GOODMAN GROUP — Annual Report 2005

Sep 20, 2005

Macquarie Goodman

21 September 2005

The Manager Company Notices Section Australian Stock Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000

Dear Sir

Macquarie Goodman Group

We confirm that the attached Macquarie Goodman Group Annual Report was dispatched to Securityholders today.

Please do not hesitate to contact the undersigned if you have any queries.

Yours faithfully

Carolyn Scobie Company Secretary

enc

Level 10, 60 Castlereagh Street Sydney NSW 2000 GPO Box 4703 Sydney NSW 2001

Telephone (02) 9230 7400 Facsimile (02) 9230 7444 info@macquariegoodman.com.au www.macquariegoodman.com

21 September 2005

Dear Securityholder

MACQUARIE GOODMAN GROUP ("MACQUARIE GOODMAN") ANNUAL REPORT FOR THE YEAR ENDED 2005

We have pleasure in enclosing the first Annual Report for the merged Macquarie Goodman Group for the year ended 30 June 2005.

The past year has been a progressive period with the merger of Macquarie Goodman Management Limited and Macquarie Goodman Industrial Trust to form Macquarie Goodman Group.

The Group has had a very strong year and has provided a total annual return of 48.5% to our former MGI Unitholders and a 20.3% total annual return to our former MGM Shareholders for the 12 months to 30 June 2005. Following the merger, Macquarie Goodman has provided Securityholders with a distribution of 12.95 cents per security ("cps") (25.90 cps on an annualised basis) which was in line with the forecasts contained within the Explanatory Memorandum for the merger.

In 2006, our team will focus on a number of initiatives including the organic growth of our Australian property portfolio and the expansion of our third party funds management businesses both in Australia and abroad.

Thank you for your support and we look forward to another exciting year ahead.

Yours faithfully

Gregory Goodman CHIEF EXECUTIVE OFFICER

Macquarie Goodman Group Macquarie Goodman Management Limited ABN 69 000 123 071 Macquarie Goodman Funds Management Limited ABN 48 067 796 641; AFSL Number 223621

Level 10, 60 Castlereagh Street Sydney NSW 2000 GPO Box 4703 Sydney NSW 2001

+61 2 9230 7400 Telephone +61 2 9230 7444 Facsimile info@macquariegoodman.com.au www.macquariegoodman.com

		244545
CONTENTS 02 Investor Hut lights 04 Creatures Letter 06 Chief Executive Officers Report 10 Group Operations 12 Properly threstments 16 Fropery Portoilo 22 Completed Developments 23 Commenced Developments 24 Funds Management 26 Fropery Development 28 Property Services 30 Capital Management 32 Oct People 34 Board of Directors 36 Serie Executives 40 Concorate Covernance 48 Communication of the Content	THE CHIPSON 899 Theatr's Report 知识 Lead Audior's Independence Declaration 65, Statements of Financial Performance 66. Statements of Financial Position 6. Statements of Gasti Flows 60 Notes to the Fill group Statements 69. 115 Diedors Declaration 116 Independent Augu Report 117 Too 20 Security to days 118 Property Trusts 120 Investor Relations IBC Glossary of Terms BC Constrate Directory

OWN

We are long-term owners of industrial and business space. This means that customers are assured of an ongoing relationship with Macquarie Goodman.

MANAGE

We do not outsource the management of our properties. We are diligent and creative in meeting the operational needs of our customers and maintain our assets to the very highest standards. Due to our attention to detail and dedicated service we achieve high occupancy rates and customer loyalty.

DEVELOP

We have a significant pipeline of development sites in strategically located growth areas and an innovative development team. Our projects are designed to meet the growing needs of our existing customers and to attract new customers. As long-term owners we can develop or purpose-build facilities to satisfy our customers both now and into the future.

.
This Annual Report for the year ended 30 June 2005 has been prepared by Macquarie Goodman Group (Macquarie Goodman Management Limited ("MGM") ABN 69 000 123 071 and its controlled entities, including Macquarie Goodman Funds Management Limited (AFSL 223821); Macquarie Goodman Industrial Trust
ARSN 091 213 839 ("MGI") and its controlled entities ABN 48 087 796 641 advice prior to making any decision relating to your investment or financial needs. This Annual Report is not an offer or invitation for subscription or purchase of securities or other financial products. Past performance is no indication of future performance. All values are expressed in Australian currency unless otherwise stated.

Macayana ao mana ny mpiasa na manarana amin'ny matr Our president de Novembre de Berger en 255. BROKOGI TI KRISTIANI KARA KATA RIGHA JELERA DERV ornessonals, Our Orskoper September Model under hans our long-trien. o anticipal construction of the construction of the construction of the construction of the construction of th

INVESTOR HIGHLIGHTS

	2005 Actual	Explanatory Memorandum Forecast
Normalised full year distribution per security (cents) (i)	25.90	25.90
Normalised full year earnings per security (cents) (1)	23.96	23.65
Macquarie Goodman net profit attributable to Securityholders (\$M)	-50.0	14.2
Total assets (\$M)	5.171	4.213
Net tangible assets per security $(\$)$	2.15	1.97
Gearing (%)	36	38
Security price (\$)	4.08	3.60
Market capitalisation (\$M)	5,732	4,511
13) Maxwallood accelerational distributions for the marked for OB. Lune OBBC include the models made remainstration of the maxwall security

a anglar na

$\rightarrow$ Macquarie Goodman Group paid a distribution of 12.95^th cents per security equivalent to 25.90 cents per security on an annualised basis in line with the Explanatory Memorandum

• $\rightarrow$ Macquarie Goodman Group normalised earnings of 11.98^th cents per security equivalent to 23.96 cents per security on an annualised basis in fine with the Explanatory Memorandum
• $\rightarrow$ Total annual return for MGI Unitholders of 48.5% (2004:19.8%)
• $\rightarrow$ Total annual return for MGM Shareholders of 20.3% (2004:121.2%).
• $\rightarrow$ Capital transactions and acquisitions totalling \$973 million
• $\rightarrow$ \$1.2 billion growth in external funds under management to \$2.3 billion
• $\rightarrow$ \$7.0 billion in assets under management throughout Australia, New Zealand, Singapore and Hong Kong
• $\rightarrow$ Increase in market capitalisation to \$5.7 billion^er

^<sup>61 Macquarie Goodman Group normalised earnings and distributions for the six months to 30 June 2005, being the period most representative of the merged group ²⁸ Based on a closing price as at 30 June 2005.

^us MGI merger ratio.
^vs MGI price at the time merger was announced.
^vs Macquarie Goodman closing price as at 30 June 2005.

^m The profil reflected for MGI is on a normalised basis for the 2005 financial year and does not reflect any one off costs associated with the merger with MGM, totalling \$13 million.
^@ The profil reflected for MGM is o

Hillian Mars

In February 2005, Macquarie Goodman undertook
the most significant transaction of its history
with the merger of MGM and MGI.

CHAIRMAN'S LETTER

Dear Securityholder

On behalf of the Board, I am pleased to present the first annual report for the recently merged Macquarie Goodman Group.

The most significant event of the past year has been the merger of MGM and MGI to form Macquarie Goodman Group.

The merger consolidates our position in the market as the largest industrial property group listed on the Australian Stock Exchange ("ASX"), the fourth largest listed property group in the S&P/ASX 200 Property Index and one of the largest listed industrial property groups globally.

The merger represents a natural evolution for both MGM and MGI, as it fully integrates the core business activities of both entities. Macquarie Goodman now has an operating and capital structure that facilitates access to growth opportunities, focused on industrial and business space.

Macquarie Goodman delivered a net operating profit of \$50 million for the year ended 30 June 2005. This result includes a 12 month profit contribution from MGM, a five month profit contribution from MGI and the effect of the one-off merger and other related transaction costs.

Importantly, following the merger, Macquarie Goodman has provided Securityholders with distributions totalling \$172.5 million which is equivalent to a distribution of 12.95 cents per security ("cps") (25.90 cps on an annualised basis). Following the merger our earnings per security, before the effect of the one-off merger costs, was 11.98 cps (23.96 cps) on an annualised basis) which was in line with the forecasts contained within the Explanatory Memorandum for the merger.

In April 2005, we announced a one for 10 non-renounceable Priority Entitlement Offer and Public Offer (the "Offer"). This initiative provided eligible Securityholders with the opportunity to purchase additional securities in the Group at a discount to market price and without brokerage and transaction costs. The Offer was highly successful and received overwhelming support from both institutional and retail investors.

MGM : www. UBS RE Manager and Developer 300

※※※※ MGI I & S&P/ASX 300 Property Accumulation Index ---------------------------------------

The solid performance of all business units has assisted in achieving a 48.5% total annual return for former MGI Unitholders and a 20.3% total annual return for former MGM Shareholders for the 12 months to 30 June 2005.

We continued to employ our unique and proven Customer Service Model to build long-term relationships with our customers.

Our underlying business continued to perform strongly resulting in the following key achievements:

• organic growth in our core Australian and New Zealand property investments;

• $\Rightarrow$ growth in our third party funds management business through the expansion of Macquarie Goodman Property Trust ("MGP") and Ascendas Real Estate Investment Trust ("A-REIT"); and
• → entry into an Asian joint venture with Macquarie Bank, including the establishment of an office in Hong Kong. The acquisition of our first Hong Kong property is intended to assist in the expansion of the Asian funds management business.

During the year, Mr Bill Moss resigned from the Board. We would like to thank Bill for his outstanding contribution to the growth and strategic development of Macquarie Goodman. Mr James Hodgkinson took his place as a Director of Macquarie Goodman. With his range of experience, James brings significant expertise to the Group and we are delighted to welcome him to the Macquarie Goodman Board.

On behalf of the Board, I would like to thank Securityholders, customers and the Macquarie Goodman team for their support during the year. We will strive to continue our success in the future.

Yours faithfully

David Clarke, AO Chairman

CHIEF EXECUTIVE OFFICER'S REPORT

Macquarie Goodman undertook the most significant corporate transaction of the Group's history during the year with the merger of MGM and MGI to become Macquarie Goodman Group.

Approval of the merger was received from MGM Shareholders and MGI Unitholders on 25 January 2005 and from the Supreme Court of NSW on 31 January 2005. Implementation of the merger took place in February 2005.

The merger addressed structural changes occurring in the listed property trust sector, in particular the need to deliver a higher level of earnings growth than would have been possible from the organic growth of the portfolio.

The merger secured the relationship between MGM and MGI by the successful pairing of MGM's proven management skills and MGI's high quality industrial and business space portfolio to form an integrated property group.

It should be noted that the results for the year ended 30 June 2005 are comprised of 12 months of results from MGM and five months of results from MGI.

On a stand alone basis, both MGM and MGI outperformed the forecasts outlined in the Explanatory Memorandum.

As at 30 June 2005, Macquarie Goodman had a core portfolio of 125 properties across Australia, New Zealand and Hong Kong, with a value of \$4.7 billion. In addition, management capabilities are provided throughout Australia, New Zealand, Singapore and Hong Kong with our assets under management now totalling \$7.0 billion.

The performance reflects the core values of our proven Customer Service Model. The model underpins our long-term commitment to our customers. It utilises the talents of our team and differentiates us as a leading industrial and business space provider in Australia, New Zealand and Asia.

GREGORY GOODMAN CHIEF EXECUTIVE OFFICER

PROPERTY INVESTMENT

Our continued focus and commitment to actively manage the portfolio throughout the year has assisted in maintaining an occupancy rate of 98%, a weighted average lease term of 5.1 years and customer retention rate of 81%.

The portfolio has had an extremely active year with capital transactions totalling \$973 million.

Key achievements during the year included:

• → \$497 million in Australian acquisitions;
• $\Rightarrow$ \$248 million in Hong Kong acquisitions (\$400 million postbalance date);
• $\Rightarrow$ \$391 million in divestments (including \$289 million in New Zealand assets); and
• $\Rightarrow$ \$64.3 million in property revaluations.

The investment portfolio benefited from the completion of \$290 million of new development space providing an average return on cost of 8.6%.

We continued to build valuable property partnerships with existing and new customers which helped secure pre-commitments for 88% of the development projects we commenced this year. This saw the continued enhancement of the portfolio, provided security of income and assisted in the continued roll out of the development pipeline.

Macquarie Goodman also holds strategic cornerstone investments in our third party managed listed property trusts, MGP and A-REIT with interests of 30% and 7% respectively.

FUNDS MANAGEMENT

We continued to successfully develop our funds management business during the year, recording a \$1.2 billion increase in funds under management. In Singapore, A-REIT doubled its total assets to A\$1.6 billion with the acquisition of 20 properties for A\$800 million. It consistently outperformed market expectations to deliver strong distribution and capital growth for Unitholders. A-REIT's total net investment income available for distribution reached A\$65 million, equating to a 17% increase in distributions to A7.39 cents per unit. Total returns to Unitholders reached 56%, with the unit price increasing 48% to A\$1.45.

The New Zealand listed MGP also enjoyed strong growth during the vear with an increase in total assets from A\$206 million to A\$495 million. growth in net profit after tax of 118.5% to A\$16.2 million and entry into the New Zealand Exchange Limited's ("NZX") top 50 entity index, the NZSX50.

MGP Unitholders were rewarded with a total return of 27% for the year, resulting from a 19% increase in gross distributions and a 10% increase in unit price to A\$1.01. MGP finished the year with a market capitalisation of A\$346 million at 31 March 2005.

During the year, we continued our expansion into Asia, facilitated by the signing of a Joint Venture Agreement ("JV Agreement") with Macquarie Bank. Under the JV Agreement, Macquarie Goodman established an office in Hong Kong, headed by Stephen Hawkins. Our Hong Kong office currently has a staff of 19 who are concentrating on the growth of that business.

Macquarie Goodman has to date secured A\$400 million worth of high quality property in Hong Kong which is in line with our strategy to launch a new real estate investment trust in Hong Kong during the first half of 2006.

* Fieflects 2005 financial year results
for the respective vehicles.

CHIEF EXECUTIVE OFFICER'S REPORT CONTINUED

PROPERTY DEVELOPMENT

The Development Division performed strongly throughout the year with over 242,000 sqm of completed space and approximately 316,000 sqm of new development space commenced.

The combination of our proven development management expertise and extensive development pipeline allows us to accommodate the future space requirements of existing and prospective customers in key growth markets whilst also adding new high quality property to the portfolio.

Key development highlights for the year included:

• $\Rightarrow$ securing the right to develop a major distribution facility for Coles Myer in Adelaide with the subsequent appointment in July 2005 to develop a national distribution facility in Sydney;
• $\rightarrow$ planning approval for the M7 Business Hub site; and
• $\rightarrow$ successful acquisition of a 75% interest in the Highbrook development site in New Zealand.

In August 2005, Macquarie Goodman partnered with one of our most significant customers, Toll Holdings Limited ("Toll") to acquire, develop and jointly manage a portfolio of Toll's properties with a potential value of \$120 million. This strategic partnership provides the basis for Toll and Macquarie Goodman to work together in a collaborative manner in the future which will importantly provide our Securityholders with additional secure income streams over the long term.

PROPERTY SERVICES

We manage 145 properties throughout Australia, New Zealand and Hong Kong. The experience and skills of our property services team and the structure of our operating platform has allowed us to replicate our proven Customer Service Model to our third party listed property trust, MGP.

Macquarie Goodman's property portfolio consists of
warehouse/distribution centres, business parks, industrial
estates, office parks and suburban commercial buildings.

In 2005, the property services team secured more than 377,000 sgm in new leasing transactions, with intensive asset management delivering strong underlying property performance to both the Macquarie Goodman and MGP portfolios.

Both portfolios enjoyed solid customer retention, higher occupancy rates and strong lease expiry profiles.

CAPITAL MANAGEMENT

To manage Macquarie Goodman's capital requirements, we raised \$565.2 million in equity during the period, bringing our market capitalisation to \$5.7 billion as at 30 June 2005.

In April this year we issued a one for 10 non-renounceable Priority Entitlement Offer and Public Offer to fund our new business activity, property acquisitions and reduce Macquarie Goodman's gearing level. The offer was strongly supported by institutions and retail Securityholders, raising \$458.4 million at an issue price of \$3.64 per security.

In July 2005, we established a new \$1.4 billion Syndicated Multi-Currency Debt Facility ("Facility") which was used to refinance the existing MGI \$1.1 billion Multi-Option Facility and MGM Facility.

The Facility, which was originally launched at \$1.2 billion, received overwhelming support from banks, resulting in the significant oversubscription and upscaling of the Facility. The purpose of the Facility is to diversify sources of debt funding to include highly rated local and international banks. It aims to combine the funding requirements of the Group and provide a robust foundation for Macquarie Goodman's overall financing needs.

Our total borrowings at year end were \$1.9 billion with gearing at 36%, which is at the lower end of our stated target range. We are well positioned to continue to fund the development pipeline and property acquisitions.

As at 30 June 2005, 74% of Macquarie Goodman's borrowings were hedged against movements in interest rates at an average cost of 6.0% per annum. As testament to our active capital management, we have continued to maintain our current gearing and hedging profiles at targeted levels.

STRATEGY AND OUTLOOK FOR 2006 Looking forward, we will continue to strengthen our presence in Australia. New Zealand and Asia. We will maintain our pursuit of expansion opportunities with well located industrial and business properties which provide stability through the diversification of our customer base.

Our team will continue to apply the fundamentals of our Customer Service Model. The Model underpins our long-term commitment to our customers. It utilises the talents of over 230 Macquarie Goodman team members and differentiates Macquarie Goodman as a leading industrial and business space provider in Australia, New Zealand and Asia.

In 2006, we intend to focus on a number of initiatives. These include organically growing our Australian investment portfolio, capitalising on our growing position in the Asian market by launching a Hong Kong real estate investment trust in the first half of 2006, and growing our third party funds management business in both Australia and abroad.

We will continue to roll-out our development pipeline with a total of 2.96 million som of vacant land available for development in Australia and New Zealand.

By focusing on our core property portfolio of industrial and business space and maintaining a strong customer focus, we are well positioned to deliver positive results to Securityholders in 2006.

Gregory Goodman Chief Executive Officer

GROUP OPERATIONS

Macquarie Goodman is a property investment and management group which specialises in the ownership, management and development of industrial and business space. Our 230 employees are specialists in managing Macquarie Goodman's investment portfolio on behalf of our Securityholders. The Group earns additional revenue by applying its specialist management skills to the property funds it manages in New Zealand and Singapore.

1990a - Wasan Kat

Asset Class Diversification

Business Parks 29%

• W Office Parks 19%
• 388888 Industrial Estates 18%
• www. Suburban Commercial Buildings 1%

Geographic Diversification

PROPERTY INVESTMENTS

1 ARTIST'S IMPRESSION

Macquarie Goodman's core property portfolio consists of warehouse/distribution centres. industrial estates, business parks and office parks.

Located in Australia. New Zealand and Hong Kong. our core portfolio of 125 properties is valued at \$4.7 billion and houses 560 customers across 3.8 million sam of lettable area.

Highlights

• Key highlights of the portfolio for the year include:
• $\rightarrow$ \$973 million in acquisitions;
• $\rightarrow$ 311,000 sqm of existing space leased representing \$35.0 million in net annual rental;
• $\rightarrow$ 240.000 sam of new development space completed with an end value of \$290 million; and
• $\rightarrow$ property revaluations adding \$64.3 million in value.

Top 25 Customers (By Percentage of Total Net Property Income)

.
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Toll	,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,			ssin sin sin Malalaha.
Linfox	100000000000000000000000000000000000000			a a an an ainm
Coles Myer			a Kalifan
ACI.			- William
Woolworths	WWW.WARESCOMMANDATORY/WWW.WARESCOMMANDATORY/		Mille de
Patricks		WEBSTEIN DES EINER WEBSTEIN ER EINER EINER EINER EINER EINER EINER EINER EINER EINER EINER EINER EINER EINER E
CSC	100000000000000000000000000000000000000
Exel Australia	$\begin{smallmatrix} & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 & 0 &$	BA
Hewlett Packard	100000000000000000000000000000000000000	a wake ku
TNT Australia	100000000000000000000000000000000000000	Y2
Ausdoc	1999 - Samhann Mhannais, ann an t-	NG.
Coca-Cola	,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Recall	1999 - Januar Albert III, menyebaran sejaran pengaran pada pada pada pada pada pada pada pa	39
Unilever	1999-1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 -	H.
SCA Hygiene Australia	________	燚
Fuji Xerox	1992.
State Government of NSW	1999)
Network Ten	1998.
ResMed	. M mazaminininininin
Commonwealth Bank of Australia	BREATHERSHIPS IN THE SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECOND SECO
Salmat	1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 - 1999 38
NYK Logistics	nny gannannannannann 38
EGL	199909999999999999999999999999999999999
Metcash	11110 Andrew March 1911
Smorgon Steel	RAS ARABARA ARABA ETA ERREGIA B,
	0%	1%	2%	3%	49

Weighted Average Lease Expiry Profile
(By Net Property Income)

Intensive asset management delivered strong underlying property performance, with 311,000 sqm of existing space leased throughout the year.

The new leases assisted in maintaining a portfolio occupancy rate of 98%, weighted average lease expiry of 5.1 years, and customer retention rate of 81%. Importantly, the new leases were secured with an increase of 3.4% on previous passing rentals, highlighting the quality of the underlying portfolio and the performance of the industrial property market.

The portfolio is strategically diversified across key asset types and is located in established industrial areas in close proximity to major transport and infrastructure links.

Our top 25 customers are leading local and multinational corporations. These customers provide approximately 37% of the Group's net property income with no one customer providing more than 4% of total net property income.

ACOLISITIONS

During the year, Macquarie Goodman. acquired properties valued at \$973 million including \$248 million in Hong Kong acquisitions (\$400 million post balance date) and \$177 million in development land.

In October 2004, MGI consolidated its holding in the former Colonial First State Industrial Property Trust with the acquisition of the remaining 25% minority interest held by Ascendas (Australia) Pte Limited for \$27.8 million (excluding acquisition costs and net of \$102.5 million Colonial Ioan arrangement). The portfolio comprises 22 industrial and high tech properties located in proven industrial precincts.

PROPERTY INVESTMENTS CONTINUED

In March 2005, Macquarie Goodman secured its first high quality property in Hong Kong with the acquisition of the Global Gateway Building. This was followed by the acquisition of a significant interest in the Evergain Plaza Building in July 2005. These buildings are strategically located in close proximity to Hong Kong's harbour and port facilities. It is intended that, together with Macquarie Bank, Macquarie Goodman will use these properties to launch a Hong Kong real estate investment trust in the first half of 2006.

Major portfolio acquisitions during the year included:

Property	Purchase Price SM
Remaining 25% interest in former Colonial First State Industrial Property Trust	130.3
Upper Global Gateway, Tsuen Wan, Hong Kong-	125.7
Lower Global Gateway, Tsuen Wan, Hong Kong (1)	122.0
IBC Business Estate, Homebush, NSW	88.0
St Leonards Corporate Centre, St Leonards, NSW	-77.0
Highbrook Business Park, East Tamaki, Auckland @	-59.6
Eden Commercial Corporate Centre, Eden Terrace, Auckland 10	-57.4
Millennium Centre (Phase 2), Greenlane, Auckland	51.5
Air New Zealand House, Viaduct Harbour, Auckland	-49.0
Regal Business Park, Rowville, Vic-	35.3

¹³ Exchanged but not settled as at 30 June 2005. ²³ 75% interest.

DIVESTMENTS

During the year, we continued the rationalisation of the core portfolio, completing the sale of nine properties valued at \$391 million, including \$289 million of New Zealand assets to MGP.

Major divestments undertaken during the year included:

Property	Disposal Price SM
New Zealand Portfolio	289.0
Forsyth Distribution Centre, Hoppers Crossing, Vic	41.0
Peninsula Business Park, Brookvale, NSW	-21.0
Hume Distribution Centre, Chullora, NSW	19.0
Queensport Quays Business Park, Murarrie, Old (remaining land)	9.9

INDEPENDENT PROPERTY REVALUATIONS

During the year, 89 properties were independently revalued, resulting in an increase of \$64.3 million or a 2.6% increase over the previous book values.

Intensive management of the portfolio and strong demand for quality industrial properties in well located areas has contributed to the revaluation performance. In particular, solid increases were recorded in South Sydney, Sydney West, Victoria and Queensland.

The combination of these factors has seen the average capitalisation rate for the revalued properties decrease from 8.9% to 8.5%.

Region	Book Value \$M	Valuation \$M	Increase in Valuation SM	Increase %	Capitalisation Rate Pre %	Weighted Post %
New South Wales
- Sydney South	555.1	572.2	17.1	3,1	8.4	8.0
- Sydney West	565.5	577.3	11.7	2.1	8.9	8,4
- Sydney Outer West	231.3	229.0	(2.3)	(1.0)	9.4	8.8
- Sydney North	504.9	512.0	7.2	1.4	8.8	8.6
Victoria	412.4	432.0	19.6	4.8	-9.1	8.5
Queensland	127.1	134.8	7.7	6.0	9.7	8.8
Other	40.8	44.1	3.3	8.2	10.4	10.0
Total	2,437.1	2,501.4	64.3	2.6	8.9	8.5

CORNERSTONE INVESTMENTS

In addition to the core portfolio, Macquarie Goodman also holds strategic cornerstone investments in our third party managed listed property trusts, MGP and A-REIT.

Strong performance from MGP and A-REIT has delivered substantial returns in 2005, with these investments reflecting a 47% increase (\$83 million) on original investment cost.

	MGP	A-REIT
Cornerstone Investment	30%	6.55%
DPU growth - financial year 2005 (1)		ap 19% to A10.3 cpu Up 17% to A7.39 cpa
Total return - financial year 2005 11	27%	56%
Total investment	\$128 million	. aaillinn 0812
Financial year 2006 forecast yield (2)	7.9%	4.3%

¹³ Reflects the financial year end for the respective vehicles.
²⁸ Based on announced forecast distribution for the financial year end and closing price as at 17 August 2005.

PROPERTY PORTFOLIO

PROPERTY SUMMARY	Site Area	Office	Warehouse	Total Lettable Area	Market Capitalisation Rate
Property	Hectares	sqm	sqm	sqm	%
Warehouse/Distribution Centres
GreystanesPark, Prospect, NSW
$-$ East (Stage 1) - West (Stage 2)	13.6 10.5	2,092 5,140	25,593 38,000	27,685 43,140	8.25 8.25
	24.1			70.825
Upper Global Gateway, Tsuen Wan, Hong Kong	0.7	$\overline{\phantom{000000000000000000000000000000000000$	42,042	42,042	6.50
MFive Industry Park, Moorebank, NSW	19.6	5,700	44,927	50.627	8.00
Centenary Distribution Centre, Moorebank, NSW
$-$ Stage 1	7.2	1,903	40,562	42,465	8.50
$-$ Stage $2$	$4.7^{2}$		13,457	13,457	8.50
	11.9			55,922
Forrester Distribution Centre, St Marys, NSW $-$ Stage 1	12.3	263	60,176	60,439	8.50
$-$ Stage 2	5.1
	17.4			60,439
Roberts Distribution Centre, Challora, NSW
- Building A	4.6	943	18,670	19,613	8.50
- Building B	6.2	799	32,175	32.974	8.75
Northgate Distribution Centre, Somerton, Vic	10.8			52.587
- Stages 1 and 2	10.9	224	54,288	54,512	7.25
$-$ Stage 3	3.2
	14.1			54,512
Reservoir Distribution Centre, Wetherill Park, NSW	10.6	2,722	46,570	49.292	8.50
Portside Distribution Centre, Banksmeadow, NSW	4.7	4,552	25,818	30,370	7.75
Wyndham Distribution Centre, Laverton, Vic	12.4	2,344	51,524	53,868	8.75
Smithfield Distribution Centre, Smithfield, NSW Great West Distribution Centre, Arndell Park, NSW	7.9 7.2	1,615 1,757	57,335 26,347	58,950 28.104	9.50 8.75
Chullora Distribution Centre, Chullora, NSW
$-$ Stage 1	3.0	1,545	20,360	21.905	8.50
$-$ Stage 2	1.7	246	14,985	15,231	9.00.
	4.7			37,136
Angliss Distribution Centre, Laverton North, Vic-	10.4	567	20,849	21,416	7.50
Southend Distribution Centre, Mascot, NSW	4.3	1,789	28,034	29,823	8.00
Westall Distribution Centre, Laverton North, Vic- Laverton Distribution Centre, Laverton North, Vic-	9.1 12.1	2,580 437	56,291 50,493	58,871 50,930	7.75 8.25
Crestmead Distribution Centre, Crestmead, Qld	12.2	4,299	28,838	33,137	8.25
Kingston Distribution Centre, Braeside, Vic	8.0	1,535	38,508	40,043	8.50
Dandenong Industrial Estate, Dandenong, Vic	19.2	3,007	30,414	33,421	8.50
Davis Distribution Centre, Wetherill Park, NSW
$-$ Stage 1	3.1	3,772	13,186	16,958	8.50
$-$ Stage 2	2.0		5,527	5,527	8.25
	5.1 15.1			22,485	8.75
Fitzgerald Distribution Centre, Laverton North, Vic Prestons Distribution Centre, Prestons, NSW	8.5	916	21,864	22,780
Hampton Park Distribution Centre, Hampton Park, Vic.	12.0	2,320	36,524	38,844	9.00
Berkeley Distribution Centre, Berkeley Vale, NSW	6.5	500	29,647	30,147	8.75
Miller Distribution Centre, Villawood, NSW	7.4	1,407	11,992	13,399	8.75
Port Wakefield Distribution Centre, Geops Cross, SA	11.3	4,320	21,804	26,124	11.50
Boundary Distribution Centre, Laverton, Vic-	9.7	1,037	22,990	24,027	8.00
Holroyd Distribution Centre, Smithfield, NSW	2.9	2,361	14,692	17,053	8.50
Sheffield Distribution Centre, Welshpool, WA $-$ Stage 1	7.5	1,360	18,205	19,565	9.25
$-$ Stage 2	3.0		4,753	4,753	9.35
	10.5			24,318
Villawood Distribution Centre, Villawood, NSW	3.1	1,046	14,520	15,566	8.50
Savill Link, Otahuhu, Auckland	23.1		$\qquad \qquad -$		$\equiv$
Tranzport Distribution Centre, Port Melbourne, Vic	$2.2\,$	4,720	7,100	11,820	9.00
Britton Distribution Centre, Smithfield, NSW	2.2	342	12,568	12,910	8.75
Sunshine Distribution Centre, Sunshine, Vic-	4.4	804 484	17,602	18,406	8.25 8.75
Federation Distribution Centre, Laverton North, Vic Westlink Distribution Centre, Laverton, Vic	5.0 $3.2\,$	342	15,957 7,402	16,441 7,744	9.50
Woodlands Distribution Centre, Braeside, Vic	2.5	2,290	8,839	11,129	8.75
Keysborough Distribution Centre, Keysborough, Vic
$-$ Stage 1	1.4	687	6,188	6,875	10.50
$-$ Stage $2$	2.9		3,612	3,612	12.00
	4.3			10,487

⁰³ Valuation of original parcel of fand on acquisition.
²³ Valuation reflects 100% adjusted interest in remaining land.

	Occupancy	Book Value 30 June 2005	Independent Valuation	Latest Independent Valuation	Terminal Capitalisation Rate
Major Customers		SM	Date	\$M	%
The Laminex Group	100	84.1	Jun 01	24.6	8.50
Exel, Linfox	100	63.9	Jun 02	19.5	8.50
	100	148.0		44.1
DHL International, Exel Hong Kong, Equinix	100	126.3	Apr 05	123.4	6.50
AUSDOC, Toll, Victa Lawncare	100	116.5	Dec 01	39.5	8.25
Woolworths	100	46.4	Jun 04	44.0	9.00
Fowles Auctions	100	20.1	Jun 04	18.5	9.00
	T00	66.5		62.5
ACI	100	55.3	ปนท 04	55.0	9.00
Vacant Land		7.0	Jun 04	6.0
	100	62.3		61.0
Toll	100	25.2	Dec 04	25.0	8.75
Toll	100 100	36.4 61.6	Sep 04	35.8 60.8	9.50
Nylex, SCA Hygiene Australia Vacant land	100 100	53.6 1.8	Jun 05 Dec 01	53.6 $3.3^{(1)}$	8.00
	100	55.4		56.9
Canon Australia, New Wave Transport	100	49.9	Dec 04	49.5	9.00
Gazal Apparel, Russ Australia	$\overline{96}$	48.5	Dec 04	47.0	8.25
Toll Coca-Cola Amatil, Linfox	100 100	38.5	Dec 04	38.1 38.0	9.00 10.25
Patrick	100	38.2 37.6	Dec 04 Jun 04	37.5	9.25
McPhersons Energy Australia	100 100	25.3 11.9	Dec 04 Dec 04	25.2 11.4	8.75 9.75
	100	37.2		36.6
Kimberly-Clark, Australia Post	100	36.4	Jun 05	36.4	8.25
Recall	100	35.1	Jun 05	35.0	8.50
Smorgon Steel ACI	100 100	33.2	Dec 04	33.1 30.6	8.75 8.75
Metcash	100	30.8 30.3	Jun 04 Dec 03	8.1	8.75
Kmart	100	30.2	Dec 04	30.0	9.25
Toll, General Electrical	100	29.9	Jun 05	28.3	9.00
New Food Coatings, 1st Fleet	100	18.8	Dec 04	18.5	8.75
Snow Confectionary	100	8.0	Dec 04	7.9	8.75
	100	26.8		26.4
Patrick	100	25.4	Dec 04	25.3	9.25
Vacant Land Coles Myer	$\equiv$ 100	25.4 23.8	Nov 04 Dec 04	22.6 23.6	$\overline{\phantom{0}}$ 9.25
Master Foods	100	22.3	Dec 04	22.2	10.50
BHP	100	21.4	Jun 04	21.2	9.25
Coles Myer	100	17.8	Dec 04	17.6	11.50
Caterpillar Logistics	100	17.6	Dec 04	17.5	9.00
Ramset Fasteners	100	17.3	Dec 04	17.2	9.00
Patrick	100	12.7	Jun 04	12.6	9.75
Orica Australia	100 100	4.2 16.9	Jun 04	3.8 16.4	9.75
Kimberly-Clark	100	16.3	Dec 04	16.2	9.00
Vacant Land	$\overline{\phantom{m}}$	15.9	Mar 04	28.5%	$\equiv$
Air International	100	14.1	Sep 04	13.7	10.00
Tyre Marketers	100	13.8	Dec 04	13.5	9.00
AUSDOC	100	13.4	Jun 05	13.1	9.00
Fastline International Toyota Australia	100 100	12.3 10.8	Sep 04 Jan 04	11.7 5.3	9.75 10.00
Crane Distribution	100	10.8	Dec 04	10.8	8.75
		6.8	Sep 04	6.5	11.50
DWN Distributors Link Building Solutions	100 100	2.8	Sep 04	2.7

PROPERTY SUMMARY	Site Area	Office	Warehouse	Total Lettable Area	Market Capitalisation Rate
Property	Hectares	sqm	sqm	som	%
Warehouse/Distribution Centres Continued
Winafield Distribution Centre, Winafield, SA	25.3	1,156	9,849	11,005	8.50
Holbeche Distribution Centre, Arndell Park, NSW	2.2	396	5,441	5,837	8.50
Lytton Distribution Centre, Lytton, Qld	2.2	322	8,246	8,568	8.00
Montague Distribution Centre, West End, Qld	0.8	1,411	4,584	5.995	10.50
Gippsland Distribution Centre, Dandenong, Vic.	2.6	306	10,151	10,457	8.75 $\equiv$
Beverley Distribution Centre, Beverley, SA	1.1	729	6,505	7,234
West Avenue Industrial Estate, Edinburgh, SA Bradford Distribution Centre, Cavan, SA	3.9 4.9	2,212 333	9,572 11,380	11,784 11,713	$\overline{\phantom{m}}$ 10.25
Wodonga Distribution Centre, Baranduda, Vic	7.8	690	9,906	10.596	10.25
Industrial Estates
Erskine Park Industrial Estate, Erskine Park, NSW	27.0	1,452	29,000	30,452	8.50
Discovery Cove Industrial Estate, Banksmeadow, NSW	7.6	16,949	32,773	49.722	7.75
Mitchell Industrial Estate, Alexandria, NSW
$-$ Stage 1	5.4	5,906	30,931	36,837	7.75
$-$ Stage 2	1.5	2,915	5,078	7,993
	6.9			44,830
Alexandria Industrial Estate, Alexandria, NSW	6.1 4.0	3,826	39,774	43,600	7.75
Kingsford Smith Industrial Estate, Alexandria, NSW Cumberland Industrial Estate, Smithfield, NSW	7.5	$\overline{\phantom{000000000000000000000000000000000000$ 1,641	$\overline{\phantom{0}}$ 26,906	15,000 28.547	$\qquad \qquad -$ 8.25
Botany Bay Industrial Estate, Botany, NSW	3.0	5,225	19,744	24.969	8.00
Gateway Industrial Estate, Arndell Park, NSW	4.6	5,989	21,976	27,965	8.50
Smithfield Industrial Estate, Smithfield, NSW
$-$ Stage 1	2.8	2,511	14,273	16,784	9.50
$-$ Stage $2$	2.9	1,631	13,262	14,893	9.25
$-$ Stage 3	1.1		3,951	3,951	10.00
	6.8			35,628
Burrows Industrial Estate, Alexandría, NSW	4.1 6.0	2,920 1,601	24,101	27,021	8.00 9.25
Portside Industrial Estate, Port Melbourne, Vic. McLaren Industrial Estate, North Rocks, NSW	14.9	$\equiv$	43,758 $\overline{\phantom{0}}$	45,359 30,505	$\overline{\phantom{0}}$
Brisbane Gate Industrial Park, Hendra, Old	8.1	2,198	41,802	44.000	8.50
Acacia Link Industrial Estate, Acacia Ridge, Qld	17.5	1,564	17,338	18,902	8.25
Arcadia Industrial Estate, Coopers Plains, Qld	6.8	3,966	32,040	36,006	8.25
Brodie Industrial Estate, Rydalmere, NSW	3.7	2.498	17,318	19,816	9.00
Riverside Centre, Parramatta, NSW	2.3	4,687	10,155	14,842	8.25
Biloela Industrial Estate, Villawood, NSW	3.7	1,622	19,045	20,667	9.00
Reserve Industrial Estate, Ermington, NSW	2.5	1,632	11,181	12,813	8.25
Tingalpa Industrial Estate, Tingalpa, Old Ferntree Industrial Estate, Notting Hill, Vic	1.9 4.3	3,005 4,022	8,579 16,484	11,584 20,506	8.25 9.50
Westcove Industrial Estate, Lane Cove, NSW	0.8	1,294	5,500	6,794	8.75
Citiport Industrial Estate, Eagle Farm, Qld	$3.2\phantom{0}$	2,730	11,723	14,453	8.50
Abbott Industrial Estate, Chester Hill, NSW	2.4	2,572	9,281	11,853	8.50
Greensquare Industrial Estate, Alexandría, NSW	0.7	2,090	4,006	6,096	7.75
Homebush Bay Industrial Estate, Homebush Bay, NSW	1.2	1,705	7,229	8,934	9.00.
Pavesi Industrial Estate, Smithfield, NSW	1.6	1,511	6,016	7,527	8.50
Woodpark Industrial Estate, Smithfield, NSW	1.5	889	7,621	8,510	9.00.
Healey Industrial Estate, Dandenong, Vic	2.9	2,085	9,798	11,883	9.75
The Gate Industry Park, Penrose, Auckland	3.0		$\overline{\phantom{0}}$		$\overline{\phantom{0}}$
Westney Industry Park, Mangere, Auckland	26.6	$\overline{\phantom{m}}$	$\qquad \qquad -$	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$
Business Parks
Lidcombe Business Park, Lidcombe, NSW Campus Business Park, Homebush, NSW	11.3 12.6	14,228 22,225	57,283 44,883	71,511 67,108	7.75 8.50
Slough Business Park, Silverwater, NSW	9.6	15,907	55,177	71,084	8.50
Highbrook Business Park, East Tamaki, Auckland	107.0	$\qquad \qquad -$	$\qquad \qquad -$		$\qquad \qquad -$
Clayton Business Park, Clayton, Vic	31.0	13,000	127,000	140,000	10.50
Acacía Ridge Business Park, Acacia Ridge, Qld
$-$ Stage 1	17.7	4,102	82,666	86,768	11.00
$-$ Stage $2$	20.0	8,000	5,875	13,875
	37.7			100.643
Chullora Business Park, Chullora, NSW	10.7	10,910	35,619	46,529	8.25
Chifley Business Park, Mentone, Vic Airgate Business Park, Mascot, NSW	28.5	5,333	78,760	84,093	8.75
$-$ Stage 1	4.4	3,787	8,646	12,433	8.00
$-$ Stage 2	3.3	3,350	10,546	13,896	8.00
	7.7			26,329

^ss No independent valuation of vacant land.
^ss Development right over leasehold land.
^ss Reflects 75% ownership.

