Introduction

These Explanatory Notes are intended to provide Security holders with information to assess the merits of the Resolutions contained in the accompanying Notice of Annual General Meeting 2009.

Appointment of Directors to the DEXUS Funds Management Limited Board

The Directors have determined, in accordance with the corporate governance framework adopted by the Group, that each Director obtain Security holders’ ratification at the Annual General Meeting immediately succeeding their initial appointment, and thereafter within three years, with at least one Director seeking ratification at each Annual General Meeting.

If an individual Director’s appointment or continued appointment as a Director fails to be ratified by a majority vote of Security holders at the required Annual General Meeting then that Director will thereafter cease to hold the office of Director of DEXUS Funds Management Limited. Consequently, that Director will also cease to hold the office of Director of DEXUS Holdings Pty Limited.

Resolution 1 – Approval of an Independent Director – Mr Christopher T Beare

Christopher Beare was last ratified as a Director at the 2006 Annual General Meeting and, by rotation, is seeking Security holders’ ratification, to continue as a Director of DEXUS Funds Management Limited.

Christopher T Beare BSc, BE (Hons), MBA, PhD, FAICD Chair and Independent Director

Chris Beare is both the Chair and an Independent Director of DEXUS Funds Management Limited (appointed 4 August 2004). He is also a member of the Board Nomination and Remuneration Committee and the Board Finance Committee.

Chris has significant experience in international business, technology, strategy, finance and management. Previously Chris was Executive Director of the Melbourne based Advent Management venture capital firm prior to joining investment bank Hambros Australia in 1991. Chris became Head of Corporate Finance in 1994 and joint Chief Executive in 1995, until Hambros was acquired by Société Générale in 1998. Chris remained a Director of SG Australia until 2002. From 1998 onwards, Chris formed Radiata – a technology start-up in Sydney and Silicon Valley – where, as Chair and Chief Executive Officer, Chris steered it to a successful sale to Cisco Systems in 2001 and continued for four years as Director Business Development for Cisco. Chris has previously been a director of a number of companies in the finance, infrastructure and technology sectors.

The Board unanimously recommends that Security holders ratify the continued appointment of Christopher Beare as a Director of DEXUS Funds Management Limited.

Resolution 2 – Approval of an Independent Director – John C Conde AO

John Conde AO was appointed an Independent Director on 29 April 2009 and is seeking Security holders’ ratification of his initial appointment as a Director of DEXUS Funds Management Limited.

John C Conde AO, BSc, BE (Hons), MBA Independent Director

John Conde AO is an Independent Director of DEXUS Funds Management Limited, is the Chair of the Board Nomination and Remuneration Committee and a member of the Board Compliance Committee.

John brings to the Board extensive experience across diverse sectors including commerce, industry and government. John was previously a Director of BHP Billiton and Excel Coal Limited, Managing Director of Broadcast Investment Holdings Pty Limited, Director of Lumley Corporation and President of the National Heart Foundation of Australia.

John is Chairman of Energy Australia, Bupa Australia Group and Whitehaven Coal Limited. John is President of the Commonwealth Remuneration Tribunal and Chairman of the Sydney Symphony, the Australian Olympic Committee (NSW) Fundraising Committee, Homebush Motor Racing Authority Advisory Board and a member of the Bond University Board of Trustees.

The Board unanimously recommends that Security holders ratify the initial appointment of John Conde AO as a Director of DEXUS Funds Management Limited.

Resolution 3 – Approval of an Independent Director – Peter B St George

Peter St George was also appointed Independent Director on 29 April 2009 and is seeking Security holders’ ratification of his initial appointment as a Director of DEXUS Funds Management Limited.

Peter B St George, CA(SA), MBA Independent Director

Peter St George is an Independent Director of DEXUS Funds Management Limited, is the Chair of the Board Finance Committee and is a member of the Board Audit and Board Risk Committees.

Peter has more than 20 years’ experience in senior corporate advisory and finance roles within NatWest Markets and Hill Samuel & Co in London. Peter acted as Chief Executive/Co-Chief Executive Officer of Salomon Smith Barney Australia/NatWest Markets Australia from 1995 to 2001. Peter was previously a Director of Spark Infrastructure Group and Chedha Holdings (Powercor and Citipower, Victoria). Peter was also Chairman of Walter Turnbull Chartered Accountants and a Director of SFE Corporation Limited.