asx code : mck macarthurcook industrial property fund ... fileand listing proposal for the fund (as...

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16 October 2007 ASX Code : MCK

MacarthurCook Industrial Property Fund – Explanatory Booklet for Unitholders

Attached to this announcement is a copy of the Notice of Meeting and Explanatory Booklet lodged by MacarthurCook Fund Management Limited, a wholly owned subsidiary of MacarthurCook Limited, in connection with the meeting of unitholders in the MacarthurCook Industrial Property Fund (the Fund) to be held on Monday, 26 November 2007. The Meeting of Unitholders will consider resolutions to implement the Restructure and Listing Proposal for the Fund (as announced earlier today).

The Notice of Meeting and Explanatory Booklet are expected to be dispatched to Unitholders in the Fund on 2 November 2007 (after the expiry of the 14 day ASIC review period prescribed by section 218(1) of the Corporations Act).

For further information, contact: Mr Craig Dunstan Managing Director MacarthurCook Limited Ph: +61 3 9660 4555

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About MacarthurCook:

MacarthurCook Limited (MCK) is an Australian Securities Exchange listed company with offices in Australia and Singapore, specialising in the investment management of direct property, real estate securities and mortgage assets.

MacarthurCook manages approximately $A1.5 billion on behalf of over 25,000 investors. The ISO accredited organisation is the investment manager for thirteen funds including: MacarthurCook Industrial REIT, MacarthurCook Industrial Property Fund, MacarthurCook Office Property Trust, MacarthurCook Retail Property Trust, MacarthurCook Diversified Property Income Fund, MacarthurCook Mortgage Fund, Advance Mortgage Fund, MacarthurCook Property Securities Fund, MacarthurCook Asian Real Estate Securities Fund, Advance Property Securities Fund, RMR Asia Pacific Real Estate Fund and RMR Asia Real Estate Fund.

The MacarthurCook Property Securities Fund is listed on the Australian Securities Exchange and the Singapore Securities Exchange. The MacarthurCook Asian Real Estate Securities Fund is listed on the Australian Securities Exchange. The MacarthurCook Industrial REIT is listed on the Singapore Securities Exchange. The RMR Asia Pacific Real Estate Fund and RMR Asia Real Estate Fund are listed on the American Stock Exchange.

The Company has approximately 1,000 shareholders, the largest of which are Ascalon Capital Managers Limited, an associate of the St George Banking Group with about 18 per cent, and MacarthurCook directors and senior executives, who hold 15 per cent.

In 2005 and 2006 BRW magazine named MacarthurCook as one of Australia’s fastest-growing companies in its Fast 100 list.

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IMPORTANT INFORMATION This Explanatory Booklet is an important document that needs your urgent attention. Please read the information in this Explanatory Booklet carefully.

It is important that you either attend the Unitholder Meeting or complete and lodge the enclosed proxy form. If you are in any doubt as to what action you should take, you should consult your stockbroker, solicitor, accountant or other professional adviser.

The Explanatory Booklet is dated 16 October 2007.

NOTICE OF MEETING AND EXPLANATORY BOOKLETissued by MacarthurCook Fund Management Limited (ABN 79 004 956 558)as responsible entity of the MacarthurCook Industrial Property Fund (ARSN 104 606 573)

MACARTHURCOOKINDUSTRIAL PROPERTY FUNDF

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01 MacarthurCook Industrial Property Fund Notice of Meeting and Explanatory Booklet

Key Dates

Event Date

Restructure and the Listing Proposal Announced Tuesday, 16 October 2007

Offers open Friday, 2 November 2007

Offers close Thursday, 22 November 2007

Last time for lodging proxies 11am (Melbourne time) on Saturday, 24 November 2007

Unitholder meeting 11am (Melbourne time) on Monday, 26 November 2007

Restructure Implementation Date and issue of Stapled Securities under the Offers

Thursday, 29 November 2007

Despatch of holding statements Monday, 3 December 2007

Trading of Stapled Securities on ASX commences Wednesday, 5 December 2007

1. The above dates are indicative only and are subject to change.2. The Restructure and the Listing Proposal will only be implemented if both Resolutions are approved by the requisite majority of Unitholders at the

Unitholder Meeting.

IMPORTANT NOTICE

Important Information

This Explanatory Booklet (which comprises the Notice of Meeting and Explanatory Memorandum) is an important document that needs your urgent attention. Please read the information in this Explanatory Booklet carefully. It is important that you either attend the Unitholder Meeting or complete and lodge the enclosed proxy form. If you are in any doubt as to what action you should take, you should consult your stockbroker, solicitor, accountant or other professional adviser. Please refer to the Glossary in Section 9 for the definitions of terms used in this Explanatory Booklet.

Disclaimers

The information contained in this Explanatory Booklet (the Information) does not constitute financial product advice. It has not been prepared taking into account your particular investment objectives, financial situation or particular needs. You should assess whether it is appropriate in the light of your circumstances before acting on it. If you are unsure you should seek the help of a professional adviser. While all reasonable care has been taken in relation to the preparation and collation of the Information, no person (including MacarthurCook Fund Management Limited) accepts responsibility for any loss or damage (however occurring) resulting from the use or reliance on the Information by any person. Prior performance is not indicative of future performance and no guarantee of future returns is implied or given.

Contents02 Letter from the Chairman04 Steps for Unitholders 05 The Restructure and the Listing Proposal09 Advantages and Disadvantages of the

Restructure and the Listing Proposal13 Tax Consequences15 Specific Information in Relation

to Resolution 1

16 Specific Information in Relation to Resolution 2

18 Notice of Meeting21 Glossary23 Schedule 1 – Independent Expert’s Report27 Schedule 2 – Amendments

to the Constitution30 Corporate Directory

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Dear Unitholder,

On behalf of the Board of Directors of MacarthurCook Fund Management Limited (MacarthurCook), it is my pleasure to invite you to a meeting of Unitholders in the MacarthurCook Industrial Property Fund (the Fund) at which Unitholders will be asked to vote on resolutions which, if approved, will facilitate:

a restructure of the Fund (the Restructure); and •

a combined rights issue and general public offer of Stapled Securities in •the Fund and the listing of the Fund on the ASX (the Listing Proposal).

If resolutions are approved, the Directors believe that it will enable them to transform the Fund into a listed property trust that can continue to deliver strong returns to Unitholders. This Explanatory Booklet contains information relevant to your decision as to how you should vote at the Unitholder meeting.

What is the Restructure?The Restructure is described in Section 3.3. The Restructure essentially involves:

Creating a ‘stapled security’ structure for the Fund, through the issue for no consideration of one Option •(with a $1.10 exercise price) for each existing Unit, and the stapling of each Option to a Unit so that they may only be traded as one security – a Stapled Security – until the unstapling date of 29 August 2008. After the unstapling date, Units and Options will be able to be traded separately and Options will be able to be exercised any time up to 31 August 2009.

Amending the Fund’s Constitution to make it suitable for a listed property trust.•

Reducing the fees payable to MacarthurCook as responsible entity of the Fund and issuing Stapled •Securities to MacarthurCook to compensate it for the reduction in fees.

What is the Listing Proposal?The Listing Proposal is described in Section 3.4. The Listing Proposal essentially involves:

The Fund making a public offer of Stapled Securities under a combined one for one non-renounceable •rights issue and general public offer.

The admission of the Fund to the official list of ASX and the Stapled Securities being granted official •quotation by ASX.

What are the advantages and disadvantages of the Restructure and the Listing Proposal?The Directors’ assessment of the advantages and disadvantages of the Restructure and the Listing Proposal are described in Section 4. The advantages include:

the grant to Unitholders for no consideration of one Option for each Unit they hold on the Restructure •Record Date;

the ability for Unitholders to realise their investment in the Fund through selling on the ASX;•

a reduced fee structure for the Fund going forward; and•

an increased ability for the Fund to increase the size of, and diversify, its investment portfolio.•

1. Letter from the Chairman

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The disadvantages of the Restructure and the Listing Proposal include:

the risks associated with expansion of the Fund’s investments into overseas markets;•

the market risks associated with having the Fund listed on the ASX; and •

the dilution of Unitholders’ existing interests in the Fund (through the issue of Stapled Securities to •MacarthurCook, the rights issue and general public offer and the grant of Options).

The Directors believe that implementing the Restructure and the Listing Proposal place the Fund in a good position to take advantage of the significant opportunities available in the global industrial real estate markets.

The Directors have formed the view that the advantages of the Restructure and the Listing Proposal outweigh the disadvantages and that, accordingly, the Restructure and the Listing Proposal are in the best interest of Unitholders.

The need for Unitholder approvalThe Restructure and the Listing Proposal are conditional on Unitholders approving a restructure of the Fund at the Unitholder meeting to be held on Monday, 26 November 2007. If the resolutions at the Unitholder meeting are not approved, the Restructure and the Listing Proposal will not proceed.

