GOODMAN GROUP — Interim / Quarterly Report 2009

Mar 11, 2009

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12 March 2009

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

Dear Sir

GOODMAN GROUP (“GOODMAN”) DISPATCH OF HALF YEAR REVIEW TO SECURITYHOLDERS

The attached Goodman Group Half Year Review for the half year ended 31 December 2008 was dispatched to Securityholders today.

Please contact the undersigned in relation to any queries.

Yours sincerely

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Carl Bicego Company Secretary

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 as responsible entity for Goodman Industrial Trust ARSN 091 213 839

Keeping focused

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Highlights

Group Chief Executive Officer’s report – Gregory Goodman

Focused on ro ert fundamentals p p y

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For the half year ended 31 December 2008, Goodman Group delivered an operating profit after tax of $216.2 million or operating earnings per security of 11.1 cents. A distribution of 9.65 cents per security was paid to securityholders as forecast.

It has been a demanding half year for the property industry around the world, with a further deterioration in financial markets and an increasingly uncertain operating environment. In this context, the Group’s half year results demonstrate our focus on our core business. We are committed to ensuring that we are in the best position to manage through the current cycle and to achieve our long-term objectives.

During the period, we completed a range of capital management initiatives to maintain our financial position and liquidity. This included a $956 million equity raising and $378 million of asset sales, with $210 million settled in the first half and $168 million to be settled in the second half of the financial year. We also undertook a review of all aspects of our operations to achieve improved efficiencies and cost savings. The review is expected to achieve 20% annualised cost savings across our business.

Property fundamentals remained robust across our direct and indirect property portfolios, maintaining our high overall retention and occupancy rates. We also grew our total assets under management by 15% to $21.3 billion.

During the half year, the Group acquired Macquarie Bank Limited’s (Macquarie) 50% interest in Macquarie Goodman Asia (excluding Japan) enabling us to restructure and streamline our Asian based operations. As a result, Goodman has considerable opportunities to build our long-term presence in Asia.

The impact on the property sector due to the deterioration of financial markets and economic conditions has been reflected by the downward revaluation of property assets across all sectors. As a result, the Group absorbed a 7% write down in the value of our overall property portfolio. Notwithstanding the current conditions, Goodman’s strength comes from the success of our integrated business model, which includes a high proportion of recurring revenue streams and diversity of our operations.

Earnings composition[1]

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Property
development
6%
Management
services
24%
Property
investments
70%
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Group operations

The contribution to our half year results from our property investment, property services, property development and fund management divisions reflected our earnings guidance provided in October 2008. The composition of earnings was revised at that time to adjust to the impact of current market conditions.

1. Based on earnings before interest and tax before unrealised gains and losses from investment property revaluations, mark to market of derivatives and other non-cash items and one-off items included in the statutory results.

Goodman Group Half Year Review – 31 December 2008

1

Group Chief Executive Officer’s report (cont)

Property investment

Goodman’s property investment portfolio increased by $0.4 billion to $6.0 billion. This portfolio includes direct property investments and cornerstone investments in our managed funds.

The key property metrics across the Group’s direct property investments remained strong. In Australia, the occupancy rate increased by 1% to 98% compared to the previous corresponding period. The weighted average lease expiry was 4.3 years and rental growth of 3.8% was achieved, demonstrating the value of our integrated customer service offering.

The Group remains committed to retaining significant strategic cornerstone investments in our managed funds. Our cornerstone investments increased by $0.5 billion to $3.2 billion largely due to our participation in the asset for equity swap undertaken by Arlington Business Parks Partnership (ABPP) in the United Kingdom in December.

Property services

Goodman manages more than 10 million sqm of industrial property and business space around the world. Our in-house property services teams ensure that the operational needs of around 1,400 customers are met and that our assets are maintained to an exceptional standard.

