Trust update

Following the marketing campaign in July 2010, we exchanged contracts for the sale of the property at a price consistent with the current book value. The contracts are now unconditional with settlement scheduled for late November. Investors can expect to receive a capital distribution, representing the majority of the sale proceeds within two weeks of settlement.

Given the leasing activity of the past 18 months, and in particular AGL’s renewed commitment to the building, we believe that the value of the property has been maximised for the medium term. For this reason combined with the trust’s imminent expiry in June 2011, we believe a sale at this time, for the price achieved, is in investors’ best interests.

Provided the sale proceeds as contracted, we expect the trust will be wound up, with net proceeds distributed to investors. The bulk of this would be distributed in mid to late December 2010, with the balance to follow upon a full reconciliation of the accounts of the trust. This is likely to be in March 2011.

Distributions and redemptions

The trust currently pays an annualised distribution of seven cents per unit. This distribution is funded by the rental income from the property. Assuming the sale proceeds to settlement, the trust will then be wound up. During the wind up period all outstanding income and expenses will need to be finalised and an independent audit of the fund completed. This process generally takes up to three months. A capital distribution of approximately $1.12 per unit will be made in two instalments following settlement of the sale. The first instalment, representing the majority of the sale proceeds will be distributed approximately two to three weeks after completion of the sale, with a final payment of any remaining monies following the final audit and payment of all expenses approximately three months after settlement.

Debt

Provided the sale proceeds to settlement, the trust’s $10.7 million debt with Bankwest will be repaid following settlement.

Sale of Funds Management business

On 6 October 2010, Becton announced the sale of its Funds Management business to 360 Capital Group. We are working on obtaining all the necessary approvals and settling the sale before the end of the calendar year. The sale is the culmination of more than two years’ work to achieve a longer term capital management solution for the funds. It will provide the funds with the backing of a debt-free specialist property funds manager which in turn will provide the funds with enhanced prospects of attracting capital where needed. For further information about the sale please refer to the CEO’s letter in this edition of Review and to the FAQs on the Becton Investment Management website: www.bim.com.au.