Multiplex Acumen Property Fund Annual Report€¦ · in commercial and residential real estate and...

Annual Report 2008Multiplex Acumen

Property Fund

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Annual Report

Annual Report 2008Multiplex AcumenProperty FundARSN 104 341 988

Responsible EntityBrookfi eld Multiplex Capital Management Limited ACN 094 936 866, AFSL 223809

Performance at a Glance 6

Portfolio Analysis 8

Message from the Chairman 10

Fund Manager’s Year in Review 12

Investment Portfolio 20

Top 12 Unlisted Property Investments 22

Board of Directors 28

Corporate Governance Statement 30

Investor Relations 38

Financial Report 40

Corporate Directory IBC

Underlying property assets

Experienced managers

Different property investments

3,000 5931

Contents

Responsible EntityBrookfield Multiplex Capital Management Limited 1 Kent Street Sydney NSW 2000 Telephone: (02) 9256 5700 Facsimile: (02) 9256 5188

DirectorsPeter Morris Brian Motteram Robert McCuaig Brian Kingston Mark Wilson

Company SecretaryNeil Olofsson

Registered Office1 Kent Street Sydney NSW 2000 Telephone: (02) 9256 5700 Facsimile: (02) 9256 5188

CustodianANZ Nominees Limited Level 25, 530 Collins Street Melbourne VIC 3000 Telephone: 1800 177 254

Stock ExchangeThe Fund is listed on the Australian Securities Exchange (ASX Code: MPF). The Home Exchange is Sydney.

AuditorKPMG 10 Shelley Street Sydney NSW 2000 Telephone: (02) 9335 7000 Facsimile: (02) 9299 7077

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Corporate Directory

The cover and first 40 pages of this document are printed on paper sourced from plantations and sustainable forests, is Elemental Chlorine Free (ECF) and holds an ISO14001 environmental accreditation. The last 60 pages are printed on an Australian-made stock which is Elemental Chlorine Free (ECF).

Multiplex Acumen Property Fund is an ASX listed property trust that predominantly invests in unlisted property securities. Total funds under management of $382 million are spread over an investment portfolio of 59 different property investments, with 31 experienced managers. These investments provide the fund with indirect exposure to more than 3,000 properties that reflect an average lease term to expiry of approximately 6.2 years.

Total assets NTA per unit Gearing

$382m $1.10 18.8%

Annual Report 2008

Multiplex Acumen Property Fund

Brookfield Asset Management Inc. is a global asset manager focussed on property, power and infrastructure assets with approximately US$95 billion of assets under management. Brookfield is listed on the New York and Toronto Stock Exchanges under the symbol BAM and on the Euronext under the symbol BAMA.

About Brookfield2

Brookfield’s competitive advantages

– Best-in-class operating platforms Unique ability to maximise value

– Established track record Outperformance in every fund formed to date

– Directly-held assets $15+ billion of invested capital to seed new funds

– Co-investment in funds Provides alignment of interests

– Transparency Sarbanes-Oxley compliant

– Broad product offering By asset class and across risk spectrum

Annual Report 2008

Brookfield’s goal is to achieve superior, risk-adjusted returns for their clients, partners and shareholders by identifying investment opportunities across select asset classes on a value basis supported by sound fundamentals.

Brookfield has established itself as an asset manager of choice for clients with a long-term focus on capital to allocate with its areas of expertise – property, power, timber and infrastructure assets.

With over 100 years of experience investing and operating these high quality assets globally, Brookfield is uniquely positioned to offer specialty investment product to its clients. Headquartered in New York and Toronto, Brookfield has many offices and operations worldwide with an exceptional team of investment professionals and more than 10,000 employees.

Brookfield – funds managementWith decades of operating experience, Brookfield has approximately US$40 billion of property assets under management in North and South America, Europe and now Australia and New Zealand.

Brookfield has developed an expertise in real estate investments ranging from equity investments in commercial and residential real estate and development to mezzanine financing, bridge lending, and management of mortgage backed securities.

Brookfield is applying this expertise to work on behalf of its clients seeking to allocate capital into real estate related private equity funds and other investment vehicles. In addition, Brookfield provides clients with an extensive array of real estate advisory, property and investment services.

Property and specialty funds– 140 premier office properties;– more than 11 million square metres of commercial

office space;– 126,000 building lots;– US$40 billion of property assets under

management; and– $34 billion assets in fixed income and real estate

securities under management.

Power– more than US$13 billion of power assets under

management;– 161 renewable power plants on 63 river systems;

and– Canada’s largest wind farm.

Timberlands– $4 billion in assets;– 40 year track record owning, operating and

financing timberlands;– among the largest timber investment management

organisations; and– investments in 2.5 million acres of high quality

timberlands.

Transmission and infrastructure– US$3 billion of transmission assets under

management;– more than 11,000 kilometres of transmission

lines; and– owned and operated transmission asset for more

than 80 years in Canada.

3

Annual Report 2008

Fund by value

54% Brookfield Multiplex Property Trust 13% Multiplex New Zealand Property Fund 11% Multiplex Prime Property Fund 10% Multiplex European Property Fund 6% Multiplex Acumen Property Fund 3% Multiplex Development and Opportunity Fund 1% Multiplex Acumen Vale Syndicate 1% Multiplex Diversified Property Fund 1% Multiplex Property Income Fund

Funds under management ($ billion)

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200820072006200520042003

About Brookfield Multiplex Capital

4

Brookfield Multiplex Capital offers investors a diversified range of investment products. With a demonstrated ability to source and create new products through Brookfield Multiplex’s integrated property model, the funds management business has more than $6 billion of funds under management as at 30 June 2008.

Brookfield Multiplex Capital is responsible for the creation and strategic direction of all investment products of Brookfield Multiplex. Our proven investment processes ensure investors’ returns are optimised and, where possible, leveraged off the complementary skills within other divisions of Brookfield Multiplex.

Our aim is to build investors’ wealth, delivering consistent earnings and capital growth potential, whilst expanding our operations in the markets in which we operate.


Geographic spread by value

77% Australia 13% New Zealand 10% Europe

Fund type by value

19% Listed 81% Unlisted

Brookfield Multiplex Capital Funds Under Management (FUM) Brookfield Brookfield Multiplex Multiplex Listed Open Investment Interest in FUM A$m Unlisted Closed % Manager % (30 Jun 2008)

Listed FundsMultiplex Prime Property Fund Listed Open 22 100 695 Multiplex European Property Fund Listed Open 20 100 600 Multiplex Acumen Property Fund Listed Open – 100 382 1,677

Unlisted FundsBrookfield Multiplex Property Trust Unlisted Closed 100 100 3,298 Multiplex New Zealand Property Fund Unlisted Closed 23 100 766 Multiplex Development and Opportunity Fund Unlisted Closed – 100 166 Multiplex Property Income Fund Unlisted Open – 100 86 Multiplex Diversified Property Fund Unlisted Open 73 100 63 Multiplex Acumen Vale Syndicate Unlisted Closed – 100 60 4,439Total Funds Under Management 6,116 Note: Brookfield Multiplex Limited has an indirect ownership in all of the above funds.

5

Annual Report 2008

Unit price and NTA history

Jul2003

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0.95

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0.90

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9.25

9.50

9.75

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10.75

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11.00

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6


Performance at a Glance

Multiplex Acumen Property Fund statistics

FY2008 FY2007

Normalised* earnings per unit (EPU) 14.08 cpu 12.25 cpu

Cash distribution paid (for the year ended 30 June) 11.17 cpu 10.72 cpu

Closing unit price $0.73 $1.305

Tax deferred component 72% 55%

Number of investments – unlisted 30 32

Number of investments – listed 29 29

Value of investments – unlisted $290.9m $279.7m

Value of investments – listed $59.7m $101.3m

Total value of investments $350.6m $381.0m

* Normalised earnings has been calculated on the basis of the accounting loss/profit of the Consolidated Entity, adjusted for non-cash and one-off items.

Normalised EPU excluding brokerage income was 13.39 cents, a 22.8% increase on the pcp, and 19.9% greater than DPU of 11.17 cents.

7

Annual Report 2008

Fund snapshot as at 30 June 2008

Listing date 8 July 2003

Market capitalisation $148 million

Total assets $382 million

NTA per unit $1.10

Portfolio weighted average lease term 6.2 years

ASX daily trading volumes (three month average) 110,000 units/day

Distributions paid Quarterly

Tax advantaged status 72%

Fund gearing (net debt/total assets) 18.8%

Management fee 0.5% (including GST) of gross asset value

Performance fee 20% of benchmark* outperformance

* S&P/ASX 200 A-REIT Accumulation Index

The fund made a net $30.8 million worth of investments in unlisted property funds during the year.


8 Portfolio Analysis

Asset allocation

84% Unlisted property 15% Listed property 1% Cash

Manager diversification

35% Brookfield Multiplex 14% Other 13% Investa 10% APN 5% Deutsche 5% Orchard 4% Cromwell 4% Westpac 4% Pengana Credo 4% Centro 3% Mirvac

Sectoral diversification

43% Office 35% Retail 10% Industrial 9% Other 3% Development

Geographic diversification

23% New Zealand 22% New South Wales 17% Europe 10% Victoria 8% Queensland 6% Western Australia 4% United States 4% Tasmania 4% South Australia 2% Australian Capital Territory

Annual Report 2008

9

On behalf of the board, I am pleased to provide this report to investors on the operations and performance of Multiplex Acumen Property Fund (fund) for the year ended 30 June 2008.

The global credit crisis has created economic uncertainty and volatility in world financial markets. The Australian Real Estate Investment Trusts (A-REITs) have sustained falls in excess of 36% for the financial year 2008*.

The fund is strongly diversified across three asset classes, five property sectors, 11 geographic locations and 31 managers. The fund’s property investments are spread over a portfolio of 59 different property investments that provide indirect exposure to approximately 3,000 property investments. This diversification has enabled the fund to minimise reductions in NTA.

Normalised profit was up 17.4% to $28.6 million on the previous corresponding period. This is attributable to a higher distribution income of $28.9 million and $10.2 million in gains on sale of investments.

Realised undistributed income was up 44.4% to $19.2 million on the previous corresponding period, which is available to be paid out to unitholders.

Distribution GuidanceAs a result of uncertain domestic and global economic, finance and property markets, more than half the fund’s 59 investments have reduced their distributions for the 2008 financial year.

Based on these market conditions, the fund’s Responsible Entity will be reducing the forecast distributions to a target distribution level of at least

9.0 cents per unit. We believe this target distribution level will assist to maximise the fund’s long-term operational health.

Brookfield Asset ManagementIn January 2008, Multiplex Group became a wholly owned subsidiary of Brookfield Asset Management Inc (Brookfield).

Brookfield is one of the top 20 companies in Canada and is listed on the New York, Toronto and Euronext stock exchanges with assets under management of approximately US$95 billion and a market capitalisation of US$20 billion.

Brookfield is focused on high-quality property, renewable power and other infrastructure assets which generate cash flow, require minimal capital expenditure and appreciate in value over time.

Brookfield and Multiplex share similar management and investment cultures and are committed to co-investing in Brookfield Multiplex Capital products.

Corporate GovernanceThe directors and management of Brookfield Multiplex Capital Management Limited (BMCML) are committed to operating within an effective, robust and transparent system of corporate governance practices. We believe good corporate governance is vital to the sustainability of our business and its performance.

Corporate governance is a dynamic force that keeps evolving and, for that reason, our systems, policies and procedures are regularly reviewed and tailored to changing circumstances.

* Source: IRESS, S&P/ASX 200 A-REIT Accumulation Index.

10


Message from the Chairman

Management ChangesIt is with regret I advise that Rob Rayner has decided to pursue other interests and that he has recently resigned from the role of CEO – Funds Management. Rob joined Brookfield Multiplex Capital in 2003 and his contributions to the business over that time have been invaluable. We wish him well in his future endeavours.

Mark Wilson has taken up the position of CEO – Funds Management. Mark has been with the Brookfield Multiplex Group for more than ten years in various managerial positions and brings with him extensive industry knowledge. Mark was instrumental in establishing the Brookfield Multiplex Capital division in 2001/2002.

The BoardThe Board now consists of five directors, of whom three are non-executive. Each of the non-executive directors, Peter Morris (Chairman), Robert McCuaig and Brian Motteram, is independent in accordance with the relationships affecting independent status listed by the ASX Corporate Governance Principles.

Up to the date of finalising this report, Rex Bevan (independent non-executive director), Ian O’Toole (executive director), Bob McKinnon (non-executive director) and Robert Rayner (CEO and executive director) resigned from the Board.

Brian Kingston and Mark Wilson have both been appointed as executive directors of the board. Brian is Chief Financial Officer of Brookfield Multiplex Limited and is a Managing Partner of Brookfield Asset Management Inc.

Mark is Chief Executive Officer – Funds Management and Infrastructure and was instrumental in a number of major equity capital markets transactions undertaken by Brookfield Multiplex.

Website EnhancementsDuring the year, we upgraded the Brookfield Multiplex Capital website. The new website provides easier navigation, increased online security and enhanced new features such as video technology, where we will showcase interviews with key representatives of our business. We encourage investors to visit our website www.brookfieldmultiplexcapital.com for regular fund updates.

Fund Strategy and OutlookThe board and management team remain committed to a long-term growth strategy for the Fund and enhancing total returns for investors. We continue to monitor market conditions closely and maintain a strong focus on corporate governance and debt management.

On behalf of the board, thank you for your support.

Peter MorrisIndependent Chairman

11

Annual Report 2008

Despite current market conditions, the underlying financial performance of the consolidated Multiplex Acumen Property Fund (fund) during the 2008 financial year was relatively solid. The fund is well placed to meet the challenges of the year ahead, having generated strong growth in realised retained earnings via its well diversified property investment portfolio and conservative business model.

Reflecting the growth in realised retained earnings, fund distributions increased for the eighth successive time since listing in July 2003 to an annualised distribution of 11.33 cents per unit. Actual 2008 distributions of 11.17 cpu were an increase of 4.1% in comparison to the previous corresponding period (pcp).

Significant movements in the fund’s performance during the year to 30 June 2008 were:

– net loss attributable to ordinary unitholders of $21.3 million, compared to a net profit of $29.7 million in the pcp;

– earning per unit (EPU) of –10.49 cents, compared to EPU of 14.96 cents in the pcp;

– distributions per unit (DPU) of 11.17 cents, up 4.1% on the pcp;

– total assets of $381.9 million, compared to $401.9 million in the pcp;

– net tangible assets (NTA) per unit of $1.10, compared to $1.43 in the pcp;

– realised retained earnings of $19.2 million (or 9.49 cents per unit), up 44.3% on the pcp; and

– total ASX return of –35.5% for the 12 months to 30 June 2008, marginally outperforming the S&P/ASX 200 A-REIT Accumulation Index which returned –36.4% for the same period.

After equity accounting adjustments for the fund’s investment in Multiplex New Zealand Property Fund, income from distributions increased 8.5% to $28.9 million over the pcp, with the higher income generated by the greater number of investments in the fund’s underlying investment portfolio.

The 2008 normalised net (loss)/profit* attributable to ordinary investors was $28.6 million, up 17.4% on the pcp, reflecting distribution income of $28.9 million and $10.2 million in gains on the sale of investments (up from $1.5 million in the pcp). More than 90% of the gains on sale arose from the wind up of several unlisted and listed property investments during the period.

As a result, normalised EPU was 14.08 cents, up 14.9% on the pcp. Importantly, normalised EPU excluding brokerage income was 13.39 cents, a 22.8% increase on the pcp, and was 19.9% greater than DPU of 11.17 cents.

During the period, the fund achieved a 44.4% increase in the level of realised retained earnings to $19.2 million (or 9.49 cents per unit), which is available to be paid out to investors. Total retained earnings (realised and unrealised) of negative $9.99 million was below the $34.94 million recorded in the pcp. This reduction in retained earnings is due to the recognition of an impairment expense of $51.7 million, which reflects the reduction in value of the fund’s A-REIT portfolio compared to its cost. The impairment expense is a non-cash item that does not impact distributable earnings and would only be realised in the unlikely event that the fund sold the A-REIT investments.

* 2008 normalised net (loss)/profit is actual net (loss)/profit of $17.8 million less profit attributable to minority interest of $3.5 million, less the share of net profit from investments accounted for by the equity method of $4.2 million, plus distributions from equity accounted investments of $5.0 million, plus non cash items of $49.0 million (comprising amortisation of borrowing expenses of $0.051 million, plus an impairment expense of $51.7 million less unrealised gains on derivatives of $2.8 million).

12


Fund Manager’s Year in Review

A major contributor to fund performance in the year to 30 June 2008 was the fund’s investment in the consolidated Multiplex Property Income Fund (Income Fund), with inflows between its launch in March 2007 and June 2008 of $52.7 million, growing the Income Fund’s total assets to $85.8 million at 30 June 2008.

The fund’s unlisted and A-REIT investment portfolio was valued at $350.6 million, a decrease of $30.4 million (or 8.0%) on the pcp. This portfolio was boosted by $40.9 million of net investments made during the year, offset by a $71.3 million decrease in the overall value of the fund’s investment portfolio. This was driven by a $51.7 million decrease in the value of the fund’s A-REIT property investment portfolio which reflects the poor performance of the A-REIT sector over the year and a $19.6 million decrease in the value of the fund’s unlisted property investment portfolio. The A-REIT investment portfolio is marked-to-market while the unlisted investment portfolio is held at NTA per unit.

Total Return The fund generated a total ASX return for investors of –35.5% during the year to 30 June 2008, comprising an 8.6% income yield and a 44.1% reduction in its ASX trading price. The fund marginally outperformed the S&P/ASX 200 A-REIT Accumulation Index which returned –36.4% during the same period.

Despite a high level of diversification and significant bank of realised retained earnings, the fund’s unit price has been negatively impacted by poor sentiment in the A-REIT market. This sentiment centres on concerns by equity investors regarding implications from the credit crunch on property valuations, borrowing costs and A-REIT valuations.

Reduction in NTANTA per unit of $1.10 as at 30 June 2008 was 23.2% below the NTA per unit as at 30 June 2007. As mentioned, this reflects lower revaluations in the fund’s A-REIT and unlisted property investment portfolios.

Growth in Normalised Earnings Per UnitActual EPU was –10.49 cents, a reduction of 170.2% on the pcp. However, the fund’s normalised EPU was 14.08 cents, up 14.9% on the pcp, predominantly driven by higher gains on sale of investments. Importantly, circa over 90% of the gains on sale came as a result of the passive wind up of several unlisted and listed property investments during the period rather than from an active decision by management to dispose of the investments.

During the period, the fund achieved a 44.4% increase in the level of realised retained earnings to $19.2 million (or 9.49 cents per unit).

13

Annual Report 2008

Chancellor Village ConvenienceReed Property Trust

14


The fund continued its prudent capital management strategy during the financial year 2008 with a reduction in gearing to 18.8%.

Capital Management The fund continued its prudent capital management strategy during the financial year 2008 with a reduction in gearing to 18.8%, the absence of any capital raising on the ASX, and the continued operation of the Income Fund. In light of the success of the Income Fund, the fund’s DRP was suspended on 11 September 2007 until further notice.

The $65.5 million accretive investments in suitable unlisted and listed property investments made during the year were funded by Income Fund inflows and $10.2 million in gains on the disposal of investments.

To further protect investor equity, during the year the fund put in place a capital hedge over 100% of the fund’s initial investment in Multiplex New Zealand Property Fund (MNZPF) in order to protect the Australian dollar value of the fund’s investment from any potential long term deterioration in the value of the New Zealand dollar. At 30 June 2008, the currency hedge was “in-the-money” to the value of $2.8 million.

Debt In a climate of renewed focus on the quality of borrowings, the fund’s debt position remains sound. Gearing at the fund level is a relatively conservative 18.8%, a reduction of 21.2% since 30 June 2007 and well below the fund’s 30% covenant limit. The fund recently extended its two year “evergreen” debt facility (yearly review) to 31 December 2009, on the same covenants and margins as the previous facility.

Interest cover is a strong 6.1 times earnings before interest and tax, well above the covenant requirement of a minimum of 3.0 times. Significantly, interest rates are fixed on 100% of borrowings for an average duration of 2.9 years at a weighted average interest rate of 6.9% (including margins).

The fund’s “look through” gearing level is 61%, with the majority of the fund’s underlying investments having interest rate hedging and other measures in place on the loan facilities within those investment vehicles.

