GPT GROUP — Annual Report 2007

Feb 21, 2007

GPT RE Limited ABN 27 107 426 504 as Responsible Entity of General Property Trust AFSL 286511

GPT Management Holdings Limited ABN 67 113 510 188 Level 52 MLC Centre 19 Martin Place Sydney NSW 2000 Australia

T: +61 2 8239 3555 F: +61 2 9225 9318 E: gpt@gpt.com.au www.gpt.com.au

22 February 2007

The Manager Companies Section Australian Stock Exchange Limited (Sydney) 20 Bridge Street SYDNEY NSW 2000

By electronic lodgement

Dear Sir

Re: GPT Group

$1₁$ Full Year Results for period to 31 December 2006

Please find attached statement regarding GPT's results for the twelve months to 31 December 2006. Also attached are GPT's audited financial statements for the twelve months to 31 December 2006, ASX Appendix 4E and the financial statements for GPT Management Holdings Limited.

1. December Quarter Distribution

GPT advises the income distribution for the quarter ended 31 December 2006 will be 7 cents per stapled security. This comprises:

7 cents Trust Distribution Company Dividend Nil Total Amount Distributed 7 cents

Trust Distribution $(a)$

A distribution for the three months ended 31 December 2006 of 7 cents per security will be paid on 28 March 2007 (the distribution for the three months ended 31 December 2005 was 6.6 cents per security and the distribution for the three months ended 30 September 2006 was 6.9 cents per security). The distribution advice for the quarter will advise the component of the distribution that is tax deferred.

Millian State (19

(b) Company Dividend

No dividend will be paid for this period.

GPT Securityholder Service Centre T: 1800 025 095 F: +61 2 9287 0303

E: gpt@gpt.com.au www.gpt.com.au

22-02-07 Full Year Results cover letter doc

$(d)$ Books Closing Date

In accordance with Listing Rule 3A(5), we give formal notice that the register of security holders will close at 5.00 pm, 5 March 2007 for the purpose of determining those security holders entitled to participate in the distribution for the quarter ended 31 December 2006.

Documents will be accepted for registration until 5.00 pm on the books closing date at the Sydney Register only:

Securities Registration Services Link Market Services Limited Level 12, 680 George Street SYDNEY NSW 2000

MARK AND REAL PROPERTY

Yours sincerely

James Coyne Company Secretary

BARK DAMARY

THE GPT GROUP ANNOUNCES 2006 Annual Results 22 February 2007

The GPT Group announces full year 2006 results

• Explanatory Memorandum forecasts delivered -
• Strong progress in strategic growth initiatives -
• Distribution growth target of 4-5% confirmed -

The GPT Group (GPT) today reported a profit after tax of \$1.384.0 billion for 2006 and announced achievement of the Group's 2006 distribution forecast (as contained in the Explanatory Memorandum) released in May 2005 when Securityholders voted for an independent GPT. The Group also made significant progress on major strategic initiatives, delivered strong performance and growth opportunities across its existing business operations and confirmed previous distribution growth targets of 4-5% per annum off the much higher base that has been delivered to Securityholders since GPT's internalisation.

The distribution paid to Securityholders of \$559.8 million reflects the Group's realised operating income, which increased 13.5% (compared to the previous corresponding period). This increase was driven by growth in income from the Group's investment portfolio, the financial and operational benefits of internalising management in 2005 and a full year contribution from the Group's joint venture with Babcock & Brown (JV).

Nic Lyons, GPT's Chief Executive Officer, said 2006 had been an extremely productive year in which the Group had been active in building a business mix with a stronger growth profile. Consistent with the strategic objectives established on GPT's internalisation in June 2005, GPT has moved from an owner of property assets to a business which has access to a broader range of income streams and growth options.

"When we changed our structure in June 2005 we had a clear objective - to transform GPT from a business model which had consistently delivered 3% growth to a business which would increase distributions in 2006 by 16.5% against those forecast under the previous model and position the business to then sustainably deliver stronger growth of $4-5\%$ .

"We are pleased to report that after only 18 months of operations we have met this objective," Mr Lyons said.

HIGHLIGHTS

• Delivery of financial forecasts distribution increased 12.7% to 27.5 cents per security
• Full investment and expansion of Joint Venture with Babcock & Brown
• \$5.9 billion in assets $\circ$
• o Additional capital committed, focus expanded
• Establishment of wholesale funds management platform with the successful launch of the GPT Wholesale Office Fund (\$2.15 billion)
• Strong performance, resulting in full performance fee
• o First acquisition in GWOF Fund now \$2.36 billion
• Australian investment portfolio expanded with key acquisitions (including Highpoint Shopping Centre) and strong comparable income growth delivered
• o Office up 10.8%
• o Hotel/Tourism up 6.7%
• o Industrial/Business Park up 5.7%
• o Retail up 4.1%
• Future growth opportunities secured through expansion of the Australian development pipeline (\$3 billion)
• Successful entry into new business and growth sector US seniors housing
• Offshore management platform grown. $\bullet$

"It is satisfying to have met the Group's forecast for the year ended December 2006 and to have established a range of additional earnings streams and platforms which deliver on our strategy and objectives and will deliver benefits to our Securityholders in future years.

"Over 2006, we made huge progress on all aspects of our strategy, particularly in relation to new initiatives to secure future growth. The successful full investment of our joint venture with Babcock & Brown was achieved, giving us access to new sectors and markets, and we expanded our commitment to this venture with the contribution of additional capital and the expansion of its business and operational focus. We have successfully entered a new growth sector and business, with investment in the US seniors housing market. In Australia we have established a funds management platform, and expanded our exposure to development - both activities give us access to income streams which leverage our experience and expertise," Mr Lyons said.

Financial Highlights

	Full Year 2006	Full Year 2005	Change (%)
Profit after tax \$m\$	1,384.0	566.8m	144%
Realised Operating Income (\$m)	558.6	492.3m	13.5%
Net Assets per Security	\$3.60	\$3.16	13.9%
Total Return (%)	45.2	16.7

Returns to Securityholders

Securityholders will receive 7.0 cents per security (cps) for the December 2006 quarter, taking the distribution for the year to 27.5 cps, an increase of 12.7% on 2005. Securityholders also benefited from security price appreciation and a total return of 45.2%, which was well above the Listed Property Trust Index return of 34%.

Continuing a focus on retaining the Group's balance sheet capacity to fund the Group's development projects and future opportunities, the Group will introduce a Distribution Reinvestment Plan (DRP), to be operational with the March Quarter distribution payment. The DRP, which will allow Securityholders to reinvest their distributions in GPT securities at a 1.5% discount, will be open to all Securityholders.

Balance sheet

The Group has a strong balance sheet and access to a range of capital sources. GPT's total borrowings, of \$4.3 billion, includes Australian, US and Euro denominated debt.

GPT's gearing of 35.8% is within the policy range of 30-40% and below the sector average of 40%. On a 'look through' basis gearing is 46.7%. The current weighted average interest rate across GPT's debt is 5% (after fees and margins) and the average term is 2.2 years.

Total assets at 31 December 2006 of \$12 billion included the benefit of valuation increases across the Group's asset base, recent acquisitions (in Australia and the US) and the benefit of further investment in the Group's Australian development pipeline and joint venture with Babcock & Brown.

Net assets per security increased by 13.9%, to \$3.60 at December 2006, an increase of 44 cents on the 31 December 2005 figure. The allocation between the Trust Unit and GPT Management Holdings Limited Share is \$3.48 and \$0.12 respectively.

Security Price

The price performance since the internalisation in June 2005 has continued to be strong, with GPT Securities closing at \$5.60 on 31 December 2006, up from \$4.10 at 31 December 2005. GPT's price from internalisation to the end of December 2006 increased by 58.6%.

GPT's full year accumulation return (security price movement and income) for the year to 31 December 2006 was 45.2%, well above the S&P/ASX Property 200 Accumulation Index return of 34.0%. GPT's three, five and ten year per annum returns were also above those of the Index, at 31.3%, 22.6% and 16.5% respectively.

Yield

The yield on the closing price on 31 December 2006 of \$5.60 was 4.9% (based on the 2006 distribution).

Strategic growth initiatives

Mr Lyons said he was pleased that GPT's strong financial performance was assisted by the initial impact of a range of initiatives which would add to future growth. A number of these opportunities, which were secured during 2006, will make their first substantial financial impacts in 2007.

"In addition to delivering on our financial performance objectives, we made excellent progress on a range of strategic goals, building on the evolution of GPT's business model to ensure that the business is able to sustainably deliver strong growth into the future," Mr Lyons said.

Funds management

The Group made significant progress on its stated intention to establish a funds management platform, with the successful launch of the Group's first wholesale fund, the GPT Wholesale Office Fund, on 21 July 2006. The Fund, which attracted \$1.3 billion in equity, represented one of the largest capital raisings undertaken in the Australian wholesale market. Fund performance since inception has been strong, resulting in above benchmark returns to investors and the achievement of the full performance fee. The Group is well progressed on the next opportunity in this sector, and is actively exploring the potential for a shopping centre fund.

US Seniors Housing

The entry into the US seniors housing market in December 2006 satisfied GPT's ambitions to build a presence in the retirement and seniors living market, a sector expected to deliver growth and ongoing investment opportunities. Consistent with an ongoing focus on evolving the Group's investment portfolio, the acquisition gives GPT access to a market which has strong demand fundamentals and limited supply risk. GPT enters 2007 well positioned to grow this portfolio, with a solid base through a portfolio of established assets and an interest in a management platform with expertise and experience in this market.

Joint Venture with Babcock & Brown

The JV achieved full investment by December 2006, with a total of \$5.9 billion in assets secured. The further development of the strategy and expansion of the Joint Venture's capital base and operations announced in November 2006 were key strategic initiatives which recognised the potential represented by this portfolio and the evolution of the European real estate market in particular and were supported by GPT's appointment of a new Head of Europe, Jonathan Johnstone, located in London. The acquisition of an interest in Halverton during the period provides the JV with an 'in house' manager for the light industrial assets and exposure to a growing management business, as Halverton broadens its funds management focus and continues to launch additional funds in 2007. This development of the strategy and focus of the JV will contribute to GPT's growth outlook and the delivery of long term enterprise value from this venture.

Australian investment portfolio

GPT's \$9.9 billion Australian investment portfolio has benefited from a focus on active management and prudent development, illustrated by an increase in income. Growth in income in the Australian business and assets was achieved through the acquisition of an interest in Highpoint Shopping Centre, a range of industrial acquisitions and the completion of developments in the retail and industrial portfolios. The announcement that GPT would undertake office developments at 818 Bourke Street, Melbourne and Darling Island, Sydney, during the year and growth in development land available across the Industrial/Business Park Portfolio reflected an expansion of the Group's focus on development.

"We have continued to maximise the value of existing assets through development and have increased our focus on development in the industrial and office sectors as a means of improving returns and continuing to access quality investment product in the increasingly competitive Australian real estate market," Mr Lyons said.

The Group now has a significant development program with a number of potential projects underway and planned at a potential cost of \$3 billion in the medium term. This will secure future growth in the Group's Australian investment assets, complementing GPT's enhanced diversification of business operations and increased offshore exposure.

Strong increases in valuations were also achieved across the portfolio, particularly across the retail and office assets, with a net increase in revaluations of \$790 million across GPT's Australian investment assets.

Outlook

Mr Lyons said he remained confident in the ability of the Group to deliver performance and to target distribution growth of 4-5% per annum following the significant achievements in 2006 in transitioning GPT to a more diversified and growth oriented business mix.

"This has been an important period in GPT's evolution, with enormous progress in relation to our strategic goals. Through the course of the past eighteen months we have created an independent and vibrant business with a stronger growth profile and a more diverse business mix in line with our strategy.

"The establishment of a funds management platform, expansion of our joint venture with Babcock & Brown, our entry into the US seniors housing market and expanded opportunities in our Australian business were all significant achievements in this respect, " Mr Lyons said.

The size and quality of GPT's investment portfolio and business operations and its increasing geographic and business diversity create a solid foundation for sustainable income and capital growth.

"Having delivered our forecast of 27.5 cps in distribution for the year, we are well placed to continue to grow distributions.

"We have established an excellent base on which to build and have an energetic and committed team, focused on delivering performance from all aspects of the business. We see 2007 as continuing our transition to a business which can sustainably deliver stronger growth as we focus on the consolidation and expansion of our current operations and recent initiatives in line with our strategy and performance goals," Mr Lyons said.

ENDS

For further information contact:

Nic Lyons Chief Executive Officer 02 8239 3565 0401 719 899

Michael O'Brien Chief Operating Officer 02 8239 3544 0417 691 028

Kieran Pryke Chief Financial Officer 02 8239 3547 0413 882 524

Donna Byrne Head of Investor Relations & Corporate Affairs 02 8239 3515 0401 711 542

ADDITIONAL INFORMATION

Australian Retail Portfolio

Head of Retail for GPT, Mr Mark Fookes, said GPT's Retail Portfolio continued to perform well with successful recently completed redevelopments at Melbourne Central, Macarthur Square and Penrith contributing strongly.

The Portfolio, which was expanded with the acquisition of a 50% interest in one of Melbourne's most successful centres, Highpoint Shopping Centre, also benefited from substantial valuation increases over 2006 and now has a value of over \$5.8 billion. Consisting of interests in 17 quality Australian shopping centres and a portfolio of eight Homemaker City Centres, the Portfolio provides diversity, scale and a range of development opportunities.

Comparable income growth was 4.1% and regional specialty occupancy costs, at 16.1%, have increased over the year but continue to provide a solid base for strong rental growth. Comparable total centre sales growth across GPT's shopping centres was 1.2% and comparable specialty sales growth was 2.3% in the year to 31 December 2006.

Transactions

The Group expanded the Retail Portfolio and the Group's retail operations with the acquisition of a 50% interest in Highpoint Shopping Centre and the management rights to the asset in March 2006 for \$672.5 million (including acquisition costs). To date, the Centre's performance has delivered on acquisition commerce, and the asset remains on target for a year one yield of 5.5% (post costs).

The Centre, which is located in a trade area with strong forecast growth and excellent future expansion potential, is one of Australia's top 10 super regional centres, and the only regional shopping centre servicing the western and north-western suburbs of Melbourne.

GPT continued to take advantage of a very strong investment market with the sale of two Homemaker City assets, at Moorabbin, and Epping. The combined sale price of \$74.6 million, was \$9.5 million above GPT's fair value. The Group retains eight Homemaker City Centres with a value of \$441 million.

Developments

The Portfolio has benefited from recently completed developments, with income at Macarthur and Penrith increasing substantially following expansions completed over the last 18 months. Penrith achieved a first year yield on cost (\$70 million) of 9% and Macarthur is anticipated to deliver a yield of 8% (on cost of \$110 million).

Melbourne Central's performance has been strong following completion of a major \$260 million development in September 2005, with income at this asset increasing by over 7%, reflecting a yield on

cost of 8%. A significant development profit was achieved on the project, with an increase in valuation of over \$80 million post development.

Building on these successful developments, projects with a potential cost of over \$1.5 billion are underway or planned.

Construction of GPT's Rouse Hill Town Centre, in Sydney's north-west, commenced in April 2006 and is progressing well, in line with a targeted staged completion from the end of 2007. As one of the last major greenfield regional retail opportunities within the Sydney metropolitan area this is a unique opportunity for the Group to develop a new retail precinct as part of a planned community. GPT will develop and own the \$470 million Rouse Hill Town Centre and is in joint venture with Lend Lease to develop the remaining facilities and the residential component of this large-scale project which is located on a 120 hectare site in Sydney's fast-growing north-west.

Major retailers committed to the development include Big W and Target discount department stores, Woolworths and Coles full line supermarkets, and a Reading Cinema complex. Specialty store leasing is progressing well with approximately 60% of space committed and strong interest from retailers.

"Our Retail assets have benefited from intensive management and proactive ongoing development, and we are seeing the benefit of successful redevelopments completed across the Portfolio over the last 18 months. These, combined with active asset management to drive returns at our operational assets and our future developments at Charlestown Square, Wollongong Central, and Rouse Hill, will deliver further income growth in the medium term.

"Extracting further investment performance through active management and development of existing assets remains a focus of the retail team," Mr Fookes said.

Australian Office Portfolio

GPT's Office Portfolio performed well over 2006, increasing income (on a comparable basis) by over 10%.

Following the successful launch in July 2006 of the GPT Wholesale Office Fund (GWOF), GPT's office investment totals \$2.6 billion, consisting of \$1.7 billion in assets held on the Group's balance sheet and GPT's \$900 million investment in GWOF.

Across the \$3.9 billion GPT managed Portfolio, 108,500 sqm was leased in the year to December 2006, resulting in 98.2% of space being committed, well above market occupancy of 93.6%.

Mr Tony Cope, GPT's Head of Office, said GPT continued to expect income growth in the medium term and was clearly seeing signs of improving market conditions. Across the assets owned by GPT and GWOF the average lease term is 6.0 years, with limited short-term expiry (only 3.0% of space across the 528,000 sqm GPT managed Portfolio is due to expire over the course of 2007). Significant increases in valuations were achieved, with a net revaluation of \$191.6 million across the GPT owned office assets.

"We have been very active in leasing space and progressing lease renewals well in advance of expiry. The Portfolio has also benefited from improving market conditions and in the medium term has the potential to improve returns to Securityholders as recently secured developments are completed," Mr Cope said.

Acquisitions and developments

In 2006 the Group commenced the development of a new 21,700 sqm campus style office building on the waterfront at 818 Bourke Street Melbourne. The building, which is adjacent to the GWOF owned 800 and 808 Bourke Street buildings, is due to be complete in early 2008. GPT will spend approximately \$100 million developing the six-level office building, 50% of which will be occupied by Ericsson (10,650 sqm) for a term of 10 years on completion. Leasing has commenced for the remaining space in this modern development and a yield of 7.5% is anticipated. A 4 Star Green Star rating will be targeted for this development.

In November 2006, GPT, in conjunction with Citta Property Group, secured the development of a seven-level office building of approximately 18,000 sqm on the waterfront at Darling Island, Sydney. The building, which will be developed at a cost of approximately \$130 million, has been designed to achieve a 6 Star Green Star rating and will be at the leading edge of sustainable development. Offering five office levels with floorplates of up to 3,500 sqm, ground floor office and retail space and basement parking for 135 cars, the building is expected to be complete in the first half of 2009.

Future development opportunities across the GPT managed Portfolio include 77 Eagle Street, adjacent to the Riverside Centre in Brisbane (owned by GPT), and the Transit Centre in Brisbane (50% owned by GWOF).

Leasing

Over 108,500 sqm was leased or renewed across the GPT and GWOF assets over 2006 and terms were agreed for a further 11,500 sqm in the December quarter. Highlights in the GPT owned portfolio include:

• Australia Square, in Sydney, where committed space is 98.4% and 13,250 sqm was leased or $\bullet$ renewed, including leases to Ninemsn, DTL Australia and CPS Corporate.
• At the MLC Centre, Russell Investment Group have leased 2,290 sqm for a 5-year term, Freehills leased 3,500 sqm and PBB Properties have leased 1,250 sqm for 8 years. Committed space is now 96.7%.

• Chubb Insurance Group have leased 1,740 sqm at the Citigroup Centre for a 7-year term commencing February 2007. The Clifton Coney Group has leased 730 sqm (for 5 years), Corus Capital has leased 300 sqm (also for a 5-year term) and Hickson Lawyers have leased 490 sqm for a 2-year term. Only 1.2% of space remains to be leased at this asset.

• At Farrer Place, Goldman Sachs have leased a further 220 sqm for a 3-year term whilst Trivest, The Sydney Institute and Arcadia Advisory have all renewed leases within the Phillip Street Terraces for terms of between 2 and 3 years. Farrer Place is now 100% leased.

• Melbourne Central and 77 Eagle Street remain fully leased. $\bullet$

Leasing was also strong across the GWOF Portfolio, and the committed space across these assets is now 97.8%.

"We are continuing to focus on current vacancy and pending expiry to continually improve our expiry profile. The performance of the Portfolio and position of the office assets remains solid, although future performance is dependant on continued improvement in office demand, particularly in the key Sydney CBD market, which has been variable throughout 2006.

"Net absorption in all markets but Sydney and Perth continues to be positive and with relatively constrained supply, we expect solid rental growth over the short to medium term," said Mr Cope.

Australian Hotel/Tourism Portfolio

Mr Bruce Morris, GPT's Hotel/Tourism Portfolio Manager, said that the Portfolio delivered a good result, despite difficult resort market conditions, with income up 6.7% on 2005 on a comparable basis. This result reflected improved performance in the second half and adjustments to Voyages returns in line with changes as a result of the internalisation.

The major assets, Ayers Rock Resort and Four Points by Sheraton, each increased revenue despite being impacted by lower inbound tourism and weak domestic demand. Cyclone Larry, which resulted in the closure of Bedarra and Dunk Islands for four months and disruption to travel generally to this region, had an adverse affect on the Lodges Portfolio during 2006, as did one-off costs relating to insurance claims.

This was also the first year that GPT's results fully reflect GPT ownership and consolidation of Voyages and the inherent seasonality in the Voyages business.

"Our outlook for 2007 and 2008 remains positive for the Hotel/Tourism Portfolio, in line with our expectations of improvements in inbound tourism and a stable but competitive domestic market.

"Despite disappointing inbound visitation to Australia in 2006, Australia is a fundamentally attractive tourist destination and should continue to enjoy steady growth," Mr Morris said.

Australian Industrial/Business Park Portfolio

GPT's Industrial/Business Park Portfolio grew to over \$660 million at 31 December 2006, with a number of acquisitions during the year. In addition to enhancing the Portfolio's scale and diversity, these acquisitions provide the Portfolio with improved expansion potential through development.

Mr Victor Georos, Industrial/Business Park Portfolio Manager, said the Portfolio had delivered significant income growth (with comparable income growth of 5.7%) in addition to delivering additional scale as new acquisitions and developments were completed and secured across the Portfolio.

During 2006, over 113,000 sam of space was leased or renewed, contributing to occupancy of 98% by income (including land leases) and an average lease term of 6.6 years.

With the completion of the Labelmakers and Coles facilities at Somerton during 2006 and the pending completion of Quad 4 at Sydney Olympic Park in early 2007, the quality and diversity of the Portfolio's accommodation and tenant base has been further enhanced. New facilities for Linfox at Somerton and Freedom Furniture at Kings Park are also underway and due to be complete in 2007.

Reflecting a focus on securing future scale and diversity, the Group secured a DA approved site in the Macquarie Park business park market, with the potential to develop a \$90 million facility and in October 2006 announced the acquisition (subject to final conditions) of a 376,000 sqm site at Erskine Park in NSW with the capacity to develop a \$300 million facility over time.

The acquisition of six industrial assets located in key industrial markets across Sydney, Melbourne, Brisbane and Canberra was completed in March 2006. The \$94.4 million in assets will provide an initial yield of 8.4%.

Other acquisitions include:

• a 20,500 sqm industrial facility leased to Onesteel at Wetherill Park (NSW) for \$21.9 million;
• a 50% interest in a recently developed 12,500 sqm facility in Port Adelaide (for \$8.2 million) which has been acquired with Austrak, GPT's partner in the Austrak Business Park at Somerton and has further development potential; and
• a 4 hectare site at Abbot Road, Seven Hills (NSW) leased to Intercast & Forge for 5 years with significant development potential, for \$14.5 million (excluding costs) on an initial yield of 9%.

"The growth of the Portfolio has continued to gain momentum and we now have considerable scale and diversity, with assets in a range of industrial markets and the ability to meet a wide range of tenant accommodation needs. With over 600,000 sqm of development land available across the Portfolio and with 60,000 sqm of space currently being developed, investors will also benefit from income growth as these new facilities are completed in the short to medium term," Mr Georos said.

US Seniors Housing

In December 2006, GPT entered the US seniors housing market, with the acquisition of a 95% interest in a portfolio of seniors housing assets and an interest in the manager of the Portfolio, Benchmark Assisted Living (BAL). The Portfolio provides access to a growth sector which the Group had been considering for some time, through an established portfolio of 19 assets and a joint venture relationship with a dominant operator in a growing market for this asset class.

The acquisition is consistent with GPT's strategy to further diversify its portfolio of ownership assets to sectors that provide compelling earnings growth potential, and was the result of an extensive process of review in relation to opportunities both locally and internationally.

The assets, located in the New England region of the United States (between Boston and Washington), were acquired for \$545 million, including acquisition costs. The investment is expected to achieve an initial yield of 7.1% pre costs (6.8% post costs). Through the Group's ownership interest in BAL, the largest owner-operator in the New England region, GPT has access to an experienced management team in delivering value from the assets and selectively expanding the Portfolio over time.

Martin Janes, Portfolio Manager for GPT, said, "This acquisition is an exciting evolution of GPT's investment portfolio, as it broadens the Group's exposure to real estate assets and related management platforms to create value for investors.

"The Portfolio and our interest in the manager gives us exposure to a market with strong demand fundamentals and the ability to deliver value through both active management and the growth of the portfolio over time," Mr Janes said.

Australian Funds Management

A major milestone in the Group's strategy to build a funds management business was achieved with the establishment of the Group's first wholesale fund in July 2006. The GPT Wholesale Office Fund (GWOF) was launched with a portfolio of \$2.15 billion of quality office assets located across Australia's major office markets. The Fund, which was oversubscribed, meets an increasing demand from institutional investors for direct property exposure to quality real estate assets and provides GPT with potential for stronger earnings growth, a broadening of the Group's base of capital partners, diversification of the Group's income streams and additional flexibility in the management of the Group's balance sheet.

GPT maintains an interest in the portfolio of assets sold to GWOF through its 40% co-investment in the Fund which at 31 December 2006 had a value of \$900 million.

Since the Fund's establishment, solid performance for investors has been delivered, resulting in outperformance against the benchmark for the period ended 31 December 2006. GPT benefited from this performance through the Group's interest in the Fund and achievement of the full performance fee.

The Portfolio was expanded with the acquisition of a 50% interest in The Zenith twin tower complex at Chatswood for \$126.25 million (excluding acquisition costs), announced in early 2007. The Fund's Portfolio now has a value of over \$2.36 billion, and with gearing of only 7% retains future growth.

Nicholas Harris, Head of Wholesale for GPT, said GPT's establishment of a vibrant and growing funds management business had made significant progress in 2006.

"With resourcing in place and the successful launch of our first fund in July we have strong relationships established in this market and an excellent base from which to build as we expand. We remain committed to delivering performance for GWOF and in progressing our next initiative, the potential launch of a shopping centre fund in 2007," Mr Harris said.

Joint Venture

The Group's Joint Venture with Babcock & Brown (JV) concluded the year having achieved its target to be fully invested by December 2006, with GPT's initial capital committed and a total of \$5.9 billion in assets, representing six portfolios located in the European and US markets, having been acquired. The JV met its financial forecasts, contributing \$55.5 million to the result for GPT in 2006. This result included a \$19.8 million contribution from Babcock & Brown under arrangements put in place when the JV was established. This contribution was higher than anticipated due to the delay in the realisation of expected trading profits from some of the existing portfolios. This is essentially a timing difference as, subsequent to year end the JV has entered into a contract to sell 23% of the German Residential Portfolio at a significant profit. If this transaction completed in 2006 as planned, the top up would not have been necessary.

Approximately 40% of the Portfolio was revalued during the year, resulting in an uplift of 7% against book cost and further profits are anticipated to be realised in 2007 as asset recycling occurs into a strong investment market.

Neil Tobin, General Manager, JV for GPT said: "The JV also moved forward strategically, with the evolution of a longer term strategy and commitment of an additional \$704 million in capital to fulfill the investment objective of pursuing real estate investment opportunities globally and to support the growth of a funds management business."

The Portfolio has achieved significant diversity and scale, with portfolios now established in a range of sectors and the acquisition of the first operating business, consistent with the JV's strategy to invest in asset management businesses and pursue opportunities to create managed funds. While the planned launch of a European retail fund did not proceed, the JV remains confident of the opportunities in this sector as the European property market evolves and through the platform already secured in Halverton.

"We remain committed to achieving our target return on total equity of 12-15% after tax as our exposure to operating platforms and portfolios continue to grow. Halverton gives us the potential to establish a range of managed funds, building on the recent success of Halverton's German Office Partnership Fund and we expect further opportunities to emerge.

"We are currently focused on bedding down acquisitions undertaken over the last year and progressing the next stage of our strategy for the $JV -$ the maximisation of returns from existing

assets, and the establishment of operating platforms and managed funds to create long term enterprise value," Mr. Tobin said.

Halverton

The JV announced the acquisition of a 50% interest in Halverton in November. This acquisition cements the relationship the JV had established with Halverton through the aggregation and management of the JV's European Light Industrial portfolio over the last 18 months, and secures an asset management platform for the JV's own assets as well as the potential to benefit from the growth of this business over time as Halverton expands its operations.

Halverton has operations in five countries and employs over 80 people focused on delivering value through active asset management, transaction identification and execution and funds management. Halverton's strong track record and management expertise provides a scaleable platform on which to build both asset management and funds management growth.

At 31 December 2006 Halverton had €1.16 billion in assets under management, including the JV's €844 million portfolio. Halverton plans to launch further funds over the course of 2007, including funds focused on regional office, retail and distribution properties in Europe.

JV Portfolio

At 31 December 2006, the JV Portfolio had a book cost of \$5.9 billion. The Portfolio is forecast to deliver a yield of 6.8% in 2007, above the cost of debt of 4.8% and includes:

German Residential

The German Residential Portfolio comprises over 34,000 apartments, located primarily in the former western Germany and Berlin, with a book cost of approximately \$2.1 billion.

The revaluation of around 60% of the portfolio during the year reflected an increase on book cost of over 11%. Since year end, the sale of a portion of the Portfolio has been finalised. This sale, of the Salzgitter and Domus assets which formed part of the Joint Venture's initial investment in this sector, will realise a significant profit.

The current focus is on pursuing future transactions to crystallise value and reducing vacancies across the existing assets.

European Light Industrial

The Portfolio was grown over the course of 2006 and now comprises 88 properties located across Germany, the Netherlands, France, Sweden and Denmark, with a book cost of approximately \$1.4 billion. The acquisition pipeline remains strong, providing the potential to further expand the Portfolio. Improvements in the operating performance of the Portfolio over time are expected through active asset management.

European Retail

This Portfolio comprises 41 assets with a book cost of approximately \$920 million, including German neighbourhood centres and shopping centres located in Germany, Poland and the Czech Republic. The longer term strategy for this Portfolio continues to focus on the development of funds management opportunities.

US Retail

The US Retail Portfolio was expanded during the second half of 2006 with the acquisition of Tutwiler Centre, a 5900,000 square ft retail centre located in Birmingham, Alabama. The Portfolio now comprises seven assets with a book cost of \$638 million. GPT is asset managing this Portfolio on behalf of the JV, and is focused on progressing medium term expansion/remixing opportunities at a number of assets.

German Office

The German Office Portfolio was expanded during the year, bringing the total book cost for this portfolio to approximately \$300 million. The portfolio, although relatively small, provides exposure to a sector with significant growth potential.

US Multifamily

The JV made its first investment in the US multifamily sector in 2006, via a one third equity interest (\$412 million) and an \$84 million mezzanine loan secured over a \$1.2 billion Multifamily Portfolio, comprising approximately 19,500 apartments in nine US states. The BNP multifamily transaction provides a potential opportunity for growth which is currently being reviewed by the JV.

Mezzanine

The JV has a strategy to assemble a diversified portfolio of real estate related mezzanine funding positions that provide appropriate risk-adjusted returns. To date, one loan has been entered into $-$ a \$16.4 million loan with a 20% total return as part of the funding of the Sydney Wharf residential development, and the focus is now on evaluating opportunities in the US.

Financial Summary

	12 months to Dec 05	12 months to Dec 06
Distributions
Distribution (cents per security)	24.4	27.5
Tax Advantaged	19.4%	11.9%
Total Income
Retail	\$304.5m	\$339.0m
Office	\$228.9m	\$222.1m 1
Hotel/Tourism	\$76.8m	\$72.5 2
Industrial/Business Park	\$26.5m	\$39.3m
Urban Communities	\$4.7m	\$5.6m
Babcock & Brown Joint Venture	\$20.2m	\$55.5m
	At 31 Dec 2005	At 31 Dec 2006
Assets
Total assets	\$10,431.7m	\$12,001.9m
Borrowings	\$3,628.2m	\$4,291.7m
Debt to total assets	35%	36%
Securities on issue ('000)	2,016,717	2,041,530
Net asset backing/security	\$3.16	\$3.60
Security price	\$4.10	\$5.60
Australian Retail
Total Value	\$4,495.5m	\$5,806.5m
Australian Office
Total Value	\$3,483.5m	\$2,567.3m 3
Australian Hotel/Tourism
Total Value	\$872.8m	\$844.9m
Australian Industrial/Business Park
Total value	\$418.3m	\$662.3m
Australian Urban Communities
Total value	\$40.2m	\$26.6m
US Seniors Housing4
Total Value	NA	\$545.0m
Joint Venture with Babcock & Brown 5
Equity Investment	\$843.8m	\$1,506.7m

ENDS

$¹$ Includes the distribution received from GPT's investment in GWOF.

^<sup>2 Income for the previous corresponding period is not directly comparable. In 2005, income included rent/interest from the Voyages resorts, however due to full consolidation of Voyages into GPT in 2006, 2006 income now represents EBITDA. On a like with like basis, total hotel/tourism income increased 6.7%.

^<sup>3Includes GPT's investment in GWOF.

^<sup>4Represents portfolio acquisition price. GPT equity investment is \$216.5 million at 31 December 2006.

^<sup>5 Represents GPT's equity investment. At 31 December 2006 the Joint Venture portfolio included \$5.9 billion of real estate assets in Europe and the United States.

GPT Background and Strategy

GPT is a diversified property group listed on the Australian Stock Exchange with a market capitalisation of approximately \$11 billion and total assets of \$12 billion.

Originally established in 1971, GPT is the longest running listed property trust (LPT) in Australia and for much of its 36 year history was an externally managed LPT whose parent was Lend Lease.

As an externally managed LPT, GPT derived all its earnings through the long-term ownership of a large, high quality Australian diversified property portfolio. The investment objective was to provide stable earnings with a modest level of growth and a relatively low risk profile. In the last decade this meant targeting approximately 3% earnings growth per annum, which was consistent with the leading externally managed vehicles.

The Australian LPT sector has undergone significant change in recent years, with a trend towards internally managed vehicles, a higher level of active earnings and higher earnings growth expectations. Earnings growth greater than 3% was not sustainable in GPT's historic structure. The Group had no exposure to more active businesses such as funds management, provision of property services or development of assets for profit. As a reflection of investor demand and these industry trends GPT substantially restructured its business in June 2005 by:

• Internalising management and separating from Lend Lease; $\bullet$
• Entering into a joint venture with Babcock & Brown (joint venture); and
• $\bullet$ Embarking on an enhanced growth strategy.

A significant objective of the restructure was to enhance earnings growth without dramatically changing the risk profile and stability of earnings for securityholders.

Today GPT has three core elements to its business strategy:

• 1. Continued ownership and active management of its investment portfolio.
• 1. The benefit of its joint venture, which is, in the short to medium term, the Group's major growth engine.
• 1. The development of further growth opportunities now possible as a result of GPT's internalised independent structure.

This strategy is being delivered by way of the following key business activities:

Investment portfolio

GPT has built a high quality diversified property investment portfolio over three decades. It has pursued a diversified strategy to diversify income streams and risk whilst maximising opportunities through most property cycles. Specialised teams work on managing each portfolio and activities include asset management, development management, acquisitions and disposals and, in the case of retail, property management and leasing.

These teams are focussed on maximising returns through active management and selected development of the assets. The portfolio is constantly being improved through capital expenditure, acquisitions and disposals but has a long term ownership objective.

The portfolio includes retail shopping centres, commercial office buildings, industrial warehouses and business parks, and hotel and tourism assets. In recent years GPT has added bulky goods retailing, US senior housing and a modest exposure to residential urban communities.

The objective of the investment portfolio is to provide a stable underlying base of earnings for GPT with a modest level of growth (circa 3%). It currently represents 87% of GPT's balance sheet.

The joint venture with Babcock & Brown (joint venture)

The joint venture seeks to leverage GPT's significant asset management and funds management expertise and Babcock & Brown's extensive global deal sourcing and financing capability.

The joint venture has two key objectives:

• 1. Aggregate portfolios of assets in several key sectors and geographies largely outside Australia.
• 1. Establish a property funds management platform seeded with the assets aggregated on balance sheet and then recycle the capital into other growth opportunities.

The joint venture's initial investments have been in Europe and the US where Babcock & Brown have extensive experience and property teams.

The philosophy is different from the investment portfolio of GPT, which targets long term ownership of core assets, as the assets and capital will be traded more frequently.

The investment objectives of the joint venture are to target returns on equity of $12 - 15\%$ and it currently represents just 13% of GPT's balance sheet. The combination of these returns plus GPT's investment portfolio earnings growth of 3% allow the Group to target overall earnings growth of $4 -$ 5%.

GPT's positioning and other growth initiatives

As an externally managed trust GPT was previously prohibited for tax reasons to control operating businesses and was restricted to the more "passive" ownership of property. With the restructure of the Group GPT is able to access higher growth opportunities and is seeking to do so where these opportunities enhance securityholder returns and are within the modest risk profile GPT wishes to maintain.

To date these initiatives have included:

• 1. Establishment of a wholesale funds management platform in Australia;
• 1. Investment in the senior housing sector in the US; and
• 1. Increasing the Australian development pipeline with the opportunity of developing for profit.

These opportunities leverage GPT's core property and funds management skills, diversify earnings sources, access higher earnings growth opportunities, enhance return on capital, assist balance sheet management and provide further growth opportunities outside the joint venture.

This strategy allows GPT to target higher earnings growth than previously delivered whilst largely retaining the high quality stable investment earnings traditionally delivered by the Group. Whilst further opportunities to enhance returns for securityholders will be considered GPT seeks to remain focused, on a selected range of businesses that can be resourced and managed efficiently to deliver the investment objectives of the Group without taking undue risk.

THE GPT GROUP

Doop

Annual Financial Report of General Property Trust ABN: 58 071 755 609 31 December 2006

Contents

	raye
Directors' Report	1.
Auditors' Independence Declaration	18
Financial Report
Income Statements	19
Balance Sheets	20
Statements of Changes in Equity	21
Cash Flow Statements	22
Notes to the Financial Statements	23
Directors' Declaration	84
Independent Audit Report to the Unitholders	85

This financial report includes separate financial statements for General Property Trust as an individual entity (the 'Trust') and the consolidated entity consisting of General Property Trust and its controlled entities, including GPT Management Holdings Limited (the 'Company') and its controlled entities, together referred to as the GPT Group (GPT). The financial report is presented in the Australian currency.

General Property Trust is a registered scheme, registered and domiciled in Australia. GPT Management Holdings Limited is a company limited by shares, incorporated and domiciled in Australia.

GPT RE Limited is the Responsible Entity of General Property Trust. GPT RE Limited is a wholly owned subsidiary of GPT Management Holdings Limited.

Their registered office and principal place of business is:

The GPT Group MLC Centre Level 52 19 Martin Place Sydney NSW 2000

A description of the nature of the consolidated entity's operations and its principal activities is included in the review of operations and activities on page 1 in the Directors' Report, which is not part of this financial report.

The financial report was authorised for issue by the directors on 21 February 2007. The Trust has the power to amend and re-issue the financial report.

Through our internet site, we have ensured that our corporate reporting is timely, complete and available globally at minimum cost to the Trust. All press releases, financial reports and other information are available on our website: www.gpt.com.au.

For the year ended 31 December 2006

The Directors of GPT RE Limited, the Responsible Entity of General Property Trust, present their report together with the financial report of General Property Trust for the financial year ended 31 December 2006 and the Audit Report thereon.

Directors

The Directors of GPT Management Holdings Limited and GPT RE Limited, the responsible entity of General Property Trust ('the Responsible Entity'), at any time during or since the end of the financial year are:

Chairman - Non-executive (i)

Peter Joseph (Chairman)

(ii) Non-executive directors

Malcoim Latham.
lan Martin
Brian Norris	(Resigned 31 August 2006)
Eric Goodwin
Ken Moss
Elizabeth Nosworthy
Anne McDonald	(Appointed 2 August 2006)

(iii) Executive director

Nic Lyons

Principal Activities

The principal activities of GPT during the financial year included:

• investment in income producing retail, commercial, hotel, industrial, office parks and residential including senior housing properties;
• development of retail, commercial, industrial and office park properties;
• residential property development;
• property trust management;
• property management;
• fund management; and
• hotel management.

GPT operates in Australia. Europe and the United States of America.

Other than an investment into a senior housing portfolio there has been no other significant change in the nature of the activities of GPT during the year.

The GPT Group (GPT)

The stapled securities of GPT are quoted on the Australian Stock Exchange under the code GPT and comprise of one unit in the Trust and one share in the Company. The unit and share are stapled together and cannot be traded separately. Each entity forming part of GPT continues as a separate legal entity in its own right under the Corporations Act 2001 and is therefore required to comply with the reporting and disclosure requirements under the Corporations Act 2001 and Australian Accounting Standards.

Review of Operations

Financial Results

	31 Dec 2006	31 Dec 2005
	SM	\$M.
Profit after tax for the stapled entity	1.384.0	566.8
Finance cost/distribution paid and payable	558.6	492.1
Finance cost/distribution per security	27.5	24.4

On the implementation of AIFRS, securityholder interests were required to be accounted for as liabilities. Following a change in the constitution on 2 June 2005, securityholder interests are now classified as equity. As a consequence, amounts accruing to securityholders until 2 June 2005 were accounted for as finance costs. Since 2 June 2005, amounts accruing to securityholders are accounted for as profit or movements in reserves. Therefore, the total amount accruing to securityholders recognised in the Income Statement for the year ended 31 December 2005 is \$566.8 million. This comprises profit after tax of \$772.3 million and finance costs of \$205.5 million. The year ended 31 December 2006 comprised entirely of profit after tax of \$1,384.0 million.

Summary of other financial highlights

• distribution per security increased by 12.7% to 27.5 cents;
• total assets increased by 15.1% to \$12,001.9 million;
• net tangible assets per security increased by 14.6% to \$3.60; and
• gearing ratio at 35.8%

1

Review of Operations and Changes in the State of Affairs (continued)

Operational highlights

The profit result reflected growth from existing business operations, including GPT's investment portfolio, and the benefits of expansion of GPT's operations into new sectors and geographies, including the establishment of the Group's first wholesale fund. The result delivered on the forecast for calendar year 2006 contained in GPT's Notice of Meeting and Explanatory Memorandum dated May 2005.

Retail portfolio

The retail portfolio delivered an increase in income over the year, reflecting improved returns from recently completed developments and the benefit of active asset management. The portfolio was remixed during the year with the addition of an interest in Highpoint Shopping Centre, and the sale of smaller Homemaker City centres in Moorabbin and Epping in Victoria. Construction on the Rouse Hill Town Centre commenced. This major development (at a cost of \$470 million) will be complete in stages from the end of 2007.

Babcock & Brown joint venture

The Joint Venture with Babcock & Brown concluded the year having met its target to be fully invested, with \$3.0 billion of assets acquired in Europe and the US providing both scale and diversity. In November 2006 GPT announced the Group would commit a further \$704 million in capital to the joint venture, bringing the Group's total capital commitment to \$2.0 billion.

Commercial portfolio

On 21 July 2006, GPT received cash proceeds of \$1.3 billion on 21 July 2006 as consideration for the sell down of its interest in GWOF. GPT continues to own the remainder of the office portfolio on balance sheet, with exposure to a value of \$902.7 million. Combined with GPT's investment in GWOF (currently 40%) GPT has exposure to a highly diversified and quality office portfolio with a value of \$2.6 billion in assets.

GPT purchased land at Victoria Harbour, Melbourne and entered into a development management contract with Lend Lease in June 2006 to develop a 21,700sqm campus style office development. Approximately half the office space is precommitted to Ericsson with completion planned for the first quarter of 2008.

GPT purchased land at Darling Island in Pyrmont in December 2006 under a 99 year lease from Sydney Harbour Foreshore Authority. The Group has entered into a Development Agreement with Citta Property Group for the delivery of the building, which will provide 17,875som of office space in a waterfront campus environment. The development is targeted for completion in February 2009.

Industrial portfolio

Construction commenced in August 2005 on the \$100 million Coles National Distribution Centre (GPT's share: \$50 million) and the \$20 million Labelmakers facility (GPT share: \$10m) at the Austrak Business Park, Somerton. Labelmakers is due for completion in the first quarter of 2006 and Coles in early 2007.

