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Operational update

Date 26 May 2008 Release Immediate

Goodman has announced its operational update for the quarter ended 31 March 2008 reaffirming its FY08 forecast for 8% EPS growth. The Group continues to capitalise on its specialised integrated global platform to grow market share in core markets.

In particular, business space Assets Under Management increased by 3%[1] over the quarter (10% financial year to date) to $18.7 billion while completed developments of $0.9 billion and commencements of $0.4 billion were undertaken in the quarter taking the financial year to date total value of completions to $2.0 billion and commencements to $1.9 billion.

The following key transactions were completed during the quarter:

- Sale of the Group’s 7% investment in Singapore listed fund, A-REIT, and its minority 40% stake in the fund’s manager for $214 million enabling it to pursue its own interests in this region over time.
- Amalgamation within the JREP joint venture of a $670 million seed portfolio of high quality warehouses for a new fund in Japan.

Since the end of the quarter, the Group has also announced:

- A $1 billion equity raising for the Goodman Australia Industrial Fund.
- Following a year long strategic review, the sale of Goodman Property Investors (“GPI”) and associated investments for approximately $260 million allowing the Group to focus on its integrated, specialist industrial business.

Goodman’s Group Chief Executive Officer, Gregory Goodman, commented that, “Leasing enquiry remains robust with our customers continuing to invest in their businesses. While rationalisation occurs in the property market, our specialisation, scale and diversity of operations has enabled us to capture development opportunities and attract long term capital.”

The Group’s $2.1 billion Australian direct investment portfolio has performed well with occupancy increasing to 98%, average rental voids on vacancy down to less than two months and new leases being struck in the quarter at an average 5.5% premium to the previous rental rate.

The Group’s current development workbook stands at $2.9 billion of which 66% is being undertaken for its funds and 72% is pre-leased. Integral to the Group’s business is the important relationships it forges with its customers. Over the past quarter, the Group has completed or

1 Excluding discontinued operations in Singapore (A-REIT) and UK funds management (GPI).

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 | [email protected] | www.goodman.com Goodman International Limited ABN 69 000 123 071 Goodman Funds Management Limited ABN 48 067 796 641 AFSL Number 223621

commenced three facilities alone for DHL across Asia Pacific and Europe and two facilities for Corporate Express in New Zealand and Germany.

Across the globe, the Group has experienced increased activity with completed or commenced properties for Mainfreight, Linfox and Toll in Australia and New Zealand; Panasonic, Amazon and Great Bear in the UK; Schenker in Germany; DSV in Netherlands; Nippon Express in Central Europe. The Group has also commenced it’s first development in Turkey. The largest transaction in the development business was a new 123,000 sqm pre-lease with Sinotrans in Shanghai.

In early May, Goodman Australia Industrial Fund (“GAIF”) concluded a $1 billion equity raising. The equity offer was structured such that the Group agreed to hold $600 million and $400 million was sought from other investors. A $970 million portfolio of 14 prime office and business park assets from within the Goodman Group was also stapled to GAIF. GAIF will benefit from an enhanced portfolio now totalling 96 properties valued at $4.1 billion as well as development upside. More recently, progress has been made on the Japan opportunity.

Commenting on investor demand Mr Goodman said, “It is becoming increasingly apparent that capital is very discretionary and our key investment clients are concentrating on opportunities with sector specialist managers who can deliver strong asset level performance through value add initiatives such as asset management and development. This was evidenced with the recent Australian offering. We are well positioned to continue to offer these opportunities across the markets in which we operate.”

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

Goodman Group Operational Update

26 May 2008

- Section 1 Overview
- Section 2 Asia Pacific Operations
- Section 3 Europe Operations
- Section 4 Fund Management + Section 5 Summary

26 May 2008

Section 1 – Overview+

Overview

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Expect leasing demand and declining supply to drive rental growth. UK de-valuation cycle slowing, other markets stable or growing
- Total direct property investment portfolio of $4.6 billion[1,2] : Development opportunities driving expenditure on balance sheet for FY09 and FY10 profitability
- Total cornerstone investments of $2.8 billion[2]

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- Continued demand for quality product with top tier management: Successful GAIF raising
- Business space AUM up 3% in the quarter to $18.7 billion[3] (+$1.7 billion v FY07)
- $2.5 billion of debt and equity capacity

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- Customers still looking for space, less competition among developers
- Development completions of $0.9 billion for the quarter and $2.0 billion YTD Commencements of $0.4 million for the quarter and $1.9 billion YTD
- $2.9 billion[4] current workbook, 6.7 months average time to completion
- 66% of current workbook in funds, 73% pre-leased
Includes core direct properties, warehoused properties and development land and WIP. 2. Adjusted for GAIF transaction executed in May 2008
Excludes GPI and A-REIT
Upon completion of committed developments

26 May 2008

Transactions

+ Focus on core operations and balance sheet management

+ GPI Sale (£121.5 million)

Completed strategic review
Focus on integrated, specialist industrial business
Benefits had been achieved, no remaining synergies for Goodman

+ Singapore sale (S$282 million): Sale of units and 40% of management business

Minority interest without full integration prospects

+ Stapling of $1.0 billion to GAIF

Goodman agreed to hold $600 million, $400 million of external equity (70% paid up – 30% to pay)
Provided GAIF with significant development opportunities and capital capacity

26 May 2008

Section 2 – Asia Pacific Operations+

Leasing – Asia Pacific

Australian Direct Portfolio

- Total direct property investment portfolio of $2.1 billion (post GAIF transaction)

+ KPI’s remain strong

54,793 sqm of leasing activity at rents 2.2% above valuation and 5.5% above previous, average incentive 6.5%
Occupancy 97.6% (up since December 2007)
Low average down-time of 1.5 months
Customer retention 71%
WALE 4.8 years
12 month rolling pending expiry 11.3%
Year 1 includes current vacancies

26 May 2008

Leasing – Asia Pacific (cont.)

Australian Direct Portfolio

+ Industrial

Lidcombe Business Park, NSW, Rentokil 7,023 sqm at $140 per sqm
Angliss Distribution Centre, Vic, Bauer GmbH (Australia) Pty Ltd, 1,412 sqm at $75 per sqm
Healy Industrial Estate, Vic, AusChar, 5,246 sqm at $64 per sqm and Buttle, 9,027 sqm at $64 per sqm
Goldsborough, SA, signed KW Doggett, 3,580 sqm at $84 per sqm
Acacia Ridge, Qld signed Greenfield Mowers, 5,700 sqm at $115 per sqm
Market rent reviews: Fujitsu, Arndell Park, NSW, 10,512sqm $125/sqm; Penfold Buscombe, Botany Grove, NSW, 9,917sqm $140/sqm

+ Office Parks

Binary Centre, Pronto Software, 1,328sqm at $290 per sqm
Precinct Corporate Centre, signed Schwark Australia, 1,090sqm at $280 per sqm
CityWest Office Park, Reckon 1,847sqm at $375 per sqm

26 May 2008

Leasing – Asia Pacific (cont.)

Indirect Investments

+ GAIF

Portfolio occupancy of 99%
Total leasing for the quarter of 14,078 sqm and 199,806 sqm year to date
Achieved increase of 2.3% on rent reviews during the quarter and 2.7% year to date

+ GMT

Portfolio occupancy of 97% and high customer retention at 84%
Weighted average increase of 4.5% p.a. on leases with market reviews

+ MGLF-HK

Portfolio occupancy of 99%
80,939 sqm of space leased during the quarter representing 10.9% of the portfolio’s gross floor area and recorded passing rent review increase of 26.7%

26 May 2008

Leasing – Asia Pacific (cont.)