Investment Portfolio Unlisted property investments As at 30 June 2008, the fund’s portfolio of 30 unlisted property investments was valued at $290.9 million, a 4% increase over the pcp, comprising $30.8 million of net investments offset by $19.6 million reduction in revaluations. On a like-for-like basis, the weighted average NTA for unlisted property securities decreased by 7.0% as a result of softer capitalisation rates being partially offset by rental growth.

15 Fund Manager’s Year in Review

Annual Report 2008

The fund made $38.6 million worth of investments in unlisted property funds during the year, including:

New unlisted property investment $ million

APN Champion Fund 13.9

Mirvac PFA Diversified Property Trust 10.0

Reed Property Trust 6.0

Charter Hall Umbrella Fund 5.0

Stockland Direct Office Trust No.3 2.7

Other 1.0

Total unlisted property investments 38.6

These investments earned the fund $1.4 million in brokerage income.

During the year, a number of unlisted property investments wound up and returned $10.2 million in capital to the fund for re-investment. Major unlisted wind-ups are as follows:

Unlisted property investments wound up $ million

ING RE Direct Office Fund 3.7

Mirvac Retail Portfolio 1.5

The fund’s unlisted portfolio provides investors with indirect exposure to over 500 underlying properties held by 30 different property investments that are managed by 17 experienced fund managers.

A-REIT investments As at 30 June 2008, the fund’s portfolio of 29 A-REITs was sourced from 21 managers and provided exposure to more than 2,400 properties. The A-REIT portfolio was valued at $51.7 million, a reduction of 41.1% over the pcp. This consisted of $10.1 million in net investments offset by a $59.7 million decrease in valuations reflecting the requirement for the fund to hold its A-REITs at market value rather than NTA per unit.

The $10.1 million worth of net investments was spread over a portfolio of A-REITs as a result of the requirement to set up the consolidated Income Fund’s A-REIT portfolio utilising a portion of the strong inflows into the Income Fund during the year.

During the year, a number of A-REITs wound up and returned capital to the fund for re-investment. Major listed wind-ups are as follows:

Unlisted property investments wound up $ million

Investa Property Group 1.1

Macquarie ProLogis Trust 0.7

In line with its stated investment strategy, SG Hiscock & Co, the manager of the fund’s A-REIT portfolio, began re-weighting the portfolio to take advantage of this period of weakness in the A-REIT market.


16


Telecom House, AucklandMultiplex New Zealand Property Fund

17

Annual Report 2008

Anzac Square Offi cesMirvac PFA Diversifi ed Property Trust


18

Brokerage Income In addition to the fund’s 8.5% growth in distribution income from the fund’s property investment portfolio during the year, the fund earned $1.4 million in brokerage income, or 0.7 cents per unit.

Multiplex Property Income Fund A major contributor to fund performance during the year was the fund’s investment in the consolidated Income Fund. Launched in March 2007, the Income Fund continued to experience strong demand with inflows of $52.7 million during the year growing the Income Fund’s total assets to $85.8 million at 30 June 2008. This demonstrates the Income Fund’s high level of appeal to investors looking for an income-secure, capital-stable, highly diversified property investment.

Fund Resources The fund has at its disposal the considerable experience and skills of a talented team within Brookfield Multiplex Capital who manage approximately $6 billion in property assets.

In January 2008, Multiplex Group was formally acquired by Brookfield Asset Management, a specialised asset manager with more than US$95 billion in assets under management and significant resources and experience.

Distribution Guidance for FY09As a result of uncertain domestic and global economic, financial and property markets, over half of the fund’s 59 investments reduced distributions for the 2008 financial year and/or provided guidance that their distributions would be lower for the year to 30 June 2009. To date, the fund has received guidance from over 86% of its investments by value.

As a result, the fund’s Responsible Entity has decided to provide distribution guidance to the market for the year ending 30 June 2009.

Based on current market conditions and baring unforeseen events, for the financial year ending 30 June 2009, the Responsible Entity has a target distribution level of at least 9.0 cents per unit.

This target distribution level is:

– designed to maximise the fund’s long term operational health;

– based on a number of conservative assumptions;– linked to the forecast sustainable cash flow from

operations from the fund’s underlying investments plus a return to unitholders of a portion of the fund’s $19.2 million of realised undistributed income.

ConclusionLooking to the future, the fund’s high level of realised undistributed income and its high level of portfolio diversification positions it well during this period of global equity market uncertainty. Through these challenging times, management will endeavour to continue to maximise long term returns to all unitholders.

Tim Spencer Fund Manager Multiplex Acumen Property Fund

19

Annual Report 2008


Fund Investments Manager Location Sector

Investment allocation

%Value at market

$mNumber of properties2

Weighted average lease expiry

years

2

Tax advantaged

%

2

Unlisted Property FundsAPN Champion Fund APN Europe Retail 1.0 2.8 16 13.8 90APN National Storage Property Trust APN Australia Other 0.5 1.5 44 11.7 88APN Regional Property Fund APN Australia Diversified 1.1 3.1 7 6.9 100APN UKA Poland Retail Fund APN/UKA Europe Retail 1.8 5.2 1 1.8 60APN UKA Vienna Retail Fund APN/UKA Europe Retail 1.3 3.8 1 1.5 90Austock Childcare Fund Austock Australia Other 0.4 1.2 31 5.4 46Centro MCS 21 Centro Australia Retail 3.7 10.6 1 5.4 32Centro MCS 22 Centro Australia Industrial 0.5 1.4 1 7.5 15Centro MCS 28 Centro Australia Retail 0.9 2.7 3 4.9 95FKP Core Plus Fund FKP Australia Development 0.7 2.1 12 2.8 0 1

Gordon Property Trust Dexus Australia Retail 1.4 4.0 1 8.0 70Investa Diversified Office Fund Investa Australia Commercial 11.2 32.5 15 3.6 72Investa Fifth Commercial Trust Investa Australia Commercial 5.2 15.0 4 4.9 100Investa Second Industrial Trust Investa Australia Industrial 0.7 2.0 4 3.6 15MAB Diversified Property Trust MAB Australia Diversified 1.9 5.5 11 3.9 60Mirvac PFA Diversified Property Trust Mirvac Australia Diversified 2.9 8.3 18 5.0 71Multiplex Development and Opportunity Fund Brookfield Multiplex Australia Development 3.1 8.9 16 0.0 0 1

Multiplex New Zealand Property Fund Brookfield Multiplex New Zealand Diversified 21.5 62.04 38 6.6 100Multiplex Property Income Fund Brookfield Multiplex Australia Diversified 7.7 22.3 342 3 5.9 73Northgate Property Trust Dexus Australia Retail 5.1 14.7 1 3.3 71Pengana Credo European Property Trust Pengana Credo Europe Retail 2.3 6.6 29 7.7 59Rimcorp Property Trust No. 3 Wellington Australia Industrial 0.3 0.7 2 8.8 88St Hilliers Enhanced Property Fund No. 2 St Hilliers Australia Development 0.7 1.9 2 0.0 0 1

Stockland Direct Retail Trust No. 1 Stockland Australia Retail 0.5 1.6 4 5.6 100The Child Care Property Fund Orchard Australia Commercial 1.2 3.4 225 7.0 100The Essential Health Care Trust Orchard Australia Other 2.8 8.0 13 22.6 100Westpac Diversified Property Fund Westpac Australia Diversified 4.9 14.1 14 7.5 80

Unlisted Total/Weighted Average 85.3 245.9 1,490 6.1 80

Listed Total/Weighted Average 14.3 41.55 2,140 6.8 79

Cash 0.5 1.3

Total Portfolio/Weighted Average 100.0 288.76 2,996 6.2 80


20 Investment Portfolio

Notes: 1 Franked distributions. 2 Last stated or manager estimate. 3 Additional properties held by Multiplex

Property Income Fund (MPIF) not already held by MPF. MPIF and MPF are co-investors in 36 of the 59 funds shown. MPF owns 100% of MPIF ordinary equity.

4 Equity accounting value is $63.5 million.

5 Balance sheet value of $59.7 million includes deferred settlement of $9.1 million as the present value of the final call of $0.40 per unit due June 2011 on Multiplex Prime Property Fund (an LPT) and new MPIF LPT investments of $9.1 million on a gross basis.

6 Balance sheet value of $347.8 million (before cash of $10.5 million) includes MPIF investments of $73.7 million on a gross basis as well as those items in Notes 4 and 5. Parent entity investment portfolio value is $288.7 million before cash of $1.3 million.

Fund Investments Manager Location Sector

Investment allocation

%Value at market

$mNumber of properties2

Weighted average lease expiry

years

2

Tax advantaged

%

2

Unlisted Property FundsAPN Champion Fund APN Europe Retail 1.0 2.8 16 13.8 90APN National Storage Property Trust APN Australia Other 0.5 1.5 44 11.7 88APN Regional Property Fund APN Australia Diversified 1.1 3.1 7 6.9 100APN UKA Poland Retail Fund APN/UKA Europe Retail 1.8 5.2 1 1.8 60APN UKA Vienna Retail Fund APN/UKA Europe Retail 1.3 3.8 1 1.5 90Austock Childcare Fund Austock Australia Other 0.4 1.2 31 5.4 46Centro MCS 21 Centro Australia Retail 3.7 10.6 1 5.4 32Centro MCS 22 Centro Australia Industrial 0.5 1.4 1 7.5 15Centro MCS 28 Centro Australia Retail 0.9 2.7 3 4.9 95FKP Core Plus Fund FKP Australia Development 0.7 2.1 12 2.8 0 1

Gordon Property Trust Dexus Australia Retail 1.4 4.0 1 8.0 70Investa Diversified Office Fund Investa Australia Commercial 11.2 32.5 15 3.6 72Investa Fifth Commercial Trust Investa Australia Commercial 5.2 15.0 4 4.9 100Investa Second Industrial Trust Investa Australia Industrial 0.7 2.0 4 3.6 15MAB Diversified Property Trust MAB Australia Diversified 1.9 5.5 11 3.9 60Mirvac PFA Diversified Property Trust Mirvac Australia Diversified 2.9 8.3 18 5.0 71Multiplex Development and Opportunity Fund Brookfield Multiplex Australia Development 3.1 8.9 16 0.0 0 1

Multiplex New Zealand Property Fund Brookfield Multiplex New Zealand Diversified 21.5 62.04 38 6.6 100Multiplex Property Income Fund Brookfield Multiplex Australia Diversified 7.7 22.3 342 3 5.9 73Northgate Property Trust Dexus Australia Retail 5.1 14.7 1 3.3 71Pengana Credo European Property Trust Pengana Credo Europe Retail 2.3 6.6 29 7.7 59Rimcorp Property Trust No. 3 Wellington Australia Industrial 0.3 0.7 2 8.8 88St Hilliers Enhanced Property Fund No. 2 St Hilliers Australia Development 0.7 1.9 2 0.0 0 1

Stockland Direct Retail Trust No. 1 Stockland Australia Retail 0.5 1.6 4 5.6 100The Child Care Property Fund Orchard Australia Commercial 1.2 3.4 225 7.0 100The Essential Health Care Trust Orchard Australia Other 2.8 8.0 13 22.6 100Westpac Diversified Property Fund Westpac Australia Diversified 4.9 14.1 14 7.5 80

Unlisted Total/Weighted Average 85.3 245.9 1,490 6.1 80

Listed Total/Weighted Average 14.3 41.55 2,140 6.8 79

Cash 0.5 1.3

Total Portfolio/Weighted Average 100.0 288.76 2,996 6.2 80

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Annual Report 2008

ASB TowerAuckland, New Zealand

Multiplex New Zealand Property Fund

Consolidated portfolio allocation (%) 16.8

Funds under management ($ million) 766.0

FY08 yield on cost (%) 9.2

Weighted average lease expiry (years) 7.1

Sector allocation

59% Office 28% Retail 13% Industrial

Geographic allocation

100% New Zealand

Investment descriptionMultiplex New Zealand Property Fund (MNZPF) is an Australian unlisted property fund which owns a diversified portfolio of New Zealand property assets. The portfolio of 37 properties, comprising 13 office, 21 retail and three industrial assets, provides investors with a quality, diversified and well leased portfolio of properties throughout New Zealand.

Manager descriptionThe Manager, Brookfield Multiplex Capital Management Limited, is part of Brookfield Multiplex Capital, the funds management division of Brookfield Multiplex. Brookfield Multiplex Capital manages approximately $6 billion of funds in an extensive portfolio of properties worldwide.

320 Pitt StreetSydney, Australia

Investa Diversified Office Fund





Sector allocation

100% Office


47% New South Wales 17% South Australia/ Northern Territory 14% Victoria 12% Queensland 5% Australian Capital Territory 5% Western Australia

Investment descriptionInvesta Diversified Office Fund (IDOF) is an open-ended commercial real estate fund which holds interests in 13 quality office buildings in most of Australia’s major centres. IDOF has $537.6 million funds under management, making it one of the larger and geographically diversified unlisted property trusts in Australia. Tenants include GE Capital, Telstra and various Government departments.

Manager descriptionThe Manager, Investa Funds Management Limited (IFML), is the responsible entity for the funds management division of Investa Property Group. The Investa Property Group (Investa) is wholly owned by Morgan Stanley Real Estate Funds (Morgan Stanley), a premier global real estate franchise listed on the New York Stock Exchange.

22


80 Stirling StreetPerth, Australia

Investa Fifth Commercial Trust





Sector allocation

100% Office


39% Victoria 23% New South Wales 22% South Australia/ Northern Territory 16% Western Australia

Investment descriptionInvesta Fifth Commercial Trust’s well diversified portfolio comprises 50% interests in three A-grade office properties (Melbourne, Adelaide and Sydney) as well as a B-grade office property in Perth. The tenant profile is strong with the Government and Telstra generating over 74% of net income.

Manager descriptionThe Manager, Investa Funds Management Limited (IFML), is the responsible entity for the funds management division of Investa Property Group. The Investa Property Group (Investa) is wholly owned by Morgan Stanley Real Estate Funds (Morgan Stanley), a premier global real estate franchise listed on the New York Stock Exchange.

Northgate Shopping CentreHobart, Australia

Northgate Property Trust





Sector allocation

100% Retail


100% Tasmania

Investment descriptionNorthgate Shopping Centre is a major shopping centre in Glenorchy, Tasmania, seven kilometres north-west of the Hobart CBD. Northgate Shopping Centre is a sub-regional shopping centre comprising two major retailers, Target and Coles Supermarket, one mini-major, Best & Less, and approximately 66 speciality retailers. The total lettable area is 19,241 square metres over one level and 867 car spaces.

Manager descriptionThe Manager is part of the Dexus Property Group. DEXUS is one of the largest diversified property groups in Australia, with over $15 billion or 250 properties under management. The Group has extensive experience in owning, managing and developing high quality office, industrial and retail properties in Australia, New Zealand, the United States, Canada, Germany and France.

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Annual Report 2008

Foodland Associated LimitedPerth, Western Australia

Westpac Diversified Property Fund





Sector allocation

51% Industrial 28% Office 21% Retail


50% Western Australia 28% New South Wales 12% Queensland 7% Victoria 3% South Australia/ Northern Territory

Investment descriptionWestpac Diversified Property Fund owns a portfolio of 14 industrial, retail and commercial properties, with a substantial exposure to Western Australia. Circa 79.7% of the current rental income is secured by leases to either governments or large corporations.

Manager descriptionThe Manager is Westpac Funds Management Limited (WFML). WFML, with approximately $3.1 billion assets under management, is one of Westpac Institutional Bank’s specialist alternative asset fund managers. WFML is the issuer of leading alternative investment products, both listed and unlisted, across property, infrastructure other markets which are available to both retail and institutional investors.

Champion Marinopoulos SupermarketLenorman, Athens Greece

APN Champion Fund





Sector allocation

100% Retail


100% Europe

Investment descriptionAPN Champion Retail Fund is an unlisted fixed term property fund. The fund has an underlying investment in a portfolio of 16 supermarkets in Greece, which are leased to Carrefour Marinopoulos, a subsidiary of the Carrefour Group, until 2022.

Manager description The Manager, APN Funds Management (APN FM), is a specialist international property funds manager established in 1998. APN FM currently manages 16 funds with total assets under management as at 31 March 2008 of $4.3 billion.

24


66 Goulburn StreetSydney, Australia

Mirvac PFA Diversified Property Trust





Sector allocation

61% Office 19% Retail 14% Other 6% Industrial


28% New South Wales 23% Victoria 21% Queensland 18% Western Australia 5% Tasmania 5% Australian Capital Territory

Investment descriptionMirvac PFA Diversified Property Trust owns a portfolio of 20 properties located throughout Australia. The trust primarily owns commercial buildings but also has an exposure to retail, industrial and hotel properties. Major tenants include PBL, Foxtel, IAG, AAPT and Country Road.

Manager descriptionMirvac PFA Limited (Mirvac PFA) is the responsible entity of the Mirvac PFA Diversified Property Trust. Mirvac PFA is a part of the Mirvac Group. Mirvac is a leading ASX-listed, integrated real estate group with more than $26.3 billion of activities under control across real estate funds management and development. Mirvac’s funds management division, of which Mirvac PFA is a member, manages approximately $13.3 billion on behalf of institutional and retail investors.

Roselands Shopping CentreSydney, Australia

Centro MCS 21





Sector allocation

100% Retail


100% New South Wales

Investment descriptionRoselands Shopping Centre is a three-level major regional shopping centre located 15km south-west of the Sydney CBD. Gross lettable area is 61,576sqm with 3,600 parking bays. Major retailers include Myer, Target, Coles and Woolworths Food for Less.

Manager descriptionThe manager is part of Centro Properties Group which is a retail investment organisation specialising in the ownership, management and development of retail shopping centres. Centro manages both listed and unlisted retail property and has an extensive portfolio of shopping centres across Australia, New Zealand and the United States. Centro has funds under management of $24.9 billion.

25

Annual Report 2008

Allamanda Private HospitalSouthport, Queensland

The Essential Health Care Trust





Sector allocation

100% Other


52% Queensland 36% New South Wales 7% Victoria 5% Tasmania

Investment descriptionOrchard Essential Health Care Trust consists of 10 hospitals and three medical centres. The portfolio is located along the eastern seaboard of Australia and is 100% occupied with a weighted average lease expiry of 22.6 years.

Manager descriptionThe Manager is part of Orchard Funds Management with over $3.5 billion in funds under management. Orchard invests in commercial property, including traditional assets in the retail, office and industrial sectors and also in a diverse range of non-traditional property assets, such as childcare centres, medical centres and hospitals.

Little Bay SouthSydney, New South Wales

Multiplex Development and Opportunity Fund




Weighted average lease expiry (years) n/a

Sector allocation

100% Development


52% Queensland 36% New South Wales 7% Victoria 5% Tasmania

Investment descriptionMultiplex Development and Opportunity Fund is an unlisted fund that provides investors with exposure to a range of property projects at various stages of the development cycle, as well as other forms of direct and indirect property investments. It seeks to provide investors with returns in excess of those generally achieved through traditional direct property investments.

Manager descriptionThe manager, Brookfield Multiplex Capital Management Limited, is part of Brookfield Multiplex Capital, the funds management division of Brookfield Multiplex. Brookfield Multiplex Capital manages approximately $6 billion of funds in an extensive portfolio of properties worldwide.

1 Unaudited as at 30 June 2008.

26


Shopping Centre NordVienna, Austria

APN UKA Vienna Retail Fund





Sector allocation

100% Retail


100% Europe

Investment descriptionAPN UKA Vienna Retail Fund owns 80% of Shopping Centre Nord located in Vienna, Austria. The gross lettable area of the shopping centre is 32,358sqm including 1,500 car parks and a cinema complex. The shopping centre is 6km from the centre of Vienna and has 82 stores.

Manager descriptionThe Manager, APN Funds Management (APN FM), is a specialist international property funds manager established in 1998. APN FM currently manages 16 funds with total assets under management as at 31 March 2008 of $4.3 billion.

3 Horwood PlaceParramatta, Australia

MAB Diversified Property Trust





Sector allocation

64% Retail 31% Office 5% Industrial


30% New South Wales 23% New Zealand 17% Queensland 13% Victoria 13% Australian Capital Territory 4% Western Australia

Investment descriptionMAB Diversified Property Trust owns 11 properties located in Australia and New Zealand. The trust offers diversification with seven retail properties, three commercial buildings and one industrial property. The retail properties are anchored by Woolworths, Kmart, Safeway, Bi-Lo and Coles.

