DEXUS — Regulatory Filings 2004

Nov 23, 2004

24 November 2004

Dear Sir/Madam

Market update

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

DB RREEF Trust (ASX:DRT)

DR RREEF Funds Management Limited (DRFM), as responsible entity of DRT, is pleased to provide its inaugural update of the Trust's progress since the restructure, effective 6 October 2004.

Since the restructure, DRFM has concluded the acquisition of the US industrial portfolio in conjunction with CALPers; achieved more than 216,000 square metres of leasing across the commercial and industrial portfolio; completed the restructure of debt facilities in two separate facilities; and executed hedging arrangements for both interest rate and foreign exchange exposures. The Trust is currently on track to meet forecast distributions.

A more detailed analysis will be provided at the half year in February 2005, and going forward. quarterly updates of the Trust's property portfolio will also be provided to the market.

$\mathbf{1}$ Property portfolio update

More than 216,000 square metres of new leases, lease renewals and heads of agreement have been secured across the commercial and industrial portfolio since the release of the Explanatory Memorandum.

and a construction

$\sim$ .

	Explanatory Memorandum		Current property data
	Vacancy (%)	Ave lease expiry (years)	Vacancy (%)	Ave lease expiry (years)
Office	$9.0\%$	5.6	8.3%	6.0
Industrial	5.0%	4.3	$2.1\%$	5.0
US Industrial	13.0%	3.1	12.4%	3.2

(Average lease expiry based on net rentable area)

DB RREEF Trust

Managed in Partnership with Deutsche Bank $\boxtimes$

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

Level 21 83 Clarence Street Sydney NSW 2000

PO Box R1822 Royal Exchange NSW 1225

Telephone 61 2 9249 9500 61 2 9249 9474 Direct Facsimile 61 2 9249 9220

Email: victor.hoogantink@dbrreef.com

Service

1.1 Office portfolio

Leasing

Since 1 July 2004 new leases and renewals totalling over 36,000 square metres across the office portfolio have been signed, with heads of agreement in place for a further 29.300 square metres. Availability rates across the commercial portfolio have been reduced to 8.3%, with the average unexpired lease term increased to 6.0 years. A summary of the major leases negotiated includes:

• 45 Clarence Street, Sydney Hudson Global Resources (Australia) Pty Ltd has signed a 7 ٠ year lease from 1 July 2005 over 6,758 square metres. HBOS Australia Pty Ltd ('HBOS') has signed an 8 year lease from 1 April 2005 over 4,149 square metres. HBOS has an option to lease the whole or any part of two further floors and the exclusive naming and signage rights of the building prior to 1 April 2005.
• One Margaret Street, Sydney Serendipity (WA) Pty Ltd has signed a new lease over 523 $\bullet$ square metres on part of level 11 for 8 years commencing 27 August 2004. Asian Development Bank has signed a new lease over 441 square metres on part level 18 for 5 years commencing 15 December 2004.
• $\bullet$ Australia Square, Sydney - Abacus has signed a new lease over 1,030 square metres on Level 34, Tower Building for 3 years commencing 16 December 2004. Provident Capital has renewed their lease over 670 square metres on level 42, Tower Building for 4 years commencing 1 October 2004.
• 383 Kent Street, Sydney Custom Call Pty Limited has signed a new lease over 3,589 $\bullet$ square metres on levels 11 and 12 for 5 years commencing 1 January 2005, with a resultant occupancy level of 98%.
• The Zenith, Chatswood Viacom Paramount Home Entertainment Pty Limited has signed $\bullet$ a new lease for 949 square metres on level 21, Tower A for 5 years commencing 15 October 2004.
• Victoria Cross, North Sydney Croft Gooden Partners Pty Ltd has signed a new lease for $\bullet$ 410 square metres on level 5 for 5 years commencing 16 August 2004.
• Southgate Complex, Melbourne IPA Pty Limited has signed a new lease for 613 square $\bullet$ metres on level 19, HWT Tower for 4 years commencing 1 November 2004. Blaze Acumen Pty Limited has signed a new lease for 419 square metres on the Podium Level, HWT Tower for 6 years, commencing 1 September 2004.
• $\bullet$ 130 George Street, Parramatta - NSW Police has signed a new lease for 7,200 square metres for a 5 year term, commencing 20 July 2004. In addition, the tenant has taken a further 1,440 square metres for a minimum term of 6 months.