GPT also undertook a number of acquisitions during the year, with a total value of \$163.1 million. They include assets located in NSW, Victoria, Queensland, Canberra, and South Australia, and provide additional scale and diversity as well as improved expansion potential.

Hotel portfolio

GPT has divested Cape Tribulation Resorts in North Queensland which includes Coconut Beach Rainforest Resort and Ferntree Rainforest Lodge for \$8.5 million. GPT has also divested Wildman Resort for \$0.6 million.

Urban communities

The sale of Twin Waters resort was settled on 29 June 2006. The sale price, of \$24.1 million was above GPT's book value of \$17.9 million,

US senior housing

GPT has entered into a shared control joint venture arrangement with BE Capital LLC which provides GPT entry into the US senior housing market with the acquisition of a 95% interest in a portfolio of senior housing assets and a 20% interest in the manager of the portfolio, Benchmark Assisted Living, LLC. The portfolio gives GPT access to a growth sector which the Group has been considering for some time, through an established portfolio of stabilised assets and a joint venture relationship with a dominant operator in a growing market for this asset class.

Wholesale fund platform

On 21 July 2006, GPT established the Group's first wholesale fund - the GPT Wholesale Office Fund (GWOF). GWOF will be GPT's core Australian prime CBD office investment partner, with GPT maintaining an interest in the portfolio through its stake in the Fund.

GPT received cash proceeds of \$1.3 billion on 21 July 2006 as consideration for the sell down of its interest in GWOF and was initially used to retire existing debt. This has enhanced GPT's capacity to fund its significant development pipeline, which has a potential value of approximately \$2 billion in the medium term, and to invest in future opportunities.

The earnings to be derived from the fund are a base management fee of 0.11254% per quarter of the asset value payable quarterly in arrears and a performance fee of 15% of the outperformance above the 10 year bond yield on the first day of the half year plus 3% per annum (post base management fee). Total management fees are capped at 0.45% of the asset value per half year. Excess outperformance and underperformance is carried forward to future periods.

For the year ended 31 December 2006

Finance Costs and Distributions

The Responsible Entity of the Trust has determined the payment of finance costs and distributions for the year ended 31 December 2006 of 27.5 cents per security (Dec 2005: 24.4 cents).

Significant changes in state of affairs

In the opinion of the directors, there were no significant changes in the state of affairs of the GPT Group that occurred during the year other than those detailed above.

Likely developments and expected results of operations

Further information on likely developments in the operation of the GPT Group and the expected results of those operations have not been included in this report as it would be likely to result in unreasonable prejudice to the GPT Group.

Environmental Regulation

The Directors are satisfied that there are no significant issues that currently have an impact on the GPT Group.

Proceedings on behalf of the Trust

No person has applied to the Court under section 237 Corporations Act 2001 for leave to bring proceedings on behalf of GPT, or to intervene in any proceedings to which GPT is a party, for the purpose of taking responsibility on behalf of GPT for all or part of the proceedings.

No proceedings have been brought or intervened in on behalf of GPT with leave of the Court under section 237 of the Corporations Act 2001.

Events Subsequent to Balance Date

The directors are not aware of any matter or circumstance occurring since the end of the financial year not otherwise dealt with in this report or accounts that has significantly or may significantly affect the operations of GPT, the results of their operations or the state of affairs of GPT in subsequent financial years, in making this statement in respect of events subsequent to balance date the conflicted directors have relied upon assurances provided by non conflicted directors.

Information about the Trust

There number of securities issued during the year is 24,813,896 (Dec 2005: NII) with securities on issue at year end at 2,041,530,506 (Dec 2005: 2,016,716,610).

The value of the Trusts assets as at 31 December 2006 is \$12,001.9 million (2005: \$10,431.7 million) derived on the basis set out in Note 1 to the financial statements.

Fees paid to the Responsible Entity during the financial year are disclosed in Note 5.

For the year ended 31 December 2006

Information on Directors

Peter Joseph OAM - Chairman

Mr Joseph is a career investment banker and an experienced company director who has had a close involvement with the BT Financial Group for 30 years. Mr Joseph was a Director of the responsible entities of a number of BT funds including some of the BT property trusts. Mr Joseph was also a Director of the Peter Kurts Properties Group for 12 years. Mr Joseph is currently the Chairman of Dominion Mining Limited. Mr Joseph is also Chairman of the St James Ethics Centre and the Black Dog Institute and, until September 2004, was the Chairman of the St Vincent's and Mater Hospitals in Sydney.

In 2000, Mr Joseph was awarded the Order of Australia Medal. Mr Joseph holds a Bachelor of Commerce degree and a Masters degree in Business Administration. Mr Joseph is a fellow of the Australian Institute of Company Directors. Mr Joseph is a member of the Nomination and Remuneration Committee.

Nic Lyons - Chief Executive Officer & Managing Director

Mr Lyons was appointed CEO of GPT in October 2000 and has more than 25 years experience in the property and property funds management industries in Australia and overseas. His long career in the property industry has included roles with entities such as ING, where he was General Manager of Listed Property Trusts, and Lend Lease Real Estate Investments where he was CEO - Real Estate Investments. Mr Lyons is a member of the Nomination and Remuneration Committee.

Eric Goodwin

Mr Goodwin is a Non-executive Director of Eureka Funds Management Limited, Lend Lease Global Properties SICAF and AMPCI Macquarie Infrastructure management No 2 Limited. Mr Goodwin joined Lend Lease in 1963 as a cadet engineer and during his 42 year career with Lend Lease held a number of senior executive and subsidiary board positions in the Australian operation, the US and he was the inaugural manager of the group's Asian operations. Eric has experience in design construction and project management, general management and funds management. His experience includes fund management of the MLC Property Portfolio during the 1980s and he was the founding Fund Manager of the Australian Prime Property Fund. Mr Goodwin is a member of the Audit and Risk Management Committee.

Malcolm Latham AM

Mr Latham is currently a director of the Hornery Institute which works throughout Australia. The Institute partners with developers, communities and their governments to enhance the quality of life and the places in which people live, learn, work and play. Prior to this Mr Latham was Chairman of the South Sydney Development Corporation and Chairman of a joint venture for the redevelopment of the Auckland Harbour waterfront. He has extensive international experience in urban planning and development. Mr Latham holds degrees in Architecture and Urban Planning and was awarded the Order of Australian in 1990 for his work as Executive Chairman of the National Capital Development Commission, Canberra. Prior to joining the GPT Board, Mr Latham was a senior executive in Lend Lease Corporation. Mr Latham is a member of the Nomination and Remuneration Committee.

Anne McDonald

Ms McDonald was appointed to the Board on 2 August 2006. Ms McDonald is currently a Non-executive Director of Westpac's Life Insurance companies and St Vincent's and Mater Health Sydney Limited. Ms McDonald is a chartered accountant and was previously a partner of Ernst & Young for fifteen years specialising as a company auditor and advising multinational and Australian companies on transaction due diligence, risk management and accounting issues. She was a Board Member of Ernst & Young Australia for seven years and a previous Director of the Private Health Insurance Administration Council. Ms McDonald is a member of the Audit and Risk Management Committee.

Ian Martin

Mr Martin is currently a Non-executive Director of Babcock & Brown Limited, Argo Investments Limited and St Vincent's, and Mater Health Sydney Limited. Mr Martin is a former Chief Executive Officer of the BT Financial Group and Global Head of Investment Management and Member of the Management Committee of Bankers Trust Corporation. Mr Martin spent eight years as an economist with the Australian Treasury, Canberra, and was the inaugural Chairman of the Investment and Financial Services Association. Mr Martin is the Chairman of the Nomination and Remuneration Committee.

Ken Moss

Dr Moss is a Non-executive Director of Adsteam Marine Limited and a Director of Macquarie Capital Alliance Group. Dr Moss is Chairman of Boral Limited and Centennial Coal Company Limited and is a board member of the Australian Maritime Safety Authority. Prior to August 2000, Dr Moss was Managing Director of Howard Smith Limited. Dr Moss is a fellow of the Australian Institute of Company Directors and holds a Bachelor of Engineering and Doctor of Philosophy. Dr Moss is the Chairman of the Audit and Risk Management Committee.

Elizabeth Nosworthy AO

Ms Nosworthy is currently Deputy Chairman of Babcock & Brown Limited and the Chairman of Commander Communications Limited and Queensland Water Commission. Ms Nosworthy is a Director of Ventracor Limited and is an Adjunct Professor of Law at the University of Queensland. Previously, Ms Nosworthy was a commercial partner in a national law firm where she specialised in financing work including infrastructure financing. Ms Nosworthy is a Fellow of the Australian Institute of Company Directors and has held a wide range of directorships in both the private and the public sectors. Ms Nosworthy is a member of the Audit and Risk Management Committee.

Company Secretary - James Coyne

Mr Coyne was appointed the General Counsel/Company Secretary of GPT in 2004. Prior to this Mr Coyne held various roles at Lend Lease initially with the construction, infrastructure and development groups before moving on to the Real Estate investments Group in 2000, where he held Senior Legal and Company Secretarial roles in both the listed and unlisted sectors.

For the year ended 31 December 2006

Attendance of Directors at Board Meetings and Board Committee meetings

The number of meetings of the Board and of each Board Committee held during the year to 31 December 2006, and the number of meetings attended by each Director is set out below.

	Board		Audit and Risk Management Committee		Nomination and Remuneration Committee
	Meetings Attended	Meetings Held	Meetings Attended	Meetings Held	Meetings Attended	Meetings Held
Peter Joseph	16	17			4	4
Eric Goodwin	16	17	7	7
Malcolm Latham	17	17			4	4
Nic Lyons 1	17	17			3	4
Anne McDonald 2	7	7	4	4
lan Martin	16	$16^{3}$			4	4
Ken Moss	17	17	7	7
Brian Norris 4	10	11	3	4
Elizabeth Nosworthy	16	$16^{5}$

$12345$ N Lyons was a member of the Nomination and Remuneration Committee until 6 December 2006.

A McDonald was appointed as a director on 2 August 2006.

I Martin abstained from participating in the entirety of 1 Board meeting due to a conflict of interest.

B Norris retired as a director on 31 August 2006.

E Nosworthy abstained from participating in the entirety of 1 Board meeting due to a conflict of interest.

Directors Interests

The relevant interests of each director in the securities of GPT are as follows:

Director	Interests in GPT Securities
Peter Joseph	50,000
Eric Goodwin	11,241
Malcolm Latham	13,195
Nic Lyons	734,116
Anne McDonald	10,500
lan Martin	51.241
Ken Moss	26,241
Elizabeth Nosworthy	6,241

For the year ended 31 December 2006

Directorships of Other Listed Companies

Details of all directorships of other listed entities held by each Director in the three years immediately before 31 December 2006 and the period
for which each directorship was held are set out below

Director	Directorship of Listed Entity	Period held
Peter Joseph	Dominion Mining Limited	1980 to present
Eric Goodwin	Nil	ΝA
Malcolm Latham	Nil	NA
Nic Lyons	ΝiΙ	NA
Anne McDonald	Nil	NA
lan Martin	Babcock & Brown Limited	2004 to present
	Argo Investments Limited	2004 to present
Ken Moss	Macquarie Capital Alliance Group (including Macquarie Capital Alliance Limited, Macquarie Capital Alliance Management Limited	2005 to present
	Boral Limited
	Centennial Coal Company Limited	1999 to present
	National Australia Bank Limited	2000 to present
		2000 to 2004.
Elizabeth Nosworthy	Babcock & Brown Limited	2004 to present
	Commander Communications Limited	2003 to present
	Stanwell Corporation Limited	2001 to 2006
	Ventracor Limited	2002 to present
	Prime Infrastucture Management Limited	2002 to 2004

Remuneration Report

This report outlines GPT's remuneration philosophy and practices together with details of the specific remuneration arrangements that apply to Directors, key management personnel as defined in AASB124 Related Party Disclosures and to the five named executives as defined in section 300A of the Corporations Act (collectively "Senior Executives").

THE NOMINATION AND REMUNERATION COMMITTEE

GPT's Board has established a Nomination and Remuneration Committee to, inter alia, review and make recommendations to the Board on:

• remuneration policies (including performance management and short and long term incentive schemes) applicable to GPT employees
• the Chief Executive Officer's performance and remuneration
• remuneration policies and packages applicable to Board members.

The Nomination & Remuneration Committee consists of three Non-executive Directors:

• lan Martin (Chair)
• Peter Joseph
• Malcolm Latham

Further information about the role and responsibility of the Nomination and Remuneration Committee is set out in its Charter which is available on GPT's website (www.gpt.com.au).

The Chief Executive Officer reviews the performance and remuneration of the Senior Executives and makes recommendations on these to the Nomination and Remuneration Committee. The Chief Executive Officer's recommendations recognise the differing experience, responsibilities. skills and contributions of executives as well as other market influences that may affect their total remuneration packages. If endorsed by the Nomination and Remuneration Committee, total remuneration packages for these executives are recommended to the Board for approval.

REMUNERATION - EXECUTIVES

GPT's Remuneration Philosophy

GPT is a performance-based culture that creates opportunities for market competitive rewards to employees in line with their performance. As a result, GPT's remuneration strategy is focussed on the objective of achieving outstanding business performance by aligning and rewarding superior employee performance. GPT's remuneration processes are designed to achieve a clear and direct link between pay and performance of the individual and GPT.

In 2005, following the unitholder vote which led to the internalisation of management, the Board - through the Nomination & Remuneration Committee - undertook a comprehensive review of GPT's remuneration strategy and practices, drawing on external advice from the Godfrey Remuneration Group Pty Limited.

Specifically, the Board sought to devise a remuneration strategy that:

• Is transparent
• Is fair and market competitive
• Encourages superior performance by aligning employee rewards with the interests of all stakeholders
• Attracts, motivates, rewards and retains talented and skilled directors, executives and employees
• Rewards employees who align their conduct and performance with the core values and culture of GPT.

The Board was also mindful to ensure the remuneration strategy was designed to:

• Satisfy the interests of all stakeholders by aligning remuneration with the achievement of strategic objectives -- including the achievement of superior returns for Securityholders.
• Attract, align, retain and motivate superior talent at all levels by adequately rewarding contribution to value creation and the execution of GPT's business strategy.

GPT's Remuneration Strategy

GPT aims to pay market competitive Total Remuneration packages made up of the following components:

• Base Salary (fixed) This is generally positioned at market median against comparable LPT sector peers on the basis of annual benchmarking. Base salaries are reviewed annually, although they may also be reviewed when there is a significant change in an employee's responsibilities, for example, in the case of a promotion,
• Short Term Incentives (STIs) (variable) Opportunities for short-term incentive awards are expressed as a percentage of Base salary and determined by annual performance against agreed financial and non-financial key performance indicators (KPI's).
• Long Term Incentives (LTIs) (variable) Opportunities for long-term incentive awards are determined by performance against KPI's and measured over three years.

Individuals can receive Total Remuneration in the top quartile of the market in a particular year only if various financial and non-financial KPI's are achieved.

Remuneration Report (continued)

For the Chief Executive Officer and other key management personnel the variable or "at risk" components of Total Remuneration are greater than at other levels of the business. The following chart shows percentage mix of the fixed and variable components of Total Remuneration for the Chief Executive Officer and other key management personnel.

Name	Base Salary (fixed)	Variable or "At Risk" Remuneration 1
		STI.	LTI
Nic Lyons Chief Executive Officer	29%	29%	42%
Michael O'Brien Chief Operating Officer	33.34%	33.33%	33.33%
Kieran Pryke Chief Financial Officer	33.34%	33.33%	33.33%
Nell Tobin General Manager Joint Venture	33.34%	33.33%	33.33%
Mark Fookes Head of Retail	33.34%	33.33%	33.33%
Bruce Morris Hotel & Tourism Portfolio Manager	33,34%	33.33%	33.33%
James Coyne General Counsel/Secretary	38%	31%	31%
Nicholas Harris Head of Wholesale	29%	42%	29%

¹ The percentage of each component of total remuneration is calculated with reference to stretch performance outcomes (ie the theoretical maximum possible remuneration the individual can achieve) in both STI and LTI - for more information on performance measurement levels see the following sections on short and long term incentives.

External Benchmarking of Total Remuneration

Against this background the Nomination and Remuneration Committee is mindful to ensure that market data considers GPT's competitors in the LPT sector as well as GPT's peers on the ASX 200, with the greatest weighting being applied to LPT sector based comparisons.

For guidance, the Nomination and Remuneration Committee and the Chief Executive Officer draw on the following data to benchmark remuneration:

• Specific external benchmarking conducted by Godfrey Remuneration Group Pty Limited
• Information available in published job matched surveys of industry peers including the Avdiev Property Industry Remuneration Report
• Commissioned surveys (if required) to supplement the published information.

Performance Measures

Performance is evaluated against both financial and non-financial KPI's.

Performance against financial KPI's is a key driver of reward outcomes in both Short Term and Long Term Incentives. Financial KPI's that apply may be a mixture of:

• Financial performance of GPT as a whole against predetermined targets and its industry peers
• Financial performance of the individual's portfolio, division, or business unit.

For the Chief Executive Officer and other key management personnel, the proportion of their short term and long term incentive potential that is weighted towards financial KPI's is high (for the CEO - 80% of the Short Term Incentive potential and 100% of the Long Term Incentive potential).

For short term incentives there is also a weighting to non-financial measures that vary between positions but include matters such as achieving strategic outcomes, operational improvement, performance enhancement and personal & staff development. The Board believes that these performance measures best align executive reward with that of consistently superior Securityholder returns and the promotion of GPT's values and culture.

Remuneration Report (continued)

GPT's Performance Management System

A uniform performance management system is used across the GPT Group which provides all employees with clear financial and personal performance objectives. Although the performance criteria are different for each executive, the principles are similar and involve assessment of performance across the following areas:

• Financial (in relation to the individual's business unit and GPT) achievement of earnings, return on equity and other relevant financial targets
• Personal achievement of personal objectives related to specific non-financial business targets such as achieving strategic outcomes, operational improvement and performance enhancement and personal & staff development
• Values achievement of performance consistent with the GPT Values ingrained as part of the GPT Group culture. Failure to perform consistently with Group Values will remove eligibility for bonus.

To ensure that the appropriate performance objectives are being set and that there is an alignment of effort with key deliverables of the GPT Group's business strategy, the Chief Executive Officer's performance objectives are set by the Board annually and from there are cascaded into the businesses via the performance objectives of all executives and employees.

Short Term Incentives (STIs)(variable component)

A potential STI, calculated as percentage of base salary, is available to all executives. The potential STI is, in turn, allocated between financial and personal goals. The STI percentage, and its allocation between financial and personal goals depends upon each executive's ability to determine particular outcomes of the Group's objectives as well as the executive's seniority and accountability.

The actual STI award for an executive is determined by assessment of the executive's performance against specific objectives. The executive's performance is assessed relative to various measurement levels (threshold, target and stretch in the case of financial goals). Expressed as a percentage of the executive's base salary, their STI potential may range from 0% to 100% for stretch performance. No STI award is made for a particular goal if performance fails below a minimum threshold level of performance.

Once an entitlement is calculated, the award may be received in a number of ways:

• Cash
• Salary sacrificed to superannuation.

Table B on page 13 shows:

• STI payments actually made during the financial year ended 31 December 2006 to the Chief Executive Officer and other Senior Executives relating to their performance in the six months to the end of 2005, and $\,$ .
• An accrual at Target level performance for the STI award they will receive in March 2007 in relation to their performance in financial year ended 31 December 2006.

Long Term Incentives (LTIs) (variable component)

Following Securityholder approval at the Annual General Meeting on 18 April 2006, the Board implemented a Long Term Incentive (LTI) scheme for Senior Executives.

The LTI scheme is designed to:

• Provide Senior Executives with a long-term incentive to create value for Securityholders, thereby aligning their interests more closely
• Provide a means through which Senior Executives can participate, over the longer term, in the ongoing success of GPT
• Assist in the attraction and retention of key executives.

The LTI scheme consists of a loan to enable nominated employees to acquire GPT Securities under GPT's Employee incentive Scheme. The loan to purchase securities is full recourse* and of no fixed term. After deducting amounts for tax on the employee's income, distributions of the GPT Securities are applied against the loan. The loan is subject to interest calculated at GPT's funding cost, which in 2006 was 5.6%. While the loan remains outstanding, the GPT Securities will not be able to be transferred or otherwise dealt with. If the employee leaves GPT, the loan must be repaid (either by the sale of securities or some other source of funds).

The Board, on the recommendation of the Nomination and Remuneration Committee, determines those executives eligible to participate in the LTI scheme and, for each participating executive, their potential LTI award and loan amount, calculated by reference to a percentage of their base salary. Subject to performance over a three-year period, the LTI award will be applied against the outstanding loan (after deductions for interest and FBT).

The performance conditions that give rise to a LTI award are determined annually by the Board, are tested at the end of each applicable three year period, and are disclosed in GPT's Remuneration Report. If below threshold performance for a particular performance condition is achieved at the end of the three-year period, no portion of the LTI allocated to that performance condition would be awarded. For performance above the threshold level, pro rata awards will occur up to stretch outcomes. Where an LTI award is made, the cost of the loan (ie the interest) will first be deducted from that amount. If the total LTI award is insufficient to cover the loan cost, that part of the remaining loan cost will be capitalised and added to the loan amount. Where the LTI award is greater than the cost of the loan, GPT will waive an amount of the loan equal to the remainder of the LTI award after deducting the amount payable by GPT for FBT.

For the year ended 31 December 2006

Remuneration Report (continued)

LTI awards will be made subject to ongoing employment and as such are a critical component of GPT's retention strategies.

*At the discretion of the Board the loan and outstanding interest may be waived in the following circumstances:

• on retirement of the employee
• death or total permanent disability of the employee
• redundancy without cause of the employee
• takeover.

2006 LTI Performance Conditions

In designing the LTI performance conditions, the Board determined that, given the nature of GPT, it was important to devise conditions that provided a direct link to GPT's distributions and their rate of growth which in turn are performance drivers of total Securityholder return. The Board also considered that some element of external benchmarking was also required. The Board believes that these requirements have been met through the mix of performance measures which are as follows for the 2006 LTI (ie performance reviewed based on the 2006, 2007 and 2008 financial years):

• Growth in Earnings per Stapled Security (EPS Growth) 50% of the potential LTI. Growth in Earnings per Stapled Security will be measured as the percentage increase in earnings per GPT Security. EPS is the base earnings per GPT Security adjusted for significant items and other items determined by the GPT Board and as disclosed in GPT's Statement of Financial Performance for the financial years ended 31 December 2006, 31 December 2007 and 31 December 2008. If EPS growth is below 6.2% on average over the three-year period, no part of LTI available for this performance measure will be awarded. If EPS growth is above 6.2%, pro rata awards will occur up to a stretch outcome of 7.5%.
• Return on Contributed Equity (RoE) 30% of the potential LTI. Return on Contributed Equity measures the total return on equity employed and takes into account both capital appreciation of the assets of the GPT Group and cash distributions of income. If RoE is below 8.5% on average over the three-year period, no part of the LTI available for this performance measure will be awarded. If RoE is above 8.5%, pro rata awards will occur up to a stretch outcome of 12.5%.
• Performance relative to Listed Property Trust Index (LPT Index) 20% of the potential LTI. A LPT Index award may be granted if GPT outperforms against the S&P ASX 200 Listed Property Trust Index. Due to the size of GPT within this Index, GPT and its performance is excluded for the purpose of calculating the LPT Index and its performance. Below index performance, no part of the total LTI available for this performance measure will be awarded. Above Index performance, pro rata awards will occur up to the stretch outcome of 2% out performance. The Board may substitute another Index if there is a material change in the composition of the LPT Index during the measurement period.

As at 31 December 2006, GPT's performance against each performance condition was as follows:

• Growth in Earnings per Stapled Security (EPS Growth): 12.7%
• Return on Contributed Equity (RoE): 21.7%
• Performance relative to Listed Property Trust Index (LPT Index): 21%.

For the year ended 31 December 2006

Remuneration Report (continued)

As a result of GPT's 2006 performance exceeding all stretch level performance conditions, a notional one third accrual has been made based on 100% delivery of LTI awards to the disclosed Senior Executives at the end of the three year period (ie the end of 2008) (see LTI Award Accrual in Table A and Table B on pages 11 and 13). As such, the accruals do not represent funds actually paid to participants. Actual awards under the 2006 LTI plan will only be made at the end of 2008 if the performance conditions outlined above are met or exceeded for the full three year period. In the event they are not met no award would be payable.

Set out below are details of the operation of the LTI scheme in 2006 for Senior Executives:

Table A - Operation of the 2006 LTI for Senior Executives

	Opening Loan Balance	GPT Security Purchase Price	Number of Securities Acquired	Total Net Distributions Applied to Loan in 2006	Loan Balance as at 31/12/06	GPT Security Price at 31/12/06	Net Value of Employee Equity at 31/12/06 1	LTI Award Accrual 2	Accumulated Interest Costs as at 31/12/06 3
Participant Name
N Lyons CEO & Director	2,874,997	4.20	684,116	54,898	2,820,098	5.60	1,010,951	432,500	62,376
M O'Brien COO	1,233,333	4.20	293,476	23,551	1,209,782	5.60	433,684	185,000	26,759
K Pryke CFO James Coyne General Counsel	1,055,554	4,20	251,173	20,156	1.035,398	5.60	371,170	158,333	22,901
/Secretary N Harris Head of wholesale (appointed	568,888	4.20	135,369	10,863	558,025	5.60	200,041	85,333	12,343
25/7/06)	888,887	4.66	190,627	7.053	881,834	5.60	185,677	133,333	14,135
M Fookes Retail GM	1,033,331	4.20	245,885	19,732	1,013,600	5.60	363,356	155,000	22,419
N Tobin JV GM	944,444	4.20	224.734	18,034	926,410	5.60	332,100	141,667	20,491
B Morris Hotels PM	877.221	4.20	208,738	16,751	860,471	5.60	308,462	131.583	19,032
Total	9,476,655		2,234,118	171,038	9,305,618		3,205,441	1,422,749	200,456

¹ Net value of employee equity at 31 December 2006 is determined by deducting the loan balance as at 31 December 2006 from the value of the securities held at the prevailing security price on that date of \$5.60.

² Given that at the end of 2006 all LTI performance conditions had been exceeded, a pro-rata accrual has been made that reflects a maximum LTI award at the end of 2008. These figures are also disclosed in Table B. As an example, if GPT's performance at the end of the three-year period was such that stretch level LTI performance conditions were all met or exceeded, then the gross award applicable to N. Lyons would be \$1,297,500, from which accumulated interest costs would first be deducted; the remainder would then be divided into loan waiver (ie and applied to reduce the balance of the loan) and FBT.

³ Under the LTI Scheme rules this interest is accumulated and applied to the loan balance at the time an LTI award is payable. If the LTI award is insufficient to cover the interest cost in whole or in part then the unpaid interest is capitalised and added to the loan balance.

GPT's Employee Incentive Scheme

Following Securityholder approval at the Annual General Meeting held on 18 April 2006, the Board implemented the GPT Employee Incentive Scheme (Scheme). The Scheme operates at two levels:

• A Long Term Incentive (LTI) Scheme for certain Senior Executives which is discussed above on page 9; and
• A General Scheme for all employees (other than Senior Executives who receive a Long Term Incentive).

Under the General Scheme, employees with a minimum of 12 months service in permanent salaried employment are offered the ability to participate up to a nominated percentage of their Base salary (20%). The objective is to align the performance and behaviour of the general employee population with Securityholder interests.

The Scheme comprises an interest free loan of no fixed term to enable employees to acquire GPT Securities. The net cost of the interest component is a cost to the business of implementing the scheme.

The loan must be used to acquire GPT Securities that are acquired by the Scheme Administrator on employees' behalf. Securities in respect of which a loan is outstanding cannot be sold or transferred. Net distributions (deducting amounts required to pay tax) must be applied to reduce the loan. If an employee leaves GPT, the loan must be repaid either by the sale of the securities or by some other source.

In 2006, 339 employees participated in the General Scheme with total loans of \$5,909,404.74. The total cost to GPT of the scheme in 2006 was \$330,926.67.

It is the view of the Board that the cost of the General Scheme is more than offset by the benefits that flow to the Group from the establishment of an ownership culture within the general employee population and the impact of that culture in terms of Group performance and alignment of employee and Securityholder interests.

Directors' Report For the year ended 31 December 2006

Remuneration Report (continued)

At the time of writing GPT is aware of proposals to change current regulations that differentiate the treatment of stapled securities from shares in listed companies for the purposes of employee incentive schemes; should these changes become law the Board may consider the impact of this on our current loan based schemes and will seek further informed independent advice from its external advisors Godfrey Remuneration Group on the ongoing adequacy and competitiveness of the existing employee incentive schemes.

Other Awards

Prior to the internalisation proposal being put to Unitholders, the Board of GPTML (comprised of its independent Directors) identified certain individuals who were either:

• critical to the internalisation process itself, or
• critical to ensure that business as usual was maintained for those parts of GPT's business that were significantly impacted by the internalisation, or
• critical for the ongoing success of the business as part of a newly formed independent GPT.

In relation to these employees, the Board (comprised of its Independent Directors) agreed to a retention payment to be made in June 2007 should the employee remain with GPT until that time.

This payment will not be made if the individual's employment is terminated prior to 1 July 2007 for misconduct, gross negligence, material breach of contract, failure to carry out a reasonable direction or any other circumstances justifying immediate termination. Details of amounts allocated to the retention referred to above have been included in Tables B & C on page 13 and 14 under the heading "Other Long Term Benefits - Retention".

REMUNERATION - NON-EXECUTIVE DIRECTORS

GPT's Policy

The Board determines the remuneration structure for Non-executive Directors based on recommendations from the Nomination and Remuneration Committee.

The Board has adopted a policy to ensure that remuneration packages for Non-executive Directors are transparent and easily explained while at the same time enabling the Board to attract and retain the highest quality candidates. The principal features of this policy are as follows:

• Non-executive Directors are paid one director's fee for participation as a Director in all GPT Group related companies (principally GPT RE Limited the responsible entity of the General Property Trust and GPT Management Holdings Limited).
• Non-executive Director remuneration is composed of three main elements:
• Main Board fees
• Committee fees
• Superannuation contributions at the statutory Superannuation Guarantee Levy (SGL) rate.
• Differences in workloads of Non-executive Directors arise mainly because of differing involvement in board committees, which is in addition to main Board work. This additional workload is rewarded via Committee fees in addition to main Board fees.
• Non-executive Directors do not participate in any incentive or performance based arrangements.
• Non-executive Directors are not entitled to any retirement benefits.
• Non-executive Director remuneration is set by reference to comparable entities listed on the Australian Stock Exchange (based on GPT's industry sector and market capitalisation).
• External independent advice on reasonable remuneration for Non-executive Directors is sought at least every three years. Between such reviews, remuneration is monitored against market movements as is the time being spent by Directors in performing their duties. Any increase resulting from this review is effective from the 1st of January and will be advised in the next Remuneration Report.
• The Chairman is paid a main board fee at a higher rate than other Non-executive Directors to reflect additional workload and responsibility. The Chairman is paid 150% more than the other Non-executive Directors but does not receive Committee fees.

Fees (including superannuation) paid to Non-executive Directors are drawn from a remuneration pool of \$1,450,000 per annum which was approved by Securityholders at the 2005 Annual General Meeting. As an executive director Nic Lyons does not receive fees from this pool but is remunerated as one of GPT's Key Management Personnel.

All Non-executive Directors receive reimbursement for reasonable travel, accommodation and other expenses incurred whilst undertaking GPT business.

For the year ended 31 December 2006

Remuneration Report (continued)

DETAILS OF REMUNERATION FOR DIRECTORS AND SENIOR EXECUTIVES

Details of the nature and amount of each element of the remuneration of the Directors and Senior Executives for the current year and for the comparative year are set out below. Table B shows the total amounts paid to the individuals for the year from 1 January 2006 to 31 December 2006 Table C shows the comparison for the year from 1 January 2005 to 31 December 2005.

Table B - Remuneration details 1 January 2006 to 31 December 2006

Details of the remuneration of the Directors and Senior Executives of the stapled entity for the year ended 31 December 2006 is set out in the following table:

CONTRACTOR		Short term employee benefits			Post Employment		Other long term benefits
	Salary & Fees STI Bonus		STI Bonus Accrued 2	Non Monetary	annuation	Super-Retirement Benefits	Accrual	LTI Award Retention 3	Payment	Total
Directors & Senior Executives
N Lyons CEO & Director	835,390	270,156	692,000	3,696	41,366		432,500	675,392		2,950,500
E Goodwin Director	96,000			÷	83,640				$\blacksquare$	179,640
M Latham Director	130,000				11,685				٠	141,685
K Moss Director	150,000				12,413				-	162,413
B Norris Director (retired 31/8/06)	90,000			$\overline{a}$	8,092				$\overline{a}$	98,092
E Nosworthy Director	135,000		$\overline{a}$	3,816	12,136	٠.			$!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!\$	150,952
P Joseph Director	300,000			$\blacksquare$	12,413				$\overline{\phantom{a}}$	312,413
I Martin Director	140,000			$\blacksquare$	17,940					157,940
A McDonald Director (appointed 2/8/06)	56,250			1,712	5,063					63,025
M O'Brien COO	540,741	126,131	277,500	1,921	12.413	$\blacksquare$	185,000	504,527		1,648,233
K Pryke CFO	462,404	103,011	237,500	9,804	12.413		158,333	412,044		1,395,509
James Coyne General Counsel /Secretary N Harris Head of	304,518	45,937	126,000	1,891	12,413		85,333	306,250		884,342
Wholesale (appointed 25/7/06)	168,829		131,520	483	5,286		133,333			439,451
M Fookes Head of Retail	448.078	78,934	232,500	3,259	40,833	٠	155,000	429,416		1,388.020
N Tobin GM JV	410,511	90,072	212,500	2.624	12,413	$\overline{\phantom{0}}$	141,667	400,324		1,270,111
B Morris PM Hotels	378,276	76,657	197,375	26,090	12,413	$\blacksquare$	131,583	383.289		1,205,683
Fotal	4,645,997	790,898	2,108,895	55,296	312,932	0	1,422,749	3, 111, 242	0	12,448,009

No termination benefits were paid during the period.

¹ STI Bonus relates to short term incentives actually paid to employees in calendar year 2006, however the amounts specified were in relation to performance in the six months ended 31 December 2005.

² STI Bonus Accrued relates to STI attributable to performance in calendar year 2006, which at the time of writing is still being finalised. It is the intention of the Board that in future the STI for the current financial year will be calculated earlier and included in the 2007 Annual Report. As an interim measure, the figures noted in this section are accruais at target level performance for the named executives; as such, the amount actually paid to executives may vary from this amount but in relation to 2006 performance it will not exceed the amounts specified.

³ The amount set out in "Other Long Term Benefits - Retention" represents an accrual for part of the retention award that becomes payable on 30 June 2007. The total amounts payable in respect of this retention award (assuming that the executive remains with GPT until 30 June 2007) is as follows: N. Lyons \$1,350,783, M. O'Brien \$1,009,054, K. Pryke \$824,088, N. Tobin \$800,647, M. Fookes \$858,831, B. Morris \$766,578 and J. Coyne \$612,500.

For the year ended 31 December 2006

Remuneration Report (continued)

Table C Remuneration details 1 January 2005 to 31 December 2005

Details of the remuneration of the Directors and Senior Executives of the stapled entity for the year ended 31 December 2005 is set out in the following table:

			Short term employee benefits		Post Employment		Other long term benefits		Share Based
	Salary & Fees STI Bonus		Bonus	Non Monetary	annuation	Super-Retirement Benefits		LTI Bonus Retention 1	Payment	Total
Directors & Senior Executives
N Lyons CEO & Director	592,152	432,251	654,484	5,933	42,377	$\overline{\phantom{a}}$	31,821	378,219	6,022	2,143,259
E Goodwin Director	34,385			$\blacksquare$	3,095				ă.	37,480
M Latham Director	101.761				6,118				٠	107,879
K Moss Director	112,960	٠	٠	$\tilde{\phantom{a}}$	7,126				$\overline{\phantom{a}}$	120,086
B Norris Director	74,394	÷.		$\overline{a}$	6,646	211,467			$\breve{~}$	292,507
E Nosworthy Director	74,231			$\overline{a}$	6,681	÷			$\blacksquare$	80,912
I Martin Director (appointed 2/6/05)	34,385	L.		w	3,095				$\blacksquare$	37,480
P Joseph Director	220.550	÷		÷,	10,689					231,239
M O'Brien COO	432,386	201,811	394,012	5,939	26,416		26,354	282,535	5,995	1,375,448
K Pryke CFO	351,039	164,818	263,311	5,939	23,156		85,996	230,745	4,894	1,129,898
J Coyne General Counsel/Secretary	261.301	73,500	183,141	64	18,690		$\overline{\phantom{a}}$	171,500	3,635	711,831
Mark Fookes Head of Retail	237,799	45,804	171,766	3,200	8,924		٠	240,473	$\blacksquare$	707,966
Neil Tobin GM JV	221,893	38,431	160 129	$\overline{a}$	8,796		٠	224,181	۰	653,430
Bruce Morris PM Hotels	212,188	41,895	153,316	٠	8,668		a.	214,642		630,709
Total	2,961,424	998,510	1,980,159	21,075	180,477	211,467	144,171	1,742,295	20,546	8,260,124

No termination benefits were paid during the period.

¹ The amount set out in "Other Long Term Benefits - Retention" represents an accrual for part of the retention award that becomes payable on 30 June 2007. The total amounts payable in respect of this retention award (assuming that the executive remains with GPT until 30 June 2007) is as follows: N. Lyons \$1,350,783, M. O'Brien \$1,009,054, K. Pryke \$824,088, N. Tobin \$800,647, M. Fookes \$858,831, B. Morris \$766,578 and J. Coyne \$612,500.

SERVICE AGREEMENTS

All employees have service agreements in place that set out the basic terms and conditions of employment.

Notice periods of one (1) month apply to all these service agreements although the Board has an intention over time to increase the standard notice period for a group of the most Senior Executives to a minimum of 3 months. No notice provisions apply where termination occurs as a result of misconduct or serious or persistent breach of the agreement.

Remuneration arrangements for early termination of a Senior Executive's contract for reasons outside the control of the individual or where the executive is made redundant may give rise to a severance payment at law. In the absence of any express entitlement, these payments would vary between individuals. The Board has approved a policy with respect to severance entitlements specifically capping the maximum severance payment that would be made to 12 months base salary. In addition the employee may be entitled to any short-term and long-term incentive at the end of the relevant period subject to the achievement of key performance indicators that had been set.

For the year ended 31 December 2006

Remuneration Report (continued)

Under the existing service agreements there are no additional payments on:

• Resignation $\bullet$
• Termination by the Company for poor performance $\bullet$
• Termination for cause $\bullet$

other than statutory entitlements such as payment of accrued but untaken annual leave.

Set out below is a summary of the terms of the service agreements for the Chief Executive Officer and other Senior Executives.

	Nic Lyons	Michael O'Brien	Kieran Pryke	Neil Tobin	Mark Fookes	Bruce Morris	James Coyne	Nicholas Harris
	Chief Executive Officer	Chief Operating Officer	Chief Financial Officer	General Manager JV	Head of Retail	Hotel & Tourism Portfolio Manager	General Counsel/ Company Secretary	Head of Wholesale
Date of Agreement	1 June 2005	1 June 2005	1 June 2005	1 June 2005	1 June 2005	1 June 2005	1 June 2005	25 July 2006
Term of Agreement	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended	Open- ended
Non- solicitation of other personnel	12 months	12 months	12 months	12 months	12 months	12 months	12 months	12 months
Retention payable June 07	Yes - see note to Tables B & C	Yes - see note to Tables B & C	$Yes - see$ note to Tables B & C	Yes - see note to Tables B & C	$Yes - see$ note to Tables B & C	Yes - see note to Tables B & C	Yes - see note to Tables B & C	N/A
Termination Notice	1 Month	1 Month	1 Month	1 Month	1 Month	1 Month	1 Month	1 Month

For the year ended 31 December 2006

Indemnification and Insurance of Directors and Officers

GPT provides a Deed of Indemnity and Access (Deed) in favour of each of the Directors and Secretaries of GPT and its subsidiary companies and each person who acts or has acted as a representative of GPT serving as an officer of another entity at the request of GPT. The Deed indemnifies these persons on a full indemnity basis to the extent permitted by law for losses, liabilities, costs and charges incurred as a director or officer of GPT, its subsidiaries or such other entities.

Subject to specified exclusions, the liabilities insured are for costs that may be incurred in defending civil or criminal proceedings that may be brought against directors and officers in their capacity as directors and officers of GPT, its subsidiary companies or such other entities, and other payments arising from liabilities incurred by the directors and officers in connection with such proceedings.

During the financial year GPT paid insurance premiums to insure the directors and officers of GPT and its subsidiary companies. The terms of the contract prohibit the disclosure of amounts of premium paid.

The Auditors are in no way indemnified out of the assets of GPT.

Non-audit services

During the year PricewaterhouseCoopers, GPT'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 advice received from the Audit and Risk Management Committee is satisfied that the provision of these services is compatible with, and did not compromise, the auditor independence requirements of the Corporation Act 2001. The Board is satisfied that the provision of non audit services by the auditor did not comprise auditor independence for the following reasons:

• The Audit & Risk Management Committee reviewed the non audit services at the time of appointment to ensure that they did not impact upon the integrity and objectivity of the auditor.
• The Board's own review conducted in conjunction with the Audit and Risk Committee, having regard to the Board's policy with respect to the engagement of GPT's auditor.
• The fact that none of the non-audit services provided by PricewaterhouseCoopers during the period had the characteristics of management, decision-making, self-review, advocacy or joint sharing of risks.

	Consolidated
	\$'000	31 Dec 2006 31 Dec 2005 \$'000
Assurance services
Audit services
PricewaterhouseCoopers Australian firm
Audit and review of financial reports and other audit work under the Corporations Act 2001	1.541.4	1,150.8
Related Practices of PricewaterhouseCoopers Australian firm including overseas firms
Audit and review of financial reports and other audit work	51.9
Total remuneration for audit services	1.593.3	1,150.8
Other Assurance Services
PricewaterhouseCoopers Australian firm
Audit of regulatory returns	81.7	46.2
AIFRS accounting services	180.8	160.0
Accounting advice	130.9
Due diligence services 1	20.0	1.325.0
Related Practices of PricewaterhouseCoopers Australian firm including overseas firms	413.4	1.531.2
Audit and review of financial reports and other audit work
Due diligence services	27.0
Total remuneration for other assurance services	440.4	1,531.2
Total remuneration for assurance services	2,033.7	2,682.0
Taxation services
PricewaterhouseCoopers Australian firm
Expatriate taxation services	83.9
Related Practices of PricewaterhouseCoopers Australian firm including overseas firms
Audit and review of financial reports and other audit work
International tax due diligence relating to acquisition entries	13.6
	97.5

¹ Other assurance services provided in 2005 were predominantly due diligence reviews on the internalisation and establishment of joint venture with Babcock & Brown Limited.

For the year ended 31 December 2006

Auditors' independence declaration

A copy of the auditors' independence declaration as required under section 307C of the Corporations Act 2001 is set out on the following page.

Rounding of Amounts

The amounts disclosed in the Directors' Report have been prepared in accordance with Class Order 98/0100 issued by the Australian Securities & Investments Commission, pursuant to which, unless otherwise indicated, the amounts in the Directors' Report have been rounded to the nearest tenth of a million dollars.

Auditor

PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.

Dated at SYDNEY this 21st day of February, 2007

Signed in accordance with a resolution of the Directors.

renh

Peter Joseph Chairmań

Nic Lyons Executive L

PricewaterhouseCoopers ABN 52 780 433 757

Darling Park Tower 2 201 Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia www.pwc.com/au Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999

Auditor's Independence Declaration

As lead auditor for the audit of the GPT Group for the year ended 31 December 2006, I declare that to the best of my knowledge and belief, there have been:

• a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of the GPT Group and the entities it controlled during the period.

