DEXUS — Annual Report 2006

Sep 25, 2006

DB RREEF

Managed in partnership with Deutsche Bank $\boxtimes$

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

Level 9 343 George Street Sydney NSW 2000

PO Box R1822 Royal Exchange NSW 1225

Telephone 61 2 9017 1100 Direct 61 2 9017 1136 Facsimile 61 2 9017 1132

Email: tony.dixon@dbrreef.com

Dear Sir / Madam

The Manager

20 Bridge Street

Sydney NSW 2000

DB RREEF Trust (ASX: DRT) - Annual Report 2006

DB RREEF Funds Management Limited, as responsible entity for DB RREEF Trust (DRT), confirms the lodgement of the following documents with the Australian Stock Exchange today:

DB RREEF Trust Annual Report 2006 $\bullet$

For further information, please contact

Australian Stock Exchange Limited

• DRT Fund Manager:	Tony Dixon	$(02)$ 9017 1136
• Investor Relations:	Karol O'Reilly	$(03)$ 8611 2930

Yours sincerely

Tanya Cox Company Secretary

26 September 2006

Managed in partnership with Deutsche Bank $[![\mathbb{Z}]!]$

contents

key financial dala and results summan MARITY letter from the chair. chief executive officer's report DB RREEF Trust overview commercial portfolio - australacia industrial portfolio - australia retail portficilo - australia in minimi industrial portfolio - united states third party funds under management sustainability report [11] [11] [11] [11] [11] [11] [11] [11 KOON ALAKSAN SOOMALEE SUMMADE

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DB RREEF Trust (ASX: DRT) comprising DB RREEF Diversified Trust ARSN 089 324 541 (DDF), DB RREEF Industrial Trust ARSN 090 879 137 (DIT), DB RREEF Office Trust ARSN 090 768 531 (DOT) and DB RREEF Operations Trust ARSN 110 521 223 (DRO). Also referred to in this annual report as "DB RREEF", "the Trust", "or "the Trusts". "DAL" means Deutsche Australia Limited. The DB RREEF group "the Group" refers to the business as a whole and includes the Responsible Entity of each of the Trusts, DB RREEF Funds Management Limited ABN 24 060 920 783. EM or Explanatory Memorandum means Explanatory Memorandum and Product Disclosure Statement dated 30 August 2004 DB refers to Deutsche Bank AG. All amounts are in Australian dollars. unless otherwise stated.

key financial data and results summary

highlights

• Total property income \$659.7 million W.
• Distribution per security of $11$ cents up 4.8 percent W.
• Total assets $$8.3$ billion up 18.6 percent 缀
• Total security holders' equity $$4.7$ billion up 21.9 percent W.
• NTA per security \$1.53 up 19.5 percent $\mathcal{G}_\mathcal{B}^\mathcal{B}$
• High quality portfolio with strong fundamentals ▒
• Crystallising value offshore through RREEF 丝
• Strong balance sheet $\mathcal{G}^{\mathcal{G}}_{\mathcal{G}}$
• gearing 38.3 percent
• S&P credit rating BBB+

letter from the chair

Governor Phillip Tower and Governor Macquarie Tower Office Complex, 1 Farrer Place, Sydney NSW
(Photo provided by Hamilton Lund of Visual Eyes International)

dear investor

I am pleased to present the second Annual Report for DB RREEF Trust (DB RREEF) for the vear ended 30 June 2006.

This year DB RREEF delivered on the objectives outlined in the Explanatory Memorandum and Product Disclosure Statement dated 30 August 2004 (EM), enhancing security holder value through the creation of a major diversified property group.

The key highlights for the year were:

• delivering on the EM distribution forecast; sis.
• consolidating DB RREEF's strong property portfolio; s.
• developing a global capability through a strategic relationship with RREEF; and ş.
• further expanding the global industrial portfolio through selective international acquisitions. ss.

The strength of DB RREEF's property portfolio continued to improve over the year. DB RREEF has been actively managing the portfolio, increasing occupancy, expanding lease durations and also creating substantial development opportunities both in Australia and internationally.

The DB RREEF group (the Group) is now one of Australia's fargest property fund managers, with total funds under management as at 30 June 2006 of approximately \$11.8 billion. The property portfolio comprises assets in Australia, New Zealand and the United States. Through our strategic relationship with RREEF, we have acquired properties in the US. France and recently announced the \$600 million Whirlpool Investment Program in the US, Canada and Poland.

On behalf of the Board, I would like to express our committment to the continuing growth and development of DB RREEF, and thank you for your support over the past 12 months.

Yours sincerely

$C$ hir $\beta$

Christopher T Beare Chair 15 September 2006

chief executive officer's report

The Zenith, 821-843 Pacific Highway, Chatswood NSW

I AM PLEASED TO PRESENT DR RREFE'S RESULTS FOR THE YEAR TO 30 JUNE 2006 WHICH CLEARLY DEMONSTRATE THAT WE HAVE DELIVERED AGAINST THE OR IFCTIVES OLITLINED IN THE EXPLANATORY MEMORANDLIM AND PRODUCT DISCLOSURE STATEMENT DATED 30 AUGUST 2004 (FM).

Our clear goal has been and continues to be to enhance. security holder value by creating a major, diversified property group - we are now doing this.

It has been a strong year for DB RREEF, with performance reflecting the consolidation of DB RREEF's domestic portfolio. significant success in increasing the portfolio's occupancy. and lengthening lease durations whilst growing net lettable. area through our development program.

Internationally, we have expanded DB RREEF's portfoliothrough recent acquisitions in the US, France, and developments currently under construction in Florida and Dulles, Northern Virginia. More recently we announced the \$600 million Whirlpool investment program in the US, Canada. and Poland. These industrial opportunities have been facilitated through our global strategic partner, RREEF.

Nationally and internationally, all key indicators have improved. The average lease duration is up, as are the occupancy levels for properties in each sector. DB RREEF has more than 300,000 square metres of new space currently under development, providing as with a substantial pipeline of new lettable area into the future.

the Group at a glance

	Year ended	Year ended
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	30 June 2006 30 June 2005
Funds under management $$$ billion $)$	11.80	10.30
Portfolio value (\$ billion)	80	6.80
Occupancy (%)	96.1	93.1
Development pipeline (\$ billion)	1.30	0.90
Area leased during year (square metres)	730.000	470.000

financial results

Distributions for the six months ended 30 June 2006 of 5.55 cents per stabled security were paid on 29 August 2006. This brings the total distributions for the year to 11 cents perstapled security or \$306.3 million, of which 51 percent represents tax advantaged income.

Net profit for the year was \$1,066 million, including a \$686.5 million revaluation of investments and a \$76.2 million unrealised gain on financial instruments. (and foreign exchange). Total property income was \$659.7 million, representing a 29.7 percent increase. on the previous 12 months' property income.

Total revenue from the funds management business for the year was \$57.8 million and DB RREEF's 50 percent interest. in the net profit after tax at the DB RREEF Holdings Pty Limited level was \$9.9 million.

Total assets at 30 June 2006 were \$8,288 million, an increase of 18.6 percent over last year. Net tangible assets (NTA) per stapled security are \$1.53, which is an increase. of 25 cents per security or 19.5 percent since 30 June 2005.

The key financial results are summarised in the table below:

		30 June 2006 30 June 2005 3
Total income (\$ million)	1.463	810
EBIT (\$ million)	1.250	605
Profit after tax (\$ million)	1.066	467
Net profit attributable to security holders (\$ million)	1.010	396
Portfolio value (\$ million)	7.995	6.597
NTA per security (\$)	1.53	1 28
Gearing ratio (%)	38.3	39 A
Distribution (\$ million)	306	281
Distribution (cents/unit)	11.0	10.5

1 The results reflect the performance of the parent DDF from 1 July 2004. and the addition of DHT, DOT and DRO from the date of consolidation. being 1 October 2004.

chief executive officer's report (continued)

capital management

DB RREEF continues to maintain a strong balance sheet. This is supported by the assignment of a Standard & Poor's long-term corporate credit rating of BBB+, with positive outlook. The refease of the rating will aid DB RREEF's continued commitment to achieve funding flexibility and capacity for active capital management.

DB RREEF's overall level of debt is \$3.2 billion, which represents a level of gearing of 38.3 percent, as measured by interest bearing debt (net of cash) to total assets (net of cash).

The duration of DB RRFFF's overall debt nortfolio is approximately three years, close to 90 percent of the debt is hedged with a hedge duration of approximately seven years. The weighted average cost of debt for DB RREEF was 5.71 percent, inclusive of margins and fees.

Subsequent to balance date, DB RREEF successfully completed a \$250 million issue of medium term notes. (MTNs) into the domestic debt capital market. This transaction was DB RRFFF's first entrée into the MTN market and further diversifies DB RREEF's capital sources.

equity

The average take up of DB RREEF's Distribution Reinvestment Plan (DRP) for the year was 40 percent or \$121 million, which resulted in the issue of approximately 85 million securities. Securities issued in the December 2005 DRP were issued at \$1.3477 per stapled security and for June 2006 will be issued at \$1.4746 per stapled security.

portfolio performance - Australia

commercial portfolio

Net income from the commercial portfolio increased to \$222.3 million (9.5 percent) over the corresponding period. to June 2005. The commercial portfolio was valued at \$3.59 billion providing an increase in value of 9.1 percent. (\$307 million) over book value.

New leases, lease renewals and heads of agreement accounting for more than 62,000 square metres, or 11.8 percent of the commercial portfolio area, were secured. The commercial portfolio's overall occupancy has increased. to 98 percent from 93.6 percent with its average lease term. to expiry by income increasing to 6.3 years, compared to 5.9 years as at 30 June 2005.

DB RREEF completed a number of key refurbishments, resulting in significant leasing success. In addition, significant progress has been made with major commercial developments. at 105 Phillip Street, Parramatta NSW, Bent Street, Sydney NSW and Charlotte Street, Brisbane QLD, When completed, these developments will add more than 103,000 square metres of commercial space to DB RREEF's portfolio with an estimated completion value in excess of \$900 million. over the next five to 10 years.

industrial portfolio

Net income from the Australian industrial portfolio increased to \$110 million over the 12 months to 30 June 2006. (5.2 percent). The industrial portfolio was valued at \$1.56 billion providing an increase in value of \$134 million. (9.2 percent) over book value.

New leases, lease renewals and heads of agreement, accounting for more than 213,000 square metres or 18.4 percent of the industrial portfolio area were secured. The industrial portfolio's overall occupancy increased from 98 percent to 99 percent, with the average lease term to expiry, by income at 4.8 years.

45 Clarence Street, Sydney NSW

DB RREEF completed nine developments (with eight tenant pre-commitments) of approximately 49,002 square metres for a total cost of approximately \$82.1 million. DB RREEF has three developments currently underway for approximately 108,000 square metres with an estimated cost of \$133 million. and an overall forecast yield on completion of approximately eight percent.

DB-RREEF also completed a key acquisition of 65 hectares. of vacant land, adjacent to its existing industrial estate at Laverton, for \$32 million. This acquisition provides a strategic extension to the industrial estate and will enable DB RREEF to leverage off the infrastructure already developed at Laverton.

retail portfolio

Net income from the retail portfolio increased to \$54.8 million. (26.3 percent) over the corresponding 12 month period to June 2005. The retail portfolio was valued at \$915 million. providing an increase in value of 8.9 percent (\$77 million). over book value.

Following the completion of the West Lakes and Mt Druitt developments, planning for the expansion of Plenty Valley VIC and North Lakes QLD is on schedule for each project to commence this financial year. Plenty Valley will see the addition of approximately 40,000 square metres at anestimated cost of \$79 million. North Lakes will see the addition of approximately 25,000 square metres at an estimated cost of \$75 million. Both projects are scheduled to be complete by mid 2008.

portfolio performance - international

US industrial portfolio

Net income from the US industrial portfolio increased by 2.3 percent to US\$85.8 million (A\$114.7 million) compared to the corresponding 12 month period to June 2005. The USindustrial portfolio was valued at A\$1.46 billion providing an increase in value of 11 percent (A\$168 million) over the book value.

Leasing activity in the US industrial portfolio has remained strong with new leases, lease renewals and heads of agreement accounting for more than 4.6 million square feet or 23 percent of the US industrial portfolio by area. The USindustrial portfolio's occupancy improved to finish the year at 92.5 percent, compared to 88.5 percent as at 30 June 2005. The US industrial portfolio's average lease term to expiry, by income, is 3.5 years and compares favourably to 3.4 years. at 30 June 2005.

The US joint venture with Calwest exercised its options to acquire five additional development land sites for a total cost \$US22 million (A\$27.3 million). The development of two of these properties, Turnpike Distribution Centre, Medley Florida and Dulles Town Crossing, Stirling, Northern Virginia has commenced for a total cost of approximately \$US69 million. (A\$93 million).

chief executive officer's report (continued)

601 South 55th Avenue, Phoenix USA

international acquisitions

During the year, DB RREEF focused on expanding the international portfolio in line with our strategy and considerable time was invested pursuing acquisition opportunities.

The groundwork has been laid to continue building our international portfolio and we are actively and confidently looking for further opportunities. All international opportunities have been scrutinised in close consultation with RRFFF

DB RREEF's international focus during the year has been to acquire property portfolios in its more traditional asset sectors of commercial and industrial. This international focus is complementary with the key strengths and core skills of RREEF globally and with DB RREEF in Australia.

DB RREEF's strategy in acquiring international properties is to "invest" overseas, not "spend" overseas, and never lose. sight of the investment fundamentals.

DB RREEF is uniquely positioned through its relationship with RREEF. We are able to focus on markets that have been identified by RREEF Research - globally recognised as a market leader in research. Beyond the US, these markets include Europe and Asia.

In November 2005, DB RREEF acquired four properties totalling 450,000 square feet in Minneapolis Minnesotal for US\$28 million (A\$38 million).

In July 2006, DB RREEF acquired a French portfoliocomprising six fully leased industrial properties of 110,000 square metres in Paris and Lyon at a cost of A\$119.6 million. on an initial yield of 6.9 percent.

Most recently, DB RREEF, utilising the resources of RREEF in the US, secured a A\$600 million property investment. program with Whirlpool, the world's largest manufacturer and marketer of household appliances. Under the program newfacilities will be built in the USA, Canada and Poland and will be acquired by DB RREEF when construction completes in approximately three years.

divisional performance - unlisted funds

At 30 June 2006 the Group managed more than \$11.8 billion. of assets of which \$3.95 billion is managed on behalf of third. party investors.

Total return for DWFP was 22.98 percent for the year ended 30 June 2006. This result is significantly higher than the Fund's benchmark. DWFP returns over three, five and 10 years were 16.27 percent, 13.65 percent and 12.46 percent respectively.

OVERALL. THE OUTLOOK IS GOOD. WE HAVE A STRONG BALANCE SHEET. LOW VACANCIES AND A GOOD LEASE EXPIRY PROFILE. A GROWING DEVELOPMENT PIPELINE AND A GLOBAL PLATEORM FROM WHICH TO ACCESS OPPORTUNITIES FOR ALL INVESTOR GROUPS.

sustainability

The Group has taken the view that appropriate action to promote sustainability enhances security holder value over time and accordingly, this is now a constant consideration in our business.

The Group was the winner of the Facilities Management Environmental Achievement Award for 2006, in recognition of continual improvement in the field of environmental management and sustainability.

2007 strategic focus

The primary objective of DB RREEF for 2007 is to deliver consistent superior performance to its investors, through the:

• a expansion of DB RREEF's direct property portfolio, specifically in the industrial and commercial sectors;
• extraction of synergies through the integration of property 验。 investment, development and management expertise; and
• a unique relationship with RREEF, one of the world's leading property funds managers, enabling DB RREEF to continue working towards achieving its target international asset mix of 35 to 50 percent.

looking forward

In 2007, DB RREEF will seek to:

• expand and manage our high quality portfolio:
• « deliver income growth in:
• commercial by actively participating in the growth cycle:
• industrial by replenishing and growing our pipeline;
• retail by working with Westfield to maximise portfolio value:
• international markets by leveraging RREEF's global platform: and
• third party funds under management by generating new investment opportunities;
• manage capital prodently; and
• continue to increase distributions.

In summary, we have a strong balance sheet, a high quality property portfolio with low vacancies, a good lease expiry profile, a growing development pipeline and a global platform. from which to access opportunities for all investor groups.

This positions DB RREEF for future growth and increased returns to security holders.

Victor P Hoog Antink Chief Executive Officer 15 September 2006

DB RREEF Trust overview

One Margaret Street, Sydney NSW

DR RREEF IS A MAJOR DIVERSIEIED LISTED PROPERTY TRUST WITH INVESTMENTS IN AUSTRALIA, NEW ZEALAND AND THE UNITED STATES.

DB RREEF is currently the sixth largest listed property trust and a top 60 listed corporate on the ASX with a total market capitalisation of approximately \$4.1 billion as at 30 June 2006.

The Group is an integrated real estate platform with two core operating activities:

• a listed direct property portfolio of approximately \$7.85 billion as at 30 June 2006; and
• a a 50 percent share in DB RREEF Funds Management Limited, a property funds management business, the remaining 50 percent being owned by a wholly owned. Deutsche Bank subsidiary, DB RREEF Funds Management Limited is responsible for managing the Group's entire direct property portfolio, as well as approximately \$3.95 billion of funds under management through three property syndicates, two direct property mandates and a wholesale property fund (under delegation).

These combine to give the Group total funds under management of approximately \$11.8 billion, making it one of Australia's largest property fund managers. The Group has access to global real estate investment opportunities. and expertise through its strategic relationship with RREEF.

RREEF relationship

The Group has a strategic partnership with RREEF, Deutsche Bank's global property and infrastructure division, which manages over US\$66.2 billion of assets.

In the US alone. RREEF manages over 705 assets which comprise in excess of 178 million square feet of commercial space and 24,673 apartment units. These US assets total US\$25.7 billion.

DB RREEF is uniquely positioned through its relationship with RREEF to focus on markets that have been identified by RREEF Research - a team with research capabilities that are globally recognised as market leaders. Beyond the US, these markets include Europe and Asia.

The Group believes it is vital to have a dedicated team representing DB RREEF in the markets it invests. DB RREEF will continue to utilise RREEF to source opportunities and manage the assets acquired in international markets. DB RREEF has the ability to undertake "value-add" activity. with RREEF managing developments on the ground. We also have the potential to undertake co-investment in core and value-add opportunities with RREEF.

DB RREEF is RREEF's third largest US core property client.

DB RREEF composition

At 30 June 2006, the Australian and New Zealand assets accounted for approximately 81 percent of the value of DB RREEF's property portfolio. The remaining 19 percent were accounted for by US assets. DB RREEF's investments are undertaken on both a wholly owned basis and through joint ventures with co-owners. Overall portfolio leases have an average of 5.3 years (by income) to maturity with an average occupancy of 96.1 percent by area.

DB RREEF Trust overview (continued)

THE OVERALL PORTFOLIO LEASES HAVE AN AVERAGE OF 5.3 YEARS (BY INCOME) TO MATURITY WITH AN AVERAGE OCCUPANCY OF 96.1 PERCENT BY AREA.

direct property portfolio value by geography at 30 June 2006

1 NSW 51% 丝 United States 19% 臘 Victoria 15% 鹽 West Australia 8% ■ Queensland 3% South Australia 2% New Zealand 1%

direct property portfolio as at 30 June 2006

Property type	Book value	Area occupied	Average lease term by income
	$(S \text{ million})$ ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	(%)	(vears)
Commercial	3.415.5	98.2	60
Industrial	1.564.3	99.2	4 R
LIS industrial	1.461.9	92.5	33
Retail	915.4	99 A	51
Car parks	2075	1.11	10 A
Total	7.564.6	นธ 1	મ વ

direct property portfolio value by sector at 30 June 2006

• 臘 Office 45%
• Industrial 21%
• 19% US industrial 19%
• a Car parks 3%

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1 Including equity accounted assets. 2. Commercial portfolio income excludes rent straight-lining AIFRS adjustments. 3 Data based on DB RREEF ownership of 80 percent. Net income excludes rent adjustment and income support.

Property portfolio value by sector at 30 June 2006.

DB RREEF Trust overview (continued)

DB RREEF Trust overview (continued)

commercial portfolio - australasia

DR RREEF PURCHASED A PREMIUM COMMERCIAL TOWER IN NEW ZEALAND FOR N7\$110.4 MILLION AND COMPLETED REFURBISHMENTS ON TWO PROPERTIES VALUED AT \$38.2 MILLION.

Leases totalling 11.8 percent of the commercial portfolio were secured during the period. All commercial portfoliofundamentals are tracking well with occupancy now at 98 percent and an increase in valuations of 9.1 percent.

portfolio attributes

The commercial portfolio comprising office and car parks, contributed \$222.3 million in net income to DB RREEF. an increase of 9.5 percent over the year to 30 June 2005. This contribution represents 44.3 percent of total property income for the year.

At 30 June 2006, the commercial portfolio comprised almost 530,000 square metres of lettable area (adjusted for ownership) in 24 properties and five car parks with over 590 tenants. Premium grade accommodation comprised 20.2 percent of the commercial portfolio by area with 65.9 percent being A-grade and the remainder being B-grade and associated retail.

In terms of geographical spread, 62.6 percent of properties by area is focated in New South Wafes, 20.6 percent in Victoria and the remainder in the Australian Capital Territory. Queensland, Western Australia and New Zealand.

acquisitions and disposals

DB RREEF purchased the Lumley Centre in Auckland, New Zealand for approximately NZ\$110.4 million. This premium commercial tower was completed in September 2005 and includes 15 office levels, seven car parking levels. The premium accommodation has been fully let to Simpson Grierson, Lumley and Minter Effison. Rudd Watts.

There were no disposals within the commercial portfolio. during the 2006 financial year.

developments and refurbishments

DB RREEF has achieved significant progress on its major commercial developments. These include:

• 8 Bent Street Sydney NSW a Stage 1 Development Application was approved by Council for a 37,500 square. metre development on the site bounded by Bent, Blighand O'Connell Streets (which is co-owned by Deutsche Wholesale Property Fund). A design competition is currently being undertaken prior to lodging a Stage 2 Development Application later this year:
• a 105 Phillip Street Parramatta NSW ~ a Development Application has been approved for construction of a 19,400 square metre office building. Substantial work on this project has been completed including the basement car park levels. DB RREEF is ready to commence development, subject to obtaining appropriate tenant pre-commitments; and
• 1. Charlotte Street Brisbane QLD - development options are being reviewed for a proposed office tower and car park development.

Refurbishment of a number of commercial properties were completed including:

• a a \$17 million refurbishment of 321 Kent Street, Sydney NSW was completed by 30 April 2006. Sparke Helmore has occupied approximately 10,500 square metres since January 2006. In addition, Urbis, Asteron, and Sydney IVF have executed leases. The office component is now fully occupied:
• a a \$21.2 million refurbishment of 130 George Street. Parramatta NSW was completed in April 2006. The office component of this building is now fully let to Medicare, NSW Police and Child Support Agency; and
• the refurbishment of three floors at 343 George Street. Sydney NSW was completed in April 2006 and a Development Application to strata title the building was lodged in June 2006 with Sydney City Council.

Lamley Centre, 88 Shortland Street, Auckland NZ

leasing

New leases, lease renewals and heads of agreement accounting for more than 62,000 square metres, or 11.8 percent of the total commercial portfolio, were secured.

As a result, the commercial portfolio occupancy increased to 98 percent at 30 June 2006, up from 94 percent the previous year, with an average lease term to expiry (by income). of 6.3 years.

rent reviews

Leases covering 80 percent of the commercial portfolio's property income were subject to rent reviews, achieving an average rental increase of four percent. In the coming year to 30 June 2007, approximately 78 percent of the commercial portfolio's income will be reviewed, with around 80 percent of those reviews being either fixed or CPI, incorporating minimum percentage increases.

revaluations

Revaluations resulted in an increase in asset value of \$307 million or 9.1 percent over book value. The weighted average capitalisation rate of the commercial portfolio now stands at 6.7 percent.

commercial lease expiry profile as at 30 June 2006.

The commercial lease expiry profile is now well diversified and the strategy to extend duration without concentration of expiries in any given year is being successfully implemented.

industrial portfolio - australia

DR RREEF EXCHANGED CONTRACTS ON A PARCEL OF LAND ADJOINING THE DR RREEF INDUSTRIAL ESTATE AT LAVERTON NORTH FOR \$32.0 MILLION AND COMPLETED WORK ON NINE DEVELOPMENT PROJECTS FOR A TOTAL VALUE OF \$82 1 MILLION

Leases were agreed for 18.4 percent of the industrial portfolioand occupancy reached 99 percent. Overall the industrial portfolio is performing well with a 9.2 percent increase in valuations.

portfolio attributes

The industrial portfolio contributed more than \$110 million in net income to DB RREEF, an increase of 5.2 percent over the year to 30 June 2005, including comparable growth of 2.5 percent. This contribution represents 21.9 percent of total property income for the year to 30 June 2006.

At 30 June 2006 the industrial portfolio comprised more than 1.1 million square mettes of lettable area in 41 properties with over 320 tenants.

acquisitions and disposals

DB RREEF exchanged contracts on 65.4 hectares of land adiacent to the DB RREEF Industrial Estate, Laverton North VIC, for \$32.0 million. Settlement is due in November 2006. This acquisition provides a strategic extension to the Estate and will enable DB RREEF to feverage off the infrastructure. already developed at Laverton, DB RREEF has achieved several recent pre-commitments that have utilised a number of major lots at the Estate, including an agreement with Fosters Australia to build a major distribution centre costing approximately \$30.9 million. This is the largest pre-commitment ever secured in the Laverton market and will provide a 7.4 percent yield on total costs.

DB RREEF sold 2a Birmingham Street, Villawood NSW, for a total consideration of \$10.3 million, representing an overall gain of \$374,432. DB RREEF also exchanged contracts for the sale. of 121 Evans Read, Salisbury QLD for \$24.0 million, with settlement in August 2006.

developments and refurbishments

DB RREEF completed nine development projects creating additional lettable area of over 49,002 square metres with a total value of approximately \$82.1 million.

These projects include:

Axxess Corporate Park, Mount Waverley VIC

• construction of a 7,880 square metre office building. was completed for Alinta Limited in September 2005. costing \$28.6 million, including construction of a multi-deck car park:
• development of 400 square metres of additional office space was completed for GS1 in December 2005 costing \$1.1 million:
• development of a 1,200 square metre office/warehouse facility costing \$2.5 million for Omron Electronics Pty Etd was completed in March 2006; and
• development of a 6,700 square metre office facility for the Fonterra Group was completed on 28 July 2006. costing \$19.4 million.
• 88 Kings Park Industrial Estate, Marayong NSW
• warehouse expansion works of 1,365 square metres were completed for Harper Collins in November 2005. for a cost of \$1.3 million;
• construction of a 5,680 square metre office/warehouse. speculative development at 1 Coronation Avenue. Kings Park was completed in April 2006 at a cost of \$5.2 million: and
• an expansion development of 2,900 square metres for Geoff Penney is due for completion on 14 August 2006. for an estimated cost of \$3.1 million.
• ⁸⁸ Pound Road West, Dandenong South VIC
• expansion works of 7,000 square metres for L'Oréal Australia were completed on 4 August 2006 costing \$7.1 million.

An additional 104,555 square metres is currently under construction at the DB RREEF Industrial Estate, Laverton North. The estimated cost of this development is \$132.7 million and the forecast yield on completion. is 7.7 percent.

• 8 DB RREEF Industrial Estate, Laverton North VIC
• construction of a 43,705 square metre chilled distribution centre for Coles Myer is due for completion in February. 2007 with an estimated cost of \$96.4 million;

Axxess Corporate Park, Mount Waverley VIC

• construction has commenced on a 7,850 square metre warehouse facility for Wrightson Seeds due for completion in October 2006 with an estimated costof \$5.7 million: and
• construction of a 53,000 square metre distribution centre for Fosters Australia with an estimated cost of \$30.9 million due for completion late 2007.

leasing

New leases, lease renewals and heads of agreement. accounting for more than 213,000 square metres or 18.4 percent of the industrial portfolio area, were secured.

As a result, the industrial portfolio occupancy increased to 99 percent at 30 June 2006 compared to 98 percent in the previous year, with an average lease term to expiry (by income) at 30 June 2006 of 4.8 years.

rent reviews

This year, leases equal to 71 percent of the industrial portfolio's property income were subject to a rent review. and consequently achieved an average rental increase of 3.4 percent. In the coming year, approximately 75 percent of the industrial portfolio's income will be reviewed, with 77 percent of those reviews being either fixed or CPI. incorporating minimum percentage increases.

industrial (australia) lease expiry profile as at 30 June 2006

revaluations

Revaluations resulted in an increase in asset value of \$134 million, or 9.2 percent over book value. The industrial portfolio's weighted average capitalisation rate now stands at 7.7 percent.

retail portfolio - australia

THE RETAIL PORTEOLIC'S POSITIVE PERFORMANCE WAS REFLECTED WITH AN INCREASE IN MOVING ANNUAL TURNOVER (MAT) OF 8.9 PERCENT AND HIGHER CHSTOMER VISITATIONS

Occupancy is strong at 99.4 percent and the retail portfolioincreased in asset value by 11.4 percent. The redevelopment of the Mount Druitt centre in NSW was successfully completed. and two major developments, North Lakes QLD and Plenty. Valley VIC are planned to commence in late 2006.

portfolio attributes

The retail portfolio contributed \$54.8 million in net income to DB RREEF, an increase of 26.3 percent over the year to 30 June 2005. This represents 10.9 percent of total property. income for the year.

At 30 June 2006, the retail portfolio comprised more than 294,000 square metres of lettable area in six properties with over 1,100 tenants. The retail portfolio is diversified. across Australia with properties in New South Wales, Victoria, Queensland, South Australia and Western Australia. The retail portfolio provides a balance of secure income streams and development potential.

acquisitions and disposals

There were no retail acquisitions or disposals during the 2006 financial year.

developments and refurbishments

During the year, DB RREEF completed a \$65 million. Mt Druitt refurbishment project. This involved the underperforming Mver and Bi-Lo stores leaving the centre and being replaced by Coles, Target, 50 new specialty stores and associated car park works. This has been a successful repositioning of this asset and it continues to trade well in the stabilisation phase.

There are two major projects currently in the planning and pre-construction phase:

* North Lakes will commence in September 2006 and will involve the addition of a Woolworths Supermarket. Big W. 80 specialty stores and an ancillary car park. The current net lettable area of 22,252 square metres will increase to 45,129 square metres, creating an additional 22,877. square metres of space. This project, with an estimated

development cost to DB RREEF of \$75 million, will take advantage of the increasing population in one of the highest growth areas in south-east Queensland. The estimated completion date is December 2007; and

a development at Plenty Valley will commence in late 2006. and will increase the net lettable area from 6.179 socare metres to 46.510 square metres. The additional 40,000 square metres in space will include Target, Safeway, Kmart. Aldi and more than 20,000 square metres of specialty space. This project is estimated to cost DB RREEF \$79 million and to be completed mid 2008.

leasing turnover and visitations

During the year, new leases, lease renewals and heads of agreement were secured equating to 228 deals and accounting for over 24,238 square metres.

retail lease expiry profile as at 30 June 2006

Occupancy of the retail portfolio was 99.4 percent as at 30 June 2006.

缀 Income

Westfield Mount Druitt, Corner Cartisle and Luxford Roads, Mount Druitt NSW

MAT for all centres was up 8.9 percent on the previous year. to \$1.5 billion.

North Lakes and Plenty Valley continue to exhibit strong growth in safes which will underpin the proposed redevelopments of these centres. Whitford and West Lakes have shown strong growth over the past 12 months, with 10.1 percent and 14.5 percent increase in sales respectively. This indicates the centres are stabilising after redevelopment.

More than 48.5 million visitations were made to the centres. representing a 2.3 percent increase over the previous year. Spend per visit averaged \$30.78 across the six centres, an increase from \$28.92 in the previous year. Occupancy cost ratios for all centres are at acceptable levels.

The MAT in the retail portfolio for the year is summarised in the table below:

rent reviews

Renewals over existing tenancies totalled 95 deals and achieved five percent above passing and two percent above budget. Whitford and West Lakes performed well achieving 17 percent and 12 percent respectively over passing. New leases over existing vacancies and newly created tenancies. totalled 133 deals and achieved two percent above budget. with North Lakes achieving 25 percent over budget.

revaluations

During the year, revaluations resulted in an increase in asset value of \$75 million or 11.4 percent of book value.

Centre	MAT	Change	MAT	Change	Specialty occupancy
	$$$ per annum)	(% )	$$$ per	(%)	cost ratio (%)
			square metre)
Whitford total	377,729,353	10.14	6,344	5.55
Majors	150.333.904	(0.39)	5.949	(0.39)
Specialties	158.511,560	9.26	8.040	3.9	13.6
West Lakes total	287,403,932	14.37	5,132	(1.93)
Majors	142.913.648	4.62	4.563	3.97
Specialties	109,449,767	21.2	7.698	(6.22)	14.1
North Lakes total	130,037,109	10.54	5,845	10.81
Majors	67.700,774	13.35	6,288	13.35
Specialties	41,130,999	6.82	6,823	7.89	12.3
Plenty Valley total	54,362,905	13.74	9,317	9.07
Majors	40,576,845	9.9	11,271	9.9
Specialties	10,052,153	24.44	7,516	11.21	9.4
Mount Druitt total	294,694,673	9.14	6,052	0.68
Majors	129,785,703	7.53	6,072	(0.13)
Specialties	118,122.780	17.09	7,535	(3.99)	16.9
Hurstville total	359,713,995	2.24	6,061	1.61
Majors	169.015.850	2.35	4,694	2.35
Specialties	149,057,290	1.3	8,503	1.47	18.2
Total	1,503,941,967	8.9	5,970	2.7

industrial portfolio - united states

DURING THE YEAR. THE US INDUSTRIAL PORTFOLIO GREW THROUGH THE ACQUISITION OF FOUR PROPERTIES IN MINNESOTA AND THE EXERCISING OF OPTIONS TO ACOURE FIVE PARCELS OF DEVELOPMENT LAND IN TEXAS ELORIDA AND NORTH VIRGINIA

Overall the US industrial portfolio is performing well with a 9.6 percent increase in valuations and a significant improvement in the occupancy levels. A 270,000 square feet development is underway in Medley, Florida and a further 220,000 square feet of development in Dulles Town Crossing, Stirling, Northern Virginia is scheduled for completion in 2008.

portfolio attributes

The US industrial portfolio has contributed US\$85.8 million (A\$114.7 million) in net income to DB RREEF, an increase of 2.3 percent over the prior nine months annualised. This represents 22.9 percent of total property income for the year. The US industrial portfolio consists of properties held by a joint venture owned 80 percent by DB RREEF and 20 percent. by CalWest Industrial Properties, LLC, a subsidiary of CalPERS, and properties owned 100 percent by DB RREEF.

At 30 June 2006, the US industrial portfolio covered more than 20.3 million square feet of lettable area in 97 properties. throughout 18 metropolitan areas across the United States. The US industrial portfolio consists of approximately 58 percent warehouse/distribution and 42 percent "flex" type properties, by market value. Average office contentis 17 percent, with income generated from approximately 560 tenants.

acquisitions and disposals

In November 2005, DB RREEF acquired a 100 percent interest in four properties, totalling approximately 450,000. square feet, in Minneapolis. Minnesota for US\$28 million. (A\$38 million). These assets were 83 percent leased with an initial yield of 7.3 percent.