Major Customers	Occupancy	Book Value 30 June 2005 SM	Independent Valuation Date	Latest Independent Valuation \$M	Terminal Capitalisation Rate %
Toll	100	9.2	Apr 05	3.3	8.75
Westgate Logistics	100	8.8	Dec 04	$\overline{8.7}$	8.75
AC	100	8.8	Jun 05	8.8	9.25
Old State Library	100	8.3	Sep 04	8.2	10.75
Amerind	100	7.0	Dec 04	7.0	8.75
Brambles	100	5.9	$\equiv$	$\equiv$	$\equiv$
Johnson Controls	100	4.8	Mar 05	1.6	$\overline{\phantom{m}}$
Patrick Recall	100 100	4.3 3.3	Jun 05 Jul 04	4.3 3.1	10.75 9.00
Packcentre, Stramit DHL International, Eagle Global Logistics	100 89	85.1 80.0	Nov 02 Jun 05	11.3 80.0	9.00 8.25
Kuehne & Nagel, Toll	100	50.2	Jun 05	50.2	7.75
		22.3	Sep 04	21.8
	100	72.5		72.0
Bremick, Fantastic Furniture	100	61.5	Jun 05	61.5	8.00
Goodman Fielder DHL Danzas, Toll	100 100	41.3 40.6	May 04 Dec $04$	33.8 39.0	$\overline{\phantom{0}}$ 8.50
Associated Customs Agents, Tranzlink	100	34.7	Dec 04	33.5	8.25
Fujitsu, Sanyo	100	34.1	Sep 04	33.8	9.00
Coghlan	100	15.8	Sep 04	14.7	10.25
Speedy Corporation, Creative Finish	100	14.4	Sep 04	14.0	9.75
Simons National Carriers	100 100	3.9 34.1	Mar 04	2.6 31.3	10.50
Sealed Air Australia, Multigroup Distribution Services	100	33.5	Jun 05	33.5	8.25
Linfox	100	32.4	Dec 04	32.2	9.75
Unilever	100	32.0	Dec 04	29.5	$\equiv$
Bridgestone Australia, Linfox	100	30.8	Dec 04	30.5	8.75
Kerry Ingredients, AUSDOC	100	28.4	Oct 04	18.0	9.50
Campbells Cash and Carry, JR Haulage	100	25.0	Jun 05	25.0	9.25
Eagle Global Logistics, Hewlett-Packard Hagar B&R, Inchape Automotive	100 96	23.5 22.9	Sep 04 Dec 04	22.7 22.6	9.75 8.50
OneSteel, Grimwood Heating	100	20.1	Jun 05	19.0	9.50
Computershare Document Services, Goodman Fielder	100	19.9	Dec 04	19.8	8.50
Queensco Unity Dairy Foods, Romacco Bosspack	100	15.6	Jun 05	15.6	9.50
Onga Proprietary, Sicpa Australia	100	14.1	Dec 04	13.9	9.75
Doubleday Australia	100	12.9	Sep 04	12.7	9.25
Mayvic, Glen Cameron Nominees Saimat	95 100	12.2 12.1	Dec 04 Dec 04	11.9 12.0	8.75 8.75
Alders International	100	11.5	Sep 04	11.4	8.25
Bayer Chemicals	93	11.3	Jun 04	11.2	9.50
RS Components	100	9.5	Sep 04	9.3	9.00
Australian Corrugated Products	100	7.9	Jun 05	7.9	9.50
Australian Char, Carter Holt Harvey	94	7.0	Dec 04	6.9	9.75
Vacant Land Vacant Land	$\qquad \qquad -$ $\qquad \qquad -$	$3.5$ $0.0^{0}$	$\qquad \qquad -$ $\overline{\phantom{0}}$	$\overline{\phantom{m}}$ $\overline{\phantom{m}}$	$\qquad \qquad -$ $\overline{\phantom{0}}$
CBA. Fisher & Paykel, Nick Scali, Tradelink	96	150.0	Jun 05	150.0	8.25
Fuji Xerox, Nissan, Optima Technology Solutions, UPS Logistics	99	129.9	Jul 01	45.0	9.00
Summit Technologies, Optus, Mulford Plastics, MPM Marketing	100	103.1	Sep 04	94.5	9.00
Vacant Land	$\qquad \qquad -$	$94.4*$	Mar 05	100.5
Australian Independent Wholesalers, Linfox	98	91.5	Jan 03	73.3	10.50
Linfox, ARLL	100	44.2	Jan 03	35.0	12.00
Smorgon Steel	100	21.9	Jan 03	16.6
	100	66.1		51.6
Sony Australia, Coles Myer, New Wave Logistics	100	64.6	Dec 04	64.1	8.50
Coca-Cola Amatil, Storpak, Visy	100	64.4	Jun 02	6.4	9.25
TNT	100	33.6	Dec 03	22.5	8.50
Exel, Hellmann Worldwide Logistics	100	30.6	Dec 03	9.0	8.50
	100	64.2		31.5

18000000000

PROPERTY SUMMARY Capitalisation Lettable Site Area Office Warehouse Rate Area Property Hectares % sqm som sqm Business Parks Continued Botany Grove Business Park, Botany, NSW 7.75 $-$ Stage 1, 2, 3 6.7 4,171 39,544 43,715 $-$ Stage 4 0.4 2,521 595 3,116 7.25
46,831 7.1
Euston Business Park, Alexandria, NSW 2.7 11,057 10,673 21.730 8.75
3.4 6,500 24.532 TransTech Business Park, Lane Cove, NSW 18,032 9.00.
St Peters Business Park, St Peters, NSW 3.4 5,002 21,794 7.75 16,792
Talavera Business Park, North Ryde, NSW
1.2 8.75 - Building A 4,006 3,137 7,143 1.3 8.50
- Building B 8,102 5,697 2,405 2.5 15.245
Regal Business Park, Roweville, Vic 23.1 2,636 17,090 19,726 8.75
Link Business Park, North Ryde, NSW
8.25 - Building A 0.9 3,888 1,675 5,563
$-$ Building B 0.8 6,344 1,187 7,531 8.75
$1.7^{2}$ 13.094
Forestridge Business Park, Frenchs Forest, NSW 1.6 13,605 3,687 17.292 9.50
5.7 Showground Business Park, Castle Hill, NSW 9,646 23,821 8.50 14,175
Enterprise Park, Gladesville, NSW 3.8 6,070 15,614 21,684 9.00
7.2 Toyota Business Park, Port Melbourne, Vic $\overline{\phantom{0}}$ 12.272 Waterloo Business Park, North Ryde, NSW 1.6 7.466 4.806 9.00.
Ferntree Business Park, Notting Hill, Vic 4,1 8.50 10,637 4,323 14,960
13.6 9,894 7,297 17,191 Queensport Quays Business Park, Murarrie, Qld $\overline{\phantom{m}}$
Seville Business Park, Villawood, NSW 2.7 4,908 15,773 20.681 9.00.
Pacific View Business Park, Frenchs Forest, NSW 8.25 1.7 4,393 4,043 8,436
Orion Business Park, Lane Cove, NSW 0.6 3,165 3,320 6.485 8.50
0.5 5,526 Citylink Business Park, Port Melbourne. Vic- 5,448 8.00 78
Chase Business Park, Chatswood, NSW 0.4 2,663 963 3.626 9.25
Office Parks
Talavera Corporate Centre, North Ryde, NSW 21,880 21,880 7.75 4.1 $\overline{\phantom{0}}$
13.2 5,800 52,267 8.50 Homebush Corporate Park, Homebush, NSW 46,467
CityWest Office Park, Pyrmont, NSW 1.0 25,904 25.904 8.50 $\overline{\phantom{0}}$
IBC Business Estate, Homebush, NSW 12.8 1,680 62,683 64,363 8.00
Macquarie Corporate Park, North Ryde, NSW 1.6 8,845 - Building A 2,279 11,124 8.00
- Building B $1.7^{2}$ 14.687 8.25 14,687
- Building C 0.6 1,030 1,540 510 10.75
27,351 3.9
Binary Centre, North Ryde, NSW 17,712 7.75 1.8 17,712 $\overline{\phantom{m}}$
St Leonards Corporate Centre, St Leonards, NSW 19,680 $3.7^{2}$ 15,686 35,366 8.50
Warringah Corporate Centre, Frenchs Forest, NSW
13,309 8.75 - Stage 1 1.6 13,309
$-$ Stage 2 0.7
2.3 13.309
Cambridge Office Park, Epping, NSW 1.3 12,816 8.50 12,816
Pinnacle Office Park, North Ryde, NSW
$-$ Stage 1 7,595 4,845 2.4 9.00 12,440 0.5
$-$ Stage 2 2.9 12,440
Hurstville Office Park, Hurstville, NSW 0.9 10,018 10.018 9.25
$\qquad \qquad -$ 1.6 The Precinct Corporate Centre, North Ryde, NSW 7,697 7,697 7.75 $\overline{\phantom{000000000000000000000000000000000000$
0.5 Air New Zealand House, Auckland 15,600 8.25 15,600 $\overline{\phantom{0}}$
Millennium Centre, Greenlane, Auckland
$-$ Phase 2 1.3 19,219 8.50 19,219
0.1 $-$ Phase 3 771
19,990 1.4
Central Park Corporate Centre, Greenlane, Auckland 1.4 $\qquad \qquad -$ $\overline{\phantom{0}}$ $\qquad \qquad -$
Suburban Commercial Buildings Ashfield Corporate Centre, Ashfield, NSW 0.6 9,705 13,022 3,317 9.00 7,440

® Stage 1 valued in July 03 and Stage 2 valued in Oct 03.
© Reflects valuation on acquisition of entire building.
® Currently under construction.
® No independent valuation of vacant land.
® Includes valuation of developm

Capitalisation	Terminal Rate %	Latest Independent Valuation SM.	Independent Valuation Date	Book Value 30 June 2005 SM	Occupancy	Major Customers
	8.25	55.6	Dec 04	56.1	100	Com Tech Communications, UPS Logistics Group, Penfold Buscombe
		4.8	Dec 04	5.7	50	WA Flick and Co
		60.4		61.8	$\overline{95}$
	9.00	46.0	$\rule{1em}{0.15mm}$ :65	49.7	100	FedEx, Harvey World Travel, Kone Elevators
	9.50	38.7	Dec 03	41.9	92	BCAIT, Foundlab
	8.25	39.0	Dec 04	39.2	100	UPS Logistics Group, Optus
	9.00	17.4	Dec 04	17.5	100	ADI.
	8.75	20.9	Dec 04	21.4	90	Damovo Australia, Kyocera Mita Australia
		38.3		38.9	95
	9.25	38.0	Nov 04	38.6	100	Blue Circle, Manassen Foods
	8.50	14.0	Dec 04	14.3	100	Konica
	9.25	20.3	Sep 04	21.4	99	Henry Walker Eltin, Global Payment Technologies
		34.3		35.7	99
	10.25	33.1	Sep 04	35.7	79	Dell Computers, Prentice Hall
	8.75 9.50	31.6 31.5	Dec 04 Dec 04	32.5 31.7	95 $\overline{95}$	Tarkett Sommer Australia, Waterford Wedgwood American Express, Beckman Coulter
	$\overline{\phantom{m}}$	24.1	Mar 05	27.4	100	Tovota Australia
	9.25	23.8	Dec 04	24.6	86	Douglas Hanly Moir Pathology, Alberto Culver
	8.75	23.6	Dec 04	24.2	$\overline{77}$	Drager Australia, CSC, Thompson Grass Valley
	$\overline{\phantom{0}}$	5.5	Sep 02	20.9	100	Linfox, NHP, OML
	9.25	17.5	Dec 04	18.0	93	Packcentre
	8.50 8.75	16.3 13.0	$Jun$ 05 Jun 05	16.3 13.0	88 $\overline{88}$	Pharmaxis, Linvatec Australia Hypercom Australia, Kyocera Mita Australia
	8.25	9.5	Dec 04	10.3	100	Isuzu, Lanier Australia
	9.75	10.2%	Sep 04	7.5	100	Evans and Peck, Hal Data Services
	8.25	33.0	Jan 02	129.1	100	CSC Australia
	9.00	33.0	Jan 02	110.9	100	Rural Fire Service
	8.25	102.7	Dec 04	104.9	96	Hutchison 3G, Macquarie Radio, Network Ten, Sydney FM Radio
	8.50	88.0	May 05	92.9	89	Bax Global, National Australia Bank, Woolworths, Neway Holdings
	8.75	33.0	Dec 04	33.4	100	ResMed
	8.50	51.4	Dec 04	52.5	100	Fuji Xerox
	11.00	5.0	Dec 03	5.6	100	Hicom International
		89.4		91.6	100
	8.25	79.3	Jun 04	81.2	97	Hewlett-Packard, Volante
	9.00	78.8	May 05	77.9	88	NSW Department of Education, LAN Systems, Interactive
	9.00	41.4	Dec 04	43.7	76	Yum Restaurants
		3.6	Dec 04	3.7	$\overline{\phantom{0}}$	Vacant Land
		45.0		47.4	76
	8.75	45.0	Dec 04	46.1	100	Baptist Community Services, Unilever
	9.75	25.5	Sep 04	27.4	100	Fujitsu, National Australia Bank
		3.5	Sep 04	6.3		Vacant Land
		29.0		33.7	100
	9.50 8.25	29.6 24.6	Dec 04 Dec 04	30.2	87 100	NRMA Insurance Limited, Qantas Staff Credit Union Telstra Corporation, Seven Sydney
	8.75	48.8	May 05	27.0 22.9	100	Air New Zealand
	9.75	52.5	Oct 04	2.9	$\qquad \qquad -$	$=$ $\circledcirc$
		1.1 53.6	Mar 05	0.6 3.5	100 100
	$\qquad \qquad -$	$\overline{\phantom{0}}$	$\equiv 9$	3.3	98	Vacant land
	9.25	37.700	Dec 04	41.4	100	NSW Land & Housing Corporation
	8.75	25.5	Dec 04	27.3	100	Sun Microsystems, HLA Envirosciences

35

Lettable Area Yield Term End Value Completion Property % ŚМ Date Years sqm Sydney West Campus Business Park, Homebush -Building A1 2,096 5 8.0 6.3 Sep 04 -Building A1 Heritage 6,128 10 7.9 9.3 Sep 04 $-Cafe$ 307 0 7.7 1.3 Sep 04 -Building A2 7 12.8 Oct 04 8,664 8.1 -Building A3 1,500 5 Oct 04 8.1 4.1 4,072 -Building E1 3 8.1 4.4 Jul 04 3 -Building E2 6,898 8.0 9.9 Jul 04 -Building E3 Jul 04 690 8.0 2.8 $\overline{\phantom{0}}$ Homebush Corporate Park, Homebush 5,800 10 - Building 1 8.1 27.0 Sep 04 36,155 7 8.1 77.9 Sydney Outer West Cumberland Industrial Estate, Smithfield 5 10,300 9.2 13.0 Jan 05 - Building 3 Erskine Park Industrial Estate, Erskine Park - Building 1B 13,600 10 8.8 14.4 Feb 05 8.2 27,700 5 30.6 Jun 05 - Building 3A - Building 2 9,200 10 8.5 10.6 Jun 06 GreystanesPark East, Prospect - Building 1A 11,700 10 8.2 15.5 Feb 05 GreystanesPark West, Prospect 15,750 5 8.5 19.6 Feb 06 - Building 1 7 88,250 8.3 103.7 Victoria Chifley Business Park, Mentone 5,200 - Building 5B 10 9.2 3.4 Dec 04 - Building 4B (1) 10 8.3 4.7 5,800 Apr 05 Clayton Business Park, Clayton - Building 1 3,500 8 9.4 3.4 Aug 04 Northgate Distribution Centre, Somerton 2 $-$ Building 1B 13,900 10.1 Dec 04 9.8 14,500 10 9.5 - Building 2A 8.1 Sep 04 Westlink Distribution Centre, Laverton $-$ Building 2 8,400 9.4 5.6 Jun 05 36.4 51,300 6 9.1 Queensland Acacia Link Industrial Estate, Acacía Ridge 5 Feb 05 4,190 8.8 4.3 $-$ Stage 2 Crestmead Distribution Centre, Crestmead 15 8.3 - Building 1 36,150 28.8 Nov 04 Queensport Quays Business Park, Murarrie 10 Jun 05 - Building 1 4,700 8.3 5.4 - Building 2 10.0 3,000 10 8.4 Jan 05 48,040 13 8.3 46.9 New Zealand Central Park Corporate Centre, Greenlane - Building 8 10 9.5 14.7 6,290 Jun 05 The Gate Industry Park, Penrose, Auckland - Building B1 5,200 15 10.6 Dec 04 6.2 9.7 - Building D2 4,800 9 Dec 04 4.1 11 16,290 10.1 25.0 240,035 8.1 289.9 Total 8.6	COMPLETED DEVELOPMENTS	Lease	Initial	Estimated	Practical

sennommannessannut esessannut mensennommannen mensennommannut mensennommannut mensennommannut mensennommannut mensennommannut mensennommannut mensennommannut mensennommannut mensennommannut mensennommannut mensennommannut

COMMENCED DEVELOPMENTS			Lettable Area	Lease Term	Initial Yield	Estimated End Value
Property	Stage	Customer	sqm	Years	%	\$M.
New South Wales
Sydney North
Talavera Corporate Centre, North Ryde	C&D	Toshiba, Sanofi Aventis	17,250	10 and 5	8.0	71.8
			17,250		8.0	71.8
Sydney West
Campus Business Park, Homebush	Fŧ	Toshiba	7,500	10	8.0	10.8
	F2	Uncommitted	11,730	$\overline{\phantom{0}}$	8.0	16.9
			19,230	4	8.0	27.7
Sydney Outer West
Centenary Distribution Centre, Moorebank	2	Coates Hire	19,800	15	8.3	17.0
Erskine Park Industrial Estate, Erskine Park	1A	Pickfords	14,549	15	8.0	17.3
GreystanesPark East, Prospect	1B	Recall	20.074	15	8.8	37.1
MFive Industry Park, Moorebank	4A	Salmat	15,000	15	8.1	20.9
			69,423	15	8.4	92.3
Victoria
Angliss Distribution Centre, Laverton	182	Fastline International	24.578	12	8.1	17.3
Chifley Business Park, Mentone	3	Visy (Expansion)	3,310	10	8.9	2.1
Clayton Business Park, Clayton	Westall Frontage	Craftsman Press	8,246	15	8.5	9.1
			36,134	13	8.4	28.5
Queensland
Acacia Link Industrial Estate, Acacia Ridge	Warehouse 3	AUSDOC	7.659	12	8.6	8.0
	Warehouse 3	AUSDOC	2,200	12	8.7	2.3
Queensport Quays Business Park, Murarrie	Building 3	QML Pathology	9,191	10	8.3	20.2
			19.050	11	8.4	30.5
South Australia
Edinburgh Distribution Centre, Edinburgh		Coles Mver	64.725	20	7.5	126.0
West Avenue Industrial Estate, Edinburgh		Johnson Controls	11,800	10	8.4	13.6
			76,525	19	7.6	138.6
New Zealand
Air New Zealand House, Auckland	$\overline{\phantom{0}}$	Air New Zealand	15,600	11	8.3	49.0
Híghbrook Business Park, East Tamakí, Auckland	1A	Exel New Zealand	23,414	5	8.4	19.8
	1B	Exel New Zealand	5,860	$\mathbf{1}$	8.4	4.4
Millennium Centre, Greenlane, Auckland	Phase 2	Uncommitted	19,219	4	10.1	51.5
Savill Link Industry Park, Otahuhu, Auckland	З	Furniture City	6,850	10	8.7	7.8
The Gate Industry Park, Penrose, Auckland		Winstone Wallboards	7,334	15	8.6	9.6
			78,277	7	9.0	142.1
Total			315,889	11	8.3	531.6

Assets Under Management

88888 Macquarie Goodman 68% A\$4.70 billion A-REIT 24% A\$1.70 billion 338888 MGP 8% A\$0.55 billion

FUNDS MANAGEMENT

Our funds management business unit provides the capability to create, manage and grow new property funds for third party investors and provides our Securityholders with stable income streams earned from those management activities. The external funds which we manage allow Macquarie Goodman to provide other management activities to those funds such as development and property services, from which we are able to earn income streams.

During the year, the business unit increased its funds under management by \$1.2 billion. Macquarie Goodman holds strategic cornerstone investments in its third party managed listed property trusts, MGP and A-REIT with interests of 30% and 7% respectively.

SINGAPORE

A-REIT was Singapore's first listed industrial property trust and is managed by Ascendas-MGM Funds Management Limited, a 60/40 joint venture between Ascendas Pte Ltd and Macquarie Goodman respectively.

A-REIT is ranked 29th by market capitalisation amongst all listed entities in Singapore and 5th amongst listed real estate entities on the Singapore Exchange Limited ("SGX"). The inclusion of A-REIT in a number of leading indices affirms the markets confidence in A-REIT which has grown its market capitalisation to A\$1.7 billion.

A-REIT doubled its total assets under management for the year ended 31 March 2005, to A\$1.6 billion with the acquisition of 20 properties for A\$800 million. To fund the acquisitions, A-REIT issued A\$557 million in new equity through a number of placements during the year to both institutional and retail investors.

A-REIT outperformed market expectations for the year delivering strong distribution growth of 17% and a total return of 56% to its Unitholders.

The attractive returns to A-REIT Unitholders was delivered through active property management and the acquisition of new properties to its portfolio which has quadrupled since listing. As at 31 March 2005, A-REIT owned 36 properties.

Over the past year, a total of 102,570 sqm of space (including expansions) was leased, contributing to an increase in the property portfolio occupancy rate to 94%. Long-term leases make up about 47% of A-REIT's portfolio, with the balance represented by short-term leases in multi-tenanted properties. The weighted average lease expiry profile increased from 4.6 years to 7.4 years over the past year. The significant extension of the weighted average lease expiry provides stability to A-REIT's future income.

NEW ZEALAND

MGP achieved a number of significant highlights in 2005. It enjoyed growth in net profit after tax of 118.5% to A\$16.2 million, an increase in total assets from A\$206.0 million to A\$494.8 million, and entry into the NZX top 50 entity index, the NZSX50.

Unitholders were rewarded with a total return of 27% for the year including a 19% increase in gross distributions per unit and an increase in the unit price to A\$1.01. MGP finished the year with a market capitalisation of A\$346.4 million as at 31 March 2005.

During the year, Macquarie Goodman (NZ) Limited ("MGNZ") proposed a number of changes to MGP to position the fund for future growth. The proposal was approved by MGP Unitholders in March 2005 and resulted in a restructure of the management fees (including the introduction of a performance related fee), the purchase of certain interests in properties from Macquarie Goodman and the alignment of interests between Macquarie Goodman and MGP Unitholders through a 30% cornerstone investment by Macquarie Goodman.

The transaction included:

• $\Rightarrow$ the acquisition of 16 previously co-owned properties for a purchase price of A\$210.3 million;
• $\Rightarrow$ the acquisition of seven projects under development for A\$66.4 million;
• $\rightarrow$ the acquisition of a 50% interest in development land for A\$5.9 million: and
• $\Rightarrow$ an institutional placement of 75.5 million new units and a nonrenounceable Priority Entitlement Offer of 66.8 million new units raising A\$140.2 million.

As at 31 March 2005, MGP owned a portfolio of 20 properties, of which have projects currently under construction and offer greenfield development land to provide MGP with new high quality assets in the future.

MGNZ's management was able to strengthen MGP's portfolio with strong leasing activity of 66,352 sqm producing A\$8.4 million in annual net rental income. MGP's portfolio had an occupancy rate of 99.5% and weighted average lease expiry profile of 4.4 years.

The expansion program and other business initiatives undertaken over the past year have consolidated our position in the New Zealand market place and has provided a foundation for future success.

ASIAN EXPANSION

Following the success of our joint venture with Ascendas Investment Pte Ltd ("Ascendas") in listing A-REIT on the SGX in November 2002, Macquarie Goodman entered into a Joint Venture with Macquarie Bank to pursue new property funds management opportunities in Asia. Under the JV Agreement, Macquarie Goodman established an office in Hong Kong, headed by Stephen Hawkins.

In March 2005, Macquarie Goodman secured its first high quality property in the region with the acquisition of the Global Gateway Building in Tsuen Wan, Hong Kong. The upper portion of the building has been purchased for A\$125.7 million with the lower portion due to settle in August 2005 for A\$122 million excluding acquisition costs. As part of the transaction, Macquarie Goodman agreed to acquire Global Gateway Group's 60% share of the Ascendas-Global Gateway building in Singapore for A\$11.3 million. The property is owned jointly with Ascendas, Macquarie Goodman's existing joint venture partner in Singapore.

Since 30 June 2005, we continue to identify new investment opportunities in the region and have acquired a 44% interest in Evergain Plaza, Kwai Chung, Hong Kong for A\$130.5 million.

These acquisitions are in line with our strategy to expand our Asian funds management business by acquiring high quality assets located in key industrial areas to seed and launch a new Hong Kong real estate investment trust by the first half of 2006.

PROPERTY DEVELOPMENT

HIGH IGHTS

The development division performed strongly in the 2005 financial year, completing \$301 million of new development product and commencing \$532 million in new projects. The development pipeline also continued to grow with the addition of 2.05 million sqm of development land to the portfolio.

On a regional basis, Macquarie Goodman together with MGP has a total of 507,830 sqm of development product over 26 properties currently underway. These developments have an estimated end value of \$795 million.

Key development highlights for the year included:

• $\Rightarrow$ securing the right to develop a major distribution facility for Coles Myer in Adelaide with the subsequent appointment in July 2005 to develop a national distribution facility in Sydney;
• $\rightarrow$ planning approval for the M7 Business Hub site; and
• $\rightarrow$ the successful acquisition of a 75% interest in Highbrook development site in New Zealand.

OPERATIONS AND ACTIVITIES

During the year, 242,378 sqm of new space was completed in Australia and New Zealand with an estimated end value of \$301 million, producing a yield on total project costs of 8.6%. More than 97% of developments were pre-committed to customers by practical completion, providing stable income returns to the portfolio.

Macquarie Goodman, together with MGP, commenced 315,889 sam of development works during the year with an estimated end value of \$532 million. The projects are 88% pre-

committed with an average weighted lease term of 11.5 years and an expected yield on total project costs of 8.3%.

Our development pipeline remains strong with a total of 2.96 million sqm of vacant land available for development in Australia and New Zealand. The pipeline is well serviced by key infrastructure, which facilitates the efficient transportation of goods across our customers' distribution bases.

Our development pipeline is designed to meet the changing needs of our customers and to facilitate their growth and expansion. Our focus remains on establishing a leading position in key industrial markets along with developing strategic partnerships with major customers.

Our development team manages all elements of the development process which encompasses masterplanning, architecture, planning approvals, engineering, project management, lease pre-commitiments and the commercial appraisal of properties.

Region	Area sgm	Initial Yield %	Estimated End Value \$M	% of Total Developments	Weighted Average Lease Term Years
Developments completed during the year include:
New South Wales
- Sydney West	36.155	8.1	77.9	26	7.0
- Sydney Outer West	88.250	8.5	103.7	35	7.0
Victoria	51,300	9.1	36.4	12	5.8
Queensland	48.040	8.3	46.9	16	12.6
Auckland	18.633	10.1	36.1	11	8.5
Total	242,378	8.6	301.0	100	8.0
Developments commenced during the year include:
New South Wales
— Sydney West	19.230	8.0	27.7	5	4.0
- Sydney Outer West	69.423	8.4	92.4	17	15.0
- Sydney North	17,250	8.0	71.8	14	5.1
Victoria	36.134	8.4	28.5	5	12.8
Queensland	19.050	8.4	30.5	6	10.7
South Australia	76.525	7.6	138.6	26	18.9
Auckland	78,277	9.0	142.1	27	7.2
Total	315,889	8.3	531.6	100	11.5

COLES MYER FACILITIES

In June 2005, Macquarie Goodman announced that Coles Myer Limited ("CML") had signed a 20 year Agreement to Lease for a new distribution centre in Edinburgh, South Australia.

On completion, the facility will contain a 64,725 sqm regional distribution centre and is expected to be completed by February 2007. The facility will be developed on a 28.3 hectare parcel of land and provides the opportunity for further expansion to satisfy CML's future requirements for the region. The facility is forecast to have an end value of \$125 million producing an initial yield of 7.5%.

In July 2005, CML entered into another Agreement to Lease for its new Western Sydney National Distribution Centre at M7 Business Hub at Eastern Creek. The 75,230 sqm facility is to be developed over 17 hectares with an end value of \$113 million.

The CML pre-commitments are consistent with our investment objective to secure major tenants over long lease terms and to provide a stable income stream.

HIGHBROOK BUSINESS PARK

During the year, Macquarie Goodman commenced developing 153 hectares of land on Auckland's Waiouru Peninsula in East Tamaki. The property will be developed into a world-class business park over the next seven years with an anticipated end value of \$900 million. The property offers a capacity of 550,000 sqm of commercial and industrial space, making it one of the largest strategic industrial land holdings in New Zealand.

In December 2004, we secured Exel Logistics as our first customer, committing to a 30,000 sqm warehouse/distribution centre.

M7 BUSINESS HUB

Macquarie Goodman continues to jointly develop the 150 hectare business park in Sydney's outer west, with Brickworks Limited. The site is in close proximity to the M4 motorway with accessibility to be substantially enhanced through its direct access to the Westlink M7 orbital, due for completion in April 2006.

Based on the current masterplan, M7 Business Hub will be developed in stages over the next seven years to accommodate a variety of customers. To date, Macquarie Goodman has focused on land subdivision and sales, together with the securing of major pre-commitments such as CML. In February 2005, Macquarie Goodman announced the exchange of contracts for approximately 75% of the first land release. Stages 1, 2 and 3 comprise approximately 32 hectares of land and pre sales have been secured over approximately 25 hectares, with sales revenue totalling approximately \$70 million. The largest pre sale is to Coca-Cola Amatil, which will develop its New South Wales logistics base on the site.

PROPERTY SERVICES

Property services capabilities are provided throughout Australia, New Zealand and Hong Kong, with a team of 66 property services specialists managing 145 properties across the region.

Key highlights of the core portfolio and MGP for the year include:

• $\rightarrow$ 377,000 sqm in leasing activity;
• $\rightarrow$ high occupancy rates;
• $\rightarrow$ stable lease expiry profiles; and
• $\rightarrow$ strong customer retention rates.

OPERATIONS AND ACTIVITIES

The property services team had an active year in 2005, with intensive asset management delivering strong underlying property performance to both the core portfolio and MGP.

Over 377,000 sqm in new leasing transactions were secured, and both portfolios enjoyed strong customer retention, high occupancy rates and stable lease expiry profiles.

As at 30 June 2005	Core Portfolio	MGP	Hong Kong
Number of properties	124 @	2012
Number of customers	530	145	30
Leasing activity for year (sqm)	310,882	66.532	n/a
Occupancy levels (%)	98	-99	100
Weighted average lease term (years)	5.1	4.4	2.3
Retention - 12 months (%)	81	-87	n/a

¹¹¹ Reflects the financial year ended 31 March 2005.
¹²¹ Includes Macquarie Goodman and MGP co-owned properties.

The core focus of the Property Services team is
the management of high quality industrial property
and business space of both the core portfolio and MGP.

Significant leases signed during the period are shown below:

MAJOR LEASING PIGHLIGHTS

Property	Customer	Lettable Area sam	SM PA	Net Rent Lease Term Years
Campus Business Park, Homebush, NSW	Samsung	12,127	1.4	b
Tranzport Distribution Centre, Port Melbourne. Vic-	Air International	11.820	1.3	10
Macquarie Corporate Park, North Ryde, NSW	CCН	5,308	1.2	6
Federation Distribution Centre, Laverton North, Vic.	Fastline International	15,342	0.9	6
Slough Business Park, Silverwater, NSW	Summit Technologies	7,693	0.9	5
Campus Business Park, Homebush, NSW	Exel	6,898	0.8	З
Ferntree Industrial Estate, Notting Hill, Vic-	Onga	11,171	0.7	З
Ferntree Business Park, Notting Hill, Vic	CSC Australia	4,286	0.6	10
Forestridge Business Park, Frenchs Forest, NSW	Pearsons	2,478	0.5	10

These results display the positive momentum of the industrial property sector with continued demand for quality accommodation managed by a committed long-term landlord.

Our team has built valuable property partnerships with both existing and new customers, which have assisted in strengthening our presence in the industrial and business space markets throughout Australia, New Zealand and Hong Kong.

Our Customer Service Model is at the heart of our business. It is designed to identify the diverse property requirements of our customers and provide a complete property solution through a range of superior products and services. From sourcing and planning to creating and managing a customer's property solutions, Macquarie Goodman's approach is designed to deliver mutually profitable partnerships with its customers over the long-term.

Over the past year we have completed 42 leasing transactions with existing customers providing \$35.0 million in net annual rental. This result is a testament to our Customer Service Model.

CAPITAL MANAGEMENT

We continued to strengthen our balance sheet through actively managing our capital structure and maintaining our gearing and hedging profile within targeted levels.

FOUTY

We raised \$565.2 million in new equity during the period, bringing our market capitalisation to \$5.7 billion as at 30 June 2005. The equity was applied to the repayment of debt and to fund both the development pipeline and a number of acquisition opportunities.

	Amount Raised 'SM	Securities issued
Priority Entitlement Offer and Public Offer	458.4	125.924.433
Distribution Reinvestment Plan ("DRP") (1)	-38.1	10.209.433
Employee Security Acquisition Plan and Executive Option Plan	-30.1	17.916.668
Conversion of Reset Preference Units ("RePS")	29.0	9.907.181
Stapling mechanism ®	-9.6	967.794.042

¹³ The DRP is in relation to the March 2005 quarter.

^® Issue of MGM shares to MGI Unitholders to enable the merger.

Prior to stapling, MGI raised \$30.7 million from a successful Unit Purchase Plan in August 2004 and \$92.5 million from the DRP.

Priority Entitlement Offer and Public Offer

In April 2005, we announced a one for 10 non-renounceable Priority Entitlement Offer and Public Offer. The initiative provided eligible Securityholders with the opportunity to purchase additional securities in Macquarie Goodman at a discount to market price and without brokerage and transaction costs.

The Priority Entitlement Offer and Public Offer raised approximately \$458.4 million at an application price of \$3.64 per security. The offer was strongly supported by institutions and retail Securityholders with the funds used to assist Macquarie Goodman deliver its objectives of pursuing expansion opportunities in Australia, New Zealand and Asia.

DRP

The DRP continues to be an important source of funding for Macquarie Goodman. Subsequent to the merger of MGI and MGM, Macquarie Goodman established a new DRP allowing Securityholders to reinvest their quarterly distributions in further securities in the Group, at a discount to market price. The plan raised \$38.1 million in May 2005 with 47% of Securityholders participating in the plan.

Over the last two quarters, the Macquarie Goodman DRP price has been calculated at a 2.0% discount to the average of the daily volume weighted average price of all sales of stapled securities recorded on the ASX for each of the first 10 ASX trading days following the ASX trading day after the record date in respect of the relevant distribution.

The issue price for securities under the DRP was as follows:

Quarter Ended	Reinvestment Price Per Security
-31 March 2005	\$3.7242
30 June 2005	\$3,9299

Interest Rate Hedging Profile^®

RePS

Since 28 May 2004, RePS Holders have had the opportunity to request conversion of their RePS into units in MGI and after 1 February 2005 into securities in Macquarie Goodman. MGF as Responsible Entity of Macquarie Goodman Capital Trust ("MGA") has, since 28 May 2004 had the right (on receipt of a conversion request) to elect to convert, purchase or arrange the purchase of RePS from RePS Holders.

To ensure that the merger of MGI and MGM did not adversely affect RePS Holders, the MGA Constitution and the RePS terms were amended to allow RePS to be converted into stapled securities.

Further, at the time of the merger, RePS Holders were offered a one-off opportunity to request and receive cash in return for their RePS. RePS Holders requested 492,302 RePS be converted to cash and a further 88,176 RePS be converted to MGI units prior to the merger. At 30 June 2005, 1,023,155 RePS remained on issue, including 492,302 RePS purchased by MGI.

During the period from 1 July 2006 until 30 June 2007, MGF as the Responsible Entity of MGA may elect to convert, purchase, arrange the purchase of RePS from RePS Holders or reset the terms on which the RePS are issued.

The Responsible Entity must provide at least 45 business days prior written notice to RePS Holders where it intends to reset the terms on which the RePS are to continue. Upon receiving this notice, RePS Holders may elect to convert their units or retain them on the new terms.

Debt

Macquarie Goodman manages a diverse range of debt financing arrangements to deliver the Group's ongoing funding requirements in key geographic regions.

Our intention is to continue to maintain a diverse range of finance facilities and increase the weighted average life of debt expiring over the next 18 months.

Refinancing of Syndicated Debt Facility

In July 2005, we established a new \$1.4 billion Syndicated Multi-Currency Facility which was used to refinance the existing MGI \$1.1 billion Multi-Option Facility and MGM's Facility and will be used for the ongoing general purposes of Macquarie Goodman.

The Facility, which was originally launched at \$1.2 billion, received overwhelming support from banks, resulting in the significant oversubscription and upscaling of the Facility. The purpose of the Facility is to diversify sources of funding to include highly rated local and international banks. It aims to combine the funding requirements of the Group and provide a robust foundation for Macquarie Goodman's overall financing needs.

Gearing Policy

Macquarie Goodman maintained gearing levels within the target gearing range of 35% and 40%. As at 30 June 2005, the total borrowing of the Group was \$1.9 billion, resulting in a 36% gearing level for the Group. This is at the lower end of the target range, leaving Macquarie Goodman well positioned to continue to fund its active development pipeline and property acquisitions.

Debt Hedging Policy

Interest rate exposures continue to be actively managed by Macquarie Goodman. As at 30 June 2005, 74% of Macquarie Goodman's borrowings were hedged against movements in interest rates at an average cost of 6.0% per annum. Interest rate risk is hedged over a 10 year period with a weighted average duration of 3.7 years.

Currency Hedging

The strenath of Macquarie Goodman's balance sheet has provided Macquarie Goodman with the capacity to fund all international investments with the equivalent currency denominated debt. This provides the Group with the capacity to maintain a natural hedge against fluctuations in foreign currencies and mitigate the exchange rate risks for Securityholders.

It is also our policy to hedge net income from international investments over a seven year period.

OUR PEOPLE

BOARD OF DIRECTORS
SENIOR EXECUTIVES

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MACQUARIE GOODMAN GROUP ANNUAL REPORT 2005

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BOARD OF DIRECTORS

MR DAVID CLARKE DR DAVID TEPLITZKY MR GREGORY GOODMAN

Chairman

Appointed 26 October 2000

David is the Executive Chairman of Macquarie Bank Limited. He was previously Managing Director and then Chairman of Macquarie Bank's predecessor organisation, Hill Samuel Australia Limited. David was educated at Sydney University (BEcon (Hons)) and Harvard University (MBA) and holds an honorary degree of Doctor of Science in Economics from Sydney University (Hon DScEcon).

David has extensive experience as a chairman and is currently Chairman of Macquarie CountryWide Management Limited, Macquarie Office Management Limited and Macquarie ProLogis Management Limited, the management companies of Macquarie CountryWide Trust, Macquarie Office Trust and Macquarie ProLogis Trust. He is also Chairman of McGuigan Simeon Wines Limited, the Wine Committee of the Royal Agricultural Society of New South Wales, Sydney Advisory Board of the Salvation Army, Opera Australia Capital Fund and Sydney University Football Club Foundation.

Independent Deputy Chairman Appointed 21 November 1990

David has a PhD and honours degree in Engineering and a Bachelor of Science. He is a retired Regional Director of American Cyanamid Company and the former Managing Director of Cyanamid Australia, Formica Australia Limited and Lederle Pharmaceuticals Limited. He is a member of both the Audit and the Remuneration and Nomination Committees of Macquarie Goodman. He is Executive Chairman of a venture capital company that is developing electric power generation from wave energy and a director of the public company, HiTec Energy Limited.

David has been active for many years in venture capital and high-technology companies in Australia and South East Asia as a consultant and director.

Chief Executive Officer Appointed 7 August 1998

Gregory is the Chief Executive Officer of Macquarie Goodman and is responsible for its overall operations and the implementation of the strategic plan. He has 23 years of experience in the property industry with significant expertise in the industrial property arena. Gregory was a co-founder of MGI and has played an integral role in establishing its specialist position in the market-place through various corporate transactions, including takeovers, mergers and acquisitions. Recently, he was involved in the merger of MGM and MGI and the repositioning of MGP in New Zealand.

Independent Director Appointed 23 February 2005

John is a Fellow of The Institute of Chartered Accountants in Australia and the Australian Institute of Company Directors. John was a partner of KPMG for 24 years, National Executive Chairman for five years and retired from KPMG in June 2000. Since retiring from KPMG, he has held a number of non-executive director roles. From March 2003 until January 2004 he was a director of BresaGen Limited, John is currently Chairman of Lipa Pharmaceuticals Limited, ICA Property Development Funds, Helmsman Capital Fund and Sydney Foundation for Medical Research. He is a director of Macquarie CountryWide Management Limited and Crane Group Limited. John is President of the Northern Suburbs Rugby Football Club Limited and a member of the Sydney Advisory Board of the Salvation Army.

Mr Harkness was not on the Board during the period.
he was employed at KPMG.

Non-Executive Director Appointed 21 February 2003*

James is an Executive Director of Macquarie Bank Limited and Joint Head of Macquarie Bank Group's Property Investment Management Division. James' responsibilities include Macquarie Bank Limited's ongoing investment in Macquarie Goodman and he also has overall responsibility for Macquarie Bank's Property Investment Management's activities in Asia. James was Chief Executive Officer of Macquarie Industrial Trust for six years prior to that trust's merger with MGI. James is also a director of Ascendas-MGM Funds Management Limited and Macquarie Goodman (NZ) Limited. James has over 18 years experience in property funds management, investment banking and chartered accounting.

Mr James Hodgkinson was appointed as an Atternate
Director to Mr David Clarke on 21 February 2003.
He was appointed a Director on 14 June 2005.

Independent Director

Appointed 23 February 2005

Anne was the General Manager, Australia for United Airlines from 1993 to 2001. She was previously on the board of NRMA Insurance/IAG for eight years.

Anne is now a professional director with board positions in a range of industries including advertising, property, construction and banking. She is on the boards of Macquarie Leisure Management Limited, STW Communications Group Límited and Spencer Street Station Redevelopment Holdings Limited. Anne is also a member of the Advisory Council of ABN AMRO Australia and New Zealand.

Non-Executive Director Appointed 23 February 2005

Patrick was educated in South Africa before coming to Australia to attend Sydney University where he attained a Bachelor of Arts and Bachelor of Law. He is the Non-Executive Chairman of Reino International Limited, an Australian parking systems technology and service provider. Patrick is also Joint Managing Director of Saltbush Funds Management Limited, a boutique funds management group focused on the alternative asset class. He is also a director and trustee of Gíant Steps Endowment Fund, which was established to raise funds for children with autism. Patrick has extensive experience in senior management roles in international companies, including Citibank and Swiss Bank Corporation, in Australia and abroad. He was previously Managing Director and an executive Board member of SBC Warburg Global Investment Bank, based in London (now UBS).

MR IAN FERRIER, AO

Independent Director Appointed 1 September 2003

fan is a co-founder of Ferrier Hodgson. He is a Fellow of The Institute of Chartered Accountants in Australia and has 41 years of experience in company corporate recovery and turnaround practice, lan is also a director of a number of private and public companies. He is currently Chairman of InvoCare Limited and Port Douglas Reef Resorts Limited and a director of McGuigan Simeon Wines Limited and Reckon Limited.