$\propto$

DH Armstrong Partner PricewaterhouseCoopers

Sydney 21 February 2007

Liability limited by a scheme approved under Professional Standards Legislation

Income Statements

For the year ended 31 December 2006

		Consolidated		Parent entity
			31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	Note	SM	\$M	\$M	SM
Revenue
Rent from investment properties		659.7	674.3	288.6	298.2
Revenue from hotel operations		226.6	125.7
Property and fund management fees		14.7
Distributions from controlled entities, associates and joint ventures				487.4	410.2
		901.0	800.0	776.0	708.4
Other income
Fair value adjustments to investment properties		670.9	351.8	298.3	180.1
Fair value adjustments of controlled entities, associates and joint
ventures				428.5	211.3
Share of after tax profits of equity accounted entities		323.9	179.0
Interest - Joint venture investment arrangements Interest - Cash and short term money market securities		62.6	18.8	51.1	14.1
Net gains on derivative financial instruments held at fair value		6.7	2.5	3.2	3.7
Profit / (loss) on disposal of assets		89.9	15.9	89.9	15.9
		10.8	10.0	(0.3)
		1.164.8	578.0	870.7	425.1
Total revenue and other income
		2,065.8	1,378.0	1,646.7	1,133.5
Expenses
Property expenses and outgoings		180.0	178.4	73.4
Expenses from hotel operations	5	173.8	94.5		77.8
Management and other administration costs		22.4	19.2	7.2
Depreciation and amortisation expense	5	19.8	72		8.1
Finance costs	5	225.2	155.6	226.5	160.7
Exchange (gains) / losses on foreign currency borrowings		17.8	9.8	(5.4)	(1.3)
Impairment and revaluation decrements		28.0	63.7	6.9	6.1
Responsible Entity's fee	5		15.4	15.1	20.7
Finance costs to Securityholders			205.5		205.5
Costs associated with internalisation/merger proposals		13.6	62.3	12.4	54.7
		680.6	811.6	336.1	532.3
Profit before income tax		1,385.2	566.4	1,310.6	601.2
Income tax expense/(benefit)	6	1.2	(0.4)
Profit for the year		1,384.0	566.8	1,310.6	601.2
Profit attributable to:
- Unitholders of the Trust		1,362.6	589.0	1,310.6	601.2
- Securityholders of other stapled entities (minority interest)		21.4	(22.2)
		Cents	Cents
Basic and diluted earnings per Unitholder of the Trust	35	67.1	29.2
Basic and diluted earnings per Unitholder of the Trust before financing
costs attributable to GPT Unitholders	35	67.1	39.4

The above Income Statements should be read in conjunction with the accompanying notes.

See Note 3 for a reconciliation of profit after tax to realised operating income.

See Note 35 for basic & diluted earnings per Securityholder for the stapled entity before and after financing costs to Unitholders.

Balance Sheets
As at 31 December 2006

		Consolidated		Parent entity
				31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	Note	\$M	5M	\$M	\$M
ASSETS
Current Assets
Cash and cash equivalents	7	58.8	93.4	40.4	27.7
Receivables	8	157.1	119.4	65.4	15.6
Inventories	9	7.3	9.1	$\blacksquare$
Derivative assets	10	79.4	27.3	79.4	27.3
Other	11	17.3	13.1	8.5	3.9
		319.9	262.3	193.7	74.5
Non-current assets classified as held for sale	12	1,955.8
		2,275.7	262.3	193.7	74.5
Non-current Assets
Investment properties	13	5,228.6	7,245.1	3,351.3	3,378.3
Investment in controlled entities	15			4,913.4	5,220.2
Investment in joint ventures	16	1,265.9	1,450.7	828.2	741.6
Investment in associates	17	934.1	23.4	853.8
Property, plant & equipment	18	891.9	689.1	170.4	3.9
Other financial assets	19	1,322.3	718.1	1,059.1	603.6
Intangible assets	20	74.1	35.6
Deferred tax asset	6	9.3	7.4
		9,726.2	10,169.4	11,176.2	9,947.6
Total Assets
		12,001.9	10,431.7	11,369.9	10,022.1
LIABILITIES
Current Liabilities
Payables	21	228.2	248.0	32.3	156.7
Borrowings	22	1,630.0	1,588.6	1,574.6	1,571.7
Derivative llabilities	23	25.5	34.3	25.5	34.3
Provisions	24	9.6	144.1		133.1
		1,893.3	2,015.0	1,632.4	1,895.8
Non-current Liabilities
Borrowings	22	2,661.7	2,039.6	2,661.7	2,039.7
Provisions	24	4.1	3.6
Deferred tax liability	6	0.7	0.2
		2,666.5	2,043.4	2,661.7	2,039.7
Total Liabilities
		4,559.8	4,058.4	4,294.1	3,935.5
Net Assets		7,442.1	6,373.3	7,075.8	6,086.6
EQUITY
Equity attributable to the Securityholders of the parent
Contributed equity	25	4,391.5	4,296.0	4,391.5	4,296.0
Reserves	25	21.1	16.2
Retained profits	25	2,724.1	1,778.4	2,684.3	1,790.6
GPT Unitholders' interest		7,136.7	6,090.6	7,075.8	6,086.6
Equity attributable to the Securityholders of other entities stapled to GPT
Contributed equity
Reserves	25	307.0	302.5
Accumulated losses	25	(0.8)	2.4
	25	(0.8)	(22.2)
Other stapled Securityholders' interest		305.4	282.7
Total Equity
		7,442.1	6,373.3	7,075.8	6,086.6

The above Balance Sheets should be read in conjunction with the accompanying notes.

Statements of Changes in Equity
For the year ended 31 December 2006

			Consolidated	Parent entity
		31 Dec 2006	31 Dec 2005	31 Dec 2006	31 Dec 2005
	Note	ŚМ	\$M	\$M	SM
Total equity at the beginning of the year		6,373.3	$\overline{\phantom{a}}$	6,086.6
Movement in asset revaluation reserve		(4.7)	4.7
Movement in foreign currency translation reserve		10.9	13.9
Net income recognised directly in equity		6.2	18.6
Profit for the year		1,384.0	566.8	1,310.6	601.2
Total recognised income and expense for the year		1,390.2	585.4	1,310.6	601.2
Transactions with Securityholders in their capacity as Securityholders:
Transfer of liabilities attributable to Unitholders from liability to equity			6,085.4		6,085.4
Issue of share capital		100.0		95.5
Movement in treasury stock reserve		(5.4)
Movement in employee incentive security scheme reserve		0.9
Capital distribution on stapling					(302.5)
Distribution paid or payable	2	(416.9)	(297.5)	(416.9)	(297.5)
Total equity at the end of the year		7.442.1	6,373.3	7.075.8	6,086.6
Total recognised income and expenditure attributable to:
Members of the Trust		1,370.4	605.2	1,310.6	601.2
Security holders of other stapled entities (minority interest)		19.8	(19.8)
		1.390.2	585.4	1,310.6	601.2

The above Statements of Changes in Equity should be read in conjunction with the accompanying notes.

ł

Cash Flow Statements
For the year ended 31 December 2006

		Consolidated		Parent entity
			31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	Note	\$M	\$M	\$M	\$M
Cash flows from operating activities
Cash receipts in the course of operations (inclusive of GST)		971.7	796.5	319.0	351.9
Cash payments in the course of operations (inclusive of GST)		(434.4)	(422.6)	(126.2)	(274.3)
Distributions received from controlled entities				399.1	360.6
Distributions received from associates and joint ventures		122.6	119.4	56.7	54.1
Interest received		30.4	22.4	26.2	17.8
Income tax paid		(2.9)
Net receipt from derivatives		29.0	7.5	29.0	7.5
		716.4	523.2	703.8	517.6
Borrowing costs		(237.5)	(172.3)	(239.0)	(195.2)
Net cash inflows from operating activities	34	478.9	350.9	464.8	322.4
Cash flows from investing activities
Payment for investment properties		(983.6)	(310.3)	(32.5)
Proceeds on disposal of investment properties		1,040.6	674.5	218.1	(155.5) 616.3
Proceeds on disposal of joint ventures		332.9
Payments for property, plant and equipment		(28.7)	(3.5)
Proceeds on disposal of property, plant and equipment		9.0
Payments for properties under construction		(209.1)	(269.4)	(168.9)	(49.1)
Payments for intangibles		(53.3)
Investments in joint ventures and associates		(211.0)	(213.4)	(86.6)	(24.5)
Loan to joint ventures and associates		(568.5)	(691.7)	(374.6)	(679.0)
(Increase)/decrease in other loans			45.6		48.1
Investment in controlled entities				(899.6)	(353.9)
Redemption of units in controlled entity				913.7
Net cash receipt on control of subsidiary			10.1
Loan (to)/from controlled entities				(164.6)	110.5
Net cash outflows from investing activities		(671.7)	(758.1)	(595.0)	(487.1)
Cash flows from financing activities
Proceeds from net commercial bills issued		481.2	1,111.6	442.6	1,111.6
Repayments of net short and medium term notes		154.8	(190.0)	154.8	(190.0)
Loans issued for employee incentive scheme		(27.8)
Proceeds from issue of securities		100.0		95.5
Finance costs and distributions paid to Securityholders		(550.0)	(471.9)	(550.0)	(774.4)
Net cash inflows from financing activities		158.2	449.7	142.9	147.2
Net increase/(decrease) in cash and cash equivalents		(34.6)	42.5	12.7	(17.5)
Cash and cash equivalents at the beginning of the year		93.4	50.9	27.7	45.2
Cash and cash equivalents at the end of the year	7	58.8	93.4	40.4	27.7

The above Cash Flow Statements should be read in conjunction with the accompanying notes.

Ŷ,

$\frac{1}{2}$

Notes to the Financial Statements

Summary of significant accounting policies 1.

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. The financial report includes separate financial statements for General Property Trust ('Trust') as an individual entity and the consolidated entity, the GPT Group (GPT), consisting of the Trust and its subsidiaries.

(a) Basis of preparation

This general purpose financial report has been prepared in accordance with the Trust's Constitution, Australian equivalents to International Financial Reporting Standards (AIFRSs), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

Compliance with IFRSs

Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards. Compliance with AIFRSs ensures that the consolidated financial statements and notes of GPT comply with International Financial Reporting Standards (IFRSs). The Trust's financial statements and notes also comply with IFRSs except that it has elected to apply the relief provided to parent entities in respect of certain disclosure requirements contained in AASB 132 Financial Instruments: Presentation and Disclosure.

Accounting Standards issued but not effective as 31 December 2006

At 31 December 2006, standards applicable to GPT that have been issued but are not yet effective are AASB 7 Financial Instruments and consequential amendments made by AASB 2005-10. The standards are applicable to annual reporting periods beginning on or after 1 January 2007. GPT does not intend to adopt these prior to this date. The impact on the financial statements relates to disclosures only.

(b) Accounting for the GPT Group

In accordance with AASB Interpretation 1002 Post-date of transition stapling Arrangements, the stapled entity reflects the consolidated entity. Equity attributable to other stapled entities is a form of minority interest in accordance with AASB Interpretation 1002 and in the consolidated column, represents the contributed equity of GPT Management Holdings Limited (the Company).

As a result of the stapling, investors in GPT will receive payments from each component of the stapled security comprising distributions from the Trust and dividends from the Company. GPT RE Limited, the Responsible Entity of the Trust, is a wholly owned entity of the Company.

(c) Segment reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment and is subject to risks and returns that are different from those of segments operating in other economic environments.

(d) Revenue recognition

Rental income from operating leases is recognised on a straight line basis over the lease term. An asset is recognised to represent the portion of operating lease revenue in a reporting period relating to fixed increases in operating lease rentals in future periods. These assets are recognised as a component of investment properties. When GPT provides lease incentives to tenants, the costs of the incentives are recognised over the lease term, on a straight line basis, as a reduction of rental income.

Dividend and distribution income is recognised when declared. GPT's share of net profits from associates and joint venture entities is included in the consolidated income statement and has been separately disclosed. Revenue not received at balance date is included as a receivable in the balance sheet.

(e) Borrowing costs

Borrowing costs incurred for the construction of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.

The capitalisation rate used to determine the amount of borrowing costs to be capitalised is the weighted average interest applicable to the entity's outstanding borrowings during the year, 6.5% (Dec 2005: 7.0%).

Summary of significant accounting policies (continued) ₫.

俏 Principles of consolidation

Subsidiaries $\left(\mathbf{i}\right)$

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries as at 31 December 2006 and the results of all subsidiaries for the year then ended. GPT and its subsidiaries together are referred to in this financial report as GPT or the consolidated entity.

Subsidiaries are all those entities (including special purpose entities) over which GPT has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether GPT controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to GPT. They are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by GPT (refer to Note $1(q)$ ).

Intercompany transactions, balances and unrealised gains on transactions between GPT entities are eliminated. Unrealised losses are eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by GPT.

(ii) Associates

Associates are all entities over which GPT has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the Trust's financial statements using the cost method and in the consolidated financial statements using the equity method. GPT's investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition (refer Note 17).

Under this method, GPT's share of the associates' net profit after tax is recognised in the consolidated income statement, and the share of movements in reserves is recognised in reserves in the consolidated balance sheet. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Distributions and dividends receivable from associates are recognised in the Trust's income statement, while in the consolidated financial statements they represent a return of GPT's investment and reduce the carrying amount of the investment.

When GPT's share of losses in associates equals or exceeds its interest in the associate, including any other unsecured receivables, it does not recognise any further losses, unless it has incurred obligations or made payments on behalf of the associate.

Accounting policies of the associates have been changed where necessary to ensure consistency with the policies adopted by GPT.

All balances and effects of transactions between associates and GPT have been eliminated.

(iii) Joint ventures

Joint venture operations

The proportionate interest in the assets, liabilities, revenues and expenses of joint venture operations have been incorporated in the financial statements under the appropriate headings. Details of the joint venture are set out in Note 16.

Joint venture entities

The Trust's interests in joint venture entities are carried at fair value. Where the underlying investment in the joint venture entity is investment property, the fair value is determined on the same basis as investment property (refer Note 1(g)(i)).

Investments in joint venture entities are accounted for using the equity method in the consolidated financial statements. Under this method, GPT's share of the joint venture entities' net profit after tax is recognised in the consolidated income statement, and the share of movement in reserves is recognised in reserves in the consolidated balance sheet.

Investments in joint venture entities held by GPT are carried at the lower of the equity accounted carrying amount and recoverable

All balances and effects of transactions between joint ventures and GPT have been eliminated.

Summary of significant accounting policies (continued) 1.

(g) Investment property

$\left( i\right)$ Investment property

Property (including land and buildings) held for long-term rental yields and that is not occupied by an entity in GPT, is classified as investment property.

Investment properties are initially recorded at cost; cost comprises the cost of acquisition, additions, refurbishments, redevelopments, borrowing costs and fees incurred. Investment property is stated at fair value with changes in the fair value being recorded in the income statement.

The Trust's Compliance Plan requires that all property investments be externally valued at intervals of not more than three years and those valuations are reflected in the financial report of GPT. It is the policy of the Responsible Entity to review the fair value of each investment property every six months. Independent valuations of the individual investments are carried out each three years in accordance with the Corporations Act 2001 and Trust Constitution, or earlier where the Responsible Entity believes there may be a material change in the carrying value of the property.

Fair value is based on active market prices, adjusted for any difference in the nature, location or condition of the specific asset or where this is not available, an appropriate valuation method which may include discounted cashflow projections and the capitalisation method. Discount rates and capitalisation rates are determined based upon the Trust's industry knowledge and expertise and where possible, direct comparison to third party rates for similar assets in a comparable location. The fair value reflects, among other things, rental income from current leases and assumptions about rental income from future leases in light of current market conditions. It also reflects any cash outflows (excluding those relating to future capital expenditure) that could be expected in respect of the property.

Subsequent expenditure is charged to the asset's carrying amount only when it is probable that future economic benefits associated with the item will flow to GPT and the cost of the item can be measured reliably.

Land and buildings (including integral plant and equipment) that comprise investment property are not depreciated. The carrying amount includes components relating to lease incentives and assets relating to fixed increases in operating lease rentals in future periods.

Land held under an operating lease is classified and accounted for as investment property when the definition of investment property is met.

Changes in the fair value of an investment property are recorded in the income statement.

Some property investments are held in joint ownership arrangements (joint venture operations). The proportionate interests in the assets, liabilities, revenues and expenses of a joint venture operation have been incorporated in the financial statements under the appropriate headings.

Certain hotel investments are classified as investment property in the Trust's financial statements, and classified as owner-occupied property in the consolidated financial statements as GPT owns and operates the hotels (refer to Note $1(g)(ii)$ ). Property that is being constructed or developed for future use as investment property is classified as property, plant and equipment and stated at cost until construction or development is complete, at which time it is reclassified and subsequently accounted for as investment property.

Investment property held for sale is classified within non-current assets held for sale, under AASB 5 Non-current Assets Held for Sale and Discontinued Operations.

(ii) Owner Occupied Property

Owner occupied property is property that is held for use in supplying services by entities within GPT. The investments in certain hotels are accounted for as owner occupied in the consolidated entity as GPT owns and operates the hotels.

Owner occupied property is classified as property, plant and equipment (refer to Note 1(p)).

Property under construction (iii)

Properties under construction are carried at historical cost until completion. Upon completion of construction, the assets are classified as investment property (refer to Note $1(g)(i)$ or property, plant and equipment (refer to Note $1(p)$ ).

Lease incentives (h)

Incentives may be provided to lessees to enter into an operating lease. These incentives may be in the form of cash, rent free periods, lessee or lessor owned fitouts. They are amortised over the term of the lease as a reduction of rental income. The carrying amount of the lease incentives is reflected in the fair value of investment properties.

$\mathbf{1}$ Summary of significant accounting policies (continued)

Cash and cash equivalents (i)

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

Trade receivables 曲

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts. Trade receivables are due to be settled in advance of the period to which they relate.

Collectibility of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful receivables is established when there is objective evidence that GPT will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows. The amount of the provision is recognised in the income statement.

(k) Inventories

Inventories are stated at the lower of cost and net realisable value. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business.

$(1)$ Intangible assets

$\theta$ Goodwill

Goodwill represents the excess of cost of an acquisition over the fair value of GPT's share of the net identifiable assets of the acquired subsidiary or associate at the date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill acquired in business combinations is not amortised. Instead. goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains or losses on disposal of an entity include the carrying amount of goodwill relating to the entity sold.

$(ii)$ Operating lease rights

Operating lease rights have a finite useful life and are carried at cost less accumulated amortisation and impaired losses. Amortisation is calculated using the straight line method to allocate the cost of the operating lease right over its useful life. The operating lease right relates to the resort operation at Lizard Island Resort.

(iii) Management rights

Property management rights with a finite useful life are carried at acquisition cost less accumulated amortisation and impaired losses. Amortisation is calculated using the straight line method to allocate the cost of the property management right over its useful life. Useful life is determined on an asset by asset basis up to a maximum of 20 years.

(m) Non-current assets classified as held for sale

Non-current assets classified as held for sale includes investment properties and are stated at fair value less costs to sell if their carrying amount will be recovered principally through the sale transaction rather than through continuing use.

Non-current assets classified as held for sale are presented separately from the other assets in the balance sheet.

(n) Derivatives

Derivatives are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured to their fair value.

GPT is exposed to changes in interest rates and foreign exchange rates and uses interest rate swaps, forward interest rate swaps, options, and forward foreign exchange contracts to hedge these risks. Such derivative financial instruments are carried on the balance sheet at fair value. Changes in the fair value of any derivative instruments are recognised immediately in the income statement. All derivatives are disclosed as assets when fair value is positive and disclosed as liabilities when fair value is negative.

(o) Other financial assets

Other financial assets are classified as loans and receivables. Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market and arise when GPT provides money or services to a debtor with no intention of selling the receivable.

Loans and receivables are carried at amortised cost using the effective interest rate method. Under this method, fees, costs, discounts and premiums directly related to the financial assets are spread over its expected life.

$\overline{1}$ . Summary of significant accounting policies (continued)

(p) Property, plant & equipment

Certain hotels are owner-occupied property and are stated at fair value. The basis of fair value is the same as outlined in investment property note 1(g). At the consolidated entity level, hotel assets are classed as property, plant and equipment and are depreciated. Any accumulated depreciation at the date of revaluation is eliminated against the carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Increments in the carrying amounts arising from revaluation on hotels are credited to the asset revaluation reserve in equity. To the extent that the increase reverses a decrease previously recognised in the income statement, the increase is first recognised in the income statement. Decreases that reverse previous increases of the same asset are first charged against the asset revaluation reserve directly in equity to the extent of the remaining reserve attributable to the asset: all other decrements are recognised in the income statement.

At the Trust level, certain hotel assets are classified as investment property and are included within that balance. Any revaluation movement is recognised in the income statement (Note 1(g)).

Office fixtures, fittings and operating equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to its acquisition. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to GPT and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual values, over their expected useful lives, as follows:

$\overline{a}$	Motor Vehicles	$4 - 7$ vears
۰	Office fixtures, fittings and operating equipment	$5 - 15$ vears
$\bullet$	Buildings	40 years

The residual values and useful lives are reviewed, and adjusted if appropriate, at each batance sheet date.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the income statement. When revalued assets are sold, it is GPT policy to transfer the amounts included in the asset revaluation reserve in respect of those assets to retained earnings.

(q) Acquisition of assets

The purchase method of accounting is used to account for all acquisition of assets (including business combinations) regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition.

Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of GPT's share of the net identifiable assets acquired represents goodwill (refer to Note 1(1)). If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement, but only after a reassessment of the identification and measurement of net assets acquired.

Where settlement of any part of cash consideration is deferred, the amount payable in the future is discounted to their present value as at the date of exchange. The discount rate used in the entity's incremental borrowing rate is at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

(r) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless GPT has unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.

Summary of significant accounting policles (continued) 1.

Income tax (si

Trusts Ĥ.

Under current tax legislation, Trusts are not fiable for income tax, provided their taxable income and taxable realised gains are fully distributed to Securityholders each financial year.

(ii) Company and other taxable entities

The income tax expense and revenue for the period is the tax payable on the current period's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred fax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Trust is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

(iii) Tax consolidation

GPT Management Holdings Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 1 January 2006. The head entity, GPT Management Holdings Limited, and the controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand alone taxpayer in its own right.

In addition to its own current and deferred tax amounts, GPT Management Holdings Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the group. Details about the tax funding agreement are disclosed in Note 6. Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.

Trade and other payables $(t)$

These amounts represent liabilities for goods and services provided to GPT prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within thirty days of recognition.

(u) Provisions

Provisions for legal claims are recognised when: GPT has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of the obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item in the same class of obligations may be small.

(v) Contributed equity

Ordinary units and shares are classified as equity.

Increases in costs directly attributable to the issue of new securities or options are shown in equity as a deduction, net of tax, from the proceeds.

Summary of significant accounting policies (continued) 1.

(w) Employee benefits

(a) Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within twelve months of reporting date are recognised in provisions in respect of employees' services up to the reporting date and are measured at the amounts to be expected to be paid when the liabilities are settled. Liabilities for non-accumulated sick leave are recognised when leave is taken and measured at the rates paid or payable.

(b) Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expect future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(c) Retirement benefit obligations

All employees of GPT are entitled to benefits on retirement, disability or death from the GPT Group Superannuation Plan. The GPT Group Superannuation Plan has a defined contribution section within its plan. The defined contribution section receives fixed contributions and GPT's legal and constructive obligation is limited to these contributions. The employees of GPT are all members of the defined contribution section of the GPT Group Superannuation Plan.

Contributions to the defined contribution fund are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

(d) Profit-sharing and bonus plans

GPT recognises a liability and expense for profit-sharing and bonuses based on a formula that takes into consideration the profit attributable to GPT's securityholders after certain adjustments. GPT recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

(e) Employee incentive scheme ('EIS')

Security-based compensation benefits are provided to employees via the EIS. Under the terms of the EIS, employees are provided with a non recourse loan which is used to acquire securities on market. The terms of the loans create a synthetic option, the value of which needs to be brought to account pursuant to the term of AASB 2 Share Based Payments. Further, AASB 2 requires the loans and underlying number of securities to be removed from receivables and contributed equity respectively.

The notional fair value of the implied options in respect of these loans is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to securities.

The notional fair value arising from the implied option flowing from the loans at grant date is determined using the Monte Carlo pricing

All recourse loans to employees are included in Other Financial Assets. Any repayments of the loans by employees reduce the amount of Other Financial Assets.

(x) Distributions and dividends

Distributions and dividends are paid to Securityholders each quarter. A provision for distribution or dividend for the amount of any distribution or dividend declared is recognised in the balance sheet in the year in which the payment remains outstanding when a constructive obligation is present. A constructive obligation is present when it is publicly recommended by the directors on or before the end of the year. In the absence of a constructive obligation a provision for dividend or distribution is not recognised in the balance sheet.

Summary of significant accounting policies (continued) $\ddagger$ .

Foreign currency translation {v}

Functional and presentation currency $\emptyset$

items included in the financial statements of each of the GPT entities are measured using the currency of the primary economic environment in which they operate ('the functional currency'). The consolidated financial statements are presented in Australian Dollars, which is the Trust's functional and presentation currency.

$(ii)$ Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

(iii) Foreign operations

Non-monetary items that are measured in terms of historical cost are converted using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences of non-monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair value gain or loss.

Exchange differences arising on monetary items that form part of the net investment in a foreign operation are taken to the profit and loss in the parent entity and against a foreign currency translation reserve on consolidation.

Where forward foreign exchange contracts are entered into to cover any anticipated excesses of revenue less expenses within foreign joint venture entities, they are converted at the ruling rates of exchange at the reporting period. The resulting foreign exchange gains and losses are taken to the income statement.

(z) Earnings per security

Basic earnings per security is calculated by dividing the net profit attributable to Securityholders of GPT, by the weighted average number of ordinary securities ('WANOS') outstanding during the financial year, adjusted for bonus elements in ordinary securities issued during the financial year.

As there are no potential ordinary shares or securities, diluted earnings per security is the same as basic earnings per security.

(aa) Rounding of amounts

The financial report of GPT has been prepared in accordance with Class Order 98/0100 issued by the Australian Securities & Investments Commission, relating to the 'rounding off of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest tenth of a million dollars, unless otherwise stated.

(bb) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cashflows are presented on a gross basis. The GST components of cashflows arising from investing or financing activities which are recoverable from, or payable to, the taxation authority are presented as an operating cashflow.

		Consolidated		Parent entity
		31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
2. Finance costs and distributions paid and payable to Securityholders	SM	\$M	\$М	SМ
In respect of the six months ended 30 June 2006
Distribution/finance costs of 6.7 cents per security paid on 25 May 2006 (20 May 2005: 5.7 cents) 1 Distribution/finance costs of 6.9 cents per security paid on 21 Sep 2006	135.1	115.0	135.1	115.0
(26 Aug 2005; 5.7 cents) 1	140.9	115.0	140.9	115.0
Finance costs and distributions paid for the six months ended 30 June 2006 13.6 cents per security (30 Jun 2005: 11.4 cents) 1	276.0	230.0	276.0	230.0
In respect of the six months ended 31 December 2006
Distribution of 6.9 cents per security paid on 17 Nov 2006 (21 Nov 2005: 6.4 cents) Distribution of nil (23 Mar 2006: 6.6 cents) 2	140.9	129.0 133.1	140.9	129.0 133.1
Distributions paid and payable for the six months ended 31 December 2006 6.9 cents per security (31 Dec 2005: 13.0 cents)	140.9	262.1	140.9	262.1
Finance costs and distributions paid or payable for the year ended 31 December 2006
20.5 cents per security (31 Dec 2005: 24.4 cents) 1	416.9	492.1	416.9	492.1

¹ Prior to 2 June 2005, returns to Unitholders were classified as finance costs.

² No provision has been made for the December quarter distribution because as at 31 December 2006 it had not been declared.
Subsequent to the end of the year, a distribution of 7.0 cents per security (\$142.9 million) tha

Reconciliation of Profit after Tax to Realised Operating Income 3.

J.

Profit after tax	1,384.0	566.8
Add: finance costs to Securityholders
Profit after tax before finance costs to Securityholders	1.384.0	205.5 772.3
Fair value adjustments to investment properties	(670.9)
Fair value adjustments to controlled entities		(351.8)
Fair value adjustments in equity accounted entities	(182.1)	(70.9)
Re-measurement of derivatives to fair value	(65.2)	(7.7)
Exchange losses on foreign currency borrowings	17.8
Impairment expense	28.0	9.8
Non cash revenue adjustments		63.7
Net gain on disposal of properties	16.6	15.2
Depreciation and amortisation expense	(10.8)	(10.0)
Costs associated with internalisation	19.8	7.2
	13.6	62.3
Early completion of Darling Park 3 development Other	5.3
	2.5	2.2
Realised operating income	558.6	492.3

Segment information $\overline{\mathbf{4}}$

Description of segments ía)

Business segments

Retail

The retail portfolio consists of regional, sub-regional and community shopping centres and Homemaker centres.

Office

The office portfolio is spread across four capital cities and comprises office space and associated retail space.

Industrial

The industrial portfolio consists of quality traditional industrial and Business Park assets with capacity for organic growth through the expansion of vacant land.

Hotel & Tourism

The hotel and tourism portfolio provides investment exposure to the Australian tourism sector and particularly the international visitor market.

Funds under management

GPT Funds Management Limited is the Responsible Entity for the GPT's wholesale fund business, earning fund fees on behalf of the GPT Group.

Joint venture with Babcock & Brown Limited

Comprises property investments carried on in Europe, the United States of America and Australia.

Corporate office

Corporate office includes group treasury, legal and corporate administration services.

Geographical segments

Although the consolidated entity's divisions are managed on a global basis they operate in three main geographical areas:

Australia

The home country of the parent entity is also the main operating entity.

Europe

Comprises operations carried out in Germany, Czech Republic, Poland, Netherlands and France.

United States of America

Comprises six retail centres, residential style apartments and senior housing in several states of the US.

Segment Information (continued) $\ddot{a}$

Primary reporting format - business segments $(b)$

31 December 2006	Retail	Office	Industrial	Hotel and Tourism	Funds Management	Joint	Ventures Inallocated 1	Corporate Office	Consol- idated
	5M	\$M	\$M	\$M	\$M	\$M	SM.	\$M	SМ
Revenue
Revenue from property investments	436.2	162.7	45.3	15.5					659.7
Revenue from hotel operations	$\blacksquare$		$\blacksquare$	226.6					226.6
Property and fund management fees	6.0		٠		8.7	$\bullet$	$\mathbf{a}$	٠	14.7
	442.2	162.7	45.3	242.1	8.7				901.0
Share of after tax profits of equity accounted entities
Net operating income	8.8	84.3		1.2	÷	44.8	2.7	$\blacksquare$	141.8
Fair value adjustments	11.7	136.9	$\blacksquare$	$\overline{a}$		33.5		$\ddot{\phantom{a}}$	182.1
	20.5	221.2	$\overline{a}$	1.2	$\blacksquare$	78.3	2.7	$\bullet$	323.9
Interest - Joint venture investment
arrangements				3.4	۷	57.9	1.3		62.6
Fair value adjustments to investment properties	478.7	152.3	26.7	13.2					670.9
Net gains on derivative financial
instruments held at fair value		٠	$\blacksquare$	٠				89.9	89.9
Other income	7.3	$\overline{a}$	2.8	0.7	÷,			6.7	17.5
Total revenue and other income	948.7	536.2	74.8	260.6	8.7	136.2	4.0	96.6	2,065.8
Expenses
Property expenses and outgoings	123.8	49.6	6.2	0.4	٠		$\blacksquare$	$\bullet$	180.0
Expenses from hotel operations			$\blacksquare$	173.8					173.8
Financing costs		÷					$\blacksquare$	225.2	225.2
Exchange losses on foreign currency
borrowings		۰					$\blacksquare$	17.8	17.8
Impairment and revaluation decrements		6.9
Corporate overheads	5.1	u		19.5	۰	1.6	$\blacksquare$	ä,	28.0
Total expenses	128.9	56.5		13.2				37.5	55.8
			6.2	206.9		1.6	a.	280.5	680.6
Segment result	819.8	479.7	68.6	53.7	8.7	134.6	4.0	(183.9)	1,385.2
Income lax expense	$\ddot{\phantom{1}}$	$\ddot{\phantom{1}}$	$\overline{a}$	$\blacksquare$	$\blacksquare$	2.2	$\blacksquare$	(1.0)	1.2
Profit for the year	819.8	479.7	68.6	53.7	8.7	132.4	4.0	(182.9)	1,384.0
Segment assets	5.806.5	2,567.3	662.3	844.9		1,506.7	243.1		11,630.8
Unallocated assets								371.1	371.1
Total assets									12,001.9
Segment liabilities	126.5	12.4	20.1	54.1			0.3		213.4
Unallocated liabilities								4,346.4	4,346.4
Total liabilities									4,559.8
Interests in joint ventures	163.6	664.9		$\blacksquare$		437.4	$\blacksquare$	÷	1.265.9
Acquisitions of investment properties	621.3	$\overline{\phantom{a}}$	145.3	٠	$\ast$	$\bullet$	$\ddot{\phantom{1}}$	÷	766.6
Acquisitions of property, plant and
equipment	$\ddot{ }$	8.6	17.8	۰	٠	$\ddot{\phantom{0}}$	$\sim$	ä,	26.4
Depreciation and amortisation expense	5.1	$\ddot{\phantom{0}}$	$\overline{\phantom{a}}$	13.2	$\blacksquare$	٠	$\ddot{\phantom{a}}$	1.5	19.8

¹ Unallocated segment includes urban communities and the investment in Benchmark.

Segment Information (continued) 4.

$\ddot{\phantom{a}}$

Primary reporting format - business segments (continued) $(b)$

31 December 2005	Retail \$M	Office SM	Industrial SM.	Hotel and Tourism SМ	Joint Venture \$M	Unallocated \$M	Corporate Office \$M	Consolidated \$М
Revenue
Revenue from property investments Revenue from hotel operations	417.2	191.6	30.8	34.7				674.3
	417.2	191,6	30.8	125.7 160.4	$\ddot{\phantom{0}}$		$\blacksquare$	125.7
Share of after tax profits of equity								800,0
accounted entities
Net operating income Fair value adjustments	8.7	79.3		0.3	17.1	2.7		108.1
	0.6	64.1	$\blacksquare$	ä,	6.2		$\bullet$	70.9
	9.3	143.4		0.3	23.3	2.7		179.0
Interest - Joint venture investment
arrangements Fair value adjustments to investment	٠			2.8	14.0	2.0		18.8
properties Net gains on derivative financial instruments held at fair value	135.8	146.9	22.9	46.2				351,8
Other income	×	k.	÷				15,9	15.9
Total revenue and other income	9.4 571.7	0.6		٠	$\overline{a}$		2.5	12.5
		482.5	53.7	209.7	37.3	4.7	18.4	1,378,0
Expenses
Properly expenses and outgoings	122.3	51.0	5.0	0,1
Expenses from hotel operations				94.5		۳, i.		178.4
Impairment of investments			٠	11.6	48.4		3.7	94.5
Financing costs Exchange losses on foreign currency borrowings				$\overline{a}$		$\overline{\phantom{0}}$	155.6	63.7 155.6
Corporate overheads			Ē,			4	9.8	9.8
Total expenses	122.3				$\blacksquare$	ă.	309.6	309.6
		51.0	5.0	106.2	48.4		478.7	811.6
Segment result	449.4	431.5	48.7	103.5
income tax expense				$\blacksquare$	(11.1) $\blacksquare$	4.7 $\cdot$	(460.3)	566.4
Profit for the year	449.4	431.5	48.7	103.5	(11.1)	4.7	(0.4) (459.9)	(0.4)
								566.8
Segment assets Unallocated assets	4,495.5	3,481.4	418.3	872.8	860.9	40.2		10.169.1
Total assets							262,6	262.6
								10,431.7
Segment liabilities	96.4	107.0
Unallocated liabilities			(10.4)	3.2		11.1		207.3
Total liabilities							3,851.1	3,851.1
								4,058.4
Interests in joint ventures	150.1	1,118.5		10.5	171.6
Acquisitions of investment properties	22.9	$\overline{\phantom{a}}$	33.1	29.2	$\omega$	$\blacksquare$		1,450.7 85.2
Acquisitions of property, plant and equipment Depreciation and amortisation expense	42.8	159.8	25.2	30.0	$\ddot{\phantom{a}}$	$\overline{\phantom{a}}$	11.6	269.4
	ä,	۰	$\tilde{\phantom{a}}$	6.6	$\blacksquare$	$\blacksquare$	0.6	7.2

¹ Unallocated segment includes urban communities.

÷ ł,

Segment information (continued) 4.

Secondary reporting format - geographical segments $(c)$

	Rent from Investment properties		Segment assets		Acquisitions of property, plant and equipment, investment properties
	2006 SМ	2005 \$M	2006 \$М	2005 SM.	2006 \$М	2005 \$M
Australia Europe	659.7	674.3 -	9,972.9 1.279.9	9,308.5 755.6	793.0	354.6
United States of America			429.2	105.3
Unaliocated	659.7	674.3	11.682.0 319.9	10,169.4 262.3	793.0	354.6
Total assets	659.7	674.3	12,001.9	10.431.7	793.0	354.6

$(d)$ Notes to and forming part of the segment information

Accounting policies

Recomming persons
Segment information is prepared in conformity with the accounting policies of the entity as disclosed in Note 1 and accounting standard AASB 114 Segment Reporting.

Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant 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, property, plant and equipment and other intangible assets, net of related provisions. While most of these assets can be directly attributable to individual segments, the carrying amounts of certain assets used jointly by segments are allocated based on reasonable estimates of usage. Segment liabilities consist primarily of trade creditors and accruals. Segment assets and liabilities do not include income taxes.

ł,

ţ.

ł,

ł.

		Consolidated		Parent entity
	31 Dec 2006	31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$M	\$M	\$M	\$M
Expenses 5.
Profit before income tax includes the following specific expenses:
Depreciation and amortisation
Depreciation of buildings	7.8	3.8
Depreciation of plant and equipment	6.6	3.4
Amortisation of management rights	5.1
Amortisation of lease incentives	0.3
	19.8	7.2	$\bullet$
Finance costs - net
Interest and finance charges paid and payable	231.9	179.1	230.8	179.1
Interest capitalised	(6.7)	(23.5)	(6.7)	(23.5)
Finance costs incurred	225.2	155.6	224.1	155.6
Interest paid on loan to related entity			2.4	5.1
Finance costs expensed	225.2	155.6	226.5	160.7
Expenses from hotel operations
Costs of sales	39.6	20.4
Employee costs	84.1	42.2
Property and other outgoings	36.2	18.3
Other expenses	13.9	13.6
	173.8	94.5	$\blacksquare$
	\$'000	\$'000	\$'000	\$'000
Auditors' remuneration (Refer Note 28)	2,131.2	2,859.2	1,299.8	2,682.0
Responsible Entity's F ee
GPT Management Limited	÷	15,353.0		8,528.3
GPT RE Limited			15,050.7	12,208.6
Total		15,353.0	15,050.7	20,736.9

GPT Management Limited, a wholly owned subsidiary of Lend Lease Corporation Limited, was the Responsible Entity of General Property
Trust until replaced on 6 June 2005. The base management fee payable by GPT to GPT Managem gross assets, with a performance component, if applicable, of 5% of GPT's outperformance compared to the S&P/ASX Property 200 Accumulation Index. The total fee payable each six months was capped at 0.275% of the gross assets of the Trust. GPT Management Limited was entitled to receive all or part of the performance fee so that earnings per unit for each six month period were not less than the earnings per unit for the previous six month period. No performance fee was payable in respect of the period to 6 June 2005.

GPT RE Limited, a wholly owned subsidiary of GPT Management Holdings Limited, became the Responsible Entity on 6 June 2005. Fees payable by the Trust to GPT RE Limited are eliminated on consolidation. Expenses for the year include recharges for management and administration costs, rent and outgoings and other associated costs.

		Consolidated		Parent entity
		31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
Income tax 6.	\$M	SM	\$M	\$М
Income tax expense / (benefit) ia)
Current tax
Deferred tax	2.6 (1.4)	6.8 (7.2)
	1.2	(0.4)	$\blacksquare$
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit before income tax expense	1,385.2	566.4
Less: profit attributed to entities not subject to tax	(1, 363.6)	(589.0)
Profit / (loss) before income tax expense	21.6	(22.6)	$\blacksquare$	$\blacksquare$
Tax at the Australian lax rate of 30%	6.5	(6.8)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Overhead costs	2.0	0.4
Investment impairment Controlled foreign company attribution tax	9.5	12.7
Withholding tax	1.2
Share of after tax profits of equity accounted entities	1.0 (19.0)	(6.7)
Income tax expense / (benefit)	1,2	(0.4)
(c) Deferred tax asset
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Employee benefits	4.5	2.9
Overhead costs Other accruals	1.7	0.5
Other provisions	2.4	3.7
Net deferred tax asset	0.7 9.3	0.3 7.4
			$\qquad \qquad \blacksquare$
Movements:
Opening balance at the beginning of the year	7.4
Credited to the income statement Transfers of employee leave entitlements	1.8	4.6
Acquisition of subsidiary	0.1	0.8
Closing balance at the end of the year	9.3	2.0 7.4
			۰

		Consolidated		Parent entity
		31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
Income tax (continued) 6.	\$M	\$M	3M	SМ
(d) Deferred tax liability
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Inventories	0.4	0.1
Depreciation	0.3	0.1
Net deferred tax liability	0.7	0.2
Movements:
Opening balance at beginning of the year	0.2
Credited/(charged) to the income statement	0.5	(0.1)
Acquisition of subsidiary		0.3
Closing balance at the end of the year	0.7	n 2

GPT Management Holdings Limited and its wholly-owned controlled entities have decided to implement the tax consolidation legislation as of 1 January 2006. The accounting policy in relation to this legislation is set out in Note 1(s).

On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, GPT Management Holdings Limited.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate GPT Management Holdings Limited for any current tax payable assumed and are compensated by GPT Management Holdings Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to GPT Management Holdings Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the whollyowned entities' financial statements.

The amounts receivable or payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are recognised as intercompany receivables or payables.

	Consolidated		Parent entity
		31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$M	\$M	\$M	\$M
Cash and cash equivalents 7.
Cash at bank and on hand	57.8	76.1	39.4	12.5
Deposits at call	1.0	17.3	1.0	15.2
	58.8	93.4	40.4	27.7

Cash at bank and on hand

Cash at bank has a floating interest rate of 5.95% for Australian Dollar balances, 2.75% for Euro balances, and 4.50% for US dollar balances (Dec 2005: AUD: 5.21%, EUR: 1.5%, USD: not applicable). These balances are at call. Cash on hand is non interest bearing.

Deposits at call

The deposits have floating interest rates ranging between 6.15% and 6.20% (Dec 2005: between 5.40% and 5.45%) for Australian Dollar balances and 2.15% (Dec 2005: 2.15%) on Euro balances. These deposits are at call.

8. Receivables

Trade receivables	38.2	43.9	1.6	6.7
Provision for doubtful receivables	(1.5)	(1.7)	(0.3)	(0.8)
	36.7	42.2	1.3	5.9
Distributions receivable from associates	12.4		12.4
Distributions receivable from joint ventures	11.2	4.4	4.8	2.6
Interest receivable from joint ventures	47.9	9.0	40.8	7.1
Other debtors	27.7	26.7
Proceeds from sale of investment property	21.2	35.8	$\blacksquare$
Loan to a related party	٠		6.1
Income tax receivable	٠	1.3	۰
	157.1	119.4	65.4	15.6

(a) Bad and doubtful trade receivables

GPT has recognised a gain of \$130,411 (Dec 2005: loss of \$228,147) in respect of bad and doubtful trade receivables during the year ended 31 December 2006. The gain has been included in 'property expenses and outgoings' in the income statement.

9. Inventories

	79.4	27.3	79.4	27.3
Forward foreign exchange contracts	11.6	1,8	11.6	1.8
Interest rate options	8.7	7.6	8.7	7.6
Knock-out swaps	10.8	6.3	10.8	6.3
Interest rate swaps	48.3	11.6	48.3	11.6
10. Derivative assets
	7,3	9.1
Other - at cost	$0.4^{\circ}$	2.6	$\bullet$
Retail - at cost	3.4	3.2
Food and beverage - at cost	2.3	2.3
General supplies - at cost	1.2	1.0

Refer to Note 37 for details.

		Consolidated		Parent entity
		31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$M	\$М	\$M	\$М
11. Other
Prepayments	17.3	13.1	8.5	3.9
12. Non-current assets classified as held for sale
Investment properties:
Carlingford Court	192.0	٠
Chimside Park	200.0	$\blacksquare$
Forestway	78.1	$\mathbf{a}$
Highpoint	622.5	$\mathbf{r}$
Homemaker Maribyrnong	59.0	۰
Macarthur Square	411.5	$\overline{\phantom{0}}$
Parkmore	175.0	٠
Wollongong Central	217.7
	1,955.8

GPT is currently expanding its wholesale funds management platform through the marketing of a second wholesale fund comprising retail assets. At present, no financial commitments exists from potential investors. The investment properties are classified in the retail segment of Note 4.