During the year, the US Joint Venture exercised its options. to acquire five parcels of development land totalling 81.5 acres with an aggregate exercise price of approximately US\$22 million (A\$27.3 million). Details of the five sites are set out in the table below.

Metropolitan area	,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Location	Area	Price (acres) (US\$ million)
Miami. FL	Medley, Miami	17.7	85
Stirling, VA	Dulies Town Crossing, Stirling	14.O	5.1
Ashbern, VA	Beaumeade, Ashhirn	10.7	31
Dalias, TX	Plano Parkway, Plano	13.5	20
Dalias, TX	Garland Jupiter, Gariand	25 B	33
			22 O

developments

DB RREEF has two land parcels currently under development - the Turnpike Distribution Centre, Medley, Florida and Dulles Town Crossing, Stirling, Northern Virginia.

The Turnpike Distribution Centre in Medley, Florida is a 268,120 square feet distribution facility with a total cost forecast of US\$17.2 million (A\$23 million). The project is already 61 percent pre-leased and schedule for completion in early 2007.

5823 Newton Drive, San Diego CA

A 220,000 square feet Class A suburban office development at Dulles Town Crossing, Stirling, Northern Virginia is due to commence by the end of the year following receipt of approval from the local authority. Dulles Town Crossing is one of the country's fastest growing and most affluent. suburban areas. The current site plan features two four level office buildings with a one acre landscaped courtyard. to connect the two buildings. Total cost is expected to be US\$52.0 million (A\$70.0 million), with an expected vield on the cost of the development of eight percent. RREEF will provide development management services to DB RREEF and will undertake asset and property management services. following the completion of the development in the first half of 2008.

leasing

The US industrial portfolio's occupancy increased from 88.5 percent to 92.5 percent, including 90 new leases totalling 1,938,906 square feet and 66 renewal leases. totalling 2,718,792 square feet. The average lease term to expiry is now 3.5 years.

revaluations

At 30 June 2006, the US industrial portfolio was independently revalued totalling US\$1.35 billion resulting in an increase of US\$118.6 million or 9.6 percent of book value. The weighted average capitalisation rate of the US industrial portfolio now stands at 7.4 percent.

industrial (united states) lease expiry profile as at 30 June 2006

third party funds under management

THE GROUP IS ONE OF AUSTRALIA'S LARGEST PROPERTY FHND MANAGERS WITH TOTAL FUNDS UNDER MANAGEMENT AS AT 30 HINE 2006 OF APPROXIMATELY \$11.8 BILLION

The fisted property portfolio comprises in excess of \$7.85 billion of direct property assets in Australia. New Zealand, the United States and France, and the unlisted property portfolio comprises approximately \$3.95 billion of domestic assets.

DB RREEF Funds Management Limited is the Responsible Entity for a number of listed and unlisted property trusts, including DB RREEF Trust, DB RREEF RENTS Trust and three property syndicates. DB RREEF Funds Management Limited is also the investment manager for the Deutsche Wholesale Property Fund (DWPF) (managed under delegation from DB Real Estate Australia Limited) and two direct property mandates.

deutsche wholesale property fund

DWPF is an unlisted, open-ended property fund with total gross assets of approximately \$1.76 billion as at 30 June 2006. DWPF is managed by DB RREEF Funds Management Limited under delegated authority from DB Real Estate Australia Limited.

DWPF's objective is to provide wholesale investors (predominantly superannuation fund, life company and non-profit group investors) with a balanced return of capital growth and income over the medium to long term, derived from a diversified portfolio of high quality property assets.

DWPF's portfolio comprises interests in 11 properties. On a sectoral basis, the portfolio is split 52 percent office. 42 percent retail and six percent industrial.

There are more than 120 investors in DWPF, with the top 10 unitholders representing approximately 72 percent of the register. For the year to 30 June 2006, DWPF produced an annual gross return of 22.98 percent. Over a three, five and 10 year period annualised gross returns were 16.27 percent, 13.65 percent and 12.46 percent respectively.

sector allocation at 30 June 2006¹

portfolio diversification at 30 June 2006¹

1 Based on book values at 30 Bane 2006.

direct mandates

The direct mandates comprise \$1.9 billion of direct property assets at 30 June 2006 managed on behalf of SAS Trustee. Corporation (STC) and the AXA Group (AXA). As at 30 June 2006, STC owned a portfolio of direct property. assets comprising 13 properties with a market value of approximately \$1.6 billion.

DB RREEF Funds Management Limited manages a portfolio of direct property for AXA's New Zealand Statutory Funds and the AXA Wholesale Australian Property Fund. The AXA mandates are in respect of 13 properties that have, as at 30 June 2006, a market value of approximately \$320 million.

syndicates

The syndicate business consists of three unlisted trusts representing assets valued at approximately \$190 million as at 30 June 2006. The syndicates have over 975 unitholders and are closed ended, fixed term products.

gordon property syndicate

This syndicate owns two retail assets, the Gordon Centreand the Gordon Village Arcade located in Gordon NSW. At 30 June 2006 total assets of the syndicate were approximately \$82.4 million.

northæste property syndicate

This syndicate owns the Northgate Shopping Centre at Glenorchy in Hobart TAS, At 30 June 2006 total assets of the syndicate were approximately \$89.3 million.

shbotsford property syndicate

This syndicate owns a commercial building in Abbotsford VIC. At 30 June 2006 total assets of the syndicate were approximately \$17.4 million.

Gordon Centre, Gordon NSW

sustainability report

343 George Street, Sydney NSW (Photo provided by Tyrone Branigan Productions)

The group is committed to the long term integration of sustainability practices fhroughout its business. Over a number of years, the Group has implemented sustainability strategies that promote both environmentally sustainable property management practices and appropriate corporate social responsibility. The Group believes that appropriate sustainability strategies are increasingly being demanded by tenants, regulators, employees and security holders.

Security holders' value is enhanced over time through the creation of working environments that are attractive to tenants, which enable them to improve their business productivity. This outcome improves the demand for DB RREEF properties and at the same time benefits the wider community. This increased demand will enable DB RREEF properties to command higher rents while obtaining efficiencies that will lower the operational cost of its buildings, increasing earnings.

The Directors and employees of the Group are proud of its sustainability performance. The 2006 Sustainability Report outlines many of its key achievements and outlines its objectives for the coming year. This report builds on the first sustainability report released in 2005 and forms an integrat part of the Group's regular reporting to security holders on this important activity. Further information on the sustainability program is located at www.dbrreef.com

I sustainability

The Group's sustainability strategy is based on its ability to identify risks and develop individual management programs which satisfy the social and environmental requirements of each property and its operations

The Group's most visible commitment to sustainability is reflected in its implementation of environmental sustainability projects across the property portfolio. However, the Group also recognises the opportunity to create a positive social impact and has implemented a number of inifiatives aimed at tenants, contractors, employees and the wider community.

Daring the year to June 2006, the Group has achieved a number of milestones in relation to its sustainability initiatives, including:

• winning the Facilities Management Environmental Achievement $3\%$ Award for 2006 in recognition of continual iraprovement in the field of environmental management and sustainability;
• launching its Resource Efficiency and Sustainability Initiative orceram:
• completing its own corporate fit-out, incorporating leading design 雛 and environmental initiatives to achieve high standards of sustainability: and
• 5 Star rating awarded to 30 The Bond under the Green 雛 Star - Office as Built rating fool.

The Group's target initiatives for 2007 include:

• Australian Building Greenhouse Rating (ABGR) assessments for all commercial properties in the Australian portfolio;
• Green Star rating assessments on existing commercial properties $\otimes$ in the Australian portfolio:
• * recording and monitoring energy, waste and water consumption data, captured for all commercial properties in the Australian and New Zealand portfolio; and
• establishing resource efficiency project opportunities for one-third of all commercial properties in the Australian and New Zealand portfolio.

All sustainability initiatives are undertaken after identifying a positive return under appropriate social, environmental or economic criteria. The Group has demonstrated its ability to reduce the impact of its activities on the environment and society without compromising economic viability.

2. The Group corporate fit-out

The Group's commitment to environmentally sustainable principles was demonstrated through its new head office fit-out at 343 George Street, Sydney. The fit-out applied leading design and environmental initiatives to create a functional, attractive and healthy workplace for its employees.

The Group was keen to preserve the heritage features of the 81 year. old building while bringing the interior into the twenty-first Century.

Reducing energy consumption was a core objective in designing the fit-out. A revolutionary chilled-bears cooling system was installed resulting in significant indoor ecology improvements and energy savings. Sophisticated lighting control and an after-hours air-conditioning system further reduce energy demand. Energy efficient T5 fluorescent lamps were installed in office areas, while compact fluorescent light fittings were used for fixed ceiling areas. The Group chose energy efficient office equipment including fridges with a 3 Star energy rating, chilled and boiled water units with automatic shutdown modes and flat-screen PC monitors, significantly reducing heat loads and demands on the HVAC System.

In designing the fit-out, the Group was mindful of the link between employee productivity and indoor environmental quality. In addition to the chilled-beam cooling system, access to natural light was also improved. All desks are within eight metres of external windows and an atrium skylight further reduces the reliance on artificial lighting. The internal staircase adds connectivity to the workspace and work is confinishe on an outdoor garden and patio area, indoor air quality was improved by choosing paint finishes with low volatile organic compounds. Indoor plants are used to improve air quality and indoor ecological benefits.

Significant water savings were possible through the installation of AAA tap ware which were fitted with water restrictors. The toilets have a dual flush/smart flush system and the chilled/boiled water units are designed to eliminate water wastage. Dishwashers are AAA energy rated.

The Group's commitment to waste minimisation and recovery was reflected in its choice of office furniture, which was recyclable or part of a take-back scheme. The company's old furniture was donated to charity, a policy which will continue in the future for disused office furniture.

Recycling bins were installed in all breakout areas and toner cartridges are collected for recycling at regular intervals.

Overall, 343 George Street, Sydney is now a leading example of building for sustainability in the office environment.

3 environmental management policy

The Group communicates its commitment to environmental best. practice through its Environmental Management Policy by:

• identifying and controlling environmental impacts via 89 a comprehensive management system;
• ensuring compliance with legislation, and
• promoting best practice to stakeholders.

The opticy embodies the precautionary oringible and commits to continual improvement facilitated by annual environmental auditing. training, teamwork and communication.

The Group leads the market in sophisticated environmental management and has implemented a range of systems and initiatives. to ensure environmental management is incorporated within the daily responsibilities of employees, property managers and tenants.

3.1 environmental management program

The foundation of the Group's environmental commitment is its Environmental Management Program which has been operational since 1999. Developed and modelled around the international standard for Environmental Management Systems (ISO 14001), the Environmental Management Program ensures the identification, management, monitoring and an annual external audit of all eavironmental issues associated with the physical property and any activities conducted at the property.

The Group won the Facilities Management Environmental Achievement Award for 2006 in recognition of its continual improvement in the field of environmental management and sustainability.

The Environmental Management Program demonstrated how the company has reduced the environmental impacts associated with its activities and services. The award recognised the culture of responsible environmental management and the judges valued the company's commitment to enhancing environmental performance. and knowledge across the facilities management sector, through communication and stakeholder engagement.

SUStainability report (continued)

Southgate Complex, Southbank, Melbourne VIC Winner of Most Improved Property -- Environment 2005

Each year the Group presents two if its properties with Environmental Achievement Awards to encourage best practice and acknowledge the management teams' initiatives. The Southgate Complex in Southbank, Melbourne, was named winner of the "Most Improved Property Environment 2005". The Southgate-Complex presents challenging environmental management issues. due to the mix of commercial office space, dining and retail outlets. and on-site parking. Highlights of its environment management. program include:

• a integrated environmental management across commercial and retail sectors.
• greater resource efficiency resulting in reduced utility bills for w tenancies:
• significant reduction in insurance premiums in recognition of environmental risk mitigation: and
• Southgate's high-quality management team has delivered 8)
  3) continual performance improvement to the complex.

3.2 environmental initiatives

The Environmental Management Program combines a number of specific environmental initiatives in order to achieve environmental best practice. These include:

3.2.1 Resource Efficiency and Sustainability Initiative Program

The Resource Efficiency and Sustainability Initiative Program was faunched in 2005 and aims to reduce each property's environmental impact and safeguard its asset value. The program works towards reducing consumption of energy and water, minimising waste and identifying industry based environmental ratings (such as ABGR and Green Star ratings) for each property across the commercial portfolio through:

• 愛 collation of baseline data and identification of potential inefficiencies in plant and/or operations;
• identification of project opportunities that enhance resource $\mathbb{S}^d$ efficiency and offer acceptable pay-back periods;
• implementation of these projects through stakeholder $\mathcal{D}^{\mathcal{A}}_{\mathcal{A}}$ consultation and specialist support; and
• 8Ý. continuous moniforing to quantitatively establish project benefits and identifying engeing opportunities for improvement.

Throughout the year. DB RREEF has implemented a portfolio-wide. resource-efficiency program. In addition, action plans for waste management and reduced water and energy consumption have been completed at 1 Farrer Place, Sydney and 201 Elizabeth Street, Sydney.

Governor Phillip and Macquarie Tower Complex 1 Farrer Place, Sydney NSW

1 Farrer Place is located in the heart of Sydney's central business district and demonstrates excellence in property environmental management. This premium-grade commercial office building consistently outperforms similar properties. A number of innovative solutions have contributed to the sustainability of the building, including:

• implementation of resource-efficient initiatives such as energy 额。 reduction:
• development of a Water Savings Action Plan for the Department 額 of Energy, Utilities and Sustainability NSW: and
• a demonstration of excellence in best practice in all areas of property environmental management, reflected in consistently high sceres in annual environmental audits.

83 Clarence Street, Sydney NSW

On behalf of the owners of 83 Clarence Street Sydney, a program was initiated to increase the building's energy efficiency.

As a result of a focused commitment to energy reduction and cost effective goarades, as well as the building owner's commitment to its tegants, the property achieved a 3.5 Star ABGR. This represents a 1.5 Star increase in just 12 months. The higher rating was achieved through strategic investment in the building's essential services and an upgrade to major services such as lifts, bathrooms and the foyer.

3.2.2 Carbon emission reduction project

The Group is currently implementing a nuraber of carbon emission. reduction initiatives, including:

• ⁸ expanding the Resource Efficiency and Sustainability Program across the property portfolio and capturing data in key areas of energy, electricity, natural gas and diesel fuel consumption;
• expanding the Environmental Management Program to collect and centralise information about the type of air conditioning equipment and the type and amount of refrigerant used in buildings;
• developing a greater understanding of the US property portfolio-缝。 in terms of emission data and potential regulation of Green-House Gas (GHG) emissions:
• ensuring property managers include the risks associated with climate change - such as flood, bush fire, rising sea levels and increased storm intensity - when preparing risk plans for properties;
• capturing and reporting on the number of maintenance supplies. 麴 purchased with preference given to those products with superior environmental performance:
• monitoring and reporting on the number of buildings with green 雛 cleaning contracts in place, including the amount of wastediverted from landfill;
• establishing emission reduction targets across the portfolio; 额。
• greater resource efficiency and therefore reduced utility bills for tenancies: and
• examining GHG emissions resulting from the Group's operations, SSS such as the use of company vehicles, business flights, wastedisposal and disposal of office consumables.

3.2.3 Water saving programs

The Group developed Water Savings Action Plans for the following three properties:

• ^® Governor Phillip and Governor Macquarie Towers, 1 Farrer Place, Sydney NSW
• Zenith Centre, 821-843 Pacific Highway, Chatswood NSW $\otimes$
• ^® Gateway, 1 Macquarie Place, Sydney NSW

The plans identified potential water savings of 78ML per annumacross the three sites. The associated projects will undergo feasibility consideration prior to implementation over the next 12 months. Further information on the water savings program can be found in the full sustainability report at www.dbrreef.com.

3.2.4 Supply chain leadership

The Group parchases large quantities of maintenance supplies for commercial properties under its management and has identified the opportunity to use its significant purchasing power to achieve an improved environmental obtcome. Further information on supply chain leadership initiatives can be found in the full report at www.dhrreef.com.

3.2.5 Green cleaning contracting

The Group is committed to implementing green cleaning methods acress the property portfolio. Cleaning contract specifications have been updated to include specific environmental requirements. Tenderers are encouraged to out forward innovative cleaning. methods, with the most appropriate selected and applied to each new cleaning contract. This system allows for the application of the most up to date products and cleaning methods. Initiatives undertaken in green cleaning contracting can be found in the foll report at www.dbreef.com.

3.2.6 industry rating tools

Through a pilot program, the Group assessed the environmental performance of a selection of commercial properties using the ABGR and the Green Building Council of Australia's Green Star Office Rating (Green Star rating). Both programs award star ratings based on the environmental performance of existing commercial properties.

As a result of the pilot, the Group will conduct ABGR and Green Starrating assessments on its commercial properties as part of its Researce Efficiency Program. This strategy will establish environmental performance and facilitate comparison and benchmarking across the portfolio.

5 Star - Green Star rating for 30 The Bond

30 The Bond, Hickson Road, Sydney was awarded a 5 Star rating under the Green Star - Office as Built rating tool earlier this year. This is the first project in Australia to achieve this rating which represents Australian Excellence, 30 The Bond, which opened in March 2005, was built to an environmentally sustainable design and developed within strict commercial parameters. The building emits 30 per cent less carbon dioxide (CO.) than a typical office building due to the use of natural ventilation, passive chilled beam cooling and folly operable shading on the building façade.

3.2.7 Participating in industry innovation

Through participation in industry organisations, the Group is able to share its knowledge and experience in environmental sustainability and ensure access to the latest developments in sustainable. property management.

The Group is active in the following industry groups:

• Property Council of Australia's Sustainability Committee: ss:
• Green Building Council: w
• Facility Management Association: s).
• City of Sydney Clean Harbour Partners network: and \$ÿ
• $\bar{\omega}$ Sydney Water Every Drop Counts network.

4 social

As one of the largest property fund managers in Australia, the Groupunderstands its potential impact on the lives of many people and appreciates it has a responsibility to make that impact a positive one. The Group's social program benefits tenants and contractors, employees and the greater community.

4.1 occupational health safety and liability risk management program

The Group recognises it has a duty of care to clients, tenants, employees, managing agents and contractors to meet its obligations. in relation to Occupational. Health, Safety and Liability (OHS&E).

To meet these obligations, the Group has implemented a rigorous. portfolio-wide OHS&L program. The OHS&L management program identifies, manages, monitors and annually audits mitigating practices against the potential for harm, including fire systems, hazard management, first aid, building design and operation and emergency response. Each year external auditors assess each property according to a 5 Star rating system. A property must receive a score of 90 percent or greater in order to achieve 5 Star status.

Woodside Plaza, Perth WA

Wisper of Most Improved Probedy - OHS&L, 2006

Similar to the Environmental Management Program, the Group presents two awards annually to the highest performers in OHS&L Management.

Woodside Plaza in Perth was awarded the "Most Improved Property" - OHS&L" in 2005 following its adoption of DB RREEF Funds Management's OHS&E procedures. In addition to these procedures, the management team also introduced a number of their own property-specific risk-management initiatives. These initiatives improved Woodside's score from 66 to 87 per cent. The initiatives undertaken by the management at Woodside Plaza can be found in the full report focated at www.dbrreef.com.

4.2 security and emergency management

Following the terrorist attacks in the US on 11 September 2001. the Group has adopted a balanced and realistic approach across its portfolio in terms of security and ferrorism threat and emergency risk management. Similar to the Environmental Management Program, the Security and Emergency Management program aims to identify, manage and monitor the security and emergency management risks. at each property and endeaveurs to minimise, remove or manage that risk.

SUStainability report (continued)

30 The Bond, Hickson Road, Sydney NSW

4.3 fair contracting principles

The property industry is a significant employer which seeks to provide best practice work environments for its employees and those of its service providers. Services such as cleaning, maintenance and security are essential to good management and property owners. expect contractors to recognise and commit to principles of corporate responsibility. In doing so, contractors demonstrate they understand the values and high standards of corporate responsibility adopted by their clients, and commit to safe, fair and equitable working conditions for their employees.

In response to this objective, the Property Council of Australia (PCA) formed a committee of corporate leaders, of which the Group is an active member, to steer this important project. This committee has developed, in consultation with major members, the "Principles for Fair Contracting" (Principles).

The Principles represent an industry standard that applies to all service providers including security, cleaners and maintenance. across all sectors within the property industry. The Principles contain obligations for both the property industry and its contractors. The Group supports these Principles and has since adapted these Principles across its business.

4.4 employee training, education and professional development

The Group offers a range of learning and development programs to ensure its employees have the most up to date knowledge and skills. The Group's Study Assistance Policy encourages employees to undertake formal study that will contribute to professional. development and the achievement of the Group's overall success. Employees are also entitled to claim costs for one professional membership per annum.

4.5 employee welfare programs

The Group recognises that the health and well-being of its employees is vital to the company's success. Employees have the opportunity to access preferential plan arrangements for private health insurance through a Group Heath Insurance plan, with the option of deducting premiums from salary payments.

Additionally, the Group offers an Employee Assistance Program. enabling employees and their families to access a confidential counselling and advisory services for personal or work related issues.

4.6 community participation

The Group supports a range of charitable organisations including:

• Property Industry Foundation as a Gold Corporate Sponsor of the Property Industry Foundation (PIF), the Group contributes to the support of "at risk" young people.
• Australian Athletes with a Disability the contributions of the Group to Australian Athletes with a Disability assist in the development, promotion and co-ordination of sport for athletes. with a disability.
• 额。 Cure Cancer Australia Foundation - a group of keen "sand eagineers" participate in the annual Castles in the Sand event. This event is a key fundraiser for the Cure Cancer Australia Foundation, with funds going towards innovative, ground-breaking cancer and leukaemia research projects.

corporate governance statement

View from 1 Farrer Place, Sydney NSW (Photo provided by Hamilton Lund of Visual Eyes International)

DB RREEF Funds Management Limited (DB RREEF Funds Management) is the Responsible Entity of each of the four trusts that comprise DB RREEF Trust, DB RREEF Funds Management is also the Responsible Entity of three property syndicates and DB RREEF RENTS Trust, and is the investment manager for two private client. property mandates. DB RREEF Funds Management is also the investment manager of the Deutsche Wholesale Property Fund (DWPF) appointed by DB Real Estate Australia Limited, the Responsible Entity of DWPF. The above trusts, syndicates and client mandates are collectively referred to in this corporate governance. statement as the Trusts.

the governance framework

The corporate governance framework is designed to support the strategic objectives of each of its Trusts by defining accountability and creating control systems appropriate to mitigate the risks inherent in the day-to-day operations of the Trusts.

To achieve this objective, the Group has implemented a corporate governance framework that meets each of the ASX Principles of Good Corporate Governance (ASX Principles). The Group has prepared a reconciliation of the ASX Principles against its own governance framework. This reconciliation can be found on the web page www.dbrreef.com/governance.

principle 1, a solid foundation for oversight and management

The Group is committed to maintaining, through both the Executive management and the Board, a batance of skills, experience and independence appropriate to the nature and extent of its operations.

The governance framework enables the Board to provide strategic. guidance, while exercising effective oversight of management. The framework also defines the roles and responsibilities of the Board

and management in order to facilitate Board and management. accountability and ensure a balance of authority. The Board, management committees and committee structure are detailed at www.dbrreef.com/governance.

DB RREEF Funds Management is a wholly owned subsidiary. of DB RREEF Holdings Pty Limited (DB RREEF Holdings). DB RREEF Roldings is 50 percent owned by DB RREEF Operations. Trust (DB RREEF Operations) and 50 percent owned by First. Australian Property Group Holdings Pty Limited, a subsidiary of Deutsche Bank AG (DB). DB RREEF Funds Management and DB RREEF Holdings share a common Board of Directors.

The shareholders of DB RREEF Holdings, namely DB RREEF Funds Management as Responsible Entity of DB RREEF Operations and First Australian Property Group Holdings Pty Etd entered into a Shareholders' Deed on 1 October 2004 (Deed). The Deed prescribes the composition of the Boards of DB RREEF Funds Management and DB RREEF Holdings (see Principle 2) and requires the agreement of the shareholders regarding the management of bersonnel in the Fluman Resources, Internal Audit, Legal and Compliance functions. Forther, the Deed prescribes a number of matters that require an ordinary resolution of shareholders, rather than a resolution of the Board. The Board has considered the provisions of the Deed and concluded that the Deed does not compromise the ability of the Board to act independently and is in the best interests of investors.

1.1 role of the board

The Board is responsible for ensuring that the fiduciary and statutory. obligations of each Trust to its investors are met, and that such duties have priority over all other dufies including the interests. of shareholders.

corporate governance statement (continued)

Having regard to these responsibilities, the Board ensures that:

• compliance with its fiduciary and statutory obligations are met; 愛
• conflict identification and management practices are in place; gy.
• the goals of the Group and each Trust are clearly established, $\frac{1}{2}$ and that strategies are in place for their achievement;
• budgets are in place and performance is monitored: $\frac{1}{2}$
• $\frac{1}{2}$ each Trust's financial statements are true and fair and otherwise. conform with law-
• appropriate risk management, internal control and regulatory compliance policies are in place; and
• management adheres to high standards of ethics and corporate Ø. eovernamee

In addition, the Board is responsible for appointing and removing the Chief Executive Officer (CEO), ratifying the appointment of the Chief Financial Officer (CFO), Chief Operating Officer (COO) and Company Secretary, and monitoring the performance of the senior management team. The Board also carries ultimate responsibility for the approval of property acquisitions, divestments and major developments. A copy of the Board Terms of Reference is available. on www.dbmeef.com/governance.

1.2 role of management

The day-to-day management of each of the Trusts rests in the hands of the management team. To assist this team in the direction, implementation and moniforing of its plans and strategies, a number of management committees have been established and responsibilities delegated. The management committees include:

• $\frac{1}{2}$ Executive Committee
• Investment Committee $\frac{1}{2}$
• Portfolio Review Committee $\frac{1}{2}$
• $\mathbb{S}^d$ Capital Markets Committee

Other management committees have been set up to assist the Board and details of these committees are available on www.dbrreef.com/ povemance

principle 2, structuring the board to add value

2.1 structure of the board

The composition of the Board reflects the duties and responsibilities if discharges as the representative of investors, and in setting each Trust's strategy and overseeing its implementation.

The qualifications for Board membership are the ability and competence to make appropriate basiness recommendations and decisions, an entrepreneurial talent for contributing to the creation of investor value, relevant experience in the industry sector. high ethical standards, sound practical sense and a total commitment to the fiduciary and statutory obligations to further the interests of invesfors. and achieve each Trust's objectives.

The Board currently comprises seven members, four of whom are independent and three of whom are appointed by DB, including the CEO.

The members of the Board as at the date of this Annual Report are detailed in the Directors section of this Annual Report and details of the Alternate Director who resigned during the year are set out in the Directors' Report.

2.2 director independence

Independent Directors are independent of management and free of any business or other relationship that could materially interfere with the exercise of their unfettered and independent judgement. Independent Directors are active in areas which enable them to relate to the strategies of the company and to make a meaningful contribution to the Board's deliberations. The Board regularly assesses the independence of its Independent Directors. in fight of interests disclosed to it.

Directors identified as independent:

• are not substantial shareholders of the company, or an officer of, $\tilde{g}^{\alpha}_{\alpha}$ . or otherwise associated directly with a substantial shareholder of the company:
• 翳 have not been, within the fast three years, employed in an executive capacity by the company, DB or any other group member, or been a Director after ceasing to hold such. employment;
• have not been, within the last three years, a principal of a si. material professional adviser or a material consultant to the company, DB or any other group member, or an employee associated with a service provider;
• have not been a material supplier or customer of the company, 雛 DB or any other group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer.
• sa. have no material contractual relationship with the company. DB or any other group member, other than as a Director of the company;
• have not served on the Board for a period which could, 88 or could reasonably be perceived to, materially interfere with the Director's ability to act in the best interests of the company;
• are free from any interest and any business or other relationship which could, or could reasonably be perceived to, interfere with the director's ability to act in the best interests of the company; and
• a are free from family ties or cross-directorships that may compromise Director independence.

For the parpose of assessing independence, the Board has determined that affiliation with a business which accounts for greater than 2.5 percent of the Group's, or the supplier's revenue would be, as a category, material.

Independent Directors hold office for three years, following their first appointment (or, if appointed by the Board between annual meetings, from the date of the Annual General Meeting immediately succeeding this appointment). It is not generally expected that an Independent Director would hold office for more than ten years, or be nominated for more than three consecutive terms, whichever is the longer. For a description of the procedure for the selection and appointment of new Directors to the Board please refer to www.dbreef.com/governance.

Although the Board is advised by internal Legal Counsel and the Company Secretary, Independent Directors are encouraged to take independent professional advice, at the Group's expense, as required. Independent Directors also confer regularly, outside Board meetings, without the involvement of management and Executive Directors.

2.3 role of the chair

The Chair is an Independent Director, and is responsible for the leadership of the Board, for the efficient organisation and conduct of the Board's functions, and for the briefing of Directors in relation to issues arising pertinent to the Board. The Board has also clearly defined, and the Chair monitors, the responsibilities of the CEO.

2.4 board nomination and remuneration committee

A Board Nomination and Remuneration Committee has been established by the Board to assist in the fulfilment of its responsibilities, by overseeing all aspects of Director and Executive remixteration, performance evaluation and Board nominations. It comprises two Independent Directors (one of whom is the Chair) and two DB appointed members.

The members of the Board Nomination and Remuneration Committee are as follows:

Committee member	Status
Christopher T Beare (Chair)	Independent Director
Stewart F Ewen (OAM)	Independent Director
Brian E Scullin	DB appointed Non-Executive Director
Patricia A Daniels	DB appointed Member

The Committee's nomination and remuneration responsibilities are set out in its Terms of Reference which is available on www.dbrreef.com/governance.

The Board Nomination and Remigneration Committee composition of two independent Directors, one of whom is the Chair, one DB appointed Non-Executive Director and one DB appointed member is in line with the ASX Principles. However, it differs from the ASX. Principles commentary and guidance in that it does not comprise a majority of Independent Directors. This departure reflects the unique shareholding of DR RREEF Funds Management, being 50 percent owned by DB RREEF and 50 percent owned by DB and enables DB to bring to defiberations its experience as a global financial institution, as well as recognising the materiality of its shareholding. The Board has considered this departure from ASX guidelines. and has determined that the departure does not compromise. the objectives of the Committee.

Reporting to the Executive Committee and the Board Nomination and Remuneration Committee, the management Compensation Committee oversees the development and implementation of all human resource management systems, including compensation and recruitment, and advises the Board Nomination and Remuneration Committee.

principle 3, promoting ethical and responsible decision-making

3.1 code of conduct

To ensure the satisfaction of statutory and fiduciary obligations to each of its investor groups and to maintain confidence in its integrity, the Board has implemented a series of clearly articulated compliance policies and procedures by which it requires all employees to abide. Policies relating to employee conduct are summarised in the Employee Code of Conduct, and assist employees in ensuring that their conduct meets the highest ethical and professional standards.

The Code of Conduct includes standards relating to:

• acting efficiently, honestly and fairly at all times;
• acting with due skill and competence; śý.
• complying with the law and internal group policies; 変
• reporting possible inappropriate activity and breaches: sy.
• w. acting in accordance with the responsibilities of managers and supervisors, if applicable;
• managing potential conflicts of interest: 瘿
• s) handling information and property appropriately;
• misuse of the group's assets or position within the group; ss:
• creating and maintaining correct records: .
  S
• 愛 communicating with clients and public appropriately.
• sy. being aware of market conduct requirements; and
• Ø. ensuring employment matters are addressed.

All employees receive regular Code of Conduct training, other compulsory training, including anti-money laundering and routine refresher training. The Employee Code of Conduct is available on www.dbrreef.com/governance.

3.2 insider trading and trading in DB RREEF securities

The Group has implemented a trading policy that sets out the requirements applying to Directors and employees who wish to trade or invest in any of the Group's financial products for their personal account or on behalf of an associate.

• The principle objectives of the trading policy are to:
• avoid insider trading; 89
• avoid conflicts of interest with the Trusts, the Group or its investors-
• ensure that the interests of the Trusts and investors take priority śý. over those of the Group and its employees;
• impose limitations on short term frading and on highly 愛 speculative deals:
• discourage staff members from engaging in periodic trading on 麬 a scale that would distract them from their responsibilities to the Trusts, the Group and investors; and
• raise awareness and minimise any potential breach of the s. prohibitions on insider trading in the Corporations Act.

The policy specifies any Director or employee who wishes to trade inany Trust must obtain written approval before entering into any trade. Approval will not be given during defined blackout periods. These periods commence at the end of the Trusts' half-year or full-year reporting periods and end on the day the Trusts' results are announced.

In addition, if Compliance or the Chief Executive Officer considers that there is the potential that inside information may be held or the potential that a significant conflict of interest could arise, additional blackeat periods may be imposed on Directors and employees at any time.

A summary of the Eraployee Trading policy is available on www.dbrreef.com/governance.

corporate governance statement (continued)

principle 4. safeguarding the integrity of financial reporting

4.1 review and authorisation

The Group has put in place a structure of review and authorisation designed to ensure the truthful and factual presentation of each Trust's financial position.

This structure includes:

• the establishment of a Board Audit Committee to review the financial statements of each entity and review the independence. and competence of the external auditor; and
• 3Ý. semi-annual management representations to the Board Audit Committee, affirming the veracity of each entity's financial statements

4.2 board audit committee

A Board Audit Committee has been established by the Board, including only Directors who are financially literate and have an understanding of the industry in which the Group operates, and one or more of whom have financial expertise. The Board Audit Committee currently comprises two Independent Directors, including the Chair and one DB appointed Director. The Board Audit Committee operates under formal Terms of Reference, has access to management, and internal and external auditors without management present, and has the right and opportunity to seek explanations and additional information. In addition, the external auditor is invited to attend all Board Audit Committee meetings. The Committee may also obtain independent professional advice in the satisfaction of its duties at the cost of the Group. The Committee meets as frequently as required to undertake its role effectively and not less than four times per annum.

The membership of the Board Audit Committee is as follows:

Committee member	Status
Elizabeth A Alexander (Chair) Independent Director
Barry R Brownjohn	Independent Director
Brian F Scellin	DB appointed Non-Executive Director

The Board Audit Committee also has responsibility for approval of the engagement of the external auditor to perform any non-audit. service for a fee greater than \$100,000. The external auditor will not provide services that have the potential to impair the independence of their audit role. Generally such services include those where the external auditor:

• participates in activities that are normally undertaken by $\frac{1}{2} \sum_{i=1}^{n}$ management:
• @ is remanerated on a "saccess fee" basis;
• may be required to review or audit their own work, including: 缀
• the preparation of accounting records;
• the design and implementation of technology systems;
• conducting valuation, actuarial or legal services:
• promoting, dealing in or underwriting securities; or
• providing internal audit services.