His experience is essentially concerned with understanding the financial and other issues confronting companies which require turnaround management, analysing those issues and implementing policies and strategies which lead to a successful rehabilitation. Ian has significant experience in property and development, tourism, manufacturing, retail, hospitality and hotels, manufacturing, infrastructure and aviation and service industries.

MR PATRICK GOODMAL

Non-Executive Director Appointed 14 April 1998

Patrick is the Managing Director of the Goodman Holdings Group, which is a major investor in Macquarie Goodman.

The diversified interests of the Goodman Holdings Group initially focused on direct and indirect property development and has expanded to include the management of a diverse portfolio across sectors covering aviation, food, rural, private equity, listed equity, infrastructure and financial services throughout Australasia.

Patrick is also a director of a number of property investment and management companies both in Australia and New Zealand.

During his 25 year career, Patrick has had considerable public and private company experience in both New Zealand and Australia.

Independent Director Appointed 23 February 2005

Lynn obtained a MA (Psychology) from Sydney University and on MBA from the Australian Graduate School of Management. She is a member of the Foreign Investment Review Board, a compliance committee member of several major fund managers, a director and vice president of the MS Society of NSW and an executive coach.

Lynn's previous board memberships include Schroders Australia Limited, ...
Schroders Australia Property Management Limited, Sedgwick (Holdings) Pty Limited, NSW Lotteries Corporation and the Investment Funds Association of Australia (now IFSA). Her career in financial services began at American Express, including a posting in Hong Kong. Lynn was awarded the Centenary Medal for service to Australian society through business and finance in 2003.

Alternate Director for Messrs David Clarke and James Hodgkinson Appointed 21 February 2003

Stephen is an Executive Director of Macquarie Bank Limited and the Head of Macquarie Property. He is or has been a director or alternate director on many of Macquarie Property listed and unlisted real estate funds.

Stephen has over 23 years of experience in chartered accounting, property finance, funds management and investment banking and is an Associate of both The Institute of Chartered Accountants in Australia and the Securities Institute of Australia. He is also a director of Macquarie Capital Partners LLC, Macquarie's global real estate investment banking joint venture.

SENIOR EXECUTIVES

CORPORATE

MR DAVID VAN AANHOLT

Chief Operating Officer David is the Chief Operating Officer of Macquarie Goodman. He works closely with the Chief Executive Officer and the board on the strategic direction of the business. David heads up Macquarie Goodman's investment program and has day-to-day responsibility for the project and development management team. He has over 17 years of experience in the property industry including valuation, asset management, development management and funds management.

MR ANTHONY ROZIC

Chief Financial Officer As Chief Financial Officer, Anthony is responsible for Macquarie Goodman's financial management, taxation, compliance and reporting obligations. He has over nine years of experience in the property investment industry and eight years of experience in the chartered accounting profession in Australia. Prior to joining Macquarie Goodman, Anthony was Head of Finance for the Property Division of AMP Capital Investors Limited.

MS CAROLYN SCOBIE

Group General Counsel and Joint Company Secretary

Carolyn is the Group General Counsel and Joint Company Secretary of Macquarie Goodman. She is directly responsible for the company secretarial and corporate legal activities of the Group, She also oversees all legal matters relating to property and compliance. Carolyn has over 15 years of legal experience in corporate and commercial property areas including three years within the legal profession and six years as in-house Counsel with Kumagai Australía Group. She holds a Masters of Arts from Sydney University, a Bachelor of Arts/Bachelor of Laws from the Australian National University and a Graduate Diploma in Company Secretarial Practice. She is a member of Chartered Secretaries Australia.

Chief Financial Officer, Asia and Joint Company Secretary

Mark is Chief Financial Officer, Asia and Joint Company Secretary of Macquarie Goodman. He is responsible for the overall financial management of Macquarie Goodman outside of Australia and New Zealand. Mark has over 25 years of experience in finance, property investment and development in Australia, New Zealand, Asia and Europe. Previously, he was the Group Financial Controller of Ipoh Limited and before that the Finance Director of a private group of property companies. Mark holds a Bachelor of Commerce and Administration from Victoria University of Wellington, New Zealand. He is also a Fellow Certified Practicing Accountant with CPA Australia.

Corporate Finance Manager

Damien manages Macquarie Goodman's internal analysis team and works closely with other members of the senior management team providing advice on the performance of the business and new business initiatives. Damien has 15 years experience in finance, property funds management and product development in Australia, Singapore and London. Damien holds a Bachelor of Commerce and a Graduate Diploma in Applied Finance. Prior to joining Macquarie Goodman, Damien was the Fund Manager for Lend Lease's UK Funds.

General Manager, People and Services Jim is responsible for Macquarie Goodman's human resources, IT and facilities management functions. He has over 30 years of professional experience in human resources management and has held senior executive positions in major organisations including Colonial State Bank and KPMG. Prior to joining. Macquarie Goodman, Jim consulted to several organisations in the financial and professional services sectors.

MR MICHAEL O'SULLIVAN

Executive, Corporate Services

Michael is responsible for managing the due diligence processes of Macquarie Goodman. He also manages its property advisory team and the development of its partnering arrangements to enhance property product offerings to customers. He works closely with other senior executives and the Board on all major transactions. Michael has 18 years of experience in chartered accounting, property finance and funds management, both locally and internationally including 10 years with KPMG. He specialises in financial due diligence, corporate finance and structuring.

MR NICK KURTIS

Executive, Corporate Services

Nick is part of the Corporate Services team and is responsible for facilitating and assisting with Macquarie Goodman's major corporate transactions. He has been with Macquarie Goodman for six years and prior to the recent merger of MGI and MGM, Nick's primary role was Fund Manager of MGI, in particular responsible for the implementation and review of acquisition and leasing strategies and the overall financial and portfolio performance. Nick has 12 years of experience in the property funds management industry. Prior to joining Macquarie Goodman, he held various positions with PricewaterhouseCoopers, National Australia Bank and Tyndall Funds Management.

Corporate Communications Manager Jayne heads up Macquarie Goodman's

corporate communications, including media relations, brand management, advertising, website development and internal and external communications. She also manages investor relations, corporate and property related marketing campaigns and the customer relationship management program. Jayne has over 16 years of experience in the funds management industry and was previously employed as investor relations manager for Capcount Property Trust.

SENIOR EXECUTIVES CONTINUED

PROPERTY

Corporate Development Manager, Asia Pacific Craig has over 15 years of experience in property development, project management and asset management in both Australia and New Zealand, Craig is responsible for new developments in Asia and establishing and managing strategic relationships with Macquarie Goodman's customers throughout the Asia Pacific region.

MR JOHN MARSH

Development Executive John is responsible for all development activities for Macquarie Goodman in Australia. John is also involved with key customer relationships on a national and international level regarding all aspects of their property development requirements. John has over 11 years of experience in the property industry including previous roles at Walker Corporation and as General Manager, Commercial Development at Australand Límited. John has a Bachelor of Architecture degree from Sydney University.

MR MATTHEW GIBB

General Manager, Victoria Matthew is responsible for acquisitions, property management, and development projects throughout Victoria and South Australia. Matthew has over 12 years of experience in the property industry and was previously a member of the national industrial development team for Jones Lang LaSalle. Matthew holds a Bachelor of Business in Property (Valuation and Agency) from the University of South Australia. He is an Associate of the Australian Property Institute (Land Economics) and a Licensed Real Estate Agent and Member of the Real Estate Institutes for both Victoria and South Australia.

Company Architect

Colin is the Company Architect for Macquarie Goodman. He is responsible for the planning and design division of the Group, which encompasses master planning of estates, planning approvals, building design for development approvals and ongoing design management of external consultant architects or design and construct contractors. Colin's career, spanning 27 years in Australia and overseas, has embraced a broad spectrum of property related disciplines with leading architectural, property development and consulting firms

Manager, Development Projects John is the manager responsible for the delivery of development projects in New South Wales and Queensland. John is also responsible for the management of capital expenditure projects within the existing portfolio. He has over 20 years experience in property and construction with a further six years in retail, financial services and information technology including 14 years with Lend Lease. John holds an MBA (Executive) from the Australian Graduate School of Management.

Project Director, Highbrook Development Limited, New Zealand

Murray is Project Director for Highbrook Business Park, a 153 hectare business park located close to the Auckland CBD. Murray oversees all aspects of Highbrook including the Highbrook Park Trust, a special purpose trust established to administer the park areas of Highbrook, which total 40 hectares. Prior to joining Macquarie Goodman, Murray was General Manager-Commercial for Auckland International Airport and more recently CEO for Urbus Management Limited.

General Manager, Group Property Investments

Tony is responsible for the overall operations of Macquarie Goodman investments. He oversees the property services, department staffing requirements, implementation of leasing and capital expenditure strategies, co-ordination of valuations and the operating performance of the existing assets of Macquarie Goodman. Tony is also involved in acquisitions and disposals of assets. Tony has over 13 years of experience in the property industry and has been with the Group for over six years. He previously held positions in both asset and portfolio management with Jones Lang LaSalle.

FUNDS MANAGEMENT

Chief Executive Officer, Asia Stephen is responsible for Macquarie Goodman's operations in Asia. Previously, he worked with the Ascendas-MGM Funds Management Limited team in Singapore on the successful listing of A-REIT and subsequent strategic growth of its asset base. He now heads up the Hong Kong office with the objective of pursuing funds management opportunities focused on industrial and business space properties in Asia.

Previously, Stephen held positions in property funds management at Suncorp-Metway Bank and the Westfield Group in Australia. He has 18 years of experience in chartered accounting, property finance and funds management.

MR JOHN DAKIN

Chief Executive Officer, New Zealand John is responsible for Macquarie Goodman's operations in New Zealand and is responsible for the overall management and operations of MGP. John has 17 years experience in the property industry, including experience in valuation, research, asset management, funds management and acquisitions and has held senior roles in the United Kingdom, Australia and New Zealand. He is a former national director of the Property Council of New Zealand and prior to joining Macquarie Goodman (NZ) Limited he was with the Colonial First State Property Group.

MR TAN SER PING

Chief Executive Officer, A-REIT, Singapore

Ser Ping works with the Executive Committee of A-REIT to determine the business strategies and plans for the future strategic development of the Trust. He works closely with the members of the A-REIT team to ensure that A-REIT is operated in accordance. with the stated business strategy. Previously, he was the Executive Vice President of Real Estate Development and Investment of Ascendas Pte Ltd.

Before joining Ascendas, Ser Ping was the Senior General Manager for the Residential and Commercial Business Group of Singapore Suzhou Industrial Park Development Company Ltd. He also held senior positions in various banks. Ser Ping has an MBA from the University of Leicester, United Kingdom and is an honours graduate with a Bachelor of Accountancy from the National University of Singapore.

Corporate governance is the system by which companies are directed and managed. It influences how the objectives of the Group and its controlled entities are set and achieved, how risk is monitored and assessed, and how performance is optimised.

The ASX published Principles of Good Corporate Governance and Best Practice Recommendations in March 2003. The Guidelines articulate 10 core principles that the ASX believes underlie good corporate governance.

Under the ASX Listing Rules, listed entities are required to provide a statement disclosing the extent to which they have followed these best practice recommendations in the reporting period.

Entities are also required to disclose practices that differ from the ASX recommendations and explain why those practices are followed instead of the ASX recommendations.

Macquarie Goodman's corporate governance practices generally accord with the ASX recommendations with the exceptions being the ongoing involvement of David Clarke as the non-executive Chairman of the Board and the Remuneration and Nomination Committee, and a period during the year when the Board determined that it and one of its committees did not comprise a majority of independent directors.

The reason for the deviations from the ASX Corporate Governance Guidelines are set out in papers 41, 42 and 47 of this Report.

The statement following outlines the ways in which Macquarie Goodman has addressed those corporate governance quidelines.

1-LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Macquarie Goodman has adopted an overall corporate governance framework that is designed to meet best practice and recognises that an effective corporate governance culture is critical to success. The Board of Macquarie Goodman is responsible for all aspects of the management of the Group and has ultimate responsibility for its corporate governance practices.

The Board has adopted a charter that is focused on giving direction and the exercise of critical but independent judgement in setting Macquarie Goodman's objectives and overseeing their implementation. The Board's functions include:

• appointment of the Chief Executive Officer of Macquarie Goodman:

• setting strategic direction;

• reviewing progress on strategy;

• developing key policies which impact on Macquarie Goodman;

• $\rightarrow$ approving strategic alliances;

• monitoring organisational performance against set targets;

• $\rightarrow$ ensuring compliance with statutory, financial and social responsibilities; and
• $\rightarrow$ ensuring business risks are appropriately identified and managed.

Macquarie Goodman has developed and implemented formal letters of appointment for Directors, in order to ensure that the Directors clearly understand corporate expectations of them. Each letter outlines the terms of the Director's appointment and includes matters such as their powers and duties, attendance at meetings, remuneration, Board Committees, induction and continuing education, disclosure of interests, and removal and resignation.

The Board is responsible for the continuing growth and success of Macquarie Goodman. To this end, the Board monitors management's performance on behalf of Securityholders and is engaged with management to ensure the appropriate development and execution of Macquarie Goodman's strategy.

The Board has developed a statement of delegated authority to management. This delegated authority stipulates which matters are dealt with by the Board and which matters are the responsibility of management. It includes areas such as finance, corporate matters and property transactions. The statement also identifies the financial limits which relate to each level of authority and the relevant authority holder.

Mr Gregory Goodman is the Chief Executive Officer. The terms, conditions and responsibilities of his role are established in a formal deed between Mr Goodman and Macquarie Goodman. Mr Goodman's role as Chief Executive Officer includes encouraging his management team to deliver the strategy devised by the Board and by management. His role also requires an intimate knowledge of all aspects of the business and the communication of the strategy to stakeholders.

2 - STRUCTURE THE BOARD TO ADD VALUE

Macquarie Goodman is the combined entity produced by the stapling, in February 2005 of MGM and MGF. The Boards of MGM and MGF meet jointly as the Board of Macquarie Goodman. As a result of the merger, both Boards comprise the same Directors as shown below.

The Boards of MGF and MGM have 10 Directors and one alternate Director. The composition of the Boards as at 30 June 2005 is shown below:

Name	Description	Appointed to MGF	Appointed to MGM	Independent Yes	No.
Mr David Clarke	Chairman	26 October 2000	26 October 2000
Dr David Teplitzky 11	Independent Deputy Chairman	23 February 2005	21 November 1990
Mr Gregory Goodman	Chief Executive Officer	17 January 1995	7 August 1998
Mr Patrick Allaway on	Non-Executive Director	27 May 2003	23 February 2005
Mr lan Ferrier	Independent Director	23 February 2005	September 2003
Mr Patrick Goodman	Non-Executive Director	23 February 2005	14 April 1998
Mr John Harkness®	Independent Director	September 2004	23 February 2005
Mr James Hodgkinson (4)	Director	14 June 2005	21 February 2003
Ms Anne Keating	Independent Director	6 February 2004	23 February 2005
Mis Lynn Wood	Independent Director	30 December 2002	23 February 2005
Mr Stephen Girdis	Alternate for Mr Clarke and Mr Hodgkinson	14 June 2005	21 February 2003

¹³ Dr Teplitzky was appointed to the Board of Triden Pty Ltd in 1990. Triden subsequently changed its name to Macquarie Goodman Management Limited.
Dr Teplitzky has only worked with the current management team of Macquar

²⁸ Mr Allaway ceased to be considered as an independent director after he entered into business arrangements with Macquarie Bank Limited during the year.

⁶⁸ Mr Harkness was not on the Board during the period he was employed at KPMG, while Mr Harkness was a partner of that firm whilst it was engaged to conduct the Audit of group entities, he was not involved in these Audits.

¹⁸ Mr Hodgkinson was appointed as Altemate Director to Mr Clarke on 21 February 2003. He was appointed a Director on 14 June 2005.

The Boards of MGM and MGF were merged as part of the stapling process. The combined Board is not a maiority independent Board. However, it was announced at the time of the merger that in order to capture the accumulated knowledge and experience of both Boards and to facilitate the orderly transfer of information in respect of the entities after the merger, Macquarie Goodman would retain all previous directors from both Boards for a period. It was also confirmed at that time that the Board would return to a majority independent Board by the Annual General Meeting in November 2005. It is still intended that this restructure will be in place by this time.

Criteria for Assessing Independence

Macquarie Goodman has assessed its Directors for independence using the definition of independence provided in the ASX Corporate Governance Guidelines. To be classed as independent, a Director:

• $\Rightarrow$ is not a member of management;

• is not a substantial Securityholder of Macquarie Goodman;

• $\rightarrow$ is not associated directly with a substantial Securityholder of Macquarie Goodman;
• $\Rightarrow$ has not, within the past three years, been employed in an Executive capacity by Macquarie Goodman or been a Director after ceasing to hold such employment;
• $\Rightarrow$ has not, within the past three years, been a principal of a material professional adviser or a material consultant to Macquarie Goodman or an employee materially associated with the service provider;
• $\Rightarrow$ is not a material supplier or customer of Macquarie Goodman:
• $\Rightarrow$ has not had a material contractual relationship with Macquarie Goodman other than as a Director of Macquarie Goodman;
• $\Rightarrow$ has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with their ability to act in the best interests of Macquarie Goodman; and

$\rightarrow$ is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with their ability to act in the best interests of Macquarie Goodman.

The Board considers that a material professional adviser or material consultant is one that derives more than 5% of their revenue from Macquarie Goodman. The Board considers that a substantial Securityholder would hold more than 10% of Macquarie Goodman.

The skills and experience of each of the Directors are summarised in the Board of Director Biography section of this report.

Independent Decision Making

The Board has adopted policies which require the independence of Directors be assessed annually and that Directors inform the Chairman prior to accepting new Board appointments. Directors are required, annually, to confirm their ability to adequately perform their role. They are entitled to take independent legal advice at Macquarie Goodman's expense should they believe it necessary for the adequate performance of their role.

The Independent Directors have also formed an Independent Directors' Committee which met during the year without management present to discuss relevant issues.

Chairman

The Chairman, Mr David Clarke, has been a Non-Executive Director since October 2000. Mr Clarke does not satisfy the definition of independence published in the ASX Corporate Governance Guidelines. However, Mr Clarke brings extensive experience and in-depth knowledge to the role of Chairman, as well as skills and experience in the fields of finance, corporate advisory and accounting. Macquarie Goodman has appointed a number of independent directors to the Board as well as to key positions on Board Committees and these independent Directors effectively review and assess the performance of management and exercise critical judgement.

2 - STRUCTURE THE BOARD TO ADD VALUE CONTINUED

Chairman Continued

Macquarie Goodman considers that the introduction of an independent Chairman would not adequately compensate Macquarie Goodman for the loss of Mr Clarke's valuable contributions.

The Chairman's role as leader of the Board includes ensuring that the Board functions as an effective and cohesive group as well as working with the Chief Executive Officer to determine the strategic direction for Macquarie Goodman. The Chairman establishes high standards of corporate governance as well as taking an indispensable role in strategic development and leadership. The role also includes formulation of the Board meeting agendas and papers and management of Board meetings to ensure the best performance of each participant. The Chairman acts as a representative of, and spokesperson for, the Board.

Macquarie Goodman has appointed Mr Ian Ferrier as both independent Chairman of the Audit Committee and lead independent Director, to further strengthen the composition of the Board.

Separation of Roles of Chairman and Chief Executive Officer

The roles of Chairman and Chief Executive Officer have been separated at Macquarie Goodman. This separation avoids concentrations of influence and increases accountability to stakeholders.

The Chief Executive Officer is Mr Gregory Goodman. Mr Goodman's role as Chief Executive Officer is to support and encourage his management team to deliver the strategy developed by the Board and management. His role involves an intimate knowledge of all aspects of the business, communication of operational results to the Board, and communication of strategy to the Board, the management team and other stakeholders.

Remuneration and Nomination Committee

The Board of Macquarie Goodman has established a combined Remuneration and Nomination Committee. The purpose of the Committee is to:

• identify and recommend individuals to the Board for nomination as members of the Board and its Committees;

• ensure performance of members of the Board is reviewed:

• develop and recommend to the Board relevant corporate governance principles;

• ensure an appropriate Board and Committee structure is in place so that the Board can perform a proper review function;

• $\Rightarrow$ review and make recommendations to the Board in respect of the administration of Macquarie Goodman's remuneration programs;
• $\Rightarrow$ review and make recommendations to the Board in respect of the approval and remuneration of senior executive officers and Non-Executive Directors;
• $\Rightarrow$ prepare for approval by the Board any report on Executive remuneration that may be required by any listing rule, legislation, regulatory body or other regulatory requirements or proposed for inclusion in any Annual Report; and
• $\Rightarrow$ report regularly to the Board on each of the above matters.

The members of the Committee and their attendance at meetings is shown in the table below:

Director	Eligible to Attend Attended
Mr David Clarke, Chairman
Dr David Teplitzky
Mr Gregory Goodman	З
Mr Ian Ferrier
Ms Anne Keating

Mr Ferrier and Ms Keating were appointed on 14 June 2005 and consequently were not eligible to attend all meetings of the Committee.

Term of Appointment

Macquarie Goodman has developed formal letters of appointment for Directors. The letters outline the terms of the Director's appointment including tenure. Non-Executive Directors are subject to re-election by rotation at least every three years and new Directors appointed to the Board are required to seek election at the first general meeting of Securityholders following their appointment.

3 - PROMOTE ETHICAL AND RESPONSIBLE DECISION MAKING

Macquarie Goodman has clarified the standards of ethical behaviour expected of Directors, key executives and employees and requires the observance of those standards. Macquarie Goodman has implemented a Code of Conduct and Gifts, Conflicts of Interest and Securities Trading policies to provide guidance as to the practices necessary to maintain confidence in Macquarie Goodman's integrity. These are summarised below:

Code of Conduct

The Code outlines the ethical standards and personal conduct expected of all Directors, Committee members and employees and makes compliance with these standards a condition of appointment and ongoing employment. Expectations regarding the treatment of confidential information and adherence to trading blackouts are made explicit. The Code expressly states that employees must not breach the insider trading rules set out in the Corporations Act 2001. The Code charges all employees with responsibility for reporting unethical or corrupt conduct.

The Code is provided to Directors and all staff upon appointment.

Gifts Policy

All Directors and employees are prohibited from accepting payment or any other benefits in money or in kind from third parties as an inducement or reward for any act or in connection with any matter or business transaction undertaken by or on behalf of Macquarie Goodman. All Directors and employees must exercise extreme care when giving or receiving business related gifts and are requested to disclose any substantial business related gifts. Whether a gift may be accepted or given will depend upon a number of factors including:

• $\rightarrow$ the monetary value of the gift;
• $\rightarrow$ the circumstances surrounding the giving or receiving of the gift; and

• whether the gift could be perceived as being unreasonable, excessive or imposing a right on the giver or an obligation on the recipient.

Conflicts of Interest Policy

Macquarie Goodman has put in place arrangements to identify, assess, manage and report on the types of conflicts of interest which it anticipates will affect or arise from its business. These arrangements include mechanisms to:

• $\Rightarrow$ identify conflicts of interest;
• $\Rightarrow$ manage conflicts of interest by assessing and evaluating identified conflicts of interests (or potential conflicts of interest) and deciding upon and implementing, an appropriate response to those conflicts; and

• maintain written records which demonstrate how Macquarie Goodman manages conflicts which occur.

Directors, consultants and employees are required to comply with the Conflicts of Interest Policy.

Securities Trading Policy

Macquarie Goodman issued the Policy to raise awareness about the insider trading provisions in the Corporations Act 2001 and to strengthen those requirements with additional compliance standards and procedures for Directors and employees who wish to trade in Macquarie Goodman's securities. The policy prohibits Directors and employees from trading when in possession of inside information and also prohibits the communication of that inside information to any other person who is likely to purchase or sell Macquarie Goodman's securities or who is likely to procure a third party to purchase or sell Macquarie Goodman's securities.

The Policy is provided to Directors and employees on their appointment. All Policies are permanently available on Macquarie Goodman's intranet site to staff and Directors.

4 - SAFEGUARD INTEGRITY IN FINANCIAL REPORTING

Statement to the Board

The Chief Executive Officer and the Chief Financial Officer are required to confirm to the Board in writing that Macquarie Goodman's financial reports present a true and fair view, in all material respects, of Macquarie Goodman's financial condition and operational results and are in accordance with relevant accounting standards.

Audit Committee

Macquarie Goodman has established an Audit Committee which operates under a formal charter. The charter sets out the Committee's role and responsibilities, composition, structure and membership requirements.

Committee Structure

As at 30 June 2005, the Macquarie Goodman Audit Committee is chaired by Mr Ian Ferrier. The other members of the Committee are Dr David Teplitzky and Mr James Hodgkinson. All three members of the Committee are Non-Executive and the majority of the members are independent Directors. A summary of the members of the Audit Committee and their attendance at meetings is shown in the table below:

Macquarie Goodman Audit Committee

Director

Eligible to Attend Attended

Mr Ian Ferrier
Dr David Teplitzky
Mr James Hodgkinson

Prior to the establishment of the Macquarie Goodman Audit Committee, MGM and MGI had separate Audit Committees. A summary of the members of both Committees and their attendance at meetings is shown in the table below:

MGM Audit Committee

Director	Eligible to Attend Attended
Mr Ian Ferrier
Dr David Teplitzky
Mr Patrick Goodman

MGF Audit Committee

Director	Eligible to Attend Attended
Ms Anne Keating
Ms Lynn Wood	о ×.
Mr Patrick Allaway
Mr John Harkness

Responsibilities

The purpose of the Audit Committee is to assist the Board of Directors fulfil its legal and corporate governance responsibilities in relation to:

• financial reporting principles and policies, controls and procedures;

• $\rightarrow$ the integrity of Macquarie Goodman's financial statements and the independent external auditor thereof, and Macquarie Goodman's compliance with legal and regulatory requirements relating thereto;

• the audit functions and committees of any entity within Macquarie Goodman; and

• any due diligence and prudential supervision procedures required by regulatory bodies.

The Committee may consider any matter which falls within the roles and responsibilities delegated to it by the Board, notwithstanding that the particular matter(s) may have been previously referred to and considered by another Board Committee.

Subject to any resolution of the Macquarie Goodman Board, the Committee has the power delegated by the Board to do all things necessary to perform its duties and fulfil its purpose including:

• $\rightarrow$ approving principles, policies, strategies, processes and control frameworks for the management of audit matters; and
• $\rightarrow$ sub-delegate its powers and discretions to Executives of Macquarie Goodman, with or without the power to delegate further.

The Committee has unlimited access to the Executives of Macquarie Goodman, external auditors and internal auditors.

Reporting

The Audit Committee reports to the Board on the outcome of its reviews and discussions with the external auditors and its findings on matters which have or are likely to have a material impact on the operating results or financial position of Macquarie Goodman.

5 - MAKE TIMELY AND BALANGED DISCLOSURE

Macquarie Goodman is committed to providing timely, balanced and readily available disclosure of material information to Securityholders, the investing community generally, other stakeholders and requiators. Macquarie Goodman is also committed to ensuring the transparency of those communications.

Macquarie Goodman has developed and implemented a Continuous Disclosure Policy that outlines the procedures followed internally to ensure timely and full disclosure of material through the ASX.

Compliance with the Policy is monitored on a monthly basis by internal compliance audits. The Policy is also monitored quarterly through external compliance audits. Information on continuous disclosure is provided to all employees on commencement of employment and reminder emails on the Policy are forwarded to all employees at least annually.

Any enquiries regarding the continuous disclosure requirements are directed to Group General Counsel in the first instance. ASX announcements are coordinated by the Group General Counsel and Corporate Communications Manager. Macquarie Goodman also relies on the input and sign-off of key employees in each division to which the ASX announcement relates.

Macquarie Goodman's website contains ASX and media releases, newsletters, annual reports and frequently asked questions.

6 - RESPECT THE RIGHTS OF SECURITYHOLDERS Macquarie Goodman has implemented a number of processes in order to facilitate the effective and efficient exercise of the rights of all Securityholders.

Macquarie Goodman communicates information to Securityholders through a range of media, including annual reports, newsletters, general communications and ASX announcements. Key financial information and stock performance are also available on Macquarie Goodman's website. Securityholders can raise questions by contacting Macquarie Goodman by telephone, facsimile, email or post. Contact details are provided on the Macquarie Goodman website and on the back cover of this Annual Report.

The Communications Strategy is available on Macquarie Goodman Group's website.

Securityholders are invited to attend the Group Annual General Meeting either in person or by proxy. The meeting is webcast to further inform Securityholders who are unable to attend and the address of the Chairman is immediately announced to the ASX. Voting results (including a summary of proxy voting) on matters considered at the meeting are released to the ASX as soon as they are determined.

The Board regards the meeting as an excellent forum in which to discuss issues relevant to Macquarie Goodman. The Board encourages the full participation of Securityholders at these meetings to ensure a high level of accountability and identification with Macquarie Goodman's strategy and objectives.

Macquarie Goodman requires its external auditors to attend the meeting and be prepared to answer questions from Securityholders about the conduct of the audits as well as the preparation and content of the independent audit report.

Macquarie Goodman's Independent Directors also play an important role in protecting the rights of minority Securityholders.

7 - RECOGNISE AND MANAGE RISK

Effective risk management is a fundamental part of Macquarie Goodman's business strategy and is central to protecting Securityholders' interests. Macquarie Goodman operates within overall guidelines and specific parameters set by the Board.

The Board has established several Committees which ensure the monitoring of risk. A summary of the work of those Committees is set out below:

Risk Committee

The purpose of the Committee is to assist the Board fulfil its corporate governance and oversight responsibilities in relation to:

• $\Rightarrow$ internal risk management systems;
• $\Rightarrow$ business continuity planning and support processes;
• $\rightarrow$ internal and external audit functions; and

• internal compliance systems.

The members of the Risk Committee are:

• Mr John Harkness, Chairman;

• $\Rightarrow$ Mr Patrick Goodman; and

• Mr Gregory Goodman.

The Committee is currently comprised of a majority of Non-Executive members as these Directors have been determined by the Board to have a particular expertise in the monitoring and management of risk.

The Board has adopted a Risk Management Policy and Plan which establishes policies on risk oversight and management. The Plan outlines the roles and responsibilities of key risk management personnel, risk reporting procedures, the process for identifying and assessing risks and risk controls, and the process for monitoring and reviewing risk management controls. The risks are reviewed and reported against on a quarterly basis.

Risk is further monitored at an Executive level by an Executive Risk Management Committee. This Committee meets monthly and at other times when required and its findings are reported to the Risk Committee of the Board.

The Audit Committee has, as part of its charter, a formal role in the oversight of risk management practices within Macquarie Goodman, with an emphasis on financial risk management.

Compliance Committee

Further, Macquarie Goodman has, since January 2000, had a majority independent membership of its Compliance Committee to monitor MGF performance of its duties as a Responsible Entity. The Committee members are:

• Mr Michael Braham, Chairman and Independent Member:

• Ms Lynn Wood, Independent Director;

• Mr Ray Kellerman, Independent Member; and

• Mr Nicholas Kurtis, Non-Independent Member (a member of Macquarie Goodman's senior executive team).

The Committee meets guarterly and reviews compliance with the Compliance Plan and the Australian Financial Services Licence. The Curriculum Vitaes of the Committee's members are set out below.

Mr Michael Braham, Chairman, and Independent Member

Michael is chairman and director of several listed and unlisted companies and he is also a member of various compliance committees. Formerly, he was a partner of a major accounting firm, investment banker and Regional Commissioner for New South Wales with Australian Securities and Investment Commission ("ASIC").

Ms Lynn Wood, Independent Director

Please refer to page 35 of this Annual Report.

Mr Ray Kellerman, Independent Member

Ray has over 15 years of experience in the funds management and corporate and structured finance industries. He has specialised in legal and compliance activities and worked on some of Australia's largest and most complex funds management, infrastructure and project financings. He was with Perpetual Trustees Australia for 10 years before establishing his own compliance consulting and advisory business in 2001. Ray currently acts as a compliance committee, audit and risk committee member and director for a number of major fund managers and financial institutions.

Mr Nick Kurtis, Macquarie Goodman Executive

Please refer to page 37 of this Annual Report.

Compliance Officer

Ms Sheelagh Callaghan is the Compliance Officer and Secretary to the Committee. The Compliance Officer is responsible for reviewing and monitoring the efficiency of the compliance systems on an ongoing basis and for reporting on the results of these activities to the Compliance Committee.

Due Diligence Committee

The Board establishes a Due Diligence Committee whenever an offer document, such as a prospectus or information memorandum, is to be issued by Macquarie Goodman. The Due Diligence Committee will usually include at least one independent Director of Macquarie Goodman and other personnel considered relevant and appropriate for that particular transaction.

Internal Audit

Macquarie Goodman has outsourced its internal audit function to Horwath (NSW) Pty Ltd, an external third party service provider. The internal audit function involves a rolling program of reviews and control testing of Macquarie Goodman's business processes. The findings of the internal auditor are regularly reported to the Audit Committee and management responds to the recommendations of the internal auditor with improved processes wherever necessary.

Executive Confirmations

The Chief Executive Officer and the Chief Financial Officer have provided the Board with written confirmation that:

• the statement given to the Board on the integrity of Macquarie Goodman's financial statements is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board; and

• $\rightarrow$ Macquarie Goodman's risk management and internal compliance and control system are operating efficiently and effectively in all material aspects.

These statements are based on a Group wide and broad ranging series of annual confirmations from senior executives and department heads in regard to the financial integrity, risk management and internal compliance and control systems within each department.

8 - ENCOURAGE ENHANCED PERFORMANCE

Performance Evaluation

The Remuneration and Nomination Committee is charged with the responsibility for ensuring that the performance of Directors is reviewed. Its charter includes developing and recommending to the Board relevant corporate governance principles and ensuring that an appropriate Board and Committee structure is in place so that the Board can perform a proper review function. The Committee is required to assess the necessary and desirable competencies of Board members, develop and review the Board succession plan, evaluate the Board's performance and recommend the appointment and removal of Directors.

The Board reviews its performance and that of its Committees every two years. An assessment of the performance of each of the Boards of MGM and MGI was conducted during the year ended 30 June 2004. The process for conducting this review consisted of the Directors completing a self-assessment questionnaire, which also elicited comments and key issues the Director wished to raise at that time, the Chairman has also met with each Director individually to discuss their Board participation.

The questionnaires completed by the Directors covered the following matters:

• $\Rightarrow$ Board contribution to developing strategy and policy;
• $\Rightarrow$ interaction between the Board and management and between Board members;

• Board processes to monitor business performance and compliance, control risk and evaluate management;

• $\Rightarrow$ Board composition and structure; and
• $\Rightarrow$ operation of the Board, including the conduct of Board meetings and committee meetings.

The next formal review is scheduled to occur prior to 30 June 2006.

Directors' Education

All new Directors are provided with a substantial information pack regarding the operations of Macquarie Goodman. The information includes the terms of their appointment, Macquarie Goodman's expectations and requirements of Directors, copies of key company policies and guidelines, constitutions for MGM and the principal trusts and copies of the compliance plans. All members of the senior executive team are available to discuss any questions or issues with Directors, to enable them to participate fully and actively in Board decision making at the earliest opportunity. These senior executives also present information at Board meetings in order to provide the Directors with unfettered access to all relevant information and the ability to candidly question senior management in regard to any matter they deem necessary. Directors are also provided with regular tours of the properties of Macquarie Goodman.

Directors and senior executives are encouraged to participate in further education. Macquarie Goodman reimburses the costs of further education which is relevant to the Director or Executive's role in Macquarie Goodman.

Information on the training undertaken by the responsible officers is reported to the Compliance Committee on a quarterly basis.

Access to Information

Macquarie Goodman has a formal policy allowing Directors to take independent legal advice at Macquarie Goodman's expense should they believe it necessary for the adequate performance of their role.

The Company Secretaries are always available to the Directors to provide them with information or clarification as required.

Joint Company Secretaries

Ms Carolyn Scobie

Ms Scobie is a solicitor with more than 15 years experience and has completed a Graduate Diploma in Company Secretarial Practice with Chartered Secretaries Australia. Please refer to page 36 of this Annual Report.

Ms Scobie is responsible for the preparation and dissemination of Board papers and prepares the minutes of the Board meetings. Ms Scobie is accountable to the Board, through the Chairman, on all governance issues.

Mr Mark Alley

Mark is Chief Financial Officer, Asia and joint Company Secretary of Macquarie Goodman. Mark has over 25 years of experience in finance, property investment and development in Australia, New Zealand, Asia and Europe. Mark holds a Bachelor of Commerce and Administration from Victoria University of Wellington, New Zealand. He is also a Fellow Certified Practicing Accountant with CPA Australia. Please refer to page 36 of this Annual Report.

9 - REMUNERATE FAIRLY AND RESPONSIBLY

Remuneration Policies

Macquarie Goodman follows the methods of remuneration which are set out in the ASX Guidelines. These include a policy of rewarding staff with a mixture of fixed, performance and equity-based remuneration. Further information in regard to the Remuneration Policies of Macquarie Goodman are set out in the Remuneration Report.

Equity-based Executive remuneration is made in accordance with the Employee Security Acquisition Plan ("ESAP") approved by Shareholders at the General Meeting held in January 2005.

Options are available to non-resident employees.

The policy for management is designed to encourage superior performance and long-term commitment to Macquarie Goodman and, at the same time, align the interests of management and Securityholders. The Policy is structured as follows:

• fixed remuneration in line with market rates and regularly benchmarked against relevant industry standards;

• $\Rightarrow$ performance remuneration in the form of boriuses based on Macquarie Goodman achieving set returns on equity hurdles; and
• $\rightarrow$ equity remuneration through participation in options or the ESAP to ensure long-term commitment to Macquarie Goodman.

The Policy for Non-Executive Directors is designed to remunerate them at market levels for their time, commitment and responsibilities. Non-Executive Directors of Macquarie Goodman are paid Directors' fees. Non-Executive Directors are also required to purchase Macquarie Goodman securities on market with their Director's fees until they have acquired the equivalent of two years fees in securities.

Securities issued as options or through the ESAP are restricted for 3 years, with securities becoming unrestricted in 3 tranches, subject to return on equity hurdles.

Annual Disclosure

The salary and/or fees of the each Director and of each of the five highest paid officers of the Group are disclosed in the Remuneration Report.

Remuneration and Nomination Committee

The Remuneration and Nomination Committee assists the Board to consider remuneration issues more efficiently and fully and to provide recommendations on remuneration. issues to the Board for approval.

The Committee's charter and its membership is set out on page 42 of this Annual Report.

The Committee is chaired by Mr Clarke, Mr Clarke does not satisfy the ASX Guidelines requirement that the Committee be chaired by an independent Director; however, the Board considers that Mr Clarke's experience in these matters is invaluable. Further, during the year, the Committee was comprised of a majority of non-executive directors rather than a majority of independent directors.

This composition arose as the Committee was comprised of directors from the previous MGM Board to which less independent directors were appointed and available for committee work. However, as from 14 June 2005 the Committee comprised a majority of independent directors.

10 - RECOGNISE THE LEGITIMATE INTERESTS OF SECURITYHOLDERS

Macquarie Goodman believes that ethical and responsible decision making is critical to the success of our business. Macquarie Goodman also believes that the transparency of these processes promotes market and Securityholder confidence in our integrity and sustainability.

Macquarie Goodman has developed several policies and conduct guides which apply to employees, management and Directors alike. The policies include the following:

Code of Conduct Policy

Please refer to page 42 of this Annual Report.

Continuous Disclosure Policy

Macquarie Goodman is committed to providing Securityholders, regulators and the market with timely, balanced and readily available disclosure of material information concerning Macquarie Goodman and its activities. The policy outlines the internal procedures which ensure timely and full disclosure of material through the ASX.

Employee Handbook

The Handbook is a quide for employees about their obligations and entitlements as employees of Macquarie Goodman. The rules and policies in the Handbook apply to all employees in Australia and overseas and form part of each employee's employment contract. The Handbook covers matters such as diversity, remuneration, insurance, presentation, leave, performance management, grievance handling, substance abuse, internet/email usage and disciplinary proceedings.

Occupational Health and Safety Manual

Macquarie Goodman recognises its obligations under the Occupational Health and Safety ("OH&S") legislation and is committed to the implementation and proper management of appropriate risk management procedures to protect the safety of its employees, contractors, tenants and visitors. Macquarie Goodman's commitment to OH&S extends to all facets of its business with the overall responsibility for OH&S resting at the highest level of management and the Board. However, every employee is required to comply with the OH&S Manual and to perform all duties in a safe and responsible manner.

Related Party Policy

Macquarie Goodman has implemented a Related Party Policy for the disclosure and resolution of any matter that may give rise to actual, potential or perceived conflicts of interest between the interests of a Director and Macquarie Goodman. The Policy ensures that all transactions involving related parties of Macquarie Goodman conform to the requirements of the Corporations Act 2001.

Securities Trading Policy

Please refer to page 43 of this Annual Report.

Macquarie Goodman recognises the importance of supporting
community and environmental initiatives and aims to develop programs that provide practical support.

HELP US SAVE THE ENVIRONMENT WITH ETREE We have partnered with eTree in an initiative that will help to restore degraded plant, animal and water resources, by decreasing the amount of paper we produce each year for our Securityholder communications.

By registering your email address with eTree you can receive communications electronically, which will create a positive environmental impact and reduce printing and mailing costs for Macquarie Goodman.

Macquarie Goodman will donate \$2 to Landcare Australia for each Securityholder that registers for eTree, which will help support reforestation projects in your state or territory.

To register, simply visit www.etree.com.au/mgq and ensure you have your Holder Identification Number or Securityholder Reference Number, postcode and ernail address handy.

ENVIRONMENTAL SUSTAINABLE DESIGNS

This environmental initiative is not limited to our investor relations practices. We have implemented an environmentally sustainable design program which extends to our industrial facilities.

The initiatives under the program include design principles that reduce energy use and maximise building and occupant benefits with smart planning. They also conserve and harvest water use for landscaping, improve indoor air quality and comfort for customers and reduce emissions and waste in material choice and construction methodology.

SUPPORTING OUR COMMUNITIES

Macquarie Goodman continues to provide practical support to targeted community, based areas of need. In particular, we work with causes that resonate with our employees and will progress this objective through the establishment of the Macquarie Goodman Foundation during 2005. The Foundation will enable employees to make payroll deductions as charitable donations and Macquarie Goodman will also fund worthwhile causes through the Foundation.

