Vicinity Centres Re : FY17 VCT Financial Report

Financial report for the year ended

30 June 2017

Vicinity Centres Trust

ARSN 104 931 928 comprising

Vicinity Centres Trust and its Controlled Entities

Responsible Entity of Vicinity Centres Trust Vicinity Centres RE Ltd

ABN 88 149 781 322

Vicinity Centres Trust | Financial report for the year ended 30 June 2017

Directors' Report 3

Auditor's Independence Declaration 8

Statement of Comprehensive Income 9

Balance Sheet 10

Statements of Changes in Equity 11

Cash Flow Statement 12

Notes to the Financial Statements 13

1. Segment information 15

2. Earnings per unit 15

3. Taxes 15

4. Investment properties 16

5. Equity accounted investments 19

6. Interest bearing liabilities and derivatives 20

7. Capital and financial risk management 23

8. Contributed equity 26

9. Receivables and other assets 27

10. Payables and other financial liabilities 28

11. Provisions 28

12. Remuneration of the Responsible Entity and Employees 29

13. Notes to the cash flow statement 29

14. Auditor's remuneration 30

15. Parent entity financial information 30

16. Related parties 31

17. Commitments and contingencies 32

18. Other accounting matters 32

19. Events occurring after the reporting date 34

Directors' Declaration 35

Independent Auditor's Report 36

Vicinity Centres Trust | Financial report for the year ended 30 June 2017

The Directors of Vicinity Centres RE Ltd, the responsible entity of Vicinity Centres Trust (the Trust or VCT), present the financial report of Vicinity Centres Trust and its controlled entities (VCT Group or the Trust Group) for the year ended 30 June 2017. The Trust is stapled to Vicinity Limited to form the stapled Group, Vicinity Centres, which is traded collectively on the Australian Securities Exchange under the code 'VCX'. Accordingly the financial report for Vicinity Centres Trust should be read in conjunction with the financial report of Vicinity Centres available at vicinity.com.au.

The responsible entity (RE) of the Trust is Vicinity Centres RE Ltd. The registered office and principal place of business of Vicinity Centres RE Ltd is Level 4, Chadstone Tower One, 1341 Dandenong Road, Chadstone, Victoria 3148.

The following persons were members of the Vicinity Centres RE Ltd Board from 1 July 2016 and up to the date of this report unless otherwise stated:

1. Chairman

   Peter Hay (Independent)

2. Non-executive Directors Charles Macek (Independent)1 David Thurin

   Debra Stirling (Independent)1 Karen Penrose (Independent) Peter Kahan

   Richard Haddock AM (Independent) (retired 30 April 2017) Tim Hammon (Independent)

   Trevor Gerber (Independent) Wai Tang (Independent)

3. Executive Director

Angus McNaughton (CEO and Managing Director)2

Carolyn Reynolds Michelle Brady

1 Mr Charles Macek and Ms Debra Stirling have announced their intent to retire as non-executive directors at the Annual General Meeting to be held on 16 November 2017.

2 As announced on 22 June 2017, CEO and Managing Director, Mr Angus McNaughton, has advised of his intention to retire during the 2018 financial year. On 11 August 2017, the Group announced Mr Grant Kelley would succeed Mr Angus McNaughton as CEO and Managing Director, with a planned commencement date of 1 January 2018.

Vicinity Centres Trust | Financial report for the year ended 30 June 2017

The Trust Group has its principal place of business at Level 4, Chadstone Tower One, 1341 Dandenong Road, Chadstone, Victoria 3148. The principal activity of the Trust Group during the year was property investment.

A detailed review of the results and operations for the Vicinity Centres Group is contained in the Directors' Report in the Vicinity Centres Group 30 June 2017 Annual Report which is available at vicinity.com.au. Key highlights of the results and operations of the Trust are outlined below:

1. Financial performance

   The statutory net profit after tax of the Trust Group for the year ended 30 June 2017 was $1,617.6 million, an increase of $351.4 million on the prior year (30 June 2016: $1,266.2 million). This increase was primarily due to revaluation gains on investment properties and lower mark-to-market losses on derivatives as compared to the prior year. Statutory result highlights for the current year included:

   • Total revenue and income of $1,268.8 million;

   • Positive operating cash flows of $696.9 million;

   • Property revaluation gains for the year of $931.1 million;

   • Basic earnings per unit of 40.86 cents; and

   • Distributions per unit of 17.3 cents.

2. Financial position

   At 30 June 2017 the Trust's net assets were $11,620.8 million, up $932.8 million from $10,688.0 million at 30 June 2016. This increase was primarily due to an increase in the investment property balance by $1,007.8 million to $15,661.4 million (including held for sale properties). This movement included:

   • Property revaluation gains for the year of $931.1 million;

   • The acquisition of investment properties valued at $151.1 million, offset by disposals totalling $437.9 million; and

   • Development spend, most notably at Chadstone, Mandurah Forum and The Glen.

3. Capital management

During the year, the following financing activities have occurred:

• US $144.0 million of US$ Private Placement Notes (USPPs) expired on 7 February 2017 and were repaid through existing available bank debt facilities;

• $200.0 million of 7-year and $200.0 million of 10-year A$ Medium Term Notes (AMTNs) were issued on 26 April 2017. The proceeds of the issue were used to repay existing bank facilities and for general corporate purposes. $260.0 million of existing bank debt facilities were cancelled following this issue;

• A thirteen month extension of certain bank debt facilities to improve the debt expiry profiles; and

• Net repayments of existing facilities have been made throughout the year from asset sales, partially offset by funds drawn for capital expenditure.

The Directors are not aware of any matter or circumstance not otherwise dealt with in the Directors' Report or the Financial Statements that has significantly affected or may significantly affect the operations of the Trust Group, the results of those operations, or the state of the Trust Group's affairs in future financial years.

Total distributions declared by Vicinity Centres Trust during the year were as follows:

The final distribution of 8.6 cents per unit will be paid on 30 August 2017.