The Board Audit Committee's Terms of Reference, the Committee's procedure for the selection and appointment of the external auditor and for the rotation of external audit engagement partners are available on www.dbrreef.com/governance.

principle 5, timely and balanced disclosure

5.1 continuous disclosure

To promote the timely and balanced disclosure of all material matters that impact the Trusts, the Board has put in place mechanisms designed to ensure compliance with ASX Listing Rules and ASIC's disclosure requirements such that:

• all investors have equal and timely access to material information, including the financial situation, performance, ownership and governance of the Trusts; and
• all announcements are factual and presented in a clear and balanced way.

To achieve this objective the Group has the following policies in place:

• $\frac{1}{2}$ Continuous Disclosure and Analyst Briefing Policy, which includes consideration of:
• the type of information that requires disclosure;
• internal notification and decision-making concerning its disclosure obligations;
• the delegation of responsibility to ensure that the Group complies with its disclosure obligations and to identify the employee responsible for determining what will be disclosed;
• measures designed to avoid the emergence of a false market in any Trust's securities; and
• external communications such as analysts briefings and responses to investor queries.
• 8 The Employee Code of Conduct which includes consideration of:
• media contact and comment- and
• safeguarding the confidentiality of corporate information to avoid premature disclosure.

The Group has also established a segregated Compliance function to assist management in the promotion of an effective compliance culture. Compliance responsibilities include the provision of compliance advice, the drafting and updating of relevant compliance. policies and procedures, conducting compliance training and monitoring adherence to key compliance policies and procedures.

For a description of these Policies please refer to the Employee Code of Conduct and the Continuous Disclosure and Analyst Briefings Policy - which are both available on www.dbrreef.com/governance.

principle 6, respecting the rights of security holders

6.1 annual general meeting

The Group respects the rights of investors and to facilitate the effective exercise of those rights the Board has committed to the conduct of an annual general meeting for DB RREEF.

Each annual general meeting will seek to:

• 霧。 supplement effective communication with investors;
• provide investors ready access to balanced and understandable ġ. information about their fund: and
• g. increase the opportunities for investor participation.

Investors of DB RREEF will also ratify the appointment of Independent Directors as outlined in Section 2.2 of this statement.

6.2 communications with investors

in addition to conducting an AGM, the Group has designed a communication strategy to promote effective communication and encourage participation with each Trust's investors. This strategy imels close

• the placement of all relevant announcements made to investors $\otimes$ and the market, and related information, on the DB RREEF website:
• * the practice of teleconferencing analyst and media briefings and general meetings, and posting a transcript of and/or presentation materials on the DB RREEF website;
• placing the full text of notices of meetings and explanatory material on the DB RREEF website; and
• providing information about historic press releases/ $\mathcal{G}_\alpha^{\mathcal{G}}$ announcements and historic financial data on the DB RREEF woheite.

6.3 audit attendance at AGM

The Group will request the external auditor of the Trust to attend each annual general meeting and be available to answer investor questions about the conduct of the audits of both the Trusts' financial records and their Compliance Plans and the preparation and content of the auditor's report.

principle 7, recognising and managing risk

7.1 risk management

The Group has designed a system of risk oversight, management and internal control to identify, assess, monitor and manage risk, and to keep investors informed of material changes in each Trust's risk profile. This system includes the establishment of a Board Risk and Compliance Committee.

7.2 board risk and compliance committee.

Atthough not required by ASIC due to the appointment of a majority independent Board, the Board has established a Board Risk and Compliance Committee to review risk and compliance raatters and monitor the Group's conformance with the requirements of the Managed Investments Act, as specified in Section 6013C of the Corporations Act. The Committee includes only members who are familiar with the requirements of the Managed Investments Act and have extensive risk and compliance experience. The Committee is also encouraged to obtain independent professional advice in the satisfaction of its duties at the cost of the Group.

The Committee currently coraprises five members, three of whom are external members (ie, members that satisfy the requirements) of Section 6013B(2) of the Corporations Act) and two of whom are executives of the Group. The scope of the Committee includes all Trusts, including the Group's investment mandates. The Committee reports to the Responsible Entity any breach of the Corporations Act or breach of the provisions contained in any Trust's Constitution, and further recorts to ASIC if the Committee is of the view that the Responsible Entity has not taken appropriate action to deal with a matter reported to it.

The membership of the Board Risk and Compliance Committee is as follows.

Committee member	Status
Brian Scullin (Chair).	Independent Member
Peter Carrigy-Ryan	Independent Member
Andy Esteban	Independent Member
Tarwa Cox	Executive Member and Chair of the Risk
	Management Committee
Biohn Easy	Executive Member and Chair of the
	Compliance and Internal Audit Committee

In addition to its responsibilities under the Act, the Board Risk and Compliance Committee is responsible for oversight of the DB RREEF Funds Management risk management system, including its internal compliance and controt environment. The Committee's Terms of Reference are available on www.dbrreef.com/governance.

To enable the Board Risk and Compliance Committee to effectively fulfil its obligations, two management committees have been established to monitor the effectiveness of the Group's risk management, internal compliance and control systems. These management committees are the Compilance and Internal Audit. Committee and the Risk Management Committee.

7.3 management representations

In addition to the operation of the above management committees, the Chief Executive Officer makes the following representations in relation to risk management:

• at least quarterly to the Flead of Compliance, regarding conformance with compliance policies and procedures. Any exceptions are reported by Compliance to the Board Risk and Compliance Committee quarterly; and
• on a semi-annual basis to the Board Audit Committee regarding ss: the veracity of the company's financial statements.

corporate governance statement (continued)

11 Tafayera Road, Macouarie Park NSW

7.4 board treasury policy committee

The Board has established a Board Treasury Policy Committee to review and recommend for approval tinancial risk management. policies and hedging and funding strategies, and to monitor overall financial risk management exposures. The Board Treasury Policy Committee includes only members who are familiar with financial risk management concepts. The scope of the Committee includes ail Trosts.

The membership of the Board Treasury Policy Committee is as follows:

Committee member	Status ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Barry & Brownjohn (Chair)	Independent Director
Christopher T Beare	Independent Director
Adviser	Independent Member
Victor P Hoog Antiak	Chief Executive Officer and
	Executive Director
Peter C Roberts	Executive Member and Chair of the
	Capital Markets Committee

The Committee's Terms of Reference are available on www.dbrreef.com/governance.

To assist the Board Treasury Policy Committee in effectively fulfilling its obligations a management Capital Markets Committee has been established.

principle 8. encouraging enhanced performance

The Board is committed to enhancing both its own and management's effectiveness. To achieve this objective the Group has implemented a training regime to facilitate performance by education for Directors and employees. The Group has also implemented a comprehensive performance evaluation program for its employees. to ensure the effectiveness of its education and training programs. The Board Nomination and Remuneration Committee has implemented an arraval performance evaluation program for the Board.

8.1 board education and performance evaluation

The Group is subject to various regulatory and legal obligations, arising from:

• a the Corporations Act (including specifically the provisions of the Managed investments Act);
• the Australian Stock Exchange listing rules and governance 臃 requirements;
• the requirements of an Australian Financial Services Elcence 翳 holder; and
• The Group's governance and compliance framework.

To ensure that Directors have the most current information to meet. the above obligations to discharge their responsibilities effectively and to allow new Directors to participate fully and actively in Board decision-making at the earliest opportunity. Board members receive:

• a Director's Information Pack, including corporate governance. e. framework, committee structures, membership and terms of reference, governing documents. Directors and Officers insprance details, current annual reports and Trust constitutions:
• a Director's induction briefing, including explanation of each Trust's financial, strategic, operational and risk management. position; and
• ^® Director training, where required, including Corporations Act (general duties of a Director, Managed Investment Act duties of a Director). Australian Stock Exchange (governance and listing rules), Australian Financial Services Licence (authorisations, financial and general requirements) and Governance and Compliance Framework (compliance plan, compliance policies) and procedures, monitoring program).

Directors are also encouraged to:

• take independent professional advice, at the Group's expense; 除
• seek additional information from management; and $\otimes$
• directly access the Company Secretary, General Counsel and $\otimes$ Head of Compliance.

The Board Nomination and Remuneration Committee is also responsible for ensuring the effectiveness of the induction process and overseeing the annual performance evaluation of the Board, its committees and individual Directors.

A description of the process for the performance evaluation of the Board is available on our website at www.dbrreef.com/governance.

8.2 employee education and performance evaluation.

The Code of Conduct requires all employees to undertake and maintain a specific type and/or amount of training determined by their job function (eg. to meet licence requirements, to meet the requirements of ASIC Policy Statement PS146 and PS164 or to meet. specific industry or professional body accreditation requirements). Managers and supervisors also have a responsibility to ensure that employees reporting to them have undertaken the required training.

In addition, employees deemed "advisers" are required to have inplace an annual training plan and to undertake a specified number of hours' training per annum. Employees who provide financial product advice to retail investors are also required to become accredited pursuant to ASIC Policy Statement PS146.

Specific minimum compulsory compliance training is provided or co-ordinated by Compliance for all employees and adherence to the training regime is monitored by the Executive Committee.

To foster continuous improvement and to ensure the effectiveness of its education and training programs, the Group conducts an annual performance evaluation of all employees.

8.3 employee performance evaluation

Each year the Board ensures that the goals of the Group are clearly established and that strategies are in place for the achievement of those goals. Goals are reviewed periodically to ensure they remain consistent with the Group's priorities and the changing nature of its business. These goals become the performance targets for the CEO and Executive Committee. Performance against these goals is reviewed annually by the Board Nomination and Remuneration Committee and is taken into account in the remuneration review. of Executive Committee members.

Cascading goals and objectives are established for all other employees and their performance is reviewed annually by the Executive Committee, Remaneration and incentive payments are considered by the Compensation Committee and recommended to the Board Nomination and Remuneration Committee, based on the achievement of approved performance objectives and market comparatives.

principle 9, remunerating fairly and responsibly

Details of the Group's remuneration framework for Non-Executive Directors and employees are set out in the Remuneration Report that forms part of the Directors' Report contained in this Annual Report.

principle 10, recognising the legitimate interests of stakeholders

10.1 stakeholder interests

The Group is aware that the creation of value through the better management of natural, human, social, financial and other resources. is essential to the development of its reputation, and acknowledges the interests of its stakeholders including investors, employees, tenants, bankers/financiers and the broader community, in the further parsuit of this objective.

To address these objectives the Group has in place a Directors' Code of Conduct, which addresses Directors' duties and responsibilities. conflicts of interest, use and confidentiality of information and Director independence. The Director's Code of Conduct is available on www.dbrreef.com/governance.

website

You will find in this Corporate Governance Statement numerous references to information and documents available on www.dbrreef.com/governance or follow the links to investments and then Governance). The governance web page includes a full description of the Group's Governance Framework along with various Committee Terras of Reference, Policies and Codes of Conduct, along with a reconciliation to the ASX Principles.

directors

Christopher T Beare BSc, BE (Hons), MBA, PhD, FAICD Chair and Independent Director Age 55

Chris Beare possesses a wealth of experience in technology, finance and investment. He joined investment bank Hambros Australia in 1991, becoming head of corporate finance in 1994 and joint Chief Executive in 1995, serving until Hambros was acquired by Société Générale in 1998. During that period Hambros was active in infrastructure. telecoms and media. Chris remained a director of SG Australia until 2002. From 1998, he helped form Radiata (a technology start-up spanning Sydney and Silicon Valley). As Chair and Chief Executive Officer, he then steered it to a successful sale to Cisco Systems in 2001. For four years prior to joining Hambros, Chris was Executive Director of the Melbourne-based Advent Management venture capital firm. Chris has been a director of a number of companies in the finance, infrastructure and technology sectors.

Chris is both the Chair and an Independent, Non-Executive Director of DB RREEF Funds Management Limited. He is also the Chair of the Board Nomination and Remuneration Committee and a member of the Board Treasury Policy Committee.

Elizabeth A Alexander AM BComm, FCA, FAICD, CPA Independent Director Age 63

Elizabeth Alexander was formerly a partner with PricewaterhouseCoopers and is currently a Director of Boral Limited and CSL Limited, deputy chair of the Financial Reporting Council, and a member of the Takeovers Panei, Elizabeth's previous appointments include National Chair of the Australian Institute of Company Directors, National President of the Australian Society of Certified Practising Accountants and a member of the Australian Accounting Standards Board. Elizabeth is also Chair of a number of Board audit committees.

Flizabeth is an Independent. Non-Executive Director of DB RREFE Eunds Management Limited and Chair of the Board Audit Committee.

Barry R Brownjohn BComm Independent Director Age 55

Barry Brownighn is a senior consultant with Pacific Road Corporate Finance where he focuses on advising companies. on strategic acquisitions and divestments in the financial services and related technology sectors. He was formerly the Australian Managing Director of the Bank of America. While with the Bank of America, Barry held a range of senior management roles in various overseas locations. He is currently an Advisory Board Member of the South Australia Financing Authority, a Director of Citigroup Pty Limited and Bakers' Delight Holdings Limited. Barry's previous appointments include Chair of the International Banks and Securities Association and the Asia Pacific Managed Futures Association.

Barry is an independent, Non-Executive Director of DB RREEF Funds Management Limited, is the Chair of the Board Treasury Policy Committee and a member of the Board Audit Committee.

Stewart F Ewen OAM FILE Independent Director Age 57

Stewart Ewen has extensive property experience, commencing with the Hooker Corporation in 1966 where he worked throughout Australia and South East Asia. In 1983 he established Byvan Limited which, by 2000, managed \$8 billion in shopping centre assets in Australia, Asia and North America. In 1999, he sold his interest in Byvan to the Savills Group in London, remaining as Chair until 2001. As the major partner of NavyB Pty Ltd he has completed numerous residential and commercial property projects. He has also held the position of Managing Director of Enacon Ltd, and was instrumental in the establishment of Converting Technology Pty Ltd. Stewart has previously served as President of the Property Council of NSW and is a Director of the Cure Cancer Australia Foundation and Cell Bank Australia. Stewart is also a Director of CapitaCommercial Trust Management Eimited, Singapore.

Stewart is an Independent, Non-Executive Director of DB RREEF Funds Management Limited and a member of the Board Nomination and Remisseration Committee.

Andrew J Fay BAg Econ (Hons), ASIA Alternate Director to Charles & Leitner III Age 41

Andrew Fay is Heart of Deutsche Asset Management Australia Limited (DeAM) as well as its Chief Investment Officer for Australia. Andrew is dually responsible for the operation of DeAM's Australian business and the consistency of the investment process for all asset classes within Australia. Andrew idined DeAM in 1994 after six years with the investment division of AMP Global Investors. Andrew sits on the Investment and Financial Services Association (IFSA) Investment Board in Australia. Andrew holds an Honours degree in Agricultural Economics from the University of Sydney and has completed a graduate diploma with the Securities Institute of Australia. Andrew is Deutsche Bank's nominated alternate Director to Charles Leitner.

Victor P Hoog Antink BComm, MBA, FCA, FAPI, MAICD Executive Director Age 52

Victor Hoog Antink joined DB Real Estate after almost nine years at Westfield Holdings where he was the Director of Funds Management, responsible for both the Westfield Trust and the Westfield America Trust. Victor has a commerce degree from the University of Queensland, an MBA from the Harvard Business School, is a fellow of the Australian Property institute, a fellow of the Institute of Chartered Accountants in Australia, and a member of the Institute of Company Directors. Victor has over 25 years' experience in property and finance and is the National President of the Property Council of Australia.

Victor is CEO and an Executive Director of DB RREEF Funds Management Limited and a member of the Board Treasury Policy Committee, Victor is a Deutsche Bank nominated Director.

Charles B Leitner III BA Executive Director Age 47

Charles Leitner is the Global Head of RREEF, the global real estate and infrastructure investment operation of Deutsche Asset Management, which manages Euros €56.2 billion of reat estate investments worldwide. With 23 years' real estate investment experience, Charles joined RREEF in 1988 and became a partner in the firm in 1996. In 2001 he assumed overall responsibility for RREEF's US property acquisition business and in 2004 was appointed Global Head of RREEF. Based in New York, Charles graduated from the University of Pennsylvania with a BA in Lirban Studies/Regional Science. He is a member of the Urban Land Institute, the Real Estate Roundtable and the National Association of Office and Industrial Parks

Charles is an Executive Director of DB RREEF Funds Management Limited and is a Deutsche Bank nominated Director.

Brian E Scullin BEc Non-Executive Director Age 55

Following a career in government and politics in Canberra. Brian Scullin was appointed the inaugural Executive Director of the Association of Superannuation Funds of Australia (ASFA) in 1987, He ioined Bankers Trust in Australia in 1993 and held a number of senior positions, becoming President of Japan Bankers Trust in 1997. In 1999 he was appointed Chief Executive Officer - Asia/Pacific for Deutsche Asset Management and refired from this position in 2002. Brian is a panel member of the Financial Industry Complaints Service Limited and a Director of State Super Financial Services Limited.

Brian is a Non-Executive Director of DB RREEF Funds Management Limited, Chair of the Board Risk and Compliance Committee and is a member of the Board Nomination and Remuneration Committee. Brian is a Deutsche Bank nominated Director

executive committee

L-R: Tanya L Cox, Chief Operating Officer; Ben Lehmann, Head of Portfolio Services; Mark Turner, Head of Unlisted Funds; Victor Hoog Antink, Chief Executive Officer; John Easy, General Counsel; Peter Roberts, Chief Financial Officer,

management team

L-R: Graham Pearson, DWPF Fund Manager; Tony Gulliver, Head of Development and Building Services; John Swadling, Head of Commercial; Bill Reynolds, Senior Investments Manager; Tony Martin, Co-Head of Capital Transactions; Louise Martin, Head of Retail;

a)

financial

TRANSPORTED TO A STORY OF A

en e a shekarar 1999 na shekarar 200

directors' report

The Directors of DB RREEF Funds Management Limited (DRFM) as Responsible Entity of DB RREEF Diversified Trust (the Trust) and its consolidated entities (DB RREEF Trust or Stapled Entity) present their Directors' Report fogether with the consolidated financial statements for the year ended 30 June 2006.

The Trust together with DB RREEF Industrief Trust, DB RREEF Office Trust and DB RREEF Operations Trust form the DB RREEF Trust stapled security.

1. directors and secretaries

1.1 directors

The following persons were Directors or Alternate Directors of DRFM at any time daring the year, and to the date of this Directors' Report:

Directors	Appointed	Resigned
Christopher T Beare	-4 August 2004
Elizabeth A Alexander AM	1 January 2005
Barry R Brownjean	1 January 2005
Stewart F. Ewen OAM	4 August 2004
Victor P Roog Antink	1. October 2004.
Charles B Leitner (II)	30 March 2005.
Brian E Scullin	3. January 2005.
Alternate Director for Charles B Leitner III
Shaun A Mays	30 March 2005	30 January 2006
Andrew J Fav	30 January 2006

Particulars of the qualifications, experience and special responsibilities of current Directors and Alternate Directors at the date of this Directors' Report are set out in the Directors section of the Annual Report and form part of this Directors' Report.

Particulars of the qualifications, experience and special responsibilities of the Alternate Director who resigned during the period are as follows:

Shaun A Mays BSc (Hons), MSc, MBA

(Alternate Director to Charles B Leitner III)

Shaun Mays was appointed the Global Head of RREEF infrastructure investments in May 2005 and is now based in New York. Prior to this appointment Shaun joined Deutsche Asset Management (Australia) Eimited as Australian Chief Executive Officer, Previously Shaun was Managing Director of Westpac Financial Services. He was also Chief Investment Officer of Commonwealth Financial Services and Managing Director and Chief Investment Officer of Mercury Asset Management. He has more than 19 years' experience in the funds management industry, in both executive management and investment positions, gained in Australia, the United Kingdom and the USA. In addition to his traditional asset management expertise, Shaun has experience in the property and private equity sectors. Shaun was Deutsche Bank's nominated Alternate Director for Charles Leitner until January 2006.

1.2 company secretaries

The names and details of the Company Secretaries of DRFM as at 30 June 2006 are as follows:

Tanva L Cox MBA MAICD (Company Secretary)

Appointed: 1 October 2004

Tanya Cox joined DB Real Estate in July 2003 as Chief Operating Officer, responsible for the overall operational efficiency of the 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 of DRFM and DB RREEF Holdings Pty Limited and is a member of the Board Risk and Compliance Committee.

John C Easy B Comm LLB (Company Secretary)

Appointed: 1 July 2005

John Easy joined Deufsche Asset Management as a senior lawyer in 1997 and has been involved in the listing of Deutsche Office Trust and a number of major acquisition, disposal and leasing transactions for the group, John has responsibility for legal issues affecting the property portfolio. John was formerly a senior associate with 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 General Counsel and Company Secretary for DRFM and DB RREEF Holdings Pty Eimited and is a member of the Board Risk and Compliance Committee.

directors' report (continued)

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

The number of Directors' meetings held during the year and each Director's attendance at those meetings is set out in the table below.

During the year the Directors met formally five times to consider general business and 11 times to consider specific business. The Directors also met on one additional occasion to consider strategy in conjunction with senior management.

Board Meetings	Main meetings hel 1	Main meetings attended!	Special meetings held 3	Special meetings attended 1
Directors
Christopher T Beare
Elizabeth A Alexander AM
Barry R Brownjohn
Stewart F Ewen OAM				30
Victor P Hoog Antiak
Charles B. Feitner BIP
Brian E Scullin				30

3 While a Director or Afternate Director

2 Based in New York, USA

Special meetings are held at a time to enable the maximum number of Directors to attend and are generally held to consider specific items that cannot be held over to the next scheduled main meeting.

The number of Board Committee meetings held during the year and each Director's attendance at those meetings is set out in the table below.

	Board Audit Committee		Board Risk and Compliance Committee		Board Nomination and Remuneration Committee		Board Treasury Policy Committee
	Meetings held 1	Meetings attended 2	Meetings hel 1	Meetings attended 1	Meetings held 1	Meetings attended 1	Meetings heid 1	Meetings attended 1
Directors
Christopher T Beare					5	5
Elizabeth A Alexander AM	9	9
Barry R Brownjohn	9	9
Stewart F Ewen OAM 2		4			5	3
Victor P Hoog Antink
Charles B Feitner BL
-Brian-F-Scellin?	in.	4	4	4	b.	5

3 While a member.

2 Stewart F Ewen resigned from the Board Audit Committee and Brian E Scullin was appointed to the Board Audit Committee effective 1 October 2005.

3, directors' and executive remuneration report

The Directors of DB RREEF Funds Management Limited (DRFM) as Responsible Entity of DB RREEF Diversified Trust (the Trust) and its consolidated entities (DB RREEF Trust or Stapled Entity) and DB RREEF Holdings Limited (DRH) present the Remuneration Report prepared in accordance with AASB 124 for the year ended 30 June 2006.

Please note that a reference to remuneration in this report has the same meaning as compensation for the purposes of AASB 124.

3.1 board nomination and remuneration committee.

The Board Nomination and Remuneration Committee oversees the remuneration of Directors and executives. The role and membership of the Board Nomination and Remuneration Committee is set out in the Corporate Governance Statement in this Annual Report. The terms of reference of the Board Nomination and Remuneration Committee can be found on the web page www.dbrreef.com/governance.

3.2 non-executive director remuneration

The disclosures in this section of the report relate to the Non-Executive Directors of DRFM who held office during the year ended 30 June 2006. Particulars of the skills, qualifications and experience of the Directors who held office during the year are set out in the Directors section of this Annual Report.

3.2.1 Non-Executive Directors' remuneration framework

Non-Executive Directors' fees reflect the demands which are made on, and the responsibilities of Directors. Non-Executive Directors' fees 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 are appropriate and in line with the market. Non-Executive Directors receive a base fee plus. an additional tee for membership of a Board Committee. The Chair, taking into account the greater time commitment required, receives a higher fee, which is market benchmarked. The Chair is not present at any discussion relating to the determination of his own fees.

Fees paid to Non-Executive Directors are paid from a remuneration pool of \$1,250,000 per annum, which was approved by DB RREEF Trust investors at the 2005 Annual General Meeting held on 25 November 2005.

						Board and Committee fees paid to Non-Executive Directors for the year ended 30 June 2006 are set out in the table below:

	Directors' fees			Cash salary
	Board	Board Audit Committee	Committee	Board Risk and Board Nomination Compliance and Remuneration Committee	Board Treasury Policy Committee	and fees total
	{\$}	{\$}	(S)	(\$)	(\$)	(\$)
Christopher T Beare	250,000			10.625	7.500	268.125
Elizabeth A Alexander AM	110.000	20,000				130.000
Barry R Brownjohn	110.000	10,000			15.000	135,000
Stewart F. Ewen OAM	110.000	2.500		7.500	1111	120.000
Brian E Scullin	110.000	7.500	20.000	7.500.		145.000
Total	690.000	40.000	20.000	25,625	22.500	798,125

All Non-Executive Directors also receive reimbursement for reasonable travel, accommodation and other expenses incurred whilst undertaking DB RREEF Trust business.

During the year ended 30 June 2006, Charles B Leitner, Executive Director and his Alternate Directors, Shaun A Mays and Andrew J Fay, were employees of Deutsche Bank or a related company (including RREEF America Inc), and were not paid fees or any other remuneration by DRFM or DRH or any of their subsidiaries.

The Chief Executive Officer, Victor P Hoog Antink, does not receive fees in respect of his role as a Director, but does receive remuneration. as a Senior Executive of DRFM.

3.2.2 Remuneration paid

Details of the nature and amount of each element of remuneration for each Non-Executive Director of DRFM for the years ended 30 June 2005 and 30 June 2006 are set out in the following table.

	Short-term employee benefits Total cash fees	Post-employment benefits Super contributions	Total
	$(\$)$	$($ \$)	(\$)
Christopher T Beare
2006	255.986	12,139	268.125
2005 commence 1 Oct 2004	193.125		193.125
Elizabeth A Alexander AM
2006	29.413	100,587	130.000
2005 commence 1 Jan 2005	65,000		65.000
Barry R Brownjohn
2006	34,413	100,587	135,000
2005 commence 1 Jan 2005	60,000		60,000
Stewart F Ewen OAM
2006	110.092	9.908	120.000
2005 commence 1 Oct 2004	92,701	2,924	95.625
Brian E Scullin
2006	132,861	12.139	145.000
2005 commence 1 Jan 2005	68.750	$\cdots$	68,750
Total
2006	562,765	235,360	798.125
2005	479.576	2.924	482,500

directors' report (continued)

3.3 senior executive remuneration

The disclosures in this section of the report relate to the executives listed below, being the Chief Executive Officer and the Senior Executives with authority and responsibility for planning, directing and controlling the activities of DB RREEF Trust during the financial year.

Name	Title	Qualification date of Senior Executives during the 12 months ended 30 June 2006
Tanya E Cox	Chief Operating Officer
John C Easy	General Counsel
Victor P Hoog Antink	Chief Executive Officer
Greg T Lee	Head of Transaction Services	Qualified until 31 January 2006.
Ben 3 Lehmann	Head of Portfolio Services
Peter C Roberts	Chief Financial Officer	Qualified from 5 December 2005.
Mark E Turner	Head of Linksted Funds

3.3.1 Senior Executive remuneration framework

The Nomination and Remuneration Committee has adopted a framework for Senior Executive remuneration (including the remuneration of the Chief Executive Officer) which is based on the following key criteria:

• transparency, competitiveness and reasonableness: $\frac{1}{2}$
• $\tilde{w}$ linked to performance:
• has the ability to attract and retain high quality executives; and $\frac{1}{2} \sum_{i=1}^{2}$
• aligns executives and investor interests. $\tilde{M}^2$

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

In consultation with external remuneration consultants. DRFM has structured a remuneration framework that is market competitive and complementary to its remuneration strategy. Alignment to investors' interests is achieved by a substantial proportion of executive remuneration being dependent upon performance. This ensures that remuneration for Senior Executives, including the Chief Executive Officer, is closely linked to:

• $\mathbb{S}^d$ delivery of forecast returns; and
• achievement of key non-financial value drivers. $\tilde{M}$

The remuneration framework is designed to attract and retain talented and motivated executives, and to encourage enhanced performance. The framework provides executives with a remuneration structure that encourages capability and performance by:

• providing a clear remuneration structure; and $\tilde{w}$
• $\mathbb{S}^d_L$ delivering competitive remimeration for contributing to the creation of value.

3.3.2 Components of Senior Executive remuneration

Senior Executive remaneration comprises the following components:

• $\frac{1}{2} \sum_{i=1}^{2}$ fixed remuneration: and
• variable pay through the short term and long term performance incentives. $\frac{1}{2}$

The more senior the executive the higher the proportion of remuneration "at risk" through short and long term incentives.

Prior to DRFM's corporate restructure in September 2004 the target remuneration mix for Senior Executives was 50 percent base salary and 50 percent short term incentive. Subsequent to the restructure and following consideration of guidance from external advisors the Board Nomination and Remeneration Committee:

• $\frac{1}{2}$ commissioned the development of a long term incentive scheme; and
• revised the target remuneration mix for the Chief Executive Officer and Other Senior Executives to more closely reflect the remuneration structure of DRFM's peer group.

Application of this target mix to the remuneration of the Chief Executive Officer and new recruits was implemented immediately. Application of the farget mix to other Senior Executives is being progressively introduced.

DRFM's current target remuneration mix between fixed, short term and long term incentives for the Chief Executive Officer and Other Senior Executives is outlined below:

Fixed	Short term incentive	Long term incentive
(%	1%.	1%.
w	25
		,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

The Board Nomination and Remuneration Committee continue to review the target remuneration mix for all Senior Executives.

3.3.2a Fixed remuneration

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

3.3.2b Performance management

DREM has in place an armial performance management program which incorporates the establishment of specific measurable, financial and non-financial targets for all executives. Performance targets are utilised to ensure that incentives are only available when yake has been created for investors.

Key performance indicators are typically a combination of financial and non-financial indicators which reflect the executive's role within DRFM and their personal objectives, and may include one or more of the following measures:

Performance indicators	Reason for use
Fund performance indicators
Total return	to ensure focus on an improving security price and delivering income to investors
Earnings growth	to ensure focus on improving earnings.
Distributions growth	to ensure focus on investor distributions.
Net tangible asset growth	to ensure the value of assets is maintained and improved
Property performance indicators
Net property income per property.	to ensure focus on target income returns to investors
Percentage of vacant space per property.	to ensure focus on target income returns to investors.
Expenses against budget	to ensure focus on appropriate cost model.
Non-financial indicators
Delivery	to ensure focus on achievement of non-financial drivers of performance
Team work	to ensure focus on achievement of non-financial drivers of performance
Employee turnover	to ensure focus on achievement of non-financial drivers of performance

3.3.2c The incentive pool

Should DRFM achieve predetermined performance targets, an incentive pool, approved by the Board following the recommendation of the Board Nomination and Remuneration Committee, is available for allocation to executives for the financial year. The size of the incentive pool may be increased for performance above targets to provide an incentive for out-performance. The allocation each executive receives from the incentive pool is based on the particular executive's performance against individual key performance indicators.

3.3.2d Short term performance incentive

At the end of each year, performance against set targets is assessed and the results reflected in the short term performance incentive allocation to each executive. The performance assessment is weighted to non-financial measures that vary between positions but include matters such as achieving delivery of projects, operational improvements, performance enhancements, leadership and team work.

Where performance falls below minimum threshold levels, no short term performance incentive is paid.

Short term performance incentives are payable in cash in August/September each year.

3.3.2e Long term incentives

During the 2005/06 year, the Board introduced a long term incentive scheme designed to achieve the following outcomes:

• * to more closely align Senior Executives' interests with those of investors;
• to give Senior Executives an incentive to create long term, sustainable value for investors by enabling them to benefit from the long term success of DB RREEF Trust's activities; and
• to assist in attracting and retaining high quality executives. 签。

Executives who are eligible to participate in the long term incentive scheme are each of DRFM's executive committee members, and any other Senior Executive who has been approved by the Nomination and Remuneration Committee. Eligible executives may only participate in the long ferm incentive scheme if they achieve key performance indicators to a satisfactory level. No participation is granted for less than satisfactory performance.

The long term incentive scheme employs the following concepts:

• The "Composite Total Return" is 50 percent of the total return of DB RREEF Trust, plus 50 percent of the combined asset weighted total return of DRFM's aplisted funds and mandates; and
• the "Performance Benchmark" is 50 percent of the S&P/ASX 200 Property Accumulation Index for DB RREEF Trust and 50 percent of the Mercers Unlisted Property Fund Index for the unlisted funds and mandates.

directors' report (continued)

DRFM's tong term incentive scheme operates as follows:

• e each year the Board, following a recommendation from the Nomination and Remuneration Committee, allocates eligible executives a long term incentive value. The long term incentive value allocated varies depending on the role of the executive and the executive's performance against key performance indicators.
• the long term incentive value is held by DRFM until the end of the three year vesting period, and is notionally reinvested during the vesting issi. period in the DB RREEF Trust (50 percent of long term incentive value) and DRFM's unlisted funds and mandates (50 percent of long term incentive value). This means that the "banked value" of the long term incentive fluctuates up and down in line with changes in the Composite Total Return:
• at the end of the three year vesting period the final long term incentive payment is determined by grossing up the final "banked value" by the Performance Moltiplier:
• the relevant Performance Multiplier is determined by comparing the Composite Total Return over the three year vesting period against the Benchmark. The table below sets out the appropriate Performance Multiplier based on the comparison of Composite Total Return against the relevant Benchmark performance groups:

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Performance burdie	Less than 95%. of benchmark	Un to 100% of benchmark .	Up to 115% of benchmark .	Up to $130\%$ of benchmark	Greater than 130% -of-benchmark
- Performance Multiplier -	100%	ነገበ%	20%	140%	350%

et consequently, the long term incentive payment made to each Senior Executive at the end of the vesting period is determined by the overall return received by all DRFM's investors compared to the benchmark group, with performance exceeding the benchmark group being recognised by a greater long term incentive payment.

In determining the construction of the Composite Total Return the DRFM Board considered the obligations Senior Executives have to all DRFM's investors in DB RREEF Trust and the unlisted funds and mandates. Following due consideration the Board determined that the appropriate measure for DB RREEF Trust and the unlisted funds and mandates should be the total return of each of the funds. The Board further determined that the performance Benchmark should be the S&P/ASX 200 Property Accumulation Index for DRT and the Mercers Unlisted Property Fund Index for unlisted funds and mandates.

Participants in the long term incentive scheme will only receive cash payments and have no entitlement to DB RREEF Trust securities or securities in any other DRFM product. In addition, if an executive terminates their employment during the vesting period their long term incentive grant is forfeited, unless otherwise determined by the Nomination and Remuneration Committee.

The table below sets out the movement in long term incentive values for each Senior Executive during the year.

Name	Opening long term incentive value outstanding as at 30 June 2005	Fluctuation due to movement in DRFM's Composite Total Return	Additional long term incentive value granted during the year	Closing balance of long term incentive value outstanding as at 30 June 2006 1
Victor P Hoog Antiak	187.500	39.263	250.000	476.763
Tanya £ Cox	10.000	-2.094	-60.000	72.094
Bohn C Easγ	12.500	2.618	50.000	65.118
Greg T Lee 2	12.500
- Beo 33 esmann	50.000	10.470	120.000	180.470
Peter C Roberts			75.000	75,000
Mark F Turner	10.000	2.094	70.000	82.094
Total	282.500	56.539	625.000	951,539

1. No amounts vested under the LTF scheme during the year.

2. Arenants forfailed during the vest

The table below sets out the achievement of an Executive's long term incentive value for the year.