I encourage you to read this Explanatory Booklet and the accompanying PDS carefully, as they contain detailed information on the Fund and the Restructure and the Listing Proposal, and to exercise your right to vote at the Unitholder meeting. If you are unable to attend the Unitholder meeting, I encourage you to appoint a proxy to vote on your behalf.

Together with my fellow directors, I commend the Restructure and the Listing Proposal to you and look forward to sharing with you in the growth of the Fund.

Yours faithfully,

Richard Haddock

Chairman MacarthurCook Fund Management Limited

M a c a r t h u r C o o k F u n d M a n a g e m e n t L i m i t e d A B N 7 9 0 0 4 9 5 6 5 5 8 A F S L i c e n c e N o : 2 5 8 0 5 2

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1 R a f f l e s P l a c e , # 2 1 - 0 1 O U B C e n t r e , S i n g a p o r e 0 4 8 6 1 6 Te l e p h o n e + 6 5 6 3 0 9 1 0 5 0 Fa c s i m i l e + 6 5 6 5 3 4 3 9 4 2

E m a i l m a i l @ m a c a r t h u r c o o k . c o m . a u We b s i t e w w w. m a c a r t h u r c o o k . c o m . a u


1. Letter from the Chairman Continued

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04

Unitholder enquiries

If you have any questions, or wish to obtain more information on any matter contained in this Explanatory Booklet, please contact the Registry on 1300 731 849 or, from outside Australia, on +61 3 9415 4685.

2. Steps for Unitholders

This Section sets out the steps that Unitholders in the MacarthurCook Industrial Property Fund (the Fund) should take.

STEP 1: READ THIS EXPLANATORY BOOKLET AND THE PDS

The Notice of Meeting in Section 8 sets out the Resolutions upon which Unitholders are being asked to vote. You should read this Explanatory Booklet and the PDS (a copy of which accompanies this Explanatory Booklet) and decide which way you will vote on the Resolutions. If you are in any doubt as to what action you should take, you should contact your stockbroker, solicitor, accountant or other professional adviser.

STEP 2: VOTE ON THE RESOLUTIONS

You can:

vote in person at the Unitholder Meeting to be held on Monday, 26 November 2007; or•

vote by proxy by completing and returning the enclosed personalised Proxy Form.•

You are encouraged to attend and vote at the Unitholder Meeting. Details of the Unitholder Meeting are as follows:

Time: 11am (Melbourne time)

Date: Monday, 26 November 2007

Place: The Windsor Hotel, 111 Spring Street, Melbourne, Victoria, 3000

If you are unable to attend the Unitholder Meeting you may complete the enclosed personalised Proxy Form. On the Proxy Form you may nominate someone to vote on your behalf at the Unitholder Meeting and, if you wish, you may direct that person how to vote. If you appoint the Chairperson of the meeting, the Chairperson will vote as directed or, if no direction is given, will vote in favour of the Resolutions. Section 8 outlines the voting and eligibility requirements for the Unitholder Meeting.

Proxy Forms must be received no later than 11am (Melbourne time) on Saturday, 24 November 2007 and should be sent, in the envelope provided, to the Registry at the following address:

By Hand: By Mail:

Computershare Investor Services Pty Limited Yarra Falls452 Johnston StreetAbbotsford Vic 3067

Computershare Investor Services Pty LimitedGPO Box 242Melbourne Vic 3001

Alternatively, Proxy Forms may be faxed to the Registry at (03) 9473 2555.

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3. The Restructure and the Listing Proposal

3.1 BACKGROUND OF THE FUND

The MacarthurCook Industrial Property Fund (the Fund) is a registered managed investment scheme complying with Chapter 5C of the Corporations Act.

The Fund was launched in December 2003 and, since that time, has raised funds from retail and wholesale investors via product disclosure statements prepared in accordance with Part 7.9 of the Corporations Act.

The Fund owns a portfolio of 14 industrial properties located in New South Wales, Victoria, Queensland, Western Australia and Tasmania which, together, have been valued at approximately $160 million. These properties are leased to a mix of publicly listed and private corporations.

The units in the Fund (Units) are currently divided into two classes – Retail Units and Wholesale Units. The only difference between Retail Units and Wholesale Units relates to the management fees paid in respect of each class of Unit – with higher fees payable in respect of the Retail Units.

As at the date of this Explanatory Booklet there are:

approximately 730 holders of Retail Units holding •approximately 24.6 million Retail Units; and

approximately 120 holders of Wholesale Units •holding approximately 40.9 million Wholesale Units.

MacarthurCook Fund Management Limited (ABN 79 004 956 558) (MacarthurCook), the responsible entity of the Fund, is a wholly owned subsidiary of MacarthurCook Limited which is itself listed on the ASX. The MacarthurCook group of companies currently manages approximately $1.5 billion of assets in Australia and Asia, including funds listed on the ASX, the Singapore Stock Exchange and the American Stock Exchange.

Further information regarding the Fund is contained in the product disclosure statement for the Offers dated 16 October 2007 (the PDS), a copy of which accompanies this Explanatory Booklet.

3.2 WHAT IS THE PROPOSAL?

MacarthurCook, as responsible entity of the Fund, is proposing to implement a series of transactions that will, in broad terms, involve:

a restructure of the Fund (the • Restructure); and

a combined rights issue and general public offer of •Stapled Securities (the Offers), described in more detail below, and the admission of the Fund to the official list of ASX and for its Stapled Securities to be granted official quotation by ASX (the Listing Proposal).

Each of the components of the Restructure and the Listing Proposal is described in more detail below. However, to implement the Restructure and the Listing Proposal, existing Unitholders in the Fund will need to approve the Resolutions at the Unitholder Meeting on Monday, 26 November 2007.

3.3 RESTRUCTURE

The key components of the Restructure are as follows:

(a) Creating the Stapled Security Structure

The first component of the Restructure will involve the creation of a ‘Stapled Security’ structure for the Fund. This will involve the following steps:

On the Restructure Implementation Date, the rights •attaching to the Retail Units and the Wholesale Units being made the same, and the Retails Units and Wholesale Units forming one class referred to as ‘Units’.

On the Restructure Implementation Date, •MacarthurCook granting to those persons registered as Unitholders on the Restructure Record Date (Participating Unitholders), for no consideration, one option to subscribe for one Unit (an Option) for each Unit they hold on the Restructure Record Date. The grant of Options to Participating Unitholders will be made pursuant to the PDS (see section 13.6 of the PDS). The number of Units held by each Participating Unitholder will also be rounded up to the nearest number of Units on the Restructure Record Date (prior to the grant of Options).

Each Option will be stapled to the Unit in respect •of which it was granted, such that the Unit and the Option may only be traded together as one security (a Stapled Security) until 11.59pm (Melbourne time) on 29 August 2008 (the Unstapling Date).

In the period prior to the Unstapling Date, Units •cannot be issued unless an Option is issued and stapled to the Unit (and vice versa).

Effective from the Unstapling Date, the Options •and Units will be ‘unstapled’ and will be able to be traded separately.

The exercise price of the Option will be $1.10, being •the offer price under the Public Offer component of the Offers (see Section 3.4).

An Option will be able to be exercised in the period after •the Unstapling Date until 31 August 2009. Options not exercised by 31 August 2009 will lapse automatically.

The creation of the Stapled Security structure will require amendments to be made to the constitution of the Fund (the Constitution). These amendments are described in more detail in Section 6 and Schedule 2 and require the approval by Unitholders (as a special resolution) at the Unitholder Meeting.

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06

(b) Amending the Constitution for listing purposes

In addition to amending the Constitution to enable implementation of the Stapled Security structure, various other amendments need to be made to the Constitution so that the Constitution is in a form suitable for an ASX-listed property trust.

These amendments are described in more detail in Section 6 and Schedule 2 and require the approval by Unitholders (as a special resolution) at the Unitholder Meeting.

(c) Amending the fee structure for MacarthurCook and issuing Stapled Securities to MacarthurCook as compensation

The Restructure and the Listing Proposal involve the Fund changing its status from an unlisted property trust to a listed property trust. The second component of the Restructure will involve amending the fee structure paid by the Fund to MacarthurCook for acting as responsible entity of the Fund, to make it more appropriate for a listed property trust.

Below is a table which summaries the proposed amendments to the fee structure for MacarthurCook:

Fee Description Current Fee Amended Fee

Contribution fee Retail Units – 4% of application monies(A)

Wholesale Units – NilNil

Management fee Retail Units – 0.95% per annum of the Gross Asset Value of the Fund attributable to Retail Units(B)

Wholesale Units – 0.75% per annum of the Gross Asset Value of the Fund attributable to Wholesale Units(B)

0.65% per annum of the Gross Asset Value of the Fund(C), (D)

Performance fee In any financial year, an amount equal to 10% of the amount by which the 3 year average annualised rate of return on the Fund (based on distributions and changes in the 'Withdrawal Price' of Units) exceeds 20% p.a.