Following the tragic events of the December 2004 Tsunami in Asia, Macquarie Goodman and its employees donated \$100,000 to various Tsunami Appeals.

The other major charity supported by Macquarie Goodman this year was OzHarvest. OzHarvest is a nondonominational charity that collects high quality excess food that would otherwise go to waste and delivers it to hostels, shelters and refuges that feed those in need. In its first 10 months of operation, OzHarvest delivered 280,000 meals. Macquarie Goodman meets the experise for leasing two refrigerated vans and has provided office accommodation at no charge for the OzHarvest operations centre at one of our sites in Alexandria, New South Wales.

FINANCIAL REI

Macquarie Goodman Management Limited and its Controlled Entities AEN 69 000 123 071

30 JUNE 2005

Ganadia a

• 50 Directors' Report
• Lead Auditor's Independence Declaration 65
• 66 Statements of Financial Performance
• 67 Statements of Financial Position
• Statements of Cash Flows 68
• 69 Notes to the Financial Statements
• Statement of Significant Accounting Policies 69 Note 1
• Change in Accounting Policy 75 Note 2
• 76 Note 3 Other Revenue from Operating Activities
• Profit from Ordinary Activities 76 Note 4 Note 5 Auditors' Remuneration
• 77 77
• Note 6 Taxation 78 Note 7
• Earnings per Security ("EPS") Dividends and Distributions 79 Note 8
• 80 Note 9 Cash Assets
• 80 Note 10 Receivables
• 80 Note 11 Inventories
• Note 12 Other Assets 80
• 81 Note 13 Investment Properties
• Note 14 Investments Accounted for Using the Equity Method 87

• 87 Note 15 Other Financial Assets

• 87 Note 16 Plant and Equipment

• 87 Note 17 Intangible Assets
• Note 18 Payables 88
• Note 19 Interest Bearing Liabilities 88
• Note 20 Provisions 89
• Note 21 Contributed Equity 90
• Note 22 Reserves 91
• Note 23 (Accumulated Losses)/Retained Profits 92
• 92 Note 24 Outside Equity Interests
• Note 25 Notes to the Statements of Cash Flows 93 95
• Note 26 Controlled Entities
• Note 27 Segment Reporting 97
• 101 Note 28 Investments Accounted for Using the Equity Method
• 102 Note 29 Interest in Joint Venture Operation
• 103 Note 30 Commitments
• 103 Note 31 Contingent Liabilities
• 104 Note 32 Director and Executive Disclosures for Disclosing Entities
• 107 Note 33 Employee Benefits
• 108 Note 34 Related Party Disclosures
• 110 Note 35 Additional Financial Instruments Disclosure
• 112 Note 36 Impact of Adopting Australian Equivalents to International Financial Reporting Standards

49

• 114 Note 37 Events Subsequent to Reporting Date
• 115 Directors' Declaration
• 116 Independent Audit Report

DIRECTORS' REPORT

The Directors of Macquarie Goodman Management Limited ("the Company" or "Parent Entity") present their Directors' Report on the Consolidated Entity consisting of the Company and the entities it controlled ("Macquarie Goodman") at the end of, or during, the year ended 30 June 2005 ("year") and the audit report thereon.

DIRECTORS

The Directors of the Company at any time during or since the end of the year are:

Mr David Clarke, AO (Chairman) Appointed 26 October 2000 Dr David Teplitzky (Independent Deputy Chairman) Appointed 21 November 1990 Mr Gregory Goodman (Chief Executive Officer) Appointed 7 August 1998 Mr Patrick Allaway (Non-Executive Director) Appointed 23 February 2005 Mr Ian Ferrier, AO (Independent Director) Appointed 1 September 2003 Mr Patrick Goodman (Non-Executive Director) Appointed 14 April 1998 Appointed 23 February 2005 Mr John Harkness (Independent Director) Mr James Hodgkinson (Non-Executive Director) Appointed 21 February 2003(1) Ms Anne Keating (Independent Director) Appointed 23 February 2005 Ms Lynn Wood (Independent Director) Appointed 23 February 2005 Mr Stephen Girdis (Alternate for David Clarke and James Hodgkinson) Appointed 21 February 2003 Mr Bill Moss (Non-Executive Director) Appointed 26 October 2000, Resigned 13 June 2005

¹¹¹ Mr James Hodgkinson was appointed as an Alternate Director to Mr David Clarke on 21 February 2003. He was appointed a Director on 14 June 2005.

Details of the Directors' qualifications and independence status are set out in the Directors' Report.

COMPANY SECRETARY

The Company Secretaries at any time during or since the end of the year are:

Ms Carolyn Scobie; and Mr Mark Alley.

Details of the Company Secretaries' qualifications and experience are set out in the Directors' Report.

DIRECTORS' MEETINGS

The number of Directors' meetings (including meetings of committees of Directors) and the number of meetings attended by each of the Directors of Macquarie Goodman during the year are:

		Board meetings		Audit Committee meetings		Remuneration and Nomination Committee meetings
Director	$\mathsf{Held}^{{!{!}!}!}}$	Attended	Held (1)	Attended	$HeId^{(1)}$	Attended
Mr David Clarke	17	17			З	3
Dr David Teplitzky		17	4	4	З	З
Mr Gregory Goodman	17	17			3	3
Mr Patrick Allaway	8
Mr Ian Ferrier		16	4	4
Mr Patrick Goodman	17	16	3	3
Mr John Harkness	8	8
Mr James Hodgkinson
Ms Anne Keating	8
Ms Lynn Wood	8
Mr Stephen Girdis (Alternate)	5	5
Mr Bill Moss		12

¹³ Reflects the number of meetings individuals were entitled to attend.

Directors absented themselves from meetings where they had a personal interest in matters being discussed.

The Remuneration Committee and Nomination Committee were combined during the year.

PRINCIPAL ACTIVITIES

The principal activities of the Consolidated Entity during the course of the year were funds management, property services, development management and investment.

As a consequence of the successful merger with Macquarie Goodman Industrial Trust ("MGI") effective 1 February 2005, the Consolidated Entity's principal activities now include property investment.

Review and Results of Operations

Effective 1 February 2005, Macquarie Goodman Group was formed following the merger of Macquarie Goodman Management Limited and Macquarie Goodman Industrial Trust.

The performance of the Consolidated Entity, as represented by the results of its operations for the year, was as follows:

Consolidated
	2005	2004
Total net assets (\$M)	3,093.1	134.1
Revenue from ordinary activities (\$M)	494.5	78.8
Net profit attributable to Securityholders of Macquarie Goodman (\$M)	50.0	-37.0
Basic earnings per security (cents)	7.4	13.9
Adjusted basic earnings per security (cents) (refer Note 7 to the financial statements)	22.0	13.9
Dividends and distributions paid by Macquarie Goodman (\$M)	194.6	17.1
Number of securities on issue (M)	1.405.0	273.2
Net tangible assets per security (\$)	2.15	0.13

Dividends and Distributions

Dividends and distributions declared by Macquarie Goodman since the end of the previous year are as follows:

					SМ
Dividends from Macquarie Goodman Management Limited Distributions from Macquarie Goodman Industrial Trust since 1 February 2005					22.1 172.5 194.6
Dividends from Macquarie Goodman Management Limited	Dividend cps	Total amount \$M.	Franked/ unfranked	Franked %	Date of payment
Final 2004 dividend Interim 2005 dividend	3.5 4.5	9.6 12.5 22.1	Partly franked Partly franked	-57 30.	22 Sep 04 2 Feb 05
Distributions from Macquarie Goodman Industrial Trust			Distribution cpu	Total amount SM.	Date of payment
March 2005 quarter distribution from the Trust Final 2005 distribution from the Trust			6.475 6.475	81.5 91.0	3 May 05 19 Aug 05
				172.5

STATE OF AFFAIRS

Key changes in Macquarie Goodman's state of affairs during the year were as follows:

a) Merger with Macquarie Goodman Industrial Trust

Effective 1 February 2005, the Company merged with Macquarie Goodman Industrial Trust. This is reflected in the financial statements as an acquisition of Macquarie Goodman Industrial Trust by Macquarie Goodman,

b) Restructuring of Interests in New Zealand

On 29 March 2005, Macquarie Goodman sold its interest in certain New Zealand properties to Macquarie Goodman Property Trust in return for cash and equity in Macquarie Goodman Property Trust.

c) Interest in Hong Kong

As at 30 June 2005, Macquarie Goodman has acquired a property in Hong Kong and is committed to the purchase of additional properties. Subsequent to 30 June 2005, Macquarie Goodman has entered into further commitments for the purchase of investment properties in Asia. These transactions have been undertaken pursuant to Macquarie Goodman's strategy for further expansion in Asia. Hong Kong acquisitions have been fully debt funded using Hong Kong dollars.

d) Entitlement Offer

On 24 May 2005, Macquarie Goodman successfully completed an Entitlement Offer which allowed all Securityholders to acquire one new security for every 10 securities held, at the price of \$3.64 per security. This Offer raised \$458 million with the issue of 126 million securities.

In the opinion of the Directors, there were no other significant changes in the state of affairs of Macquarie Goodman that occurred during the year.

STRATEGY AND OUTLOOK

Looking forward, we will continue to strengthen our presence in Australia, New Zealand and Asia with a focus on pursuing expansion opportunities and vield-accretive properties that are well located and provide stability through the diversification of our customer base, asset and geographic mix.

Likely developments in the near future include launching a property fund in Hong Kong in the first half of 2006 with a view to expanding Macquarie Goodman's third party funds management operations. Expansion of the third party funds management opportunities will be actively pursued in Australia.

Further information as to other likely developments in the operations of the Consolidated Entity and the expected results of those operations in future years has not been included in the Financial Report because disclosure of the information would be likely to result in unreasonable prejudice to the Consolidated Entity.

ENVIRONMENTAL REGULATIONS

The Consolidated Entity's operations are not subject to any significant environmental regulations under either Commonwealth or State legislation in relation to its property activities. An Environmental Committee monitors compliance with environmental regulations prior to the acquisition of properties and during the development or redevelopment of the properties. The Directors are not aware of any breaches during the period covered by the Directors' Report.

Where necessary, an independent expert's advice is sought to review environmental issues affecting Macquarie Goodman. The Directors believe that Macquarie Goodman has adequate systems in place for the management of its environmental requirements under the various Acts and guidelines currently in place, as they relate to industrial and commercial property.

EVENTS SUBSEQUENT TO REPORTING DATE

Other than the matters discussed below, there has not arisen in the interval between the end of the year and the date of the Directors' Report, any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors, to affect significantly the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity, in future financial years.

a) Refinancing of Loan Facilities

Subsequent to year end, Macquarie Goodman agreed terms with its bankers for the refinancing of certain of its bank debts. Existing facilities totalling \$1.1 billion were replaced with new facilities totalling \$1.4 billion.

b) Introduction of Australian Equivalents to International Financial Reporting Standards ("AIFRS")

For reporting periods beginning on or after 1 July 2005, the Consolidated Entity must comply with AIFRS as issued by the Australian Accounting Standards Board. The implementation plan and potential impact of adopting AIFRS are detailed in Note 36 to the financial statements.

c) Acquisition and Sale of Properties

Macquarie Goodman has exchanged and/or settled contracts for the purchase of properties in Australia, New Zealand, Singapore and Hong Kong for \$380.4 million. Subsequent to 30 June 2005, Macquarie Goodman has exchanged and/or settled contracts for the sale of properties in Australia for \$32.9 million.

OPTIONS GRANTED DURING THE YEAR

During or since the end of the year, Macquarie Goodman has not issued any options over unissued securities of Macquarie Goodman to its Directors or Executive Officers. The following options over unissued securities were issued by the Company under the Executive Option Scheme to other employees during the year:

Date granted	Expiry date	Exercise price	Options issued
-23 Jul 04	23 Jul 09	3.1859	300,000
23 Jul 04	23 Jul 09	3.4448	100,000
			400,000

UNISSUED STAPLED SECURITIES UNDER OPTION

At the date of the Financial Report, unissued stapled securities of Macquarie Goodman under option are:

Date granted	Expiry date	Exercise price	Number of securities
10 Oct 01	10 Oct 06	0.7810	133,334
13 Dec 01	13 Dec 06	1.1423	500,000
28 Oct 03	28 Oct 08	2.5761	700,000
23 Jan 04	23 Jan 09	2.8255	500,000
23 Jul 04	23 Jul 09	3.1714	300,000
			2,133,334

All options expire on the earlier of their expiry date or termination of the employee's employment. In addition, the ability to exercise the options is conditional on the Consolidated Entity achieving certain performance hurdles. The performance hurdle applicable to the above options issued under the Executive Option Scheme requires compound annual growth in earnings per security for Macquarie Goodman of 10% or more since the end of the previously reported 12 month period immediately preceding the date of grant (as reported in the Annual Report or Half Yearly Report of the Consolidated Entity).

SECURITIES ISSUED ON EXERCISE OF OPTIONS

During or since the end of the year, Macquarie Goodman issued securities as a result of the exercise of options as follows:

Amount paid per security	Number of securities issued
0.2291	750,000
0.5033	100,000
0.5178	4,599,999
0.7810	66,667
0.7955	1,833,335
1.1568	500,000
1.2778	1,250,000
1.3478	166,667
2.5906	7,550,000
3.4448	100,000
3.7564	1,000,000

DIRECTORS' INTERESTS

The relevant interest of each Director in the contributed equity of Macquarie Goodman as notified by the Directors to the Australian Stock Exchange Limited ("ASX") in accordance with section 205G (1) of the Corporations Act 2001, at the date of the Financial Report is as follows:

Directors	Total securities held	Securities neig through associated interests
Non-Executive
Mr David Clarke	206,901	89,044
Dr David Teplitzky
Mr Patrick Allaway	65,400	65,400
Mr Ian Ferrier
Mr Patrick Goodman	100,500,347	100,500,347
Mr John Harkness
Mr James Hodgkinson	158,817	48,106
Ms Anne Keating	15.675	15.675
Ms Lynn Wood	18,984	18,984
Mr Stephen Girdis	1,105	1,105
Mr Bill Moss	97.997	97,997
Executive
Mr Gregory Goodman	108,381,164	100,500,347

None of the Directors held any options over unissued securities at 30 June 2005.

REMUNERATION REPORT

The Board, based on advice from the Remuneration and Nomination Committee (referred to herein as the Remuneration Committee) has developed policies dealing with the short, medium and long-term remuneration of Macquarie Goodman's staff. The role of the Remuneration Committee and these policies are set out below.

Remuneration Committee

The Remuneration Committee reviews and makes recommendations to the Board on remuneration packages and policies applicable to the Chief Executive Officer, senior executives and Directors themselves. It is also responsible for various incentive performance packages, including the Bonus Policy, Executive Option Plan, Employee Security Acquisition Plan ("ESAP"), superannuation entitlements, termination entitlements, gifts and the fringe benefits policy.

The members of the Remuneration Committee during the year were:

• a) Mr David Clarke (Non-Executive Chairman);
• b) Dr David Teplitzky (Independent Member):
• c) Mr Gregory Goodman (Executive Member);
• d) Mr lan Ferrier (Independent Member, appointed 14 June 2005); and
• e) Ms Anne Keating (Independent Member, appointed 14 June 2005).

The Remuneration Committee meets as required to review and recommend to the Board annual bonuses and salary reviews. Decisions are made by the Committee during the year either in meeting or via circular resolutions in relation to new appointments and promotions. The Committee has the resources and authority appropriate to discharge its duties and responsibilities. It is able to engage external professionals to advise on any relevant matters. The Committee engaged external consultants during the year in order to benchmark the appropriate fees for the new Board of Macquarie Goodman as a stapled entity. The Committee members' attendance record is disclosed in the table of Directors' meetings in the Directors' Report.

On 14 June 2005, the Committee was combined with the Nomination Committee and expanded its functions to include those previously performed by the Nomination Committee.

Further information relating to the activities of the Committee is available on the Macquarie Goodman's website.

Remuneration Policies

Overview of Remuneration Policies

The Board recognises that Macquarie Goodman's performance is dependent on the quality of its people.

Remuneration levels are competitively set to attract and retain appropriately qualified and experienced Directors and senior executives. The Remuneration Committee obtains independent advice on the appropriateness of remuneration packages, given trends in comparative companies. Remuneration packages include a mix of fixed remuneration, shortterm performance-based remuneration, and equity-based remuneration. The remuneration structures explained below are designed to attract suitably qualified candidates and are aligned to effect the broader outcome of increasing Macquarie Goodman's return on equity.

Fixed Remuneration

Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any Fringe Benefits Tax charges related to employee benefits including motor vehicles), as well as employer contributions to superannuation funds.

Remuneration levels are reviewed annually by the Remuneration Committee through a process that considers individual, segment and overall performance of the Consolidated Entity. In addition, external consultants provide analysis and advice to ensure the Directors' and senior executives' remuneration is competitive in the market-place. A senior executive's remuneration may also be reviewed on promotion.

REMUNERATION REPORT CONTINUED

Performance-Linked Remuneration

Performance-linked remuneration is reviewed on an annual basis and includes both short-term and long-term incentives and is designed to reward Executive Directors and senior executives for meeting or exceeding their financial and personal objectives.

a) Short-Term Incentive ("STI")

The STI provides cash bonuses for individual performance against peers and objectives set for the year. Total STIs are calculated in accordance with a Bonus Policy approved by the Remuneration Committee and the Board. The Bonus Policy determines a bonus pool which is allocated across all staff with the Chief Executive Officer entitled to between 15% and 20% of the total bonus pool. Individual allocations are made based on an assessment by senior managers and the Chief Executive Officer of each individual's performance. The Bonus Pool is calculated based on the Consolidated Entity achieving return on equity targets on average greater than 11% for that year.

The Bonus Policy provides that the first \$50,000 of any bonus granted is paid in cash in August of the year following the year in which the bonus was earned. The remainder is paid fortnightly over three years subject to the conditions attaching to senior executives' service agreements described later in this report. Executives will only receive unpaid bonuses if they remain as employees of the Consolidated Entity.

b) Long-Term Incentive ("LTI")

The LTI provides equity-based remuneration through the issue of options or participation in the ESAP. The purpose of these plans is to provide alignment of the interests of employees and Securityholders by matching rewards under the LTI with the long term growth and prosperity of Macquarie Goodman. Details of equity-based remuneration are as follows:

i) Options

Macquarie Goodman has an Executive Option Plan which was approved at the Annual General Meeting on 14 September 1999. Due to anomalies in the Australian tax rules that apply to options over stapled securities, the future issue of options will be limited to non-resident employees. During or since the end of the year, no options over unissued securities were granted to Directors or to Executive Officers. Future issues of options will be subject to the following broad terms:

• options will expire on the earlier of five years or termination of the employee's employment;

• → the ability to exercise options will be conditional on the Consolidated Entity achieving return on equity hurdles on average greater than 11% over the period of the option;

• options will vest equally over the end of years three, four and five; and

• exercise price of options will be based on the weighted average market price of securities traded on ASX during five trading days immediately prior to the date options are offered to the employee.

ii) ESAP

Macquarie Goodman's ESAP was approved at the Shareholders' meeting on 25 January 2005. Initially, participants of the ESAP were Australian Option Holders who rolled over into the ESAP. Generally, Option Holders who rolled into the ESAP had similar restrictions and benefits applying to their securities as would have applied if they continued to hold their options.

The broad terms of future grants under the ESAP are as follows:

• subject to offers made from time to time by the Company, eligible employees will be able to acquire securities at the market price prevailing at the time of issue using funds borrowed from Macquarie Goodman. Securities may only be acquired during the periods permitted under the Company's policies for employees dealing in the Company's securities;

• -> the market price will be the five day volume weighted average price at which securities are traded on the ASX;

• securities will be restricted for three years, with one third of the securities becoming unrestricted each year at the end of years three, four and five, subject to return on equity hurdles;

• -> restrictions will be based on the participant remaining an employee and the Consolidated Entity achieving return on equity targets on average greater than 11% over the period of the offer;

• loans to purchase securities will be non-recourse and interest bearing at Macquarie Goodman's weighted average cost of debt; and

• -> the after-tax amount of any dividends or distributions paid on restricted securities acquired with the loan must be applied towards payment of interest and the principal of the loan. Tax is deducted at the highest marginal rate for individuals.

SERVICE AGREEMENTS

Senior Executives

The service agreements for nominated senior executives including Mr Gregory Goodman, Mr David van Aanholt, Mr Nick Kurtis, Mr Michael O'Sullivan and Ms Carolyn Scobie were amended in January 2005 to provide that:

$\Rightarrow$ each Executive agreed not to resign from Macquarie Goodman for a period of at least two years from January 2005;

• → the Company agreed that in the event that Macquarie Goodman terminated the Executive's employment during the two year term to December 2006 (for reasons other than serious or wilful misconduct) that it would pay an amount equivalent to one year of remuneration plus any unpaid amounts of short-term incentive pay that had been awarded but not yet received by the Executive. This provision was inclusive of any notice periods in existing employment contracts:
• → each Executive has agreed to "non-compete" and "non-poach" conditions that will apply for a period of twelve months following termination of employment; and

• each Executive agreed to the effective conversion of outstanding Executive options to restricted securities in Macquarie Goodman under the ESAP with restrictions lapsing on the same timetable that operated under the Executive Option Plan applying to the Executive.

Other aspects of Executive service agreements including compliance with the Company's Code of Conduct and Human Resource Policies remain unaltered.

Other Employees

All employees are engaged under written employment agreements that provide for usual conditions of employment applying in the industry, including the need for compliance with specific policies of the Company in relation to its Code of Conduct and Human Resource Policies. Notice provisions vary from periods of one month to six months depending upon the role of the employee.

Non-Executive Directors

Total remuneration payable by the Company for all Non-Executive Directors, last voted upon by Shareholders at its meeting on 25 January 2005, is not to exceed \$950,000 per annum. Remuneration is set based on advice from external advisers with reference to fees paid to other non-executive directors of comparable companies. Directors' base fees are presently up to \$75,000 per annum with additional amounts paid for committee membership, chairing of committees and the Board along with per diem allowances for due diligence or special projects.

The following also applies to Non-Executives Directors' remuneration:

• Non-Executive Directors do not receive any long-term or short-term incentives;

• Macquarie Goodman does not operate an incentive or retirement scheme for Non-Executive Directors;

• $\rightarrow$ 25% of the after tax remuneration must be applied to the on-market purchase of securities until the value of securities held by the Director equals two years of fees for that Director. Securities may only be acquired during the periods permitted for purchases of Macquarie Goodman securities. These securities will be held in escrow until the Director's retirement; and
• all Non-Executive Directors must act as a member of at least one Board Committee.

DIRECTORS' REMUNERATION

Details of the nature and amount of each major element of the remuneration of each Director of Macquarie Goodman in relation to the management of Macquarie Goodman's affairs are set out below. This excludes amounts paid prior to the merger to individuals who were Directors of the Responsible Entity of Macquarie Goodman Industrial Trust and its controlled entities in relation to the management of the affairs of those trusts. All information provided within this Remuneration Report has been subject to audit except where otherwise indicated.

	Salary including superannuation S	Other (3) Ś.	Bonus [4] s	Options S	Total \$	Paid By
For the year ended 30 June 2005
Directors
Non-Executive
Mr David Clarke (1)	75,660			$\qquad \qquad$	75,660	Consolidated Entity/MBL
Dr David Teplitzky	83,418	11,000			94,418	Consolidated Entity
Mr Patrick Allaway	34,063				34,063	Consolidated Entity
Mr Ian Ferrier	67,303	6,000			73,303	Consolidated Entity
Mr Patrick Goodman	68.761				68,761	Consolidated Entity
Mr John Harkness	40.875			$\overbrace{\qquad \qquad }$	40.875	Consolidated Entity
Mr James Hodgkinson (2)	42,500	270,792	$\overline{\phantom{0}}$	12,360	325,652	MBL
Ms Anne Keating	36,333			$\overline{\phantom{0}}$	36,333	Consolidated Entity
Ms Lynn Wood	36,333			$\overline{\phantom{0}}$	36,333	Consolidated Entity
Mr Stephen Girdis 27	12,320	98,634	—	5,316	116,270	MBL
Mr Bill Moss (1)						MBL
Executive
Mr Gregory Goodman	484.615	9,916	450,000	460.000	1,404,531	Consolidated Entity
For the year ended 30 June 2004
Directors
Non-Executive
Mr David Clarke (1)						MBL
Dr David Teplitzky	68,003	6,120		$\overline{\phantom{000000000000000000000000000000000000$	74,123	Consolidated Entity
Mr Ian Ferrier	46,326			$\overline{\phantom{m}}$	46,326	Consolidated Entity
Mr Patrick Goodman	55,591			$\hspace{0.05cm}$	55,591	Consolidated Entity
Mr Bill Moss (1)						MBL
Executive
Mr Gregory Goodman	399,998	10,864	400,000	542.917	1,353,779	Consolidated Entity

111 There is no meaningful basis on which to allocate the remuneration of Mr David Clarke and Mr Bill Moss to the entities of which they are directors. Mr David Clarke is Executive Chairman and Mr Bill Moss is a director of Macquarie Bank Limited ("MBL") and their total remuneration is disclosed below.
The basis for calculating the MBL profit share and option amounts are

		Salary including superannuation (primary)	MBL profit	MBL share (primary) options (equity)	Total
Mr David Clarke	2005	329.662	8,727,805	237.778	9,295,245
	2004	329,666	5,741,523	168,726	6,239,915
Mr Bill Moss	2005	470.945	14,205,956	467.357	15,144,258
	2004	470.952	4,217,339	322.151	5,010,442

¹³ Mr James Hodgkinson and Mr Stephen Girdis are employed by MBL. The remuneration shown above is an apportionment of their total remuneration paid by MBL. The basis for calculating the MBL profit share and option amounts are disclosed in the MBL Annual Report for the year ended 31 March 2005. Messrs Hodgkinson and Girdis did not receive any remuneration from Macquarie Goodma

^cs For all the Directors except James Hodgkinson and Stephen Girdis, Other includes reportable fringe benefits, car parking and per diem allowances. Refer above
for details of amounts paid by MBL to Messrs Hodgkinson and

¹⁴ Bonus payments are paid in accordance with the policy determined by the Remuneration Committee. The first \$50,000 of any bonus payment is paid as cash with
Ithe balance being paid in equal fortnightly cash instalments

EXECUTIVE OFFICERS' REMUNERATION

Details of the nature and amount of each major element of the remuneration of each of the named Executive Officers who receive the highest remuneration and those specified Executives identified in accordance with AASB 1046 Director and Executive Disclosures by Disclosing Entities are set out in the tables below:

		Salary including superannuation S	Other (1) S	Bonus 2 S	Options S	Total \$
For the year ended 30 June 2005
Consolidated Entity
Executive Officers (excluding Directors)
Mr David van Aanholt	A,B	399,039	9,916	350,000	230,000	988,955
Mr Nick Kurtis	A,B	322,116	10,315	300,000	349,979	982,410
Mr Michael O'Sullivan	A,B	304,374	10,315	300,000	154,063	768.752
Mr Stephen Hawkins ®	Β	346,729		300,000	91,438	738,167
Mr John Marsh	Α	300,000	9,756	100,000	292,500	702,256
Mr John Dakin	A,B	272,795	4,869	46,236	120,000	443,900
For the year ended 30 June 2004
Consolidated Entity
Executive Officers (excluding Directors)
Mr David van Aanholt	A,B	325,000	10,817	324,999	224,208	885,024
Mr Nick Kurtis	A,B	260,000	10,201	175,000	261.225	706,426
Mr Stephen Hawkins (3)	A,B	236.683		226,575	199,500	662,758
Mr Michael O'Sullivan	A,B	260,000	13,430	150,000	154,063	577,493
Mr Craig Goodman	Α	233,365	17,824	125,000	59,646	435,835
Ms Carolyn Scobie	Α	250,576	7,391	100,000	75,604	433,571
Mr John Dakin	Β	104,171			60,000	164,171

A Executive is included as one of the five named Company Executives who receive the highest remuneration in the current financial year in accordance with section 300A of the Corporations Act 2001.

B Executive is included as a Specified Executive in accordance with AASB 1046 Directors and Executive Disclosures for Disclosing Entities for the Consolidated Entity.

$\langle 3 \rangle$ Other includes reportable fringe benefits and car parking.

Bonuses paid by the Consolidated Entity are paid in accordance with the Bonus Policy. The Specified Executives' bonuses are based on individual performance Ø. services paint of the conditions of their service contracts. Specified Executives will only receive their unpaid bonuses if they remain as employees forthightly over a period of
three years. Subject to the conditions of th

The proportion of bonuses included as remuneration for the year remaining unpaid at the end of the year is as follows:

	30 June 2005 ℅	30 June 2004 %
Mr David van Aanholt	57	66
Mr Nick Kurtis	56	66
Mr Michael O'Sullivan	56	67
Mr Stephen Hawkins	66	58
Mr John Dakin
Mr John Marsh	33
Mr Craig Goodman		55
Ms Carolyn Scobie		-51

^ss Mr Stephen Hawkins is now employed directly by a Joint Venture in which Macquarie Goodman has a 50% interest. He is included in this table by virtue of his role
as Fund Manager, Singapore which he held up to 30 Novemb

EXECUTIVE OFFICERS' REMUNERATION CONTINUED

Employers	Period covered	Salary including superannuation	Other	Bonus	Options	Total
Funds Manager, Singapore	-Jul to 30 Nov	127.278			$rac{1}{2}$	127.278
The Company	Dec to 31 Jan	52,784		300,000	91.438	444.222
Hong Kong Joint Venture	Feb to 30 Jun	166.667				166.667
Total		346,729		300,000	91,438	738,167

REMUNERATION AND PAST FINANCIAL PERFORMANCE (UN-AUDITED)

The level of fixed remuneration and performance-linked remuneration has been a function of the growth undertaken by Macquarie Goodman Management Limited and the Company's ability to attract and retain qualified and experienced management. Key financial drivers used to determine the level of remuneration in the past and moving forward include: net profit after tax; earnings per share/security; total Shareholder returns and return on equity. Return on equity will be the most significant factor moving forward of which Executives will be remunerated by exceeding a benchmark performance of return on equity. Historical performance for these financial drivers over the past four years for Macquarie Goodman Management Limited is as follows:

"Before performance fee.
"Before performance fee and merger cost.
"Before performance fee (35.0% after performance fee).

As demonstrated by the above historical performance, total performance remuneration is directly linked to pre-determined benchmarks which have historically been achieved based on the Consolidated Entity's financial performance.

ANALYSIS OF MOVEMENTS IN OPTIONS (UN-AUDITED)

None of the Non-Executive Company Directors were granted, exercised, or forfeited any options over shares or securities during the year.

The value of options over Macquarie Goodman securities exercised by the Chief Executive Officer and by each of the five named Executive Officers during the reporting period, are detailed below. This information is not subject to audit. No options were granted to or forfeited by these individuals during the year.

		Value of options exercised during the year
	Exercised prior to merger	Restricted under ESAP	Unrestricted S
Executive Director
Mr Gregory Goodman	4,853,668	9,319,131	881,442
Consolidated Entity
Executive Officers
Mr David van Aanholt	1.631.100	3.435.500	261,805
Mr Nick Kurtis	174.968	2.992.621	52.555
Mr Michael O'Sullivan		3.640.250	536,588
Mr John Dakin
Mr John Marsh		433.600

The value of options exercised during the year is calculated as the market price of shares/securities of the Company on the Australian Stock Exchange at close of trading on the date the options were exercised after deducting the price paid or payable to exercise the option.

INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS

Macquarie Goodman has insured current and former Directors and officers of Macquarie Goodman and its controlled entities in respect of Directors and officers' liability and legal expenses. The Directors have not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the Directors and officers' liability and legal expenses insurance contracts, as such disclosure is prohibited under the terms of those contracts. The auditors of the Consolidated Entity are not indemnified in any way by this insurance cover.

NON-AUDIT SERVICES

During the year, KPMG, the Company's auditor, has performed certain other services in addition to their statutory duties.

The Board has considered the non-audit services provided during the year by the auditor and in accordance with written advice provided by resolution of the Audit Committee, is satisfied that the provision of those non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services were subject to the corporate governance procedures adopted by the Compary and have been reviewed by the Audit Committee to ensure they do not impact the integrity and objectivity of the auditor; and

→ the non-audit services provided do not undermine the general principles relating to auditor independence as set out in Professional Statement F1 Professional Independence, as they did not involve reviewing or auditing the auditor's own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

NON-AUDIT SERVICES CONTINUED

Details of the amounts paid to the auditors of the Company, KPMG and its related practices for the audit and non-audit services, provided during the year are set out below. In addition, amounts paid to other auditors for the statutory audit have been disclosed.

		Consolidated
	2005	2004
	S	£
Statutory audit
Auditors of the Company
- audit and review of financial reports (KPMG Australia)	376,766	68,000
- audit and review of financial reports (overseas KPMG firms)	28.088	13,520
	404,854	81,520
Other auditors
- audit and review of financial reports (non-KPMG firms)	18,495	1,387
	423,349	82,907
Services other than statutory audit
Other regulatory services (KPMG Australia)	68,500	13,000
Other assurance services
- investigative accounting services (KPMG Australia)	1,412,828
Other services
- taxation compliance services (KPMG Australia)	264,293	141,592
- taxation compliance services (overseas KPMG firms)	15,584	24,202
	1,761,205	178,794
	2,184,554	261,701

The lead auditor's independence declaration under section 307C of the Corporations Act 2001 is attached to this Directors' Report.

ROUNDING

Macquarie Goodman is an entity of a kind referred to in Australian Securities & Investments Commission ("ASIC") Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the Financial Report and Directors' Report have been rounded to the nearest million dollars, unless otherwise stated.

QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES OF DIRECTORS AND COMPANY SECRETARIES

Board of Directors

Mr David Clarke, AO - Chairman Appointed 26 October 2000

David is the Executive Chairman of Macquarie Bank Limited. He was previously Managing Director and then Chairman of Macquarie Bank's predecessor organisation, Hill Samuel Australia Limited. David was educated at Sydney University (BEcon (Hons)) and Harvard University (MBA) and holds an honorary degree of Doctor of Science in Economics from Sydney University (Hon DScEcon).

David has extensive experience as a chairman and is currently Chairman of Macquarie CountryWide Management Limited, Macquarie Office Management Limited and Macquarie ProLogis Management Limited, the management companies of Macquarie CountryWide Trust, Macquarie Office Trust and Macquarie ProLogis Trust. He is also Chairman of McGuigan Simeon Wines Limited, the Wine Committee of the Royal Agricultural Society of New South Wales, Sydney Advisory Board of the Salvation Army, Opera Australia Capital Fund and Sydney University Football Club Foundation.

Dr David Teplitzky - Independent Deputy Chairman Appointed 21 November 1990

David has a PhD and honours degree in Engineering and a Bachelor of Science. He is a retired Regional Director of American Cyanamid Company and the former Managing Director of Cyanamid Australia, Formica Australia Limited and Lederle Pharmaceuticals Limited. He is a member of both the Audit and the Remuneration and Nomination Committees of Macquarie Goodman. He is Executive Chairman of a venture capital company that is developing electric power generation from wave energy and a director of the public company, HiTec Energy Limited.

David has been active for many years in venture capital and high technology companies in Australia and South East Asia as a consultant and director.

Mr Gregory Goodman - Chief Executive Officer

Appointed 7 August 1998

Gregory is the Chief Executive Officer of Macquarie Goodman and is responsible for its overall operations and the implementation of the strategic plan. He has 23 years of experience in the property industry with significant expertise in the industrial property arena. Gregory was a co-founder of Macquarie Goodman Industrial Trust and has played an integral role in establishing its specialist position in the market-place through various corporate transactions, including takeovers, mergers and acquisitions. Recently, he was involved in the merger of Macquarie Goodman Industrial Trust and Macquarie Goodman Management Limited and the repositioning of Macquarie Goodman Property Trust in New Zealand.

Mr Patrick Allaway - Non-Executive Director

Appointed 23 February 2005

Patrick was educated in South Africa before coming to Australia to attend Sydney University where he attained a Bachelor of Arts and Bachelor of Law. He is the Non-Executive Chairman of Reino International Limited, an Australian parking systems technology and service provider. Patrick is also Joint Managing Director of Saltbush Funds Management, a boutique funds management group focused on the alternative asset class. He is also a director and trustee of Giant Steps Endowment Fund, which was established to raise funds for children with autism. Patrick has extensive experience in senior management roles in international companies, including Citibank and Swiss Bank Corporation, in Australia and abroad. He was previously Managing Director and an executive Board member of SBC Warburg Global Investment Bank, based in London (now UBS).

Mr Ian Ferrier, AO - Independent Director

Appointed 1 September 2003

lan is a co-founder of Ferrier Hodgson. He is a Fellow of The Institute of Chartered Accountants in Australia and has 41 years of experience in company corporate recovery and turnaround practice. Ian is also a director of a number of private and public companies. He is currently Chairman of InvoCare Limited and Port Douglas Reef Resorts Limited and a director of McGuigan Simeon Wines Limited and Reckon Limited.

His experience is essentially concerned with understanding the financial and other issues confronting companies which require turnaround management, analysing those issues and implementing policies and strategies which lead to a successful rehabilitation. Ian has significant experience in property and development, tourism, manufacturing, retail, hospitality and hotels, manufacturing, infrastructure and aviation and service industries.

Mr Patrick Goodman - Non-Executive Director

Appointed 14 April 1998

Patrick is the Managing Director of the Goodman Holdings Group, which is a major investor in Macquarie Goodman.

The diversified interests of the Goodman Holdings Group initially focused on direct and indirect property development and has expanded to include the management of a diverse portfolio across sectors covering aviation, food, rural, private equity, listed equity, infrastructure and financial services throughout Australasia.

Patrick is also a director of a number of property investment and management companies both in Australia and New Zealand. During his 25 year career, Patrick has had considerable public and private company experience in both New Zealand and Australia.

Mr John Harkness - Independent Director

Appointed 23 February 2005

John is a Fellow of The Institute of Chartered Accountants in Australia and the Australian Institute of Company Directors. John was a partner of KPMG for 24 years, National Executive Chairman for five years and retired from KPMG in June 2000. Since retiring from KPMG, he has held a number of non-executive director roles. From March 2003 until January 2004 he was a director of BresaGen Limited. John is currently Chairman of Lipa Pharmaceuticals Limited, ICA Property Development Funds, Helmsman Capital Fund and Sydney Foundation for Medical Research. He is a director of Macquarie CountryWide Management Limited and Crane Group Limited. John is President of the Northern Suburbs Rugby Football Club Limited and a member of the Sydney Advisory Board of the Salvation Army.

QUALIFICATIONS. EXPERIENCE AND SPECIAL RESPONSIBILITIES OF DIRECTORS AND COMPANY SECRETARIES CONTINUED

Mr James Hodgkinson - Non-Executive Director Appointed 21 February 2003*

James is an Executive Director of Macquarie Bank Limited and Joint Head of Macquarie Bank Group's Property Investment Management Division. James' responsibilities include Macquarie Bank Limited's ongoing investment in Macquarie Goodman and he also has overall responsibility for Macquarie Bank's Property Investment Management Division activities in Asia. James was Chief Executive Officer of Macquarie Industrial Trust for six years prior to that trust's merger with Macquarie Goodman Industrial Trust. James is also a director of Ascendas - MGM Funds Management Limited and Macquarie Goodman (NZ) Limited. James has over 18 years experience in property funds management, investment banking and chartered accounting.

* Mr James Hodgkinson was appointed as an Alternate Director to Mr David Clarke on 21 February 2003. He was appointed a Director on 14 June 2005.

Ms Anne Keating - Independent Director

Appointed 23 February 2005

Anne was the General Manager, Australia for United Airlines from 1993 to 2001. She was previously on the board of NRMA Insurance/IAG for eight years. Anne is now a professional director with board positions in a range of industries including advertising, property, construction and banking. She is on the boards of Macquarie Leisure Management Limited, STW Communications Group Limited and Spencer Street Station Redevelopment Holdings Limited. Anne is also a member of the Advisory Council of ABN AMRO Australia and New Zealand.

Ms Lynn Wood - Independent Director Appointed 23 February 2005

Lynn obtained a MA (Psychology) from Sydney University and an MBA from the Australian Graduate School of Management. She is a member of the Foreign Investment Review Board, a compliance committee member of several major fund managers, a director and vice president of the MS Society of NSW and an executive coach.

Lyrin's previous board memberships include Schroders Australia Limited, Schroders Australia Property Management Limited, Sedgwick (Holdings) Pty Limited, NSW Lotteries Corporation and the Investment Funds Association of Australia (now IFSA). Her career in financial services began at American Express, including a posting in Hong Kong. Lynn was awarded the Centenary Medal for service to Australian society through business and finance in 2003.

Mr Stephen Girdis - Alternate Director for Messrs David Clarke and James Hodgkinson Appointed 21 February 2003

Stephen is an Executive Director of Macquarie Bank Limited and the Head of Macquarie Property. He is or has been a director or alternate director on many of Macquarie Property listed and unlisted real estate funds. Stephen has over 23 years of experience in chartered accounting, property finance, funds management and investment banking and is an Associate of both The Institute of Chartered Accountants in Australia and the Securities Institute of Australia. He is also a director of Macquarie Capital Partners LLC, Macquarie's global real estate investment banking joint venture.

Company Secretaries

Ms Carolyn Scobie, Group General Counsel and Joint Company Secretary

Carolyn is the Group General Counsel and Joint Company Secretary of Macquarie Goodman. She is directly responsible for the company secretarial and corporate legal activities of the Group. She also oversees all legal matters relating to property and compliance. Carolyn has over 15 years of legal experience in corporate and commercial property areas including three years within the legal profession and six years as in-house Counsel with Kumagai Australia Group. She holds a Masters of Arts from Sydney University, a Bachelor of Arts/Bachelor of Laws from the Australian National University and a Graduate Diploma in Company Secretarial Practice. She is a member of Chartered Secretaries Australia.

Mr Mark Alley, Chief Financial Officer - Asia and Joint Company Secretary

Mark is Chief Financial Officer, Asia and Joint Company Secretary of Macquarie Goodman. He is responsible for the overall financial management of Macquarie Goodman outside of Australia and New Zealand. Mark has over 25 years of experience in finance, property investment and development in Australia, New Zealand, Asia and Europe. Previously, he was the Group Financial Controller of Ipoh Limited and before that the Finance Director of a private group of property companies. Mark holds a Bachelor of Commerce and Administration from Victoria University of Wellington, New Zealand. He is also a Fellow Certified Practicing Accountant with CPA Australia.

