Financial Results Presentation

For the Half Year Ended 31 December 2013

Australian Education Trust (ASX : AEU)

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Contents

Performance Overview Financial Results to December 2013 Capital Management Acquisitions Capital Raising Property Portfolio Outlook Appendices Further Information

Nick Anagnostou Chief Executive Officer

Travis Butcher Chief Financial Officer

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Performance Overview

Key Highlights for the Half

Distributable income of $11.3 million, an increase of $2.6 million or 29.9% on the previous corresponding period (“pcp”)

Distribution for half of 6.0 cpu, an increase of 20.0% on pcp

Acquisition of Folkestone Childcare Fund increasing portfolio by 22 properties

Acquired 6 established early learning properties, 4 of which settled prior to 31 December 2013

Development pipeline underway with 3 development sites acquired

100% occupancy across the portfolio

Net Tangible Asset (“NTA”) per unit of $1.40, an increase of 5.3% on pcp

Equity raising undertaken raising $45.0 million

FY14 distribution of approximately 12.0 cpu

About AET The Australian Education Trust (“AET or Trust”) aims to provide Unitholders with a secure, growing income stream and long-term capital growth through investing in education related direct property predominantly in the early learning sector.

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Financial Results to December 2013

For the half ended Dec 2013 Dec 2012 Change from

Dec 2012

Operating Revenue $21.1m $20.4m 3%

Operating Expenses $5.8m $5.5m 5%

Finance Costs $4.0m $6.2m 35%

Distributable Income $11.3m $8.7m 30%

Distribution 6.0 cpu 5.0 cpu 20%

Net profit1 $21.3m $14.9m 43%

As at Dec 2013 June 2013 Change from

June 2013

Total Assets $429.4m $368.5m 16%

Borrowings2 $132.2m $125.8m 5%

NTA per unit $1.40 $1.33 5%

Gearing3 30.8% 34.1% 3%

1 Refer to page 7 of the Half-Year Report for a reconciliation between distributable income and net profit 2 Borrowings includes cash overdraft 3 Gearing is calculated by borrowings / total assets

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Capital Management - Banking

Debt Facility Limit $132.2 million

Debt Drawn Amount $132.2 million

Overdraft Facility $10 million

Facility Maturity February 2016

LVR Covenant 50% of all Secured Property

ICR Covenant Not to be less than 2.0 x measured on a 6 monthly basis

Cost of Debt

Overall cost of debt is 6.1% pa including amortisation of borrowing costs

AET’s debt facility is now in two tranches as a result of the FCF acquisition where FCF’s existing facility remained in place. AET’s existing facility ($123m) matures in February 2016 and FCF’s ($9.2m) in January 2015.

FCF facility will be rolled into the overall facility during 2014.

Debt facility will be increased to fund the balance of the acquired properties yet to settle.

As at 31 December 2013 (Including FCF Facility)

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Capital Management - Hedging

As at 31 December 13, AET had hedged $90 million at a fixed rate of 4.3% pa.

As part of FCF acquisition a $4.6 million hedge at a fixed rate of 2.7% pa. is in place to January 2015.

Staggered hedging positions through to June 2018 with 72% hedged through to June 14

Average hedged positions of 52% through to June 2018

Hedging Profile (based on debt of $132.2 million as at 31 December 2013)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1 Jan 14 - 30 June 14

1 July 14 - 30 June 15

1 July 15 - 30 June 16

1 July 16 - 30 June 17

1 July 17 - 30 June 18

Hedged

Unhedged

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Acquisitions

Consistent with the new growth phase of AET, the following transactions were entered into:

Acquisition of 5 early learning centres in premium Sydney metropolitan locations, operated by Only About Children.

Acquisition of a new early centre located in Canberra’s growth corridor, Gungahlin; and

Acquisition of the Folkestone Childcare Fund, an unlisted property fund comprising 22 early learning centres.

Acquisition of 3 development sites for new early centres to be constructed on a fund-through basis with lease agreements in place.

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Acquisition Benefits

Key benefits of the acquisitions are:

Enhance the asset quality and earnings growth of AET’s portfolio;

Provide tenant diversification to quality operators;

Development sites refresh the portfolio with new stock and decrease obsolescence

Establish alliances with high quality operators with proven track records, providing further partnership opportunities for further growth.

These transactions demonstrate the ability of the Trust to complete acquisitions that combine quality underlying real estate and proven early learning operators, strengthening AET’s position as the leading provider of early learning accommodation.

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The centre and development acquisitions have been partially funded by the $45.0 million equity raising which was successfully completed in December 2013.

The equity raising comprised a $20.0 million institutional placement and a $25.0 million accelerated non-renounceable entitlement offer.

The equity raising resulted in 29,604,264 new units being issued at an issue price of $1.52.

Capital Raising F

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Property Portfolio – Key Metrics

351 properties, 297 in Australia and 54 in New Zealand

WALE of 8.3 years

Passing yield of 9.2%

Rental growth averaged 2.3% during the year

No. of Properties

Carrying Value

$m’s

Current Rent (pa)

$m’s1

Australia 297 371.0 35.8

New Zealand 54 50.9 4.32

Total Properties as at 31 December 2013 351 421.9 40.1

1 Includes head-lease rent on leasehold properties of $1.1m 2 Based on NZD rent of $4.7 million at an exchange rate of 1.086 as at 31 December 2013

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Property Portfolio – Valuations

Properties independently valued on a 3 year rolling basis

51 properties independently valued increased by an average of 6.3%.

Strong growth in NSW and New Zealand driven by both yield compression and annual rental growth.

Directors valuations adopted for a further 129 properties (Queensland and leasehold properties excluded) to reflect rent increases, yield compression in NSW and New Zealand and exchange rate movements.