Manager descriptionThe Manager, MAB FM, was formed in November 2001 and has approximately $280 million funds under management. MAB FM is a subsidiary of MAB Corporation Pty Ltd, a leading diversified property group. MAB Corporation employs more than 100 property executives and support staff in the operation of its property investment, development and management businesses.

27

Annual Report 2008

Peter MorrisIndependent Chairman

Peter has over 35 years’ experience in property, initially in project and development management and more recently in funds management. He is a recognised leader in the development and project management fields, having played a major role in the growth of professional project management as a specialist skill in Australia. For 14 years he acted as Managing Director of Bovis Australia (now part of Bovis Lend Lease) and its forerunners. During this time he was responsible for the delivery of some of Australia’s largest and most high profile commercial projects. Peter acts as Independent Chairman of Brookfield Multiplex Capital Management Limited, Brookfield Multiplex Capital Investments Limited and Brookfield Multiplex Capital Securities Limited.

Board of Directors

Mark WilsonExecutive Director

Mark Wilson is the CEO of Funds Management and Infrastructure for Brookfield Multiplex. Mark has overall responsibility for the strategy and operations of the funds management business. In his eleven years at Brookfield Multiplex, Mark has held various managerial roles including Executive General Manager, Corporate Development and Group Company Secretary. Mark has been instrumental in a number of major equity capital markets transactions undertaken by Brookfield Multiplex, including the establishment of the Brookfield Multiplex Capital division and the Multiplex Group Initial Public Offering in 2003. Mark has 17 years operating and investing experience and is a Fellow of Finance with Financial Services Institute of Australasia.

2828


Brian MotteramIndependent Director

Brian has in excess of 30 years’ experience working in the area of finance and accounting. He has worked with international accounting firms, in his own private practice, and during the last 18 years in private enterprise in both the mining and property industries. He spent eight years (from 1996 to 2004) as an executive of a private Perth-based property group in positions of Chief Financial Officer and later, Finance Director.

Robert McCuaigIndependent Director

Robert is Chairman of the Advisory Board of Colliers International Property Consultants in Australia. Along with David Collier, he formed McCuaig and Collier, which in 1988 became the New South Wales office of Colliers International. He was a forerunner in the establishment of Colliers in Australia, now one of the world’s largest professional property services groups. Robert has acted as a property adviser to the University of Sydney, Westpac, Qantas Airways, Presbyterian Church, Sydney Ports Authority, Benevolent Society of NSW, the State of New South Wales and the Commonwealth of Australia.

Brian KingstonExecutive Director

Brian is the Chief Financial Officer of Brookfield Multiplex Limited. Brian joined Brookfield Asset Management Inc. in 2001 and has held various senior management positions within Brookfield and its affiliates, including mergers and acquisitions, merchant banking and real estate advisory services.

29

Annual Report 2008

The directors and management of Brookfield Multiplex Capital Management Limited (BMCML) are committed to operating within an effective, robust and transparent system of corporate governance practices. We believe that a functional and flexible framework is essential to the health of BMCML and the Multiplex Acumen Property Fund (the fund), and to the operation of an orderly market through clarity and accountability in the achievement of BMCML’s and the fund’s objectives.

The fund was listed on the Australian Securities Exchange in July 2003. BMCML, as the fund’s Responsible Entity, has operated within a corporate governance system that the directors and management have developed over time. Corporate governance is a dynamic force that keeps evolving and for that reason, our systems, policies and procedures are regularly reviewed and tailored to changing circumstances.

A description of BMCML’s governance framework, as well as a comparison to the ASX Corporate Governance “Principles and Recommendations” and the extent to which the fund has followed the recommendations in the reporting period, is set out below. We believe that each principle is of equal importance.

Following the acquisition by Brookfield Asset Management Inc (BAM) of Multiplex Group in early 2008, BMCML became a wholly owned BAM subsidiary. BAM is listed on the New York, Toronto and Euronext Stock Exchanges. In light of this change in ownership, BMCML is now required to comply with the US Sarbanes-Oxley Act, as well as its Canadian equivalent. Those laws deal with, amongst other things, corporate governance of US public company boards.

1. Lay solid foundations for management and oversightCompanies should establish and disclose the respective roles and responsibilities of board and management.

Recommendation 1.1: Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions.

During 2007, the board adopted a board charter that details its functions and responsibilities, a summary of which is available at www.brookfieldmultiplexcapital.com.

The fund has a dedicated Fund Manager who is responsible for the day-to-day management of the fund’s operations and who reports to the Chief Executive Officer (CEO). The Fund Manager and the CEO have formal job descriptions and letters of appointment describing their duties, rights and responsibilities.

BMCML holds Australian Financial Services Licence (AFSL) No. 223809 and is an experienced responsible entity. It is subject to duties imposed by its AFSL, the fund’s constitution, the Corporations Act, the ASX Listing Rules, the fund’s compliance plan and the law. BMCML has appointed Key Persons and Responsible Managers (who are executives within the Brookfield Multiplex Capital business) and they are named on its AFSL. Their duties are to assist with and ensure BMCML’s ongoing compliance with the conditions of the AFSL and the law.

The fund has entered into a custody agreement with ANZ Nominees Limited for the provision of custodian services, and has entered into a portfolio management services agreement with SG Hiscock & Co Limited for the management of the fund’s listed property security portfolio.

30


Corporate Governance Statement

Recommendation 1.2: Companies should disclose the process for evaluating the performance of senior executives.

The performance of all senior executives is formally reviewed by their manager at least once per year in relation to key performance indicators and targets.

Each Brookfield Multiplex Group (BMG) employee is required to have a performance agreement with BMG. The agreement includes a review of the employee’s position description and lists performance objectives and specific results to be achieved during the coming year. Each employee is required to work with his or her manager to establish the agreement, which is then regularly reviewed and updated at least annually.

All new employees undergo an induction process. Ongoing training is provided for directors and staff as relevant, including attendance at conferences, seminars, presentations and formal course work.

2. Structure the board to add valueCompanies should have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties.

Recommendation 2.1: A majority of the board should be independent directors.

The board consists of five directors, three of whom are non-executive. The executive directors are Mr Mark Wilson (CEO) and Mr Brian Kingston. Each of the non-executive directors are independent in accordance with the relationships affecting independent status listed by the ASX Corporate Governance Principles. For further details on the directors who comprise the board including their skills, experience, expertise and term in office, please refer to page 28 of this report or www.brookfieldmultiplexcapital.com.

During the period up to the date of this report, Mr Rex Bevan (independent non-executive director), Mr Ian O’Toole (executive director), Mr Bob McKinnon (non-executive director) and Mr Robert Rayner (CEO and executive director) resigned from the board.

Non-executive directors may obtain independent professional advice at the expense of BMCML with the prior approval of the Chairman.

Recommendation 2.2: The chair should be an independent director.

The non-executive Chairman, Dr Peter Morris, is an independent director.

Annual Report 2008

31

Recommendation 2.3: The roles of chair and chief executive officer should not be exercised by the same individual.

The CEO is Mr Mark Wilson. Therefore, the roles of the chairman and CEO are not exercised by the same person.

Recommendation 2.4: The board should establish a nomination committee.

As a wholly owned subsidiary of BAM, the board has not established a nomination committee as it believes the consideration of director appointments is a matter for BAM in conjunction with the views of the board.

Recommendation 2.5: Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.

The board conducted a self evaluation of its performance and that of individual directors during January 2008 by way of a survey of each director, followed by an analysis and discussion of responses by the board. As part of the review, consideration was given to the skills and competency of board members as well as the appropriate mix of skills required for managing BMCML and the fund. An assessment of board, committee and individual director performance is intended to occur on an annual basis and may in the future include an external mediator.

The company secretary supports the effectiveness of the board by monitoring board policies and procedures followed, and co-ordinating the timely completion and dispatch of board agenda and briefing material. All directors have access to the company secretary.

3. Promote ethical and responsible decision-makingCompanies should actively promote ethical and responsible decision-making.

Recommendation 3.1: Companies should establish a code of conduct and disclose the code or a summary of the code as to:

– the practices necessary to maintain confidence in the company’s integrity

– the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders

– the responsibility and accountability of individuals for reporting and investigating reporting and investigating reports of unethical practices

As a wholly owned subsidiary of BAM, BMCML is subject to the Brookfield Multiplex Code of Business Conduct and Ethics, which articulates standards of honesty and ethical behaviour to be carried out by all employees in undertaking their duties. Employees are encouraged to report any breaches of the code in accordance with the BMG Whistle Blower Policy. This includes access to a whistle blowing hotline which is managed independently of BAM. A summary of the code is available at www.brookfieldmultiplexcapital.com.

BMG also has a Chinese Walls Policy for the control and monitoring of the flow of sensitive information to minimise potential conflicts of interest. In accordance with ASIC Regulatory Guide 181 – “Licensing: Managing conflicts of interest,” Brookfield Multiplex Capital has established a Conflicts Policy and Register for the management of actual and perceived conflicts of interest.

32



During 2007, BMCML established a Mandate Conflict Committee to consider conflicts of interest, related party transactions and allocation matters which may arise in the course of managing the business of BMCML and the fund. The committee is comprised of an independent chairman, the CEO, the Brookfield Multiplex Capital Divisional Legal Counsel and the Brookfield Multiplex Capital Senior Compliance Manager. The committee’s independence is enhanced by the appointment of an independent chairman and is comprised of a majority of members who do not have operational responsibilities directly linked to the performance of specific schemes. The committee has a charter and a summary of this is available at www.brookfieldmultiplexcapital.com.

Recommendation 3.2: Companies should establish a policy concerning trading in company securities by directors, senior executives and employees, and disclose the policy or a summary of that policy.

BMCML is subject to the Brookfield Multiplex Capital Securities Trading Policy. It applies to all directors and employees and places restrictions and reporting requirements, including limiting trading in units in the fund to specific trading windows and in a specific manner. A summary of the policy may be found at www.brookfieldmultiplexcapital.com. Employees are regularly reminded of the existence of, as well as the requirement to comply with, the policy. Training on the code of conduct is facilitated on a regular basis.

4. Safeguard integrity in financial reportingCompanies should have a structure to independently verify and safeguard the integrity of the Fund’s financial reporting

Recommendation 4.1: The board should establish an audit committee.

During 2007, BMCML established an audit committee which meets on a regular basis and reports to the board the results of its deliberations.

A procedure for the selection and appointment of external auditors, and for the rotation of external audit engagement partners, has been approved by the board.

BAM has implemented an internal control project within BMG to ensure compliance with Section 404 of the Sarbanes-Oxley Act. This requires management to report annually on the effectiveness of internal control over financial reporting and requires the external auditor to attest to and report on management’s assessment. BMCML is required to comply with the Sarbanes-Oxley Act requirements. As the fund is not controlled by BAM directly, it is not mandatorily required to comply with the Sarbanes-Oxley Act requirements.

Recommendation 4.2: The audit committee should be structured so that it:

– consists only of non-executive directors

– consists of a majority of independent directors

– is chaired by an independent chair, who is not chair of the board

– has at least three members

The Audit Committee comprises three independent non-executive directors: Brian Motteram (Chairman), Peter Morris and Robert McCuaig.

33

Annual Report 2008

Recommendation 4.3: The audit committee should have a formal charter.

The duties and responsibilities of the Audit Committee are set out in the Committee Charter, a summary of which appears at www.brookfieldmultiplexcapital.com. The Audit Committee has rights of access to management, including the right to seek any explanations or additional information and access to auditors (internal and external), without management present.

The audit committee reports to the board in relation to the financial statements and notes, as well as the external audit report. An external auditor, KPMG, has been appointed to audit the fund and the fund’s compliance plan.

5. Make timely and balanced disclosureCompanies should promote timely and balanced disclosure of all material matters concerning the Fund.

Recommendation 5.1: Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.

BMCML is subject to the Brookfield Multiplex Capital Continuous Disclosure Policy, which is designed to ensure compliance with the ASX Listing Rules and its continuous disclosure obligations. All price-sensitive information is to be disclosed to the ASX.

A summary of the policy is available at www.brookfieldmultiplexcapital.com. Whilst accountability with the ASX Listing Rules rests with all employees, the CEO has primary responsibility for ensuring compliance with continuous disclosure obligations.

34



6. Respect the rights of UnitholdersCompanies should respect the rights of unitholders and facilitate the effective exercise of those rights.

Unitholder rights, as owners, need to be clearly recognised and upheld.

Recommendation 6.1: Companies should design a communications policy for promoting effective communication with unitholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.

Price-sensitive information concerning the fund is disclosed to investors and other interested stakeholders in accordance with the Brookfield Multiplex Capital Continuous Disclosure Policy. BMCML also has a Communications Policy (a summary of which also appears at www.brookfieldmultiplexcapital.com) which sees it provide regular communication to investors, including publication of:

(i) a quarterly magazine Capital which provides updated information concerning the fund;

(ii) the fund’s half-yearly update which provides an update on the investments held by, operation of, and the performance for the period of the fund;

(iii) the fund’s annual report including audited financial statements for each year ending 30 June;

(iv) quarterly distribution statements;

(v) annual taxation statements; and (vi) any continuous disclosure notices given by

the fund.

The fund has its own section on the Brookfield Multiplex Capital website that provides up to date Fund information including current ASX unit price (subject to a 20-minute delay), financial reports, and distribution information.

As the fund is a listed managed investment scheme, there is no mandatory requirement to hold annual general meetings. In the future BMCML may decide to hold annual general meetings of fund investors if BMCML forms the view that there is sufficient demand from fund investors to incur that cost.

Fund investors are able to contact either the Fund Registry or the Fund Manager during business hours to discuss any queries in relation to their investment or the operation of the fund.

As part of BMCML’s commitment to fund investors it has an internal dispute resolution mechanism in place which is designed to meet the requirements of the Corporations Act and its AFSL. The process complies with the key principles of Australian Standard AS ISO 10002:2004 “Customer satisfaction – Guidelines for complaints handling in organisations” and the minimum requirements of the ASIC Regulatory Guide 165 – “Licensing: Internal and external dispute resolution”. If a dispute cannot be resolved through the internal dispute resolution mechanism, it can be referred to the Financial Ombudsman Service, an independent complaint resolution service of which BMCML is a member.

BMCML encourages fund investors to visit its website regularly and communicate with the company electronically as a first preference.

35

Annual Report 2008

7. Recognise and manage riskCompanies should establish a sound system of risk oversight and management and internal control.

Every business decision has an element of uncertainty and carries a risk that can be managed through effective oversight and internal control.

Recommendation 7.1: Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.

Management is responsible for developing and implementing policies and procedures to identify, manage and mitigate the risks across BMCML’s and the fund’s operations. These policies are designed to ensure relevant risks are effectively and efficiently managed and monitored to enable the achievement of BMCML’s and the fund’s objectives.

Risk within BMCML is assessed using a risk management methodology based upon the frameworks developed by the Commission of Sponsoring Organisations (COSO) of the Treadway Commission. Risk management statements are prepared for Brookfield Multiplex Capital in which the material business risks are identified. Annually a risk assessment is performed and considered by BMCML. Brookfield Multiplex Capital has an internal control system in place and is moving towards compliance with the US and Canadian equivalent Sarbanes-Oxley Act obligations through documenting and testing of internal control processes. A summary of the Brookfield Multiplex Capital Risk Management Policy is available at www.brookfieldmultiplexcapital.com. The fund is not mandatorily required to comply with the requirements of the Sarbanes-Oxley Act.

During 2007 BMCML amended the terms of reference of its Compliance Committee, renaming it the “Risk and Compliance Committee”. It comprises two external members (non BMCML directors) and the Brookfield Multiplex Capital Senior Compliance Manager. The committee discharges Part 5C.5 obligations under the Corporations Act in relation to managed investment schemes. The committee considers compliance, risk management and internal control matters and regularly reports its deliberations to the board. It has a charter, a summary of which appears at www.brookfieldmultiplexcapital.com.

Recommendation 7.2: The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.

Further to the preceding material, BMCML receives quarterly reports on the operation of the risk management system and ad hoc reports as and when material changes are identified to material business risks. The board annually reviews management’s risk assessment in relation to BMCML. Additionally, the board receives the minutes of the Audit Committee and the Risk and Compliance Committee.

BMG has an internal audit function which as part of its annual program may review aspects of the BMCML business and the fund. The internal audit function communicates with the Audit Committee and the Risk and Compliance Committee.

36



Recommendation 7.3: The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that system is operating effectively in all material respects in relation to financial reporting risks.

The board receives assurance from the CEO and the CFO that the declaration provided in accordance with section 295A is founded on a sound system of risk management and internal control. That system is operating effectively in all material respects in relation to financial reporting risks in relation to annual and half year reports.

8. Remunerate fairly and responsiblyCompanies should ensure that the level and composition of remuneration is sufficient, and reasonable, and that its relationship to performance is clear.

Rewards are needed to attract the skills required to achieve the performance expected by unitholders. There is a clear relationship between performance and remuneration.

Recommendation 8.1: The board should establish a remuneration committee.

As a wholly owned subsidiary of BAM, the board has not established a remuneration committee as it believes that consideration of executive management remuneration is a matter to be considered by BAM.

Recommendation 8.2: Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives.

The independent and non-executive directors receive fees for serving as directors. These fees are not linked to the performance of BMCML or the fund. The executive director does not receive payment for his role as a director, instead receiving remuneration in his capacity as an employee of BMG.

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Annual Report 2008

ASX ListingMultiplex Acumen Property Fund is listed on the ASX under the code MPF. Daily unit prices can be found in all major Australian newspapers, on the ASX website and at www.brookfieldmultiplexcapital.com.

DistributionsDistribution payments are payable quarterly to investors approximately four to five weeks after record date for March, June, September and December.

Annual Taxation StatementsAn annual taxation statement is sent to unitholders in early September each year. The statement summarises the distribution/s paid for the previous financial year. Unitholders should retain this statement for their taxation records.

Online ServicesAccessing investments online is one of the many ways that Brookfield Multiplex Capital is ensuring convenience and accessibility to unitholder investment holdings. Links to the registry providers are available via the Brookfield Multiplex Capital website. Unitholders can access their account balance, transaction history and distribution details.

E-communicationsThe default for Brookfield Multiplex Capital annual and interim reports is now electronic. Online versions of the annual and interim reports are available at www.brookfieldmultiplexcapital.com.

Investors who have elected to receive hard copy reports will continue to receive them. Should you wish to change your preference, please contact Brookfield Multiplex Capital Customer Service on 1800 570 000.

38


Investor Relations

Contact Us Brookfield Multiplex Capital has a dedicated Customer Service Officer to assist with all investor and financial adviser enquiries.

There are several ways of accessing information about the fund and providing feedback to Customer Service:

By postGPO Box 172 Sydney NSW 2001

By phone1800 570 000 (within Australia) +61 2 9256 5700 (outside Australia)

By fax+61 2 9256 5188

By [email protected]

By internetThe Brookfield Multiplex Capital website provides investors with up-to-date information on all funds as well as reports, media releases, fund performance, unit price information and corporate governance guidelines.

www.brookfieldmultiplexcapital.com

Contact the RegistryQueries relating to individual unit holding or requests to change investment record details such as:

– change of address (issuer sponsored holdings only)

– update method of payment for receiving distributions

– tax file number notification– annual report election

– Dividend Reinvestment Plan (DRP)

should be addressed to: Registries Limited Level 7 207 Kent Street Sydney NSW 2000 Freecall: 1800 766 011 Email: [email protected]

Investor ComplaintsBrookfield Multiplex Capital is a member of an independent dispute scheme, the Financial Ombudsman Service. Investors wishing to register a complaint should direct it to:

The Complaints Manager Brookfield Multiplex Capital GPO Box 172 Sydney NSW 2001

39

Annual Report 2008

Directors’ Report 41

Lead Auditor’s Independence Declaration 50

Income Statements 51

Balance Sheets 52

Statements of Changes in Equity 53

Statements of Cash Flows 54

Notes to Financial Statements 55

Directors’ Declaration 94

Independent Auditor’s Report 95

ASX Additional Information 97

40


Financial Report

IntroductionThe Directors of Brookfield Multiplex Capital Management Limited (ACN 32 094 936 866) (BMCML), the Responsible Entity of Multiplex Acumen Property Fund (ARSN 104 341 988) (MPF or the Fund), present their report together with the financial report of the Fund and the Consolidated Entity, being the Fund, its subsidiaries and the Consolidated Entity’s interest in associates, for the year ended 30 June 2008 and the Auditor’s Report thereon.

