Responsible Entity Brookfield Capital Management Limited ACN 094 936 866 AFSL 223809

BRookFiELd PRiME PRoPERty FuNdARSN 110 096 663

Interim Report 2012

1 Message from the Chairman 2 Half year Review 6 Portfolio Analysis 8 Property Analysis 14 Condensed Consolidated interim Statement of Comprehensive income 15 Condensed Consolidated interim Statement of Financial Position IBC Corporate directory

BRookFiELd PRiME PRoPERty FuNd iNtERiM REPoRt 20121

Message from the Chairman

on behalf of the Board of Brookfield Capital Management Limited (BCML), enclosed are the interim financial results for the six month period to 31 december 2011 for Brookfield Prime Property Fund (the Fund).

FiNANCiAL RESuLtSthe Fund reported a net loss of $5.4 million for the six month period to 31 december 2011 compared to a net profit of $23.7 million for the comparable six month period to 31 december 2010.

key financial results as at 31 december 2011 include:

– Net assets of $241.3 million (30 June 2011: $266.5 million) and Net tangible Asset (NtA) per unit of $4.82 (30 June 2011: $5.28) with the reduction largely reflecting an unrealised movement in the Fund’s interest rate derivatives;

– total revenue and other income of $38.2 million (31 december 2010: $51.0 million); – Earnings (loss) per unit of (10.82) cents (31 december 2010: 46.98 cents); – Property portfolio value of $906.5 million (30 June 2011: $627 million) including

$5.2 million in unrealised losses on revaluations of investment properties recorded during the period.

the Fund is currently in compliance with all its debt covenants.

PRoPERty PoRtFoLioin July 2011, the Fund completed its acquisition of a 50% interest in Southern Cross West tower, Melbourne and Bankwest tower, Perth and in November announced the sale of defence Plaza, Melbourne. these significant events will position the Fund to benefit from the high quality properties within the portfolio.

Settlement of defence Plaza’s sale in March 2012 will enable the senior debt facility and bridging facility provided by Brookfield to be reduced.

outLookin September 2011 BCML announced the introduction of a unit buyback. over the period since the buyback announcement the trading price of the Fund has risen from $3.07 to a closing price $3.85 per unit on 31 december 2011.

in addition to the buyback BCML will continue to focus on strategies to enhance value for unitholders and to narrow the discount which exists between the Fund’s trading price and underlying net asset value.

Please visit ww w.au.brookfield.com for the Fund’s half year financial report. on behalf of the Board, thank you for your ongoing support.

F. Allan Mcdonald independent Chairman

2

Half Year Review

Brookfield Capital Management Limited (BCML), the Responsible Entity of Brookfield Prime Property Fund (the Fund) provides a review of the half year ended 31 december 2011.

FiNANCiAL RESuLtSthe Fund reported a net loss of $5.4 million which can in part be attributed to $5.2 million in net unrealised losses on the revaluation of the property portfolio, and unrealised losses of $4.7 million relevant to the Fund’s interest rate derivatives. As at 31 december 2011, the Fund’s Net Assets were $241.3 million. Earnings (loss) per unit was (10.82) cents (31 december 2010: 46.98 cents).

MovEMENt iN NtAthe Fund’s underlying NtA decreased from $5.28 to $4.82 per unit over the period. the fall in NtA is primarily based on the value of the Fund’s interest rate derivative which has moved to a liability of $34 million, compared to a liability of approximately $12.7 million at 30 June 2011 (a reduction in NtA of 42.5 cents per unit). in accordance with accounting standards, an amount of $4.7 million is reflected in the Fund’s income statement with $16.3 million through a decrease in the Fund’s reserves.

Property values across the portfolio show no material change in value over the period.