Developments and refurbishments

• 45 Clarence Street, Sydney The \$12 million refurbishment is continuing towards substantial completion by the end of December 2004. Hudson fit-out handover is scheduled for 31 December 2004.
• 321 Kent Street, Sydney A Development Application has been lodged with Sydney City. $\bullet$ Council for the first stage of a proposed \$15 million refurbishment for 321 Kent Street following Ernst & Young's departure from the building in early 2005.
• NRM Tower, Auckland, New Zealand The tower's structural frame is complete and the ٠ steel roof framing works commenced in October. Installation of the curtain wall and the internal fit-out of floors is progressing well. Completion is scheduled by early June 2005.

Acquisitions and disposals

144 Edward St. Brisbane has been sold for \$44.65 million compared to a book value of \$44.9 million before costs. Settlement occurred on 19 November 2004.

1.2 Australian Industrial portfolio

Leasing

Since 1 July 2004 new leases and renewals totalling over 60,000 square metres across the industrial portfolio have been secured, with heads of agreement in place for a further 11,000 square metres of industrial space. As a result of this activity, availability within the industrial portfolio has been reduced to 2.1% and the average unexpired lease term increased to 5 years. A summary of major leases includes:

• DB Business Park Brookvale Fujifilm Australia Pty Ltd has extended its lease over $\bullet$ 11,307 square metres by 3 years until March 2011.
• DB Distribution Centre Salisbury Welded Tube Mills of Australia Pty Ltd and QLD $\bullet$ Slitting Company Pty Ltd have exercised 5 year options over 7,240 square metres and 8,032 square metres respectively.
• Redwood Gardens Dingley 3 new leases have been entered into for a total of 13,710 $\bullet$ square metres for an average term of 6.4 years.
• 40 Talavera Road North Ryde new leases have been entered into for a total of 5.671 $\blacksquare$ square metres for an average of 6.5 years.

Development and refurbishment

$\bullet$ DB Industrial Estate Greystanes - Completion of this project was achieved in July at which time 61% of the facility was leased. Since then a lease to Kobelco - CNH Australia Pty Ltd has been signed for 3,761 square metres and terms have been agreed on the final 8,367 square metre unit.

DB Industrial Estate Dandenong - 2 developments are currently underway within the $\bullet$ estate - 10.614 square metres is being constructed for Westgate Logistics Pty Ltd and 7,580 square metres for Aluminium Specialties Group Pty Ltd. Both projects are progressing on time and scheduled for completion by the end of the calendar year. The buildings will provide DRT with a yield on total cost of 8.75%.

B RREEF Trust

Managed in Partnership with Deutsche Bank Z

• DB Industrial Estate Laverton North The 20,000 square metre facility under $\bullet$ construction for Visy Steel Products Pty Ltd is tracking approximately one month ahead of schedule and on budget with completion now expected in early December 2004. Terms have been agreed with another tenant to construct a 4,397 square metre facility with capacity to double this via an expansion provision. The capital expenditure will be approximately \$6 million with a return on incremental cost of circa 11%. In addition, DRT has proposals with tenants for in excess of 175,000 square metres of space.
• $\bullet$ Axxess Corporate Park (Mount Waverley) - DRT has secured a 7.650 square metre office pre commitment, including 350 car spaces from Alinta Limited for a 10 year term. Practical completion is scheduled for November 2005, generating a yield on total cost of 8.0%.

Acquisitions and disposals

• Station & Powers Road, Seven Hills sales totalling \$41.8 million settled during $\bullet$ September and October. Contracts have been exchanged for further sales totalling \$4.5 million with settlement to take place prior to the calendar year end.
• 33 McDowell Street, Welshpool this sale totalling \$4.2 million settled on 4 November $\bullet$ 2004.
• Redwood Gardens, Victoria sales totalling \$4.0 million settled during September and $\bullet$ October. Contracts have been exchanged for further sales totalling \$8.8 million with settlement to take place over the period to the end of March 2005.