13. Investment properties

Retail	3,491.7	4.345.7	2.412.7	2.219.1
Office	935.7	2.362.5	604.5	832.6
Industrial	604.1	354.8	334.1	326.6
Hotel & Tourism	197.1	182.1	- 44
	5 228 6	72451	3.351.3	3.378.3

Melbourne Central has been allocated in the table above as 64% Retail (\$577.0 million) and 36% Office (\$331.2 million) (Dec 2005: 64% Retail (\$488.1 million) and 36% Office (\$274.0 million)).

Reconciliation

Reconciliations of the carrying amounts of investment properties at the beginning and end of the current and previous year are set out below.

Carrying amount at the beginning of the year	7.245.1	7.491.3	3.378.3	3.649.6
Additions	99.3	244.2	35.9	100.0
Acquisitions	766.6	85.2		56.0
Transfer from property, plant and equipment	83.8	329.0		8.7
Transfer to property, plant and equipment	(22.9)	(586.5)	(22.9)
Transfer of properties to classified as held for sale	(1,955.8)
Lease Incentives	33.9	21.3	20.0	11.2
Amortisation of lease incentives	(19.0)	(15.2)	(7.3)	(6.7)
Disposals	(1.040.6)	(666.5)	(218.1)	(617.2)
Transfer to investment in associates	(634.8)		(134.1)
Net gain from fair value adjustments	670.9	336.6	298.3	171.1
Leasing costs	2.1	5.7	1.2	5.6
Carrying amount at end of the year	5,228.6	7,245.1	3.351.3	3,378.3

Refer to Note 14 for details of investment properties.

Refer to Note 14(h) for details on the establishment of GPT Wholesale Office Fund.

$\sim$

$\bar{z}$

Consolidated	Parent entity
	31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
SМ SM	\$M SM.

14. Property investments

For all the properties listed in this note, GPT holds an interest directly or indirectly through investments in other entities. These property investments are classified in the balance sheet as follows:

Investment properties	5,228.6	7.245.1	3.351.3	3.378.3
Interests in hotel operations	607.1	614.6	*	$\mathbf{w}$
Property under construction	271.8	63.5	170.4	3.9
Investments in joint ventures	828.2	1.278.8	828.2	741.6
Investments in associates	6.3	7.7	$\bullet$
	6,942.0	9,209.7	4.349.9	4.123.8

$\bar{.}$

14. Property investments (continued)

(a) Investment properties

Name	Ownership 96(1)	Acquisition Date	Acquisition Price \$M	Total Cost including Additions and Lease Incentives SM.	Date of Latest External Valuation	Independent Valuer	Latest Valuation SМ	Movement since Independent Independent Fair Value Valuation SМ	31 Dec 06 \$M.
RETAIL
Casuarina Square NΤ	100	Oct 1973	4.5	159.6	Mar 2006	CB Richard Ellis M Steur, AAPI	380.0	4.6	384.6
Charlestown Square NSW	100	Dec 1977	7.3	197.8	Mar 2006	Knight Frank KL Goddard, FAPI	$420.0^{(2)}$	9.0	429.0
Pacific Highway, Charlestown NSW	100	Oct 2002 Jul 2003	7.1 5.3	8.0 5.3	Mar 2006	Knight Frank KL Goddard, FAPI	14.0	1.2	15.2
Dandenong Plaza VIC	100	Dec 1993 Dec 1999	60.2 60.3	197.1 60.3	Sep 2006	Colliers S Andrew, FAPI	215.0	0.6	215.6
Erina Fair NSW	33.3%	Jun 1992	55.1	168.2	Mar 2006	CB Richard Ellis J Barras, AAPI	284.0	2.2	286.2
Westfield Penrith (4) NSW	50	Jun 1971	212.7	307.7	Mar 2006	Knight Frank KL Goddard, FAPI	458.0	27.0	485.0
Sunshine Plaza QLD	50	Dec 1992 Sep 2004	32.8 130.4	186.1	Dec 2005	Knight Frank P Kwan, AAPI	295.0	18.9	313.9
Plaza Parade QLD	50	Jun 1999	4.7	12.0	Dec 2005	Knicht Frank P Kwan, AAPI	13.5	$\overline{a}$	13.5
Westfield Woden (5) ACT	50 Leaschold	Feb 1986	42.0	131.4	Mar 2006	CB Richard Ellis J Barras, AAPI	269.0	0.7	269.7
General Property Trust									2,412.7
Floreat Forum WA	100	Jul 1996	33.3	88.2	Sep 2006	Knight Frank M Crowe, AAPI	120.0		120.0
Homemaker City Aspley QLD	100	Nov 2001	43.2	53.3	Jun 2005	Knight Frank P Kwan, AAPI	60.0	5.9	65,9
Homemaker City Bankstown NSW	100	Nov 2001	38.5	41.1	Sep 2006	CB Richard Ellis M Steur, AAPF	51.4	0.3	51.7
Homemaker City Cannon Hill QLD	100	Nov 2001	13.9	14,8	Sep 2006	CB Richard Ellis M Steur, AAPI	20.9	$\overline{\phantom{a}}$	20.9
Homemaker City Fortitude Valley (3) QLD	100	Dec 2001	7.2	123.2	Sep 2006	CB Richard Ellis T Irving, AAP!	132.2	0.1	132.3
Homemaker City Jindalee QLD	100	Nov 2001	38.7	41.2	Sep 2004	Jones Lang LaSalle J Apted, FAPI	55.0	8.4	63.4
Homemaker City Mt Gravatt QLD	100	Nov 2001	17.9	19.9	Mar 2005	Knight Frank P Kwan, AAPI	22.2	3.1	25.3
Homemaker City Windsor QLD	100	Nov 2001	20.0	20.6	Jun 2005	CB Richard Ellis T Irving, AAPI	21.0	1,5	22.5
Retail portion of Melbourne Central (6)									577.0
Total Retail									3.491.7

$(1)$
$(2)$
$(3)$
$(4)$
$(5)$
$(6)$

Freehold, unless otherwise stated.
Valuation for Charlestown was \$418.8 million, which did not include \$1.2 million of land.
Homemaker Fortillude Valley includes the redevelopment stages 2 & 3.
Westfield Penrith formerly k

14. Property investments (continued)

(a) Investment properties (continued)

Name	Ownership $v_{6}$ (1)	Acquisition Date	Acauisition Price \$M	Total Cost including Additions and Lease Incentives SM.	Date of Latest External Valuation	Independent Valuer	Latest Independent Valuation \$M	Movement since Independent Valuation SM.	Fair Value 31 Dec 06 \$М
OFFICE
Australia Square NSW	50	Sep 1981	42.5	158.9	Jun 2006	Savills A Pannifex, AAPI	237.0	0.6	237.6
MLC Centre NSW	50	Apr 1987	233.5	333.8	Jun 2006	Jones Lang LaSalle M Smallhorn, AAP	332.5	7.0	339.5
Indigo House QLD	100	Apr 1984	9.1	17.5	Jun 2006	Jones Lang LaSalle J Apted, FAPI	24.4	3.0	27.4
General Property Trust									604.5
Office portion of Melbourne Central (2)
Total Office									331.2
									935.7

$\binom{1}{2}$

Freehold, unless otherwise stated.
Melbourne Central: 64% Retail and 36% Office (Dec 2005: 64% Retail and 36% Office).

MIXED
Melbourne Central VIC	100	May 1999 Mar 2001	410.2 17.1 3.5 430.8 TANSALLE	741.4 (3)	Mar 2006	CB Richard Ellis P Fay, AAPI	903.3	4,9	908.2
Total Mixed ________ -------------- .									ななな つ

(3) Acquisition costs.

14. Property investments (continued)

(a) Investment properties (continued)

Name	Ownership	Acquisition Date	Acquisition Price	Total Cost including Additions and Lease Incentives	Date of Latest External Valuation	Independent Valuer	Latest Valuation	Movement since Independent Independent Fair Value Valuation	31 Dec 06
	% (1)		\$M	\$M			SM.	SM	\$M
INDUSTRIAL
2 - 4 Harvey Road	100	May 1999	24.9	25.1	Mar 2005	Savills	31.0	1.2	32.2
Kings Park NSW						M Pisano, AAPI
Citi-West Industrial Estate Altona North VIC	100	Aug 1994	60.0	70.0	Mar 2006	Savills S Robb, AAPI	69.3	0.5	69.8
Quad 1 Sydney Olympic Park	100 Leasehold	Jun 2001	15.5	15.8	Jun 2004	Colliers A Graham, AAPI	16,6	0.2	16.8
Quad 2	100	Dec 2001	$\overline{2.3}$	16.0	Jun 2004	Colliers	18.7	0.6	19.3
Sydney Olympic Park	Leaschold					A Graham, AAPI
Quad 3	100	Mar 2003	2.7	16.2	Mar 2006	Colliers	20.1	0.1	20.2
Sydney Olympic Park	Leasehold					B Collier, AAPI
8 Herb Elliott	100	Aug 2004	$\overline{8.5}$	8.5	$\tilde{\phantom{a}}$		$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	8,5
Sydney Olympic Park	Leasehold
5 Figuree Drive	100	Jul 2005	20.2	20.3	$\blacksquare$	$\bar{\phantom{a}}$	$\overline{\phantom{0}}$		20.3
Sydney Olympic Park	Leasehold
7 Figtree Drive	100	Jul 2004	10.2	10.2	ä,			$\frac{1}{2}$	10.2
Sydney Olympic Park	Leasehold
7 Parkview Drive	100	May 2002	16.1	16.4	May 2005	Knight Frank	18.0	0.4	18.4
Sydney Olympic Park Rosehill Business Park	Leasehold 100	May 1998	9.9	57.9	Sep 2006	TM Phelan, FAPI CB Richard Ellis	70.0	0.2	70.2
Camellia NSW						C Renshaw AAPI
15 Berry Street	100	Nov 2000	10.0	10.4	Sep 2006	CB Richard Ellis	14.5	$\overline{\phantom{a}}$	14.5
Granville NSW						C Renshaw AAPI
19 Berry Street	100	Dec 2000	18.8	19.1	Sep 2006	CB Richard Ellis	20.6	0.1	20.7
Granville NSW						C Renshaw AAPI
973 Fairfield Road	100	Nov 2005	12.9	13.0	L.	÷.	$\blacksquare$	$\blacksquare$	13.0
Yeroongpilly NSW
General Property Trust				$\epsilon$					334.1
Austrak Business Park	50	Oct 2003	25.5	108.2	Sep 2006	Knight Frank M Schuh, AAPI	$124.1^{(2)}$		124.1
Somerton VIC 134 - 140 Fairbaim Road	100	Mar 2006	13.5	13.5		$\ddot{}$	۰	$\blacksquare$	13.5
West Sunshine, VIC
92 - 116 Holt Street	100	Mar 2006	14.1	14.3	ă.	$\overline{\phantom{0}}$	$\frac{1}{2}$	$\blacksquare$	14.3
Pinkenba, QLD
Block 1 & 4, Section 15	100	Mar 2006	9,6	96	$\overline{\phantom{a}}$	$\blacksquare$	÷.	u.	9.6
Sandford St, Mitchell ACT	Leasehold
31 Vision Drive Burwood East, VIC	100	Mar 2006	10.5	10.5	×,	$\overline{\phantom{0}}$	$\blacksquare$	۰	10.5
4 Holker Street Silverwater NSW	100	Mar 2006	34.2	34.2	$\blacksquare$	÷,	L.	$\blacksquare$	34.2
120 Miller Road	100	Apr 2006	17.9	18.1				$\qquad \qquad \blacksquare$	18.1
Villawood NSW
372 - 374 Victoria Street Wetherill Park, NSW	100	Jul 2006	21.9	22.1	$\tilde{\phantom{a}}$	٠	$\bullet$	۰	22.1
18-24 Abbott Road Seven Hills, NSW	100	Oct 2006	15.4	15.4	$\bullet$	$\blacksquare$	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	15.4
Lots 42 & 44 Ocean
Steamers Road	50	Jul 2006	8.2	8.2					8.2
Port Adelaide SA
Total Industrial									604.1

j,

Freehold, unfess otherwise stated.
Valuation for Austrak was \$141.7 million, which included land of \$17.6 million. $\binom{1}{2}$

14. Property investments (continued)

(a) Investment properties (continued)

Name	Ownership $%$ (1)	Acquisition Date	Acquisition Price \$М	Total Cost including Additions and Lease incentives SМ	Date of Latest External Valuation	Independent Valuer	Lalesl Valuation \$M	Movement since Independent Independent Fair Value Valuation	31 Dec 06
HOTEL & TOURISM								\$M.	\$M
Four Points by Sheraton	100	May 2000	146.1	174.2	Mar 2005	Knight Frank	181.0	23.1
Sydney, NSW	Leasehold Security Deposit					A Bell, AAPI			204.1
Total Hotel & Tourism									$(7.0)^{(2)}$
									197,1
Total General Property Trust
Total Investment Properties									3.351.3
									5,228.6

(b) Interest in hotel operations

HOTEL & TOURISM
Ayers Rock Resort NΤ	100	Dec 1997	231.9	375.7	Mar 2004	JLL Hotels M Cooper, AAPI	$353.8^{(3)}$	66.6	420.4
Bedarra Island Resort QLD	100	Jul 2004	25.6	27.3			$\overline{\phantom{a}}$		23.1
Brampton Island Resort QLD	100 Leasehold	Mar 2005	11.8	13.6	$\overline{\phantom{0}}$		٠	٠	19.6
Cradle Mountain Resort TAS	100 Part leasehoid	Jul 2004	11.2	17.0	Sep 2006	Knight Frank A Bell, AAPI	21.0	0.8	21.8
Dunk Island Resort QLD	100 Part leasehold	Jul 2004	55.3	64.8					47.1
El Questro Resort WA	100	Jul 2005	17.4	20.6	$\overline{\phantom{a}}$				17.5
Heron Island (Including Wilson Island) QLD	100 Leasehold	Jul 2004	44.7	45.6	۰				35.4
Silky Oaks Lodge QLD.	100	Jul 2004	18.5	19.3	Sep 2006	Knight Frank A Bell, AAPI	18.7	0.3	19.0
Wrotham Park QLD	100 Leasehold	Jul 2004	7.3	9.4	$\tilde{\phantom{a}}$			u	3.2
Total Interest in Hotel Operations
									607.1

$(1)$
$(2)$
$(3)$

Freehold, unless otherwise stated.
Security deposit held by GPT.
Valuation for Ayers Rock Resort was \$360 million, of which \$6.2 million related to plant and equipment owned by Voyages Hotels & Resorts Pty Limited.

14. Property investments (continued)

(c) Property under construction

Name	Ownership % (1)	Acquisttion Date	Acquisttion Price 5M	това сеза including Additions and Lease Incentives \$M	Date of Latest External Valuation	Independent Valuer	Latest Independent Independent Fair Value Valuation	Movement since	Valuation 31 Dec 06
INDUSTRIAL							\$M	\$M	SM
Rouse Hill Town Centre NSW	100	Dec 2005	22.9	149.3			$\overline{\phantom{0}}$	۰	$149.3^{(5)}$
818 Bourke Street Victoria Harbour, VIC	100	Jun 2006	5.4	32.3	ä,			$\overline{a}$	$32.3^{5}$
21 Talavera Road Macquarie Park NSW	100	Jun 2006	17.8	18.6				$\blacksquare$	$18.6^{(5)}$
Quad 4 Sydney Olympic Park	100 Leasehold	Jun 2004	2.7	21.1	$\overline{\phantom{0}}$		L.	$\blacksquare$	$21.1^{(5)}$
Darfing Island NSW	100 Leasehold	Dec 2006	3.2	32.0	$\ddot{\phantom{0}}$	$\blacksquare$			$32.0^{(5)}$
Austrak Business Park, Somerton VIC	50	Oct 2003	18.5	18.5	$\blacksquare$		$\blacksquare$	a,	$18.5^{(5)}$
Total Property Under Construction									$271.8^{(6)}$
(d) Investments in associates and joint ventures RETAIL Erina Fair	16.7	Jun 1992
NSW Horton Parade	50		55.1	72.6	Mar 2006	CB Richard Ellis J Barras, AAPI	142.0	1,0	$143.0^{(2)}$ [3}
OLD Marcochydore Superstore		Jun 1998	3.8	7.8	Dec 2005	Knight Frank P Kwan, AAPI	10.0	0.1	$10.1^{(2)}$
Piaza QLD		Feb 1999	5.5	8.4 16.2	Dec 2005	Knight Frank P Kwan, AAPI	$10.5^{(4)}$		$10.5^{(2)}$
Total General Property Trust									20.6
Total Retail									163.6 163.6
OFFICE
Citigroup Centre	50
NSW		Jul 2001 Dec 2001	51.2 212.4 0.8	268.5	Dec 2006	Colliers D Hillier, AAPI	346.5		346.5(2)
1 Farrer Place NSW	25	Dec 2003	253.6	265.1	Dec 2006	Savils	321.1	٠	$(3.0)^{(3)}$ $321.1^{(2)}$
Total General Property Trust						A Pannifex, FAPI			(3)
Total Office									664.6
HOTEL & TOURISM									664.6
Kings Canyon (Watarrka) Resort Trust NT	46	Jun 2005	7.4	7.4	Jun 2006	Colliers	6.1		$6.1^{(2)}$
Total Hotel & Tourism						A West, FAPI			$0.2^{(3)}$
Total Equity Accounted Investments									6.3
									834.5

Total Cool

$(1)$

Freehold, unless otherwise stated.
Share of Associates' property assets. The value of the Trust's interest in the Associates' property assets is included in the valuation,
Share of Associates' other property related net as $\binom{2}{3}$

Valuation of Marocchydore superstore was \$7.5 million, which did not include the land of \$3 million.
Properties under construction are held at cost.

$\binom{4}{5}$

14. Property investments (continued)

(e) Additions to existing property investments

During the year the following additions and lease incentives were made to existing property investments:

	Consolidated 31 Dec 2006 31 Dec 2005 \$M \$М
Retail	225.2 258.6
Office	30.9 206.6
industrial	64.0 26.0
Masterplanned	2.1 4,1
Hotel & Tourism .	28.2 29.1
	350.4 524.4

Additions to property investments include capitalised interest on redevelopment of \$6.7 million using an interest rate of 6.5% (Dec 2005; \$23.5 million using 7.0%).

Macarthur Square

Construction commenced in September 2004 on the \$218 million (GPT's share \$109 million) expansion of Macarthur Square. The first stage of the development opened in the second half of 2005 and the second stage was completed in July 2006. This property is held for sale at 31 December 2006.

Rouse Hill Town Centre

Construction on Rouse Hill Town Centre commenced in April 2006. The major Greenfield development, at a cost of \$470 million is due to open from the end of 2007.

Parkmore

Construction commenced in August 2006 on the \$22.0 million supermarket and specialty store remix. The project which opens in various stages is due to be completed in August 2007.

The Quad, Sydney Olympic Park

Construction commenced in December 2005 on the fourth stage of The Quad Business Park. Quad 4 is scheduled for completion in early 2007 at a forecast cost of \$27 million, including land.

Austrak Business Park

Construction commenced in August 2005 on the \$100 million Coles National Distribution Centre (GPT's share: \$50 million) and the \$20 million Labelmakers facility (GPT's share: \$10 million) at the Austrak Business Park, Somerton. Labelmakers was completed in the first half 2006 and Coles was completed in December 2006.

(f) Purchase of Investments

Highpoint shopping centre

A 50% interest in the Highpoint Shopping Centre and 100% of the management rights to the centre were acquired on 31 March 2006. This property is held for sale at 31 December 2006.

Portfolio of six industrial parks

The portfolio of six industrial assets were acquired in March 2006 for \$99.8 million located in Sydney, Melbourne, Brisbane and Canberra, which provide an initial yield of 8.4% and an average lease term of 9 years.

Lots 42 & 44 Ocean Steamers Road, Port Adelaide

A 50% interest in a recently developed facility comprising 12,550 sqm of existing assets and 2.5ha of developable land was acquired in July 2006. Rail siding and access to dock warehouses extend along the northern and southern boundaries of the site.

21 Talavera Road, Macquarie Park

A 2.0ha development site with DA approval in place to build an office complex of 18,500sqm was acquired in June 2006 for \$17.8 million.

372 - 374 Victoria Street, Wetherlll Park

This property comprises 20,462sqm of gross lettable area and is leased to One Steel Limited for 8 years.

Darling Island 3

GPT purchased the land at Darling Island known as Site 6, located in Pyrmont under a 99 year lease from Sydney Harbour Foreshore Authority. The Group has entered into a Development Agreement with Citta Property Group for the delivery of the building, which will provide 17,875 sqm of office space in a waterfront campus environment which is targeted for completion in February 2009.

818 Bourke St, Melbourne

GPT purchased land at Victoria Harbour, Melbourne and entered into a development management contract with Lend Lease in June 2006 to develop a 21,700sqm campus style office development. Approximately half the office space is precommitted to Ericsson with completion planned for the first quarter of 2008.

14. Property investments (continued)

(g) Disposal of investments

Homemaker Moorabbin

In August 2006, GPT settled on the sale for \$36.6 million.

Homemaker Epping

In August 2006, GPT settled on the sale for \$38.0 million.

5 Gladstone Road, Castle Hill

In December 2006, GPT exchanged on the sale for \$12.8 million. The sale is expected to be completed in June 2007.

Cape Tribulation

GPT has exchanged contracts for the sale of Cape Tribulation Resorts in North Queensland. The sale price of \$8.5 million includes the Coconut Beach Rainforest Resort and Ferntree Rainforest Lodge. The sale is expected to be completed in January 2007.

Wildman Resort

In December 2006, GPT settled on the sale for \$0.6 million.

(h) Establishment of GPT Wholesale Office Fund

On 21 July 2006, GPT announced that it had finalised the establishment of the Group's first wholesale fund - the GPT Wholesale Office Fund (GWOF). GWOF will be GPT's core Australian prime CBD office investment partner, with GPT maintaining an interest in the portfolio through its stake in the Fund. At 31 December 2006, GPT owned office assets with a value of \$1.7 billion on balance sheet and had an investment in GWOF (40% of the Fund) of \$902.7 million, giving GPT exposure to a highly diversified and quality office portfolio with a value of \$2.6 billion.

GPT received cash proceeds of \$1.3 billion on 21 July 2006 as consideration for the sell down of its interest in GWOF and was initially used to retire existing debt. This has enhanced GPT's capacity to fund its significant development pipeline, which has a potential value of approximately \$2 billion in the medium term, and to invest in future opportunities.

The earnings to be derived from the fund are a base management fee of 0.11254% per quarter of the asset value payable quarterly in arrears and a performance fee of 15% of the outperformance above the 10 year bond yield on the first day of the half year plus 3% per annum (post base management fee). Total management fees are capped at 0.45% of the asset value per half year. Excess outperformance and underperformance is carried forward to future periods.

(i) Other information

Four Points by Sheraton Hotel

The property is wholly owned by GPT. GPT also has a 40% interest in an associated company, 161 Sussex Street Ply Limited ('161 Sussex') which leases and operates the hotel. Starwood Pacific Hotels Pty Limited ('Starwood'), a wholly owned subsidiary of Starwood Hotels and Resorts Worldwide Inc. owns the remaining 60% interest.

In May 2000, 161 Sussex leased the hotel from GPT for 10 years, with 161 Sussex having an option to extend the lease for a further term of 5 years. After May 2005 the lease may be terminated by GPT if the hotel is sold. 161 Sussex has provided a security deposit of \$7.0 million.

At the time of acquisition, GPT provided a loan to 161 Sussex to fund its purchase of business assets, the payment of the security deposit and initial working capital requirements. The loan balance at 31 December 2006 was \$1.9 million.

		Consolidated		Parent entity
		31 Dec 2006 31 Dec 2005	31 Dec 2006 31 Dec 2005
	\$M.	\$M	SM	SM.
15. Investment in controlled entities
Unlisted units in controlled trusts
GEM Commercial Property Trust $\ddot{\phantom{a}}$				1.774.4
GPT BM Investment Trust $\blacksquare$			124.3
GPT BM Loan Trust ۰			82.9
GPT Hotel Trust ٠			841.6	849.1
GPT Industrial Trust $\tilde{\phantom{a}}$			304.5	83.4
GPT Investment Trust No.1 $\blacksquare$			187.2	105.3
GPT Residential Trust $\overline{\phantom{a}}$		٠	38.4	38.4
GEM Retail Property Trust $\blacksquare$		$\overline{\phantom{a}}$	2,440.0	1,616.4
Melbourne Central Unit Trust $\ddot{}$		$\blacksquare$	846.7	705.4
		$\overline{\phantom{a}}$	4,865.6	5,172.4
Unlisted shares in corporations
GPT Pty Limited $\overline{\phantom{a}}$	٠		0.1	0.1
Melbourne Central Holdings Pty Limited $\overline{\phantom{a}}$			47.7	47.7
	$\blacksquare$	$\mathbf{w}$	47.8	47.8
		$\blacksquare$	4,913.4	5,220.2

		Consolidated		Parent entity
	31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$M	\$M.	SM	\$M.
16. Interests in joint ventures

Details of interests in joint ventures are as follows:

Name	Principal Activity	Ownership Interest 2006 %	2005 %
Australian investments 1
1 Farrer Place Trust	Investment property	50	50	321.1	278.2	321.1	278.2
2 Park Street Trust	Investment property	50	50	343.5	313.3	343.5	313.3
Erina Property Trust	Investment property	50	50	143.0	129.6	143.0	129.6
Horton Trust	Investment property	50	50	20.6	20.5	20.6	20.5
Darling Park Trust 2	Investment property	50	50		285.4
Darling Park Property Trust 2	Investment property	50	50		190.3
Roma Street Trust 2	Investment property	50	50		61.5
				828.2	1,278.8	828.2	741.6
BGA Real Estate Finance Trust 3	Managing property	50		2.3
DPT Operator Pty Limited	Managing property	50	50	0.3	0.3
DPPT Operator Pty Limited	Managing property	50	50
				830.8	1,279.1	828.2	741.6
Europe investments 1
BGP Investment S.a.r.l. 3	Property investment	50	50	265.9	152.0
BGP UK Investments Limited 3	Managing investment	50		2.8
United States investments 1				268.7	152.0	$\blacksquare$
Babcock & Brown GPT REIT Inc 3	Property investment	50	50	27.2	19.6
B&B GPT Alliance 1 LLC 3	Property investment	50		1.0
B&B GPT Alliance 2 LLC 3	Mezzanine Ioan	50		10.0
Benchmark GPT LLC 4	Property investment	95		124.3
B-VII Operations Holding Co LLC 4	Property investment	95		3.9
				166.4	19.6
Total investment in joint ventures				1,265.9	1,450.7	828.2	741.6

All joint ventures have a balance date of 30 June, except for those relating to the joint venture arrangement with Babcock & Brown Limited and Benchmark which have a balance date of 31 December.

¹ Australian investments are incorporated in Australia, BGP Investment S.a.r.I is incorporated in Luxembourg, BGP SPV UK Limited is incorporated in the United Kingdom and United States investments are incorporated in the United States of America.

² These investments were held in GEM Commercial property Trust (now known as GPT Wholesale Office Fund). GPT redeemed units in the fund, retaining 40% ownership.

³ Joint venture arrangement with Babcock & Brown Limited

GPT has entered into a joint venture arrangement with Babcock & Brown Limited to identify and invest in real estate opportunities which offer superior risk adjusted returns. The joint venture's key activities are acquiring and intensively managing assets which have attractive underlying investment fundamentals, undertaking selected investment and development projects and external property funds management, in both the listed and wholesale markets.

Funding of the joint venture is by way of both ordinary equity and preferred loans to each of the joint venture entities within the joint venture arrangement. GPT has a 50% ordinary equity interest in the above joint venture entities. Refer to Note 19 for preferred loans provided to joint venture entities.

⁴ Joint venture arrangement with Benchmark

GPT has entered into a shared control joint venture arrangement with BE Capital LLC which provides GPT entry into the US senior housing market with the acquisition of a 95% interest in a portfolio of senior housing assets and a 20% interest in the manager of the portfolio, Benchmark Assisted Living, LLC. The portfolio gives GPT access to a growth sector which the Group has been considering for some time, through an established portfolio of stabilised assets and a joint venture relationship with a dominant operator in a growing market for this asset class. Major decisions regarding the GPT / Benchmark joint venture require unanimous approval from both parties. Accordingly, the investment is accounted for as a joint venture.

Funding of the joint venture is by way of both ordinary equity and loans.

1. Interests in joint ventures (continued)

		Australia		Europe		United States		Total
		31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec
	Consolidated	2006	2005	2006	2005	2006	2005	2006	2005
		\$M	\$M	\$M	\$М	\$M	SM.	\$M	\$M
(a)	GPT's share of results of interests in joint ventures
	Revenue	186.3	172.7	208.6	128.3	30.3	4.2	425.2	305.2
	Expenses	12.7	21.7	109.2	74.9	19.9	3.0	141.8	99.6
	Profit before income tax expense	173.6	151.0	99.4	53.4	10.4	1.2	283.4	205.6
	Income tax expense			35.0	31.0	0.0	$\tilde{\phantom{a}}$	35.0	31.0
	Share of net profits of interests in joint
	ventures	173.6	151.0	64.4	22.4	10.4	1.2	248.4	174.6
(b)	GPT's share of movements in carrying amount of interests in joint ventures
	Carrying amount at the beginning of the year	1,279.1	1,203.4	152.0	$\ddot{\phantom{0}}$	19.6		1,450.7	1,203.4
	Investments acquired during the year		0.2	2.9	169.5	136.0	24.5	138.9	194.2
	Additions during the year	9.6	9.9	52.4	٠	2.7	$\blacksquare$	64.7	9.9
	Share of net operating income	74.0	86.2	33.3	17.1	8.0	0.4	115.3	103.7
	Share of fair value adjustments	99.6	64.8	31.1	5.3	2.4	0.8	133.1	70.9
	Movements in reserves			(1.5)	2.4	(0.1)	$\overline{\phantom{a}}$	(1.6)	2.4
	Investments impaired during the year			(1.5)	(42.3)	(0.1)	(6.1)	(1.6)	(48.4)
	Investments disposed during the year	(558.5)						(558.5)
	Distributions / dividends received and
	receivable	(73.0)	(85.4)			(2.1)		(75.1)	(85.4)
	Carrying amount at the end of the year	830.8	1,279.1	268.7	152.0	166.4	19.6	1,265.9	1,450.7
	(c) GPT's share of aggregate assets and liabilities of interests in joint ventures
	Cash and cash equivalents	7.2	5.7	266.5	94.0	22.3	3.0	296.0	102.7
	Receivables	4.6	8.7	123.8	144.9	67.9	29.8	196.3	183.4
	Investment properties	840.8	1,283.2	2,697.8	936.8	792.9	262.0	4,331.5	2,482.0
	Total assets	852.6	1,297.6	3,088.1	1,175.7	883.1	294.8	4,823.8	2,768.1
	Other liabilities	15.4	18.5	230.0	188.9	10.3	6.6	255.7	214.0
	Interest bearing fiabilities - GPT	6.4	$\overline{\phantom{a}}$	505.6	301.8	158.6	42.9	670.6	344.7
	Interest bearing liabilities - external			2,095.6	533.0	547.8	225.7	2,643.4	758.7
	Total liabilities	21.8	18.5	2,831.2	1,023.7	716.7	275.2	3,569.7	1,317.4
	Net assets	830.8	1,279.1	256.9	152.0	166.4	19.6	1,254.1	1,450.7
	(d) Share of interests in joint ventures capital expenditure commitments contracted for
	Capital commitments	2.2	11.2	166.4	27.9	2.8		171.4	39.1
	Lease commitments			51.0				51.0
		2.2	11.2	217.4	27.9	2.8	$\blacksquare$	222.4	39.1

The above commitments are included in Note 29.

					Consolidated		Parent entity
Investments in associates 17.				\$M	31 Dec 2006 31 Dec 2005 \$M	31 Dec 2006 \$М	31 Dec 2005 SM.
Details of investments in associates are as follows:
Name	Principal Activity		Ownership Interest
Australian investments		2006 $\%$	2005 %
161 Sussex St Pty Ltd	Property management	40	40	2.7	0.8
GPT Wholesale Office Fund	Property investment	40	$\overline{\phantom{a}}$	902.7		853.8
Kings Canyon (Watarrka) Resort Trust	Investment property	46	46	6.3	7.7
Lend Lease GPT (Rouse Hill) Pty Ltd	Property development	49	49	5.5	4.3
Lend Lease (Twin Waters) Pty Ltd	Property development	49	49	11.5	10.6	$\blacksquare$
United States investments
Benchmark Assisted Living, LLC	Property management	20		5.4
				934.1	23.4	853.8

All associates are incorporated in Australia with the exception of Benchmark Assisted Living, LLC which is incorporated in the United States of America.

All Associates have a balance date of 30 June, other than for 161 Sussex St Pty Limited and Benchmark Assisted Living, LLC which have a balance date of 31 December.

(a) GPT's share of results of investments in associates

Revenue	111.5	30.7
Expenses	35.9	25.8
Share of associates' profit before income tax expense	75.6	4.9
Share of associates' income tax expense	0.1	0.5
Share of associates' net profit	75.5	4.4
(b) GPT's share of movements in carrying amount of investments in associates
Carrying amount at the beginning of the year	23.4	11.6
Transfer from investment properties and joint ventures	860.7
Investments acquired during the year	5.4	7.4
Share of net operating income	26.5	4.4
Share of fair value adjustments	49.0
Investments impaired during the year	(8.4)
Dividends / distributions received and receivable	(22.5)
Carrying amount at the end of the year	934.1	23.4	$\blacksquare$
(c) GPT's share of aggregate assets and liabilities of investments in associates
Cash and cash equivalents	9.2	9.2
Receivables	20.1	21.2
Investment properties	980.7	37.7
Total assets	1,010.0	68.1
Other payables	75.9	44.7
Total liabilities	75.9	44.7
Net assets	934.1	23.4	۰
(d) GPT's share of investments in associates' capital expenditure commitments contracted for
Capital commitments	7.8
The above commitments are included in Note 29.

Refer to Note 14(h) for details on the establishment of unlisted GPT Wholesale Fund.

		Property under Construction 1	Consolidated Hotel Properties 2	Office fixtures, fittings & operating equipment	Total	Parent entity Property under Construction 1	Total
	Note	\$M	\$M	\$M	\$M	\$M	\$M
18. Property, plant and equipment
Consolidated
At 1 January 2005
Cost or fair value 12		164.7			164.7
Accumulated depreciation						$\blacksquare$
Net book amount		164.7	$\blacksquare$	$\tilde{\phantom{a}}$	164.7	٠
Year ended 31 December 2005
Opening net book amount
Additions		164.7 227.8	$\blacksquare$		164.7	2.9	2.9
Transfer to investment properties	13	(329.0)	30.0	11.6	269.4	1.0	1.0
Transfer from investment properties	13				(329.0)
Revaluations			586.5 4.7	÷	586.5
Depreciation charge		-	(6.6)	$\blacksquare$ (0.6)	4.7	$\blacksquare$
Closing carrying value		63.5	614.6	11.0	(7.2) 689.1	3.9	3.9
At 31 December 2005
Cost or fair value 12
Accumulated depreciation		63.5	614.6	11.6	689.7	3.9	3.9
Net book amount				(0.6)	(0.6)	$\tilde{\phantom{a}}$	$\bullet$
		63.5	614.6	11.0	689.1	3.9	3.9
Year ended 31 December 2006
Opening net book amount		63.5	614.6	11.0	689.1	3.9	3.9
Additions		269.2	26.5	19.1	314.8	143.6	143.6
Disposals			(8.3)	(15.5)	(23.8)	٠
Transfer from investment properties	13	22.9		۰	22.9	22.9	22.9
Transfer to investment properties	13	(83.8)		$\blacksquare$	(83.8)	٠
Revaluations 3			(12.8)	$\overline{\phantom{a}}$	(12.8)
Depreciation charge			(12.9)	(1.6)	(14.5)
Closing carrying value		271.8	607.1	13.0	891.9	170.4	170.4
At 31 December 2006
Cost or fair value 12 ÷		271.8	607.1	15.2	894.1
Accumulated depreciation $\blacksquare$				(2.2)	(2.2)	170.4	170.4
Net book amount		271.8	607.1	13.0	891.9
						170.4	170.4

¹ Property under construction is held at cost.

² Hotel properties are held at fair value.

³ The downward revaluation impacted reserves by \$4.7m and income statement by \$8.1 million.

$\hat{\boldsymbol{\beta}}$ l, $\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\bar{\$

		Consolidated	Parent entity
		31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
19. Other financial assets	\$M	\$M	\$M	\$M
Details of loans to joint ventures and associates is as follows:
Australian dollars
161 Sussex St Pty Limited	1.9	2.8
BGA Real Estate Finance Trust '	12.8
Lend Lease (Twin Waters) Pty Limited
Lend Lease GPT (Rouse Hill) Pty Limited	14.5	17.9
	29.2	7.4
Euros		28.1	$\blacksquare$	۰
BGP Investment S.a.r.i. 1	991.6	603.6
BGP UK Investments Limited 1	19.5	$\ddot{\phantom{a}}$	991.6	603.6
GPT MaltaCo1 Limited	0.1	$\blacksquare$	19.5
	1,011.2	603.6	1,011.1
US dollars				603.6
Babcock & Brown GPT REIT Inc 1	95.6	85.7
B&B GPT Alliance 1 LLC 1	15.2
B&B GPT Alliance 2 LLC 1	63.7
Benchmark GPT LLC 2	82.9
	257.4	85.7
	1,297.8	717.4	1,011.1	603.6
Loans to employees	23.8
Loans to Voyages Hotels & Resorts Pty Limited
Working Capital Loan			48.0
Unlisted shares in corporations
Roma Street Operations Pty Limited	0.7	0.7
	1,322.3	718.1	1,059.1	603.6

The carrying value included in the balance sheet approximates the fair value

¹ Joint venture arrangement with Babcock & Brown Limited

Funding of the joint venture is by way of both ordinary equity and preferred loans to each of the joint venture entities within the joint venture arrangement. GPT has a 50% ordinary equity interest in the joint venture entities, refer to Note 16. Refer to the above table for preferred loans provided to joint venture entities.

The loans provided to the joint venture entities are fixed over a period of 3 years and at the end of the period the interest rate is reset to the 3 year swap rate prevailing at the time of the reset. The interest earned by GPT is the equivalent to the 3 year swap rate at the time of funding plus 300 basis points which is paid quarterly in arrears in the functional currency of the loan.

As at 31 December 2006, the average interest rate on the Euro loans is 5.95% (Dec 2005: 5.59%), USD loans are 7.94% (Dec 2005: 7.81%) and AUD loan is 9.10% (Dec 2005: Not applicable).

² Joint venture arrangement with Benchmark

Funding of the joint venture is by way of both ordinary equity and loan. GPT has a 95% ordinary equity interest in the joint venture entities, refer Note 15 and a 20% ordinary equity interest in the manager of the portfolio, refer Note 17. Refer to the above table for loan provided.

The loans provided to the joint venture are repayable on 31 December 2016 with interest payable at 9% compounded monthly.

	Management Rights 1 \$M	Goodwill 2 \$M	Lizard Island Operating Rights $3$ \$M	Total SM
Intangible assets 20.
Consolidated
At 31 December 2005
Cost or fair value		7.3	39.9	47.2
Accumulated depreciation and impairment		۰	(11.6)	(11.6)
Net book amount		7.3	28.3	35.6
Year ended 31 December 2006
Opening net book amount		7.3	28.3	35.6
Acquisition of intangible	51.2	$\overline{\phantom{a}}$		51.2
Additions			2.2	$2.2\,$
Impairment	$\overline{\phantom{0}}$	(7.3)	(2.5)	(9.8)
Amortisation charge	(5.1)	$\tilde{\phantom{a}}$	÷	(5.1)
Closing net book value	46.1	$\overline{\phantom{a}}$	28.0	74.1
At 31 December 2006
Cost or fair value $\blacksquare$	51.2		42.1	93.3
Accumulated depreciation and impairment	(5.1)		(14.1)	(19.2)
Net book amount	46.1	$\blacksquare$	28.0	74.1

¹ On 31 March 2006, the Company purchased the management rights for the Highpoint Shopping Centre. The management rights include asset, property and development management rights of the Centre, which are being amortised over a period of 7.5 years.

² Goodwill was recognised when GPT gained control over Voyages Hotels & Resorts Pty Limited on 30 June 2005. Goodwill was calculated as the difference between the consideration paid to date and the fair value of assets, liabilities and contingent liabilities as at the date of control. Goodwill was impaired as the Voyages managed hotel properties are carried at fair value as disclosed in Note 18. These valuations include the net income of the property after management costs.

³ Lizard Island operating rights were purchased on 30 June 2005 from Voyages Hotels & Resorts Pty Limited as part of the acquisition of Voyages Hotels & Resorts Pty Limited by GPT. The operating right under which GPT operates Lizard Island Resort expires 31 August 2033. The cost of the operating right less any impairment is amortised over the life of the lease.

The Trust does not have any intangibles.

		Consolidated		Parent entity
			31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$M	\$M	\$M	\$M.
21. Payables
Trade payables	215.4	244.9	31.3	44.9
Other payables
other	6.6	2.7	0.6	0.9
related party	0.4	0.4	0.4	0.4
Loans from related party	$\blacksquare$			110.5
Loan from Babcock & Brown Limited	5.8
	228.2	248.0	32.3	156.7
22. Borrowings
Current Liabilities
Unsecured
Short term notes (refer Note 22(b))	566.5	470.8	566.5	470.8
Medium term notes (refer Note 22(b))	299.9	640.0	299.9	640.0
Bank facilities (refer Note 22(c))	708.2	460.9	708.2	460.9
	1,574.6	1,571.7	1,574.6	1,571.7
Secured
Bank facilities (refer Note 22(c))	55.4	16.9
	1,630.0	1,588.6	1,574.6	1,571.7
Non-current Liabilities
Unsecured
Medium term notes (refer Note 22(b))	1,533.5	1,134.4	1,533.5	1,134.4
Bank facilities (refer Note 22(c))	1,003.7	780.7	1,003.7	780.8
CPI coupon indexed bond (refer Note 22(d))	124.5	124.5	124.5	124.5
	2,661.7	2,039.6	2,661.7	2,039.7
The maturity profile in respect of current and non-current borrowings is set out below:
Due within one year	1,630.0	1,588.6	1,574.6	1,571.7
Due between one and five years	2,325.9	1,703.9	2,325.9	1,704.0
Due after five years	335.8	335.7	335.8	335.7
	4,291.7	3,628.2	4.236.3	3,611.4

Finance arrangements

The following finance arrangements include both current and non-current borrowings.

(a) Credit standby arrangements

GPT has unused stand-by facilities of \$400 million (Dec 2005: \$600 million) at balance date to provide liquidity backup for the short term / medium term note programme. \$200 million matures on 30 April 2007 and a further \$ anticipated that it will be possible to extend all facilities.

These are subject to negative pledge arrangements which require GPT to comply with certain minimum financial requirements.

22. Borrowings (continued)

(b) Short term note / medium term note programme

The short term/medium term note programme ('the Programme') is a revolving, non-underwritten, debt programme. The Programme provides flexible short term and medium term funding to enable GPT to fund commitments and to act promptly on investment opportunities. The Programme can be terminated at the discretion of GPT and is unsecured. The value of the notes issued under the Programme is limited by the GPT constitution. The constitution limits the amount of debt to no more than 40% of the total assets. At 31 December 2006, the percentage of debt to total assets is 35.8% (Dec 2005: 34.8%). GPT is committed to a maximum of 50% debt to total assets on a 'look through' basis. In calculating 'look through' gearing, GPT's interest in the joint venture with Babcock and Brown Limited and Benchmark Assisted Living are consolidated on a 50% and 95% basis respectively. At 31 December 2006, the percentage of 'took through' debt to total assets is 46.7% (Dec 2005: 38.5%).

$($ Short term notes

Short term notes are issued in the form of commercial paper. Commercial paper is always of less than one year maturity and is typically issued at a margin above bank bill rates. As at 31 December 2006, the effective interest rate of the commercial paper, including margins is 6.5% (Dec 2005: 5.7%). The carrying value included in the balance sheet approximates the fair value.