The Directors' Report is made with a resolution of the Directors.

David Clarke, AO Chairman Sydney, 18 August 2005

Gregory Goodman Director

Under Section 307C of the Corporations Act 2001

To: the Directors of Macquarie Goodman Management Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2005 there have been:

• $\rightarrow$ no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
• $\rightarrow$ no contraventions of any applicable code of professional conduct in relation to the audit.

$KPRG$
$Q_{\mathbf{m}} Q_{\mathbf{m}} Q_{\mathbf{m}} Q$

P M Reid Partner Sydney, 18 August 2005

KPMG, AN AUSTRALIAN PARTNERSHIP, IS PART OF THE KPMG INTERNATIONAL NETWORK. KPMG INTERNATIONAL IS A SWISS COOPERATIVE.

			Consolidated		Parent Entity
		2005	2004	2005	2004
	Note	\$M	\$M	\$M	\$M
REVENUE FROM ORDINARY ACTIVITIES
Gross property income		154.5	$\overline{\phantom{m}}$
Funds management		13.6	39.5
Proceeds from sale of investment properties		278.0	$\qquad \qquad -$	$\overline{\phantom{0}}$
Property services		10.5	13.9	$\equiv$
Development management		22.8	20.4	$\overline{\phantom{0}}$
Other revenue from operating activities	3	15.1	6.0	18.2	25.0
Total revenue		494.5	78.8	18.2	25.0
EXPENSES FROM ORDINARY ACTIVITIES
Carrying value of investment properties sold		(261.0)
Property expenses		(27.4)	$\overline{\phantom{0}}$
Employee expenses		(17.4)	(14.4)	$\overline{\phantom{m}}$	$\overline{\phantom{0}}$ (1.8)
Borrowing costs Merger transaction expenses		(25.9) (22.5)	(2.7) $\overline{\phantom{0}}$	(2.9) (39.6)
Diminution in value of management rights		(95.4)	$\overline{\phantom{0}}$	(67.8)
Other expenses from ordinary activities		(17.6)	(9.6)	(0.6)	(0.4)
	4	(467.2)	(26.7)	(110.9)	(2.2)
Share of net results of associates and joint ventures	28	6.3	1.3
		33.6	53.4		22.8
Profit/(loss) from ordinary activities before income tax Income tax benefit/(expense) relating to ordinary activities	4	18.1		(92.7) 27.7
	6(a)		(16.4)		(0.8)
Net profit/(loss) after income tax		51.7	37.0	(65.0)	22.0
Amount attributable to outside equity interests		(1.7)	$\overline{\phantom{m}}$
Net profit/(loss) attributable to Securityholders of Macquarie Goodman		50.0	37.0	(65.0)	22.0
NON-OWNER TRANSACTION CHANGES IN EQUITY
Net increase in revaluation reserves	22	70.6	$\overline{\phantom{0}}$
Net exchange difference relating to self-sustaining foreign operations	22	0.6	0.1
Total changes in equity from non-owner related transactions
attributable to Securityholders of Macquarie Goodman		121.2	37.1	(65.0)	22.0
Basic earnings per security (¢)	7	7.4	13.9
Diluted earnings per security (¢)	7	7.2	13.1
Adjusted basic earnings per security (¢)	7	22.0	13.9
	7	27.2	7.2

The Statements of Financial Performance are to be read in conjunction with the accompanying notes.

******************

			Consolidated		Parent Entity
		2005	2004	2005	2004
	Note	\$M	\$M	\$M	\$M
CURRENT ASSETS
Cash assets	9	7.2	10.3	0.1	$\overline{\phantom{a}}$
Receivables	10	80.7	42.4	22.4	25.9
Inventories	11	13.5	2.7	$\overline{\phantom{0}}$	$\overline{\phantom{000000000000000000000000000000000000$
Current tax receivables	6(b)	6.3	0.1	2.6	0.4
Other assets	12.	48.0	3.1	1.0	0.3
Total current assets		155.7	58.6	26.1	26.6
NON-CURRENT ASSETS
Receivables	10	15.5	$\overline{\phantom{0}}$	64.8	6.0
Investment properties	13	4,739.9	$\overline{\phantom{0}}$
Inventories	Ħ	17.2	6.1
Investments accounted for using the equity method	14	120.0	1.8	$\overline{\phantom{000000000000000000000000000000000000$
Deferred tax assets		7.0	1.6	4.6	1.6
Other financial assets	15	101.0	72.0	31.5	57.8
Other assets	12	5.5	$\qquad \qquad -$	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$
Plant and equipment	16	3.3	2.8	—
Intangible assets	17	6.0	99.0	$\qquad \qquad -$	64.9
Total non-current assets		5,015.4	183.3	100.9	130.3
Total assets		5,171.1	241.9	127.0	156.9
CURRENT LIABILITIES
Payables	18	91.7	9.6	1.6	0.3
Interest bearing liabilities	19	207.0	$\overline{\phantom{m}}$	$\qquad \qquad -$
Provisions	20	93.5	0.7	$\overline{\phantom{000000000000000000000000000000000000$
Total current liabilities		392.2	10.3	1.6	0.3
NON-CURRENT LIABILITIES
Payables	18	28.5	$\overline{\phantom{m}}$	38.1
Interest bearing liabilities	19	1,656.2	79.1	33.7	33.4
Deferred tax liabilities		0.7	18.2	$\overline{\phantom{000000000000000000000000000000000000$	18.2
Provisions	20	0.4	0.2	$\overline{\phantom{m}}$	$\overline{\phantom{0}}$
Total non-current liabilities		1,685.8	97.5	71.8	51.6
Total liabilities		2,078.0	107.8	73.4	51.9
Net assets		3,093.1	134.1	53.6	105.0
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF MACQUARIE
GOODMAN MANAGEMENT LIMITED
Contributed equity	21	162.3	126.6	162.3	126.6
Reserves	22	37.5	0.1	$\overline{\phantom{m}}$
(Accumulated losses)/retained profits	23	(98.9)	7.4	(108.7)	(21.6)
Total equity attributable to Shareholders of Macquarie Goodman Management Limited		100.9	134.1	53.6	105.0
EQUITY ATTRIBUTABLE TO UNITHOLDERS OF MACQUARIE
GOODMAN INDUSTRIAL TRUST
Contributed equity	21	2,815.7	$\overline{\phantom{000000000000000000000000000000000000$
Reserves Retained profits	22 23	8.1 99.2	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$
Total equity attributable to Unitholders
		2,923.0	—
of Macquarie Goodman Industrial Trust Outside equity interests	24	69.2 3,093.1	$\qquad \qquad -$

The Statements of Financial Position are to be read in conjunction with the accompanying notes.

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

		Consolidated		Parent Entity
		2005	2004	2005	2004
	Note	\$M	\$M	\$M.	\$M
CASH FLOWS FROM OPERATING ACTIVITIES
Property income received		163.5
Other cash receipts from services provided		93.2	50.0	$\overline{\phantom{0}}$
GST collected		23.5	$\overline{\phantom{000000000000000000000000000000000000$
Property expenses paid		(45.2)		$\overline{\phantom{0}}$
GST paid		(29.9)	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$
Other cash payments in the course of operations		(51.2)	(26.2)	$\overline{\phantom{a}}$	(0.3)
Dividends/distributions received		7.1	3.8	15.9	22.2
Interest received		2.1	0.5	1.9	2.8
Borrowing costs paid		(53.8)	(2.6)	(2.5)	(1.8)
Income taxes paid (net of refunds)		(10.4)	(3.6)	(2.4)	(0.2)
Net cash provided by operating activities	25(b)	98.9	21.9	12.9	22.7
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from deferred settlement and sale of investment properties		185.5	5.2	$\overline{\phantom{000000000000000000000000000000000000$
Proceeds from sale of investments		$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	26.3
Payments for shares issued by controlled entities		$\rightarrow$	$\overline{ }$	$\overline{\phantom{0}}$	(1.6)
Payments for investments		(30.3)	(38.8)	$\overline{\phantom{000000000000000000000000000000000000$	(26.3)
Payments for investment properties and developments		(635.9)	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$
Payments for plant and equipment		(1.2)	(1.5)	$\overline{\phantom{0}}$
Payments for management rights		(3.5)	(42.4)	(3.5)
Cash on acquisition of Macquarie Goodman Industrial Trust		20.6		$\overline{\phantom{a}}$
Merger transaction costs		(23.1)	$\overline{\phantom{0}}$	(23.0)
Net cash (used in) investing activities		(487.9)	(77.5)	(0.2)	(27.9)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of securities		462.6	38.7	26.6	38.7
Transaction costs from Issue of securities		(11.3)	(0.7)	(0.5)	(0.7)
Net loans from/(to) controlled entities		$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	11.2	(45.6)
Proceeds from borrowings		815.2	75.1	6.7	62.8
Repayment of borrowings		(719.6)	(40.9)	(34.5)	(40.9)
Dividends and distributions paid		(91.1)	(17.1)	(22.1)	(17.1)
Amounts paid to outside equity interests	26(c)	(69.9)
Net cash provided by/(used in) financing activities		385.9	55.1	(12.6)	(2.8)
Net (decrease)/increase in cash held		(3.1)	(0.5)	0.1	(8.0)
Cash at beginning of year		10.3	10.9	$\overline{\phantom{000000000000000000000000000000000000$	8.0
Effects of exchange rate fluctuations on the balances of cash
held in foreign currencies			(0,1)	$\overline{\phantom{0}}$
Cash at end of year	25(a)	7.2	10.3	0.1

The Statements of Cash Flows are to be read in conjunction with the accompanying notes.

******************

The significant accounting policies which have been adopted in the preparation of the Financial Report are:

a) Basis of Preparation

The Financial Report is a general purpose financial report which has been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

It has been prepared on the basis of historical costs and, except where stated, does not take into account changing money values or fair values of non-current assets.

These accounting policies have been consistently applied by each entity in the Consolidated Entity and, except for the change in accounting policy as set out in Note 2, are consistent with those of the previous year.

b) Principles of Consolidation

Accounting for the Acquisition of Macquarie Goodman Industrial Trust

The merger of Macquarie Goodman Management Limited and Macquarie Goodman Industrial Trust was approved at separate meetings of the respective Shareholders and Unitholders on 25 January 2005. Following approval of the merger, shares in Macquarie Goodman Management Limited and units in Macquarie Goodman Industrial Trust were stapled to one another and are quoted as a single security on the Australian Stock Exchange.

Australian Accounting Standards require an acquirer to be identified and an in-substance acquisition to be recognised. In relation to the merger of Macquarie Goodman and Macquarie Goodman Industrial Trust, the Company is identified as having acquired control over the assets of Macquarie Goodman Industrial Trust. To recognise the in-substance acquisition, the following accounting principles have been applied:

• no goodwill is recognised in acquisition of Macquarie i). Goodman Industrial Trust because there is no direct ownership interest by Macquarie Goodman in Macquarie Goodman Industrial Trust; and
• ii) the equity issued by Macquarie Goodman to Macquarie Goodman Industrial Trust Unitholders to give effect to the transaction is recognised at the dollar value of the consideration payable by the Macquarie Goodman Industrial Trust Unitholders. This is because the issue of shares by Macquarie Goodman was administrative in nature rather than for the purposes of the Company acquiring an ownership interest in Macquarie Goodman Industrial Trust.

Controlled Entities

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Company as at 30 June 2005 and the results of all such entities for the year ended 30 June 2005. Macquarie Goodman and its controlled entities together are referred to in the Financial Report as the Consolidated Entity.

Where an entity either began or ceased to be controlled during the year, the results for that entity are included only from/to the date control commenced or ceased.

Associates

Associates are those entities over which the Consolidated Entity exercises significant influence, but not control and which are not intended for sale in the near future.

In the consolidated financial statements, investments in associates are accounted for using the equity method. Investments in associates are carried at the lower of the equity accounted amount and recoverable amount. Under this method, the Consolidated Entity's share of postacquisition profits or losses of associates is recognised in the Statement of Financial Performance, and its share of post-acquisition movements in reserves is recognised in consolidated reserves. Cumulative post-acquisition movements in both profit or loss and reserves are adjusted against the cost of the investment.

Joint Ventures

A joint venture is either an entity or operation that is jointly controlled by the Consolidated Entity.

Joint Venture Entities

In the consolidated financial statements, investments in joint venture entities are accounted for using equity accounting principles, Investments in joint venture entities are carried at the lower of the equity accounted amount and recoverable amount.

The Consolidated Entity's share of the joint venture entity's net profit or loss is recognised in the consolidated Statement of Financial Performance from the date joint control commences. Other movements in reserves are recognised directly in consolidated reserves.

Joint Venture Operations

The Consolidated Entity's interests in unincorporated joint ventures are brought to account by including its proportionate share of joint venture operations' assets, liabilities and expenses and the Consolidated Entity's revenue from the sale of its share of output on a line-byline basis from the date joint control commences to the date joint control ceases.

Transactions Eliminated on Consolidation

Unrealised gains and losses and inter-entity balances resulting from transactions with or between controlled entities are eliminated in full on consolidation.

Unrealised gains resulting from transactions with associates and joint ventures, including those relating to contributions of non-monetary assets on establishment, are eliminated to the extent of the Consolidated Entity's interest. Unrealised gains relating to associates and joint venture entities are eliminated against the carrying amount of the investment. Unrealised losses are eliminated in the same way as unrealised gains, unless they evidence a recoverable amount impairment.

c) Revenue Recognition

Rental Income

Rental income is brought to account on an accruals basis and, if not received at balance date, is reflected in the Statement of Financial Position as a receivable or if paid in advance, as rental in advance. Lease incentives are reflected in the Statement of Financial Position as other assets and amortised over the period of the lease.

Recoverable Outgoings

Recovery of certain outgoings is accrued on an estimated basis and adjusted when the actual amounts are invoiced to respective customers.

Rendering of Services

Fee income derived from funds management, property services, development management and property advisory services is recognised progressively as the services are provided, net of the amount of Goods and Services Tax ("GST").

Interest Revenue

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

Asset Sales

The gross proceeds of asset sales are included as revenue of the Consolidated Entity when contracts for the sale have been unconditionally exchanged. The gain or loss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposal and the net proceeds on disposal.

Income from Dividends and Distributions

Dividend revenue is recognised net of any franking credits.

Dividend income is recognised when a dividend has been declared and, if not received at balance date is reflected in the Statement of Financial Position as a receivable.

Revenue from distributions from controlled entities is recognised by the Parent Entity when they are declared by the controlled entities.

d) GST

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation 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.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Statements of Financial Position.

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

e) Foreign Currency Translation

Transactions

Foreign currency transactions are translated to Australian currency at the rates of exchange ruling at the dates of the transactions. Amounts receivable and payable in foreign currencies at reporting date are translated at the rates of exchange ruling on that date. Resulting exchange differences are recognised in the Statements of Financial Performance.

Translation of Controlled Foreign Operations

The assets and liabilities of foreign operations, including controlled entities and associates, that are self-sustaining are translated at rates of exchange ruling at reporting date. Equity items are translated at historical rates. The Statements of Financial Performance are translated at weighted average rates for the year. Exchange differences arising on translation are taken directly to the foreign currency translation reserve until the disposal or partial disposal of the operations.

e) Foreign Currency Translation Continued

Exchange Rates Used

The following exchange rates are the main exchange rates used in translating foreign currency transactions, balances and financial statements (expressed in Australian dollars):

	Average 2005		Average 2004 As at 30 June 2005 As at 30 June 2004
New Zealand dollar	. 0814	1.1356	1.0949.	1.0970
Singapore dollar	-2503-	.2257	1.2928	1.1833
Hong Kong dollar	5.8608	N/A	5.9978	N/A

f) Derivatives

The Consolidated Entity is exposed to changes in interest rates and foreign exchange rates from its activities. The Consolidated Entity uses interest rate swaps, crosscurrency swaps and forward foreign exchange contracts to hedge these risks. Derivative financial instruments are not held for speculative purposes.

Hedges

Transactions are designated as hedges of specific purchases or sales of goods or services, purchases of qualifying assets, or an anticipated interest transaction, only when they are expected to reduce exposure to the risks being hedged. Derivative financial instruments are designated prospectively so that it is clear when an anticipated transaction has or has not occurred. Derivative financial instruments are designated as hedges only when it is probable that the anticipated transaction will occur as designated. Gains or losses on the hedge arising up to the date of the anticipated transaction, together with any costs or gains arising at the time of entering into the hedge, are deferred and included in the measurement of the anticipated transaction when the transaction has occurred as designated. Any gains or losses on the hedge transaction after that date are included in the Statement of Financial Performance.

The net amounts receivable or payable under crosscurrency swaps and forward foreign exchange contracts and the associated deferred gains or losses are recorded on the Statement of Financial Position from the date of inception of the hedge transaction. When recognised, the net receivables or payables are revalued using the foreign currency rate current at the reporting date.

The Consolidated Entity has entered into interest rate swap agreements to hedge against the risk of increases in interest rates on the Consolidated Entity's debt. The net amounts receivable and payable under the swap agreements are accounted for on an accruals basis and are included in interest expense.

When the anticipated transaction is no longer expected to occur as designated, the deferred gains and losses relating to the hedged transaction are recognised immediately in the Statement of Financial Performance.

Where a hedge transaction is terminated early and the anticipated transaction is still expected to occur as designated, the deferred gains and losses that arose on the hedge prior to its termination continue to be deferred and are included in the measurement of the purchase or sale or interest transaction when it occurs. Where a hedge transaction is terminated early because the anticipated transaction is no longer expected to occur as designated, deferred gains and losses that arose on the hedge prior to its termination are included in the Statement of Financial Performance for the year.

g) Taxation

The Consolidated Entity adopts the income statement liability method of tax effect accounting.

Income tax expense is calculated on profit from ordinary activities adjusted for permanent differences between taxable and accounting income. The tax effect of timing differences, which arise from items being brought to account in different periods for income tax and accounting. purposes, is carried forward as a future income tax benefit or a provision for deferred income tax.

Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable doubt, or if relating to tax losses when realisation is virtually certain.

To the extent that dividends are proposed by controlled entities incorporated overseas, the Consolidated Entity has provided for withholding tax where applicable. A provision is also made for the withholding tax on the balance of unremitted profits that eventually will be remitted to Macquarie Goodman.

Tax Consolidation

Macquarie Goodman Management Limited is the head entity in a tax consolidated group comprising all Australian wholly-owned subsidiaries (this excludes Macquarie Goodman Industrial Trust and its whollyowned subsidiaries). The head entity recognises all of the current and deferred tax assets and liabilities of the tax consolidated group (after elimination of intra-group transactions).

The tax consolidated group has entered into a tax funding arrangement that requires wholly-owned subsidiaries to make contributions to the head entity for current tax assets and liabilities and movements in deferred tax balances arising from external transactions during the year.

Under the tax funding arrangements, the contributions are calculated on a "standalone basis" so that the contributions are equivalent to the tax balances generated by external transactions entered into by wholly-owned subsidiaries within the tax consolidated group. The timing of contributions reflects the timing of the head entity's obligations to make payments for tax liabilities to the relevant tax authorities. The assets and liabilities arising under the tax funding arrangement are recognised as inter-company assets and liabilities with a consequential adjustment to income tax expense/revenue.

Macquarie Goodman Industrial Trust and its Controlled Entities

Under current Australian income tax legislation, Macquarie Goodman Industrial Trust and its controlled entities are not liable for income tax, including capital gains tax, provided that Securityholders are presently entitled to the distributable income of Macquarie Goodman Industrial Trust as calculated for trust law purposes.

Tax allowances for building and plant and equipment depreciation are distributed to Securityholders in the form of tax deferred components of distributions. Any taxable capital gains are distributed.

h) Receivables

Trade debtors and rental debtors are carried at amounts due as they are due for settlement no more than 30 days from the date of recognition. The collectibility of trade debtors is assessed at balance date. Debts which are known to be uncollectable are written off. A provision for doubtful debts is made when some doubt as to collection exists.

i) Investment Properties

Investment properties comprise investment interests in land and buildings (including integral plant and equipment) held for the purpose of producing rental income. Land and buildings (including integral plant and equipment) comprising investment properties, are regarded as composite assets and are disclosed as such in the financial statements.

Where a contract of purchase includes a deferred settlement arrangement, the acquisition value is determined as the cash consideration payable in the future, discounted to present value at the date of acquisition.

The fair value basis is used to measure the carrying amount of investment properties. An independent valuation of investment properties is obtained at least every three years to use as a basis for measuring the fair value of the properties.

The independent registered valuer determines the market value based on a willing, but not anxious, buyer and seller, a reasonable period to sell the property, and that the property is reasonably exposed to the market. Where an investment property is acquired, the property is carried at cost which includes the costs of acquisition.

At reporting dates occurring between obtaining independent valuations, the Directors review the carrying value of the Consolidated Entity's investment properties to be satisfied that, in their opinion, the carrying value of the investment properties is not materially different to the fair value of the investment properties at that date. Where the carrying amount value materially differs from fair value, an adjustment is made as appropriate.

Revaluation increments are credited directly to an asset revaluation reserve. Revaluation decrements are taken directly to the Asset Revaluation Reserve to the extent that such decrements are reversing amounts previously credited to that reserve that are still available in that reserve. Revaluation decrements in excess of amounts available in the reserve are charged to the Statement of Financial Performance. Subsequent revaluation increments that recover amounts previously charged to the Statement of Financial Performance are, to that extent, credited to the Statement of Financial Performance.

Disposal of Revalued Assets

The gain or loss on disposal of previously revalued properties is calculated as the difference between the carrying amount of the property at the time of the disposal and the proceeds on disposal and is included in the Statement of Financial Performance in the year of disposal. Any related revaluation increment in the Asset Revaluation Reserve at the time of disposal is transferred to the Capital Profits Reserve.

j) Development Costs of Investment Properties

From time to time, the Consolidated Entity will undertake development of investment properties in order to enhance marketability for customers. The cost of any development is reflected as part of the cost of the investment property. The carrying amounts of non-current assets valued on the cost basis are reviewed to determine whether they are in excess of their recoverable amount at balance date. If the carrying amount of a non-current asset exceeds its recoverable amount, the asset is written down to the lower amount. The write-down is recognised as an expense in the net profit or loss in the reporting period in which it occurs.

Costs of development includes the costs of all materials used in construction, costs of managing the project, holding costs and borrowing costs incurred during construction.

The Consolidated Entity's policy is to obtain an independent valuation at practical completion of each development in order to assess fair value. The carrying amount of the completed development is subject to the policies in Note 1(i).

k) inventories

Work in progress in respect of land subdivision and development costs includes the costs of acquisition, planning, management, development and holding costs such as rates and taxes. Work in progress is carried at the lower of cost and net realisable value.

I) Depreciation

Investment properties are not depreciated. Buildings and plant integral to the property are classified as investment properties and accordingly are not depreciated. The properties are subject to continual maintenance and regularly revalued on the basis described above. Taxation allowances for building, plant and equipment depreciation are claimed by the Consolidated Entity and are declared as tax deferred components of distributions.

Items of plant and equipment are initially recorded at cost and depreciated using the straight line method over their estimated useful lives to the Consolidated Entity. The depreciation and amortisation rates or useful lives used for each class of asset are as follows:

Plant and equipment	Useful lives
Leasehold improvements	4 to 10 years
Plant and equipment	2 to 15 years

m) Deferred Leasing and Tenancy Costs

Expenditure on direct leasing and tenancy costs is deferred and amortised over the lease term in proportion to the rental income recognised in each financial year.

n) Borrowing Costs

Expenditure incurred in obtaining debt finance is deferred and written off over the period of the finance facility. Borrowing costs relating to a qualifying asset are capitalised as part of the cost of that asset using a weighted average cost of debt. Qualifying assets are assets which take more than 12 months to get ready for their intended use or sale. All other borrowing costs are expensed as incurred.

o) investments

Controlled Entities

Investments in controlled entities are carried in Macquarie Goodman's financial statements at the lower of cost and recoverable amount. The carrying amounts of investments in controlled entities are reviewed to determine whether they are in excess of their recoverable amount at balance date. If the carrying amount exceeds its recoverable amount, the asset is written down to the lower amount. The write-down is recognised as an expense in the net profit or loss in the reporting period in which it occurs. Distributions/dividends are brought to account in the Statement of Financial Performance when they are declared by the controlled entities.

Associates

Investments in listed shares of associates are carried at fair value which is measured with reference to quoted market values. Investments in unlisted shares of associates are carried at the lower of cost and recoverable amount.

Other

Investments in other listed entities are measured at fair value which is determined with reference to quoted market values at reporting date. Refer Note 1(x).

p) Leased Assets

Leases under which the Consolidated Entity assumes substantially all the risks and benefits of ownership are classified as finance leases. Other leases are classified as operating leases.

Finance Leases

A lease asset and a lease liability equal to the present value of the minimum lease payments are recorded at the inception of the lease.

Lease liabilities are reduced by repayments of principal. The interest components of the lease payments are expensed. Contingent rentals are expensed as incurred.

Operating Leases

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.

Lease incentives are recognised as liabilities. Lease rental payments are allocated between rental expense and reduction of the liability, on a straight line basis over the period of the incentive.

q) Intangible Assets - Management Rights

Management rights are carried at the lower of cost or recoverable amount. Management rights are amortised on a straight line basis over their useful lives. The recoverable amount of management rights is reviewed by the Directors on a regular basis. Any diminution in value of management rights is recognised in the Statement of Financial Performance in the period in which it occurs.

r) Pavables

Liabilities are recognised for amounts to be paid in the future for goods or services received by the Consolidated Entity prior to the end of the year.

s) Interest Bearing Liabilities

Bank loans are recognised at their principal amount. Interest expense is accrued at the contracted rate and included in the Statement of Financial Position as Other creditors and accruals.

Debentures and notes payable are recognised when issued at the net proceeds received with the premium or discount on issue amortised over the period to maturity. Interest expense is recognised on an effective yield basis.

t) Provisions

A provision is recognised when there is a legal, equitable or constructive obligation as a result of a past event and it is probable that a future sacrifice of economic benefits will be required to settle the obligation, the timing or amount of which is uncertain.

If the effect is material, a provision is determined by discounting the expected future cash flows (adjusted for expected future risks) required to settle the obligation at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability most closely matching the expected future payments, except where noted below. The unwinding of the discount is treated as part of the expense related to the particular provision.

Dividends/Distributions

Provisions for dividends and distributions payable are recognised in the reporting period in which the dividends and distributions are declared, for the entire undistributed amount regardless of the extent to which they will be paid in cash.

u) Issue Costs

Transaction costs arising on the issue of equity are offset directly against the proceeds from the issue.

v) Employee Benefits

Wages, Salaries, Annual Leave and Sick Leave

Liabilities for employee benefits for wages, salaries, annual leave and sick leave represent present obligations resulting from employees' services provided to reporting date. They are calculated at undiscounted amounts based on remuneration wage and salary rates that the Consolidated Entity expects to pay as at reporting date including related on-costs, such as, workers compensation insurance and pavroll tax.

Long Service Leave

The provision for employee benefits to long service leave represents the present value of the estimated future cash outflows to be made resulting from employees' services provided to reporting date.

The provision is calculated using expected future increases in wage and salary rates including related on-costs and expected settlement dates based on turnover history and is discounted using the rates attaching to national government bonds at reporting date which most closely match the terms of maturity of the related liabilities. The unwinding of the discount is treated as long service leave expense.

Executive Option Plan

Macquarie Goodman has granted options to certain executives under the Executive Option Plan. Costs incurred in administering the Plan are expensed as incurred.

No accounting entries are made in relation to the Executive Option Plan until options are exercised, at which time amounts received are recognised in the Statement of Financial Position as contributed equity.

The amounts disclosed for remuneration of Directors and Executives in the Directors' Report and Note 32 include the assessed fair values of options at the date they were granted and have been allocated between the grant and vesting dates of the options.

ESAP

Funds advanced to employees under the ESAP are recognised as receivables and at the amounts due to be repaid to Macquarie Goodman. Loans are initially recognised upon approval of the loans to individual employees. Conversions of Executive options to ESAP loans were recognised on the date the merger with Macquarie Goodman Industrial Trust was approved.

v) Employee Benefits Continued

Superannuation Plan

The Consolidated Entity contributes to employees and Directors' defined contribution superannuation funds by making the required contributions to independent superannuation funds as required by legislation. These contributions are expensed in the Statement of Financial Performance.

Bonus Plan

A liability is recognised for employee bonuses payable as the benefit calculations are formally documented in accordance with the Bonus Policy.

w) Earnings per Security ("EPS")

Basic EPS is calculated by dividing the net profit attributable to Securityholders for the reporting period, after excluding any costs of servicing equity (other than ordinary securities), by the weighted average number of ordinary securities of Macquarie Goodman, adjusted for any bonus issue.

Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after-tax effect of financing costs associated with dilutive potential ordinary securities and the effect on revenues and expenses of conversion to ordinary securities associated with dilutive potential ordinary securities, by the weighted average number of ordinary securities and dilutive potential ordinary securities adjusted for any bonus issue.

x) Revaluation of Non-Current Assets

Classes of non-current assets measured at fair value are revalued with sufficient regularity to ensure the carrying amount of each asset in the class does not differ materially from fair value at reporting date. Revaluation increments, on a class of assets basis, are recognised in the Asset Revaluation Reserve except that amounts reversing a decrement previously recognised as an expense are recognised as revenues. Revaluation decrements are only offset against revaluation increments relating to the same class of asset and any excess is recognised as an expense.

Potential capital gains tax is only taken into account if the asset is held for sale and forms part of the assessable income of the Consolidated Entity.

y) Acquisition of Assets

The cost of the purchase of an ownership interest in assets acquired is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs directly attributable to the acquisition. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value at the date of acquisition.

z) Recoverable Amount of Non-Current Assets Valued on Cost Basis

The carrying amounts of non-current assets valued on the cost basis are reviewed to determine whether they are in excess of their recoverable amount at reporting date. If the carrying amount of a non-current asset exceeds its recoverable amount, the asset is written down to the lower amount. The write-down is expensed in the reporting period in which it occurs.

Where a group of assets working together supports the generation of cash inflows, recoverable amount is assessed in relation to that group of assets.

In assessing recoverable amounts of non-current assets. the relevant cash flows have been discounted to their present value.

aa) Rounding

In accordance with ASIC Class Order 98/100, the amounts shown in the Financial Report and Directors' Report have been rounded to the nearest hundred thousand dollars. unless otherwise stated.

ab) Comparative figures

Where applicable, certain comparative figures have been restated to conform with the presentation in the current year's Financial Report.

NOTE 2 - CHANGE IN ACCOUNTING POLICY

Investments in Listed Trusts

In order to more accurately reflect the assets of the Consolidated Entity, the accounting policy for investments in listed trusts, except where they are equity accounted in accordance with the policy set out in Note 1(b), has been changed from cost to fair value. Fair value is measured with reference to quoted market prices.

The increase in the carrying amount of the listed units in a Singapore listed property trust ("A-REIT") by the Consolidated Entity at 30 June 2005 is \$36.9 million. The corresponding increase in value has been recognised in the Asset Revaluation Reserve.

If the change in accounting policy had been applied at 30 June 2004, the increase in the carrying value of the units would have been \$10.1 million and the corresponding increase in value would have been recognised in the Asset Revaluation Reserve.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

			Consolidated		Parent Entity
	Note	2005 \$M	2004 \$M	2005 \$M	2004 \$M
NOTE 3 - OTHER REVENUE FROM OPERATING ACTIVITIES
Revenue from ordinary activities includes the following:
Interest income from:
- Related parties	34	-	0.7	$\overline{\phantom{m}}$	$\overline{\phantom{0}}$
$-$ Controlled entities			$\qquad \qquad$	1.5	2.6
- Other parties		2.5	0.5	0.8	0.2
Dividends from controlled entities		$\overline{\phantom{0}}$	$\qquad \qquad -$	14.8	21.1
Dividends/distributions from listed property trusts		7.7	3.8	1.1	1.1
Proceeds from sale of investment in associate		4.9	$\overline{\phantom{m}}$	$\overbrace{\phantom{12322111}}$
		15.1	5.0	18.2	25.0
NOTE 4 - PROFIT FROM ORDINARY ACTIVITIES
Profit from Ordinary Activities before Income Tax
has been arrived at after (charging)/crediting the following items:
Transaction costs (1) Performance fee waived		(22.5)	$\overline{\phantom{0}}$	(22.4)
Merger transaction expenses		$\overline{\phantom{0}}$ (22.5)	$\overline{\phantom{m}}$	(17.2) (39.6)
Diminution in value of management rights (2)		(95.4)		(67.8)
Bank loans and overdraft interest		(48.8)	(2.7)	(1.8)	(1.8)
Interest bearing loans/advances from controlled entities		$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{m}}$	(1.1)	$\overline{\phantom{000000000000000000000000000000000000$
		(48.8)	(2.7)	(2.9)	(1.8)
Capitalised borrowing costs (3)		22.9	$\overline{\phantom{000000000000000000000000000000000000$	$\qquad \qquad -$	$\overline{\phantom{000000000000000000000000000000000000$
Borrowing costs		(25.9)	(2.7)	(2.9)	(1.8)
		278.0
Proceeds from sale of investment properties Carrying value of investment properties sold		(261.0)	$\qquad \qquad -$	$\qquad \qquad -$
Net profit on sale of investment properties		17.0	—
Proceeds from sale of investment in associate		4.9	$\qquad \qquad$
Carrying value of investment sold		(4.7)
Net profit on sale of investment in associate		0.2	—
Depreciation of plant and equipment		(0.6)	(0.2)
Amortisation of leasehold improvements		(0.1)	$\overline{\phantom{m}}$	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$
Amortisation of management rights		(1.1)	(1.5)	(1.0)	(0.4)
Amortisation of deferred leasing and tenancy costs		(0.3)
Total depreciation and amortisation		(2.1)	(1.7)	(1.0)	(0.4)
		(1.0)	(0.4)
Net expense in provision for employee benefits

^ttl Transaction costs incurred relates mainly to fees paid to financial advisers, lawyers and investigating accountants in connection with the stapling
of Macquarie Goodman Management Limited shares and Macquarie Goodman

^(a) For details of the diminution in value of management rights, refer to Note 17.

⁶⁸ Borrowing costs were capitalised to investment properties under development at a weighted average rate of 6.35% per annum.

***************

2004 2005 2004 2005 \$ \$ \$ \$ Statutory audit Auditors of the Company - audit and review of financial reports (KPMG Australia) 376,766 68,000 13,520 28,088 404,854 81,520 18,495 1,387 423,349 82,907 Services other than statutory audit Other regulatory services (KPMG Australia) 68,500 13,000 - investigative accounting services (KPMG Australia) 1,412,828 1,160,875 141,592 264,293 15,584 24,202 1,761,205 178,794 1,160,875 2,184,554 261,701 1,160,875 Consolidated Parent Entity 2004 2005 2004 2005 \$М \$M \$М NOTE 6 - TAXATION a) Income Tax Benefit/(Expense) Prima facie income tax (expense)/benefit calculated at 30% (2004: 30%) on the profit from ordinary activities (10.1) (16.0) 27.8 (Increase)/decrease in income tax due to: 40.3 (3.9) (10.8) (0.2) (0.4) (0.1) - Non-assessable income - intragroup dividend 4.4 $\overline{\phantom{m}}$ $\qquad \qquad -$ - Net assessable foreign income (0.3) (0.4) (1.4) - Net foreign tax credits received/(paid) 0.7 (0.1) - Income tax expense related to current and deferred tax transactions of the wholly-owned subsidiaries in the tax consolidated group $\overline{\phantom{0}}$ (0.2) 0.1 Income tax benefit/(expense) attributable to profit from ordinary activities (16.4) 27.7 18.1		Consolidated		Parent Entity
\$Μ 6.3 14.3
(6.8) (0.3) (14.3) (0.8)	NOTE 5 - AUDITORS' REMUNERATION
	- audit and review of financial reports (overseas KPMG firms)
	Other auditors
	- audit and review of financial reports (non-KPMG firms)
	Other assurance services
	Other services
	- taxation compliance services (KPMG Australia)
	- taxation compliance services (overseas KPMG firms)
	- Net profit attributable to Unitholders of Macquarie Goodman
	Industrial Trust
	- Diminution in value of management rights
	- Other non-deductible items
	- Recovery of income tax expense under a tax funding
	arrangement at transition
	(Under)/over provision in prior year

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

		Consolidated		Parent Entity
	2005	2004	2005	2004
	\$M	SM.	\$M	\$M
NOTE 6 - TAXATION CONTINUED
b) Current Tax Receivables
Balance at beginning of year	0.1	(5.4)	0.4	(0.3)
Movements during the year:
- Income taxes paid (net of refunds) - Current year's income tax expense on profit from ordinary activities	10.4 (4.0)	3.6 (6.5)	2.4 (0.2)	0.2 0.5
- Income tax refundable related to current and deferred tax transactions
of the wholly-owned subsidiaries in the tax consolidated group		8.3
(Under)/over provision in prior year	(0.2)	0.1
Balance at end of year	6.3	0.1	2.6	0.4
				Consolidated
		2005		2004
		Cents		Cents
NOTE 7 - EARNINGS PER SECURITY ("EPS")
Attributable to Securityholders of Macquarie Goodman
Basic earnings per security		7.4		13.9
Diluted earnings per security		7.2		13.1
Adjusted basic earnings per security - refer (i)		22.0		13.9
Distribution/dividend per security - refer (ii)		27.2		7.2
			Number of securities
		2005		2004
Weighted average number of securities used in calculating
basic earnings per security and adjusted basic earnings per security		680,007,042		266,552,469
Effect of Executive options on issue and RePS conversion		18,997,334		15,874,729
Weighted average number of securities used in calculating
diluted earnings per security		699,004,376		282,427,198
		2005		2004
		\$M		\$M
i) Net profit after tax used in calculating earnings per security
Net profit after tax used in calculating basic and diluted earnings per security		50.0		37.0
Add back:
Merger transaction expenses		22.5
Diminution in value of management rights (net of tax)		77.3
Net profit after tax used in calculating adjusted basic earnings per security		149.8		37.0
ii) Dividends and distributions for the year used in calculating
dividend/distribution per security
31 December 2004 dividend of 4.5 cents (2003: 3.5 cents)		12.5		9.5
31 March 2005 distribution of 6.475 cents (2003: nil)		81.5
30 June 2005 distribution of 6.475 cents (2003: 3.5 cents)		91.0		9.6
		185.0		19.1

******************

NOTE 8 - DIVIDENDS AND DISTRIBUTIONS

a) Dividends Recognised in the Current Year by Macquarie Goodman

	Dividend cps	Total amount \$M	Franked/ unfranked	% Franked	Date of payments
2005
Final 2004 dividend	3.5	9.6	Partly franked	-57	22 Sep 04
Interim 2005 dividend	4.5	12.5	Partly franked	30	2 Feb 05
		22.1
2004
Final 2003 ordinary	3.0	7.6	Partly franked	-56	14 Nov 03
Interim 2004 ordinary	3.5	9.5	Partly franked	85	3 Mar 04
		17.1
					Parent Entity

	2005 cuu SM.	'' M bz⊾ ZUV" ۰n

Dividend Franking Account

30% franking credits available to Shareholders of Macquarie Goodman Management Limited for subsequent financial years

The partly franked dividends paid during the year were franked at the tax rate of 30%.

The above amounts are based on the balance of the dividend franking account at year end adjusted for:

a) franking credits that will arise from the payment of the current tax liability;

b) franking debits that will arise from the payment of dividends recognised as a liability at year end;

c) franking credits that will arise from the receipt of dividends recognised as a receivable at year end; and

d) franking credits that the entity may be prevented from distributing in subsequent years.

The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends.

b) Distributions Declared by Macquarie Goodman Industrial Trust since the Date of Acquisition

	Distribution cpu	Total amount \$M	Date of payment
2005 distributions for the quarter ended
March 2005 quarter distribution from the Trust	6.475	-81.5	3 May 05
Final 2005 distribution from the Trust	6.475	.91.0	19 Aug 05
	12.950	172.5

$(0.6)$

$0.3\,$

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

		Consolidated		Parent Entity
	2005	2004	2005	2004
	\$M	\$M	\$M	\$M
NOTE 9 - CASH ASSETS
Cash at bank and on hand	7.2	10.3	0.1
NOTE 10 - RECEIVABLES
Current
Trade debtors	20.2	12.5	1.2
Other debtors (1)	48.8	0.6	3.5	0.2
Receivables from ESAP (2)	11.1	$\overline{\phantom{000000000000000000000000000000000000$	11.1
Loans to controlled entities		$\overline{ }$	6.6	8.5
Performance fee receivable	$\overline{\phantom{m}}$	17.2	$\overline{\phantom{000000000000000000000000000000000000$	17.2
Deferred settlement on sale of inventories		12.1
Loans to related parties	0.6		$\overline{\phantom{000000000000000000000000000000000000$
	80.7	42.4	22.4	25.9
Non-current
Receivables from ESAP (2)	15.5		15.5
Loans to controlled entities (3)		—	49.3	6.0
	15.5		64.8	6.0

¹³¹Other debtors at 30 June 2005 includes \$24.7 million receivable from the sale of investment properties (30 June 2004; nil).

^ta Amounts receivable from employees are at the Consolidated Entity's weighted average interest rate of 6.5% per annum and are for periods of up to five years.
Loans are limited recourse to the value of the securities re

88 Non-current loans to controlled entities are interest bearing, with the exception of \$21.5 million (2004: \$1.2 million) which is non-interest bearing, with no fixed term of repayment. Interest is charged per the loan agreement at 9.55% per annum (2004: 7.99% per annum).

