New Star International Property Fund acquires first property in Melbourne, Australia

17- STOREY OFFICE BLOCK IN FLAGSTAFF PRECINCT

28 February 2008 – The New Star International Property Fund has acquired 414 La Trobe Street, a 17-storey office building in the Flagstaff Precinct in Melbourne, from Investa Properties Ltd for AU$67,136,100.

The 17 storeys, which include three levels of above-ground tenant car parking, have a net lettable area (NLA) of approximately 14,299 square metres over a square-shaped site of 1,409 square metres.

Work is currently being undertaken to improve the sustainable nature of the property. We believe this will give a level of rating in the Australian property market that places the building as one of only two properties within its asset class in the Melbourne market to achieve such a high standards.

The property's office accommodation is 100% leased to the Australian Tax Authority and the Department of Workplace Relations on terms between five and 10 years. This provides a secure and long-term income stream with fixed annual rental increases of between 3.75% and 4%.The Flagstaff precinct has seen historically low vacancy rates of 4.7%, which is below the Melbourne Central Business District average. Rents increased 13% in 2007 and similar growth is expected for 2008. 

Stuart Webster, head of global property at New Star Asset Management, said:
"We are pleased to have been able to secure this acquisition in Melbourne from Investa Properties. This acquisition will complement our existing Australian portfolio in Sydney and Perth. The type of asset and tenant profile matches the fund's requirements for long-term secure income for our investors."

"Investa is a leader in the field of sustainable property investment and New Star is committed to continuing the current works. We wish to achieve an Australian Building Green Rating (ABGR) in excess of three stars. Sustainability is an important consideration, especially in Australia."

"We continue to view the story in Australia as compelling for our investors and we are looking for further opportunities to increase our participation."

Campbell Hanan, Group Executive, Internal Funds at Investa Properties, said:
"The sale of 414 Latrobe Street to a group such as New Star supports our view that international buyers will increasingly be drawn to Australia as a source of quality investment assets. This well-located building boasts Federal Government tenants on long leases in a market that has performed particularly well in recent years."

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NOTES TO EDITORS:

New Star, one of the UK's fastest growing fund management companies, was founded in June 2000 by John Duffield, previously the founder of Jupiter Asset Management, which he built into one of the most successful retail investment businesses in the UK.

• New Star is expanding its international business in response to the growing demand from investors in Continental Europe. The aim is to become a leading mutual fund provider in the next few years, offering international investors the investment expertise of one of the fastest growing UK fund management groups.
• New Star's international strategy is to develop key partnerships in local markets.
• New Star International's website can be found at www.newstaram.com.
  

IMPORTANT INFORMATION

Past performance is not necessarily a guide to future performance. This document is for information purposes only and does not constitute an offer or solicitation to invest in the fund detailed within. It should not be distributed to any third parties. Please be aware that the fund is registered for sale in the UK, recognised in Singapore as a restricted collective investment scheme, and is not registered for sale in Hong Kong.

This document is for professional investors, other financial institutions and professional advisers only and should not be provided to or relied upon by private investors. This document should not be distributed to any third parties and does not constitute an offer or solicitation to anyone in any jurisdiction in which such an offer is not authorised or to any person to whom it is unlawful to make such offer or solicitation.

Full details of the fund including risk factors can be found in the prospectus, which is available on request. Yield figures may vary and are not guaranteed. The annual management charge for the New Star International Property Fund is taken from capital. Capital growth will therefore be restricted. The value of investments may be affected by changing stockmarket conditions and, where applicable, by exchange rate movements. Investors may not get back the amount they originally invested when they sell their investment.

Although national interest rates and changing currency exchange rates may benefit the fund, they also present an added risk. The managers may seek to reduce the impact of any risk of fluctuations in international interest rates and currency exchange rates by purchasing instruments that provide hedging. The New Star International Property Fund invests in a specialist sector, which may be less liquid and produce more volatile performance than an investment in broader investment sectors.

Please note, the bid-offer spread for this fund is likely to be wider than on less specialist funds and may vary. The bid-offer spread represents the difference between the buying and selling prices for the underlying assets in the fund. Changes to the fund's pricing basis will lead to an increase or decrease in what you will pay or receive when buying or selling shares. The overall impact of these changes should be less for long term investors and may be either positive or negative.

Whilst property valuations are conducted by an independent expert, any such valuation is a matter of the valuer's opinion. The fund could be subject to significant losses if it holds a large position in a particular region that declines in value or is otherwise adversely affected. The amount raised when a property is sold may be less than the valuation, especially if the property needs to be sold quickly. Although the property shares element of the fund provides it with some liquidity, in certain circumstances, for example where there are significant redemptions, there may be constraints on the redemption or switching of shares in the fund.

The fund's exposure to direct international commercial property may be less than 75% depending on market conditions, during times of significant inflows, or when reallocating between sectors or markets.

The value of capital and income will fluctuate as property values and rental income rise and fall. Whilst the manager will seek to hold a relatively diversified portfolio, as a result of operating in an international remit over a large number of jurisdictions and with investments in largely illiquid assets, the fund's performance may be adversely affected by changes in market and economic conditions, tax or other laws or regulations or accounting standards.

The opinions expressed here represent the views of the fund manager at the time of preparation and should not be interpreted as investment advice.

New Star Investment Funds is the trading name of New Star Investment Funds Limited, part of the New Star Marketing Group. New Star Investment Funds is not authorised to give investment advice and only provides information on New Star's products. Issued by New Star Investment Funds Limited. Authorised and regulated by the Financial Services Authority.

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