No. of Properties

Valued

Carrying Value

$m’s % Movement

NSW/ACT 11 $12.5 +11% QLD 14 $14.9 -2%

VIC 6 $6.9 +5% New Zealand 15 $14.8 +16%

SA 5 $3.5 -5% Total 51 $52.6 +6%

Independent Valuations

No. of Properties

Valued

Carrying Value

$m’s % Movement

NSW/ACT 42 $55.0 +5% VIC 38 $53.9 +2% New Zealand 30 $30.0 +12%

Tas 2 $3.0 +8% SA 9 $8.7 -2% WA 8 $9.0 +3% Total 129 $159.6 +5%

Director Valuations

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FY14 Outlook

Portfolio Income

Sustainable increases through predominantly CPI based annual indexation

Market rental reviews providing good rent uplift (+5.7%)

Focus on growth in income for FY14 and beyond through investment and re-investment

Growth

Disciplined and sensible asset acquisitions and disposals to enhance the portfolio and as a catalyst for future growth

Asset Values

Yield compression in market together with further indexed rental growth may provide further capital appreciation

Sector Engagement

Continued sector and industry engagement as Australia’s leading provider of early learning accommodation

$180 $244

$313

$0

$50

$100

$150

$200

$250

$300

$350

June 2012 June 2013 Dec 2013

Market Cap $m

10.0 10.7 12.0

0

5

10

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Actual 2012 Actual 2013 Forecast 2014

Distribution Growth CPU

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Appendices

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Market Performance – Appendix 1

The 6 month total return for AET was 14%, compared to a negative 1.5% total return for the S&P/ASX 200 A-REIT Index

Effective rental nature of AET’s leases minimises volatility in rents and need for additional capital to sustain rental and capital values

AET unit price performance based upon predictability of earnings, long WALE, predictable costs and limited capex

AET Unit Price v A-REIT Index - Last 6 months

90.0

95.0

100.0

105.0

110.0

115.0

Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13

ASX:AEU

S&P/ASX 200 A-REIT INDEX (ACCUM)

AET Total Return v A-REIT Index - Last 6 months

$1.30

$1.35

$1.40

$1.45

$1.50

$1.55

$1.60

$1.65

$1.70

Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13

ASX:AEU

S&P/ASX 200 A-REIT INDEX

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Property Portfolio - Tenant Profile – Appendix 2

AET’s properties are leased to 29 tenants

AET’s tenant base is increasing with a defined strategy of dealing only with quality operators with a proven track record

Asset spread and geographic diversification provides overall stability to the portfolio

AET holds approximately $23 million of bank guarantees, most on a ‘pooled guarantee’ basis from its tenants

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SA 26 Properties, 7%

Vic

62 Properties, 18%

NSW

87 Properties, 25%

TAS 2 Properties, 1%

ACT 3 Properties, 1%

NZ South 18 Properties, 5%

NZ North 36 Properties, 10%

Qld

107 Properties, 30%

WA 10 Properties, 3%

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Property Portfolio – Lease Profile – Appendix 3

Generally Triple net leases (ex land tax)

5 year tenant refurbishment provisions

Typical early learning centre:

– initial lease term 15 years plus two 5 year options

– 5 year notice period to take-up options

100% occupancy

No significant expiry until 2019

Mill

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2.0

4.0

6.0

8.0

10.0

2014 2016 2018 2020 2022 2024 2026 2028

Expiry Profile by Annual Rent

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QUESTIONS

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Further Information & Disclaimer Australian Education Trust ASX Code: AEU Website: www.educationtrust.com.au

Responsible Entity: Folkestone Investment Management Limited ABN: 46 111 338 937 AFSL: 281544 Level 12, 15 William Street Melbourne Vic 3000

Independent Board of Directors: Vic Cottren - Chairman & Independent Non-Executive Director Michael Johnstone - Independent Non-Executive Director Grant Hodgetts - Independent Non-Executive Director Nick Anagnostou – Executive Director Senior Management: Nick Anagnostou – Chief Executive Officer Travis Butcher - Chief Financial Officer Company Secretary: Scott Martin Investor Relations: Lula Liossi Phone: +61 3 8601 2668 Email: lliossi@folkestone.com.au Registry: Boardroom Pty Limited PO Box R67, Royal Exchange NSW 1223 Telephone: 1300 131 856 or +61 2 9290 9600 E-mail: enquiries@boardroomlimited.com.au Website: www.boardroomlimited.com.au

This paper has been published for information purposes only. The information contained in this paper is of a general nature only and does not constitute financial product advice. This presentation has been prepared without taking account of any person's objectives, financial situation or needs. Because of that, each person should, before acting on this presentation, consider its appropriateness, having regard to their own objectives, financial situation and needs. You should consult a professional investment adviser before making any decision regarding a financial product.

In preparing this presentation the author has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which has otherwise been reviewed in preparation of the paper. The information contained in this paper is current as at the date of this paper and is subject to change without notice. Past performance is not an indicator of future performance.

Neither Folkestone Limited, nor any of their associates, related entities or directors, give any warranty as to the accuracy, reliability or completeness of the information contained in this paper. Except insofar as liability under any statute cannot be excluded, Folkestone Limited and its associates, related entities, directors, employees and consultants do not accept any liability for any loss or damage (whether direct, indirect, consequential or otherwise) arising from the use of this paper.

If a product managed by Folkestone Limited or its associates is acquired, Folkestone Limited or its associates and related entities may receive fees and other benefits.

Folkestone Limited Folkestone Investment Management Limited Level 10, 60 Carrington Street Level 12, 15 William Street

Sydney NSW 2000 Melbourne, VIC 3000

T: +612 8667 2800 T: +613 8601 2092

www.folkestone.com.au enquiries@folkestone.com.au

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