MARKET RELEASE

CDI FY11 STATUTORY PROFIT OF $51.5 MILLION; PROFIT FROM OPERATING ACTIVITIES $44.4 MILLION;ACHIEVED EARNINGS GUIDANCE OF 4.9 CENTS.Key PointsStatutory net profit after tax: $51.5 million (FY10: $15.5 million) Profit from operating activities: $44.4 million (FY10: $47.4 million)FY11 earnings per unit (epu) of 4.9 cents and distribution of 4.0 cents per unit (cpu)Net tangible assets (NTA) per unit of 67 cents (FY10: 66 cents) Investment property valuations up $18.3 million (2.2% on FY10) Balance sheet gearing 27.1%1Occupancy: 93.7%; WALE: 5.0 yearsFY12 operating epu guidance of 4.7 cents and dpu guidance of 4.1 cents

9 August 2011, Sydney – Challenger Diversified Property Group (ASX:CDI) today announced a statutory net profit after tax of $51.5 million for the year ended 30 June 2011 (FY11). Profit from operating activities of

$44.4 million was lower than FY10. This was primarily due to a decrease in net property income associated with the current vacancies and asset sales, partially offset by portfolio rental growth and the improved operating performance of the Domain car park.

Occupancy as at 30 June 2011 was 93.7%, up from 91.5% as at 31 December 2010. During the half CDI has executed a number of important leasing transactions, particularly in the office and industrial segments with new leasing deals this half representing 18.1% of the portfolio by gross income. Additionally at the Jam Factory, CDI has been successful in securing the first Target concept store, Urban by Target, in Australia along with another well-known major international fashion brand.

CDI Fund Manager Trevor Hardie said: “CDI’s financial performance has been in line with guidance and we have progressed our portfolio enhancement strategy through the accretive acquisition of 31 Queen Street, and the sale of five properties at or above book value.

“Closing the gap between the unit price and NTA continues to be our priority, and is addressed through initiatives such as the buyback, improving leasing metrics, and enhancing the composition of the portfolio.

1 Pro forma post payment of 2H11 distribution and Pac Brands settlement

Further enquiry: Chantal Travers, Investor Relations, Challenger Limited, 02 9994 7560

Stuart Barton, Head of Corporate Marketing and Communications, Challenger Limited, 02 9994 7008

Challenger Diversified Property Group

(comprising Challenger Diversified Property Trust 1 ARSN 121 484 606 and Challenger Diversified Property Trust 2 ARSN 121 484 713) Responsible Entity Challenger Listed Investments Limited ABN 94 055 293 644 AFSL 236887

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“A final distribution of 2.0 cpu will be paid on 30 August to unitholders. Distribution guidance has been announced for the 2012 financial year of 4.1 cents per unit (cpu) and earning guidance of 4.7 cpu.”

Portfolio Enhancement

CDI has achieved a number of key milestones in their portfolio enhancement objectives. Firstly, CDI sold five properties ($42 million) at an average sale price premium 8% above valuation. Secondly, CDI acquired 31

Queen Street on 31 March 2011($81 million), reflecting the trust’s commitment to portfolio enhancement, through increased exposure to deeper leasing markets and improving income diversification by reducing single tenancy risk. Thirdly, CDI has announced a number of development initiatives to capitalise on the latent value within its portfolio. Finally, CDI will proceed with the orderly sale of the remainder of its French portfolio.

As part of its development initiatives, CDI is pleased to announce that it has secured a ten year lease pre- commitment for the construction of a new 20,200sqm distribution facility at The Junction Industrial Park in Enfield in Sydney’s Inner West. The tenant, Bunzl Australasia Limited, is a leading global supply chain management and specialist distribution company operating in 24 countries. On completion in June 2012, the

$34m facility will deliver FY13 earnings accretion.

Further, CDI will spend approximately $10 million ($16 million at 100%) on repositioning the Jam Factory. The departure of Borders has created an opportunity to accelerate this repositioning. CDI has secured both Urban by Target and a further international fashion group (soon to be named), as tenants at the Jam Factory. Urban by Target (1,200sqm) will commence trading at the end of August 2011 with the well-known fashion retailer opening for 2011 Christmas trading. The repositioning will also include a new food court and the revitalisation of the centre through additional lifestyle and entertainment offerings.

