1s

t