Total investments

Direct property Cornerstone investments investments 47% 53%

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Property development Goodman’s property development activities are an integral part of the Group’s own+develop+manage business model. We have halved our current development activities in light of the prevailing operating environment. The Group will however continue to develop select projects that offer attractive returns on a low risk basis.

The Group completed 48 developments valued at $1.5 billion during the half year. Importantly, 97% of these developments had customer precommitments, which significantly reduces risk.

The level of participation in developments by our managed funds continues to increase with 75% of developments completed on their behalf. This trend is set to continue with 89% of our current development work in progress underway for our fund management business.

Fund management

Goodman’s third party assets under management increased by 20% to $17.1 billion, while our total assets under management grew by 15% to $21.3 billion over the half year.

The Group’s managed fund portfolios continue to perform well with average occupancy levels of 95% and a weighted average lease expiry profile of 6.9 years. The overall performance of our fund management business was however impacted by the lower development volumes and lack of performance fees earned.

During the period, Macquarie Goodman Hong Kong Logistics Fund (MGLF-HK) acquired a 50% share in the Interlink and Seaview development projects from the Group and Macquarie.

As previously indicated, Goodman and our joint venture partners, Macquarie and J-REP Co., Ltd, established two wholesale funds in Japan investing in 15 assets valued at $1.2 billion.

In the United Kingdom, ABPP completed a $764 million asset for equity swap from existing investors.

The capital management strategy for our funds produced a weighted average debt maturity of 3.3 years as at 31 December 2008 and ensured that all funds are well capitalised, with no debt maturities for the year ending 30 June 2009.

This approach has resulted in a high customer retention rate of 77% and consistently high occupancy rates.

Keeping focused

2

Group Chief Executive Officer’s report (cont)

Sustainability

Building on our commitment to sustainability, Goodman continues to develop a sustainability framework to achieve a consistent approach across all markets in which we operate and better measure our performance and effectiveness.

The Group delivered a number of projects that have achieved substantial sustainability outcomes for our customers and the environment.

In addition, we continue to implement programmes across the Group to benchmark and measure our sustainability performance. This will lead to Goodman providing greater transparency and detailed sustainability reporting in the near future. Further, we continue to work with various industry bodies around the world to ensure that sustainability is embedded into the property sector and that the opportunities presented by a sustainable approach to property are maximised.

Capital management

Goodman Group

Goodman undertook capital management initiatives in October 2008 to further improve our financial position in the context of the current environment. Included in the initiatives was a $956 million equity raising, which was supported by institutional and retail investors.

Asset sales to the value of $210 million were completed in line with these initiatives, with the proceeds used to retire debt. Post balance date, a further $168 million of asset sales are expected to be completed shortly.

As at 31 December 2008, Goodman had available liquidity of $842 million to meet our ongoing capital expenditure requirements. Significantly, capital commitments have reduced for the second half of the current financial year, largely reflecting lower development activity.

Gearing has increased from 39.9% to 41.2%, partially reflecting the timing in realising some asset sales and the impact of revaluations.

A non-cash valuation loss of $419.6 million has been recorded against Goodman’s currency and interest rate derivative positions.

The Group’s weighted average term to maturity across all debt facilities is 3.5 years.

Managed funds

Goodman successfully refinanced debt facilities for our managed funds during the period. The refinancing included $210 million of new and $210 million of existing debt for MGLF-HK; $450 million of existing debt for Goodman Australia Industrial Fund; and $753 million of existing debt for Goodman Property Trust.

We also completed a $310 million equity raising for MGLF-HK and, as previously mentioned, a $764 million equity raising for ABPP in the form of an asset for equity swap from existing investors.

These initiatives ensure that our funds are well capitalised with an average gearing of 42.8% and $1.3 billion of capital capacity ($0.5 billion in undrawn equity and $0.8 billion in debt).

The distribution of 9.65 cents per security was declared and paid to Securityholders for the half year ended 31 December 2008. In accordance with past practice, the Board will review and determine the final distribution for the half year ending 30 June 2009 closer to the date taking into account operating performance and market conditions.