Medium term notes (ii)

Medium term notes have been issued at either face value or at a discount or premium to face value. The discount or premium is amortised to finance costs over the term of the notes. Medium term notes are issued at a combination of fixed and floating rate terms. As at 31 December 2006 the effective interest rate of the medium term notes, including margins is 6.5% (Dec 2005: 6.3%).

				2006		2005
Face value	Fixed / Floating	Rate	Maturity date	Carrying value	Fair value	Carrying value	Fair value
				\$M	\$M	\$M	\$M
300.0	Fixed	6.50%	15 Oct 2007	299.9	303.1	299.8	307.1
160.0	Fixed	6.0%	27 Jun 2008	159.9	158.3	159.8	160.3
325.0	Fixed	6.0%	30 Mar 2009	323.2	323.8	$\tilde{\phantom{a}}$
100.0	Fixed	6.25%	7 Nov 2010	99.4	98.3	99.3	101.2
200.0	Fixed	$6.50\%$	22 Aug 2013	199.3	198.2	199.2	206.4
260.0	Fixed	6.75%	26 May 2006	٠	٠	260.3	262.5
60.0	Fixed	5.75%	29 Nov 2006		٠	60.0	60.2
240.0	Floating	3M BBSW + 0.40%	29 Nov 2006		۰.	239.8	241.5
56.0	Floating	3M BBSW + 0.38%	26 May 2006			79.9	80.5
140.0	Floating	$3M$ BBSW + 0.47%	26 Jun 2008	139.9	140.4	139.8	140.6
100.0	Floating	3M BBSW + 0.48%	22 Aug 2008	100.0	101.0	99.9	101.0
375.0	Floating	3M BBSW + 0.40%	30 Mar 2009	375.0	375.0
125.0	Floating	3M BBSW + 0.48%	6 Nov 2010	124.8	126.1	124.7	125.9
12.0	Floating	$3M$ BBSW + 0.78%	22 Aug 2013	12.0	12.1	12.0	12.1
				1,833.4	1.836.3	1,774.5	1,799.3

(c) Bank facilities

Details of drawdown value of bank facilities are set out below:

			LUUU	LUU
Type of facility	Currency	Security	Maturity date	Utilised \$M	Facility SМ	Utilised \$M	Facility \$M
Short term note	AUD	Unsecured	6 month notice	130.0	500.0	111.8	500.0
Multi-option 1,2	AUD	Unsecured	30 April 2007		91.7	350.0	850.0
Bill facility 3	AUD.	Secured	19 April 2007	55.4	57.5	16.9	55.7
				185.4	649.2	478.7	1,405.7
Multi-option $1.2$	Euro	Unsecured	30 April 2007	275.1	275.1
Syndicated revolving credit 1	Euro	Unsecured	30 June 2008	1,004.7	1.004.7	782.4	967.9
				1,279.8	1,279.8	782.4	967.9
Multi-option 1.2	USD	Unsecured	30 April 2007	433.2	433.2
				433.2	433.2
				1.898.4	2.362.2	1.261.1	2.373.6

anne

$- - -$

onne

22. Borrowings (continued)

(c) Bank facilities (continued)

¹ Facility is subject to negative pledge arrangements which require GPT to comply with certain minimum financial requirements.

² Multi-Option Facility Limit is AUD 800.0 million and covers drawings in all currencies.

³ The GPT / Austrak Joint Venture has a \$115.0 million (GPT's Share \$57.5 million) Bill Facility to fund the capital expenditure requirements of Austrak Business Park, Somerton. This facility is broken up into 3 tranches, a working capital facility of \$10 million, a Labelmakers facility of \$17.1 million, and a Coles Myer facility of \$83.3 million which expires on 19 April 2007. The surplus of \$4.6 million is for future variations. This facility is secured by a mortgage over Austrak Business Park, Somerton, As at 31 December 2006, \$110.6 million (GPTs share \$55.4 million) has been drawn down, (Dec 2005: \$33.8 million (GPT's Share \$16.9 million)).

The carrying value included in the balance sheet approximates the fair value.

(d) CPI coupon indexed bond

On 10 December 1999, the Trust issued a CPI coupon indexed bond totalling \$125 million. The security will expire on 10 December 2029 and has a current coupon of 7.44% (Dec 2005: 7.16%). The coupon compounds quarterly at the increase in CPI.

Face value		Maturity date	2006		2005
	Current rate		Carrying value \$M	Fair value \$M	Carrying value \$M	Fair value 5M
125.0	7.44%	10 Dec 2029	124.5	163.3	124.5	169.3

		Consolidated
(e) Summary of finance facilities		31 Dec 2006 31 Dec 2005
Committed drawdown values of finance facilities available to GPT:
Total Financing Facilities at the end of the year	5,164.2	5,350.6
Amounts utilised	4.300.2	3,638.1
Available financing facilities	864.0	1,712.5
Cash	58.8	93.4
Financing Resources available at the end of the year	922.8	1,805.9
The maturity profile of finance facilities is set out below:
Due within one year	2,497.5	2,270.7
Due between one and five years	2,329.7
Due after five years		2,742.9
	337.0	337.0
	5.164.2	5.350.6

The facilities comprise credit standby arrangements, floating rate secured and unsecured facilities, fixed and floating rate notes and CPI indexed bond. Certain facilities are also subject to negative pledge arrangements which require GPT to comply with specific minimum

		Consolidated		Parent entity
			31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$M	\$М	SM	\$M
Derivative liabilities 23.
Interest rate swap	2.0	15.6	2.0	15.6
Knock-out swaps		5.3		5.3
Interest rate options	13.3	10.4	13.3	10.4
Forward foreign currency contracts	10.2	3.0	10.2	3.0
	25.5	34.3	25.5	34.3
Refer to Note 37 for details.
24. Provisions
Current liabilities
Employee benefits	6.7	6.6
Income tax	2.0	3.6
Other	0.9	0.8
Distribution payable		133.1	$\bullet$	133.1
	9.6	144.1	$\bullet$	133.1
Non-current liabilities
Employee benefits	4.1	3.6

25. Total equity/net assets attributable to Securityholders

Equity attributable to the Securityholders

Consolidated	Note	Parent \$M	Other stapled entities \$M	Total \$M
2006
Contributed equity	25(a)	4,391.5	307.0	4,698.5
Reserves	25(b)	21.1	(0.8)	20.3
Retained earnings / (accumulated losses)	25(c)	2,724.1	(0.8)	2,723.3
		7,136.7	305.4	7,442.1
2005
Contributed equity	25(a)	4,296.0	302.5	4,598.5
Reserves	25(b)	16.2	2.4	18.6
Retained earnings / (accumulated losses)	25(c)	1,778.4	(22.2)	1,756.2
		6,090.6	282.7	6,373.3
Parent
2006
Contributed equity		4,391.5		4,391.5
Retained earnings	25(c)	2,684.3	۰	2,684.3
		7,075.8	$\bullet$	7,075.8
2005
Contributed equity		4,296.0		4,296.0
Retained earnings	25(c)	1,790.6	$\epsilon$ $\overline{\phantom{a}}$	1,790.6
		6,086.6	$\blacksquare$	6,086.6

25. Total equity/net assets attributable to Securityholders (continued)

	Consolidated
	31 Dec 2006	31 Dec 2005
	Securities	Securities
(a) Issued securities

Issued securities (fully paid) 2,041,530,506 securities (Dec 2005: 2,016,761,610 units)	4.698.5	4,598.5

Movements in ordinary securities/units:

Date	Details	Notes	Number of units/securities	\$M
1 January 2005	Opening units on issue		2.016.716.610	4.598.5
6 June 2005 6 June 2005	Proceeds from capital distribution from units Proceeds from ordinary shares stapled to become stapled securities	(ii) (ii)		(302.5) 302.5
	31 December 2005 Closing securities on issue		2,016,716,610	4,598.5
8 June 2006	Proceeds from the issue of securities	(iii)	24,813,896	100.0
	31 December 2006 Closing securities on Issue		2,041,530,506	4,698.5

For further detail in regard to the stapling of securities, refer Note 1(b).

Stapled securities (l)

Each stapled security comprises one unit in the Trust and one share in the Company. They cannot be traded or dealt with separately. Stapled securities entitle the Securityholder to participate in distributions/dividends and the proceeds of any winding up of GPT in proportion to the number of amounts paid or securities held. On a show of hands every holder of stapled securities present at the meeting in person or by proxy, is entitled to one vote. In a poll each ordinary Securityholder is entitled to one vote for each fully paid security.

All securities issued are fully paid.

(ii) Capital distribution

The Trust Unitholders received 15 cents per unit of capital distribution totalling \$302.5 million, referred to as the stapling distribution. Unitholders authorised GPT RE Limited (the new Responsible Entity for the Trust) to apply the stapling distribution to subscribe for shares in the Company of \$302.5 million. For each unit held in the Trust, Unitholders received one share in the Company.

(iii) Security purchase plan

On 28 April 2006 GPT invited its Securityholders to subscribe to new additional securities at a 2% discount to the market at an average price of \$4.03 per security. The new securities were issued on 8 June 2006 entitling Securityholders to the interim distribution payable for the quarter to 30 June 2006.

(iv) Employee incentive scheme

Information relating to the employee incentive scheme, including details of securities issued under the scheme, is set out in Note 26.

There is no par value.

25. Total equity/net assets attributable to Securityholders (continued)

		Consolidated		Parent entity
	SМ	\$M	31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005 \$M	\$M
(b) Reserves
Asset revaluation reserve		4.7
Foreign currency translation reserve	24.8	13.9
Treasury stock reserve	(5.4)
Employee incentive security scheme reserve	0.9
	20.3	18.6
Movements
Asset revaluation reserve
Balance at the beginning of the year	4.7
Asset revaluation arising during the year	(4.7)	4.7
Balance at the end of the year		4.7
Foreign currency translation reserve
Balance at the beginning of the year	13.9
Currency translation differences arising during the year	10.9	13.9
Balance at the end of the year	24.8	13.9
Treasury stock reserve
Balance at the beginning of the year
Purchase of securities arising during the year	(5.9)
Sale of securities and repayments	0.5
Balance at the end of the year	(5.4)		$\blacksquare$
Employee incentive scheme reserve
Balance at the beginning of the year
Employee incentive scheme movement arising during the year	0.9
Balance at the end of the year	0.9

Nature and purpose of reserves

$\left( i\right)$ Asset revaluation reserve

The asset revaluation reserve is used to record increments and decrements on the revaluation of property, plant and equipment.

$(iij)$ Treasury stock reserve

The treasury stock reserve is used to record the issue and repayment of securities under the non-recourse scheme of the employee incentive scheme.

(iii) Employee incentive scheme reserve

The employee incentive scheme reserve is used to recognise the fair value of securities issued.

(iv) Foreign currency translation reserve

Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency translation reserve, as described in Note $1(y)$ . The reserve is recognised as a profit or loss when the net investment is disposed.

(c) Retained profits

Movements in retained profits were as follows:

Balance at the beginning of the year	1.756.2		1.790.6
Transfer from net assets attributable to Securityholders		.566.5		1,566.5
Net profit for the year after distributions paid	967.1	189.7	893.7	224.1
Balance at the end of the vear	2.723.3	.756.2	2.684.3	1.790.6

26. Share based payments

Employee Incentive Scheme

A scheme under which securities are purchased on-market or to subscribe for the issue of new GPT Securities on behalf of employees for no cash consideration was approved by shareholders at the 2005 annual general meeting. All permanent employees (excluding nonexecutive directors) who are continuously employed by GPT are eligible to participate in the scheme. Employees may elect not to participate in the scheme.

Structure of the Scheme

Under the Scheme, loans are made available to participating employees to fund the acquisition of GPT Securities by a Scheme Administrator acting on their behalf. The Scheme Administrator must use the loan proceeds to acquire those GPT Securities on market or to subscribe for the issue of new GPT Securities. The GPT Securities are acquired on-market at the market price prevailing at the time of acquisition.

When the GPT Securities are issued, the acquisition price is the market value of GPT Securities, being the weighted average of the prices at which GPT Securities were traded on the ASX during the five trading days up to and including the day the GPT Securities are issued.

The scheme operates on two levels, a 'General' scheme for all employees other than certain Senior Executives and a 'Long Term Incentive' (LTI) scheme where participation is offered to certain Senior Executives.

The General Scheme

Under the General Scheme, employees may participate up to a nominated percentage (being 20%) of their Total Package Value (TPV). TPV includes cash, superannuation, leave loading, other salary sacrifice items and FBT. Where an employee's TPV is increased following a remuneration review, the amount that they may be loaned will increase up to 20% of their new TPV.

The loan made under the Scheme is of no fixed term and is interest free. The interest component is a cost to the business of implementing the Scheme.

The loans are repaid using net distributions from the GPT Securities (deducting amounts required for tax). While the loan remains outstanding, the GPT Securities are held subject to a holding lock and are not able to be transferred or otherwise dealt with.

If an employee elects to withdraw their GPT Securities from the Scheme, the employee is required to pay the loan in full irrespective of the value of their GPT Securities. If the employee leaves they may repay the outstanding loan through their own funds or the sale of the GPT Securities but the loan is non-recourse in the event that the market value of the GPT Securities is less than the outstanding loan amount. If this occurs, employees will not be liable for that outstanding amount. The Board may waive loan amounts in its discretion.

The Long Term Incentive (LTI) Scheme

The Board of GPT, on the recommendation of the Nomination and Remuneration Committee, determines those Senior Executives eligible to participate in the LTI Scheme and, for each participating executive, their maximum potential LTI and loan amount, calculated by reference to a percentage of their TPV having regard to the advice received from external remuneration consultants.

As with the General Scheme, the loan has no fixed term. After deducting amounts for tax on the employee's income, distributions on the GPT Securities are applied to reduce and repay the loan. While the loan remains outstanding, the GPT Securities will be held subject to a holding lock and are not able to be transferred or otherwise dealt with.

Unlike the General Scheme, the loan is not interest free. Interest is calculated on a simple basis on the balance of the loan, at 31 December 2006: 5.6%.

Except in defined circumstances, the loan under the LTI Scheme is full recourse. If the employee leaves GPT, the loan and the accumulated cost of providing the loan at that time must be repaid (either by the sale of securities or some other source of funds). In determining any shortfall, profits on each tranche of GPT Securities and associated loans will be offset against losses on other GPT Securities and their associated loans. However, at the discretion of the Board the loan and outstanding interest may be waived in the following circumstances:

• (i) on retirement of the employee;
• (ii) death or total permanent disability of the employee;
• (iii) redundancy without cause of the employee; or
• (iv) takeover.

26. Share based payments (continued)

Employee Incentive Scheme (continued)

Fair value of securities granted

Under the requirements of AASB 2, loans granted under the General Scheme are accounted for as 'options' to employees because of the non-recourse loan feature. The fair value of the 'options' was calculated as 95.0c per security.

The Monte Carlo pricing model used to calculate fair value takes into account the grant date, security price at grant date, staff turnover rate, voluntary exercise rate, risk free interest rate, dividend yield, impact of dilution and volatility.

	Consolidated
	Shares	31 Dec 2006 31 Dec 2005 Shares
Securities issued under the Scheme to participating employees Long Term Incentive Scheme
General Scheme	5,710,332	$\omega$
Total	1,296,815
	7,007,147

Each participant was issued with securities on the weighted average market price of \$4.26.

27. Key management personnel

(a) Directors

The directors of GPT Management Holdings Limited and GPT RE Limited, the Responsible Entity of General Property Trust ('the Responsible Entity'), at any time during or since the end of the financial year.

Chairman - Non-executive $\omega$

Peter Joseph (Chairman)

(ii) Non-executive directors

Malcolm Latham lan Martin Brian Norris (Resigned 31 August 2006) Eric Goodwin Ken Moss Elizabeth Nosworthy Anne McDonald (Appointed 2 August 2006)

(iii) Executive director

Nic Lyons

(b) Other key management personnel

In addition to the directors noted above, the following persons were the key management personnel with the greatest authority for the strategic direction and management of GPT or the most highly remunerated executives during the financial year:

Name	Position	Employer
Michael O'Brien	Chief Operating Officer	GPT Management Holdings Limited
Kieran Pryke	Chief Financial Officer	GPT Management Holdings Limited
James Coyne	General Counsel and Secretary	GPT Management Holdings Limited
Mark Fookes	Head of Retail	GPT Management Holdings Limited
Neil Tobin	General Manager Joint Venture	GPT Management Holdings Limited
Bruce Morris	Hotels & Tourism Portfolio Manager	GPT Management Holdings Limited
Nicholas Harris	Head of Wholesale Funds	GPT Management Holdings Limited

(c) Compensation of key management personnel

The following table sets out the compensation for key management personnel in aggregate. Refer to the Remuneration Report in the Directors' Report for details of remuneration policy and compensation details by individual.

		Consolidated		Parent entity
	31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005 \$'000	\$'000	\$'000	\$'000
Short term employee benefits Post employment benefits	7.601	5.961	7.601	5.961
	313	392	313	392
Other long-term benefits	4.534	1,886	4.534	1.886
Share based payments		21		21
	12,448	8.260	12,448	8.260

All GPT Management Limited directors, executives and employees were paid by Lend Lease Corporation Limited. GPT Management Limited received a fee for managing GPT. Following Unitholders' approval on 2 June 2005, a stapled entity (the GPT Group) was formed on 6 June 2005 by stapling together the units in General Property Trust ('Trust') to the shares in GPT Management Holdings Limited ('Company'). The directors, executives and employees from 6 June 2005 are paid by GPT Management Holdings Limited, the employer entity for the GPT Group.

27. Key management personnel (continued)

(d) Equity instrument disclosures relating to key management personnel

The following table sets out the equity holdings for key management personnel in aggregate.

	Balance 1 Jan 2005	Purchases/ (Sales)	Balance 31 Dec 2005	Purchases/ (Sales)	Balance 31 Dec 2006
Peter Joseph	50,000		50,000		50,000
Eric Goodwin		10,000	10,000	1,241	11,241
Malcolm Latham	13,195	۰	13,195
Ken Moss	25,000	٠	25,000		13,195
Brian Norris 1	4,097			1,241	26,241
Elizabeth Nosworthy	5,000		4,097
lan Martin			5,000	1,241	6,241
Anne McDonald	$\bullet$	50,000	50,000	1,241	51,241
	$\blacksquare$			10,500	10,500
Nic Lyons	٠	50,000	50,000	684,116	734,116
Michael O'Brien				298,476	298,476
James Coyne
Kieran Pryke	53			135,369	135,369
Neil Tobin		5,000	5,053	246,173	251,226
	-	5,000	5,000	225,975	230,975
Mark Fookes		3,500	3,500	248,385	251,885
Bruce Morris				208,738	208,738
Nicholas Harris				190,627	190,627

¹ Brian Norris resigned during the year, so his holdings as at 31 December 2006 is not shown.

(e) Loan to key management personnel

	Balance 1 Jan 2006	Loan made during the year	Interest accrued for the year	Interest not accrued 1	Balance 31 Dec 2006	Highest indebtedness during the year
Nic Lyons	$\overline{\phantom{a}}$	2.874.997	62,376	35,087	2,820,098
Michael O'Brien	$\tilde{\phantom{a}}$	1,233,333	26,758	15,051	1,209,782	2,874,997
James Covne	$\blacksquare$	568,888	12.343	6,943	558,025	1,233,333
Kieran Pryke	$\ddot{}$	1,055,554	22,901	12,882	1,035,398	568,888
Neil Tobin		944,444	20,491	11.526	926,410	1,055,554
Mark Fookes	۰	1,033,331	22,419	12,611	1,013,600	944,444
Bruce Morris	$\overline{\phantom{a}}$	877.221	19,032	10.706		1,033,331
Nicholas Harris	w	888,887	14.135	7.951	860,471 881,834	877,221 888,887

¹ The amounts shown for interest not charged in the table above represents the difference between the amount paid and payable for the year and the amount of interest that would have been charged on an arm's length basis.

All these loans are pursuant to the Employee Incentive Scheme (EIS). Refer to Note 26 for details.

Other transactions with key management personnel $(f)$

There have been no transactions with key management personnel other than those transactions outlined above.

		Consolidated	Parent entity
			31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$'000	\$'000	\$'000	\$'000
28. Remuneration of auditors
Assurance services
Audit services
PricewaterhouseCoopers Australian firm Audit and review of financial reports and other audit work under the Corporations Act 2001	1,541.4	1,260.8	1.086.9	1,150.8
Related Practices of PricewaterhouseCoopers Australian firm including overseas firms
Audit and review of financial reports and other audit work	51.9
Total remuneration for audit services	1,593.3	1,260.8	1,086.9	1,150.8
Other Assurance Services
PricewaterhouseCoopers Australian firm
Audit of regulatory returns	81.7	46.2	57.1	46.2
AIFRS accounting services	180.8	160.0	90.4	160.0
Accounting advice	130.9		65.4
Due diligence services 1	20.0	1,325.0		1,325.0
Related Practices of PricewaterhouseCoopers Australian firm including overseas firms	413.4	1,531.2	212.9	1,531.2
Audit and review of financial reports and other audit work
Due diligence services	27.0
Total remuneration for other assurance services	440.4	1,531.2	212.9	1,531.2
Total remuneration for assurance services	2,033.7	2,792.0	1,299.8	2,682.0
Taxation services
PricewaterhouseCoopers Australian firm
Expatriate taxation services	83.9	67.2
Related Practices of PricewaterhouseCoopers Australian firm including overseas firms
Audit and review of financial reports and other audit work
International tax due diligence relating to acquisition entries	13.6
	97.5	67.2

¹ Other assurance services provided in 2005 were predominantly due diligence reviews on the internalisation and establishment of joint venture with Babcock & Brown Limited.

a canal

29. Commitments

	Consolidated		Parent entity
	31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
\$M	SM	\$M	SM.

(a) Capital expenditure

At balance date capital expenditure approved but not provided for in the financial report:

Due within 1 year	587.7	62.5	294.1	24.3
Due between 1 and 5 years	153.1	32.2 ------	42.8
	740.8	94. . .	336.9	24.3 --------------------

(b) Operating leases

Estimated aggregate amount of operating lease expenditure agreed or contracted but not provided for in the financial report:

Due within 1 year	10.5	13.6	0.4	0.1
Due between 1 and 5 years	33.5	49.2	1.3	0.5
Over 5 years and expiry date of leases	108.4	56.6	4.9	0.5.
	152.4	119.4	6.6

Included in the total operating lease commitments, \$53.6 million relates to an operating lease with SEA Island Holdings for the use of Lizard Island. The calculation is based on the current monthly rental. The rental payment increases every 2 years by the rate of CPI in Brisbane, which has not been reflected in the above disclosure. This operating lease also requires the payment of 10% of all beverages sold and 20% of all accommodation and meal revenue to SEA Island Holdings, payable on a half yearly basis. These amounts have not been included in the \$55.6 million commitment

An operating lease commitment of \$50.6 million relating to a ground lease and hereditary building rights held in the joint venture entity, BGP Investment S.a.r.I. \$28.8 million relates to a ground lease over four leasehold properties in Germany which have durations between 40 and 196 years. \$21.8 million relates to heritage building rights on three German properties which have duration of 198 years. Amounts payable have been discounted to reflect the current liability.

(c) Other commitments

Estimated aggregate amount of other commitments agreed or contracted but not provided for in the financial report:

Due within 1 year		12.0
Due between 1 and 5 years		6.0		$\sim$
	. . -----	18.0	.	$\sim$

These include medium term retention arrangements for certain GPT employees as a result of the transition from being Lend Lease employees to GPT employees

30. Contingent assets and liabilities

During the year GPT earned a performance fee of \$4.3 million from GPT Wholesale Office Fund (GWOF). An additional potential performance fee of \$9.3 million has not been recognised as a receivable on the balance sheet as receipt of this amount is contingent on future events not wholly within the control of GPT.

There are no other contingencies at balance sheet date.

31. Related party transactions

(a) Parent entity

The ultimate Australian parent entity is General Property Trust.

(b) Subsidiaries, joint ventures and associates

Interests in subsidiaries, joint ventures and associates are set out in Notes 15, 16 and 17 respectively. Loans with subsidiaries are set out in Note 8 and loans with joint venture and associates are in Note 19.

(c) Key management personnel

Key management personnel and their compensation are set out in Note 27. Details of the remuneration policy are contained in the Remuneration Report within the Directors' Report.

Included in the note 27(a) in other key management personnel is Elizabeth Nosworthy and Ian Martin who are directors of Babcock & Brown Limited, with whom GPT have a joint venture arrangement. The remuneration they received was transacted at arm's length. Refer to the Remuneration Report in the Directors' Report for compensation details.

(d) Transactions with related parties

Transactions with subsidiaries

The income received and receivable by the Trust from subsidiaries in the form of distributions and dividends for the year, refer Notes 15 for details. The following transactions occurred with subsidiaries during the year:

		Consolidated	Parent entity
		31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
Revenue	\$M	\$M	\$М	\$M
Distributions from subsidiaries
Rent received from the Company			544.5	360.6
			0.8	0.1
Expenses
Cost associated with internalisation paid to GPT RE Limited
Interest paid on loan from the Company			(11.2)
Responsible Entity fees paid to GPT RE Limited			(2.4)	(5.1)
			(15.1)	(12.3)
Other transactions
Loan advanced from the Company
Loan repayments to the Company				302.5
Loan advanced to the Company			(110.5)	(192.0)
Loans advanced to subsidiaries			(6.1)
			(48.0)
Loan repayments from subsidiaries				7.1
Loan repayments to subsidiaries
Investment in controlled entities		٠	(899.6)	(353.9)
Redemption of units in controlled entity			913.7
Property and development management fees paid to the Company
Fund management fees capitalised to the Trust		$\blacksquare$	(29.5)	(1.4)
			(6.6)

31. Related party transactions (continued)

(e) Transactions with related parties (continued)

Transactions with joint ventures and associates

The income received and receivable by the Trust from joint ventures and associates in the form of interest on loans and profit from distributions and dividends for the year, refer Notes 16 and 17 for details. The following transactions occurred with joint ventures and associates during the year:

	Consolidated		Parent entity
	31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
Revenue	\$M	\$M	\$M	SM.
Distributions from B&B joint ventures
Distributions from Australian joint ventures	2.1
Distributions from associates	73.0	85.4	49.5	46.3
Interest income from B&B joint ventures	22.5		22.5
Interest income from Australian joint ventures	57.9	14.0	47.7	13.7
Interest income from associates		0.2		0.1
	4.7	2.0
Other transactions
Investment in BGP Investment S.a.r.1
Investment in Babcock & Brown GPT REIT Inc.	52.4 2.7	(163.5)
Investment in BGA Real Estate Finance Trust	1.6	(24.5)
Investment in B&B GPT Alliance 1 LLC	2.0
Investment in B&B GPT Alliance 2 LLC	5.8
Investment in B&B SPV UK Limited	2.9
Investment in Benchmark GPT LLC	124.3
Investment in GPTMH BM Investment LLC	3.9
Investment in Benchmark Assisted Living, LLC	5.4
Loans advanced to BGP Investment S.a.r.I	361.6	(592.5)	361.6
Loans advanced to Babcock & Brown GPT REIT Inc.	16.0	(85.7)		(592.5)
Loans advanced to BGA Real Estate Finance Trust	12.8
Loans advanced to B&B GPT Alliance 1 LLC	16.2
Loans advanced to B&B GPT Alliance 2 LLC	68.2
Loans advanced to B&B SPV UK Limited	19.5		19.5
Loans advanced to Benchmark GPT LLC	82.9
Increase in units in Australian joint ventures	8.0	(12.2)	104.1	(7.8)
Increase in shares in associates		(0.9)
Loans advanced to associates		(4.6)
Loan repayments from associates	25.1	3.9
Superannuation contributions
Contributions to superannuation funds on behalf of employees
	(7.5)	(3.8)

$(f)$ Terms and conditions

Transactions relating to distributions were on the same terms and conditions that applied to other Securityholders.

All other transactions were made on normal commercial terms and conditions and at market rates, except that there are no fixed terms for the repayment of loans between the parties. The interest rate on loan between the Trust and the Company was 6.63%. The interest rate on loan between the Trust and Voyages Hotels & Resorts Pty Limited was 8.57%. Any other loans between the Trust and controlled entities are non interest bearing with no fixed term for repayment. The interest rates on loans with joint ventures and associates are disclosed in Note

Outstanding balances are unsecured and are repayable in cash and callable on demand.

31. Related party transactions (continued)

(g) Transactions with Lend Lease Group

The Responsible Entity of the Trust up until it was replaced in June 2005 was GPT Management Limited (now Lend Lease Funds Management Limited), a wholly owned subsidiary of Lend Lease Corporation Limited.

Detail of the Responsible Entily's fee is disclosed in Note 5. GPT Management Limited's immediate and ultimate holding company is Lend Lease Corporation Limited.

All dealings between the Trust and Lend Lease Corporation Limited and its controlled entities and related parties ('Lend Lease') were on normal commercial terms and conditions and material dealings are reviewed by the Audit & Risk Management Committee. All contracts are subject to commercial appraisal, on a basis acceptable to GPT Management Limited, by an external valuer or a qualified external party approved by GPT Management Limited.

The following transactions took place with the Lend Lease Group up to 2 June 2005:

	Consolidated		Parent entity
			31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$M	\$M	\$M	\$M
Capital expenditure in relation to contracts for development, refurbishment and upgrades
Purchase of Darting Park Stage 3		129.5		32.5
Property management including property maintenance and insurance
Rental income from Lend Lease Group		13.7		7.3
Income guaranteed by Lend Lease under development and sale agreements		0.1		0.1
GPT's share of Associates Responsible Entity fee / (reimbursement) Agreement with Lend Lease Corporation to provide for a smooth and orderly transition of business of responsible entity of GPT from GPT Management Limited		0.2
to the new responsible entity to be known as GPT RE Limited. The agreement covered the operational and logistical matters for the transition.		16.5		16.5

32. Subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 1(c):

Name of entity	Country of incorporation	Class of shares	2006	Equity holding 12 2005
Controlled entities			₩	%
GPT Hotel Trust	Australia	Ordinary	100	100
Avers Rock Resort Trust	Australia	Ordinary	100	100
GPT Hotel (Darling Harbour) Trust	Australia	Ordinary	100	100
GPT Hamilton Island Trust	Australia	Ordinary	100	100
GPT Industrial Trust (formerly known as Wales House Trust)	Australia	Ordinary	100	100
GPT Industrial (Somerton) Trust	Australia	Ordinary	100	100
GPT Industrial Subsidiary Trust	Australia	Ordinary	100
GPT Industrial Subsidiary Trust No.2	Australia	Ordinary	100.
GPT Residential Trust (formerly GPT Office Trust) GPT Residential (Rouse Hill) Trust	Australia Australia	Ordinary Ordinary	100	100
GPT Residential (Twin Waters) Trust	Australia	Ordinary	100 100	100 100
GPT Subsidiary Holding Trust	Australia	Ordinary	100	100
GEM Retail Property Trust	Australia	Ordinary	100	100
Crown Street Trust	Australia	Ordinary	100	100
Homemaker Retail Property Trust	Australia	Ordinary	100	100
GPT Retail Subsidiary Trust ۰	Australia	Ordinary	100
GPT BM Loan Trust	Australia	Ordinary:	100	$\overline{\phantom{a}}$
GPT BM Investment Trust	Australia	Ordinary	100
GPT BM Investment LLC GPT investment Trust No 1	United States	Ordinary	100
GPT Retail (Rouse Hill) Trust	Australia Australia	Ordinary Ordinary	100 100	100
GPT Commercial Subsidiary Trust	Australia	Ordinary	100
818 Bourke Street Trust	Australia	Ordinary	100
GPT Pty Limited	Australia	Ordinary	100	100
GPT Finance Pty Limited	Australia	Ordinary	100	100
GPT Funds Management 2 Pty Limited	Australia	Ordinary	100	100
GPT Management Custodian Pty Limited	Australia	Ordinary	100	100
GPT Nominees Pty Limited	Australia	Ordinary	100	100
Melbourne Central Custodian Pty Ltd Melbourne Central Holdings Pty Ltd	Australia	Ordinary	100	100
GPT Management Holdings Limited	Australia Australia	Ordinary Ordinary	100 100	100 100
GPT Funds Management Limited $\bullet$	Australia	Ordinary	100	100
GPT Development Pty Limited $\blacksquare$	Australia	Ordinary	100
GPT Property Management Pty Limited	Australia	Ordinary	100	100
GPT International Pty Limited $\blacksquare$	Australia	Ordinary	100
GPT US Inc	United States	Ordinary	100
GPT UK Limited $\ddot{\phantom{0}}$	United Kingdom	Ordinary	100	$\sim$
GPTMH BM Investment LLC ۰	United States	Ordinary	100	$\overline{a}$
Voyages Hotels & Resorts Pty Limited Destinations & Voyages Travel Pty Limited	Australia Australia	Ordinary	100	100
Voyages Lodges Pty Limited	Australia	Ordinary Ordinary	100 100	100 100
Australian Resorts Pty Limited	Australia	Ordinary	100	100
Brampton Island Pty Limited	Australia	Ordinary	100	100
Dunk Island Pty Limited	Australia	Ordinary	100	100
Bedarra Hideaway Pty Limited	Australia	Ordinary	100	100
Bedarra Island Pty Limited	Australia	Ordinary	100	100
Heron Island Pty Limited	Australia	Ordinary	100	100
Lizard Island Pty Limited $\overline{\phantom{a}}$	Australia	Ordinary	100	100
Wrotham Park Lodge Pty Limited Voyages Mountain & Marine Pty Limited	Australia	Ordinary	100	100
Silky Oaks Pty Limited	Australia Australia	Ordinary Ordinary	100 100	100 100
GPT RE Limited	Australia	Ordinary	100	100
Homemaker Retail Management Pty Limited	Australia	Ordinary	100
Homemaker Property Management ă.	Australia	Ordinary	100
GPT Malta 1 Limited	Malta	Ordinary	100	100
GPT Malta 2 Limited ۰	Malta	Ordinary	100	100
GPT Europe S.a.r.l.	Luxembourg	Ordinary	100	100
GPT Europe Finance S.A.	Luxembourg	Ordinary	100

¹ The proportion of ownership interest is equal to the proportion of voting power held.
² Entities acquired during the year were at their fair values (refer note 1(a)). Consideration paid for business combinations wer

Ì,

33. Events occurring after the balance sheet date

Declaration of December quarter distribution

On 21 February 2007, a distribution of 7.0 cents per security (\$142.9 million) payable on 28 March 2007 was declared.

34. Reconciliation of profit after income tax to net cash inflows from operating activities

	Consolidated		Parent entity
		31 Dec 2006 31 Dec 2005	31 Dec 2006	31 Dec 2005
	\$М	\$M	\$M	\$M
Profit for the year	1,384.0	566.8	1,310.6	601.2
Add: finance costs to Securityholders		205.5		205.5
Profit for the year after finance costs to Securityholders	1,384.0	772.3	1.310.6	806.7
Fair value adjustments to investment properties	(670.9)	(351.8)	(298.3)	(180.1)
Fair value adjustments in equity accounted entities	(182.1)	(70.9)	(428.5)	(211.3)
Re-measurement of derivatives to fair value	(60.9)	(7.7)	(60.9)	(7.7)
Exchange losses on foreign currency borrowings	17.8	9.8	(5.4)	(1.3)
Impairment and revaluation decrements	28.0	63.7	69	6.1
Non cash revenue adjustments	18.8	15.2	7.0	9.0
Gain on disposal of properties	(10.8)	(10.0)	(11.1)
Depreciation and amortisation expense	19.8	7.2
Amortisation of leasing fees	2.4	2.7	1.0	1.0
Employee incentive security scheme expense	0.9
Provision for doubtful debts	(0.2)	0.5	(0.5)
Interest capitalised	(6.7)	(23.5)	(6.7)	(23.5)
(Increase)/decrease in receivables	(54.4)	(69.2)	(52.9)	6.0
Increase/(decrease) in payables	(6.8)	12.6	3.6	(82.5)
Net cash inflows from operating activities	478.9	350.9	464.8	322.4

$\mathcal{L}^{\text{max}}_{\text{max}}$

	Consolidated 31 Dec 200631 Dec 2005
35. Earnings per security	Cents	Cents
Basic earnings per security {a}
Attributable to Securityholders of the Trust
Basic and diluted earnings per Securityholder of the Trust	67.1	29.2
Basic and diluted earnings per Securityholder of the Trust before financing costs attributable to GPT Unitholders divided by the average number of units	67.1	39.4
Attributable to Securityholders of the stapled entity
(Net operating income including book profits divided by weighted average number of securities)
Basic and diluted earnings per stapled security	68.2	28.1
Basic and diluted earnings per stapled security before financing costs attributable to GPT Securityholders divided by the average number of securities	68.2	38.3
Basic and diluted earnings per stapled security using realised operating income, refer Note 3.	27.5	24.4
(b) Weighted average number of securities used as the denominator
Weighted average number of ordinary shares and potential ordinary securities used as the denominator in calculating diluted earnings per security	2.030.7	2,016.7

36. Financial risk management

GPT's activities expose it to a variety of financial risks; foreign exchange risk, credit risk, liquidity risk, cash flow and fair value interest rate risk. GPT's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of GPT. GPT uses derivative financial instruments to hedge exposure to fluctuations in foreign exchange rates and interest rates.

Financial risk management is carried out under policies approved by the Board of Directors. This involves the identification, evaluation and hedging of financial risks in close co-operation with GPT's operating units. The Board approves written principles for overall financial risk management.

(a) Foreign exchange risk

Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency which is not GPT's functional currency, being Australian dollars. GPT is exposed to foreign exchange risk arising from currency exposures to the Euro and US dollar.

GPT manages foreign exchange risk by borrowing in the same functional currency of its investment to form a natural economic hedge against any foreign currency fluctuations. GPT manages the foreign exchange risk of the cost of funding and income derived from the investment by entering into forward exchange contracts to convert the net amount of foreign currency received back to Australian dollars.

A forward exchange contract obliges GPT to sell and the other party to buy a specific foreign currency at a specific price, amount and future date.

(b) Credit risk

The risk that GPT suffers financial loss due to the inability of its counterparties to meet their financial obligations. GPT has no significant concentrations of credit risk and has policies to review the aggregate exposure to tenancies across its portfolio. GPT also has policies to ensure that sales of products and services are made to customers with an appropriate credit history and multiple counterparties are used for its hedging transactions with organisations that have a long term credit rating no lower than A- or A3.

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the business, GPT aims at maintaining flexibility in funding by keeping committed credit lines available.

(d) Refinancing risk

The risk that unfavourable interest rate and credit market conditions result in an unacceptable increase in GPT's credit margins and interest cost. Refinancing risk arises when GPT is required to obtain debt to fund existing and new debt positions. GPT is exposed to refinancing risks arising from the availability of finance as well as the interest rates and credit margins at which financing is available. GPT manages this risk by spreading maturities of borrowings and interest rate swaps, using interest rate derivatives to hedge known and forecast positions and reviewing potential transactions to understand the impact on the credit rating.

(e) Cash flow and fair value interest rate risk

The income and the associated operating cashflows of GPT's assets are substantially independent of changes in market interest rates. GPT's interest rate risk arises from long-term borrowings. Borrowings issued at floating rates expose GPT to cash flow interest rate risk. Borrowings issued at fixed rates expose GPT to fair value interest rate risk.

GPT manages its cash flow interest rate risk by entering into interest rate swap agreements that are used to convert floating interest rate borrowings to fixed interest rates. Such interest rate swaps are entered into with the objective of hedging the risk of interest rate fluctuations in respect of underlying borrowings. Under the interest rate swaps, GPT agrees with other parties to exchange, at specified intervals (mainly quarterly), the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts.

Under certain interest rate swaps the fixed contract rate is indexed by CPI as at 31 December 2006 the notional amount of these swaps was \$400.0 million (Dec 2005: nil). The CPI indexed cost of borrowings is a natural hedge against anticipated CPI indexed rental revenue. The CPI has been estimated in relation to these swaps in order to disclose underlying fixed interest rate exposure.

Occasionally, GPT also enters into interest rate swap agreements that are used to convert fixed interest rate swaps to floating. Such interest rate swaps are entered into to give GPT the flexibility to utilise existing hedge positions.

GPT also enters into knock-out swaps and interest rate options such as callable swaps and receiver swaptions, where it is comfortable with the worst case outcome on entering into these options on its total cost of borrowings, in return for a reduction in its cost of borrowings.

Under knock-out swaps, GPT agrees with other parties that no exchange will occur on an underlying interest rate swap if floating interest rates are above a trigger level on a specific roll date.

Under interest rate options, GPT has given other parties the right to but not the obligation, to enter into an interest rate swap at a specified price on a specified date whereby GPT aggress to pay fixed interest rates and receive floating interest rates on the notional amount of the contract.

37. Financial instruments

(a) Interest rate risk

(i) Interest rate risk exposures and maturity profile
GPT's exposure to interest rate risk, categorised by the earlier of contractual repricing dates or maturity dates is set out in the following

Exposures arise from assets and liabilities bearing floating interest rates as GPT intends to hold fixed rate liabilities to maturity. As at 31
December 2006, 94.9% of financial assets and 81.5% of financial liabilities ar financial liabilities).

Consolidated		Fixed interest maturing in:
2006 Financial assets	Floating interest rate \$M	less \$M	1 year or Over 1 to Over 2 to 2 years \$M	3 years \$M	Over 3 to Over 4 to 4 years \$M	5 years \$M	Over 5 years \$M	Non interest bearing SM	Total \$M
Cash and cash equivalents
- Australian dollar	50.2			w					50.2
- Euros	0.6			٠					0.6
- United States dollar	8.0			۰		$\tilde{\phantom{a}}$			8.0
Receivables
- Australian dollar - Euros					$\blacksquare$		٠	109.3	109.3
- United States dollar		$\overline{a}$						40.8	40.8
Other financial assets			w					7.0	7.0
- Australian dollar
- Euros	23.8	16.4	12.8		$\blacksquare$	۰		0.7	53.7
- United States dollar		615.4	395.8			٠		w	1,011.2
Derivative financial instruments	$\blacksquare$	79.8	94.7			w	82.9		257.4
Total financial assets	$\bullet$			$\blacksquare$				79.4	79.4
	82.6	711.6	503.3	$\blacksquare$		$\blacksquare$	82.9	237.2	1,617.6
Financial liabilities
Payables
- Australian dollar		4.9
Borrowings								223.3	228.2
- Australian dollar	1,373.6	299.9	159.9	323.2
- Euros	1,278.7	÷			99.4	$\overline{\phantom{a}}$	323.8		2,579.8
- United States dollar	433.2						÷		1,278.7
Derivative financial instruments	$\blacksquare$		$\overline{\phantom{a}}$			$\overline{a}$			433.2
Total financial liabilities	3,085.5	304.8	159.9	323.2	u. 99.4	$\tilde{\phantom{a}}$ $\overline{a}$		25.5	25.5
							323.8	248.8	4,545.4
Interest rate swaps 1 - Australian dollar
- Euro dollar	(1, 140.0)	(125.0)	(110.0)	300.0	425.0	250.0	400.0
- United States dollar	(837.2)	167.5	184.2	167.4	83.7	167.4	67.0
Total financial liabilities	(266.2)	$\blacksquare$	76.1	126.7		63.4
adjusted for interest rate
swaps	842.1	347.3
			310.2	917.3	608.1	480.8	790.8	248.8	4.545.4

¹ Notional interest rate swaps used to extend contractual repricing dates.

