DR RREEE

Managed in partnership with Deutsche Bank $\boxtimes$

DB RREEF Funds Management Limited ABN 24 060 920 783 Australian Financial Services Licence Holder

Level 21 83 Clarence Street Sydney NSW 2000

PO Box R1822 Royal Exchange NSW 1225

Telephone 61 2 9249 9500 Direct 61 2 9249 9040 Facsimile 61 2 9279 3090

DB RREEF Trust (ASX: DRT) - 2005 Financial Statements for DIT, DOT and DRO

DB RREEF Funds Management Limited, as responsible entity for DB RREEF Trust (DRT), wishes to provide the 2005 Financial Statements as at 30 June 2005 for DB RREEF Industrial Trust ("DIT"), DB RREEF Office trust ("DOT") and DB RREEF Operations Trust ("DRO")

For further information, please contact

$\bullet$	Institutional Investors:	Tony Dixon	$(02)$ 9249 9040
٠	Retail Investors:	Karol O'Reilly	$(03)$ 9270 4419
	• Media inquiries:	Megan Owen	$(02)$ 9249 9904

Yours sincerely

Tanya Cox Company Secretary

28 September 2005

The Manager Australian Stock Exchange Limited 20 Bridge Street Sydney NSW 2000

Dear Sir/Madam

DB RREEF Trust combined financial statements 2005

Managed in partnership with Deutsche Bank $\boldsymbol{\varXi}$

PICTURED FRONT COVER: One Margaret Street, Sydney NSW; ABOVE: Pound Road, Dandenong VIC.

financial statements

directors' report

directors' and executive remuneration report/ auditors' independence declaration. statements of financial performance.

RZE OKG

statements of financial position

statements of cash flows

notes to the financial statements

directors' declaration

independent auditor's report.

directors' report

The Directors of DB RREEF Funds Management Limited ("DRFM") as Responsible Entity of DB RREEF Office Trust (formerly Deutsche Office Trust) ("the Trust" or "DOT") and its consolidated entities ("the group") present their Directors' Report ("Report") together with the consolidated financial report of the Trust for the year ended 30 June 2005.

1. directors and secretaries

On 29 September 2004, DRFM replaced Deutsche Asset Management (Australia) Limited as Responsible Entity of the Trust.

1.1 DB RREEF Funds Management Limited

The following persons were Directors or atternate Directors of DRFM at any time during the period 29 September 2004 to 30 June 2005:

Name	Appointed	Resigned
Directors
Christopher T Beare	4 August 2004	Continuing
Elizabeth A Alexander AM	1 January 2005	Continuing
Barry & Brownjohn	3 January 2005	Continuing
Stewart F Ewen	4 August 2004	Continuing
Victor P Hoog Antink	1 October 2004	Continuing
Charles B Leitner III	10 March 2005	Continuing
Shaun A Mays	13 May 2004	10 March 2005
Brian E Scullin	1 January 2005	Continuing
Daniel S Weaver	1 October 2004	17 December 2004
Alternate Director
Shaun A Mays (alternate for Charles B Leitner III)	10 March 2005	Continuing

Particulars of the qualifications, experience and special responsibilities of current Directors or alternate Directors of DRFM at the date of this Report are set out in the DRT Annual Report 2005 in the section titled "Directors".

Particulars of the qualifications, experience and special responsibilities of Daniel S Weaver, a Director of DRFM during the period 29 September 2004 to 30 June 2005 are as follows:

Daniel S Weaver BArch, MBA, AFIRE (Executive Director)

With over 18 years of real estate experience, primarily with firms specialising in retail property, Daniel joined RREEF's acquisition group in 1996. Daniel's responsibilities entail overseeing RREEF's retail property acquisitions, including expanding its target markets and serving as the retail specialist on RREEF's Investment Committee. Prior to his current role, Daniel was most recently a portfolio manager for one of RREEF's separate account pension fund clients. Prior to joining RREEF, Daniel was a vice president with Homart Development Co. Daniel is a member of the International Council of Shopping Centres (ICSC) and the Association of Foreign Investors in Real Estate (AFIRE). He holds an undergraduate degree in architecture and an MBA from Miami University.

1.2 Deutsche Asset Management (Australia) Limited

The following persons were Directors of Deutsche Asset Management (Australia) Limited at any time during the period 1 July 2004 to 29 September 2004:

Name	Appointed	Resigned
Directors
Christopher T Beare, Chair!	-25 March 2003	20 October 2004
Stewart F Ewen ^Ly	25 March 2003	20 October 2004
Shaan A Mays	13 May 2004	4 May 2005
William B Robinson ^6,8,5	25 May 2000	20 October 2004
-Brian-E-Scullin?	20 December 1999	Continuing
David C Shields	25 March 2003	Continuing

1 Independent Director.

2 Audit Committee Member.

3 Compliance Committee Member.

Particulars of the qualifications and experience of each of the Directors mentioned in this sub-section are set out in section 1.1 of this Report and in the DRT Annual Report 2005 in the section titled "Directors".

1.3 company secretaries

The names and details of the Company Secretaries of DRFM as at 30 June 2005 are as follows:

Tanya L Cox MBA MAICD (Company Secretary)

Appointed: 1 October 2004

Tanya joined DB Real Estate in July 2003 as Chief Operating Officer, responsible for the efficient management of the overall real estate business in Australia. Tanya has held various general management positions over the past 15 years, including Director and Chief Operating Officer of NM Rothschild & Sons (Australia) Ltd and General Manager - Finance, Operations and IT of Bank of New Zealand (Australia).

Tanya is Chief Operating Officer and Company Secretary for DRFM and DB RREEF Holdings Pty Limited.

lan Thompson BEc (Company Secretary)

Appointed: 12 July 2000 Resigned: 1 July 2005

lan has worked in a range of roles including: Research and Policy Officer, Senior Administration Officer and Assistant Company Secretary in the State Superannuation Board, Local Government Superannuation Board, Public Authorities Superannuation Board, State Superannuation Investment and Management Corporation and Axiom Funds Management Limited, prior to being appointed as Company Secretary to various Group companies of Deutsche Bank in 2000.

John C Easy BComm, LLB (Company Secretary)

Appointed: 3 July 2005

John joined Deutsche Asset Management as a senior lawyer in 1997 and is now the Head of Legal for DB RREEF. John has been involved in the listing of Deutsche Office Trust and major acquisition, disposal and leasing transactions for the group, along with responsibility for legal issues affecting the property portfolio. John was formerly a senior associate with major law firms Allens Arthur Robinson and Gilbert & Tobin. John is currently undertaking the Graduate Diploma in Applied Corporate Governance with Chartered Secretaries Australia.

John is Head of Legal and Company Secretary for DRFM and DB RREEF Holdings Pty Limited.

2. attendance of directors at board meetings and board committee meetings

2.1 DB RREEF Funds Management Limited

The Responsible Entity of the Trust changed from Deutsche Asset Management (Australia) Limited to DRFM on 29 September 2004. Set out below are the details of Director attendance at Board and Board committee meetings:

DB RREEF Funds Management Limited for the period to 30 June 2005

		Board		Board Audit Committee		Board Nomination and Remuneration		Board Risk and Compliance
	Meetings held	Meetings attended	Meetings held	Meetings attended	Meetings held	Meetings attended	Meetings held	Meetings attended
Directors
Christopher T Beare	9	9
Elizabeth A Alexander AM	8		5	5
Barry R Brownjohn	8	6	5	3
Stewart F Ewen	9	9	5	5	3
Victor P Hoog Antink	9	9
Charles B Leitner III	5.	3
Shaun A Mays"	4	3
Brian E Scullin	8	8			3		2	2
Daniel S Weaver		O
Alternate Director
Shaun A Mays (alternate)
for Charles B Leitner (IB)	5.	4			J.

1 Number of meetings held while a Director.

2 Shaun A Mays resigned as a Director on 10 March 2005.

Since 30 June 2005 the DRFM Board has established the Board Treasury Policy Committee.

2.2 Deutsche Asset Management (Australia) Limited

The following table outlines details of Director attendance at Board and Board committee meetings for the period to 29 September 2004 for Deutsche Asset Management (Australia) Limited, the then Responsible Entity of DOT.

Deutsche Asset Management (Australia) Limited for the period to 29 September 2004

	Board		Board Audit Committee		Board Risk and Compliance Committee
	Meetings held	Meetings attended	Meetings held	Meetings attended	Meetings held	Meetings attended
Deutsche Asset Management (Australia) Limited
Christopher T Beare	4	4
Stewart F Ewen	4	4
Shaun A Mays	Δ	4
William 8 Robinson	4	4
Brian E Scullin	4	3
David C Shields	Δ	4

1 Number of meetings held while a Director.

3. directors' and executive remuneration report

DRFM's Directors' and Executive Remuneration is set out in the section titled "Directors' and Executive Remuneration Report" that follows this Report.

4. directors' interests

4.1 interest in securities

As at the date of this Report, the interests of each Director in the securities of DB RREEF Trust ("DRT") are:

	Personally	Indirectly
Christopher T Beare	N#	Ni
Elizabeth A Alexander AM	N8I	Ni
Barry R Brownjehn	N#	Ni
Stewart F Ewen	Nä	Ni
Victor P Hoog Antink	图	Ni
Charles B Leitner III	下注	Ni
Sharin A Mays (alternate to Charles B Leitner III).	图	Ni
Brian E Scolán	Nì	Ni

As at the date of this Report, no Director held options over securities in DRT.

4.2 other interests

As at the date of this Report, no Director held any interest in any other fund or scheme managed by the Responsible Entity or another entity that forms part of DRT.

5. directors' directorships in other listed companies

The following table sets out directorships that the Directors of the Responsible Entity held as at 30 June 2005 and during the three years. preceding 30 June 2005 and up to the date of this Report including the period for which each directorship was held:

Directors	Company	Date appointed	***** Date resigned
Christopher T Beare	DB RREEF Holdings Limited®	21 Sep 2004	Continuing
	DB RREEF Funds Management Limited®	4 Aug 2004	Continuing
Elizabeth A Alexander AM	DB RREEF Holdings Limited!	1 Jan 2005	Continuing
	DB RREEF Funds Management Limited®	3 Jan 2005	Continuing
	Amcor Limited	Apr 1994	Continuing
	Boral Limited	Sep 1994	Continuing
	CSL Limited	Jel 1991	Continuing
Barry R Brownjeha	DB RREEF Holdings Limited®	3 Jan 2005	Continuing
	DB RREEF Funds Management Limited®	3 Jan 2005	Continuing
Stewart F Ewen	DB RREEF Holdings Limited®	21 Sep 2004	Continuing
	DB RREEF Funds Management Limited®	4 Aug 2004	Continuing
Victor P Hoog Antink	DB RREEF Holdings Limited®	1 Oct 2004	Continuing
	DB RREEF Funds Management Limited®	1 Oct 2004	Continuing
Charles B Leitner III	DB RREEF Holdings Limited®	10 Mar 2005	Continuing
	DB RREEF Funds Management Limited®	10 Mar 2005	Continuing
Brian E Scuttin	DB RREEF Holdings Limited ³	3 Jan 2005	Continuing
	DB RREEF Fands Management Limited®	3 Jan 2005	Continuing
	(YS Instalment Receipt Limited®	24 Oct 2000	Continuing
	Deutsche Asset Management (Australia) Limited ^®	20 Dec 1999	Continuing
Alternate Director
Shaun A Mays	DB RREEF Holdings Limited!	10 Mar 2005	Continuing
(alternate to Charles B Leitner HI)	DB RREEF Funds Management Limited®	3 Jan 2005	Continuing
	(YS Instalment Receipt Limited®	13 May 2004	4 May 2005
	Deutsche Asset Management (Australia) Limited ^®	13 May 2004	4 May 2005

OB RREEF Holdings Pty Limited is the holding company of DRFM.

2 DRFM is Responsible Entity for (a) the Trust, a managed investment scheme whose units are stapled to the units of DB RREEF Industrial Trust, DB RREEF Operations Trust and DB RREEF Diversified Trust and trade on ASX as DB RREEF Trust and (b) DB RREEF RENTS Trust, whose Reat-Estate perpelbal exchaNgeable sTep-up Securities called RENTS are listed on ASX.

3 IYS Instalment Receipt Limited has issued ASX listed instalment receipls over units in the Deutsche Relail Infrasbucture Trust, a managed investment scheme that is issed but not quoted on ASX and whose Responsible Entity is Deutsche Asset Management (Australia) Limited.

directors' report (continued)

6. principal activities

During the year the principal activity of the Trust consisted of investment in a diversified portfolio of real estate assets within Australia and New Zealand.

The number of employees of the group during the reporting period was nil as at 30 3une 2005 (2004; nil).

7, total value of trust assets

The total value of the assets of the Trust as at 30 June 2005 was \$2.7 million (2004: \$2.3 million). A schedule detailing the basis of this valuation is outlined in note 1 of the financial statements.

8. review and results of operations

A review of the results and operations, including the expected results. of operations of the Trust, is set out in the "Chief Executive Officer's Report" in the DRT Annual Report 2005.

9. likely developments and expected results of operations

In the opinion of the Directors, disclosure of any further information. of the future developments or results of the Trust, other than that information already outlined in this Report or the financial statements accompanying this report, would be unreasonably prejudicial to the Trust.

10. significant changes in the state of affairs

On 27 September 2004, unitholders of the Trust, DB RREEF Diversified Trust (formerly Deutsche Diversified Trust) ("DDF") and DB RREEF Industrial Trust (formerly Deutsche Industrial Trust) ("DiT") voted to replace their respective constitutions, replace their respective responsible entities and staple their units together with a newly formed trading trust DB RREEF Operations Trust ("DRO") to create a stapled security known as DB RREEF Trust ("DRT") (ASX Code: DRT). Details on the proposal were outlined in the information. Memorandum and Product Disclosure Statement dated 30 August 2004. The result of these resolutions became effective on 30 September 2004.

The consolidation of the Trust and DDF, DIT and DRO, the acquisition of the US REIT, and the associated debt arranging and interest rate hedging, are referred to as "the Transaction".

For the purposes of statutory reporting, the stapled security must be accounted for as a consolidated group. The parent entity, DDF is the deemed acquirer of DIT, DOT and DRO.

DB RREEF Funds Management is a wholly owned subsidiary of DB RREEF Holdings Pty Eimited ("DRH"). DRH is 50 per cent owned by DREM as Responsible Entity for DRO and 50 per cent owned by First Australian Property Group Holdings Pfy Limited, a subsidiary of the Deutsche Bank Group.

As part of the stapling process, the Trust, DDF and DIT each paid. a special distribution by way of a capital return that was applied onbehalf of each unltholder to subscribe for new issued unlts in each

of the other trusts, including DRO. The number of units issued by each trust changed so that each trust had the same number of issued units. The namber of stapled securities owned by an investor in DRT equals the same number of units in the Trust, DDF, DIT and DRO.

Other than the matters disclosed above, the Directors of the Responsible Entity are not aware of any matter or circumstance not otherwise dealt with in the Report or the financial statements that has significantly or may significantly affect the operations of the Trust, the results of those operations, or state of the Trust's affairs in future. financial years.

11. matters subsequent to the end of the financial year

On 7 3xly 2005, amendments were made to the Trust's constitution. that enabled the Trust to satisfy the Australian International Financial Reporting Standards criteria for unitholders' funds to be classified as equity. The Directors of the Responsible Entity were of the view that such amendments were not materially adverse to unitholders' rights. or inferests nor did they change the nature of the Trust.

Since the end of the year the Directors of the Responsible Entity are not aware of any matter or circumstance that has significantly affected or may significantly affect the operations of the Trust, the results of those operations, or state of the Trust's affairs in foture years.

12. distributions

Distributions paid or payable by the Trust for the year ended 30 June 2005 are detailed in note 24 of the financial statements and form part of this Report.

13. responsible entity and associate interests

Fees totaling \$10.8 million (2004: \$10.2 million) were paid or are payable by the Trust to the Responsible Entity for the year ended 30 June 2005. Details of these fees are outlined in note 2 of the financial statements and form part of this Report.

The namber of interests in the Trust held by the Responsible Entity or its associates as at the end of the financial year are disclosed innote 28 of the financial statements and form part of this Report.

14. interests in the trust

The movement in securities on issue in the Trust is detailed in note 21 of the financial statements and forms part of this Report.

The Trust did not issue any options during the year.

15. environmental regulation

The Directors of the Responsible Entity are satisfied that adequate systems are in place for the management of its environmental responsibility and compliance with the various licence requirements. and regulations. Further, the Directors are not aware of any breaches of these requirements and to the best of their knowledge, all activities have been undertaken in compliance with environmental requirements.

16. indemnification and insurance

The insurance premium for a policy of insurance indemnifying directors, officers and others (as defined in the relevant policy of insurance) is paid by the Responsible Entity.

17. audit

17.3 auditor

PricewaterhouseCoopers ("PwC" or "Auditor") continues in office in accordance with section 327 of the Corporations Act 2001.

17.2 mon-surfit carvicae

Details of the amounts paid to the Auditor, which include amounts paid for non-audit services totalling \$757,126, are set out in note 5. in the Notes to the Financial Statements.

The Directors are satisfied that the provision of non-audit services provided during the year by the Auditor (or by another person or firm on the Auditor's behalt), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

Reasons for the Directors being satisfied that the provision of those non-audit services, during the year, by the Auditor did not compremise the Auditor's independence are as follows:

Board Audit Coramittee has determined that the external auditor 缀 will not provide services that have the potential to impair the independence of their audit role, including:
participating in activities that are normally undertaken gg. by reanagement;
being remunerated on a "success fee" basis;
providing services where the Auditor may be required $\mathcal{Q} \mathcal{Q}$ to review or audit their own work, including:
- the preparation of accounting records;
- the design and implementation of information technology systems;
- conducting valuation, actuarial or legal services;
- promoting, dealing in or underwriting securities; or
- providing internal audit services;
Board Audit Committee regularly reviews the performance and $855$ independence of the external Auditor and whether the independence of this function has been maintained having regard to the provision of non-audit services; and
the external Auditor must provide a written declaration to the 缀 Board regarding their independence each reporting period.

Since 30 Jane 2005, Board Audit Committee approval is required before the engagement of the external Auditor to perform any non-audit service for a fee greater than \$100,000.

17.3 audit indebendence statement

A copy of the Auditor's Independence Dectaration as required under section 307C of the Corporations Act 2001 is set out on page 14, and forms part of this Report.

18. corporate governance

The Responsible Entity's Corporate Governance Statement is set out in the DRT Annual Report 2005, which accompanies this Report.

19. rounding of amounts and currency

The Trust is a registered scheme of a kind referred to in Class Order 98/0100, issued by the Australian Securities & Investments Commission, relating to the "rounding off" of amounts in the Directors' Report and financial report.

Amounts in the Directors' Report and financial report have been rounded off in accordance with that Class Order to the nearest thousand deflars, unless otherwise indicated.

All figures in this Report and the financial report, except whereofherwise stated, are expressed in Australian dollars.

20. management representation

The Chief Executive Officer and the Chief Operating Officer have reviewed the group's financial reporting processes, policies and procedures together with the Trast's risk raanagement and internal control and compliance policies and procedures. Following that review if is their opinion that the Trust's financial records for the financial year have been properly maintained in accordance with the Corporations Act and the financial statements and their notes comply. with the accounting standards and give a true and fair view.

21. directors' authorisation

This Report is made in accordance with a resolution of the Directors.

Chix Seen

Christopher T Beare Chair Sydney 25 August 2005

Victor P Hoog Antink Chief Executive Officer Sydney 25 August 2005

DB RREEF Office Trust Financial Statements 2005 9

directors' and executive remuneration report

The Directors of DB RREEF Funds Management Limited ("DRFM") as Responsible Entity of DB RREEF Office Trust ("the Trust" or "DOT") and its consolidated entities present their Remuneration Report for the year ended 30 June 2005.

1. general remuneration framework

The objective of DRFM's remuneration reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns employee reward with achievement. of strategic objectives and the creation of value for investors, and conforms with market best practice for delivery of reward.

The Board Nomination and Remuneration Committee oversee the remuneration of executives to ensure that executive reward satisfies the following key criteria for good reward governance practices:

competitiveness and reasonableness; Ø
娑 performance linkage/alignment;
transparency; and Ø
financial and non-financial resource management. Ŷ.

ta consultation with external remuneration consultants DRFM has structured a remuneration framework that is market competitive and complementary to its reward strategy. Alignment to investors' interests is achieved through increased focus on group performance being a core component of plan design, as well as the plan rewarding:

delivery of forecast returns; and 86
ø achievement of key non-financial value drivers.

Alignment of employees' inferests is achieved through the planrewarding capability and performance. For participants, the plare-

provides a clear structure for earning reward; Ø
delivers competitive reward for contribution to the creation. W of value; and
provides recognition for contribution. 慾

The plan is designed to attract and retain talented and motivated employees, and to encourage enhanced performance.

The remuneration framework provides a mix of fixed and variable pay, being base pay and short-term performance incentive. As an employee gains sersiority within DRFM, the balance of this mix shifts to a higher proportion of "at risk" rewards. DRFM is further developing a long-term performance incentive scheme for implementation during the year ending 30 June 2006.

To ensure that base pay is competitive, external remuneration consultants provide analysis and advice regarding market remuneration for comparable roles. Base pay for employees is reviewed annually. There are no guaranteed base pay increases for employees.

Should DRFM achieve predetermined performance targets, a shortterm incentive pool, approved by the Board Nomination and Remuneration Committee, is available for allocation to employees during the annual review. Cash incentives are payable in September each year. Performance targets are utilised to ensure that variable reward is only available when value has been created for investors, and when performance is consistent with forecasts. The incentivepool may be feveraged for performance above targets to provide. incentive for employee out-performance.

Key performance indicators are linked to short-term incentives based on group, individual business and personal objectives. Performance indicators require achievement of specific targets in relation to the Trust's performance, as well as other key non-financial measures linked to drivers of performance in future reporting periods. Shortterm incentive payments may be adjusted up or down in line with under or over achievement against target performance levels, at the discretion of the Board Noraination and Remuneration Committee.

Termination provisions for the Chief Executive Officer ("CEO") are set out in the CEO's contract of employment. In the event of early termination, DRFM may be required to give 12 months notice and may elect to payout all or part of this notice period.

There are no termination provisions extended to any other DREM executive.

2. non-executive directors' remuneration framework and structure

Fees and payments to Non-Executive Directors reflect the demands which are made on, and the responsibilities of Directors. Non-Executive Directors' fees and payments are reviewed annually. by the Board Nomination and Remuneration Committee. The Committee also obtains advice from independent remuneration. consultants to ensure Non-Executive Directors' fees and payments. are appropriate and in line with market. The Chair's fee is determined independently of the fees of Non-Executive Directors, based on comparative roles in the external market. The Chair is not present at any discussions relating to the determination of his/her own remuneration. Non-Executive Directors do not receive share options.

Non-Executive Directors who accept positions on Board committees. receive an additional annual fee for each committee membership. Non-Executive Directors' fees are also recommended for approval by DB RREEF Trust investors.

3. details of remuneration of directors

3.1 DB RREEF Funds Management Limited

Details of the nature and amount of each element of remuneration for each Director of the Responsible Entity for the year ending 30 June 2005 are set out in the following tables.

Year ending 30 June 2005

	Note(s)	Salary	Non-monetary	Superannuation	Total
		and fees	benefits
			Ω	Î,	S
Non-Executive Directors
Christopher T Beare		193.125			193,125
Elizabeth A Alexander		65,000			65,000
Barry R Brownjohn		60,000			60.000
Stewart F Ewen		95,625			95.625
Brian E Scuttin		68.750			68.750
Executive Directors
Victor P Hoog Antink	3	682.139		68.800	750.939
Charles B Leitner III	2	12,300			12.300
Shaon A Mays (alternate to Charles B Leitner III).	2	16,000			16,000
Daniel S Weaver	2	$\cdots$

Note 1: Non-Executive Director's remuneration is a cost of DB RREEF Funds Management Limited. The amount shown in this Remuneration Report is Director's total remoneration from 1 October 2004, or the date of appointment if later than 1 October 2004, to 30 June 2005.

Note 2: These Executive Director's remuneration is a cost of their employer, Deutsche Bank. The amount shown in this Remuneration Report is an apportionment of each Executive's total remuneration based on their time spent on DB RREEF Funds Management Limiled's activities during the period ending 30 June 2005.

Note 3: The Chief Executive Officer's remuneration is a cost of DB RREEF Funds Management Limited. The amount shown in this report is the Chief Executive Officer's total remuneration for the period ending 30 June 2005. No short term incentive payment for the period 1 October 2004 to 30 June 2005 has been allocated. Consequently, no payment is included in the above.

There were no stapled securities or options issued during the period to any Director or employee as part of their remuneration. No Director or Executive received any retirement benefit during the period.

directors' and executive remuneration report (continued)

3.2 Deutsche Asset Management (Australia) Limited and DB Real Esiate Australia Limited

The remuneration received by the Directors of Deutsche Asset Management (Australia) Limited and DB Real Estate Australia Limited was paid by Deutsche Bank. As the Directors of each of these Responsible Entities are common the following table details the combined amount of each efement of remuneration, for the period 1 July 2004 to 29 September 2004 (being the date when each entity ceased to be the Responsible Entity of its respective trusts and DB RREEF Funds Management Limited became the Responsible Entity of DB RREEF Diversified Trust, DB RREEF Industrial Trust and DB RREEF Office Trust).

For the period 1 July 2004 to 29 September 2004

	Note(s)	Salary and fees	Total
		\$
Non-Executive Directors
Christopher T Beare		12,500	12,500
Stewart F Ewen		21.250	21,250
William 8 Robinson		15,000	15.000
Brian E Scullin		20.250	20.250
Executive Directors
Shaun A Mays	2	9.000	9.000
David C Shields	o	9.811	9.811

Non-Executive Director's remuneration was a cost of Deutsche Bank. The amount shown in this Remuneration Report is each Director's total Note 1: remuneration for the period ending 29 September 2004.

Note 2-Executive Director's remuneration is a cost of their employer, Deutsche Bank. The amount shown in this Remuneration Report is an apportionment of each Executive's total remuneration based on their time spent on Deulsche Asset Management (Australia) Limited and DB Real Estate Australia Limited activities relating to DB RREEF Diversified Trust, DB RREEF Industrial Trust and DB RREEF Office Trust during the period ending 29 September 2004.

4. details of remuneration of executives

Listed in the following table are the six highest paid executives who are also the six executives who have the greatest authority within DB RREEF Funds Management, and who became executives of DB RREEF Holdings Limited on 1 October 2004. Prior to 1 October 2004 there were no specified executives. The components of each executive's total remuneration package for the period commencing 1 October 2004 and ending 30 June 2005 is set out in the following table:

For the period commencing 1 October 2004 and ending 30 June 2005

	Position	Salary	Bonus	Superannuation	Total
		£	\$		£
Tariya L. Coxi	Chief Operating Officer	178.811	50.000	8.689	237.500
John C Easy	Head of Legal	163.811	25,000	8.689	197.500
Greg T Lee	Head of Transaction Services	216.311	62.000	8.689	287.000
Ben J Lehmann	Head of Portfolio Services	216.311	75.000	8.689	300,000
lan D Robins.	Head of Capital Markets	272.561	175.000	8.689	456.250
Mark F Turner	Head of Mandates	178.811	50.000	8.689	237.500

No short term incentive payment has been allocated for the period 1 January 2005 to 30 June 2005. Consequently, no short term incentive payment has been included for the same period.

5. other disclosures

There were no loans, stapled securities or options issued or granted during the period to any Director or employee. No Director or Executive received any retirement benefit during the period.

6. directors' authorisation

This Report is made in accordance with a resolution of the Directors.

Chix Sem

Christopher T Beare Chair Sydney

25 August 2005

auditors' independence declaration

Auditors' Independence Declaration

PricewaterhouseCoopers ABN 52 780 433 757

Darling Park Tower 2 201 Sussex Street GPO 8OX 2650 SYONEY NSW 1171 DX 77 Sydney Australia www.pwc.com/au-Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999

As lead auditor for the audit of DB RREEF Office Trust for the year ended 30 June 2005, I declare that to the best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of DB RREEF Office Trust and the entities it controlled during the period.

DA Prothero Partner PricewaterhouseCoopers

Sydney 25 August 2005

Lisbility limited by a scheme approved under Professional Standards Legistation

statements of financial performance

DB RREEF OFFICE TRUST STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2005

			Consolidated		Parent Entity
		2005	2004	2005	2004
	Note(s)	\$'000	\$'000	\$'000	\$'000
Revenue from ordinary activities
Property income	3	216,686	202,273	137.980	121,529
Distribution income				47.138	56,245
Interest income		1.411	389	932	322
Other revenues from ordinary activities	4	260	557	258	557
Share of net profits of associates accounted for using the equity method	13	2,277	2.196
Total revenue from ordinary activities		220,634	205,415	186,308	178,653
Expenses from ordinary activities
Property expenses		(56,751)	(53,685)	(33, 423)	(30,513)
Responsible Entity fees	28	(10, 825)	(10, 189)	(7,383)	(6,828)
Borrowing costs expense	6	(53,894)	(40.962)	(53,035)	(39, 246)
Other expenses from ordinary activities.	6	(2.982)	(1.155)	(2,855)	(928)
Decrement on revaluation of investments	22	(6.807)
Costs associated with the Transaction	7	(12,480)		(12,480)
Total expenses from ordinary activities		(143,739)	(105, 991)	(109, 176)	(77, 515)
Net profit		76,895	99,424	77,132	101,138
Net profit attributable to outside equity inferests.		(619)
Net profit attributable to unitholders	22	76,276	99,424	77,132	101,138
Net increase in asset revaluation reserve	22	69,554	1,053	69.591	1.053
Net increase in foreign currency translation reserve	22	38
Total revenues, expenses and valuation adjustments attributable
to members of the Trust recognised directly in equity		69,592	1,053	69,591	1,053
Total changes in equity other than those resulting from transactions with unitholders as owners		145,868	100,477	146,723	102,191
		Cents	Cents
Basic earnings - cents per unit	33	3.44	8.66
Dituted earnings - cents per unit	33	3.44	8.66
Basic earnings before the Transaction - cents per unit	33	7.54	8.66

The above Statements of Financial Performance should be read in conjunction with the accompanying notes.

		Consolidated			Parent Entity
		2005	2004	2005	2004
	Note(s)	\$'000	\$'000	\$000	\$'000
Distribution
Net profit attributable to unitholders.		76.276	-99.424	77.132	101.138
Movement in undistributed income		(635)	1.750	(1.491)
Transfer to/trom asset revaluation reserve		10.275	2.151	10.275	2.187
Distribution paid and payable	22/24	85,916	103.325	85.916	103.325
Distribution paid/payable - cents per unit		Cents	Cents
Ordinary units	24	3.22	-9.00

statements of financial position

DB RREEF OFFICE TRUST STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2005

				Parent Entity
		2005	Consolidated 2004	2005	2004
	Note(s)	\$'000	\$000	\$'000	\$'000
Current assets
Cash assets		9.850	5,139	7,958	3,738
Receivables	8	3,483	3,759	91,674	271,420
Loan to third party	9	5,006	$\ddots$
Other	10	5.484	7,314	4,183	5,367
Total current assets		23,823	16,212	103,815	280,525
Non-current assets
investment properties	11	2,446,810	2,290,951	1,683,432	1,590,042
investments in controlled entities	12			519,856	476,084
trivestments accounted for using the equity method	13	36.852	40.234
interest bearing loans receivable from related parties	14	207,354	u.	207,354
Other	15	7,310	15,574	5,707	11,715
Total non-current assets		2,698,326	2,346,759	2,416,349	2,077,841
Total assets		2,722,149	2,362,971	2,520,164	2,358,366
Current liabilities
Payables	16	24,050	19,229	22,975	16,514
Provisions	17	35,517	52,810	35,517	52,810
Total current liabilities		59,567	72,039	58,492	69,324
Non-current fiabilities
Interest bearing liabilities	18	952.449	889.500	952,449	889,500
Loan with related parties	19	55.684	i.	55,684
Other	20	694	663	4,611	5,950
Total non-current liabilities		1,008,827	890,163	1,012,744	895,450
Total liabilities		1,068,394	962,202	1,071,236	964,774
Net assets		1,653,755	1,400,769	1,448,928	1,393,592
Equity
Contributed equity	21	1,359,854	1,365,325	1,359,854	1,365,325
Reserves	22	91,856	32,539	87,583	28,267
Undistributed income	22	3,540	2,905	1,491
Outside equity interests in controlled entities	23	198,505
Total equity		1,653,755	1,400,769	1,448,928	1,393,592

The above Statements of Financial Position should be read in conjunction with the accompanying notes.

statements of cash flows

DB RREEF OFFICE TRUST STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2005

		Consolidated			Parent Entity
		2005	2004	2005	2004
	Note(s)	\$'000	\$'000	\$'000	\$'000
Cash flows from operating activities
Receipts in the course of operations		225,691	229,670	123,202	203,006
Payments in the course of operations		(89, 187)	(87, 881)	(54, 824)	(62, 343)
Interest received		466	389	932	322
Borrowing costs paid		(52,208)	(44, 844)	(49,660)	(43, 128)
Distributions from investments accounted for using the equity method		1,788	2.152
Net cash inflow from operating activities	31	86,550	99.486	19,650	97,857
Cash flows from investing activities
Payment for purchase of controlled entity, net of cash acquired	34	(4.562)
Payments for capital expenditure on investment properties.		(70.042)	(296.008)	(53.138)	(297,004)
Payments for investments in unit trusts			(15.821)
Lean (to)/from controlled entities				245.056	(14, 613)
Net cash (outflow)/inflow from investing activities		(74, 604)	(311, 829)	191,918	(311.617)
Cash flows from investing activities
Proceeds from issue of RENTS units		204,000
Establishment expenses and unit issue costs		(6.114)
Proceeds from borrowings		70,643	1.261.376	70.643	1,261,376
Repayment of borrowings		(7.694)	(939.576)	(7.694)	(939, 576)
Borrowings provided to Stapled Trusts		(227.759)		(227, 759)
Borrowings provided by Stapled Trasts		12,498		10,271
Distributions paid		(52,809)	(105, 191)	(52,809)	(105, 157)
Net cash (outflow)/inflow from financing activities		(7, 235)	(216, 609)	(207, 348)	216,643
Net increase in cash held		4.711	4.266	4,220	2,883
Cash at the beginning of the period		5,139	873	3,738	855
Cash at the end of the period		9,850	5,139	7,958	3,738

The above Statements of Cash Flows should be read in conjunction with the accompanying notes.

notes to the financial statements

DB RREEF OFFICE TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 UJNE 2005

note 1, summary of significant accounting policies

(a) basis of preparation

On 30 September 2004, DB RREEF Trust was created by the stapling together of the Trust, DDF, DIT and DRO and their consolidated entities. The deemed acquirer of the Trust is DDF. The basis of this approach is consistent with current practice. in relation to the financial obligations of stapled entities that were formed after 1 July 2004.