The potential future value of an executive long term incentive entitlement cannot be estimate as it is based on the movements of the Composite Total Return measure which cannot be forecast.

3.3.2f Equity plans and loans

DRFM does not operate a security or option participation scheme or loan scheme for any Director or Senior Executive.

3.3.3 DB RREEF Trust performance

DB RREEF Trust was created as a single stapled security in September 2004. Since stapling DB RREEF Trust's operational and financial performance has been in line with expectations. As stapling occurred in September 2004, DB RREEF Trust has no directly comparable information for prior years.

The following tables detail DB RREEF Trust's financial performance since stapling.

DB RREEF Trust Security Price Performance DRT monthly volume weighted average price

Source: IRESS.

1 Trading in DB RREEF Trust commenced 6 October 2004.

DB RREEF Trust Earnings and Distributions Paid per stapled security and Net Tangible Assets (NTA) per stapled security

Year to 30 June	Earnings per security	Distribution per security	NTA per security
2006	36 44
2005	LR 26	いに

Total return analysis

Composite Total Return - 50 percent of the total return of DB RREEF Trust, plus 50 percent of the combined asset weighted total return of DRFM's unlisted funds and mandates.

Composite Performance Benchmark - 50 percent of the Mercers Unlisted Property Fund Index and 50 percent of the S&P/ASX 200 Property Accumulation Index.

	12 months to 30 June 2006 (%)	Return since 1 October 2004 1 (%)
Composite Total Return	-28.9	37 Ps
Composite Performance Benchmark	16.6	35 B
DB RREEF Trust	20.6	372
S&P/ASX 200 Property Accumatation Index	12.	16.3

1 Inception date is 1 October 2004.

Capital returns

During the year DB RREEF Trust did not buy back any of its securities.

3.3.4 Remuneration paid

Details of the nature and amount of each element of remuneration for the Chief Executive Officer and Other Senior Executives for the years ended 30 June 2005 and 30 June 2006 are set out in the following table.

directors' report (continued)

		Short term employee benefits		Post-employment benefits		Other long term benefits	Total
	Cash salary and fees	Short term incentive	Other short term benefit	Pension and super benefits	Long term incentive amount 2	Other long term benefits
	\$)	$($ \$)	$($ \$}	$($ \$)	$($ \$}	$($ \$)	$($ \$)
Victor P Hoog Antiak
2006	907.714	500,000		92.286	250,000	$\cdots$	1.750.000
2005	681,200	375,000		68,800	187,500		1,312,500
Tanya L Cox
2006	237.861	175.000		12.139	60.000		485,000
2005*	178.811	150,000		8.689	10.000	$\cdots$	347,500
John C Easy
2006	287,861	100,000		12,139	50,000		450,000
2005	163,811	75,000		8.689	12.500		260.000
Greg T Lee
2006*	185.419			7.081			192.500
2005!	216.311	187.500		8.689	12.500		425.000
Ben 3 Lehmann
2006	387.861	230,000		12.139	120.000	$\cdots$	750.000
2005*	216.311	200.000		8,689	50.000	$\cdots$	475.000
Peter C Roberts
20064	150,469	125,000	130,000	22,350	75,000	25,000	527,819
2005
Mark F Turner
2006	274,900	180.000		25,100	70,000		550.000
2005!	178.811	150,000		8.689	10.000		347,500
Total
2006	2.432.085	1.310,000	130.000	183.234	625,000	25.000	4.705.319
2005	1.635.255	1.137.500		112.245	282,500		3.167.500

3 Actual 2005 remuneration received from DRFM was for the nine month period commencing 1 October 2004. Remuneration paid during the three month period to 30 September 2004, the stapling implementation date, was paid by Deutsche Bank and was not a cost of DB RREEF Trust. In addition, the 2005 short term incentive values have been restated to reflect actual incentive values granted to executives in September 2005 which related to the period ended 30 June 2005. Consequently, the 2005 short term incentive amounts and corresponding line totals will differ from those published in the 2005 Annual Report.

2 A long lerm incentive scheme for other Key Management Personnel was introduced in July 2005, with an effective date of I January 2005. The above 2005 long term incentive values were therefore granted for the six month period to 30 June 2005.

3 The Board determined that Greg T Lee qualified as Key Management Personnel for part of the period to 31 January 2006.

4 Other short and long term benefits represent recruitment incentives and the pay out of retained incentives from previous employers. Peter Roberts commenced with DRFM on 5 December 2005.

3.4 employment agreements

The table below outlines employment arrangements for the Chief Executive Officer and Other Senior Executives:

Name and title	Commencement date	Term	Termination provisions/benefits
Victor P Hoog Antink Chief Executive Officer	1 October 2005.	Unlimited in term	In the event of early termination. DRFM is required to give 12 months' notice and may elect to pay out all or part of this notice period. The provision of this payment constitutes full satisfaction of the Company's obligations in respect of notice of termination.
Other Sepior Executives		Liniimited in term-	In the event of early termination. DRFM is required to give three months' notice and may elect to pay out all or part of this notice period.

All other DRH executives have a standard service contract with DRH. These agreements are unlimited in term and provide for one month's notice of termination by either party. However, no notice period is required if termination is for misconduct or serious or persistent breach of the agreement.

Where termination is outside the control of the executive, including Senior Executives, or the executive is made redundant, the termination payment will vary between executives. Where a termination payment is to be made it will be determined:

in the case of Senior Executives, by the Board on the recommendation of the Board Nomination and Remuneration Committee; and

in the case of all other executives, by the Chief Executive Officer on the recommendation of the Compensation Committee. $\mathbb{S}^{\mathcal{M}}_{\mathcal{P}}$

In both situations the payment will take into account the seniority of the executive, the length of service, the performance of the executive, the reasons for termination and the statutory and other rights (if any) of the executive and DRH.

4. directors' interests

4.1 interest in DB RREEF Trust's securities

As at the date of this Directors' Report, the interests of each Director in the securities of DB RREEF Trust are:

Name ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Held personally	Held indirectly
Christopher T Beare	Ni	Wi
Elizabeth A Alexander AM	Nil	Nil
Barry R Brownjohn	Nil	N۱
Stewart F Ewen OAM	Nil	Nil
Andrew J Fay (afternate to Charles B Leitner (1)	Νil	N H
Victor P Roog Antink	Nil	NĦ
Charles B Leitner (II)	Nil	NIJ
Brian E Scullin	Ni	NB

As at the date of this Directors' Report, no Director, Alternate Director or any officer of DRFM held options over, or any other confractual inferest in, securities in DB RREEF Trust.

4.2 other interests

As at the date of this report, no Director or Alternate Director held an interest in any other fund managed by DRFM, or any other entity that forms part of DB RREEF Trust.

5. directors' directorships in other listed entities

The following table sets out directorships of other listed entities, not including DRFM, held by the Directors at any time in the three years. immediately prior to the end of the year, and the period for which each directorship was held:

Director	Company	Date appointed	Date resigned
	CSL Crmited	.Jul 1991
	Boral Limited	Sep 1994
Flizabeth A Alexander AM	AMCOR Limited	Acr 1994	-Crit 2005
Brian E Scullin	Deutsche Asset Management (Australia) Limited 3	-20 Dec 1999 -
	IYS Instalment Receipt Limited 1	24 Oct 2005
Alternate Director
Andrew J Fay (afternate to Charles B Leitner (iii)	Deutsche Asset Management (Australia) Limited 3	4 May 2005
	IYS Instalment Receipt Limited!	4 May 2005

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

6. principal activities

During the year the principal activity of DB RREEF Trust was real estate funds management and investment in real estate assets. There were no significant changes in the nature of the Stapled Entity's activities during the year.

The number of employees of the Stapled Entity during the reporting period to 30 June 2006 was 132 (2005:123).

7, total value of trust assets

The total value of the assets of DB RREEF Trust as at 30 June 2006 was \$8.287.5 million (2005:\$6.985.0 million). Details of the basis of this valuation are outlined in note 1 of the Notes to the financial statements and form part of this Directors' Report.

8. review and results of operations

A review of the results, financial position, operations including business strategies and the expected results of operations of DB RREEF Trust, is set out in the Chief Executive Officer's Report in this Annual Report.

9. Ilkely developments and expected results of operations

In the opinion of the Directors, disclosure of any information regarding business strategies and the future developments or results of DB RREEF Trust, other than the information already outlined in this Directors' Report or the financial statements accompanying this Directors' Report, would be unreasonably prejudicial to DB RREEF Trust.

directors' report (continued)

10. significant changes in the state of affairs

The Directors of the Responsible Entity are not aware of any matter or circumstance, not otherwise dealt with in this Directors' Report. or the Financial Statements that has significantly or may significantly affect the operations of DB RREEF Trust, the results of those operations, or the state of DB RREEF Trust's affairs in future financial years.

11. matters subsequent to the end of the financial vear

Since the end of the year the Directors of the Responsible Entity are not aware of any matter or circumstance not otherwise dealt with inthis Directors' Report or the Financial Statements that has significantly or may significantly affect the operations of DB RREEF. Trust, the results of those operations, or the state of DB RREEF Trust's affairs in future financial years.

12. distributions

Distributions paid or payable by DB RREEF Trust for the year ended 30 June 2006 were 11.0 cents per security (2005:10.5 cents per security) as outlined in note 32 of the Notes to the Financial Statements.

13. responsible entity fees and associate interests

Details of fees paid or payable by the Trust to the Responsible Entity for the year ended 30 June 2006 are outlined in note 36 of the Notes to the Financial Statements and form part of this Directors' Report.

The number of interests in DB RREEF Trust held by the Responsible Entity or its associates as at the end of the financial year are disclosed in note 36 of the Notes to the Financial Statements and form part of this Directors' Report.

14. interests in DB RREEF Trust

The movement in securities on issue in DB RREEF Trust during the year and the number of securities on issue as at 30 June 2006 are detailed in note 29 of the Notes to the Financial Statements and form part of this Directors' Report.

DB RREEF Trust did not have any options on issue as at 30 3ane 2006 (2005) ril).

15. environmental regulation

The Directors of the Responsible Entity are satisfied that adequate systems are in place for the management of its environmental responsibilities and compliance with its 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 compilance with environmental receirements.

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.

The auditors are in no way indemnified out of the assets of the Stabled Entity.

17 audit

17.1 auditor

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

17.2 non-audit services

Defails of the amounts paid to the Auditor, which include amounts paid for non-audit services are set out in note 7 of the Notes to the Financial Statements.

The Board Audit Committee is 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 behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The reasons for the Directors being satisfied are:

• Board Audit Committee has determined that the external auditor 验。 will not provide services that have the potential to impair the independence of its audit role, including:
• participating in activities that are normally undertaken by management; and
• being remixterated on a "success fee" basis.
• 1. Board Audă Commâtee has determined that the Auditor will not provide services where the Auditor may be required to review or audit its own work, including:
• the preparation of accounting records; $\sim$
• 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.
• a Board Audit Committee regularly reviews the performance and independence of the Auditor and whether the independence of this function has been maintained having.
• regard to the provision of non-audit services:
• the Auditor has provided a written declaration to the Board regarding its independence at each reporting period; and
• 8 Board Audit Committee approval is required before the engagement. of the Auditor to perform any non-audit service for a fee in excess of \$100,000.

The above Directors' statements are in accordance with the advice received from the Brand Austit Committee.

17.3 audit independence declaration

A copy of the Auditors' Independence Declaration as required under section 3070 of the Corporations Act 2001 is set out in the financial statements and forms part of this Directors' Report.

18. corporate governance

The Responsible Entity's Corporate Governance Statement is set out in a separate section of this Annual Report.

19. rounding of amounts and currency

DB RREEF Trust is a registered scheme of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission, relating to the "rounding off" of amounts in this Directors' Report and the financial statements. Amounts in this Directors' Report and financial statements have been rounded off in accordance with that Class Order to the nearest thousand dollars. unless otherwise indicated. All figures in this Directors' Report and the financial statements, except where otherwise stated, are expressed in Australian dollars.

20, management representation

The Chief Executive Officer and the Chief Financial Officer have reviewed DB RREEF Trust's financial reporting processes, policies and procedures together with its risk management and internal control and compliance policies and procedures. Following that review it is their opinion that DB RREEF Trust's financial records for the financial year 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 Directors' Report is made in accordance with a resolution of the Directors.

Char Sea

Christopher T Beare Chair 22 August 2006

Victor P Hoog Antink Chief Executive Officer 22 August 2006

auditor's independence declaration

Listably animality a actume approved woder Protessions Standards Legistable

income statements

FOR THE YEAR ENDED 30 JUNE 2006

			Consolidated		Parent Entity
	Note(s)	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Revenue from ordinary activities
Property revenue	2	659,749	508,795	145,763	153,263
Distribution revenue				10,425	8,102
Dividend revenue		11,900		30,222 627	600
interest revenue			5,932
Total revenue from ordinary activities		671,649	514,727	187,037	161,965
Share of net profits of associates accounted for using the equity method	16	26,911	12,544
Net gain on sale of investment properties		1,490	25,707	112	21,765
Net fair value gain of investment properties		686,490	256,607	186,002	43,935
Net fair value gain of investments			$\cdots$	99,488	41,185
Net fair value gain of derivatives		73,271	$\cdots$	15,349
Net foreign exchange gain/(loss)		2,903	42	(3,154)	9,461
Other income		519	260.	190
Total income		1,463,233	809,887	485,024	278,311
Expenses
Property expenses		(160, 651)	(126, 485)	(36, 211)	(40,070)
Responsible Entity fees Finance costs	36 з	(28, 695) (166, 116)	(21,141) (117, 265)	(10, 534) (35, 377)	(8,690) (21, 399)
Depreciation		(1,023)	$\cdots$	$\cdots$
Costs associated with the Transaction	4	(480)	(42, 281)	(160)	(14,795)
impairment of goodwill	20	(3,287)
Other expenses	6	(7,473)	(9,206)	(1,523)	(1,753)
Total expenses		(367,725)	(316, 378)	(83, 805)	(86,707)
Profit before tax		1,095,508	493,509	401,219	191,604
Tax expense
income tax expense Withholding tax expense	5 5	(1,169) (27,954)	(990) (25, 586)
Total tax expense		(29, 123)	(26, 576)
Profit after tax		1,066,385	466,933	401,219	191,604
Profit attributable to: Equity holders of the parent entity		398,925	191,565	401.219	191,604
Equity holders of other stapled entities (minority interest)		611,417	204,466
Stapled security holders		1,010,342	396,031	401,219	191,604
Net profit attributable to other minority interests		56,043	70,902
Net profit		1,066,385	466,933	401,219	191,604
Earnings per unit		Cents	Cents	Cents	Cents
Basic earnings per unit on profit attributable
to equity holders of the parent entity	41	14.39	8.83	14.47	8.83
Diluted earnings per unit on profit attributable to
equity holders of the parent entity	41	14.39	8.83	14.47	8.83

The above income Statements should be read in conjunction with the accompanying notes.

balance sheets

AS AT 30 JUNE 2006

			Consolidated		Parent Entity
	Note(s)	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Current assets
Cash and cash equivalents	8	106,428	68,959	15,743	10,238
Receivables	9	35,254	29,859	22,109	8,883
Held for safe investment properties Inventories	13 10	24,000 3.344	48.469
Derivative financial instruments	11	92,478		26,054
Loans and receivables	18	45,092	45.092
Current tax assets Other	12	289 6,050	$\cdots$ 15,956	1,227	2.072
Total current assets		312,935	208,335	65,133	21,193
Non-current assets
Investment properties	13	7,579,447	6,520,919	1,673,804	1,398,751
Property, plant and equipment	14	152,966	27,913
Other financial assets at fair value through profit or loss	15 16		208,732	247,172	233,867
Investments accounted for using the equity method Investments in associates	16	235,062 $\mathbf{u}$		454,398	332,615
Deferred tax assets	17	116	127
Goodwill	20		3,215
Other	21	7.012	15,762	750	3,647
Total non-current assets		7,974,603	6,776,668	2,376,124	1,968,880
Total assets		8,287,538	6,985,003	2,441,257	1,990,073
Current liabilities
Payables Interest bearing liabilities	22 23	100,901 244,553	118,479 369,836	15,671	12,880
Loans with related parties	19			34,332	34,332
Current tax liabilities		3,156	2,547
Provisions	24	155,523	144,800	54,178	67.756
Derivative financial instruments Other	$\frac{1}{2}$ 25	20,477 5,452	8,673	9,052	1,121
Total current liabilities		530,062	644,335	113,233	116,089
Non-current liabilities
Interest bearing liabilities	23	2,950,494	2,421,728	706,986	581,077
Deferred tax liabilities	26	48,726	23.685
Financial liability with minority interest Other	27 28	29.105 13,638	29.543	1,084	3,926
Total non-current liabilities		3,041,963	2,474,956	708,070	585,003
Total liabilities		3,572,025	3,119,291	821,303	701,092
Net assets		4,715,513	3,865,712	1,619,954	1,288,981
Equity
Equity attributable to equity holders of the parent entity
Contributed equity	29	1,094,144	1,059,867	1,094,144	1,059,866
Reserves Undistributed income	30 30.	739 524,375	(649) 229,075	525,810	229,115
Parent entity security holders' interest		1,619,258	1,288,293	1,619,954	1,288,981
Equity attributable to equity holders of other
entities stapled to DDF (minority interest)
Contributed equity	29	2,094,887	2,034,388
Reserves Undistributed income	30 30.	(561) 574,078	(474) 178,147
Other stapled security holders' interest		2,668,404	2,212,061	n×.
Stapled security holders' interest		4,287,662	3,500,354	1,619,954	1,288,981
Other minority interest	31	427,851	365,358
Total equity		4,715,513	3,865,712	1,619,954	1,288,981

The above Balance Sheets should be read in conjunction with the accompanying notes.

statements of changes in equity

FOR THE YEAR ENDED 30 JUNE 2006

			Consolidated		Parent Entity
	Note(s)	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Total equity at the beginning of the year		3,865,712	1,192,652	1,288,981	1,192,652
Adjustment on adoption of AASB 132 and AASB 139.
net of tax: Undistributed income		3.443		2.165
Exchange differences on translation of
foreign operations	30	1,301	(1.250)
Net income recognised directly in equity		4.744	(1,250)	2,165
Net profit		1,066,385	466,933	401,219	191,604
Total recognised income and expense for the year		1,071,129	465,683	403,384	191,604
Transactions with equity holders in their capacity as equity holders:
Contributions of equity, net of transaction costs	29	94.776	143.033	34,278	57.558
Net capital contributions/(distributions)
to staple, net of transaction costs			54,472		(25.720)
Distributions provided for or paid	32	(306, 259)	(281.303)	(106.689)	(127,113)
Transactions with rainority interest:
Contributions of equity, net of transaction costs		7.649	262,012
Distributions provided for or paid Minority interest on acquisition of subsidiary	32	(21, 964)	(461) 37,773
Foreign currency translation reserve		4.470	(4.868)
Additional equity acquired on stapling Foreign currency translation reserve acquired on stapling			1.868.722 127
Undistributed income acquired on stapling			127,870
Total transactions with equity holders		(221, 328)	2,207,377	(72, 411)	(95, 275)
Total equity at the end of the year		4,715,513	3,865,712	1,619,954	1,288,981
Total recognised income and expense for the year
is attributable to: Equity holders of the parent entity - DDF unitholders		403,377	190.916	403,384	191.604
Equity holders of other stapled entities
(minority interest)		611,428	203.865
Security holders of DB RREEF Diversified Trust		1,014,805	394,781	403.384	191,604
Other minority interest		56,324	70,902
Total recognised income and expense for the year		1,071,129	465,683	403,384	191,604

The above Statements of Changes in Equity should be read in conjunction with the accompanying notes.

cash flow statements

FOR THE YEAR ENDED 30 JUNE 2006

2006 Note(s) 2005 2006 2005 \$'000 $000*$ \$′000 \$'000 Cash flows from operating activities Receipts in the course of operations (inclusive of GST) 733.609 540.713 154,091 196.488 (252, 829) Payments in the course of operations (inclusive of GST). (174, 785) (60.182) Interest received 9,295 3.373 581 (171.697) (135.504) Finance costs paid to financial institutions (7.796) Distributions received 12,165 8.212 35,750 9.026 Dividends received 1,500 $\cdots$ (4.018) (760) Income and withholding taxes paid Net cash inflow from operating activities 39 328,025 241,249 122,444 145,113 Cash flows from investing activities Proceeds from safe of investment properties 11,221 505.117 109 463.446 Payment for purchase of controlled entity, net of cash acquired (485, 165) $\ddot{\phantom{a}}$ Cash acquired on stapling 14,285 $\ddot{\phantom{a}}$ $\ddot{\phantom{a}}$ (218.013) (90.379) Payments for capital expenditure on investment properties. (176.787) (85.722) Payments for investment properties (155.597) (124.376) (61, 927) $\ddotsc$ Payments for investments accounted for using the equity method (16, 269) (157.437) (60.131) Payments for inventories (3,362) Payments for property, plant and equipment (7,72) Payments for capital expenditure on property (70, 542) plant and equipment Lean to/from controlled entities 3,793 Proceeds from repayment of third party loan 5,049 Payments for other financial assets at fair value through profit or loss (455, 225) Net cash outflow from investing activities (424, 363) (145,744) Cash flows from financing activities Proceeds from issue of RENTS units 204,000 Increase in minority interest 7.814 64.125 Borrowings provided to the Trusts (85.963) Borrowings provided by the Trusts 126.582 276.978 Establishment expenses and unit issue costs (267) (6.566) Proceeds from borrowings 977,813 1.774.507 77,509 136.000 Repayment of borrowings (602.066) (1,768,391) (3, 341) Distributions paid to security holders (200, 900) (16, 191) (85,982) Distributions paid to other minority interests (461) (18,918) Net cash inflow from financing activities 163,476 251,023 28,805 69,249 Net inflow in cash and cash equivalents 36,276 67,909 5,505 7,751 Cash and cash equivalents at the beginning of the year 68,959 10,238 2.487 2.487 Effects of exchange rate changes on cash		Consolidated	Parent Entity
			(51, 492)
			600.
			(9.509)
			(231, 290)
			(290,254)
			(206, 611)
			(162, 338)
			(165, 200)
			(16, 191)
and cash equivalents 1.193 (1,437)
68.959 10.238 Cash and cash equivalents at the end of the year 106,428 15.743

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

notes to the financial statements

FOR THE YEAR ENDED 30 HUNE 2006

note 1. summary of significant accounting policies

(a) basis of preparation

On 30 September 2004, DB RREEF Diversified Trust (the Trust) and its subsidiaries (the Stapled Entity) was formed by the stapling together of DDF, DFT, DOT and DRO (the Trusts). In accordance with AASB Interpretation 1002 Post-Date-of-Transition Stapling Arrangements, the Stapled Entity reflects a consolidated group. The parent entity and deemed acourrer of the trusts is DDF. The consolidated results reflect the performance of the parent, DDF, from 1 July 2004 and the additions of DIT, DOT and DRO from the date of consolidation, being 1 October 2004. Equity attributable to other stapled entities is a form of minority interest in accordance. with AASB 1002 and in the DDF consolidated column, represents the equity of DfT, DOT and DRO. Other minority interests represent the equity attributable to parties external to the Stapled Entity.

The DDF Consolidated column represents the consolidated financial report of DDF, which comprises DDF and its controlled entities. DIT and its controlled entities. DOT and its controlled entities and DRO and its controlled entities.

DRT stapled securities are quoted on the Australian Stock Exchange under the code DRT and comprise one unit in each of the Trust, DIT, DOT and DRO. These units can not be traded separately. 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.

This financial report for the vear ended 30 June 2006 has been prepared in accordance with the requirements of the Trusts' Constitutions, the Corporations Act 2001 and Australian Equivalents to international Financial Reporting Standards (AIFRS).

This financial report is prepared on the going concern basis 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 for the revaluation of certain non-current assets and financial instruments. (refer notes $l(t)$ , $l(n)$ , $l(p)$ and $l(t)$ ),

This is the first financial report prepared in accordance with AIFRS. The Stapled Entity changed its accounting policies on 1 July 2005. to comply with AIFRS. The transition to AIFRS has been accounted for in accordance with AASB 1: First Time Adoption of Australian Equivalents to International Financial Reporting Standards, with 1 July 2004 as the date of transition. Reconciliations and descriptions of the effects of transition from previous AGAAP to AIFRS are provided in note 43.

Critical accounting estimates

The preparation of financial statements in conformity with AFRS may require the use of certain critical accounting estimates and management to exercise its judgement in the process of applying the Trust's accounting policies. Other than the estimation of fair values described in notes 1(f) and 1(p), no key assumptions concerning the future, or other estimation of uncertainty at the reporting date, have a significant risk of causing material adjustments to the financial statements in the next annual reporting period.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2006. With the exception of financial instruments, the comparative information presented in these financial statements has been restated to reflect these adjustments.

The Stapled Entity has taken the exemption available under AASB 1 to only apply AASB 132: Financial Instruments - Disclosure and Presentation and AASB 139: Financial Instruments - Recognition and Measurement from 1 July 2005.

The Stapled Entity has elected not to apply AASB 3: Business Combinations retrospectively to business combinations that occurred prior to the transition date of 1 July 2004.

(b) principles of consolidation

Controlled entities

The financial statements have been prepared on a consolidated basis in recognition of the fact that while the securities issued by the Trusts are stapled into one trading security and cannot be tracted separately, the financial statements must be presented on a consolidated basis. The parent entity and deemed acquirer of the Trasts is DDE

On 30 September 2004, DDF was deemed to have acquired the other Trusts and as a result, the underlying assets and liabilities. of the other Trusts were adjusted to fair value as at this date. Information from the financial statements of the subsidiaries has been included from 1 October 2004. It should be noted that investors in DRT have been entitled to the returns from the underlying Trusts from 1 July 2004. The accounting policies of the subsidiary Trusts are consistent with those of the parent.

The financial statements incorporate an elimination of inter-entity transactions and balances to present the financial statements on a consolidated basis.

Net profit and equity in controlled entities, which are attributable to the unit holdings of minority interests are shown separately in the Income Statements and Balance Sheets respectively.

Where control of an entity is obtained during a financial year, its results are included in the Income Statements from the date on which control is obtained.

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

Partnerships and joint ventures.

Where assets are held in a partnership or joint venture with another entity directly, the Stapled Entity's share of the results and assets of this partnership or joint venture is consolidated into the Income-Statements and Balance Sheets of the Stapled Entity. Where assets are jointly controlled via ownership of units in single purpose. unlisted unit trusts or shares in companies, the Stapled Entity applies equity accounting to record the operations of these investments (refer note 1(s)).

(c) other financial assets at fair value through profit or loss.

Interests held by the Trust in controlled entities and associates are measured at fair value with changes in fair value recognised immediately in the Income Statements.

(d) revenue recognition

Rent

Rental income is brought to account on a straight-line basis over the lease term for leases with fixed rent review clauses, in all other circumstances rental income is brought to account on an accruats. basis. If not received at balance date, rental income is reflected in the Balance Sheets as a receivable. Recoverability of receivables is reviewed on an ongoing basis. Debis which are known to be not collectable are written off.

note 1. summary of significant accounting policies (continued)

(d) revenue recognition (continued)

Interest income

Interest income is brought to account on an accruais basis using the effective interest rate method and, if not received at the balance date, is reflected in the Balance Sheets as a receivable.

Dividends and distribution income

Income from dividends and distributions is recognised when declared. Amounts not received at balance date are included as a receivable in the Balance Sheets.

(e) expenses

Expenses are brought to accesint on an accruats basis and, if not paid at the balance date, are reflected in the Balance Sheets as a pavable.

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 Trusts.

Financing costs to financial institutions

Financing costs include interest expense and other costs incurred in respect of obtaining finance. Other transaction costs incurred including loan establishment fees in respect of obtaining finance are applied against the related financings with the amortisation of such costs being recognised through the effective interest rate on the financing over the term of the respective agreement.

Financing costs are expensed unless they relate to qualifying assets. Qualifying assets are assets which take a substantial period of time. to prepare for their intended use or sale. Where funds are borrowed specifically for the acquisition or construction of a qualitying asset. financing costs capitalised are those incurred in relation to that financing, net of any interest earned on those financings. Where funds are borrowed generally, financing costs are capitalised using a weighted average capitalisation rate.

(f) derivatives and other financial instruments

The Stapled Entity has adopted the exemption available under AASB 1 to apply AASB 132 and AASB 139 from 1 July 2005. Therefore, the Stapled Entity has applied superseded AGAAP in the comparative information on financial instruments within the scope of AASB 132 and AASB 139.

Under AGAAP, the accounting policies were as follows:

The Stapled Entity'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 rate risk respectively. In conjunction with its advisers, the Responsible Entity continually reviews the Stapled Entity's exposures and updates its treasury policies and procedures. The Stapled Entity 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 underiving assets or liabilities.

The accounting policies adopted prior to 1 3sly 2005 in relation to material financial instruments are detailed below:

(i) Debt instruments

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

(ii) Interest rate swaps

The Stapled Entity 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 Income Statements on an accruals basis over the life of the hedges.

(iii) Forward exchange contracts

Forward exchange contracts are entered into by the Stapled Entity to hedge its earnings exposure in relation to foreign investments. This currency hedge rate is used to translate items in the Income Statements.

The unrealised gains receivable/losses payable in respect of all currency hedges are recorded on the Balance Sheets.

The accounting policies set out below are applicable from 1 July 2005.

(i) Derivatives

The Stapled Entity's activities expose it to changes in interest rates and foreign exchange rates. Accordingly, the Stapled Entity enters into various derivative financial instruments to manage its exposure to the movements in interest rates and foreign exchange rates. Policies and limits are 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 risks and foreign currency risks. In conjunction with its advisers, the Responsible Entity continually reviews the Stapled Entity's exposures and updates its treasury policies and procedures. The Stapled Entity does not trade in derivative instruments for speculative purposes.

Even though the derivatives entered into aim to provide an economic. hedge to interest rate and foreign corrency risks, the Stapled Entity has elected not to apply hedge accounting under AASB 139: Financial Instruments - Recognition and Measurement. Accordingly derivatives, including interest rate swaps and foreign exchange forward contracts, are measured at fair value with any changes. in fair value recognised immediately in the Income Statements.

(ii) Embedded derivatives

Derivatives embedded in other financial instruments or other host. contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of host contracts and the host contracts are not measured at fair value with changes in fair value recognised in the income Statements.

(iii) Debt and equity instruments issued by the Stapled Entity Financial instruments issued by the Stapled Entity are classified as either liabilities or as equity in accordance with the substance of the contractual arrangements. Accordingly, ordinary units issued by DDF, DIT, DOT and DRO are classified as equity.

Further securities issued by RENTS, a controlled entity, are classified as equity and are treated as minority interest.

Interest and distributions are classified as expenses or as distributions of profit consistent with the balance sheet classification. of the related debt or equity instruments.

Transaction costs arising on the issue of equity instruments are recognised directly in equity (net of tax) as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued.

(iv) Loans and receivables

Loans and other receivables are measured at amortised cost using the effective interest rate method less impairment.

(g) goods and services fax

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 the expense.

Cash flows are included in the Cash Flow Statements on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from or payable to the ATO is classified as operating cash flows.

(h) taxation

Under current Australian income tax legislation DDF, DIT and DOT are not fiable for income tax provided they satisfy the requirements. of the ATO. However, DRO as a trading trust is subject to tax as follows:

• the income tax expense for the year is the tax payable on the current year's taxable income based on a tax rate of 30 percent. adjusted for changes in deferred tax assets and liabilities and sienised fax inssec-
• $\otimes$ deferred tax assets and fiabilities are recognised for temporary differences arising from differences between the carrying araount of assets and fiabilities and the corresponding tax base of those items. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary. differences to measure the deferred tax assets or liabilities;
• deferred tax assets are recognised for deductible temporary $\otimes$ differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses;
• « deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future; and
• ^® current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly. in equity.

Withholding tax payable on dividends received by the Stapled Entity from DB RREEF industrial Properties Inc (US REIT) is recognised as an expense as incurred. In addition, a deferred tax liability or asset and related deferred tax expense/benefit is recognised on differences between the tax cost base of US assets and liabilities in the Trust (held by US REIT) and their accounting carrying values at balance date. Any deferred tax liability or asset is calculated using a blend of the current withholding tax rate applicable to income distributions and the applicable US federal and state taxes.

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

(i) distributions

In accordance with the Trust's Constitution, the Trust distributes its distributable income to paitholders by cash or reinvestment. Distributions are provided for when they are declared.

(i) repairs and maintenance

Plant is required to be overhauled on a regular basis and 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 replaced component will be derecognised and the replacement costs capitalised in accordance with note 1(p). Other routine operating maintenance, repair costs and minor renewals are also charged as expenses as incurred.

(k) cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject. to an insignificant risk of changes in value.

(1) receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, which is based on the invoiced amount less provision for doubtful debts. Trade receivables are required to be settled within 30 days and are assessed on an ongoing basis for impairment. Receivables which are known to be uncollectable are written off. A provision for doubtful debts is established when there is objective evidence that the Stabled Entity. will not be able to collect all amounts due according to the original terms of the receivables.

(m) inventories

Properties undergoing or having completed construction or development for ultimate sale, are classified as inventory and are measured at the lower of cost or net realisable value. Costis assigned by specific identification and includes the cost of acquisition, development and finance costs during development. After development is completed, finance costs and other holding charges are expensed as incurred.

(n) property, plant and equipment

All property, plant and equipment is initially recognised at cost. including transaction costs. Land and freehold buildings are accounted for asing the cost method. Construction in progress is subsequently recognised at fair value in the financial statements.

Revaluation increments are credited directly to the asset revaluation reserve, unless they are reversing a previous decrement charged as as expense in the Income Statements, in which case they are credited directly to the Income Statements.

Revaluation decrements are recognised directly as an expense in the Income Statements, unless they are reversing a revaluation increment. previously credited to, and still included in the balance of the asset revaluation reserve, in which case they are debited directly to the asset revaluation reserve.

note 1. summary of significant accounting policies (continued)

(o) depreciation of property, plant and equipment

Land is not depreciated. Depreciation on buildings (including fit-out) is calculated on a straight-line basis so as to write off the net cost of each non-current asset over its expected useful life. Buildings (including fit-out) have estimated useful lives of between five and 50 years. Estimates for useful lives are reviewed on a regular basis.

(p) investment properties

Investment properties consist of properties held for long term rental vields, capital appreciation or both. Investment properties are initially recognised at cost including transaction costs. Investment properties are subsequently recognised at fair value in the financial statements.

The basis of valuation of investment properties is fair value, being the amount 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. Where this is not available, an appropriate valuation method is used, which may include the discounted cash flow and the capitalisation method. Discount rates and capitalisation rates are determined based on the Trust's expertise, knowledge of the industry and where possible a direct comparison to third party rates for similar assets in a comparable location. Rental income from current leases and assumptions about future leases, as well as any expected operational cash oufflows in relation to the property, are also reflected in fair value.

External valuations of the individual investments are carried out in accordance with the Trusts' Constitutions, or may be earlier where the Responsible Entity believes there is a potential for a material change in the fair value of the property.