In any financial year, an amount equal to 10% of the amount by which the 3 year average annualised rate of return on the Fund (based on distributions and changes in the market price of Stapled Securities or Units, as applicable) exceeds 20% p.a.(E), (F)

Property acquisition fee

2% of the purchase price of any real property 1% of the purchase price of any real property outside Australia only

Property disposal fee

2% of the net sale proceeds of any real property if the net sale proceeds exceed the purchase price plus the acquisition costs plus any deferred management fees that are recouped on the sale

0.50% of the net sale proceeds of any real property outside Australia only, if the net sale proceeds exceed the purchase price plus the acquisition costs plus any deferred management fees that are recouped on the sale

Replacement fee 2% of the Gross Asset Value of the Fund No change – 2% of the Gross Asset Value of the Fund

(A) Note that MacarthurCook is currently entitled under the Constitution to charge a contribution fee of up to 5% of application monies relating to Retail Units.(B) Note that MacarthurCook is currently entitled under the Constitution to charge a management fee of up to 1.5% per annum of the Gross Asset

Value of the Fund attributable to Retail Units and a management fee of up to 0.75% per annum of the Gross Asset Value of the Fund attributable to Wholesale Units. The Constitution also currently entitles MacarthurCook to charge an additional management fee of up to 2.5% per annum of the Net Property Income of the Fund (although this fee is not currently being charged).

(C) The Gross Asset Value, for the purposes of the calculation of the management fee, will exclude any amount invested in the MacarthurCook Industrial REIT (which is listed on the Singapore Stock Exchange).

(D) MacarthurCook will be entitled to elect to take some or all of its management fee through the issue of Stapled Securities or Units, as applicable (subject to Unitholder approval every third year, the first such approval being required in 2011).

(E) MacarthurCook will be issued Stapled Securities or Units (as applicable) in satisfaction of the performance fees for the periods until 30 June 2012 (subject to Unitholder approval every third year, the first such approval being required in 2011). Any Stapled Securities or Units taken as performance fees will not be able to be sold before 30 June 2012 (unless MacarthurCook is replaced as the responsible entity of the Fund, or the sale is to a related body corporate of MacarthurCook, or otherwise in connection with a takeover bid for the Units or a trust scheme involving a merger of the Fund).

(F) Further detail on the calculation of the performance fee is contained in section 11 of the PDS.

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As compensation for MacarthurCook agreeing to this reduction in fees, the Restructure also involves an issue of Stapled Securities to MacarthurCook (in its personal capacity).

BDO Kendalls Corporate Finance (NSW) Pty Ltd (the Independent Expert) was engaged by MacarthurCook to provide a valuation of the reduction in management fees and the loss of disposal fees for MacarthurCook as a result of the implementation of the Restructure.

The Independent Expert has concluded that the value of the reduction in management fees and the loss of disposal fees for MacarthurCook as a result of the implementation of the Restructure is in the range of $4.5 million to $4.8 million. A copy of the Independent Expert's report is contained in Schedule 1.

Accordingly, it is proposed that the Fund issue 4,090,909 Stapled Securities to MacarthurCook (in its personal capacity) – equal to the lower end of the Independent Expert's value of the reduction in management fees and the loss of disposal fees for MacarthurCook as a result of the implementation of the Restructure ($4.5 million) divided by the issue price of Stapled Securities under the Public Offer ($1.10 per Stapled Security) – as compensation for MacarthurCook agreeing to this reduction in fees. The issue of Stapled Securities to MacarthurCook will be made pursuant to the PDS (see section 13.6 of the PDS).

The Stapled Securities issued to MacarthurCook as part of the Restructure will not be entitled to a distribution from the Fund for the 3 month period ending 31 December 2007. The first distribution from the Fund to which those Stapled Securities will be entitled will be for the 3 month period ending 31 March 2008. Other than in relation to the distribution from the Fund for the 3 month period ending 31 December 2007, the Stapled Securities issued to MacarthurCook will rank equally in all respects with other Stapled Securities.

As the issue of Stapled Securities to MacarthurCook constitutes the provision of a financial benefit to MacarthurCook (for the purposes of Chapter 2E of the Corporations Act, as modified by Part 5C.7 of the Corporations Act), the Directors consider it prudent to seek Unitholder approval for the issue of Stapled Securities.

3.4 THE LISTING PROPOSAL

In conjunction with the Restructure, MacarthurCook proposes to undertake the Listing Proposal, which will involve:

the Offers; and •

the admission of the Fund to the official list of ASX •and the Stapled Securities being granted official quotation by ASX.

The Offers are described in detail in section 2 of the PDS which accompanies this Explanatory Booklet. A summary of the Offers is as follows:

(a) The Offers will seek to raise up to $72.6 million through the issue of up to 66 million Stapled Securities.

(b) The Offers have two components:

a one for one non-renounceable rights issue to •Unitholders on the Rights Issue Record Date with a registered address in Australia (Eligible Unitholders) at an issue price of $1.04 per Stapled Security (the Rights Issue); and

a public offer to Australian resident investors •(including Eligible Unitholders to the extent that they wish to subscribe for more than their entitlement under the Rights Issue) at an issue price of $1.10 per Stapled Security (the Public Offer).

(c) The Stapled Securities issued under the Offers will not be entitled to a distribution from the Fund for the 3 month period ending 31 December 2007. The first distribution from the Fund to which the Stapled Securities issued under the Offers will be entitled will be for the 3 month period ending 31 March 2008.

(d) Other than in relation to the distribution from the Fund for the 3 month period ending 31 December 2007, the Stapled Securities issued under the Offers will rank equally in all respects with other Stapled Securities.

(e) Commonwealth Securities Limited has agreed to underwrite a minimum subscription under the Public Offer of 18,181,818 Stapled Securities, or such lesser number of such Stapled Securities that on completion of the Offers will be equal to 19.9% of the total number of Stapled Securities on issue.

(f) The Offers will only proceed if Unitholders pass both Resolutions at the Unitholder Meeting.

3. The Restructure and the Listing Proposal Continued

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The proceeds of the Offers will be used:

to pay the costs of the Offers, the Restructure and •the Listing Proposal;

to invest $15 million in the MacarthurCook Industrial •REIT – which is listed on the Singapore Stock Exchange and has a portfolio of industrial property in Singapore and intends to expand into other Asian markets by 31 March 2008; and

to repay existing debt. •

No specific Unitholder approvals, in addition to those required to implement the Restructure, are required to implement the Listing Proposal.

3.5 PDS

The PDS, a copy of which accompanies this Explanatory Booklet, contains all information in respect of the Offers and the Fund required to be included in a product disclosure statement under Part 7.9 of the Corporations Act. In particular, the PDS contains all information that might reasonably be expected to have a material influence on the decision of a reasonable person, as a retail client, whether to acquire Stapled Securities under the Offers.

You should read the PDS carefully as it contains information regarding the existing assets of the Fund, the Offers, the proposed use of funds raised under the Offers and the current and forecast financial position and prospects of the Fund and contains information that is relevant to your decisions whether to vote in favour of the Resolutions.

Please note that applications for Stapled Securities under the Offers may only be made on the application form that is included in, or accompanies, the PDS.

3.6 UNITHOLDER APPROVALS

At the Unitholder Meeting, Unitholders will be asked to approve the Resolutions:

Resolution 1: • To approve amendments to the Constitution.

Resolution 2:• To approve the issue of Stapled Securities to MacarthurCook.

Each Resolution is conditional on the other being approved. Accordingly, the Restructure, the Listing Proposal and the issue of Stapled Securities under the Offers will only proceed if both Resolutions are approved by Unitholders at the Unitholder Meeting by the requisite majorities.

If either Resolution is not approved by Unitholders at the Unitholder Meeting by the requisite majority, none of the Restructure, the Listing Proposal or the issue of Stapled Securities under the Offers will proceed.

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4. Advantages and Disadvantages of the Restructure and the Listing Proposal

4.1 OVERVIEW

This Section seeks to provide an overview of what MacarthurCook considers to be the material advantages and disadvantages of the Restructure and the Listing Proposal. However, this Section does not purport to be a comprehensive list of all advantages and disadvantages of the Restructure and the Listing Proposal.

4.2 ADVANTAGES OF THE RESTRUCTURE AND THE LISTING PROPOSAL

MacarthurCook considers that the following are the material advantages of the Restructure and the Listing Proposal that Unitholders should consider when making a decision on how to vote on the Resolutions at the Unitholder Meeting.

(a) Grant of Options

Under the Restructure, Participating Unitholders will be granted for no consideration one Option for each Unit they hold on the Restructure Record Date. In addition, Eligible Unitholders (and other investors) who subscribe for Stapled Securities under the Offers will receive an Option as part of each Stapled Security.

Each Option will have an exercise price of $1.10 and will be able to be exercised in the period from the Unstapling Date to 31 August 2009.

The grant of these Options to Participating Unitholders and investors will enable them to benefit from any actual, or perceived potential, increase in the value of Units above the exercise price, either by:

selling their Stapled Securities (which includes the •Option) on the ASX prior to the Unstapling Date;

selling their Options on the ASX after the Unstapling •Date; or

exercising their Options after the Unstapling Date and •receiving Units which can either be retained or sold.