DB RREEF Trust stapled securities are quoted on the Australian Steck Exchange under the code DRT and comprise one unit in each of the Trust, DDF, DIT and DRO. Each entity forming part of DRT continues as a separate legal entity in its own right under the Corporations Act 2001 and is therefore required to comply with the reporting and disclosure requirements under the Corporations Act. 2001 and Australian Accounting Standards.

DB RREEF Funds Management as Responsible Enfity for the Trust, DDF, DIT and DRO may only unstaple the Trust if approval is obtained by special resolution from unitholders of each of the Trusts.

This general purpose financial report has been prepared in accordance with the requirements of the Trust Constitution, Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group-Consensus Views and the Corporations Act 2001 in Australia.

It is prepared on the basis of the going concern and historical cost. conventions and has not been adjusted to take account of either changes in the general purchasing power of the dollar or changes. in the values of specific assets, except to the extent that the Trust. investments have been revalued.

It is recommended that this report be read in conjunction with any public pronouncements made by the Trust during the year inaccordance with the continuous disclosure requirements of the Corporations Act 2001. The accounting policies adopted are consistent with those of the previous period unless otherwise specified. Comparative information has been reclassified whereappropriate to enhance comparability.

(b) principles of consolidation

The consolidated financial statements incorporate all the assets, liabilities and net operating results of the parent and its controlled entities.

The effects of all transactions between controlled entities in the Trust have been eliminated in full.

Certain property investments are held via joint ownership. arrangements (refer note 13). These joint ownership arrangements include the ownership of units in single purpose unlisted trusts over which the Trust exercises significant influence but not control ("Associates").

investments in associates are accounted for in the consolidated financial statements using the equity method. Under this method, the consolidated entity's share of the post-acquisition profits of associates is recognised as revenue in the consolidated Statements of Financial Performance, and its share of post-acquisition movements in reserves is recognised in consolidated reserves.

(c) revenue recognition

Rent

Rent is brought to account on an accruals basis and, if not received at balance date, is reflected in the Statements of Financial Position. as a receivable. Recoverability of receivables is reviewed on anongoing basis. Debts which are known to be not collectable are written off.

Income support

Rental income support is brought to account on an accruals basis in accordance with the relevant contractual arrangements.

interest income

Interest income is brought to account on an accruals basis and, if not received at the balance date, is reflected in the Statements of Financial Position as a receivable.

(d) expenses

Expenses are brought to account on an accruals basis and, if not paid at the balance date, are reflected in the Statements of Financial Position as a payable.

Property expenses

Property expenses include rates, taxes and other property outgoings. incurred in relation to investment properties where such expenses are the responsibility of the Trust.

Borrowing costs

Borrowing costs include interest expense and other costs incurred in respect of obtaining finance. Other costs incurred including fean establishment fees in respect of obtaining finance are deferred and written off over the term of the respective agreement.

Borrowing costs are expensed unless they relate to qualifying assets. Qualifying assets are assets which take a substantial period of timeto get ready for their intended use or sale. Where funds are borrowed specifically for the acquisition or construction of a qualifying asset, the amount of borrowing costs capitalised is those incurred inrelation to that borrowing, net of any interest earned on those borrowings. Where funds are borrowed generally, borrowing costs are capitalised using a weighted average capitalisation rate.

(e) derivatives and other financial instruments

The Trast's activities expose it to changes in interest rates and foreign exchange rates. There are policies and limits approved by the Boardof Directors of the Responsible Entity in respect of the usage of derivatives and other financial instruments to hedge those cash flows and earnings which are subject to interest rate risk and foreign currency risk respectively. In conjunction with its advisers, the Responsible Entity continually reviews the Trust's exposures and updates its treasury policies and procedures. The Trust does not trade in derivative instruments for speculative purposes.

Changes in the net market values of hedging instruments are matched and brought to account with the carrying values and income streams of the underlying assets or liabilities.

The accounting policies adopted in relation to financial instruments are detailed below:

Debt instruments

Debt instruments are carried at face value. Inferest is brought to account on an accruals basis.

Interest rate swaps

The Trust enters into interest rate swap agreements with the objective of hedging the risk of interest rate fluctuations in respect of underlying borrowings. Net receipts and payments in relation to interest rate swaps are recognised in the Statements of Financial Performance on an accruals basis over the life of the hedges (refer note 25).

Forward exchange contracts

Forward exchange contracts are entered into by the Trust to hedge its earnings exposure in relation to foreign investments. This currency hedge rate is used to translate items in the Statements of Financial Performance (refer note 1(s) and note 25).

ID GST

Revenues, expenses and capital assets are recognised net of the amount of goods and services tax ("GST"), except where the amountof GST incurred is not recoverable from the Australian Tax Office. ("ATO"). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

(g) taxation

Under current legislation, the Trust and its controlled enlities are not liable for income tax, provided that the taxable income and taxable realised gains are fully distributed to unitholders each year. Tax allowances for building and plant and equipment depreciation are distributed to unitholders in the form of tax deferred components of the distribution.

(h) distributions

In accordance with the Trust's Constitution, the Trust distributes its distributable income to unitholders by cash or reinvestment.

(i) repairs and maintenance

Plant of the Trust is required to be overhauled on a regular basis. This is managed as part of an ongoing major cyclical maintenance program. The costs of this maintenance are charged as expenses as incurred, except where they relate to the replacement of a component of an asset, in which case the costs are capitalised in accordance with note 1(I). Other routine operating maintenance, repair costs and minor renewals are also charged as expenses. as incurred.

(i) cash

For the purposes of the Statements of Cash Flows, cash includes deposits at call which are readily convertible to cash on hand and are subject to an insignificant risk of change in value.

(k) receivables

Debtors to be settled within 30 days are carried at amounts due. Debts are assessed at balance date and provision is made for any doubtful accounts.

(f) investment properties

It is the policy of the Responsible Entity to review the carrying value. of each property at the reporting date. External valuations of the individual investments are carried out in accordance with the Trusts' Constitution, or earlier where the Responsible Entity believes theremay be a material change in the fair value of the property.

The valuations are measured at fair value being the amounts for which assets could be exchanged between knowledgeable willing parties in an arm's length transaction. Revaluations are made with sufficient regularity to ensure that the carrying amount of each investment property does not differ materially from its fair value at the reporting date.

A revaluation increment is credited directly to the asset revaluation. reserve, unless it is reversing a previous decrement charged as anexpense in the Statements of Financial Performance in respect of that same class of assets, in which case the increment is credited directly to the Statements of Financial Performance.

A revaluation decrement is recognised directly as an expense in the Statements of Financial Performance, unless it is reversing a revaluation increment previously credited to, and still included in the balance of the asset revaluation reserve in respect of that same. class of assets, in which case it is debited directly to the assetrevaluation reserve.

The gain or loss on disposal of revalued assets is calculated as the difference between the carrying amount of the asset at the date of disposal and the net proceeds from disposal and is included in the Statements of Financial Performance in the year of disposal. Any related balance remaining in the asset revaluation reserve at the time. of disposal is transferred to undistributed income.

Land and buildings have the function of an investment and areregarded as a composite asset. The applicable Accounting Standards do not require that investment properties be depreciated. Accordingly, the buildings and any component thereof (including plant and equipment) are not depreciated.

Expenses capitalised to properties may include the cost of acquisition, additions, refurbishment, redevelopment, borrowing costs and fees incurred.

The carrying amounts of current and non-current investment. properties are reviewed to determine whether they are in excess of their recoverable amount at balance date. If the carrying amount of current and non-current investment properties exceeds the recoverable amount, the asset is written down to the lower amount.

(m) leasing fees

Leasing fees incurred in relation to the initial letting of property or following redevelopments are capitalised to the property. Leasing feesincurred in relation to the ongoing renewal of major tenancies are capitalised and amortised over the lease periods to which they relate.

note 1, summary of significant accounting policies (continued)

(n) lease incentives

Prospective lessees may be offered incentives as an inducement to enter into non-cancellable operating leases. These incentives may take various forms including up front cash payments, rent free periods, or a contribution to certain lessee costs such as fit out costs. or relocation costs.

These incentives are repaid out of future lease payments and therefore are recognised as an asset in the Statements of Financial Position. Specifically:

rent free periods when provided, the rent forgiven in early years. 娑 is capitalised to a deferred income account, at the earlier date from which the tenant has effective use of the premises or the lease commencement date and is released to the Statements of Figancial Performance in later years to ensure a constant rate of return over the term of the lease:
gg. cash contributions - where provided, the amount of contribution is capitalised as an asset in the Statements of Financial Position. and written off over the term of the lease;
g tenant fit out costs associated with fitting out a building specifically for a lessee and that are not expected to be used. beyond the term of the lease are capitalised in the Statements of Financial Position and written off over the term of the lease; and
lessor owned fit out when the fit out is an asset of the lessor gg. and can be retained by the lessor beyond the lease terra, it is considered integral to the building and is capitalised into the cost of the property and adjusted through the valuations.

(o) investments accounted for using the equity method

Some property investments are held through the ownership of units in single purpose unlisted trusts where the Trust exerts significant influence but does not have a controlling interest. The Trust has adopted the equity method of accounting for these investments.

interests held by the Trust are brought to account at valuation based on the net tangible asset backing.

(p) acquisition of assets

The purchase method of accounting is used for all acquisitions. Cost is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs directly attributable to the acquisition.

(q) payables

These amounts represent liabilities for amounts owing by the Trust at year end which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(r) earnings per unit

Basic and diluted earnings per unit are determined by dividing the net profit attributable to unitholders of the Trust by the weighted average number of ordinary units outstanding during the financial year.

(s) foreign currency

Foreign currency investments

Foreign assets and liabilities are converted to Australian Dollars. ("A\$") at the rate of exchange on the date of the transaction or at hedged rates if applicable.

Foreign investments are in New Zealand ("NZ").

Translation of foreign currency operations

All foreign operations are deemed self-sustaining in accordance with AASB 1012: Foreign Currency Translation, as each is financially and operationally independent of the Australian operations.

The financial reports of overseas operations are translated to Australian dollars using the current rate method, except for earnings which are translated at the applicable currency hedge contract rates. Any exchange differences are faken directly to the foreign currency. transfation reserve.

Exchange rates

The following exchange rates have been used to translate financial statements of foreign operations to Australian dollars:

		30 June 2005
Spot A\$/NZ\$	Statements of Financial Position	3. 0937.
	Average A\$/NZ\$3 Statements of Financial Performance	3. A804.

1 The average exchange rate includes applicable hedges.

(t) international financial reporting standards ("IFRS")

The adoption of Australian equivalents to IFRS ("AIFRS") will be first reflected in the financial statements for the half year ended. 31 December 2005 and the year ended 30 June 2006.

The Responsible Entity has established a project team to manage the transition to AIFRS, including training of staff, and systems and internat control changes necessary to gather all the required financial information. In seme cases choices of accounting policies are available, including elective exemptions under Accounting Standard AASB 1: First-time Adoption of Australian Equivalents to IFRS. The project is now at a stage where material AIFRS adjustments. are known, to enable the preparation of an opening Statement of Financial Position as at 1 3aly 2004, the transition date to AIFRS.

Impact of transition to AIFRS

The impact of transition to AIFRS, including the selection and application of AIFRS accounting policies, is based on AIFRS. standards that management expect to be in place, or whereapplicable, have been adopted, when preparing the first complete-AIFRS financial report. The disclosures below assume that the Trust will elect not to apply the requirements of AASB 132 and AASB 139. in the first comparative year under AIFRS.

Although the adjustments disclosed in this note are based. on management's best knowledge of expected standards and interpretations, and current facts and circumstances, these may change.

Revisions to the selection and application of AIFRS accounting policies may be required as a result of:

si. changes in financial reporting requirements that are relevant to the Trust's first complete AIFRS financial report arising from new or revised accounting standards or interpretations issued by the Australian Accounting Standards Board subsequent to the preparation of the 30 June 2005 financial report;
additional guidance on the application of AIFRS in the property industry; or
st changes to the Trust's operations.

Therefore, until the Trust prepares its first full AIFRS financial statements, the possibility cannot be excluded that the accompanying disclosures may have to be adjusted.

Major changes identified to date that will be required to the consolidated entity's existing accounting policies include the following (references to new AASB standards below are to the Australian equivalents to IFRS issued in July 2004):

Investment properties

Under AASB 140: Investment Property, gains and losses arising from changes in the fair values of investment properties will be recognised. in the Statements of Financial Performance rather than through the asset revaluation reserve of the Statements of Financial Position.

On transition to AIFRS, the balance of the asset revaluation reserve as at 1 July 2004 will be transferred to retained earnings. This will increase the balance of retained earnings by \$91,818,000. Had AASB 140 been applied during the year ended 30 June 2005, the impact to net profit would have been an increase of \$69,554,000.

Certain real estate investments currently classified as investment. properties (such as properties under construction) may not meet. the AIFRS definition of investment property. Therefore, a separate class of assets may be shown on the face of the Statements of Financial Position.

Financial instruments

All inferest rate and foreign currency derivatives will be recognised at fair value in the Statements of Financial Position, with changes in fair value during the period recognised in the Statements of Financial Performance, or if classified as a cash flow hedge and proved to be effective, deferred in equity.

The Board has decided not to adopt hedge accounting for financial instruments in existence at 30 June 2005, which may result in future. unrealised earnings volatilities, without any associated volatility incash earnings, and hence distributions. The Board will continually review this position and may elect to apply hedge accounting to financial instruments entered into in the future.

The Trust will be electing to adopt the exemption available under AASB 1 to apply AASB 132: Financial Instruments - Disclosure and Presentation and AASB 139: Financial Instruments - Recognition and Measurement only from 1 July 2005. This allows the Trust to apply AGAAP to the comparative information of financial instruments. within the scope of AASB 132 and AASB 139 for the 30 June 2006. financial report.

Rental revenue

Accounting Standard AASB 117: Leases, requires rental revenues to be recognised on a straightline basis over the term of the lease. This applies to operating leases with fixed rent review clauses. The Responsible Entity has analysed the impact of straightlining fixed reviews and has determined that the amount of income that would have been recognised for the year ended 30 June 2005 if the standard had applied for this financial year would have been \$8,957,000. On transition to AIFRS, an amount of \$21,583,000 will be recognised as lease income receivable that will form part of the property portfolio. However, these would be offset by a notional fair value adjustment to income and investment properties to bring the balance of the investment properties back to fair value, resulting inno impact to net profit and net assets of the Trust.

Lease incentives

Accounting standard AASB 117: Leases, and UIG 115: Operating Leases - Incentives, requires all lease incentives to be capitalised. and amortised over the period of the lease. The Responsible Entity has assessed the impact of this treatment based on the current lease. incentives and has estimated an additional amortisation expense and accumulated amortisation of \$6.5 million for the year ended 30 June. 2005. On transition to IFRS, an amount of \$73 million will be recognised as unamortised lease incentives that will form part of the fair value of the property portfolio. However, these would be offset by a notional fair value adjustment to income and investment properties. to bring the balance of the investment properties back to fair value, resulting in no impact to net profit and net assets of the Trust.

Revenue disclosures in refation to the sale of non-current assets

Under AIFRS, the reveaue recognised in relation to the sale of noncurrent assets is the net gain on the sale. This is in contrast to the current AGAAP treatment under which the gross proceeds from sale. are recognised as revenue and the carrying amount of the assets sold is recognised as an expense. The net impact on the Statement of Financial Performance is nil.

As the Trust had no asset safes in the year ended 30 June 2005, had this policy been applied in the current year there would have been no impact. on the consolidated revenue from ordinary activities or the expense.

Unitholders equity

Accounting Standard AASB 132: Financial Instruments - Disclosure and Presentation, outlines and defines the criteria for recognising a financial instrument as either debt or equity. Under currentaccounting standards (AGAAP) units in a fixed life trust are considered equity. However under AIFRS the same instrument would be classified as debt due to the fixed life of the issuance. Distributions paid to unifficiders under this classification would be reclassified as a form of finance charge. These changes would not impact on the financial or economic position of the Stapled Entity or that of the unitholder but would significantly impact on the presentation and disclosure in the financial accounts.

On 6 June 2005, ASIC issued class order 05/566 "Managed Investment Schemes: Perpetuity Clauses in Scheme Constitutions". This class order allows the Responsible Entity to amend a constitution by removing a termination clause and make other amendments as required so long as the changes do not materially change the nature of the scheme or have a materially adverse effect. on the interests of members.

note 1, summary of significant accounting policies (continued)

On 7 of July 2005, amendments to the constitution were made that enable the Trust to satisfy the criteria for unitholders funds to be classified as equity. The Board was of the view that such amendments were not materially adverse to unitholders nor did they change the nature of the scherae.

These changes are the only material changes anticipated, but should not be regarded as the only changes in accounting policies that will result from the transition to AFRS as regulatory bodies have significant orgoing projects that could affect the interpretation of the differences between Australian Generally Accepted Accounting Principles and IFRS.

While the application of IFRS may introduce volatility into forecast financial information, this will not affect the cash flows from operations.

note 2. individually significant items

On 1 October 2004, DB RREEF Funds Management Limited replaced Deutsche Asset Management (Australia) Limited as Responsible Entity of the Trust.

The management fee structure was amended to reflect new feearrangements as follows:

austration and new zealand assets

B Fee: 0.45 per cent per annum of gross assets.
Basis: annualised average gross assets calculated on a month- $\mathscr{C}$ end basis, in accordance with the Trust's Constitution.
Calculated: monthly. 经
Payment frequency: monthly. gg.
Effective date: 1 October 2004. $q\bar{q}$
Performance fees no longer apply to the Trust. The last period for 怨 which performance fees were calculated for the Trust was the six months ending 30 June 2004. No performance fees were earned post 30 Jane 2004. Similarly, performance fees carried forward. from previous periods are no longer available.

note 3. property income

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
		Consolidated		Parent Entity
	2005 2004		2005	2004
	\$000	\$000	\$'000	\$'000
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Rent and recoverable outgoings.	206.678	191.828	131,939	,,,,,,,,,,,,,,,,,,,, 116.375
Other income	10.008	10.445.	-6.041	5.154
Total property income	216.686	202.273	137.980	121.529

note 4, other revenues from ordinary activities

	Consolidated			Parent Entity
	2005	2004	2005	2004
*********	\$000	\$'000	\$'000	\$'000
Other income	260	551	258	557
Total other revenues from ordinary activities	260	557	258	557

note 5. remuneration of auditors

During the year the auditor of the parent entity and its related practices earned the following remuneration:

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$'000	\$'000
PricewaterhouseCoopers
Audit and review of financial reports and other audit work
under the Corporations Act 2001	263.338	114.274	222.538	92.398
Fees paid in relation to oulgoings	70,101	25.629	36.444	7.481
Total auditing fees	333.439	139,903	258,982	99.879
Assurance
Fees paid to PwC Australia	333,439	139.903	258.982	99,879
Taxation Services
Fees paid to PwC Australia	84.777	75.470	29.377	26.983
Advisory Services
Fees paid to PwC Australia in relation to IFRS project.	5,000		5.000
Total audit and advisory fees	423.216	215,373	293,359	126,862
Fees paid in relation to the establishment of the New Zealand and RENTS sub-trusts
Fees paid to PwC Australia	244.601
Fees paid to related practices of PwC Australia	8,162
	252,763	$\overline{\phantom{a}}$
Fees paid in relation to the Transaction
Fees paid to PwC Australia	296.529		296.529
Fees paid to related practices of PwC Australia	118.057		118.057
Total included in costs associated with the Transaction	414.586		414.586

Total costs associated with the Transaction, paid by the Stapled Entity to PWC and its related practices were \$1,243,759. The Trust's share of these costs was \$414,586.

note 6 (a), other expenses from ordinary activities

		Consolidated	Parent Entity
		2005	2004	2005	2004
	Note(s)	\$000	\$'000	\$'000	\$'000
PricewaterhouseCoopers
Audit and advisory fees	5	423	215	293	127
Custodian fees		212	208	212	208
Legal and other professional fees.		325	€	325
Bad and deathful debts			259	$\cdots$	127
Registry costs and listing fees		$\cdots$	301	$\cdots$	101
Other expenses		2.022	366	2.025	365.
Total other expenses from ordinary activities		2.982	1.155	2.855	928

note 6 (b), borrowing costs

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$000	\$'000	\$'000
interest paid/payable	57.171	47.720	56.312	46.004
Amount capitalised	(3.277)	(6.758)	(3.277)	(6.758)
Borrowing costs expense	53.894	40.962	53.035	39,246

note 7, costs associated with the transaction

The costs, totalling \$42.28 million relate to the fees and expenses arising from the stapling of the Trust, DDF, DfT and DRO, the acquisition of the US REIT, and the associated debt arranging and interest rate hedging (together referred to as "the Transaction"). The Trust's share of these costs was \$12.48 million.

note 8, current assets - receivables

	Consolidated			Parent Entity
	2005		2005	2004
	\$'000	\$'000	\$'000	\$000
Rent receivable	1,458	2.665	781	1.899
Less-Provision for doubthal debts.	16)	(41)	(6)	(41)
Total rental receivables	1.452	2.624	775	1.858
Distribution receivable from controlled entities.			47.336	27.864
Other receivables from controlled entities			42.674	240.592
Goods and Services Tax ("GST") receivable	348		-95
Other receivables	1,683	1.135	794	1.106
Total other receivables	2.031	1,135	90.899	269.562
Total current assets -- receivables	3,483	3.759	91.674	271.420

other receivables from controlled entities

Other receivables from controlled entities represents an inter-entity loan, which is a non-interest bearing loan between the Trust and its controlled entity, DOT Commercial Trust and its controlled entities.

note 9. Ioan to third party

On 4 August 2004, the Trust entered into a contract to purchase NRM Tower, Auckland on completion of its development for NZ\$110.4 million. (subject to an area survey and the leasing profile of the building). NZ\$5.5 million has been lent to the developer as a contribution prior to completion. The value of this loan has been translated at the spot rate as at 30 June 2005 to AUD\$5.0 million.

note 10, current assets - other

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$'000	\$'000
Prepayments	1.812	4.524	1.015	3.596
Capitalised lease incentives	1.035	2.153	678	1.379
Capitalised feasing fees	637	637	490	392
Deferred loss on foreign exchange contract	-99	$\cdots$	-99
Deferred borrowing costs	1.901	$\cdots$	1.901	$\cdots$
Total current assets -- other	5.484	7.314	4.183	5.367

note 11. non-current assets - investment properties

Property	Ownership (% )	Acquisition date	Cost including all additions \$'000
Held by parent entity
Governor Phillip Tower and Governor Macquarie Tower Office Complex, Sydney NSW
1 Farrer Place, Sydney NSW	50	Dec 1998	465.556
45 Clarence Street, Sydney NSW	100	Dec 1998	197.929
309-321 Kent Street, Sydney NSW	50	Dec 1998	142.929
1 Margaret Street, Sydney NSW	100.	Dec 1998	141.398
Victoria Cross 60 Miller Street, North Sydney NSW	100	Dec 1998	83.582
Zenith Centre 821-843 Pacific Highway, Chatswood NSW	100	Dec 1998	190.518
240 St Georges Terrace, Perth WA	100	3an 2001	238.765
30-34 Hickson Read, Sydney NSW	100	May 2002	117,675
Total parent entity			1,578,352
Held by controlled entities
Southgate Complex 3 Southgate Avenue, Southgate VIC	100	Aug 2000	346,664
O'Connell House 15-19 Bent Street, Sydney NSW	100	Aug 2000	49.086
201 Elizabeth Street, Svdnev NSW	50	Aug 2000	106.796
Garema Court 140-180 City Walk, Civic ACT	100.	Aug 2000	43,313
Australia Square 264 George Street, Sydney NSW	50.	Aug 2000	195,399
Total controlled entities			741.258
Total investment properties -- non-current			2,319,610
Property investments accounted for using the equity method
2 O'Conneil Street, Sydney NSW	50.	Sep 2001	6,810
4 O'Connell Street, Sydney NSW	50	Sep 2001	10.711
1 Bligh Street, Sydney NSW	50.	Dec 2003	16.277
9 Bligh Street, Sydney NSW	50	Sep 2001	4,926
Total property investments accounted for using the equity method			38,724
Total investments -- non-current			2,358,334

The title to all properties is freehold with the exception of Garema Court 140-180 City Walk, Civic ACT, which is leasehold and they are all commercial properties.

Consolidated book value 30 June 2004 \$000	Consolidated book value 30 June 2005 \$'000	Independent valuation amount \$'000

485,583
162,866
129,175
131,828
90,068
216,000
252,522
122,000
1,590,042

317,750
47,276
112,776
44,721
178,386
700,909
2,290,951

7,328
11,681
15,978
5,247
40,234
2,331,185	2,483,662	2,467,100

valuer

(a) Colliers International (b) M3 Property (c) CB Richard Ellis

(d) Jones Lang LaSalle

(e) Knight Frank Valuations

(f) FPD Savills

valuations of investment properties.

The basis of valuation of investment properties is fair value being the amounts for which the assets could be exchanged between knowledgeable willing parties in an arm's length transaction, based on current prices in an active market for similar properties in the same location and condition and subject to similar leases. Properties independently valued in the last 12 months were based on independent assessments by a member of the Australian Property institute. Properties not independently valued during the last 12 months are carried at Directors' valuation at 30 June 2005, being the independent valuation plus capital expenditure incurred since the date of valuation, and taking into consideration market movements.

note 11, non-current assets - investment properties (continued)

acquisitions

NRM Tower, Auckland

On 4 August 2004, the Trust entered into a contract to purchase NRM Tower, Auckland on completion of its development for NZ\$110.4 million. (subject to an area survey and the leasing profile of the building). NZ\$5.5 million has been lent to the developer as a contribution prior to completion. It is currently estimated that the project will reach practical completion in September 2005.

reconciliation

Capital distributions

formed in Australia.

Revaluation increment/(decrement)

		Consolidated			Parent Entity
		2005	2004	2005	2004
	Note(s)	\$'000	\$'000	\$'000	\$'000
Carrying amount at 1 July 2004		2.331.185	2.011.226	1.590.042	1.298,903
Additions		67.395	318.863	46.668	288.279
Revaluation increments on investment properties	22	88.464	1.053	46.722	2.860
Revaluation increments on investments accounted for using the equity method.		(3.871)	$\cdots$
Movement in profits receivable in investment properties. accounted for using the equity method.		489	43	$\cdots$
Carrying amount as at 30 June 2005		2.483.662	2.331,185	1.683.432	1.590.042

note 12, non-current assets - investments in controlled entities

	***** Parent Entity
2005	2004
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	\$'000 ,,,,,,,,,,,,,,,


515,271	476,084
-4,584

$\ddotsc$
519,856	476,084

	Parent Entity
2005	2004
	\$'000

476,084	462.172
	15,719
	\$'000 \$'000 4,571 - 1

519,856 476,084 Carrying amount as at 30 June 2005 All controlled entities are wholly owned sub-trusts of the Trust, with the exception of DB RREEF RENTS Trust ("RENTS"). All units with a beneficial interest in RENTS assets are listed on the Australian Stock Exchange. The Trust owns one unit in RENTS that does not have a beneficial interest in the RENTS assets, but holds all voting rights in relation to RENTS. Both the parent entity and the controlled entities were

$(35)$

$(1,807)$

39,216

note 13, non-current assets - investments accounted for using the equity method

Investments are accounted for in the consolidated financial statements using the equity method of accounting and are carried at Directors' valuation (refer note 1). Information relating to these entities is set out below.

Name of trust	Principal activity	2005	Ownership interest 2004	2005	Consolidated carrying amount 2004
		℅	%	\$'000	\$'000
2 O'Connell Street Trust	Commercial property investment	50	50	8.045	7,328
4 O'Connell Street Trust	Commercial property investment	50	50	12.222	11,681
Bligh Street Trust	Commercial property investment	50	50	16,585	21,225
Total				36.852	40,234
				2005 \$'000	Consolidated 2004 \$'000
	Movements in carrying amounts of investments accounted for using the equity method
Carrying amount as at 1 July 2004				40,234	23,856
Interest acquired during the period					15,822
Share of net profits after incorne tax				2.277	2.196
Distributions received				(1,788)	(2,152)
	Share of (decrement)/increment on revaluation of investment properties			(3,871)	512
Carrying amount as at 30 June 2005				36,852	40,234
Results attributable to associates
Net profit before income tax				2.277	2.196
Income tax expense
Net profit after income tax				2,277	2,196
Less: Distributions received				1,788	2,152
Movement in undistributed income for the year				489	44
Undistributed income attributable to associates as at 1 3uly 2004				613	569
	Undistributed income attributable to associates as at 30 June 2005			1,102	613
Reserves attributable to associates
Asset revaluation reserve
Opening balance as at 1 July 2004				1.998	1.486
	Share of (decrement)/increment on revaluation of investment properties			(3,871)	512
Add: decrement recognised as an experse				1,873
Closing balance as at 30 June 2005					1,998
equity method	Summary of the performance and financial position of investments accounted for using the
	The aggregate profits, assets and liabilities of investments accounted for using the equity method are:
Profits from ordinary activities after income tax expense				2,277	2,196
Assets				76,522	40.666
Liabilities				300	162
Share of associates' expenditure commitments
Capital commitments

note 14. non-current assets - interest bearing loans receivable from related parties

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$000	\$000	\$'000	\$'000
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Loan to DB RREEF Finance Pty Limited	207.354	$\cdots$	-207.354	$\cdots$
Total non-current assets -- interest bearing loans receivable from related parties	207,354	me.	207.354	mm.

note 15, non-current assets - other

	Consolidated			Parent Entity
	2005 \$000	2004 \$000	2005 \$'000	2004 \$'000
Capitalised lease incentives	3.131	10.852	2.407	8.654
Capitatised leasing fees	3.508	4.012	2.819	2.534
Tenapt and other bonds.	480	472	480	472
Other	191	238		55
Total non-current assets -- other	7.310	15.574	5.707	11,715

note 16, current liabilities - payables

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$'000	\$'000
Trade creditors	6.899	7.848	4,896	5.220
Accruals	2.790	434	2.371	377
Prepaid income	3.972	5.228	5,608	5,460
Responsible Entity fee payable	915	872	626	596
GST payable		338	$\cdots$	352
Accrued interest	9.474	4.509	9.474	-4,509
Total current liabilities -- payables	24.050	19.229	22.975	16,514

note 17. current liabilities - provisions

	Consolidated		Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$'000	\$'000
Provision for distribution
Opening balance as at 1 3uly 2004	52.810	56.827	52.810	56.827
Additional provisions	85.916	99.308	85.916	99.308
Payments and reinvestment of distributions.	(103.209)	(103.325)	(103.209)	(103.325)
Provisions for distributions as at 30 June 2005	35.517	52.810	35.517	52.810
Total current liabilities -- provisions	35.517	52.810	35.517	52.810

provision for distribution.

Provision is made for distributions to be paid for the period ending 30 June 2005 payable on 29 August 2005.

note 18, non-current fiabilities - interest bearing fiabilities

		Consolidated		Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$'000	\$000
Non-current - secured
Commercial paper	452.449	389.500	-452.449	389.500
Commercial mortgage backed securities	500,000	500.000	500.000	500.000
Total secured	952.449	889.500	952.449	889.500
Total non-current liabilities - interest bearing liabilities	952.449	889,500	952.449	889.500

DB RREEF Office Trust has issued asset backed commercial paper ("CP") and commercial mortgage backed securities ("CMBS"). The CMBS has an aeticipated maturity date of April 2009.

financing arrangements

The Trust has access to the following lines of credit:

		Consolidated		,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$000	\$'000

Borrowing facilities
Commercial mortgage backed securities	500,000	500,000	500.000	500,000
Commercial notes	453,300	453.300	453.300	453,300
	953,300	953,300	953.300	953,300
Used at balance date	(952.449)	(889.500)	(952, 449)	(889, 500)
Unused at balance date	851	63.800	851	63.800

At balance date, the Stapled Enfity has unutilised facilities of \$327 million which are available to the Trust, DDF, DIT and DRO.

note 19, non-current fiabilities - loan with related parties

Total non-current liabilities -- loan with related parties	55.684	www.	55.684	nn.
Non-interest bearing toan	55.684	---	55.684	$\cdots$
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	\$'000	\$'000	\$'000	\$'000 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
	2005	2004	2005	2004
		Consolidated		Parent Entity
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

note 20, non-current fiabilities - other

	Consolidated			Parent Entity
	2005 \$'000	2004 \$'000	2005 \$000	2004 \$'000
Tenant bonds	670	655	480	472
Deferred swap income	10.000	$\cdots$	4.131	5.478
Other	24	8	$\cdots$	$\cdots$
Total non-current liabilities -- other	694	663	4.611	5,950

note 21, contributed equity

	2005 \$'000	2004 \$'000
(a) Value of units on issue
Opening balance as at 1 3uly 2004	1,365,325	1,365,325
Placement of units	22,517
issue of units to staple	302,826
Cost of distributions reinvested	(187)
Distributions reinvested	56,608
Capital distribution to staple	(387, 235)
Closing balance as at 30 June 2005	1,359,854	1,365,325
	2005	2004
	Mumber of units	Number of units
(b) Number of units on issue
Opening balance as at 1 3uly 2004		1,148,052,162 1,148,052,162
Placement of units	41,521,457
issue of units to staple	1,514,131,505
Distributions reinvested	106,718,540
Capital consolidation to staple	(78, 341, 275)
Closing balance as at 30 June 2005	2.732.082.389 1.148.052.162

terms and conditions

Each unit ranks equally with all other ordinary units for the purpose of distributions and on termination of the Trust. Ordinary units entitle the holder to one vote, either in person or by proxy, at a meeting of the Trust.

distribution reinvestment plan

On 26 September 2004 the Trust established a distribution. reinvestment plan ("DRP") under which holders of DRT stapled securities may elect to have all or part of their distribution. entitiements satisfied by the issue of new ordinary units rather than by being paid in cash.