Portfolio

The CDI investment portfolio comprises interests in 23 quality office, retail and industrial assets located in

Australia (93.5%) and five properties (6.5%) in France.

All properties in CDI’s portfolio were revalued as at 30 June 2011 – 59% (by value) by independent valuation and the remainder by internal valuation. The revaluation resulted in an $11.6 million (1.4%) uplift in investment property valuations from 31 December 2010 and an $18.3 million (2.2%) uplift from 30 June

2010. The carrying value of the total investment portfolio at 30 June 2011 was $828.8 million.

CDI’s weighted average market cap rate for the Australian investment portfolio has remained stable at

8.25%, while the French portfolio market cap rate moved down from 7.73% to 7.66%, resulting in a total investment portfolio weighted average cap rate of 8.21%. CDI’s implied cap rate is 9.7%, using the 10 day VWAP up to 8 August of 51.8 cents.

Further enquiry: Chantal Travers, Investor Relations, Challenger Limited, 02 9994 7560

Stuart Barton, Head of Corporate Marketing and Communications, Challenger Limited, 02 9994 7008

Challenger Diversified Property Group

(comprising Challenger Diversified Property Trust 1 ARSN 121 484 606 and Challenger Diversified Property Trust 2 ARSN 121 484 713) Responsible Entity Challenger Listed Investments Limited ABN 94 055 293 644 AFSL 236 887

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The performance of 31 Queen St, Melbourne has been particularly strong. The property was independently revalued at $86.5 million at 30 June 2011, representing a 6.8% increase from the 31 March 2011 acquisition price of $81.0 million. Occupancy has increased from 86.8% as at acquisition to 92.5% at 30 June 11 exceeding our acquisition assumptions.

Capital Management

On 8 April 2011, CDI announced its intention to complete an accretive buyback of 10% of issued capital through an on market buyback. Since the buyback commenced, CDI has purchased to date ~10.0 million units (more than 1% of issued capital) at an average 20% discount to NTA per unit - equivalent to purchasing a property on a 9.3% yield.

CDI has successfully executed the refinancing of its entire existing multi-currency debt facility, increasing the limit to $280 million from $261 million and extending the weighted average term of available debt to 3.0 years. Borrowings stand at $234 million, pro forma post receipt of proceeds from the sale of Pacific Brands and payment of the distribution for the six months ended 30 June 2011, with undrawn debt of $46 million. Pro forma balance sheet gearing is 27.1%. CDI has no debt expiries in FY12 or FY13, with staggered maturities over FY14, 15 and 16, the next expiry occurs in July 2013 for $90 million.

Outlook

In regards to outlook, Mr Hardie said: “Bridging the gap between unit price and NTA gap is our key priority, in order to maximise unit holder value. We are executing on this through the portfolio enhancement strategy, the continuation of active capital management, increasing occupancy and growing earnings. CDI has made significant inroads into our enhancement strategy and while the performance of the portfolio has improved we continue to focus on lifting occupancy. Finally the FY12 operating earnings and distribution guidance, is

4.7 and 4.1 cents per unit respectively.”

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About Challenger Diversified Property Group (CDI):

CDI provides investors with exposure to a diversified portfolio of quality, well located properties which offer stable income returns and potential for capital growth. With total assets of $876.3 million at 30 June 2011, CDI holds investment interests in 28 office, industrial and retail properties located in Australia and France. In addition, CDI holds a cumulative

25 year leasehold interest in Sydney’s Domain car park. Further details are provided on CDI’s website

www.challenger.com.au/cdi

Important notice:

Any forward looking statements included in this document are by nature subject to significant uncertainties, risks and contin gencies, many of which are outside the control of, and are unknown to, Challenger, so that actual results or events may vary from thos e forward looking statements, and the assumptions on which they are based.

N.B. All property metrics as at 30 June 2011, ex Pac Brands settled 29th July

Further enquiry: Chantal Travers, Investor Relations, Challenger Limited, 02 9994 7560

Stuart Barton, Head of Corporate Marketing and Communications, Challenger Limited, 02 9994 7008

Challenger Diversified Property Group

(comprising Challenger Diversified Property Trust 1 ARSN 121 484 606 and Challenger Diversified Property Trust 2 ARSN 121 484 713) Responsible Entity Challenger Listed Investments Limited ABN 94 055 293 644 AFSL 236 887