Responsible EntityThe Responsible Entity of the Fund is Brookfield Multiplex Capital Management Limited which was appointed as Responsible Entity on 26 October 2007, replacing Multiplex Capital Securities Limited. The Responsible Entity changed its name from Multiplex Capital Management Limited (on 17 June 2008), which was subsequent to the acquisition of Multiplex Group by Brookfield Asset Management Inc. in December 2007. The registered office and principal place of business of the Responsible Entity and the Fund is 1 Kent Street, Sydney.

DirectorsThe following persons were Directors of the Responsible Entity at any time during or since the end of the year:

Name Capacity

Peter Morris (Director since 14 April 2004) Non-Executive Independent Chairman

Rex Bevan (Director since 21 February 2007 – resigned 31 January 2008)

Non-Executive Independent Director

Brian Motteram (Director since 21 February 2007) Non-Executive Independent Director

Robert McCuaig (Director since 31 March 2004) Non-Executive Independent Director

Ian O’Toole (Director since 31 March 2004 – resigned 31 October 2007)

Executive Director

Robert Rayner (Director since 31 October 2000 – resigned 22 August 2008)

Executive Director

Bob McKinnon (appointed 7 December 2007 – resigned 18 July 2008)

Non-Executive Director

Mark Wilson (appointed 27 August 2008) Executive Director

Brian Kingston (appointed 27 August 2008) Executive Director

Information on DirectorsPeter MorrisNon-Executive Independent ChairmanPeter has more than 36 years of experience in property, initially in project and development management and more recently in funds management. He is a recognised leader in the development and project management fields, having played a major role in the growth of professional project management as a specialist skill in Australia. For 14 years he acted as Managing Director of Bovis Australia (now part of Bovis Lend Lease) and its forerunners. During this time he was responsible for the delivery of some of Australia’s largest and most high profile commercial projects.

Peter acts as Independent Chairman of Brookfield Multiplex Capital Management Limited.

41

Annual Report 2008

Directors’ ReportFor the year ended 30 June 2008

Brian MotteramNon-Executive Independent DirectorBrian has in excess of 30 years of experience working in the area of finance and accounting. He has worked with international accounting firms, in his own private practice, and during the last 18 years in private enterprise in both the mining and property industries. He spent eight years (from 1996 to 2004) as an executive of a Perth-based private property company in the position of Chief Financial Officer and, later, as Financial Director.

Robert McCuaigNon-Executive Independent DirectorRobert is Chairman of the Advisory Board of Colliers International Property Consultants in Australia. Along with David Collier, he formed McCuaig and Collier, which in 1988 became the New South Wales office of Colliers International. He was a forerunner in the establishment of Colliers in Australia, now one of the world’s largest professional property service groups. Robert has acted as a property adviser to the University of Sydney, Westpac, Qantas Airways, Presbyterian Church, Sydney Ports Authority, Benevolent Society of New South Wales, the State of New South Wales and the Commonwealth of Australia.

Mark WilsonExecutive DirectorMark Wilson is the CEO for Funds Management and Infrastructure for Brookfield Multiplex Group. Mark has overall responsibility for the strategy and operations of the funds management business. In his eleven years at Brookfield Multiplex, Mark has also held various managerial roles including Executive General Manager, Corporate Development and Group Company Secretary. Mark has been instrumental in a number of major equity capital markets transactions undertaken by Brookfield Multiplex, including the establishment of the Brookfield Multiplex Capital division and the Brookfield Multiplex Group Initial Public Offering in 2003. Mark has 17 years operating and investing experience and is a Fellow of Finance with Financial Services Institute of Australasia.

Brian KingstonExecutive Director Brian is the Chief Financial Officer of Brookfield Multiplex Limited. Brian joined Brookfield Asset Management Inc. in 2001 and has held various senior management positions within Brookfield and its affiliates, including mergers and acquisitions, merchant banking and real estate advisory services.

Company SecretaryAlex Carrodus was appointed to the position of Company Secretary on 25 January 2005.

Information on Company SecretaryAlex CarrodusAlex has more than 13 years’ experience in the areas of company secretarial practice and compliance in the funds management industry, having worked for the ASX listed Ronin Property Group (prior to its acquisition by Brookfield Multiplex Group), AMP and Australian Securities Exchange Limited. Prior to this period Alex worked for eight years in the insolvency and audit divisions of a number of local and international accounting firms both in Sydney and in London. Alex is a Chartered Accountant and Chartered Secretary.

Directorships of other listed entitiesThe only Director during the period who held directorships with other listed entities was Bob McKinnon. Bob McKinnon was a Director of Multiplex Limited from July 2007 until the acquisition of Multiplex by Brookfield Asset Management Inc. in December 2007. No other Director has held directorships in other listed entities in the three years immediately preceding the end of the financial year.

42



Directors’ interestsThe following table sets out each Director’s relevant interest in the units, debentures, rights or options over such instruments, issued interests in registered schemes and rights or options over such instruments issued by the entities within the Consolidated Entity and other related bodies corporate as at the date of this report:

Multiplex Acumen Property Fund Director units held (’000)

Peter Morris –

Brian Motteram 411

Robert McCuaig 30

Mark Wilson –

Brian Kingston –

No options are held by/have been issued to Directors.

Directors’ meetings Board Audit Committee meetings meetingsDirector A B A B

Peter Morris 13 13 3 3

Rex Bevan (resigned 31 January 2008) 6 6 1 1

Brian Motteram 12 13 3 3

Robert McCuaig 11 13 2 2

Ian O’Toole (resigned 31 October 2007) 4 4 – –

Robert Rayner (resigned 22 August 2008) 13 13 – –

Bob McKinnon (appointed 7 December 2007 – resigned 18 July 2008) 7 8 – –

Mark Wilson (appointed 27 August 2008) – – – –

Brian Kingston (appointed 27 August 2008) – – – –

A – Number of meetings attended.B – Number of meetings held during the time the Director held office during the year.

Principal activitiesThe principal activity of the Consolidated Entity is the investment in a portfolio of listed and unlisted property securities.

The Consolidated Entity did not have any employees during the year or subsequent to balance date.

Review of operations The significant events of the financial year for Multiplex Acumen Property Fund (MPF) and its subsidiary Multiplex Property Income Fund (MPIF) were as follows.

43

Annual Report 2008

Multiplex Acumen Property FundThe Consolidated Entity owned total assets of $381,887,000, primarily consisting of a diverse portfolio of unlisted and listed property securities, at the end of the 2008 financial year. The Consolidated Entity’s property securities investment portfolio is spread over 61 different property investments that own almost 3,000 properties and reflect an average lease term to expire of approximately 5.7 years. The property investment portfolio is strongly diversified across three assets classes, five property sectors and 24 experienced managers.

The significant events of the financial year were:

the net loss for the year ended 30 June 2008 was $17,826,000 (2007: net profit $29,810,000); –excluding the impairment loss recognised for the year of $51,723,000, the Consolidated Entity made a net –profit of $33,897,000, an increase of 10.4% on the prior year’s profit;the Consolidated Entity’s listed and unlisted property portfolio was valued at $284,247,000 at year end, –a decline of 7.1% on the prior year;the net tangible assets per ordinary unit of the Consolidated Entity at the end of the year was $1.10, –a decrease of 23.2% on the prior year;ordinary unitholders received a distribution of 11.165 cents per unit (2007: 10.72 cents per unit), an –increase of 4.1% on the prior year;total distributions paid or declared to ordinary unitholders for the year ended 30 June 2008 was –$22,649,000 (2007: $21,336,000); and the Consolidated Entity’s return for ordinary unitholders for the year was –35.5%, marginally outperforming –the –36.4% total return for the S&P/ASX 200 A-REIT Index over the same period.

Multiplex Property Income Fund1

This year represented the first full year of operation for MPIF.

At the end of the 2008 financial year, MPIF owned a diverse portfolio of unlisted and listed property securities valued at $73,733,000. MPIF’s property securities investment portfolio is spread over 39 different property investments that own over 2,000 properties and reflect an average lease term to expiry of approximately six years. MPIF’s property investment portfolio is strongly diversified across three asset classes, four property sectors, 11 geographic locations and 22 experienced managers.

Income unitholders received a distribution of 8.2826 cents per unit (2007: 2.187 cents per unit), representing the first full year of distributions earned by Income unitholders.

Total distributions paid or payable to unitholders for the year were $3,464,000. Ordinary unitholders received, or are due to receive, $3,318,000 in distributions.

The net loss attributable to ordinary unitholders (being MPF) for the year was $7,047,000, which includes a $10,365,000 impairment loss recognised on its A-REIT portfolio (a non cash expense). Excluding the impairment loss and income attributable (and paid) to minority interests (being income unitholders) of $3,464,000, MPIF generated a net profit of $6,782,000.Note:1 On 8 March 2007, MPIF was launched. MPIF was seeded with $30,076,000 of investments from Multiplex Acumen Property Fund

with a portfolio of 20 unlisted property securities. MPF holds all of the ordinary units in MPIF. Other investors hold Income units which are represented as minority interests in the consolidated financial statements of MPF.

44



Movements in units on issueThe movement in units on issue of Multiplex Acumen Property Fund for the year was as follows:

2008 2007 units units

Ordinary units Opening units on issue 201,215,338 195,229,230Units issued during the year under the distribution reinvestment plan 1,645,592 5,986,108Units redeemed during the year – –

Units on issue as at 30 June – Ordinary Units 202,860,930 201,215,338

MPIF Income units Opening units on issue 9,557,653 –Units issued during the year 56,114,127 9,557,653Units redeemed during the year (3,340,335) –

Units on issue as at 30 June – Income Units 62,331,445 9,557,653

$’000 $’000

Value of total consolidated assets of the Consolidated Entity as at 30 June 381,887 401,919

Interests of the Responsible EntityManagement feesThe Fund paid $1,608,337 in management fees to the Responsible Entity during the year (2007: $1,475,672). These fees were paid out of the assets of the Fund.

Units heldJPMorgan Nominees Australia Limited, as custodian for Brookfield Multiplex Capital Management Limited, as responsible entity for Multiplex Diversified Property Fund (ARSN 123 879 630), holds 43,430,615 units or 21.41% of the Fund (2007: 42,596,941 units or 21.15% of the Fund).

Significant changes in the state of affairsIn the opinion of the Directors, there were no significant changes in the state of affairs of the Fund that occurred during the financial year not otherwise disclosed in this report or in the financial report.

45

Annual Report 2008

Events subsequent to reporting dateSubsequent to the reporting date, the fair value of the Consolidated Entity’s listed property trust (also known as the A-REIT) portfolio, the day immediately prior to the date the financial statements were approved, was $54,754,000, which represents a change of $4,906,000. The financial statements have not been amended to reflect this change in fair value. Had the financial statements been amended, the impact would have been to increase impairment expense and decrease available for sale assets by$4,906,000.

Subsequent to the reporting date, the fair value of the Fund’s A-REIT portfolio, the day immediately prior to the date the financial statements were approved, was $46,812,000, which represents a change of $3,722,000. The financial statements have not been amended to reflect this change in fair value. Had the financial statements been amended, the impact would have been to increase impairment expense and decrease available for sale assets by $3,722,000.

Other than the matter discussed above, there were no other matters or circumstances which have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity in subsequent financial years.

Likely developmentsInformation on likely developments in the operations of the Consolidated Entity in future financial years and the expected results of those operations has not been included in this report because the Directors believe that to do so would be likely to result in unreasonable prejudice to the Consolidated Entity.

Environmental regulationThe Consolidated Entity has systems in place to manage its environmental obligations. Based upon the results of inquiries made, the Responsible Entity is not aware of any significant breaches or non-compliance issues during the year covered by this report.

46



DistributionsDistributions paid to unitholders or declared by the Consolidated Entity during the year were as follows:

Cents Total amount Date of per unit $’000 payment

Ordinary unitsJune 2008 distribution 2.8325 5,746 1 August 2008March 2008 distribution 2.8325 5,746 30 April 2008December 2007 distribution 2.7500 5,579 31 January 2008September 2007 distribution 2.7500 5,578 31 October 2007

Total distribution to ordinary unitholders for the year ended 30 June 2008 11.1650 22,649

MPIF Income units – minority interestJune 2008 distribution 0.6967 434 17 July 2008May 2008 distribution 0.7199 431 17 June 2008April 2008 distribution 0.6967 401 14 May 2008March 2008 distribution 0.7199 401 15 April 2008February 2008 distribution 0.6753 353 18 March 2008January 2008 distribution 0.7219 350 20 February 2008December 2007 distribution 0.6956 319 14 January 2008November 2007 distribution 0.6452 248 13 December 2007October 2007 distribution 0.6727 189 14 November 2007September 2007 distribution 0.6781 142 11 October 2007August 2007 distribution 0.6896 110 14 September 2007July 2007 distribution 0.6710 86 10 August 2007

Total distribution to Income unitholders for the year ended 30 June 2008 8.2826 3,464

Ordinary units June 2007 distribution 2.7000 5,440 31 July 2007March 2007 distribution 2.7000 5,391 30 April 2007December 2006 distribution 2.6600 5,273 31 January 2007September 2006 distribution 2.6600 5,232 31 October 2006


MPIF Income units – minority interest June 2007 distribution 0.6530 62 9 July 2007May 2007 distribution 0.6710 59 7 June 2007April 2007 distribution 0.6530 3 10 May 2007March 2007 distribution 0.2100 1 20 April 2007

Total distribution to Income unitholders for the year ended 30 June 2007 2.1870 125

47

Annual Report 2008

Indemnification and insurance premiumsUnder the Fund’s Constitution, the Responsible Entity’s officers and employees are indemnified out of the Fund’s assets for any loss, damage, expense or other liability incurred by it in properly performing or exercising any of its powers, duties or rights in relation to the Fund.

The Fund has not indemnified any auditor of the Consolidated Entity.

No insurance premiums are paid out of the Fund’s assets in relation to cover for the Responsible Entity, its officers and employees, the Risk and Compliance Committee or auditors of the Fund. The insurance premiums are paid by the Responsible Entity.

Non-audit servicesAll amounts paid to KPMG for audit, review and regulatory services are disclosed in Note 6.

Details of the amounts paid to the auditor of the Consolidated Entity, KPMG, and its related practices for non-statutory audit services provided during the year are set out below. These amounts were paid out of the assets of the Consolidated Entity.

Consolidated Fund 2008 2007 2008 2007

Services other than statutory audit Paid to KPMG Australia – Agreed upon procedures engagement regarding

disclosures to the Australian Securities Exchange 7,893 – 7,893 –– Agreed upon procedures engagement in relation

to Multiplex Property Income Fund’s NTA – 13,760 – –

7,893 13,760 7,893 –

Fees in relation to compliance plan audits are borne by the Responsible Entity.

Remuneration report – audited(a) Remuneration of Directors and key management personnel of the Responsible EntityThe Fund does not employ personnel in its own right. However, it is required to have an incorporated Responsible Entity to manage the activities of the Fund and this is considered the key management personnel (KMP).

The Directors and Executives of the Responsible Entity are KMP of that entity and their names are:

Peter Morris – Non-Executive Independent Chairman –Rex Bevan – Non-Executive Independent Director (resigned 31 January 2008) –Brian Motteram – Non-Executive Independent Director –Robert McCuaig – Non-Executive Independent Director –Ian O’Toole – Executive Director (resigned 31 October 2007) –Robert Rayner – Executive Director (resigned 22 August 2008) –Bob McKinnon – Non-Executive Director (appointed 7 December 2007 – resigned 18 July 2008) –Mark Wilson – Executive Director (appointed 27 August 2008) –Brian Kingston – Executive Director (appointed 27 August 2008) –

48



The Responsible Entity is entitled to a management fee which is calculated as a proportion of gross asset value.

No compensation is paid directly by the Fund to Directors or to any of the KMP of the Responsible Entity.

Since the end of the financial year, no Director or KMP of the Responsible Entity has received or become entitled to receive any benefit because of a contract made by the Responsible Entity with a Director or KMP, or with a firm of which the Director or KMP is a member, or with an entity in which the Director or KMP has a substantial interest, except at terms set out in the Fund Constitution.

Loans to Directors and key management personnel of the Responsible EntityThe Fund has not made, guaranteed or secured, directly or indirectly, any loans to the Directors and KMP or their personally related entities at any time during the reporting period.

Other transactions with Directors and specified Executives of the Responsible EntityFrom time to time, Directors and KMP, or their personally related entities, may buy or sell units in the Fund. These transactions are subject to the same terms and conditions as those entered into by other Fund investors.

No Director or KMP has entered into a contract for services with the Responsible Entity since the end of the previous financial year and there were no contracts involving Directors or KMP subsisting at year end.

(b) Responsible Entity fees and other transactionsThe management fee paid by the Consolidated Entity to the Responsible Entity for the year ended 30 June 2008 was $1,608,337 (2007: $1,475,672).

Rounding of amountsThe Consolidated Entity is of a kind referred to in ASIC Class Order 98/100, dated 10 July 1998 (updated by CO 05/641 effective 28 July 2005 and CO 06/51 effective 31 January 2006), and in accordance with that Class Order, all financial information presented in Australian dollars has been rounded to the nearest thousand dollars, unless otherwise stated.

Lead auditor’s independence declarationThe lead auditor’s independence declaration is set on page 46 and forms part of the Directors’ report for the financial year ended 30 June 2008.

Dated at Sydney this 27th day of August 2008.

Signed in accordance with a resolution the Directors made pursuant to Section 306(3) of the Corporations Act 2001.

Brian Kingston Director Brookfield Multiplex Capital Management Limited

49

Annual Report 2008

To: the directors of Brookfield Multiplex Capital Management Limited as the Responsible Entity of Multiplex Acumen Property Fund

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2008 there have been:

(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

Tanya Gilerman Partner

Sydney, NSW 27 August 2008

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International network. KPMG International is a Swiss cooperative.

50


Lead Auditor’s Independence Declarationunder Section 307C of the Corporations Act 2001

Consolidated Fund 2008 2007 2008 2007 Note $’000 $’000 $’000 $’000

Revenue and other income Share of net profit of investments accounted for using the equity method 5 4,180 10,310 – –Distribution income – listed and unlisted property trusts 23,908 21,737 23,634 25,373Distribution income from controlled entities – – 3,318 1,161Brokerage income 1,402 2,691 241 2,536Interest income 819 499 367 478Net gain from change in fair value of derivatives 2,785 – 2,785 –Gain on disposal of investments 10,210 1,521 10,353 6,196

Total revenue and other income 43,304 36,758 40,698 35,744

Expenses Finance costs – external parties (6,120) (4,721) (6,120) (4,721)Impairment expense 10 (51,723) – (41,358) –Responsible Entity fees (1,608) (1,476) (1,608) (1,476)Other expenses (1,679) (751) (1,326) (327)

Total expenses (61,130) (6,948) (50,412) 6,524Net (loss)/profit (17,826) 29,810 (9,714) 29,220

Attributable to: Ordinary unitholders (21,290) 29,685 (9,714) 29,220Minority interest – MPIF Income unitholders 3,464 125 – –

Net (loss)/profit (17,826) 29,810 (9,714) 29,220

Earnings per unit Basic and diluted earnings per ordinary unit (cents) 8a (10.5) 15.0

The Income Statements should be read in conjunction with the Notes to the Financial Statements.