Units were issued under the DRP for the December 2004 distribution and forther units will be issued for the Jane 2005 distribution.

On 28 February 2005, 106,718,540 units were issued at a unit price. of \$0.5304.

stapling unit change

On 30 September 2004 the Stapled Entity was formed by stapling together the Trust, DDF, DfT and DRO. Each trust subscribed for units in accordance with the stapling ratios described in the Explanatory Memorandum and Products Disclosure Statement dated 30 August 2004.

As part of the stapling process the Trust, DDF and DIT paid a capital distribution that was applied on behalf of each unitholder to subscribe for new issued units in each of the other trusts and DRO. As a consequence of this activity the number of units issued by each trust changed so that each trust had the same number of issued units. The number of stapled securities owned by an investor in DRT. equals the number of units in the Trust, DDF, DIT and DRO.

On 19 October 2004, 1,514,131,505 units were issued at a unit price of \$0,2000 (refer to the Explanatory Memorandum and Product Disclosure Statement dated 30 August 2004). This was the price at which the Trust's anits were issued to unitholders of DDF and DIT as part of the stapling process described above. This was funded from the capital distribution that was paid by DDF and DIT.

On 4 November 2004, 41,521,457 units were issued at a unit price. of \$0.5423. This issue of units was made in consideration of the acquisition of management rights from FAP, a subsidiary of Deutsche-Australia Limited. The units were issued at \$1.3119 being the volume weighted average price over the ten business days immediately following the initial quotation of DRT securities on the Australian Stock Exchange.

note 22, reserves and undistributed income

(a) reserves

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Consolidated	Parent Entity
	2005 \$'000	2004 \$000	2005 \$000	2004 \$000
Asset revaluation reserve	91.818	32.539	87.583	28.267
Foreign currency translation reserve	38	$\cdots$	$\cdots$
Total reserves	91.856	32.539	87.583	28,267

Movements

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$'000	\$000
Asset revaluation reserve
Opening balance as at 1 July 2004	32.539	-33.636	28.267	29,401
Increment on revaluation of investment properties	88,464	1.053	46.722	2.860
Add: decrement recognised as an expense	6.807
Fair value adjustment for capitalised lease incentives	(21.846)		(16.347)
(Decrement)/increment on revaluation of investments accounted for using the equity method	(3,871)
Increment/(decrement) on revaluation of investments in controlled entities			39.216	(1.807)
Total movement in asset revaluation reserve	69,554	1,053	69,591	1.053
Transfer to undistributed income	(10.275)	(2.350)	(10, 275)	(2.187)
Closing balance as at 30 June 2005	91.818	32,539	87,583	28,267
		Consolidated		Parent Entity
	2005 \$'000	2004 \$'000	2005 \$'000	2004 \$'000
Foreign currency translation reserve
Opening balance as at 3 July 2004
Exchange difference arising from the translation of the
financial statements of foreign operations	38
Total movement in foreign currency translation reserve	38
Closing balance as at 30 June 2005	38

(b) nature and purpose of reserves.

Asset revaluation reserve

The asset revaluation reserve records increments and decrements on the revaluation of assets.

Foreign currency translation reserve

The foreign currency translation reserve records exchange differences arising from the translation of the financial statements of self-susfaining foreign operations.

		Consolidated
				Parent Entity
	2005	2004	2005	2004
	\$000	\$000	\$'000	\$'000
Undistributed income as at 1 July 2004	2.905	4.656
Net profit attributable to unitholders	76.276	99.424	77.132	101.138
Transfer from asset revaluation reserve	10.275	2.150	10.275	2.187
Distributions provided for or paid	(85.916)	(103.325)	(85.916)	(103.325)
Undistributed income as at 30 June 2005	3.540	2.905	1.491

note 23, outside equity interests in controlled entities

	Consolidated			Parent Entity
	2005 \$'000	2004	2005	2004
		\$000	\$'000	\$'000
Interests in
Share capital	197.886	$\cdots$	$\cdots$	$\cdots$
Retained profits	619	$\cdots$	$\cdots$	$\cdots$
	198,505
		mn.	mm.	TOP.

note 24. distribution paid and payable

		Parent Entity
	2005	2004
	\$'000	\$'000
31 December (paid 28 February).	50,399	50.515
30 June (payable 29 August)	35.517	52.810
Total distributions	85,916	103,325

		Parent Entity
	2005 cents per unit	2004 cents per unit
31 December (paid 28 February).	1.92	-4.40
30 June (payable 29 August)	1.30	4.60

The number of units has increased by 3,584,030,227 as a result of the Transaction and the February 2005 DRP. Had these not occurred and the number of units outstanding remained at 1,148,052,162, distribution per unit for 2005 would have been 7.48 cents per unit.

note 25. foreign currency and financial instruments

(a) credit risk

Credit risk is the risk that a tenant will fail to perform contractual obligations, including horiouring the term of its lease agreement. either in whole or in part, under a contract.

Concentrations of credit risk are minimised primarily by:

a ensuring tenants, together with their respective credit limits, are approved; and
ensuring that leases are undertaken with a large number of 3 tenants.

As such, the Trust does not have a concentration of credit risk that arises from an exposure to a single tenant.

Furthermore, the Trust does not have a material exposure to a group of counterparties which are expected to be affected similarly by changes in economic or other conditions.

On-balance sheet financial instruments

The credit risk on financial assets of the Trust which have been recognised in the Statements of Financial Position is the carrying amorent.

Off-balance sheet financial instruments

Oredit risk from entering into interest rate swap agreements and foreign exchange contracts is the risk that interest rate swap and foreign exchange counterparties default on any amount due under the contract.

Credit risk on interest rate swap agreements and foreign exchange. contracts are minimised as counterparties are recognised financial intermediaries with acceptable credit ratings determined by recognised rating agencies.

Concentration of credit risk on interest rate swap agreements and foreign exchange contracts are minimised primarily by ensuring such agreements are undertaken with a reasonable spread of counterparties.

The credit risk on interest rate swap agreements and foreign exchange contracts are approximately equal to the net fair value or replacement value (refer note 25(b)).

(b) net fair value of financial assets and liabilities

Market risk is the risk that the value of the Trust's investment. portfolio will fluctuate as a result of changes in valuations. This risk is managed by ensuring that all activities are transacted inaccordance with mandates, overall investment strategy and within approved limits. Market risk analysis is conducted regularly on a total portfolio basis.

On-balance sheet financial instruments

The net fair value of cash and non-interest bearing monetary. financial assets and liabilities approximate their carrying value.

As at 30 Jane 2005, the net fair value of contracts representing the net unrealised less from converting forward exchange contracts was (\$68,613) (2004; nil), calculated using market rates, taking into account the fime value of money. An amount of \$98.686 has been recognised on the Statement of Financial Position using year end spot rates.

Off-balance sheet financial instruments

As at 30 June 2005, the net fair value of financial (liabilities)/assets arising from interest rate swap agreements was (\$1,875,463) (2004: $($7,262,224)$ .

These amounts represent the potential (liability)/asset of the Trust if existing swap agreements and forward exchange contracts as at 30 June 2005 were to be terminated.

(c) liquidity and cash flow risk

Liquidity risk is the risk that the Trust will experience difficulty in either realising assets or otherwise raising sufficient fonds to satisfy commitments. The risk management guidelines adopted are designed to minimise liquidity risk through:

ensuring that there is no significant exposure to any individual creditor; and
applying limits to ensure there is no concentration of liquidity risk. Ø to a particular counterparty or market segment.

(d) interest rate risk exposures

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

The Trust's exposure to interest rate risk is hedged with interest rate swaps and the weighted average effective interest rate (for each class of financial asset and financial liability, and each maturity bracket including floating rate financial assets and liabilities) is set out in the table below:

Consolidated	Fixed interest maturing in:
30 June 2005		Floating interest rate	1 year or less	Over 1 and less than 5 years	More than 5 years	Non- interest bearing	Total
	Note(s)	\$7000	\$'000	\$'000	\$'000	\$'000	\$'000
Financial assets
Cash assets		9,850				$\cdots$	9,850
Receivables	8					3.483	3.483
Other						4,483	4,483
Loan to third party		5.006		н.			5.006
interest bearing loans receivable from related parties.	-14	207,354				$\ldots$	207,354
Total		222.210	$\mathcal{L}_{\mathcal{M}}$	ww	m	7,966	230.176
Weighted average interest rate		6.41%
Financial liabilities
Pavables	16					24.050	24,050
Provision for distribution	17					35,517	35,517
Other						670	670
Loan with related parties						55,684	55,684
Interest bearing liabilities	18	797.449		155,000			952,449
interest rate swaps!		(1.253.756)		655,756	598.000
Total		(456, 307)	$\mathcal{L}_{\mathcal{R}}$	810,756	598,000	115,921	1,068,370
Weighted average interest rate (including swaps).		6.08%
Net financial assets/(liabilities)		678.517	$\mathbf{w}$	(810,756)	(598.000)	(107.955)	(838, 194)

I The above interest rate swaps include \$741 million of swaps that are forward starting. These swaps will replace existing swaps as they roll out to maintain the hedging profile approved by management.

Consolidated	Fixed interest maturing in:
30 June 2004		Floating interest rate	l year or less	Over 1 and less than 5 years	More than 5 years	Non- interest bearing	Total
	Note(s)	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000
Financial assets
Cash assets		5,139					5,139
Receivables	8		÷.			3.759	3.759
Other						472	472
Total		5,139	$\sim$	www.	$\mathbf{w}$	4.231	9,370
Weighted average interest rate		4.45%
Financial liabilities
Payables	16					19.229	19.229
Provision for distribution	17	$\ddotsc$		$\ddotsc$		52,810	52,810
Other						472	472
Interest bearing liabilities	18	734,500		155,000			889.500
Interest rate swaps		(563,000)	150.000	295,000	-118.000
Total		171,500	150,000	450,000	118,000	72,511	962,011
Weighted average interest rate (including swaps).		6.21%
Net financial liabilities		(166, 361)	(150.000)	(450,000)	(118,000)	(68, 280)	(952, 641)

note 25. foreign currency and financial instruments (continued)

(e) foreign exchange rate risk exposures

When hedging its exposures, the Trust adopts a strategy using both physical and derivative financial Instruments. With regard to derivative financial instruments, the Trust uses forward exchange contracts for hedging purposes.

note 26, contingent liabilities

The Directors of the Responsible Entity are not aware of any matters in relation to the Trust, ofter than those disclosed in the financial statements, which should be brought to the attention of unitholders as at the date of completion of this report.

Details and estimates of maximum amounts of contingent liabilities are as follows:

	Consolidated			Parent Entity
	2005 \$'000	2004 \$000	2005 \$'000	2004 \$000
Bank guarantees by the parent entity in respect of variations and other financial risks associated with the development of 240 St Georges Terrace, Perth WA	2.200	7.488.	2.200	7.488
Total contingent liabilities	2.200	7.488	2.200	7.488

The Trust is also a joint guarantor of a A\$600 million and US\$210 million syndicated bank debt facility and US\$200 million of privately placed notes, which have all been negotiated to finance the Stapled Entity. The Trust's guarantee has been given in support of debt outstanding and drawn against these facilities.

The guarantee is issued in respect of the Stapled Entity and does not constitute an additional liability to the Stapled Entity, to those already disclosed in its Statements of Financial Position.

note 27. commitments for expenditure

capital commitments

The following amounts represent capital expenditure on investment properties contracted at the reporting date but not recognised as liabilities payable.

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$000	\$'000	\$'000
Capital expenditure commitments in relation to development works:
Not longer than one year
240 St Georges Terrace, Perth WA		4,312		4,312
30-34 Hickson Read, Sydney NSW
1 Margaret Street, Sydney NSW	402	1.073	402	1.073
Victoria Cross 60 Miller Street, North Sydney NSW		2.493		2.493
Zeaith Centre 821-843 Pacific Highway, Chatswood NSW	1.346	6.129	1.346	6.129
45 Clarence Street, Sydney NSW	9.828	4,194	9.828	4.194
Governor Phillip Tower and Governor Macquarie Tower Office Complex
1 Farrer Place, Sydney NSW	4.071	4.315	4.071	4.315
201 Elizabeth Street, Svdnev NSW		4.546
Australia Square 264 George Street, Sydney NSW	3.406	2.517
O'Connell House 15-19 Bent Street, Sydney NSW		423
Southgate Complex 3 Southgate Avenue, Southgate VIC		379
NRM Tower 88 Shortland Street, Auckland NZ	100.942
	119,995	30,381	15.647	22,516
Later than one year but not later than five years
Governor Phillip Tower and Governor Macquarie Tower Office Complex
1 Farrer Place Sydney NSW	22.826		22,826
Later than five years	n.
Total capital commitments	142,821	30,381	38,473	22,516

note 28, related parties

responsible entity

On 1 October 2004, DB RREEF Funds Management replaced Deutsche Asset Management (Australia) Limited, a wholly owned subsidiary of Deutsche Bank AG (ABN 13 064 165 162) as the Responsible Entity.

responsible entity fees

Under the terms of the Trust Constitution, the Responsible Entity is entitled to receive fees in relation to the management of the Trust-(refer note 2).

In addition, the Responsible Entity is entitled to property management fees and to be reimbursed for expenses incurred on behalf of the Trust.

related party transactions

All related party transactions are conducted on normal commercial terras and conditions unless otherwise stated.

unitholdings

Deutsche Bank AG and its related parties, schemes and portfolios managed by Deutsche Bank AG and its related parties held 453,322,396 units (2004: 407,500,132) in the Trust.

Deutsche Bank AG

Deutsche Bank AG up to 30 September 2004 was the ultimate parent company of the Responsible Entity, Deutsche Asset Management (Australia) Limited, Deutsche Bank continued to be a related party after 30 September 2004 as it continues to own fifty percent of the manager and new Responsible Entity, DB RREEF Funds Management. Dealings with the bank include, not only transactions in its capacity as part owner of the new Responsible Entity, but also in the provision of financial services. There were a number of transactions and balances between the Trust and the Responsible Entity and related entities as detailed below:

	Consolidated			Parent Entity
		2005	2004	2005	2004
	Note(s)	\$'000	\$000	\$'000	\$000
Transactions with Deutsche Asset Management (Australia) Limited in its capacity as Responsible Entity of the Trust
Responsible Entity fees paid and payable	2	2,629	10,189	1.803	6,828
Property management fees paid and payable		428	2.219	428	2.228
Administration expenses incurred by the Responsible Entity which are reimborsed in accordance with the Trust's Censtitution		521	586	482	542
Aggregate arriounts payable to the Responsible Entity at reporting date		$\cdots$	708		687
Transactions with Deutsche Bank AG in its capacity as financier
Interest and financing fees paid and payable on borrowings to Deutsche Bank AG.			2,579		2.579
Interest received and receivable on swaps for whom the counterparty was Deutsche Bank AG.		1.907		1.907
Other transactions with Deutsche Bank AG
Underwriting fees paid and payable to Deutsche Bank AG		3,543		3.543
Financial adviser's fee paid and payable to Deutsche Bank AG in relation to the Transaction		2.692		2.692

DB RREEF Funds Management Limited

From 29 September 2004 DB RREEF Funds Management Limited replaced Deutsche Asset Management (Australia) Limited as Responsible Entity of the Trust. There were a number of transactions and balances between the Trust and Responsible Entity and related entities as detailed below:

			Consolidated		Parent Entity
		2005	2004	2005	2004
	Note(s)	\$'000	\$000	\$'000	\$'000
Responsible Entity fees paid/payable		8.196	10.5	5.580
Property management fees paid/payable		1.699	$\cdots$	1.699
Administration expenses incurred by the Responsible Entity.
which are reimbursed in accordance with the Trust's Constitution.		734	$\cdots$	706
Aggregate amounts payable to the Responsible Entity at reporting date		2.030	$\cdots$	726

trusts within the stapled entity

Aggregate amounts included in the determination of profit that resulted from transactions with each class of other related parties:

	Consolidated			Parent Entity
	2005 \$'000	2004 \$.000	2005 \$'000	2004 \$'000
Costs associated with the Transaction Trusts within the Stapled Entity	2.228		2.228
Interest expense trusts within the Stapled Entity	1.689	$\cdots$	1.689
Non-inferest bearing loans advanced from trusts within the Stapled Entity	55.684		55.684
Interest bearing loans advanced from trusts within the Stapled Entity.	20.405	$\cdots$	20.405
Interest bearing loans to trusts within the Stapled Entity.	227.759	$\cdots$	227.759

directors of the responsible entity

On 29 September 2004, DB RREEF Fonds Management Limited replaced Deutsche Asset Management (Australia) Limited as Responsible Entity of the Trust. The following persons were Directors of Deutsche Asset Management (Australia) Limited up to 29 September 2004;

CIT Beare BSc, BE (Hons), MBA, PhD, FAICD?

S. F. Ewen F.I.L.E^1,2 S.A.Mays BSc (Hons), MSc, MBA W 8 Robinson ABIA, AASAMAA 8 E Scullin BEc²

DIC Shields BE (Hons), MBA

From 29 September 2004 and up to the date of this report, the following persons were Directors of DB RREEF Funds Management, unless otherwise stated:

Name	Appointed	Resigned
Directors
Christopher T Beare BSc. BE (Hons), MBA, PhD, FAICD!	-4 August 2004	Continuing
Elizabeth A Alexander AM, BComm, FCA, FAICD, CPA ¹²	1 January 2005	Continuing
Barry R. Brownjohn BComm ³²	1 January 2005	Continuing
Stewart F. Ewen, E.H., Etc.	-4 August 2004	Continuing
Victor P Hoog Antink BCoram, MBA, FCA, FAPI, MAICD	1 October 2004	Continuing
Charles B Leitner III BA	30 March 2005	Continuing
Shaun A Mays BSc (Hons), MSc, MBA	13 May 2004	30 March 2005
Brian E Scullin BEc*	1 January 2005	Continuing
Daniel S Weaver BArch, MBA, AFIRE	1 October 2004	17 December 2004

1 Independent Director.

2 Audil Committee Member.

3 Compliance Committee Member.

No Directors held an interest in the Trust as at 30 June 2005 or at the date of this report.

40 DB RREEF Office Trust Financial Statements 2005

note 28, related parties (continued)

directors' and executive remuneration

1. General remuneration framework

The objective of DRFM's remaineration reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns eraployee reward with achievement of strategic objectives and the creation of value for investors, and conforms with market best practice for delivery of reward.

The Board Nomination and Remuneration Committee oversee the remuneration of executives to ensure that executive reward satisfies the following key criteria for good reward governance practices:

competitiveness and reasonableness; ses.
performance linkage/alignment; 缀
transparency; and 繸
financial and non-financial resource management. 655

In consultation with external remuneration consultants DRFM has structured a remaneration framework that is market competitive and complementary to its reward strategy. Alignment to Investors' interests is achieved through increased focus on group performance being a core component of plan design, as well as the plan rewarding:

delivery of forecast returns; and se:
achievement of key non-financial value drivers.

Alignment of employees' interests is achieved through the planrewarding capability and performance. For participants, the plan-

provides a clear structure for earning reward; 繸
delivers competitive reward for confribution to the creation. 繸 of value; and
s provides recognition for contribution.

The plan is designed to attract and retain talented and motivated employees, and to encourage enhanced performance.

The remuneration framework provides a mix of fixed and variable pay, being base pay and short-term performance incentive. As an employee gains seniority within the group, the balance of this mix shifts to a higher proportion of "at risk" rewards. DRFM is further developing a long-term performance incentive scheme for implementation during the year ending 30 June 2006.

To ensure that base pay is competitive, external remuneration consultants provide analysis and advice regarding market. remuneration for comparable roles. Base pay for employees is reviewed annually. There are no guaranteed base pay increases for employees.

Should DRFM achieve predefermined performance targets, a short-term incentive pool, approved by the Board Nomination and Remuneration Committee, is available for allocation to employees during the annual review. Cash incentives are payable in September each year. Performance fargets are utilised to ensure that variable reward is only available when value has been created for Investors, and when performance is consistent with forecasts. The incentive pool may be leveraged for performance above targets to provide. incentive for employee out-performance.

Key performance indicators are linked to short-term incentives based. on group, individual business and personal objectives. Performanceindicators require achievement of specific targets in relation to the Trust's performance, as well as other key non-financial measures linked to drivers of performance in future reporting periods. Short-termincentive payments may be adjusted up or down in line with under or over achievement against target performance levels, at the discretion of the Board Nomination and Remuneration Committee.

There are no termination provisions extended to any other DRFM executive.

2. Non-Executive Directors' remuneration framework and structure

Fees and payments to Non-Executive Directors reflect the demands which are made on, and the responsibilities of Directors. Non-Executive Directors' fees and payments are reviewed annually by the Board Nomination and Remuneration Committee. The Committee also obtains advice from independent remuneration. consultants to ensure Non-Executive Directors' fees and payments are appropriate and in line with market. The Chair's fee is determined independently of the fees of Non-Executive Directors, based on comparative roles in the external market. The Chair is not present at any discussions relating to the determination of his/her own. remuneration. Non-Executive Directors do not receive share options.

Non-Executive Directors who accept positions on Board committees receive an additional annual fee for each committee membership. Non-Executive Directors' fees are also recommended for approval by DB RREEF Trust investors.

3. Details of remuneration of Directors

3.1 DB RREEF Funds Management Limited

Details of the nature and amount of each element of remuneration for each Director of the Responsible Entity for the year ending 30 June 2005 are set out in the following tables.

Year ending 30 June 2005

	Note(s)	Salary and fees	Bonus	Non-monetary benefits	Superannuation	Total
		£	S	S
Non-Executive Directors
Christopher T Beare		193,125				193,125
Elizabeth A Alexander		65.000				65.000
Barry R Brownjohn		60.000				60.000
Stewart F Ewen		95.625				95.625
Brian E Scullin		68.750				68.750
Executive Directors
Victor P Hoog Antink	3	682.139			68,800	750,939
Charles B Leitner III	2	12.300				12.300
Shaun A Mays (alternate to Charles B Leitner (II)	2	16.000				16.000
Daniel S Weaver	2	$\cdots$

Note 1: Non-Executive Directors' remuneration is a cost of DB RREEF Funds Management Limited. The amount shown in this Remuneration Report is each Director's total remuneration from 1 October 2004, or the date of appointment if later than 1 October 2004, to 30 June 2005.

Note 2: These Executive Directors' remuneration is a cost of their employer, Deutsche Bank. The amount shown in this Remuneration Report is an apportionment of each Executive's total remuneration based on their time spent on DB RREEF Funds Management Limited's activities during the period ending 30 June 2005.

Note 3: The Chief Executive Officer's remuneration is a cost of DB RREEF Funds Management Limited. The amount shown in this report is the Chief Executive Officer's total remuneration for the nine months ending 30 June 2005. No short term incentive payment for the period 1 October 2004 to 30 June 2005. has been allocated. Consequently, no payment is included in the above.

note 28, related parties (continued)

3.2 Deutsche Asset Management (Australia) Limited and DB Real Estate Australia Limited

The remuneration received by the Directors of Deutsche Asset Management (Australia) Limited and DB Real Estate Australia Limited was paid by Deutsche Bank. As the Directors of each of these Responsible Entities are common the following table details the combined amount of each element of remuneration, for the period 1 3uly 2004 to 29 September 2004 (being the date when each entity ceased to be the Responsible Entity of its respective trusts and DB RREEF Fands Management Limited became the Responsible Entity of DB RREEF Diversified Trust, DB RREEF Industrial Trust and DB RREEF Office Trust).

For the period 1 July 2004 to 29 September 2004

	Note(s)	Salary	Non-monetary	Superannuation	Total
		and fees	benefits
		\$	S	\$	S
Non-Executive Directors
Christopher T Beare		12,500			12.500
Stewart F Ewen		21.250			21.250
William B Robinson		15,000			15.000
Brian E Scuttin		20.250			20,250
Executive Directors
Shaun A Mays	2	9,000			9.000
David C Shields	っ	9,811			9.811

Note 1: Non-Executive Director's remuneration was a cost of Deutsche Bank. The amount shown in this Remuneration Report is each Director's total remuneration for the period ending 29 September 2004.

Note 2: Executive Director's remuneration is a cost of their employer, Deutsche Bank. The amount shown in this Remuneration Report is an apportionment of each Executive's total remuneration based on their fime spent on Deutsche Asset Management (Australia) Limited and DB Real Estate Australia Limited activities relating to DB RREEF Diversified Trust, DB RREEF Industrial Trust and DB RREEF Office Trust during the period ending 29 September 2004.

4. Details of remuneration of Executives

For the period commencing 1 October 2004 and ending 30 June 2005

	Position	Salary	Bonus	Superannuation	Total
			S		£
Tariya L. Cox	Chief Operating Officer	178.811	50.000	8.689	237.500
John C Easy	Head of Legal	163.811	25,000	8.689	197.500
Greg T Lee	Head of Transaction Services	216.311	62.000	8.689	287.000
Ben J Lehmann	Head of Portfolio Services	216.311	75,000	8.689	300,000
Lan D Robins	Head of Capital Markets	272.561	175.000	8.689	456,250
Mark F Turner	Head of Mandates	178.811	50.000	8.689	237.500

No short term incentive payment has been allocated for the period 1 January 2005 to 30 June 2005. Consequently, no short term incentive payment has been included for the same period.

5. Other disclosures

There were no foans, stapled securities or options issued or granted during the period to any Director or employee. No Director or Executive received any retirement benefit during the period.

note 29, events occurring after reporting date

On 7 July 2005, amendments were made to the Trust's Constitution that enable the Trust to satisfy the AIFRS criteria for unitholders funds to be classified as equity. The Board of the Responsible Entity was of the the view that such amendments were not materially adverse to unitholders nor did they change the nature of the scheme.

Since the end of the year, other than the matter discussed above, the Directors of the Responsible Entity are not aware of any matter or circumstance not otherwise dealt with in their report or the financial statements that has significantly or may significantly aftect the operations of the Trust, the results of those operations, or state of the Trust's affairs in foture financial periods.

note 30. segment information

business segment

The Trust operates solely within the commercial property sector.

geographical segments

The Trust's investments are located in Australia and New Zealand.

2005		Australia New Zealand	Consolidated
	\$.000	\$000	\$'000
Reatal and other property income.	216.946	$\cdots$	216.946
Interest income	3.005	406	1.411
Share of net profits of associates accounted for using the equity method	2.277	$\cdots$	2,277
Total segment revenue	220.228	406	220,634
Segment result	75.898	378	76.276
Segment assets	2.717.143	5.006	2.722.149
Segment liabilities	1.068.371	23	1.068.394
Acquisitions of property, plant and equipment, intangibles and
other non-current segment assets	67.395		67.395
Net cash inflow/(outflow) from operating activities	86,550		86.550

2004	\$'000	Australia New Zealand \$'000	Consolidated \$'000
Rental and other property income.	202.830	$\cdots$	202,830
Interest income	389	$\cdots$	389
Share of net profits of associates accounted for using the equity method	2.196		2.196
Total segment revenue	205.415	w.	205.415
Segment result	99.424		99.424
Segment assets	2.362.971	$\cdots$	2.362.971
Segment liabilities	962.202		962.202
Acquisitions of property, plant and equipment, intangibles and other non-current segment assets	318.863	ww.	318,863
Net cash inflow/(outflow) from operating activities	99,530		99.530

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$'000	\$000
Net profit	76.895	99.424	77.132	101.138
Capitalised Interest	(3.277)	$\cdots$	(3.277)
Revaluation decrement	6.807	$\cdots$	1.872
Share of net profit of investments accounted for using the equity method	(489)	-{44}	$\cdots$
Provision for doubtfal debts	(35)	(224)	(35)	(224)
Change in operating assets and liabilities
Decrease/(increase) in receivables	2.000	7.958	(14.598)	3.553
Decrease/(increase) in other current assets	713	(3.691)	(48.052)	(2.926)
(increase)/decrease in other non-current assets	(S14)	(4.715)	1.486	(3.441)
Increase in payables.	4,819	580	-6.461	-1.446
Increase/(decrease) in other non-current liabilities	31	198	(1.339)	(1.689)
Net cash inflow from operating activities	86.550	99.486	19.650	97.857

components of cash

Cash at the end of the year as shown in the Statements of Cash Flows is reconciled to the Statements of Financial Position as follows:

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
		Consolidated		Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$'000	\$'000

Cash assets	9,850	5.139	7.958	138

note 32. non-cash financing and investing activities

,vvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvvv	Consolidated				Parent Entity
	Note(s)	2005 \$'000	2004 \$'000	2005 \$'000	2004 \$'000
xxuaaaaaaxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Placement of units	21	22,517	$\cdots$	22.517	$\cdots$
Distributions reinvested	21	56,608	$\cdots$	56.608	$\cdots$
		79,125	TOM:	79.125	$\overline{a}$

note 33, earnings per unit

*********	2005 \$'000	Consolidated 2004 \$000
Basic and diluted earnings - cents per unit	3 44	8.66.
Weighted average number of units outstanding used in the calculation of basic and diluted earnings per unit.		2,214,289,196 1.148,052.162

The weighted average number of units has increased by 1,066,237,034 as a result of the Transaction and the February 2005 DRP. Had these not occurred, the weighted average number of units outstanding would have been 1,148,052,162.

note 33, earnings per unit (continued)

Consolidated
	2005	2004
	\$'000	\$'000
Basic earnings per unit before the Transaction
Net profit attributable to unitholders.	76.276	99.424
Add: Costs associated with the Transaction	12.480
	88.756	99.424
Number of sigits had the Trapsaction not occurred.	1.148.052.162 1.148.052.162
Basic earnings per unit before the Transaction -- cents per unit	7.54	8.66

note 34, acquisitions of controlled entities

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, *********
Name of entity	Country of	Class of	Equity
	incorporation	units	holding
********* DOT NZ Sub-trust No 1	Australia	Ordinary	-99.9%

acquisition of controlled entity

On 4 August 2004, the Trust acquired 99.9 per cent of DOT NZ Sub-trust No 1. The remaining 0.1 per cent of the units were acquired by DOT NZ Sub-trast No 2, a wholly owned sub-trast of the Trast. The results of this newly controlled entity have been included in the Statements of Financial Performance since the date of acquisition. Details of the acquisition are as follows:

	2005
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	\$'000
Fair value of identifiable net assets of controlled entity acquired.
Loan to third party	-4,959
Payables	(397)
	4,562
Less: Investment by DOT NZ Sub-trust No 2	6
	4,557
Cash consideration	4,557
*********	,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Consolidated
	2005
*********	\$'000
Outflow of cash to acquire controlled entity, net of cash acquired
Cash consideration	4,557
Less: Balances acquired
Cash assets	$\cdots$
Outflow of cash	4,557

note 34. acquisitions of controlled entities (continued)

Name of entity	Country of	Class of	Equity
	incorporation	units	holding
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, DOT NZ Sub-trust No 2	Australia	Ordinary	100%

acquisition of controlled entity

On 4 August 2004, the Trust acquired 100 per cent of DOT NZ Sub-trust No 2. The results of this newly controlled entity have been included in the Statements of Financial Performance since the date of acquisition. Details of the acquisition are as follows:

			2005
			\$'000
Fair value of identifiable net assets of controlled entity acquired
Investment in unit trust.			5
Cash consideration			5
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,			Consolidated
			2005
			\$'000
Outflow of cash to acquire controlled entity, net of cash acquired
Cash consideration			5
Less: Balances acquired
Cash assets
Outflow of cash			5
Name of entity	Country of	Class of	Equity
	incorporation	units	holding
DB RREEF RENTS Trust	Australia	Ordinary	0%

acquisition of controlled entity

On 27 January 2005, the Trust acquired one unit in DB RREEF RENTS Trust. All units with a beneficial interest in RENTS assets are listed on the Australian Stock Exchange. The Trust owns one unit in RENTS that does not have a beneficial inferest in the RENTS assets, but holds all voting rights in relation to RENTS. The results of this newly controlled entity have been included in the Statements of Financial Performance since the date of acquisition.

directors' declaration

DB RREEF OFFICE TRUST DIRECTORS' DECLARATION FOR THE YEAR ENDED 30 JUNE 2005

The Directors of DB RREEF Funds Management Limited (formerly Paladin Australia Limited) as Responsible Entity of DB RREEF Office Trust (formerly Deutsche Office Trust) ("the Trust") a listed property trust declare that the financial statements and notes set out on pages 15 to 47:

(i) comply with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements: and
(ii) give a true and fair view of the Trust's and consolidated entity's financial position as at 30 June 2005 and of their performance, as represented by the results of their operations and their cash flows, for the financial year ended on that date.

In the Directors' opinion:

(a) the financial statements and notes are in accordance with the Corporations Act 2001;
(b) there are reasonable grounds to believe that the Trust and its consolidated entities will be able to pay their debts as and when they become due and payable; and
(c) the Trust has operated in accordance with the provisions of the Constitution dated 1 December 1999 (as amended) during the year ended 30 June 2005.

This declaration is made in accordance with a resolution of the Directors.

Clux Sem

Christopher T Beare Chair Sydney

25 August 2005

independent auditor's report

PRICEWATERHOUSE COPERS

Independent audit report to the unitholders of DB RREEF Office Trust (formerly Deutsche Office Trust)

Matters relating to the electronic presentation of the audited financial report

This audit report relates to the financial report of DB RREEF Office Trust and the DB RREEF Office Trust Group (defined below) for the financial year ended 30 June 2005 included on DB RREEF Office Trust's web site. The directors of DB RREEF Funds Management Limited are responsible for the integrity of DB RREEF Office Trust's web site. We have not been engaged to report on the integrity of this web site. The audit report refers only to the financial report identified below. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report presented on this web site.