7

5

6

3

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2

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1

NTA per unit ($)

Net assets July 11

Net property income

Share of profit of

associates

Change in fair value

of financial

derivatives

Net loss on

revaluation of

investment properties

Finance costs

Management fees

Other items

Distributions paid /

declared

Impact of unit buy

back

Net assets 31 December

2011

5.280.39 0.23 (0.42)

(0.02)(0.06)

(0.51)

(0.04) (0.04) 0.01 4.82

NtA RECoNCiLiAtioN

BRookFiELd PRiME PRoPERty FuNd iNtERiM REPoRt 20123

PRoPERty PoRtFoLioAs at 31 december 2011 the property portfolio value was $906.5 million (30 June 2011: $627 million). the Fund acquired a 50% interest in Bankwest tower, Perth and a 50% interest in Southern Cross West tower, Melbourne. the combined value of the two assets at 31 december 2011 was $280.0 million.

in November 2011, the Fund agreed to sell defence Plaza, Melbourne for a net consideration of $78 million. Settlement is expected to take place on 30 March 2012.

the value of the portfolio as a whole has remained stable over the period with a small decline in value of the Ernst & young Centre, Sydney largely offset by an increase in the value of Southern Cross East tower, Melbourne.

the property portfolio has a weighted average lease expiry (by income) of 7.67 years and occupancy rate of 97% at 31 december 2011.

PROPERTY SUMMARY

PROPERTY LOCaTIOnFund ShaRE

(%)

VaLuE aT 31 dECEmBER 2011

$m

VaLuE aT 30 JunE 2011

$m

Ernst & young Centre and 50 Goulburn Street Sydney 50 265.5 270.0American Express House Sydney 100 130.0 130.0defence Plaza1 Melbourne 100 78.0 77.0Southern Cross East tower Melbourne 25 153.0 150.0Southern Cross West tower Melbourne 502 135.0 n/aBankwest tower Perth 502 145.0 n/aTotal 906.5 627.0

Notes:1 the Fund agreed to sell defence Plaza to Real i.S.AG. Settlement is expected to take place on 30 March 2012. 2 Acquisition of the interests in the two properties was settled after 30 June 2011.

Settlement of Defence Plaza’s sale in March 2012 will enable the senior debt facility and the bridging facility provided by Brookfield to be reduced.

4

Half Year Review

dEBtthe Fund entered into a new three year senior debt facility with a limit of $525 million in June 2011. the Facility was used to repay the previous debt facility of $363 million and to fund the purchase of the 50% interest in Bankwest tower and 50% interest in Southern Cross West tower.

the Fund was in compliance with all debt covenants as at 31 december 2011.

the Fund entered into a subordinated bridge facility agreement (subordinated behind the senior debt facility) with a Brookfield Australia investments Group entity for up to $130 million for a one year term commencing 1 July 2011 with an option to extend for one year. the facility was entered to assist with the acquisition of the 50% interests in Bankwest tower and Southern Cross West tower. As at 31 december 2011, $105.5 million, including accrued interest, was payable under this facility.

upon settlement of the defence Plaza sale, the Fund will be required to repay $46.2 million of the senior debt facility. Remaining proceeds are expected to be utilised to reduce the Brookfield bridging facility.

the loan to value ratio calculated as at 31 december 2011 was 57.9% and post the sale of defence Plaza will reduce to approximately 57.2%.

during the current period, an option relating to the interest rate derivative was exercised by the Fund’s derivative counterparties. As a result, an amount of $419 million payable under the Fund’s senior debt facility is swapped with an applicable rate of 5.88% plus 2.15%. the remainder of the facility is unhedged and carries a rate or Bank Bill Rate plus 2.15%.

FuNd SNAPSHot (as at 31 december 2011)

Market capitalisation $192.7 millionFunds under management $966.5 millionListing date 15 September 2006NtA per unit $4.82Portfolio occupancy 97.0%Portfolio weighted average lease term by income 7.7Loan to value ratio 57.9%Management fee 0.65% pa (excluding GSt) of gross asset valuePerformance fee tier 1 – 5%, tier 2 – 15% (excluding GSt)

of benchmark1 outperformance

Notes:1 uBS Commercial Property Accumulation (2008) index.