Changes in fair values are recorded in the Income Statements. The gain or loss on disposal of an investment property 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 Income Statements in the year of disposal.

Subsequent redevelopment and refurbishment costs (other than repairs and maintenance) are capitalised to the investment property where they result in an enhancement in the future economic benefits of the property. Repairs and maintenance are accounted for inaccordance with note 1(i).

Held for sale investment properties

Investment properties intended for sale are separately disclosed. on the Balance Sheets as "Held for safe investment properties". Such properties are measured using the same methodology as investment properties.

(g) leasing fees

Leasing fees incurred are capitalised and amortised over the lease periods to which they relate.

(r) lease incentives

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

The costs of incentives are recognised as a reduction of rental income on a straight-line basis from the earlier of the date which the tenant has effective use of the premises or the lease commencement. date to the end of the lease term. The carrying amount of the lease incentives is reflected in the fair value of investment properties.

(s) investments accounted for using the equity method

Some property investments are held through the ownership of units in single perpose unlisted trusts or shares in unlisted companies. where the Stapled Entity exerts significant influence or joint control. but does not have a controlling interest. These investments are considered to be associates and the equity method of accounting is applied in the financial statements.

Under this method, the entity's share of the post-acquisition profits of associates is recognised as income in the Consolidated Income Statements. The curriciative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends or distributions receivable from associates are recognised in the parent. entity's Income Statements, while in the consolidated financial statements they reduce the carrying amount of the investment.

When the Stabled Entity's share of losses in an associate equals or exceeds its interest in the associate (including any unsecured receivables) the Stapled Entity does not recognise any further losses. unless it has incurred obligations or made payments on behalf of the associate.

(t) acoulsition of assets

The purchase method of accounting is used for all acquisitions. including business combinations. Cost is measured as the fair value of the assets given up, shares issued or liabilities assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition, the value of the instruments is their published market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuation methods providea more reliable measure of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Identifiable assets acquired and fiabilities and contingent fiabilities assumed in a business combination are measured initially at their fair values. The excess of the acquisition cost over the fair value of the assets and tiabilities acquired is recorded as goodwill (refer note) 1(u)). If the cost is less than the fair value of the net assets acquired. the difference is recognised directly in the Income Statements.

Where settlement of any part of the cash consideration is deferred, the amounts payable in the future are discounted to their presentvalue as at the date of exchange at the entity's incremental financing rate.

(u) goodwill

Where an operation or entity is acquired, the identifiable net assets acquired are measured at fair vatue. The excess of the acquisition costs over the fair value of the identifiable net assets is brought to account as goodwill in the Balance Sheets. The carrying value of the goodwill is tested for impairment at each reporting date with any decrement in value taken to the Income Statements as an expense.

(y) fair value estimation of financial assets and liabilities

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement and for disclosure ourposes.

The fair value of financial instruments traded in active markets (such as publicly traded derivatives and available for sale securities). is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Stapled Entity is the current bid price. The appropriate quoted market price for financial liabilities is the current ask price.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined. using valuation techniques including dealer quotes for similar instruments and discounted cash flows. In particular, the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows and the fair value of forward exchange rate contracts is determined using forward exchange market rates. at the balance sheet date.

(w) payables

These amounts represent liabilities for amounts owing at balance date. The amounts are unsecured and are usually paid within 30 days of recognition.

(x) interest bearing flabilities

All loans and borrowings are initially recognised at fair value net of issue costs associated with the borrowing.

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs and any discount or premium on settlement.

(v) earnings per unit

Basic and diluted earnings per unit are determined by dividing the net profit attributable to equity holders of the parent entity (DDF) by the weighted average number of ordinary units outstanding during the year.

(z) foreign currency

ttems included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The financial statements are presented in Australian dollars, which is the Trust's functional and presentation currency.

(i) Foreign currency transactions

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end. exchange rates of monetary assets and fiabilities denominated in foreign currencies are recognised in the tacome Statements.

(ii) Foreign operations

Foreign operations are located in the United States of America (US) and New Zealand (NZ). These operations have functional currencies of US Dollars and NZ Dollars respectively, which are translated into the presentation corrency.

The assets and liabilities of the foreign operations are translated at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates fluctuate significantly. Exchange differences arising are recognised in the foreign currency translation reserve and recognised in profit or loss on disposal of the foreign operation.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after the date of transition to AIFRS are treated as assets and fiabilities of the foreign operation and translated at exchange rates prevailing at the reporting date.

(aa) segment reporting

A business segment is a group of assets and operations engaged in providing services that are subject to risks and returns that are different to those of other business segments. A geographical segment is engaged in providing services within a particular geographic environment and is subject to risks and returns that are different from those of segments operating in other geographic eavironments.

(ab) rounding of amounts.

The Stanled Entity is the kind referred to in Class Order 98/0100 issued by the Australian Securities and Investment Commission. relating to the rounding off of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.

(ac) new accounting standards and UIG interpretations.

Certain new accounting standards and UIG interpretations have been published that are not mandatory for the 30 June 2006 reporting period. Our assessment of the impact of these new standards and interpretations is set out below:

(i) AASB 7: Financial Instruments Disclosure and AASB 2005-10: Amendments to Australian Accounting Standards (AASB 132, AASB 101, AASB 114, AASB 117, AASB 133, AASB 139, AASB 1, AASB 4, AASB 1023 and AASB 1038).

AASB 7 and AASB 2005-10 are applicable to annual reporting periods beginning on or after 1 January 2007. AASB 7 requires qualitative information about exposure to risks arising from financial instruments, including specific minimum disclosures about credit risk, liquidity risk and market risk. The Trust has elected not to adopt the standard early. Application of this standard will not affect any of the amounts recognised in the financial statements.

• (ii) AASB 2005-4: Amendments to Australian Accounting Standards (AASB 139, AASB 132, AASB 1, AASB 1023 and AASB 1038). AASB 2005-4 is applicable to annual reporting periods. beginning on or after 1 January 2006. The amendment restricts the ability to designate financial assets and financial fiabilities. "at fair value through profit or loss". The amendment will not affect the Trust's financial statements.
• (iii) AASB 2005-11: Amendments to Australian Accounting Standards (AASB 101, AASB 112, AASB 132, AASB 133, AASB 139 and AASB 141). The amendment deals with the impact of contingently issuable shares and contingently returnable shares. on earnings per share. The Trust does not issue shares of this type and accordingly, the amendment will not affect the Trust's financial statements.

note 2. property revenue

	Consolidated
	2006 \$'000	2005 \$'000	2006 \$000	2005 \$'000
Rent and recoverable outgoings.	659.667	510.252	143.818	153,286
Incentive amortisation	(25.322)	(9.657)	(5.487)	(2.465)
Other revenue	25.404	8.200	7.432.	2.442
Total property revenue	659.749	508,795	145,763	153,263

note 3. finance costs

	Consolidated		Parent Entity
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	2006	2005	2006	2005
	\$'000	\$'000	\$'000	\$000
Interest paid/payable	176.604	130.202	41.004	30.331
Amount capitalised	(10.488)	(12.937)	(5.627)	(8.932)
Total finance costs	166,116	117.265	35.377	21.399

The average capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is 6.23 percent (2005: 6.26 percent).

note 4. costs associated with the transaction

The costs relate to the fees and expenses arising from the stapling of the Trust, DFT, DOT and DRO, the acquisition of the US REIT, and the associated debt arranging and interest rate hedging (together referred to as "the Transaction").

note 5, tax expense

(a) income tax expense

		Consolidated
	2006 \$000	2005 \$000
Current tax	936	1.069.
Deferred tax	233	(79)
Income tax expense	1.169	990
Deferred income tax (revenue)/expense included in income tax expense comprises:
(Increase)/decrease in deferred tax assets	207	(127)
Increase in deferred tax fiabilities	26	48
	233	791

(b) reconciliation of income tax expense to net profit

		Consolidated
	2006 \$7000	2005 \$'000
Profit before tax	1,095.508	493.509
Profit not subject to income tax (note 1(h))	(1,087,056)	(487.639)
	8.452	5.870
Prima facie Tax at the Australian tax rate of 30 percent (2005; 30 percent)	2.535	1.761
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Depreciation	88
Share of net profits of associates	(1.454)	(773)
	(1.366)	(771)
Income tax expense	1.169	990

(c) amounts recognised directly in equity

Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss but directly debited or credited to equity:

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,		Consolidated
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	2006 \$'000	2005 \$000
Net deferred tax - credited directly to equity	(196)	1111
	(196)	BANK

(d) withholding tax expense

Withholding tax expense includes \$24,727,000 (2005: \$23,514,000) of deferred tax expense which is recognised on differences between the tax cost base of the US assets and liabilities and their accounting carrying value at balance date. The majority of the deferred tax expense arises due to the revaluation of US investment properties.

note 6, other expenses

		Consolidated			Parent Entity
	Note(s)	2006 \$000	2005 \$000	2006 \$'000	2005 \$'000
Audit and advisory fees.		2.673	1.807	586	353
Custodian fees		518	415	165	180
Legal and other professional fees		415	1.667	$\cdots$	515
Bad and doubtful debts		1.654	1.071	95
Registry costs and listing fees		377	403	47	278
Other expenses		1.836	3.843	630	427
Total other expenses		7.473	9.206	1.523	1.753

note 7, audit and advisory fees

During the year the auditor of the parent entity, its related practices and non-related audit firms earned the following remuneration.

(a) assurance services

Audit Services

	Consolidated			Parent Entity
	2006 (\$)	2005 (\$)	2006 (\$)	2005 (\$)
PwC audit and review of financial reports and other audit work under the Corporations Act 2001	1.299.465	863.563	-457.000	309.000
PwC fees paid in relation to outgoings.	-72-155	72.094	$\cdots$
Fees paid to non-PwC audit firms for audit of US controlled entity - Deloittes	597.323	394.962	$\cdots$
Total remuneration for assurance services	1.968.943	1.330.619	457.000	309.000

(b) taxation services

		Consolidated			Parent Entity
	2006 (\$)	2005 (\$)	2006 {\$}	2005 {\$]
Fees paid to PwC Australia	370.690	-461.670	126.000	39.000
Fees paid to PwC US	213.160	1111	$\cdots$
Fees paid to non-PwC audit firms.	109.975	1111	$\cdots$
Total remuneration for taxation services	693.825	461,670	126,000	39.000

note 7. audit and advisory fees (continued)

(c) advisory services

	Consolidated			Parent Entity
	2006 (\$)	2005 (6)	2006 (\$)	2005 (\$)
Fees paid to PwC Australia in relation to IFRS project.	8.950	15.000	3.000	5.000
Fees paid to PwC Australia in relation to the establishment of the RENTS sub-trust.	$\cdots$	235.000
Fees paid to PwC Australia in relation to the Transaction.	$\cdots$	889.587		296.529
Fees paid to related practices of PwC Australia in relation to the Transaction	$\cdots$	354.171		118.057
Total remuneration for advisory services	8.950	1.493.758	3.000	419,586

note 8. current assets - cash and cash equivalents

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
	Consolidated			Parent Entity
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	2006 \$'000	2005 \$'000	2006 \$'000 *********	2005 \$000
Cash at bank t	106.428	-68.959	15.743	10.238
Total current assets - cash and cash equivalents	106.428	68.959	15.743	10.238

I Consolidated cash at bank at 30 June 2006 includes \$28,933,000 held for the purchase of DIT France Logistique (refer note 37).

note 9. current assets - receivables

	Consolidated			Parent Entity
	2006 \$'000	2005 \$'000	2006 \$000	2005 \$'000
Rent receivable	-24.108	14.039	5.424	439
Less: Provision for doubtful debts	(1.783)	(1.116)	(273)	(261)
Total rental receivables	22,325	12.923	5.151	178
Distribution receivable from controlled entities			3.100	3.100
Dividend receivable	4.750	1111
Other receivables from controlled entities.			10.778
GST receivable	954		405
Interest receivable	8	1.241
Settlement adjustments receivable	1.367	2.626	1.367	1.260
Other receivables	5.850	13.069	1,308	4.345
Total other receivables	12.929	16.936	16.958	8.705
Total current assets -- receivables	35,254	29,859	22,109	8,883

other receivables from controlled entities.

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

note 10, inventories

	Consolidated		Parent Entity
	2006 \$000	2005 \$'000	2006 \$'000	2005 \$000
Land and buildings	3,344	1111	$\cdots$	1111
Work in progress	$\cdots$	48.469	$\cdots$	11111
Total inventories	3.344	48.469	nm.	www.

Oak Park Business Centre, Minnesofa

On 27 June 2006, DB RREEF Industrial Properties, Inc. executed an agreement to sell Oak Park Business Centre in Minnesota. The selling price is \$4.0 million.

note 11, derivative financial instruments

	Consolidated			Parent Entity
	2006 \$7000	2005 \$'000	2006 \$'000	2005 \$'000
Current assets
interest rate swap contracts	89,366		24.498
Forward foreign exchange contracts	3.112		1.556
Total current assets -- derivative financial instruments	92.478		26,054
Current liabilities
interest rate swap contracts	19.979		8.870
Forward foreign exchange contracts	498	1.11	182
Total current liabilities - derivative financial instruments	20,477		9.052
Net current derivative financial instruments	72.001		17.002

Refer note 33 for further discussion regarding derivative financial instruments.

note 12, current assets - other

	Consolidated			Parent Entity
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$000
Prepayments	6.030	4.908	1.227	906
Tenant bonds	20	34	$\cdots$
Deferred borrowing costs		3.623	$\cdots$	$\cdots$
Net receivable on currency hedge contracts		2.341	$\cdots$	3.121
Loan to third parties	1.1.1	5,005	$\cdots$
Other	1000000000000000000000000000000000000	45	$\cdots$	45
Total current assets -- other	6,050	15.956	1,227	2.072

note 13. (a) current assets - held for sale investment properties

Jwnership.
	(%
121 Evans Road, Salisbury QLD	10C
Total held for sale investment properties

note 13. (b) non-current assets - investment properties

Property	Ownership
	(%)
Held by parent entity
Kings Park Industrial Estate, Bowmans Road, Marayong NSW	100
Target Distribution Centre, Taras Road, Altona North VIC	100
Axxess Corporate Park, 164-180 Forster Road, 11 & 21-45 Gilby Road, 307-355 Fernfree Gully Road, Mount Waverley V(C	100
Knoxfield Industrial Estate, Henderson Road, Knoxfield VIC	100
12 Frederick Street, St Leonards NSW	100
40-50 Talavera Road, North Ryde NSW	100
Wallgrove, Eastern Creek NSW	100
Redwood Gardens Industrial Estate Stages 3, 5, 6 & 7 and Ect 4 Boundary Road, Dingley VIC +	76
44 Market Street, Sydney NSW	100
8 Nicholson Street, Melbourne VIC	100
Ferguson Centre, 130 George Street, Parramatta NSW	100
Flinders Gate Coraplex, 172 Flinders Street (and 189 Flinders Lane), Melbourne VIC	100
383–395 Kent Street, Sydney NSW	100
14 Moore Street, Civic, Canberra ACT **	100
Sydney CBD Floor Space 2 , Sydney NSW	100
Westfield Whitford City Shopping Centre, Marmion and Whitford Avenue, Hillarys WA?	50
Westfield Whitford Avenue and Lot 6 Endeavour Road, Hillarys WA?	50
West Lakes Shopping Centre, 11 West Lakes Boulevarde, West Lakes SA	50
Pienty Valley Town Centre, McDonald's Road, South Morang VIC®	50
Westfield North Lakes Shopping Centre, Corner Anzac Avenue and Northlakes Drive, Mango Hill QLD 3	50
Albert & Charlotte Streets, Brisbane QLD	100
34-60 Little Collins Street, Melbourne VIC **	100
32–44 Flinders Street, Melbourne VIC	100
Flinders Gate Car Park, (including air development rights) 172-189 Flinders Street, Melbourne VIC	100
383-395 Kent Street, Sydney NSW	100
John Martin's Car Park and Retail Plaza Joint Venture. Adelaide SA	ł
Total parent entity

acquisition date ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Cost including all additions \$000	Independent alisation date	Independent valuation amount \$000	Indeoendent valuer .	Consolidated book value 30 June 2006 \$000	Consolidated book value 30 June 2005 \$000
.โกค 1997	16 777	Dec 2005	21.000		24,000
	16.777		21.000		24,000	mm.

Acquisition date	Cost including all additions \$'000	independent valuation date	Independent valuation amount \$'000	Independent valuer	Consolidated book value 30 June 2006 \$'000	Consolidated book value 30 June 2005 \$'000
May 1990	78,194	Jun 2005	93.000	$\langle a \rangle$	93,000	78,500
Oct 1995	25,430	Jun 2005	35,000	$\langle c \rangle$	36,500	35,000
Oct 1996	141,944	Dec 2005	147,750	$\langle \dagger \rangle$	170,000	109,444
Aug 1996	30.139	Jun 2006	37.050	(e)	37,050	31,885
Jin 2000	25,437	Jun 2005	31,500	$\langle \emptyset \rangle$	35,700	31,500
Oct 2002	32,575	Apr 2005	28,500	$\langle \dagger \rangle$	32,500	29,498
Mar 2004	23,555	ങ്ങ			23,555	23,523
Dec 1994	23,599	Jun 2006	28,850	(e)	28,850	23,206
Sep 1987	166,037	Jen 2006	185,000	$\langle \dagger \rangle$	185,000	149,376
Nov 1993	69,421	Jun 2005	91,800	$\langle \mathrm{g} \rangle$	98,000	91,800
May 1997	96,956	Jun 2006	80.000	$\langle d \rangle$	80,000	49,626
Mar 1999	13,749	Jun 2006	18,000	$\langle d \rangle$	18,000	15,538
Sep 1987	105,351	Jun 2006	115,000	$\langle$ d)	115,000	105,138
May 2002	37,226	Apr 2005	36,250	$\langle e \rangle$	38,000	36,250
Jul 2000	n/a	-a/a			2,173	2,390
Oct 1984	128,505	Dec 2005	200,000	$\langle \dagger \rangle$	221,500	185,997
Dec 1992	5,506	Dec 2005	10,000	$\langle \dagger \rangle$	11,000	8,613
Nov 1998	116,792	Dec 2005	131,000	(a)	143,000	122,892
Nov 1999	19,740	Jun 2004	17,835	$\langle c \rangle$	20,200	20,601
Aug 2004	69.239	Jun 2004	60,250	$\langle \text{c} \rangle$	77,176	65,049
Oct 1984	13,783	Jun 2006	38,500	(e)	38,500	32,035
Nov 1984	16,164	Jun 2006	37,500	(d)	37,500	41,522
Jun 1998	21,239	Jun 2006	32,500	(d)	32,500	24,575
Mar 1999	47,043	Jun 2006	39,000	$\langle d \rangle$	39,000	45,275
Sep 1987	30,257	Jun 2006	60,000	$\langle$ d)	60,000	39,418
Sep 1994					100	100
	1,337,881		1,554,285		1,673,804	1,398,751

note 13. (b) non-current assets - investment properties (continued)

Property	Ownership
********	(%)
Other consolidated investment properties - non-current
Westfield Hurstville, 262-264 Forest Road and 292 Forest Road, Hurstville NSW	50
3765 Atlanta Industrial Drive, Atlanta	80
7100 Highlands Parkway, Atlanta	80
Town Park Drive, Atlanta	80
Williams Drive, Atlanta	80
Stone Mountain, Atlanta	-80
MD Food Park, Baltimore	80
West Nursery, Baltimore	80
Cabot Techs, Battimore	80
9112 Guildford Road, Baltimore	80
8155 Stayton Drive, Battimore	80
Patuxent Range Road, Baltimore	80
Bristol Court, Baltimore	80
NE Baltimore, Baltimore	80
1181 Portal, 1831 Portal and 6615 Tributary, Fort Holabird Industrial, Baltimore	80
10 Kenwood Circle, Boston	80
Commerce Park, Charlotte	80
9900 Brookford Street, Charlotte	80
Westinghouse, Charlotte	-80
Airport Exchange, Cincinnati/North Kentucky	80
Empire Drive, Cincinnati/North Kentucky	80
International Way, Cincinnati/North Kentucky	80
Kentucky Drive, Cincinnati/North Kentucky	80
Spiral Drive, Cincinnati/North Kentucky	80
Turfway Road, Cincinnati/North Kentucky	80
124 Commerce, Cincinnati/North Kentucky	80
Kenwood Road, Cincinnati/North Kentucky	80
Lake Forest Drive, Cincinnati/North Kentucky	80
World Park, Cincinnati/North Kentucky	80
Equity/Westbelt/Dividend, Columbus	80
2700 International Street, Columbus	80
3800 Twin Creeks Drive, Columbus	80
SE Colombus, Columbus	80
Arlington, Dallas	80
1900 Diplomat Drive, Dallas	80
2055 Diplomat Drive, Dallas	80
1413 Bradley Lane, Dallas	80
North Lake, Dalias	80
555 Airline Drive, Dallas	80
455 Airline Drive, Dallas	80
Hilfguard, Daltas	80
11011 Regency Crest Drive, Dallas	80

Acquisition date	Cost including all additions \$'000	independent valuation date	Independent valuation amount \$'000	Independent valuer	Consolidated book value 30 June 2006 \$'000	Consolidated book value 30 June 2005 \$'000
May 2005	246,499	Feb 2005	232,500	$\langle \circ \rangle$	260,000	232,730
Sep 2004	6,443	Jan 2006	4,978	$\langle c \rangle$	4,978	6,702
Sep 2004	18,826	Jan 2006	18,835	$\langle c \rangle$	18.835	17,277
Sep 2004	8,844	Jan 2006	10,628	$\langle c \rangle$	10,628	8,701
Sep 2004	12,875	Jan 2006	12,915	$\langle c \rangle$	13,302	10,842
Sep 2004	9,415	Jan 2006	6,592	$\langle c \rangle$	6,592	6,711
Sep 2004	25,052	Jan 2006	31,347	$\langle c \rangle$	33,799	29,581
Sep 2004	9,671	Jan 2006	11,032	$\langle c \rangle$	11,570	8,538
Sep 2004	28,017	Jun 2006	37,401	$\langle c \rangle$	37,401	31,414
Sep 2004	10,894	Jan 2006	13,454	$\langle c \rangle$	13,454	12,304
Sep 2004	9,322	Jan 2006	10,628	$\langle c \rangle$	10,628	9,734
Sep 2004	15,457	Jan 2006	17,355	$\langle c \rangle$	17,355	15,576
Sep 2004	13,368	Jun 2006	15,202	$\langle c \rangle$	15,945	13,481
Sep 2004	9,679	Jan 2006	11,301	$\langle c \rangle$	11,301	10,509
Jun 2005	14,040	Jan 2006	15,068	$\langle c \rangle$	15,355	13,446
Sep 2004	14,379	Jan 2006	14,933	$\langle c \rangle$	14,933	13,482
Sep 2004	9,361	Jan 2006	9,754	$\langle c \rangle$	9,754	8,672
Sep 2004	5,119	Jan 2006	5,045	$\langle c \rangle$	5,045	4,843
Sep 2004.	25,504	Jun 2006	24,889	$\langle c \rangle$	26,267	22,548
Sep 2004	5,260	Jun 2006	4,978	$\langle c \rangle$	4,978	4,748
Sep 2004	7,305	Jun 2006	7,669	$\langle c \rangle$	8,486	8,026
Sep 2004	13,711	Jan 2006	14,463	$\langle c \rangle$	14,463	13,089
Sep 2004	14,760	Jan 2006	16,279	$\langle c \rangle$	16,279	14,071
Sep 2004	7,146	Jan 2006	6,054	$\langle c \rangle$	6,054	6,468
Sep 2004.	6,424	Jan 2006	6,390	$\langle c \rangle$	6,390	6,235
Sep 2004	3,042	Jan 2006	3,363	$\langle c \rangle$	3,363	2,683
Sep 2004	23,899	Jan 2006	22,333	$\langle c \rangle$	22,723	22,423
Sep 2004	16,110	Jan 2006	16,548	$\langle c \rangle$	16,548	14,763
Sep 2004	16,248	Jan 2006	15,337	$\langle c \rangle$	15,337	12,958
Sep 2004	46,818	Jan 2006	50,081	$\langle \texttt{C} \rangle$	50,081	49,921
Sep 2004	5,140	Jan 2006	5,281	$\langle c \rangle$	5,281	5,199
Sep 2004	6,202	Jan 2006	6,794	$\langle c \rangle$	6,794	6,283
Sep 2004	17,262	Jan 2006	16,279	$\langle c \rangle$	16,279	14,673
Sep 2004	11,811	Jan 2006	12,243	$\langle c \rangle$	12,243	10,864
Sep 2004	5,785	Jan 2006	6,189	$\langle c \rangle$	6,189	5,628
Sep 2004	4,527	Jan 2006	4,843	$\langle c \rangle$	4,843	4,429
Sep 2004	4,162	Jan 2006	3,807	$\langle c \rangle$	3,807	3,534
Sep 2004	12,754	Jan 2006	17,355	$\langle c \rangle$	17,355	13,613
Sep 2004	8,354	Jan 2006	8,745	$\langle c \rangle$	9,296	8,115
Sep 2004	4,179	Jan 2006	5,112	化	5,112	4,581
Sep 2004	11,119	Jan 2006	11,705	$\langle C \rangle$	12,088	10,521
Sep 2004	8,827	Jan 2006	7,803	(C)	9,046	7,997

note 13. (b) non-current assets - investment properties (continued)

Property	Ownership
	(%)
Other consolidated investment properties - non-current (continued)
East Collins, Dallas	80
3601 East Plano/1000 Shiloh Road, Dailas	80
East Plano Parkway, Dallas	80
820-860 Avenue F, Dallas	80
10th Street, Dallas	80
Capital Avenue, Dallas	80
CTC at Valwood, Dallas	80
Brackbill, Harrisburg	80
Mechanicsburg, Harrisburg	80
181 Fulling Mill Road, Harrisburg	80
Glendale, Los Angeles	80
14489 Industry Circle, Los Angeles	80
14555 Alondra/6530 Altura, Los Angeles	80
San Femando Valley, Los Angeles	80
Memphis Industrial, Memphis	80
2950 Lexington Avenue South, Minneapolis	80
Mounds View, Minneapolis	80
6105 Trenton Lane, Minneapolis	80
8575 Monticello Lane, Minneapolis	80
7401 Cahill Road, Minneapolis	80
CTC at Dulles, Northern Virginia/Washington DC	80
Alexandria, Northern Virginia/Washington DC	80
Nokes Boulevard, Northern Virginia/Washington DC	80
Guildford, Northern Virginia/Washington DC	80
Beaumeade Telecom, Northern Virginia/Washington DC	80
Orlando Central Park, Orlando	80
7500 Exchange Drive, Orlando	80
105-107 South 41st Avenue, Phoenix	80
1429-1439 South 40th Avenue, Phoenix	80
10397 West Van Buren Street, Phoenix	80
844 44th Avenue, Phoenix	80
220 South 9th Street, Phoenix	80
431 North 47th Avenue, Phoenix	80
601 South 55th Avenue, Phoenix	80
1000 South Priest Drive, Phoenix	80
1120-1150 West Alameda Drive, Phoenix	80
1858 East Encante Drive, Pheenix	80
3802-3922 East University Drive, Phoenix	80
Chino, Riverside	80
Mira Loma, Riverside	80
Ontario, Riverside	80
4190 East Santa Ana Street, Riverside	80

Acquisition date	Cost including all additions \$'000	Independent valuation date	Independent valuation amount \$'000	Independent valuer	Consolidated book value 30 June 2006 \$'000	Consolidated book value 30 June 2005 \$'000
Sep 2004	4,779	Jun 2006	4,978	$\left( c\right)$	4,978	5,090
Sep 2004	17,159	Jun 2006	18,700	$\left( c\right)$	20,030	18,158
Sep 2004	27,361	Jun 2006	28,387	$\left( c\right)$	28,387	27,016
Sep 2004	8,760	Jun 2006	9,687	$\left( c\right)$	9,687	9,234
Sep 2004	12,137	Jun 2006	12,915	$\left( c\right)$	13,304	11,453
Sep 2004	7,524	Jun 2006	7,601	$\left( c\right)$	7,601	6,741
Sep 2004	4,517	Jun 2006	6,054	$\left( c\right)$	6,054	4,712
Sep 2004	28,286	Jun 2006	33,634	$\left( \mathrm{c}\right)$	33,634	30,105
Sep 2004	23,483	Jun 2006	25,696	$\left( c\right)$	25,696	23,822
Sep 2004	11,745	Jun 2006	12,108	$\left( c\right)$	12,108	11,822
Sep 2004	66,603	Jun 2006	84,084	$\left( \mathrm{c}\right)$	86,725	73,460
Sep 2004	9,209	Jun 2006	12,983	$\left( \mathrm{c}\right)$	12,983	10,916
Sep 2004	23,241	Jun 2006	31,347	$\left( c\right)$	31,347	27,225
Sep 2004	19,561	Jun 2006	26,234	$\left( c\right)$	26,234	23,168
Sep 2004	12,381	Jun 2006	12,915	$\left( c\right)$	12,915	12,435
Sep 2004	11,922	Jun 2006	12,377	$\left( c\right)$	13,363	11,126
Sep 2004	26,007	Jun 2006	28,723	$\left( c\right)$	29,173	24,714
Sep 2004	10,000	Jun 2006	10,763	$\left( c\right)$	10,763	9,555
Sep 2004	2,333	Jun 2006	3,094	$\left( c\right)$	3,094	2,506
Sep 2004	4,304	Jun 2006	4,036	$\left( c\right)$	4,036	2,901
Sep 2004	32,952	Jun 2006	40,361	$\left( \mathrm{c}\right)$	40,361	34,031
Sep 2004	59,828	Jun 2006	72,784	$\left( c\right)$	74,181	69,247
Sep 2004	27,017	Jun 2006	39,015	$\left( \mathrm{c}\right)$	39,015	35,995
Sep 2004	22,705	Jun 2006	33,634	$\left( c\right)$	33,634	27,225
Sep 2004	42,720	Jun 2006	55,159	$\left( \mathrm{c}\right)$	55,159	44,503
Sep 2004	76,731	Jun 2006	91,484	$\left( c\right)$	91,484	76,224
Sep 2004	7,310	Jun 2006	8,476	$\left( \mathrm{c}\right)$	8,476	7,235
Sep 2004	18,290	Jun 2006	23,678	$\left( c\right)$	24,115	19,634
Sep 2004	11,785	Jun 2006	16,144	$\left( \mathrm{c}\right)$	16,144	13,613
Sep 2004	9,426	Jun 2006	17,624	$\left( \mathrm{C}\right)$	17,624	13,613
Sep 2004	7,945	Jun 2006	10,897	$\left( \mathrm{c}\right)$	10,897	9,424
Sep 2004	8,481	Jun 2006	11,570	$\left( c\right)$	-11,570	8,770
Sep 2004	7,794	Jun 2006	10,359	$\left( \mathrm{c}\right)$	10,359	9,031
Sep 2004	5,611	Jun 2006	7,265	$\left( \mathrm{c}\right)$	7,265	6,152
Sep 2004	6,322	Jun 2006	8,072	$\left( c\right)$	8,072	6,545
Sep 2004	9,816	Jun 2006	11,570	$\left( c\right)$	11,570	9,824
Sep 2004	5,394	Jun 2006	7,265	$\left( c\right)$	7,265	5,366
Sep 2004	12,268	Jun 2006	13,319	$\left( \mathrm{C}\right)$	13,739	12,558
Sep 2004	7,882	Jun 2006	11,974	$\left( c\right)$	11,974	8,508
Sep 2004	13,737	Jun 2006	27,311	$\left( c\right)$	27,311	17,866
Sep 2004	38,378	Jun 2006	61,886	$\left( c\right)$	61,886	46,607
Sep 2004	6,314	Jun 2006	10,763	(c)	10,763	7,788

note 13. (b) non-current assets - investment properties (continued)

Property	Ownership
	(%)
Other consolidated investment properties - non-current (continued)
Rancho Cucamonga, Riverside	80
12000 Jersey Court, Riverside	80
Airway Road, San Diego 5823 Newton Drive, San Diego	80 80
2210 Oak Ridge Way, San Diego	80
Kent West, Seattle	80
26507 79th Avenue South, Seattle	80
8005 South 266th Street, Seattle	80
West Palm Beach, South Florida	80
Calvert/Murry's, Northern Virginia/Washington DC	80
Dulles Town Crossing, Stirling, Northern Virginia/Washington DC	80
Garland Jupiter, Garland, Dallas	80
Beaumeade Circle	80
Piano Parkway, Plano, Dallas	80
7700 68th Avenue, Brooklyn Park	100
7500 West 78th Street, Bloomington	100
1285 and 1301 Corporate Center Drive, 1230 and 1270 Eagan Industrial Road, Eagan	100
79-99 St Hilliers Road, Auburn NSW	100
3 Brookhollow Avenue, Baulkham Hills NSW	100
1 Garigal Road, Belrose NSW	100
2 Minna Close, Beirose NSW	100
114-120 Old Pittwater Road, Brookvale NSW	100
145-151 Arthur Street, Fiernington NSW	100
436-484 Victoria Road, Gladesville NSW	100
1 Foundation Place, Greystanes NSW	100
706 Mowbray Road, Lane Cove NSW	100
1-15 Rosebery Avenue and 1-55 Rothschild Avenue, Rosebery NSW	100
10-16 South Street, Rydalmere NSW	100
19 Chifley Street, Smithfield NSW	100
Pound Road West, Dandenong VIC.	100
352 Macaulay Road, Kensington ViC	100
DB RREEF Industriat Estate, Boundary Road, Laverton North VtC 250 Forest Road South, Lara VIC	100 100
15-23 Whicker Road, Gillman SA	100
25 Donkin Street South, West End, Brisbane QLD	100
52 Holbeche Road, Arndell Park NSW	100
3-7 Bessemer Street, Blackfown NSW	100
30-32 Besseraer Street, Blacktown NSW	100
27-29 Elberty Road, Huntingwood NSW	100
154 O'Riordan Street, Mascot NSW	100
11 Talavera Road, Macquarie Park NSW	100
DB RREEF Industrial Estate, Egerton Street, Silverwater NSW	100

Acquisition date	Cost including all additions \$'000	Independent valuation date	Independent valuation amount \$'000	Independent valuer	Consolidated book value 30 June 2006 \$'000	Consolidated book value 30 June 2005 \$'000
Sep 2004	28,847	Jun 2006	47,491	$\left( c\right)$	47,491	35,591
Sep 2004	5,621	Jun 2006	9,518	$\left( \mathrm{c}\right)$	9,518	7,286
Sep 2004	12,376	Jun 2006	16,817	$\left( c\right)$	16,817	14,765
Sep 2004	22,085	Jun 2006	30,270	$\left( c\right)$	30,270	25,131
Sep 2004	6,734	Jun 2006	9,014	$\left( c\right)$	9,014	7,853
Sep 2004	35,247	Jun 2006	40,361	$\left( \mathrm{c}\right)$	40,901	35,468
Sep 2004	3,524	Jun 2006	4,036	$\left( c\right)$	4,036	3,534
Sep 2004	9,278	Jun 2006	10,494	(c)	10,494	9,748
Sep 2004	28,321	Jun 2006	32,356	$\left( \mathrm{c}\right)$	32,356	26,831
Sep 2004	7,052	Jun 2006	7,399	$\left( c\right)$	7,399	6,793
Jun 2006	7,010	Jun 2006	8,341	$\left( \mathrm{c}\right)$	8,341
Jun 2006	4,367	Jun 2006	4,789	$\left( c\right)$	4,789
Jun 2006	4,212	Jun 2006	4,305	$\left( \mathrm{c}\right)$	4,305
Jun 2006	2,739	Jun 2006	3,067	$\left( c\right)$	3,067
Nov 2005	7,397	Nov 2005	6,890	$\left( \mathrm{c}\right)$	6,949
Nov 2005	6,302	Nov 2005	8,496	$\left( c\right)$	8,429
Nov 2005	21,349	Nov 2005	20,257	$\left( c\right)$	20,987
Sep 1997	34,712	3ยก 2005	41,000	(d)	41,749	41,011
Dec 2002	43,171	Dec 2005	42,400	(f)	43,251	41,753
Dec 1998	23,340	Dec 2004	27,400	(a)	31,900	27,400
Dec 1998	34,144	Dec 2004	32,400	(a)	33,707	33,119
Sep 1997	33,794	Jun 2006	45,500	亜	45,500	42,638
Sep 1997	24,171	3เก 2005	31,000	(f)	34,135	31,000
Sep 1997	27,939	Dec 2004	43,000	(d)	48,500	43,182
Dec 2002	39,162	Jun 2006	46,000	(⊕)	46,000	41,905
Sep 1997	22,589	Jun 2006	26,200	(e)	26,200	25,923
Apr 1998 & Oct 2001	70,506	Dec 2005	92,800	(f)	93,158	81,013
Sep 1997	35,868	Jun 2004	42,000	(f)	44,682	42,605
Dec 1998	11,820	Dec 2005	17,200	(a)	17,499	13,499
Jan 2004	56,674	3เกา 2005	56,250	$\left( \mathrm{c}\right)$	58,000	56,250
Oct 1998	7,610	Dec 2005	8,900	(g)	8,900	7,300
Jul 2002	15,888	Jun 2004	23,700	$\left( c\right)$	17,500	15,888
Dec 2002	33,757	มีเสา 2005	34,600	$(\oplus)$	40,900	34,600
Dec 2002	19,783	3เค 2005	21,300	$\circlede$	24,600	21,300
Dec 1998	19,031	3ยก 2005	20,700	$(\oplus)$	23,614	20,866
Jul 1998	11,296	Dec 2005	12,500	(d)	12,500	11,104
Jun 1997	11,086	Sep 2003	10,100	$\circledS$	10,209	10,202
May 1997	11,844	Jun 2006	17,850	$\langle \mathbf{f} \rangle$	17,850	14,540
Jul 1998	7,971	Jun 2006	9,000	$(\oplus)$	9,000	7,300
Jun 1997	10,908	Jun 2004	13,650	(a)	14,600	13,697
Jan 2002	133,005	Jun 2006	145,500	(d)	145,500	134,567
May 1997	36,332	Dec 2005	42,000	(f)	43,900	39,601

note 13. (b) non-current assets - investment properties (continued)

Property	Ownership
	(%)
Other consolidated investment properties - non-current (continued)
239-251 Woodpark Road, Smithfield NSW	100
40 Biloela Street, Villawood NSW	100
2a Birmingham Street, Villawood NSW	100
27-33 Frank Street, Wetherill Park NSW	100
114 Fairbank Road, Clayton ViC	100
30 Belirick Street, Acacia Ridge QLD	100
121 Evans Road, Salisbury QLD	100
68 Hasker Road, Herdsman WA	100
GPT/GMT Complex and Terraces, 1 Farrer Place, Sydney NSW	50
45 Clarence Street, Sydney NSW	100
309-321 Kent Street, Sydney NSW	50
One Margaret Street, Sydney NSW	100
Victoria Cross, 60 Miller Street, North Sydney NSW	100
The Zenith, 821-843 Pacific Highway, Chatswood NSW	100
Weodside Plaza, 240 St George's Terrace, Perth WA	100
30 The Bond, 30-34 Hickson Read, Sydney NSW	100
Southgate Complex, 3 Southgate Avenue, Southbank VIC	100
O'Connell House, 15-19 Bent Street, Sydney NSW	100
201 Elizabeth Street, Sydney NSW	50
Gareraa Court, 140-180 City Walk, Civic ACT **	100
Australia Square Complex, 264-278 George Street, Sydney NSW	50
Lumley Centre, 88 Shortland Street, Auckland, New Zealand 3	100
Total other consolidated investment properties -- non-current
Total investment properties - non-current
1. The property was externally valued at N7\$121.600.000 at 31 December 2006 and internally valued at N7\$123.000.000.