51

Annual Report 2008

Income Statements For the year ended 30 June 2008


Assets Current assets Cash and cash equivalents 10,518 4,653 1,306 3,726Trade and other receivables 9 17,610 14,392 16,421 13,959Fair value of financial derivatives 17(f) 241 – 241 –

Total current assets 28,369 19,045 17,968 17,685

Non-current assets Investments – available for sale 10 284,247 306,093 273,886 340,546Investments accounted for using the equity method 5 63,529 74,909 – –Investment in controlled entity 11 – – 30,076 30,076Fair value of financial derivatives 17(f) 5,742 1,872 5,742 1,872

Total non-current assets 353,518 382,874 309,704 372,494Total assets 381,887 401,919 327,672 390,179

Liabilities Current liabilities Trade and other payables 12 1,017 1,280 1,054 1,048Distributions payable 6,453 5,495 6,016 5,433

Total current liabilities 7,470 6,775 7,070 6,481

Non-current liabilities Deferred settlement 13 9,123 8,782 9,123 8,782Interest bearing liabilities 14 80,200 89,000 80,200 89,000

Total non-current liabilities 89,323 97,782 89,323 97,782Total liabilities 96,793 104,557 96,393 104,263Net assets 285,094 297,362 231,279 285,916

Equity Units on issue – ordinary units 15 202,869 200,777 202,869 200,777Minority interest – MPIF income units 15 62,260 9,596 – –Reserves 16a 28,964 52,049 42,550 66,916Undistributed (losses)/income 16b (8,999) 34,940 (14,140) 18,223

Total equity 285,094 297,362 231,279 285,916

The Balance Sheets should be read in conjunction with the Notes to the Financial Statements.

52


Balance Sheets As at 30 June 2008


Opening equity 297,362 231,244 285,916 231,244

Units on issue Reinvested distributions 2,092 6,490 2,092 6,490

Minority interests (income units) Minority interest – MPIF Income units issued 56,004 9,596 – –Minority interest – MPIF Income units redeemed (3,340) – – –

Hedge reserve Fair value movement in financial derivatives 16 1,315 986 1,315 986

Available for sale reserve Fair value movement in unlisted investments 16 3,088 19,531 (16,210) 40,895Fair value movement in listed investments 16 (61,101) 6,525 (50,829) 6,618Net change in fair value of listed property trusts recognised as an impairment expense 10 51,723 – 41,358 –

Foreign currency translation reserve Share of movement in reserves of investment accounted for using the equity method 16 (18,110) 14,642 – 8,052

Undistributed (losses)/income Net (loss)/profit attributable to: – Ordinary unitholders (21,290) 29,685 (9,714) 29,220– Minority interest – MPIF income units 3,464 125 – –

Reversal of prior year retained earnings 5 – – – (16,253)Distributions – ordinary units 7 (22,649) (21,337) (22,649) (21,336)Distributions – MPIF income units 7 (3,464) (125) – –

Closing equity 285,094 297,362 231,279 285,916

The Statements of Changes in Equity should be read in conjunction with the Notes to the Financial Statements.

53

Annual Report 2008

Statements of Changes in EquityFor the year ended 30 June 2008


Cash flows from operating activities Cash receipts in the course of operations 30,169 19,771 27,505 19,900Cash payments in the course of operations (2,656) (1,061) (2,656) (1,716)Interest received 756 444 348 429Financing costs paid (5,764) (5,088) (5,764) (5,088)

Net cash flows from operating activities 18 22,505 14,066 19,433 13,525

Cash flows from investing activities Purchase of investments (67,234) (65,260) (22,292) (56,113)Cash received on the sale of investments 29,793 31,022 29,213 31,022

Net cash flows (used in)/from investing activities (37,441) (34,238) 6,921 (25,091)

Cash flows from financing activities Proceeds from issue of Income units 56,004 9,596 – –Redemption of Income units (3,340) – – –Proceeds from interest bearing liabilities 8,000 28,350 8,000 28,350Repayment of interest bearing liabilities (16,800) – (16,800) –Distributions paid (23,063) (14,503) (19,974) (14,440)

Net cash flows from/(used in) financing activities 20,801 23,443 (28,774) 13,910Net increase/(decrease) in cash and cash equivalents 5,865 3,271 (2,420) 2,344Cash and cash equivalents at 1 July 4,653 1,382 3,726 1,382

Cash and cash equivalents at 30 June 10,518 4,653 1,306 3,726

The Statements of Cash Flows should be read in conjunction with the Notes to the Financial Statements.

54


Statements of Cash FlowsFor the year ended 30 June 2008

1 Reporting entityMultiplex Acumen Property Fund (the Fund) is an Australian registered managed investment scheme under the Corporations Act 2001. Brookfield Multiplex Capital Management Limited, the Responsible Entity of the Fund, is incorporated and domiciled in Australia. The consolidated financial statements of the Fund as at and for the year ended 30 June 2008 comprise the Fund, its subsidiaries (together referred to as the Consolidated Entity) and the Consolidated Entity’s interest in associates.

2 Basis of preparation(a) Statement of complianceThe financial report is a general purpose financial report which has been prepared in accordance with the Australian Accounting Standards (AASBs) (including Australian interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial report of the Consolidated Entity and the financial report of the Fund comply with International Financial Reporting Standards (IFRSs) and interpretations adopted by the International Accounting Standards Board (IASB).

The financial statements were authorised for issue by the Directors on 27 August 2008.

(b) Basis of measurementThe consolidated financial statements have been prepared on the basis of historical cost, except for the following:

derivative financial instruments which are measured at fair value; –available for sale financial assets which are measured at fair value; and –deferred settlement liability which is measured at fair value. –

The methods used to measure fair value are discussed further in Note 3.

The financial statements are presented in Australian dollars, which is the Fund’s functional and presentation currency.

The Fund is of a kind referred to in ASIC Class Order 98/100, dated 10 July 1998 (updated by CO 05/641 effective 28 July 2005 and CO 06/51 effective 31 January 2006), and in accordance with that Class Order, all financial information presented in Australian dollars has been rounded to the nearest thousand dollars, unless otherwise stated.

(c) Use of estimates and judgementsThe preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements is provided in the following notes:

Note 13 – Deferred settlement liability (refer to Note 3(l) for a description of the accounting policy); and –Note 17 – Valuation of derivatives (refer to Note 3(j)) for a description of the accounting policy). –

55

Annual Report 2008

Notes to the Financial Statements For the year ended 30 June 2008

3 Significant accounting policiesThe principal accounting policies set out below have been applied consistently to all periods presented in these financial statements.

(a) Principles of consolidationThe consolidated financial statements incorporate the financial statements of the Fund and entities controlled by the Fund (its subsidiaries) (referred to as the Consolidated Entity in these financial statements). Control is achieved where the Fund has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated Income Statements from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Consolidated Entity.

All intra-group transactions, balances, income and expenses, including unrealised profits arising from intra-group transactions, are eliminated in full in the consolidated financial statements. In the separate financial statements of the Fund, intra-group transactions are generally accounted for by reference to the exiting carrying value of the items. Where the transaction value differs from the carrying value, the difference is recognised as a contribution by or distribution to equity participants by the transacting entities.

Income units issued in Multiplex Property Income Fund are shown as minority interest in the consolidated financial statements.

In the Fund’s financial statements, investments in controlled entities are carried at cost.

(b) Revenue recognitionRevenues are recognised at the fair value of the consideration received for the sale of goods and services, net of the amount of Goods and Services Tax (GST), rebates and discounts.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Consolidated Entity and the revenue can be reliably measured. The following specific criteria for the major business activities must also be met before revenue is recognised. Where amounts do not meet these recognition criteria, they are deferred and recognised in the period in which the recognition criteria are met.

Dividends and distributionsRevenue from dividends and distributions is recognised when the right of the Consolidated Entity or the Fund to receive payment is established. In the case of distributions and dividends from listed and unlisted property equity investments, the revenue is recognised when they are declared.

Dividends and distributions received from associates reduce the carrying amount of the investment of the Consolidated Entity in that associate and are not recognised as revenue.

Interest revenue Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.

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Realised profits on available for sale financial assetsListed and unlisted investments are classified as being available for sale and are stated at fair value, with any resulting gain or loss recognised directly in equity in the Balance Sheets, except for impairment losses, which are recognised directly in the Income Statements. Where these investments are derecognised, the cumulative gain or loss previously recognised directly in equity in the Balance Sheets is recognised in the Income Statement.

The fair value of listed investments is the quoted bid price at the Balance Sheets date. The fair value of unlisted investments is the Fund’s and Consolidated Entity’s share of the net tangible assets of the unlisted investment at the reporting date.

(c) Expense recognitionFinance costsFinance costs are recognised as expenses using the effective interest rate method, unless they relate to a qualifying asset.

Finance costs include:

interest on bank overdrafts and short-term and long-term borrowings, including amounts paid or received –on interest rate swaps; amortisation of discounts or premiums relating to borrowings;amortisation of ancillary costs incurred in connection with the arrangement of borrowings; –finance lease charges; and –certain exchange differences arising from foreign currency borrowings. –

Management feesA base management fee up to 0.5% (including GST less any reduced input tax credits) per annum of the gross value of assets is payable to the Responsible Entity. The fee is payable by the Fund quarterly in arrears.

Expenses are recognised by the Consolidated Entity on an accrual basis. No expense is recognised if the fees are waived by the Responsible Entity.

Performance feeA performance fee of 20% (including GST less any reduced input tax credits) of the outperformance of the Consolidated Entity against the Benchmark return (S&P/ASX A-REIT Accumulation Index) is recognised on an accrual basis unless waived by the Responsible Entity. Any previous underperformance must be recovered before a performance fee becomes payable.

Other expenditureExpenditure including rates, taxes, other outgoings, performance fees and Responsible Entity fees is brought to account on an accrual basis.

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Annual Report 2008

3 Significant accounting policies continued(d) Goods and Services TaxRevenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST), except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an expense item.

Receivables and payables are stated with the amount of GST. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Balance Sheets.

Cash flows are included in the Statements of Cash Flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

(e) Income tax Under current income tax legislation, the Consolidated Entity and its controlled entities are not liable for Australian income tax, provided that the taxable income is fully distributed to unitholders each year, and any taxable capital gain derived from the sale of an asset acquired after 19 September 1985 is fully distributed to unitholders.

The Consolidated Entity fully distributes its taxable income each year, calculated in accordance with the Constitution and applicable legislation, to unitholders who are presently entitled to income under the Constitution.

Tax allowances for building and plant and equipment depreciation are distributed to unitholders in the form of a tax deferred component of distributions.

(f) Cash and cash equivalentsFor purposes of the Statements of Cash Flows, cash includes cash balances, deposits at call with financial institutions and other highly liquid investments (with short periods to maturity), which are readily convertible to cash on hand and are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts.

(g) Trade and other receivablesTrade debtors and other receivables are stated at their amortised cost using the effective interest rate method less any identified impairment losses. Impairment charges are brought to account as described in Note 3(p). Non-current receivables are measured at amortised cost using the effective interest rate method.

(h) Available for sale assetsUnlisted and listed investments are classified as being available for sale. Available for sale financial assets are initially recognised at fair value plus directly attributable transaction costs. Subsequent to initial recognition they are measured at fair value, with any resulting gain or loss recognised directly in equity. Where there is evidence of impairment in the value of the investment, usually through adverse market conditions, the impairment loss will be recognised directly in profit and loss. Where listed investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the profit and loss.

58



(i) AssociatesThe Consolidated Entity’s investments in associates are accounted for using the equity method of accounting in the consolidated financial report. An associate is an entity in the Consolidated Entity that has a significant influence, but not control, over their financial and operating policies.

Under the equity method, investments in associates are carried in the consolidated Balance Sheets at cost plus post-acquisition changes in the Consolidated Entity’s share of net assets of the associates. After application of the equity method, the Consolidated Entity determines whether it is necessary to recognise any additional impairment loss with respect to the Consolidated Entity’s net investment in the associates. The consolidated Income Statements reflects the Consolidated Entity’s share of the results of operations of the associates.

When the Consolidated Entity’s share of losses exceeds its interest in an associate, the Consolidated Entity’s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Consolidated Entity has incurred legal or constructive obligations or made payments on behalf of an associate.

Where there has been a change recognised directly in the associate’s equity, the Consolidated Entity recognises its share of changes and discloses this in the consolidated Statements of Changes in Equity.

Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Consolidated Entity’s interest in the associate. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Gains and losses are recognised when the contributed assets are consumed or sold by the associate.

(j) Derivative financial instrumentsThe Consolidated Entity uses derivative financial instruments to hedge its exposure to interest rate risk arising from operational, financing and investing activities. The Consolidated Entity does not hold or issue derivative financial instruments for trading purposes.

Hedging activitiesDerivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.

The Consolidated Entity only enters into hedges of actual and highly probable forecast transactions (cash flow hedges). It does not enter into, nor does it have any, hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges) or hedges of net investments in foreign operations (net investment hedges).

The Consolidated Entity documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Consolidated Entity also documents its assessment, both at the inception of the hedge and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair values of cash flows of the hedged items.

The effective portion of changes in the fair value of cash flow hedges is recognised directly in equity. Movements on the hedging reserve are shown in the Statements of Changes in Equity. The gain or loss relating to any ineffective portion is recognised immediately in the Income Statements.

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Annual Report 2008

3 Significant accounting policies continuedAmounts accumulated in equity are transferred in the Income Statements in the period when the hedged item will affect profit or loss (for instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or a liability, the gains or losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability.

Interest rate swapsThe fair value of interest rate swaps is the estimated amount that the Consolidated Entity would receive or pay to terminate the swap at the Balance Sheets date, taking into account current interest rates and the current creditworthiness of the swap counterparties.

(k) Non-derivative financial instrumentsNon-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivate financial instruments are recognised initially at fair value plus, for instruments not at a fair value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.

A financial instrument is recognised if the Consolidated Entity becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Consolidated Entity’s contractual rights to the cash flows from the financial assets expire or if the Consolidated Entity transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchase and sales of financial assets are accounted for at trade date, i.e., the date that the Consolidated Entity commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Consolidated Entity’s obligations specified in the contract expire or are discharged or cancelled.

Accounting policies for cash and cash equivalents (Note 3(f)), trade and other receivables (Note 3(g)), equity securities (Note 3(h)), trade and other payables (Note 3(l)), and interest bearing liabilities (Note 3(m)) are discussed elsewhere within the financial report.

Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.

(l) Trade and other payablesTrade and other payables are stated at amortised cost using the effective interest rate method and represent liabilities for goods and services provided to the Consolidated Entity prior to the end of the financial period and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(m) Interest bearing liabilitiesInterest bearing liabilities are recognised initially at fair value less any attributable transaction costs. Subsequent to initial recognition, interest bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the Income Statements over the period of the borrowings on an effective interest rate basis.

Interest bearing liabilities are classified as current liabilities unless the Fund has an unconditional right to defer settlement of the liability for at least 12 months after the balance date.

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(n) Distributions paid or declaredA provision for distribution is recognised in the Balance Sheets if the distribution has been declared prior to balance date.

Distributions paid and payable on units are recognised in equity as a reduction of undistributed income for the year. Distributions paid are included in cash flows from financing activities in the Statements of Cash Flows.

(o) EquityIssued and paid up units are recognised at the fair value of the consideration received by the Consolidated Entity. Incremental costs directly attributable to the issue of new units are shown in equity under unit issue costs.

(p) ImpairmentFinancial assetsA financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flow of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available for sale financial asset is calculated by reference to its current fair value.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in profit and loss. Any cumulative loss in respect of an available for sale financial asset recognised previously in equity is transferred to profit and loss.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost and available for sale financial assets that are debt securities, the reversal is recognised in profit and loss. For available for sale financial assets that are equity securities, the reversal is recognised directly in equity.

Non-financial assetsThe carrying amounts of the Consolidated Entity’s non-financial asset are reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists then the asset’s recoverable amount is estimated. An impairment loss in respect of goodwill is not reversed. In respect of all other assets (other than goodwill), impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(q) Earnings per unitThe Fund presents basic and diluted earnings per unit (EPU) data for all its ordinary unitholders. Basic EPU is calculated by dividing the profit or loss attributable to ordinary unitholders of the Fund by the weighted average number of ordinary units outstanding during the period. Diluted EPU is determined by adjusting the profit or loss attributable to ordinary unitholders and the weighted average number of ordinary units outstanding for the effects of all dilutive potential ordinary units.

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Annual Report 2008

3 Significant accounting policies continued(r) New standards and interpretations not yet adoptedThe following standards, amendments to standards and interpretations have been identified as those which may impact the Consolidated Entity in the period of initial application. They are available for early adoption at 30 June 2008, but have not been applied in preparing these financial statements:

Revised AASB 3 – Business Combinations changes the application of acquisition accounting for business combinations and the accounting for non-controlling (minority) interests. Key changes include: the immediate expensing of all transaction costs; measurement of contingent consideration at acquisition date with subsequent changes through the income statement; measurement of non-controlling (minority) interests at full fair value or the proportionate share of the fair value of the underlying net assets; guidance on issues such as reacquired rights and vendor indemnities; and the inclusion of combinations by contract alone and those involving mutuals. The revised standard becomes mandatory for the Consolidated Entity’s 30 June 2010 financial statements. The Consolidated Entity has not yet determined the potential effect of the revised standard on the Consolidated Entity’s financial report. AASB 8 – Operating Segments introduces the “management approach” to segment reporting. AASB 8, which becomes mandatory for the Consolidated Entity’s 30 June 2010 financial statements, will require the disclosure of segment information based on the internal reports regularly reviewed by the Consolidated Entity’s chief operating decision maker in order to assess each segment’s performance and to allocate resources to them. The Consolidated Entity does not present information based on business or geographic segments. Information is presented to the chief operating decision maker based on the Consolidated Entity’s investment portfolio, which at present is categorised between unlisted property trusts, listed property trusts and other assets. Under the management approach, it is anticipated segment information will be disclosed based on the Consolidated Entity’s investment portfolio.Revised AASB 101 – Presentation of Financial Statements introduces as a financial statement (formerly “primary” statement) the “statement of comprehensive income”. The revised standard does not change the recognition, measurement or disclosure of transactions and events that are required by other AASBs. The revised AASB 101 will become mandatory for the Consolidated Entity’s 30 June 2010 financial statements. The Consolidated Entity has not yet determined the potential effect of the revised standard on the Consolidated Entity’s disclosures.Revised AASB 123 – Borrowing Costs removes the option to expense borrowing costs and requires that an entity capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. The revised AASB 123 will become mandatory for the Consolidated Entity’s 30 June 2010 financial statements. In accordance with the transitional provisions, the Consolidated Entity will apply the revised AASB 123 to qualifying assets for which capitalisation of borrowing costs commences on or after the effective date. The Consolidated Entity has not yet determined the potential effect of the revised standard on future earnings. Revised AASB 127 – Consolidated and Separate Financial Statements changes the accounting for investments in subsidiaries. Key changes include: the re-measurement to fair value of any previous/retained investment when control is obtained/lost, with any resulting gain or loss being recognised in profit or loss; and the treatment of increases in ownership interest after control is obtained as transactions with equity holders in their capacity as equity holders. The revised standard will become mandatory for the Consolidated Entity’s 30 June 2010 financial statements. The Consolidated Entity has not yet determined the potential effect of the revised standard on the Consolidated Entity’s financial report.

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4 Segment reportingThe Fund is organised into one main segment which operates solely in the business of investment in property securities within Australia.

5 Investments accounted for using the equity method Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Multiplex New Zealand Property Fund 63,529 74,909 – –

Share of profit in the period from investments accounted for using the equity method as follows:

Multiplex New Zealand Property FundShare of net profit of associate 2,205 1,257 – –Share of net profit of associate – fair value adjustments through property revaluation gains 1,975 9,053 – –

4,180 10,310 – –

Summary financial information for equity accounted investees, not adjusted for the percentage ownership held by the Consolidated Entity.

Current assets 11,521 42,041 – –Non-current assets 754,055 858,003 – –

Total assets 765,576 900,044 – –

Current liabilities 32,884 70,215 – –Non-current liabilities 471,685 528,109 – –

Total liabilities 504,569 598,324 – –

Revenues 82,754 96,824 – –Expenses (65,581) (54,552) – –

Profit 17,173 42,272 – –

The Fund owns 24.34% of Multiplex New Zealand Property Fund at 30 June 2008 (2007: 24.39%).

In accordance with AASB 128 Investments and Associates, equity accounting is not applied in the separate financial statements of the Fund; rather, it is applied in the Consolidated Entity’s financial statements where consolidated financial statements are prepared. In 2006 the Fund did not prepare consolidated financial statements as it did not have any subsidiaries. As such, equity accounting was applied in the Fund’s financial statements. The first set of consolidated financial statements were prepared in 2007. An adjustment was made to undistributed income of the Fund in 2007 to correctly reflect the impact of equity accounting only in the consolidated financial statements rather than the Fund’s financial statements. The adjustment in the Fund’s financial statements was to reduce retained earnings by $16,253,000, to reduce “investments accounted for using the equity method” by $62,935,000 and to increase “Investments – available for sale” by $46,682,000.

