Business Groups

Real Estate

Overview

The Real Estate Division is an integrated asset management and funds management group operating across 22 countries around the world. Asset origination includes principal investments on Babcock & Brown’s balance sheet where opportunities exist to develop, enhance or aggregate assets for new or existing funds. The specialised fund and asset management platform has undergone significant growth during 2007 reflected in the growth of AUM.

At 31 December 2007 AUM was $13.1 billion, representing 41% growth during the year. Growth in AUM was primarily driven by growth in AUM in BJT and a growing number of property mandates in Europe and North America which draw on Babcock & Brown’s asset origination, asset management and funds management expertise.

INVESTMENT MANAGEMENT PRINCIPAL INVESTMENT ADVISORY

Private investment syndicates Listed vehicles Unlisted retail funds Development projects (in joint ventures) Mezzanine debt provider Equity investor Underwriter Acquisition advisor Financial advisor Debt/equity arrangement Tenant advisor

 

Net Revenue

Year ended 31 December 2007 $'000 Year ended 31 December 2006 $'000

Base fees from AUM 27,676 22,072 Performance fees from AUM 4,288 29,542 Advisory fees from AUM 67,408 35,755 Other Operating Income 7,653 3,109 Development fees, interest and profits 77,983 38,466 Principal investment 207,325 95,931 Third Party advisory fees 5,708 1,612 Net Revenue (excl Minority Interest) 492,885 318,606 Segment Minority Interest 4,478 (3,458) Total Net Revenue 497,363 315,148

Transaction Types

The business encompasses most classes of real estate and most stages of development. A selection of the types of transactions which Babcock & Brown has completed is listed below:

Residential Land subdivision Apartment development House and land packages Integrated golf course, Commercial CBD offices Pre-committed lease developments Portfolio acquisitions Industrial Warehouses Distribution centres Retail Bulky goods Regional shopping centres Department stores Neighbourhood shopping centres Hotels/Leisure Portfolio acquisitions Leased hotel properties Listed hotel securities Operating golf courses Ski resorts Special Purpose Wool stores Caravan parks Archives facilities Self Storage Hospitals University buildings Petrol Stations

 

Development fees, interest and profits

Babcock & Brown's development fees, interest and profits includes the following:

Country Focus of Activity

Australia The focus of activity is residential development in Australia's key capital cities, and the financing of, and investment in, land earmarked for future development and in joint ventures with experienced partners. Spain Industrial, residential and other developments in joint ventures with operating partners. United Kingdom Involved in a number of commercial and mixed-use developments. France Retail and residential development and the provision of mezzanine debt. Germany Residential developments in low cost sector, shopping centres and food retailing. United States Initial development activities have centred on residential, retail and self storage development and the provision of mezzanine financing for both residential and commercial developments. New Zealand Provision of mezzanine debt, and financial advisory work on residential developments. Switzerland Food retailing and mixed use retail. Central & Eastern Europe Retail and residential development. Japan Income and gains from the disposal of property to BJT and third parties. Italy Development of residential and commercial offices primarily in Milan.