Investors will not be obliged to exercise their Options, but may benefit from doing so if the prevailing market price of a Unit at the time of exercising the Option is greater than the exercise price of the Option (ie, where the market price of Units is more that $1.10).

Of course, there is no guarantee that the market price of Units will exceed the exercise price of the Options or that there will be a liquid market on ASX for Stapled Securities, Options or Units.

(b) Participation in the Rights Issue

If the Restructure and the Listing Proposal are approved by Unitholders at the Unitholder Meeting, Eligible Unitholders that lodge valid applications under the Rights Issue to subscribe for Stapled Securities will be issued Stapled Securities at a price which represents a discount to the net tangible assets per Unit.

However, if the Restructure and the Listing Proposal are not approved by Unitholders at the Unitholder Meeting, the Rights Issue will not proceed and those Eligible Unitholders who lodge valid applications under the Rights Issue will not be issued Stapled Securities at the discounted price.

(c) Greater liquidity

The Fund is currently not liquid and there are only very limited opportunities for Unitholders to realise their investment in the Fund. In the most recent supplementary product disclosure statement issued by MacarthurCook in relation to the Fund (dated 4 June 2007), MacarthurCook confirmed that in accordance with its discretion under the current Constitution, and as a result of the current financial commitments of the Fund, the 6-monthly withdrawal offer due to be made in July 2007 would not be made.

If the Restructure and the Listing Proposal are not implemented, MacarthurCook expects that (having regard to its expected financial commitments and financial position) it will be unable to make regular 6-monthly withdrawal offers to Unitholders to provide them with an opportunity to realise their investment in the Fund.

However, if the Restructure and the Listing Proposal are implemented, Unitholders will have the opportunity to realise their investment in the Fund by selling their Stapled Securities (and, after the Unstapling Date, their Units and Options) on the ASX.

Of course, there is no guarantee that there will be a liquid market on ASX for Stapled Securities, Options or Units, but MacarthurCook considers that a listing of the Fund on ASX will provide the greatest flexibility for investors to realise their investment in the Fund should they wish to do so. F

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(d) Reduced fees

If the Restructure and the Listing Proposal are implemented, there will be a reduction in the fees paid to MacarthurCook (as described in Section 3.3(c)). To compensate MacarthurCook for this reduction, there will be an issue of Stapled Securities to MacarthurCook (in its personal capacity) (as described in Section 3.3(c)).

The reduction in fees paid to MacarthurCook will reduce the overall fees payable by the Fund which, other things being equal, should increase the ability of the Fund to pay distributions to Unitholders.

(e) Expansion and diversification of investment portfolio

MacarthurCook considers that the Restructure and the Listing Proposal will provide the Fund with increased opportunity to expand and diversify its investment portfolio.

The Offers will provide the Fund with additional capital which is to be used (after paying for the costs of the Offers, the Restructure and the Listing Proposal) to:

invest $15 million in the MacarthurCook Industrial •REIT – which is listed on the Singapore Stock Exchange and has a portfolio of industrial property in Singapore and intends to expand into other Asian markets; and

repay existing debt. •

Initially, this will increase the size of the Fund's investment portfolio and provide it with exposure to the Asian industrial property sector. In the longer term, the Fund will be in a better position to acquire industrial properties to expand its portfolio by drawing down on its available debt facilities. The funds raised under the Offers will allow the Fund to continue building a diversified and high-yielding portfolio of industrial properties. In particular, the Fund will actively seek to invest in industrial properties located in Australia and overseas, including key industrial real estate markets located in Asia, Europe and the United States. Further information regarding the Fund's strategy if the Restructure and the Listing Proposal are implemented is contained in section 3 of the PDS.

MacarthurCook considers that the increase in the size and diversity of the investment portfolio of the Fund will be a benefit to Unitholders by reducing the proportionate exposure of investors to any one property or tenant. Further, the increase in the diversity of markets in which the Fund will invest will reduce the Unitholders' exposure to any one market.

(f) Refurbishment and Redevelopment opportunities

Currently, several properties held by the Fund present refurbishment and redevelopment opportunities which, if pursued, MacarthurCook considers could increase the value of the Fund's existing investment portfolio.

These refurbishment and redevelopment opportunities were recognised by MacarthurCook at the time of acquiring the properties. Although these properties could be sold now by the Fund and, in doing so, derive capital gains for the Fund, MacarthurCook considers that the option of refurbishment and redevelopment would deliver greater returns on these properties and, in turn, to investors in the Fund.

If the Restructure and the Listing Proposal are implemented, the repayment of some of the Fund's debt through the proceeds of the Offers will provide MacarthurCook with greater flexibility to progress these refurbishment and redevelopment opportunities than it would have if the Restructure and the Listing Proposal are not implemented.

(g) Increased investor base and ability to raise further capital

If the Restructure and the Listing Proposal are implemented, MacarthurCook considers that the Fund is likely to attract greater attention from those retail and institutional investors whose investment policies and strategies do not permit investment in unlisted investments. MacarthurCook considers that this should assist in diversifying the investor base of the Fund and, in turn, should increase the ability of the Fund to raise further capital (both debt and equity) to pursue the expansion and refurbishment and redevelopment opportunities for the Fund (as outlined above).

If the Restructure and the Listing Proposal are not implemented, MacarthurCook considers that its ability to raise further capital to pursue expansion and refurbishment and redevelopment opportunities for the Fund will be constrained.

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4.3 DISADVANTAGES OF THE RESTRUCTURE AND THE LISTING PROPOSAL

MacarthurCook considers that the following are the material disadvantages of the Restructure and the Listing Proposal that Unitholders should consider when making a decision on how to vote on the Resolutions at the Unitholder Meeting.

(a) Dilution of Existing Unitholders' interests

As noted in Section 3.3(c), if the Restructure and the Listing Proposal are implemented, MacarthurCook (in its personal capacity) will be issued 4,090,909 Stapled Securities as compensation for MacarthurCook agreeing to a reduction in its fees. This represents:

6.2% of the total number of Stapled Securities •that will be on issue prior to the issue of Stapled Securities under the Offers;

4.7% of the total number of Stapled Securities that •will be on issue assuming the minimum number of Stapled Securities are issued under the Offers; and

3.1% of the total number of Stapled Securities that •will be on issue if the maximum number of Stapled Securities are issued under the Offers.

As can be seen from the above, the effect of this issue of Stapled Securities to MacarthurCook will be to dilute the proportionate interest of each existing Unitholder in the assets of the Fund. In this respect, however, MacarthurCook notes that:

the total value of the Stapled Securities to be issued •to MacarthurCook is based on the lower end of the Independent Expert's valuation of the reduction in management fees and the loss of disposal fees for MacarthurCook as a result of implementing the Restructure; and

the Stapled Securities are being issued to •MacarthurCook at an issue price which is the same as Stapled Securities are being issued to investors under the Public Offer and at a price higher than the issue price at which Stapled Securities are being issued to Eligible Unitholders under the Rights Issue.

(b) Dilutive effect of the Options

If the Restructure and the Listing Proposal are implemented, under the Restructure each Participating Unitholder will be issued with an Option for each Unit they hold on the Restructure Record Date, and each successful applicant under the Offers will be issued with an Option. Each Option will have a fixed exercise price of $1.10 per Option. If the market price of Units increases above the exercise price of the Options, although the Fund will receive $1.10 cash for each Option exercised, the effect of exercising the Options will be to dilute each Unitholder's interest in the assets of the Fund (on the basis that the exercise price of $1.10 is less than the market value of a Unit and, thereby, theoretically reduces the market value of that Unit).

However, although the exercise of the Options may have the dilutive effect referred to above, each Unitholder on the Restructure Record Date and each investor under the Offers will be issued an Option and, as such, will be entitled to benefit from the advantages offered by the Options (either through exercising their Options or selling their Options, whether separately or as part of the Stapled Securities).

(c) Dilutive effect of the Offers

If the Restructure and the Listing Proposal are implemented, those Eligible Unitholders that do not take up their full entitlement to Stapled Securities under the Rights Issue will have their proportionate interest in the Fund diluted (notwithstanding the receipt of funds by the Fund under the Offers). However Unitholders should note that, in its current form, the Fund is an open ended trust and, as such, Unitholders are already subject to the risk of additional Units being issued by MacarthurCook and their proportionate interest in the Fund being diluted.

(d) Market pricing risk

If the Restructure and the Listing Proposal are implemented, and the Fund is listed on the ASX, the price at which Stapled Securities (or, after the Unstapling Date, the Units and the Options) trade on the ASX can fall as well as rise. In addition, although a listing on the ASX should provide Unitholders with liquidity, the price at which the Stapled Securities, Units and Options trade on the ASX will be subject to some factors which are beyond the control of MacarthurCook and its directors and may not directly relate to the performance of the Fund (for example, movements in stock markets generally).