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Annual Report 2008

6 Auditors’ remuneration Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Audit servicesAuditor of the Fund – KPMG:Audit and review of financial reports 119,000 85,000 119,000 60,000Agreed upon procedures engagement regarding disclosures to the Australian Securities Exchange 7,893 – 7,893 –Agreed upon procedures engagement in relation to Multiplex Property Income Fund’s NTA – 13,760 – –

126,893 98,760 126,893 60,000

Fees in relation to compliance plan audits are borne by the Responsible Entity.

Audit fees in relation to MPIF are borne by the Fund.

7 Distributions paid or declaredDistributions paid to unitholders or declared by the Consolidated Entity were as follows: Cents Total amount Date of 2008 per unit $’000 payment

Ordinary unitsJune 2008 distribution 2.8325 5,746 1 August 2008March 2008 distribution 2.8325 5,746 30 April 2008December 2007 distribution 2.7500 5,579 31 January 2008September 2007 distribution 2.7500 5,578 31 October 2007


MPIF income units – minority interestJune 2008 distribution 0.6967 434 17 July 2008May 2008 distribution 0.7199 431 17 June 2008April 2008 distribution 0.6967 401 14 May 2008March 2008 distribution 0.7199 401 15 April 2008February 2008 distribution 0.6753 353 18 March 2008January 2008 distribution 0.7219 350 20 February 2008December 2007 distribution 0.6956 319 14 January 2008November 2007 distribution 0.6452 248 13 December 2007October 2007 distribution 0.6727 189 14 November 2007September 2007 distribution 0.6781 142 11 October 2007August 2007 distribution 0.6896 110 14 September 2007July 2007 distribution 0.6710 86 10 August 2007

Total distribution to Income unitholders for the year ended 30 June 2008 8.2826 3,464

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Cents per Total amount Date of 2007 unit $’000 payment

Ordinary unitsJune 2007 distribution 2.7000 5,440 31 July 2007March 2007 distribution 2.7000 5,391 30 April 2007December 2006 distribution 2.6600 5,273 31 January 2007September 2006 distribution 2.6600 5,232 31 October 2006


MPIF income units – minority interestJune 2007 distribution 0.6530 62 9 July 2007May 2007 distribution 0.6710 59 7 June 2007April 2007 distribution 0.6530 3 10 May 2007March 2007 distribution 0.2100 1 20 April 2007

Total distribution to income unitholders for the year ended 30 June 2007 2.1870 125

8 Earnings per unitClassification of securities as ordinary unitsAll securities have been classified as ordinary units and included in basic earnings per unit, as they have the same entitlement to distributions.

(a) Earnings per unit There are no dilutive potential ordinary units; therefore diluted EPU is the same as basic EPU.

Consolidated 2008 2007

Net (loss)/profit attributable to ordinary unitholders ($’000) (21,290) 29,685

Weighted average number of ordinary units used in the calculation of basic earnings per unit (’000) 202,861 198,487

Basic and diluted earnings per ordinary unit (cents) (10.5) 15.0

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Annual Report 2008

8 Earnings per unit continued(b) Normalised earnings per unitNormalised earnings per unit has been calculated based on the accounting loss/profit of the Consolidated Entity, adjusted for non-cash and one-off items, divided by the weighted average number of units. A reconciliation from accounting profit/(loss) to normalised earnings is provided below.

Consolidated 2008 2007 $’000 $’000

Net (loss)/profit attributable to ordinary unitholders (21,290) 29,685Adjusted for:– Impairment expense 51,723 –– Unrealised gains on derivatives (2,785) –– Difference between share of associate’s income

and distributions received from associate 857 (5,363)– Other non cash items 51 –

Normalised earnings1 28,556 24,322Weighted average number of ordinary units used in the calculation of basic earnings per unit (’000) 202,861 198,487

Normalised earnings per unit (cents) 14.1 12.3

Note:1 As determined by the Directors.

9 Trade and other receivables Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Distributions receivable – unlisted and listed investments 8,370 8,386 6,387 7,425Distributions receivable – controlled entities – – 1,332 1,161Brokerage receivable 11 161 11 11Other receivables 8,758 4,104 8,220 4,104Prepayments 471 1,741 471 1,258

17,610 14,392 16,421 13,959

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10 Investments – available for sale Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Listed investmentsListed investments at cost 111,383 91,967 91,892 88,970Fair value adjustments – 9,378 – 9,471Impairment (51,723) – (41,358) –

59,660 101,345 50,534 98,441

Unlisted investmentsUnlisted investments at cost 192,306 170,389 184,000 187,765Fair value adjustments 32,281 34,359 39,352 54,340

224,587 204,748 223,352 242,105Total 284,247 306,093 273,886 340,546

Included in the listed and unlisted investments above are the following investments in related parties:

Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Unlisted and listed investments in related parties (Note 19)Unlisted and listed investments in related parties 48,351 48,010 101,762 101,421Fair value adjustments (866) 158 7,562 19,644Impairment (11,950) – (11,950) –

35,535 48,168 97,374 121,065

Details of the material investments held by both the Consolidated Entity and the Fund are shown on the following pages.

Impairment expenseDuring the year, the Consolidated Entity recognised an impairment loss, in accordance with accounting standards, of $51,723,000, in relation to its available for sale assets. The Fund recognised an impairment loss of $41,358,000.

The Responsible Entity has determined there is objective evidence at the date of this report that the value of the Consolidated Entity’s and Fund’s listed property trust portfolio is impaired. This determination has arisen due to the significant and prolonged decline in value of listed property trusts during the year, their further subsequent decline in value after year end and market conditions within the property sector generally. As such, any previous declines in value recognised in the available for sale reserve have been recognised directly in the income statement.

The impairment loss recognised represents the difference between the cost of the portfolio and the market value as at 30 June 2008. No impairment loss was recognised by the Consolidated Entity or the Fund during the year ended 30 June 2007.

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Annual Report 2008

10 Investments – available for sale continuedUnit holdings – consolidatedMaterial investments of the Consolidated Entity are stated below as follows:

2008 2008 2007 2007 units % ownership units % ownership

Unlisted managed investment schemesAbbotsford Property Trust – – 314,000 6.3APN Champion Retail Fund 13,900,000 20.0 – –APN Regional Property Fund 3,571,428 10.9 3,571,428 10.9APN UKA Poland Retail Fund 7,542,100 19.9 7,542,100 19.9APN UKA Vienna Retail Fund 6,000,000 13.1 6,000,000 13.6Austock Childcare Fund 1,000,000 7.4 1,000,000 7.4Centro MCS 21 5,525,000 13.9 5,525,000 13.9Centro MCS 22 1,291,743 11.6 1,291,743 11.6Charter Hall Diversified Property Fund 4,783,316 5.6 4,783,316 5.6Gordon Property Trust 1,683,000 7.8 1,683,000 7.8ING Real Estate Direct Office Fund – – 2,000,000 18.8Investa Diversified Office Fund 27,152,201 16.2 27,116,330 16.1Investa Fifth Commercial Trust 9,550,000 19.1 9,540,000 19.1Investa First Industrial Trust – – 1,452,652 5.5Investa Second Industrial Trust 1,479,154 5.5 1,479,154 5.5MAB Diversified Property Trust 7,000,000 10.6 7,000,000 10.6Mirvac Retail Portfolio – – 2,678,000 6.2Multiplex Development and Opportunity Fund 9,320,388 5.9 9,320,388 6.5Northgate Property Trust 5,136,191 25.7 5,136,191 22.9Pengana Credo European Property Trust 10,400,000 19.9 10,400,000 19.9Reed Property Trust 5,515,213 8.2 – –Rimcorp Property Trust #3 1,500,000 18.5 1,500,000 18.5St Hilliers Enhanced Property Fund #2 2,000,000 10.0 2,000,000 10.0The Child Care Property Fund 5,000,000 4.3 5,000,000 5.8The Essential Health Care Trust 8,713,838 12.3 8,713,838 14.5Westpac Diversified Property Fund 14,316,283 7.2 22,108,000 19.9

Listed investmentsMultiplex Prime Property Fund1 27,894,723 9.9 27,894,723 9.9Multiplex European Property Fund 12,750,000 5.1 12,750,000 5.1

The Consolidated Entity does not hold more than 5% of any other listed property trusts.Note:1 The Consolidated Entity’s investment in Multiplex Prime Property Fund of 27,894,723 units at $25,860,000 comprises $16,737,000

being an initial call partly paid to $0.60 per unit and $9,123,000 (2007: $8,782,000) being the present value of the final call of $0.40 per unit payable in June 2011. The final call also creates a deferred settlement liability of $9,123,000 (2007: $8,782,000). The discount rate used to determine the present value is 6.73% (2007: 6.0%).

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Unit holdings – FundMaterial investments of the Fund are stated below as follows:

2008 2008 2007 2007 units % ownership units % ownership

Unlisted managed investment schemesAbbotsford Property Trust – – 282,600 5.7APN Regional Property Fund 2,857,142 8.8 2,857,142 8.8APN UKA Poland Retail Fund 4,525,260 11.9 4,525,260 11.9APN UKA Vienna Retail Fund 3,600,000 7.9 3,600,000 8.2Austock Childcare Fund 1,000,000 7.4 1,000,000 7.4Centro MCS 21 4,972,500 14.5 4,972,500 12.5Centro MCS 22 645,871 5.8 645,871 5.8Gordon Property Trust 1,514,700 7.0 1,514,700 7.0ING Real Estate Direct Office Fund – – 2,000,000 18.8Investa Diversified Office Fund 24,255,517 14.5 24,228,435 14.4Investa Fifth Commercial Trust 7,642,000 15.3 7,632,000 15.3Investa First Industrial Trust – – 1,452,652 5.5Investa Second Industrial Trust 1,479,154 5.5 1,479,154 5.5MAB Diversified Property Trust 4,900,000 7.4 4,900,000 7.4Mirvac Retail Portfolio – – 2,678,000 6.2Multiplex Development and Opportunity Fund 9,320,388 5.9 9,320,388 6.5Multiplex New Zealand Property Fund 51,699,756 23.8 51,699,756 23.8Northgate Property Trust 4,622,572 23.1 4,622,572 20.6Pengana Credo European Property Trust 9,400,000 18.0 9,400,000 18.0Rimcorp Property Trust #3 750,000 9.3 750,000 9.3St Hilliers Enhanced Property Fund #2 2,000,000 10.0 2,000,000 10.0The Essential Health Care Trust 7,406,762 12.3 7,406,762 12.3Westpac Diversified Property Fund 12,884,655 6.4 19,897,200 18.0

Listed investmentsMultiplex Prime Property Fund1 27,894,723 9.9 27,894,723 9.9Multiplex European Property Fund 12,750,000 5.1 12,750,000 5.1

The Fund does not hold more than 5% of any other listed property trusts.Note:1 The Fund’s investment in Multiplex Prime Property Fund of 27,894,723 units at $25,860,000 comprises $16,737,000 being an

initial call partly paid to $0.60 per unit and $9,123,000 (2007: $8,782,000) being the present value of the final call of $0.40 per unit payable in June 2011. The final call also creates a deferred settlement liability of $9,123,000 (2007: $8,782,000). The discount rate used to determine the present value is 6.73% (2007: 6.0%).

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Annual Report 2008

11 Investment in controlled entity 2008 2007 Ownership 2008 Ownership 2007 Fund % $’000 % $’000

Investment in Multiplex Property Income Fund – ordinary units 100% 30,076 100% 30,076

On 13 March 2007 Multiplex Property Income Fund was launched and ordinary and Income units were issued as a result. Multiplex Acumen Property Fund owns 30,075,871 units in MPIF, representing all the issued ordinary units in MPIF. Income unitholders are not entitled to any profits from MPIF other than Income unit distributions and have no right to influence or control MPIF.

Controlled Entities of Multiplex Property Income FundMPIF owns 100% of Multiplex Income UPT International Investments Trust (2007: 100%) and owns 100% of Multiplex Income UPT Domestic Investments Trust (2007: 100%).

12 Trade and other payables Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Management fee payable (refer to Note 19) 335 398 335 398Accruals and other payables 682 882 719 650

1,017 1,280 1,054 1,048

13 Deferred settlement liabilityThe Fund’s investment in Multiplex Prime Property Fund of 27,894,723 units at $25,860,000 comprises $16,737,000 being an initial call partly paid to $0.60 per unit and $9,123,000 (2007: $8,782,000) (in the Consolidated Entity and the Fund) being the present value of the final call of $0.40 per unit payable in June 2011. The final call also creates a deferred settlement liability of $9,123,000 (2007: $8,782,000). The discount rate used to determine the present value is 6.73% (2007: 6.0%).

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14 Interest bearing liabilities Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Secured bank debtNon-current liabilitiesBank loans – secured 80,200 89,000 80,200 89,000

Finance arrangementsFacilities availableBank debt facilities – expires December 2009 93,400 98,800 93,400 98,800Less: facilities utilised (80,200) (89,000) (80,200) (89,000)

Unused facilities at reporting date 13,200 9,800 13,200 9,800

The interest bearing liabilities relate to secured bank debt in the form of a bill facility, in Australian dollars, which expires in December 2009. The Fund has given various representations, warranties, covenants and undertakings to the banks, including in relation to its corporate status. This debt is 100% hedged at a fixed base rate of 6.94% via interest rate swap instruments. The weighted average nominal interest rate on the interest bearing liabilities is 7.65% (2007: 6.94%).

15 Units on issue 2008 2008 2007 2007 $’000 units $’000 units

Units on issueOrdinary unitsOpening balance 200,777 201,215,338 194,287 195,229,230Units redeemed – – – –Units issued 2,092 1,645,592 6,490 5,986,108

Closing balance – ordinary units 202,869 202,860,930 200,777 201,215,338

Minority interest – income unitsOpening balance 9,596 9,557,653 – –Issue of income units 56,004 56,114,127 9,596 9,557,653Redemption of units (3,340) (3,340,335) – –Net profit attributable to minority interest 3,464 – 125 –Distributions to minority interest (3,464) – (125) –

Closing balance – Minority interest – income units 62,260 62,331,445 9,596 9,557,653

The above table for ordinary units represents the ordinary units of the Consolidated Entity and the Fund. The minority interest represents income units issued by Multiplex Property Income Fund and are only shown in the consolidated financial statements.

In accordance with the Fund’s Constitution, each unitholder is entitled to receive distributions as declared from time to time and is entitled to one vote per unit at unitholder meetings. In accordance with the Fund’s Constitution, each unit represents a right to an individual share in the Fund and does not extend to a right to the underlying assets of the Fund.

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Annual Report 2008

16 Reserves and undistributed (losses)/income(a) ReservesA summary of the Fund’s and Consolidated Entity’s reserves is provided below:


ReservesAvailable for sale reserve 37,286 43,576 39,352 65,033Foreign currency translation reserve (11,520) 6,590 – –Hedge reserve 3,198 1,883 3,198 1,883

Total reserves 28,964 52,049 42,550 66,916

Available for sale reserveMovements in the carrying value of the available for sale reserve during the year were as follows:


Opening balance 43,576 17,520 65,033 17,520Fair value movement in relation to listed and unlisted investments (58,013) 26,056 (67,039) 47,513Impairment recognised on available for sale assets 51,723 – 41,358 –

Closing balance 37,286 43,576 39,352 65,033

The Fund and Consolidated Entity recognised an impairment loss on their listed property trust portfolios during the year. Refer to Note 10 for further details.

Foreign currency translation reserveMovements in the carrying value of the foreign currency translation reserve during the year were as follows:


Opening balance 6,590 (8,052) – (8,052)Share of movement of associate’s reserves (18,110) 14,642 – 8,052

Closing balance (11,520) 6,590 – –

Hedge reserveMovements in the carrying value of the hedging reserve during the year were as follows:


Opening balance 1,883 897 1,883 897Fair value movement in relation to interest rate swap hedges 1,315 986 1,315 986

Closing balance 3,198 1,883 3,198 1,883

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(b) Undistributed (losses)/incomeMovements in undistributed during the year were as follows:


Opening balance 34,940 26,592 18,223 26,592Net (loss)/profit (21,290) 29,685 (9,714) 29,220Reversal of equity accounted profit (refer below) – – – (16,253)Distributions – ordinary units (22,649) (21,337) (22,649) (21,336)

Closing balance (8,999) 34,940 (14,140) 18,223

Reversal of equity accounted profitIn accordance with AASB 128 Investments and Associates, equity accounting is not applied in the separate financial statements of the Fund; rather, it is applied in the Consolidated Entity’s financial statements where consolidated financial statements are prepared. In 2006 the Fund did not prepare consolidated financial statements as it did not have any subsidiaries. As such, equity accounting was applied in the Fund’s financial statements. The first set of consolidated financial statements were prepared in 2007. An adjustment was made to undistributed income of the Fund in 2007 to correctly reflect the impact of equity accounting only in the consolidated financial statements rather than the Fund’s financial statements. The adjustment in the Fund’s financial statements was to reduce retained earnings by $16,253,000, to reduce “investments accounted for using the equity method” by $62,935,000 and to increase “Investments – available for sale” by $46,682,000.

17 Financial instrumentsSignificant accounting policiesDetails of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset and financial liability, are disclosed in Note 3 to the financial statements.

(a) Capital risk managementThe Board’s policy is to maintain a strong capital base so as to maintain investor and market confidence and the sustainable future growth of the Fund. The Responsible Entity monitors the market unit price of the Fund against the Fund’s and Consolidated Entity’s net tangible assets (attributable to ordinary unitholders), along with earnings per unit invested and distributions paid per unit.

The Board seeks to raise new capital through issuance of Income Units by MPIF. The Board monitors applications and redemptions of Income units, including the return provided to Income unitholders. The Board maintains a sufficient amount of liquid assets (in the form of cash, cash equivalents and listed equities) to meet Income unit redemptions. The risk of significant capital outflows due to redemption of Income units is mitigated as redemptions in any month are capped. Refer to discussion under 17(d) Liquidity risk management for more information on redemptions.

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the security afforded by a sound capital position. As per the Fund’s Product Disclosure Statement, the Responsible Entity seeks to restrict the level of short-term borrowings (up to 12 months in maturity) to 30% of the total tangible assets of the Fund.

There were no changes in the Fund’s or Consolidated Entity’s approach to capital management during the year.

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Annual Report 2008

17 Financial instruments continued(b) Financial risk managementOverviewThe Fund and Consolidated Entity are exposed to financial risks in the normal course of their operations. These exposures arise at two levels:

Direct exposures – – arising from the Fund’s and Consolidated Entity’s use of financial instruments; andIndirect exposures – – arising from the Fund’s and Consolidated Entity’s equity investments in other funds (Underlying Funds).

The Underlying Funds are exposed to financial risks in the course of their operations, which can impact their profitability. The profitability of the Underlying Funds impacts the returns the Fund and Consolidated Entity earn from these investments and the investment values.

The Fund and Consolidated Entity have direct and indirect exposures to the following risks in the normal course of their operations:

credit risk; –liquidity risk; and –market risk including interest rate risk, foreign currency risk and equity price risk. –

The Responsible Entity has responsibility for the establishment and monitoring of the risk management framework and the risk management policies of the Fund and Consolidated Entity. These policies seek to minimise the potential adverse impact of the above risks on the Fund’s and Consolidated Entity’s financial performance. The Risk and Compliance Committee (established by the Board) is responsible for ensuring compliance with those risk management policies. The risk management framework and policies are set out in the Fund’s Constitution and Product Disclosure Statement, and allow the use of certain financial derivative instruments.

Compliance with the Fund’s and Consolidated Entity’s policies is reviewed by the Responsible Entity on a regular basis. The results of these reviews are reported to the Board and Risk and Compliance Committee of the Responsible Entity quarterly.

Investment mandateThe Fund’s investment mandate, as disclosed in its Constitution and Product Disclosure Statement, is to invest in unlisted and listed property trust securities.

Derivative financial instrumentsWhilst the Fund utilises derivative financial instruments, it does not enter into or trade derivative financial instruments for speculative purposes. The use of derivatives is governed by the Fund’s investment policies, which provide written principles on the use of financial derivatives. These principles permit the use of derivatives to mitigate financial risks associated with financial instruments utilised by the Fund.

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(c) Credit riskCredit risk is the risk of financial loss to the Consolidated Entity if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Fund and Consolidated Entity are exposed to both direct and indirect credit risk in the normal course of their operations.