37. Financial instruments (continued)

(a) Interest rate risk (continued)

Interest rate risk exposures (continued) $\left\langle i\right\rangle$

Consolidated

$\hat{\mathcal{L}}$

Consolidated Fixed interest maturing in:
2005	Floating interest rate \$M	1 year or less SM	Over $1 to$ 2 years \$M	Over 2 to 3 years \$M	Over 3 to 4 years \$M	Over 4 to 5 years SM	Over 5 years \$M	Non interest bearing \$M	Total \$M
Financial assets
Cash and cash equivalents
- Australian dollar - Euros	92.4								92.4
- United States dollar	1.0								1,0
Receivables									$\ddot{}$
- Australian dollar
- Euros								110.4	110.4
- United States dollar								26.1	26.1
Other financial assets
- Australian dollar		28.1						0.7	28.8
- Euros			603.6					٠	603.6
- United States dollar			85.7						85.7
Derivative financial instruments									27.3
Total financial assets	93.4	28.1	689.3	÷.	٠		۰.	137.2	$975.\overline{3}$
Financial flabilities
Payables
- Australian dollar								248.0	248.0
- Euros								$\overline{\phantom{a}}$
- United States dollar
Borrowings
- Australian dollar	1,644.7	320.2	299.8	159.8		99.3	323.7		2,847.5
- Euros - United States dollar	780.7								780.7
Derivative financial instruments
Total financial liabilities	2,425.4	320.2	299.8					34.3	34.3
				159.8		99.3	323.7	282.3	3,910.5
Interest rate swaps $^{\rm 1}$
- Australian dollar	(1,410.0)	(155.0)	(550.0)	40.0	350.0	475.0	1,250.0
- Euros		(322.6)			322.6
- United States dollar				108.9	$\equiv$		(108.9)
Total financial liabilities
adjusted for interest rate swaps	1.015.4	(157.4)	(250.2)	308.7	672.6	574.3	1.464.8	282.3	3.910.5

¹ Notional interest rate swaps used to extend contractual repricing dates.

Ŷ.

37. Financial instruments (continued)

(a) Interest rate risk (continued)

(ii) Interest rate risk contracts – other financial assets
GPT's policy is to protect loans from exposure to interest rate fluctuations by entering into fixed rate loans. Refer to Note 19 for terms and

The table below depicts the principal of fixed rate loans in each currency and the weighted average interest rate of those contracts at 31 December each year are as follows:

2006	Dec 2006 М	Dec 2007 M	Dec 2008 М	Dec 2009 М	Dec 2010 M	Dec 2011 м
Euros Other financial assets Average fixed rate	603.8 6.0%	603.8 6.0%	229.6 6.5%	$\blacksquare$ $\blacksquare$	$\blacksquare$
US dollar Other financial assets Average fixed rate	220.6 7.9%	220.6 8.6%	157.8 8.5%	82.9 9.0%	82.9 9.0%	82.9 9.0%
2005	Dec 2005 М	Dec 2006 М	Dec 2007 М	Dec 2008 М	Dec 2009 М	Dec 2010 M
Euros Other financial assets Average fixed rate	374.2 5.6%	374.2 5.6%	374.2 5.6%		$\ddot{}$
US dollar Other financial assets Average fixed rate	62.8 7.8%	62.8 7.8%	62.8 7.8%		۰

78

37. Financial instruments (continued)

(a) Interest rate risk (continued)

(iii) Interest rate risk contracts - borrowings

GPT's policy is to protect borrowings from exposure to interest rate fluctuations by entering into a combination of fixed rate borrowings and interest rate swap contracts under which it receives interest at floating and pays interest at fixed. Occasionally, GPT also enters into interest rate swap agreements that are used to convert fixed interest rate swaps to floating. Such interest rate swaps are entered into to give GPT the flexibility to utilise existing hedge positions.

Interest rate swap contracts have been recorded on Balance Sheet at their fair value in accordance with AASB 139 Financial Instruments: Recognition and Measurement. The AIFRS documentation, designation and effectiveness requirements cannot be met in all circumstances, as a result derivatives do not qualify for hedge accounting and are recorded at fair value through the income statement. Refer accounting policy at Note 1 (n).

The table below depicts the notional principal of interest rate swaps and the outstanding principal of fixed rate bonds in their local currency, and the weighted average interest rate of those contracts in each currency at 31 December each year are as follows:

2006	Dec 2006		Dec 2007 Dec 2008 Dec 2009		Dec 2010	Dec 2011
Australian dollar	М	М	M	М	N	M
Interest rate swaps
Borrowings	1,650.0 700.0	1,625.0	1,575.0	1,275.0	850.0	600.0
Total fixed	2,350.0	550.0 2,175.0	550.0 2,125.0	225.0 1,500.0	125.0	125.0
Average fixed rate	5.8%	5.9%	6.0%		975.0	725.0
				6.1%	6.5%	7.0%
Euros
Interest rate swaps	500.0	400.0	290.0	190.0	140.0	40.0
Borrowings
Total fixed	500.0	400.0	290.0	190.0	140.0	40.0
Average fixed rate	3.4%	3.7%	3.6%	3.4%	3.2%	3.3%
US dollar
Interest rate swaps
Borrowings	210.0	210,0	150.0	50.0	50.0
Total fixed	210.0
Average fixed rate	5.0%	210.0 5.0%	150.0 4.5%	50.0	50.0	$\bullet$
				5.2%	5.2%
2005	Dec 2005	Dec 2006	Dec 2007	Dec 2008	Dec 2009	Dec 2010
	м	М	M	М	М	М
Australian dollar
Interest rate swaps Borrowings	1,920.0	2.158.7	2,329.6	2,522.3	2,281.5	2,028.3
Total fixed	695.0	414.1	273.9	225.0	225.0	166.3
Average fixed rate	2,615.0 6.1%	2,572.8	2,603.5	2,747.3	2,506.5	2,194.6
		6.0%	6.1%	6.1%	6.1%	6.1%
Euros
Interest rate swaps
Borrowings	$\blacksquare$	$\blacksquare$
Total fixed	$\overline{\phantom{a}}$	$\blacksquare$	$\overline{\phantom{a}}$	$\blacksquare$	$\blacksquare$
Average fixed rate					$\overline{a}$
US dollar
Interest rate swaps	80.0	80.0	80.0	48.0
Borrowings		٠
Total fixed	80.0	80.0	80.0	48.0	$\blacksquare$	$\blacksquare$
Average fixed rate	4.8%	4.8%	4.8%	4.8%	$\bullet$

CPI linked instruments have been included in the above analysis, which include CPI linked bonds, \$125.0 million (Dec 2005: \$125.0 million) and CPI linked swaps, \$400.0 million (Dec 2005: nil), assuming an annual inflation rate of 3%.

37. Financial instruments (continued)

(a) Interest rate risk (continued)

(iii) Interest rate risk contracts - borrowings (continued)

Knock-out swaps and interest rate options are entered into where GPT is comfortable with the worst case outcome on its total cost of borrowings in return for a reduction of its cost of borrowings. GPT has elected not to hedge account for these knock-out swaps and interest rate options. Consequently, they have been recorded on balance sheet at their fair value in accordance AASB 139 Financial Instruments: Recognition and Measurement.

The table below summarises the weighted average interest rate of the outstanding principal of fixed and floating borrowings, including the impact of interest rate swap, knock-out swaps and option contracts.

	Consolidated 31 Dec 2006 31 Dec 2005 %	$\%$
Australian dollar Euros US dollar	5.63 3.77 5.28	6.09 3.12 4.80
Combined	5.04	5.45

At balance date the interest rate swap, knock-out swaps and option contracts were an asset of \$67.8 million (Dec 2005: \$25.5 million) and a liability of \$15.3 million (Dec 2005: \$31.3 million). In the year ended 31 December 2006, the gain in the income statement from the increase in fair value of the net asset together with the net receipts received during the year is \$80.2 million (Dec 2005: \$17.1 million).

37. Financial instruments (continued)

(b) Forward exchange contracts

Forward exchange contracts to hedge net foreign income

GPT's policy is to protect against exchange rate movements by entering into forward exchange contracts to sell Euros and US dollar equivalent to expected distributions from the joint venture arrangement with Babcock & Brown Limited. As management desires to have certainty over the Australian dollars received once the Euros and US dollar are converted, GPT has entered into the forward contracts on behalf of the Euros and US dollar received quarterly from the joint venture.

Contracts are entered into based on forecast distributions from the joint venture for the ensuing financial years. The contracts are timed to mature at the end of each quarter when the distribution is expected to be received from the joint venture. Contracts are deferred where distributions are deferred to ensure contracts remain outstanding for the distributions outstanding.

The cash flows are expected to occur at various dates from the balance date to the period outlined below. At 31 December 2006, the details of outstanding contracts are:

		Buy Australian dollars		Sell Euros		Average exchange rate
				31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$M	SМ	\$M	\$M
Maturity
Less than 1 year	87.8	39.0	49.1	22.6	0.5592	0.5789
$1 - 2$ years	75.1	50.2	41.4	28.4	0.5513	0.5662
$2 - 3$ years	60.8	58.6	33.4	33.2	0.5493	0.5668
$3 - 4$ years	58.7	66.1	31.7	37.5	0.5400	0.5668
$4 - 5$ vears	49.7	66.3	26.0	37.4	0.5231	0.5645
Over 5 years	53.5	9.4	27.2	5.2	0.5084	0.5480
Total	385.6	289.6	208.8	164.3

	Buy Australian dollars		Sell USD		Average exchange rate
		31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
Maturity	\$M	\$M	\$M	\$M
Less than 1 year	46		3,4	٠	0.7346
$1 - 2$ years	5.9		4.3	$\overline{\phantom{a}}$	0.7346
$2 - 3$ years	6.7	-	4.9	$\overline{\phantom{a}}$	0.7346	۰
$3 - 4$ years	7.2	$\blacksquare$	5.3	$\overline{\phantom{a}}$	0.7346	٠
$4 - 5$ years	3.7	$\blacksquare$	2.7	$\bullet$	0.7346
Over 5 years			$\blacksquare$		0.7346
Total	28.1		20.6

(ii) Forward exchange contracts to hedge foreign currency assets and liabilities

GPT had entered into a forward exchange contract to hedge its US dolfar investment funded by commercial paper in Australian dollars as at 31 December 2005 for US\$80.7 million. The Australian dollar funding has since been converted to US dollars by rolling the commercial paper into the multi-option facility.

At balance date forward exchange contracts were an asset of \$11.6 million (Dec 2005: \$1.8 million) and a liability of \$10.2 million (Dec 2005: \$3.0 million). In the year ended 31 December 2006, the gain in the income statement from the increase in fair value of the net asset together with the net receipts received is \$9.7 million (Dec 2005: loss of \$1.2 million).

38. Unhedged foreign currency net assets

GPT manages its foreign exchange risk for its assets and liabilities denominated in foreign currency by borrowing in the same functional currency of its investment to form a natural economic hedge against any foreign currency fluctuations as well as using forward exchange contracts where funds were borrowed in local currency. For accounting purposes, interests in the joint ventures are revalued at the end of each reporting period with the fair value movement reflected in equity as a movement in the foreign currency translation reserve. The interests are then equity accounted to reflect the underlying net assets of the joint ventures with changes reflected in the income statement as share of after tax profits of equity accounted entities, refer accounting policy Note 1(f).

The loans to the joint ventures are revalued at the end of each reporting period with the fair value movement reflected in equity as a movement in the foreign currency translation reserve. Borrowings and forward exchange contracts are revalued at the end of each reporting period with the fair value movement reflected in the income statement as exchange gains or losses on foreign currency borrowings and net gains or losses on derivative financial instruments held at fair value respectively, refer accounting policy Note 1(n).

The following tables show the Australian dollar equivalents of GPT's investments denominated in foreign currencies.

Euros	\$M	31 Dec 2006 31 Dec 2005
Assets		\$M
Interests in joint ventures	268.7	152.0
Loans to joint ventures	1,011.2	603.6
	1,279.9	755.6
Liabilities
Borrowings	1,279.8	780.7
Net assets / (liabilities)	0.1	(25.1)
US dollars
Assets
Interests in joint ventures
Loans to joint ventures	166.4	19.6
	257.4 423.8	85.7 105.3
Liabilities
Borrowings
Forward exchange contract 1	433.2
	$\bullet$	111.8
	433.2	111.8
Net liabilities	(9.4)	(6.5)

¹ Notional principal amounts.

ħ

39. Fair value of financial assets and liabilities

Set out below is a comparison by category of carrying amounts and fair values of all GPT's financial assets and liabilities recognised in the financial statements.

The fair values of other financial assets have been determined by reference to the net assets of the underlying investments.

The fair value of domestic and foreign medium term notes and interest rate and cross currency swaps have been calculated by discounting the ran value of domestic and roleign measure rent nodes and measure

	Carrying amount	Fair value	Carrying amount	Fair value
		31 Dec 2006 31 Dec 2006 31 Dec 2005		31 Dec 2005
	斜峰	\$М	\$M	\$M
Consolidated assets
Cash	58.8	58.8	93.4	93.4
Receivables	157.1	157.1	119.4	119.4
Derivative assets	79.4	79.4	27.3	27.3
Other financial assets	1,322.3	1,292.3	718.1	707.6
	1,617.6	1,587.6	958.2	947.7
Consolidated liabilities
Payables	228.2	228.2	248.0	248.0
Derivative liabilities	25.5	25.5	34.3	34.3
Borrowings	4,291.7	4,334.7	3,628.2	3,699.2
	4,545.4	4,588.4	3,910.5	3,981.5
Net financial liabilities	(2,927.8)	(3,000.8)	(2,952.3)	(3.033.8)
Unrealised losses		(73.0)		(81.5)
Parent assets
Cash	40.4	40.4	27.7	27.7
Receivables	65.4	64.9	15.6	15.6
Derivative assets	79.4	79.4	27.3	27.3
Other financial assets	1.059.1	1,016.2	603.6	591.9
	1,244.3	1,200.9	674.2	662.5
Parent liabilities
Payables	32.3	32.3	156.7	156.7
Derivative liabilities	25.5	25.5	34.3	34.3
Borrowings	4,236.3	4,279.3	3,611.4	3,682.4
	4,294.1	4,337.1	3,802.4	3,873.4
Net financial liabilities	(3,049.8)	(3, 136.2)	(3, 128.2)	(3,210.9)
Unrealised losses		(86.4)		(82.7)

Directors' Declaration

In the directors of the Responsible Entity's opinion:

• (a) the financial statements and notes set out on pages 19 to 83 are in accordance with the Corporations Act 2001, including:
• complying with the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements: and
• giving a true and fair view of the Trust's and GPT Group's financial position as at 31 December 2006 and of its performance, as represented by the results of their operations, changes in equity and their cashflows, for the financial year ended on that date; and
• (b) there are reasonable grounds to believe that the Trust will be able to pay its debts as and when they become due and payable; and
• the audited remuneration disclosures set out on pages 7 to 15 of the Directors' Report comply with Accounting Standards AASB 124 $(c)$ Related Party Disclosures and Class Order 06/50 issued by the Australian Securities and Investments Commission; and

The directors have been given the declarations by the chief executive officer and chief financial officer required by Section 295A of the Corporations Act 2001.

This declaration is made in accordance with the resolution of the directors.

$2e/\hbar$

Peter Joseph Chairman

GPT RE Limited

Sydney 21 February 2007

Nic Lyons Executive Di

Independent audit report to the unitholders of General Property Trust

PricewaterhouseCoopers ABN 52 780 433 757

Darling Park Tower 2 201 Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia www.pwc.com/au Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999

Matters relating to the electronic presentation of the audited financial report

This audit report relates to the financial report and remuneration disclosures of General Property Trust and the GPT Group (defined below) for the financial year ended 31 December 2006 included on the GPT Group's web site. The directors of GPT RE Limited (the Responsible Entity) are responsible for the integrity of the GPT Group web site. We have not been engaged to report on the integrity of this web site. The audit report refers only to the financial report and remuneration disclosures identified below. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report or the remuneration disclosures. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report and remuneration disclosures to confirm the information included in the audited financial report and remuneration disclosures presented on this web site.

Audit opinion

In our opinion:

• 1. the financial report of General Property Trust:
• gives a true and fair view, as required by the Corporations Act 2001 in Australia, of the financial position of General Property Trust and the GPT Group (defined below) as at 31 December 2006 and of their performance for the year ended on that date, and
• is presented in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia, and the Corporations Regulations 2001, and
• 1. the remunerations disclosures that are contained in pages 7 to 15 of the directors' report comply with Accounting Standard AASB124 Related Party Disclosures (AASB124) and the Corporations Regulations 2001.

This opinion must be read in conjunction with the rest of our audit report.

Scope

The financial report, audited remunerations disclosures and directors' responsibility

The financial report comprises the balance sheet, income statement, cash flow statements, statement of changes in equity, accompanying notes to the financial statements, and the directors' declaration for both General Property Trust (the Trust) and the GPT Group (the consolidated entity)

PRICEWATERHOUSE COPERS ®

for the year ended 31 December 2006. The consolidated entity comprises both General Property Trust and the entities it controlled during that year, including GPT Management Holdings Limited and its controlled entities.

The consolidated entity has disclosed information about the remuneration of directors and executives (remuneration disclosures) as required by AASB124, under the heading "remuneration report" on pages 7 to 15 of the directors' report, as permitted by the Corporations Regulations 2001.

The directors of GPT RE Limited (the Responsible Entity) are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report. The directors are also responsible for the remuneration disclosures contained in the directors' report.

Audit approach

We conducted an independent audit in order to express an opinion to the unitholders of the Trust. Our audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance as to whether the financial report is free of material misstatement and the remuneration disclosures comply with AASB124 and the Corporations Regulations 2001. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected. For further explanation of an audit, visit our website http://www.pwc.com/au/financialstatementaudit.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the Trust and the consolidated entity's financial position, and of their performance as represented by the results of their operations, changes in equity and cash flows. We also performed procedures to assess whether the remuneration disclosures comply with AASB124 and the Corporations Regulations 2001.

We formed our audit opinion on the basis of these procedures, which included:

• examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report and remuneration disclosures, and
• assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Anivathanilospers

PricewaterhouseCoopers

eat

DH Armstrong Partner

Sydney 21 February 2007

Appendix 4E

Preliminary final report

ABN or equivalent company reference		Full year ended ('current period')
58 071 755 609		31 December 2006
Results for announcement to the market				\$A'm
Revenues from ordinary activities (1)	up	47.2%	to	1,741.9
Explanation - Refer Directors' Report
Profit (loss) from ordinary activities after tax attributable to equity holders	up	144.2%	to	1,384.0
Explanation - Refer Directors' Report
Net profit (loss) for the period attributable to equity holders	up	131.3%	to	1,362.6
Explanation - Refer Directors' Report
Distributions		Amount per security		Franked amount per security
Final distributions (December quarter)		7.0		N/A
Interim distributions (nine months)		20.5		N/A
Record date for determining entitlements to the December quarter distribution		5 March 2007
Date on which the December quarter distribution is payable		28 March 2007

(1) Please note that the share of net profits from associates has been excluded from Revenues from ordinary activities.

Introduced 31/12/2003.

NTA backing	Current period	Previous corresponding period
Net tangible asset backing per ordinary security	\$3.60	\$3.16

Control gained or lost over entities during period

Date of gain or loss of control

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ------ ---
--------------------------------------- ------------------------ --------------

Interests in entities which are not controlled entities

Name of entity	Percentage of ownership date of disposal	interest held at end of period or	Contribution to net profit (loss)
Equity accounted associates and joint venture entities	Current period	Previous corresponding period	Current period \$A'm	Previous corresponding period - \$A'm
Roma Street Trust	50%	50%	$\overline{20.3}$	$\overline{11.5}$
Erina Property Trust	50%	50%	19.4	7.5
Horton Trust	50%	50%	1.1	1.7
Darling Park Trust	50%	50%	12.4	25.3
Darling Park Property	50%	50%
Trust			7.9	23.0
2 Park Street Trust	50%	50%	52.9	47.8
161 Sussex Street	40%	40%
Pty Ltd			1,9	0.8
1 Farrer Place Trust	50%	50%	58.7	35.4
Lend Lease GPT (Rouse	49%	49%
Hill) Pty Limited	49%		0.4	0.3
Lend Lease (Twin Water) Pty Limited		49%		2.4
BGP Investment S.a.r.l	50%	50%	2.3	22.5
Babcock & Brown GPT			64.7
REIT Inc.	50%	50%	8.9	0.9
GPT Wholesale Office
Fund	40%	0%	71.4	$\bf{0}$
BGA Real Estate
Finance Trust	50%	0%	0.7	$\bf{0}$
B&B/GPT Alliance I
LLC	50%	0%	(0.9)	0
B&B/GPT Alliance II
$_{LLC}$	50%	0%	2.1	0
BGP UK Investments
Limited	50%	0%	(0.3)	0
Benchmark GPT LLC	95%	0%	Ω	0
B-VII Operations
Holding Co LLC	95%	$0\%$	0	0
Benchmark Assisted
Living, LLC	20%	$0\%$	0	0
Total			323.9	179.0

Details of aggregate share of profits (losses) of associates and joint venture entities

Group's share of associates' and joint venture entities':

Share of net profit (loss) of associates and joint ventures entities.

Current period A\$ m	Previous corresponding period - A\$ m
323.9	179.0

To be read in conjunction with the most recent annual financial report.

Appendix 4E Page 3

Condensed consolidated statement of financial performance

		Current period-	Previous
		A\$m	corresponding period
			- A\$ m
1.1	Revenues from ordinary activities (see items $1.16 - 1.18$	1,741.9	1,199.0
1.2	Expenses from ordinary activities (see items 1.19 & 1.20	(455.4)	(450.5)
1.3	Borrowing costs	(225.2)	(361.1)
1.4	Share of net profits (losses) of associates
	and joint venture entities	323.9	179.0
1,5	Profit (loss) from ordinary activities before tax	1,385.2	566.4
1.6	Income tax on ordinary activities (see note 4)	1.2	(0.4)
1.7	Profit (loss) from ordinary activities after tax	1,384.0	566.8
1.8	Profit (loss) from extraordinary items after tax (see item 2.5)
1.9	Net profit (loss)	1,384.0	566.8
1.10	Net profit (loss) attributable to other stapled entities	21.4	(22.2)
1.11	Net profit (loss) for the period attributable to equity holders	1,362.6	589.0

Earnings per security (EPS)	Current period	Previous corresponding period
1.12 Basic and diluted earnings per equity holder of the Trust	67.1c	29.2c
Basic and diluted earnings per equity holder of the Trust before financing costs attributable to GPT unit holders	67.1c	39.4c

ĺ

Appendix 4E Page 4

Notes to the condensed consolidated statement of financial performance

	Current period- A\$ m	Previous corresponding period - A\$ m
1.13 Profit (loss) from ordinary activities after tax (item 1.7)	1,384.0	566.8
1.14 Less (plus) profit attributable to other 21.4 stapled entities		(22.2)
1.15 Profit (loss) from ordinary activities after tax, attributable to equity holders	1.362.6	589.0

Profit (loss) from ordinary activities attributable to members

Revenue and expenses from ordinary activities

		Current period-	Previous
		ASm	corresponding period - A\$ m
1.16	Revenue from sales or services
1.17	Interest revenue	69.3	21.3
1.18	Other relevant revenue
	Rent	659.7	674.3
	Revenue from hotel operations	226.6	125.7
	Proceeds on disposal of properties	10.8	10.0
	Property and fund management fees	14.7
	Fair value adjustments to investment
	properties	670.9	351.8
	Net gains on derivative financial	89.9	15.9
	instruments held at fair value
	Other income
1.19	Details of relevant expenses
	Property expenses and outgoings	180.0	178.4
	Net exchange loss on foreign currency
	borrowings	17.8	9.8
	Responsible Entity's fee	0	15.4
	Management and other administrative
	costs	22.4	19.2
	Impairment of investments	28.0	63.7
	Expenses from hotel operations	173.8	94.5
	Costs Associated with merger proposals	13.6	62.3
1.20	Depreciation and amortisation excluding	19.8	7.2
	amortisation of intangibles (see item 2.3)

1.21	Capitalised outlays Interest costs capitalised in asset values	6.7	23.5
	Outlays capitalised in intangibles (unless arising from an + acquisition of a business)

Consolidated retained profits

		Current period- A\$ m	Previous corresponding period - A\$ m
	1.23 Retained profits (accumulated losses) at the beginning of the financial period	1,756.2
1.24	Transfer from net assets attributable to security holders		1,566.5
1.25	Net profit for the year	967.1	189.7
1.26	Transfer from asset revaluation reserve
1.27	Dividends and other equity distributions paid or payable
1.28	Retained profits (accumulated losses) at end of financial period (see items 4.24 & 4.28)	2,723.3	1.756.2

Intangible and extraordinary items

				Consolidated - current period
		Before tax $A\$ m	Related tax $A\$ m	Related outside	Amount (after tax)
				+ equity interests AS m	attributable to members A\$ m
		(a)	(b)	(c)	(d)
2.1	Amortisation of goodwill
2.2	Amortisation of other intangibles	(5.4)			(5.4)
2.3 1	Total amortisation of intangibles	(5.4)	N/A	N/A	(5.4)
2.4	Extraordinary items (details)
2.5	Total extraordinary items	N/A	N/A	N/A	N/A

Comparison of half year profits

• $3.1$ Consolidated profit (loss) from ordinary
  activities after tax attributable to equity
  holders reported for the 1st half year (item
  1.22 in the half yearly report)
• Consolidated profit (loss) from ordinary
  activities after tax attributable to equity $3.2$ holders for the 2nd half year

Current period - A\$ m	Previous year - A\$m
696.5	66.2
687.5	500.6

Appendix 4E Page 7

$\frac{1}{4}$

Condensed consolidated statement of financial position		At end of current period A\$m	As shown in last annual report ASm
	Current assets
4.1	Cash	58.8	93.4
4.2	Receivables	157.1	119.4
	Derivative assets	79.4	27.3
4.3	Other (provide details if material)	24.6	22.2
4.4	Total current assets	319.9	262.3
	Non-current assets
4.5	Investments (equity accounted)	2,200.0	1,474.1
4.6 4.7	Intangible assets Tax assets	74.1	35.6
4.8	Other investments	9.3 9,398.6	7.4 8,652.3
4.9	Total non-current assets	11,682.0	10,169.4
4.10	Total assets	12,001.9	10,431.7
	Current liabilities
4.11	Payables	228.2	248.0
4.12	Interest bearing liabilities	1,630.0	1,588.6
4.13	Provisions exc. tax liabilities	35.1	178.4
4.14	Total current liabilities	1.893.3	2,015.0
	Non-current liabilities
4.15	Interest bearing liabilities	2,661.7	2,039.6
4.16	Provisions	4.1	3.6
4.17	Tax liabilities	0.7	0.2
4.18	Total non-current liabilities	2,666.5	2,043.4
4.19	Total liabilities	4,559.8	4,058.4
	Net assets attributable to security
4.20	holders
4.21	Net assets	7,442.1	6,373.3
	Equity
4.22	Capital/contributed equity	4,391.5 21.1	4,296.0 16.2
4.23	Reserves	2,724.1	1,778.4
4.24 4.25	Retained profits (accumulated losses)	7,136.7	6,090.6
	Equity attributable to the equity holders of the parent entity
4.26	Capital/contributed equity	307.0	302.5
4.27	Reserves	(0.8)	2.4
4.28	Retained profits (accumulated losses)	(0.8)	(22.2)
4.29	Equity attributable to equity holders of
	other entities stapled to GPT	305.4	282.7
4.30	Total equity	7,442.1	6,373.3
4.31	Preference capital included as part of items 4.22 & 4.26

$\cdot$

Appendix 4E Page $8$

Condensed consolidated statement of cash flows

	Current period	Previous
		corresponding
		period - A\$ m
		796.5
		(422.6)
		119.4
Interest and other items of similar nature received		22.4
Income tax paid	(2.9)	0
Net receipts from derivatives	29.0	7.5
Interest and other costs of finance paid	(237.5)	(172.3)
Net operating cash flows	478.9	350.9
Cash flows related to investing activities Payment for purchases of property, plant	(1,221.4)	(583.2)
Proceeds from sale of property, plant and equipment	1,040.6	674.5
(Increase) in other financial assets	(490.9)	(849.4)
Net investing cash flows		(758.1)
Proceeds from borrowings	636.0	921.6
	100.0	0
		O
		(471.9) 449.7
Net increase (decrease) in cash held	(34.6)	42.5
(see Reconciliation of cash) Exchange rate adjustments	93.4	50.9
Cash at end of period	58.8	93.4
	Cash flows related to operating activities Receipts from customers Payments to suppliers and employees Distributions received from associates and equipment Cash flows related to financing activities Proceeds from the issue of securities Loans issued to employees Dividends paid Net financing cash flows Cash at beginning of period (see Reconciliation of cash)	A\$m 971.7 (434.4) 122.6 30.4 (671.7) (27.8) (550.0) 158.2

Reconciliation of cash

Reconciliation of cash at the end of the period (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.		Current period A\$m	Previous corresponding period - A\$ m
-6.1	Cash on hand and at bank	57.8	76.1
6.2	Deposits at call	1.0	17.3
6.3	Bank overdraft
6.4	Other (provide details)
6.5	Total cash at end of period (item 5.18)	58.8	93.4

Other notes to the condensed financial statements

	Ratios	Current period	Previous corresponding Period
7.1	Profit before tax / revenue Consolidated profit (loss) from ordinary activities before tax (item 1.5) as a percentage of revenue ( item $1.1$ )	79.5%	47.9%
7.2	Profit after tax / + equity interests Consolidated net profit (loss) from ordinary activities after tax (item 1.09) as a percentage of equity (similarly attributable) at the end of the period (item 4.30)	18.6%	8.9%

Dividends (in the case of a trust, distributions)

$8.1$ Date the dividend (distribution) is payable 28 March 2007

8.2 *Record date to determine entitlements to the dividend (distribution) (ie, on the basis of proper instruments of transfer received by 5.00 pm if ⁺securities are not ⁺CHESS approved, or security holding balances
established by 5.00 pm or such later time permitted by SCH Business Rules if ⁺securities are ⁺CHESS approved)

5 March 2007

Amount per security

		Amount per security	Franked amount per security at % tax	Amount per security of foreign source dividend
9.1	(Preliminary final report only) Final dividend: Current year (Dec qtr)	7.0 c	N/A	N/A
9.2	Previous year	6.6c	N/A	N/A
9.3	(Half yearly and preliminary final reports) Interim dividend: Current year (9 mths)	20.5c	N/A	N/A
9.4	Previous year	17.8 c	N/A	N/A

Total dividend (distribution) per security (interim plus final)
(Preliminary final report only)

		Current year	Previous year
10.1	+ Ordinary securities	27.5c	24.4c
	10.2 Preference securities	N/A	N/A

$\Gamma$

Issued and quoted securities at end of current period

Category of + securities	Total number	Number quoted	Issue price per security	Amount paid ាប per security
+ Ordinary securities	2,041,530,506	2,041,530,506	N/A	N/A

Compliance statement

$\mathbf{1}$ This report has been prepared in accordance with Australian equivalents to IFRS (AIFRS), AASB Standards, other AASB authoritative pronouncements and Urgent Issues Group Consensus Views or other standards acceptable to ASX (see note 12).

Identify other standards used N/A

audited.

• $\overline{2}$ This report, and the 'accounts upon which the report is based (if separate), use the same accounting policies.
• 3 This report does give a true and fair view of the matters disclosed (see note 2).
• This report is based on 'accounts to which one of the following applies. (Tick one) The ^*accounts have been The 'accounts have been П
  • l I
• The 'accounts are in the $\Box$ process of being audited or subject to review.

The 'accounts have not yet been audited or reviewed.

subject to review.

5 The entity has a formally constituted audit committee.

Sign here:

4

n/Company Secretary)

Date: $22/207$

Print name: James Coyne

Annual Financial Report ABN: 67 113 510 188 31 December 2006

Page

Contents

Directors' Report
Auditors' Independence Declaration	17
Financial Report
Income Statements	18
Balance Sheets	19
Statements of Changes in Equity	-20
Cash Flow Statements	21
Notes to Financial Statements	22
Directors' Declaration	52
Independent Audit Report to the members	-53

This financial report covers both GPT Management Holdings Limited as an individual entity and the consolidated entity consisting of GPT Management Holdings Limited and its controlled entities. The financial report is presented in Australian currency.

GPT Management Holdings Limited ('Company') is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

GPT Management Holdings Limited MLC Centre Level 52 19 Martin Place Sydney NSW 2000

A description of the nature of the consolidated entity's operations and its principal activities is included in the review of operations and activities on page 1 in the Directors' Report, which is not part of this financial report.

The financial report was authorised for issue by the directors on 21 February 2007. The Company has the power to amend and re-issue the financial report.

Through our internet site, we have ensured that our corporate reporting is timely, complete and available globally at minimum cost to the Company. All press releases, financial reports and other information are available on our website: www.gpt.com.au.

For the year ended 31 December 2006

The Directors of GPT Management Holdings Limited present their report on the consolidated entity and its controlled entities for the financial year ended 31 December 2006 and the Audit Report thereon.

Directors

The Directors of GPT Management Holdings Limited (the 'Company') at any time during or since the end of the financial year are:

Chairman - Non-executive (i)

Peter Joseph (Chairman)

(ii) Non-executive directors

Malcolm Latham lan Martin
Brian Norris Eric Goodwin	(Resigned 31 August 2006)
Ken Moss Elizabeth Nosworthy
Anne McDonald	(Appointed 2 August 2006)

(iii) Executive director

Nic Lyons

Principal Activities

The principal activities of the Company during the financial year were:

• investment in income producing retail, commercial, industrial, office park properties and senior housing;
• development of commercial properties;
• management and administration of the General Property Trust;
• property management;
• fund management; and
• hotel management.

The Company operates in Australia, Europe and United States of America.

There has been no significant change in the nature of the activities of the Company during the year.

The GPT Group (GPT)

The stapled securities of GPT are quoted on the Australian Stock Exchange under the code GPT and comprise of one unit in the Trust and one share in the Company. The unit and share are stapled together and cannot be traded separately. Each entity forming part of GPT continues as a separate legal entity in its own right under the Corporations Act 2001 and Is therefore required to comply with the reporting and disclosure requirements under the Corporations Act 2001 and Australian Accounting Standards.

Review of Operations

Financial Results

	31 Dec 2006	31 Dec 2005
	\$'000	\$'000
Profit/ (Loss) after tax for the consolidated entity	21,437	(22, 237)

Dividends

The Directors have not declared any dividends for the year (2005: Nil).

Significant changes in state of affairs

In the opinion of the directors, there were no significant changes in the state of affairs of the Company that occurred during the year.

Likely developments and expected results of operations

Information on likely developments in the operation of the Company and the expected results of those operations has not been included in this report because it would be likely to result in unreasonable prejudice to the Company.

Environmental Regulation

The Directors are satisfied that there are no significant issues that currently have an impact on the Company.

For the year ended 31 December 2006

Proceedings on behalf of the Company

No person has applied to the Court under section 237 Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the company for all or part of the proceedings.

No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporations Act $2001.$

Events Subsequent to Balance Date

The directors are not aware of any matter or circumstance occurring since the end of the financial year not otherwise dealt with in this report or accounts that has significantly or may significantly affect the operations of the Company, the results of their operations or the state of affairs of the Company in subsequent financial years. In making this statement in respect of events subsequent to balance date the conflicted directors have relied upon assurances provided by non conflicted directors.

Information about the Company

There number of shares issued during the year is 24,813,896 (Dec 2005: 2,016,716,610) with securities on issue at year end at 2,041,530,506 (Dec 2005: 2,016,716,610).

For the year ended 31 December 2006

Information on Directors

Peter Joseph OAM - Chairman

Mr Joseph is a career investment banker and an experienced company director who has had a close involvement with the BT Financial Group for 30 years. Mr Joseph was a Director of the responsible entities of a number of BT funds including some of the BT property trusts. Mr Joseph was also a Director of the Peter Kurts Properties Group for 12 years. Mr Joseph is currently the Chairman of Dominion Mining Limited. Mr Joseph is also Chairman of the St James Ethics Centre and the Black Dog Institute and, until September 2004, was the Chairman of the St Vincent's and Mater Hospitals in Sydney.

In 2000, Mr Joseph was awarded the Order of Australia Medal. Mr Joseph holds a Bachelor of Commerce degree and a Masters degree in Business Administration. Mr Joseph is a fellow of the Australian Institute of Company Directors. Mr Joseph is a member of the Nomination and Remuneration Committee

Nic Lyons - Chief Executive Officer & Managing Director

Mr Lyons was appointed CEO of GPT in October 2000 and has more than 25 years experience in the property and property funds management industries in Australia and overseas. His long career in the property industry has included roles with entities such as ING, where he was General Manager of Listed Property Trusts, and Lend Lease Real Estate Investments where he was CEO - Real Estate Investments. Mr Lyons is a member of the Nomination and Remuneration Committee.

Eric Goodwin

Mr Goodwin is a Non-executive Director of Eureka Funds Management Limited, Lend Lease Global Properties SICAF and AMPCI Macquarie Infrastructure management No 2 Limited. Mr Goodwin joined Lend Lease in 1963 as a cadet engineer and during his 42 year career with Lend Lease held a number of senior executive and subsidiary board positions in the Australian operation, the US and he was the inaugural manager of the group's Asian operations. Eric has experience in design construction and project management, general management and funds management. His experience includes fund management of the MLC Property Portfolio during the 1980s and he was the founding Fund Manager of the Australian Prime Property Fund. Mr Goodwin is a member of the Audit and Risk Management Committee.

Malcolm Latham AM

Mr Latham is currently a director of the Hornery Institute which works throughout Australia. The Institute partners with developers, communities and their governments to enhance the quality of life and the places in which people live, learn, work and play. Prior to this Mr Latham was Chairman of the South Sydney Development Corporation and Chairman of a joint venture for the redevelopment of the Auckland Harbour waterfront. He has extensive international experience in urban planning and development. Mr Latham holds degrees in Architecture and Urban Planning and was awarded the Order of Australian in 1990 for his work as Executive Chairman of the National Capital Development Commission, Canberra. Prior to joining the GPT Board, Mr Latham was a senior executive in Lend Lease Corporation. Mr Latham is a member of the Nomination and Remuneration Committee.

Anne McDonald

Ms McDonald was appointed to the Board on 2 August 2006. Ms McDonald is currently a Non-executive Director of Westpac's Life Insurance companies and St Vincent's and Mater Health Sydney Limited. Ms McDonald is a chartered accountant and was previously a partner of Ernst & Young for fifteen years specialising as a company auditor and advising multinational and Australian companies on transaction due diligence, risk management and accounting issues. She was a Board Member of Ernst & Young Australia for seven years and a previous Director of the Private Health Insurance Administration Council. Ms McDonald is a member of the Audit and Risk Management Committee.

fan Martin

Mr Martin is currently a Non-executive Director of Babcock & Brown Limited, Argo Investments Limited and St Vincent's, and Mater Health Sydney Limited. Mr Martin is a former Chief Executive Officer of the BT Financial Group and Global Head of Investment Management and Member of the Management Committee of Bankers Trust Corporation. Mr Martin spent eight years as an economist with the Australian Treasury, Canberra, and was the inaugural Chairman of the Investment and Financial Services Association. Mr Martin is the Chairman of the Nomination and Remuneration Committee.

Ken Moss

Dr Moss is a Non-executive Director of Adsteam Marine Limited and a Director of Macquarie Capital Alliance Group. Dr Moss is Chairman of Boral Limited and Centennial Coal Company Limited and is a board member of the Australian Maritime Safety Authority. Prior to August 2000, Dr Moss was Managing Director of Howard Smith Limited. Dr Moss is a fellow of the Australian Institute of Company Directors and holds a Bachelor of Engineering and Doctor of Philosophy. Dr Moss is the Chairman of the Audit and Risk Management Committee.

Elizabeth Nosworthy AO

Ms Nosworthy is currently Deputy Chairman of Babcock & Brown Limited and the Chairman of Commander Communications Limited and Queensland Water Commission. Ms Nosworthy is a Director of Ventracor Limited and is an Adjunct Professor of Law at the University of Queensland. Previously, Ms Nosworthy was a commercial partner in a national law firm where she specialised in financing work including infrastructure financing. Ms Nosworthy is a Fellow of the Australian Institute of Company Directors and has held a wide range of directorships in both the private and the public sectors. Ms Nosworthy is a member of the Audit and Risk Management Committee.

Company Secretary - James Coyne

Mr Coyne was appointed the General Counsel/Company Secretary of GPT in 2004. Prior to this Mr Coyne held various roles at Lend Lease initially with the construction, infrastructure and development groups before moving on to the Real Estate Investments Group in 2000, where he held Senior Legal and Company Secretarial roles in both the listed and unlisted sectors.

For the year ended 31 December 2006

Attendance of Directors at Board Meetings and Board Committee meetings

The number of meetings of the Board and of each Board Committee held during the year to 31 December 2006, and the number of meetings attended by each Director are set out below

	Board		Audit and Risk Management Committee		Nomination and Remuneration Committee
	Meetings Attended	Meetings Heid	Meetings Attended	Meetings Held	Meetings Attended	Meetings Held
Peter Joseph	16	17			4	4
Eric Goodwin	16	17	7	7
Malcolm Latham	17	17			4	4
Nic Lyons 1	17	17			3	4
Anne McDonald 2	7	7	4	4
lan Martin	16	$16^{3}$			4	4
Ken Moss	17	17	7	7
Brian Norris 4	10	11	3	4
Elizabeth Nosworthy	16	$16^{5}$

N Lyons was a member of the Nomination and Remuneration Committee until 6 December 2006.
A McDonald was appointed as a director on 2 August 2006. $\pmb{\mathfrak{f}}$

$\overline{2}$

3 I Martin abstained from participating in the entirety of 1 Board meeting due to a conflict of interest.

4 B Norris retired as a director on 31 August 2006.

E Nosworthy abstained from participating in the entirety of 1 Board meeting due to a conflict of interest. 5

Directors Interests

The relevant interests of each director in the securities of GPT are as follows:

Director	Interests in GPT Securities
Peter Joseph	50,000
Eric Goodwin	11,241
Malcolm Latham	13,195
Nic Lyons	734,116
Anne McDonald	10,500
lan Martin	51,241
Ken Moss	26,241
Elizabeth Nosworthy	6,241

4

Directors' Report
For the year ended 31 December 2006

Directorships of Other Listed Companies

Details of all directorships of other listed entities held by each Director in the three years immediately before 31 December 2006 and the period for which each directorship was held are set out below

Director	Directorship of Listed Entity	Period held
Peter Joseph	Dominion Mining Limited	1980 to present
Eric Goodwin	Nil	NA
Malcolm Latham	Nil	NA
Nic Lyons	Nil	NA
Anne McDonald	Nil	NA
lan Martin	Babcock & Brown Limited	2004 to present
	Argo Investments Limited	2004 to present
Ken Moss	Macquarie Capital Alliance Group (including Macquarie Capital Alliance Limited, Macquarie Capital Alliance Management Limited	2005 to present
	Boral Limited
	Centennial Coal Company Limited	1999 to present
	National Australia Bank Limited	2000 to present
		2000 to 2004.
Elizabeth Nosworthy	Babcock & Brown Limited	2004 to present
	Commander Communications Limited	2003 to present
	Stanwell Corporation Limited	2001 to 2006
	Ventracor Limited	2002 to present
	Prime Infrastucture Management Limited	2002 to 2004

$\tau$

Remuneration Report

This report outlines GPT's remuneration philosophy and practices together with details of the specific remuneration arrangements that apply to Directors, key management personnel as defined in AASB 124 and to the five named executives as defined in section 300A of the Corporations Act (collectively "Senior Executives").

THE NOMINATION AND REMUNERATION COMMITTEE

GPT's Board has established a Nomination and Remuneration Committee to, inter alia, review and make recommendations to the Board on:

• remuneration policies (including performance management and short and long term incentive schemes) applicable to GPT employees
• the Chief Executive Officer's performance and remuneration
• remuneration policies and packages applicable to Board members.

The Nomination & Remuneration Committee consists of three Non-executive Directors:

• Ian Martin (Chair)
• Peter Joseph
• Malcolm Latham

Further information about the role and responsibility of the Nomination and Remuneration Committee is set out in its Charter which is available on GPT's website (www.gpt.com.au).

The Chief Executive Officer reviews the performance and remuneration of the Senior Executives and makes recommendations on these to the Nomination and Remuneration Committee. The Chief Executive Officer's recommendations recognise the differing experience, responsibilities, skills and contributions of executives as well as other market influences that may affect their total remuneration packages. If endorsed by the Nomination and Remuneration Committee, total remuneration packages for these executives are recommended to the Board for approval.

REMUNERATION - EXECUTIVES

GPT's Remuneration Philosophy

GPT is a performance-based culture that creates opportunities for market competitive rewards to employees in line with their performance. As a result, GPT's remuneration strategy is focussed on the objective of achieving outstanding business performance by aligning and rewarding superior employee performance. GPT's remuneration processes are designed to achieve a clear and direct link between pay and performance of the individual and GPT.

In 2005, following the unitholder vote which led to the internalisation of management, the Board - through the Nomination & Remuneration Committee - undertook a comprehensive review of GPT's remuneration strategy and practices, drawing on external advice from the Godfrey Remuneration Group Pty Limited.

