Strong research support for Macquarie Property Income Fund

26 September 2005

Recently released independent research has endorsed the top performing Macquarie Property Income Fund (MPIF), giving strong support to the concept of using a tightly controlled geared investment strategy for listed property securities.

Managed Investment Assessments (MIA), the specialist property rating agency contracted to provide property ratings and property research to van Eyk Research, has recently given the fund a rating of 77, the upper end of the "quality" category and only 3 points below the rarefied "superior" rating.

Christopher Andrews, Division Director of Macquarie Property said: "We are pleased with this result. MIA conducted a very thorough review of the people and processes involved and we were impressed by their depth of understanding of what we are aiming to achieve for our investors. A score of 77 means MPIF should be included on a wide variety of financial planner recommended lists, master funds and wrap menus."

MPIF was launched in June 2003, is invested in listed property trusts and borrows up to 50 per cent to increase the gross value of its assets. For the year to end June 2005, the fund returned over 29 per cent in total, of which 18 per cent was the income distribution. MPIF has been the top performing property securities fund for the last two consecutive years, as measured by independent funds research house, Morningstar.

The underlying concept of investing in listed property securities on a leveraged basis has also been investigated separately by Mercer Investment Consulting which gave a positive overall view as to the merits of personal investors gearing into listed property securities.

"Whilst MPIF is perceived to be a niche investment strategy, we have always believed that, although the concept is not well understood, it is an extremely robust investment strategy. Plenty of people invest in a single property asset on a negatively geared basis. How much better to invest in a diversified portfolio on a positively geared, income-generating basis?" said Mr Andrews.

The research highlighted, amongst other attributes, MPIF's highly competitive fees (below those of the sector average), superior income returns and a strong focus on risk control and a price volatility no greater than investing in the broader share market.

Macquarie also released a series of investor strategies to assist financial advisers who are looking for ways to help their clients achieve financial security by the time they retire, with the ultimate aim of building a property portfolio that generates substantial income for the client in retirement. "MPIF is a good example of the type of property fund that can be used when implementing such a strategy," said Mr Andrews.

The MIA Research Report draws the following conclusions about the respective strengths of the Fund, and its Manager, Macquarie Bank: "The Macquarie Property Income Fund has out-performed since its inception. This has been delivered through gearing strategies that have delivered value for investors whilst mitigating volatility normally associated with geared funds. The appointment of Credit Suisse as the second investment manager adds diversity of investment style. Management fees are relatively low for a fund of this type. These factors contribute to our rating of the Fund as a "Quality" Product."

For further information, please contact:

Christopher Andrews
Division Director
Macquarie Property
Tel: 03 9635 8413

Robert Morton
Division Director
Macquarie Property
Tel: (61 2) 8232 7363

Robyn Turner
Senior Communications Manager
Macquarie Banking and Property Group
Tel: (612) 8232 6989

http://www.macquarie.com.au/au/property/direct/property_funds/overview.htm

This document has been prepared by Macquarie Bank Limited ABN 46 008 583 542 (MBL) without taking into account the personal objectives, financial situation or needs of particular individuals. Before acting, we recommend potential investors speak to a financial and/or other professional advisor.

Past performance is not a reliable indication of future performance. Due care and attention has been exercised in the preparation of forecast information, however forecasts, by their very nature, are subject to uncertainty and contingencies, many of which are outside the control of MBL. Actual results may vary from any forecasts provided.