BLACKWALL  PROPERTY  FUNDS  LIMITED    ABN  37  146  935  131  Level  1,  50  Yeo  Street,  Neutral  Bay,  Sydney  NSW  2089  Australia  |  PO  Box  612,  Neutral  Bay,  Sydney  NSW  2089  Australia  |  Tel  +61  2  9033  8611  |  Fax  +61  2  9033  8600  |  www.blackwallfunds.com.au    

   

CEO’s  Address  To  Shareholders  Annual  General  Meeting  

11.15  am  30  November  2011    

 About  BlackWall  BlackWall  Property  Funds  Limited  listed  on  the  ASX  on  21  October  2011.    Our  businesses  generate   fee   income   from   the  management   of   a   real   estate   property   portfolio   valued   at  over  $450  million.      Recent  Highlights  In   recent   times   the  Group’s   assets   under  management   have   grown  by   over   $210  million  through  the  acquisition  of  a  number  of  distressed  funds  management  platforms.      Although  sentiment  and  general  economic  conditions  have  remained  challenging  we  have  completed  some  significant  transactions.  Specifically  we  have  executed  over  20,000  sqm  of  leasing  transactions,  renewed  or  refinanced  over  $175  million  of  senior  debt  and  listed  P-­‐REIT  (our  diversified  property  trust)  on  the  ASX  (Code:  PXT).  While  we  continue  to  work  on   some   legacy   issues   within   this   fund   the   portfolio   is   stable   and   well   positioned   for  growth.      Earnings  and  Dividend  Guidance  BlackWall  businesses  are  expected  to  generate  a  pre-­‐tax  profit  for  the  full  year  to  30  June  2012  of  approximately  $2.5m  and  on  this  basis  we  aim  to  pay  a  maiden  dividend  for  the  full  year  to  30th  June  2012.    Medium  term  Strategy  Our  goal  is  to  grow  funds  under  management  to  over  $1  billion  over  the  medium  term.      With   ongoing   negative   market   sentiment   in   the   property   funds   management   space   we  continue   to   identify   opportunities   similar   to   those  we   executed   in   late   2009.  As   in   2009  some   of   these   deals   will   be   distressed  with   BlackWall  managing   the   stabilisation   of   the  financial   structures   and   repositioning   of   their   assets.   We   are   working   on   executing   a  number  of  transactions  both  at  the  fund  and  corporate  level.      Our   experience   over   the   past   three   years   shows   that   such   opportunities   can   generate  significant  growth  in  assets  under  management.      Long  Term  Strategy  The  demand  for  retail  property  fund  investments  has  contracted  over  the  last  three  years,  however   we   expect   that   investment   strategies   going   forward   will   include   a   prudent  allocation  to  property.  There  has  also  been  a  reduction  in  the  number  of  boutique  property  fund   managers   competing   for   capital   in   property   investment.   These   factors   combine   to  make  the  fundamentals  of  the  retail  property  funds  management  model  compelling.    

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30  November  2011  

-­‐2-

   Critical  to  our  long  term  business  model  are  the  relationships  with  our  investors  and  their  advisors.   We   have   commenced   the   roll   out   of   a   technology   based   investor   and   adviser  platform  in  order  to  streamline  investment  management  and  information  flow.  We  expect  this  initiative  to  be  completed  over  the  coming  9  months.      Above  all  else  we  are  acutely  aware  that  our  success  turns  on  the  decisions  we  have  made,  and  will   continue   to  make,  with   respect   to   the  property  owned  by  our   investors.  We  see  this  focus  as  our  key  strength  and  that  which  defines  our  activities.    More  Information  Attached   to   this   address   is   a   presentation   on   our   business   activities   and   recent  achievements.      The  presentation   includes  a  description  of   two  projects  which  demonstrate  our  business  model:    

• The  WRV  Unit  Trust  was  established   to  acquire  a   failed  bulky  goods   retail   centre.  The   property   has   been   repositioned   into   The  Woods   Action   Centre  which   is   now  fully  let  and  comprises  over  10,000  sqm  of  leisure  uses,   including  ten  pin  bowling,  go-­‐karting,  rock-­‐climbing  and  a  children’s  play  centre;  

• The  BlackWall  Storage  Fund,  since  its  commencement  in  2006,  has  generated  cash  distributions  in  excess  of  10%  per  annum  and  a  total  IRR  of  14%.    

 In  conclusion  I  would  like  to  thank  BlackWall’s  investors,  staff,  shareholders  and  directors  for  their  support  and  wish  all  a  happy  and  safe  holiday  season.        Yours  Faithfully            Stuart  Brown  Chief  Executive  Officer    

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   Annual  General  Meeting    CEO  Presentation  

 November  2011  

Silver  @  The  Exchange,  Gold  Coast   APN,  Yandina  

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Overview  

•  Manager   of   real   estate  investment  capital  

•  Fee  income  from  $450m  AUM  

 

•  Targeting  $1b  AUM  

AGM  November  2011   2  

50  Yeo  Street,  Neutral  Bay  

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Corporate  Highlights  

•  Forecast   pre-­‐tax  proFit  of  $2.5  m  for  2012  

•  BWF  listed  21  October  2011  

•  85%   growth   in   AUM  from  2009  to  2011  

 AGM  November  2011   3  

Silver  @  The  Exchange,  Gold  Coast  

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Key  Financial  Data  •  51,326,021  shares  on  issue  