These valuations have been fransisted in to Australian dollars at the spot rate on 30 June 2006.

The title to all properties is freehold, with the exception of the properties marked ** which are leasehold.

• (a) Colliers International
• (b) Landmark White
• (c) CB Richard Ellis
• (d) Jones Lang LaSake
• (e) Knight Frank Valuations
• (f) FPD Savills
• (g) M3 Property

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 or the Appraisal Institute in the United States of America.

Acquisition date	Cost including all additions \$'000	Independent valuation date	Independent valuation amount \$'000	Independent valuer	Consolidated book value 30 June 2006 \$'000	Consolidated book value 30 June 2005 \$'000
May 1997	5,057	Jun 2006	6,450	(f)	6.450	5,756
Jat 1997	6,801	Jun 2006	8,750	(a)	8,750	7,019
Jun 1997	-n/a	mla	inża			8.900
Jul 1998	15,121	Jun 2006	13,200	(a)	13,200	12,685
Jol 1997	10,601	Jun 2006	12,800	$\left( c\right)$	12,800	10,913
Jun 1997	13,166	Dec 2005	17,375	$\langle e \rangle$	18,700	-11,919
Jal 1997	-n/a	mla	in/a			18,450
Jul 1998	9,702	Jun 2004	8,000	$\langle e \rangle$	9,500	8,379
Dec 1998	471,719	Dec 2004	512.500	$\langle e \rangle$	575,000	515,328
Dec 1998	220,863	Jun 2005	195,000	亜	228,000	195,000
Dec 1998	162,123	Dec 2005	139,250	(a)	165.000	131,655
Dec 1998	142,372	Jun 2005	139,000	(c)	152,000	139,000
Dec 1998	88,997	Dec 2005	90,000	亜	95,000	86,805
Dec 1998	193,068	Jun 2004	216,000	(d)	217,000	223,698
Jan 2001	240,561	Jun 2006	315,000	$\left( \mathrm{c}\right)$	315,000	269,997
May 2002	118,098	Jun 2006	150,000	$\langle e \rangle$	150,000	123,654
Aug 2000	352,766	Jun 2005	361,000	(g)	390,000	361,002
Aug 2000	49,318	Sep 2004	55,500	$\langle e \rangle$	54,400	56,590
Aug 2000	113.037	Dec 2004	117.000	$\langle e \rangle$	122,000	117,190
Aug 2000	43,379	Jun 2006	52,000	(f)	52,000	44,865
Aug 2000	203,437	Jun 2005	184,000	(d)	226,000	184,269
Sep 2005	102.599	Dec 2005	100.008	(d)	101.173
	5,075,275		5,610,118	m	5,905,643	5,122,168
	6,413,156		7,149,903		7,579,447	6,520,919

*****

.......

........ ........

note 13. (c) non-current assets - investment properties (continued)

developments

Ferguson Centre, 130 George Street, Parramatta NSW

Practical completion was achieved in March 2006, with a development cost of \$21.2 million. Office accommodation is now 100 percent occupied following finalisation of leases to Child Support Agency and Medicare totalling 11,867 square metres.

Kings Park Industrial Estate, Marayong NSW

Construction on Lot 61 Coronation Avenue reached practical completion in April 2006 at a cost of \$5 million. An agreement with Geoff Penney Australia Pty Limited has been entered into for a 2,900 square metre expansion on a current tenancy, costing approximately \$3.1 million. Construction has commenced and is scheduled for completion in August 2006.

Axxess Corporate Park, Mount Waverly VIC

In January 2006, the Trust entered into an agreement to lease and construct an office building for Omron Electronics Pty Limited. The esfimated project cost is \$2.5 million and practical completion was reached in March 2006. The Trust entered into an agreement with the Fonterra Group to develop a 6,700 square metre facility costing approximately \$19.4 million and is due to complete in July 2006.

Pound Road West, Dandenong VIC

In December 2005, DIT entered into an agreement for the extension of EOréal Australia Pty Eimited tenancy. Construction of this extension has commenced and completion is expected in August 2006.

Dulles Town Crossing, Stirling, Northern Virginia/Washington DC

Development of this land parcel is expected to begin during the December 2006. The development will consist of two four story office buildings comprising 220,000 square feet (20,440 square meters) in a rapidly growing area of Virginia. The total budgeted cost for the project is \$64 million, including the initial cost of the land. The current plan calls for construction completion in early 2008 with stabilisation occurring approximately 12 to 15 months thereafter.

disposals

2a Birmingham Street, Villawood NSW

In December 2005, DFT entered into an agreement for sale of 2a Birmingham Street, Villawood for \$10.3 million. Settlement occurred on 31 May 2006.

1-55 Rothschild Avenue, Rosebery NSW

In February 2005, DIT sold part of Rothschild Avenue, Rosebery, Legal proceedings in relation to interest payable on the settlement sum were heard in the New South Wales Court of Appeal in March 2006. The appeal was granted in favour of DB RREEF Industrial Trust and settlement. monies were received in April 2006.

121 Evans Road, Salisbury QLD

In June 2006, DIT entered an agreement for sale of 121 Evans Road, Satisbury for \$24.0 million. Settlement is expected to occur in August 2006.

acoulsitions

Lumley Centre, Auckland, New Zealand

In September 2005, DOT purchased 88 Shortland Street, Auckland for NZ\$110.4 million (AUD\$100.2 million).

Minneapolis Industrial Portfolio, Minnesota

In November 2005, DB RREEF Industrial Properties, Inc. purchased 7700 68th Avenue, Brooklyn Park, 7500 West 78th Street, Bloomington and 1285 and 1301 Corporate Center Drive, 1230 and 1270 Eagan Industrial Road, located in various cities of Minnesota for \$33.9 million. 9955 Valley View Road. Eden Prairie was also acquired for \$3.4 million and has been classified as inventory.

On 23 June 2006, DB RREEF Industrial, LLC acquired four land parcels from Calwest Industrial Properties, pursuant to its option agreement with Industrial Properties, at predetermined prices as shown below:

Property	Purchase price \$'000
Plano Parkway, Plano TX	2.762
Garland Jupiter, Garland TX	4.400
Beaumeade, Ashburn VA	4.260
Duites Town Crossing, Stirting VA	6.982
	18.404

reconciliation

		Consolidated		Parent Entity
	30 Jun 2006 \$'000	30 Jun 2005 \$'000	30 Jun 2006 \$'000	30 Jun 2005 \$'000
Carrying arount at 1 36ly 2005.	6.520.919	-1.635.508	1.398.751	1.635.508
Properties acquired on stapling	$\cdots$	3.280.344	$\cdots$
Additions	135.540	1.768.366	84.483	163.260
Acquisitions	155.793		$\cdots$
Transfer from property, plant and equipment.		15.888
Transfer to held for sale investment properties	(24.000)
Lease incentives	87.943	22.820	10.055	-2.160
Amertisation of fease incentives	(26.443)	(11.958)	(5.487)	(4.431)
Rent straight-lining	14.484	5.743
Disposals	(8.277)	(479.043)	$\cdots$	(441.681)
Net gain from fair value adjustments	695.666	252.991	186.002	43.935
Foreign exchange difference on foreign currency translation	27.822	30.260
Carrying amount as at 30 June 2006	7,579,447	6,520,919	1.673.804	1.398.751

note 14, non-current assets - property, plant and equipment

(a) property, plant and equipment

			Consolidated			Parent Entity
	in progress	Construction Freehold land and buildings	Total	Construction in progress	Freehold land and buildings	Total
	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000
2006
Opening balance as at 1 July 2005.	15.107	12.806	27.913	$\ddotsc$
Additions	68.581	57.495	126.076		$\ddot{\phantom{a}}$
Depreciation charge	$\cdots$	(1.023)	(1.023)	$\cdots$
Closing balance as at 30 June 2006	83,688	69,278	152,966		m.
Cost	83.688	70.301	153.989
Accumulated depreciation		(1,023)	(1,023)		$\ddotsc$
Net book value as at 30 June 2006	83,688	69,278	152.966	nm.	w
2005
Opening balance as at 1 July 2004	10.894	12.806	23.700
Additions	20.101		20,101
Transfer from property, plant and equipment.	(15.888)	$\cdots$	(15.888)
Closing balance as at 30 June 2005	15,107	12.806	27,913		$\mathbf{w}$
Cost	15,107	12.806	27.913
Net book value as at 30 June 2005	15,107	12,806	27,913	mm.	www.

(b) basis of valuation

Freehold land and buildings are accounted for using the cost method (refer note 1(n)). Construction in progress is recognised at fair value. As at 30 June 2006, the fair value of construction in progress is equal to cost.

(c) non-corrent assets pledged as security

Refer to note 23 for information on non-current assets pledged as security by the parent entity and its controlled entities.

(d) acquisitions and developments

Turnpike Distribution Center, Medley, Florida

The total projected investment for Tumpike Distribution Center, including all construction costs, due diligence and closing costs, is estimated at \$23 million or \$86 per square foot. Development of a single industrial building is on schedule to be completed by the first quarter 2007 and the property is projected to be leased/stabilised by December 2007. Total costs incurred to 30 June 2006 are \$16.1 million.

DB RREEF Industrial Estate, Boundary Road, Laverton North VIC

in June 2005, DIT entered into agreements to lease and build a major distribution centre for Coles Myer Eimited. Construction of this building has commenced and completion is expected in the first quarter of 2007. In February 2006, DIT entered into an agreement to lease and build a warehouse and distribution facility for Wrightson Seeds Australia Limited. Construction of this building has commenced and completion is expected in the last quarter of 2006.

note 15, non-current assets - other financial assets at fair value through profit or loss

Name of entity	Principal activity		Ownership interes?		Parent Entity
		2006 (%)	2005 (%)	2006 \$000	2005 \$'000
DB RREEF Harstville Trust	Retail property investment	100.	100	247.172	233.867
DB RREEF Industrial Trust *	Industrial property investment.	100.	100
DB RREEF Office Trust!	Commercial property investment	100	100
DB RREEF Operations Trust 3	Financial services	100.	100
	Total non-current assets -- other financial assets at fair value through profit or loss			247.172	233.867

reconditation

	Parent Entity
2006 \$'000	2005 \$'000
Opening balance as at 1 July 2005. 233,867
Additions	233.867
(16,800) Distributions
30,105 -Fair value gain
Closing balance as at 30 June 2006 247,172	233,867

In accordance with AASB Interpretation 1002, DDF is the deemed acquirer of DFT, DOT and DRO and therefore they are reflected in the financial statements as controlled antifact of DDF

All controlled entities are wholly owned by the Trust. Both the parent entity and the controlled entities were formed in Australia.

note 16, non-current assets - investments accounted for using the equity method

Investments in associates 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 fair value through the profit and loss, Information relating to these entities is set out below.

Name of entity	Principal activity	Ownership interest	Consolidated			Parent
		2006 (96)	2006 \$7000	2005 \$000	2006 \$000	2005 \$'000
Held by parent entity
Mt Druitt Shopping Centre Trust	Retail property investment	-50	182.500	154.957	182.500	154.957
DB RREEF Industrial Properties, Inc. 1	Asset, property and funds management	-50			271.898	177.658
Held by controlled entities
2 O'Connell Street Trust	Commercial property investment	-50	9.702	7.928
4 O'Connell Street Trust	Commercial property investment	50	15.197	12.240
Bligh Street Trust	Commercial property investment.	50	11.902	36.441
DB RREEF Holdings Pty Limited (DRH)	Asset, property and funds management.	50	15.761	17.166
Total			235,062	208,732	454.398	332,615

1 The remaining 50 percent of this entity is owned by DIT. As a result, this entity is classed as controlled on a DDF consolidated basis.

These entities were formed in Australia with the exception of DB RREEF Industrial Properties, Inc. which was formed in the United States.

		Consolidated
	2006 \$'000	2005 \$7000
Movements in carrying amounts of investments accounted for using the equity method
Opening balance as at 1 July 2005	208,732
interest acquired on stapling		36.723
interest acquired during the year	18,335	167.678
Share of net orofits after tax	26,911	12.544
Distributions/Dividends received	(18, 916)	(8,213)
Closing balance as at 30 June 2006	235,062	208,732
Results attributable to associates
Operating profits before income tax	29.187	13.306
income tax expense	(2,276)	(762)
Operating profits after income tax	26.911	12.544
Less: Distributions/Dividends received	(18, 916)	(8,213)
	7,995	4.331
Undistributed income attributable to associates as at 1 July 2005.	5.304
Undistributed income attributable to associates acquired on stapling		973
Undistributed income attributable to associates as at 30 June 2006	13.299	5.304
Summary of the performance and financial position of investments accounted for using the equity method
The Trust's share of aggregate profits, assets and fabilities of investments accounted for using the equity method is:
Profits from ordinary activities after income tax expense	26,911	12,544
Assets	274.809	292,353
Liabilities	66.294	54.150
Share of associates' expenditure commitments
Capital commitments		17.557

contingent liabilities of investments accounted for using the equity method

Upon satisfaction of certain conditions, the Trust may elect to exercise a call option granted to it in relation to the purchase of the remaining 50 percent interest in DRH.

note 17, non-current assets - deferred tax assets

			Consolidated		Parent Entity
	Note(s)	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$000
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss/Derivative financial instruments		46
Other		70	127	---
Net deferred tax assets		116	127
Movements
Opening balance at 1 July 2005		127
Change on adoption of AASB 132 and AASB 139.		196
Credited/(charged) to the income Statements	Ь	(207)	127	$\cdots$
Closing balance at 30 June 2006		116	127

note 18, current assets - loans and receivables

79999999999999999999999999999999999999
		Consolidated		Parent Entity
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	2006 \$000	2005 \$000	2006 \$'000 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	2005 \$'000
Loan notes receivable from DB RREEF Holdings Pty Limited	45.092	-45.092	1000000000000000000000000000000000000
Total current assets - loans and receivables	45.092	45.092	TOW-

DRH issued an equal amount of corporate bonds to its two owners - FAP and DRO, in order to fund its 100 percent acquisition of DB RREEF Funds Management Limited (the Responsible Entity of DRO). FAP is a wholly owned subsidiary of Deutsche Bank AG, a related party to the Stapled Entity. These bonds are 20 years in duration and yield 11 percent per annum.

note 19. loans with related parties

		Consolidated		Parent Entity
	2006 \$7000	2005 \$'000	2006 \$000	2005 \$'000
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Current liabilities -- loans with related parties
Non-interest bearing loans with the Trusts +	$\cdots$		34.332	34.332
Total current liabilities - loans with related parties	TOWN.	TOTA	34.332	34.332

I The non-interest bearing foans with the Trusts were created to effect the stapling of the Trust, DIT, DOT and DRO. These foan balances eliminate on consolidation.

note 20. non-current assets - goodwill

	Consolidated		Parent Entity
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$000
Opening balance as at 1 July 2005.	3.215	1.11	10000
Additions		3.443	$100 - 100$
Impairment charge	(3.287)		$100 - 100$
Net exchange differences arising during the year	72	(228)	10000
Closing balance as at 30 June 2006.		3.215
Cost		3.443	188
Net exchange difference arising during the year		(228)	10000
Total non-current assets -- goodwill		3.215

note 21, non-current assets - other

	Consolidated			Parent Entity
	2006 \$'000	2005 \$000	2006 \$1000	2005 \$'000
Tenant and other bonds.	6.298	2.173	750	615
Deferred borrowing costs	$\sim$	4.293	$\cdots$
Net receivable on currency hedge contracts.	$\cdots$	6.064		3.032
Other	714	3,234	1.1.1.1
Total non-current assets -- other	7.012	15.762	750.	3.647

note 22, current liabilities - payables

		Consolidated		Parent Entity
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Trade creditors	51.964	32.183	10.394	-8.379
Accruals	6.938	6.265	1.042	712
Amount payable to other minority interest	3.509	26.727
Accrited capital expenditure	2.117	2.795		2.561
Prepaid income	7.727	28.830	1.409	422
Responsible Entity fee payable	2.692	-2.142	1.093	682
GST payable	1.350	516		124
Accrued interest	24.095	19.021	1,258
Deferred settlement of property acquisition	4755		475
Other	34
Total current liabilities -- pavables	100.901	118,479	15,671	12.880

note 23. interest bearing liabilities

current

		Consolidated		Parent Entity
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Secured
Commercial paper	---	118.338
Commercial mortgage backed securities	---	236.000
Bank loans	29,402	15.498
Total secured	29,402	369,836	DOM:
Unsecured
Bank loans	217,000
Total unsecured	217,000	70
Deferred borrowing costs	(1.849)	1111
Total current liabilities - interest bearing liabilities	244,553	369,836

non-current

	Consolidated		Parent Entity
2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
452,449	452.449
710,883	705.169
422,508	439.666
1,585,840	1,597,284	WW
538.140	261.780
825.449	555.707	$\ddotsc$
7,025	-6.836
		707,039	581.077
125	121
1,370,739	824,444	707.039	581,077
(6.085)		(53)
2,950,494	2,421,728	706,986	581,077

E The intercompany loan represents a loan from DB RREEF Finance Pty Limited to DDF, DIT and DOT. These loan balances eliminate on consolidation.

note 23. Interest bearing liabilities (continued)

financing arrangements

The Stapled Entity has access to the following lines of credit:

		Consolidated		Parent Entity
	2006 \$000	2005 \$'000	2006 \$000	2005 \$'000
Borrowing facilities
Commercial paper	453,300	578.200
Commercial mortgage backed securities	710.883	-941.169	1.11
Commercial notes	538.140	261.780	$\cdots$
Bank keans	1.794.434	- 1.330.033
Medium term notes	7.025	6.835	$\cdots$
	3,503,782	3,118,017
Bank guarantee facility utilised at balance date	(5.000)		$\cdots$
Used at balance date.	(3.202.856)	(2.791.443)	1000000000000000000000000000000000000
Unused at balance date	295.926	326.574

fair value

		2006		2005
	Carrying amount \$'000	Fair value \$'000	Carrying amount \$'000	Fair value \$'000
The carrying amounts and fair values of borrowings at
balance date are:
Commercial paper	452.449	452.449	570.787	570.787
Commercial mortgage backed securities	710.883	711.550	-941.169	945.212
Commercial potes	538.140	514.989	261.780	267.941
Bank leans	1.494.359	1.473.107	1.010.871	1.010.197
Medium term notes	7.025	7,585	-6.836	7.916
	3,202,856	3.159.680	2.791.443	2,802,053

None of the classes of borrowings is readily traded on organised market in standardised form.

Fair value is inclusive of cost which would be incurred on settlement. of a liability.

The fair value of borrowings is based upon market prices where a market exists or by discounting the expected future cash flows. by the current inferest rates for liabilities with similar risk profiles.

bank loans

DB RREEF Finance Pty Limited, a wholly-owned subsidiary of DRO, has syndicated bank debt facilities which comprises a \$300 million. multi-currency revolving credit facility maturing in September 2007. a \$300 million multi-currency revolving credit facility maturing in September 2006 and a US\$210 million (\$282.524 million) multi-currency revolving credit facility maturing in September 2007. In addition, DB RREEF Finance Pty Limited entered into bilateral bank debt facilities in December 2005 mainly to refinance DB RREEF Industrial Trust's asset backed commercial paper and commercial mortgaged backed securities. The facilities include a total of \$360 million multi-currency revolving credit facilities maturing in December 2010 and a total of \$100 million multi-currency revolving credit facilities maturing in December 2006, of which \$5 million is utilised as a bank guarantee facility for the Coles Myer development (refer note 35). These bank debt facilities are supported by the Stapled Entity guarantee arrangements.

These facilities have negative piedge provisions which (imit the amount and type of encumbrances that the Stapled Entity can have over its assets and ensures that all senior presecured debt ranks. pari passe. DB RREEF industrial Properties, Inc. may only berrow. under the US\$210 million multi-currency revolving credit facility and up to a total of A\$240 million of the total \$360 million multi-currency revolving credit facilities and the A\$100 million multi-currency. revolving credit facilities.

The current debt facilities will be refinanced as at/or prior to their maturity. Subsequent to 30 June 2005, DB RREEF Finance Pty Limited established a Medium Term Note/Commercial Paper Programme, supported by the Stapled Entity guarantee arrangements. On 4 August 2006, DB RREEF Finance Pty Limited issued \$250 million of unsecured medium terra notes, maturing in February 2010, in addition, negotiations on the near term maturing facilities are well advanced. This together with the unused borrowing facilities provides adequate funding.

The consolidated accounts of the Stapled Enlity include the debt facilities of the US REIT. The facilities include a total of US\$110.905 million (\$149.206 million) of secured bank debt facilities that amortise through monthly principal and interest payments with a weighted average maturity date of September 2008. and a US\$225 million (\$302.704 million) secured interest only bank loan maturing in September 2009. These facilities are secured by mortgages over investment properties of the US joint venture totalling. \$412.834 million and \$723.223 million respectively as at 30 June 2006.

commercial notes - US private placement market

DB RREEF Finance Pty Limited has on issue US\$200 million. (\$269.070 million) of notes which were privately placed with investors on terms to maturity ranging from December 2011. to March 2017.

In February 2006, DB RREEF Industrial Properties, Inc. issued US\$200 million (\$269.070 million) of notes which were privately placed with investors on terms to maturity ranging from February 2011 to February 2016.

These notes are supported by the Stapled Entity guarantee arrangements. These notes have negative pledge provisions which limit the amoust and type of encumbrances that the Stapled Entity can have over its assets and ensures that all senior unsecured debt ranks pari passu.

commercial paper and commercial mortizage backed securities

DB RREEF Office Trust (DOT) has liabilities resulting from the issuance of \$452.4 million (facility limit of \$453.3 million) asset. backed commercial paper (CP) and \$500 million commercial mortgage backed securities (CMBS). The CMBS has an anticipated maturity date of April 2009. The CP and CMBS are both secured by mortgages over nine investment properties of DOT with a total value of \$2,242 million as at 30 June 2006.

The US joint venture has fiabilities resulting from a US\$156.749 million (\$210.883 million) CMBS issue, maturing in September 2008. (inclusive of a two by one year extension option beginning September 2006). This is secured by investment properties of the US joint venture totalling \$577.930 million as at 30 June 2006.

medium term notes

The US joint venture has fiabilities resulting from US\$5.222 million. (\$7.025 million) unsecured medium term notes maturing in September 2010.

preferred shares

DB RREEF Industrial Properties, Inc. has issued US\$92.550. (\$124.512) of preferred shares as part of the requirement to be classified as a Real Estate Investment Trust (REIT) under US tax legislation. These preferred shares will remain on issue until such time that the Board decides that it is no longer in the company's interest to qualify as a REF.

note 24, current liabilities - provisions

	Consolidated		Parent Entity
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Provision for distribution
Opening balance as at 1 July 2005.	144.800	-23.171	67.756	23.171
Additional provisions	306.259	284.657	106.689	127.133
Payments and reinvestment of distributions.	(295.536)	(163.028)	(120.267)	(82.528)
Closing balance as at 30 June 2006	155.523	144.800	54.178	67.756

Provision is made for distributions to be paid for the period ending 30 June 2006 payable on 29 August 2006.

note 25, current liabilities - other

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
		Consolidated		Parent Entity
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$000
Deferred gain on currency hedge contracts		2.242		1.121
Tenant bonds	20	34	$\cdots$
Other borrowing costs	5.432	6.397	$\cdots$
Total current liabilities - other	5.452	8.673	DOM:	1.121

note 26. non-current liabilities - deferred tax liabilities

The balance comprises temporary differences attributable to:

		Consolidated		Parent Entity
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Amounts recognised in profit or loss
Investment property	48.652	23.685	$100 - 100$
Other	74		10000
Total non-current liabilities -- deferred tax liabilities	48.726	23.685
Movements
Opening balance at 1 July 2005.	23.685		$\cdots$
Credited/(charged) to the income statement	25.041	-23.685
Closing balance at 30 June 2006	48.726	23,685

note 27. non-current liabilities - financial liabilities with minority interest

DB RREEF Industrial Properties, Inc. (US REIT) owns 80 percent of DB RREEF Industrial, LLC, a joint venture with Calwest Industrial Properties. LEC (Calwest), the 20 percent owner. The joint venture agreement entitles Calwest to receive 40 percent of certain cash flows arising from the joint verdure, rather than the 20 percent that it would be entitled to in terms of its ownership interest, up until 30 June 2014, after which time the rights to the cash flows revert to the ownership percentages. This additional entitiement is known as the "special interest" or "Calwest promote".

The joint venture agreement entitles US REIT to purchase the special interest from Calwest at any time up until 30 June 2014 at an agreed predefermined price (which increases over time) (the agreed price). Calwest has a right to sell the special interest to the US REIT, from 1 July 2009 to 30 June 2014, at a price not exceeding the agreed price.

The agreed price at 30 June 2006 was \$29,105,000, which is the value recognised in the financial statements.

note 28, non-current liabilities - other

		Consolidated		Parent Entity
	2006 \$000	2005 \$000	2006 \$000	2005 \$'000
Other borrowing costs	5.634	15,352
Tenant bonds	7.982	8.103	1.084	894
Deferred gain on currency hedge contracts	$\cdots$	6.064	1.1.1.1	3.032
Other	22	-24	1000000000000000000000000000000000000
Total non-current liabilities -- other	13,638	29.543	1.084	3.926

note 29, contributed equity

(a) contributed equity of equity holders of the parent entity

	Consolidated			Parent Entity
	2006 \$000	2005 \$000	2006 \$'000	2005 \$'000
Opening balance as at 1 July 2005.	1.059.867	1.028.028	1.059.866	1.028.028
Issue of units to stable	A 1999	21.101	$\cdots$	21.101
Issue of stapled securities	$\cdots$	316.263	$1 - 1$	316.263
Capital distribution/(consolidation) to staple	$\cdots$	(362.916)	$\cdots$	(362.916)
Distributions reinvested	34.284	57.558	34,284	57.558
Cost of distributions reinvested	01	(167)	-{6}	(168)
Closing balance as at 30 June 2006	1.094.144	1.059.867	1.094.144	1.059.866

(b) contributed equity of equity holders of other stapled entities (minority interest).

	Consolidated			Parent Entity
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$000
Opening balance as at 1 July 2005.	2.034.388	$1 - 1$
Additional equity acquired on stapling	$\cdots$	1,868.722	$100 - 100$
Placement of units.	$\cdots$	33.371	---
issue of stapled securities.	$\cdots$	(316.263)
Capital distribution/(consolidation) to staple	$\cdots$	362.916
Distributions reinvested	60.509	85.926
Cost of distributions reinvested	(10)	i284)
Closing balance as at 30 June 2006	2.094.887	2.034.388

(c) number of securities on issue

		Consolidated		Parent Entity
	2006 Number of securities	2005 Number of securities	2006 Number of units	2005 Number of units
Opening balance as at Ellely 2005.	2,732,082,389	996.612.986	2.732.082.389	996.612.986
Additional units created on stapling	$\cdots$	1.581.311.602
issue of units to staple	$\cdots$			1,581,311,602
Placement of crists.	$\cdots$	41.521.457		41,521.457
Distributions reinvested	70.127.004	112.636.344	70.127.004	112.636.344
Closing balance as at 30 June 2006	2,802,209,393	2.732.082.389	2,802,209,393	2.732.082.389

Terms and conditions

Each stapled security ranks equally with all other stapled securities for the purposes of distributions and on fermination of the Trust. Each stapled security entitles the holder to one vote, either in person or by proxy, at a meeting of each of the Trusts.

Distribution reinvestment plan

Under the distribution reinvestment plan (DRP), stapled security holders may elect to have all or part of their distribution entitlements satisfied by the issue of new stapled securities, rather than being paid in cash.

On 29 August 2005, 33,705,917 units were issued at a unit price of \$1,3477 in relation to the June 2005 distribution period. On 28 February 2006, 36.421.087 units were issued at a unit price of \$1.3555 in relation to the December 2005 distribution period.

note 30, reserves and undistributed income

(a) reserves

		Consolidated		Parent Entity
	2006 \$'000	2005 \$'000	2006 \$000	2005 \$000
Foreign currency translation reserve	178	(1.123)
Total reserves	178	(1.123)
Movements:
Foreign currency translation reserve
Opening balance as at 1 July 2005	(3.123)
Foreign currency translation reserve acquired on stabling	$\sim$	127	---
Exchange difference arising from the translation of the financial statements of foreign operations.	1.301	(1.250)
Total movement in foreign currency translation reserve	1.301	(1.123)
Closing balance as at 30 June 2006	178	(1.123)

(b) nature and purpose of reserves

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations.

note 30, reserves and undistributed income (continued)

(c) undistributed income

		Consolidated		Parent Entity
	2006 \$000	2005 \$'000	2006 \$'000	2005 \$'000
Undistributed income as at 1 July 2005.	407.222	164.624	229.115	164.624
Net profit attributable to security holders.	1.010.342	396.031	401.219	191.604
Transfer to capital reserve of minority interest.	(16.014)	1111
Undistributed income acquired on stapling		127.870	10.001
Distributions provided for or paid-	(306.259).	(281.303)	(106.689)	(127.113)
Adjustment on adoption of AASB 132 and 139.	3.162		2.165
Undistributed income as at 30 June 2006	1.098.453	407.222	525,810	229.115

note 31, minority interests

79999999999999999999999999999999999999
	Consolidated			Parent Entity
	2006 \$000	2005 \$'000	2006 \$'000	2005 \$'000
Interest in
Contributed equity	343.932	336.283	1000000000000000000000000000000000000
Reserves	15.616	(4.868)	10000
Undistributed income	68,303	33.943	1000000000000000000000000000000000000
Total minority interests	427.851	365,358	TOM:	WWW

On 15 June 2005, DB RREEF Funds Management Limited in its capacity as Responsible Entity of DB RREEF RENTS Trust issued 2,040,000 preference units with a face value of \$100 each on the ASX. The securities, known as RENTS, entitle holders to receive non-curraliative quarterly floating rate distributions at a margin of 130 basis points above the 90 day bank bill rateh. RENTS may be exchanged for cash or stapled securities on 30 June 2012 (the Step-up Date). For each distribution period following the Step-up Date, the margin will increase by a once only step-up of 2 percent per annum unless RENTS are repurchased or exchanged.

note 32, distributions paid and payable

(a) distribution to security holders

	Consolidated			,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Parent Entity
	2006 \$000	2005 \$000	2006 \$'000	2005 \$'000
31 December (paid 28 February 2006)	150.736	136.503	52.511	59.357
30 Jane (payable 29 August 2006)	155.523	144.800	54.178	67.756
Total distributions	306.259	281,303	106,689	127.113

(b) distribution to minority interests

		Consolidated
	2006 \$000	2005 \$000	2006 \$'000	2005 \$'000
DB RREEF Industrial Roldings, LLC (paid)	7.178	461	1.1.1.1
DB RREEF RENTS Trust (paid 17 October 2005)	4.223		1.1.1.1
DB RREEF RENTS Trast (paid 17 January 2006).	3.566		1000000000000000000000000000000000000
DB RREEF RENTS Trust (paid 21 April 2006).	3.488		1000000000000000000000000000000000000
DB RREEF RENTS Trust (paid 17 July 2006).	3.509		1000
	21.964	461
Total distributions	328.223	281.764	106.689	127.113

(c) distribution rate

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,		Consolidated		Parent Entity
	2006 Cents per security	2005 Cents per security	2006 Cents per unit	2005. Cents per unit
31 December (paid 28 February 2006).	5.45	5.20	1 93	2.26
30 June (payable 29 August 2006).	5.55	5.30.	1.96	2.48
Total distributions	11.00.	10.50	3.89	4.74

(d) franked dividends

The franked portions of the final dividends recommended atter 30 June 2006 will be franked out of existing franking credits or out of franking credits arising from the payment of income tax in the year ending 30 June 2006.