Audit opinion

In our opinion, the financial report of DB RREEF Office Trust:

gives a true and fair view, as required by the Corporations Act 2001 in Australia, of the financial position of DB RREEF Office Trust and the DB RREEF Office Trust Group (defined below) as at 30 June 2005, and of their performance for the year ended on that date, and
is presented in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia, and the Corporations Regulations 2001.

This opinion must be read in conjunction with the rest of our audit report.

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for both DB RREEF Office Trust (the Trust) and the DB RREEF Office Trust Group (the consolidated entity), for the year ended 30 June 2005. The consolidated entity comprises both the Trust and the entities it controlled during that year.

The directors of DB RREEF Funds Management Limited, the responsible entity, are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Liability is limited by the Accountant's Scheme under the Professional Standards Act 1994 (NSW)

PricewaterhouseCoopers ABN 52 780 433 757

Darling Park Tower 2 201 Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia www.pwc.com/au Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999

independent auditor's report (continued)

PRICEWATERHOUSE COPERS @

Audit approach

We conducted an independent audit in order to express an opinion to the unitholders of the Trust. Our audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected. For further explanation of an audit, visit our website http://www.pwc.com/au/financialstatementaudit.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the Trust's and the consolidated entity's financial position, and of their performance as represented by the results of their operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

examining, on a test basis, information to provide evidence supporting the amounts and 魯 disclosures in the financial report, and
assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

(manufactions of

PricewaterlyouseCoopers

DA Prothero Partner

Sydney 25 August 2005

financial statements

directors' report

directors' and executive remuneration report auditors' independence declaration statements of financial performance. statements of financial position statements of cash flows notes to the financial statements directors' declaration independent auditor's report

directors' report

The Directors of DB RREEF Funds Management Limited ("DRFM") as Responsible Entity of DB RREEF Industrial Trust (formerly Deutsche Industrial Trust) ("the Trust" or "DIT") and its consolidated entities present their Directors' Report ("Report") together with the consolidated financial report of the Trust for the year ended 30 June 2005.

1. directors and secretaries

On 29 September 2004, DRFM replaced Deutsche Asset Management (Australia) Limited as Responsible Entity of the Trust.

1.1 DB RREEF Funds Management Limited

The following persons were Directors or atternate Directors of DRFM at any time during the period 29 September 2004 to the date of this Report:

Name	Appointed	Resigned
Directors
Christopher T Beare	4 August 2004	Continuing
Elizabeth A Alexander AM	1 January 2005	Continuing
Barry R Brownjohn	1 January 2005	Continuing
Stewart F Ewen	4 August 2004	Continuing
Victor P Hoog Antink	1 October 2004	Continuing
Charles B Leitner III	10 March 2005	Continuing
Shaun A Mays	13 May 2004	10 March 2005
Brian E Scullin	1 January 2005	Continuing
Daniel S Weaver	1 October 2004	17 December 2004
Alternate Director
Shaun A Mays (alternate for Charles B Leitner III).	10 March 2005	Continuing

Particulars of the qualifications, experience and special responsibilities of Daniel S Weaver, a Director of DRFM during the period 29 September 2004 to 30 June 2005 are as follows:

Daniel S Weaver BArch, MBA, AFIRE (Executive Director)

1.2 Deutsche Asset Management (Australia) Limited

The following persons were Directors of Deutsche Asset Management (Australia) Limited at any time during the period 1 July 2004 to 29 September 2004:

Name	Appointed	Resigned
Directors
Christopher T Beare, Chair®	25 March 2003	20 October 2004
Stewart F Ewen ¹²	25 March 2003	20 October 2004
Shaan A Mays	13 May 2004	4 May 2005
William B Robinson ¹²²	25 May 2000	20 October 2004
Brian E Scullin'	20 December 1999	Continuing
David C Shields	25 March 2003	Continuing

1 Independent Director.

2 Audit Committee Member.

3 Compliance Committee Member.

Particulars of the qualifications and experience of each of the Directors mentioned in this sub-section are set out in section 1.1 of this Report and in the DRT Annual Report 2005 under the section titled "Directors".

1.3 company secretaries

The names and details of the Company Secretaries of DRFM as at 30 June 2005 are as follows:

Tanya L Cox MBA MAICD (Company Secretary)

Appointed: 1 October 2004

Tanya joined DB Real Estate in July 2003 as Chief Operating Officer, responsible for the efficient management of the overall real estate business in Australia. Tanya has held various general management positions over the past 15 years, including Director and Chief Operating Officer of NM Rothschild & Sons (Australia) Ltd and General Manager -- Finance, Operations and IT of Bank of New Zealand (Australia).

Tanya is Chief Operating Officer and Company Secretary for DRFM and DB RREEF Holdings Pty Limited.

lan Thompson BEc (Company Secretary)

Appointed: 12 July 2000 Resigned: 1 July 2005.

John C Easy BComm, LLB (Company Secretary)

Appointed: 3 July 2005

John joined Deutsche Asset Management as a senior lawyer in 1997 and is now the Head of Legal for DB RREEF. John has been involved in the listing of Deutsche Office Trust and major acquisition, disposal and leasing transactions for the group, along with responsibility for legal issues affecting the property portfolio. John was formerly a senior associate with major law firms Altens Arthur Robinson and Gilbert & Tobin. John is currently undertaking the Graduate Diploma in Applied Corporate Governance with Chartered Secretaries Australia.

John is Head of Legal and Company Secretary for DRFM and DB RREEF Holdings Pty Limited.

2. attendance of directors at board meetings and board committee meetings

2.1 DB RREEF Funds Management Limited

DB RREEF Funds Management Limited for the period to 30 June 2005

	Board		Board Audit Committee		Board Nomination and Remuneration		Board Risk and Compliance
	Meetings held"	Meetings attended	Meetings held	Meetings attended	Meetings held	Meetings attended	Meetings held	Meetings attended
Directors
Christopher T Beare	9	9
Elizabeth A Alexander AM	8		5	5
Barry R Brownjohn	8	6	5	3
Stewart F Ewen	9	9	5	5	ł.
Victor P Hoog Antink	9	9
Charles B Eeitner BIT	5	3
Shaun A Mays ²	4	3
Brian E Scullin	8	8					2	2.
Daniel S Weaver		e
Alternates
Shaun A Mays (alternate)
for Charles B Leitner (II)	5	4			÷.

1 Number of meetings held while a Director.

Shaun A Mays resigned as a Director on 10 March 2005.

Since 30 June 2005 the DRFM Board has established the Board Treasury Policy Committee.

2.2 Deutsche Asset Management (Australia) Limited

The following table outlines details of Director attendance at Board and Board committee meetings for the period to 29 September 2004 for Deufsche Asset Management (Australia) Limited, the then Responsible Entity of DIT.

Deutsche Asset Management (Australia) Limited for the period to 29 September 2004

	Board		Board Audit		Board Risk and
			Committee		Compliance Committee
	Meetings	Meetings	Meetings	Meetings	Meetings	Meetings
	held	attended	held ³	attended	held	attended
Deutsche Asset Management (Australia) Limited
Christopher T Beare	╩	4
Stewart F Ewen		4
Shaun A Mays	4	4
William B. Robinson	∠	4
Brian E Scullin		3
David C Shields		4

1 Number of meetings held while a Director.

3. directors' and executive remuneration report

DRFM's Directors' and Executive Remuneration is set out in the section fitted "Directors' and Executive Remuneration Report" that follows this Report.

4. directors' interests

4.1 interest in securities

As at the date of this Report, the interests of each Director in the securities of DB RREEF Trust ("DRT") are:

	Personally	Indirectly
Christopher T Beare	懶	Ni
Elizabeth A Alexander AM	懶	Ni
Barry R Brownjehn	隠	Ni
Stewart F Ewen	陱	Nil
Victor P Hoog Antink	懶	Nil
Charles B Leitner III	翻	Νì
Shaun A Mays (alternate to Charles B Leitner III)	圈	Νì
Brian E Scollin	懶	ΝŘ

As at the date of this Report, no Director held options over securities in DRT.

4.2 other interests

As at the date of this Report, no Director held any interest in any other fund or scheme managed by the Responsible Entity or another entity that forms part of DRT.

5. directors directorships in other listed companies

Directors	Company	Date appointed	Date resigned
Christopher T Beare	DB RREEF Holdings Limited	,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 21 Sep 2004	Continuing
	DB RREEF Funds Management Limited®	4 Aug 2004	Continuing
Elizabeth A Alexander AM	DB RREEF Holdings Limited®	1 Jan 2005	Continuang
	DB RREEF Funds Management Limited®	1 Jan 2005	Continuing
	Amcor Limited	Apr 1994	Continuing
	Boral Limited	Sep 1994	Continuing
	CSL Limited	3al 1991	Continuing
Barry R Brownichn	DB RREEF Holdings Limited®	1 Jan 2005	Continuing
	DB RREEF Funds Management Limited®	1 Jan 2005	Continuing
Stewart F Ewen	DB RREEF Holdings Limited®	21 Sep 2004	Continuing
	DB RREEF Funds Management Limited®	4 Aug 2004	Continuing
Victor P Hoog Antink	DB RREEF Holdings Limited®	1 Oct 2004	Continuing
	DB RREEF Funds Management Limited®	1 Oct 2004	Continuing
Charles B Leitner III	DB RREEF Holdings Limited®	10 Mar 2005	Continuing
	DB RREEF Funds Management Limited®	10 Mar 2005	Continuing
Brian E Scuttin	DB RREEF Holdings Limited ²	1 Jan 2005	Continuang
	DB RREEF Funds Management Limited®	1 Jan 2005	Continuing
	(YS Instalment Receipt Limited®	24 Oct 2000	Continuing
	Deutsche Asset Management (Australia) Limited ^®	20 Dec 1999	Continuing
Alternate Director
Shaun A Mays	DB RREEF Holdings Limited®	10 Mar 2005	Continuing
(alternate to Charles B Leitner HI)	DB RREEF Funds Management Limited®	1 Jan 2005	Continuing
	IYS Instalment Receipt Limited®	13 May 2004	4 May 2005
	Deutsche Asset Management (Australia) Limited®	13 May 2004	4 May 2005

OB RREEF Holdwigs Pty Limited is the holding company of DRFM.

2 DRFM is Responsible Entily for (a) the Trust, a managed investment scheme whose units are stapled to the units of DB RREEF Office Trust and DB RREEF Diversified Trust and trade on ASX as DB RREEF Trust and (b) DB RREEF RENTS Trust, whose Real-Estate perpetual exchaNgeable sTep-up Securities called RENTS are listed on ASX.

3 IYS Instalment Receipt Limited has issued ASX listed instalment receipts over units in the Deutsche Retail Infrastructure Trust, a managed investment scheme that is listed but not quoted on ASX and whose Responsible Enlity is Deutsche Asset Management (Australia) Limited.

directors' report (continued)

6. principal activities

During the year the principal activity of the Trust consisted of investment in an industrial portfolio of real estate assets within Australia and the United States.

The number of employees of the Trust during the reporting period was nil as at 30 3une 2005 (2004; nil).

7. total value of trust assets

The total value of the assets of the Trust as at 30 June 2005 was \$1,313.8 million (2004: \$932.6 million). A schedule detailing the basis of this valuation is outlined in note 1 of the financial statements.

8. review and results of operations

A review of the results and operations, including the expected results of operations of the Trust, is set out in the "Chief Executive Officer's Report" in the DRT Annual Report 2005.

9. likely developments and expected results of operations

10. significant changes in the state of affairs

On 27 September 2004, unitholders of the Trust, DB RREEF Diversified Trust (formerly Deutsche Diversified Trust) ("DDF") and DB RREEF Office Trast (formerly Deutsche Office Trast) ("DOT") voted to replace their respective constitutions, replace their respective responsible entities and staple their units together with a newly formed trading trust DB RREEF Operations Trust ("DRO") to create a stapled security known as DB RREEF Trust. ("DRT") (ASX Code: DRT). Details on the proposal were outlined. in the Information Memorandum and Product Disclosure Statement. dated 30 August 2004. The result of these resolutions became effective on 30 September 2004.

The consolidation of the Trust and DDF, DOT and DRO, the acquisition of the US REIT, and the associated debt arranging and interest rate hedging, are referred to as "the Transaction".

For the purposes of statutory reporting, the stapled security must be accounted for as a consolidated group. The parent entity, DDF is the deemed acquirer of DIT, DOT and DRO.

DB RREEF Funds Management is a wholly owned subsidiary of DB RREEF Roldings Pty Limited ("DRH"). DRH is 50 per cent owned. by DRFM as Responsible Entity for DRO and 50 per cent owned by First Australian Property Group Holdings Pty Limited, a subsidiary of the Deutsche Bank Group.

As part of the stabling process, the Trust, DDF and DOT each paid a special distribution by way of a capital return that was applied on behalf of each unitholder to subscribe for new issued units in each of the other trusts, including DRO. The number of units issued by each trust changed so that each trust had the same number of issued units. The namber of stapled securities owned by an investor in DRT equals the same number of units in the Trust, DDF, DOT and DRO.

11, matters subsequent to the end of the financial year

On 7 3uly 2005, amendments were made to the Trust's constitution. that enabled the Trust to satisfy the Australian Infernational Financial Reporting Standards criteria for unitholders' funds to be classified as equity. The Directors of the Responsible Entity were of the view that such amendments were not materially adverse to unitholders' rights. or interests nor did they change the nature of the Trust.

On 27 July 2005, the Responsible Entity lodged an appeal with the Supreme Court of New South Wales in relation to the interest payable. on the settlement sum in respect of the sale of part of 1-55 Rothschild Avenue, Rosebery.

Since the end of the year, other than the matters discussed in this Report, the Directors of the Responsible Entity are not aware of any matter or circumstance that has significantly affected or may significantly affect the operations of the Trust, the results of those operations, or state of the Trust's affairs in foture years.

12. distributions

Distributions paid or payable by the Trust for the year ended. 30 June 2005 are detailed in note 23 of the financial statements. and form part of this Report.

13. responsible entity and associate interests

Fees totaking \$5.5 million (2004: \$5.0 million) were paid or are payable by the Trust to the Responsible Entity for the year ended. 30 June 2005. Details of these fees are outlined in note 27 of the financial statements and form part of this Report.

The namber of interests in the Trust held by the Responsible Entity or its associates as at the end of the financial year are disclosed in note 27 of the financial statements and form part of this Report.

14. Interests in the trust

The movement in securities on issue in the Trust is detailed in note 21 of the financial statements and forms part of this Report.

The Trast did not issue any options during the year.

15. environmental regulation

The Directors of the Responsible Entity are satisfied that adequate systems are in place for the management of its environmental responsibility and compliance with the various licence requirements and regulations. Further, the Directors are not aware of any breaches of these requirements and to the best of their knowledge, all activities have been undertaken in compliance with environmental requirements.

16. Indemnification and Insurance

Insurance premium for a policy of insurance indemnifying directors, officers and others (as defined in the relevant policy of insurance) is paid by the Responsible Entity.

17. audit

17.1 auditor

PricewaterhouseCoopers ("PwC" or "Auditor") continues in office in accordance with section 327 of the Corporations Act 2001.

17.2 non-audit services

Details of the amounts paid to the Auditor, which include amounts paid for non-audit services totalling \$494,628, are set out in note 5 in the Nofes to the Financial Statements.

The Directors are satisfied that the provision of non-audit services. provided during the year by the Auditor (or by another person or firm on the Auditor's behalt), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

Reasons for the Directors being satisfied that the provision of those non-audit services, during the year, by the Auditor did not compremise the Auditor's independence are as follows:

Board Audit Coramittee has determined that the external Auditor 缕 will not provide services that have the potential to impair the independence of their audit role, including:
@ participating in activities that are normally undertaken by management;
being remunerated on a "success fee" basis;
providing services where the Auditor may be required to gg. review or audit their own work, including:
- the preparation of accounting records;
- the design and iraplementation of information technology systems;
- conducting valuation, actuarial or legal services;
- promoting, dealing in or underwriting securities; or
- providing internal audit services; and
Board Audit Committee regularly reviews the performance and independence of the external Auditor and whether the independence of this function has been maintained having regard to the provision of non-audit services; and
the external Auditor must provide a written declaration to the 緵 Board regarding their independence each reporting period.

Since 30 June 2005, Board Audit Committee approval is required before the engagement of the external Auditor to perform any non-audit service for a fee greater than \$100,000.

17.3 audit independence statement

A copy of the Auditor's Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on page 62. and forms part of this Report.

18, corporate governance

The Responsible Entity's Corporate Governance Statement is set out in the DRT Annual Report 2005, which accompanies this Report.

19. rounding of amounts and currency

Amounts in the Directors' Report and financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, unless otherwise indicated.

All figures in this Report and the financial report, except where ofherwise stated, are expressed in Australian dollars.

20. management representation

The Chief Executive Officer and the Chief Operating Officer have reviewed DRT's financial reporting processes, policies and procedures together with the Trust's risk raanagement and internal control and compliance policies and procedures. Following that review it is their opinion that the Trust's financial records for the financial year have been properly mainfained in accordance with the Corporations Act 2001 and the financial statements and their notes comply with the accounting standards and give a true and fair view.

21. directors' authorisation

This Report is made in accordance with a resolution of the Directors.

Chix Sen

Christopher T Beare Chair Sydney

25 August 2005

Victor P Hoog Antink Chief Executive Officer Sydney 25 August 2005

DB RREEF Industrial Trust Financial Statements 2009 57

directors' and executive remuneration report

The Directors of DB RREEF Funds Management Limited (*DRFM*) as Responsible Entity of DB RREEF Industrial Trust ("the Trust" or "DIT") and its consolidated entities present their Remuneration Report for the year ended 30 June 2005.

1. general remuneration framework

The Board Nomination and Remuneration Committee oversee the remuneration of executives to ensure that executive reward satisfies the following key criteria for good reward governance practices:

competitiveness and reasonableness; Ø
娑 performance linkage/alignment;
transparency; and Ø
financial and non-financial resource management. Ŷ.

In consultation with external remuneration consultants DRFM has structured a remaneration framework that is market competitive and complementary to its reward strategy. Alignment to investors' interests is achieved through increased focus on group performance being a core component of plan design, as well as the plan rewarding:

delivery of forecast returns; and gg.
achievement of key non-financial value drivers. q

Alignment of employees' inferests is achieved through the planrewarding capability and performance. For participants, the plan-

provides a clear structure for earning reward; Ø
delivers competitive reward for contribution to the creation of W value; and
provides recognition for contribution. gg.

The plan is designed to attract and retain talented and motivated employees, and to encourage enhanced performance.

Should DRFM achieve predetermined performance targets, a short-term incentive pool, approved by the Board Nomination and Remuneration Committee, is available for allocation to employees during the annual review. Cash incentives are payable in September each year. Performance targets are utilised to ensure that variable reward is only available when value has been created for investors, and when performance is consistent with forecasts. The incentivepool may be feveraged for performance above targets to provide. incentive for employee out-performance.

Key performance indicators are linked to short-term incentives based on group, individual business and personal objectives. Performance indicators require achievement of specific targets in relation to the Trust's performance, as well as other key non-financial measures. linked to drivers of performance in future reporting periods. Short-termincentive payments may be adjusted up or down in tine with under or over achievement against target performance levels, at the discretionof the Board Nomination and Remuneration Committee.

There are no termination provisions extended to any other DRFM. executive.

2. non-executive directors' remuneration framework and structure

Fees and payments to Non-Executive Directors reflect the demands which are made on, and the responsibilities of Directors. Non-Executive Directors' fees and payments are reviewed annually by the Board-Nomination and Remuneration Committee. The Committee also obtains advice from independent remuneration consultants to ensure. Non-Executive Directors' fees and payments are appropriate and inline with market. The Chair's fee is determined independently of the fees of Non-Executive Directors, based on comparative roles in the external market. The Chair is not present at any discussions relating to the determination of his/her own remuneration. Non-Executive Directors do not receive share options.

3. details of remuneration of directors

3.1 DB RREEF Funds Management Limited

Details of the nature and amount of each element of remuneration for each Director of the Responsible Entity for the period ending 30 June 2005 are set out in the following tables.

Period ending 30 June 2005

	Note(s)	Salary	Non-monetary	Superannuation	Total
		and fees	benefits
		\$	S	\$	\$
Non-Executive Directors
Christopher T Beare		193.125			193.125
Elizabeth A Alexander		65,000			65,000
Barry R Brownjehn		60,000			60.000
Stewart F Ewen		95.625			95.625
Brian E Scuttin		68,750			68,750
Executive Directors
Victor P Hoog Antink	3	682.139		68.800	750,939
Charles B Leitner III	2	12,300			12.300
Shaon A Mays (alternate to Charles B Leitner III)	2	16,000			16,000
Daniel S Weaver		$\cdots$

Note 1: Non-Executive Directors' remuneration is a cost of DB RREEF Funds Management Limited. The amount shown in this Remuneration Report is Director's total remoneration from 1 October 2004, or the date of appointment if later than 1 October 2004, to 30 June 2005.

Note 2. These Executive Directors' remuneration is a cost of their employer, Deutsche Bank. The amount shown in this Remuneration Report is an apportionment of each Executive's total remuneration based on their time spent on DB RREEF Funds Management Limited's activities during the period ending 30 June 2005.

directors' and executive remuneration report (continued)

3.2 Deutsche Asset Management (Australia) Limited and DB Real Esiate Australia Limited

For the period 1 July 2004 to 29 September 2004

	Note(s)	Salary	Non-monetary	Total
		and fees S	benefits	£
Non-Executive Directors
Christopher T Beare		12.500		12.500
Stewart F Ewen		21.250		21,250
William 8 Robinson		15,000		15.000
Brian E Scullin		20.250		20.250
Executive Directors
Shaun A Mays	2	9,000		9.000
David C Shields	o	9,811		9.811

Note 1: Non-Executive Directors' remuneration was a cost of Deutsche Bank. The amount shown in this Remuneration Report is each Director's total remuneration for the period ending 29 September 2004.

Note 2: Executive Directors' remuneration is a cost of their employer, Deutsche Bank. The amount shown in this Remuneration Report is an apportionment of each Executive's total remuneration based on their time spent on Deutsche Asset Management (Australia) Limited and DB Real Estate Australia Limited activities relating to DB RREEF Diversified Trust, DB RREEF Industrial Trust and DB RREEF Office Trust during the period ending 29 September 2004.

4. details of remuneration of executives

For the period commencing 1 October 2004 and ending 30 June 2005

	Position	Salary	Bonus	Superannuation	Total
		£	\$		£
Tariya L. Coxi	Chief Operating Officer	178.811	50.000	8.689	237.500
John C Easy	Head of Legal	163.811	25,000	8.689	197.500
Greg T Lee	Head of Transaction Services	216.311	62.000	8.689	287,000
Ben J Lehmann	Head of Portfolio Services	216.311	75.000	8.689	300,000
lan D Robins.	Head of Capital Markets	272.561	175.000	8.689	456.250
Mark F Turner	Head of Mandates	178.811	50.000	8.689	237.500

No short term incentive payment has been allocated for the period 1 January 2005 to 30 June 2005. Consequently, no short term incentive payment has been included for the same period.

5. other disclosures

There were no loans, stapled securities or options issued or granted during the period to any Director or employee. No Director or Executive received any retirement benefit during the period.

6. directors' authorisation

This Report is made in accordance with a resolution of the Directors.

Clus Sem

Christopher T Beare Chair Sydney

25 August 2005

auditors' independence declaration

Auditors' Independence Declaration

As lead auditor for the audit of DB RREEF Industrial Trust for the year ended 30 June 2005, I declare that to the best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of DB RREEF Industrial Trust and the entities it controlled during the period.

DA Prothero Partner PricewaterhouseCoopers

Sydney 25 August 2005

PricewaterhouseCoopers ABN 52 780 433 757 Darting Park Tower 2 201 Sussex Street GPO 80X 2650 SYONEY NSW 1171 DX 77 Sydney Australia

www.pwc.com/au Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999

Liability is limited by the Accountant's Scheme under the Professional Standards Act 1994 (NSW)

statements of financial performance

DB RREEF INDUSTRIAL TRUST STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2005

		2005	Consolidated 2004	2005	Parent Entity 2004
	Note(s)	\$'000	\$'000	\$'000	\$'000
Revenue from ordinary activities
Property income	3	94,903	87.717	62,065	55,367
Distribution income				30,285	31,362
Dividend income			Ξ.	1,715
Interest income		282	401	220	303
Net foreign exchange gain		29	u,	9.461
Proceeds from sale of investment properties	4	26,200	14,098	22,000
Share of net profits of associates accounted for using the equity method	13	20,078
Total revenue from ordinary activities		141,492	102,216	125,746	87,032
Expenses from ordinary activities
Property expenses		(17.683)	(18,603)	(11,517)	(12,102)
Responsible Entity fees	27	(5,491)	(4,997)	(5,491)	(3,420)
Borrowing costs expense	6	(24, 627)	(16, 431)	(24, 626)	(16, 430)
Other expenses from ordinary activities	6	(1,341)	(1,167)	(1,188)	(935)
Book value of property investments sold	4	(25, 221)	(14,624)	(20, 832)
Increment/(decrement) on revaluation of investments	22	3,795	7,752	(581)	1
Costs associated with the Transaction.	7	(14.729)		(14, 729)
Total expenses from ordinary activities		(85, 297)	(48,070)	(78, 964)	(32, 886)
Net profit attributable to unitholders	22	56,195	54,146	46,782	54,146
Net increase in asset revaluation reserve	22	62,541	19.753	71.305	19.753
Net decrease in foreign currency translation reserve	22.	(649)
Total revenues, expenses and valuation adjustments attributable to members of the Trust recognised directly in equity		61,892	19,753	71,305	19,753
Total changes in equity other than those resulting from
transactions with unitholders as owners		118,087	73,899	118,087	73,899
		Cents	Cents
Basic earnings - cents per unit	32	2.85	16.02
Dituted earnings - cents per unit	32	2.85	16.02
Basic earnings before the Transaction - cents per unit	32	20.95	ะช่อ

The above Statements of Financial Performance should be read in conjunction with the accompanying notes.

			Consolidated		Parent Entity
		2005	2004	2005	2004
	Note(s)	\$'000	\$'000	\$'000	\$'000
Distribution
Net profit attributable to unitholders.		56.195	54.146	46.782	54,146
Movement in undistributed income.		(4.133)	(727)	3.710	(727)
Transfer from asset revaluation reserve		14,300	$\cdots$	15,870
Distribution paid and payable	22/23	66.362	53.419	66.362	53.419
Distribution paid/payable - cents per unit		Cents	Cents
Ordinary units	23	2.47	15.80

statements of financial position

DB RREEF INDUSTRIAL TRUST STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2005

	2005		Consolidated 2004	2005	Parent Entity 2004
	Note(s)	\$'000	\$'000	\$'000	\$'000
Current assets
Cash assets		5,577	5,157	4,039	4,787
Receivables	8	3,076	2,937	50,227	43,369
investment properties	10		23,055	$\ddotsc$	18,787
Other	9	3,751	4,800	2,742	3,811
Total current assets		12.404	35,949	57.008	70,754
Non-current assets
investment properties	10	961,355	885,980	647,071	580,207
interest bearing loans receivable from related parties	11	1,234		1,234
investments in controlled entities	12			269,284	269,865
investments accounted for using the equity method	13	192,297
investments in associates	13	$\overline{\phantom{a}}$		192,297
Loan with related parties	14	138,948		138,948
Other	15	7,551	10,705	5,873	9,178
Total non-current assets		1,301,385	896,685	1,254,707	859,250
Total assets		1,313,789	932,634	1,311,715	930,004
Current liabilities
Payables	16	10,459	11,004	8,520	8,503
Interest bearing liabilities	17	354,338	$\ldots$	354,338
Provisions	18	39,615	27,058	39,615	27,058
Other	19	1,121		1,121
Total current liabilities		405,533	38,062	403,594	35,561
Non-current liabilities
Interest bearing liabilities	17	132,199	339,474	132,199	339,474
Other	20	4,108	1,076	3,973	947.
Total non-current liabilities		136,307	340,550	136,172	340,421
Total liabilities		541,840	378,612	539,766	375,982
Net assets		771,949	554,022	771,949	554,022
Equity
Contributed equity	21	668,995	502,793	668,995	502,793
Reserves	22	97,853	50.261	102,954	47,519
Undistributed income	22	5,101	968		3,710
Total equity		771,949	554,022	771,949	554,022

The above Statements of Financial Position should be read in conjunction with the accompanying notes.

statements of cash flows

DB RREEF INDUSTRIAL TRUST STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2005

				Parent Entity
	Note(s)	2005 \$'000	2004 \$'000	2005 \$'000	2004 \$'000

Cash flows from operating activities
Receipts in the course of operations		94.004	86,554	62.061	54.934
Payments in the course of operations		(30.731)	(26.114)	(23, 870)	(14, 937)
Interest received		282	401	220	303
Borrowing costs paid		(22.202)	(18, 525)	(22, 202)	(18,524)
Net cash inflow from operating activities	30	41,353	42,316	16,209	21,776
Cash flows from investing activities
Proceeds from sale of investment properties		26,200	13,888	22,000
Payments for capital expenditure on investment properties.		(45, 855)	(31,620)	(41.394)	(30,022)
Payments for investment properties			(52,315)		(52,315)
Payments for investments accounted for using the equity method		(138.033)
Payments for investments in associates				(138,033)
Lean from controlled entities				23,715	34,171
Net cash outflow from investing activities		(157, 688)	(70, 047)	(133,712)	(48, 166)
Cash flows from financing activities
Establishment expenses and unit issue costs		(4)	$\langle 8 \rangle$	(4)	(8)
Proceeds from borrowings		50,739	121,993	50.739	121,993
Repayment of borrowings		(17.374)	(41.497)	(17.374)	(41.400)
Borrowings provided to Stapled Trusts.		(42, 143)		(42, 143)
Borrowings provided by Stapled Trusts		151,988		151,988
Distributions paid		(26, 451)	(51,339)	(26, 451)	(51, 339)
Net cash inflow from financing activities		116,755	29,149	116,755	29,246
Net increase/(decrease) in cash held		420	1,418	(748)	2.856
Cash at the beginning of the year		5,157	3.739	4.787	1,931
Cash at the end of the year		5.577	5,157	4,039	4,787

The above Statements of Cash Flows should be read in conjunction with the accompanying notes.

notes to the financial statements

DB RREEF INDUSTRIAL TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 UJNE 2005

note 1, summary of significant accounting policies

(a) basis of preparation

On 30 September 2004, DB RREEF Trust was created by the stapling together of the Trust, DDF, DOT and DRO and their consolidated entities. The deemed acquirer of the Trust is DDF. The basis of this approach is consistent with current practice in relation to the financial obligations of stapled entities that were formed after 1 July 2004.

DB RREEF Trust stapled securities are quoted on the Australian Steck Exchange under the code DRT and comprise one unit in each of the Trust, DDF, DOT and DRO. Each entity forming part of DRT continues as a separate legal entity in its own right under the Corporations Act 2001 and is therefore required to comply with the reporting and disclosure requirements under the Corporations Act. 2001 and Australian Accounting Standards.

DB RREEF Funds Management as Responsible Entity for the Trust, DDF, DOT and DRO may only unstaple the Trust if approval is obtained by special resolution from unitholders of each of the Trusts.

This general purpose financial report has been prepared in accordance with the requirements of the Trust Constitution, Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Consensus. Views and the Corporations Act 2001 in Australia.

It is prepared on the basis of the going concern and historical cost. conventions and has not been adjusted to take account of either changes in the general purchasing power of the dollar or changes in the values of specific assets, except to the extent that the Trust investments have been revalued.

(b) principles of consolidation

The consolidated financial statements incorporate all the assets, liabilities and net operating results of the parent and its controlled entities.

The effects of all fransactions between controlled entities and the Trust have been eliminated in full.

Certain property investments are held via joint ownership arrangements. (refer note 13). These joint ownership arrangements include the ewnership of units in single purpose unlisted trusts over which the Trust exercises significant influence but not control ("Associates").

trivestments in associates are accounted for in the consolidated financial statements using the equity method. Under this method, the consolidated entity's share of the post-acquisition profits of associates is recognised as revenue in the consolidated Statements of Financial Performance, and its share of post-acquisition movements in reserves is recognised in consolidated reserves.

(c) revenue recognition

Rent

Rent is brought to account on an accruais basis and, if not received at balance date, is reflected in the Statements of Financial Position as a receivable. Recoverability of receivables is reviewed on an ongoing basis. Debts which are known to be not collectable are written off.

Income support

Rental income support is brought to account on an accruals basis in accordance with the relevant contractual arrangements.

interest income

Interest income is brought to account on an accruais basis and, if not received at the balance date, is reflected in the Statements of Financial Position as a receivable.

(d) expenses

Expenses are brought to account on an accruais basis and, if not paid at the balance date, are reflected in the Statements of Financial Position as a payable.

Property expenses

Property expenses include rates, taxes and other property outgoings. incurred in relation to investment properties where such expenses are the responsibility of the Trust.

Borrowing costs

Borrowing costs include interest expense and other costs incurred in respect of obtaining finance.

Borrowing costs are expensed unless they relate to qualifying assets. Qualifying assets are assets which take a substantial period of timeto get ready for their intended use or sale. Where funds are borrowed specifically for the acquisition or construction of a qualifying asset, the amount of borrowing costs capitalised is those incurred in relation to that berrowing, net of any interest earned on those berrowings, until the asset is ready for its intended use or sale. Where funds are borrowed generally, borrowing costs are capitalised using a weighted average capitalisation rate.

Other costs incurred, including loan establishment fees in respect of obtaining finance, are deferred and written off over the term of the respective agreement.

(e) derivatives and other financial instruments

The Trust's activities expose it to changes in interest rates and foreign exchange rates. There are policies and limits approved by the Board of Directors of the Responsible Entity in respect of the usage of derivatives and other financial instruments to hedge those cash flows. and earnings which are subject to interest rate risk and foreign currency risk respectively. In conjunction with its advisers, the Responsible Entity continually reviews the Trust's exposures and updates its treasury policies and procedures. The Trust does not trade in derivative instruments for speculative purposes.