Outlook

Despite the challenging market conditions, Goodman is committed to the execution of our long-term strategy of owning, developing and managing industrial property and business space.

Goodman has been actively repositioning our business to reflect the current environment. We have significantly reduced operating costs, reengineered our development business and have a strong focus on our capital management and allocation strategy.

Goodman is a fundamentally strong business with a global footprint and the right strategy to manage through these difficult times and to deliver long-term growth.

As a result, we maintain our target earnings per security of 19.3 cents for the full year.

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Gregory Goodman Group Chief Executive Officer

Goodman Group Half Year Review – 31 December 2008

3

Extracts from the interim financial statements[1]

Income statement

Income statement
For the half year ended	Consolidated
	31 Dec 2008 $M 31 Dec 2007 $M*
Revenue Gross property income Fund management Property services Development management Distributions from investments	131.5 167.8 47.4 61.0 32.1 35.4 203.0 135.8 7.1 16.8
	421.1 416.8
Property and development expenses Property expenses Development expenses	(25.0) (29.8) (163.7) (110.0)
	(188.7) (139.8)
Other income Net (loss)/gain from fair value adjustments on investment properties Net (loss)/gain on disposal of investment properties Net gain on disposal of controlled entities Share of net results of equity accounted investments Netgain on disposal of equityinvestments	(208.1) 54.6 (2.6) 81.7 28.1 67.4 (220.3) (9.3) 15.5 –
	(387.4) 194.4
Other expenses Employee expenses Share based payments credit/(expense) Administrative and other expenses Impairment losses on equityinvestments	(26.2) (47.8) 34.4 (15.3) (46.0) (50.5) (170.5) –
	(208.3) (113.6)
(Loss)/earnings before interest and tax and discontinued operation	(363.3) 357.8
Financing costs Financial income Financial expenses	11.0 5.7 (112.7) (69.9)
Net fnancingcosts	(101.7) (64.2)
(Loss)/proft before income tax	(465.0) 293.6
Income tax beneft/(expense)	14.6 (13.5)
(Loss)/proft after income tax from continuingoperations	(450.4) 280.1
Discontinued operation Proft from discontinued operation(net of income tax)	– 6.3
(Loss)/proft for the halfyear	(450.4) 286.4
(Loss)/proft attributable to Shareholders (Loss)/proft attributable to Unitholders	(101.3) 7.0 (364.6) 277.9
(Loss)/proft attributable to Securityholders	(465.9) 284.9
Amount attributable to other minorityinterests	15.5 1.5
(Loss)/proft for the halfyear	(450.4) 286.4
Basic (loss)/earnings per Company share (¢) Diluted(loss)/earningsper Companyshare(¢)	(5.2) 0.4 (5.2) 0.4
Continuing operations Basic (loss)/earnings per Company share (¢) Diluted(loss)/earningsper Companyshare(¢)	(5.2) – (5.2) –

• Restated for discontinued operation.

Keeping focused

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Extracts from the interim financial statements[1]