•  Market  Capitalisation  

–  $12.8m    (@  25c  listing  price)  

–  $  7.7m  (@  15c  VWAP)  

•  Forecast  pre-­‐tax  proFit   -­‐  $2.5  million  

•  Forecast  EPS  -­‐  3  cents/share  

AGM  November  2011   4  

Eye  Hospital,  Canberra  

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Balance  Sheet  at  31  Oct  2011  Current  Assets   Cash  at  Bank    $930,000         Accounts  Receivable      $450,000    Total  Current  Assets            $1,380,000    Financial  Assets   Loans  and  Other  Receivables    $390,000         Investment  in  P-­‐REIT  Units*    $5,150,000         Investment  in  Bakehouse  Bonds    $5,000,000         Investment  in  Managed  Funds    $960,000         Investment  in  Joint  Ventures    $110,000    Total  Financial  Assets        $11,610,000    Other  Assets   Property  Plant  &  Equipment    $770,000         Other  assets    $120,000         Goodwill    $420,000    Total  Other  Assets        $1,310,000    Total  Assets        $14,300,000    

Current  Liabilties   Trade  and  other  payables    ($920,000)  Total  Current  Liabilities        ($920,000)  Non  Current  Liabilities   Borrowings    ($450,000)       Other  Liabilities    ($160,000)  Total  Non  Current  Liabilties        ($610,000)  Total  Liabilities        ($1,530,000)              Net  Assets        $12,770,000    

AGM  November  2011   5  *  17.2  million  units  at  NTA  price  of  30  cpu  

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Disciplines  •  Structured  Finance  

•  Fund,   Asset   and   Debt  Management  

•  Leasing,   Property   and  Development  Management  

•  Specialist  Management:  •  Pubs  •  Self-­‐Storage  •  Services  OfFices  

AGM  November  2011   6  

The  Bakehouse  Quarter  

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Portfolio  

AGM  November  2011   7  

48,000  sqm    

45,000  sqm    

41,000  sqm    

36,000  sqm    

34,000  sqm    Retail  

Commercial  

Industrial  

Pubs  &  Leisure  

Self-­‐Storage  

Total  Area  =  204,000  sqm  For

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Portfolio  Achievements  

AGM  November  2011   8  

•  Over  20,000  sqm  of  leasing    

•  $175  million  debt  renewed  or  reFinanced  

•  P-­‐REIT  lists  on  the  ASX  (Code:PXT)  

Telstra  House,  Canberra  

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Project  Examples  

AGM  November  2011   9  

Following  is  a  description  of  two  projects  that  illustrate   BlackWall’s   business   model   and  capabilities:  

•  BlackWall  Storage  Fund  

•  WRV  Unit  Trust  –  The  Woods  Action  Centre  

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AGM  November  2011   10  

BlackWall  Storage  Fund  

•  Retail   syndicate   issued   hybrid   property   securities   knows   as  PIPES  in  2006  

•  Syndicate  controls  three  self-­‐storage  facilities  in  the  ACT  region  •  Operations  are  under  the  brand  Capital  Self  Storage  •  Syndicate  members  have  earned  a  14%  IRR  since  inception  •  BlackWall  holds  an  option  to  roll  the  fund  for  further  terms  

    2007   2008   2009   2010   2011  

Annualised  Cash  Distributions     10.30%   10.30%   11.00%   11.30%   11.50%  Gross  Asset  Value   $14.9  m   $15.8  m*   $16.9  m*   $21.7  m#   $22.8  m  *Development  of  additional  storage  NLA  #Acquisition  of  a  $500,000  adjoining  property    

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The  Woods  Action  Centre  

AGM  November  2011   11  

The   property  was   a   substantially   vacant   bulky   goods   retail   centre   in   Villawood,  Western  Sydney,  generating  less  than  $200,000  gross  rental  per  annum.    

The   group   structured   a  wholesale   development   syndicate   to   acquire   the   site   in  2007.   The   group   has   undertaken   all   development/property   management   and  leasing,  as  well  as  arranging  debt  and  equity  structures.    

The  Woods  Action  Centre  is  now    a  substantial  entertainment  precinct  with  a  DA  lodged  to  expand  for  the  development   of   Australia’s   First  indoor  sky  diving  centre.  

Gross   revenue   is   currently   $1.6  million    which  is    expect  to  grow  to  $1.9  million.    

 

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The  Woods  Action  Centre  

AGM  November  2011   12  

Tenancy  Schedule    The  Wiggles     Kids  Play  Centre   1040  sqm     2013  AMF  Bowling  (ASX:  AAD)   Indoor  Bowling  &  Laser  Tag   3857  sqm     2018  Kartatak  Raceway   Indoor  GoKarting   2199  sqm     2016  Sydney  Indoor  Climbing  Gym   Indoor  Rock  Climbing   1235  sqm     2020  My  Dream  Receptions#   Function  Centre   803  sqm     10  year  term  Sydney  Sky  Divers#   Indoor  Sky  Diving   460  sqm     20  year  term  Coffee  Shop*   Coffee  Shop/Restaurant   181  sqm     -­‐  

#Lease  Executed  DA  pending  *  For  Lease  

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