Changes in the net market values of hedging instruments are matched and brought to account with the carrying values and income streams of the underlying assets or liabilities.

The accounting policies adopted in relation to financial instruments are detailed below:

Debt instruments

Debt instruments are carried at face value. Inferest is brought to account on an accruals basis.

Interest rate swaps

Forward exchange contracts

ID GST

Revenues, expenses and capital assets are recognised net of the amount of goods and services tax ("GST"), except where the amount of GST incurred is not recoverable from the Australian Tax Office. ("ATO"). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

(g) taxation

Under corrent legislation, the Trust and its controlled entities are not liable for income tax, provided that the taxable income and taxable realised gains are fully distributed to unitholders each year. Tax allowances for building and plant and equipment depreciation. are distributed to unitholders in the form of tax deferred components. of the distribution.

Dividends received from DB RREEF Industrial Properties, Inc. ("US REIT") will be net of US withholding taxes payable in respect of those distributions. The US foreign operations theraselves will generally not be subject to US Federal or State income taxes provided they satisfy the necessary requirements of a Real Estate Investment Trust ("REIT").

No provision is made for additional taxes which would become payable if certain reserves of the foreign controlled entity were to be distributed as it is not expected that any substantial amount will be distributed from those reserves in the foreseeable future.

Under current Australian income tax legislation, the phitholders will be generally entitled to receive a foreign tax credit for US withholding tax deducted from dividends paid by the US REIT.

(h) distributions

In accordance with the Trast's Constitution, the Trust distributes its distributable income to unitholders by cash or reinvestment.

(i) receirs and maintenance.

Plant of the Trust is required to be overhauled on a regular basis. This is managed as part of an ongoing major cyclical maintenance program. The costs of this maintenance are charged as expenses as incurred, except where they relate to the replacement of a component of an asset, in which case the costs are capitalised. in accordance with note 1(f). Other routine operating maintenance, repair costs and minor renewals are also charged as expenses. as incurred.

(i) nask

For the purposes of the Statements of Cash Flows, cash includes deposits at call which are readily convertible to cash on hand and are subject to an insignificant risk of change in value.

(k) receivables

Debtors to be settled within 30 days are carried at amounts due. Debts are assessed at balance date and provision is made for any doubtful accounts.

(i) investment properties

It is the policy of the Responsible Entity to review the carrying value. of each property at the reporting date. External valuations of the individual investments are carried out in accordance with the Trust's Constitution, or earlier where the Responsible Entity believes theremay be a material change in the fair value of the property.

The valuations are measured at fair value being the amounts for which assets could be exchanged between knowledgeable willing parties in an arm's length transaction. Revaluations are made with sufficient regularity to ensure that the carrying amount of eachinvestment property does not differ materially from its fair value. at the reporting date.

A revaluation increment is credited directly to the asset revaluation. reserve, unless it is reversing a previous decrement charged as an expense in the Statements of Financial Performance in respect of that same class of assets, in which case the increment is credited directly to the Statements of Financial Performance.

A revaluation decrement is recognised directly as an expensein the Statements of Financial Performance, unless it is reversing a revaluation increment previously credited to, and still included in the balance of the asset revaluation reserve in respect of that same class of assets, in which case it is debited directly to the asset revaluation reserve.

Land and buildings have the function of an investment and are regarded as a composite asset. The applicable Accounting Standards do not require that investment properties be depreciated. Accordingly, the buildings and any component thereof (including plant and equipment) are not depreciated.

note 1, summary of significant accounting policies (continued)

(I) investment properties (continued)

Expenses capitalised to properties may include the cost of acquisition, additions, refurbishment, redevelopment, borrowing costs and fees incurred.

The carrying amounts of current and non-current investment. properties are reviewed to determine whether they are in excess. of their recoverable amount at balance date. If the carrying amount of current and non-current investment properties exceeds the recoverable amount, the asset is written down to the lower amount.

(in) leasing fees

Leasing fees incurred in relation to the initial letting of property or following redevelopments are capitalised to the property, and taken to account through periodic revaluation. Leasing fees incurred in relation to the origoing renewal of major tenancies are capitalised and amortised over the lease periods to which they relate.

(n) lease incentives

Prospective lessees may be offered incentives as an inducement to enter info non-cancellable operating leases. These incentives may take various forms including up front cash payments, rent free periods, or a contribution to certain lessee costs such as fit out costs. or relocation costs.

These incentives are repaid out of future lease payments and therefore are recognised as an asset in the Statements of Financial Position. Specifically:

rent free periods when provided, the rent forgiven in early years. is capitalised to a deferred income account, at the earlier datefrom which the tenant has effective use of the premises or the lease commencement date and is released to the Statements of Financial Performance in fater years to ensure a constant rate of return over the term of the lease;
@ cash contributions where provided, the amount of contribution is capitalised as an asset in the Statements of Financial Position. and written off over the term of the lease;
雞 tenant fit out - costs associated with fitting out a building specifically for a lessee and that are not expected to be used beyond the term of the lease are capitalised in the Statements of Financial Position and written off over the term of the lease; and
雞 tessor owned fit out - when the fit out is an asset of the lessor and can be retained by the lessor beyond the lease term, it is considered integral to the building and is capitalised into the cost of the property and adjusted through the valuations.
(o) investments accounted for using the equity method/ investments in associates

Interests held by the Trust are brought to account at valuation based on the net tangible asset backing.

At the parent level, investments in associates are carried at Directors' valuation, being net tangible assets of the underlying entity and faking into consideration market and movements.

(p) acquisition of assets.

The parchase method of accounting is used for all acquisitions. Cost is measured as the fair value of the assets given up, shares issued or fiabilities undertaken at the date of acquisition plus incidental costs. directly attributable to the acquisition.

Goodwill is brought to account on the basis described in note 1(g).

(q) intangible assets

Where an entity or operation is acquired, the identifiable net assets acquired are measured at fair value. The excess of the fair value of the identifiable net assets acquired, is brought to account as goodwill and amortised on a straightline basis over the period which the benefits are expected.

(r) payables

These amounts represent liabilities for amounts owing by the Trustat year end which are unpaid. The amounts are presecured and are usually paid within 30 days of recognition.

(s) earnings per unit

(t) foreign currency

Foreign currency investments

Foreign assets and liabilities are converted to Australian Dollars ("A\$") at the rate of exchange on the date of the transaction or at hedged rates if applicable.

Foreign investments are in the United States of America ("US").

Translation of foreign currency operations

All foreign operations are deemed self-sustaining in accordance. with AASB 1012: Foreign Currency Translation, as each is financially and operationally independent of the Australian operations.

Exchange rates

The following exchange rates have been used to translate financial statements of foreign operations to Australian dollars:

	,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	-30 June 2005
Spot A\$/US\$	Statements of Financial Position	A 7640.
Average A\$/US\$'	-Statements of Financial Performance	በ 7242

1 The average exchange rate includes applicable hedges

(u) international financial reporting standards ("IFRS")

The adoption of Australian equivalents to IFRS ("AIFRS") will be first reflected in the financial statements for the half year ended. 31 December 2005 and the year ended 30 June 2006.

The Responsible Entity has established a project team to manage the transition to AIFRS, including training of sfaff, and systems and internal control changes necessary to gather all the required financial information. In some cases choices of accounting policies are available, including elective exemptions under Accounting Standard AASB 1: First-time Adoption of Australian Equivalents to IFRS. The project is at a stage where material AIFRS adjustments are known, to enable the preparation of an opening Statement of Financial Position as at 1 July 2005, the transition date to AIFRS.

Impact of transition to AIFRS

The impact of transition to AIFRS, including the selection and application of AIFRS accounting policies, is based on AIFRS. standards that management expect to be in place, or where applicable, have been adopted, when preparing the first complete. AIFRS financial report. The disclosures below reflect that the Trust has elected not to apply the requirements of AASB 132 and AASB 139 in the first comparative year under AIFRS.

Although the adjustments disclosed in this note are based on management's best knowledge of expected standards and interpretations, and current facts and circumstances, these may change.

Revisions to the selection and application of AIFRS accounting policies may be required as a result of:

changes in financial reporting requirements that are relevant to the Trust's first complete AIFRS financial report arising from new or revised accounting standards or interpretations issued by the Australian Accounting Standards Board subsequent to the preparation of the 30 June 2005 financial report;
additional guidance on the application of AIFRS in the property $\mathcal{G}^{\mathrm{ss}}_{\mathrm{sc}}$ industry: or
a changes to the Trust's operations.

Therefore, until the Trust prepares its first full AIFRS financial statements, the possibility cannot be excluded that the accompanying disclosures may have to be adjusted.

Investment properties

Under AASB 140: Investment Property, gains and losses arising from changes in the fair values of investment properties will be recognised. in the Statements of Financial Performance, rather than through the asset revaluation reserve of the Statements of Financial Position.

On transition to AIFRS, the balance of the asset revaluation reserve as at 1 July 2004 will be transferred to retained earnings. This will increase the balance of retained earnings by \$50,261,000. Had AASB 140 been applied during the year ended 30 June 2005, the impact to net profit would have been an increase of \$62,541,000.

Financial instruments

All interest rate and foreign currency derivatives will be recognised at fair value in the Statements of Financial Position, with changes in fair value during the period recognised in the Statements of Financial Performance, or if classified as a cash flow hedge and proved to be effective, deferred in equity.

The Board has decided not to adopt hedge accounting for financial instruments in existence at 30 June 2005, which may result in futureunrealised earnings volatilities, without any associated volatility in cash earnings, and hence distributions. The Board will continually review this position and may elect to apply hedge accounting to financial instruments enfered into, in the future.

The Trust has elected to adopt the exemption available under AASB 1 to apply AASB 132: Financial Instruments - Disclosure and Presentation and AASB 139: Financial Instruments - Recognition and Measurement only from 1 July 2005. This allows the Trust to apply AGAAP to the comparative information of financial instruments. within the scope of AASB 132 and AASB 139 for the 30 June 2006. financial report.

Rental revenue

Lease incentives

Accounting standard AASB 117: Leases, and UIG 115: Operating Leases - Incentives, requires all lease incentives to be capitalised. and amortised over the period of the lease. The Responsible Entity has assessed the impact of this treatment based on the current lease. incentives and has estimated an additional amortisation expense and accumulated amortisation of \$561,000 for the year ended 30 June 2005. On transition to IFRS, an amount of \$717,000 will be recognised as unamortised lease incentives that will form part of the fair value of the property portfolio. However, this would be offset by a notional fair value adjustment to income and to investment properties. to bring the balance of the investment properties back to fair value, resulting in no impact to the net profit and net assets of the Trust.

note 1, summary of significant accounting policies (continued)

Revenue disclosures in relation to the sale of non-current assets.

Under AIFRS, the reversue recognised in relation to the sale of non-current assets is the net gain on the sale. This is in contrast to the current AGAAP treatment under which the gross proceeds from sale are recognised as revenue and the carrying amount of the assets sold is recognised as an expense. The net impact on the Statements of Financial Performance is nil.

If the policy required under AIFRS had been applied during the year ended 30 June 2005, the consolidated revenue from ordinary activities would have been \$25,221,000 (ower with a corresponding reduction in the expense for the year.

Unitholders equity

Accounting Standard AASB 132: Financial Instruments - Disclosure and Presentation, outlines and defines the criteria for recognising a financial instrument as either debt or equity. Under current accounting standards (AGAAP) units in a fixed life trust are considered equity. However under AIFRS the same instrument. would be classified as debt due to the fixed life of the issuance. Distributions paid to unitholders under this classification would be reclassified as a form of finance charge. These changes would not impact on the financial or economic position of the Trust or that of the unitholder but would significantly impact on the presentation. and disclosure in the financial accounts.

On 6 June 2005, ASIC issued class order 05/566 "Managed" Investment Schemes: Perpetuity Clauses in Scheme Constitutions". This class order allows the Responsible Entity to amend a constitution by removing a termination clause and make other amendments as required so long as the changes do not materially change the nature of the scheme or have a materially adverse effect on the interests of members.

On 7 July 2005, amendments to the Constitution were made that enable the Trust to satisfy the criteria for unitholders funds to be classified as equity. The Board was of the view that such amendments were not materially adverse to unitholders nor did they change the nature of the schease.

These changes are the only material changes anticipated, but should not be regarded as the only changes in accounting policies that will result from the transition to AIFRS as regulatory bodies have significant orgoing projects that could affect the interpretation of the differences between Australian Generally Accepted Accounting Principles and IFRS.

While the application of IFRS may introduce volatility into forecast financial information, this will not affect the cash flows from operations.

note 2. individually significant items

On 29 September 2004, DB RREEF Funds Management replaced Deutsche Asset Management (Australia) Limited as Responsible Entity of the Trust.

The management fee structure was amended to reflect new feearrangements as follows:

australian assets

⁸⁸ Fee: 0.45 per cent per annum of gross assets.
Basis: annualised average gross assets calculated on a gg. month-end basis, in accordance with the Trust's Constitution.
Calculated: monthly.
Payment frequency: monthly. gg.
Effective date: 1 October 2004.
DB RREEF Industrial Properties, Inc. (initial portfolio only).
發 Fee: 0.25 per cent per amnum of gross assets to DB RREEF Funds Management.
^® Fee: 0.02 per cent per attrium of gross assets to RREEF Americal ELC ("RREEF") (the US Fund Manager).
Basis: annualised average gross assets calculated on a 彮 month-end basis, in accordance with the Trust's Constitution.
終 Calculated: monthly.
慾 Payment frequency: monthly.
貉 Effective date: 1 October 2004.
@ Readdition, a management fee of US\$700,000 per annum (subject to annual escalation by reference to the US inflation rate) is payable by the US foreign operations to RREEF.
慾 Performance fees no longer apply to the Trust. The last period for which performance fees were calculated for the Trust was the six months ending 30 June 2004. No performance fees were earned post 30 June 2004. Similarly, performance fees carried forward from previous periods are no longer available.

note 3. property income

Consolidated			Parent Entity
2005	2004	2005	2004
\$'000	\$'000	\$000	\$'000
92.799	85.215	61.378	55.203
1.347	2.285	$\cdots$	$\ddotsc$
757	217	687	164
94.903	87.717	62.065	55,367

note 4. gain/(loss) on sale of investments

		Consolidated		Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$'000	\$'000
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Proceeds on sale of investment properties	26.200	14.098	-22.000
Book value of investment properties sold	(25.221)	(14.624)	(20.832)	---
Net gain/(loss) on sale of investment properties	979.	(526)	1.168

note 5. remuneration of auditors

During the year the auditor of the parent entity and its related practices earned the following remuneration:

		Consolidated	Parent Entity
	2005	2004	2005	2004
				\$
PricewaterhouseCoopers
Audit and review of financial reports and other audit work under the Corporations Act 2001	202.709	124.069	182.509	100,156
Fees paid in relation to oulgoings.	3,203	2.912
Total auditing fees	205,912	126,981	182,509	100,156
Assurance
Fees paid to PwC Australia	205,912	126.981	182.509	100.156
Taxation Services
Fees paid to PwC Australia	75,042	47.213	37.741	19.682
Advisory Services
Fees paid to PwC Australia in relation to IFRS project	5,000		5,000
Total audit and advisory fees	285,954	174,194	225,250	119,838
Fees paid in relation to the Transaction.
Fees paid to PwC Australia	296,529	$\ldots$	296.529
Fees paid to related practices of PwC Australia.	118,057		118,057
Total included in costs associated with the Transaction	414.586	ww	414.586

Total costs associated with the Transaction, paid by the Stapled Entity to PwC Australia and its related practices were \$1,243,758. The Trust's share of these costs was \$414,586.

note 6 (a), other expenses from ordinary activities

	Consolidated			Parent Entity
		2005	2004	2005	2004
	Note(s)	\$'000	\$000	\$'000	\$000
Audit and advisory fees	5	286	174	225	3.20
Bad and doubtful debts		111	280	84	332.
Custodian fees		96	91	81	81
Legal and other professional fees		377	35	358	19
Registry costs and listing fees		176	165	152	365.
Other expenses		295	422	288	418.
Total other expenses from ordinary activities		1.341	1.167	1.188	935

note 6 (b), borrowing costs

	Consolidated			Parent Entity
	2005 \$'000	2004 \$000	2005 \$'000	2004 \$'000
Interest paid/payable	27.602	19.161	27.601	19.160
Amount capitalised	(2.975)	(2.730)	(2.975)	(2.730)
Borrowing costs expense	24.627	16.431	24,626	16,430

note 7. costs associated with the transaction

The costs, totaling \$42.28 million, relate to the fees and expenses arising from the stapling of the Trust, DDF, DOT and DRO, the acquisition of the US REfT, and the associated debt arranging and interest rate hedging (together referred to as "the Transaction"). The Trust's share of these costs was \$14.73 million.

note 8, current assets - receivables

	Consolidated 2004 2005		2005	Parent Entity 2004
	\$7000	\$'000	\$000	\$000
Rent receivable	1.763	-2.679	1.097	-1.664
Less: Provisien for doubtful debts	(62)	(230)	(62)	(82)
Total rental receivables	1.701	2.449	1.035	1.582
Distribution receivable from controlled entities.			30.288	31.362
Other receivables from controlled entities			17.813	10.171
Goods and Services Tax ("GST") receivable				122
Other receivables	1,375	488	1.091	132
Total other receivables	1,375	488	49.192	41.787
Total current assets -- receivables	3.076	2.937	50.227	43.369

other receivables from controlled entities.

Other receivables from controlled entities represents an inter-entity loan, which is a non-interest bearing loan between the Trust and its controlled entities, Paladin Industrial Trust and Foundation Macquarie Park Trust.

note 9, current assets - other

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$'000	\$'000
-Prepayments	1.628	1.820	1.053	1.211
Capitalised lease incentives	414	2.053	163	1.817
Capitalised leasing fees	239	571	-56	427
Deferred berrowing costs	349	356	349	356.
Net receivable on currency hedge contracts.	1,12}	$\cdots$	1.121	$\cdots$
Total current assets - other	3.751	4.800	2.742	3,811

DB RREEF INDUSTRIAL TRUST STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2005

note 10 (a), current assets - investment properties

Property	Ownership (%)	Acquisition date	Cost including all additions \$000
Held by parent entity
1-55 Rothschild Avenue, Rosebery NSW	10O	-0ct 2001	n/a
Total parent entity
Held by controlled entities
33 McDowell Street, Weishpool WA	100.	-lui 1997	n/a
Total controlled entities			--
Total investment properties -- current

note 10 (b), non-current assets - investment properties

Property	Ownership (% )	Acquisition date	Cost including all additions \$'000
Held by parent entity
79-99 St Hilliers Road, Auburn NSW	100	Sep 1997	33,952
1 Garigal Road, Belrose NSW	-100	Dec 1998	23.406
2 Minna Close, Belrose NSW	-100	Dec 1998	33,484
114-120 Old Pittwater Road, Brookvale NSW	-100	Sep 1997	32.749
145-151 Arthur Street, Flemington NSW	-100	Sep 1997	22.952
436-484 Victoria Road, Gladesville NSW	300	Sep 1997	27.612
706 Mowbray Road, Lane Cove NSW	-100	Sep 1997	21.798
1-15 Rosebery Avenue, and 1-55 Rothschild Avenue, Rosebery NSW	-100	Apr 1998 and Oct 2001	69.449
10-16 South Street, Rydalmere NSW	-100	Sep 1997	35.370
19 Chiftey Street, Smithfield NSW	-100	Dec 1998	11.426
3 Brookhollow Avenue, Baulkhara Hills NSW	-100	Dec 2002	41.753
1 Foundation Place, Greystanes NSW	-100	Dec 2002	39.124
352 Macaulay Road, Kensington VIC	-100	Oct 1998	7.597
250 Forest Road, South Lara VIC	-100	Dec 2002	33.757
Boundary Road, Laverton North VIC	-100	Jul 2002	36,410
Pound Road West, Dandenong VIC	-100	Jan 2004	52.713
15-23 Whicker Road, Gillman SA	-100	Dec 2002	19.783
25 Donkin Street, South Brisbane QLD	-100	Dec 1998	18.552
Total parent entity			561.887

Consolidated book value 30 June 2004 \$000	Consolidated book value 30 June 2005 \$'000	Independent valuation amount \$'000	Independent valuation date
18.787	$\cdots$	n/a	in/a
18,787		-
4.268	$\cdots$	n/a	n/a
4,268		mm.
23,055		-

Consolidated book value 30 June 2004	Consolidated book value 30 June 2005	Independent valuer	Independent valuation amount	Independent valuation date
\$'000	\$'000		\$'000

37,013	41,000	$\langle d \rangle$	41,000	3un 2005
24,688	27,400	(a)	27.400	Dec 2004
28,824	33,077	(a)	32,400	Dec 2004
42,000	42,587	(a)	42,000	Sep 2003
25,918	31,000	$\left(\ddot{\xi}\right)$	31,000	3un 2005
41,046	43,182	$\langle d \rangle$	43,000	Dec 2004
25,600	25,788	$\left(\begin{smallmatrix} \mathcal{E} \ \mathcal{E} \end{smallmatrix}\right)$	25,300	Sep 2003
80,806	81,157	(a)	78,700	Jun 2003
42,000	42,588	$\left(\vec{\xi}\right)$	42.000	3un 2004
13,475	13,498	$\left( c\right)$	13,400	Jun 2003
40,884	41,753	(e)	36,600	Dec 2003
35,597	41,905	(a)	41.700	Dec 2004
7,300	7,300	(e)	7,300	Jun 2003
33,757	34,600	(e)	34,600	3un 2005
23,700	41,986	$\left( c\right)$	23,700	3um 2004
40,174	56,250	$\left( c\right)$	56,250	3un 2005
19,783	21,300	(e)	21,300	*Jun 2005*
17,642	20,700	(e)	20.700	3an 2005
580,207	647.071		618,350

note 10 (b), non-current assets - investment properties (continued)

Property	Ownership (% )	Acquisition date	Cost including all additions \$7000
Held by controlled entities
52 Holbeche Road, Amdell Park NSW	-100	Jul 1998	11,296
3-7 Bessemer Street, Blacktown NSW	100	Jun 1997	11.016
30-32 Bessemer Street, Blacktown NSW	100	May 1997	11,888
27-29 Liberty Road, Hundingwood NSW	-100	Jul 1998	7.962
154 O'Riordan Street, Mascot NSW	-100	3up 1997	10.761
Egerton Industrial Estate, Silverwater NSW	100	May 1997	37.271
239-251 Woodpark Road, Smithfield NSW	-100	May 1997	5,058
40 Biloela Street, Villawood NSW	-100	Jul 1997	7.056
2a Birmingham Avenue, Villawood NSW	100	3in 1997	7.753
27-33 Frank Street, Wetherill Park NSW	-100	Jul 1998	15.109
11 Talavera Road, North Ryde NSW	-100	3in 2002	131.263
114-116 Fairbank Road, Clayton VIC	100	Jul 1997	10,751
30 Bellrick Street, Acacia Ridge QLD	-100	Jan 1997	12,839
121 Evans Road, Salisbury QLD	100	Jul 1997	16.588
68 Haster Road, Herdsman WA	100	Jul 1998	9.690
Total controlled entities			306,301
Total investment properties -- non-current			868,188
Property investments accounted for using the equity method
Investment in DB RREEF Industrial Properties, Inc.	50	Sep 2004	138,033
Total property investments accounted for using the equity method			138,033
Total investment - non-current			1,006,221
Total investment - current and non-current			1,006,221

The title to all properties is freehold and they are all industrial properties.

valuer (a) Colliers International (b) LandMark White (c) CB Richard Ellis (d) Jones Lang LaSalle (e) Knight Frank (f) FPD Savills

valuations of investment properties

The basis of valuation of investment properties is fair value, being the amounts for which the assets could be exchanged between. knowledgeable willing parties in an arm's length transaction, based on current prices in an active market for similar properties in the same focation and condition and subject to similar leases. Properties independently valued in the last 12 months were based. on independent assessments by a member of the Australian Property. Institute or the Appraisal Institute in the United States of America. Properties not independently valued during the last 12 months. are carried at Directors' valuation at 30 June 2005, being the independent valuation plus capital expenditure incurred since the date of valuation, and taking info consideration market movements.

Consolidated book value 30 June 2004 \$'000	,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Consolidated book value 30 June 2005 \$'000	Independent valuer	Independent valuation amount \$'000	Independent valuation date

11,100	11,104	(a)	11,100	Sep 2003
10,102	10,202	(b)	10,100	Sep 2003
14,500	14,540	(b)	14,500	Sep 2003
7,300	7,300	(a)	7,300	Sep 2003
13,650	13,694	(a)	13,650	3um 2004
39,477	39,524	(e)	39,375	Sep 2003
5,756	5,756	(b)	5,750	Sep 2003
7,019	7,019	(d)	7.000	Sep 2003
8,600	8,792	$\langle d \rangle$	8,600	Sep 2003
12,664	12,685	(b)	12,650	Dec 2003
130,243	134,006	(a)	130,000	3un 2003
10,807	10,913	(a)	10,800	Sep 2003
11,900	11,920	(d)	-11,900	Sep 2003
14,655	18,450	(e)	18,450	Dec 2004
8,000	8,379	(e)	8,000	3un 2004
305,773	314,284		309,175
885,980	961.355		927,525

	192,297	n/a	n/a	n/a
	192,297		$\overline{\phantom{a}}$
885,980	1,153,652		927,525
909,035	1,153,652		927,525

note 10 (c), current and non-current assets - investment properties

acquisitions

DB RREEF Industrial Properties, Inc.

On 30 September 2004, the Trust, in conjunction with DDF, eachacquired a 50 per cent interest in the US REIT. The US REIT owns an 80 per cent interest in a joint venture with CalWest that owns 93. industrial properties in the United States of America. The consideration paid for the assets was \$138 million (net of liabilities assumed).

disposals

McDowell Street, Weishpool WA

On 3 November 2004, the Trust sold 33 McDowell Street, Welshpool for \$4.2 million.

Rothschild Avenue, Rosebery NSW

In February 2005, the Trust sold part of Rothschild Avenue, Rosebery for \$22 million.

reconciliation

developments

Boundary Road, Laverton North VIC

In December 2004, construction of the first building for Visy Industrial Packaging and Stage 1 infrastructure works reached practical completion.

Brookhollow Avenue, Baulkham Hills NSW

The approved Masterplan for the estate provides for approximately 25,000 square metres of office and warehouse accommodation.

Pound Road West, Dandenong VIC

In December 2004, construction of the building for Aluminium. Specialties Group was completed and in February 2005, construction of the building for Westgate Logistics was completed.

			Consolidated		Parent Entity
		2005	2004	2005	2004
	Note(s)	\$'000	\$'000	\$'000	\$'000
Carrying amount at 1 July 2004		909.035	821.147	598.994	506,098
Additions		184.122	75.007	41.252	73.143
Disposals		(25.221)	(14.624)	(20, 832)
Revaluation increments on investment properties	22	31.452	27.505	27.657	19.753
Revaluation increments on investments accounted.
for using the equity method.	22	45.982	$\mathbf{r}$
Foreign exchange difference on foreign currency translation		(10.081)
Movement in profits receivable in investment properties.
accounted for using the equity method.		18.363
Carrying amount as at 30 June 2005		1.153,652	909.035	647.071	598.994

note 11, non-current assets - interest bearing loans receivable from related parties

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,		Consolidated		Parent Entity
	2005	2004	2005	2004
	\$000	\$000	\$'000	\$'000
Loan to DB RREEF Finance Pty Limited	1.234	$\cdots$	1.234
Total non-current assets – interest bearing loans receivable from related parties	1,234	T/T	1.234

note 12, non-current assets - investments in controlled entities

		Parent Entity
	2005	2004
	\$'000	\$000
Units in controlled entities
At Directors' valuation
-Paladin Industrial Trust	158.630	158.630
Foundation Macquarie Park Trust	110.654	111.235
Total non-current assets - investments in controlled entities	269.284	269.865
reconciliation

			Parent Entity
		2005	2004
	Note(s)	\$'000	\$'000

Parent
Carrying amount at 1 3uly 2004.		269.865	269.864
Revaluation (decrement)/increment	22	(581)
Carrying amount as at 30 June 2005		269,284	269,865

All controlled entities are wholly owned sub-trusts of the Trust. Both the parent entity and the controlled entities were formed in Australia.

note 13, non-current assets - investments accounted for using the equity method

Investments are accounted for in the consolidated financial statements using the equity method of accounting (refer note 1).

These investments are carried by the parent entity at Directors' valuation, being net tangible asset of the underlying entity and taking into consideration market movements.

Information relating to these entities is set out below.

Name of trust	Principal activity		Ownership interest		Consolidated carrying amount
		2005	2004	2005	2004
		℅	%	\$'000	\$'000
DB RREEF Industrial Properties, Inc.	Asset and property management	50		192,297
Total				192,297
					Consolidated
				2005	2004
				\$'000	\$'000
	Movements in carrying amounts of investments accounted for using the equity method
Carrying amount as at 1 July 2004
interest acquired during the year				138,033
Share of net profits after tax				20,078
Foreign exchange difference on foreign currency translation				(10,081)
Dividends received				(1,725)
Share of increment on revaluation of investment property				45,982
Carrying amount as at 30 June 2005				192,297
Results attributable to associates
Operating profits before tax				21,114
Tax expense				(1,036)
Operating profits after tax				20,078
Less: Dividends received				1,715
Movement in undistributed income for the year				18,363
Undistributed income attributable to associates as at 1 July 2004
Undistributed income attributable to associates as at 30 June 2005.				18,363
Reserves attributable to associates
Asset revaluation reserve
Opening balance as at 1 July 2004
Share of increment on revaluation of investment properties				45,982
Closing balance as at 30 June 2005				45,982
	Summary of the performance and financial position of investments accounted for using the equity method
	The aggregate profits, assets and liabilities of investments accounted for using the equity method are:
Profits from ordinary activities after fax expense.				20,078
Asseis				630.048
Liabilities				417,340
Share of associates' expenditure commitments
Capital commitments				1,171

note 14, non-current assets - Ioan with related parties

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Consolidated			Parent Entity
	2005	2004 \$'000	2005 \$'000	2004
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	\$'000			\$000
- Non-interest bearing toan-	138.948	$\cdots$	138.948
Total non-current assets - loan with related parties	138,948	$n \times n$	138,948	BM

note 15, non-current assets - other

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$000	\$000	\$'000	\$000
Capitalised lease incentives	2.694	7.466	1.749.	6.493
Capitalised leasing fees	749	1.673	151	2.248
Tenant and other bonds.	1.076	1.082	-941	953
Deferred borrowing costs		484	$\cdots$	484
Net receivable on currency hedge contracts.	3.032	$\cdots$	3.032
Total non-current assets -- other	7.551	10.705	5.873	9.178

note 16. current liabilities - payables

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$000	\$'000
Trade creditors	3.531	1.996	2.678	1.454
Accruais	1.514	803	1.297	585
Prepaid income	2.737	3.222	2.192	1.817
Responsible Entity fee pavable	545	387	545	261
GST payable	819	210	495
Accrued interest	1.313	1.051	1.313	1.051
Deferred settlement of property acquisition	$100 - 100$	3.335		3,335
Total current liabilities -- payables	10.459	11.004	8.520	8.503

note 17, current and non-current liabilities - interest bearing liabilities

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$000	\$'000
Current - secured
Commercial paper	118.338	$\cdots$	118.338
Commercial mortgage backed securities	236,000	$\cdots$	236,000
Total secured	354,338	www.	354.338
Total current liabilities - interest bearing liabilities	354,338	ww.	354.338
Non-current - secured
Commercial paper		103.474		103.474
Commercial mortgage backed securities		236,000		236.000
Total secured	www.	339,474	$\mathbf{a}$	339,474

DB RREEF INDUSTRIAL TRUST STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2005.

note 17, current and non-current fiabilities - interest bearing liabilities (continued)

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$'000	\$'000
Unsecured
intercompany ioan*	132.199	$\cdots$	132.199
Total unsecured	132,199	mm.	132.199	mon.
Total non-current liabilities - interest bearing liabilities	132,199	339.474	132.199	339,474

1 The intercompany ioan represents a loan from DB RREEF Finance Pty Limited. At balance date, the Stapled Entity has unutilised facilities of \$327 million which are available to the Yrust, DDF, DOT and DRO.

The Trust has liabilities resulting from the issuance of asset backed commercial paper ("CP") and commercial mortgage backed securities ("CMBS"). The CMBS has a maturity date of December 2005.

In respect of current liabilities, management is in the process of negotiating new unsecured bank loans to replace CP and CMBS via DB RREEF Finance Pty Limited intercompany lending arrangements. This will be finalised prior to December 2005.

financing arrangements

The Trust has access to the following lines of credit:

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$7000	\$000	\$'000	\$'000
Borrowing facilities
Commercial paper	124.900	124.900	124.900	124.900
Commercial mortgage backed securities	236.000	236.000	236,000	236.000
	360.900	360.900	360.900	360.900
Used at balance date	354.338	339.474	354,338	339,474
Unused at balance date	6.562	21,426	6.562	21.426

note 18, current liabilities - provisions

Consolidated			Parent Entity
2005	2004	2005	2004
\$'000	\$'000	\$'000	\$'000

27.058	26.158	27.058	26.158
66.362	53.419	66.362	53.419
(53.805)	(52.519)	(53.805)	(52.519)
39.615	27.058	39.615	27.058
39.615	27.058	39.615	27.058

provision for distribution

Provision is made for distributions to be paid for the period ending 30 June 2005 payable on 29 August 2005.

note 19, current fiabilities - other

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,		Consolidated
	2005	2004	2005	2004
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	\$'000	\$000	\$7000	\$'000
Deferred gain on currency hedge contracts.	1.121	$\cdots$	} 121	$\sim$
Total current liabilities -- other	1,121	TOM:	1.121

note 20, non-current fiabilities - other

	Consolidated			Parent Entity
	2005 \$'000	2004 \$'000	2005 \$'000	2004 \$'000
-Tenant bonds-	1.076	1.076	941	947
Deferred gain on currency hedge contracts	3,032	$\cdots$	3.032	$\cdots$
Total non-current liabilities -- other	4,108	1.076	3.973	947

note 21, contributed equity

	2005	2004
	\$'000	\$'000
(a) Value of units on issue
Opening balance as at 3 July 2004	502.793	501,620
Placement of units	10.770
Issue of units to staple	331.559
Cost of distributions reinvested	(98)	(8)
Distributions reinvested	29,634	1.181
Capital distribution to staple	(205, 663)
Closing balance as at 30 June 2005	668,995	502,793
	2005	2004
	Number of units	Number of units
(b) Number of units on issue
Opening balance as at 3 July 2004	338,230,559	337.564.735
Placement of units	41,521.457
Issue of units to staple	2,072,241,677
Distributions reinvested	107,055,184	665.824
Capital split to staple	173,033.512
Closing balance as at 30 June 2005	2,732,082,389	338,230,559

terms and conditions

Each unit ranks equally with all other ordinary units for the purpose of distributions and on termination of the Trust. Ordinary units entitie the holder to one vote, either in person or by proxy, at a meeting of the Trust.

distribution reinvestment plan

Units were issued to existing unitholders under the old DRP plan in relation to distributions for the June 2004 distribution period.