Balance sheet

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Consolidated
As at 31 Dec 2008 30 Jun 2008
$M $M
Current assets
Cash 166.7 639.2
Receivables 450.1 532.9
Inventories 14.6 8.7
Current tax receivables 0.3 0.3
Assets classified as held for sale 25.0 33.3
Other assets 197.4 98.1
Total current assets 854.1 1,312.5
Non-current assets
Receivables 301.8 252.2
Investment properties 3,934.3 4,263.8
Inventories 39.8 34.2
Investments accounted for using the equity method 3,113.5 2,399.5
Deferred tax assets 23.1 34.6
Other financial assets 62.0 238.7
Plant and equipment 28.7 24.9
Intangible assets 1,293.6 1,073.2
Total non-current assets 8,796.8 8,321.1
Total assets 9,650.9 9,633.6
Current liabilities
Payables 526.7 424.0
Current tax payables 13.0 50.8
Interest bearing liabilities 668.9 512.1
Provisions 297.8 193.2
Total current liabilities 1,506.4 1,180.1
Non-current liabilities
Payables 171.5 4.7
Interest bearing liabilities 3,404.1 3,717.0
Deferred tax liabilities 53.5 53.8
Provisions 6.6 8.9
Total non-current liabilities 3,635.7 3,784.4
Total liabilities 5,142.1 4,964.5
Net assets 4,508.8 4,669.1
Equity attributable to Shareholders
Issued capital 241.6 193.9
Reserves (63.8) 65.1
Retained earnings/(accumulated losses) 13.0 (23.3)
Total equity attributable to Shareholders 190.8 235.7
Minority interests
Equity attributable to Unitholders
Issued capital 5,003.7 4,123.3
Reserves (933.4) –
Accumulated losses (81.9) (10.5)
Total equity attributable to Unitholders 3,988.4 4,112.8
Other minority interests 329.6 320.6
Total equity 4,508.8 4,669.1
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Goodman Group Half Year Review – 31 December 2008

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Extracts from the interim financial statements[1]

Statement of recognised income and expense

Statement of recognised income and expense
For the half year ended	Consolidated
	31 Dec 2008 $M 31 Dec 2007 $M
Amounts recognised directly in equity (net of tax) Effect of foreign currency translation Cash fow hedges: – Net change in fair value of cash fow hedges – Net change in fair value of cash fow hedges transferred to proft or loss Changes in fair value of available for sale fnancial assets Share based payments credits booked directly to reserves Actuarial losses on defned beneft superannuation funds	47.4 5.8 (347.5) (78.3) (1.0) – (14.6) (15.8) (15.0) – (2.2) –
Net expense recognised directlyin equity	(332.9) (88.3)
(Loss)/proft for the halfyear	(450.4) 286.4
Total recognised income and expense	(783.3) 198.1
Attributable to: – Securityholders – Minorityinterests	(798.8) 196.6 15.5 1.5
Total recognised income and expense	(783.3) 198.1

Keeping focused

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Extracts from the interim financial statements[1]

Cash flow statement

Cash fow statement
For the half year ended	Consolidated
	31 Dec 2008 $M 31 Dec 2007 $M
Cash fows from operating activities Property income received Other cash receipts from services provided Property expenses paid Other cash payments in the course of operations Dividends/distributions received Finance income received Finance costs paid Income taxespaid(net of refunds)	145.2 186.6 126.6 185.8 (27.5) (17.5) (81.9) (168.7) 77.5 39.5 11.0 5.7 (69.3) (55.1) (26.5) (11.7)
Net cashprovided byoperatingactivities	155.1 164.6
Cash fows from investing activities Proceeds from deferred settlement and sale of investment properties Proceeds from sale of controlled entities (net of cash disposed) Proceeds from sale of equity investments Payments to acquire controlled entities (net of cash acquired) Payments for equity investments Payments for intangible assets Payments for investment properties and developments Payments forplant and equipment	215.9 1,288.4 8.2 119.4 273.9 153.6 (49.3) (176.1) (856.0) (846.3) – (11.9) (396.8) (977.2) (4.8) (4.2)
Net cash used in investingactivities	(808.9) (454.3)
Cash fows from fnancing activities Proceeds from issue of ordinary securities Proceeds from issue of Goodman PLUS hybrid securities Transaction costs from issue of securities Loans to related entities Proceeds from borrowings Repayments of borrowings Dividends and distributionspaid	956.1 16.9
	– 326.8
	(31.6) – (6.7) (45.8) 2,398.6 2,550.0 (2,977.2) (2,334.5) (157.9) (145.3)
Net cashprovided byfnancingactivities	181.3 368.1
Net (decrease)/increase in cash held Cash at beginningof the halfyear	(472.5) 78.4 639.2 81.8
Cash at end of the halfyear	166.7 160.2

1. Extracts from the interim financial statements have been provided for your convenience. The Interim Financial Report dated

2. 24 February 2009 was lodged with the Australian Securities Exchange and Australian Securities & Investments Commission and is

3. available on our website at www.goodman.com. You should read the interim financial statements and accompanying notes in their entirety and also in conjunction with the Annual Report 2008.