NOTE 11-INVENTORIES

Current
Work in progress	13.5	2.7
Non-current
Work in progress	17.2	6.1
Details of transactions with related parties involving work in progress are set out in Note 34. The transactions relate to the Brickworks Joint Venture and the Moorabbin Airport Corporation Pty Limited projects.
NOTE 12 - OTHER ASSETS
Current
Prepayments	11.2.	0.5
Deferred borrowing costs	2.0
Deferred leasing and tenancy costs	1.4
Other (1)	33.4	2.6	1.0	0.3
	48.0	3.1	1.0	0.3
Non-current
Deferred leasing and tenancy costs	4.7
Other	0.8
	5.5

131 Includes refundable deposits of \$33.3 million for the purchase of investment properties.

***************

		Consolidated		Parent Entity
	2005 \$M	2004 SM.	2005 \$M	2004 SM.
NOTE 13 - INVESTMENT PROPERTIES
Carrying amount at beginning of year Acquisitions
- on acquisition of Macquarie Goodman Industrial Trust and its controlled entities	4,250.2
$-$ other acquisitions	498.6
Capital expenditure	218.9
Disposals	(261.0)
Valuation increment	33.2
Carrying amount at end of year	4,739.9

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Properties	Acquisition Date	Price Including Acquisition 3M	Cost laciudino Gapital Costs Expenditure SM	Valuation Date	\$M	Cost Since Valuation Acquisition SM	SM	Disposal Revaluation During Increment/ the Year (Decrement) SM	Book Value 30 June 2005 SM 3
AUSTRALIA
Warehouse/Distribution Centres
GreystanesPark, Prospect, NSW - East, Stage 1	1 Feb 05	61.7	84.1	1 Feb 05	61.7	22.4			84.1
- West, Stage 2	1 Feb 05	53.9	63.9	1 Feb 05	53.9	10.0			63.9
		115.6	148.0		115.6	32.4	$\overline{\phantom{0}}$		148.0
MFive Industry Park, Moorebank, NSW	1 Feb 05	108.7	116.5	1 Feb 05	108.7	7.8			116.5
Centenary Distribution Centre, Moorebank, NSW
- Stage 1	1 Feb 05	46.4	46.4	1 Feb 05	46.4				46.4
$-$ Stage 2	1 Feb 05	19.8	20.1	1 Feb 05	19.8	0.3	$\qquad \qquad -$	$\overline{\phantom{0}}$	20.1
		66.2	66.5		66.2	0.3	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	66.5
Forrester Distribution Centre, St Marys, NSW
$-$ Stage 1	1 Feb 05	55.3	55.3	1 Feb 05	55.3				55.3
$-$ Stage 2	1 Feb 05	6.7	7.0	1 Feb 05	6.7	0.3			7.0
		62.0	62.3		62.0	0.3		$\overbrace{\phantom{12322111}}$	62.3
Roberts Distribution Centre, Chullora, NSW
— Building A	1 Feb 05	25.2	25.2	1 Feb 05	25.2				25.2
Building B	1 Feb 05	36.4	36.4	1 Feb 05	36.4			$\overline{\phantom{0}}$	36.4
		61.6	61.6		61.6			$\overline{\phantom{0}}$	61.6
Northgate Distribution Centre, Somerton, Vic
- Stages 1 and 2	1 Feb 05	45.1	45.6	30 Jun 05	53.6	0.5	$\overline{\phantom{000000000000000000000000000000000000$	8.0	53.6
$-$ Stage 3	1 Feb 05	2.4	2.4	1 Feb 05	2.4	$\overline{\phantom{0}}$	(0.6)	$\overline{\phantom{0}}$	1.8
		47.5	48.0		56.0	0.5	(0.6)	8.0	55.4
Reservoir Distribution Centre, Wetherill Park, NSW	1 Feb 05	49.7	49.9	1 Feb 05	49.7	0.2			49.9
Portside Distribution Centre, Banksmeadow, NSW	1 Feb 05	48.5	48.5	1 Feb 05	48.5				48.5

***************************************

	Acquisition	Price Including Acquisition	Gost lactudiag Capital Gosts Expenditure	Valuation		Gost Since Valuation Acquisition		Disposal Revaluation During Increment/ the Year (Decrement)	Book Value 30 June 2095
Properties	Date	SM	3M	Date	\$M	SM	\$M	\$M	SM
NOTE 13 - INVESTMENT PROPERTIES CONTINUED
AUSTRALIA CONTINUED
Warehouse/Distribution Centres continued
Wyndham Distribution Centre, Laverton, Vic	1 Feb 05	38.5	38.5	1 Feb 05	38.5				38.5
Smithfield Distribution Centre, Smithfield, NSW	1 Feb 05	38.2	38.2	1 Feb 05	38.2			$\overline{\phantom{0}}$	38.2
Great West Distribution Centre, Arndell Park, NSW Chullora Distribution Centre, Chullora, NSW	1 Feb 05	37.6	37.6	1 Feb 05	37.6			$\overline{\phantom{0}}$	37.6
$-$ Stage 1	1 Feb 05	25.3	25.3	1 Feb 05	25.3				26.3
- Stage 2	1 Feb 05	11.9	11.9	1 Feb 05	11.9	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	$\qquad \qquad -$	11.9
		37.2	37.2		37.2	$\overline{\phantom{0}}$		$\overline{\phantom{0}}$	37.2
Angliss Distribution Centre, Laverton North, Vic	1 Feb 05	19.2	32.9	30 Jun 05	36.4	13.6	$\overline{\phantom{000000000000000000000000000000000000$	3.6	36.4
Southend Distribution Centre, Mascot, NSW	1 Feb 05	35.1	35.1	1 Feb 05	35.1	$\overline{\phantom{000000000000000000000000000000000000$		$\overline{\phantom{000000000000000000000000000000000000$	35.1
Westall Distribution Centre, Clayton, Vic	1 Feb 05	33.2	33.2	1 Feb 05	33.2			$\overline{\phantom{0}}$	33.2
Laverton Distribution Centre, Laverton North, Vic	1 Feb 05	30.8	30.8	1 Feb 05	30.8	$\overline{\phantom{0}}$		$\overline{\phantom{0}}$	30.8
Crestmead Distribution Centre, Crestmead, Qld	1 Feb 05	30.0	30.3	1 Feb 05	30.0	0.3	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$	30.3
Kingston Distribution Centre, Braeside, Vic Dandenong Industrial Estate, Dandenong, Vic	1 Feb 05 30 Jun 05	30.2 29.9	30.2 29.9	1 Feb 05 30 Jun 05	30.2 28.3	$\overbrace{\phantom{12322111111111111111111111111111111111$ $\overline{\phantom{0}}$		$\qquad \qquad -$ $\overline{\phantom{0}}$	30.2 29.9
Davis Distribution Centre, Wetherill Park, NSW
— Building A	1 Feb 05	18.5	18.8	1 Feb 05	18.5	0.3		$\qquad \qquad -$	18.8
- Building B	1 Feb 05	7.9	8.0	1 Feb 05	7.9	0.1	$\qquad \qquad -$	$\qquad \qquad -$	8.0
		26.4	26.8		26.4	0.4	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	26.8
Fitzgerald Distribution Centre, Laverton North, Vic	1 Feb 05	25.4	25.4	1 Feb 05	25.4	$\overline{\phantom{m}}$		$\overline{\phantom{0}}$	25.4
Prestons Distribution Centre, Preston, NSW	4 Mar 05	24.8	25.4	23 Nov 04	22.6	0.6		$\overline{\phantom{0}}$	25.4
Hampton Park Distribution Centre, Hampton Park, Vic 1 Feb 05		23.8	23.8	1 Feb 05	23.8	$\overline{\phantom{000000000000000000000000000000000000$		—	23.8 22.3
Berkeley Distribution Centre, Berkeley Vale, NSW Miller Distribution Centre, Villawood, NSW	1 Feb 05 1 Feb 05	22.3 21.3	22.3 21.4	1 Feb 05 1 Feb 05	22.3 21.3	$\overline{\phantom{a}}$ 0.1	$\overbrace{\phantom{12322111}}$	$\overline{\phantom{0}}$ $\overline{\phantom{000000000000000000000000000000000000$	21.4
Port Wakefield Distribution Centre, Gepps Cross, SA 1 Feb 05		17.8	17.8	1 Feb 05	17.8	$\overbrace{\phantom{123221111}}$	$\overline{\phantom{0}}$	$\qquad \qquad -$	17.8
Boundary Distribution Centre, Laverton, Vic	1 Feb 05	17.6	17.6	1 Feb 05	17.6	$\overline{\phantom{000000000000000000000000000000000000$		$\qquad \qquad$	17.6
Holroyd Distribution Centre, Smithfield, NSW	1 Feb 05	17.3	17.3	1 Feb 05	17.3			$\overline{\phantom{0}}$	17.3
Sheffield Distribution Centre, Welshpool, WA
- Stage 1 $-$ Stage 2	1 Feb 05 1 Feb 05	12.7 4.2	12.7 4.2	1 Feb 05 1 Feb 05	12.7 4.2			$\overline{\phantom{000000000000000000000000000000000000$	12.7 4.2
		16.9	16.9		16.9	$\overline{\phantom{000000000000000000000000000000000000$ $\overline{\phantom{0}}$		$\qquad \qquad -$ $\overline{\phantom{000000000000000000000000000000000000$	16.9
Villawood Distribution Centre, Villawood, NSW	1 Feb 05	16.3	16.3	1 Feb 05	16.3				16.3
Tranzport Distribution Centre, Port Melbourne, Vic	1 Feb 05	14.1	14.1	1 Feb 05	14.1				14.1
Britton Distribution Centre, Smithfield, NSW	1 Feb 05	13.8	13.8	1 Feb 05	13.8			$\overline{\phantom{0}}$	13.8
Sunshine Distribution Centre, Sunshine, Vic	1 Feb 05	13.4	13.4	1 Feb 05	13.4			$\overline{\phantom{0}}$	13.4
Federation Distribution Centre, Laverton North, Vic	1 Feb 05	12.3	12.3	1 Feb 05	12.3			$\overline{\phantom{0}}$	12.3
Woodlands Distribution Centre, Braeside, Vic	1 Feb 05	10.8	10.8	1 Feb 05	10.8	$\overline{\phantom{0}}$		$\overline{\phantom{0}}$	10.8
Westlink Distribution, Laverton, Vic	1 Feb 05	6.7	10.6	1 Feb 05	6.7	3.9			10.6
Keysborough Distribution Centre, Keysborough, Vic - Stage 1	1 Feb 05	6.7	6.8	1 Feb 05	6.7	0.1			$6.8\,$
$-$ Stage 2	1 Feb 05	2.8	2.8	1 Feb 05	2.8	$\overline{\phantom{m}}$		$\qquad \qquad -$ —	2.8
		95	96.		9.5	01			96

*******************

*************************************

	Acquisition	Price Including Acquisition	Cost Including Capital Costs Expenditure	Valuation		Cost Since Valuation Acquisition		Disposal Revaluation During Increment/ the Year (Decrement)	Book Value 30 June 2005
Properties	Date	SM	SM	Date	SM	SM	SM	SM	\$M
NOTE 13 - INVESTMENT PROPERTIES CONTINUED
AUSTRALIA CONTINUED
Warehouse/Distribution Centres continued
Wingfield Distribution Centre, Wingfield, SA	30 Jun 05	9.2	9.2	30 Jun 05	8.7				9.2
Lytton Distribution Centre, Lytton, Qld	1 Feb 05	7.6	7.6	30 Jun 05	8.8	$\overline{\phantom{0}}$		1.2	8.8
Holbeche Distribution Centre, Arndell Park, NSW	1 Feb 05	8.8	8.8	1 Feb 05	8.8	$\overline{\phantom{0}}$	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$	8.8
Montague Distribution Centre, West End, Qld	1 Feb 05	8.3	8.3	1 Feb 05	8.3	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$	$\overline{\phantom{000000000000000000000000000000000000$	8.3
Gippsland Distribution Centre, Dandenong, Vic	1 Feb 05	7.0	7.0	1 Feb 05	7.0	$\overline{\phantom{0}}$		$\overline{\phantom{000000000000000000000000000000000000$	7.0
Beverley Distribution Centre, Beverley, SA	28 Jun 05	5.7	5.9	$\overline{\phantom{0}}$	$\overline{\phantom{m}}$	0.2	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$	$5.9\,$
Edinburgh Distribution Centre, Edinburgh, SA	28 Apr 05	1.6	4.8	11 Mar 05	1.6	3.2			4.8
Bradford Distribution Centre, Cavan, SA	1 Feb 05	3.8	3.8	30 Jun 05	4.3	$\overline{\phantom{000000000000000000000000000000000000$		0.5	4.3
Wodonga Distribution Centre, Baranduda, Vic	1 Feb 05	3.3	3.3	1 Feb 05	3.3	$\overline{\phantom{0}}$	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$	3.3
Industrial Estates
Erskine Park Industrial Estate, Erskine Park, NSW	1 Feb 05	48.2	85.1	1 Feb 05	48.2	36.9	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$	85.1
Discovery Cove Industrial Estate, Bariksmeadow, NSW1 Feb 05		72.2	73.6	30 Jun 05	80.0	1.4	$\overline{\phantom{000000000000000000000000000000000000$	6.4	80.0
Alexandria Industrial Estate, Alexandria, NSW	1 Feb 05	60.1	63.1	30 Jun 05	61.5	3.0	$\overline{\phantom{0}}$	(1.6)	61.5
Mitchell Industrial Estate, Alexandria, NSW	1 Feb 05	47.2	47.5	30 Jun 05	50.2	0.3	$\overline{\phantom{0}}$	2.7	50.2
Kingsford Smith Industrial Estate, Alexandria, NSW 1 Feb 05		41.3	41.3	1 Feb 05	41.3	$\overline{\phantom{0}}$		$\overline{\phantom{000000000000000000000000000000000000$	41.3
Cumberland Industrial Estate, Smithfield, NSW	1 Feb 05	37.8	40.6	1 Feb 05	37.8	2.8	$\overbrace{\phantom{12321111111111111111111111111111111111$	$\overline{\phantom{000000000000000000000000000000000000$	40.6
Botany Bay Industrial Estate, Botany, NSW	1 Feb 05	34.1	34.7	1 Feb 05	34.1	0.6	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$	34.7
Gateway Industrial Estate, Arndell Park, NSW	1 Feb 05	34.1	34.1	1 Feb 05	34.1	$\overline{\phantom{0}}$		$\overline{\phantom{0}}$	34.1
Smithfield Industrial Estate, Smithfield, NSW
$-$ Stage 1	1 Feb 05	15.8	15.8 14.4	1 Feb 05	15.8	$\overline{\phantom{0}}$ $\overline{\phantom{0}}$		$\overline{\phantom{0}}$	15.8 14.4
$-$ Stage $2$ $-$ Stage 3	1 Feb 05 1 Feb 05	14.4 3.8	3.9	1 Feb 05 1 Feb 05	14.4 3.8	0.1	$\qquad \qquad -$	$\overline{\phantom{000000000000000000000000000000000000$	3.9
		34.0	34.1		34.0	0.1	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$	34.1
Burrows Industrial Estate, Alexandria, NSW	1 Feb 05	32.0	32.3	30 Jun 05	33.5	0.3	$\overline{\phantom{000000000000000000000000000000000000$	1.2	33.5
Portside Industrial Estate, Port Melbourne, Vic	1 Feb 05	32.4	32.4	1 Feb 05	32.4	$\overline{\phantom{0}}$	—	$\overline{\phantom{000000000000000000000000000000000000$	32.4
McLaren Industrial Estate, North Rocks, NSW	1 Feb 05	31.1	32.0	1 Feb 05	31.1	0.9		$\equiv$	32.0
Brisbane Gate Industrial Park, Hendra, Qld	1 Feb 05	30.7	30.8	1 Feb 05	30.7	0.1	$\qquad \qquad -$	$\overline{\phantom{000000000000000000000000000000000000$	30.8
Acacia Link Industrial Estate, Acacia Ridge, Qld	1 Feb 05	20.3	28.4	1 Feb 05	20.3	8.1	$\qquad \qquad$	$\overline{\phantom{000000000000000000000000000000000000$	28.4
Arcadia Industrial Estate, Coopers Plains, Qld	1 Feb 05	23.0	23.2	30 Jun 05	25.0	0.1	$\overline{\phantom{0}}$	1.9	25.0
Brodie Industrial Estate, Rydalmere, NSW Riverside Centre, Parramatta, NSW	1 Feb 05 1 Feb 05	23.5 22.8	23.5 22.9	1 Feb 05 1 Feb 05	23.5 22.8	$\overline{\phantom{0}}$ 0.1	—	$\overline{\phantom{000000000000000000000000000000000000$	23.5 22.9
Mitchell Industrial Estate, Alexandria, NSW	1 Feb 05	20.7	22.3	1 Feb 05	20.7	1.6			22.3
Biloela Industrial Estate, Villawood, NSW	1 Feb 05	19.9	20.1	1 Feb 05	19.9	0.2			20.1
Reserve Industrial Estate, Ermington, NSW	1 Feb 05	19.9	19.9	1 Feb 05	19.9	—	—	$\qquad \qquad -$	19.9
Tingalpa Industrial Estate, Tingalpa, Qld	1 Feb 05	13.8	13.8	30 Jun 05	15.6	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	1.8	15.6
Ferntree Industrial Estate, Notting Hill, Vic	1 Feb 05	14.1	14.1	1 Feb 05	14.1	—		$\overline{\phantom{000000000000000000000000000000000000$	14.1
Westcove Industrial Estate, Lane Cove, NSW	1 Feb 05	12.9	12.9	1 Feb 05	12.9	—	—	$\overline{\phantom{000000000000000000000000000000000000$	12.9
Citiport Industrial Estate, Eagle Farm, Qld	1 Feb 05	12.2	12.2	1 Feb 05	12.2			$\qquad \qquad -$	12.2
Abbott Industrial Estate, Chester Hill, NSW	1 Feb 05	12.1	12.1	1 Feb 05	12.1			$\overline{\phantom{000000000000000000000000000000000000$	12.1
Greensquare Industrial Estate, Alexandria, NSW	1 Feb 05	11.6	11.6	1 Feb 05	11.6	—	—	$\overbrace{\phantom{12322111111111111111111111111111111111$	11.6
Homebush Bay Industrial Estate, Homebush, NSW 1 Feb 05		11.3	11.3	1 Feb 05	11.3			$\overline{\phantom{000000000000000000000000000000000000$	11.3
Pavesi Industrial Estate, Smithfield, NSW	1 Feb 05	9.5	9.5	1 Feb 05	9.5			$\overline{\phantom{000000000000000000000000000000000000$	9.5
Woodpark Industrial Estate, Smithfield, NSW	1 Feb 05	7.2	7.3	30 Jun 05	7.9	0.1	$\overline{\phantom{000000000000000000000000000000000000$	0.6	7.9
Healey Industrial Estate, Dandenong, Vic	1 Feb 05	7.0	7.0	1 Feb 05	7.0	$\overline{\phantom{000000000000000000000000000000000000$		$\overline{\phantom{000000000000000000000000000000000000$	7.0

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

	Acquisition	Price Including Acquisition	Gost lactudiag Capital Costs Expenditure	Valuation		Gost Since Valuation Acquisition		Disposal Revaluation During Increment/ the Year (Decrement)	Book Value 30 June 2095
Properties	Date	\$M	\$M	Date	\$M	SM	\$M	SM	SM
NOTE 13 - INVESTMENT PROPERTIES CONTINUED
AUSTRALIA CONTINUED
Business Parks
Lidcombe Business Park, Lidcombe, NSW Campus Business Park, Homebush, NSW	1 Feb 05 1 Feb 05	142.9 125.2	143.3 129.9	30 Jun 05 1 Feb 05	150.0 125.2	0.4 4.7	$\overline{\phantom{000000000000000000000000000000000000$ $\overbrace{\phantom{12322111}}$	6.7 $\overline{\phantom{0}}$	150.0 129.9
Slough Business Park, Silverwater, NSW	1 Feb 05	101.1	103.1	1 Feb 05	101.1	2.0	$\overline{\phantom{0}}$	$\overline{\phantom{000000000000000000000000000000000000$	103.1
Clayton Business Park, Clayton, Vic	1 Feb 05	87.7	91.5	1 Feb 05	87.7	3.8	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$	91.5
Acacia Ridge Business Park, Acacia Ridge, Qld
$-$ Stage 1	1 Feb 05	44.1	44.2	1 Feb 05	44.1	0.1	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$	44.2
$-$ Stage 2	1 Feb 05	20.3	21.9	1 Feb 05	20.3	1.6	$\overline{\phantom{000000000000000000000000000000000000$	—	21.9
		64.4	66.1		64.4	1.7	$\overline{\phantom{0}}$	$\overline{\phantom{m}}$	66.1
Chullora Business Park, Chullora, NSW	1 Feb 05	64.4	64.6	1 Feb 05	64.4	0.2	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$	64.6
Chifley Business Park, Mentone, Vic	1 Feb 05	56.6	64.4	1 Feb 05	56.6	7.8	$\overline{\phantom{000000000000000000000000000000000000$	$\qquad \qquad -$	64.4
Airgate Business Park, Mascot, NSW
$-$ Stage 1	1 Feb 05	23.4	25.2	1 Feb 05	23.4	1.8	$\overline{\phantom{m}}$	$\overline{\phantom{000000000000000000000000000000000000$	25.2
$-$ Stage 2	1 Feb 05	30.0	30.6	1 Feb 05	30.0	0.6	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$	30.6
$-$ Stage 3	1 Feb 05	8.4	8.4	1 Feb 05	8.4	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{m}}$	8.4
		61.8	64.2		61.8	2.4	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	64.2
Botany Grove Business Park, Botany, NSW
$-$ Stage 1	1 Feb 05	17.5	17.6	1 Feb 05	17.5	0.1	$\overbrace{\phantom{12321111111111111111111111111111111111$	$\overline{\phantom{000000000000000000000000000000000000$	17.6
$-$ Stage 2	1 Feb 05	20.8	20.9	1 Feb 05	20.8	0.1	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	20.9
$-$ Stage 3	1 Feb 05	17.5	17.6	1 Feb 05	17.5	0.1	$\qquad \qquad$	$\overline{\phantom{0}}$	17.6
$-$ Stage 4	1 Feb 05	5.2	5.7	1 Feb 05	5.2	0.5	$\overline{\phantom{m}}$	$\qquad \qquad -$	5.7
		61.0	61.8		61.0	0.8	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	61.8
Euston Business Park, Alexandria, NSW	1 Feb 05	49.7	49.7	1 Feb 05	49.7	$\overline{\phantom{m}}$	$\overline{\phantom{0}}$	$\overline{\phantom{000000000000000000000000000000000000$	49.7
TransTech Business Park, Lane Cove, NSW	1 Feb 05	41.0	41.9	1 Feb 05	41.0	0.9	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	41.9
St Peters Business Park, St Peters, NSW	1 Feb 05	39.2	39.2	1 Feb 05	39.2	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	39.2
Talavera Business Park, North Ryde, NSW
- Building A $-$ Building B	1 Feb 05 1 Feb 05	17.5 21.4	17.5 21.4	1 Feb 05 1 Feb 05	17.5 21.4	$\overline{\phantom{000000000000000000000000000000000000$		$\overline{\phantom{0}}$	17.5 21.4
		38.9	38.9		38.9	$\overline{\phantom{m}}$ $\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{m}}$ $\overline{\phantom{0}}$	$\qquad \qquad -$ $\overline{\phantom{000000000000000000000000000000000000$	38.9
Regal Business Park, Roweville, Vic	1 Feb 05	37.6	38.6	1 Feb 05	37.6	1.0			38.6
Forestridge Business Park, Frenchs Forest, NSW 1 Feb 05 Link Business Park, North Ryde, NSW		34.7	35.7	1 Feb 05	34.7	1.0			35.7
- Building A	1 Feb 05	14.3	14.3	1 Feb 05	14.3				14.3
$-$ Building B	1 Feb 05	21.0	21.4	1 Feb 05	21.0	0.4	—	$\overline{\phantom{0}}$	21.4
		35.3	35.7		35.3	0.4	$\overline{\phantom{0}}$	$\overline{\phantom{m}}$	35.7
Showground Business Park, Castle Hill, NSW	1 Feb 05	32.0	32.5	1 Feb 05	32.0	0.5	$\overline{\phantom{0}}$	$\overline{\phantom{m}}$	32.5
Enterprise Business Park, Gladesville, NSW	1 Feb 05	31.7	31.7	1 Feb 05	31.7	$\overline{\phantom{000000000000000000000000000000000000$		$\overline{\phantom{000000000000000000000000000000000000$	31.7
Toyota Business Park, Vic - Parcel A	14 Apr 05	16.7	16.7	17 Mar 05	16.0	$\overline{\phantom{000000000000000000000000000000000000$		$\overline{\phantom{m}}$	16.7
$-$ Parcel $B$	24 Mar 05	10.7	10.7	17 Mar 05	10.1	$\overline{\phantom{000000000000000000000000000000000000$	—	$\overline{\phantom{0}}$	10.7
		27.4	27.4		26.1	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	$\overline{\phantom{m}}$	27.4

***************************************

***************************************

Properties	Acquisition Date	Price laclading Acquisition SM	Cost laciudino Capital Costs Expenditure SM	Valuation Date	SM	Cost Since Valuation Acquisition SM	SM	Disposal Revaluation During Increment/ the Year (Decrement) SM	Book Value 30 June 2005 \$M
NOTE 13 - INVESTMENT PROPERTIES CONTINUED
AUSTRALIA CONTINUED
Business Parks continued
Waterloo Business Park, North Ryde, NSW	1 Feb 05	24.2	24.6	1 Feb 05	24.2	0.4		$\overbrace{\phantom{12322111}}$	24.6
Ferntree Business Park, Notting Hill, Vic	1 Feb 05	23.8	24.2	1 Feb 05	23.8	0.4	$\overline{\phantom{000000000000000000000000000000000000$		24.2
Queensport Quays Business Park, Murarrie, Qld	1 Feb 05	17.3	27.3	1 Feb 05	17.3	10.0	(6.4)	$\overline{\phantom{000000000000000000000000000000000000$	20.9
Seville Business Park, Villawood, NSW	1 Feb 05	17.9	18.0	1 Feb 05	17.9	0.1	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$	18.0
Pacific View Business Park, Frenchs Forest, NSW	1 Feb 05	15.9	16.2	30 Jun 05	16.3	0.3	$\overline{\phantom{0}}$	0.1	16.3
Orion Business Park, Lane Cove, NSW	1 Feb 05	12.8	12.9	30 Jun 05	13.0	0.1	$\overline{\phantom{0}}$	0.1	13.0
Citylink Business Park, Port Melbourne, Vic	1 Feb 05	9.6	10.3	1 Feb 05	9.6	0.7	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$	10.3
Chase Business Park, Chatswood, NSW	1 Feb 05	10.1	10.2	1 Feb 05	10.1	0.1	(2.7)	$\overline{\phantom{000000000000000000000000000000000000$	7.5
Peninsula Business Park, Brookvale, NSW	1 Feb 05	17.7	18.5	1 Feb 05	17.7	0.8	(18.5)	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$
Wedgewood Business Park, Hallam, Vic	1 Feb 05	2.1	2.3	1 Feb 05	2.1	0.2	(2.3)	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$
Office Parks
Talavera Corporate Centre, North Ryde, NSW	1 Feb 05	110.8	129.1	1 Feb 05	110.8	18.3	$\overline{\phantom{0}}$		129.1
Homebush Corporate Park, Homebush, NSW	1 Feb 05	106.3	110.9	1 Feb 05	106.3	4.6	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$	110.9
CityWest Office Park, Pyrmont, NSW	1 Feb 05	104.6	104.9	1 Feb 05	104.6	0.3	—		104.9
Macquarie Corporate Park, North Ryde, NSW
— Building A	1 Feb 05	33.4	33.4	1 Feb 05	33.4	—			33.4
$-$ Building B	1 Feb 05	52.4	52.5	1 Feb 05	52.4	0.1		$\overline{\phantom{000000000000000000000000000000000000$	52.5
- Building C	1 Feb 05	5.4	5.6	1 Feb 05	5.4	0.2	$\qquad \qquad$	$\overline{\phantom{m}}$	5.6
		91.2	91.5		91.2	0.3	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	91.5
IBC Business Estate, Homebush, NSW	30 Jun 05	92.9	92.9	1 May 05	88.0	$\overline{\phantom{000000000000000000000000000000000000$			92.9
Binary Centre, North Ryde, NSW	1 Feb 05	81.1	81.2	1 Feb 05	81.1	0.1	$\overline{\phantom{0}}$		81.2
St Leonards Corporate Centre, St Leonards, NSW	31 May 05	77.9	77.9	1 May 05	77.5	$\overline{\phantom{000000000000000000000000000000000000$			77.9
Warringah Corporate Centre, Frenchs Forest, NSW
$-$ Stage 1	1 Feb 05	43.7	43.7	1 Feb 05	43.7	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$		43.7
$-$ Stage 2	1 Feb 05	3.6	3.7	1 Feb 05	3.6	0.1	$\overline{\phantom{000000000000000000000000000000000000$	$\overbrace{\phantom{12322111111111111111111111111111111111$	3.7
		47.3	47.4		47.3	0.1	$\overbrace{\qquad \qquad }^{}$	$\overline{\phantom{0}}$	47.4
Cambridge Office Park, Epping, NSW	1 Feb 05	46.1	46.1	1 Feb 05	46.1				46.1
Pinnacle Office Park, North Ryde, NSW
- Stage 1	1 Feb 05	26.8	27.4	1 Feb 05	26.8	0.6			27.4
$-$ Stage 2	1 Feb 05	5.4	6.3	1 Feb 05	5.4	0.9	$\qquad \qquad -$	$\qquad \qquad$	6.3
		32.2	33.7		32.2	1.5			33.7
Hurstville Office Park, Hurstville, NSW	1 Feb 05	29.9	30.2	1 Feb 05	29.9	0.3			30.2
The Precinct Corporate Centre, North Ryde, NSW
$-$ Stage 1	1 Feb 05	16.4	17.7	1 Feb 05	16.4	1.3			17.7
$-$ Stage 2	1 Feb 05	9.3	9.3	1 Feb 05	9.3	$\overline{\phantom{m}}$		$\overline{\phantom{000000000000000000000000000000000000$	9.3
		25.7	27.0		25.7	1.3	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	27.0

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

Properties	Acquisition Date	Price Including Acquisition SM	Gost lactudiag Capital Costs Expenditure \$M	Valuation Date	\$M	Gost Since Valuation Acquisition SM	\$M	Disposal Revaluation During Increment/ the Year (Decrement) SM	Book Value 30 June 2095 SM
NOTE 13 - INVESTMENT PROPERTIES CONTINUED
AUSTRALIA CONTINUED
Suburban Commercial Buildings
Ashfield Corporate Centre, Ashfield, NSW
- Stage 1	1 Feb 05	28.2	28.2	1 Feb 05	28.2	$\overline{\phantom{000000000000000000000000000000000000$			28.2
$-$ Stage 2	1 Feb 05	12.7	13.2	1 Feb 05	12.7	0.5			13.2
		40.9	41.4		40.9	0.5	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	41.4
Gordon Corporate Centre, Gordon, NSW	1 Feb 05	26.9	27.3	1 Feb 05	26.9	0.4			27.3
Total Australia			4,280.3 4,469.4		4,317.0	189.9	(30.5)		33.2 4,471.9
NEW ZEALAND
Industrial Estates Savill Link, Otahuhu, Auckland	1 Feb 05	17.7	22.3	1 Feb 05	17.7	4.8	(6.6)		15.9
The Gate Industry Park, Penrose, Auckland	1 Feb 05	39.0	39.7	1 Feb 05	39.0	0.7	(36.2)	$\qquad \qquad -$	3.5
Penrose Industrial Estate, Penrose, Auckland	1 Feb 05	15.8	15.8	1 Feb 05	15.8	$\overline{\phantom{000000000000000000000000000000000000$	(15.8)	$\overline{\phantom{0}}$	$\overline{\phantom{000000000000000000000000000000000000$
Business Parks
Highbrook Business Park, East Tamaki, Auckland	1 Feb 05	81.1	94.4	1 Feb 05	81.1	13.3			94.4
Office Parks
Air New Zealand House, Auckland	4 May 05	20.1	22.9	4 May 05	54.6	2.8		$\qquad \qquad -$	22.9
Central Park Corporate Centre, Greenlane, Auckland	1 Feb 05	46.6	53.3	1 Feb 05	46.6	6.7	(50.0)	$\overline{\phantom{0}}$	3.3
Neilson Street, Penrose, Auckland	30 Jun 05	1.1	1.1	12 May 05	2.0	$\overline{\phantom{0}}$		$\overline{\phantom{0}}$	1.1
Millennium Centre, Phase 3, Greenlane, Auckland	8 Apr 05	0.6	0.6	4 Mar 05	1.1	$\overline{\phantom{000000000000000000000000000000000000$		$\qquad \qquad -$	0.6
Fletcher Head Office, Penrose, Auckland	1 Feb 05	33.8	33.8	1 Feb 05	33.8	$\qquad \qquad -$	(33.8)	$\overline{\phantom{0}}$	$\overline{\phantom{m}}$
Millennium Centre, Greenlane, Auckland	1 Feb 05	20.4	20.4	1 Feb 05	20.4	$\overline{\phantom{000000000000000000000000000000000000$	(20.4)	$\overline{\phantom{0}}$	$\overline{\phantom{000000000000000000000000000000000000$
IBM Centre, Auckland	1 Feb 05	10.1	10.1	1 Feb 05	10.1		(10.1)	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$
BTI House, Newmarket, Auckland	1 Feb 05	7.9	7.9	1 Feb 05	7.9		(7.9)	$\overline{\phantom{0}}$
Vector House, Newmarket, Auckland	1 Feb 05	7.6	7.6	1 Feb 05	7.6	$\overline{\phantom{0}}$	(7.6)	$\overline{\phantom{0}}$
Nestlé Building, Manukau, Auckland	1 Feb 05	3.8	3.8	1 Feb 05	3.8	$\overline{\phantom{m}}$	(3.8)	$\overbrace{\phantom{12333}}$
Ricoh Building, Parnell, Auckland	1 Feb 05	3.6	3.6	1 Feb 05	3.6	$\overbrace{\phantom{12322111111111111111111111111111111111$	(3.6)	$\overbrace{\phantom{12333}}$
Kodak Building, Parnell, Auckland	1 Feb 05	4.0	4.0	1 Feb 05	4.0	$\overline{\phantom{000000000000000000000000000000000000$	(4.0)	$\overline{\phantom{0}}$
Windsor Court, Parnell, Auckland	1 Feb 05	3.1	3.1	1 Feb 05	3.1	$\overline{\phantom{000000000000000000000000000000000000$	(3.1)	$\overline{\phantom{0}}$
EDS Building, Mt Wellington, Auckland	1 Feb 05	2.7	2.7	1 Feb 05	2.7	$\overbrace{\phantom{12322111111111111111111111111111111111$	(2.7)	$\overline{\phantom{0}}$
HSBC Centre, Auckland	1 Feb 05	10.3	10.3	1 Feb 05	10.3	$\overline{\phantom{000000000000000000000000000000000000$	(10.3)
HP House, Auckland	1 Feb 05	12.1	12.1	1 Feb 05	12.1	$\overline{\phantom{0}}$	(12.1)	$\qquad \qquad -$	$\overline{\phantom{0}}$
Westney Industry Park, Mangere, Auckland	1 Feb 05	0.8	2.5	1 Feb 05	0.8	1.7	(2.5)	$\overline{\phantom{m}}$
Total New Zealand		342.2	372.0		378.1		30.0 (230.5)	—	141.7
HONG KONG
Office Parks
Upper Global Gateway	20 Jun 05	126.3	126.3	1 Apr 05	123.4				126.3
Total Hong Kong		126.3	126.3		123.4				126.3
Total Investment Properties			4,748.8 4,967.7		4,818.5		218.9 (261.0)		33.2 4,739.9

Valuations dated 1 February 2005 represent Directors' fair valuations of investment properties at the date of acquisition of Macquarie Goodman Industrial Trust. All other valuations are independent valuations.

*******************

			Consolidated		Parent Entity
	Note	2005 \$M	2004 SM	2005 \$M	2004 SM
NOTE 14 - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Associates	28	120.0	1.8
Joint venture entity	28		$\overline{\phantom{000000000000000000000000000000000000$
		120.0	1.8	$\overline{\phantom{0}}$
NOTE 15 - OTHER FINANCIAL ASSETS
Investments in controlled entities
- Unlisted shares at cost	26		$\overline{\phantom{m}}$	31.5.	31.4
Investments in other entities
- Listed units at fair value (1)		101.0
— Listed units at cost			72.0		26.4
		101.0	72.0	31.5	57.8
NOTE 16 - PLANT AND EQUIPMENT
Leasehold improvements at cost		1.5	1.4
Accumulated amortisation		(0.1)	$\overline{\phantom{000000000000000000000000000000000000$
		1.4	1.4	$\qquad \qquad -$
Plant and equipment at cost		2.7	1.6
Accumulated depreciation		(0.8)	(0.2)
		1.9	1.4	$\overline{\phantom{0}}$
Total plant and equipment at net book value		3.3	2.8	-
Reconciliation
Leasehold improvements
Carrying amount at beginning of year		1.4
Additions Amortisation		0.1	1.4
Carrying amount at end of year		(0.1) 1.4	$\overline{\phantom{0}}$
			1.4	-
Plant and equipment
Carrying amount at beginning of year		1.4	0.5
Additions		1.1	1.1
Depreciation		(0.6)	(0.2)	—
Carrying amount at end of year		1.9	1,4	$\qquad \qquad -$
NOTE 17 - INTANGIBLE ASSETS
Management rights at cost		106.6	103.1	68.8	65.3
Provision for diminution in value		(95.4)	$\overline{\phantom{m}}$	(67.8)	$\overbrace{\phantom{12333}}$
Accumulated amortisation		(5.2) 6.0	(4.1) 99.0	(1.0) —	(0.4) 64.9

As a result of the acquisition of Macquarie Goodman Industrial Trust, a provision for diminution in the value of management rights relating to Macquarie Goodman Industrial Trust and its controlled entities is recognised at

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

		Consolidated		Parent Entity
	2005 \$M	2004 SM.	2005 \$M	2004 \$M
NOTE 18 - PAYABLES
Current
Trade creditors	0.9	2.2		0.1
Other creditors and accruals	38.2	7.4	1.6	0.2
Deferred settlements (1)	52.6	$\overline{\phantom{000000000000000000000000000000000000$
	91.7	9.6	1.6	0.3
Non-current
Deferred settlements (1)	19.2
Loans to controlled entities (2)			38.1
Other creditors and accruals	9.3
	28.5		38.1

¹¹ Deferred settlements include amounts for acquisition of ordinary shares in Highbrook Development Limited payable within 12 months (\$20.4 million)
and after 12 months (\$19.2 million). The amounts payable after 12 month (6.49% per annum) at the date of acquisition.

²⁸ Non-current loans to controlled entities are non-interest bearing, with no fixed term of repayment.

NOTE 19 - INTEREST BEARING LIABILITIES

Current
Other loans – deferred payment $(3)$	207.0
Non-current
Bank loans - secured (2)	935.3	79.0	5.7	33.4
Other loans - CMBS $\otimes$	720.9
Other loans - controlled entity			28.0
Lease liabilities		0.1
	1.656.2	79.1	33.7	33.4

(1) Interest bearing deferred payments of \$207 million (2004: nil) relate to the fair value of the deferred payment owed to Commonwealth Managed Investments Limited on the acquisition of Colonial First State Industrial Property Trust in April 2003. The vendor can call for repayment at any time up to 1 April 2006. The liability attracts a coupon rate of 8.4% per annum. The effective interest rate after fair valuation is 6.9% per annum (2004: nil).

Macquarie Goodman has a \$575 million Syndicated Multi-Option Facility, a \$225 million Syndicated Standby Facility and $(2)$ a \$300 million (2004; nil) bridging facility with National Australia Bank Limited and Westpac Banking Corporation. Security is by way of first or second ranking mortgages and charges over various assets. The multi option and standby facilities are available to 30 April 2006 and the bridging facility is available to 31 July 2005. Amounts denominated in foreign currencies are as follows: New Zealand dollars \$144.8 million (2004: nil), Singapore dollars \$34.9 million (2004: nil) and Hong Kong dollars \$85.2 million (2004: nil). Any resulting foreign currency exposure is hedged by property and other assets purchased in the corresponding currency with the proceeds. These facilities were refinanced subsequent to 30 June 2005. Refer to Note 37 for details.

Macquarie Goodman has a further \$37 million Multi-Option Facility with Westpac Banking Corporation, of which \$32 million (2004: \$33.5 million) is denominated in New Zealand dollars. Any resulting foreign currency exposure is hedged by corresponding New Zealand investments purchased with the proceeds. Security is by way of charges over various assets of the Consolidated Entity. The facility expires on 31 December 2005. This facility was refinanced subsequent to 30 June 2005. Refer to Note 37 for details.

A controlled entity has bank loan of \$87.4 million (2004: \$45.6 million) which is denominated in Singapore dollars. Any resulting foreign currency exposure is hedged by corresponding Singapore investments purchased with the proceeds. Security is by way of charges over various assets of the Consolidated Entity. The facility expires on 24 November 2007.

NOTE 19 - INTEREST BEARING LIABILITIES CONTINUED

Controlled entities have bank loans of \$65.8 million (2004: nil) which are denominated in New Zealand dollars. Any resulting foreign currency exposure is hedged by investments in New Zealand assets purchased with the proceeds. Security is by way of charges over the assets of the Consolidated Entity to which the borrowings relate. The sum of \$45.6 million of the facility expires on 28 February 2007 and \$20.2 million on 31 October 2005.

A controlled entity has a bank loan of \$130 million (2004: nil) which is denominated in Hong Kong dollars. Any resulting foreign currency exposure is hedged by corresponding Hong Kong property investments purchased with the proceeds. Security is by way of charges over the property. The facility expires in June 2007.

Macquarie Goodman Industrial Trust has Commercial Mortgage Backed Securities ("CMBS") of \$720.9 million (2004: nil). (3) Standard & Poor's has rated \$510.9 million at AAA, \$109 million at AA and \$101 million at A. Security is by way of first registered mortgages and charges over various assets. The sum of \$233 million of CMBS matures on 7 September 2006 and \$487.9 million on 7 November 2006.