On 26 September 2004, the Trust established a new distribution reinvestment plan ("DRP") under which holders of DRT stapled securities may elect to have all or part of their distribution entitlements satisfied by the issue of new ordinary units rather than by being paid in cash.

Units were issued under this new DRP for the December 2004 distribution and further units will be issued for the June 2005 distribution.

On 13 August 2004, 336,644 units were issued at a unit price of \$1,8026.

On 28 February 2005, 106,718,540 units were issued at a unit price of \$1.2791.

note 21, contributed equity (continued)

stapling unit change

On 30 September 2004, the Stapled Entity was formed by stapling together the Trust, DDF, DOT and DRO. Each trust subscribed for units in accordance with the stapling ratios described in the Explanatory Memorandum and Product Disclosure Statement dated 30 August 2004.

As part of the stapling process, the Trust, DDF and DOT each paid a special distribution by way of a capital return that was applied on behalf of each unitholder to subscribe for new issued units in each of the other trusts, including DRO. The number of units issued by each trust changed so that each trust had the same number of issued units. The number of stapled securities owned by an investor in DRT equals the same number of units in the Trust, DDF, DOT and DRO.

On 19 October 2004, 2,072,241,677 units were issued at a unit price of \$0.1600 (refer to the Explanatory Memorandum and Product Disclosure Statement dated 30 August 2004). This was the price at which the Trust's units were issued to unitholders of DDF and DOT as part of the stapling process described above. This was funded from the capital distribution that was paid by DDF and DOT.

On 4 November 2004, 41,521,457 units were issued at a unit price of \$0.2509. This issue of units was made in consideration of the acquisition of management rights from FAP, a subsidiary of Deutsche Australia Limited. The units were issued at \$1.3119 being the volume weighted average price over the ten business days immediately following initial quotation of DRT securities on the Australian Stock Exchange.

note 22, reserves and undistributed income

(a) reserves
		Consolidated		Parent Entity
	2005 \$'000	2004 \$000	2005 \$'000	2004 \$'000
Asset revaluation reserve	98.502	50.261	102.954	47.519
Foreign currency translation reserve	(649)	$\cdots$	$\cdots$
Total reserves	97.853	50.261	102.954	47,519
Movements

	Consolidated			Parent Entity
	2005 \$'000	2004 \$000	2005 \$'000	2004 \$'000
Asset revaluation reserve
Opening balance as at 1 3Bly 2004	50.261	30.508	47,519	27,766
increment on revaluation of investment properties	31.452	27.505	27.657	19.753
Less: (Increment) recognised as a revenue	(3,795)	(7.752)
(Decrement)/Increment on revaluation of investments in controlled entities			(581)
Less: Decrement/(Increment) recognised as an expense/(revenue)			581	-(1)
Fair value adjustment for capitalised lease incentives	(11.098)		(10.517)
fricrement on revaluation of investments accounted for using the equity method	45.982
increment on revaluation of investments in associates			54,165
Total movement in asset revaluation reserve	62.541	19.753	71.305	19.753
Transfer to undistributed income.	(14,300)		(15, 870)
Closing balance as at 30 June 2005	98,502	50,261	102.954	47.519
		Consolidated		Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$'000	\$'000
Foreign currency translation reserve
Opening balance as at 1 Buly 2004
Exchange difference arising from the translation of the
financial statements of foreign operations.	(649)
Total movement in foreign currency translation reserve	(649)
Closing balance as at 30 June 2005	(649)

84 DB RREEF Industrial Trust Financial Statements 2005

note 22, reserves and undistributed income (continued)

(b) nature and purpose of reserves

Asset revaluation reserve

The asset revaluation reserve records increments and decrements on the revaluation of assets.

Foreign currency translation reserve

The foreign currency translation reserve records exchange differences arising from the translation of the financial statements of self-sustaining foreign operations.

(c) undistributed income

		Consolidated		Parent Entity
	2005	2004	2005	2004
	$$^{\circ}000$	\$'000	\$'000	\$'000
Undistributed income as at 1 3alv 2004.	968	241	3.710	2.983
Net profit attributable to unitholders.	56.195	54.146	46.782	54.146
Transfer from asset revaluation reserve	14.300	$\cdots$	15,870
Distributions provided for or paid-	(66.362)	(53.419)	(66.362)	(53, 419)
Undistributed income as at 30 June 2005	5,101	968	$\overline{a}$	3.710

note 23. distribution paid and payable

	2005 \$'000	Parent Entity 2004 \$000
Timing of distributions
The distributions were paid/payable as follows:
31 December (paid 28 February 2005)	26.747	26.361
30 Brine (payable 29 August 2005)	39.615	27.058
Total distributions	66,362	53,419
	2005 cents per unit	Parent Entity 2004 cents per unit
31 December (paid 28 February 2005)	1.02	7.80
30 Bune (payable 29 August 2005)	1.45	8.00
Total distributions	2.47	15.80

The number of units has increased by 2,393,515,186 as a result of the Transaction and the February 2005 DRP. Had these not occurred and the number of units outstanding remained at 338,567,203, distribution per unit for 2005 would have been 19.60 cents per unit.

note 24, foreign currency and financial instruments

(a) credit risk

Credit risk is the risk that a tenant will fail to perform contractual obligations, including honouring the term of its lease agreement. either in whole or in part, under a contract.

Concentrations of credit risk are minimised primarily by:

ensuring tenants, together with their respective credit limits, 奫 are approved; and
窗 ensuring that leases are undertaken with a large number of tenants.

As such, the Trust does not have a concentration of credit risk that arises from an exposure to a single tenant.

Furthermore, the Trust does not have a material exposure to a group of counterparties which are expected to be affected similarly by changes in economic or other conditions.

On-balance sheet financial instruments

The credit risk on financial assets of the Trust which have been recognised in the Statements of Financial Position is the carrying amount.

Off-balance sheet financial instruments

Credit risk from entering into interest rate swap agreements and foreign exchange contracts is the risk that interest rate swap and foreign exchange counterparties default on any amount due under the contract.

Credit risk on interest rate swap agreements and foreign exchange contracts are minimised as counterparties are recognised financial. intermediaries with acceptable credit ratings determined by recognised rating agencies.

The credit risk on interest rate swap agreements and foreign exchange contracts are approximately equal to the net fair value or replacement value (refer note 24(b)).

(b) net fair value of financial assets and flabilities

Market risk is the risk that the value of the Trust's investment portfolio. will fluctuate as a result of changes in valuations. This risk is managed by ensuring that all activities are transacted in accordance with mandates, overall investment strategy and within approved limits. Market risk analysis is conducted regularly on a total portfolio basis.

On-balance sheet financial instruments

The net fair value of cash and non-interest bearing monetary financial assets and liabilities approximate their carrying value.

As at 30 June 2005, the net fair value of contracts representing the net unrealised gain from converting forward exchange contracts was \$2,834,176, calculated using market rates and, taking into account the time value of money. An amount of \$4,152,825 has been recognised in the Statements of Financial Position using year end spot rates.

Off-balance sheet financial instruments

As at 30 June 2005, the net fair value of financial (liabilities) arising from interest rate swap agreements was (\$5,460,297). (2004: (\$1,204,935)). These financial instruments are currently not required to be recognised under Australian Accounting Standards. in the Statements of Financial Position as at 30 June 2005.

These amounts represent the potential (liability)/asset of the Trust if existing swap agreements and forward exchange contracts as at 30 June 2005 were to be terminated.

(c) liquidity and cash flow risk

Liquidity risk is the risk that the Trust will experience difficulty in either realising assets or otherwise raising sufficient funds to satisfy commitments. The risk management guidelines adopted are designed to minimise liquidity risk through:

麴 ensuring that there is no significant exposure to any individual creditor: and
applying limits to ensure there is no concentration of liquidity risk. to a particular counterparty or market segment.

(d) interest rate risk exposures

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

The Trasf's exposure to interest rate risk is hedged with inferest rate swaps and the weighted average effective interest rate (for each class of financial asset and financial liability, and each maturity bracket including floating rate financial assets and liabilities) is set out in the table opposite:

Consolidated - 30 June 2005				Fixed interest maturing in:
		Floating		I year Over I and less	More than	Non-interest	Total
		interest rate	or less	than 5 years	5 years	bearing
	Note(s)	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000
Financial assets
Cash assets		5.577					5.577
Receivables	8	$\ddotsc$				3.076	3.076
Interest bearing loans receivable from
related parties	11	1.234		$\ddotsc$			1.234
Loan with related parties	14					138.948	138.948
Other	15			$\ddotsc$		1.076	1.076
Total		6,811	w	www.	www.	143,100	149,911
Weighted average interest rate		4.52%
Financial liabilities
Payables	16					7.722	7.722
Provision for distribution	18					39.615	39.615
Other	20					1.076	1.076
Interest bearing liabilities	17	386.537	100,000	$\cdots$	$\ddotsc$		486.537
Interest rate swaps ^®		(665.000)	(45.000)	459.686	250.314
Total		(278.463)	55,000	459.686	250.314	48,413	534,950
Weighted average interest rate (including swaps)		5.92%
Net financial assets/(liabilities)		285,274	(55.000)	(459, 686)	(250, 314)	94.687	(385,039)

The above interest rate swaps include \$250 million of swaps that are forward starting. These swaps will replace existing swaps as they roll out to maintain the hedging profile approved by management.

Consolidated - 30 June 2004				Fixed interest maturing in:
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Note(s)	Floating interest rate \$'000	l year or less \$'000	Over 1 and less than 5 years \$000	More than 5 years \$'000	Non-interest bearing \$'000	Total \$'000
Financial assets							,,,,,,,,,,,,,,,,
Cash assets		5.157					5.157
Receivables	8					2.937	2.937
Other	15				٠.	1.082	1.082
Total		5,157	ww	$\mathbf{w}$	www.	4,019	9,176
Weighted average interest rate		4.62%
Financial liabilities
Payables	16					7.782	7.782
Provision for distribution	18			$\cdots$		27.058	27.058
Other	20			$\cdots$		1.076	1,076
Interest bearing liabilities	17	239.474		100.000			339,474
Interest rate swaps		(155,000)		155.000
Total		84.474	ww	255,000	www.	35,916	375,390
Weighted average interest rate (including swaps)		6.25%
Net financial liabilities		(79,317)	ww.	(255,000)	TITLE	(31,897)	(366, 214)

note 24. foreign currency and financial instruments (continued)

(e) foreign exchange rate risk exposures.

When hedging its exposures, the Trust adopts a strategy using both physical and derivative financial instruments. With regard to derivative financial instruments, the Trust uses forward exchange contracts for hedging purposes.

Weighted average exchange rate - 30 June 2005	Contracts to sell US\$ at an agreed exchange rate:
	l vear or less	Over 1 and less than 2 years	More than 2 years \$'000
To pay US\$ million			14
To receive AS million	16		20
Weighted average exchange rate	-0.7079.	ା ବେଥବା	0.6878.

note 25. contingent liabilities

The Directors of the Responsible Entity are not aware of any matters in relation to the Trust, other than those disclosed in the financial statements, which should be brought to the attention of unitholders as at the date of completion of this report.

Details and estimates of maximum amounts of contingent liabilities are as follows:

	Consolidated			Parent Entity
	2005 \$000	2004 \$'000	2005 \$'000	2004 \$'000
Bank guarantees by the parent entity in respect of:
Coles Myer Limited development at Boundary Road, Laverton North VIC.	5.000	$\cdots$	5.000
Total contingent liabilities	5.000		5.000	TOP-

The guarantee is issued in respect of the Stapled Entity and does not constitute an additional liability to the Stapled Entity to those already disclosed in its Statements of Financial Position.

note 26, commitments for expenditure

capital commitments

The following amounts represent capital expenditure on investment properties contracted at the reporting date but not recognised as liabilities payable.

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$'000	\$000	\$'000
Capital expenditure commitments in relation to development works:
Not longer than one year
Boundary Road, Laverton North VIC	35,266	14.770	35.266	14.770
Pound Road West, Dandenong VIC		11.906		11.906
11 Talavera Road, North Ryde NSW		4.230
1 Foundation Place, Greystanes NSW		1.718		1.718
1-15 Resebery Avenue, Rosebery NSW	114	$\cdots$	114
436-484 Victoria Road, Gladesville NSW	$\cdots$	806		806
	35,380	33,430	35.380	29,200
Later than one year but not later than five years
Boundary Road, Laverton North VIC	50,749	$\ldots$	50.749
	50.749	$\sim$	50.749
Total capital commitments	86.129	33.430	86.129	29.200

note 27, related parties

responsible entity

On 29 September 2004, DB RREEF Funds Management replaced Deutsche Asset Management (Australia) Limited, a wholly ownedsubsidiary of Deutsche Bank AG (ABN 13 064 165 162) as the Responsible Entity.

responsible entity fees

Under the terms of the Trust Constitution, the Responsible Entity is entitled to receive fees in relation to the management of the Trust-(refer note 2).

In addition, the Responsible Entity is entitled to property. management fees and to be reimbursed for expenses incurred. on behalf of the Trust.

related party transactions.

All related party transactions are conducted on normal commercial terms and conditions unless otherwise stated.

unitholdings

Deutsche Bank AG and its related parties, schemes and portfolios managed by Deutsche Bank AG and its related parties held 453,322,396 units (2004: 55,921,404) in the Trust.

note 27. related parties (continued)

Deutsche Bank AG

Deutsche Bank AG up to 29 September 2004 was the ultimate parent company of the Responsible Entity, Deutsche Asset Management. (Australia) Limited. Deutsche Bank continued to be a related party after 29 September 2004 as it continues to own 50 per cent of the Manager and new Responsible Entity, DB RREEF Funds Management. Dealings with the bank include, not only transactions in its capacity as part owner of the new Responsible Entity, but also in the provision of financial services. There were a number of transactions and balances between the Trust and the Responsible Entity and related entities as detailed below:

			Consolidated
	Note(s)	2005 \$'000	2004 \$000	2005 \$'000	2004 \$'000
Transactions with Deutsche Asset Management (Australia) Limited in its capacity as Responsible Entity of the Trust
Responsible Entity fees paid and payable	2.	1.235	4.997	1.235	3,420
Property management fees paid and payable		728	2.464	644	1,969
Administration expenses incurred by the Responsible Entity which are reimbursed in accordance with the Trust's Constitution		203	737	111	558
Aggregate amounts payable to the Responsible Entity at reporting date			1.123		895
Transactions with Deutsche Bank, AG in its capacity as a financier
interest paid and payable on swaps for whom the counterparty was Deutsche Bank, AG		1.002		1.002
interest and financing fees paid and payable on borrowings to Deutsche Bank, AG		136	1.861	136	1,861
Borrowings from Deutsche Bank, AG		14.000		14,000
Loan repayment to Deutsche Bank, AG		14,000	$\cdots$	14.000
Interest and financing fees payable to Deutsche Bank, AG		56	39	56	-39
Other transactions with Deutsche Bank, AG
Underwriting fees paid and payable to Deutsche Bank, AG		96		96
Financial adviser's fee paid and payable to
Deutsche Bank, AG in relation to the Transaction.		2.692		2,692

DB RREEF Funds Management Limited

On 29 September 2004 DB RREEF Funds Management replaced Deutsche Asset Management (Australia) Limited as Responsible Entity of the Trust. There were a number of transactions and balances between the Trust and Responsible Entity and related entities as detailed below:

	Consolidated				Parent Entity
	Note(s)	2005	2004	2005	2004
		\$'000	\$7000	\$'000	\$000
Responsible Entity fees paid and payable		4.256	$\cdots$	4.256	$\cdots$
Property management fees paid and payable.		3.664	$\cdots$	- 202
Administration expenses incurred by the Responsible Entity
which are reimbursed in accordance with the Trust's Constitution.		384	$\cdots$	322
Aggregate amounts payable to the Responsible Entity at reporting date		678	$\cdots$	647

trusts within the stapled entity

Aggregate amounts included in the determination of profit that resulted from transactions with each class of other related parties:

	Consolidated			Parent Entity
	2005 \$'000	2004 \$'000	2005 \$'000	2004 \$000
Costs associated with the Transaction
Trusts within the Stapled Entity	3.062	$-$	3.062	---
Interest expense
Trusts within the Stapled Entity	4.899	$\cdots$	4.899	$\cdots$

Aggregate amounts brought to account in relation to other transactions with each class of other related parties:

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$7000	\$'000	\$'000	\$000
Non-interest bearing foans advanced to
Trusts within the Stapled Entity	138.948	$\cdots$	138.948
Interest bearing leans advanced to
Trusts within the Stapled Entity	177.545	$\cdots$	177.545
Interest bearing leans repayment from
Trusts within the Stapled Entity	46.580	$\cdots$	46.580

directors of the responsible entity

On 29 September 2004, DB RREEF Funds Management replaced Deutsche Asset Management (Australia) Limited as Responsible Entity of the Trust. The following persons were Directors of Deufsche Asset Management (Australia) Limited up to 29 September 2004:

C T Beare BSc, BE (Hors), MBA, PhD, FAICD!

S F Ewen F.U.LE⁽²⁾

S.A. Mays BSc (Hons), MSc, MBA

W.B. Robinson ABIA, AASA⁶²³

B E Scollin BEc2

D C Shields BE (Hons), MBA

From 29 September 2004 and up to the date of this report, the following persons were Directors of DB RREEF Funds Management, unless otherwise stated:

Name Appointed		Resigned
Directors
Christopher T Beare BSc, BE (Hons), MBA, PhD, FAICD?	-4 August 2004	Continuiag
Elizabeth A Alexander AM, 8Comm, FCA, FAICD, CPA ¹²	1 January 2005	Continuing
Barry R Brownjehn BCorara ^us	1 January 2005	Continuing
Stewart F Ewen F.I.L.E ¹²	4 August 2004	Continuing
Victor P Hoog Antink BComm, MBA, FCA, FAPI, MAICD	1. October 2004.	Continuing
Charles B Leitner (II 8A	10 March 2005	Continuing
Shadh A Mays BSc (Hons), MSc, MBA	13 May 2004	10 March 2005
Brian E Scuttin BEc*	1 January 2005	Continuing
Daniel S Weaver BArch, MBA, AFIRE	1 October 2004	17 December 2004
Alternative Director
Shaun A Mays (alternate for Charles B Lettner (II)	10 March 2005	Continuing

Independent Director.

2 Audit Committee Member.

3 Compliance Committee Member.

No Directors held an interest in the Trust as at 30 June 2005 or at the date of this report.

note 27, related parties (continued)

directors' and executive remuneration

1. General remuneration framework

The Board Nomination and Remuneration Committee oversee the remuneration of executives to ensure that executive reward satisfies. the following key criteria for good reward governance practices:

competitiveness and reasonableness; 銐
performance linkage/alignment; Ŷ.
transparency; and 鐜
financial and non-financial resource management. gg.

ta consultation with external remuneration consultants DRFM has structured a remuneration framework that is market competitive and complementary to its reward strategy. Alignment to investors' interests. is achieved through increased focus on group performance being a core component of plan design, as well as the plan rewarding:

delivery of forecast returns; and
鐜 achievement of key non-financial value drivers.

Alignment of employees' inferests is achieved through the planrewarding capability and performance. For participants, the plan-

provides a clear structure for earning reward; Ø
delivers competitive reward for contribution to the creation Ø of value; and
provides recognition for contribution. gg.

The plan is designed to attract and retain talented and motivated employees, and to encourage enhanced performance.

The remuneration framework provides a mix of fixed and variable pay, being base pay and short-term performance incentive. As an employee gains seniority within DRFM, the balance of this mix shifts to a higher proportion of "at risk" rewards. DRFM is further developing a long-term performance incentive scheme for implemenfation during the year ending 30 June 2006.

Should DRFM achieve predetermined performance targets, a short-terra incentive poot, approved by the Board Nomination and Remuneration Committee, is available for allocation to employees. during the annual review. Cash incentives are payable in September each year. Performance targets are utilised to ensure that variable reward is only available when value has been created for investors, and when performance is consistent with forecasts. The incentivepool may be feveraged for performance above targets to provide. incentive for employee out-performance.

Key performance indicators are linked to short-term incentives based on group, individual business and personal objectives. Performance indicators require achievement of specific targets in relation to the Trust's performance, as well as other key non-financial measures. linked to drivers of performance in future reporting periods. Short-termincentive payments may be adjusted up or down in tine with under or over achievement against target performance levels, at the discretionof the Board Nomination and Remuneration Committee.

Termination provisions for the Chief Executive Officer ("CEO"). are set out in the CEO's contract of employment. In the event of early termination, DRFM may be required to give 12 months notice. and may elect to payout all or part of this notice period.

There are no fermination provisions extended to any other DRFM executive.

2. Non-Executive Directors' remuneration framework and structure

Fees and payments to Non-Executive Directors reflect the demands which are made on, and the responsibilities of Directors. Non-Executive Directors' fees and payments are reviewed annually by the Board Nomination and Remuneration Committee. The Committee also obtains advice from independent remuneration consultants to ensure Non-Executive Directors' fees and payments are appropriate and inline with market. The Chair's fee is determined independently of the fees of Non-Executive Directors, based on comparative roles in the external market. The Chair is not present at any discussions relating to the determination of his/her own remuneration. Non-Executive Directors do not receive share options.

3. Details of remuneration of Directors

3.1 DB RREEF Funds Management Limited

Details of the nature and amount of each element of remuneration for each Director of the Responsible Entity for the period ending 30 June 2005. are set out in the following tables.

Period ending 30 June 2005

	Note(s)	Salary and fees	Bonus	Non-monetary benefits	Superannuation	Total
		\$	\$	S	\$	S
Non-Executive Directors
Christopher T Beare		193.125				193.125
Elizabeth A Alexander		65,000				65,000
Barry R Brownjehn		60.000				60.000
Stewart F Ewen		95,625				95.625
Brian E Scuttin		68.750				68.750
Executive Directors
Victor P Hoog Antink	3	682.139			68.800	750.939
Charles B Leitner III	2	12,300				12.300
Shaon A Mays (alternate to Charles B Leitner III)	2	16.000				16.000
Daniel S Weaver	2	$\cdots$

Note 2: These Executive Directors' remuneration is a cost of their employer, Deutsche Bank. The amount shown in this Remuneration Report is an apportionment of each Executive's lotal remuneration based on their time spent on DB RREEF Funds Management Limited's activities during the period ending. 30 June 2005.

Note 3: The Chief Executive Officer's remuneration is a cost of DB RREEF Funds Management Limited. The amount shown in this report is the Chief Executive Officer's total remuneration for the nine months ending 30 June 2005. No short term incentive payment for the period 1 October 2004 to 30 June 2005 has been allocated. Consequently, no payment is included in the above.

note 27, related parties (continued)

3.2 Deutsche Asset Management (Australia) Limited and DB Real Estate Australia Limited

The remuneration received by the Directors of Deutsche Asset Management (Australia) Limited and DB Real Estate Australia Limited was paid by Deutsche Bank. As the Directors of each of these Responsible Entities are common the following table details the combined amount of each element of remuneration, for the period 1 July 2004 to 29 September 2004 (being the date when each entity ceased to be the Responsible Entity of its respective trusts and DB RREEF Funds Management Limited became the Responsible Entity of DB RREEF Diversified Trust, DB RREEF Industrial Trust and DB RREEF Office Trust).

For the period 1 July 2004 to 29 September 2004

	Note(s)	Salary	Bonus	Non-monetary	Total
		and fees		benefits
		\$	\$		\$
Non-Executive Directors
Christopher T Beare		12,500			12,500
Stewart F Ewen		21.250			21.250
William 8 Robinson		15,000			15,000
Brian E Scullin		20.250			20,250
Executive Directors
Shaun A Mays	っ	9,000			9.000
David C Shields	2	9,811			9.811

Note 1: Non-Executive Directors' remuneration was a cost of Deutsche Bank. The amount shown in this Remuneration Report is each Director's total remuneration for the period ending 29 September 2004.

4. Details of remuneration of Executives

For the period commencing 1 October 2004 and ending 30 June 2005

	Position	Salary	Bonus	Superannuation	Total
			S		S
Tanya L Cox	Chief Operating Officer	178.811	50.000	8.689	237.500
John C Easy	Head of Legal	163.811	25,000	8.689	197.500
Greg T Lee	Head of Transaction Services	216.311	62.000	8.689	287.000
-Bea I Lehmann	Head of Portfolio Services	216.311	75.000	8.689	300,000
tan D Robins	Head of Capital Markets	272.561	175.000	8.689	456.250
Mark F Turner	Head of Mandates	178.811	50.000	8.689	237.500

No short term incentive payment has been allocated for the period 1 January 2005 to 30 June 2005. Consequently, no short term incentive payment has been included for the same period.

5. Other disclosures

There were no loans, stapled securities or options issued or granted during the period to any Director or employee. No Director or Executive received any retirement benefit during the period.

note 28, events occurring after reporting date

On 27 July 2005, the Responsible Entity lodged an appeal with the Supreme Court of New South Wales in relation to the interest payable on the settlement sum in respect of the sale of part of 1-55 Rethschild Avenue, Rosebery.

Since the end of the year, other than the matters discussed above, the Directors of the Responsible Entity are not aware of any matter or circumstance not otherwise dealt with in their report or the financial statements that has significantly or may significantly affect the operations of the Trust, the results of those operations, or state of the Trust's aftairs in future financial periods.

note 29. segment information

business segment

The Trust operates solely within the industrial property sector.

geographical segments.

‴∵

The Trust's investments are located in Australia and the United States of America.

2005	Australia \$000	United States of America \$000	Consolidated \$'000
Rental and other property income	94.903		94.903
Proceeds on sale of investment procerties	26.200		26,200
Share of net profits of associates accounted for using the equity method		20.078	20.078
Other revenue	311		311
Total segment revenue	121,414	20,078	141,492
Segment result	36.117	20.078	56,195
Segment assets	1.121.492	192.297	1,313.789
Segment liabilities	409.641	132.199	541.840
Acquisitions of property, plant and equipment, intangibles and other non-current segment assets	46.089	138.033	184,122
Net cash inflow/(outflow) from operating activities	41,353		41,353
2004	Australia \$000	United States of America \$'000	Consolidated \$'000
Rental and other property income	87.717		87.717
Proceeds on sale of investment properties	14.098		14.098
Other revenue	401		401
Total segment revenue	102.216		102.216

Segment result	54.146	mer.	54.146
Segment assets	932.634	$\cdots$	932.634
Segment kabilities	378.612	--	378.612
Acquisitions of property, plant and equipment,
intangibles and other non-current segment assets	75.007	mm.	75.007
Net cash inflow/(outflow) from operating activities	42.316	$\sim$	42.316

note 30, reconciliation of net profit to net cash inflow from operating activities

	Consolidated			Parent Entity
	2005	2004	2005	2004
	\$'000	\$.000	\$'000	\$'000
Net profit	56.195	54,146	46,782	54.146
Capitalised interest	(2.975)	(2.730)	(2.975)	(2.730)
Revaluation (increment)/decrement	(3.795)	(7.752)	581	$\langle 1 \rangle$
(Gain)/loss on sale of investment properties	(979)	526	(1.168)
Provision for doubtful debts	(168)	202	(20)	82
Change in operating assets and liabilities.
Decrease/(increase) in receivables	28	1.168	(30.553)	(30.567)
Decrease/(increase) in other current assets.	1.049	(951)	1.069	(1.055)
(Increase)/decrease in other non-current assets	(8.062)	(202)	9.808	230
Increase/(decrease) in payables	2.196	(1,436)	3.134	2,025
Increase in other current liabilities	1.121	$\cdots$	1.121
(Decrease) in other non-current liabilities	(3,257)	(655)	(11.570)	(354)
Net cash inflow from operating activities	41,353	42,316	16.209	21,776

components of cash-

Cash at the end of the year as shown in the Statements of Cash Flows is reconciled to the Statements of Financial Position as follows:

7YYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY	Consolidated			Parent Entity
	2005	2004	2005	2004
\$'000		\$000	\$'000	6'000
******** 5.577 Cash assets		5.157	4.039	4.787

note 31, non-cash financing and investing activities

74444444444444444444444444444444444444		Consolidated Parent Entity
	Note(s)	2005 \$000	2004 \$000	2005 \$'000	2004 \$'000
Placement of units		10.770		10.770	$\cdots$
Distributions reinvested		29.634	1.181	29.634	1.181
		40.404	1.181	40.404	1.181

note 32, earnings per unit

		Consolidated
	2005	2004
Basic and diluted earnings - cents per unit	2.85	36.02
Weighted average number of units outstanding used in the
calculation of basic and dilated earnings per anit	1.970.295.165

The weighted average number of units has increased by 1,631,767,621 as a result of the Transaction and the February 2005 DRP. Had these not occurred, the weighted average number of units outstanding would have been 338,527,544.

	Consolidated 2005 \$'000
Basic earnings per unit before the Transaction
Net profit attributable to unitholders.	56.195
Add: Costs associated with the Transaction	14.729
	70.924
Number of units had the Transaction not occurred	338,527.544
Basic earnings per unit before the Transaction - cents per uniti-	-20.95

Basic earnings per unit before the Transaction incorporates the financial impact of the acquisition of the US REIT.

directors' declaration

DB RREEF INDUSTRIAL TRUST DIRECTORS' DECLARATION FOR THE YEAR ENDED 30 JUNE 2005

The Directors of DB RREEF Funds Management Limited (formerly Paladin Australia Limited) as Responsible Entity of DB RREEF Industrial Trust (formerly Deutsche Industrial Trust) ("the Trust") a listed property trust declare that the financial statements and notes set out on pages 63 to 97:

(i) comply with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

(ii) give a true and fair view of the Trust's and consolidated entity's financial position as at 30 June 2005 and of their performance, as represented by the results of their operations and their cash flows, for the financial year ended on that date.

In the Directors' opinion:

(a) the financial statements and notes are in accordance with the Corporations Act 2001;

(b) there are reasonable grounds to believe that the Trust and its consolidated entities will be able to pay their debts as and when they become due and payable; and
(c) the Trust has operated in accordance with the provisions of the Constitution dated 22 December 1999 (as amended) during the year ended 30 June 2005.

This declaration is made in accordance with a resolution of the Directors.

Chix Sem

Christopher T Beare Chair Sydney

25 August 2005

independent auditor's report

PRICEWATERHOUSE COPERS

independent audit report to the unitholders of DB RREEF Industrial Trust (formerly Deutsche Industrial Trust)

Matters relating to the electronic presentation of the audited financial report

This audit report relates to the financial report of DB RREEF Industrial Trust and the DB RREEF Industrial Trust Group (defined below) for the financial year ended 30 June 2005 included on DB RREEF Industrial Trust's web site. The directors of DB RREEF Funds Management Limited are responsible for the integrity of DB RREEF Industrial Trust's web site. We have not been engaged to report on the integrity of this web site. The audit report refers only to the financial report identified below. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report presented on this web site.

Audit opinion

In our opinion, the financial report of DB RREEF Industrial Trust:

gives a true and fair view, as required by the Corporations Act 2001 in Australia, of the financial position of DB RREEF Industrial Trust and the DB RREEF Industrial Trust Group (defined below) as at 30 June 2005, and of their performance for the year ended on that date, and
is presented in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia, and the Corporations Regulations 2001.

This opinion must be read in conjunction with the rest of our audit report.

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for both DB RREEF Industrial Trust (the Trust) and the DB RREEF Industrial Trust Group (the consolidated entity), for the year ended 30 June 2005. The consolidated entity comprises both the Trust and the entities it controlled during that year.

(Jability is limited by the Accountant's Scherne under the Professional Standards Act 1994 (NSW)

PricewaterhouseCoopers ABN 52 780 433 757

Darling Park Tower 2 201 Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia www.pwc.com/au Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999

independent auditor's report (continued)

PRICEWATERHOUSE COPERS LO

Audit approach

We formed our audit opinion on the basis of these procedures, which included:

examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

renabloration of a

PricewaterhouseCoopers

DA Prothero Partner

Sydney 25 August 2005

financial statements

directors' report

The Directors of DB RREEF Funds Management Limited ("DRFM") as Responsible Entity of DB RREEF Operations Trust ("the Trust" or "DRO") and its consolidated entities present their Directors' Report ("Report") together with the consolidated financial report of the Trust for the period ended 30 June 2005.

1. directors and secretaries

DRO was established on 11 August 2004 and DRFM was appointed Responsible Enfity of the Trust on that date.