Sources of credit risk and risk management strategiesDirect credit risk arises principally from the Consolidated Entity’s listed and unlisted investments (in terms of distributions receivable and capital invested) and derivative counterparties. For the Fund, credit risk arises principally from its listed and unlisted investments (in terms of distributions receivable and capital invested), derivative counterparties and receivables due from subsidiaries. Other credit risk also arises for both the Fund and Consolidated Entity from cash and cash equivalents.

Indirect credit risk arises principally from the Underlying Funds’ investments in listed and unlisted property trusts, property tenants and derivative counterparties.

Trade and other receivablesThe Fund’s and Consolidated Entity’s exposure to credit risk is influenced mainly by the individual characteristics of each counterparty. The Fund and Consolidated Entity manage and minimise exposure to credit risk by actively reviewing their investment portfolios to ensure committed distributions are paid.

Investments – available for saleDirect risk exposuresCredit risk arising from investments is mitigated by investing in securities in accordance with the Fund’s Constitution and Product Disclosure Statement. The Fund and Consolidated Entity manage their investments investing in the following target ranges:

unlisted property securities – up to a maximum of 100% of total assets; –listed property securities – up to a maximum of 50% of total assets; –direct property – up to a maximum of 20% of total assets and spread across the main property sectors –of commercial, retail, industrial and diversified property securities; andcash and cash equivalents – up to a maximum of 20% of total assets. –

In managing exposures to individual counterparties, the investments are managed (in accordance with the Fund’s Product Disclosure Statement) by limiting exposures to individual counterparties to the following target ranges:

individual asset manager – 30% of portfolio; –individual property security – 20% of direct property portfolio; and –individual tenants – 30% of direct property portfolio. –

The Responsible Entity may make investments that place the Fund and Consolidated Entity outside of these ranges for a short period of time.

Indirect risk exposuresPrior to making an investment in an Underlying Fund, the Responsible Entity will assess the Underlying Fund’s asset portfolio to ensure the risk profile of these underlying assets is in accordance with the Fund and Consolidated Entity’s risk profile. The Responsible Entity also reviews the entire portfolio of the Underlying Fund’s assets to ensure their sources of income are sufficiently diversified and in accordance with the Fund’s Constitution.

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Annual Report 2008

17 Financial instruments continuedFair value of financial derivativesTransactions with derivative counterparties are limited to established financial institutions that meet the Fund’s and Consolidated Entity’s minimum credit rating criteria. The Fund also utilises the International Swaps and Derivatives Association’s (ISDA’s) agreements with derivative counterparties where possible to limit the credit risk exposure of such transactions by allowing settlement of derivative transaction on a net rather than gross basis.

The Fund’s and Consolidated Entity’s overall strategy of credit risk management remains unchanged from 2007.

Exposure to credit riskDirect risk exposuresThe table below shows the maximum exposure to credit risk at the reporting date. It is the opinion of the Responsible Entity that the carrying amounts of these financial assets represent the maximum credit risk exposure at the reporting date.


Cash and cash equivalents 10,518 4,653 1,306 3,726Trade and other receivables 9 17,610 14,392 16,421 13,959Investments – available for sale 10 284,247 306,093 273,886 340,546Fair value financial derivatives 17(f) 5,983 1,872 5,983 1,872

Total 318,358 327,010 297,596 360,103

Concentrations of credit risk exposureDirect risk exposuresThere were no significant concentrations of credit risk at the reporting date for the Fund or Consolidated Entity (2007: nil).

Indirect risk exposuresThe Underlying Funds do not have significant concentrations of credit risk at year end (2007: nil). As such there are no significant concentrations of indirect credit risk in the Fund or Consolidated Entity as at reporting date (2007: nil).

The Consolidated Entity’s and Fund’s financial assets were all exposed to credit risk in Australia at the reporting date (2007: Australia).

Collateral obtained/heldWhere applicable, the Fund and Consolidated Entity obtain collateral from counterparties to minimise the risk of default on their contractual obligations.

At the reporting date the Fund and Consolidated Entity did not hold any other collateral in respect of their financial assets.

During the year ended 30 June 2008 neither the Fund nor the Consolidated Entity called on any collateral provided (2007: nil).

Financial assets past due but not impairedNo financial assets of the Fund or Consolidated Entity were past due at the reporting date (2007: nil).

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Financial assets whose terms have been renegotiatedThere are no significant financial assets that have had their terms renegotiated that would otherwise have rendered the financial assets past due or impaired.

Impairment lossesDuring the year, the Consolidated Entity and Fund recognised impairment expenses of $51,723,000 and $41,358,000 respectively, in relation to their available for sale assets. Refer to Note 10 for further information.

(d) Liquidity riskLiquidity risk is the risk the Fund and Consolidated Entity will not be able to meet their financial obligations as and when they fall due.

Sources of liquidity risk and risk management strategiesThe Fund and Consolidated Entity are exposed to direct and indirect liquidity risk in the normal course of their operations. The main sources of liquidity risk are discussed below.

Direct liquidity riskThe main sources of direct liquidity risk for the Fund and Consolidated Entity are refinancing of interest bearing liabilities and unlisted investment securities. The Fund’s approach to managing liquidity risk is to ensure that it has sufficient cash available to meet its liabilities as and when they fall due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Fund’s reputation.

The Fund and Consolidated Entity also manage liquidity risk by maintaining adequate banking facilities, through continuous monitoring of forecast and actual cash flows and matching maturity profiles of financial assets and liabilities.

Indirect liquidity riskThe main source of indirect liquidity risk for the Fund and Consolidated Entity is the refinancing of interest bearing liabilities held by the Underlying Funds, as this can directly impact the amount of distributions the Underlying Funds can pay. The Fund’s approach to managing this risk forms part of the investment selection process. The Fund also monitors the activities of the Underlying Funds, to ensure they have sufficient cash to meet their liabilities as and when they fall due.

The Fund’s and Consolidated Entity’s specific risk management strategies are discussed below.

Interest bearing liabilitiesDirect risk exposureThe Fund and Consolidated Entity are exposed to liquidity risk (refinancing risk) on their interest bearing loans. The Fund and Consolidated Entity manage this risk by ensuring debt maturity dates are regularly monitored and negotiations with counterparties are commenced well in advance of the debt’s maturity date.

Indirect risk exposureThe Underlying Funds are exposed to liquidity risk (refinancing risk) on their interest bearing liabilities. The Fund and Consolidated Entity manage this risk by reviewing the gearing levels of the Underlying Funds and assessing the ability of Underlying Funds to fulfil the terms of these liabilities prior to making their investment. The Fund and Consolidated Entity also constantly monitor developments within the Underlying Funds and credit markets, to identify potential events that may impact the Underlying Funds’ liquidity.

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Annual Report 2008

17 Financial instruments continuedUnitholdersThe Fund is not exposed to liquidity risk associated with unitholder redemptions as its units are traded on the Australian Securities Exchange. The Consolidated Entity is exposed to liquidity risk on the Income units issued by MPIF, as these can be redeemed by unitholders, subject to the following conditions:

Indirect unitholders (via wrap platforms) – unit redemptions may be made at the beginning of every month –at a price of $1.00 per unit. Redemptions are subject to the total number of units redeemed not exceeding 5% of the total number –of units on issue (as at the preceding quarter end), and that each request is made at least five working days before the redemption date. Direct unitholders – redemptions of units can only be made after the units have been held for a –minimum period of 12 months. Unit redemptions may be settled either in cash or by issuance of units in Multiplex Acumen Property Fund, i.e. the Fund. The terms of settlement are at the discretion of the Responsible Entity.

Investments – available for saleThe Fund’s and Consolidated Entity’s listed investments are considered readily realisable as they are listed on the Australian Securities Exchange. Whilst the Fund’s and Consolidated Entity’s unlisted investments are not considered as liquid as listed investments, liquidity risk in relation to these investments is managed by:

maintaining a well diversified portfolio of unlisted investments, in order to ensure no significant exposure –to any one Underlying Fund;maintaining a sufficient level of liquid investments to meet the debts of the Fund and Consolidated Entity –as and when they fall due; andwhen unlisted investments are to be liquidated, the Responsible Entity enters into discussion with the –Underlying Fund well in advance of the liquidation date.

The Fund’s and Consolidated Entity’s liquidity risk is also managed in accordance with their investment strategy, as disclosed in the Product Disclosure Statement.

Refer to Note 14 for details of the banking facilities available to the Fund and Consolidated Entity.

The Fund’s and Consolidated Entity’s overall strategy to liquidity risk management remains unchanged from 2007.

Maturity analysis of financial liabilitiesThe following are the contractual maturities of financial liabilities, including estimated interest payments. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Fund and Consolidated Entity can be required to pay.

78



Consolidated Carrying Contractual Within amount cash flows 1 year 1 to 2 years 2 to 5 years $’000 $’000 $’000 $’000 $’000

2008Non-derivative financial liabilitiesTrade and other payables 1,017 1,017 1,017 – –Distributions payable 6,453 6,453 6,453 – –Interest bearing liabilities 80,200 90,727 7,018 83,709 –Deferred settlement 9,123 11,158 – – 11,158

96,793 109,355 14,448 83,709 11,158

Financial derivativesInterest rate swaps – net (inflow)/outflow (3,198) (3,249) (2,166) (1,083) –

93,595 106,106 12,282 82,626 11,158

2007Non-derivative financial liabilitiesTrade and other payables 1,280 1,280 1,280 – –Distributions payable 5,495 5,495 5,495 – –Interest bearing liabilities 89,000 105,020 6,408 6,408 92,204Deferred settlement 8,782 11,158 – – 11,158

104,557 122,953 13,183 6,408 103,362

Financial derivativesInterest rate swaps – net (inflow)/outflow (1,872) (2,305) (922) (922) (461)

102,685 120,648 12,261 5,486 102,901

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Annual Report 2008

17 Financial instruments continuedFund Carrying Contractual Within amount cash flows 1 year 1 to 2 years 2 to 5 years $’000 $’000 $’000 $’000 $’000

2008Non-derivative financial liabilitiesTrade and other payables 1,054 1,054 1,054 – –Distributions payable 6,016 6,017 6,017 – –Interest bearing liabilities 80,200 90,727 7,018 83,709 –Deferred settlement 9,123 11,158 – – 11,158

96,393 108,956 14,089 83,709 11,158

Financial derivativesInterest rate swaps – net (inflow)/outflow (3,198) (3,249) (2,166) (1,083) –

93,195 105,707 11,923 82,626 11,158

2007Non-derivative financial liabilitiesTrade and other payables 1,048 1,048 1,048 – –Distributions payable 5,433 5,433 5,433 – –Interest bearing liabilities 89,000 105,020 6,408 6,408 92,204Deferred settlement 8,782 11,158 – – 11,158

104,263 122,659 12,889 6,408 103,362

Financial derivativesInterest rate swaps – net (inflow)/outflow (1,872) (2,305) (922) (922) (461)

102,391 120,354 11,967 5,486 102,901

Cash flow hedges – timing of cash flowsInterest rate swapsThe Fund and Consolidated Entity have entered into interest rate swaps, which are used to hedge the interest rate risk on the Fund’s and Consolidated Entity’s interest bearing liabilities. The timing of cash flows on the derivatives is matched to the timing of interest payments due on the interest bearing liabilities. Interest payments on the interest bearing liabilities and derivatives occur monthly (2007: monthly).

The cash flow hedges will impact the income statement at the same time as the underlying cash flows, whilst the hedges remain effective. It is expected the hedges will remain effective for the duration of their term.

Defaults and breachesDuring the financial year ended 30 June 2008 the Fund and the Consolidated Entity have not defaulted on or breached any terms of their loan covenants (2007: nil).

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(e) Market riskMarket risk is the risk that changes in market prices, such as equity prices, foreign exchange rates and interest rates, will affect the Fund’s and Consolidated Entity’s income or the value of their holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising returns.

Sources of market risk and risk management strategiesThe Fund and Consolidated Entity are exposed to direct and indirect market risk.

Direct risk exposuresThe main types of direct market risk the Fund and Consolidated Entity are exposed to are:

equity price risk, arising from their listed investment portfolio; –interest rate risk, arising from their interest bearing liabilities; and –foreign currency risk. –

The Fund and Consolidated Entity enter into derivatives in order to manage interest rate risk on their external borrowings and foreign currency risk from their investment in Multiplex New Zealand Property Fund. All such transactions are carried out in accordance with the Fund’s hedging policies and procedures. Derivatives are not entered into for speculative purposes.

The Fund’s and Consolidated Entity’s equity price risk is managed by investing in Underlying Funds in accordance with the Fund’s and Consolidated Entity’s investment mandate.

Indirect risk exposuresThe main types of indirect market risk the Fund and Consolidated Entity are exposed to are:

equity price risk; –interest rate risk; and –foreign currency risk. –

Prior to investing in Underlying Funds, the Responsible Entity will perform due diligence on the Underlying Fund, including understanding their exposures to interest rate risk, foreign currency risk and other market risk. The Responsible Entity will analyse the risk management strategies utilised by the Underlying Fund to manage these risk exposures. Investments are made into Underlying Funds only if their residual risk exposures are within acceptable limits and consistent with the overall investment mandate of the Fund and Consolidated Entity.

Each of these market risks is discussed below.

Interest rate riskInterest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates.

Sources of risk and risk management strategiesDirect risk exposureThe only material source of interest rate risk for the Fund is derived from its interest bearing liabilities. The Fund manages this exposure by ensuring up to 100% of its interest bearing liabilities are on a fixed rate basis. This is achieved by entering into interest rate swaps.

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Annual Report 2008

17 Financial instruments continuedIndirect risk exposureThe Fund and Consolidated Entity are indirectly exposed to interest rate risk on the interest bearing liabilities of the Underlying Funds. The Fund and Consolidated Entity manage this exposure by ensuring the unhedged risk exposures of the Underlying Funds are in accordance with the risk appetite of the Fund and Consolidated Entity prior to making their investment. The Fund and Consolidated Entity also actively monitor interest bearing liability levels and hedging levels of interest rates of the Underlying Funds regularly.

The table below shows the Fund’s and Consolidated Entity’s direct exposure to interest rate risk at year end, including maturity dates.

Consolidated Fixed interest maturing in Less than Non-interest Floating rate 1 year 1 to 2 years 2 to 5 years bearing Total $’000 $’000 $’000 $’000 $’000 $’000

2008Financial assetsCash and cash equivalents 10,518 – – – – 10,518Trade and other receivables – – – – 17,610 17,610Investments – available for sale – – – – 284,247 284,247Financial derivatives – 241 – 5,742 – 5,983

10,518 241 – 5,742 301,857 318,358

Financial liabilitiesTrade and other payables – – – – 1,017 1,017Distributions payable – – – – 6,453 6,453Interest bearing liabilities 80,200 – – – – 80,200Deferred settlement – – – 9,123 – 9,123

80,200 – – 9,123 7,470 96,793

2007Financial assetsCash and cash equivalents 4,653 – – – – 4,653Trade and other receivables – – – – 14,392 14,392Investments – available for sale – – – – 306,093 306,093Financial derivatives – – – 1,872 – 1,872

4,653 – – 1,872 320,485 327,010


89,000 – – 8,782 6,775 104,557

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Fund Fixed interest maturing in Less than Non-interest Floating rate 1 year 1 to 2 years 2 to 5 years bearing Total $’000 $’000 $’000 $’000 $’000 $’000

2008Financial assetsCash and cash equivalents 1,306 – – – – 1,306Trade and other receivables – – – – 16,421 16,421Investments – available for sale – – – – 273,886 273,886Financial derivatives – 241 – 5,742 – 5,983

1,306 241 – 5,742 290,307 297,596

Financial liabilitiesTrade and other payables – – – – 1,054 1,054Interest bearing liabilities 80,200 – – – – 80,200Distributions payable – – – – 6,016 6,016Deferred settlement – – – 9,123 – 9,123

80,200 – – 9,123 7,070 96,393

2007Financial assetsCash and cash equivalents 3,726 – – – – 3,726Trade and other receivables – – – – 13,959 13,959Investments – available for sale – – – – 340,546 340,546Financial derivatives – – – 1,872 – 1,872

3,726 – – 1,872 354,505 360,103


89,000 – – 8,782 6,481 104,263

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Annual Report 2008

17 Financial instruments continuedSensitivity analysisDirect risk exposure– Fair value sensitivity analysis for fixed rate instrumentsThe Fund or Consolidated Entity do not have any fixed rate financial assets or financial liabilities, and do not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss.

– Fair value sensitivity for variable rate instrumentsA change of 1% in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant.

Consolidated Entity 2008 2007 1% 1% 1% 1% Profit Profit and loss Equity and loss Equity $’000 $’000 $’000 $’000

Increase in interest ratesVariable rate instruments– cash and cash equivalents 114 114 80 80– interest bearing liabilities (873) (873) (716) (716)– deferred settlement – 268 – 342

(759) (491) (636) (294)

Interest rate swaps– impact on settlements 739 739 598 598– impact on fair value – 1,853 – 2,520

(20) 2,101 (38) 2,824

Decrease in interest rates– cash and cash equivalents (114) (114) (80) (80)– interest bearing liabilities 873 873 716 716– deferred settlement – (276) – (357)

759 483 636 279

Interest rate swaps– impact on settlements (739) (739) (598) (598)– impact on fair value – (1,942) – (2,642)

20 (2,198) 38 (2,961)

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Fund 2008 2007 1% 1% 1% 1% Profit Profit and loss Equity and loss Equity $’000 $’000 $’000 $’000

Increase in interest ratesVariable rate instruments– cash and cash equivalents 51 51 77 77– interest bearing liabilities (873) (873) (716) (716)– deferred settlement – 268 – 342

(822) (554) (639) (297)

Interest rate swaps– impact on settlements 739 739 598 598– impact on fair value – 1,853 – 2,520

(83) 2,038 (41) 2,821

Decrease in interest rates– cash and cash equivalents (51) (51) (77) (77)– interest bearing liabilities 873 873 716 716– deferred settlement – (276) – (357)

822 546 639 282

Interest rate swaps– impact on settlements (739) (739) (598) (598)– impact on fair value – (1,942) – (2,642)

83 (2,135) 41 (2,958)

Indirect risk exposureThe Fund and Consolidated Entity have investments in Underlying Funds which are exposed to interest rate risk. No sensitivity analysis has been performed on the indirect risk exposures of the Fund or Consolidated Entity as the likely impact on the Fund and Consolidated Entity from a change in interest rates cannot be reliably measured.

Foreign currency riskForeign currency risk is the risk that the market value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

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Annual Report 2008

17 Financial instruments continuedSources of risk and risk management strategiesDirect risk exposureThe Fund is directly exposed to foreign currency risk due to its investment in Multiplex New Zealand Property Fund (MNZPF). The value of the Fund’s investment in MNZPF is impacted by movements in the AUD/NZD exchange rate. The Fund has entered into a forward foreign currency exchange rate swap to hedge the original value of capital invested in MNZPF against adverse movements in the AUD/NZD exchange rate.

The following table shows the direct foreign currency exposures of both the Fund and Consolidated Entity at the reporting date, based on notional amounts.

Fund 2008 2007 AUD NZD AUD NZD $’000 $’000 $’000 $’000

Investments – available for sale 52,034 65,610 71,744 76,878Forward exchange contracts (54,735) (63,734) – –

Net exposure (2,701) 1,876 71,744 76,878

– Sensitivity analysisA 5% strengthening of the Australian dollar against the New Zealand dollar would have increased the profit or loss and equity of the Fund and Consolidated Entity by $1,864,000 at 30 June 2008 (2007: nil). A 5% strengthening of the Australian dollar against the New Zealand dollar would have increased the profit or loss and equity of the Fund and Consolidated Entity by $1,864,000 at 30 June 2008 (2007: nil). This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2007.

Sensitivity analysis has not been performed on the impact of a change in AUD/NZD exchange rates on the Consolidated Entity’s investment in MNZPF, as MNZPF is equity accounted in the financial statements of the Consolidated Entity. Therefore, in the consolidated financial statements the investment in MNZPF is not considered a financial instrument.

Indirect risk exposureThe Fund and Consolidated Entity have invested in entities that are exposed to foreign currency risk, due to their operations being located in countries outside of Australia.

The Fund and Consolidated Entity manage these risks by conducting due diligence on the Underlying Investment during the investment selection process and on an ongoing basis, and ensuring the unhedged risk exposure of the Underlying Fund is in accordance with the risk appetite of the Fund and Consolidated Entity.