		Consolidated	Parent Entity
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$000
Franking credits
Opening balance as at 1 July 2005.	$\cdots$
Franking credits arising during the year on payment of tax at 30 percent.	1.069.		$\cdots$
Franking debits arising from payment of interim dividend	(574)		$\cdots$
Closing balance as at 30 June 2006	495	TOP.	DOM:

note 33. financial risk management

The Trust's activities expose it to a variety of financial risks: credit risk, market risk (including currency risk, fair value interest rate risk and price risk), liquidity risk and cash flow interest rafe risk. The Trust's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Trust.

Accordingly, the Trust enters into various derivative financial instruments to manage its exposure to the movements 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 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.

(a) credit risk

Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.

Concentrations of credit risk are minimised primarily by:

• « ensuring tenants, together with the respective credit limits, are approved and ensuring that leases are undertaken with a large number of tenants; and
• ensuring derivative counterparties and cash transactions are limited to high credit quality financial institutions. The Trust has policies that limit the amount of credit exposure to any one financial institution. Credit risk is further minimised by spreading transactions amongst approved counterparties.

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

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 Balance Sheets is the carrying amount.

(b) market risk

(i) Foreign exchange risk

Foreign exchange risk is the risk that movements in exchange rates used to convert foreign currency revenues, expenses, assets, or liabilities to the Trust functional corrency will have an adverse affect on the Stapled Entity.

The Trust operates internationally with investments in the United States and New Zealand and is exposed to foreign exchange risk arising from currency exposures in US and NZ dollars.

Forward contracts are used to manage foreign exchange risk.

(ii) Fair value interest rate risk

Refer to (d) on the following page.

(iii) Price risk

This 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.

note 33. financial risk management (continued)

(c) liquidity 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 maintaining sufficient cash balances and the availability of funding through an adequate amount of committed credit facilities.

(d) cash flow and fair value interest rate risk

Interest rate risk for the Trust arises from its borrowings. Borrowings issued at variable rates expose the Trust to cash flow interest rate risk. Borrowings issued at fixed rates expose the Trust to fair value interest rate risk.

A portfolio approach to interest rate risk management is adopted whereby generally any fixed rate debt is converted into floating rate exposure via fixed-to-floating interest rate swaps. This mitigates fair value interest rate risk. The Trust then manages its cash flow interest rate risk by using floating-to-fixed inferest rate swaps. Under the inferest rate swaps, the Trust agrees with other parties to exchange, at specified intervals (mainly quarterly), the difference between fixed contract rates and floating-rate interest amounts calculated by reference to the agreed notional principal amounts.

Fixed debt and swaps currently in place cover approximately 95 percent (2005: 84 percent) of the loan principle outsfanding, with a further \$2.7 billion (2005: \$1.1 billion) in swaps that are forward starting.

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 following table.

30 June 2006

Consolidated					Fixed interest maturing in:
	Note(s)	Floating interest rate \$'000	1 year or less \$'000	Over 1 and less than 2 years \$'000	Over 2 and less than 3 years \$'000	Over 3 and less than 4 years \$'000	Over 4 and less than 5 vears \$'000	More than 5 years \$'000	Total \$'000
Financial assets
Cash and cash
equivalents	8	106,428							106,428
Loans and receivables	18	45.092							45.092
Total		151.520	ww.	$\mathbf{v}$	$\sim$	m	$\mathbf{w}$	$\mathcal{L}_{\mathcal{F}}$	151.520
Weighted average inferest rate		6.25%
Financial liabilities Interest bearing
liabilities	23	2.070.961	14.582	21.712	263.290	302.704	146.942	382.790	3.202.981
Interest rate swaps 3 Forward start interest		(1.919.769)	668.349	180.000	214.572	515.533	290.205	51.110
rate swaps 3			(707.257)	(130.000)	(445, 465)	(468.182)	(309.029)	(642.884)	(2.702.817)
Forward start interest rate swaps maturities 3				$\cdots$	183,814	$\cdots$	45.533	2.473.470	2,702,817
Total		151.192	(24.326)	71.712	216,211	350.055	173,651	2.264,486	3.202.981
Weighted average interest rate (including swaps)		5.75%	5.66%	5.66%	5.63%	5.85%	5.96%	6.03%
Net financial (liabilities)/assets		328	24.326	(71.712)	(216.211)	(350.055)		$(173.651)$ $(2.264.486)$ $(3.051.462)$

30 line 2006

Consolidated		Fixed interest maturing in:
	Note(s)	Floating interest rate \$'000	1 vear or less \$'000	Over 1 and less than 2 years \$'000	Over 2 and less than 3 years \$'000	Over 3 and less than 4 years \$'000	Over 4 and less than 5 years \$'000	More than 5 vears \$'000	Total \$'000
Financial assets
Cash and cash
eouivalents	8	68.959							68.959
Loans and receivables	18	45.092							45,092
Total		114,051	w	w	÷.			$\mathcal{L}_{\mathcal{M}}$	114,051
Weighted average interest rate		5.64%
Financial liabilities interest bearing
liabilities	23	1.832.297	109.453	14.940	23.040	263.189	294.503	254.142	2.791.564
interest rate swaps 1		(1.395.225)	40.000	100,000	180.000	610.000	439.372	25.853
Forward start interest rate swaps!			(340.756)	(498, 534)	(50,000)	(90,000)	(102.094)		(1.081.384)
Forward start interest rate swaps maturities!			$\cdots$	180,000	80.756			820.628	1,081,384
Total		437,072	(191, 303)	(203, 594)	233,796	783.189	631,781	1.100.623	2.791,564
Weighted average interest rate (including swaps)		5.52%	5.63%	5.61%	5.60%	5.55%	5.88%	6.01%
Net financial (liabilities)/assets		(323,021)	191,303	203.594	(233,796)	(783, 189)			$(631,781)$ $(1,100,623)$ $(2,677,513)$

E Notional principal amounts.

(e) foreign exchange rate risk exposures

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

30 June 2006

Weighted average exchange rate		Contracts to sell US\$ at an agreed exchange rate:
	I vear or less	Over 1 and less than 2 years	More than 2 years
To pay US\$ raillion			26
To receive A\$ million	24		36
Weighted average exchange rate	0.7086	ሰ 7015	0.7041.

Weighted average exchange rate	Contracts to sell NZ\$ at an agreed exchange rate:
	I year or less	Over 1 and less than 2 years	More than 2 years
To pay NZ\$ million	$-$		$-$
To receive A\$ million	$\cdots$	1.11
Weighted average excitange rate	$\cdots$	1.11	$\cdots$

Weighted average exchange rate	Contracts to sell $6$ at an agreed exchange rate:
	I year or less	Over 1 and less than 2 years	More than 2 years
To pay € million
To receive A\$ million	30		ъ.
Weighted average exchange rate	N 5839	8.5626	0.5402

note 33. financial risk management (continued)

(e) foreign exchange rate risk exposures (continued)

30 June 2006

Weighted average exchange rate	Contracts to sell US\$ at an agreed exchange rate:
		1 year or less Over 1 and less than 2 years	More than 2 years
To pay US\$ million		ib
To receive A\$ million	31		40
Weighted average exchange rate	0.7079.	16929	0.6878.

Weighted average exchange rate		Contracts to sell NZ\$ at an agreed exchange rate:
	1 year or fess	Over 1 and less than 2 years	More than 2 years
To pay NZ\$ million
To receive A\$ million	$\sim$
Weighted average exchange rate	1.1134

Weighted average exchange rate			Contracts to sell $6$ at an agreed exchange rate:
	1 year or less	Over 1 and less than 2 years	More than 2 years
To pay $\varepsilon$ million
To receive A\$ million	1111
Weighted average exchange rate	1111

note 34, contingent liabilities

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

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Consolidated			Parent Entity
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	2006 \$000	2005 \$'000	2006 \$'000	2005 \$'000
Bank guaraniees by the Stapled Entity in respect of variations and other financial risks associated with the development of:
-240 St George's Terrace, Perth WA	200	-2.200	10.001
Coles Myer development at Boundary Road, Laverton North VIC	5.000	5.000	10.001
Total contingent liabilities	5.200	7.200

The Trusts are also guarantors of a A\$600 million and US\$210 million syndicated bank debt facility and a total of A\$460 million of bank bilateral facilities and a total of US\$400 million of privately placed notes, which have all been negotiated to finance the Stapled Entity. The guarantees have been given in support of debt outstanding and drawn against these facilities.

The guarantees are issued in respect of the Stapled Entity and do not constitute an additional liability to those already existing in interest bearing liabilities on the Balance Sheets.

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

note 35, commitments

(a) 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
Capital expenditure commitments in relation to development works:	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Not fonger than one year
Ferguson Centre, 130 George Street, Parramatta NSW		23,821		23.821
Axxess Corporate Park, Mount Waverley VIC	7,900	11,375	7,900	11,375
Plenty Valley Town Centre, McDonald's Road, South Morang ViC	35,000	$\cdots$	35,000
Westfield North Lakes Shopping Centre, Mango Hill QLD	50,000	2,276	50,000	2.276
Westfield Mt Druitt Shopping Centre, Mt Druitt NSW		17,557		17,557
DBREEF Industrial Estate, Boundary Road, Laverton North VIC	55,820	35,266
Pound Road West, Dandenong ViC	1,957
1-15 Rosebery Avenue, Rosebery NSW		114
One Margaret Street, Sydney NSW	264	402
Zenith Centre, 821-843 Pacific Highway, Chatswood NSW		1.346
45 Clarence Street, Sydney NSW		9,828
Governor Phillip Tower and Governor Macquarie Tower Office Complex
1 Farrer Place, Sydney NSW	14,534	4,071
309-321 Kent Street, Sydney NSW	5,254
Australia Square, 264-278 George Street, Sydney NSW	2,248	3.406
Southgate Complex, 3 Southgate Avenue, Southbank V(C)	100
88 Shortland Street, Auckland, New Zealand		100.942
World Park, Cincinnati/North Kentucky		805
Equity/Westbelt/Dividend, Columbus		794
2055 Diploraat Drive, Dallas		914
Orlando Central Park, Orlando		415
Williams Drive, Atlanta	398
West Nursery, Baltimore	235
NE Baltimore, Baltimore	215
Kenwood Road, Cincinnati/North Kentucky	124
East Collins, Dalias	180
10th Street, Dallas	530
Mechanicsburg, Harrisburg	471
Glendale, Los Angeles	124
Memphis Industrial, Memphis	221
1000 South Priest Drive, Phoenix	410
Kent West, Seattle	573
	176,558	213,332	92,900	55,029
Later than one year but not later than five years
Plenty Valley Town Centre, McDonald's Road, South Morang ViC	40,000		40,000
Westfield North Lakes Shopping Centre, Mango Hill QLD	25,000		25,000
Governor Phillip Tower and Governor Macquarie Tower Office Complex
1 Farrer Place, Sydney NSW		22,826
OB RREEF Industrial Estate, Boundary Road, Laverton North VIC		50,749
	65,000	73,575	65,000
Total capital commitments	241,558	286,907	157,900	55,029

note 35, commitments (continued)

(b) lease payable commitments

	Consolidated			Parent Entity
	2006 \$'000	2005 \$'000	2006 \$000	2005 \$000
Commitments in relation to leases contracted for at the reporting date but not recognised as liabilities, payable
Within one year	290	290	290	-290
Later than one year but not later than five years.	3.162	1.162	1.162	1.162
Later than five years	7.550	7.840	7.550	7.840
Total lease payable commitments	9.002	9.292	9.002	9,292

Payments made under operating leases are expensed on a straight line basis over the term of the lease except where an alternative basis is more representative of the pattern of benefits to be derived from the leased property.

The Trust has a commitment for ground rent payable in respect of a leasehold property included in property investments. An amount of \$290.356 was paid in respect of the year ended 30 June 2006 (2005; \$290.356). This commitment was reviewed in 2003 and annual lease payments were increased by a CPI factor as per the lease agreement. This commitment is next subject for review in 2012 and expires in 2037.

No provisions have been recognised in respect of non-cancellable operating leases.

(c) lease receivable commitments

	Consolidated			Parent Entity
	2006 \$'000	2005 \$000	2006 \$'000	2005 \$'000
The future minimum lease payments receivable by the Stapled Entity are
Within one year	541.745	573.724	147.352	195.013
Later than one year but not later than five years.	1.531.569	1.716.962	423.153	585.208
Later than five years	967.674	1.258.766	273.761	435.459
Total lease receivable commitments	3,040,988	3.549.452	844.266	1.215.680

note 36, related parties

responsible eatity

On 29 September 2004, DB RREEF Funds Management Limited replaced DB Real Estate 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 Constitutions, the Responsible Entity is entitled to receive fees in relation to the management of the Trust.

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

At 30 June 2006 Deutsche Bank AG and its related parties, schemes and portfolios managed by Deutsche Bank AG and its related parties hold 48,480,053 stapled securities (2005:453,322,396) in the Stapled Entity.

investments

DB RREEF Funds Management Limited, the Responsible Entity, is a wholly owned subsidiary of DRH. DRH is 50 percent owned by DRO and 50 percent owned by FAP, a subsidiary of Deutsche Bank Group. The Trust is the parent entity and deemed acquirer of DRO.

Deutsche Bank AG

Up to 29 September 2004 Deutsche Bank AG 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 percent of the Manager and new Responsible Entity, DB RREEF Funds Management Limited. Deatings 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
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Transactions with DB Real Estate Australia Limited/Deutsche Asset Management (Australia) Limited in its capacity as Responsible Entity of the Trust:
Responsible Entity fees paid and payable Administration expenses incurred by the Responsible Entity which are		1.894		1.894
reinstairsed in accordance with the Trust's Constitution		521
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 interest and financing fees paid and payable on borrowings.	13.334	1.126	(467)	583
to Deutsche Bank AG Dealer fees paid and payable to Deutsche Bank AG for the co-management	585	772		296
of medium ferm notes issued during the year		1.157
Borrowings from Deutsche Bank AG	10,103	129.887		125.000
Loan repayment to Deutsche Bank AG interest received and receivable on swaps for whom the counterparty	5.251	125.000		125.000
was Deetsche Bank AG	(12.834)	72	1	36.
Other transactions with Deutsche Bank AG:
Underwriting fees paid and payable to Deutsche Bank AG.	$\cdots$	6.034		167
Financial adviser's fees paid and payable to Deutsche Bank AG		8.076		2.692
Costs associated with the Transaction	480.		160
interest paid and payable to FAP	566

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
	2006 \$'000	2005 \$'000	2006 \$'000	2005 \$'000
Responsible Entity fees paid and payable	28.695	39.247	10.534	6.796
Aggregate amounts payable to the Responsible Entity at reporting date	3.410	3.587	093	879

note 36, related parties (continued)

RREEF

RREEF (a subsidiary of Deutsche Bank AG), as fund manager of the DB RREEF Industrial Properties, Inc. is entitled to the following fees:

	Consolidated	Parent Entity
	2006 \$000	2005 \$'000	2006 \$'000	2005 \$'000
Investment management fee paid and payable	1.053	738
Asset management fee paid and payable	303	211
Acquisition fee paid and payable	555	71
Disposal fee paid and payable		82
Financing fees paid and payable		791
Property management fees paid and payable	4.758	4.177	---
Leasing fees paid		1.699
Construction supervision fee paid and payable	1.150	-605	$\overline{a}$
Marketing fees paid		17
Development fee	172	1111
Leasing commissions	3.708
Performance fee	211		$\cdots$

DB RREEF Holdings Pty Limited

	Consolidated			Parent Entity
	2006 \$000	2005 \$000	2006 \$000	2005 \$000
Loan note interest earned from DB RREEF Holdings Pty Limited	4 960	3.696
Loan note interest receivable from DB RREEF Holdings Pty Eimited		1.238	$-$
Loan notes receivable at reporting date	45.092	45.092	$- - - -$
Property management fees paid and payable to DB RREEF Holdings Pty Limited	6.260	3.363	10000
Recovery of administration expenses paid to DB RREEF Holdings Pty Limited	8.589	3.505	1 742	407

directors

The following persons were Directors of DRFM during the whole of the financial year and up to the date of this report, unless otherwise stated:

Directors	Appointed	Resigned
IC T Beare BSc, BE (Hoas), MBA, PhD, FAICD 3,3,5
E A Alexander AM BComm, FCA, FAICD, FCPA 1,2
B R Brownjohn BComm 3, 2,3
S.F. Fwen FILE 54
A J Fay BAg Econ (Hons), ASIA (Alternate to C 8 Leitner).	30 January 2006
V P Hoog Antisk BComm, MBA, FCA, FAPI, MAICD 3
C.B. Leitner, BA
S. A Mays BSc (Hons), MSc. MBA (Alternate to C. B. Leitner).		30 January 2006
B E Scullin BEc2, 3,4
3 Independent Director.
-2 - Audit Committee Member

3 Compliance Committee Member.

4 Remuneration Committee.

5 Treasury Committee.

No Directors held an interest in the Trust as at 30 June 2006 or at the date of this report.

other key management personnel

In addition to the Directors listed above the following persons were deemed by the Board Nomination and Remuneration Committee to be key management personnel during all or part of the financial year and up to the date of this report:

Name	Position	Qualification date of other key management personnel during the 12 months ended 30 June 2006
Tanya L Cox	Chief Operating Officer
John C Easy	General Counsel
Greg Titlee	Head of Transaction Services	Qualified until 31 January 2006.
Ren I Lehmann	Head of Portfolio Services
Peter C Roberts.	Chi ef Fi nascial Officer	Oualitied from 5 December 2005.
Mark E Turner I	Head of Linisted Funds

No key management personnel or their related parties held an interest in the Trust for the years ended 30 June 2005 and 30 June 2006 or at the date of this report.

There were no loans or other transactions with key management personnel or their related parties during the years ended 30 June 2005. and 30 June 2006 or at the date of this report.

Compensation	2006 (集)	2005: (\$)
Short term employee benefits	-4.434.850	3.252.331
Post-employment benefits	418.594	115.169
Other fong term benefits?	650.000	282.500
	5.503.444	3,650,000

1. Actual 2005 remuneration received from DRFM was for the nine month period commencing 1 October 2004. Remuneration paid during the 3 month period to 30 September 2004, the stapling implementation date, was paid by Deutsche Bank and was not a cost of DB RREEF Trust. In addition, the 2005 short term incentive values have been restated to reflect actual incentive values granted to Executives in September 2005 which related to the period ended 30 June 2005. Consequently, the 2005 short term incentive amounts and corresponding line totals will differ from those published in the 2005 Annual Report.

2 A long ferm incentive scheme for other Key Management Personnel was introduced in July 2005, with an effective date of 1 January 2005. The above 2005 tong term incentive values were therefore granked for the six month period to 30 June 2005.

The Trust has taken advantage of the relief provided by ASIC Class Order 06/50 and has transferred the detailed remuneration disclosures to the Directors' Report. The relevant information can be found in section 3 of the Directors Report on pages 48 to 54.

note 37, events occurring after reporting date

acquisition of Prologis France 1 SAS

On 11 July 2006 DB RREEF Industrial Trust incorporated DIT France Logistique, a wholly owned subsidiary, which acquired all of the issued shares in Protogis France 1 SAS on the same date for a cash consideration of \$56,158,118.

Details of the net assets adquired and goodwill are as follows:

*********
	2006
	\$'000
Purchase consideration
Cash paid	56,158
Direct costs related to acquisition.	1.906
Total parchase price	58,064
Fair value of net identifiable assets acquired (refer below).	(41.259)
Goodwill	16.805

note 37, events occurring after reporting date (continued)

acquisition of Profesis France 1 SAS (continued)

Assets and fiabilities acquired

The assets and liabilities arising from the acquisition are as follows:

	Provisional fair value \$'000	Acquiree's carrying amount \$'000
Investment properties	73.438	29.332
Receivables	808	808
Prepayments	48	48
Cash and cash equivalents.	45	45
Payables	(945)	(945)
Deferred revenue	(344)	(344)
Security deposits	-(101)	(101)
Group borrowings	(16.790)	(16.790)
Deferred CGT liability	(14.900)
Net identifiable assets acquired	41.259	12.053

acquisition of Prologis France XXXII EURL

On 11 July 2006, DIT France Logistique, a wholiv owned subsidiary, acquired all of the issued shares in Prologis France XXXII EURL for a cash consideration of \$23,728,219.

Details of the net assets acquired and goodwill are as follows:

	2006 \$'000
Purchase consideration
Cash paid-	23,728
Direct costs related to acquisition.	572
Total purchase price-	24,300
Fair value of net identifiable assets acquired (refer below).	(16, 812)
Goodwill	7.488

assets and liabilities acquired

The assets and liabilities arising from the acquisition are as follows:

	Provisional fair value \$'000	Acquiree's carrying amount \$000
Investment properties	-42.681	18.853
Receivables	1.067	1.067
Prepayments	39	39
Payables	(981)	(98!)
Group borrowings	(19.079)	(19.079)
Deferred capital gains tax liability	(6.915)
Net identifiable assets acquired	16,812	(101)

The goodwill on consolidation arises because the consideration paid for Prologis France I and Prologis France XXXII exceeds the values at which its net assets are required to be recognised in the financial statements. The differences are primarily attributable to lafent CGT liabilities, which arise as a result of the properties' fair market values exceeding their tax base values.

It is unlikely that the CGT liability will ever crystallise. Crystallisation would require that the companies dispose of the properties concerned individually and it is the intention of the companies to hold these properties as long term investments. Should DB RREEF Industrial Trust wish to sell the properties, it would likely sell the structure rather than the properties. However, AASB 112: Income Taxes requires the recognition of a liability in respect of such latent CGT (at an undiscounted amount) even if the entity does not intend to dispose of the asset concerned.

The financial effects of the above transactions have not been brought to account at 30 June 2006. The operating results and assets and liabilities of the companies will be consolidated from 11 July 2006.

acquisition of additional land

In July 2006 DfT exchanged contracts to acquire a 65.4 hectare site at Laverton North, Victoria for \$32 million, with settlement due in November 2006. This site is adjacent to DIT's existing holdings, and provides a strategic extension to this development, in which several recent and pending pre-commitments have utilised a number of major lots.

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 Stapled Entity, the results of those operations, or state of the Stapled Entity's affairs in future periods.

note 38, segment information

Business segments

The Stapled Entity operates in the following segments:

• Retail investment in the retail property sector.
• Commercial and car park investment in the commercial and car park property sectors.
• « Industrial investment in the industrial property sector.

2006

	Retail	Commercial and car park	Industrial	Eliminations/ unatlocated	Consolidated
	\$'000	\$'000	\$'000	\$′000	\$'000
Property revenue	64.441	304.249	290.905	354	659,749
interest revenue	257	837	5.209	5,597	11,900
Share of net profits of associates accounted for
using the equity method.	19,632	2.434		4.845	26,911
	84,330	307.520	296.114	10,596	698,560
Net gain on sale of investment properties.		131	1,359	$\cdots$	1,490
Net fair value gain of investments properties	76,901	307,526	302,063		686,490
Net fair value gain of derivatives.				73,271	73,271
Net foreign exchange gain/(loss)		117	2.786		2,903
Other income		329		190	519
Total segment revenue/income	161,231	615,623	602,322	84,057	1,463,233
Segment result	140,857	469,881	338,973	60.631	1,010,342
Segment assets	932,720	3,738,259	3.520.817	95,742	8,287,538
Segment liabilities	19.161	115.126	1.385.629	1.052.109	3.572.025
investments accounted for using the equity method.	182,500	36,801		15.761	235,062
Acquisition of investment properties.		102.599	53,194		155.793
Additions of property, plant and equipment.		57,495	68.581		126,076
Amortisation expense	2.157	18.712	4,453		25,322
trapairment of goodwill			3,287		3.287
Other non-cash expenses		3,023			1.023

2005

	Retail	Commercial and car park	Industrial	Eliminations/ unallocated	Consolidated
	\$'000	\$'000	\$'000	\$'000	\$'000
Property revenue	54,385	227.820	224.875	1.715.	508,795
interest revenue	560	1.209	-903	3.260	5.932
Share of net profits of associates accounted for using the equity method.	8.298	1.674		2.572	12,544
	63,243	230,703	225,778	7,547	527,271
Net gain on sale of investment properties	18.077	3.120	4.510		25.707
Net fair value gain of investment properties.	18.405	60.174	178.028		256.607
Net foreign exchange gain/(loss)			42		42
Other income		260			260
Total segment revenue/income	99,725	294.257	408.358	7.547	809,887
Segment result	77,980	171,298	218,716	(71.963)	396,031
Segment assets	818,412	3.147.514	2,909,885	109.192	6.985.003
Segment liabilities	535.269	1,016.602	1.724.254	(156.834)	3,119.291
lavestments accounted for using the equity method	154.957	36.609		17.166	208,732
Amortisation expense	845	7.674	1,138		9.657

note 38, segment information (continued)

geographical segments

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

2006

	Australia \$'000	New Zealand \$7000	United States of America \$000	Consolidated \$'000
Rental and other property income	498.281	8.595.	152.873	659.749
Segment assets	6.292.518	102 125	1,892.895	8.287.538
Acquisitions of investment properties	$\cdots$	102.599	53.194	155.793
Additions of property, plant and equipment.	109.932	$\cdots$	16.144	126.076

2005

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
	Australia \$'000	New Zealand \$7000	United States of America \$'000	Consolidated \$'000
79999999999999999999999999999999999999
Reatal and other property income	390.029		118.766	508.795
Segment assets	5.411.346	5.006	1,568,651.	6.985.003

note 39, reconciliation of net profit/(loss) to net cash inflow from operating activities

		Consolidated		Parent Entity
	2006 \$000	2005 \$'000	2006 \$'000	2005 \$'000
-Net-profit	1,066,385	466.933	401.219	191,604
Capitalised interest	(10.488)	(12.937)	(5.627)	(8.932)
Capitalised expenses		(1.863)		(1.863)
Depreciation	1.023
Net increment on revalization of investments	(686.490)	(256.607)	(285.490)	(82.020)
Share of net profits of associates accounted for using the equity method	(5.036)	(2.458)
Net increment on revaluation of derivatives	(73.271)		(15, 349)
Net gain on sale of investment properties	(1.487)	(25,706)	(109)	(21.765)
Net foreign exchange loss/(gain)	10.772	(545)	3,508
Provision for doebtful debts.	635	466	(1)	(218)
Impairment of goodwill	3.287
Change in operating assets and liabilities
(increase)/decrease in receivables	(1.412)	30.789	(13.205)	49.286
Decrease in prepaid expenses	368	-6.036	845	3.710
Decrease in other non-current assets - investments	1.209	17.307	26.828	2.368
Decrease/fincrease) in other current assets	3.098	(3.518)		(5.227)
(Increase)/decrease in other non-current assets	(2.384)	15.127	1.776	(4.713)
increase/(decrease) in payables	6.267	6.360	2.317	(2.849)
(Decrease)/increase in deferred tax fiabilities		23.637
(Increase)/decrease in other current liabilities	(655)	3.359	(1.880)	1.121
tocrease/(decrease) in other non-current liabilities	16.204	(25.131)	7,622	24.611
Net cash inflow from operating activities	328.025	241.249	122,444	145,113

note 40. non-cash financing and investing activities

79999999999999999999999999999999999999
			Consolidated		Parent Entity
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Note(s)	2006 \$'000	2005 \$'000 *********	2006 \$'000	2005 \$'000
Placement of units	29	$\cdots$	54.472	$\cdots$	21.101.
Distributions reinvested	29	94.793	143 484	34.284	57.558

note 41, earnings per unit

(a) basic earnings per unit on profit attributable to equity holders of the parent entity

	Consolidated		Parent Entity
2006 Cents	2005 $\:$ ents	2006 Cents	2005 Cents
14.39	. 83	14.47	ス ぢろ

(b) diluted earnings per unit on profit attributable to equity holders of the parent entity

	Consolidated		Parent Entity
2006 Cents	2005 Cents	2006 $\epsilon$ ents	2005 Cents
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 14.39	8.83	14.47	8.83

(c) recondiliation of earnings used in calculating earnings per unit

		Consolidated		Parent Entity
	2006 \$000	2005 \$'000	2006 \$'000	2005 \$000
Net profit	1.066.385	466.933	401.239.	393.604
Net profit attributable to equity holders. of other Stapled Entities (minority interest)	(611.417)	(204.466)
Net profit attributable to other minority interests.	(56.043)	(70.902)
Net profit attributable to the unitholders of the Trust in calculating basic and diluted earnings per unit	398,925	191.565	401.219	191.604

(d) weighted average number of units used as a denominator

		Consolidated		Parent Entity
	2006	2005.	2006	2005.
Weighted average sumber of units outstanding used in the calculation of basic and diluted earnings per unit			2.772.613.360

note 42, business combinations

acquisition of DB RREEF Industrial Holdings Ltd

,0000000000000000000000000000000000000
Name of entity	Country of incorporation	Class of shares	Nature of business	Equity holding (%)
DB RREEF Industrial Holdings LLC –	- Boited States of America	Ordinarvi	Property trust	80.

On 30 September 2004, the Stapled Entity (via DDF and D(T) acquired 80 percent of DB RREEF Industrial Holdings, LLC. The operating results of this controlled entity have been included in the Income Statements since the date of acquisition. The acquired business contributed revenues of \$268,011,000 and net profit of \$102,876,000 to the consolidated result for the period 30 September 2004 to 30 June 2005.

If the acquisition had occurred on 1 July 2004, the Stapled Entity's consolidated revenue and consolidated profit for the year ended 30 June 2005. would have been \$809,887,000 and \$396,031,000 respectively.

For the year ended 30 June 2006, \$326,120,000 of revenues and \$129,976,000 of profit have been included in the consolidated result.

Details of the acquisition are as follows:

	2005 \$'000
Fair value of identifiable net assets of controlled entity acquired
Investment properties	1,446,780
Other assets	12,400
Cash assets	43,210
Interest bearing liabilities	(1,062,279)
Payables	(44.636)
Provisions	(28, 422)
	367,053
Less: Outside equity interests	(73, 411)
	293,642
Goodwill on consolidation	3,443
Cash consideration	297,085
Outflow of cash to acquire controlled entity, net of cash acquired
Cash consideration	297.085
Less: Balances acquired
Cash assets	(43.210)
	(43, 210)
Outflow of cash	253,875

Name of entity	Country of incorporation	Class of shares	Nature of business	Equity holding $(\%)$
---------------------------------------			,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
DB RREEF RENTS Trust	Anstralia	Ordinarv	Investment in property trust

acquisition of controlled entity

On 27 January 2005, the Trust acquired one unit in 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. The results of this newly controlled entity have been included in the Income Statements since the date of acquisition.

Name of entity	Country of Incorporation	Class of shares	Nature of business	Equity holding (%)
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
- DB-RREEF Harstville Trust -	Australia	Jrdinary	Property trust

On 6 May 2005, DDF acquired 100 percent of DB RREEF Hurstville Trust. The operating results of this controlled entity have been included in the consolidated Income Statements since the date of acquisition. The acquired business contributed revenues of \$3,332,000 and net profit of \$2,402,000 to the consolidated result for the period 6 May 2005 to 30 June 2005.

If the acquisition had occurred on 1 July 2004, the Stapled Entity's consolidated revenue and consolidated profit for the year ended 30 June 2005 would have been \$809,887,000 and \$396,031,000 respectively.

For the year ended 30 June 2006, \$35,179,000 of revenues and \$30,106,000 of profit have been included in the consolidated result.

Details of the acquisition are as follows:

	2005 \$'000
Fair value of identifiable net assets of controlled entity acquired
investment properties	232,500
Cash assets	1.210
Receivables	1.387
Other assets	310
Payables	(1,609)
Other liabilities	(1.110)
Provisions	(188)
	232,500
Goodwill on consolidation
Cash consideration	232,500
Outflow of cash to acquire controlled entity, net of cash acquired
Cash consideration.	232,500
Less: Balances acquired
Cash assets	(1,210)
	(1,210)
Outflow of cash	231.290

deemed acquisition of controlled entities through stapling

Name of entities	Country of incorporation	Class of shares	Nature of business	Equity holding (%)
DB RREEF Industrial Trust (formerly Deutsche Industrial Trust)	Australia	Ordinary	Property trust
DB RREEF Office Trust (formerly Deutsche Office Trust)	Australia	Ordinary.	Property trust
DB RREEF Operations Trust	Australia	Ordinarv	Public trading trust

On 30 September 2004, DDF was deemed to acquire 100 percent of DB RREEF Industrial Trust, DB RREEF Office Trust and DB RREEF Operations Trust as a result of stapling the Trusts. The operating results of these controlled entities have been included in the Income Statements since the date of acquisition. The acquired businesses contributed revenues of \$365,448,000 and net profit of \$204,327,000 to the consolidated result for the period 30 September 2004 to 30 June 2005.

If the acquisition had occurred on 1 July 2004, the Stapled Entity's consolidated revenue and consolidated profit for the year ended 30 June 2005. would have been \$923,744,000 and \$470,655,000 respectively.

For the year ended 30 June 2006, \$800,370,000 of revenues and \$615,925,000 of profit have been included in the consolidated result.