4. Advantages and Disadvantages of the Restructure and the Listing Proposal Continued

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(e) Diversification risk

If the Restructure and the Listing Proposal are implemented, MacarthurCook will seek to invest in industrial properties located outside of Australia, including key industrial real estate markets located in Asia, Europe and the United States.

Although the expansion and diversification of the Fund's investment portfolio has the advantages outlined in Section 4.2, such a diversification carries with it the risk associated with investing in different markets – including risks associated with changes in foreign exchange rates and changes in market and general economic conditions in those markets outside Australia.

4.4 MACARTHURCOOK'S POSITION

As:

implementation of the Restructure and the Listing •Proposal will result in MacarthurCook (in its personal capacity) being issued Stapled Securities as compensation for accepting the reduced fee structure;

each of the Directors is also a director of •MacarthurCook Limited, the parent company of MacarthurCook; and

four of the Directors hold shares or options in •MacarthurCook Limited (see section 13.11 of the PDS),

each of the Directors considers it has an interest in the outcome of the Resolutions and, as such, does not wish to make a recommendation to Unitholders about how to vote on the Resolutions.

However, in considering whether the Restructure and the Listing Proposal should be put to Unitholders, the Directors have formed the view that the advantages of the Restructure and the Listing Proposal outweigh the disadvantages and that, accordingly, the Restructure and the Listing Proposal are in the best interest of Unitholders.

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5. Tax Consequences

5.1 OVERVIEW

The purpose of this Section is to provide a general outline of the Australian taxation implications of the Restructure and the Listing Proposal for Australian resident Unitholders who hold their investment on capital account. The comments made do not consider the implications for Unitholders who have held their Units on revenue account or as trading stock nor do they consider the specific implications relating to non-resident Unitholders.

This Section is general in nature and does not address all of the taxation consequences that may be applicable. As the taxation consequences for Unitholders may vary according to their own specific circumstances, we recommend that Unitholders seek their own professional taxation advice associated with the Restructure and the Listing Proposal. This Section is not, and is not intended to be, taxation advice to any Unitholder.

Taxation laws do change from time to time and case-law interpretation of the law is subject to variation. Accordingly, Unitholders should note that the comments made in this Section are based on taxation laws as at the date of this Explanatory Booklet and that statutory enactments or case-law handed down in the future may affect its accuracy.

Unitholders should also note that a separate Taxation Report, which further discusses the general tax implications to Unitholders and the Fund, is included in section 10 of the PDS.

5.2 GRANT OF OPTIONS AND STAPLING TO EXISTING UNITS

Under the Restructure, Participating Unitholders will be issued an Option for no consideration for each Unit held on the Restructure Record Date. In the past, the receipt of such rights has not been subject to income tax unless they are subsequently sold. Following the decision of the High Court of Australia in FC of T v McNeil in February 2007, there is uncertainty as to whether the Australian Taxation Office could treat Participating Unitholders as having derived assessable income equal to the market value of the Options at the time they are granted.

On 26 June 2007, the Assistant Treasurer announced that legislative amendments would be made to the income tax laws to restore the taxation treatment of rights issues, and that such legislation would be retrospectively applied from the 2001-02 income year. As at the date of this Explanatory Booklet, amending legislation has not yet been introduced into Parliament. While it is unlikely that Participating Unitholders would be assessed at the time the Options are granted, it is not possible to provide any conclusive guidance on the matter. The remainder of this Section assumes that the grant of Options under the Restructure is not taxable at the time of issue.

The stapling of existing Units with the Options granted will not result in any capital gains tax (CGT) consequences to Participating Unitholders. Whilst a Stapled Security must be dealt with as a whole, the Unit and the Option that make up a Stapled Security will be treated as separate assets for tax purposes. A Participating Unitholder’s cost base in the existing Units should be equal to their original cost base, and a Participating Unitholder’s cost base in the Options granted for no consideration under the Restructure should be nil.

5.3 RIGHTS ISSUE

Under the Rights Issue, Eligible Unitholders will have a one-for-one non-renounceable right to acquire Stapled Securities. Consistent with the comments in Section 5.2, the non-renounceable rights issue should not trigger any income tax consequences to Unitholders at the time of issue (although it is not possible to provide any conclusive guidance on this issue).

Where Eligible Unitholders acquire Stapled Securities under the Rights Issue, Eligible Unitholders will be treated as having acquired two separate assets, being the Units and Options. For CGT purposes, Eligible Unitholders must work out the cost base for each Unit and Option by apportioning on a reasonable basis the issue price of $1.04 per Stapled Security.

Where Eligible Unitholders do not acquire Stapled Securities under the Rights Issue and allow their rights to lapse, no tax consequences will arise.F

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5.4 DISPOSAL OF STAPLED SECURITIES

Where Stapled Securities are disposed of by Unitholders prior to the Unstapling Date, Unitholders must determine their capital gain or loss in respect of their Units and Options separately. In so doing, the capital proceeds received from sale of the Stapled Securities must be apportioned on a reasonable basis to the Units and Options that make up the Stapled Securities. After the Unstapling Date, Unitholders may separately dispose of their Units and Options.

A Unitholder will make a capital gain on the disposal of a Unit or Option to the extent that the capital proceeds from disposal exceed the respective cost base of the Unit or Option. Similarly, a Unitholder will make a capital loss on disposal of a Unit or Option to the extent that the capital proceeds from disposal is less than the respective reduced cost base of the Unit or Option. All capital gains and losses arising in a financial year are aggregated to determine whether a Unitholder has made a net capital gain or net capital loss.

Where Units or Options have been held for longer than 12 months at the time of disposal, the CGT discount will apply to reduce a capital gain on disposal by 50% for Unitholders who are individuals or trustees of a trust and one-third for Unitholders that are Australian complying superannuation funds.

5.5 EXERCISING OF AN OPTION

After the Unstapling Date, Unitholders may exercise their Options to acquire further Units at the exercise price. No CGT implications will arise upon exercising the Options. The cost base of Units acquired upon exercising the Option will be equal to the cost base of the Option (if any) plus the amount paid to exercise the Option.

Where the Option expires unexercised, the Unitholder will generally make a capital loss equal to the Unitholder’s cost base in the Option (if any).

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6. Specific Information in Relation to Resolution 1

6.1 AMENDMENTS TO THE CONSTITUTION

Resolution 1 is a resolution to approve amendments being made to the Constitution to facilitate the Restructure and the Listing Proposal. The amendments to the Constitution can be broadly summarised into the following categories.

(a) Stapled Security Structure Amendments

The Constitution will be amended to provide for:

On the Restructure Implementation Date, the rights •attaching to the Retail Units and Wholesale Units being made the same, and the Retails Units and Wholesale Units forming one class referred to as 'Units'.

On the Restructure Implementation Date, the •rounding up of the aggregate number of Units held by each Participating Unitholder on the Restructure Record Date to the nearest whole number of Units.

On the Restructure Record Date, the granting to •each Participating Unitholder of one Option for each Unit they hold on the Restructure Record Date.

Each Option to be stapled to the Unit in respect of •which it was granted, such that the Unit and the Option may only be traded together as a Stapled Security until the Unstapling Date.

In the period prior to the Unstapling Date, prohibiting •Units being issued unless an Option is issued and stapled to the Unit (and vice versa).

On the Unstapling Date, the Options and Units being •'unstapled' and being able to be traded separately.

The exercise price of the Option being $1.10.•

The exercise period of the Option running from •the Unstapling Date until 31 August 2009, and Options not exercised by 31 August 2009 lapsing automatically.

(b) Amended Fee Structure Amendments

The Constitution will be amended to include the amended fee structure for MacarthurCook (as responsible entity of the Fund) as described in Sections 3.3(c). The Constitution will also be amended to permit the MacarthurCook to elect to be issued Units or Stapled Securities instead of cash in payment of its fees or reimbursement of its expenses.

(c) Offer-related Amendments

The Constitution will be amended to permit the issue of Stapled Securities under the Offers.

(d) Listing Proposal Amendments

The Constitution will be amended to:

delete those provisions in the Constitution that are •not suitable for an ASX-listed trust; and

include new provisions in the Constitution that are •suitable for an ASX-listed trust.

6.2 TEXT OF THE AMENDMENTS TO THE CONSTITUTION

As the Constitution was originally prepared on the basis that the Fund was to be unlisted, there are quite a large number of amendments that need to be made to the Constitution. These changes will be made in a Deed Poll to be tabled at the Unitholder Meeting, and the amendments are summarised in Schedule 2.

The Deed Poll setting out the text of the amendments is available for inspection at the registered office of MacarthurCook at Level 4, 30 Collins Street, Melbourne, Victoria. Alternatively, a copy of the Deed Poll can be obtained by calling MacarthurCook on 1300 655 197.

6.3 REqUIRED MAjORITY FOR APPROVAL OF RESOLUTION 1

Resolution 1 is a special resolution and will be passed if at least 75% of the votes cast by Unitholders entitled to vote on the resolution are in favour of the resolution.

