Babcock & Brown Acquires U.S. Regional Mall Portfolio and Asset Manager/Operator

NEW YORK, May 15 /PRNewswire-FirstCall/ -- International investment and advisory firm, Babcock & Brown (ASX: BNB) , announced today that it has entered into an agreement to acquire both Gregory Greenfield & Associates, Ltd. ("GG&A"), a U.S.-based regional mall owner and operator, as well as a portfolio of eight regional malls currently managed and controlled by GG&A. Included in the Babcock & Brown acquisition of GG&A is the asset management role for six additional malls in GG&A's portfolio currently owned by third party investors.

The principals of GG&A have extensive experience in the North American retail industry, including acquisitions, development, leasing and project management.

Since its inception in 1998, GG&A has acquired 28 regional retail centres on behalf of its investors, at an aggregate acquisition cost of roughly $1.5 billion. Dan Brickman, Head of Babcock & Brown's North American Real Estate Division said, "Greg Greenfield and his team are outstanding operators and asset managers of regional malls and their addition to our team represents a very positive step in the growth of Babcock & Brown's retail real estate business in the U.S."

This transaction represents Babcock & Brown's third significant investment in North American retail real estate. In November 2005, Babcock & Brown, along with The GPT Group ("GPT"), acquired a portfolio of six regional malls from Colonial Properties Trust ("Colonial") pursuant to a joint venture structure, whereby Colonial retained a 10% interest. In November 2006, Babcock & Brown and GPT acquired an additional mall and power centre from Colonial. As a result of this transaction, Babcock & Brown will own interests in a portfolio of 16 malls and will asset manage six other regional malls in the U.S., forming a combined portfolio under management of 22 malls valued in excess of $1.7 billion with a total gross leasable area of 15.3 million square feet.

Babcock & Brown and GPT intend, upon the completion of Babcock & Brown's acquisition of GG&A and the eight mall portfolio, to buy out the Colonial minority interest and consolidate the management of the two portfolios under this one platform. This will enable Babcock & Brown to more effectively and actively operate and asset manage the combined retail portfolio, providing economies of scale, portfolio diversification across more markets and a potential future acquisition pipeline of assets.

Babcock & Brown and GPT are currently discussing the basis upon which the joint venture between Babcock & Brown and GPT might jointly participate in the Greenfield transaction.

Eric Lucas Head of Global Real Estate at Babcock & Brown said, "The creation of this retail investment platform will establish Babcock & Brown as a major participant in the US retail market offering enhanced opportunities for future portfolio growth and flexibility with respect to potential value creation strategies."

  The acquisition is expected to be completed in August 2007.

  Further Information:

  Kelly Hibbins
  Babcock & Brown
  kelly.hibbins@babcockbrown.com
  +61 2 9229 1866

  About Babcock & Brown

Babcock & Brown is a global investment and advisory firm with longstanding capabilities in structured finance and the creation, syndication, and management of asset and cash flow-based investments. Babcock & Brown was founded in 1977 and is listed on the Australian Stock Exchange.

Babcock & Brown operates from 28 offices across Australia, North America, Europe, Asia, United Arab Emirates, and Africa and has in excess of 1,000 employees worldwide. Babcock & Brown has five operating divisions including real estate, infrastructure and project finance, operating leasing, structured finance, and corporate finance. The company has established a funds management platform across the operating divisions that has resulted in the creation of a number of focused investment vehicles in areas including real estate, renewable energy, and infrastructure.

For further information about Babcock & Brown, please see our website: http://www.babcockbrown.com/.