BRookFiELd PRiME PRoPERty FuNd iNtERiM REPoRt 20125

The value of the portfolio as a whole has remained stable over the period with a small decline in value of the Ernst & Young Centre, Sydney largely offset by an increase in the value of Southern Cross East Tower, Melbourne.

MARkEt Buy BACkon 2 September 2011 the Fund announced an on market buy-back of its securities. during the period to 31 december 2011, the Fund bought back 380,563 securities at a cost of $1.383 million.

the average price paid per security during the period was $3.63 per unit, which is a discount of approximately 25% on the NtA of $4.82 per unit as at 31 december 2011.

diStRiButioNSA distribution of 2.0 cents per unit was paid on 26 September 2011. the Fund also declared a distribution of 2.0 cents per unit on 15 december 2011, paid on 31 January 2012.

1210 1486420

The Fund as at 31 December 2011

American Express House

Bankwest Tower

Defence Plaza

Ernst & Young Centre and 50 Goulburn Street

Southern Cross East Tower

Southern Cross West Tower

WEiGHtEd AvERAGE LEASE EXPiRy (by income)

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Portfolio Analysis

LEASE EXPiRy PRoFiLE (by income)

GEoGRAPHiC ALLoCAtioN (by value) tENANCy MiX (by income)

44% New South Wales 40% Victoria 16% Western Australia

28% Victorian State Government 18% Other 14% Ernst & Young 14% Australia Post 12% Bankwest 6% American Express 5% Commonwealth Government 3% Parsons Brinckerhoff

BRookFiELd PRiME PRoPERty FuNd iNtERiM REPoRt 20127

Southern Cross East tower, Melbourne Brookfield Prime Property Fund

Bankwest tower, 108 St Georges terrace, Perth

Brookfield Prime Property Fund

American Express House, 12 Shelley Street, Sydney Brookfield Prime Property Fund

8

Property Analysis

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Ernst & Young Centre and 50 Goulburn Street, Sydney

PRoPERty dESCRiPtioNErnst & young Centre is a landmark commercial office tower within the southern periphery of the midtown precinct of the Sydney CBd. the property comprises a substantial lobby with two retail areas and 35 upper levels of office accommodation incorporating low, mid, high and sky rise.

50 Goulburn Street is a six level commercial building situated on the corner of George Street and Goulburn Street, incorporating ground floor, four levels of office accommodation, a small rooftop terrace and car parking for 28 vehicles. the property’s services are integrated with the Ernst & young Centre and the property is serviced with retail and transport facilities in close proximity.

PRoPERty dEtAiLSownership (%) 50Net lettable area – whole building (sqm) 67,998occupancy (%) 93Weighted average lease expiry (years) 4.3valuation (50%) $265.5 millionvaluation date 31 december 2011

tENANCy MiX (by income)

55% Ernst & Young 13% Parsons Brinckerhoff 5% AAPT 8% Link Market Services 6% Flairview Travel 13% Other

LEASE EXPiRy (by area)

BRookFiELd PRiME PRoPERty FuNd iNtERiM REPoRt 20119

Southern Cross East Tower, Melbourne

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PRoPERty dESCRiPtioNSouthern Cross East tower is a landmark A-grade office building with premium grade services. the building comprises a ground level foyer and retail tenancies, 36 levels of office accommodation and basement parking for 950 vehicles.

the property is located at the eastern end of the Melbourne CBd bordering Exhibition, Bourke and Little Collins Streets. Public transport facilities include tram and bus services and Parliament Railway Station is situated 100 metres to the west.