Details of the acquisition are as follows:

investment properties	3.280.343
lavestments accounted for using the equity method.	37.106
Other assets	23,276
Cash assets	14.285
interest bearing liabilities.	(1.319,600)
Payables	(31.704)
Provisions	(13.374)
Net assets acquired on stapling	1,990,332

note 43. explanation of transition to Australian Equivalents to IFRS

(a) reconciliation of equity reported under previous Australian Generally Accepted Accounting Principles (AGAAP) to equity under Australian Equivalents to International Financial Reporting Standards (AIFRS)

At the date of transition to AIFRS: 1 July 2004

		Consolidated			Parent Entity
	Note(s)	Previous АСААР	Effect of transition to aifrs	AIFRS	Previous AGAAP	Effect of transition to AIFRS	AIFRS
		\$'000	\$'000	\$'000	\$'000	\$'000	\$'000
Current assets
Cash and cash equivalents		2.487		2.487	2.487		2.487
Receivables		11.352		11,352	11,352		11,352
Property sale proceeds
receivable Other	d(iv)	51.760 4.394	(607)	51.760 3.787	51.760 4.394	(607)	51.760 3,787
Total current assets		69.993	(607)	69,386	69,993	(607)	69,386
Non-current assets
Investment properties		1.635.508		1,635,508	1,635,508	$\cdots$	1,635,508
Other	d(iv)	1,524	(94)	583	1,524	(94)	583
Total non-current assets		1,637,032	(941)	1,636,091	1,637,032	(94)	1,636,091
Total assets		1,707,025	(1,548)	1,705,477	1,707,025	(1,548)	1,705,477
Current liabilities
Payables		14.869		14.869	14.869		14,869
Interest bearing liabilities		474.200		474.200	474,200		474.200
Provisions		23.171		23,171	23.171		23,171
Total current liabilities		512.240	ww.	512.240	512.240	$\overline{a}$	512.240
Non-current liabilities
Other		585		585	585		585
Total non-current liabilities		585	m	585	585		585
Total liabilities		512,825	w	512,825	512,825	$\overline{a}$	512.825
Net assets		1,194,200	(1,548)	1,192,652	1,194,200	(1,548)	1,192,652
Equity Equity attributable to equity holders of the parent:
Contributed equity		1,028,028	$\ddotsc$	1.028.028	1,028,028	$\cdots$	1.028.028
Reserves	d(v)	153.961	(153.961)		153.961	(153,961)
Undistributed income		12,211	152,413	164.624	12,211	152,413	164.624
Parent unitholders' interest	d(xi)	1,194,200	(1.548)	1,192,652	1.194.200	(1.548)	1,192,652
Total equity	$d(x_i)$	1,194,200	(1,548)	1,192,652	1,194,200	(1,548)	1,192,652

At the end of the last reporting period under previous AGAAP: 30 June 2005
----------------------------------------------------------------------------	--

	Consolidated			Parent Entity
	Note(s)	Previous AGAAP \$'000	Effect of transition to AIFRS \$'000	AIFRS \$'000	Previous agaap \$'000	Effect of transition to AIFRS	aifrs
						\$'000	\$'000
Current assets Cash and cash equivalents		68,959		68,959	10,238		10,238
Receivables		29,859		29,859	8,883		8,883
inventory		48,469		48,469
Other	$\mathrm{d}(\mathrm{i}\mathrm{v})$	18,368	(2,412)	15,956	2,552	(480)	2,072
Total current assets		165,655	(2,412)	163,243	21,673	(480)	21,193
Non-current assets investment properties	đ(iv)	6,542,062	(21,143)	6,520,919	1,397,062	1,689	1,398,751
Loan note receivable
from associate		45,092		45,092
Goodwill		3,215		3,215
Property, plant and equipment	đ(vi)		27,913	27.913
investments in controlled entities	d(ix)				233,867		233,867
investments accounted for using the equity method	d(vii)	208.974	(242)	208,732
Investments in associates	d(viii)				347,154	(14,539)	332.615
Deferred tax asset		127		127
Other	$\mathrm{d}(\mathrm{i}\mathrm{v})$	31,852	(16,090)	15,762	4,942	(1,295)	3,647
Total non-current assets		6,831,322	(9,562)	6,821,760	1,983,025	(14, 145)	1,968,880
Total assets		6,996,977	(11,974)	6,985,003	2,004,698	(14, 625)	1,990,073
Current liabilities
Payables		118,479		118,479	12,880		12,880
interest bearing liabilities		369,836		369,836
Loan with related parties Current tax liabilities		2,547		2.547	34.332		34.332
Provisions		144.800		144,800	67.756		67,756
Other		8,673		8,673	1,121		1,121
Total current liabilities		644.335	w.	644,335	116,089	w.	116,089
Non-current liabilities
interest bearing liabilities		2.421.728		2,421,728	581,077		581.077
Deferred tax liabilities Other	$\mathfrak{C}(\mathbb{R})$	48 29,543	23,637	23,685 29.543	3,926		3,926
Total non-current liabilities		2,451,319	23,637	2,474,956	585,003		585,003
Total liabilities		3,095,654	23,637	3,119,291	701,092	$\sim$	701,092
Net assets		3,901,323	(35, 611)	3,865,712	1,303,606	(14, 625)	1,288,981
Equity
Contributed equity		1,059,867		1,059,867	1,059,866		1,059,866
Reserves Undistributed income	d{ii), (v)	236,307 6,743	(236,956) 222,332	(649) 229,075	243,740	(243,740) 229,115	229,115
Parent unitholders' interest		1,302,917	(14, 624)	1,288,293	1,303,606	(14, 625)	1,288,981
Equity attributable to equity
holders of other entities
stapled to DDF Contributed equity		2,034,388		2,034,388
Reserves	$C(\hat{\mathfrak{h}}\hat{\mathfrak{h}})$ , $(\mathsf{v})$	187,522	(187,996)	(474)
Undistributed income		9.844	168,303	178,147
Other stapled security holders' interest		2,231,754	(19,693)	2,212,061		$\ddot{\phantom{a}}$
Stapled security holders' interest		3,534,671	(34, 317)	3,500,354	1,303,606	(14, 625)	1,288,981
Other minority interest	$\mathbb{G}(V)$	366,652	(1,294)	365,358		$\cdots$
Total equity	$\mathcal{C}(x)$	3,901,323	(35, 611)	3,865,712	1,303,606	(14, 625)	1,288,981

note 43. explanation of transition to Australian Equivalents to IFRS (continued)

(b) reconciliation of profit for the year ended 30 June 2005

		Consolidated			Parent Entity
	Note(s)	Previous асаар	Effect of transition to AIFRS	AIFRS	Previous асаар	Effect of transition to aifrs	AIFRS
		\$000	\$'000	\$'000	\$000	\$'000	\$'000
Revenue from ordinary activities
Property revenue	$d(i)$ , $(iv)$	512,709	(3,914)	508,795	155,728	(2,465)	153,263
Distribution revenue	d(ix)				11,202	(3,100)	8,102
Interest revenue		5,932		5,932	600		600
Proceeds from sale of investment properties	d(ii)	504,750	(504,750)		463,446	(463,446)
Total revenue from ordinary activities		1,023,391	(508, 664)	514,727	630,976	(469,011)	161,965
Net gain on sale of investment properties	d(i)		25,707	25,707		21,765	21,765
Share of net profits of associates accounted for using the equity method		12,544		12,544
Increment on revaluation of investments	d(i), (iv), (v), $(vii)$ , $(ix)$	$\cdots$	256.607	256.607		85.120	85.120
Net foreign exchange gain		42		42	9,461		9,461
Other income		260		260
Total income		1,036,237	(226, 350)	809,887	640,437	(362, 126)	278,311
Expenses
Property expenses	d(iv)	(127,991)	1.506	(126, 485)	(40.500)	430	(40,070)
Responsible Entity fees		(21, 242)		(21,141)	(8,690)		(8,690)
Finance costs		(117,265)	$\cdots$	(117,265)	(21, 399)		(21, 399)
Decrement on revaluation of investments	d(v)	(4,934)	4.934
Book value of property investments sold	d(i)	(479, 043)	479,043		(441.681)	441,681
Costs associated with the Transaction		(42.281)		(42, 281)	(14, 795)		(14,795)
Other expenses		(9,206)		(9,206)	(1,753)		(1,753)
Total expenses		(801,861)	485.483	(316,378)	(528, 818)	442,111	(86,707)
Profit from before tax		234.376	259,133	493,509	111,619	79,985	191,604
Tax expense
Income tax expense		(990)		(990)
Withholding tax expense	d(iii)	(2,072)	(23, 514)	(25,586)
Profit after tax		231,314	235,619	466,933	111,619	79,985	191,604
Net profit attributable to other minority interests	d(v)	(11,791)	(59,111)	(70,902)
Net profit attributable to stapled security holders		219,523	176,508	396,031	111,619	79,985	191,604

(c) reconciliation of the statements of cash flows for the trust

The adoption of AIFRS has not resulted in any material adjustments to the Statements of Cash Flows.

(d) notes to the reconciliation for the Trust

(i) Rental revenue

Under AGAAP, the amount of rental revenue recognised in each reporting period was determined according to the contracted amount owed by each tenant for that reporting period.

AASB 117: Leases, requires rental revertues from leases with fixed rent review clauses to be straight-lined over the life of the lease. This will result in changes to rental revenue recognised in each reporting period, and the recognition of a straight-lining asset, which will be included as part of the book value of the property to which it relates. However, these will 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 Triet.

The effect on the Trust is:
For the year ended 30 June 2005.	Rental revenue increased by \$5,744,000 and increment on revaluation of investments decreased by \$5.744.000.
The effect on the parent entity is:
For the year ended 30 June 2005.	There is no effect on the parent entity.

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

Under AGAAP, gross proceeds from the safe of non-current assets were recognised as income and the carrying amount of the assets sold was recognised as an expense. Under AIFRS, the revenue recognised in relation to the sale is the net gain on sale.

The effect on the Trust is:
For the year ended 30 June 2005.	Proceeds from sale of investment properties of \$504,750,000, and book value of property investments sold of \$479,043,000, are no longer shown in the Incorne Statements, with the net amount of \$25,707,000 being shown instead as net gain on sale of investment properties.
The effect on the parent entity is:
For the year ended 30 June 2005.	Proceeds from the sale of investment properties of \$463,446,000, and book value of property investments sold of \$441,681,000, are no longer shown in the Income Statements, with the net amount of \$21,765,000 being shown instead as net gain on safe of investment properties.

(iii) Tax expense

Previously, under AGAAP, depreciation allowances for tax purposes, revaluations of investment properties held in the US REIT and the revaluation of derivatives did not impact on the tax expense in the Income Statements. A liability was only recognised if management intended to dispose of an investment property, without acquiring a replacement asset, within the permitted time frame.

Under AASB 112: Income Taxes, deferred tax balances are determined using the balance sheet method. A deferred tax liability is recognised for depreciation allowances for tax purposes, revaluations of investment properties held in the US REIT and the revaluation of derivatives associated with this operation. This change does not impact on Australian assets owned by trusts classed as flow through vehicles under Australian Taxation Law.

The effect on the Trust is:
At 1 3uly 2004.	There is no effect on the Trust.
At 30 June 2005	Deferred tax liabilities increased by \$23.637.000 and foreign currency translation reserve has increased by \$123,000.
For the year ended 30 June 2005.	Withholding tax expense has increased by \$23.514.000.
The effect on the parent entity is:
At 1 3uly 2004	There is no effect on the parent entity.
At 30 June 2005	There is no effect on the parent entity.
For the year ended 30 June 2005.	There is no effect on the parent entity.

(iv) Lease incentives

Under AGAAP, the policy of the Trust was to capitalise rent free incentives and leasing fees and amorfise these over the life of the lease with the amortisation expense being shown as part of property expenses. The amortised balances of these incentives were shown as an asset separate to the properties to which they related. Fit-out and cash incentives owned by the lessor were capitalised into the book values of the properties to which they related.

Under AASB117: Leases, and U(G 115: Operating Leases - Incentives, all lease incentives are required to be capitalised and amortised against property revenue over the life of lease to which they relate. All incentives will now be incorporated into the property book values. Amortisation recorded on these incentives will be offset by a notional fair value adjustment to the income Statements and to investment properties to bring the balance of the investment properties back to fair value, resulting in no impact to the net profit of the Trust.

note 43. explanation of transition to Australian Equivalents to IFRS (continued)

(iv) Lease incentives (continued)

The effect on the Trust is:
At 1 July 2004	Other assets - current decreased by \$607,000, other assets - non-current decreased by \$941,000 and undistributed income decreased by \$1,548,000.
At 30 June 2005	Other assets - current decreased by \$2,412,000, other assets - non-current decreased by \$16,090,000 and investment properties increased by \$18,502,000. \$11,732,000 of the increase in investment properties has been adjusted through revaluations since the transition date.
For the year ended 30 June 2005.	Property expenses decreased by \$1,506,000, property revenue decreased by \$9,658,000 and increment on revaluation of investments increased by \$147,000 with the remainder being taken to investment properties.
The effect on the parent entity is:
At 1 July 2004	Other assets - current decreased by \$607,000, other assets - non-current decreased by \$941,000 and undistributed income decreased by \$1,548,000.
At 30 June 2005	For the parent entity other assets - current decreased by \$480,000, other assets - non-current decreased by \$1,295,000 and investment properties increased by \$1,775,000. \$86,000 of the Increase in investment properties has been adjusted through revaluations since the transition date.
For the year ended 30 June 2005.	Property expenses decreased by \$430,000, property revenue decreased by \$2,465,000 and the increment on revaluation of investments increased by \$546,000, with the remainder being taken to investment properties.

(v) Investment property

Under AGAAP, revaluation increments and decrements on investment properties were recognised in the asset revaluation reserve. Under AASB 140: Investment Property, such revaluation increments and decrements are recognised through the income Statements.

Further on transition to AIFRS, the balance of the asset revaluation reserve was transferred to undistributed income.

The effect on the Trust is:
At 1 July 2004	The asset revaluation reserve was decreased by \$153.961.000 and undistributed income increased by \$153.961.000.
At 30 3cme 2005	The asset revaluation reserve was decreased by \$425.217,000, undistributed income increased by \$218,816,000 and minority interest decreased by \$1,294,000 with the remainder being taken to the income Statements.
For the year ended 30 June 2005.	The increment on revaluation of investments has increased by \$267,138,000 and net profit attributable to minority interest has increased by \$59.111.000.
The effect on the parent entity is:
At 1 July 2004	The asset revaluation reserve was decreased by \$153.961.000 and undistributed income increased by \$153,961,000.
At 30 Jane 2005	The asset revaluation reserve was decreased by \$189,575,000 and undistributed income increased by \$147,717,000, with the remainder being taken to the Income Statements.
For the year ended 30 June 2005.	The increment on revaluation of investments has increased by \$41,849,000.

(vi) Property, plant and equipment

Under AGAAP, properties under construction were included in, and accounted for, as investment properties. Under AASB 116: Property, Plant and Equipment, properties under construction have been reclassified in the Balance Sheets as property, plant and equipment.

The effect on the Trust is:
At 1 July 2004	There is no effect on the Trust.
At 30 June 2005	Investment properties decreased by \$27,913,000 and property, plant and equipment increased by \$27.913.000.
The effect on the parent entity is:
At 1 July 2004	There is no effect on the parent eatity.
At 30 June 2005	There is no effect on the parent entity.

(vii) Investments accounted for using the equity method

All investments accounted for using the equity method held by the Trust now apply the AIFRS standards. Under AASB 140: Investment Property, revaluation increments and decrements are now shown in the Income Statements. Also, under AASB 112: Income Taxes, a deferred tax expense is recognised for tax depreciation allowances and revaluations of investment properties held in the US REIT.

As a result, these adjustments are now reflected in the share of net profits of associates using the equity method on the Income Statements. and the investments accounted for using the equity method on the Balance Sheets.

Further on transition to AIFRS, the balance of the asset revaluation reserve was transferred to undistributed income.

The effect on the Trust is:
At 1 Buly 2004.	There is no effect on the Trust.
At 30 June 2005	Investments accounted for using the equity method decreased by \$242,000 with the adjustment taken to undistributed income.
For the year ended 30 June 2005.	There is no effect on the Trust.
The effect on the parent entity is:
At 1 Buly 2004	There is no effect on the parent entity.
At 30 June 2005	There is no effect on the parent entity.
For the year ended 30 June 2005.	There is no effect on the parent entity.

(viii) Investments in associates

Under AGAAP, revaluation increments and decrements on investments in associates were recognised in the asset revaluation reserve. Under AASB 139: Financial Instruments, Recognition and Measurement, such revaluation increments and decrements are recognised through the Income Statements.

Further on transition to AIFRS, the balance of the asset revaluation reserve was transferred to undistributed income.

The effect on the Trust is:
At 1 3uly 2004	There is no effect on the Trust.
At 30 June 2005	There is no effect on the Trust.
For the year ended 30 June 2005.	There is no effect on the Trust.
The effect on the parent entity is:
At 1 3uly 2004	There is no effect on the parent entity.
At 30 June 2005	The asset revaluation reserve decrease by \$54,165,000 and investments in associates decreased by $$14,539,000.$
For the year ended 30 June 2005.	The increment on revaluation of investments has increased by \$39,626,000.

(ix) Investments in controlled entities

All investments in controlled entities held by the parent entity now apply the AIFRS standards. This has resulted in a reduction of the net asset. value of the underlying sub-trusts. Accordingly, the parent entity has revalued its investment in controlled entities which is now reflected in the increment on revaluation of investments on the Income Statements, and the investments in controlled entities on the Balance Sheets.

The effect on the Trust is:
At 1 3uly 2004	There is no effect on the Trust.
At 30 June 2005	There is no effect on the Trust.
For the year ended 30 June 2005.	There is no effect on the Trust.
The effect on the parent entity is:
- At 1 Buly 2004	There is no effect on the parent entity.
At 30 June 2005	There is no effect on the parent entity.
For the year ended 30 June 2005.	The distributions received decreased by \$3,100,000 and the increment on revaluation of investments has increased by \$3,100,000.

(x) Derivatives

Under previous AGAAP, derivatives were not recorded on Balance Sheets but disclosed in the notes to the accounts. The Trust has elected not to apply hedge accounting under AASB139: Financial Instruments, Recognition and Measurement. Accordingly, derivatives including interest rate swaps and foreign exchange forward contracts are measured at fair value through the Income Statements and recognised on the Balance Sheets. However, the Trust has adopted the exemption available under AASB 1 to apply AASB 132 and AASB 139 from 1 July 2005. Therefore the Trust has applied previous AGAAP in the comparative information on financial instruments within the scope of AASB 132 and AASB 139.

note 43, explanation of transition to Australian Equivalents to IFRS (continued)

(x) Derivatives (continued)

At 1 July 2005 for the Trust:

• $35\%$ a derivative financial asset of \$15,672,000 and a derivative financial lability of \$18,521,000 were recorded to recognise the fair value of interest rate swaps; \$3,127,000 being taken to undistributed income with the balance of \$278,000 being taken to minority interest;
• $\frac{1}{2}$ a derivative financial asset of \$5.716.000 and a derivative financial liability of \$115.000 were recorded to recognise the fair value of foreign exchange contracts, with the net of \$5,601,000 being taken to undistributed income; and
• an additional deferred tax asset of \$689,000 was recorded to recognise the tax impact of the value of derivative financial instruments. $\frac{1}{2} \sum_{i=1}^{2}$ with the adjustment taken to undisfributed income.

At 1 July 2005 for the parent entity:

• a derivative financial asset of \$4,911,000 and a derivative financial liability of \$5,581,000 were recorded to recognise the fair value SSP of interest rate swaps with the balance of \$670,000 being taken to undistributed income; and
• a derivative financial asset of \$2.858.000 and a derivative financial liability of \$23,000 were recorded to recognise the fair value of $\frac{1}{2}$ foreign exchange contracts, with the net of \$2,835,000 being taken to undistributed income.

(xi) Valuation of sub-trust

For the Trast under previous AGAAP, DOT's sub-trast, DB RREEF RENTS Trust recorded its investment in DOT Commercial Trast at cost. On 1 July 2005, DOT applied AASB 132 and AASB 139, and the basis of valuation of this investment was changed to fair value. The impact of this change at 1 July 2005 was to increase other minority interest by \$6,368,000 with a corresponding decrease in undistributed income.

There is no effect on the parent entity

(xii) Equity

The effect on equity of the changes set out above are as follows:

	Consolidated			Parent Entity
	1 Jul 2004 \$7000	30 Jun 05 \$7000	1 Jul 2004 \$7000	30 Jun 05 \$'000
Total equity under AGAAP	1.194.200	3.901.323	1.194.200	1.303.606
AIFRS adjustments to equity:
investment properties		(39.645)	1.111	1.689
Property, plant and equipment.		27.913
investments accounted for using the equity method.		(242)		(14.539)
Other assets	(1.548)		(1.548)	(1.775)
Deferred tax liabilities		(23.637)
Total equity under AIFRS	1.192.652	3.865.712	1.192.652	1.288.981

directors' declaration

The Directors of DB RREEF Funds Management Limited as Responsible Entity of DB RREEF Diversified Trust (the Trust) declare that the financial statements and notes set out on pages 59 to 114:

• (i) comply with applicable Australian Equivalents to International Financial Reporting 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 2006 and of their performance, as represented by the results of their operations and their cash flows, for the 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 15 September 1984 (as amended) during the year ended 30 June 2006.

The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act 2001.

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

$C_{\lambda}$ $\lambda$

Christopher T Beare Chair Sydney 22 August 2006

independent auditor's report

PRICEWATERHOUSE COPERS CO

Independent audit report to the stapled security holders of DB RREEF Diversified Trust

Matters relating to the electronic presentation of the audited financial report

This audit report relates to the financial report of DIE SREEP Diversified Trust and the DB RREEF Diversified Trest Group (defined below) for the financial year ended 30 June 2006 included on DB RREEF Diversified Trust's web site. The directors of DB RREEF Funds Management Limited (the Responsible Entity of the Trust) are responsible for the integrity of the DB RREEF Diversified Trust's web site. We have not been engaged to report on the integrity of this web site. The studit report refers only to the financial report and remuneration disclosures identified below. It does not provide an opinion on any other information which may have been hyperisked to/from the financial report or remuneration report. If users of this report are concerned with the inherent risks urising from electronic data communications they are advised to refer to the hand 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 opinien.

• 1. the financial report of DB RREEF Diservitied Trust:
• gives a true and fair viaw, as required by the Corporations Act 2001 in Australia, of the financial position of DB RREEF Diversified Trust and the DB RREEF Diversified Trust Circup (defined helow) as at 30 June 2006 and of the results of their performance for the year ended on that date,
• is presented in accordance with Corporations Act 2001 in Australia, Accounting Standards and other mandatory financial reporting requirements in Australia, and the Corporations Regulations 2001 in Australia; and
• 1. the remaneration disclosures that are contained in sections 3.1 to 3.3.2 and 3.3.4 to 3.5 of the directors' report comply with Accounting Standard AASB 124 Related Party Disclosures (AASB 124) and the Corporations Regulations 2001.

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

Scope

The financial remort, rensumeration dischaures and directors' resmonsibility

The financial report comprises the balance shoet, income statement, statement of changes in coulty, cash flow statement, accompanying notes to the financial statements, and the directors^'t declaration for both DB RREEF Diversified Trust (the Trust) and the DB RREEF Diversified Trust Group (the consolidated entity), for the year ended 30 June 2006. The consolidated entity comprises both the Trust and the entities it controlled during that period, including DB RREEF Office Trust, DB RREEF Industrial Trust, DB RREEF Operations Trust and their subsidiaries.

The Trust has disclosed information about the remuneration of directors and executives (remuneration disclosures) as required by AASB 124, under the heading "remuneration report" in sections 3.1 to 3.3.2 and 3.3.4 to 3.5 of the directors' report, as permitted by the Corporations Negatations 2001.

theoly trues by a school again ander Fritestone Standard Compa

.
Финасовой Марков, Воови . ....................
ABN 82 780 433 757

Darijest Park Tower I 201 SUSER SHER сто вси зего EVIDENT NEW 1871 CX 17 Sydney สีเมลเลียนดินเ ahara.cric.com/su Telephone +41 2 6244 0000 Facsimic +6+ 2 2206 0909

PRICEWATERHOUSE COPERS ®

The directors of DB RREEF Funds Management Limited are responsible for the preparation and trusand 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. The directors are also responsible for the nonunctation disclosures contained in the directors' report.

Анай арргеаси

We conducted an independent audit in order to express an opinion to the stapled security holders of the Trast. Our andit was conducted in accordance with Australian Auditing Standards, in order to provide resonable assuming as to whether the financial report is free of mozerial misstatement and the remuneration disclosures comply with AASB 124 and the Corporations Regulations 2007. 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 statuntee that all material misstatements have been detected. For further explanation of an audit, visit our website http://www.gwc.com/au/fluancialstatementaudit.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with Clernovations Act 2001 in Australia, 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 their performance as represented by the results of their operations, changes in couldy and cash flows. We also performed precedures to assess whether the remaneration disclosures comply with AASB 124 and the Corporations Negatations 2007.

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

• esamining, on a test basis, information to provide evidence supporting the amounts and disclasures in the financial report and remuneration disclosures, and
• assessing the approcriateness of the accounting policies and disclosures used and the reasonablences of significant accounting culimates made by the directors.

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

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our mulit was out designed to provide assumence on huernal controls.

Clur and h did not involve an analysis of the prodence of business decisions made by the directors of the Responsible Entity or management.

Indonendence

In conducting our audit, we followed applicable independence requirements of Ausamlian professional ethical pronouncements.

Lucomodahan - Cooper

Pricewated and Councils

DA Prosincen Shareswork

Svalness 22 August 2006

registry information

top 20 stapled security holders as at 31 August 2006

Rank	Investor	Current balance	Percentage of issued capital (%)
ł	J P Morgan Nominees Australia Limited	441.687.891	15.49
2	Westpac Custodian Nominees Eimited	425.923.942	14.94
3	National Nominees Limited	362.803.005	12.73
4	Cificorp Nominees Pty Limited	204.901.393	739
5	ANZ Norsinees Limited	179.229.851	6.29
6	RBC Dexia Investor Services Australia Nominees Pty Limited	145.031.426	5.09
7	ANZ Nominees Limited	66.125.393	2.32
8	Citicorp Nominees Pty Limited	64.829.228	2.27
9	Cogent Nominees Pty Limited	48,523,697	3.70
10	Questor Financial Services Limited	43.292.102	1.52
11	Westpac Financial Services Limited	40.362.098	3.43
12	UBS Norainees Pty Liraited <1160 a/c>	40.000.000	1.40
13	AMP Life Limited	37.118.502	1.30
14	Victorian Workcover Authority	33.576.337	1.18
15	Cogent Nominees Pty Limited	25.998.941	0.91
16	Bond Street Custodians Limited	21.330,714	0.75
17	Transport Accident Commissions	19,653,292	-0.69
18	Australian Executor Trustees Eimited	14.957.178	0.52
19	Citicorp Nominees Pty Limited	13.982.071	0.49
20	Suncorp Custodian Service Pty Limited	12.739.275	0.45
	Total for top 20	2,242,336,336	78.66
	Total other investors	608.484.732	21.34
	Grand total	2.850.821.068	100.00

substantial holders as at 31 August 2006

The names of substantial holders who, as at 31 August 2006, have notified the Responsible Entity in accordance with section 671B of the Corporations Act 2001 are:

Name	Number of stapled securities	Percentage voting (%)
Barclays Global Investors Australia Limited	256.479.590	-9.27
Commonwealth Bank of Australia	154.356.895	5.65
AMP Limited	147.662.502	-5.40-
APN Funds Management Limited	138.195.694	5.00.

classes of securities

DB RREEF has one class of stapled security trading on ASX with, as at 31 August 2006, 25,970 investors holding 2,850,821,068 stapled securities.

spread of stapled securities holders as at 31 August 2006

Ranges	Investors	Stapled securities	Percentage of issued capital (%)
$1 - 1.000$	1.271	509.439	0.02
$1.001 - 5.000$	4.673	15.204.281	0.54
$5.001 - 10.000$	6.528	50.086.285	1.76
$10,001 - 100,000$	13.084	320.098.983	11.23
100,001 and over	414	2.464.886.080	86.46
Total	25.970.	2,850,821,068	100.00

As at 31 August 2006, the number of investors holding less than a marketable parcel of 320 securities is 612 and they hold 57,621 securities.

voting rights

At meetings of the security holders of the DB RREEF Diversified Trust, DB RREEF industrial Trust, DB RREEF Office Trust and DB RREEF Operations Trust, being the Trusts that comprise DB RREEF, on a show of hands, each security holder of each Trust has one vote. On a poll, each security helder of each Trust has one vote for each dollar of the value of the total interests they have in the Trust.

the number and class of securities that are restricted or subject to voluntary escrow

There are no stapled securities are restricted or subject to voluntary escrow.

on-market buy-back

DB RREEF has no on-market buy-back currently in place.

investor information

DB RREEF Trust information

Investors and other interested people may obtain information on various aspects of DB RREEF's activities by accessing its website at www.dbrreef.com and following the links to Investments and DRT or alternatively by going directly to www.dbrreef.com/DRT. Information available includes:

• $\frac{1}{2}$ ASX apprenancements
• 弱 annual reports, property synopsis (containing detailed property information) and product disclosure statements:
• distribution and tax information. 貓
• corporate governance; and $\tilde{g}_{\rm B}$
• research. sa.

security registry

If you have administrative inquiries such as change of address or the way in which you wish your distributions paid, you can either contact Eink Market Services on the InfoLine 1800 819 675 or update your account details via the website at www.dbrreef.com.

enquiries, obtaining information or making a complaint

The Group has processes in place to deal with security holder questions and complaints. If you have any questions, complaints, or wish to obtain information regarding the stapled securities, please contact our client service infoLine on 1800 819 675 or from outside Australia +61 2 8280 7126 or email: enquiries.drt@dbrreef.com.

The Group is a member of the Financial Industry Complaints Service Eimited (FICS). This is an independent dispute resolution service. and may be contacted through:

Financial Industry Complaints Service Limited

PO Box 579 Collins Street West Melbourne VIC 8007

Phone: 1300 780 808 Fax: +61 3 9621 2291

stock exchange listing

The stapled security (ASX: DRT) is included in the top 200 listed entities in Australia in terms of market capitalisation and currently forms part of the following indices: All Ordinaries: All Industrials: Listed Property Trusts: and the S&P/ASX200.

annual tax statement

After the end of a financial year you will receive a tax statement. This statement summarises the distributions paid to you during the year and includes information required to complete your tax return.

DB RREEF Trust capital gains taxation cost base information

A brochure called "Capital Gains Taxation Information" has been prepared for DB RREEF stapled security holders and updated for 30 June 2006 that will assist holders determine their capital gains. tax cost base of their DB RREEF securities and the determination. of any capital gains on the disposal of a holders' stapled securities. Holders may obtain a copy of this brochure by either visiting our website at www.dbmeef.com, or by contacting the InfoLine on-1800 819 675.

investor information (continued)

apportionment percentages of DB RREEF stapled securities since stapling

For capital gains tax purposes investors need to apportion the cost of each stapled security and the proceeds on sale of each stapled security over the four Trusts that make up the stapled security. This apportionment should be done on a reasonable basis. One basis of apportionment is to use the relative net tangible assets (NTA) of each of the Trusts.

Using NTA as a basis, the tollowing table outlines the apportionment percentages that will apply to any on or off market buying or selling of stapled securities, or the issue of new stapled securities between the dates specified.

Please note that the correct allocation percentage to be used depends on the relevant date of the specific transaction. Consequently, the allocation percentage relevant for the acquisition of a parcel of stapled securities, (either on or off market, or through the issue of securities), may differ from their disposal percentage.

The Group will periodically release revisions to this table and it will be published on its website. A copy of the schedule can be downloaded by visiting our website at www.dbrreef.com or by centacting the InfoLine on 1800 819 675.

Dates	DB RREEF Diversified Trust (%	DR RREEF Industrial Trust (%)	DB RREEF Office Trust (%)	DB RREEF Operations Trust l%.
-6 October 2004 to 30 December 2004	3835	20.88.	40.79.	0.18
-31 December 2004 to 30 June 2005	37.05	21.27	41 47	0.23
E July 2005 to 31 December 2005	36.82	21 RI	-41 IR	-0.24
1 January 2006 to 30 June 2006.	3737	22.GQ.	40.22	0.32
1 July 2006 to the next announced NTA.	36.05	21.03	42.57	0.35

Note: The NTA is reviewed on 30 June and 31 December each year and at other times when required.

distribution history and timetable

Distribution history schedules for DB RREEF since October 2004 and DDF, DIT, DOT prior to October 2004 can be downtoaded by visiting our website at www.dbrreef.com or by contacting the InfoLine on 1800 819 675.

With respect to your distributions, you can have your distribution paid directly into your nominated Australian bank, building society or credit union account.

DB RREEF's distribution periods end on 30 June and 31 December each year with distribution being paid no later than two months following each half year. The timetable below shows the anticipated distribution, banking and mailing dates for the next three distributions, please note that these dates are indicative and may change.

Distribution period date	Announcement date	Ex-distribution date	Record date	Anticipated date
El July to 31 December 2006.	19 December 2006 -	-22 December 2006.	-31 December 2006 -	-28 February 2007
1 January to 30 June 2007.	-21 .fune 2007	-26 . î une 2007	-30 June 2007	-29 August 2007 -

distribution reinvestment plan (DRP)

DB RREEF has a distribution reinvestment plan available to security holders providing them the opportunity to purchase additional stapled securities by reinvesting all or part of their periodic income distributions. The amount to be reinvested will be applied to acquire fully paid stapled securities in DB RREEF. Where the amount to be reinvested does not equal a whole multiple of the DRP issue price the residual money will be carried forward and added to the next reinvestment amount. For forther information on the DRP please go to our website at www.dbrreef.com.

unpresented cheques and unclaimed funds

DB RREEF has a number of security holders who have unpresented cheques and/or unclaimed funds. If you believe you have unpresented cheques or unclaimed funds please contact our Share Registry, Link Market Services on 1800 819 675. Eink Market Services will be able to do a search for you and assist you in recovering your funds. Link Market Services will be able to do a search going back seven years, after fhat you should contact the NSW Office of State Revenue on 1300 366 016 or go to their website at www.osr.nsw.gov.au and use their search facility for unclaimed moneys.

tax file number

You are not required by law to provide your tax file number, Australian Business Number or Exemption. However if you do not provide your TFN, ABN or Exemption, withholding tax at the highest marginal rate, currently 48.5 percent may be deducted from distributions paid to you. If you have not supplied this information and wish to do so, please advise the registry or your sponsoring broker.

directory

DB RREEF Diversified Trust ARSN 089 324 541

DB RREEF Industrial Trust ARSN 090 879 137

DB RREEF Office Trust ARSN 090 768 531

DB RREEF Operations Trust ARSN 110 521 223

responsible entity

DB RREEF Funds Management Limited ABN 24 060 920 783

registered office of responsible entity

Level 9, 343 George Street Sydney NSW 2000

PO Box R1822 Royal Exchange NSW 1225

Phone: +61 2 9017 1100 Fax: +61 2 9017 1101

directors of the responsible entity

Christopher T Beare, Chair Elizabeth A Alexander AM Barry R Brownjehn Stewart F Ewen OAM Victor P Roog Antink Charles B Leitner BI (Alternate: Andrew J Fay) Brian E Scullin

secretaries of the responsible entity

Tanya L Cox John C Easy

investor enquiries

Email: enquiries.drt@dbrreef.com InfoLine: 1800 819 675

Phone: +61 2 8280 7126

Website: www.dbrreef.com

auditors

PricewaterhouseCoopers Chartered Accountants 201 Sussex Street Sydney NSW 2000

security registry

Link Market Services Limited Level 12, 680 George Street Sydney NSW 2000

Locked Bag A14 Sydnev South NSW 2000

Phone: +61 2 8280 7126 InfoLine: 1800 819 675 Fax: +61 2 9261 8489 Eraall: registrars@linkmarketservices.com.au Website: www.linkmarketservices.com.au

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web at www.dbreef.com and follow the links. $\frac{1}{2}$ and $\frac{1}{2}$
: Listed on the Australian Stock Exchange ASX Code: DRT. [11] [11]
InfoLine 1800 819 675 Monday to Friday between
8.30am and 5.30pm (Sydney time).