Specifically, the Board sought to devise a remuneration strategy that:

• Is transparent
• Is fair and market competitive
• Encourages superior performance by aligning employee rewards with the interests of all stakeholders
• Attracts, motivates, rewards and retains talented and skilled directors, executives and employees
• Rewards employees who align their conduct and performance with the core values and culture of GPT.

The Board was also mindful to ensure the remuneration strategy was designed to:

• Satisfy the interests of all stakeholders by aligning remuneration with the achievement of strategic objectives including the achievement of superior returns for Securityholders.
• Attract, align, retain and motivate superior talent at all levels by adequately rewarding contribution to value creation and the execution of GPT's business strategy.

GPT's Remuneration Strategy

GPT aims to pay market competitive Total Remuneration packages made up of the following components:

• Base Salary (fixed) This is generally positioned at market median against comparable LPT sector peers on the basis of annual benchmarking. Base salaries are reviewed annually, although they may also be reviewed when there is a significant change in an employee's responsibilities, for example, in the case of a promotion.
• Short Term Incentives (STIs) (variable) Opportunities for short-term incentive awards are expressed as a percentage of Base salary and determined by annual performance against agreed financial and non-financial key performance indicators (KPI's).
• Long Term Incentives (LTIs) (variable) Opportunities for long-term incentive awards are determined by performance against KPI's and measured over three years.

Individuals can receive Total Remuneration in the top quartile of the market in a particular year only if various financial and non-financial KPI's are achieved.

For the year ended 31 December 2006

Remuneration Report (continued)

For the Chief Executive Officer and other key management personnel the variable or "at risk" components of Total Remuneration are greater than at other levels of the business. The following chart shows percentage mix of the fixed and variable components of Total Remuneration for the Chief Executive Officer and other key management personnel.

Name	Base Salary (fixed)	Variable or "At Risk" Remuneration 1
		8TI.	LTI
Nic Lyons Chief Executive Officer	29%	29%	42%
Michael O'Brien Chief Operating Officer	33.34%	33.33%	33.33%
Kieran Pryke Chief Financial Officer	33.34%	33.33%	33.33%
Neil Tobin General Manager Joint Venture	33.34%	33.33%	33.33%
Mark Fookes Head of Retail	33.34%	33,33%	33.33%
Bruce Morris Hotel & Tourism Portfolio Manager	33.34%	33.33%	33.33%
James Coyne General Counsel/Secretary	38%	31%	31%
Nichofas Harris Head of Wholesale	29%	42%	29%

¹ The percentage of each component of total remuneration is calculated with reference to stretch performance outcomes (ie the theoretical maximum possible remuneration the individual can achieve) in both STI and LTI - for more information on performance measurement levels see the following sections on short and long term incentives.

External Benchmarking of Total Remuneration

Against this background the Nomination and Remuneration Committee is mindful to ensure that market data considers GPT's competitors in the LPT sector as well as GPT's peers on the ASX 200, with the greatest weighting being applied to LPT sector based comparisons.

For guidance, the Nomination and Remuneration Committee and the Chief Executive Officer draw on the following data to benchmark remuneration:

• Specific external benchmarking conducted by Godfrey Remuneration Group Pty Limited
• Information available in published job matched surveys of industry peers including the Avdiev Property Industry Remuneration Report
• Commissioned surveys (if required) to supplement the published information.

Performance Measures

Performance is evaluated against both financial and non-financial KPI's.

Performance against financial KPI's is a key driver of reward outcomes in both Short Term and Long Term Incentives. Financial KPI's that apply may be a mixture of:

• Financial performance of GPT as a whole against predetermined targets and its industry peers
• Financial performance of the individual's portfolio, division, or business unit.

For the Chief Executive Officer and other key management personnel, the proportion of their short term and long term incentive potential that is weighted towards financial KPI's is high (for the CEO - 80% of the Short Term incentive potential and 100% of the Long Term Incentive potential).

For short term incentives there is also a weighting to non-financial measures that vary between positions but include matters such as achieving strategic outcomes, operational improvement, performance enhancement and personal & staff development. The Board believes that these performance measures best align executive reward with that of consistently superior Securityholder returns and the promotion of GPT's values and culture.

Directors' Report For the year ended 31 December 2006

Remuneration Report (continued)

GPT's Performance Management System

A uniform performance management system is used across the GPT Group which provides all employees with clear financial and personal performance objectives. Although the performance criteria are different for each executive, the principles are similar and involve assessment of performance across the following areas:

• Financial (in relation to the individual's business unit and GPT) achievement of earnings, return on equity and other relevant financial targets
• Personal achievement of personal objectives related to specific non-financial business targets such as achieving strategic outcomes, operational improvement and performance enhancement and personal & staff development
• Values achievement of performance consistent with the GPT Values ingrained as part of the GPT Group culture. Failure to perform consistently with Group Values will remove eligibility for bonus.

To ensure that the appropriate performance objectives are being set and that there is an alignment of effort with key deliverables of the GPT Group's business strategy, the Chief Executive Officer's performance objectives are set by the Board annually and from there are cascaded into the businesses via the performance objectives of all executives and employees.

Short Term Incentives (STIs) (variable component)

A potential STI, calculated as percentage of base salary, is available to all executives. The potential STI is, in turn, allocated between financial and personal goals. The STI percentage, and its allocation between financial and personal goals depends upon each executive's ability to determine particular outcomes of the Group's objectives as well as the executive's seniority and accountability.

The actual STI award for an executive is determined by assessment of the executive's performance against specific objectives. The executive's performance is assessed relative to various measurement levels (threshold, target and stretch in the case of financial goals). Expressed as a percentage of the executive's base salary, their STI potential may range from 0% to 100% for stretch performance. No STI award is made for a particular goal if performance falls below a minimum threshold level of performance.

Once an entitlement is calculated, the award may be received in a number of ways:

• Cash
• Salary sacrificed to superannuation.

Table B on page 13 shows:

• STI payments actually made during the financial year ended 31 December 2006 to the Chief Executive Officer and other Senior Executives relating to their performance in the six months to the end of 2005, and
• An accrual at Target level performance for the STI award they will receive in March 2007 in relation to their performance in financial year ended 31 December 2006.

Long Term Incentives (LTIs) (variable component)

Following Securityholder approval at the Annual General Meeting on 18 April 2006, the Board implemented a Long Term Incentive (LTI) scheme for Senior Executives.

The LTI scheme is designed to:

• Provide Senior Executives with a long-term incentive to create value for Securityholders, thereby aligning their interests more closely
• Provide a means through which Senior Executives can participate, over the longer term, in the ongoing success of GPT
• Assist in the attraction and retention of key executives.

The LTI scheme consists of a loan to enable nominated employees to acquire GPT Securities under GPT's Employee Incentive Scheme. The loan to purchase securities is full recourse* and of no fixed term. After deducting amounts for tax on the employee's income, distributions of the GPT Securities are applied against the loan. The loan is subject to interest calculated at GPT's funding cost, which in 2006 was 5.6%. While the loan remains outstanding, the GPT Securities will not be able to be transferred or otherwise dealt with. If the employee leaves GPT, the loan must be repaid (either by the sale of securities or some other source of funds).

The Board, on the recommendation of the Nomination and Remuneration Committee, determines those executives eligible to participate in the LTI scheme and, for each participating executive, their potential LTI award and loan amount, calculated by reference to a percentage of their base salary. Subject to performance over a three-year period, the LTI award will be applied against the outstanding loan (after deductions for interest and FBT).

The performance conditions that give rise to a LTI award are determined annually by the Board, are tested at the end of each applicable three year períod, and are disclosed in GPT's Remuneration Report. If below threshold performance for a particular performance condition is achieved at the end of the three-year period, no portion of the LTI allocated to that performance condition would be awarded. For performance above the threshold level, pro rata awards will occur up to stretch outcomes. Where an LTI award is made, the cost of the loan (ie the interest) will first be deducted from that amount. If the total LTI award is insufficient to cover the loan cost, that part of the remaining loan cost will be capitalised and added to the loan amount. Where the LTI award is greater than the cost of the loan, GPT will waive an amount of the loan equal to the remainder of the LTI award after deducting the amount payable by GPT for FBT.

For the year ended 31 December 2006

Remuneration Report (continued)

LTI awards will be made subject to ongoing employment and as such are a critical component of GPT's retention strategies.

*At the discretion of the Board the loan and outstanding interest may be waived in the following circumstances:

• on retirement of the employee
• death or total permanent disability of the employee
• redundancy without cause of the employee
• takeover.

2006 LTI Performance Conditions

In designing the LTI performance conditions, the Board determined that, given the nature of GPT, it was important to devise conditions that provided a direct link to GPT's distributions and their rate of growth which in turn are performance drivers of total Securityholder return. The Board also considered that some element of external benchmarking was also required. The Board believes that these requirements have been met through the mix of performance measures which are as follows for the 2006 LTI (ie performance reviewed based on the 2006, 2007 and 2008 financial years):

• Growth in Earnings per Stapled Security (EPS Growth) 50% of the potential LTI. Growth in Earnings per Stapled Security will be measured as the percentage increase in earnings per GPT Security. EPS is the base earnings per GPT Security adjusted for significant items and other items determined by the GPT Board and as disclosed in GPT's Statement of Financial Performance for the financial years ended 31 December 2006, 31 December 2007 and 31 December 2008. If EPS growth is below 6.2% on average over the three-year period, no part of LTI available for this performance measure will be awarded. If EPS growth is above 6.2%, pro rata awards will occur up to a stretch outcome of 7.5%.
• Return on Contributed Equity (RoE) 30% of the potential LTI. Return on Contributed Equity measures the total return on equity employed and takes into account both capital appreciation of the assets of the GPT Group and cash distributions of income. If RoE is below 8.5% on average over the three-year period, no part of the LTI available for this performance measure will be awarded. If RoE is above 8.5%, pro rata awards will occur up to a stretch outcome of 12.5%.
• Performance relative to Listed Property Trust Index (LPT Index) 20% of the potential LTI. A LPT Index award may be granted if GPT outberforms against the S&P ASX 200 Listed Property Trust Index. Due to the size of GPT within this Index, GPT and its performance is excluded for the purpose of calculating the LPT Index and its performance. Below Index performance, no part of the total LTI available for this performance measure will be awarded. Above Index performance, pro rata awards will occur up to the stretch outcome of 2% out performance. The Board may substitute another Index if there is a material change in the composition of the LPT Index during the measurement period.

As at 31 December 2006, GPT's performance against each performance condition was as follows:

• Growth in Earnings per Stapled Security (EPS Growth): 13.5%
• Return on Contributed Equity (RoE): 22.5%
• Performance relative to Listed Property Trust Index (LPT Index): 21%.

For the year ended 31 December 2006

Remuneration Report (continued)

As a result of GPT's 2006 performance exceeding all stretch level performance conditions, a notional one third accrual has been made based on 100% delivery of LTI awards to the disclosed Senior Executives at the end of the three year period (ie the end of 2008) (see LTI Award Accrual in Table A and Table B on pages 11 and 13). As such, the accruals do not represent funds actually paid to participants. Actual awards under the 2006 LTI plan will only be made at the end of 2008 if the performance conditions outlined above are met or exceeded for the full three year period. In the event they are not met no award would be payable.

Set out below are details of the operation of the LTI scheme in 2006 for Senior Executives:

Table A - Operation of the 2006 LTI for Senior Executives

	Opening Loan Balance	GPT Security Purchase Price	Number of Securities Acquired	Total Net Distributions Applied to Loan in 2006	Loan Balance as at 31/12/06	GPT Security Price at 31/12/06	Net Value of Employee Equity at 31/12/06 1	LTI Award Accrual 2	Accumulated Interest Costs as at 31/12/06 3
Participant Name
N Lyons CEO & Director	2,874,997	4.20	684,116	54,898	2,820,098	5.60	1,010,951	432,500	62.376
M O'Brien COO	1,233,333	4.20	293,476	23,551	1,209,782	5.60	433,684	185,000	26,759
K Pryke CFO James Coyne General Counsel	1,055,554	4.20	251,173	20,156	1,035,398	5.60	371,170	158,333	22,901
/Secretary N Harris Head of wholesale (appointed	568,888	4.20	135,369	10,863	558,025	5.60	200,041	85,333	12,343
25/7/06)	888,887	4.66	190,627	7,053	881,834	5.60	185,677	133,333	14,135
M Fookes Retail GM	1,033,331	4.20	245,885	19,732	1,013,600	5.60	363,356	155,000	22.419
N Tobin JV GM	944,444	4.20	224,734	18,034	926,410	5.60	332,100	141,667	20,491
B Morris Hotels PM	877,221	4.20	208,738	16,751	860,471	5.60	308,462	131,583	19,032
Total	9,476,655		2,234,118	171,038	9,305,618		3,205,441	1,422,749	200,456

¹ Net value of emplovee equity at 31 December 2006 is determined by deducting the loan balance as at 31 December 2006 from the value of the securities held at the prevailing security price on that date of \$5.60.

² Given that at the end of 2006 all LTI performance conditions had been exceeded, a pro-rata accrual has been made that reflects a maximum LTI award at the end of 2008. These figures are also disclosed in Table B. As an example, if GPT's performance at the end of the three-year period was such that stretch level LTI performance conditions were all met or exceeded, then the gross award applicable to N. Lyons would be \$1,297,500, from which accumulated interest costs would first be deducted; the remainder would then be divided into loan waiver (ie and applied to reduce the balance of the loan) and FBT.

³ Under the LTI Scheme rules this interest is accumulated and applied to the loan balance at the time an LTI award is payable. If the LTI award is insufficient to cover the interest cost in whole or in part then the unpaid interest is capitalised and added to the loan balance.

GPT's Employee Incentive Scheme

Following Securityholder approval at the Annual General Meeting held on 18 April 2006, the Board implemented the GPT Employee Incentive Scheme (Scheme). The Scheme operates at two levels:

• A Long Term Incentive (LTI) Scheme for certain Senior Executives which is discussed above on page 9; and
• A General Scheme for all employees (other than Senior Executives who receive a Long Term Incentive).

Under the General Scheme, employees with a minimum of 12 months service in permanent salaried employment are offered the ability to participate up to a nominated percentage of their Base salary (20%). The objective is to align the performance and behaviour of the general employee population with Securityholder interests.

The Scheme comprises an interest free loan of no fixed term to enable employees to acquire GPT Securities. The net cost of the interest component is a cost to the business of implementing the scheme.

The loan must be used to acquire GPT Securities that are acquired by the Scheme Administrator on employees' behalf. Securities in respect of which a loan is outstanding cannot be sold or transferred. Net distributions (deducting amounts required to pay tax) must be applied to reduce the loan. If an employee leaves GPT, the loan must be repaid either by the sale of the securities or by some other source.

In 2006, 339 employees participated in the General Scheme with total loans of \$5,909,404.74. The total cost to GPT of the scheme in 2006 was \$330,926.67.

It is the view of the Board that the cost of the General Scheme is more than offset by the benefits that flow to the Group from the establishment of an ownership culture within the general employee population and the impact of that culture in terms of Group performance and alignment of employee and Securityholder interests.

For the year ended 31 December 2006

Remuneration Report (continued)

At the time of writing GPT is aware of proposals to change current regulations that differentiate the treatment of stapled securities from shares in listed companies for the purposes of employee incentive schemes; should these changes become law the Board may consider the impact of this on our current loan based schemes and will seek further informed independent advice from its external advisors Godfrey Remuneration Group on the ongoing adequacy and competitiveness of the existing employee incentive schemes.

Other Awards

Prior to the internalisation proposal being put to Unitholders, the Board of GPTML (comprised of its Independent Directors) identified certain individuals who were either:

• critical to the internalisation process itself, or
• critical to ensure that business as usual was maintained for those parts of GPT's business that were significantly impacted by the internalisation, or
• critical for the ongoing success of the business as part of a newly formed independent GPT.

In relation to these employees, the Board (comprised of its Independent Directors) agreed to a retention payment to be made in June 2007 should the employee remain with GPT until that time.

This payment will not be made if the individual's employment is terminated prior to 1 July 2007 for misconduct, gross negligence, material breach of contract, failure to carry out a reasonable direction or any other circumstances justifying immediate termination. Details of amounts allocated to the retention referred to above have been included in Tables B & C on page 12 and 13 under the heading "Other Long Term Benefits - Retention".

REMUNERATION - NON-EXECUTIVE DIRECTORS

GPT's Policy

The Board determines the remuneration structure for Non-executive Directors based on recommendations from the Nomination and Remuneration Committee.

The Board has adopted a policy to ensure that remuneration packages for Non-executive Directors are transparent and easily explained while at the same time enabling the Board to attract and retain the highest quality candidates. The principal features of this policy are as follows:

• Non-executive Directors are paid one director's fee for participation as a Director in all GPT Group related companies (principally GPT RE Limited the responsible entity of the General Property Trust and GPT Management Holdings Limited).
• Non-executive Director remuneration is composed of three main elements:
• Main Board fees
• Committee fees ĸ
• Superannuation contributions at the statutory Superannuation Guarantee Levy (SGL) rate.
• Differences in workloads of Non-executive Directors arise mainly because of differing involvement in board committees, which is in addition to main Board work. This additional workload is rewarded via Committee fees in addition to main Board fees.
• Non-executive Directors do not participate in any incentive or performance based arrangements.
• Non-executive Directors are not entitled to any retirement benefits.
• Non-executive Director remuneration is set by reference to comparable entities listed on the Australian Stock Exchange (based on GPT's industry sector and market capitalisation).
• External independent advice on reasonable remuneration for Non-executive Directors is sought at least every three years. Between such reviews, remuneration is monitored against market movements as is the time being spent by Directors in performing their duties. Any increase resulting from this review is effective from the 1st of January and will be advised in the next Remuneration Report.
• The Chairman is paid a main board fee at a higher rate than other Non-executive Directors to reflect additional workload and responsibility. The Chairman is paid 150% more than the other Non-executive Directors but does not receive Committee fees.

Fees (including superannuation) paid to Non-executive Directors are drawn from a remuneration pool of \$1,450,000 per annum which was approved by Securityholders at the 2005 Annual General Meeting. As an executive director Nic Lyons does not receive fees from this pool but is remunerated as one of GPT's Key Management Personnel.

All Non-executive Directors receive reimbursement for reasonable travel, accommodation and other expenses incurred whilst undertaking GPT business.

For the year ended 31 December 2006

Remuneration Report (continued)

DETAILS OF REMUNERATION FOR DIRECTORS AND SENIOR EXECUTIVES

Details of the nature and amount of each element of the remuneration of the Directors and Senior Executives for the current year and for the comparative year are set out below. Table B shows the total amounts paid to the individuals for the year from 1 January 2006 to 31 December 2006) Table C shows the comparison for the year from 1 January 2005 to 31 December 2005.

Table B - Remuneration details 1 January 2006 to 31 December 2006

Details of the remuneration of the Directors and Senior Executives of the stapled entity for the year ended 31 December 2006 is set out in the following table:

. .		Short term employee benefits				Post Employment		Other long term Share benefits Based
	Fees	Salary & STI Bonus 1	STI Bonus Accrued 2	Non Monetary	annuation	Super-Retirement Benefits	Accrual	LTI Award Retention 3	Payment	Total
Directors & Senior Executives
N Lyons CEO & Director	835,390	270,156	692,000	3,696	41.366		432,500	675,392		2,950,500
E Goodwin Director	96,000			$\blacksquare$	83.640		¥		٠	179,640
M Latham Director	130,000				11,685		٠		$\tilde{\phantom{a}}$	141,685
K Moss Director	150,000			٠	12,413				$\overline{a}$	162,413
B Noms Director (retired 31/8/06)	90,000				8,092				$\overline{a}$	98,092
E Nosworthy Director	135,000			3,816	12,136				$\bullet$	150,952
P Joseph Director	300,000			٠	12,413		w		$\bullet$	312,413
I Martin Director	140,000			L.	17,940					157,940
A McDonald Director (appointed 2/8/06)	56,250			1.712	5.063					63.025
M O'Brien COO	540.741	126,131	277,500	1.921	12.413	٠	185,000	504,527		1,648,233
K Pryke CFO	462,404	103.011	237,500	9.804	12.413	٠	158,333	412.044		1,395,509
James Coyne General Counsel /Secretary N Harris Head of	304,518	45,937	128,000	1,891	12,413		85.333	306,250		884,342
Wholesale (appointed 25/7/06)	168,829		131,520	483	5,286		133,333			439,451
M Fookes Head of Retail	448,078	78,934	232,500	3,259	40,833	$\blacksquare$	155,000	429,416		1,388,020
N Tobin GM JV	410,511	90,072	212,500	2,624	12,413		141,667	400,324		1,270,111
B Monis PM Hotels	378,276	76.657	197,375	26,090	12,413		131,583	383,289		1,205,683
Total	4,645,997	790,898	2,108,895	55,296	312,932	0	1,422,749	3.111,242	0	12,448,009

No termination benefits were paid during the period.

¹ STI Bonus relates to short term incentives actually paid to employees in calendar year 2006, however the amounts specified were in relation to performance in the six months ended 31 December 2005.

² STI Bonus Accrued relates to STI attributable to performance in calendar year 2006, which at the time of writing is still being finalised. It is the intention of the Board that in future the STI for the current financial year will be calculated earlier and included in the 2007 Annual Report. As an interim measure, the figures noted in this section are accruals at target level performance for the named executives; as such, the amount actually paid to executives may vary from this amount but in relation to 2006 performance it will not exceed the amounts specified.

³ The amount set out in "Other Long Term Benefits - Retention" represents an accrual for part of the retention award that becomes payable on 30 June 2007. The total amounts payable in respect of this retention award (assuming that the executive remains with GPT until 30 June 2007) is as follows: N. Lyons \$1,350,783, M. O'Brien \$1,009,054, K. Pryke \$824,088, N. and J. Covne \$612,500.

For the year ended 31 December 2006

Remuneration Report (continued)

Table C Remuneration details 1 January 2005 to 31 December 2005

Details of the remuneration of the Directors and Senior Executives of the stapled entity for the year ended 31 December 2005 is set out in the following table:

			Short term employee benefits	Post Employment Share benefits Based Payment				Other long term
Directors & Senior	Salary & Fees	STI Bonus	Bonus	Non Monetary	annuation	Super- Retirement LTI Bonus Retention 1 Benefits				Total
Executives
N Lyons CEO & Director	592,152	432,251	654.484	5.933	42,377		31,821	378,219	6,022	2,143,259
E Goodwin Director	34,385			$\overline{\phantom{a}}$	3,095				$\omega$	37,480
M Latham Director	101,761			$\blacksquare$	6,118				$\overline{\phantom{a}}$	107,879
K Moss Director	112,960			۰	7.126				۰	120,086
B Norris Director	74,394			$\blacksquare$	6,646	211,467		$\blacksquare$	٠	292,507
E Nosworthy Director	74,231			٠	6,681				÷,	80,912
I Martin Director (appointed 2/6/05)	34,385			$\overline{\phantom{a}}$	3,095				a.	37,480
P Joseph Director	220,550			٠	10,689				L,	231,239
M O'Brien COO	432,386	201,811	394,012	5,939	26,416		26,354	282,535	5,995	1,375,448
K Pryke CFO	351,039	164,818	263,311	5,939	23,156	$\overline{\phantom{0}}$	85,996	230,745	4,894	1,129,898
J Covne General Counsel/Secretary	261,301	73,500	183,141	64	18,690	٠	$\blacksquare$	171,500	3.635	711,831
Mark Fookes Head of Retail	237,799	45,804	171,766	3.200	8.924		$\blacksquare$	240.473	$\tilde{\phantom{a}}$	707,966
Neil Tobin GM JV	221,893	38,431	160,129		8,796		$\overline{\phantom{a}}$	224,181		653,430
Bruce Morris PM Hotels	212,188	41,895	153,316		8,668			214,642		630,709
Total	2,961,424	998,510	1,980,159	21,075	180,477	211,467	144,171	1,742,295	20,546	8,260,124

No termination benefits were paid during the period.

¹ The amount set out in "Other Long Term Benefits - Retention" represents an accrual for part of the retention award that becomes payable on 30 June 2007. The total amounts payable in respect of this retention award (assuming that the executive remains with GPT until 30 June 2007) is as follows: N. Lyons \$1,350,783, M. O'Brien \$1,009,054, K. Pryke \$824,088, N. Tobin \$800,647, M. Fookes \$858,831, B. Morris \$766,578 and J. Coyne \$612,500.

SERVICE AGREEMENTS

All employees have service agreements in place that set out the basic terms and conditions of employment.

Notice periods of one (1) month apply to all these service agreements although the Board has an intention over time to increase the standard notice period for a group of the most Senior Executives to a minimum of 3 months. No notice provisions apply where termination occurs as a result of misconduct or serious or persistent breach of the agreement.

Remuneration arrangements for early termination of a Senior Executive's contract for reasons outside the control of the individual or where the executive is made redundant may give rise to a severance payment at law. In the absence of any express entitlement, these payments would vary between individuals. The Board has approved a policy with respect to severance entitlements specifically capping the maximum severance payment that would be made to 12 months base salary. In addition the employee may be entitled to any short-term and long-term incentive at the end of the relevant period subject to the achievement of key performance indicators that had been set.

For the year ended 31 December 2006

Remuneration Report (continued)

Under the existing service agreements there are no additional payments on:

• Resignation $\overline{\phantom{a}}$
• Termination by the Company for poor performance
• Termination for cause ٠

other than statutory entitlements such as payment of accrued but untaken annual leave.

Set out below is a summary of the terms of the service agreements for the Chief Executive Officer and other Senior Executives.

	Nic Lyons	Michael O'Brien	Kleran Pryke	Neil Tobin	Mark Fookes	Bruce Morris	James Coyne	Nicholas Harris
	Chief Executive Officer	Chief Operating Officer	Chief Financial Officer	General Manager JV	Head of Retail	Hotel & Tourism Portfolio Manager	General Counsel/ Company Secretary	Head of Wholesale
Date of Agreement	1 June 2005	1 June 2005	1 June 2005	1 June 2005	1 June 2005	1 June 2005	1 June 2005	25 July 2006
Term of Agreement	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended	Open- ended
Non- solicitation of other personnel	12 months	12 months	12 months	12 months	12 months	12 months	12 months	12 months
Retention payable June 07	$Yes - see$ note to Tables B & C	Yes see note to Tables B & C	Yes - see note to Tables B & C	Yes - see note to Tables B & C	Yes - see note to Tables B & C	$Yes - see$ note to Tables B & C	$Yes - see$ note to Tables B & C	N/A
Termination Notice	1 Month	1 Month	1 Month	1 Month	1 Month	1 Month	1 Month	1 Month

Indemnification and Insurance of Directors and Officers

The Company provides a Deed of indemnity and Access (Deed) in favour of each of the Directors and Secretaries of the Company and its subsidiary companies and each person who acts or has acted as a representative of the Company serving as an officer of another entity at the request of the Company. The Deed indemnifies these persons on a full indemnity basis to the extent permitted by law for losses, liabilities, costs and charges incurred as a director or officer of the Company, its subsidiaries or such other entities.

Subject to specified exclusions, the liabilities insured are for costs that may be incurred in defending civil or criminal proceedings that may be brought against directors and officers in their capacity as directors and officers of the Company, its subsidiary companies or such other entities, and other payments arising from liabilities incurred by the directors and officers in connection with such proceedings.

During the financial year the Company paid insurance premiums to insure the directors and officers of the Company and its subsidiary companies. The terms of the contract prohibit the disclosure of amounts of premium paid.

The Auditors are in no way indemnified out of the assets of the Company.

Non-audit services

During the year PricewaterhouseCoopers, 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 advice received from the Audit and Risk Management Committee is satisfied that the provision of these services is compatible with, and did not compromise, the auditor independence requirements of the Corporation Act 2001. The Board is satisfied that the provision of non-audit services by the auditor did not comprise auditor independence for the following reasons:

• The Audit & Risk Management Committee reviewed the non-audit services at the time of appointment to ensure that they did not impact upon the integrity and objectivity of the auditor.
• The Board's own review conducted in conjunction with the Audit and Risk Committee, having regard to the Board's policy with respect to the engagement of GPT's auditor.
• The fact that none of the non-audit services provided by PricewaterhouseCoopers during the period had the characteristics of management, decision-making, self-review, advocacy or joint sharing of risks.

	Consolidated
	31 Dec 2006	31 Dec 2005
Assurance services	s
Audit services
PricewaterhouseCoopers Australian firm
Audit and review of financial reports and other audit work under the Corporations Act 2001	454.484	154,668
Related Practices of PricewaterhouseCoopers
Australian firm including overseas firms
Audit and review of financial reports and other audit work	51.875
Total remuneration for audit services	506.359	154.668
Other Assurance Services
PricewaterhouseCoopers Australian firm
Audit of regulatory returns	24,606	8.140
IFRS accounting services	90.375
Accounting advise	65,438
Due diligence services	20,000
Related Practices of PricewaterhouseCoopers
Australian firm including overseas firms
Due diligence services	27.036
Total remuneration for other assurance services	227,455	8.140
Total remuneration for assurance services	733,814	162,808
Taxation Services
PricewaterhouseCoopers Australian firm
Expatriate taxation services	83,881	67,200
Related Practices of PricewaterhouseCoopers
Australian firm including overseas firms
International tax consulting and tax advice on mergers and acquisitions	13.561
	97.442	67.200

Directors' Report For the year ended 31 December 2006

Auditors' independence declaration

A copy of the auditors' independence declaration as required under section 307C of the Corporations Act 2001 is set out on the following page.

Rounding of Amounts

The amounts disclosed in the Directors' Report have been prepared in accordance with Class Order 98/0100 issued by the Australian Securities & Investments Commission, pursuant to which, unless otherwise indicated, the amounts in the Directors' Report have been rounded to the nearest thousand dollars.

Auditor

PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.

Dated at SYDNEY this 21st day of February, 2007

Signed in accordance with a resolution of the Directors.

re NL

Peter Jeseph Chairman

Nic Lyons Executive ector

PRICEWATERHOUSE COPERS @

PricewaterhouseCoopers ABN 52 780 433 757

Darling Park Tower 2 201 Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia www.pwc.com/au Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999

Auditor's Independence Declaration

As lead auditor for the audit of GPT Management Holdings Limited for the year ended 31 December 2006, I declare that to the best of my knowledge and belief, there have been:

• a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of GPT Management Holdings Limited and the entities it controlled during the period.

DOT

DH Armstrong Partner PricewaterhouseCoopers

Sydney 21 February 2007

Liability limited by a scheme approved under Professional Standards Legislation

Income Statements
For the year ended 31 December 2006

		Consolidated		Parent entity
				31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	Note	\$'000	\$'000	\$'000	\$'000
Revenue
Revenue from hotel operations		226,599	125,340
Fund management fees		32,231	13,003	14,266	10,069
Property management fees		15,392	4,388		4,388
Development management fees		14,075	4,010		4,010
Dividend from subsidiary				16,119	5,800
		288,297	146,741	30,385	24,267
Other income
Share of after tax profits of equity accounted entities	10,11	63,526	22,804
Management costs recharged		6,719	1,387	36,907	3.634
Interest income		4,911	5,570	3,918	5,149
Other		3,180	138	3,180	3
		78,336	29,899	44,005	8,786
Total revenue and other income		366,633	176,640	74,390	33,053
Expenses
Remuneration expenses		133,458	59,253	47,992	17,197
Rental expense attributable to hotel operations		60,293	31,853
Cost of sales attributable to hotel operations		39,629	20,424
Property rent and outgoings		39,811	18,309
Repairs and maintenance		11,605	5,849	1,354	1,381
Advertising and promotion		5,789	3,374
Professional fees		6,224	2,869	2,923	1,819
Impairment and revaluation decrements		31,685	42,325	8,848	42,325
Depreciation and amortisation expenses	4	4,835	1,106	521	141
Interest expense	4	3,236	962	582	1
Costs associated with internalisation		797	4,854	797	4,854
Other expenses		7,675 345,037	8,145 199,323	2,652 65,669	6,197 73,915
Profit/ (loss) before income tax		21,596	(22, 683)	8,721	(40, 862)
Income tax expense / (benefit)	5	159	(446)	2,886	(870)
Profit / (loss) attributable to the members of GPT Management Holdings Limited		21,437	(22, 237)	5,835	(39,992)
		Cents	Cents
Basic/diluted earnings per share attributable to the ordinary equity holders of the company	25	0.01	(0.01)

The above Income Statements should be read in conjunction with the accompanying notes.

÷. $\mathbb{C}$ à, l,

Balance Sheets
As at 31 December 2006

		Consolidated	Parent entity
		31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
Note	\$'000	\$'000	\$'000	\$'000
ASSETS
Current Assets
Cash and cash equivalents 6	24,354	33,992	3,320	14,811
Receivables 7	51,828	34,381	102,541	15,280
inventories 8	7,290	9,089
	83,472	77,462	105,861	30,091
Non-current Assets
Investment in General Property Trust	3,750		3,750
Investment in controlled entities 9			200,158	141,486
Interests in joint ventures 10	273,975	152,314
Investments in associates 11	11,682	7,637
Other financial assets 12	25,435	111,474	23,683	110,485
Property, plant & equipment 13	45,105	11,015	3,022	2,300
Intangible assets 14	27,028	7,278
Deferred tax asset 5	9,332	7,423	5,382	5,187
	396,307	297,141	235,995	259,458
Total Assets	479,779	374,603	341,856	289,549
LIABILITIES
Current Liabilities
Payables 15	111,939	47,386	58,784	17,489
Provisions 16	9,658	12,410	7,330	7,228
	121,597	59,796	66,114	24,717
Non-current Liabilities
Payables 15	48,000	28,420
Provisions 16	4,107	3,531	3,037	2,316
Deferred tax liability 5	715	211
	52,822	32,162	3,037	2,316
Total Liabilities	174,419	91,958	69,151	27,033
Net Assets	305,360	282,645	272,705	262,516
EQUITY
Contributed equity 17	306,995	302,508	306,995	302,508
Reserves 18	(835)	2,374	(133)
Accumulated losses 18	(800)	(22, 237)	(34, 157)	(39, 992)
Total Equity	305,360	282,645	272,705	262,516

The above Balance Sheets should be read in conjunction with the accompanying notes.

Statements of Changes in Equity
For the year ended 31 December 2006

		Consolidated		Parent entity
		31 Dec 2006		31 Dec 2005 31 Dec 2006	31 Dec 2005
	Note	\$'000	\$'000	\$'000	\$'000
Total equity at the beginning of the year		282,645	$\overline{\phantom{a}}$	262,516
Movement in foreign currency translation reserve	18	(1,629)	2.374
Net income recognised directly in equity		(1,629)	2,374
Profit/ (loss) for the year		21,437	(22,237)	5,835	(39,992)
Total recognised income and expense for the year		19,808	(19, 863)	5,835	(39,992)
Transactions with Equityholders in their capacity as Equityholders:
Movement in treasury stock reserve	18	(1.623)		(176)
Movement in employee incentive security scheme reserve	18	43		43
Proceeds from issue of shares, net	17	4.487	302,508	4.487	302,508
Total equity at the end of the year		305,360	282,645	272,705	262.516

The above Statements of Changes in Equity should be read in conjunction with the accompanying notes.

Cash Flow Statements
For the year ended 31 December 2006

$\bar{z}$

$\sim$

$\sim$

		Consolidated		Parent entity
				31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	Note	\$'000	\$'000	\$'000	\$'000
Cash flows from operating activities
Cash receipts in the course of operations (inclusive of GST)		281,082	121,338	54,354	10,378
Cash payments in the course of operations (inclusive of GST)		(282, 909)	(124, 864)	(31, 673)	(9, 337)
Income tax paid		(3,207)		(3,901)
Interest received		4,718	5,570	3,918	5,149
Net cash inflows from operating activities	24	(316)	2,044	22,698	6,190
Cash flows from investing activities
Net cash receipt on control of subsidiary			10,150
Payment for controlled entitles			(4,351)	(67, 520)	(184, 011)
Payment for joint venture		(66, 826)	(170,005)
Payment for investments		(1,079)		(1,079)
Payments for intangibles		(51, 200)
Payment for property, plant & equipment		(7, 784)	(2,869)	(1, 243)	(2,441)
Net cash flows from investing activities		(126, 889)	(167, 075)	(69, 842)	(186, 452)
Cash flows from financing activities
Proceeds from issue of units		4,487	302,508	4,487	302,508
Payment of employee incentive scheme		(29, 221)		(27, 222)
Proceeds from related party borrowings		19,580	7,000	58,388	2,850
Repayment of related party borrowings		122,721	(110, 485)		(110, 285)
Net cash flows from financing activities		117,567	199,023	35,653	195,073
Net increase/(decrease) in cash and cash equivalents		(9,638)	33,992	(11, 491)	14,811
Cash and cash equivalents at the beginning of the year		33,992		14,811
Cash and cash equivalents at the end of the year	6	24,354	33,992	3,320	14,811

The above Cash Flow Statements should be read in conjunction with the accompanying notes.

Notes to the Financial Statements

Summary of significant accounting policies $\ddagger$ .

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to the year presented, unless otherwise stated. The financial report includes separate financial statements for GPT Management Holdings Limited ('Company') as an individual entity and the consolidated entity consisting of the Company and its controlled entities.

(a) Basis of preparation

This general purpose financial report has been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRSs), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

Compliance with IFRS

Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards. Compliance with AIFRS ensures that the consolidated financial statements and notes of the consolidated entity comply with International Financial Reporting Standards (IFRS). The Company's financial statements and notes also comply with IFRS.

Accounting Standards issued but not effective as 31 December 2006

At 31 December 2006, standards applicable to consolidated entity that have been issued but are not yet effective are AASB 7 Financial Instruments and consequential amendments made by AASB 2005-10 Amendments to Australian Accounting Standards. The standards are applicable to annual reporting periods beginning on or after 1 January 2007. The consolidated entity does not intend to adopt these prior to this date. The impact on the financial statements relates to disclosures only.

(b) Accounting for GPT Management Holdings Limited

The shares of GPT Management Holdings Limited are quoted on the Australian Stock Exchange under the stapled entity code GPT and comprise one unit in General Property Trust ('Trust') and one share in GPT Management Holdings Limited. The unit and share are stapled together under the terms of the constitution and cannot be traded separately. Each entity forming part of GPT continues as a separate legal entity in its own right under the Corporations Act 2001 and is therefore required to comply with the reporting and disclosure requirements under the Corporations Act 2001 and Australian Accounting Standards.

As a result of the stapling, investors in GPT will receive distributions from each component of the stapled security comprising distributions from the Trust and dividends from the Company.

(c) Segment Reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment and is subject to risks and returns that are different from those of segments operating in other economic environments.

(d) Revenue recognition

Revenue is measured at fair value of the consideration received or receivable.

Dividend and distribution income is recognised when declared. The Company's share of net profits from joint venture entities is included in the consolidated Income Statement and has been separately disclosed. Revenue not received at balance date is included as a receivable in the Balance Sheet.

$\mathbf{f}$ . Summary of significant accounting policies (continued)

Principles of consolidation $\left( \mathbf{e} \right)$

$(i)$ Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries as at 31 December 2006 and the results of all subsidiaries for the year then ended. The Company and its subsidiaries together are referred to in this financial report as the Company.

Subsidiaries are all those entities (including special purpose entities) over which the Company has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Company (refer to Note 1(m)).

Intercompany transactions, balances and unrealised gains on transactions between the Company entities are eliminated. Unrealised losses are eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company.

$(i)$ Joint venture entities

The Company's investments in joint venture entities are carried at cost by the parent entity and accounted for using the equity method in the consolidated financial statements. Under this method, the Company's initial share of the joint venture entities' net profit after tax is recognised in the consolidated income statement, and the share of movement in reserves is recognised in reserves in the consolidated balance sheet.

Investments in joint venture entities are carried at the lower of cost and recoverable amount in the Company. Investments in joint venture entities in the consolidated entity are carried at the lower of equity accounted carrying amount and recoverable amount.

All balances and effects of transactions between joint ventures and the Company have been eliminated.

(III) Associates

Associates are all entities over which the Company has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the parent's financial statements using the cost method and in the consolidated financial statements using the equity method. The Company's investment in the associate includes goodwill (net of any accumulated impairment loss) identified on acquisition.

Under this method, the Company's share of the associate's net profit after tax is recognised in the consolidated Income Statement, and the share of movements in reserves is recognised in reserves in the consolidated Balance Sheet. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Distributions and dividends receivable from associates are recognised in the Company's Income Statement, while in the consolidated financial statements they represent a return of the Company's investment and reduce the carrying amount of the investment.

When the Company's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, it does not recognise any further losses, unless it has incurred obligations or made payments on behalf of the associate.

Accounting policies of the associate have been changed where necessary to ensure consistency with the policies adopted by the Company.

All balances and effects of transactions between associates and the Company have been eliminated.

Summary of significant accounting policies (continued) $\ddagger$

(f) Lease incentives

Incentives may be provided to lessees to enter into an operating lease. These incentives may be in the form of cash, rent free periods, lessee or lessor owned fitouts. They are amortised over the term of the lease as a reduction of rental income. The carrying amount of the lease incentives is reflected in the fair value of investment properties.

(g) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term money, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the Balance Sheet.

(h) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts. Trade receivables are due to be paid in advance of the period that it relates and no more than thirty days for other debtors.

Collectibility of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful trade receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the trade receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the Income Statement.

Inventories $\left( i \right)$

Inventories are stated at the lower of cost and net realisable value. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business.

Intangible assets $\mathbf{q}$

$\boldsymbol{\theta}$ Goodwill

Goodwill represents the excess of cost of an acquisition over the fair value of the Company's share of the net identifiable assets of the acquired subsidiary or associate at the date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill acquired in business combinations is not amortised. Instead, goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains or losses on disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Management rights (ii)

Property management rights with a finite useful life are carried at acquisition cost less accumulated amortisation and impaired losses. Amortisation is calculated using the straight line method to allocate the cost of the property management right over its useful life. Useful life is determined on an asset by asset basis up to a maximum of 20 years.

(k) Investments and other financial assets

Financial assets are classified as loans and receivables and are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and arise when the Company provide money or services to a debtor with no intention of selling the receivable.

Loans and receivables are carried at amortised cost using the effective interest rate method. Under this method, fees, costs, discounts and premiums directly related to the financial assets are spread over its expected life.

Property, plant & equipment $\blacksquare$

Office fixtures, fittings and operating equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to its acquisition. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the Income Statement during the year in which they are incurred.

Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual values, over their expected useful lives, as follows:

• Motor Vehicles

• Office fixtures, fittings and operating equipment

$4 - 7$ years $5 - 15$ years

Summary of significant accounting policies (continued) $\mathbf{f}$ .

An asset's residual value and useful life is reviewed, and adjusted if appropriate, at each Balance Sheet date.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the Income Statement.

(m) Acquisition of assets

The purchase method of accounting is used to account for all acquisition of assets (including business combinations) regardless of whether equity instruments or other assets are acquired.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Company's share of the net identifiable assets acquired represents goodwill (refer to Note 1(j)). If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the Income Statement, but only after a reassessment of the identification and measurement of net assets acquired.

Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition.

Where settlement of any part of cash consideration is deferred, the amount payable in the future is discounted to its present value as at the date of exchange.

(n) Income tax

The income tax expense and revenue for the vear is the tax payable on the current year's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Current and deferred tax balances attributable to amounts recognised indirectly in equity are also recognised directly in equity.

Tax Consolidation

GPT Management Holdings Limited and its wholly owned controlled entities have decided to implement tax consolidation legislation as of 1 January 2006. The Australian Taxation Office will be notified of this decision in conjunction with the submission of the December 2006 tax returns.

As a consequence, GPT Management Holdings Limited, as the head entity in the tax consolidated group, has recognised amounts receivable or payable under the proposed tax sharing and funding agreement with the tax consolidated entities, corresponding to the tax liabilities and assets assumed from the tax consolidated entities. Expenses and revenues arising under the proposed tax sharing and funding agreement are recognised as a component of income tax expense or revenue in the relevant entity in the tax consolidated group, as each entity continues to account for their own tax amounts as if each were a stand alone taxpayer in its own right.

Assets and liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the group.

(o) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Income Statement over the year of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the consolidated entity has unconditional right to defer settlement of the liability for at least twelve months after the Balance Sheet date.

Summary of significant accounting policies (continued) $\mathbf{1}$ .

(p) Trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the year which are unpaid. The amounts are unsecured and are usually paid within thirty days of recognition.

(q) Foreign currency translation

Functional and presentation currency 仂

Items included in the financial statements of each of the Company entities are measured using the currency of the primary economic environment in which the Company operates (functional currency). The consolidated financial statements are presented in Australian Dollars, which is the Company's functional and presentation currency.