PRoPERty dEtAiLSownership (%) 25Net lettable area – whole building (sqm) 79,733occupancy (%) 100Weighted average lease expiry (years) 12.8valuation (25%) $153.0 millionvaluation date 31 december 2011

tENANCy MiX (by income)

69% Victorian State Government (Other) 22% Victorian State Government (DOI) 9% Other

LEASE EXPiRy (by area)

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Property Analysis

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Defence Plaza, Melbourne

PRoPERty dESCRiPtioNthis A-grade property is a commercial building constructed in circa 1990 consisting of ground floor retail and other accommodation, together with nine upper levels of office accommodation.

the property has two street frontages, with the main entrance on Bourke Street, and the floors provide good natural light. the property is situated in the western fringe of the Melbourne CBd within 100 metres of Southern Cross Railway Station. Also located nearby are docklands and Etihad Stadium.

A 10 year lease renewal for 100% of the building was signed with the Commonwealth of Australia commencing in June 2011. the Fund has agreed to sell defence Plaza. Settlement is expected to take place on 30 March 2012.

PRoPERty dEtAiLSownership (%) 100Net lettable area – whole building (sqm) 19,089occupancy (%) 100Weighted average lease expiry (years) 9.5valuation (100%) $78.0 millionvaluation date 31 december 2011

tENANCy MiX (by income)

100% Commonwealth Government of Australia

LEASE EXPiRy (by area)

BRookFiELd PRiME PRoPERty FuNd iNtERiM REPoRt 201111

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American Express House, Sydney

PRoPERty dESCRiPtioNAmerican Express House is an A-grade commercial office building completed in late 2007. the property comprises 10 levels of commercial office fully occupied by American Express with ancillary retail and underground parking for 69 vehicles.

the property is located within the western corridor precinct of the Sydney CBd with frontage on Shelley Street. American Express House is close to Wynyard Railway Station and Bus interchange as well as king Street Wharf retail and restaurants.

PRoPERty dEtAiLSownership (%) 100Net lettable area – whole building (sqm) 14,974occupancy (%) 100Weighted average lease expiry (years) 6.8valuation (100%) $130.0 millionvaluation date 31 december 2011

tENANCy MiX (by income)

96% American Express 4% Other

LEASE EXPiRy (by area)

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Property Analysis

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Southern Cross West Tower, Melbourne

PRoPERty dESCRiPtioNSouthern Cross West tower forms part of the Southern Cross landmark development. the A-grade property was completed in 2009 and comprises ground floor retail tenancies, lobby, 20 upper levels of office accommodation and basement parking.

the property is located at the eastern end of the Melbourne CBd, bordering Bourke and Little Collins Streets. Public transport facilities include tram and bus services and Parliament Railway Station is situated 100 metres to the west.

PRoPERty dEtAiLSownership (%) 50Net lettable area – whole building (sqm) 47,367occupancy (%) 100Weighted average lease expiry (years by income) 7.7valuation (50%) $135 millionvaluation date 31 december 2011

tENANCy MiX (by income)

95% Australia Post 5% Other

LEASE EXPiRy (by area)

BRookFiELd PRiME PRoPERty FuNd iNtERiM REPoRt 201113

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Bankwest Tower, 108 St Georges Terrace, Perth

PRoPERty dESCRiPtioNBankwest tower (108 St Georges terrace) is an A-grade, 52-level commercial office tower and includes the four-level Palace Hotel, a heritage listed ground floor banking chamber with associated offices on the upper levels.

the building is prominently located on the corner of St Georges terrace and William Street in the core of the Perth CBd and has expansive city views from the upper floors.

PRoPERty dEtAiLSownership (%) 50Net lettable area – whole building (sqm) 39,024occupancy (%) 92.1Weighted average lease expiry (years) 3.4valuation (50%) $145.0 millionvaluation date 31 december 2011

tENANCy MiX (by income)

70% Bankwest 9% Norton Rose 21% Other

LEASE EXPiRy (by area)

14

Condensed Consolidated Interim Statement of Comprehensive IncomeFor the half year ended 31 december 2011