6.4 VOTING RESTRICTIONS

In accordance with section 253E of the Corporations Act, MacarthurCook and its associates are not entitled to vote on Resolution 1 where they have an interest in the resolution or in the matter other than as a Unitholder (other than where they do so as proxy holder and the proxy specifies the way they are to vote and they vote in that way).

6.5 RESOLUTION 1 IS CONDITIONAL ON APPROVAL OF RESOLUTION 2

Resolution 1 is expressed to be conditional on Resolution 2 being approved. The Restructure, Listing Proposal and the issue of Stapled Securities under the Offers will only proceed if both Resolutions are approved at the Unitholder Meeting by the requisite majorities.

If Resolution 1 is approved by Unitholders but Resolution 2 is not approved by Unitholders, Resolution 1 will be of no effect and none of the Restructure, the Listing Proposal or the issue of Stapled Securities under the Offers will proceed.

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7.1 APPROVAL OF THE ISSUE OF STAPLED SECURITIES TO MACARTHURCOOK

Resolution 2 is a resolution to approve the issue of 4,090,909 Stapled Securities to MacarthurCook (in its personal capacity) as compensation for MacarthurCook agreeing to a reduction in fees.

The number of Stapled Securities to be issued to MacarthurCook (in its personal capacity) is equal to:

$4.5 million – being the lower end of the Independent •Expert's valuation of the reduction in management fees and the loss of disposal fees for MacarthurCook as a result of the implementation of the Restructure, divided by

$1.10 - being the issue price per Stapled Security •under the Public Offer.

The Stapled Securities will be issued to MacarthurCook (in its personal capacity) on the Restructure Implementation Date.

A copy of the Independent Expert's report setting out its valuation of the reduction in management fees and the loss of disposal fees for MacarthurCook as a result of the implementation of the Restructure is contained in Schedule 1.

7.2 THE NEED FOR UNITHOLDER APPROVAL

Chapter 2E of the Corporations Act (as amended by Part 5C.7 of the Corporations Act) requires that, subject to certain exceptions, a financial benefit given out of the property of a managed investment scheme registered under Chapter 5C of the Corporations Act to the responsible entity of that scheme or a related party of the responsible entity of that scheme (a Related Party) must be approved by the members of that scheme.

One of the exceptions to the requirement for member approval is where the financial benefit is given on terms that would be reasonable in the circumstances if the responsible entity of the scheme (in its capacity as responsible entity of the scheme) and responsible entity or the Related Party were dealing at arm's length.

In the circumstances of the Restructure and the Listing Proposal, the proposed issue of Stapled Securities to MacarthurCook (in its personal capacity) constitutes a financial benefit and, as such, will require the approval of Unitholders. Even though:

the Independent Expert has provided an independent •valuation of the reduction in management fees and the loss of disposal fees for MacarthurCook as a result of the implementation of the Restructure; and

the Stapled Securities to be issued to •MacarthurCook will be issued at the same issue price as Stapled Securities are to be issued under the Public Offer and at a price higher than the issue price at which Stapled Securities are being issued to Eligible Unitholders under the Rights Issue,

the Directors consider it prudent to seek Unitholder approval of the financial benefit to be provided to MacarthurCook through the issue of Stapled Securities under Chapter 2E of the Corporations Act, and Resolution 2 seeks that approval.

7.3 ADDITIONAL INFORMATION RELEVANT TO RESOLUTION 2

In accordance with the requirements of section 219 of the Corporations Act (as modified by section 601LA of the Corporations Act), the following additional information is provided to Unitholders in relation to the proposed issue of Stapled Securities to MacarthurCook (in its personal capacity):

(a) The entity to whom the financial benefit will be provided is MacarthurCook. Information regarding MacarthurCook is contained in Section 3.1 and in section 6 of the PDS.

(b) The nature of the financial benefit to be provided to MacarthurCook is the issue of Stapled Securities to MacarthurCook. The consideration to be provided by MacarthurCook for the financial benefit is its agreement to the reduced fee structure described in Section 3.3(c).

Details regarding the calculation of the number of Units to be issued to MacarthurCook, and the basis of that calculation, are described in more detail in Sections 3.3(c) and 7.1 and Schedule 1.

Further, the material advantages and disadvantages associated with the Restructure and the Listing Proposal – of which the issue of Stapled Securities to MacarthurCook forms part – are described in Section 4.

Unitholders should use the information referred to above to decide whether or not it is in the best interests of Unitholders to pass Resolution 2.

7. Specific Information in Relation to Resolution 2F

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(c) Section 4.4 discloses:

the interests of each of the Directors in the •outcome of Resolution 2; and

the reasons why each of the Directors does •not wish to make a recommendation about Resolution 2.

(d) Apart from the information in this Explanatory Booklet and the PDS, MacarthurCook and its directors are not aware of any other information that would reasonably be required by Unitholders in order to decide whether or not it is in the best interests of Unitholders to pass Resolution 2.

7.4 REqUIRED MAjORITY FOR APPROVAL OF RESOLUTION 2

Resolutions 2 is an ordinary resolution and will be passed if at least 50% of the votes cast by Unitholders entitled to vote on the resolution are in favour of the resolution.

7.5 VOTING RESTRICTIONS

In accordance with section 253E of the Corporations Act, MacarthurCook and its associates are not entitled to vote on Resolution 2 where they have an interest in the resolution or in the matter other than as a Unitholder (other than where they do so as proxy holder and the proxy specifies the way they are to vote and they vote in that way).

7.6 RESOLUTION 2 IS CONDITIONAL ON APPROVAL OF RESOLUTION 1

Resolution 2 is expressed to be conditional on Resolution 1 being approved. The Restructure, Listing Proposal and the issue of Stapled Securities under the Offers will only proceed if both Resolutions are approved at the Unitholder Meeting by the requisite majorities.

If Resolution 2 is approved by Unitholders but Resolution 1 is not approved by Unitholders, Resolution 2 will be of no effect and none of the Restructure, the Listing Proposal or the issue of Stapled Securities under the Offers will proceed.

7. Specific Information in Relation to Resolution 2 Continued

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MacarthurCook Industrial Property Fund(ARSN 104 606 573)

NOTICE is given that a meeting of Unitholders of the MacarthurCook Industrial Property Fund (ARSN 104 606 573) (the Fund) will be held at The Windsor Hotel, 111 Spring Street, Melbourne, Victoria, 3000 at 11am (Melbourne time) on Monday, 26 November 2007.

This Notice of Meeting is issued by MacarthurCook Fund Management Limited (ABN 79 004 956 558) (MacarthurCook) as responsible entity of the Fund.

In accordance with section 252S(1) of the Corporations Act 2001 (Cth), MacarthurCook appoints Mr Richard Haddock or, in his absence, Ms Jane Tongs as Chairperson of the meeting.

BUSINESS OF THE MEETING

The business of the meeting will be to consider, and if thought fit, pass the following resolutions:

1. Resolution 1 – Amendments to the Constitution

To consider, and if thought fit, pass the following resolution as a special resolution:

"THAT, subject to Resolution 2 specified in the notice convening this meeting being passed, the constitution of the MacarthurCook Industrial Property Fund (ARSN 104 606 573) is amended in accordance with the provisions of the Deed Poll in the form tabled at the meeting and signed by the Chairperson of the meeting for the purposes of identification."

2. Resolution 2 – Approval of the issue of Stapled Securities to MacarthurCook

To consider, and if thought fit, pass the following resolution as an ordinary resolution:

"THAT, for the purposes of Chapter 2E of the Corporations Act 2001 (Cth) (as modified by Part 5C.7 of the Corporations Act 2001 (Cth)), the issue of 4,090,909 Stapled Securities in the MacarthurCook Industrial Property Fund (ARSN 104 606 573) to MacarthurCook Fund Management Limited (ABN 79 004 956 558) on the terms described in the Explanatory Booklet of which the notice convening this meeting form part, is approved."

NOTES

Offer Document and Explanatory Booklet for Unitholders

This Notice of Meeting should be read in conjunction with the rest of the Explanatory Booklet of which this Notice of Meeting forms part and the PDS.

The Explanatory Booklet and the PDS contain information that is relevant to you, as a Unitholder, to make an informed decision as to how to vote on the Resolutions.

Unless otherwise defined in this Notice of Meeting, terms used in this Notice of Meeting have the same meaning as set out in the Glossary in Section 9 of this Explanatory Booklet.

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Eligibility to vote

All Unitholders on the register of Unitholders as at 5pm (Melbourne time on Saturday, 24 November 2007 will be entitled to attend and vote at the meeting.

Voting exclusion statement

In accordance with section 253E of the Corporations Act, MacarthurCook and its associates are not entitled to vote on a Resolution where they have an interest in the Resolution or in the matter other than as a Unitholder (other than where they do so as proxy holder and the proxy specifies the way they are to vote and they vote in that way).