1.1 DB RREEF Funds Management Limited

The following persons were Directors or atternate Directors of DRFM at any time during the period to the date of this Report:

Name	Appointed	Resigned
Directors
Christopher T Beare	4 August 2004	Continuing
Elizabeth A Alexander AM	3 January 2005	Continuing
Barry R Brownjohn	3 January 2005	Continuing
Stewart F Ewen	4 August 2004	Continuing
Victor P Hoog Antink	1 October 2004	Continuing
Charles B Leitner III	10 March 2005	Continuing
Shaun A Mays	13 May 2004	10 March 2005
Brian E Scullin	3 January 2005	Continuing
Daniel S Weaver	1 October 2004	17 December 2004
Alternate Director
Shaun A Mays (alternate for Charles B Leitner III)	10 March 2005	Continuing

Particulars of the qualifications, experience and special responsibilities of Daniel S Weaver, a Director of DRFM during the period 29 September 2004 to 30 June 2005 are as follows:

Daniel S Weaver BArch, MBA, AFIRE (Executive Director)

1.2 company secretaries

The names and details of the Company Secretaries of DRFM as at 30 June 2005 are as follows:

Tanya L Cox MBA MAICD (Company Secretary)

Appointed: 1 October 2004

Tanya joined DB Real Estate in July 2003 as Chief Operating Officer, responsible for the efficient management of the overall real estate business in Australia. Tanya has held various general management positions over the past 15 years, including Director and Chief Operating Officer of NM Rothschild & Sons (Australia) Ltd and General Manager -- Finance, Operations and IT of Bank of New Zealand (Australia).

Tanya is Chief Operating Officer and Company Secretary for DRFM and DB RREEF Holdings Pty Limited.

lan Thompson BEc (Company Secretary)

Appointed: 12 July 2000 Resigned: 1 July 2005

John C Easy BComm, LLB (Company Secretary)

Appointed: 3 July 2005

John is Head of Legal and Company Secretary for DRFM and DB RREEF Holdings Pty Limited.

directors' report (continued)

attendance of directors at board meetings and board committee meetings

2.1 DB RREEF Funds Management Limited

Set out below are the details of Director attendance at Board and Board committee meetings:

DB RREEF Funds Management Limited for the period to 30 June 2005

	Board		Board Audit Committee			Board Nomination and Remuneration	Board Risk and Compliance
	Meetings held	Meetings attended	Meetings held	Meetings attended	Meetings held	Meetings attended	Meetings held ^:	Meetings attended
Directors
Christopher T Beare	9	9			3
Elizabeth A Alexander AM	8		5	5
Barry R Brownjohn	8	6	5	3
Stewart F Ewen	Q	9	5	5
Victor P Hoog Antink	9	9
Charles B Leitner III	5	3
Shaun A Maysr	4	3
Brian E Scullin	8	8			3		2
Daniel S Weaver		0
Alternate Director
Shaun A Mays (alternate for Charles B Leitner (III)	5	4			3

1 Number of meetings held while a Director.

Shaun A Mays resigned as a Director on 10 March 2005.

Since 30 June 2005 the DRFM Board has established the Board Treasury Policy Committee.

3. directors' and executive remuneration report

DRFM's Directors' and Executive Remuneration is set out in the section titled "Directors' and Remuneration Report" that follows this Report.

4. directors' interests

4.1 interest in securities

As at the date of this Report, the interests of each Director in the securities of DB RREEF Trust ("DRT") are:

	Personally	Indirectly
Christopher T Beare	Ni	Nii
Elizabeth A Alexander AM	Ni	Ni
Barry R Brownjohn	Ni	Nii
Stewart F Ewen	Nil	Nii
Victor P Hoog Antink	Νì	Ni
Charles B Leitner III	Ni	NB
Shaun A Mays (alternate to Charles B Leitner (II)	Ni	Nil
Brian E Scullin	Νiξ	ΝN

As at the date of this Report, no Director held options over securities in DRT.

4.2 other interests

As at the date of this Report, no Director held any interest in any other fund or scheme managed by the Responsible Entity or another entity that forms part of DRT.

5. directors directorships in other listed companies

Directors	Company	Date appointed	Date resigned
Christopher T Beare	DB RREEF Holdings Limited®	21 Sep 2004	Continuing
	DB RREEF Funds Management Limited®	4 Aug 2004	Continuing
Elizabeth A Alexander AM	DB RREEF Holdings Limited ³	1 Jan 2005	Continuing
	DB RREEF Funds Management Limited®	1 Jan 2005	Continuing
	Amcor Limited	Apr 1994	Continuing
	Boral Limited	Sep 1994	Continuing
	CSL Limited	Jul 1991	Continuing
Barry R Brownjeha	DB RREEF Holdings Limited®	1 Jan 2005	Continuing
	DB RREEF Funds Management Limited®	1 Jan 2005	Continuing
Stewart F Ewen	DB RREEF Holdings Limited®	21 Sep 2004	Continuing
	DB RREEF Funds Management Limited®	4 Aug 2004	Continuing
Victor P Hoog Antink	DB RREEF Holdings Limited®	1 Oct 2004	Continuing
	DB RREEF Funds Management Limited®	1 Oct 2004	Continuing
Charles B Leitner III	DB RREEF Holdings Limited®	10 Mar 2005	Continuing
	DB RREEF Funds Management Limited®	10 Mar 2005	Continuing
Brian E Scuttin	DB RREEF Holdings Limited ³	1 Jan 2005	Continuing
	DB RREEF Funds Management Limited®	1 Jan 2005	Continuing
	(YS Instalment Receipt Elmited®	24 Oct 2000	Continuing
	Deutsche Asset Management (Australia) Limited ^®	20 Dec 1999	Continuing
Alternate Director
Shaun A Mays	DB RREEF Holdings Limited ³	10 Mar 2005	Continuing
(alternate to Charles B Leitner HI)	DB RREEF Fonds Management Limited®	1 Jan 2005	Continuing
	(YS Instalment Receipl Limited)	13 May 2004	4 May 2005
	Deutsche Asset Management (Australia) Limited ^s	13 May 2004	4 May 2005

DB RREEF Holdings Pty Limited is the holding company of DRFM.

2 DRFM is Responsible Entily for (a) the Trust, a managed investment scheme whose units are stapled to the units of DB RREEF Industrial Trust, DB RREEF Office Trust and DB RREEF Diversified Trust and trade on ASX as DB RREEF Trust and (b) DB RREEF RENTS Trust, whose Reaf-Estate perpelual exchaNgeable sTep-up Securities called RENTS are listed on ASX.

3 IYS Instalment Receipt Limited has issued ASX listed instalment receipts over units in the Deutsche Relail Infrastructure Trust, a managed investment scheme that is listed but not quoted on ASX and whose Responsible Entity is Deutsche Asset Management (Australia) Limited.

directors' report (continued)

6. principal activities

The purpose of the Trust is to be a trading trust.

The orinoloal activities of the Trust and its related entities during the course of the period was the provision of investment and property management services as Responsible Entity to registered and unregistered schemes or as an Investment Manager to other clients. and the investment in real property within Australia.

The nuraber of employees of the Trust during the reporting period was 123 as at 30 June 2005.

7. total value of trust assets

The total value of the assets of the Trust as at 30 June 2005 was \$827.5 million. A schedule detailing the basis of this valuation is outfined in note 1 of the financial statements.

8. review and results of operations

A review of the results and operations, including the expected results. of operations of the Trust, is set out in the "Chief Executive Officer's Report" in the DRT Annual Report 2005.

9. likely developments and expected results of operations

in the opinion of the Directors, disclosure of any further information. of the future developments or results of the Trust, other than that information already outlined in this Report or the financial statements accompanying this report, would be unreasonably prejudicial to the Trust.

10. significant changes in the state of affairs

On 27 September 2004, unitholders of DB RREEF Diversified Trust (formerly Deutsche Diversified Trust) ("DDF"), DB RREEF Industrial Trust (formerly Deutsche Industrial Trust) ("DIT") and DB RREEF Office Trust (formerly Deutsche Office Trust) ("DOT") voted to replace their respective constitutions, replace their respective responsible entities and staple their units together with the Trustto create a stapled security known as DB RREEF Trust ("DRT"). (ASX Code: DRT). Details on the proposal were cutlined in the Information Memorandum and Product Disclesure Statement dated 30 August 2004. The result of these resolutions became effective on 30 September 2004.

The consolidation of the Trust, DDF, DIT and DOT, the acquisition of a US REIT, and the associated debt arranging and interest rate hedging, are referred to as "the Transaction".

For the purposes of statutory reporting, the stapled security must be accounted for as a consolidated group. The parent entity, DDF is the deemed acquirer of DIT, DOT and DRO.

DB RREEF Funds Management is a wholly owned subsidiary of DB RREEF Holdings Pty Limited ("DRH"). DRH is 50 per cent owned by DRFM as Responsible Entity for DRO and 50 per cent owned by First Australian Property Group Holdings Pty Limited, a subsidiary of the Deutsche Bank Group.

As part of the stapling process, DDF, DIT and DOT each paid a special distribution by way of a capital return that was applied on behalf of each unitholder to subscribe for new issued units in each of the other trusts, including the Trust. The number of units issued by each trust changed so that each trust had the same number of issued units. The namber of stapled securities owned by an investor in DRT. equals the same number of units in the Trust. DDF, DIT and DOT.

11, matters subsequent to the end of the financial year

On 7 3gly 2005, amendments were made to the Trust's constitution. that enabled the Trust to satisfy the Australian Infernational Financial Reporting Standards criteria for unitholders' funds to be classified as equity. The Directors of the Responsible Entity were of the view that such amendments were not materially adverse to unitholders' rights. or interests nor did they change the nature of the Trust.

Since the end of the period, other than the matters discussed in this Report, the Directors of the Responsible Entity are not aware of any matter or circumstance that has significantly affected or may significantly affect the operations of the Trust, the results of those operations, or state of the Trust's affairs in future years.

12. distributions

Distributions paid or payable by the Trust for the period ended. 30 Jane 2005 are detailed in note 22 of the financial statements. and form part of this Report.

13. responsible entity and associate interests

Details of related party transactions and the number of interests in the Trust held by the Responsible Entity or its associates as at the end of the financial period are disclosed in note 25 of the financial statements and form part of this Report.

14. interests in the trust

The movement in securities on issue in the Trust is detailed in note 20 of the financial statements and forms part of this Report.

The Trast did not issue any options during the period.

15. environmental regulation

The Directors are satisfied that adequate systems are in place for the management of its environmental responsibility and compliance with the various licence requirements and regulations. Further, the Directors are not aware of any breaches of these requirements and to the best of their knowledge, all activities have been undertaken in compliance with environmental requirements.

16. indemnification and insurance

An insurance premium for a policy of insurance indemnifying directors, officers and others (as defined in the relevant policy of insurance) is paid by the Responsible Entity.

17. audit

17.1 auditor

PricewaterhouseCoopers ("PwC" or "Auditor") continues in office in accordance with section 327 of the Corporations Act 2001.

17.2 non-audit services

Details of the amounts paid to the Auditor, which include amounts paid for non-audit services totalling \$131,543, are set out in note 3. in the Nofes to the Financial Statements.

The Directors are satisfied that the provision of non-audit services provided during the period by the Auditor (or by another person or firm on the Auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

Reasons for the Directors being satisfied that the provision of those non-audit services, during the period, by the Auditor did not compremise the Auditor's independence are as follows:

Board Audit Coramittee has determined that the external auditor 缕 will not provide services that have the potential to impair the independence of their audit role, including:
participating in activities that are normally undertaken by reanagement;
being remunerated on a "success fee" basis;
providing services where the Auditor may be required gg. to review or audit their own work, including:
- the preparation of accounting records;
- the design and iraplementation of information technology systems;
- conducting valuation, actuarial or legal services;
- promoting, dealing in or underwriting securities; or
- providing internal audit services;
Board Audit Committee regularly reviews the performance and independence of the external Auditor and whether the independence of this function has been maintained having regard to the provision of non-audit services; and
the external Auditor must provide a written declaration to the 緵 Board regarding their independence each reporting period.

Since 30 June 2005, Board Audit Committee approval is required before the engagement of the external Auditor to perform any non-audit service for a fee greater than \$100,000.

17.3 audit indebendence statement

A copy of the Auditor's Independence Dectaration as required under section 307C of the Corporations Act 2001 is set out on page 111, and forms part of this Report.

18, corporate governance

The Responsible Entity's Corporate Governance Statement is set out in the DRT Annual Report 2005, which accompanies this Report.

19. rounding of amounts and currency

Amounts in the Directors' Report and financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, unless otherwise indicated.

All figures in this Report and the financial report, except whereotherwise stated, are expressed in Australian dollars.

20. management representation

The Chief Executive Officer and the Chief Operating Officer have reviewed the Trust's financial reporting processes, policies and procedures together with the Trust's risk management and internal control and compliance policies and procedures. Following that review it is their coinion that the Trust's financial records for the financial period have been properly maintained in accordance with the Corporations Act 2001 and the financial statements and their notes comply with the accounting standards and give a true and fair view.

21. directors' authorisation

This Report is made in accordance with a resolution of the Directors.

Clur Der

Christopher T Beare Chair Sydnev

25 August 2005

Victor P Hoog Antink Chief Executive Officer Sydney 25 August 2005

DB RREEF Operations Trust Financial Statements 2005 107

directors' and executive remuneration report

The Directors of DB RREEF Funds Management Limited ("DRFM") as Responsible Entity of DB RREEF Operations Trust ("the Trust" or "DRO") and its consolidated entities present their Remuneration. Report for the period ended 30 June 2005.

1. general remuneration framework

The Board Nomination and Remuneration Committee oversee the remuneration of executives to ensure that executive reward satisfies the following key criteria for good reward governance practices:

competitiveness and reasonableness; Ø
娑 performance linkage/alignment;
transparency; and Ø
financial and non-financial resource management. Ŷ.

delivery of forecast returns; and 8&
achievement of key non-financial value drivers. Ø

Alignment of employees' inferests is achieved through the planrewarding capability and performance. For participants, the plare-

provides a clear structure for earning reward; Ø
delivers competitive reward for contribution to the creation W of value; and
provides recognition for contribution. 慾

The plan is designed to attract and retain talented and motivated employees, and to encourage enhanced performance.

Key performance indicators are linked to short-term incentives based on group, individual business and personal objectives. Performance indicators require achievement of specific targets in relation to the Trust's performance, as well as other key non-financial measures. linked to drivers of performance in future reporting periods. Short-termincentive payments may be adjusted up or down in tine with under or over achievement against target performance levels, at the discretionof the Board Nomination and Remuneration Committee.

There are no termination provisions extended to any other DRFM. executive.

2. non-executive directors' remuneration framework and structure

Fees and payments to Non-Executive Directors reflect the demands which are made on, and the responsibilities of Directors. Non-Executive Directors' fees and payments are reviewed annually by the Board-Nomination and Remuneration Committee. The Committee also obtains advice from independent remuneration consultants to ensure. Non-Executive Directors' fees and payments are appropriate and inline with market. The Chair's fee is determined independently of the fees of Non-Executive Directors, based on comparative roles in the external market. The Chair is not present at any discussions relating to the determination of his/her own remuneration. Non-Executive Directors do not receive share options.

3. details of remuneration of directors

3.1 DB RREEF Funds Management Limited

Details of the nature and amount of each element of remuneration for each Director of the Responsible Entity for the period ending 30 June 2005 are set out in the following tables.

Period ending 30 June 2005

	Note(s)	Salary	Bonus	Non-monetary	Superannuation	Total
		and fees		benefits
		\$	£	Ś.	\$	\$
Non Executive Directors
Christopher T Beare		193.125				193.125
Elizabeth A Alexander		-65.000				65,000
Barry R Brownjohn		60,000				60.000
Stewart F Ewen		95,625				95.625
Brian E Scuttin		68.750				68,750
Executive Directors
Victor P Hoog Antink	З	682.139			68.800	750.939
Charles B Leitner III	2	12,300				12.300
Shaon A Mays (alternate to Charles B Leitner III).	2.	16,000				16,000
Daniel S Weaver	2	$\cdots$

Note 1: Non-Executive Directors' remuneration is a cost of DB RREEF Funds Management Limited. The amount shown in this Remuneration Report is Directors' total remuneration from 1 October 2004, or the date of appointment if later than 1 October 2004, to 30 June 2005.

These Executive Directors' remuneration is a cost of their employer, Deutsche Bank. The amount shown in this Remuneration Report is an apportionment Note 2: of each Executive's total remuneration based on their time spent on DB RREEF Funds Management Limited's activities during the period ending 30 June 2006.

The Chief Executive Officer's remuneration is a cost of DB RREEF Funds Management Limited. The amount shown in this report is the Chief Executive Note 3: Officer's lotal remuneration for the period ending 30 June 2005. No short term incentive payment for the period 1 October 2004 to 30 June 2005 has been allocated. Consequently, no payment is included in the above.

directors' and executive remuneration report (continued)

4. details of remuneration of executives

For the period commencing I October 2004 and ending 30 June 2005.

	Position	Salary	Bonus	Non-monetary benefits	Superannuation	Total
		\$	£	£		S
Tanya L Cox	Chief Operating Officer	178.811	50.000		8.689	237.500
John C Easy	Head of Legal	163.811	25,000		8.689	197.500
Greg T Lee	Head of Transaction Services	216.311	-62.000		8.689	287.000
Bea J Lehmann	Head of Portfolio Services	216.311	75.000		8.689	300,000
ian D Robins	Head of Capital Markets	272.561	175.000		8.689	456.250
Mark F Turner	Head of Mandates	178.811	50.000		8.689	237.500

No short term incentive payment has been allocated for the period 1 January 2005 to 30 June 2005. Consequently, no short term incentive payment has been included for the same period.

5. other disclosures

There were no loans, stapled securities or options issued or granted during the period to any Director or employee. No Director or Executive received any retirement benefit during the period.

6. directors' authorisation

This Report is made in accordance with a resolution of the Directors.

Chix Seem

Christopher T Beare Chair Sydney

25 August 2005

auditors' independence declaration

Auditors' Independence Declaration

As lead auditor for the audit of DB RREEF Operations Trust for the period. ended 30 June 2005, I declare that to the best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of DB RREEF Operations Trust and the entities it controlled during the period.

DA Prothero Partner PricewaterhouseCoopers

Sydney 25 August 2005

PricewaterhouseCoopers ABN 52 780 433 757 Darling Park Tower 2 201 Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia

www.pwc.com/au Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999

statements of financial performance

DB RREEF OPERATIONS TRUST STATEMENTS OF FINANCIAL PERFORMANCE FOR THE PERIOD ENDED 30 JUNE 2005

		Consolidated 2005	Parent Entity 2005
	Note(s)	\$'000	\$'000
Revenue from ordinary activities
Property income	2	1.380
Recoveries from Stapled Trusts		9.159	26
Interest income from Stapled Trusts		27.152	928
Interest income		3.797	3.718
Share of net profits of associates accounted for using the equity method	$12 \overline{ }$	2,571
Total revenue from ordinary activities		44.059	4,672
Expenses from ordinary activities
Property expenses		(343)
Borrowing costs expense		(29, 357)	(1, 556)
Other expenses from ordinary activities	4	(144)	(104)
Costs associated with the Transaction	5	(8,345)
Total expenses from ordinary activities		(38, 189)	(1,660)
Profit from ordinary activities before tax		5.870	3.012
Tax expense	6	(990)	(904)
Profit from ordinary activities after tax	21	4,880	2.108
Net profit attributable to unitholders	21	4,880	2.108
		Cents
Basic earnings - cents per unit	30	0.36
Diluted earnings - cents per unit	30	0.36

The above Statements of Financial Performance should be read in conjunction with the accompanying notes.

	2005 \$'000	2005 \$'000
Distribution
Net profit attributable to unitholders.	-4.880	2.108
Movement in undistributed incorne-	(2.968)	(196)
Distribution paid and payable 21.22	1.912	1.912
Distribution paid/payable - cents per unit	Cents
Ordinary units 22	.07

statements of financial position

DB RREEF OPERATIONS TRUST STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2005

		Consolidated 2005	Parent Entity 2005
	Note(s)	\$'000	\$'000
Current assets
Cash assets		1.278	150
Receivables	7	2,097	1,254
Inventory	8	48,469
Other	9	137
Total current assets		51,981	1,404
Non-current assets
Loan notes receivable from associate	30	45,092	45.092
Investments in controlled entities.	Ħ		100
Investments in associates	32		14.595
Investments accounted for using the equity method	12	17,166
Interest bearing lears receivable from related parties	13	713,276	47,855
Total non-current assets		775,534	107,642
Total assets		827,515	109,046
Current liabilities
Payables	14	4.025	243
Current tax liabilities	16	1,117	920
Provisions	37	1,912	1,912
Other	18	34
Total current liabilities		7,088	3,075
Non-current liabilities
Interest bearing liabilities	15	762,987	51,303
Loan with related parties	39	48.932	48.932
Total non-current liabilities		811,919	100,235
Total liabilities		819,007	103,310
Net assets		8,508	5,736
Equity
Contributed equity	20	5.540	5,540
Undistributed income	21	2,968	196
Total equity		8,508	5,736

The above Statements of Financial Position should be read in conjunction with the accompanying notes.

statements of cash flows

DB RREEF OPERATIONS TRUST STATEMENTS OF CASH FLOWS FOR THE PERIOD ENDED 30 JUNE 2005

		Consolidated	Parent Entity
	Note(s)	2005 \$'000	2005 \$'000

Cash flows from operating activities Receipts in the course of operations		10.939
		(8.737)	(47)
Payments in the coarse of operations Interest received
		29,082	2.529
Borrowing costs paid		(27,069)	(237)
Net cash inflow from operating activities	28	4,215	2,245
Cash flows from investing activities
Payments for capital expenditure on properties		(452)
Payments for investment properties		(46.980)
Payments for investments accounted for using the equity method		(5,235)	(5.215)
Loans provided to Stapled Trusts		(942.184)	(46,900)
Repayment of loans by Stapled Trusts		228,908
Net cash outflow from investing activities		(765, 923)	(52,115)
Cash flows from financing activities
Establishment expenses and unit issue costs		$\langle 1 \rangle$
Proceeds from borrowings		1.544,885	50.020
Repayment of borrowings		(781,898)
Net cash inflow from financing activities		762,986	50,020
Net increase in cash held		1,278	150
Cash at the beginning of the period
Cash at the end of the period		1,278	150

The above Statements of Cash Flows should be read in conjunction with the accompanying notes.

notes to the financial statements

DB RREEF OPERATIONS TRUST NOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 30 JUNE 2005

note 1. summary of significant accounting policies

(a) basis of preparation

On 30 September 2004, DB RREEF Trust was created by the stapling together of the Trust, DDF, DfT and DOT and their consolidated entities. The deemed acquirer of the Trust is DDF. The basis of this approach is consistent with current practice in relation to the financial obligations of stapled entities that were formed after 1 July 2004.

DB RREEF Trust stapled securities are quoted on the Australian. Stock Exchange under the code DRT and comprise of one unit in each of the Trash, DDF, DIT and DOT. Each entity forming part of DRT continues as a separate legal entity in its own right under the Corporations Act 2001 and is therefore required to comply with the reporting and disclosure requirements under the Corporations Act 2001 and Australian Accounting Standards.

DB RREEF Funds Management as Responsible Entity for the Trust, DDF, DIT and DOT may only unstaple the Trust if approval is obtained by special resolution from unitholders of each of the Trusts.

This general purpose financial report has been prepared in accordance with the requirements of the Trust Constitution, Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Consensus Views and the Corporations Act 2001 in Australia.

It is prepared on the basis of the going concern and historical cost. cenventions and has not been adjusted to take account of either changes in the general purchasing power of the dollar or changes. in the values of specific assets, except to the extent that the Trustinvestments have been revalued.

It is recommended that this report be read in conjunction with any public pronouncements made by the Trust during the reporting period in accordance with the continuous disclosure requirements. of the Corporations Act 2001.

(b) principles of consolidation

The consolidated financial statements incorporate all the assets, liabilities and net operating results of the parent and its controlled entities.

The effects of all transactions between controlled entities in the Trush have been eliminated in full.

Where control of an entity is gained during a financial year, its results are included in the consolidated Statements of Financial Performance from the date on which control is gained.

Investments in associates are accounted for in the consolidated financial statements using the equity method. Under this method, the consolidated entity's share of the post-acquisition profits of associates is recognised as revenue in the consolidated Statements of Financial Performance, and its share of post-acquisition movements in reserves is recognised in consolidated reserves.

(c) revenue recognition

Rent

Rent is brought to account on an accruais basis and, if not received at balance date, is reflected in the Statements of Financial Position as a receivable. Recoverability of receivables is reviewed on an ongoing. basis. Debts which are known to be not collectable are written off.

Interest income

interest income is brought to account on an accruals basis and, if not received at the balance date, is reflected in the Statements of Financial Position as a receivable.

(d) expenses

Expenses are brought to account on an accruals basis and, if not paid at the balance date, are reflected in the Statements of Financial Position as a pavable.

Property expenses

Property expenses include rates, taxes and other property outgoings. incurred in relation to the development property, where such expenses are the responsibility of the Trust.

Borrowing costs

Berrowing costs include interest expense and other costs incurred. in respect of obtaining finance. Other costs incurred including loanestablishment fees in respect of obtaining finance are deferred and written off over the term of the respective agreement.

Borrowing costs are expensed unless they relate to qualifying assets. Qualifying assets are assets which take a substantial period of time to get ready for their intended use or sale. Where funds are borrowed specifically for the acquisition or construction of a qualifying asset, the arabiant of borrowing costs capitalised is those incurred inrelation to that borrowing, net of any interest earned on those borrowings. Where funds are borrowed generally, borrowing costs are capitalised using a weighted average capitalisation rate.

(e) derivatives and other financial instruments

The Trust's activities expose it to changes in interest rates and foreign exchange rates. There are policies and limits approved by the Boardof Directors of the Responsible Entity in respect of the usage of derivatives and other financial instruments to hedge those cash flows. which are subject to interest rate risks and foreign currency risk respectively. In conjunction with its advisers, the Responsible Entity continually reviews the Trust's exposures and updates its treasury policies and procedures. The Trust does not trade in derivative instruments for speculative purposes.

Changes in the net market values of hedging instruments are matched and brought to account with the carrying values and income streams of the underlying assets or liabilities.

The accounting poticies adopted in relation to material financial instruments are detailed below:

Debt instruments

Debt instruments are carried at face value. Interest is brought to account on an accruals basis.

Interest rate swaps

The Trust enters into interest swap agreements with the objective of hedging the risk of interest rate fluctuations in respect of underlying borrowings. Net receipts and payments in relation to interest rate swaps are recognised in the Statements of Financial Performance. on an accruals basis over the life of the hedges (refer note 23).

note 1, summary of significant accounting policies (continued)

Forward exchange contracts

Forward exchange contracts are entered into by the Trust to hedge its earnings exposure in relation to foreign investments.

This currency hedge rate is used to translate items in the Statements. of Financial Performance (refer note 23).

$(9.657)$

Revenues, expenses and capital assets are recognised net of the amount of goods and services tax ("GST"), except where the amount of GST incurred is not recoverable from the Australian Tax Office ("ATO"). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

noitsxaf (g)

Tax effect accounting procedures were followed whereby the incometax expense in the Statements of Financial Performance is matched with the accounting profit allowing for permanent differences.

The future tax benefit relating to tax losses is not carried forward as an asset untess the benefit is virtually certain of realisation. Incometax on cumulative timing differences is set aside to the deferred income tax or the future income tax benefit accounts at the rates which are expected to apply when those fiming differences reverse.

The Trust's taxable income is taxed at the tax rate of 30 per cent.

(h) distributions

In accordance with its Constitution, the Trust's Responsible Entity may declare a distribution which will be paid to unitholders by cash. or reinvestment.

(i) repairs and maintenance.

Plant of the Trust is required to be overhauled on a regular basis. This is managed as part of an ongoing raajor cyclical maintenance program. The costs of this maintenance are charged as experises as incurred, except where they relate to the replacement of a component of anasset, in which case the costs are capitalised in accordance with note-1(t). Other roldine operating maintenance, repair costs and minor renewals are also charged as expenses as incurred.

$(i)$ cash

For the purposes of the Statements of Cash Flows, cash includes deposits at call which are readily convertible to cash on hand and are subject to an insignificant risk of change in value.

(k) receivables

Debtors to be settled within 30 days are carried at amounts due. Debts are assessed at balance date and provision is made for any doobiful accounts.

(1) inventories

In accordance with Accounting Standard AASB 1019: Inventories, properties purchased for the purpose of sub-division or stratification, and subsequent re-sale are carried at lower of cost or net realisable. value. The cost includes the cost of acquisition, development and financing costs up until the date the units are ready for sale.

(m) leasing fees

Leasing fees incurred in relation to the initial letting of property or following redevelopments are capitalised to the property. Leasing fees incurred in relation to the origoing renewal of major tenancies are capitalised and amortised over the lease periods to which they relate.

(n) lease incentives

Prospective lessees may be offered incentives as an inducement to enter into non-cancellable operating leases. These incentives may fake various forms including up front cash payments, rent freeperiods, or a contribution to certain lessee costs such as fit out costs. or relocation costs.

These incentives are repaid out of future lease payments and therefore are recognised as an asset in the Statements of Financial Position, Specifically:

rent free periods -- when provided, the rent forgiven in early years g. is capitalised to a deferred income account, at the earlier date from which the tenant has effective use of the premises or the lease commencement date and is released to the Statements of Financial Performance in later years to ensure a constant rate of return over the term of the fease;
cash contributions -- where provided, the amount of contribution gg. is capitalised as an asset in the Statements of Financial Position. and written off over the term of the lease;
tenant fit out costs associated with fitting out a building 娑 specifically for a lessee and that are not expected to be used. bevond the term of the lease are capitalised in the Statements of Financial Position and written off over the term of the lease; and
lessor owned fit out -- when the fit out is an asset of the lessor 9Ù. and can be retained by the lessor beyond the lease term, it is considered integral to the building and is capitalised into the cost. of the property and adjusted through the valuations.

(c) investments in associates and investments accounted for using the equity method

Some investments are held through the ownership of shares incompanies. Where the Trust exerts a significant influence, but does not have a controlling interest, the Trust adopts the equity method of accounting for these investments on consolidation. At the parentlevel, investments in associates are accounted for at cost.

Interests held by the Trust are brought to account at valuation based. on the net tangible asset backing.

(p) acquisition of assets

The parchase method of accounting is used for all acquisitions. Cost is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs. directly attributable to the acquisition.

(g) payables

These amounts represent liabilities for amounts owing by the Trust at period end which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(r) earnings per unit

Basic and diluted earnings per unit is determined by dividing the netprofit attributable to unitholders of the Trust by the weighted average. number of ordinary units outstanding during the financial period.

(s) foreign currency

Exchange rates

The following exchange rates have been used to translate financial statements of foreign currency investments to Australian dollars:

		-30 June 2005
Spot A\$/US\$	Statements of Etnancial Position	0.7640.
	Average A\$/US\$ ⁵ Statements of Financial Performance	-0.7195

1 The average exchange rate includes applicable hedges.

(t) international financial reporting standards ("IFRS").

The adoption of Australian equivalents to IFRS ("AIFRS") will be first reflected in the financial statements for the half year ended. 31 December 2005 and the year ended 30 June 2006.

The Responsible Entity has established a project team to manage the transition to AIFRS, including training of staff, and systems and internal control changes necessary to gather all the required financial information. In some cases choices of accounting policies are available, including elective exemptions under Accounting Standard. AASB 1: First-time Adoption of Australian Equivalents to IFRS.

Impact of transition to AIFRS

The impact of transition to AIFRS including the selection and application of AIFRS accounting policies, is based on AIFRS. standards that management expect to be in place, or where applicable, have been adopted, when preparing the first complete. AIFRS financial report. The disclosures below assume that the Trust will elect not to apply the requirements of AASB 132 and AASB 139. in the first comparative year under AIFRS.

Although the adjustments disclosed in this note are based on management's best knowledge of expected standards and interpretations, and current facts and circumstances, these may change.

Revisions to the selection and application of the AIFRS accounting policies may be required as a result of:

a changes in financial reporting requirements that are relevant to the Trust's first complete AFRS financial report arising from new or revised accounting standards or interpretations issued by the Australian Accounting Standards Board subsequent to the preparation of the 30 June 2005 financial report;
a changes to the Trust's operations; or
additional guidance on the application of AIFRS in the property 繸 industry.

Therefore, until the Trust prepares its first full AIFRS financial statements, the possibility cannot be excluded that the accompanying disclosures may have to be adjusted.

Income tax

Under the AASB 112: fricame Taxes, deferred tax balances are determined using the balance sheet method which calculates. temporary differences based on the carrying amounts of an entity's assets and liabilities in the Statements of Financial Position and their associated tax bases, in addition, current and deferred taxes attributable to amounts directly in equity are also recognised directly. in equity. This will result in a change to the current accounting policy, under which deferred tax balances are determined using the incomestatement method, items are only tax-affected if they are included in the determination of pre-tax accounting profit and loss and/or taxable income or loss and current and deferred taxes cannot be recognised. directly in equity.

On implementation of AIFRS, no material adjustment to retained earnings will be required.

Financial instruments

The Board has decided not to adopt hedge accounting for financial instruments in existence at 30 June 2005, which may result in future unrealised earnings volatilities, without any associated volatility in cash earnings and hence distributions. The Beard will continually review this position and may elect to apply hedge accounting to financial instruments enfered into the future.

The Trust will be electing to adopt the exemption available under AASB 1 to apply AASB 132: Financial Instruments -- Disclosure and Presentation and AASB 139: Financial Instruments - Recognition and Measurement only from 1 July 2005. This allows the Trust to apply AGAAP to the comparative information of financial instruments. within the scope of AASB 132 and AASB 139 for the 30 June 2006. financial report.

Unitholders equity

Accounting Standard AASB 132: Financial Instruments - Disclosure and Presentation outlines and defines the criteria for recognising a financial instrument as either debt or equity. Under currentaccounting standards (AGAAP) units in a fixed life trust are considered equity. However under AIFRS the same instrument would be classified as debt due to the fixed life of the issuance. Distributions paid to unitholders under this classification would be reclassed as a form of finance charge. These changes would not impact on the financial or economic position of the Trust or that of the unitholder but would significantly impact on the presentation. and disclosure in the financial accounts.

note 1. summary of significant accounting policies (continued)

On 7 July 2005, amendments to the constitution were made that enable the Trust to satisfy the criteria for unitholders funds to be classified as equity. The Board was of the view that such amendments were not materially adverse to unitholders nor did they change the nature of the scheme.