– Sensitivity analysisWhilst the Fund and Consolidated Entity have an indirect risk exposure to foreign currency risk, no sensitivity analysis has been performed, as the impact of a reasonably possible change in foreign exchange rates on the Consolidated Entity cannot be reliably measured.

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Other market riskOther market risk is the risk that the total value of investments will fluctuate as a result of changes in market prices. The primary source of other market risk for the Fund and Consolidated Entity is associated with its listed and unlisted investment portfolio.

The Responsible Entity manages the Fund’s and Consolidated Entity’s market risk on a daily basis in accordance with the Fund’s and Consolidated Entity’s investment objectives and policies. These are detailed in the Fund’s Constitution and Product Disclosure Statement.

Sensitivity analysisA 10% increase in equity prices would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2007.

2008 2007 10% 10% 10% 10% Profit Profit and loss Equity and loss Equity $’000 $’000 $’000 $’000

Consolidated EntityListed investments 5,966 5,966 – 10,135Unlisted investments* – 22,459 – 20,475

5,966 28,425 – 30,610

The FundListed investments 5,053 5,053 – 9,844Unlisted investments* – 22,335 – 24,211

5,053 27,388 – 34,055

A 10% decrease in equity prices would have had the equal but opposite effect on the investments shown above, on the basis that all other variables remain constant.* A change in value of the Fund’s listed investments would have impacted the income statement, as the change in fair value of the listed

investment was recognised in the income statement as an impairment expense. Had an impairment expense not been recognised, the impact would have been directly in equity.

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Annual Report 2008

17 Financial instruments continued(f) Specific instrumentsDerivativesThe Fund has entered into derivative contracts to hedge against the Fund’s financial risk exposures.

Interest rate swapsThe Fund and Consolidated Entity have entered into floating to fixed interest rate swaps to hedge the interest rate risk on the Fund’s and Consolidated Entity’s interest bearing liabilities (refer to Note 14). All of the derivatives have been determined to be 100% effective for hedge accounting purposes (2007: 100%), and any changes in the fair value are recognised in reserves (refer to Note 16).

A summary of the derivative contracts and their expiration dates for the Fund and Consolidated Entity is provided below.

2008 2007 Notional Fair Fair Fair Fair contract Fixed value value value value Interest rate amount Maturity interest asset liability asset liability exposure $’000 date rate $’000 $’000 $’000 $’000

CurrentBBSY 15,200 Jun 2009 6.30 241 – 136 –

Non-CurrentBBSY 39,500 Aug 2010 5.62 1,800 – 1,403 –BBSY 3,500 Nov 2011 6.35 154 – 72 –BBSY 3,000 Nov 2012 6.45 143 – 58 –BBSY 13,000 May 2014 6.57 659 – 222 –BBSY 6,000 Jun 2014 6.88 201 – – (19)

80,200 3,198 – 1,891 (19)

Forward foreign currency exchange contractsThe Fund has entered into a forward foreign currency exchange contract to hedge its investment in MNZPF. The Fund entered into a derivative contract to exchange $63,734,000 NZD at a rate of $1.1644 on 15 December 2011. The fair value of the derivative at the reporting date was $2,785,000 (2007: nil).

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(g) Fair valuesMethods for determining fair valuesA number of the Fund’s and Consolidated Entity’s accounting policies and disclosures require the determination of fair value for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods.

Trade and other receivablesFair value, which is determined for disclosure purposes, is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date.

Listed investmentsThe fair value of listed investments is determined by reference to their quoted closing bid price at the reporting date.

Unlisted investmentsThe fair value of unlisted investments is determined by reference to the Fund’s and Consolidated Entity’s share of the net tangible assets of the unlisted investment.

DerivativesThe fair value of forward exchange contracts is based on present value of future cash flows, discounted at the market rate of interest at the reporting date.

Non-derivative financial liabilitiesFair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.

Fair values versus carrying amountsThe carrying amounts of the Fund’s and Consolidated Entity’s financial assets and liabilities reasonably approximate their fair values.

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Annual Report 2008

18 Reconciliation of cash flows from operating activities Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Net (loss)/profit for the year (17,826) 29,810 (9,714) 29,220

Adjustments for:Items classified as investing and financing activities– gain on sale of investments (10,210) (1,521) (10,353) (6,196)– distributions received from associate 5,036 5,036 – –

Non-cash itemsImpairment expense 51,723 – 41,358 –Change in fair value of derivatives (2,785) – (2,785) –Share of associates profit (4,180) (10,310) – –

Operating profit before changes in working capital 21,758 23,015 18,506 23,024

Changes in assets and liabilities during the periodIncrease in receivables 1,012 (17,203) 921 (19,431)Increase in payables (265) 8,254 6 9,932

Net cash from operating activities 22,505 14,066 19,433 13,525

19 Related partiesResponsible EntityThe Responsible Entity of Multiplex Acumen Property Fund is Brookfield Multiplex Capital Management Limited (ABN 32 094 936 866) whose immediate and ultimate holding company is Brookfield Multiplex Limited (ABN 96 008 687 063) which is incorporated and domiciled in Australia.

Key management personnelThe Consolidated Entity does not employ personnel in its own right. However, it is required to have an incorporated Responsible Entity to manage the activities of the Consolidated Entity and this is considered the key management personnel. The Directors of the Responsible Entity are key management personnel of that entity and their names are Dr Peter Morris, Mr Brian Motteram, Mr Robert McCuaig, Mr Robert Rayner, Mr Bob McKinnon, Mr Mark Wilson and Mr Brian Kingston. Messrs Rex Bevan and Ian O’Toole have resigned during the year. Messrs Bob McKinnon and Robert Raynor resigned subsequent to the reporting date. Messrs Mark Wilson and Brian Kingston were appointed as directors subsequent to the reporting date.

The Responsible Entity is entitled to a management fee which is calculated as a proportion of gross assets.

During the year, the Consolidated Entity recognised expenses of $1,608,337 (2007: $1,475,672) in relation to Responsible Entity fees. At balance date an amount of $334,955 (2007: $397,765) owing to the Responsible Entity was included in trade and other payables.

No compensation is paid to any of the key management personnel of the Responsible Entity directly by the Fund.

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Directors’ interestsThe following table sets out each Director’s relevant interest in the units, debentures, rights or options over such instruments, issued interests in registered schemes and rights or options over such instruments issued by the companies within the Consolidated Entity and other related bodies corporate as at the reporting date:

2008 2007 Multiplex Acumen Multiplex Acumen Property Fund Property Fund units held units held Director ‘000 ‘000

Peter Morris – –Brian Motteram 411 300Robert McCuaig 30 30Robert Rayner (resigned 22 August 2008) 500 361Bob McKinnon (resigned 18 July 2008) – –

Responsible Entity’s fees and other transactionsManagement FeesA base management fee up to 0.5% (including GST less any reduced input tax credits) per annum of the gross value of assets is payable to the Responsible Entity. The fee is payable by the Fund quarterly in arrears.

Expenses are recognised by the Consolidated Entity on an accrual basis. No expense is recognised if the fees are waived by the Responsible Entity.

Performance feeA performance fee of 20% (including GST less any reduced input tax credits) of the outperformance of the Consolidated Entity against the benchmark return (S&P/ASX A-REIT Accumulation Index) is payable to the Responsible Entity. Any previous underperformance must be recovered before a performance fee becomes payable.

Whilst the benchmark return for the year has been met, the Fund made an overall negative return. As such, it has been agreed the Responsible Entity will not earn a performance fee for the 2008 financial year. Hence no performance fee has been paid or is payable (2007: benchmark return not met).

Related party unitholdersJPMorgan Nominees Australia Limited, as custodian for Brookfield Multiplex Capital Management Limited, as Responsible Entity for Multiplex Diversified Property Fund, holds 43,430,615 units or 21.41% of the Fund (2007: 42,596,941 units or 21.15% of the Fund).

Total quarterly distributions paid or payable to ordinary unitholders for the year were $22,649,423 (2007: $21,336,201). Distributions paid or payable to related party unitholders for the financial year were $4,849,028 (2007: $2,223,471). No related parties held Income units during the year (2007: nil).

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Annual Report 2008

19 Related parties continuedRelated party unit holdingsANZ Nominees Limited, as custodian for Brookfield Multiplex Capital Management Limited, as Responsible Entity for Multiplex Acumen Property Fund, holds the following investments in related party entities:

Multiplex European Property Fund (ARSN 124 527 206) – 12,750,000 units or 5.1% of the Fund –(2007: 12,750,000 or 5.1% of the Fund)Multiplex New Zealand Property Fund (ARSN 110 281 055) – 53,025,391 units or 24.34% of the Fund –(2007: 53,025,391 units or 24.39% of the Fund)Multiplex Prime Property Fund (ARSN 110 096 663) – 27,894,723 units or 9.9% of the Fund –(2007: 27,894,723 units or 9.9% of the Fund)Multiplex Development and Opportunity Fund (ARSN 100 563 488) – 9,320,388 units or 5.9% of the –Fund (2007: 9,320,388 units or 6.5% of the Fund)

Transactions with related parties Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Transactions with subsidiariesDistribution income – – 3,318 1,161

Distributions receivable – – 1,332 1,161Investments (held at cost) – – 30,076 30,076

Transactions with associatesDistribution income 5,037 5,037 – –

Distributions receivable 1,259 1,259 – –

Transactions with the Responsible EntityBrokerage income – 767 – 767Interest income – 48 – 48Management fees 1,608 1,476 1,608 1,476Expense recoveries 845 110 845 110

Management fees payable 335 398 335 398

Transactions with related parties of the Responsible EntityDistribution income– Multiplex New Zealand Property Fund – – 4,911 4,911– Multiplex Development and Opportunity Fund 770 1500 770 1,500– Multiplex Prime Property Fund 1,339 1,295 1,339 1,295– Multiplex European Property Fund 1,095 255 1,095 255

Investments held (at fair value)– Multiplex New Zealand Property Fund – – 62,112 72,897– Multiplex Development and Opportunity Fund 8,860 9,600 8,860 9,600– Multiplex Prime Property Fund 20,281 25,818 20,281 25,818– Multiplex European Property Fund 6,120 12,750 6,120 12,750

Distributions receivable– Multiplex New Zealand Property Fund – – 1,228 1,228– Multiplex Development and Opportunity Fund 199 374 199 374– Multiplex Prime Property Fund 335 321 335 321– Multiplex European Property Fund 268 270 268 270

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20 Contingent liabilities and assetsThere were no contingent liabilities or assets at 30 June 2008 or 30 June 2007.

21 Capital commitments There were no capital or other commitments at 30 June 2008 or 30 June 2007.

22 Events subsequent to reporting dateSubsequent to the reporting date, the fair value of the Consolidated Entity’s listed property trust (also known as the A-REIT) portfolio, the day immediately prior to the date the financial statements were approved, was $54,754,000, which represents a change of $4,906,000. The financial statements have not been amended to reflect this change in fair value. Had the financial statements been amended, the impact would have been to increase impairment expense and decrease available for sale assets by $4,906,000.

Subsequent to the reporting date, the fair value of the Fund’s A-REIT portfolio, the day immediately prior to the date the financial statements were approved, was $46,812,000, which represents a change of $3,722,000. The financial statements have not been amended to reflect this change in fair value. Had the financial statements been amended, the impact would have been to increase impairment expense and decrease available for sale assets by $3,722,000.

Other than the matter discussed above, there were no other matters or circumstances which have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity in subsequent financial years.

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Annual Report 2008

Multiplex Acumen Property FundDirectors’ Declaration1 In the opinion of the Directors of Brookfield Multiplex Capital Management Limited as Responsible Entity

for Multiplex Acumen Property Fund: (a) The consolidated financial statements and notes, set out on pages 47 to 89, are in accordance with

the Corporations Act 2001, including: (i) giving a true and fair view of the financial position of the Fund and the Consolidated Entity as at

30 June 2008 and of their performance for the financial year ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting

Interpretations) and the Corporations Regulations 2001; (b) The financial report also complies with International Financial Reporting Standards as disclosed in

Note 2(a); and (c) There are reasonable grounds to believe that the Fund will be able to pay its debts as and when they

become due and payable.2 The Directors have been given the declarations required by Section 295A of the Corporations Act 2001

from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2008.Signed in accordance with a resolution of the Directors.

Dated at Sydney this 27th day of August 2008.

Brian Kingston Director Brookfield Multiplex Capital Management Limited

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Directors’ DeclarationFor the year ended 30 June 2008

Independent auditor’s report to the unitholders of Multiplex Acumen Property FundReport on the financial reportWe have audited the accompanying financial report of Multiplex Acumen Property Fund (the “Fund”), which comprises the balance sheets as at 30 June 2008, and the income statements, statements of changes in equity and statements of cash flows for the year ended on that date, a description of significant accounting policies and other explanatory notes 1 to 22 and the directors’ declaration, of the Consolidated Entity comprising the Fund and the entities it controlled at the year’s end or from time to time during financial year.Directors’ responsibility for the financial reportThe directors’ of Brookfield Multiplex Capital Management Limited (the Responsible Entity) are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, where due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstancesAuditor’s responsibilityOur responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors of the Responsible Entity, as well as evaluating the overall presentation of the financial report.We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards (including the Australia Accounting Interpretations) a view which is consistent with our understanding of the Fund and the Consolidated Entity’s financial position, and of their performance.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.IndependenceIn conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

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Annual Report 2008

Independent Auditor’s Report

Auditor’s opinionIn our opinion the financial report of Multiplex Acumen Property Fund is in accordance with the Corporations Act 2001, including:(i) giving a true and fair view of the financial position of the Fund and the Consolidated Entity as at

30 June 2008 and of their performance for the financial year ended on that date; and(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations)

and the Corporations Regulations 2001.

KPMG

Tanya Gilerman Partner

Sydney, NSW 27 August 2008

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International network. KPMG International is a Swiss cooperative.

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Independent Auditor’s Report

Additional information required by the ASX Listing Rules and not disclosed elsewhere in this report is set out below. The equity holder information set out below was applicable as at 27 August 2008.

1. Substantial holdersName No of units % of units on issue

JP Morgan Nominees Australia Limited ACF Multiplex Diversified Property Fund 43,430,615 21.41

Avanteos Investments Ltd 19,383,730 9.56

RBC Dexia Investor Services Australia Nominees Pty Ltd 12,181,055 6.01

2. Distribution of ordinary unitsAnalysis of numbers of unitholders by size of holding:

Units Unitholders

1–1,000 35,512 911,001–5,000 993,859 3015,001–10,000 4,340,448 52910,001–100,000 63,889,304 2,126100,001 and over 133,601,807 139

202,860,930 3,186

There were 72 holders with less than a marketable parcel of units.

3. UnitholdersTwenty largest quoted unitholdersThe twenty largest holders of ordinary units are listed below:

Ordinary unitsName Number held % of ordinary units

JP Morgan Nominees Australia Ltd 45,399,551 22.38Avanteos Investments Ltd 19,383,730 9.56RBC Dexia Investor Services Australia Nominees Pty Ltd 12,181,055 6.01Avanteos Investments Ltd 7,935,911 3.91UBS Wealth Management Australia Nominees Pty Ltd 7,830,726 3.86Bond Street Custodians Limited 4,850,000 2.39ANZ Nominees Limited 2,773,223 1.37M F Custodians Ltd 2,215,376 1.09Share Direct Nominees Pty Ltd 1,329,145 0.66Collier Charitable Fund Custodian Corporation 1,000,000 0.49Mr Robert Otto Albert 1,000,000 0.49Cambooya Pty Limited 833,616 0.41

ASX Additional Information97

Annual Report 2008

3. Unitholders continuedTwenty largest quoted unitholders continued

Ordinary unitsName Number held % of ordinary units

Ms Danita Rae Lowes 762,220 0.38Mr Paul Donohue and Mrs Suzanne Donohue 579,784 0.29HSBC Custody Nominees (Australia) Limited 529,307 0.26Waylan Bay Nominees Pty Ltd 500,000 0.25Marielle Pty Ltd 475,401 0.23Favermead Pty Ltd 442,000 0.22Mr Salvatore Cutuli and Mrs Dina Cutuli 425,000 0.21Perpetual Trustees Consolidated Limited 411,235 0.20

4. On-market buy-backThere is no current on-market buy-back.

5. Class of unitsThe only class of units on issue are ordinary units.

6. Transactions during the periodThere were a total of 140 listed and five unlisted transactions relating to the purchase of securities during the period, with total brokerage cost of $28,684.

7. Summary of investmentsAt 27 August 2008, the Consolidated Entity held investments in the following entities:

Unlisted Unlisted

APN Champion Retail Fund Investa First Industrial Trust APN National Storage Property Trust Investa Second Industrial Trust APN Regional Property Fund MAB Diversified Property Trust APN UKA Poland Retail Fund Mirvac PFA Diversified Property Trust APN UKA Vienna Retail Fund Multiplex Development and Opportunity Fund Austock Childcare Fund Multiplex New Zealand Property Fund Centro MCS 21 Northgate Property Trust Centro MCS 22 Pengana Credo European Property Trust Centro MCS 28 Reed Property TrustCharter Hall Diversified Property Fund Rimcorp Property Trust #3 Charter Hall Umbrella Fund St Hilliers Enhanced Property Fund #2 FKP Core Plus Fund Stockland Direct Retail Trust No. 1 Gordon Property Trust Stockland Direct Retail Trust No. 3ING Real Estate Direct Office Fund The Child Care Property Fund Investa Diversified Office Fund The Essential Health Care Trust Investa Fifth Commercial Trust Westpac Diversified Property Fund

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ASX Additional Information

7. Summary of investments continued

A-REIT A-REIT

Abacus Property Group Macquarie DDR Trust APN UKA European Retail Trust Macquarie Office Trust Aspen Group Mirvac GroupAustraland Property Group Mirvac Industrial Trust Australian Education Trust Mirvac Real Estate Investment Trust Cento Retail Group Multiplex European Property Fund Challenger Diversified Property Group Multiplex Prime Property Fund Challenger Wine Trust Reckson New York Trust Cromwell Group Rubicon America Trust Dexus Property Group Rubicon Europe TrustGalileo Japan Trust Rubicon Japan Trust GPT Group StocklandING Real Estate Communities Group Tishman Speyer Office Fund Macarthur Property Securities Fund Valad Property GroupMacquarie Countrywide Trust

8. Voting rightsRefer to Note 15 of the financial statements for details of voting rights.

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Annual Report 2008

Conservation House, WellingtonMultiplex New Zealand Property Fund

100


Performance at a Glance 6

Portfolio Analysis 8

Message from the Chairman 10

Fund Manager’s Year in Review 12

Investment Portfolio 20

Top 12 Unlisted Property Investments 22

Board of Directors 28

Corporate Governance Statement 30

Investor Relations 38

Financial Report 40

Corporate Directory IBC

Underlying property assets

Experienced managers

Different property investments

3,000 5931

Contents

Responsible EntityBrookfield Multiplex Capital Management Limited 1 Kent Street Sydney NSW 2000 Telephone: (02) 9256 5700 Facsimile: (02) 9256 5188

DirectorsPeter Morris Brian Motteram Robert McCuaig Brian Kingston Mark Wilson

Company SecretaryNeil Olofsson

Registered Office1 Kent Street Sydney NSW 2000 Telephone: (02) 9256 5700 Facsimile: (02) 9256 5188

CustodianANZ Nominees Limited Level 25, 530 Collins Street Melbourne VIC 3000 Telephone: 1800 177 254

Stock ExchangeThe Fund is listed on the Australian Securities Exchange (ASX Code: MPF). The Home Exchange is Sydney.

AuditorKPMG 10 Shelley Street Sydney NSW 2000 Telephone: (02) 9335 7000 Facsimile: (02) 9299 7077

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Corporate Directory

The cover and first 40 pages of this document are printed on paper sourced from plantations and sustainable forests, is Elemental Chlorine Free (ECF) and holds an ISO14001 environmental accreditation. The last 60 pages are printed on an Australian-made stock which is Elemental Chlorine Free (ECF).

Annual Report 2008Multiplex Acumen

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Annual Report

Annual Report 2008Multiplex AcumenProperty FundARSN 104 341 988

Responsible EntityBrookfi eld Multiplex Capital Management Limited ACN 094 936 866, AFSL 223809

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