Required majority

Resolution 1 is a special resolution and will be passed if at least 75% of the votes cast by Unitholders entitled to vote on each resolution are in favour of the resolution.

Resolution 2 is an ordinary resolution and will be passed if at least 50% of the votes cast by Unitholders entitled to vote on the resolution are in favour of the resolution.

Voting requirements

The vote on the Resolutions will be decided on a poll.

On a poll, each Unitholder has one vote for each whole $1.00 of Unit value that it holds in the Fund. In accordance with section 253F(c) of the Corporations Act, MacarthurCook has determined that the value of a Unit will be equal to $1.10, being the issue price under the Public Offer.

If you are entitled to more than one vote, you need not exercise all of your votes in the same way, and you do not need to cast all of your votes.

How to vote

You can vote in one of two ways:

attending the meeting and voting in person (if a corporate Unitholder, by representative); or•

voting by proxy.•

Attending in person or by corporate representative:Individuals voting in person:• If you plan to attend the Unitholder Meeting, please arrive 30 minutes prior to the designated time for the meeting so that the value of your Units can be checked against the register of Unitholders and your attendance noted.

Jointly held Units: • If your Units are jointly held, only one of the joint holders in entitled to vote. If more than one Unitholder votes in respect of jointly held Units, only the vote of the Unitholder whose name appears first in the register of Unitholders will be counted.

Corporations sending a representative to vote in person:• In order to vote at the Unitholder Meeting (other than by proxy), a corporation that is a Unitholder must appoint a person to act as its representative. The appointment must comply with section 253B of the Corporations Act. The representative must bring to the Unitholder Meeting evidence of his or her appointment, including any authority under which it was signed.

Voting by proxyIf you cannot or do not wish to attend the Unitholder Meeting, you may appoint up to two proxies to attend and vote for you. A proxy does not need to be a Unitholder. If you appoint two proxies you must specify the proportion or number of votes that each proxy is entitled to exercise. If you do not specify the proportion, each proxy will be entitled to exercise an equal portion of your votes.

8. Notice of Meeting Continued

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To ensure that all Unitholders can exercise their right to vote on the Resolutions, a Proxy Form is enclosed with this Explanatory Booklet together with a reply paid envelope. The Proxy Form states what you need to do.

If you return your Proxy Form but do not nominate a proxy, the Chairperson will be your proxy and will vote on your behalf as you direct on your Proxy Form. Also, if your nominated proxy holder does not attend the Unitholder Meeting, then your proxy vote will revert to the Chairperson.

If the Chairperson is your proxy and you have not specified in your Proxy Form how the Chairperson should vote, the Chairperson will exercise your votes in favour of the Resolutions.

Proxy Forms must be received no later than 11am (Melbourne time) on Saturday, 24 November 2007 and should be sent, in the envelope provided, to the Registry:

By Hand: By Mail:

Computershare Investor Services Pty Limited Yarra Falls452 Johnston StreetAbbotsford Vic 3067

Computershare Investor Services Pty LimitedGPO Box 242Melbourne Vic 3001

Alternatively, Proxy Forms may be faxed to the Registry at (03) 9473 2555.

The Proxy Form must be signed by the Unitholder or by the Unitholder's attorney. In the case of joint Unitholders, all the joint holders must sign the Proxy Form. If the Unitholder is a corporation, the Proxy Form must be executed in accordance with the Corporations Act or by the corporation's attorney. If signed by an attorney, the power of attorney (or a copy certified as a true copy by statutory declaration) must be provided with the completed Proxy Form.

By order of the Board

Philippa Marshall Company Secretary MacarthurCook Fund Management Limited 16 October 2007

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In this Explanatory Booklet, the following terms have the following meanings unless the context requires otherwise.

$ means Australian dollars

ASX means ASX Limited (ABN 98 008 504 532)

Constitution means the constitution of the Fund (as amended from time to time)

Corporations Act means the Corporations Act 2001 (Cth)

Directors means the directors of MacarthurCook

Eligible Unitholders means those persons registered as Unitholders on the Rights Issue Record Date

Explanatory Booklet means this Explanatory Booklet (including the Notice of Meeting), which is dated 16 October 2007

Fund means the MacarthurCook Industrial Property Fund (ARSN 104 606 573)

Independent Expert means BDO Kendalls Corporate Finance (NSW) Pty Ltd

Listing Proposal means the proposal for the Fund to be admitted to the official list of ASX and for the Stapled Securities to be granted official quotation by ASX (as described in this Explanatory Booklet, in particular in Section 3.4)

MacarthurCook means MacarthurCook Fund Management Limited (ABN 79 004 956 558)

Notice of Meeting means the notice convening the Unitholder Meeting contained in Section 8

Offers means the offer of Stapled Securities pursuant to the PDS, comprising the Rights Issue and the Public Offer

Option means an option to subscribe for a Unit on the terms described in Section 3.3(a)

Participating Unitholders means those persons registered as Unitholders on the Restructure Record Date

PDS means the product disclosure statement relating to the Offers dated 16 October 2007 (as modified and varied by any supplementary product disclosure statement)

Public Offer means the public offer of Stapled Securities to Australian resident investors (including Eligible Unitholders to the extent that they wish to subscribe for more than their entitlement under the Rights Issue) at an issue price of $1.10 per Stapled Security (as described in the PDS)

Registry means the Unit registry for the Fund, being Computershare Investor Services Pty Limited (ABN 48 078 279 277)

Resolution 1 means the first resolution set out in the Notice of Meeting

Resolution 2 means the second resolution set out in the Notice of Meeting

Resolutions means Resolution 1 and Resolution 2

Restructure means the series of transactions to effect a restructure of the ownership structure of the Fund and amend the Constitution (as described in this Explanatory Booklet, in particular in Sections 3.3, 6 and 7)

Restructure Implementation Date

means 29 November 2007

Restructure Record Date means 7pm (Melbourne time) on 26 November 2007

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Rights Issue means the one-for-one non-renounceable rights issue of Stapled Securities to Eligible Unitholders with a registered address in Australia at an issue price of $1.04 per Stapled Security (as described in the PDS)

Rights Issue Record Date means 7pm on 16 October 2007

Stapled Security means one Unit and one Option, stapled together so that they may only be traded together as one security

Retail Units means those Units which are, as at the date of this Explanatory Booklet, classified under the Constitution as ‘Retail Units’

Unit: means:

(a) in the period prior to the implementation of the Restructure and the Listing Proposal – a fully paid unit in the Fund comprising either a Retail Unit or a Wholesale Unit, and

(b) in the period after the implementation of the Restructure and the Listing Proposal – a fully paid unit in the Fund

Unitholder means a person registered as a holder of Units (including Units forming part of Stapled Securities)

Unitholder Meeting means the meeting of Unitholders to be held at 11am (Melbourne time) on Monday, 26 November 2007 for the purpose of voting on the Resolutions (including any adjournment thereof)

Unstapling Date means 11.59pm (Melbourne time) on 29 August 2008

Wholesale Units means those Units which are, as at the date of this Explanatory Booklet, classified under the Constitution as ‘Wholesale Units’

In addition, references to a Section or a Schedule are references to sections of, or schedules to, this Explanatory Booklet.

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Schedule 1 – Independent Expert’s ReportF

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Schedule 1 – Independent Expert’s Report Continued

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The following table summarises the proposed amendments to the Fund's Constitution, which are the subject of Resolution 1.

This is a summary only. The Deed Poll setting out the full text of the proposed amendments is available for inspection at the registered office of MacarthurCook at Level 4, 30 Collins Street, Melbourne, Victoria. Alternatively, a copy of the Deed Poll can be obtained by calling MacarthurCook on 1300 655 197.

Issue Proposed Amendment

Stapled Securities Amendments will be made to the Constitution to implement the Stapled Securities structure, as described in Section 6.1(a).

Listing Rules and Corporations Act

A new clause will be inserted to provide that, while the Fund is admitted to the official list of ASX, the ASX Listing Rules will prevail to the extent of any inconsistency between those Rules and the Constitution. This clause is required by the ASX Listing Rules.

A new clause will also be included permitting MacarthurCook to amend the Constitution, without seeking Unitholder approval, to remove or amend any provision of the Constitution that has been included to comply with the requirements of the Corporations Act, ASIC or ASX, in circumstances where that requirement ceases or changes.

Classes of Units The Constitution currently establishes six classes of Units – namely Underwriter Units, Vendor Units, Retail Units, Wholesale Units, Convertible Units and Income Units.

There are currently two classes of Units on issue – namely Wholesale Units and Retail Units. The rights, obligations and restrictions conferred by Wholesale Units and Retail Units are identical, except that the Constitution provides for a lower management fee to be payable in respect of Wholesale Units.

The amendments to the Constitution have the effect of “converting” the Wholesale Units and Retail Units into a single class of Units, to be referred to as 'Units'. This means that the previous Wholesale Units and Retail Units will confer the same rights, obligations and restrictions and will be subject to the same management fee (which will be lower than the management fee previously charged with respect to Wholesale Units and Retail Units).

