GOODMAN GROUP — Annual Report 2009

Aug 27, 2009

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Goodman confirms full year operating profit of $408 million

Date 28 August 2009 Release Immediate

Goodman Group (Goodman) today confirms an operating profit after tax[1] of $408.1 million for the financial year ended 30 June 2009. Operating earnings per security (EPS) was 17.4 cents. Distribution per security (DPS) was 9.65 cents. Goodman’s statutory accounting loss for the year was $(1,120) million, as a result of property and equity investment revaluations of $(1,158) million, $(280) million of primarily derivative mark to market movements and other non-operating items.

Goodman Group Chief Executive Officer, Mr Greg Goodman said, “This result has been achieved in the context of the ongoing challenging operating conditions experienced by the property industry over the last year.

Our management team’s focus has been to strengthen the Group’s financial position. We have undertaken a range of capital management and strategic initiatives during the year, and postbalance date, at the Group level and in our managed funds to significantly improve our balance sheet, lower operating costs and position the Group to capitalise on its leading industrial property and business space platform. We will keep our core managed funds sound and explore growth with new capital and relationships, such as China Investment Corporation (CIC) and Canada Pension Plan Investment Board”

New equity of $956 million was raised during the year. Additionally, on 6 August 2009, we announced capital management initiatives including a $1.3 billion equity offer (expected to complete on 16 September 2009) and a $500 million hybrid security issue to CIC (subject to securityholder approval). Further, $4.1 billion of debt restructuring initiatives were announced which on completion will result in a comprehensive repositioning of the Group across its balance sheet and that of its managed funds.

On a pro forma basis[2] , Goodman has available liquidity of $1.1 billion, gearing[3] at 26.7% and an expected interest cover ratio[4] of 3.2 times.

Operations

The Group’s operations delivered operating EBIT of $500 million. The earnings composition was in line with expectations and reflects a lower contribution from developments and no

1 Operating income of $408.1 million is before unrealised gains and losses from investment property revaluations, mark to market of derivatives and other non-cash items and one off profits included in the statutory profit. 2

Pro forma as at 30 June 2009, adjusted for the capital management initiatives announced on 6 August 2009. 3 Calculated as net debt/total assets less cash.

4 Operating EBITDA/Gross interest.

Level 10, 60 Castlereagh Street, Sydney NSW 2000 | GPO Box 4703, Sydney NSW 2001 Australia Tel +61 2 9230 7400 | Fax +61 2 9230 7444 | info-au@goodman.com | www.goodman.com Goodman Limited ABN 69 000 123 071 Goodman Funds Management Limited ABN 48 067 796 641 AFSL Number 223621

performance fees earned. Investments contributed 78%, with 13% from development projects and 9% from management services. Operational highlights include:

Investments

Goodman’s total investment portfolio was unchanged for the year at $5.6 billion. Property fundamentals were resilient, with a high 94% occupancy rate achieved and new rents in line with passing. Demand for space remained robust with 1.6 million sqm leased. Despite sound underlying asset performance, the prevailing market conditions led to a full year valuation loss of $522 million in the Group’s direct portfolio for the year.

“Notwithstanding the market conditions, demand for prime industrial space is expected to remain stable. Minimal new supply should keep vacancy levels low and customers are typically opting to remain in existing premises.” Mr Goodman said.

The Group’s cornerstone investments in its managed funds increased by $1.3 billion, mainly due to its participation in the Arlington Business Park Partnership asset for equity swap undertaken in the first half.

Management

Third party assets under management (AUM) have remained unchanged over the year at $14.3 billion, while total AUM declined slightly to $18.5 billion from $18.6 billion.

The Group’s core managed funds remain in a sound position, with active management achieving occupancy of 94%. Asset sales of $1 billion have facilitated the recycling of capital, improving asset quality and returns.

“Our funds remain in a fundamentally sound position with average gearing of 42.9% and with the recent support from our lenders, they have sufficient liquidity and covenant headroom. Investor demand continues to exist for the right opportunities, and we are focused on sourcing new funding.” Mr Goodman said.

Developments

The Group and its managed funds delivered 84 developments during the year, valued at $2.1 billion. Customer pre-commitments were secured for 88% of these developments. Previously committed projects to the value of $864 million were withdrawn from in order to preserve capital. This had a substantial impact on income for the year but was necessary in the context of market conditions.

“We have adapted our development approach to conserve capital, by undertaking a smaller number of projects that are pre-leased, and pre-sold with third-party funding in place. The limited availability of capital has seen a less competitive market evolve, but at the same time active enquiry on over 870,000 sqm of pre-lease opportunities currently exists. Despite our reduced development volume, this scenario will continue to provide the Group with opportunities to achieve attractive risk-adjusted returns.” Mr Goodman said.

Strategy and outlook

Goodman remains committed to its core business model of owning, developing and managing industrial property and business space for its customers and investors in its key markets around the world.

Level 10, 60 Castlereagh Street, Sydney NSW 2000 | GPO Box 4703, Sydney NSW 2001 Australia Tel +61 2 9230 7400 | Fax +61 2 9230 7444 | info-au@goodman.com | www.goodman.com Goodman Limited ABN 69 000 123 071 Goodman Funds Management Limited ABN 48 067 796 641 AFSL Number 223621

“We believe that property fundamentals are holding up relatively well and early signs are emerging that market conditions are beginning to stabilise. Liquidity is returning to the market and capital markets conditions also appear to be easing. The Group has retained its global business platform, which will be a significant benefit as markets show further signs of improvement.

The Group is well placed to deliver its strategic objectives and capitalise on opportunities to expand our operations in a measured way. We have a significant global business platform, well regarded team in place and recapitalised balance sheet, all of which position us well for the future.” Mr Goodman said.

The Group has provided guidance for an FY2010 estimated operating profit after tax of $310 million and operating EPS of 5.7 cents[5] . DPS of 3.4 cents is expected to be paid for the year. These estimates assume no material changes to market conditions.

For further information, please contact Goodman: Gregory Goodman Nick Vrondas Group Chief Executive Officer Group Chief Financial Officer Tel +61 2 9230 7400 Tel +61 2 9230 7400

About Goodman

Goodman Group is an integrated property group with operations throughout Australia, New Zealand, Asia, Europe and the United Kingdom. Goodman Group, comprised of the stapled entities Goodman Limited and Goodman Industrial Trust, is the largest industrial property group listed on the Australian Securities Exchange and one of the largest listed specialist fund managers of industrial property and business space globally.

Goodman’s global property expertise, integrated own+develop+manage customer service offering and significant fund management platform ensures it creates innovative property solutions that meet the individual requirements of its customers, while seeking to deliver longterm returns for investors

For more information please visit www.goodman.com

5 5.7 cents is on an undiluted basis. Equates to 5.2 cents per security diluted for the CIC hybrid securities and the Macquarie and CIC options.

Level 10, 60 Castlereagh Street, Sydney NSW 2000 | GPO Box 4703, Sydney NSW 2001 Australia Tel +61 2 9230 7400 | Fax +61 2 9230 7444 | info-au@goodman.com | www.goodman.com Goodman Limited ABN 69 000 123 071 Goodman Funds Management Limited ABN 48 067 796 641 AFSL Number 223621