Retail portfolio $1.3$

Overview

The retail sector continues to benefit from solid growth in retail spending and high levels of consumer confidence. The September 30 2004 moving annual turnover is summarised as follows:

		Occupancy Cost
	Centre \$'PSM	Total Centre Growth %	Specialty \$'PSM \$	Total Specialty Growth $\%$	Specialty $\%$
Whitford City	5.977	23.3%	7.801	28.0%	13.8%
Westlakes	5,382	2.7%	8,808	1.80%	14.8%
Plenty Valley	8,340	11.9%	5,958	4.0%	14.1%
North Lakes	4,564	n/a	5,383	n/a	N/A
Mt Druitt	4,501	8.1%	7,532	5.6%	16.4%

• Westlakes, SA MAT has increased by 2.7% to September 2004, despite the disruption caused by the development currently being undertaken, which is due for completion by March 2005.
• Whitford City, WA MAT has increased by 23% to September 2004 following the development expansion which was completed in November 2003.

Developments

• Westlakes The development is on budget and scheduled to be completed on time by March 2005.
• Mount Druitt The \$60 million development of Mount Druitt commenced this month, with $\bullet$ completion due in stages in September 2005 and March 2006. On completion of the development, forecast income to 30 June 2006 will generate a yield of 7.6% on DRT's acquisition and development cost of \$170.15 million.

$1.4$ US Industrial portfolio

Leasing

Since 1 July 2004, leasing activity has been highlighted by four major deals representing over 800,000 square feet, or 4% of the portfolio's net rentable area. As a result of this activity, the vacancy rate across the US Industrial portfolio is 12.4%, compared to market vacancy of 12.5% in the portfolio's metro markets. The average unexpired lease term is 3.2 years. As a general comment, the US industrial markets showed clear signs of improvement during the first half of 2004. Most encouraging was the pickup in net absorption in a broad number of metro markets where DRT is invested. Importantly, indicators suggest that this pattern of steady, but real improvement in demand will carry forward into 2005.

Summary of the major leases includes:

• $\bullet$ 1614-1634 Westbelt Drive, Columbus, Ohio – United Stationers Supply Co. has renewed its lease over 229,200 square feet for 5 years at \$2.20 per square foot. The rent increases by 10 cents per square foot each year.
• 9565 Santa Anita Avenue, Riverside, California Weber Inc. has entered into a 5 year $\bullet$ lease over 212,300 square feet at \$3.66 per square foot per annum. The rental increases mid term by 30 cents per square foot.
• 9565 Santa Anita Ave. Pheonix, Arizona States Logistics has leased 278,142 square $\bullet$ feet for 15 months at \$2.88 per square foot per annum.
• 3601 East Plano Parkway, Plano, Texas Tekelec has leased 87,195 square feet for 10 $\bullet$ years at \$3.85 per sq foot per annum. The rental increases by 30 cents per square foot biannually.

$\overline{2}$ Treasury, Debt Capital Management and Hedging

$2.1$ Debt Facilities

• A\$ Syndicated debt facilities The underwritten syndicated bank debt and bridging facilities referred to in the Explanatory Memorandum have been drawn. As outlined in the Explanatory Memorandum, the funds available from these facilities were used to refinance DDF's existing unsecured debt and to fund the acquisition of new assets.
• US\$ Private Placement The marketing of a private placement of notes to US investors is progressing, and subject to finalisation of due diligence with investors, is expected to raise debt capital of US\$200million. The note issue was priced on 15 November at a weighted average spread over US government bonds of 1.28%. The notes will be issued in 7, 10 and 12 year tranches, providing a weighted average maturity of 9.4 years. They are unsecured but supported by DRT's guarantee structure and therefore rank equally with DRT's unsecured bank debt facilities. The notes will replace the US\$200million bridging facility that is due to mature at the end of March 2005. US\$160 million of the notes will settle at the end of December this year and US\$40 million will settle by the end of March 2005.