The Constitution will continue to permit MacarthurCook to create new classes of Units in the future.

Options The Constitution currently permits MacarthurCook to issue options to subscribe for Units. More detailed provisions relating to options (including the Options that will form part of the Stapled Securities) will be included in the Constitution.

In accordance with ASIC requirements, the amendments also govern the exercise price for Options. Generally, while Units are quoted on the ASX, the exercise price must be the market price of the Units (as defined in the Constitution) at the time of issue of the option. However, the exercise price may be a discount to the market price where the options are issued under a rights issue or placement (provided certain conditions imposed by ASIC are satisfied).

Financial Instruments The Constitution will be amended to permit MacarthurCook to issue other types of interests, rights or instruments relating to the Fund, in addition to Units and Options. These may include derivatives, debentures, convertible notes or other instruments of a debt, equity, quasi-debt, quasi-equity or hybrid nature.

Partly-Paid Units and Forfeiture

The Constitution currently permits MacarthurCook to issue Units on a partly-paid basis. The provisions dealing with partly-paid Units will be expanded, including by inserting procedures for making calls and provisions relating to the consequences of failing to pay an instalment (including the imposition of interest and forfeiture of the defaulting Unitholder's party-paid Units).

Schedule 2 – Amendments to the ConstitutionF

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Issue Price of Units As the Fund is currently unlisted, the issue price of a Unit is calculated by reference to the net asset value of the Fund. The Constitution will be amended to facilitate the issue of Units (and Stapled Securities) in the Fund following its admission to the official list of ASX. The new provisions, which are quite lengthy and complex, have been drafted in accordance with ASIC requirements.

Generally, while Units (or Stapled Securities) are quoted on the ASX, they must be issued at their market price (as defined in the Constitution). Broadly speaking, the market price will be the weighted average price per Unit (or Stapled Security) for sales of Units (or Stapled Securities) during the previous 10 ASX trading days.

The Constitution will allow Units (or Stapled Securities) to be issued at a discount to market price in certain capital raising situations, including rights issues, placements, distribution reinvestment plans, and Unit purchase plans (provided certain conditions imposed by ASIC are satisfied).

A new clause will also be inserted specifying the price at which a Unit forming part of a Stapled Security may be issued under the Restructure and the Listing Proposal (namely, $1.04 per Unit under the Rights Issue and $1.10 per Unit under the Public Offer, in both cases with the stapled Option issued for no consideration).

Withdrawal Rights and Withdrawal Price

The withdrawal provisions of the Constitution currently require MarcarthurCook to make an annual withdrawal offer to Unitholders while the Fund is 'liquid' (as defined in the Corporations Act). This is intended to provide a limited form of liquidity to Unitholders, by enabling them to realise their investment in the Fund. However, as discussed in Section 4.2(c), the Fund is currently not 'liquid' and, in accordance with its discretion under the current Constitution, in June 2007 MacarthurCook confirmed that the withdrawal offer due to be made in July 2007 would not be made.

If the Restructure and the Listing Proposal are implemented, Unitholders will have the opportunity to realise their investment in the Fund by selling their Stapled Securities (and, after the Unstapling Date, their Units and Options) on the ASX. Therefore, the Constitution will be amended by removing the obligation to make a withdrawal offer to Unitholders on an annual basis. MacarthurCook will, however, still have the discretion to make a withdrawal offer to Unitholders while the Fund is listed (even if it is not 'liquid').

The broader provisions relating to withdrawal rights and procedures and the calculation of the withdrawal price will be rewritten to achieve greater clarity and flexibility. A new clause will also be inserted to permit MacarthurCook to undertake on-market buy backs of Units or Stapled Securities (in accordance with any applicable ASIC or ASX requirements).

Small Holdings A new clause will be inserted in the Constitution which will permit MacarthurCook, in its discretion, to sell or redeem any Units or Stapled Securities held by a Unitholder which comprise less than a 'marketable parcel' (as defined in the ASX Listing Rules) without request by the Unitholder. MacarthurCook must provide the Unitholder with six weeks' notice of such proposed sale. If, within this notice period, the Unitholder advises MacarthurCook that it wishes to retain the Units or Stapled Securities, MacarthurCook will not sell the relevant Units or Stapled Securities.

Transfer of Units The procedures for transferring Units that are contained in the current Constitution are not suitable where Units (or Stapled Securities) are quoted on the ASX. Accordingly, these provisions will be amended to allow Units, Options and Stapled Securities to be transferred in any manner permitted by an applicable uncertificated trading system (such as ASX).For

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Fractions of Units The Constitution currently permits fractions of Units to be issued. However, as fractions of Units cannot be quoted on the ASX, the Constitution will be amended to specify that fractions of a Unit may not be issued. When any calculations under the Constitution would result in the issue of a fraction of a Unit, the number of Units to be issued must be rounded down to the nearest whole Unit. Any excess application or other money becomes an asset of the Fund.

In order to implement the Restructure, the Constitution will include a specific clause authorising MacarthurCook to round up any fractions of Units held by Unitholders on the Restructure Record Date.

Fee Structure The Constitution will be amended to implement the new fee structure set out in Section 3.3(c). The Constitution will specify the maximum fees shown in the 'Amended Fee' column in the table in Section 3.3(c).

Units as payment for fees

A new clause will be included in the Constitution which will permit MacarthurCook (subject to the Corporations Act and the Listing Rules) to elect that it be issued Units or Stapled Securities instead of cash in payment of its fees or reimbursement of its expenses under the Constitution. Under the Corporations Act, the responsible entity of a registered managed investment scheme may acquire and hold units in the scheme, but it must do so for not less than the consideration that would be payable if the interest were acquired by another person and subject to terms and conditions that would not disadvantage other scheme members.

Meetings of Unitholders Some technical changes will be made to the procedures for holding meetings of Unitholders.

Complaints Handling Some technical changes will be made to the procedures for handling complaints by Unitholders. These changes are intended to bring the complaints handling procedures in line with the procedures that MacarthurCook has recently implemented for other managed investment schemes that it operates.

Winding up the Fund The Constitution currently provides that the Fund will automatically terminate on the 80th anniversary of the day before it commenced. Clauses of this nature have historically been included in trust deeds to ensure that there is no contravention of the rule against remoteness of vesting, commonly known as the rule against perpetuities. That rule renders void a trust in circumstances where a person's interest in the trust property could 'vest' after a particular period (i.e. the 'perpetuity period').

This clause will be deleted to address issues raised by the introduction of AIFRS (Australian equivalents to the International Financial Reporting Standards). Under AIFRS, clauses of this nature give rise to a de facto 'repayment' obligation on the trust with respect to its unit capital, which may result in unitholders' funds being treated as debt under AIFRS.

Instead, to ensure that there is no contravention of the rule against perpetuities, a new clause will be inserted prohibiting MacarthurCook from issuing or redeeming any Units from the 80th anniversary of the commencement of the Fund if that issue or redemption would cause a contravention of the rule against perpetuities or any other rule of law or equity.

Amendments will also be made to the definition of 'Liabilities' in the Constitution to ensure that Unitholders' capital is not characterised as a liability of the Fund.

The Restructure and Listing Proposal

Provisions will be inserted into the Constitution authorising MacarthurCook to do all things which it considers are necessary, desirable or reasonably incidental to give effect to the Restructure and the Listing Proposal. Subject to the Corporations Act, MacarthurCook will have no liability to Unitholders arising from it doing or refraining from doing any act pursuant to or in connection with the implementation of the Restructure and Listing Proposal.

Schedule 2 – Amendments to the Constitution Continued

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RESPONSIBLE ENTITY OF THE MACARTHURCOOK INDUSTRIAL PROPERTY FUND

MacarthurCook Fund Management Limited (ABN 79 004 956 558) Level 4, 30 Collins Street Melbourne VIC 3000

DIRECTORS OF RESPONSIBLE ENTITY

Richard M Haddock (Chairman) Craig Dunstan Nick Basile Geoff Coffey Hugh Gurner Jane Tongs

INDEPENDENT EXPERT

BDO Kendalls Corporate Finance (NSW) Pty Ltd Level 19, 2 Market Street Sydney NSW 2000

LEGAL ADVISORS TO THE RESPONSIBLE ENTITY

Allens Arthur Robinson Level 27, 530 Collins Street Melbourne VIC 3000

REGISTRY

Computershare Investor Services Pty Limited Yarra Falls, 452 Johnston Street Abbotsford VIC 3067

Corporate DirectoryF

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MacarthurCook Fund Management Limited ABN 79 004 956 558

Level 4 30 Collins Street Melbourne VIC 3000 Australia

1 Raffles Place #21–01 OUB Centre Singapore 048616

Customer Telephone Enquiries Australia 1300 655 197 +61 3 9660 4555

Singapore +65 6309 1050

Website www.macarthurcook.com.au

Email [email protected]

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asx code : mck macarthurcook industrial property fund ... fileand listing proposal for the fund (as...

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