COnSOLIdaTEdhaLF YEaR EndEd31 dECEmBER 2011

$’000

COnSOLIdaTEdhaLF YEaR EndEd31 dECEmBER 2010

$’000

Revenue and other incomeShare of net profit of investments accounted for using the equity method 11,675 22,537Property rental income 25,701 9,835interest income 832 430Net gain on revaluation of financial derivatives – 10,381Net gain on revaluation of investment properties – 6,679Net gain on sale of investments – available for sale – 990other income 5 154Total revenue and other income 38,213 51,006ExpensesProperty expenses 5,955 1,444impairment expense – 93Finance costs 25,701 17,071Finance costs – amortisation of cash flow hedge reserve – 6,549Net loss on revaluation of financial derivatives 4,731 –Net loss on revaluation of investment properties 1,161 –Management fees 3,150 1,998Property selling expenses 2,711 –other expenses 221 155Total expenses 43,630 27,310Net (loss)/profit for the period (5,417) 23,696Other comprehensive incomeChange in cash flow hedge reserve (16,385) 6,549Changes in fair value of available for sale financial assets (8) (665)Other comprehensive (loss)/profit for the period (16,393) 5,884Total comprehensive (loss)/profit for the period (21,810) 29,580Net (loss)/profit attributable to ordinary unitholders (5,417) 23,696Total comprehensive (loss)/profit attributable to ordinary unitholders 21,810 29,850

Earnings per unitBasic and diluted earnings per ordinary unit (cents) (10.82) 46.98

the Condensed Consolidated interim Statement of Comprehensive income should be read in conjunction with the Notes to the Condensed Consolidated interim Financial Statements, available at ww w.au.brookfield.com.

BRookFiELd PRiME PRoPERty FuNd iNtERiM REPoRt 201215

Condensed Consolidated Interim Statement of Financial PositionAs at 31 december 2011

COnSOLIdaTEd 31 dECEmBER 2011

$’000

COnSOLIdaTEd30 JunE 2011

$’000

AssetsCurrent assetsCash and cash equivalents 33,802 17,890trade and other receivables 955 13,503Assets held for sale 100,000 –Total current assets 134,757 31,393Non-current assetsinvestment properties 410,000 207,000investments – available for sale 103 111investments accounted for using the equity method 421,637 417,945Total non-current assets 831,740 625,056Total assets 966,497 656,449LiabilitiesCurrent liabilitiestrade and other payables 41,209 14,175Fair value of financial derivatives – 12,774interest bearing liabilities 46,200 363,014Liabilities associated with assets held for sale 22,000 –Total current liabilities 109,409 389,963Non-current liabilitiesFair value of financial derivatives 34,021 –interest bearing liabilities 581,787 –Total non-current liabilities 615,808 –Total liabilities 725,217 389,963Net assets 241,280 266,486Equityunits on issue 306,224 307,610Reserves (16,374) 19undistributed losses (48,570) (41,143)Total equity 241,280 266,486

the Condensed Consolidated interim Statement of Financial Position should be read in conjunction with the Notes to the Condensed Consolidated interim Financial Statements, available at ww w.au.brookfield.com.

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Corporate Directory

RESPoNSiBLE ENtityBrookfield Capital Management Limited Level 22 135 king Street Sydney NSW 2000 telephone: (02) 9322 2000 Facsimile: (02) 9322 2001

diRECtoRSF. Allan Mcdonald Barbara Ward Brian Motteram Russell Proutt Shane Ross

CoMPANy SECREtARyNeil olofsson

REGiStEREd oFFiCELevel 22 135 king Street Sydney NSW 2000 telephone: (02) 9322 2000 Facsimile: (02) 9322 2001

CuStodiANBrookfield Funds Management Limited Level 22 135 king Street Sydney NSW 2000

StoCk EXCHANGEthe Fund is listed on the Australian Securities Exchange (ASX Code: BPA). the Home Exchange is Sydney.

AuditoRdeloitte touche tohmatsu the Barrington Level 10 10 Smith Street Parramatta NSW 2150 telephone: (02) 9840 7000 Facsimile: (02) 9840 7001

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