2.2 Duration

As a result of these initiatives, the weighted average duration on debt facilities will increase from 2.5 years to 3.5 years. The funding margins are in line with the Explanatory Memorandum earnings forecasts and are appropriate given the longer tenor of the notes which aides in reducing DRT's liquidity and re-financing risk.

Interest Rate hedging - $2.3$

Following the completion of US\$ interest rate swaps at rates that were approximately 0.50% better than those assumed in the Explanatory Memorandum forecast. DRT interest rate hedging profile is as follows:

Position as at 30 June	2005	2006	2007	2008	2009
A\$m hedged	1,523	1,383	1,018	838	338
A\$ hedge rate	5.69%	5.70%	5.66%	5.69%	5.76%
Average rate 2	6.28%	6.28%	6.27%	6.31%	6.43%
US\$m hedged 3	646	635	619	611	550
US\$ hedge rate	5.13%	5.08%	4.98%	4.98%	4.69%
Average rate 2	4.68%	4.77%	4.83%	4.96%	4.92%
NZ\$m hedged		88	88
NZ\$ hedge rate		7.33%	7.33%
Average rate 2		7.37%	7.38%	7.31%	7.30%

weighted average hedge rate including margins and fees

² weighted average fixed and floating rate including margins and fees

³ includes 80% of total hedges of DB RREEF Industrial LLC (US JV)

As at FY05, approximately 80% of US\$ debt is hedged and the blended fixed / floating cost of debt is 4.68% (including margin and fees). As at FY05, approximately 86% of A\$ debt is hedged and the blended fixed / floating cost of debt is 6.28% (including margin and fees).

2.4 Foreign Income hedging

Foreign exchange contracts have been transacted at rates that are approximately 2.5 cents above those assumed in the Explanatory Memorandum forecasts. This is more than offset by savings at the interest expense level. The foreign income hedging profile is as follows:

Position as at	US\$ hedge amount	Average A\$/US\$ hedge rate
30 June 2005	13.5	0.7131
30 June 2006	15.5	0.6930
30 June 2007	12 4	0.6859
30 June 2008	94	0.6761
30 June 2009	4.8	0.6681
"otal	55 A	0.6910

For the year ending 30 June 2005, approximately 87% of US\$ earnings has been hedged at a weighted average rate of A\$/US\$ 0.7131.

$3.$ Equity

New stapled securities issued

A reconciliation for stock issuance is provided as follows:

	Units (000's)
Issued to existing DDF, DIT and DOT unitholders	2,583,842
Plus issuance to subsidiary entity of Deutsche Australia Limited	41.521
Current issued capital	2,625,363

Acquisition of the real estate funds management businesses is being undertaken on a staged basis:

• Since the restructure, additional stapled securities have been issued in respect of the $\bullet$ acquisition of \$8.5 billion funds under management. The stapled securities were issued at a 10 day VWAP of \$1.31, as compared to the Explanatory Memorandum forecast of \$1.30.
• $\bullet$ As noted in the Explanatory Memorandum, the consultation process with the investors of Deutsche Wholesale Property Fund (DWPF) is continuing and an additional tranche of stapled securities is proposed to be issued pending the satisfactory finalisation of arrangements with DWPF investors.

Managed in Partnership with Deutsche Bank $\boxed{2}$

$\mathcal{L}$

Page 8

Existing stapled securities - cash and sale facilities completed

Merrill Lynch Equities (Australia) Limited was retained to undertake the cash sale facilities on behalf of overseas investors and investors who elected to utilise the facilities. The sell down program has now been completed.

4. Board update

The independent Board Directors are currently interviewing a short list of potential candidates to fill the two vacant board seats. DRFM will advise when the selection process and individual appointments are finalised.

5. Contact details

For any further information, please contact:

■ Institutional investors	Victor Hoog Antink	02 9249 9474
■ Retail investors and media	Kristin Silva	02 9249 9568

24 November 2004

Yours Sincerely

lan Thompson

Company Secretary