These changes are the only material changes anticipated, but should not be regarded as the only changes in accounting policies that will result from the transition to AIFRS as regulatory bodies have significant ongoing projects that could affect the inferpretation of the differences between Australian Generally Accepted Accounting Principles and IFRS.

While the application of IFRS may introduce volatility into forecast financial information, this will not affect the cash flows from operations.

note 2. property income

*********
	Consolidated	Parent Entity
	2005	2005
	\$'000	\$'000
*********		,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Rent and recoverable outgoings	1,067	$\cdots$
Other income	313

Total property income	1,380	TOP.

note 3, remuneration of auditors

During the period the auditor of the parent entity and its related practices earned the following remuneration:

	Consolidated 2005	Parent Entity 2005

PricewaterhouseCoopers
Audit and review of financial reports and other audit work under the Corporations Act 2001	95.000	88,000
Total auditing fees	95,000	88.000
Taxation fees	36,543	4,000
Total auditor remuneration	131,543	92.000

note 4, other expenses from ordinary activities

		Consolidated	Parent Entity
		2005	2005
	Note(s)	\$'000	\$'000
Audit and advisory fees	×.	132	-92
Custodian fees		h	h
Registry costs and listing fees
Other expenses		in.	in,
Total other expenses from ordinary activities		144	104

note 5, income and costs associated with the transaction

The costs relate to the fees and expenses arising from the stapling of the Trust, DDF, DIT and DOT, the acquisition of the US REIT, and the associated debt arranging and interest rate hedging (together referred to as "the Transaction"). The costs associated with the Transaction totalled \$42.28 million. The controlled entity, DB RREEF Finance, provided a proportion of this funding and incurred expenses of \$8.34 million for DDF, DIT and DOT to facilitate the Transaction. These have been on-charged to DDF, DIT and DOT and therefore appear as an item of income.

note 6, income tax

	Consolidated	Parent Entity
	2005 \$'000	2005 \$'000
Income tax expense
The income tax expense for the financial period differs from the amount calculated on the profit. The differences are reconciled as follows:
Profit from ordinary activities before income tax	5.870	3.012
Income tax calculated at 30 per cent.	1.761	904
Tax effect of permanent differences
Share of net profits of associates	(771)
Income tax adjusted for permanent differences.	-990	904
Income tax expense attributable to profit from ordinary activities	990	904
Aggregate income tax expense	990	904
Aggregate income tax expense comprises
Current taxation provision	1.069	920
Future income tax benefit	(127)	(16)
Deferred income tax liability	48
	990	904

note 7. current assets - receivables

	Consolidated	Parent Entity
	2005	2005
	\$'000	\$'000
Rent receivable	15
Total rental receivables	15
Goods and Services Tax ("GST") receivable	38
Interest receivable	3.917	1.238
Deferred tax asset	127	16
Total other receivables	2.082	1.254
Total current assets - receivables	2.097	1.254

note 8. current assets - inventory

	Consolidated	Parent Entity
	2005	2005
	\$'000	\$'000
Building held for resale
Cost of acquisition	47,037
Capitalised development costs	1,432	1.11
	48,469

note 9, current assets - other

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Consolidated 2005 \$'000	Parent Entity 2005 \$'000
Prepayments	103	$\cdots$
Tenant bonds	34	$\cdots$
Total current assets - other	137

note 10, non-current assets - Joan notes receivable from associate

*********
	Consolidated	Parent Entity
	2005	2005
	\$'000	\$'000
********* Loan notes receivable from DB RREEF Holdings Pty Limited	45.092	,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 45.092
Total non-current assets - loan notes receivable from associate	45.092	45.092

DRH issued an equal amount of corporate bonds to its two owners - First Australian Property Pty Eimited and the Trust, in order to fund its 100 per cent acquisition of DB RREEF Funds Management Limited (the Responsible Entity of the Trust). These bonds are 20 years in duration and yield 11 per cent per amount.

note 11, non-current assets - investments in controlled entities

	Parent Entity
	2005 \$'000

Units/shares in controlled entities
At cost
Barrack Street Trust	-99
DB RREEF Finance Pty Limited
Total non-current assets - investments in controlled entities	100
Reconciliation
	Parent Entity
	2005
	\$'000
Parent
Carrying amount at 11 August 2004
Additions	100
Carrying amount as at 30 June 2005	100

All controlled entities are wholly owned by the Trust. Both the parent entity and the controlled entities were formed in Australia.

note 12. non-current assets - investments accounted for using the equity method

Investments are accounted for in the consolidated financial statements using the equity method of accounting and are carried at cost (refer note 1). Information relating to these entities is set out below.

Name of Entity	Principal activity	Ownership	Consolidated
		interest	carrying
			amount
		2005	2005
		$\frac{\sigma}{\sigma}$	\$'000
DB RREEF Holdings Pty Limited	Asset, property and funds management	-50	17.166
Total			17,166
Movements in carrying amounts of investments accounted for using the equity method
Carrying amount as at 11 August 2004
Interest acquired during the period			14.595
Share of net profits after tax			2.571
Carrying amount as at 30 June 2005			17,166
Results attributable to associates
Operating profits before income tax			3.333
Income tax expense			(762)
Operating profits after income tax			2,571
Less: Distributions received
			2,571
Summary of the performance and financial position of investments accounted for using the equity method
The aggregate profits, assets and liabilities of invesiments accounted for using the equity method are:
Profits from ordinary activities after income tax expense.			2.571
Assets			69.586
Liabilities			52.420

DRO has an option to acquire the remaining 50 per cent of DRH from First Australian Property Group ("FAP") based on a pre-determined formula as defined in the Shareholders Deed dated 1 October 2004. Consideration is to be made via cash or issue of units.

note 13, non-current assets - interest bearing loans receivable from related parties

\$'000 Interest bearing lears receivable from related parties. 713.276	\$7000 47.855
Total non-current assets -- interest bearing loans receivable from related parties 713.276	47.855

The intercompany loans receivable from members of the Stapied Entity is an interest bearing loan where interest is charged based on the Trust's interest expense and allocated to each entity based on the ratio of their weighted average intercompany balance.

note 14. current liabilities - payables

	Consolidated 2005 \$'000	Parent Entity 2005 \$'000
Trade creditors	163	$\cdots$
Accruals:	1,101	59
Prepaid income	393	$100 - 100$
Accrued interest	2,368	184
Total current liabilities - payables	4.025	243

note 15. non-current liabilities - interest bearing liabilities

	Consolidated	Parent Entity
	2005	2005
	\$'000	\$'000
Non-current - unsecured
Commercial notes	261,780
Bank loans	292.618
Loans from related parties?	208,589	51,303
Total unsecured	762.987	51.303
Total non-current liabilities -- interest bearing liabilities	762.987	51.303

I These represent loans from DIT and DOT for the consolidated entily and a loan from DB RREEF Finance Pty Limited (controlled by the Trust) for the parent entily.

financing arrangements

The Trust has access to the following lines of credit:

	Consolidated	,,,,,,,,,,,,,,,,,, Parent Entity
	2005	2005
	\$'000	\$'000
Borrowing facilities
Commercial notes	261.780
Bank loans	874.869
	1.136.649
Used at balance date	554,398
Used at balance date by DB RREEF Industrial Properties, Inc1	263,089
Unused at balance date	319.162

1 A DIT investment.

note 15, non-current fiabilities - interest bearing fiabilities (continued)

bank loans

DB RREEF Finance Pty Limited, a wholly-owned subsidiary of the Trust, entered into syndicated bank debt facilities on 29 September 2004. The facilities include a \$300 million three year, multi-currency revolving credit facility, a \$300 million 364 day, revolving credit facility and a US\$210 million (A\$274.869m) three year, revolving credit facility. These facilities are supported by the Stapled Entity guarantee arrangements. DB RREEF Industrial Properties, Inc may only borrow under the US\$210 million facility. The \$300m 354 day facility has been extended for a further 364 days to mature in September 2006.

DB RREEF Finance Pty Limited also enfered into two bilateral arrangements on 29 September, 2004. A \$170 million 364 day non-revolving bridge facility has been repaid by asset sale proceeds and the limit cancelled in April 2005. A US\$200 million 180 day bridge facility was executed to provide funds for the repayment of US dollar denominated preference shares in December 2004 and May 2005. US\$160 million and the balance of the bridge facility limit, US\$40 million, was cancelled in December 2004 and March 2005 respectively, with the issue of commercial notes (refer below).

commercial notes

US\$160 million notes were issued in December 2004 to redeem US\$160 million of preference units. An additional US\$40 million of notes were settled in March 2005 to redeem the remaining US\$40 million of preference units in May 2005, bringing the total commercial notes on issue to US\$200 million (A\$261.780m). The US dollar denominated notes were privately placed with investors on terms to maturity ranging from December 2011 to March 2017.

note 16, current liabilities - current tax liabilities

	Consolidated	Parent Entity
	2005	2005
	\$'000	\$'000
Opening balance as at 11 August 2004	$\cdots$
Deferred income tax liability	48
Current year's income tax expense on profit from ordinary activities.	3.069	920.
Total current liabilities -- current tax liabilities	1117	920.

note 17, current flabilities - provisions

	Consolidated 2005 \$000	Parent Entity 2005 \$000

Provision for distribution
Opening balance as at 11 August 2004	$\cdots$
Additional provisions recognised	3.932	3.912
Closing balance provision for distribution as at 30 June 2005	1.912	1.912
Total current liabilities -- provisions	1.912	1.912

provision for distribution.

Provision is made for distributions to be paid for the period ending 30 June 2005 payable on 29 August 2005.

note 18, current liabilities - other

	Consolidated	Parent Entity
	2005	2005
	\$'000	\$'000
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Tenant bonds	34	$\cdots$

Total current liabilities - other	34	BANK

note 19, non-current liabilities - loan with related parties

Consolidated 2005	Parent Entity 2005
\$'000 *********	\$'000 ,,,,,,,,,,,,,,,,,
Non-interest bearing loan 48.932	I.R.932
Total non-current liabilities -- loan with related parties 48,932	48.932

note 20, contributed equity

	2005
	\$'000
(a) Value of units on issue
Opening balance as at 11 August 2004
issue of units to staple	5,168
issue of units	83
Distributions reinvested	289
Closing balance as at 30 June 2005	5,540
	2005 Number of units
(b) Number of units on issue
Opening balance as at 11 August 2004
Settlement of Trust	10
issue of units to staple	2,583,842,392
issue of units	41.521,457
Redemption of settlement units	(10)
Distributions reinvested	106,718,540
Closing balance as at 30 June 2005	2.732.082.389

terms and conditions

Each unit ranks equally with all other ordinary units for the purposes of distributions and on termination of the Trust. Ordinary units enfitfe the holder to one vote, either in person or by proxy, at a meeting of the Trust.

distribution reinvestment plan-

On 26 September 2004, the Trust established a distribution reinvestment plan ("DRP") under which holders of DRT stapled securities may elect to have all or part of their distribution entitlements satisfied by the issue of new ordinary units rather than by being paid in cash.

On 28 February, 106,718,540 units were issued with a dollar value of \$289,000 under the DRP for the December 2004 distribution and further units are likely to be issued for the June 2005 distribution. As the Trust made no distribution on this date, the units issued in the Trust were funded by DDF, DIT and DOT.

note 20, contributed equity (continued)

stapling unit change

On 30 September 2004, the Stapled Entity was formed by stapling together the Trust. DDF, DIT and DOT, Each trust subscribed for units in accordance with the stapling ratios described in the Explanatory Memorandum and Product Disclosure Statement dated 30 August 2004.

As part of the stapling process, DDF, DIT and DOT paid a capital distribution that was applied on behalf of each unitholder to subscribe for new issued units in each of the other Stapled Trusts, including the Trust. The number of units issued by DDF, DIT and DOT changed so that each trust had the same number of issued units. The number of stapled securities owned by an investor in DRT equals the number of units in the Trust, DDF, DIT and DOT.

On 19 October 2004, 2,583,842,392 units were issued at a unit price of \$0.0020 (refer to the Explanatory Memorandum and Product Disclosure Statement dated 30 August 2004). This was the price at which the Trust's units were issued to unitholders of DDF, DIT and DOT as part of the stapling process described above. This was funded from the capital distribution that was paid by DDF, DIT and DOT.

On 4 November 2004, 41,521,457 units were issued at a price of \$0.0020. This issue of units was made in consideration for the acquisition by the Trust of management rights from FAP, a subsidiary of Deufsche Australia Limited. The stapled securities were issued at \$1.3119 being the volume weighted average price over the ten business days immediately following the initial quotation of DRT securities on the Australian Stock Exchange.

note 21. reserves and undistributed income

Undistributed income

	Consolidated 2005 \$'000	Parent Entity 2005 \$'000
Undistributed income as at 11 August 2004	$\overline{\phantom{a}}$
Net profit attributable to unitholders.	4.880	2.108
Distributions provided for or paid	(1.912)	(1.912)
Undistributed income as at 30 June 2005	2.968	196.

note 22. distribution paid and payable

Total distributions	.07
31 December (paid 28 February 2005) 30 Brine (payable 29 August 2005)	.07
	2005 cents per unit
Total distributions	1,912
30 Brine (payable 29 August 2005)	1.912
31 December (paid 28 February 2005)
The distributions were paid/payable as follows:
Timing of distributions

	\$'000
	2005

note 23 financial instruments

(a) credit risk

Credit risk is the risk that a tenant will fail to berform contractual obligations, including honouring the term of the lease agreements either in whole or in part, under a contract.

Concentrations of credit risk are minimised primarily by:

ensuring tenants, together with the respective credit limits, are ø abbroved: and
ensuring that leases are undertaken with a large number of Ŷ. tenants

As such, the Trust does not have a concentration of credit risk that arises from an exposure to a single tenant.

On-balance sheet financial instrument

The credit risk on financial assets of the Trust which have been recognised in the Statements of Financial Position is the carrying amount.

Off-balance sheet financial instruments

Credit risk on interest rate swap agreements and foreign exchange contracts are minimised as counterparties are recognised financial intermediaries with acceptable credit ratings determined by recognised rating agencies.

The credit risk on interest rate swap agreements and foreign exchange contracts are approximately equal to the net fair value (or replacement value) (refer note 23(b)).

(b) net fair value of financial assets and flabilities

Market risk is the risk that the value of the Trust's investment portfoliowill fluctuate as a result of changes in valuations. This risk is managed by ensuring that all activities are transacted in accordance with mandates, overall investment strategy and within approved limits. Market risk analysis is conducted regularly on a total portfolio basis.

On-balance sheet financial instruments

The net fair value of cash and non-interest bearing monetary financial assets and liabilities approximate their carrying value.

Off-balance sheet financial instruments

As at 30 June 2005, the net fair value of financial assets arising from interest rate swap agreements was \$1,139,036. Back to back interest rate swaps have been enfered into with related parties with a net fair value of \$3,296,708 bringing the net fair value of financial assets arising from inferest rate swaps agreements to \$4,435,744. As at 30 June 2005, the net fair value of contracts representing the net unrealised gain from converting the forward exchange contracts was \$5,668,353.

Back to back forward exchange contracts have been entered into with related parties bringing the company's net exposure to nit.

These amounts represent the potential (liability)/asset of the Trust if existing swap agreements and forward exchange contracts as at 30 June 2005 were to be terminated.

(c) figuidity and cash flow risk

ensuring that there is no significant exposure to any individual gg. creditor: and
a applying limits to ensure there is no concentration of liquidity risk to a particular counterparty or market segment.

(d) interest rate risk exposures

Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

The Trust's exposure to interest rate risk is hedged with interest rate swaps and the weighted average effective interest rate (for each class of financial asset and financial liability, and each maturity bracket including ficating rate financial assets and liabilities) is set out in the table below:

Consolidated - 30 June 2005				Fixed interest maturing in:
		Floating interest	I year or less	Over 1 and less than	More than 5 years	Non- interest	Total
	Note(s)	rate \$'000	\$'000	5 years \$'000	\$'000	bearing \$'000	\$'000
Financial assets
Cash assets		1,278					1,278
Receivables	7					2,097	2,097
Other	8	34				103	137
Loan notes receivable from associate	30	$\cdots$			45.092		45.092
Interest Bearing loans from related parties	13	713,276				$\cdots$	713,276
Interest rate swaps ^®		(1.320.000)		599.372	720,628
Total		(605, 412)	$\sim$	599,372	765,720	2,200	761,880
Weighted average interest rate (including swaps)		5.63%
Financial liabilities
Payables	34					4.025	4.025
Interest bearing liabilities	15	520.840			242,147		762,987
Loans with related parties	39	ш,				48.932	48.932
Current tax liabilities	36	$\cdots$	$\ddotsc$			1,117	1.117
Provisions	37					1,912	-1,912
Other	18	34					34
Interest rate swaps ^®		(1.127.853)		599,372	528.481
Total		(606, 979)	$\mathbf{w}$	599,372	770,628	55,986	819,007
Weighted average interest rate (including swaps)		5.62%
Net financial assets/(liabilities)		1.567			(4.908)	(53.786)	(57.127)

The above interest rate swaps include \$1 billion of swaps that are forward starting. These swaps will replace existing swaps of the Stapled Entity. The existing swaps mature to mainlain the hedging profile approved by management.

(e) foreign exchange rate risk exposures

When hedging its exposures, the Trust adopts a strategy using both physical and derivative financial instruments. In regard to derivative financial instruments, the Trust uses forward exchange contracts for hedging purposes.

Weighted average exchange rate - 30 June 2005	Contracts to sell US\$ at an agreed exchange rate:
	or less	1 year Overland less than 2 years	More than 2 years
To pay US\$ million		16
To receive A\$ million	31	23	40
Weighted average exchange rate	0.7079.	ଣ ବେ2ବା	A 6878.

note 24. contingent liabilities

The Directors of the Responsible Entity are not aware of any matters in relation to the Trust, offer than those disclosed in the financial statements, which should be brought to the attention of unitholders as at the date of completion of this report.

Details and estimates of maximum amounts of contingent liabilities are as follows:

	Consolidated
	2005 \$'000

Bank guarantee by the Trust in respect of the Coles Myer development, Laverton, (a property owned by DIT).	5.000
Total contingent liabilities	5.000

The above bank guarantee is in turn provided by DIT to the Trust so that there is no net exposure.

The Trust is also a guarantor of a US\$210 million syndicated bank debt facility which has all been negotiated to finance the Stapled Entity. The Trust's guarantee has been given in support of debt outstanding and drawn against these facilities.

The guarantee is issued in respect of the Stapled Entity and does not constitute an additional liability to those already disclosed in its Statements of Financial Position.

note 25, related parties

related party transactions.

All related party transactions are conducted on normal commercial terms and conditions unless otherwise stated.

responsible entity

The Trust was formed on 11 August 2004 at which time DB RREEF Funds Management Limited was appointed as the Responsible Entity. Due to the Trust's ownership interest in the Responsible Entity, management fees are waived in relation to the Trust.

unitholdings

Deutsche Bank AG and its related parties, schemes and portfolios managed by Deutsche Bank AG and its related parties held 453,322,396 units in the Trust.

note 25, related parties (continued)

Deutsche Bank AG

Deutsche Bank AG owns 50 per cent of DRH, which is the 100 per cent owner of DRFM, the Responsible Entity of the Trust. Dealings with the bank include, not only transactions in its capacity as part owner of the new Responsible Entity, but also in the provision of financial services. There were a number of transactions and balances between the Trust and Deuische Bank and related entities as detailed below:

	Consolidated
	2005 \$'000

Transactions with Deutsche Bank AG in its capacity as financier
Interest and financing fees paid/payable to Deutsche Bank	476
Administration expenses incurred by the Responsible Entity which are reimbursed in accordance with the Trust's Constitution
Dealer fees paid/payable to Deutsche Bank AG for the co-management of medium
term notes issued during the financial year	1.157
Interest paid/payable on swaps for whom the counterparty was Deutsche Bank AG	(1.217)
Borrowings from Deutsche Bank	4.887
Other transactions with Deutsche Bank AG
Underwriting fees paid/payable to Deutsche Bank	2.678
Aggregate amounts included in the determination of profit that resulted from transactions with each class of other related parties
Interest revenue from other trusts within the Stapled Enfity	27.152
Lean note interest earned from DB RREEF Holdings Pty Eimited	3.696
Lean note interest receivable from DB RREEF Holdings Pty Limited	1.237

directors of the responsible entity

From 11 August 2004 and up to the date of this report, the following persons were Directors of DB RREEF Funds Management, unless otherwise stated:

Name	Appointed	Resigned
Directors
Christopher T Beare BSc, BE (Hons), M8A, PhD, FAICD?	-4 August 2004	Continuing
Elizabeth A Alexander AM, 8Comm, FCA, FAICD, CPA ¹²	1 January 2005	Continuing
Barry R Brownjehn BComm ^er	1 January 2005	Continuing
Stewart F. Ewen F. H. F ¹²	-4 August 2004	Continuing
Victor P Hoog Antink BComm, MBA, FCA, FAPI, MAICD.	1 October 2004	Continuing
Charles B. Leitner (ILBA	10 March 2005	Continuing
Shadn A Mays BSc (Hons), MSc, MBA	13 May 2004	10 March 2005.
Brian E Scuttin BEC*	1 January 2005	Continuing
Daniel S Weaver BArch, MBA, AFIRE	1 October 2004	17 December 2004

1 Independent Director.

2 Audit Committee Member.

3 Compliance Committee Member.

No Directors held an interest in the Trust as at 30 June 2005 or at the date of this report.

note 25, related parties (continued)

directors' and executive remuneration

1. General remuneration framework

The Board Nomination and Remuneration Committee oversee the remuneration of executives to ensure that executive reward satisfies. the following key criteria for good reward governance practices:

competitiveness and reasonableness; 慾
performance (inkage/afignment) Ŷ.
¥, transparency; and
financial and non-financial resource management. Ø

in consultation with external remaneration consultants DRFM has structured a remuneration framework that is market competitive and complementary to its reward strategy. Alignment to investors' interests. is achieved through increased focus on group performance being a core component of plan design, as well as the plan rewarding:

g) delivery of forecast returns; and
achievement of key non-financial value drivers. Ø

Alignment of employees' interests is achieved through the planrewarding capability and performance. For participants, the plan-

provides a clear structure for earning reward; Ŷ.
q. delivers competitive reward for contribution to the creation. of value: and
provides recognition for contribution. gg.

The plan is designed to attract and retain talented and motivated employees, and to encourage enhanced performance.

The remuneration framework provides a raix of fixed and variable pay, being base pay and short-term performance incentive. As an employee gains seniority within DRFM, the balance of this mix shifts. to a higher proportion of "at risk" rewards. DRFM is further developing a long-term performance incentive scheme for implemenfation during the year ending 30 June 2006.

Key performance indicators are linked to short-term incentives based on group, individual business and personal objectives. Performance indicators require achievement of specific targets in relation to the Trust's performance, as well as other key non-financial measures. linked to drivers of performance in future reporting periods. Short-termincentive payments may be adjusted up or down in tine with under or over achievement against target performance levels, at the discretionof the Board Nomination and Remuneration Committee.

Termination previsions for the Chief Executive Officer ("CEO") are set out in the CEO's contract of employment, in the event of early termination, DRFM may be required to give 12 months notice and may elect to payout all or part of this notice period.

There are no fermination provisions extended to any other DRFM exectitive

2. Non-Executive Directors' remuneration framework and structure

Fees and payments to Non-Executive Directors reflect the demands which are made on, and the responsibilities of Directors. Non-Executive Directors' fees and payments are reviewed annually by the Board Nomination and Remuneration Committee. The Committee also obtains advice from independent remuneration consultants to ensure Non-Executive Directors' fees and payments are appropriate and inline with market. The Chair's fee is determined independently of the fees of Non-Executive Directors, based on comparative roles in the external market. The Chair is not present at any discussions relating to the determination of his/her own remuneration. Non-Executive Directors do not receive share options.

3. Details of remuneration of Directors

3.1 DB RREEF Funds Management Limited

Details of the nature and amount of each element of remuneration for each Director of the Responsible Entity for the period ending 30 June 2005 are set out in the following tables.

Period ending 30 June 2005

	Note(s)	Salary	Bonus	Non-monetary	Superannuation	Total
		and fees		benefits
		\$	£	S	\$	\$
Non Executive Directors
Christopher T Beare		193.125				193.125
Elizabeth A Alexander		65,000				65,000
Barry R Brownjehn		60,000				60,000
Stewart F Ewen		95,625				95.625
Brian E Scuttin		68.750				68.750
Executive Directors
Victor P Hoog Antink	З	682,139			68.800	750.939
Charles B Leitner III	2	12,300				12.300
Shaon A Mays (alternate to Charles B Leitner III).	2	16.000				16.000
Daniel S Weaver	2	$\cdots$

Note 1: Non-Executive Directors' remuneration is a cost of DB RREEF Funds Management Limited. The amount shown in this Remuneration Report is each Directors' total remuneration from 1 October 2004, or the date of appointment if later than 1 October 2004, to 30 June 2005.

The Chief Executive Officer's remuneration is a cost of DB RREEF Funds Management Limited. The amount shown in this report is the Chief Executive Note 3: Officer's lotal remuneration for the nine months ending 30 June 2006. No short term incentive payment for the period 1 October 2004 to 30 June 2005 has been affecated. Consequently, no payment is included in the above.

note 25, related parties (continued)

4. Details of remuneration of Executives

For the period commencing 1 October 2004 and ending 30 June 2005

	Position	Safary	Bonus	Superannuation	Total
					£
Tanya L Cox	Chief Operating Officer	178.811	50.000	8.689	237.500
John C Easy	Head of Legal	163.811	25,000	8.689	197.500
Greg T Lee	Head of Transaction Services	216.311	62.000	8.689	287.000
Ben J Lehmann	Head of Portfolio Services	216.311	75.000	8.689	300.000
⊰an D Robins.	Head of Capital Markets	272.561	175.000	8.689	456.250
Mark F Turner	Head of Mandates	178.811	50.000	8.689	237.500

No short term incentive payment has been allocated for the period 1 January 2005 to 30 June 2005. Consequently, no short term incentive payment has been included for the same period.

5. Other disclosures

There were no loans, stapled securities or options issued or granted during the period to any Director or employee. No Director or Executive received any retirement benefit during the period.

note 26, events occurring after reporting date

constitution amendment

On 7th of July 2005, amendments to the constitution were made that enable the Trust to satisfy the AIFRS criteria for unitholders funds to be classified as equity (ASIC Class Order 05/566). The Board was of the view that such amendments were not materially adverse to unitholders nor did they change the nature of the scheme.

Since the end of the year, other than the matter discussed above, the Directors of the Responsible Entity are not aware of any matter or circumstance not otherwise dealt with in their report or the financial statements that has significantly or may significantly aftect the operations. of the Trust, the results of those operations, or state of the Trust's affairs in future financial periods.

note 27. segment information

The Trust's associate and wholly owned entities are involved in property development and provide financial services to trusts within the Stapled Entity, and to other clients.

The Trust operates solely in Australia.

2005	Financial	Property	Investment in funds	Consolidated
	services	development	management company
	\$'000	\$'000	\$000	\$'000
Rental and other property income.		1.380		1.380
Other revenue	40.108	$\cdots$	2.571	42.679
Total segment revenue	40.108	1.380	2.571	44,059
Segment result	2.262	47	2.571	4,880
Segment assets	778.222	49.293		827.515
Segment kabilities	817.619	1.388		819.007
Acquisitions of property, plant and equipment, intangibles
and other non-current segment assets		47.036	m.	47.036
Investments in Associates	17,166		nw.	17,166
Net cash outflow from operating activities	3.133	1.082		4.215

note 28, reconciliation of net profit to net cash inflow from operating activities

	Consolidated	Parent Entity
	2005	2005
	\$'000	\$'000
Net profit attributable to members	4.880	2.108
Share of net profit of investments accounted for using the equity method	(2.571)
Change in operating assets and liabilities
Increase in receivables	(2.097)	(1.254)
Increase in other current assets	(103)
Increase in other non-current assets.		(954)
Increase in pavables	-2.989	243
Increase in other current liabilities	3.137	920
Increase other non-current (abilities)	---	1.182
Net cash inflow from operating activities	4.215	2.245

components of cash

Cash at the end of the year as shown in the Statements of Cash Flows is reconciled to the Statements of Financial Position as follows:

$1.11111111111111111111111111111111111$ Consolidated	Parent Entity
2005	2005
\$'000	- 000
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Cash assets	150

note 29. non-cash financing and investing activities

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Note(s)	Consolidated 2005 \$'000	Parent Entity 2005 \$'000
Placement of units	20	5,251	5.251
Distributions reinvested	20	289	289
		5,540	5.540

Distributions satisfied by the issue of units under the distribution reinvestment plan are shown in note 20.

note 30. earnings per unit

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Consolidated
	2005
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Basic and dilated earnings - cents per unit	-0.36
Weighted average number of units outstanding used in the calculation.
of basic and diluted earnings per unit.	1,366,041,195

directors' declaration

DB RREEF OPERATIONS TRUST DIRECTORS' DECLARATION FOR THE YEAR ENDED 30 JUNE 2005

The Directors of DB RREEF Funds Management Limited as Responsible Entity of DB RREEF Operations Trust ("the Trust") a listed trust declare that the financial statements and notes set oul on pages 112 to 134.

(i) comply with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

In the Directors' opinion:

(a) the financial statements and notes are in accordance with the Corporations Act 2001;
(b) there are reasonable grounds to believe that the Trust and its consolidated entities will be able to pay their debts as and when they become due and payable; and
(c) the Trust has operated in accordance with the provisions of the Constitution dated 11 August 2004 during the period ended 30 June 2005.

This declaration is made in accordance with a resolution of the Directors.

Cluir Seem

Christopher T Beare Chair Sydney

25 August 2005

independent auditor's report

PRICEWATERHOUSE COPERS

Independent audit report to the unitholders of DB RREEF Operations Trust

Matters relating to the electronic presentation of the audited financial report

This audit report relates to the financial report of DB RREEF Operations Trust and the DB RREEF Operations Trust Group (defined below) for the financial year ended 30 June 2005 included on DB RREEF Operations Trust's web site. The directors of DB RREEF Funds Management Limited are responsible for the integrity of DB RREEF Operations Trust's web site. We have not been engaged to report on the integrity of this web site. The audit report refers only to the financial report identified below. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report presented on this web site.

Audit opinion

In our opinion, the financial report of DB RREEF Operations Trust:

gives a true and fair view, as required by the Corporations Act 2001 in Australia, of the financial position of and the DB RREEF Operations Trust Group (defined below) as at 30 June 2005, and of their performance for the period from 11 August 2004 to 30 June 2005, and
is presented in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia, and the Corporations Regulations 2001.

This opinion must be read in conjunction with the rest of our audit report.

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for both DB RREEF Operations Trust (the Trust) and the DB RREEF Operations Trust Group (the consolidated entity), for the period from 11 August 2005 to 30 June 2005. The consolidated entity comprises both the Trust and the entities it controlled during that period.

Liability is limited by the Accountant's Scheme under the Professional Standards Act 1994 (NSW)

PricewaterhouseCoopers ABN 52 780 433 757

Darling Park Tower 2 201 Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia www.pwc.com/au Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999

PRICEWATERHOUSE COPERS &

Audit approach

We formed our audit opinion on the basis of these procedures, which included:

examining, on a test basis, information to provide evidence supporting the amounts and a) disclosures in the financial report, and
assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

nandatram soft

PricewaterhouseCoopers

DA Prothero Partner

Sydney 25 August 2005

LEFT: 30 The Bond, Sydney NSW; ABOVE: Greystanes NSW; R(GHT: Westfakes SA,

AI assistant

DEXUS — Annual Report 2005

64807_rns_2005-09-27_4e49c2be-473f-4fb2-9c13-4f7b671f84c4.pdf

DR RREEE

Managed in partnership with Deutsche Bank $\boxtimes$

DB RREEF Trust (ASX: DRT) - 2005 Financial Statements for DIT, DOT and DRO

DB RREEF Trust combined financial statements 2005

financial statements

directors' report

directors' report

1. directors and secretaries

1.1 DB RREEF Funds Management Limited

Daniel S Weaver BArch, MBA, AFIRE (Executive Director)

1.2 Deutsche Asset Management (Australia) Limited

1.3 company secretaries

Appointed: 1 October 2004

2. attendance of directors at board meetings and board committee meetings

2.1 DB RREEF Funds Management Limited

2.2 Deutsche Asset Management (Australia) Limited

Deutsche Asset Management (Australia) Limited for the period to 29 September 2004

3. directors' and executive remuneration report

4. directors' interests

4.1 interest in securities

4.2 other interests

5. directors' directorships in other listed companies

directors' report (continued)

6. principal activities

7, total value of trust assets

8. review and results of operations

9. likely developments and expected results of operations

10. significant changes in the state of affairs

11. matters subsequent to the end of the financial year

12. distributions

13. responsible entity and associate interests

14. interests in the trust

15. environmental regulation

16. indemnification and insurance

17. audit

17.3 auditor

17.2 mon-surfit carvicae

17.3 audit indebendence statement

18. corporate governance

19. rounding of amounts and currency

20. management representation

21. directors' authorisation

directors' and executive remuneration report

1. general remuneration framework

2. non-executive directors' remuneration framework and structure

3. details of remuneration of directors

3.1 DB RREEF Funds Management Limited

directors' and executive remuneration report (continued)

3.2 Deutsche Asset Management (Australia) Limited and DB Real Esiate Australia Limited

For the period 1 July 2004 to 29 September 2004

4. details of remuneration of executives

5. other disclosures

6. directors' authorisation

auditors' independence declaration

Auditors' Independence Declaration

statements of financial performance

DB RREEF OFFICE TRUST STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2005

statements of financial position

statements of cash flows

DB RREEF OFFICE TRUST STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2005

notes to the financial statements

DB RREEF OFFICE TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 UJNE 2005

note 1, summary of significant accounting policies

(a) basis of preparation

(b) principles of consolidation

(c) revenue recognition

Rent

Income support

interest income

(d) expenses

Property expenses

Borrowing costs

(e) derivatives and other financial instruments

Debt instruments

Interest rate swaps

Forward exchange contracts

ID GST

DEXUS Annual Report 2005