Brookfield Prime Property Fund : Proposal from Brookfield to acquire units in the Fund

7 April 2017‌

Brookfield Capital Management Limited (BCML) as Responsible Entity for Brookfield Prime Property Fund (BPA or the Fund) announces a proposal from Brookfield BPPF Investments Pty Limited as trustee for Brookfield BPPF Investments Trust (Brookfield) to buy the remaining units in the Fund.

• BCML has entered into an Implementation Deed with Brookfield in relation to a proposal to implement a trust scheme to acquire the units in the Fund not currently owned by Brookfield and its related bodies corporate (Proposal);

• the Proposal is subject to a number of conditions that need to be satisfied before the Proposal can be implemented (including unitholder approval);

• the offer price under the Proposal is $8.89 per unit less the amount of any distributions paid or payable on or after 28 March 2017. As announced on 22 March 2017, BCML has declared a 7.5c per unit distribution which is payable to unitholders on 28 April 2017 and accordingly the adjusted offer price, as at the date of this announcement, is $8.815 per unit (Adjusted Offer Price);

• the Adjusted Offer Price represents a premium of approximately:

  • 18% to the closing price on ASX on 6 April 2017 of $7.50 per unit;

  • 16% to the 30 day volume weighted average price of $7.59 per unit; and

  • 32% to the 90 day volume weighted average price of $6.69 per unit;

• the Independent Directors of BCML intend to recommend the Proposal subject to receipt of a report from an independent expert and in the absence of any other proposal which is superior and in the best interests of unitholders;

• certain unitholders have expressed indicative support for the Proposal (further details are set out below); and

• a meeting of unitholders will be held to consider and vote on the Proposal. The meeting is currently targeted to occur on 14 June 2017. A Notice of Meeting and Explanatory Memorandum including the independent expert's report is anticipated to be sent to unitholders on or around 18 May 2017.

  Implementation Deed

  A copy of the Implementation Deed is attached.

  A number of conditions under the Implementation Deed are currently outstanding.

  The conditions relating to unitholder approval and regulatory approvals cannot be

  waived and if those conditions are not satisfied, the Proposal will not proceed. Other conditions may be waived in certain circumstances as set out in the Implementation Deed.

  The Implementation Deed may be terminated in limited circumstances, including if, between 7 April 2017 and 6:00 pm on the day before the unitholder meeting, BCML receives an alternative proposal which is superior to the Proposal and in the best interests of unitholders.

  Resolutions to be put to unitholders

  In order to implement the Proposal BCML is proposing two resolutions for unitholders' consideration, both of which must be approved.

  Resolution 1

  Unitholders must approve amendments to the Constitution, as required by section 601GC of the Corporations Act, to authorise the transfer of all units to Brookfield. These amendments must be approved by a special resolution which requires approval by at least 75% of votes cast by unitholders entitled to vote on the resolution. Members of the Brookfield Group will not be entitled to

  vote on the resolution.

  Resolution 2

  Unitholders must approve acquisition of the units by Brookfield for the purposes of item 7 section 611 of the Corporations Act by an ordinary resolution. To be passed, the ordinary resolution requires approval by more than 50% of votes cast by unitholders entitled to vote on the resolution. Members of the Brookfield Group will not be entitled to vote on the resolution.

  Unitholder support for the Proposal

  Following Brookfield's approach to BCML and before the Independent Directors determined to put forward the Proposal and commit to the associated time and expense, BCML sought an indication from the major independent unitholders as to whether they might in principle support the Proposal, subject to receipt of full information.

  In this context:

• Phoenix Portfolios which holds a relevant interest in approximately 5.5% of units on issue, has indicated that it currently intends to vote in favour of the Proposal in the absence of a superior proposal. However, it has reserved the right to change this intention and will await the release of the Explanatory Memorandum including the independent expert's report in respect of the Proposal before reaching a concluded view; and

• Greig & Harrison Pty Ltd, which holds a relevant interest in approximately 4.9% of units on issue, has indicated that it currently intends to vote in favour of the Proposal in the absence of a superior proposal. However, it has reserved the right to change this intention (including if the Independent Directors do not unanimously recommend the Proposal, if the independent expert does not conclude that the Proposal is fair and reasonable and in the best interests of

unitholders not associated with Brookfield, if the valuation of the Fund's property portfolio materially improves, or if the Proposal is to be implemented after 30 June 2017). This indication of current intention is based on the information currently available to it, pending the release of the Explanatory Memorandum and independent expert's report for the Proposal on which its final decision will be based.

BCML will engage an independent expert to provide an independent expert's report in relation to the Proposal.

The Notice of Meeting and Explanatory Memorandum will also contain a recommendation by the Independent Directors of BCML having regard to the advantages and potential disadvantages of the resolutions and the opinion of the independent expert.

A current indicative timetable for the Proposal is set out in the Appendix to this announcement.

The Notice of Meeting and Explanatory Memorandum, setting out the advantages and disadvantages of the proposal, key dates and which will include the independent expert's report is being prepared and is anticipated to be released through the ASX and mailed to unitholders on or around 18 May 2017.

BCML recommends that unitholders consider carefully the contents of this announcement and the information to be contained in the Notice of Meeting and Explanatory Memorandum, and to consult with their investment, tax, legal or other professional adviser.

Additional information about the Fund and its assets can be found at www.au.brookfield.com.

--ends--

Brookfield Customer Service Ph: 1800 570 000