		Consolidated		Parent Entity
	2005 \$M	2004 \$M	2005 \$M	2004 SM.
NOTE 19 - INTEREST BEARING LIABILITIES CONTINUED
Financing Arrangements The Consolidated Entity has access to the following lines of credit:
Total facilities available:
Bank loans	1.414.7	85.6	5.7	39.9
Bank guarantees	5.5	5.1	5.1	5.1
	1,420.2	90.7	10.8	45.0
Facilities utilised at reporting date:
Bank loans	935.3	79.1	5.7	33.4
Bank guarantees	5.5	5.1	5.1	5.1
	940.8	84.2	10.8	38.5
Facilities not utilised at reporting date:
Bank loans	479.4	6.5		6.5
Bank guarantees	479.4	6.5		6.5
NOTE 20 - PROVISIONS
Current
Provisions for distributions to Securityholders Provisions for distributions to RePS Holders	91.0 1.0
Provisions for employee benefits	1.5	0.7
	93.5	0.7
Non-current
Provisions for employee benefits	0.4	0.2
Provision for Distributions to Securityholders
Provisions for distributions	182.1	$\overline{\phantom{0}}$
Payment of distributions	(91.1)
Closing balance	91.0	—	$\overline{\phantom{0}}$
Provisions for Distributions to RePS Holders
Initial provision at the date of stapling	3.4
Provisions for distributions	1.7
Payment of distributions	(4.1)	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$
Closing balance	1.0	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

		Consolidated		Parent Entity
	2005 \$M	2004 SM.	2005 \$M	2004 \$M
NOTE 21 - CONTRIBUTED EQUITY
Parent Entity
1,404,967,533 shares (2004: 273,215,776 ordinary shares) fully paid (1)	166.0	129.6	166.0	129.6
Issue costs	(3.7)	(3.0)	(3.7)	(3.0)
	162.3	126.6	162.3	126.6
Macquarie Goodman Industrial Trust
1,404,967,533 units (2004: nil) fully paid (1)	2,876.7
Issue costs	(61.0)	—
	2,815.7
Total contributed equity	2,978.0	126.6	162.3	126.6

¹³¹ Reconciliation of securities of Macquarie Goodman

Terms and Conditions

Stapled security means one share in the Company stapled to one unit in Macquarie Goodman Industrial Trust.

Holders of Macquarie Goodman stapled securities are entitled to receive dividends and distributions as declared from time to time and are entitled to one vote per stapled security at Shareholders' and Unitholders' meetings. In the event of winding up of Macquarie Goodman, Securityholders rank after creditors and are fully entitled to any proceeds of liquidation. Note 33 provides details of shares/securities issued on exercise of options.

	Macquarie Goodman Consolidated Industrial Entity Trust		Macquarie Goodman Management Limited
	2005 \$M	2005 SM.	2005 \$M	2004 \$M
Balance at 1 July 2004: 273,215,776 shares (1 July 2003: 250,854,945) Contributed value of units in Macquarie Goodman Industrial	129.6		129.6	90.9
Trust immediately prior to stapling	2.347.9	2,347.9
Securities issued
$-4,149,997$ (2004: 4,433,331) from the exercise of options
under the Executive Option Plan	2.4		2.4	2.8
- 13,766,671 issued under the Employee Security	27.7		27.7
Acquisition Plan on 27 January 2005 - 967,794,042 shares issued to Unitholders of Macquarie Goodman
Industrial Trust at one cent per share (1)	9.6		9.6
- Return of capital to Shareholders in the Company for investment in
Macquarie Goodman Industrial Trust pursuant to the merger transaction		29.1	(29.1)
- 10,209,433 issued under the Distribution Reinvestment Plan	38.1	36.2	1.9
$-$ 125,924,433 (2004: 17,927,500) issued under the
Entitlement Offer on 19 May 2005	458.4	435.9	22.5	35.9
- 9,907,181 issued on conversion of RePS during the year	29.0	27.6	1.4
Balance at 30 June 2005 1,404,967,533 securities
(30 June 2004: 273,215,776)	3.042.7	2.876.7	166.0	129.6
Less: issue costs	(64.7)	(61.0)	(3.7)	(3.0)
	2,978.0	2,815.7	162.3	126.6

^ul in order to implement the merger, 967,794,042 shares of Macquarie Goodman Management Limited were issued to Unitholders of Macquarie Goodman
Industrial Trust. The number and value of the shares were calculated using t

		Consolidated		Parent Entity
	2005 \$M	2004 \$M	2005 \$M	2004 \$M
NOTE 22 - RESERVES
Asset revaluation reserve (1)	61.5
Foreign currency translation reserve (2)	0.7	0.1
Capital profits reserve (3)	4.2
RePS repurchase reserve (4)	(20.8)
Total reserves	45.6	0.1

The reserves of Macquarie Goodman are apportioned below between the amounts Securityholders of Macquarie Goodman are entitled by virtue of their Shareholding in Macquarie Goodman Management Limited and their Unitholding in Macquarie Goodman Industrial Trust. .
Literatura kale

	Unitholders Shareholders of of Macquarie Macquarie Goodman Goodman Management Limited Industrial Trust		Securityholders of Macquarie Goodman
Consolidated	2005 \$M	2004 SM.	2005 \$M	2004 \$M	2005 \$M	2004 \$M
(1) Asset Revaluation Reserve
Balance at beginning as at 1 July
Balance at acquisition of Macquarie Goodman Industrial Trust			112.6		112.6
Increases due to revaluations:
- Increase on revaluation of listed investments	37.4				37.4
- Increase on revaluation of investment properties			33.2		33.2
Total revaluation increases for the year	37.4		33.2		70.6
Transfers to retained profits			(121.7)	$\overline{\phantom{0}}$	(121.7)
Balance as at 30 June	37.4		24.1		61.5
(2) Foreign Currency Translation Reserve
Balance at beginning as at 1 July	0.1				0.1
Balance at acquisition of Macquarie Goodman Industrial Trust			(0.9)		(0.9)
Transfers to Capital Profits Reserve			0.9		0.9
Net exchange differences on conversion
of self-sustaining operations		0.1	0.6		0.6	0.1
Balance as at 30 June	0.1	0.1	0.6		0.7	0.1

The foreign currency translation reserve records the foreign currency differences arising from the translation of self-sustaining foreign operations in New Zealand, Singapore and Hong Kong.

(3) Capital Profits Reserve
Balance at beginning as at 1 July
Balance at acquisition of Macquarie Goodman Industrial Trust		5.1	-5.1
Transfers from Foreign Currency Translation Reserve		(0.9)	(0.9)
Balance as at 30 June		4.2	4.2
(4) RePS Repurchase Reserve
Balance at beginning as at 1 July
Premium paid on repurchase of RePS
from Outside Equity Interests		(20.8)	(20.8)

The RePS Repurchase Reserve arises on acquisition of RePS by Macquarie Goodman. The balance will reverse on conversion of the RePS instruments to Macquarie Goodman securities. Refer Note 24 for details.

Total consolidated reserves	. .		$\overline{\phantom{000000000000000000000000000000000000$

The Parent Entity did not hold any Asset Revaluation Reserve, Foreign Currency Translation Reserve, Capital Profits Reserve or RePS Repurchase Reserve at any time during the year or the comparative year.

NOTE 23 - (ACCUMULATED LOSSES)/RETAINED PROFITS

The (accumulated losses)/retained profits of Macquarie Goodman are apportioned below between the amounts Securityholders of Macquarie Goodman are entitled to by virtue of their Shareholding in Macquarie Goodman Management Limited and their Unitholding in Macquarie Goodman Industrial Trust. Unitholders

	Shareholders of Macquarie Goodman Management Limited		Goodman	of Macquarie Industrial Trust	Securityholders of Macquarie Goodman
	2005 \$М	2004 \$M	2005 \$M	2004 \$M	2005 \$M	2004 \$M
Consolidated
Retained profits/(accumulated losses) at 1 July	7.4	(12.5)			7.4	(12.5)
Net (loss)/profit for the year	(84.2)	37.0	134.2		50.0	37.0
Transfers from reserves		$\overline{\phantom{000000000000000000000000000000000000$	137.5		137.5
Dividends/distributions declared	(22.1)	(17.1)	(172.5)	—	(194.6)	(17.1)
(Accumulated losses)/retained profits at 30 June	(98.9)	7.4	99.2		0.3	7.4
Parent Entity
Accumulated losses at 1 July	(21.6)	(26.5)
Net (loss)/profit for the year	(65.0)	22.0
Dividends declared	(22.1)	(17.1)
Accumulated losses at 30 June	(108.7)	(21.6)

	2005 \$M	2004 SM.
NOTE 24 - OUTSIDE EQUITY INTERESTS
Outside equity interests in controlled entities comprise:
RepS (1)	-51.0
Other Shareholders in Highbrook Development Limited	18.2
	69.2

¹¹ Reset Preference Shares ("RePS") are a class of securities that provide preferred distributions fixed for an initial period; the first reset date on the RePS
is scheduled to occur at the discretion of Macquarie Goodma the RePS Holders can convert their securities into predetermined numbers of Macquarie Goodman securities.

Prior to the merger with the Company, Macquarie Goodman Industrial Trust acquired 492,302 RePS from RePS Holders for consideration of \$68.4 million.
This amount was paid in cash subsequent to the acquisition. The Company h Report in the business contains the company was not been an interest of the instruments. The remaining balance of \$20.8 million is recognised
in the RePS Repurchase Reserve.

			Consolidated		Parent Entity
	Note	2005 \$М	2004 \$M	2005 \$M	2004 \$M
NOTE 25 - NOTES TO THE STATEMENTS OF CASH FLOWS
a) Reconciliation of Cash For the purpose of the Statement of Cash Flows, cash includes cash on hand and at bank and short-term deposits at call. Cash as at the end of the year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:
Cash assets	9	7.2	10.3	0.1
b) Reconciliation of Profit/(Loss) from Ordinary Activities after Income Tax to Net Cash Provided by Operating Activities Profit/(loss) from ordinary activities after income tax		51.7	37.0	(65.0)	22.0
Items classified as investing/financing activities
Profit on sale of investment properties		(17.0)
Profit on sale of investment in associate		(0.2)
Interest paid capitalised Merger transaction costs		(22.9) 22.5		22.4
Non-cash items
Depreciation and amortisation		2.1	1.7	1.0	0.4
Diminution in value of management rights		95.4	$\overline{\phantom{0}}$	67.8
Share of net results of associates and joint ventures		(6.3)	(1.3)	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$
Inter-company recharges		$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	(1.1)
Decrease in income taxes payable (Increase) in income taxes receivable		$\overline{ }$ (6.2)	(5.4) (0.1)	$\overline{\phantom{0}}$ (2.2)	(0.3) (0.4)
Net cash provided by operating activities before change in assets and liabilities		119.1	31.9	24.0	20.6
Change in assets and liabilities during the year:
- Decrease/(increase) in receivables		66.0	(24.9)	8.9	(14.6)
- (Increase) in inventories		(24.9)	(1.6)
- (Increase)/decrease in tax assets		(5.4)	0.1	(3.0)	(1.5)
- Decrease/(increase) in other assets - (Decrease)/increase in payables		12.8 (52.2)	(2.2)	1.2	0.1
- (Decrease)/increase in deferred taxes payable		(17.5)	$\overline{\phantom{m}}$ 18.2	(18.2)	18.2
- Increase/(decrease) in provisions		1.0	0.4	—	(0.1)
Net cash inflow from operating activities		98.9	21.9	12.9	22.7

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

NOTE 25 - NOTES TO THE STATEMENTS OF CASH FLOWS CONTINUED

c) Non-Cash Financing and Investing Activities

During the year, the following non-cash transactions were undertaken:

(i) acquisition of Macquarie Goodman Industrial Trust;

• (ii) acquisition of units in Macquarie Goodman Property Trust;
• (iii) settlement of trust distribution liabilities;
• (iv) issue of securities under ESAP;
• (v) return of capital to Shareholders; and
• (vi) conversion of RePS.

(i) Acquisition of Macquarie Goodman Industrial Trust

As a result of the stapling, Macquarie Goodman acquired control of Macquarie Goodman Industrial Trust, effective 1 February 2005. No consideration was paid for the acquisition. The net assets of Macquarie Goodman Industrial Trust at the date of acquisition were as follows:

	\$M
Cash	20.6
Receivables	98.4
Investment properties	4,250.2
Other assets	65.4
	4,434.6
Payables	178.7
Interest bearing liabilities	1,691.0
Provisions	28.9
	1,898.6
Net assets acquired	2,536.0

(ii) Acquisition of Units in Macquarie Goodman Property Trust

As a result of a restructuring of Macquarie Goodman's interests in New Zealand, Macquarie Goodman sold certain properties and investments in New Zealand to Macquarie Goodman Property Trust. The key components of the transaction are summarised as follows:

Properties and investments sold	249.2
Consideration received:
Cash	175.8
Units in Macquarie Goodman Property Trust	73.4
	249.2

(iii) Settlement of Macquarie Goodman Industrial Trust Distribution Liabilities

Since the date of acquisition of Macquarie Goodman Industrial Trust, 10,209,433 stapled securities were allocated under the Distribution Reinvestment Plan for total consideration of \$36.2 million.

(iv) Issue of Securities under ESAP

During the year, 17,916,668 securities were issued as a result of the exercise of options. Of this amount, 13,766,671 securities were issued to the Chief Executive Officer and the other employees under the ESAP. No cash was received on the exercise of these options and \$27.7 million was recognised as a receivable on that date.

(v) Return of Capital to Shareholders

Pursuant to the merger transaction, Macquarie Goodman Management Limited returned capital to its Shareholders at a rate of one cent per share held. The proceeds of this transaction (\$29.1 million) were used as a consideration for units in Macquarie Goodman Industrial Trust acquired by Shareholders of Macquarie Goodman Management Limited.

(vi) Conversion of RePS

During the year, 9,907,181 securities were issued as a result of RePS Holders' conversion elections. The value of the securities issued was \$29 million. No cash was received as a result of these transactions.

			Parent Entity
		2005 \$M	2004 \$M
NOTE 26 - CONTROLLED ENTITIES
a) Particulars in Relation to Controlled Entities
Investments in controlled entities at cost		31.5	31.4
			Interest held
	Country of incorporation	2005 %	2004 %
Controlled companies
Macquarie Goodman Funds Management Limited	Australia	100.0	100.0
Macquarie Goodman Property Services Pty Limited	Australia	100.0	100.0
Macquarie Goodman Development Management Pty Limited	Australia	100.0	100.0
Macquarie Goodman Property Development Pty Limited	Australia	100.0	100.0
Macquarie Goodman Corporate Services Pty Limited	Australia	100.0	100.0
Macquarie Goodman Building Services Pty Limited	Australia Australia	100.0 100.0	100.0 100.0
Macquarie Goodman Industrial Finance Pty Limited Macquarie Goodman Industrial Management Pty Limited	Australia	100.0	100.0
Macquarie Goodman Vineyard Pty Limited (1)	Australia	100.0	50.0
Macquarie Goodman Wholesale Limited (2)	Australia	100.0
Macquarie Goodman Acquisitions Pty Limited (2)	Australia	100.0
Macquarie Goodman Foundation Pty Limited 27	Australia	100.0
Macquarie Goodman Holdings Pty Limited	Australia	100.0
Tallina Pty Limited (3)	Australia	100.0
Tidecard Pty Limited ®	Australia	100.0
Mintbail Pty Limited ®	Australia	100.0
01 Pty Limited (3) 02 Pty Limited (3)	Australia Australia	100.0 100.0
Binary Centre Pty Limited ®	Australia	100.0
Riverside 1 Pty Limited ®	Australia	100.0
Riverside 2 Pty Limited (3)	Australia	100.0
Riverside 3 Pty Limited (3)	Australia	100.0
Tranway Pty Limited ®	Australia	100.0
Tranway No. 1 Pty Limited ®	Australia	100.0
Oxcap Pty Limited ®	Australia	100.0
Ashcap Pty Limited ® CityCap Pty Limited (3)	Australia Australia	100.0 100.0
Suricap Pty Limited ®	Australia	100.0
Clayton Business Park Pty Limited ®	Australia	100.0
Graham Street F Pty Limited ®	Australia	100.0
Clyvina Pty Limited ®	Australia	100.0
Keeto Pty Limited ®	Australia	100.0
MGI HK Pty Limited (2)	Australia	100.0
MGM Acquisitions Pty Limited ®	Australia	100.0
Macquarie Goodman (NZ) Limited	New Zealand	100.0	100.0
Macquarie Goodman Highbrook Limited	New Zealand	100.0	100.0
Highbrook Development Limited	New Zealand	75.0
Macquarie Goodman Property Services (NZ) Limited Yeung UK A Limited	New Zealand Cayman Islands	100.0 100.0	100.0
MGD Asia 29	Cayman Islands	100.0
MGI HK Investment (2)	Cayman Islands	100.0
MGPS Hong Kong Limited ®	Hong Kong	100.0
Comfort Developments Limited	Hong Kong	100.0
Elite Bright Properties Limited	Hong Kong	100.0
MGM Singapore Pte Limited	Singapore	100.0	100.0

12000

^ui Classified as an associate at 30 June 2004.
ⁱⁿ Companies incorporated during the year ended 30 June 2005.
^se Controlled companies of Macquarie Goodman Industrial Trust acquired on 1 February 2005.

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

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

			Interest held
	Country of	2005	2004
	establishment	%
NOTE 26 - CONTROLLED ENTITIES CONTINUED
Controlled unit trusts
Industrial Property Management Trust	Australia	100.0	100.0
Trusts acquired on acquisition of Macquarie Goodman Industrial Trust
Macquarie Goodman Industrial Trust	Australia	100.0
Macquarie Industrial Trust	Australia	100.0
O'Riordan Street Unit Trust	Australia	100.0
Homebush Subtrust	Australia	100.0
Carter Street Trust	Australia	100.0
Penrose Trust	Australia	100.0
Macquarie Goodman Capital Trust	Australia	99.8
- Biloela Street Unit Trust	Australia	99.8
- BDE Unit Trust	Australia	99.8
- Macquarie Goodman Commercial Property Trust	Australia	99.8
— Waterloo Road Office Trust	Australia	99.8
- Cambridge Office Park Trust	Australia	99.8
- Liverpool Road Trust	Australia	99.8
- Saunders Street Trust	Australia	99.8
- 828 Pacific Highway Trust	Australia	99.8
Binary No. 1 Trust	Australia	100.0
- Binary No. 2 Trust	Australia	100.0
Riverside No. 4 Unit Trust (1)	Australia
- Riverside No. 3 Unit Trust (1)	Australia
- Riverside No. 2 Unit Trust (1)	Australia
— Riverside Unit Trust 01	Australia	$\overline{\phantom{m}}$
Orion Road Trust	Australia	100.0
Hill Road Trust	Australia	100.0 100.0
Clayton 1 Trust - Clayton 2 Trust	Australia Australia	100.0
- Clayton 3 Trust	Australia	100.0
Port Melbourne 1 Trust	Australia	100.0
- Port Melbourne 2 Trust	Australia	100.0
$-$ Port Melbourne 3 Trust	Australia	100.0
Smithfield Property Trust	Australia	100.0
- Smithfield Property Trust No. 2	Australia	100.0	$\overline{\phantom{0}}$
MGA Industrial Portfolio Trust	Australia	100.0
- MGA Industrial Subsidiary Trust No. 1	Australia	100.0
- MGA Industrial Subsidiary Trust No. 2	Australia	100.0
- MGA Industrial Subsidiary Trust No. 3	Australia	100.0
MGA Direct Property Trust	Australia	100.0
Thomas Trust	Australia	100.0
Macquarie Goodman Thomas Trust	Australia	100.0
Euston Road Trust	Australia	100.0
- Euston Road Subtrust	Australia	100.0
Highbrook Trust	Australia	100.0
MG Holding Trust No. 1 (formerly Liverpool Showgrounds Trust)	Australia	100.0
- Regal Business Park Trust (formerly Liverpool Showgrounds Subtrust)	Australia	100.0

***************************************

***************************************

			Interest held
	Country of establishment	2005 %	2004 %
NOTE 26 - CONTROLLED ENTITIES CONTINUED
Trusts acquired subsequent to the acquisition of Macquarie Goodman Industrial Trust
TMG Property Fund (1)	Australia	100.0	$\overline{\phantom{000000000000000000000000000000000000$
MGM Holding Trust (1)	Australia	100.0
Macquarie Goodman Wholesale Trust (1)	Australia	100.0
$-$ MG Wholesale Subtrust (1)	Australia	100.0
St Leonards Trust (1)	Australia	100.0
Wacol Trust (1)	Australia	100.0
IBC Trust (1)	Australia	100.0
Q Stores Trust (1)	Australia	100.0
Woolsheds Trust (1)	Australia	100.0

⁰³ Trusts established during the year ended 30 June 2005.

b) Acquisition of Controlled Entities

Name	Date acquired	Consolidated Entity's Interest	Consideration SM.
Macquarie Goodman Industrial Trust and its controlled entities	1 Feb 05.	100
Highbrook Development Limited (1)	$1$ Feb 05	75	30.3
Comfort Development Limited	20 Jun 05	100	81.6
Elite Bright Properties Limited	20 Jun 05	100	44.4

¹³ The Company acquired a 37.5% interest in Highbrook Development Limited on 19 November 2004. As a result of the acquisition of Macquarie Goodman Industrial
Trust, Macquarie Goodman's interest in Highbrook Development L

c) Amounts Paid to Outside Equity Interests

Prior to the merger, Macquarie Goodman Industrial Trust acquired 492,302 RePS from RePS Holders for consideration of \$68.4 million. This is included in the amount paid to Outside Equity Interests as the liability was settled by the Consolidated Entity subsequent to the merger.

NOTE 27 - SEGMENT REPORTING

Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, inventories, investment properties (including properties under development) and other intangible assets, net of related provisions. Segment liabilities consist primarily of trade and other creditors and employee benefits. Segment assets and liabilities do not include income taxes.

Segment revenues, expenses and results include transfers between segments. Such transfers are priced on an arm's length basis and are eliminated on consolidation.

As a result of the acquisition of Macquarie Goodman Industrial Trust during the year, property investment has been recognised as an additional industry segment. This segment represents investment in industrial and commercial properties in Australia, New Zealand, Singapore and Hong Kong.

The major products/services from which the below segments (based on the Consolidated Entity's management reporting system) derive revenue are:

Industry segments	Products and services
Property investment	Ownership of properties for investment potential and revenue returns;
Funds management	Management of trusts;
Property services	Property management, leasing services and due diligence works;
Development management	Design, development and project management; and
Other investments	Investments in third party funds managed by Macquarie Goodman or related entities.

	Property ŝМ	Funds investment management SМ	Property services SM.	Development management investments \$M	Other \$M	SM.	Eliminations Consolidated SM.
NOTE 27 - SEGMENT REPORTING CONTINUED
Primary Reporting - Business Segments
2005
External segment reveriue	432.5	13.6	10.5	22.8	7.7		487.1
Internal segment revenue Unallocated revenue	3.5 $\overline{\phantom{0}}$	0.2 $\overline{\phantom{000000000000000000000000000000000000$	6.4 $\overline{\phantom{0}}$	9.6 $\overline{\phantom{000000000000000000000000000000000000$		(18.7) $\overline{\phantom{000000000000000000000000000000000000$	7.4
Total revenue							494.5
Segment result	117.8	12.7	(0.1)	16.7	3.2	(4.1)	146.2
Share of net results of equity
accounted investments	2.1	4.2					6.3
Diminution in value of
management rights Merger transaction expenses							(95.4) (22.5)
Other unallocated revenues and expenses							(1.0)
Profit from ordinary activities before income tax							33.6
Income tax benefit							18.1
Net profit after tax							51.7
Assets
Segment assets	4,854.0	6.9	7.7	36.0	101.0		5,005.6
Equity accounted investments		120.0					120.0
Unallocated assets							45.5
Consolidated total assets							5,171.1
Liabilities
Segment liabilities	1,893.5	101.4	8.4	2.9	64.6		2,070.8
Unallocated liabilities				$\overline{\phantom{0}}$			7.2
Consolidated total liabilities							2,078.0
Acquisitions of
non-current assets	573.5	3.5	1,2				578.2

***************************************

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

	Property \$M	Funds investment management ŝМ	Property services SM.	Development management investments SM.	Other SM	\$M	Eliminations Consolidated SM.
NOTE 27 - SEGMENT REPORTING CONTINUED
Primary Reporting - Business Segments Continued
2004
External segment revenue		39.5	13.9	20.4	3.8		77.6
Unallocated revenue							1.2
Total revenue							78.8
Segment result		31.1	8.1	11.6	0.9		51.7
Share of net results of equity
accounted investments		1.3					1.3
Unallocated revenues and expenses							0.4
Profit from ordinary activities before income tax							53.4
Income tax expense							(16.4)
Net profit after tax							37.0
Assets
Segment assets		113.9	10.7	29.7	72.0		226.3
Equity accounted investments		1.8					1.8
Unallocated assets							13.8
Consolidated total assets							241.9
Liabilities
Segment liabilities		1.0	6.0	2.2	72.2		81.4
Unallocated liabilities		$\overline{\phantom{0}}$		$\overline{\phantom{0}}$			26.4
Consolidated total liabilities							107.8
Acquisitions of non-current assets -		37.4	7.6				45.0

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

NOTE 27 - SEGMENT REPORTING CONTINUED

Geographical Segments

In presenting information on the basis of geographical segments, segment revenue is based on the geographical
location of customers. Segment assets are based on the geographical location of the assets.

	Australia \$M	New Zealand \$M	Asia \$M	Consolidated SM
2005
Revenue (property investment, funds management,
property services and development management)	184.3	16.9	0.2	201.4
Proceeds from sales of assets
(investment properties and other investments)	33.7	249.2		282.9
Distributions received from listed property trusts		2.6	5.1	7.7
Interest income	2.5		$\overline{\phantom{000000000000000000000000000000000000$	2.5
Total revenue	220.5	268.7	5.3	494.5
Share of net results of equity accounted investments		2.7	3.6	6.3
Total	220.5	271.4	8.9	500.8
Assets
Investment properties	4,471.8	141.8	126.3	4,739.9
Investments in listed property trusts			101.0	101.0
Investments accounted for using the equity method		113.7	6.3	120.0
Inventories	30.7			30.7
Intangible assets		6.0		6.0
Other assets	114.9	27.9	30.7	173.5
Total assets	4,617.4	289.4	264.3	5,171.1
Acquisition of non-current assets	273.8	178.1	126.3	578.2
2004
Revenue (funds management, property services
and development management)	70.3	$3.5\,$		73.8
Distributions received from listed property trusts		1.1	2.7	3.8
Interest income	1.2	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$	1.2
Total revenue	71.5	4.6	2.7	78.8
Share of net results of equity accounted investments		$\equiv$	1.3	1.3
Total	71.5	4.6	4.0	80.1
Assets
Investments in listed property trusts		26.4	45.6	72.0
Other assets	158.6	9.3	2.0	169.9
Total assets	158.6	35.7	47.6	241.9
Acquisition of non-current assets	38.5	6.5		45.0

					Consolidated		Parent Entity
				2005 \$M	2004 \$M	2005 \$M	2004 \$M.
	NOTE 28 - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
	Share of net results accounted for using the equity method
$-$ Associates (a)				6.3	1.3
- Joint ventures (b)
				6.3	1,3
Name	Principal activities incorporation	Country of Reporting		date ownership interest	Consolidated ordinary share	carrying amount	Consolidated investment
				2005 %	2004 %	2005 \$M	2004 \$M
Ascendas-MGM Funds
Management Limited (1) Macquarie Goodman	Funds management	Singapore	31 March	40.	40	6.3	1.8
Property Trust (2) Macquarie Goodman	Property investment New Zealand		31 March	30	17.4	113.7
Vineyard Pty Limited ® Auckland Business Park	Development management	Australia	30 June		50.

30 June

120.0

$1.8$

¹³ Ascendas-MGM Funds Management Limited is the manager of A-REIT, a Singapore-based listed property trust.

Pty Limited⁽⁴⁾

⁸⁸ As a result of the Consolidated Entity restructuring its interests in New Zealand during the year, its equity interest in Macquarie Goodman Property
Trust was increased from 17.4% to 30% and reclassified from Other Fi

Property investment New Zealand

^st As a result of the acquisition of Macquarie Goodman Industrial Trust, Macquarie Goodman now controls Macquarie Goodman Vineyard Pty Limited
and this entity is consolidated at 30 June 2005.

¹⁸ As a result of the acquisition of Macquarie Goodman Industrial Trust, Macquarie Goodman acquired a 50% interest in Auckland Business Park Pty Limited.
This interest was subsequently sold as part of Macquarie Goodman's

		Consolidated
	2005	2004
	\$M	SM.
Movements in carrying amount of investments
Carrying amount at beginning of year	1.8	0.5
Reclassification of MGP units, at cost, from Other Financial Assets	26.4
Investments in associates during the year	90.2
Disposal of investment in Auckland Business Park Pty Limited	(4.7)
Share of net results after tax of associates	6.3	1.3
Carrying amount at the end of year	120.0	1.8
Summary of financial position of associates
The aggregate assets and liabilities of associates is as follows:
Assets	172.1	2.7
Liabilities	(52.1)	(0.9)
Net asset equity adjusted	120.0	1.8

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

Name	Principal activities reporting date ownership interest	Joint venture	Consolidated ordinary share		Consolidated investment carrying amount
			2005 %	2004 %	2005 \$M	2004 \$Μ
NOTE 28 - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD CONTINUED.
(b) interests in Joint Venture Entities Macquarie Goodman (Hong Kong) Limited Funds management		31 March	50.0

Results of Joint Venture Entities

The joint venture did not contribute any amount to the Company's or Consolidated Entity's result for the year.

NOTE 29 - INTEREST IN JOINT VENTURE OPERATION

Macquarie Goodman is in a joint venture with The Austral Brick Company Pty Ltd ("Austral") relating to development of the Brickworks site in Sydney.

Under the terms of the Joint Venture Agreement, Macquarie Goodman pays for infrastructure works and has provided Austral with a put and call option which gives Austral the right to require Macquarie Goodman to purchase unsold lots of land and Macquarie Goodman the right to acquire unsold lots of land after specified dates subject to the conditions as outlined in Note 31.

For the year ended 30 June 2005, the joint venture did not contribute any amount to the operating profit of the Company or the Consolidated Entity.

Included in the assets and liabilities of the Company and the Consolidated Entity are the following items which represent the Company's and the Consolidated Entity's interest in the assets and liabilities employed in the joint venture, recorded in accordance with the accounting policies described in Note 1.

		Consolidated		Parent Entity
	2005 \$M	2004 \$M	2005 \$M	2004 \$Μ
Total assets
Trade debtors	1.2
Other assets	6.8
Inventories (1)	26.7
Total liabilities
Trade creditors	(5.3)
Net assets	29.4

¹³¹ Amounts expected to be recovered after 12 months are \$15.3 million.

Refer to Note 31 for details of contingent liabilities.

2004 2005 2005 \$М \$M SM. NOTE 30 - COMMITMENTS			Consolidated	Parent Entity
				2004 SM.
	Capital expenditure commitments
Contracted but not provided for and payable:
Within one year - capital expenditure on investment properties 160.6
	Non-cancellable operating lease commitments
Future operating lease commitments not provided for
in the financial statements and payable:	Within one year	2.1	1.7
	One year or later and no later than five years (1)	5.0	5.5
		7.1	7.2

¹⁵ Includes lease for Levels 9 and 10, 60 Castlereagh Street, Sydney, NSW under a five year agreement expiring 16 November 2008.

Acquisition of Investment Properties

Amounts contracted for the acquisition of investment properties not provided for is \$211.8 million (2004: nil).

Operating Lease Commitments not Provided for in the Financial Statements

• a) Gordon Corporate Centre, Gordon, NSW is subject to a 99 year ground lease that commenced in August 1991. Rent under this lease is 17.5% of net property income, payable monthly in advance.
• b) Chifley Business Park, Mentone, Vic is subject to a sublease to April 2048, with a 49 year option to review. Under the terms of the sublease, rent is 10% of the freehold value of the land, calculated on each fifth anniversary of the sublease. Between these market reviews, rent is reviewed annually subject to consumer price index changes. Rent is subject to abatements of between 50% and 100% until 30 June 2006.

Funding Commitments

A guarantee exists between Macquarie Goodman and the Security Trustee for RePS Holders, such that in the event that Macquarie Goodman Capital Trust has either insufficient amounts to pay the distribution or insufficient funds to pay the face value in the event of a winding up of Macquarie Goodman Capital Trust, Macquarie Goodman will, subject to some limitations, be required to pay the RePS Holders an amount equal to the shortfall. The Consolidated Entity's obligation to deliver securities on conversion is also guaranteed. The amount that Macquarie Goodman is required to pay under the guarantee in respect of distributions will not be greater than the income that Macquarie Goodman Industrial Trust has available to distribute to its Securityholders. The obligations of Macquarie Goodman under the guarantee are subordinated to the claims of Macquarie Goodman's secured creditors.

Contractual Commitments

Under the terms of the agreement for the acquisition of the Upper Global Gateway property, the vendor has an option to repurchase up to 50% of their Hong Kong property interests sold to Macquarie Goodman in the event that a Hong Kong Real Estate Investment Trust is not formed within 30 months of the date Macquarie Goodman acquired the property. This consideration payable is calculated as 50% of the contract acquisition price plus any capital expenditure incurred since the date of acquisition.

NOTE 31 - CONTINGENT LIABILITIES

Contingent Consideration

Under the terms of the Heads of Agreement signed between Macquarie Goodman and Brickworks Limited, Austral has a right to require Macquarie Goodman to take a transfer of certain lots of land if they remain unsold after a specified time. The consideration payable over the duration of the development will be the market price of the unsold saleable lots less a 2.5% discount if the market price is in aggregate less than \$10 million or a 5% discount if it is in aggregate greater than \$10 million.

Bank Guarantees

The Consolidated Entity had contingent liabilities at 30 June 2005 of \$5.5 million (30 June 2004: \$5.1 million) in respect of bank guarantees provided in support of the fulfilment of financial obligations under licence conditions.

Other Guarantees

The Consolidated Entity also has provided a guarantee in support of distribution payments to RePS Holders.

Entities within the Consolidated Entity are, in the normal course of business, called upon to provide guarantees and indemnities in respect of the performance by controlled entities of their contractual and financial obligations. The value of these guarantees and indemnities is indeterminable in amount.

NOTE 32 - DIRECTOR AND EXECUTIVE DISCLOSURES FOR DISCLOSING ENTITIES

Executive Option Plan

Up to the date of the acquisition of Macquarie Goodman Industrial Trust, Macquarie Goodman issued options under the Executive Option Plan, providing for staff to receive options over ordinary shares for no consideration. The ability to exercise the options was conditional on the Consolidated Entity achieving the performance hurdles of a compound annual growth in EPS in Macquarie Goodman of 10% or more since the end of the previously reported 12 month period immediately preceding the date of grant (as reported in the Annual Report or Half Yearly Report of the Consolidated Entity).

From the date of announcement up to the date of approval of the merger, Option Holders had the opportunity to exercise their options regardless of the status of their exercise of conditions. A requirement of the early exercise was that Option Holders use a loan under the ESAP. The loans advanced are on the same conditions as described above. In addition, the security may be forfeited if the performance and vesting conditions attaching to the original Executive options are not met.

ESAP and Executive Option Plan

Subsequent to the acquisition of Macquarie Goodman Industrial Trust, current tax arrangements make it unfeasible to issue options to employees who are resident in Australia for tax purposes. In order that Macquarie Goodman can continue to facilitate these employees' investment in the Consolidated Entity, an ESAP has been launched, the significant features of which are as follows:

$\Rightarrow$ subject to offers to subscribe made from time to time by the Company, eligible employees can acquire securities at the market price prevailing at the time of issue, using funds borrowed from Macquarie Goodman. The terms of the loans are at the discretion of the Directors. Securities may only be acquired during the periods permitted under the Company's policies for employees dealing in the Company's securities. The after-tax amount of any dividends or distributions paid on the securities acquired with the loan must be applied towards payment of interest, if any, and the principal of the loan;

• loans are for periods of up to five years and are repayable at the earliest of the timetable agreed in the loan agreement with the employee, the date the employee ceases to be an employee of Macquarie Goodman or at the time of disposal of the securities by the employee; and

• with the exception of Mr Gregory Goodman, loans to eligible employees are limited recourse to the value of the Macquarie Goodman securities held under the plan.

Total remuneration for all Non-Executive Directors, last voted upon by Shareholders at the Annual General Meeting in 2004, is not to exceed \$950,000 per annum. The amount paid by Macquarie Goodman to Non-Executive Directors for the year was \$459,746. Non-Executive Directors do not receive bonuses nor are they issued options over Macquarie Goodman securities. Directors' remuneration covers all Board activities and membership of required committees throughout the year.

Options over Equity Instruments

Up to the date of the acquisition of Macquarie Goodman Industrial Trust, the options were exercisable on a one-forone basis under the Executive Option Plan. Since the date of acquisition of Macquarie Goodman Industrial Trust, as described more fully below, all options held by employees who were at that time Australian residents for tax purposes were converted to loans from Macquarie Goodman to the individuals to purchase Macquarie Goodman securities.

NOTE 32 - DIRECTOR AND EXECUTIVE DISCLOSURES FOR DISCLOSING ENTITIES CONTINUED

Option Holdings during the Year

The movement during the year in the number of options over Macquarie Goodman securities held, directly, indirectly or beneficially, by each Specified Director and Specified Executive, including their personally related entities, is as follows:

	Held at 1 July 2004	Number of options vested during the year	Number of securities issued on exercise of options	Amount paid/ payable per security S	Held at 30 June 2005
Specified Director
Mr Gregory Goodman	3,333,333	3,333,333	3,333,333	0.5178
	2,000,000	2.000.000	2,000,000	2.5906
Specified Executives
Mr David van Aanholf.	1.000.000	1.000.000	1.000.000	0.5178
	1.000.000	1,000,000	1.000.000	2.5906
Mr Nick Kurtis	133.334	133.334	133,334	0.7955
	100,000	100,000	100,000	0.5178
	1,500,000	1,500,000	1,500,000	2.5906
Mr Michael O'Sullivan	1.250.000	1,250,000	1,250,000	1.2778
Mr Stephen Hawkins	1.000.000	500,000	500,000	1.1568	500,000
Mr John Dakin	500,000				500,000

Equity Holdings and Transactions

The movement during the reporting period in the number of Macquarie Goodman securities held, directly, indirectly or beneficially, by each Specified Director and Specified Executive, including their personally related entities is as follows:

	Shares in Macquarie Goodman Management Limited at 1 July 2004	Securities acquired	Securities disposed	Securities 30 June 2005
Specified Directors
Non-Executive
Mr David Clarke	107,143	99,758		206,901
Dr David Teplitzky
Mr Patrick Allaway		125,400	60,000	65,400
Mr Ian Ferrier
Mr Patrick Goodman (1)	51,688,385	48,811,962		100,500,347
Mr John Harkness
Mr James Hodgkinson	25,715	133,102		158,817
Ms Anne Keating		15,675		15,675
Ms Lynn Wood	10,822	8,162		18,984
Mr Stephen Girdis		1,105		1,105
Mr Bill Moss		97,997		97,997
Executive
Mr Gregory Goodman (1)	53,474,099	54,907,065		108,381,164
Specified Executives
Mr David van Aanholt	1,959,293	1,729,507		3,688,800
Mr Nick Kurtis	275,598	2,033,972	170,000	2,139,570
Mr Michael O'Sullivan	11,152	1,365,358		1,376,510
Mr Stephen Hawkins	524,153	638,661		1,162,814
Mr John Dakin

135 Mr Gregory Goodman and Mr Patrick Goodman together hold 100,500,347 securities through interests associated with them.

NOTE 32 - DIRECTOR AND EXECUTIVE DISCLOSURES FOR DISCLOSING ENTITIES CONTINUED

Analysis of share-based payments granted as remuneration

None of the Non-Executive Directors held any options over securities at any time during the year.

Details of the vesting profile of the securities awarded as remuneration to the Executive Director and each of the five named Executives are detailed below:

		Uptions granted			value yet to vest
	Number	Date	Percentage vested in year	Financial years in which grant vests	Min (1) \$	$Max^{(2)}$ \$
Director
Mr Gregory Goodman	3.333.333	30 Mar 01	100
	2,000,000	28 Oct 03	100
Consolidated Entity
Executives
Mr David van Aanholt	1,000,000	30 Mar 01	100
	1,000,000	28 Oct 03	100
Mr Nick Kurtis	133,334	10 Oct 01	100
	100.000	30 Mar 01	100
	1,500,000	28 Oct 03	100
Mr Michael O'Sullivan	1.250.000	28 Oct 02	100
Mr John Dakin	166.666	23 Jan 04	$\overline{\phantom{0}}$	30 Jun 06	$\overline{\phantom{0}}$	218,330
	166,667	23 Jan 04	$\overline{\phantom{0}}$	30 Jun 07	$\overline{\phantom{0}}$	218,334
	166,667	23 Jan 04	$-$	30 Jun 08		218,334
Mr John Marsh	1.000.000	23 Apr 04	100

$\frac{1}{2}$

القطاعات لقطاعات والمنافذة

TRUE LEA

¹³¹ The minimum value of options yet to vest is nil as the performance criteria may not be met and consequently the option may not vest.

²³ The maximum value of options yet to vest is not determinable as it depends on the market price of Macquarie Goodman securities at the date the option is exercised. The maximum values presented above are based on the assumption that the stapled security price on the date the option is exercised does not exceed \$4.15 for the above grants.

Loans with Specified Director and Specified Executives

	Balance	Balance 1 July 2004 30 June 2005	merest paig and payable in the year 35	піцнезі balance in the year
Specified Director Mr Gregory Goodman		5.325,172	162.512	6.174.051
Specified Executives Mr David van Aanholt. Mr Nick Kurtis Mr Michael O'Sullivan Mr Stephen Hawkins Mr John Dakin		2.662,586 4,048,386 1.094.423	74.891 110.227 33.761	2,880,962 4,050,572 1.609.481
		7,805,395	218.879	8,541,015

Interest on loans to Directors and Executives is charged at 6.5% per annum. The after-tax amount of any dividends or distributions paid on the securities acquired with the loans must be applied towards payment of interest, if any, and the principal of the loan.

Loans are for the periods of up to five years and are repayable earlier on termination of the employee or disposal of the securities. No amounts have been written down or recorded as allowances as the balances are considered fully collectible.