Goodman Group Half Year Review – 31 December 2008

7

Corporate directory

Goodman Group

Goodman Limited ABN 69 000 123 071

Goodman Industrial Trust ARSN 091 213 839

Responsible Entity

Goodman Funds Management Limited ABN 48 067 796 641; AFSL Number 223621

Company Secretary

Mr Carl Bicego

Security Registrar

Computershare Investor Services Pty Limited Level 5 115 Grenfell Street Adelaide SA 5000

GPO Box 1903 Adelaide SA 5001

Offices

Registered office Level 10 60 Castlereagh Street Sydney NSW 2000 Australia

Telephone: 1300 723 040 (within Australia) +61 3 9415 4000 (outside Australia) Facsimile: +61 8 8236 2305 Email: web.queries@computershare.com.au Website: www.computershare.com

GPO Box 4703 Sydney NSW 2001

Telephone: 1300 791 100 (within Australia) +61 2 9230 7400 (outside Australia) Facsimile: +61 2 9230 7444 Email: info-au@goodman.com Website: www.goodman.com

Custodians

Trust Company Limited 35 Clarence Street Sydney NSW 2000

Perpetual Trustee Company Limited 123 Pitt Street Sydney NSW 2000

Other offices

Abu Dhabi Frankfurt Adelaide Fukuoka Amsterdam Hamburg Auckland Hong Kong Barcelona Istanbul Beijing Kraków Birmingham London Brisbane Luxembourg Brussels Lyon Bucharest Madrid Budapest Marseille Christchurch Melbourne Düsseldorf Milan Eindhoven Munich

Nagoya Osaka Parchim Paris Perth Poznan Prague Reading Senec Shanghai Tokyo Warsaw

Auditor

KPMG 10 Shelley Street Sydney NSW 2000

ASX code

GMG

Directors

Acting Chairman Group Chief Executive Officer Non-Executive Director Non-Executive Director Independent Director Independent Director Non-Executive Director Independent Director

Mr Ian Ferrier, AM Acting Chairman Mr Gregory Goodman Mr David S Clarke, AO Non-Executive Director Mr Patrick Goodman Non-Executive Director Ms Diane Grady, AM Independent Director Mr John Harkness Independent Director Mr James Hodgkinson Non-Executive Director Ms Anne Keating Independent Director Mr James Sloman, OAM Independent Director

Keeping focused

8

This Half Year Review has been prepared by Goodman Group (Goodman Limited (ABN 69 000 123 071) and Goodman Funds Management Limited (ABN 48 067 796 641; AFSL Number 223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091 213 839)). It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with professional advice, when deciding if an investment is appropriate. This Half Year Review is not an offer or invitation for subscription or purchase of securities or other financial products. This Half Year Review does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to any “US person” (as defined in Regulation S under the US Securities Act of 1933, as amended (Securities Act) (US Person)). Securities may not be offered or sold in the United States or to US Persons unless they are registered under the US Securities Act of 1933 or an exemption from registration is available. The stapled securities of Goodman Group have not been, and will not be, registered under the Securities Act or the securities laws of any state or jurisdiction of the United States. This Half Year Review contains certain “forwardlooking statements”. The words “anticipate”, “believe”, “expect”, “project”, “forecast”, “estimate”, “likely”, “intend”, “should”, “could”, “may”, “target”, “plan” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Due care and attention have been used in the preparation of forecast information. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Goodman Group. These may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. All values are expressed in Australian currency unless otherwise stated. March 2009

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Goodman Group Half Year Review – 31 December 2008