Macquarie Goodman is pleased to announce the establishment of a new European fund to be named the Arlington European Logistics Fund (the “Fund”). The Fund has equity commitments that will allow it to hold a portfolio of prime industrial real estate exceeding €1.2 billion when fully invested.

Macquarie Goodman identified an opportunity to create an open ended Continental European industrial sector specialist fund to meet the increasing demand for direct property investment vehicles. The Fund will be Macquarie Goodman’s primary Continental European industrial investment partner and will benefit from the Group’s in house development capabilities and asset management expertise.

Mr Gregory Goodman, Group Chief Executive Officer of Macquarie Goodman and Chairman of the Fund said, “We are again delighted with the response from investors to the launch of this Fund.  The establishment of this Fund highlights the strengths of the Group’s strategy and in particular the advancement of the European platform.”

Arlington European Logistics Wholesale Fund
The Fund’s initial portfolio consists of 12 logistics properties located throughout Continental Europe’s major logistics markets. The portfolio has been priced at independent valuation (the initial portfolio is detailed in the annexure attached).

In line with Macquarie Goodman’s strategy of creating third party funds management businesses, the Fund will have a first right of refusal over Macquarie Goodman’s logistics development pipeline throughout Continental Europe.

The Fund will aim to provide long-term stable core property exposures, with a total equity return target of greater than 9.5% per annum and an initial annualised distribution yield of greater than 6.3% for CY07.

Investors have committed total equity of €625 million of which 24% is to be contributed initially.  The balance will be called by the Fund over a period of up to three years to fund further acquisition opportunities.  The long term gearing target of the Fund is 50%.

The capital raising has attracted a broad cross section of global institutions.  Macquarie Goodman’s co-investment will initially be approximately 40% with a subsequent sell down of part of this stake over H2FY07 to meet the demand of additional investors. In line with its strategy of holding significant co-investments in its managed funds, Macquarie Goodman is targeting a holding range of 20% to 30% over the long term.

All major decisions of the Fund will be approved by an Investment Committee which will be comprised initially of six members with two Macquarie Goodman executives and four directors to be appointed by the unit holders. Mr Goodman will be the Chairman of the Investment Committee.

Impact on Macquarie Goodman
The establishment of the Fund has previously been foreshadowed by the Group and is consistent with the stated strategy of creating third party funds management businesses. This Fund will compliment the Group’s investment management platform and will be a major focus for the growth of the Group’s European logistics operations.

Macquarie Goodman’s funds management business provides the capability to create, manage and grow new property funds for third party investors and provides Securityholders with stable income streams earned from these management activities.  Importantly, the long term growth and viability of the fund management platform is underpinned by the ability for third party fund investors to gain access to the Group’s development pipeline and to over 850 real estate professionals.

The Group will earn fund management fees for its role as manager of the Fund which are consistent with those charged by the Group across its managed fund platform.

The Group will receive gross cash proceeds of approximately €230 million which will initially be used by the Group to repay existing debt facilities.

Macquarie Bank Limited acted as financial adviser and sole lead manager in relation to the establishment of the Fund.
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For further information, please contact Macquarie Goodman:

Gregory Goodman
Group Chief Executive Officer
Tel: +61 2 9230 7400

Jeff Pulsford
CEO Arlington Securities
Tel: + 44 118 930 4141