		Consolidated		Parent Entity
	2005 \$М	2004 SM.	2005 \$M	2004 \$M
NOTE 33 - EMPLOYEE BENEFITS
Aggregate liability for employee benefits including on-costs: Current:
- Employee benefits provision	1.5	0.7
Non-current:
- Employee benefits provision	0.4	0.2
Number of employees
Number of employees at year end	23.	181

Options over Unissued Ordinary Securities/Shares

Details of options issued over unissued ordinary shares as at the beginning of the year and movements up to the date of conversion to the ESAP are set out below:

			Options outstanding at beginning of vear	Options issued	Total options exercised and securities issued	Options at end of year shares issued	Options outstanding exercised and
Date granted	Expiry date	Exercise price	2005	2005	2005	2005	2004
13 Dec 99	17 Sep 04	\$0,2291	750,000		750.000		500,000
30 Mar 01	10 Mar 06	\$0.5033(1)	100,000		100,000
30 Mar 01	10 Mar 06	\$0.5178(1)	4.599.999		4,599,999		2,533,334
10 Oct 01	10 Oct 06	\$0.7810 (2)	66.667		66.667
10 Oct 01	10 Oct 06	\$0.7955 (2)	1.966.669		1,833,335	133,334	816,664
13 Dec 01	13 Dec 06	\$1.1568	1,000,000		500,000	500.000	500,000
13 Mar 02	13 Mar 07	\$1,3478	166.667		166,667		83,333
28 Oct 02	28 Oct 07	\$1,2778	1,250,000		1,250,000
28 Oct 03	28 Oct 08	\$2,5906	8.250,000		7,550,000	700,000
23 Jan 04	23 Jan 09	\$2,8400	500.000			500,000
23 Apr 04	23 Apr 09	\$3,7564	1.000.000		1,000,000
23 Jul 04	23 Jul 09	\$3,1859	$\hspace{0.1mm}-\hspace{0.1mm}$	300,000		300,000
23 Jul 04	23 Jul 09	\$3.4448		100,000	100,000
			19,650,002	400.000	17,916,668	2,133,334	4.433.331

¹⁵ Of 4,699,999 options on issue at 1 July 2004, 4,599,999 were exercised prior to the merger. The remaining 100,000 options were exercised at the revised exercise price of \$0.5033.

²⁸ Of 2,033,336 options on issue at 1 July 2004, 1,966,669 were exercised prior to the merger. The remaining 66,667 options were exercised at the revised exercise price of \$0.7810.

During the year, the vesting conditions relating to options held by non-Australian residents were changed and the resulting securities issued are dealt with under the terms of the ESAP. Refer to information set out in the Directors' Report for further details of the ESAP.

The amounts recognised in the financial statements in relation to options exercised during the year were:

			Consolidated		Parent Entity
	Note	2005 æ	2004	2005 \$	2004 SM.
Contributed equity		21 30,174,713 2,814,000 30,077,341			2,814,000

Employee Share Plans

In addition to ESAP, Macquarie Goodman maintains two share plans, the Exempt Employee Share Plan and the Deferred Employee Share Plan, which are available to all eligible employees to acquire ordinary shares in Macquarie Goodman. Macquarie Goodman contributes up to \$500 per employee, with the balance of the cost of shares being paid by the employee. Upon successful approval of the acquisition of Macquarie Goodman Industrial Trust, the provisions of the Employee Share Plans were amended so that they relate to stapled securities. Macquarie Goodman does not intend to grant any further securities under either Employee Share Plan.

NOTE 34 - RELATED PARTY DISCLOSURES

Directors of Macquarie Goodman

The names of the persons holding the position of Director of Macquarie Goodman during the year were:

Mr David Clarke, AO Dr David Teplitzky Mr Gregory Goodman Mr Patrick Allaway (appointed 23 February 2005) Mr Ian Ferrier, AO Mr Patrick Goodman Mr John Harkness (appointed 23 February 2005) Mr James Hodgkinson Ms Anne Keating (appointed 23 February 2005) Ms Lynn Wood (appointed 23 February 2005) Mr Stephen Girdis (Alternate Director for Mr David Clarke and Mr James Hodgkinson) Mr Bill Moss (resigned 13 June 2005).

Transactions with Director Related Entities

The terms and conditions of the transactions with Directors and their Director related entities were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-Director related entities on an arm's length basis.

Macquarie Bank Group

Mr David Clarke, Mr Bill Moss and Mr James Hodgkinson are directors of Macquarie Bank Limited ("MBL"). During the year ended 30 June 2005, a total of \$17,166,098 (2004: \$2,283,304) was paid to MBL in relation to various services provided.

Goodman Holdings Group

Mr Gregory Goodman and Mr Patrick Goodman are Directors and Shareholders in Moorabbin Airport Corporation Pty Limited ("MAC"), the lessor of the Chifley Business Park, Mentone, Victoria. The Consolidated Entity has agreed with MAC to pay all infrastructure costs incurred in developing the Chifley Business Park site. These costs, which totalled \$6,498,732 at 30 June 2005 (2004: \$5,843,679), are to be reimbursed by MAC progressively as the site is developed, leased and rental income is being derived by MAC. To the extent that these costs are not reimbursed progressively, the balance of such costs will be repayable by MAC by 2005 and are secured by a floating charge of certain of the assets of MAC limited to \$2.5 million. Costs totalling \$2 million (2004: \$0.4 million) have been recharged to MAC during the year.

Mr Gregory Goodman and Mr Patrick Goodman are Directors of and Shareholders in the Goodman Holdings Group. During the year, Macquarie Goodman was also reimbursed by the Goodman Holdings Group for a portion of office rental costs to the value of \$67,466 (2004: \$61,638).

During the year, the Consolidated Entity also reimbursed travel costs totalling \$23,997 to a wholly-owned subsidiary of Goodman Holdings Group.

Pooles Rock Wines Pty Limited

On 15 January 2003, Pooles Rock Wines Pty Limited (a Director related entity of Mr David Clarke) entered into a six year lease at CityWest Office Park, Pyrmont, NSW with Macquarie Goodman Industrial Trust. Rent and outgoings from the date Macquarie Goodman acquired Macquarie Goodman Industrial Trust to 30 June 2005 amounted to \$85,095.

Non-Director Related Parties

The classes of non-Director related parties are:

• (a) controlling entity of Macquarie Goodman; (b) wholly-owned controlled entities;
• (c) partly-owned controlled entities;
• (d) commonly controlled entities;
• (e) associates;
• (f) joint venture entities and operations; and

(g) directors of related parties and their personally related entities.

Transactions with Entities in the Wholly-owned Group

Transactions between Macquarie Goodman and other entities in the wholly-owned group during the years ended 30 June 2005 and 2004 included the following:

(a) payment of dividends to Macquarie Goodman; (b) loans advanced by/to Macquarie Goodman; (c) sale of management rights; (d) fees for services charged by Macquarie Goodman; and (e) interest charged by/to Macquarie Goodman.

All of the above transactions were made on normal commercial terms and conditions with the exception of certain loans which are interest free and have no specified time period for repayment.

Macquarie Goodman is the head entity in the tax consolidated group comprising all Australian wholly-owned subsidiaries of Macquarie Goodman Management Limited. The head entity recognises all of the current and deferred tax assets and liabilities of the tax consolidated group (after elimination of intra-group transactions). The assets and liabilities arising under the tax funding arrangement are recognised as inter-company assets and liabilities.

Aggregate amounts included in the determination of net profit after income tax that resulted from transactions with entities in the wholly-owned group are disclosed in the Statement of Financial Performance and Notes 3 and 4.

Aggregate amounts receivable and payable from entities in the wholly-owned group at balance date are disclosed in Notes 10 and 18.

NOTE 34 - RELATED PARTY DISCLOSURES CONTINUED

Macquarie Goodman Industrial Trust and its Controlled Entities

A subsidiary of Macquarie Goodman is the Responsible Entity for Macquarie Goodman Industrial Trust. Up to the date of acquisition by Macquarie Goodman of Macquarie Goodman Industrial Trust, the Consolidated Entity earned a majority of its revenues from Macquarie Goodman Industrial Trust. During the year and up to the date of its acquisition, the following transactions took place with Macquarie Goodman Industrial Trust:

		Consolidated
	2005 \$	2004 \$
Revenue Earned from Macquarie Goodman Industrial Trust
Performance fee (1)	$\overline{\phantom{m}}$	17,151,752
Management fees (in relation to acting as Responsible Entity)	10,184,023	16.430.795
Trustee fees (in relation to acting as Responsible Entity).	687,846	1.122.870
Property services fees (including property management, leasing and due diligence work)	8,722,721	12,793,879
Development and project fees (including development management)	16,277,445	19,395,085
	35,872,035	66,894,381
Expenses Reimbursed by Macquarie Goodman Industrial Trust
Building supervisor costs	1.136.694	1,534,323
Responsible Entity costs	100.625	235,539
	1,237,319	1,769,862

¹³ Subsequent to the merger transaction, the performance fee receivable from Macquarie Goodman industrial Trust

in respect of the half year ended 31 December 2003 was waived by the Company.

An amount of \$2,621,514 representing a portion of the selling price (including interest) in relation to a property sold to Macquarie Goodman Industrial Trust during 2001, has been deferred for up to five years. The amount is repayable with interest at commercial rates as tenanted developments are completed. Total interest receivable during the year up to the date of acquisition was \$510,825 (2004: \$706,000).

Macquarie Goodman Property Trust and its Controlled Entities

A company in the wholly-owned group is the Manager of Macquarie Goodman Property Trust ("MGP"). During the year, the following transactions took place with MGP:

Revenue Earned from MGP

Sale of investment properties to MGP Management fees in relation to acting as a Manager of MGP	250.651.362 1.726.569	711.960
Property services fees (including property management, leasing and due diligence work)	1.049.499	794.668
Development and project fees (including development management)	1.727.780.	19.850
	255,155,210	1,526,478

Dealings between the Consolidated Entity and other related parties are on normal commercial terms and conditions. All material dealings are, where appropriate, appraised by qualified external parties to ensure they are at commercial market rates.

Brickworks Joint Venture

During the year, the Consolidated Entity paid \$20.5 million to its fellow venturer in respect of costs incurred in the development of the M7 Business Hub. The Consolidated Entity also charged fees to the Joint Venture totalling \$2.4 million at 30 June 2005 (2004: nil).

Ascendas-MGM Funds Management Limited ("AMFM")

During the year, the Consolidated Entity and AMFM each charged expenses to the other party for costs incurred in relation to their operations. The net amount reimbursed to Macquarie Goodman by AMFM was \$5,504 (2004: \$563,134). As at 30 June 2005, the outstanding balance to AMFM is \$644 (2004: \$109,143).

Joint Venture with MBL

During the year, the Consolidated Entity has recharged fees to the joint venture with MBL totalling \$567,767. As at 30 June 2005, the outstanding balance due to Macquarie Goodman is \$567,767 (2004: nil).

NOTE 35 - ADDITIONAL FINANCIAL INSTRUMENTS DISCLOSURE

a) Interest Rate Risk

The Consolidated Entity enters into interest rate swaps to manage cash flow risks associated with the interest rates on borrowings that are floating. The maturity dates of the interest rate swap contracts are principally between December 2005 and April 2013. The interest rate swap contracts are for 90 and 180 day intervals and involve quarterly and semi-annual payments or receipts of the net amount of interest. At 30 June 2005, the fixed rates varied from 1.8% per annum to 6.7% per annum and the floating rates were at bank bill rates plus a credit margin.

The Consolidated Entity's exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and financial liabilities are set out below:

	Note	Weighted average rate pa (1)	Floating interest interest rate \$M	Fixed interest maturing in 1 vear or less \$M	1 to 5 vears \$M	Non- interest bearing \$M	Total \$M
2005
Financial assets
Cash assets	9	3.53%	7.2				7.2
Receivables	10	6.32%	31.4			64.8	96.2
Other financial assets	15, 6(b)					107.3	107.3
			38.6	—	—	172.1	210.7
Financial liabilities
Payables	18	6.49%		20.4	19.2	80.6	120.2
Provisions	20, 33					93.9	93.9
Bank and other loans	19	6.23%	1,435.3	207.0	220.9	$\overbrace{\qquad \qquad }^{}$	1,863.2
			1,435.3	227.4	240.1	174.5	2,077.3
Interest rate swaps (2)			(853.7)		853.7	$\overline{\phantom{0}}$
2004
Financial assets
Cash assets	9	4.4%	10.3				10.3
Receivables	10	6.3%	12.1			30.3	42.4
Other financial assets	15		$\overline{\phantom{000000000000000000000000000000000000$			72.0	72.0
			22.4	—	—	102.3	124.7
Financial liabilities
Payables	18					9.6	9.6
Provisions	20					0.9	0.9
Lease liabilities	19	10.4%			0.1	$\overline{\phantom{000000000000000000000000000000000000$	0.1
Bank loans	19	5.3%	79.0	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	79.0
			79.0		0.1	10.5	89.6
Interest rate swaps (2)			(60.2)		60.2	$\overline{\phantom{0}}$

¹³ After incorporating the effect of interest rate swaps.

^® Notional principal amounts.

NOTE 35 - ADDITIONAL FINANCIAL INSTRUMENTS DISCLOSURE CONTINUED

b) Credit Risk

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

Recognised Financial Instruments

The credit risk on financial assets, excluding investments, of the Consolidated Entity which have been recognised on the Statement of Financial Position, is the carrying amount, net of any provision for doubtful debts.

The Consolidated Entity has a policy of assessing the creditworthiness of all potential tenants and is not materially exposed to any one tenant or industry group. The Consolidated Entity evaluates all tenants' perceived credit risk and may require the lodgement of rental bonds or bank guarantees, as appropriate, to reduce credit risk. In addition, all rents are payable monthly in advance.

The Consolidated Entity minimises credit risk by dealing with major financial institutions in relation to cash and short-term borrowings.

Concentration of credit risk exists from time to time on trade debtors for the proceeds of disposals of investment properties. The credit risk is minimised as legal title is paid only upon receipt of proceeds for the sale of those assets.

Unrecognised Financial Instruments

The credit risk in relation to derivative contracts which have not been recognised in the Statement of Financial Position is minimal, as counterparties are generally large banks.

Credit risk on swap contracts is limited to the net amount to be received from or paid to counterparties on contracts that are favourable or unfavourable to the Consolidated Entity. The accrued amount payable by the Consolidated Entity at 30 June 2005 was \$0.1 million (2004: nil).

c) Foreign Exchange Risk

The Consolidated Entity is exposed to foreign exchange risk through its investments in New Zealand, Singapore and Hong Kong. Foreign exchange risk represents the loss that would be recognised from fluctuations in foreign currency prices against the Australian dollar.

Macquarie Goodman has entered into forward foreign exchange contracts to hedge a proportion of the income received from its New Zealand and Singapore investments. The Consolidated Entity has contracts to sell 15.4 million New Zealand dollars and sell 11.4 million Singapore dollars. The contracts settle at quarterly intervals from August 2005 to June 2008. The net fair value gain on forward foreign exchange contracts at 30 June 2005 was \$0.3 million.

d) Net Fair Value of Financial Assets and Liabilities Recognised Financial Instruments

The Consolidated Entity's financial assets and flabilities included in the Statement of Financial Position are carried at amounts that approximate net fair value. The valuation approach equates to the historical costs of the underlying transactions. Net fair values of assets and liabilities are reviewed by the Directors on a regular basis.

Unrecognised Financial Instruments

The loss on net fair value of interest rate swaps not recognised on the Statement of Financial Position as at the reporting date is \$13.9 million (2004; gain of \$0.1 million).

For reporting periods beginning on or after 1 January 2005, the Consolidated Entity must comply with Australian equivalents to International Financial Reporting Standards ("AIFRS") as issued by the Australian Accounting Standards Board.

This Financial Report has been prepared in accordance with Australian accounting standards and other financial reporting requirements (Australian Generally Accepted Accounting Principles ("Australian GAAP" or "AGAAP")) applicable for reporting periods ended 30 June 2005.

Transition Management

A formal implementation project has been established to assess the impact of transition to AIFRS and to achieve compliance with AIFRS reporting for the financial year commencing 1 July 2005.

Assessment and Planning Phase

The assessment and planning phase generated a high level overview of the impacts of conversion to AIFRS on existing accounting and reporting policies and procedures, systems and processes, business structures and staff.

The assessment and planning phase is complete as at 30 June 2005.

Design Phase

The design phase for the transition to AIFRS included:

• formulation of revised accounting policies for compliance with AIFRS requirements;

• $\rightarrow$ identification of potential financial impacts as at the transition date and for subsequent reporting periods prior to adoption of AIFRS; and
• $\rightarrow$ development of revised AIFRS disclosures.

The design phase is substantially complete as at 30 June 2005.

NOTE 36 - IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

Implementation Phase

The implementation phase includes implementation of identified changes to accounting and business procedures, to enable the Consolidated Entity to generate the required reconciliations and disclosures of AASB 1 First Time Adoption of Australian Equivalents to International Financial Reporting Standards.

This phase is substantially complete as at 30 June 2005.

Impact of Transition to AIFRS

The impact of transition to AIFRS, including the transitional adjustments disclosed in the reconciliations from current Australian GAAP to AIFRS, and the selection and application of AIFRS accounting policies, are based on AIFRS standards that management expects to be in place, or where applicable, early adopted, when preparing the first complete AIFRS financial report (being the half year ending 31 December 2005). Only a complete set of financial statements and notes together with comparative balances can provide a true and fair presentation of the Company's and Consolidated Entity's financial position, results of operations and cash flows in accordance with AIFRS. This Note provides only a summary therefore, further disclosure and explanations will be required in the first complete AIFRS financial report for a true and fair view to be presented under AIFRS.

There is a significant amount of judgement involved in the preparation of the reconciliations from current Australian GAAP to AIFRS consequently, the final reconciliations presented in the first financial report prepared in accordance with AIFRS may vary materially from the reconciliations provided in this Note.

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

• $\Rightarrow$ changes in financial reporting requirements that are relevant to the Company's and Consolidated Entity's first complete AIFRS financial report arising from new or revised accounting standards or interpretations issued by the Australian Accounting Standards Board subsequent to the preparation of the 30 June 2005 Financial Report; and
• $\rightarrow$ additional quidance on the application of AIFRS in a particular industry or to a particular transaction.

The significant changes in accounting policies expected to be adopted in preparing the AIFRS reconciliations and under AASB 1 are set out below:

a) Investment Property Revaluations

Under AIFRS, revaluation increments and decrements relating to investment properties are recognised in the operating results in the Statement of Financial Performance whereas under Australian GAAP they are recognised through the asset revaluation reserve. The increase in the fair value of the investment properties recognised by the Consolidated Entity since the date of acquisition of Macquarie Goodman Industrial Trust is \$33.2 million. The net profit after tax for the year ended 30 June 2005 determined under AIFRS is increased by \$33.2 million due to the inclusion of net revaluation increments.

b) Fixed Increases in Lease Rentals under AIFRS

The Consolidated Entity has entered into lease arrangements with customers which allow for fixed annual increases in rental income. Under AIFRS, the Consolidated Entity be required to recognise the total lease rental income evenly over the life of the lease. As a result, lease rental income for the year ended 30 June 2005 is increased by \$4.5 million. No adjustments are expected for the Company.

c) Loan Facilities Refinanced

Under current Australian GAAP, Ioan facilities totalling \$756 million which are due to expire within 12 months of the balance sheet date have been treated as non-current liabilities. Under AIFRS, the Consolidated Entity will be required to reclassify these amounts as current liabilities. No adjustment is required for the Company.

d) Management Rights

Management rights acquired will be stated at cost less accumulated amortisation and impairment losses.

Under AIFRS, intangible assets relating to management rights over fixed life trusts are amortised and annually tested for impairment. No impairment losses are expected for either the Consolidated Entity or Parent Entity for the year ended 30 June 2005.

NOTE 36 - IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS CONTINUED

el Taxation

On transition to AIFRS, the balance sheet method of tax effect accounting will be adopted, rather than the income statement method applied currently under Australian GAAP.

Under the balance sheet approach, income tax on the profit and loss for the year comprises current and deferred taxes. Income tax will be recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it will be recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at reporting date, and any adjustments to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences will not be provided in respect of either the initial recognition of assets and liabilities that affect neither accounting or taxable profit, or differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided will be based on the expected manner of realisation of the asset or settlement of the liability, using tax rates enacted or substantively enacted at reporting date.

A deferred tax asset will be recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets will be reduced to the extent it is no longer probable that the related tax benefit will be realised.

The expected impact of the change in basis on the tax expense for the financial year ended 30 June 2005 is an Increase in tax expense by \$4.3 million for the Consolidated Entity and nil for the Company. Deferred tax assets and deferred tax liabilities of the Consolidated Entity are expected to increase by \$0.3 million and \$14.8 million respectively as at 30 June 2005. For the Company, the expected impact at 30 June 2005 is an increase in deferred tax assets of nil and an increase in deferred tax liabilities of nil.

f) Share Based Payments

Under current Australian GAAP, no expense is recognised for options issued to employees.

Under AIFRS, the fair value of options granted must be recognised as an employee benefits expense with a corresponding increase in equity. The fair value will be measured at grant date taking into account market performance conditions only, and spread over the vesting period during which the employees become unconditionally entitied to the options. The amount recognised as an expense will be adjusted to reflect the actual number of options that vest except where forfeiture is due to market related conditions.

No employee benefits expense has been recognised for the year ended 30 June 2005 by either the Consolidated Entity or the Company as the value of the options exercised is recoverable from the employees under the ESAP.

g) Business Combinations

No change in accounting policy for the merger has been recognised in the reconciliations between AGAAP and AIFRS set out below. Whilst discussions are ongoing between the Australian Accounting Standards Board and its associated bodies in relation to the treatment of stapling transactions under AIFRS, the Directors believe that the presentation of the merger under AIFRS is appropriate under both AGAAP and AIFRS. However, should the Australian Accounting Standards Board or its associated bodies issue definitive guidance on this matter, changes may be required to Macquarie Goodman's current accounting policy.

h) Financial Instruments

Macquarie Goodman has taken advantage of the election in AASB 1 to not restate comparatives for AASB 132 Financial Instruments: Disclosure and Presentation or AASB 139 Financial Instruments: Recognition and Measurement. There are no expected adjustments in relation to these standards for 1 July 2004 or the financial year ended 30 June 2005 as current Australian GAAP is expected to continue to apply.

The Consolidated Entity has followed Australian GAAP in accounting for financial instruments within the scope of AASB 132 and AASB 139 as described in Note 1 Statement of Significant Accounting Policies.

As at 1 July 2005 the expected adjustments are:

• under current Australian GAAP, not all derivatives were recognised on the balance sheet. On adoption of AASB 139, all derivatives will be recognised at fair value on the balance sheet. The effect on the Consolidated Entity is to decrease fair value derivatives and the hedging reserve by \$13.9 million arising principally from the fair value of interest rate swaps at 30 June 2005. No adjustment is expected for the Company.

• currently under Australian GAAP, the RePS are classified as equity and distributions to RePS Holders are treated as payments to outside equity interests. Under AIFRS, RePS are regarded as a compounded financial instrument. A portion of the instrument will be recognised as debt and classified as interest bearing liabilities. Distributions to RePS Holders will include an amount which will be treated as interest expense. The net profit after tax for the year ended 30 June 2005 determined under AIFRS will be reduced by the after tax amount attributed to interest for the period. The amount of this adjustment has not been quantified at this time.

NOTE 36 - IMPACT OF ADOPTING AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS CONTINUED

AGAAP \$M	impact \$M	AIFRS \$M	AGAAP SM.	impact \$M	AIFRS \$M
			26.1		26.1
5,015.4	0.8	5,016.2	100.9	$\overline{\phantom{0}}$	100.9
5,171.1	0.8	5,171.9	127.0		127.0
					(1.6)
(1,685.8)	743.3	(942.5)	(71.8)		(71.8)
(2,078.0)		(2,090.7)	(73.4)		(73.4)
3,093.1		3,081.2	53.6		53.6
2,978.0	0.1	2,978.1	162.3	$\qquad \qquad \longleftarrow$	162.3
45.6	(39.3)	6.3
0.3	27.3	27.6	(108.7)	$\overline{\phantom{m}}$	(108.7)
69.2		69.2
3,093.1	(11.9)	3,081.2	53.6		53.6
	155.7 (392.2)	Transition	30 June 2005 Consolidated 155.7 $(756.0)$ $(1,148.2)$ (12.7) (11.9)	(1.6)	30 June 2005 Parent Entity Transition

	---------------		.
	Retained profits Reserves \$M	SM.	Accumulated losses Reserves \$M	SM.
Reconciliation of retained profits/(accumulated losses) and other reserves under AIFRS for the year ended 30 June 2005
Balance as at 30 June 2005 under AGAAP	0.3	45.6	(108.7)
AIFRS reconciliation as at 1 July 2004 - deferred tax adjustment Adjustments in respect of current year's performance	2.0
- Revaluation of investment properties	33.1	(33.2)
- Deferred tax adjustments	(4.3)	(10.5)
- Straight line treatment for fixed increase leases	4.5
— Other adjustments	(3.7)
- Transfer of other net reserves to retained profits	(4.2)	4.2
Balance as at 30 June 2005 under AIFRS	27.7	6.1	(108.7)

NOTE 37 - EVENTS SUBSEQUENT TO REPORTING DATE

Subsequent to the year end, Macquarie Goodman agreed terms with its bankers for the refinancing of certain of its bank debts. Existing facilities totalling \$ 1.1 billion were replaced with new facilities totaling \$1.4 billion.

Since the balance sheet date, the Consolidated Entity has exchanged and/or settled contracts for the purchase of properties in Australia, New Zealand, Singapore and Hong Kong for \$380.4 million, and has exchanged and settled contracts for the sale of properties in Australia for \$32.9 million.

The Directors are not aware of any matters or circumstances not otherwise dealt with in this Financial Report or the Directors' Report that have significantly affected or may significantly affect the operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in the financial year subsequent to the year ended 30 June 2005.

DIRECTORS' DECLARATION

In the opinion of the Directors of Macquarie Goodman Management Limited ("Macquarie Goodman"):

• (a) the financial statements and the accompanying notes, are in accordance with the Corporations Act 2001, including:
• (i) giving a true and fair view of the financial position of Macquarie Goodman and the Consolidated Entity as at 30 June 2005 and of their performance, as represented by the results of their operations and their cash flows, for the year ended on that date; and
• (ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001.
• (b) there are reasonable grounds to believe that Macquarie Goodman will be able to pay its debts as and when they become due and payable.
• (c) The Directors of Macquarie Goodman have received a declaration from the Chief Executive Officer and Chief Financial Officer stating that the financial statements of Macquarie Goodman Management Limited and its controlled entities present a true and fair view, in all material respects, of Macquarie Goodman Management Limited's financial condition and operational results and are in accordance with the relevant accounting standards.

Signed in accordance with a resolution of the Directors:

David Clarke, AO Chairman Sydney, 18 August 2005

Gregory Goodman Chief Executive Officer

SCOPE

We have audited the Financial Report of Macquarie Goodman Management Limited for the financial year ended 30 June 2005, consisting of the Statements of Financial Performance, Statements of Financial Position, Statements of Cash Flows, accompanying notes 1 to 36, the disclosures made in accordance with the Corporations Regulations 2001, including the disclosures as required by AASB 1046 Director and Executive Disclosures by Disclosing Entities, in the "Remuneration Report" in pages 55 to 60 of the Directors' Report ("remuneration disclosures") and the Directors' declaration, set out on page 115. The financial report includes the consolidated financial statements of the Consolidated Entity, comprising the Company and the entities it controlled at the end of the year or from time to time during the financial year. The Company's Directors are responsible for the Financial Report, including the remuneration disclosures. We have conducted an independent audit of the financial report, including the remuneration disclosures, in order to express an opinion on it to the members of the Company.

Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the Financial Report is free of material misstatement and the remuneration disclosures comply with Accounting Standard AASB 1046 and the Corporations Regulations 2001. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the Financial Report, including the remuneration disclosures, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material respects, the Financial Report is presented fairly in accordance with Accounting Standards and other mandatory professional reporting requirements in Australia and statutory requirements so as to present a view which is consistent with our understanding of the Company's and the Consolidated Entity's financial position, and performance as represented by the results of their operations and their cash flows and whether the remuneration disclosures comply with Accounting Standard AASB 1046 and the Corporations Regulations 2001.

The audit opinion expressed in this report has been formed on the above basis.

Audit opinion

In our opinion, the Financial Report including the remuneration disclosures of Macquarie Goodman Management Limited are in accordance with:

• a) the Corporations Act 2001, including:
• i. giving a true and fair view of the Company's financial position as at 30 June 2005 and of its performance for the financial year ended on that date; and
• ii. complying with Accounting Standards in Australia, including AASB 1046 Director and Executive Disclosures by Disclosing Entities, and the Corporations Regulations 2001; and

b) other mandatory financial reporting requirements in Australia.

Р М Нека Partner Sydney, 18 August 2005

KPMG, AN AUSTRALIAN PARTNERSHIP, IS PART OF THE KPMG INTERNATIONAL NETWORK, KPMG INTERNATIONAL IS A SWISS COOPERATIVE.

Top 20 Securityholders as at 29 August 2005			Numbers of securities held % of total issued securities
1	Westpac Custodian Nominees Ltd	169,791,585	11.98
2	National Nominees Limited	142,400,509	10.04
3	J P Morgan Nominees Australia Limited	137,116,662	9.67
4	Citicorp Nominees Pty Limited	130,497,464	9.20
5	Macquarie Bank Limited	118,676,616	8.37
6	Goodman Holding Group	109,233,360	7.70
7	ANZ Nominees Limited	80,043,480	5.65
8	Cogent Nominees Pty Limited	59,769,017	4.22
9	RBC Global Services Australia Nominees Pty Limited	35,446,190	2.50
10.	Questor Financial Services Limited	29,337,277	2.07
11	Bond Street Custodian Limited	26,082,049	1.84
	12 AMP Life Limited	20,486,664	1.44
13.	Queensland Investment Corp	18,316,808	1.29
	14 HSBC Custody Nominees (Australia) Limited	13,544,596	0.96
15.	Mr Peter Menzies, Ms Mary Mahoney and Mr Peter Mahoney	12,685,298	0.89
16.	Westpac Financial Services Limited	11,482,485	0.81
17.	Victorian Workcover Authority	9,512,755	0.67
18.	Mormart Pty Ltd	9,484,472	0.67
	19 Transport Accident Commission	8,016,984	0.57
20.	Suncorp Custodian Services Pty Limited	6,231,782	0.44
	Securities held by top 20 Security holders	1,148,156,053	80.98
	Balance of securities held	269,641,573	19.02
	Total issued securities	1,417,797,626	100.00

Securitynolder Distribution as at 29 August 2005	Number of Security holders	Number of securities
$1 - 1.000$	1.641	743.937
$1.001 - 5.000$	7,868	24.223.861
$5.001 - 10.000$	6,938	50.247.397
$10.001 - 100.000$	6.300	125,989,918
100,001 and above	240	1,216,592,513
Total	22,987	1,417,797,626
Securityholder with less than a marketable parcel	325	13,420
Substantial Securityholder as at 29 August 2005		Numbers of Securities held
Macquarie Bank Limited		118,676,616
Goodman Holding Group		109.233.360

Goodman Holding Group 2 Colonial First State Global Asset Management (Group) 3

Voting Rights

On a show of hands every person present who is a Voting Member shall have one vote and on a poll every person present who is a Voting Member shall have one vote for each security that the Voting Member holds or represents (as the case may be).

87,444,324

PROPERTY TRUSTS MANAGED BY MACQUARIE GOODMAN

Macquarie Goodman Capital Trust⁽¹⁾

	Indust ria.
Number of Properties
Total Assets	A\$2.05 billion
RePS Price (as at 30 June 2005)	AS140.40
RePS Yield (as at 30 June 2005)
ASX Code

¹¹ MGA is a subtrust of MGI. Based on MGA's results for the financial year ended 30 June 2005.

Macquarie Goodman Property Trust⁽¹⁾

Number of Properties
Total Assets	7\$541.8 million
Unit Price (as at 31 March 2005)	---------------------------------------
Yield (as at 31 March 2005).	1በ 2%
NZX Code
19 MWW is Estad an this Mail: Factoring Fisherman Clarent an MOON care the factbook fundated compared Of Moonk OONE

^s MGP is listed on the New Zealand Exchange. Based on MGP's results for the financial year ended 31 March 2005.

Ascendas Real Estate Investment Trust⁽¹⁾

	Business/Industrial/Logistics
Number of Properties
Total Assets
Unit Price (as at 31 March 2005)
Yield (as at 31 March 2005)
SGX Code	Ascendasreit

^m Listed on the Singapore Stock Exchange. Managed by Ascendas-MGM Funds Management Limited, which is a
60/40 joint venture between Ascendas Investment Pte Etd and Macquarie Goodman Management Limited. Based
on A-REIT's r

For more information on investing in a Macquarie Goodman product, please visit www.macquariegoodman.com, call 1300 723 040 or email us at info@macquariegoodman.com.au. For A-REIT, please visit www.a-reit.com.

PROPERTY TRUSTS MANAGED BY ASSOCIATES OF MACQUARIE GOODMAN

Macquarie CountryWide Trust
Rector
Number of Properties	249
Assets under Management
Current Unit Price (as at 30 June 2005)	\$1.92
Current Yield (as at 30 June 2005)
ASX Code	MCM
13 Financíal year 2006 forecast vield.

Macquarie DDR Trust

	Retail (US community shopping centres)
Number of Properties
Assets under Management	SP 6 hillion
Current Unit Price (as at 30 June 2005)
Current Yield (as at 30 June 2005)	8. 1%
ASX Code

Macquarie Leisure Trust Group

Number of Properties
Assets under Management
Current Security Price (as at 30 June 2005)
Current Yield (as at 30 June 2005)
ASX Code.	MI F

Macquarie Office Trust

Sector
Number of Properties
Assets under Management	83 R hill
Current Unit Price (as at 30 June 2005)
Current Yield (as at 30 June 2005)
ASX Code	MOE

Macquarie ProLogis Trust

Sector	Industrial (North America)
Number of Properties
Assets under Management	象t & hillinn
Current Unit Price (as at 30 June 2005)
Current Yield (as at 30 June 2005)
ASX Code	.

Macquarie Direct Property

Macquarie Direct Property currently manages 10 property syndicates, with properties in the commercial and retail sectors. In addition, Macquarie Direct Property also manages Macquarie Property Income Fund, a unit trust that uses gearing and debt to invest into property securities.

For further information on Macquarie's listed or unlisted property trusts, please contact your stockbroker or financial adviser, Ask Macquarie on 1300 365 585 (local call cost), visit Macquarie's website www.macquarie.com/propertytrusts or email Macquarie at propfunds@macquarie.com

The objective of our investor relations team is to provide thorough and transparent communications and a comprehensive website to make the management of your investment as efficient as possible.

Please visit our website at www.macquariegoodman.com to find out more about Macquarie Goodman and our services.

From the Home Page:

• $\Rightarrow$ portfolio updates;
• $\Rightarrow$ latest news; and

• stock prices.

From the Investor Centre:

• $\Rightarrow$ distribution payment and reinvestment options;

• check your holding, change your details or download forms;

• $\Rightarrow$ current and historical tax information;
• $\Rightarrow$ performance statistics and the current stapled security price;
• Set up a watch list for Macquarie Goodman; and

• register for eTree and receive communications via email.

Securityholder Benefits

During the year, we have delivered the following benefits to our Securityholders:

• introduced the DRP which allows Securityholders to use their distributions to "buy" new securities in Macquarie Goodman. Investors who participate in the DRP generally receive a discount on the issue price, which is based on the average of the daily volume weighted average price of all sales of stapled securities recorded on the ASX for each of the first 10 ASX trading days following the ASX trading day after the record date in respect of the relevant distribution. There is also no brokerage charged on your new securities since the issue is undertaken via the Security Registrar; and

• undertook a non-renounceable one for 10 Priority Entitlement Offer and Public Offer, which offered new securities at \$3.64 each to all Securityholders.

Distribution Details

Macquarie Goodman distributes income quarterly for the periods ending 30 September, 31 December, 31 March and 30 June. Distributions are generally paid within two months after these dates.

ANNUAL TAX STATEMENTS AND 2005 TAX RETURN GUIDE The Annual Tax Statements were dispatched to Securityholders on 24 August 2005.

This year, Macquarie Goodman provided Securityholders with a Tax Return Guide to provide basic assistance to complete the 2005 TaxPack. Tax Return Guides were dispatched with the Annual Tax Statements.

A copy of the Tax Return Guide can be downloaded from the Investor Centre page of our website or obtained by calling InvestorPhone 1300 723 040 to receive a copy by post.

Contact Us

There are a number of ways to make enquiries about vour securityholdina:

• investorPhone operates 24 hours a day, seven days a week and is a convenient way to check and amend details relating to your securityholding just call 1300 723 040;
• Our website www.macquariegoodman.com is a great source of information including distributions, latest news, registry forms and more. It also allows you to check details of your securityholding online;
• 2 You can email the Security Registrar at web.enquiries@computershare.com.au, or Macquarie Goodman at info@macquariegoodman.com.au for a quick and easy reply to your enquiries; or
• $\boxtimes$ Please mail all correspondence to: Macquarie Goodman Group C/- Computershare Investor Services Pty Limited GPO Box 1903 Adelaide SA 5001.

GLOSSARY OF TERMS

nenn	Detinition
Aussis	Australian equivalent to International Emanoial Reporting Standards
A REN	Ascendas Real Estate Investment Trust
ASIC	Australian Securities & Investment Commission
ASX	Australian Stock Exchange Limited
2000)	Australian Taxation Office
Consolidated Entity	Macquare Goodman together with all entities it controls
Controlled entities	Entities owned by Macquare Goodman as detailed in Note 6 to the tinancial statements
$\alpha_{\rm BS}$	Cents per security
ĐEË	Macquarie Goodman's Distribution Reinvestment Phan
Employee Share Plans	The Employee Share Plans consist of the Exempt Employee Share Plan and the Deferred
	Employee Share Plan approved by Shareholders on 14 September 1999
elek	Earnings per security
Executive Option Plan	The Executive Option Plan was approved by Shareholders on 14 September 1999.
Ex-dividend	When stanled securities are traded after this date, they will not quality for the forthcoming distribution
Goodman Holdings Group	Goodman Holdings Pty Limited and its controlled entities
CST	Goods and services tax
JV Agreement	The joint venture agreement between Macquarie Goodman and Macquarie Bank Limited
Macquarie Bank Group	Macquare Bank unnted and its controlled entries
Macquarie Goodman	Macquarie Goodman Group or Macquarie Goodman Management Limited ABN 69 000 123 071 and its controlled entities including Macquare Goodman
	Industrial Trust (ARSN 091-213-839) and its controlled entities. AFSL 223621
Management rights	Costs of acquiring funds under management amortised over their expected useful life
MBI	Macquare Bank Limited
MeW Meil	Macquarie Goodman Capital Trust (ARSN 100-155-986) and its controlled entities. Macquarie Goodman Industrial Trust (ARSN 091-213-839) and its controlled entities
MGF	Macquane Goodman Funds Management Limited (ABN 48 067-796 641;
	AFSL 223621) and its controlled entities
MGM	Macquare Goodman Management Limited (ABN 69 000 123 071) and its controlled entities
MCNZ	Macquarie Goodman (NZ) Limited
Mee	Macquare Goodman Property Trust and its controled entities
MGO	Macquarie Goodman Group ASX code
NZ.	New Zealand Exchange Limited
Onell	The one for 10 non-remainmeable Priority Entitlement Offer and Public Offer
0185 Record date	Occupational health and safety The day Macquare Goodman's register is closed for the purpose of determining
	a Security indeter's entitlement to the distribution for the relevant period
RePS	Resal Preference Units in MGA
RePS Holder	Ansder of PePS
Responsible Entity	Responsible Entity means a public company that holds an Australian Financial Services Licence ("AFSL") authorising if to operate a managed investment scheme.
	In respect of MSI. The Responsible Entity is MSF, a wholly owned subsidiary
	of Macquare Goodman
S&P	Standard & Poor's tan independent rating agency that provides evaluation of securities investments and credit risk)
Securities	One MGM share and one MGI unit stapled and traded as one Macquare Goodman security
Securityholder	A person who is reqistered as the holder of a security in Macquarie Golddman's
SCX	register of members Singapore Excluence Limited
Sqm	Scuare metres

en de la familie de la familie de la familie de la familie de la familie de la familie de la familie de la fa
La familie de la familie de la familie de la familie de la familie de la familie de la familie de la familie d

IVAT LA SERIES DE L'ANTIGRATION

Contact in the Contact of the Contact of the Contact of the Contact of the Contact of the Contact of the Conta

Macquarie Goodman Group

0,000,000,000,000,000,000,000,000,000, AFIN 69 000 123 071

e de la componentación de la componentación ARSN OGV 213 839

Responsible entity WIN AS OCT 7 SOCA AND 22 SEA

Registered Office

Level 10 60 Castlereagh Street Sydney NSW 2000 Avevata

CPO BOX 4703 Sydney NSW 2001

Telephone within Australia 1300 791 100 Telephone/outside Australia +61 2 9230 7400 Facsmile 61 2 9230 7444 Emal info@macquariegoodman.com.au www.macquarego.cman.com

Directors

Mr David Clarke, AO, Chairman Dr David Teplitzky, Independent Deputy Chairman Mr Gregory Goodman, Chief Executive Officer Mr Patrick Allaway, Non-Executive Director Mr lan Femer, AQ, Independent Director Mr Patrick Goodman, Non-Executive Director Mr John Harkness, Independent Drector Mr James Hodgkinson, Non-Executive Director Ms Ame Keating, Independent Director Ms Lynn Wood, Independent Director Mr Stephen Girdis, Alternate Director to Messrs David Clarke and James Hodgkinson

Joint Company Secretaries

Ms Carolyn Scoble Mr Mark Alley

Security Registrar

a sa mga mga mga mga mga mga mga mga ersentitet
Verkland LOIS 115 Grentell Street Adelaide SA 5000

Australia

GPO Box 1903 Adelaide SA 5001

Telephone/within Australia 1300 723 040 Telephone/outside Australia +61 3 9415 4000 Facelmie: +61 8 8236 2305 Email web queries@computershare.com.au www.computershare.com

Custodians

, serra en 1997, i sua constructiva a constitut del 1993, especial españa españa del 1999 estado de 1999.
El segundo de 1998, el constituido de 1998, el segundo de 1999, el constituido de 1998, el segundo de 1999, el
Unido 35 Clarence Street Sydrey NSW 2000 Auctralia

00000000000000000000000000000000000000 A CARACAN SAA Sydrey NSW 2000

Auditor

10 Shelley Street Sydney NSW 2000 Australia

ASX Code MGO

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an EMK (according passi Architectic
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the conditional space is a more than the condition of
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