$(ii)$ Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of year-end exchange of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement.

Translation differences of non-monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair value gain or loss.

Non-monetary items that are measured in terms of historical cost are converted using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Exchange differences arising on monetary items that form part of the net investment in a foreign operation are taken to the profit and loss in the Company and against a foreign currency translation reserve on consolidation.

(r) Employee benefits

(i) Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within twelve months of reporting date are recognised in other payables in respect of employees' services up to the reporting date and are measured at the amounts to be expected to be paid when the liabilities are settled. Liabilities for non-accumulated sick leave are recognised when leave is taken and measured at the rates paid or payable.

Long service leave $(ii)$

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expect future wage and salary levels, experience of employee departures and years of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(m) Retirement benefit obligations

All employees of the Company are entitled to benefits on retirement, disability or death from the GPT Group Superannuation Plan. The GPT Group Superannuation Plan has a defined contribution section within its plan. The defined contribution section receives fixed contributions and the Company's legal and constructive obligation is limited to these contributions. The employees of the Company are all members of the defined contribution section of the GPT Group Superannuation Plan.

Contributions to the defined contribution fund are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Profit-sharing and bonus plans (iv)

The Company recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

$(\vee)$ Employee incentive scheme ('EIS')

Security-based compensation benefits are provided to employees via the EIS. Under the terms of the EIS, employees are provided with a non recourse loan which is used to acquire securities on market. The terms of the loans create a synthetic option, the value of which needs to be brought to account pursuant to the term of AASB 2 Share Based Payments. Further, AASB 2 requires the loans and underlying number of securities to be removed from receivables and contributed equity respectively.

The securities are recognised in equity when loans are repaid and the proceeds received allocated to share capital. If loans are forgiven, equity is recognised but not for nil consideration. Therefore the number of securities on issue increases without a corresponding increase in the value of equity.

Summary of significant accounting policies (continued) 1.

The notional fair value of the implied options in respect of these loans is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to securities.

The notional fair value arising from the implied option flowing from the loans at grant date is determined using Black-Scholes option model pricing.

All recourse loans to employees are included in Other Financial Assets. Any repayments of the loans by employees reduce the amount of Other Financial Assets.

(s) Provisions

Provisions for legal claims are recognised when: the Company has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of the obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item in the same class of obligations may be small.

Dividends (t)

Provision is made for the amount of any dividend declared, being appropriately organised and no longer at the discretion of the entity, on or before the end of the year but not distributed at balance date.

(u) Contributed equity

Ordinary shares are classified as equity.

Increase in costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(v) Earnings per share

Basic earnings per share is calculated by dividing the net profit attributable to Shareholders of the Company, by the weighted average number of ordinary shares ('WANOS') outstanding during the year, adjusted for bonus elements in ordinary shares issued during the vear.

As there are no potential ordinary shares or securities, diluted earnings per share is the same as basic earnings per share.

(w) Rounding of amounts

The financial report of the Company has been prepared in accordance with Class Order 98/0100 issued by the Australian Securities & Investments Commission, relating to the 'rounding off' of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest tenth of a million dollars, unless otherwise stated.

(x) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred in not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cashflows are presented on a gross basis. The GST components of cashflows arising from investing or financing activities which are recoverable from, or payable to, the taxation authority are presented as a operating cashflow.

Dividends paid and payable to Shareholders $2.$

No dividends have been paid or declared for the year.

Segment information 3.

(a) Description of segments

Business segments

Corporate office Corporate office includes group treasury, legal and corporate administration services.

Hotel & Tourism

The hotel and tourism portfolio provides investment exposure to the Australian tourism sector and particularly the international visitor market.

Funds under management GPT Funds Management Limited is the Responsible Entity for the GPT's wholesale fund business, earning fund fees on behalf of the consolidated entity.

Joint venture with Babcock & Brown Limited

Comprises property investments carried on in Europe, United States of America and Australia.

Geographical segments

Although the consolidated entity's divisions are managed on a global basis they operate in three main geographical areas:

Australia

The home country of the parent entity is also the main operating entity.

Europe

Comprises operations carried out in Germany, Czech Republic, Poland, Netherlands and France.

United States of America

Comprises an investment in residential style apartments and senior housing market in several states of the US.

Segment information (continued) $\mathbf{3}_{\star}$

(b) Primary reporting format - business segments

	Corporate	Funds	Property	Hotel &	Joint
31 December 2006	Office \$'000	Management \$'000	Management \$'000	Tourism \$'000	Ventures \$'000	Consolidated \$'000
Revenue
Revenue from hotel operations				226,599		226.599
Fund Management fees	23,555	8,676				32,231
Property management fees			15,392			15,392
Development management fees			14,075			14,075
Total revenue	23,555	8,676	29,467	226,599		288,297
Share of after tax profits of equity accounted
entities				184	63,342	63,526
Management costs recharged	3,569	(3,569)
Management recoveries	2,656		4,063			6,719
Interest – cash and loans	4,160	261	2	488		4,911
Other income	3,180					3,180
Total revenue and other income	37,120	5,368	33,532	227,271	63,342	366,633
Expenses
Salaries and wages	25,264	780	23,344	84,070		133,458
Rental expense attributable to hotel operations				60,293		60,293
Cost of sales attributable to hotel operations				39,629		39,629
Property outgoings	769	73	2.736	36,233		39,811
Repairs and maintenance	1,525	51	1,614	8,415		11,605
Advertising and promotion				5.789		5,789
Professional fees	2.659	228	1,395	1,942		6,224
Impairment expense			21,200	9,006	1,479	31,685
Depreciation and amortisation expenses	521		2,976	1,338		4,835
Interest expense	1			3,235		3,236
Costs associated with internalisation	797					797
Management and other expenses	4,298	153	2.988	236		7,675
Total expenses	35,834	1,285	56,253	250,186	1,479	345,037
Segment result	1,286	4.083	(22, 721)	(22, 915)	61,863	21,596
Tax benefit/(expense)	(2,787)	(1,225)	(459)	4,312		(159)
Profit/(loss) for the year	(1, 501)	2,858	(23, 180)	(18, 603)	61,863	21,437
Segment assets	85,355	18,648	31,807	70,315	273,654	479,779
Total assets	85,355	18,648	31,807	70,315	273,654	479,779
Segment liabilities	31,458	5.790	54.988	82,183		174,419
Total liabilities	31,458	5,790	54,988	82,183		174,419
Investments in associates and joint venture
partnership	9,621			6,283	269,753	285.657
Acquisitions of property, plant and equipment	33,864	$\bullet$	38	17,211		51,113
Depreciation and amortisation expense	521	$\overline{a}$	2,976	1,338		4,835

Segment information (continued) $3.$

(b) Primary reporting format - business segments (continued)

31 December 2005	Corporate Office \$'000	Property Management \$'000	Hotel & Tourism \$'000	Joint Ventures \$'000	Consolidated \$'000
Revenue
Revenue from hotel operations			125,340		125,340
Fund Management fees	13,004				13,004
Property management fees		4,387			4,387
Development management fees		4,010			4,010
Total revenue	13,004	8.397	125,340		146,741
Share of after tax profits of equity accounted entities			343	22,461	22,804
Management costs recharged	755	632			1,387
Interest - cash and loans	5,357		213		5,570
Other income	138				138
Total revenue and other income	19,254	9,029	125,896	22,461	176,640
Expenses
Salaries and wages	10,797	6,239	42.217		59,253
Rental expense attributable to hotel operations			31,853		31,853
Cost of sales attributable to hotel operations			20,424		20,424
Property outgoings			18,309		18,309
Repairs and maintenance	1,463	7	4,379		5,849
Advertising and promotion			3,374		3,374
Professional fees	486	845	1,538		2,869
Impairment expense				42,325	42,325
Depreciation and amortisation expenses	141		965		1,106
Interest expense Costs associated with internalisation	1 4,854		961		962
Management and other expenses	6,826	616	703		4,854 8,145
Total expenses	24,568	7,707	124,723	42,325
					199,323
Segment result	(5,314)	1,322	1,173	(19, 864)	(22, 683)
Tax benefit/(expense)	807		(361)		446
Profit/(loss) for the year	(4,507)	1,322	812	(19, 864)	(22, 237)
Segment assets	158,926	$\blacksquare$	63,708	151,969	374,603
Total assets	158,926	$\bullet$	63,708	151,969	374,603
Segment liabilities	26,136	٠	65,822		91,958
Total liabilities	26,136	L.	65,822	$\blacksquare$	91,958
Investments in associates and joint venture partnership			7,637	135,225	142,862
Acquisitions of property, plant and equipment	2,441	$\blacksquare$	9,243	$\blacksquare$	11,684
Depreciation and amortisation expense	141	$\overline{\phantom{a}}$	965		1.106

(c) Secondary reporting format - geographical segments

. .	________ Revenue from operations		Segment assets		Acquisition of property, plant and equipment
	2006	2005	2006	2005	2006	2005
	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000
Australia	303.073	154,179	200.726	222.634	50.442	3.029
Europe	64.491	22.461	268.783	151.969
United States of America	(931)		10.270		671
	366,633	176,640	479.779	374.603	51,113	3.029

3. Segment information (continued)

(d) Notes to and forming part of the segment information

Accounting policies

Segment information is prepared in conformity with the accounting policies of the entity as disclosed in Note 1 and accounting standard AASB 114 Segment Reporting.

Segment revenues, expenses, assets and liabilities are those that are directly altributable to a segment and the relevant 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, property, plant and equipment and other intangible assets, net of related provisions. While most of these assets can be directly attributable to individual segments, the carrying amounts of certain assets used jointly by segments are allocated based on reasonable estimates of usage. Segment liabilities consist primarily of trade creditors and accruals. Segment assets and liabilities do not include income taxes.

		Consolidated	Parent entity
	\$'000	31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005 \$'000	\$'000	\$'000
Expenses 4.
Profit before income tax includes the following specific expenses:
Depreciation and Amortisation
Depreciation of plant and equipment	1,573	669	521	141
Amortisation of management rights	2,972
Amortisation of lease incentives	290	437
	4.835	1.106	521	141
Finance costs - net
Interest and finance charges paid	3,236	962	582	1
	\$	\$	S	£
Remuneration of auditors
Assurance services
Audit services
PricewaterhouseCoopers Australian firm
Audit and review of financial reports and other audit work under
the Corporations Act 2001 Related Practices of PricewaterhouseCoopers Australian Firm	454,484	154,668	176,687	39.623
Including overseas firms
Audit and review of financial reports and other audit work	51,875
Total Remuneration for audit services	506,359	154,668	176,687	39.623
Other Assurance Services
PricewaterhouseCoopers Australian firm
Audit of regulatory returns	24,606	8,140
Accounting advice	65,438		65.438
AIFRS accounting services	90.375		90,375
Due diligence services	20,000		20.000
Related Practices of PricewaterhouseCoopers Australian firm including
overseas firms
Due diligence services	27,036		27,036
Total remuneration for other assurance services	227,455	8.140	202,849
Total remuneration for assurance services	733,814	162,808	379,536	39,623
Taxation services
PricewaterhouseCoopers Australian firm
Expatriate taxation services	83,881	67,200	83,881	67,200
Related Practices of PricewaterhouseCoopers Australian firm including
overseas firms International tax consulting and tax advice on mergers and acquisitions
Total remuneration for taxation services	13,561 97,442	67.200	13,561	67,200
			97,442

J.

	Consolidated		Parent entity
				31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$'000	\$'000	\$'000	\$'000
5. income tax expense
Income tax expense / (benefit) {a}
Current tax	1,564	6,977	3,081	4,317
Deferred tax	(1,405)	(7, 423)	(195)	(5, 187)
	159	(446)	2,886	(870)
Numerical reconciliation of income tax expense to prima facie tax (b) payable
Profit / (loss) before income tax expense	21,596	(22, 683)	8,721	(40, 862)
Tax at the Australian tax rate of 30%	6,479	(6,805)	2,616	(12, 259)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Meals and entertainment	43	399	88	431
Joint Venture related overhead costs	865		865
Underprovided tax ٠	(139)		(36)
Share of after tax profits of equity accounted entities $\overline{a}$	(18,990)	(6,738)
Employee Incentive Security Scheme ٠	286		286
Controlled Foreign Company Attribution Tax $\overline{\phantom{0}}$ Amortisation	1,248 892		1,248
٠ Impairment expense $\overline{\phantom{a}}$				12,698
Dividend from subsidiary	9,475	12,698	2,654 (4, 835)	(1,740)
Income tax expense/(benefit)	159	(446)	2,886	(870)
Deferred tax asset (C)
The balance comprises temporary differences attributable to:
Amounts recognised in the income statement
Employee benefits	4,542	2,921	2,957	2,215
Overhead costs	1,700	661
Other accruals	2,381	3,663	2,366	2,972
Other provisions	709	178	59
Net deferred tax asset	9,332	7,423	5,382	5,187
Movements:
Opening balance at the beginning of the year	7,423		5,187
Credited to the Income Statement	1,839	4,592	125	4,379
Transfer of employee leave balances	70	808	70	808
Acquisition of subsidiary Closing balance at the end of the year	9,332	2,023 7,423	5,382	5,187

	Consolidated		Parent entity
	\$'000	31 Dec 2006 31 Dec 2005 \$'000	31 Dec 2006 31 Dec 2005 \$'000	\$'000
Income tax expense (continued) 5.
Deferred tax liability (d)
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss
Inventories $\blacksquare$	415	116
Depreciation $\leftarrow$	(978)	95
Other receivables $\blacksquare$	1,167	$\blacksquare$
Other $\overline{\phantom{a}}$	111		-
Net deferred tax liability	715	211	$\blacksquare$
Movements:
Opening balance at the beginning of the year	211
Credited /(charged) to the Income Statement	504	(77)
Under-provision in prior year		288
Closing balance at the end of the year	715	211

GPT Management Holdings Limited and its wholly-owned controlled entities have decided to implement the tax consolidation legislation as of 1 January 2006. The accounting policy in relation to this legislation is set out in Note 1(n).

On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, GPT Management Holdings Limited.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate GPT Management Holdings Limited for any current tax payable assumed and are compensated by GPT Management Holdings Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to GPT Management Holdings Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the whollyowned entities' financial statements.

The amounts receivable or payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are recognised as intercompany receivables or payables.

		Consolidated	Parent entity
	\$'000	\$'000	31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005 \$'000	\$'000
6. Cash and cash equivalents
Cash at bank and on hand	24.354	33,992	3,320	14,811

Cash at bank and on hand

Cash at bank is at floating interest rates between 5.50% and 6.25% (Dec 2005 5.25% and 5.50%). These balances are at call. Cash on hand is non interest bearing.

	Consolidated		Parent entity
			31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$'000	\$'000	\$'000	\$'000
Receivables 7.
Trade receivables	26,695	28,288	66	8,634
Provision for doubtful receivables	(675)	(495)	$\blacksquare$
	26,020	27,793	66	8,634
Dividend receivable from subsidiary 1	$\bullet$	٠	21.919	5,800
Other debtors	19,601	5,152	3,655	56
Intercompany receivable	$\blacksquare$	$\blacksquare$	75,370	200
Prepayments	6,207	1,436	1,531	590
	51.828	34,381	102,541	15,280

¹ The dividend receivable from subsidiary in 2005 was overstated in error by \$11,289,000, due to the dividend having not been declared at balance date. The 2005 receivable balance in the balance sheet has been restated with a corresponding reduction in 2005 to dividend from subsidiary in the income statement. There was no impact on the 2005 consolidated financial statements.

Inventories 8.

General supplies - at cost	1.184	985		$\overline{a}$
Food and beverage - at cost	2.279	2.296
Retail - at cost	3.413	3.246		$\overline{\phantom{0}}$
Other - at cost	414	2.562	$\blacksquare$
	7.290	9.089	×.	$\sim$

There have been no write-downs of inventories to net realisable value during the year.

Investments in controlled entities 9.

GPT Funds Management Limited		$\blacksquare$	10,000
GPT International Pty Limited	$\blacksquare$	$\overline{\phantom{a}}$	1.836
GPT Property Management Pty Limited	$\blacksquare$	$\blacksquare$
GPT RE Limited	$\bullet$	$\bullet$	10.000	10,000
GPT Development Pty Limited	$\bullet$	ш	$\sim$
GPT Malta 1 Limited		۰	178.322	127.135
Voyages Hotels & Resorts Pty Limited		-		4.351
		$\cdot$	200.158	141,486

GPT Management Holdings Limited's investment in Voyages Hotels & Resorts Pty Limited has been written off to nil (Dec 05: \$4,351,000). The net assets and liabilities of Voyages Hotels & Resorts Pty Limited are recognised in the consolidated balance sheet.

Parent entity	Consolidated
31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
\$'000 \$'000 \$*000	\$'000

10. Interests in joint ventures

Details of interests in joint ventures are as follows:

Name	Principal Activity		Ownership Interest
		2006	2005
		%	$\frac{1}{2}$
Australian investments 1
DPT Operator Pty Limited	Managing property	50	50	321	345
DPPT Operator Pty Limited	Managing property	50	50
Europe investments 1
BGP Investment S.a.r.l. 2	Leveraged investments	50	50	265,938	151,969
BGP SPV UK Limited 2	Managing property	50	-	2.845
United States investments 1
B&B GPT Alliance 1 LLC 2	Property investment	50		970
B-VII Operations Holding Co LLC 3	Property investment	95	$\sim$	3,901
Total Investment in joint ventures				273,975	152,314

All Joint Ventures have a balance date of 30 June, except for BGP Investment S.a.r.l. and B&B GPT Alliance 1 LLC which have a balance date of 31 December.

¹ Australian investments are incorporated in Australia, BGP Investment S.a.r.I is incorporated in Luxembourg and United States investments are incorporated in the United States of America.

² Joint venture arrangement with Babcock & Brown Limited

The Company has entered into a joint venture arrangement with Babcock & Brown Limited to identify and invest in real estate opportunities which offer superior risk adjusted returns. The joint venture's key activities are acquiring and intensively managing assets which have attractive underlying investment fundamentals, undertaking selected investment and development projects and external property funds management, in both the listed and wholesale markets.

Funding of the joint venture is by way of both ordinary equity and preferred toans to each of the joint venture entities within the joint venture arrangement. The Company has a 50% ordinary equity interest in the above joint venture entities.

³ Joint venture arrangement with Benchmark

The Company has entered into a shared control joint venture arrangement with BE Capital LLC which provides GPT entry into the US senior housing market with the acquisition of a 95% interest in a portfolio of senior housing assets and a 20% interest in the manager of the portfolio, Benchmark Assisted Living, LLC. The portfolio gives the Company access to a growth sector which the Group has been considering for some time, through an established portfolio of stabilised assets and a joint venture relationship with a dominant operator in a growing market for this asset class.

Funding of the joint venture is by way of both ordinary equity and loans.

1. Interests in joint ventures (continued)

	Australia			Europe	United States		Consolidated
	31 Dec 2006 \$000	31 Dec 2005 \$000	31 Dec 2006 \$000	31 Dec 2005 \$000	31 Dec 2006 \$000	31 Dec 2005 \$000	31 Dec 2006 \$000	31 Dec 2005 \$000
(a) GPT's share of results of interests in joint ventures:
Revenue	28	145	208,588	128,335			208,616	128,480
Expenses	62	$\overline{a}$	109,367	74,911	931		110,360	74.911
Profit / (loss) before income tax expense	(34)	145	99,221	53,424	(931)	$\Delta$	98,256	53,569
Income tax expense / (benefit)	(10)	÷,	34,924	30,964		÷	34,914	30,964
Share of net profits / (losses) of interests in joint ventures	(24)	145	64,297	22,460	(931)		63,342	22,605
(b) GPT's movements in carrying amount of interests in joint ventures:
Carrying amount at the beginning of the year	345		151,969				152,314
Investments acquired during the year		200	3,079	169.460	5,935		9.014	169,660
Additions during the year			52,413				52,413
Share of net operating income	(24)	145	33.193	17,089	664	$\overline{a}$	33,833	17,234
Share of fair value adjustments			31,104	5,371	(1, 595)		29,509	5,371
Movements in reserves			(1,496)	2,374	(133)		(1,629)	2,374
Investment Impaired during the year			(1,479)	(42, 325)			(1, 479)	(42, 325)
Carrying amount at the end of the year	321	345	268,783	151,969	4,871		273,975	152,314
GPT's share of aggregate assets and (C) - liabilities of interests in joint ventures:
Cash and cash equivalents	291	756	266,547	93,967	3,942		270,780	94.723
Receivables	66	175	123,800	144,922		$\blacksquare$	123,866	145,097
Investment properties			$-2.697.815$	936,793	8,991		2,706,806	936.793
Total assets	357		931 3,088,162 1,175,682		12,933	$\qquad \qquad \blacksquare$	3,101,452	1,176,613
Other liabilities	36	586	229,989	188,866	459		230,484	189,452
Interest bearing liabilities - GPT	$\ddot{\phantom{0}}$		505.587	301,778	7,603		513,190	301,778
Interest bearing liabilities - external			2,095,623	533,069			2,095,623	533,069
Total liabilities	36		586 2,831,199	1,023,713	8,062	$\omega$	2,839,297	1,024,299
Net assets	321	345	256,963	151,969	4,871	$\overline{\phantom{a}}$	262,155	152,314
(d) GPT's share of interests in joint ventures capital expenditure commitments contracted for
Lease commitments			166,448	27,942			166,448	27,942
Capital commitments		$\blacksquare$	50.973			$\tilde{\phantom{a}}$	50,973
			217,421	27,942	$\blacksquare$	$\overline{\phantom{a}}$	217,421	27,942

36

Notes to the Financial Statements (continued)

					Consolidated	Parent entity
						31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
Investments in associates 11.				\$'000	\$'000	\$'000	\$'000
Details of investments in associates are as follows:
Name	Principal Activity	2006	Ownership Interest 2005
		%	$\%$
Australian investments
Kings Canyon (Watarrka) Resort Trust	Property investment	46	46	6.283	7,637	$\blacksquare$
United States investments
Benchmark Assisted Living, LLC	Property management	20	٠	5,399	٠	$\bullet$
				11,682	7,637	w

The Australian associate is incorporated in Australia with a balance date of 30 June. The US associate is incorporated in the United States of America with a balance date of 31 December.

(a) GPT's share of results of investments in associates

Revenue	5.665	3.236
Expenses
	5.424	2.746
Share of associates' profit before income tax expense	241	490
Share of associates' income tax expense	(57)	(147)
Share of associates' net profit	184	343

(b) GPT's movements in carrying amount of investments in associates

Carrying amount of investments at the beginning of the year	7.637
Investments in associates acquired during the year	5.399	7.294
Devaluation of investment	(1,538)	$\overline{\phantom{a}}$	$\blacksquare$
Share of net profit for the year	184	343
Carrying amount of investments at the end of the year	11.682	7.637

(c) GPT's share of aggregate assets and liabilities of investments in associates

2,624 2.624 2.940
	$\bullet$
	$\blacksquare$
	7,308 425 7,126 14,859 553	1,909 460 8,208 10,577 316

(d) GPT's share of investment in associates' capital expenditure commitments contracted for

Capital commitments	1.700 _______	.

	Consolidated		Parent entity
		31 Dec 2006 31 Dec 2005 31 Dec 2006		31 Dec 2005
	\$'000	\$'000	\$'000	\$'000
12. Other financial assets
Lease incentives	508	989
Loans to employees 1	23,848	$\blacksquare$	22,478
Loan to General Property Trust 2	٠	110,485	۰	110,485
Loan to Malta 1 Limited	×,		126
Unlisted shares in corporations
- Roma Street Operations Pty Limited	1,079		1,079
	25.435	111.474	23,683	110,485

^t Loan to employees

Refer to Note 19 The Long Term Incentive (LTI) Scheme for details of these loans.

² Loan from General Property Trust

The loan provided by General Property Trust had an average floating interest rate of 6.63%.

	Property under construction \$'000	Buildings \$ 000	Computers \$'000	Office fixtures & fittings \$'000	Total \$'000
13. Property, plant and equipment
Consolidated
At 31 December 2005
Cost	÷	$\ddot{\phantom{1}}$	2,997	8,687	11,684
Accumulated depreciation			(155)	(514)	(669)
Net book amount	$\bullet$	$\blacksquare$	2,842	8,173	11,015
Year ended 31 December 2006
Opening net book amount			2,842	8,173	11,015
Additions	31,977	671	2,533	15,932	51,113
Disposals			(895)	(14, 555)	(15, 450)
Depreciation charge	÷		(1,012)	(561)	(1, 573)
Closing carrying value	31,977	671	3,468	8,989	45,105
At 31 December 2006
Cost	31,977	671	4,635	10,064	47,347
Accumulated depreciation			(1,167)	(1,075)	(2, 242)
Net book amount	31,977	671	3,468	8,989	45,105
Parent
At 31 December 2005
Cost	۰	$\overline{ }$	1,357	1,084	2,441
Accumulated depreciation		$\blacksquare$	(105)	(36)	(141)
Net book amount	$\overline{\phantom{a}}$	$\frac{1}{2}$	1,252	1,048	2,300
Year ended 31 December 2006
Opening net book amount			1,252	1,048	2,300
Additions			942	313	1,255
Disposals	$\ddot{\phantom{0}}$			(12)	(12)
Depreciation charge		$\bullet$	(402)	(119)	(521)
Closing carrying value	$\qquad \qquad \blacksquare$	$\blacksquare$	1,792	1,230	3,022
At 31 December 2006
Cost	÷	$\blacksquare$	2,299	1,385	3,684
Accumulated depreciation			(507)	(155)	(662)
Net book amount			1,792	1,230	3,022

	Goodwill 1 \$'000	Management Rights 2 \$'000	Total \$'000
14. Intangibles
Consolidated
At 31 December 2005 Cost ۰ Accumulated amortisation $\ddot{}$ Net book amount	7,278 7,278	$\cdot$	7,278 7,278
Year ended 31 December 2006 Opening net book amount Acquisition of management rights Impairment expense Amortisation charge Closing carrying value	7,278 (7, 278)	51,200 (21, 200) (2,972) 27,028	7,278 51,200 (28, 478) (2, 972) 27,028

¹Goodwill was recognised when Company gained control over Voyages Hotels & Resorts Pty Limited on 30 June 2005. Goodwill was calculated as the difference between the consideration paid to date and the fair value of assets, liabilities and contingent liabilities as at the date of control. Goodwill was impaired as the Voyages Hotels and Resorts is in a net liability position as a result of the fees paid to the trust being greater than its operating income.

² On 31 March 2006, the Company purchased the management rights for the Highpoint Shopping Centre. The management rights include asset, property and development management rights of the Centre, which are being amortised over a period of 7.5 years. The management rights have been impaired as the net cashflow generated by the Company from administering the management rights does not substantiate the cost for which they were acquired. The carrying amount of the management rights has been reduced to its recoverable amount through the recognition of an impairment charge against the intangible. The impairment has been restated at the GPT Group level.

The parent does not have any intangibles.

	Consolidated		Parent entity
	31 Dec 2006 \$'000	\$'000	31 Dec 2005 31 Dec 2006 31 Dec 2005 \$'000	\$'000
15. Payables
Current
Trade payables	34,775	34,191	1,154	535
Accruals	35,975	13,195	27,595	11,873
Deferred consideration	28,360	$\overline{\phantom{a}}$
Other payables	948	$\overline{\phantom{a}}$	341	2,231
Intercompany loan	٠	$\overline{\phantom{a}}$	13.620	2,850
Intercompany payables		۰	4,193
Loan from General Property Trust 1	6.081	$\overline{\phantom{m}}$	6,081
Loan from Babcock & Brown Limited 2	5,800		5,800
	111 939	47.386	58 784	17.480

¹ Loan from General Property Trust

The loan provided by General Property Trust has no fixed term for repayment; it is repayable on demand. As at 31 December 2006, the average floating interest rate on the loan is 7.25%.

² Loan from Babcock & Brown Limited

Monument

The loans provided by Babcock & Brown Limited is repayable on receipt of preferred return from BGP Investment S.a.r.l.

INAIL-CAILEN
Loan from related party	48.000 --------------------------------------	28,420
			-----

The loan provided by General Property Trust to Voyages as working capital facility expires 30 June 2008 at an average interest rate of 8.6%.

		Consolidated			Parent entity
16. Provisions		\$'000	31 Dec 2006 31 Dec 2005 \$000	\$'000	31 Dec 2006 31 Dec 2005 \$'000
Current Employee benefits		6.749
Current tax liability		1,962	7,388 3,604	3,694 2,687	2,895 3,508
Other provisions		947	1,418	949	825
		9,658	12,410	7,330	7,228
Non-current
Employee benefits		4,107	3,531	3,037	2,316
				31 Dec 2006	31 Dec 2005
				Shares	Shares
				\$'000	\$'000
17. Contributed equity
	Issued shares (fully paid) 2,041,530,506 shares (Dec 2005: 2,016,716,610 shares)			306,995	302,508
Movements in ordinary share capital:
				Number of
Date	Details		Note	shares	\$'000
22 April 2005	Proceeds from the issue of shares	(ii)		2,016,716,610	302,508
31 December 2005	Closing shares on issue			2,016,716,610	302,508
8 June 2006	Proceeds from the issue of shares	(iii)		24,813,896	4,487
31 December 2006	Closing shares on issue			2,041,530,506	306.995

(i) Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each unit is entitled to one vote. The issued ordinary shares have no par value as at 31 December 2006.

(ii) Issue of shares

On 6 June 2005, the Trust Unitholders received 15 cents per unit capital distribution of \$302.5 million, referred to as the stapling distribution. Unitholders authorised GPT RE Limited (the new Responsible Entity for the Trust) to apply the stapling distribution to subscribe for shares in the Company of \$302.5 million. For each unit held in the Trust Unitholders received one share in the Company.

(iii) Security purchase plan

On 28 April 2006 GPT invited its Securityholders to subscribe to new additional securities at a 2% discount to the market at an average price of \$4.03 per security. The new securities were issued on 8 June 2006 entitling Securityholders to the interim distribution payable for the quarter to 30 June 2006.

(iv) Employee incentive security scheme

Information relating to the employee incentive security scheme, including details of securities issued under the scheme, is set out in Note 19.

Notes to the Financial Statements (continued)

	Consolidated			Parent entity
	\$'000	31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005 \$'000	\$'000	\$'000
Reserves and accumulated losses 18.
Reserves (a)
Treasury stock reserve	(1,623)		(176)
Employee incentive security scheme reserve	43		43
Foreign currency translation reserve	745 (835)	2,374 2,374	(133)
Movements
Treasury stock reserve
Balance at the beginning of the year
Treasury stock movement arising during the year	(1,623)		(176)
Balance at the end of the year	(1,623)		(176)
Employee incentive security scheme reserve
Balance at the beginning of the year
Purchase of securities on behalf of employees	43		43
Balance at the end of the year	43		43
Foreign currency translation reserve
Balance at the beginning of the year	2,374
Foreign currency translation arising during the year	(1,629)	2,374
Balance at the end of the year	745	2.374
(b) Accumulated losses
Movements in accumulated losses were as follows:
Balance at the beginning of the year	(22, 237)		(39,992)
Profit / (loss) for the year	21,437	(22, 237)	5,835	(39.992)
Balance at the end of the year	(800)	(22.237)	(34,157)	(39,992)

(c) Nature and purpose of reserves

Treasury stock reserve $\theta$

The treasury stock reserve is used to record the issue and repayment of securities under the non recourse scheme of the employee incentive security scheme.

Employee incentive security scheme reserve $(ii)$

The employee incentive security scheme reserve is to recognise the fair value of securities issued.

$(iii)$ Asset revaluation reserve

The asset revaluation reserve is used to record increments and decrements on the revaluation of property, plant and equipment.

(iv) Foreign currency translation reserve

Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation reserve, as described in Note 1(q). The reserve is recognised in profit and loss when the net investment is disposed.

19. Share based payments

Employee incentive security scheme

A scheme under which securities are purchased on-market or to subscribe for the issue of new GPT Securities on behalf of employees for no cash consideration was approved by shareholders at the 2005 annual general meeting. All permanent employees (excluding nonexecutive directors) who are continuously employed by GPT are eligible to participate in the scheme. Employees may elect not to participate in the scheme.

Structure of the Scheme

Under the Scheme, loans are made available to participating employees to fund the acquisition of GPT Securities by Scheme Administrator acting on their behalf. The Scheme Administrator must use the loan proceeds to acquire those GPT Securities on-market or to subscribe for the issue of new GPT Securities. The GPT Securities are acquired on-market at the market price prevailing at the time of acquisition.

When the GPT Securities are issued, the acquisition price is the market value of GPT Securities, being the weighted average of the prices at which GPT Securities were traded on the ASX during the five trading days up to and including the day the GPT Securities are issued.

The scheme operates on two levels, a 'General' scheme for all employees other than certain senior executives and a 'Long Term Incentive' (LTI) scheme where participation is offered to certain Senior Executives.

The General Scheme

Under the General Scheme, employees may participate up to a nominated percentage (being 20%) of their Total Package Value (TPV). TPV includes cash, superannuation, leave loading, other salary sacrifice items and FBT. Where an employee's TPV is increased following a remuneration review, the amount that they may be loaned will increase up to 20% of their new TPV.

The loan made under the Scheme is of no fixed term and is interest free. The interest component is a cost to the business of implementing the Scheme.

The loans are repaid using net distributions from the GPT Securities (deducting amounts required for tax). While the loan remains outstanding, the GPT Securities are held subject to a holding lock and are not able to be transferred or otherwise dealt with.

If an employee elects to withdraw their GPT Securities from the Scheme, the employee is required to pay the loan in full irrespective of the value of the GPT Securities. If the employee leaves they may repay the outstanding loan through their own funds or the sale of the GPT Securities but the loan is non-recourse in the event that the market value of the GPT Securities is less than the outstanding loan amount. If this occurs, employees will not be liable for that outstanding amount. The Board may waive loan amounts in its discretion.

The Long Term Incentive (LTI) Scheme

The Board of GPT, on the recommendation of the Nomination and Remuneration Committee, determines those Senior Executives eligible to participate in the LTI Scheme and, for each participating executive, their maximum potential LTI and loan amount, calculated by reference to a percentage of their TPV having regard to the advice received from external remuneration consultants.

As with the General Scheme, the loan has no fixed term. After deducting amounts for tax on the employee's income, the distributions on the GPT Securities are applied to reduce and repay the loan. While the loan remains outstanding, the GPT Securities will be held subject to a holding lock and are able to be transferred or otherwise dealt with.

Unlike the General Scheme, the loan is not interest free. Interest is calculated on a simple basis on the balance of the loan, 31 December 2006: 5.6%.

Except in defined circumstances, the loan under the LTI Scheme is full recourse. If the employee leaves GPT, the loan and the accumulated cost of providing the loan at that time must be repaid (either by the sale of securities or some other source of funds). In determining any shortfall, profits on each tranche of GPT Securities and associated loans will be offset against losses on other GPT Securities and their associated loans. However, at the discretion of the Board the loan and outstanding interest may be waived in the following circumstances:

• $(i)$ on retirement of the employee;
• death or total permanent disability of the employee; (ii)
• (iii) redundancy without cause of the employee; or
• (iv) takeover.

Notes to the Financial Statements (continued)

19. Share based payments (continued)

Employee incentive security scheme (continued)

Fair value of securities granted

Under the requirements of AASB 2, share based payments loans granted under the General Scheme are accounted for as 'options' to employees because of the non-recourse loan feature. The fair value of the 'options' was calculated as 95.0c per security.

The Monte Carlo pricing model used to calculate fair value takes into account the grant date, security price at grant date, staff turnover rate, voluntary exercise rate, risk free interest rate, dividend yield, impact of dilution and volatility.

	Consolidated
	31 Dec 2006 31 Dec 2005
	Shares	Shares
Securities issued under the Scheme to participating employees
Long Term Incentive Scheme	5,710,332
General Scheme	1,296,815
Total	7,007,147

Each participant was issued with securities on the weighted average market price of \$4.26.

20. Key management personnel

Directors $(a)$

The directors of GPT Management Holdings Limited at any time during or since the end of the year are:

Chairman - Non-executive 0

Peter Joseph (Chairman)

Non-executive directors (ii)

Malcolm Latham lan Martin Brian Norris (Resigned 31 August 2006) Eric Goodwin Ken Moss Elizabeth Nosworthy Anne McDonald (Appointed 2 August 2006)

(iii) Executive director

Nic Lyons

(b) Other key management personnel

In addition to the directors noted above, the following persons were the key management personnel with the greatest authority for the strategic direction and management of the consolidated entity or the most highly remunerated executives during the year:

Name	Position	Employer
Michael O'Brien	Chief Operating Officer	GPT Management Holdings Limited
Kieran Pryke	Chief Financial Officer	GPT Management Holdings Limited
James Coyne	General Counsel and Secretary	GPT Management Holdings Limited
Mark Fookes	General Manager Retail Portfolio	GPT Management Holdings Limited
Neil Tobin	General Manager Joint Venture	GPT Management Holdings Limited
Bruce Morris	Hotels & Tourism Portfolio Manager	GPT Management Holdings Limited
Nicholas Harris	Head of Wholesale	GPT Management Holdings Limited

(c) Compensation of Key Management Personnel

The following table sets out the compensation for key management personnel in aggregate. Refer to the Remuneration Report in the Directors' Report for details of remuneration policy and compensation details by individual.

	Consolidated		Parent entity
		31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$'000	\$'000	\$'000	\$'000
Short term employee benefits	7,601	5.961	7.601	5,961
Post employment benefits	313	392	313	392
Other long-term benefits	4.534	1,886	4.534	1,886
Share based payments		21	$\blacksquare$	21
	12.448	8.260	12.448	8.260

20. Key management personnel (continued)

(d) Equity instrument disclosures relating to Key Management Personnel

The following table sets out the equity holdings for key management personnel in aggregate.

	Balance	Purchases/	Balance	Purchases/	Balance
	1 Jan 2005	(Sales)	31 Dec 2005	(Sales)	31 Dec 2006
Peler Joseph	50,000		50,000		50,000
Eric Goodwin	٠	10,000	10,000	1,241	11,241
Maicolm Latham	13,195	-	13,195		13,195
Ken Moss	25,000	$\overline{\phantom{a}}$	25,000	1,241	26,241
Brian Norris 1	4,097		4,097
Efizabeth Nosworthy	5,000		5,000	1,241	6,241
lan Martin	$\overline{\phantom{a}}$	50,000	50,000	1,241	51,241
Anne McDonald				10,500	10,500
Nic Lyons	٠	50,000	50,000	684,116	734,116
Michael O'Brien	$\blacksquare$			298,476	298,476
James Coyne	$\overline{r}$		$\overline{\phantom{a}}$	135,369	135,369
Kieran Pryke	53	5,000	5,053	246,173	251,226
Neil Tobin	٠	5,000	5,000	225,975	230,975
Mark Fookes	$\overline{\phantom{a}}$	3,500	3,500	248,385	251,885
Bruce Moms	۰		۰	208,738	208,738
Nicholas Harris			٠	190,627	190,627

¹ Brian Norris resigned during the year, so his holdings as at 31 December 2006 is not shown.

(e) Loan to Key Management Personnel

	Balance 1 Jan 2006	Loan made during the year	Interest accrued for the year	Interest not accrued 1	Balance 31 Dec 2006	Highest indebtedness during the year
Nic Lyons	$\bullet$	2,874,997	62.376	35,087	2.820.098	2,874,997
Michael O'Brien	$\overline{\phantom{a}}$	1.233.333	26.758	15,051	1,209,782	1,233,333
James Coyne	۰	568,888	12,343	6.943	558,025	568,888
Kieran Pryke	۰	1.055.554	22,901	12,882	1.035.398	1.055.554
Nell Tobin	$\sim$	944.444	20.491	11.526	926.410	944.444
Mark Fookes	$\blacksquare$	1.033,331	22,419	12.611	1.013.600	1.033.331
Bruce Morris	۰	877.221	19.032	10,706	860,471	877.221
Nicholas Harris	۰	888,887	14,135	7,951	881.834	888.887

All these loans are pursuant to the Employee Incentive Security Scheme (EIS). Refer to Note 19 for details.

(f) Other transactions with key management personnel

There have been no transactions with key management personnel other than those transactions outlined above.

	Consolidated		Parent entity
	31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$'000	\$'000	\$'000	\$'000
21. Commitments

Capital expenditure

Expenditure contracted for at the reporting date but not recognised as liabilities is as follows:

Due within 1 year	171.435	5,580	2.417	2,417
Due between 1 and 5 years	93,277	22.320	5.697	8.114
	264.712	27,900	8.114	10.531 ----------

Operating leases

Estimated aggregate amount of operating lease expenditure agreed or contracted but not provided for in the financial report:

Due between 1 and 5 years Due between 5 years and expiry date of leases	75.249 87.056 203.424	88.035 53.235 179.835	-
Due within 1 year	41.119	38,583

An operating lease commitment of \$50,605,967 relating to a ground lease and hereditary building rights held in the joint venture entity, BGP Investment S.a.r.t. \$28,777,793 relates to a ground lease over four leasehold pro 196 years. \$21,828,174 relates to heritage building rights on three German properties which have duration of 198 years. Amounts payable have been discounted to reflect the current liability.

Joint venture arrangement with Babcock & Brown Limited

Refer to Notes 10 & 11 for details of share of commitments in joint ventures and associates.

22. Subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 1(e):

	Country of
Name of entity	incorporation	Class of shares	Equity holding 1
			2006	2005
			۰,	%
Controlled entities
GPT Funds Management Limited	Australia	Ordinary	100	100
GPT Funds Management 2 Pty Limited	Australia	Ordinary	100	100
GPT International Pty Limited	Australia	Ordinary	100
GPT Development Pty Limited	Australia	Ordinary	100
GPT UK Limited	United Kingdom	Ordinary	100
GPT US Inc. ÷	United States	Ordinary	100
GPTMH BM Investment LLC	United States	Ordinary	100
GPT Malta 1 Limited	Malta	Ordinary	100	100
GPT Malta 2 Limited	Malta	Ordinary	100	100
GPT Europe S.a.r.l. -	Luxembourg	Ordinary	100	100
GPT Europe Finance S.A.	Luxembourg	Ordinary	100
GPT Property Management Pty Limited	Australia	Ordinary	100	100
GPT RE Limited	Australia	Ordinary	100	100
Homemaker Retail Management Pty Limited	Australia	Ordinary	100
Homemaker Property Management Pty Limited	Australia	Ordinary	100
Voyages Hotels & Resorts Pty Limited	Australia	Ordinary.	100	100
Destinations & Voyages Travel Pty Limited	Australia	Ordinary	100	100
Voyages Lodges Pty Limited ×.	Australia	Ordinary	100	100
Brampton Island Pty Limited ٠	Australia	Ordinary	100	100
Lizard Island Pty Limited ۰	Australia	Ordinary	100	100
Wrotham Park Lodge Pty Limited ۰	Australia	Ordinary	100	100
Heron Island Pty Limited ۰	Australia	Ordinary	100	100
Dunk Island Pty Limited ٠	Australia	Ordinary	100	100
Bedarra Hideaway Pty Limited	Australia	Ordinary	100	100
Bedarra Island Pty Limited	Australia	Ordinary	100	100
Voyages Mountain & Marine Pty Limited	Australia	Ordinary	100	100
Silky Oaks Pty Limited	Australia	Ordinary	100	100

¹ The proportion of ownership interest is equal to the proportion of voting power held.

23. Related party transactions

(a) Parent entity

GPT Management Holdings Limited ('the Company') is the ultimate Australian parent entity.

(b) Subsidiaries, joint ventures and associates

Interests in subsidiaries, joint ventures and associates are set out in Notes 9, 10 and 11 respectively. Loans and intercompany receivables are set out in Notes 12 and 15 respectively.

(c) Key management personnel

Key management personnel and their compensation are set out in Note 20. Details of the remuneration policy are contained in the Remuneration Report within the Directors' Report.

Included in the Note 20(a) in other key management personnel are Elizabeth Nosworthy and Ian Martin who are directors of Babcock & Brown Limited, with whom GPT have a joint venture arrangement. The remuneration they received was transacted at arm's length. Refer to the Remuneration Report in the Directors' Report for the compensation details.

(d) Transactions with related parties

	Consolidated		Parent entity
	\$'000	31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005 \$'000	\$'000	\$'000
Transactions with General Property Trust (GPT)
Revenue
Fund management fees received from GPT	23,555	13,003	14,266	10.069
Property management fees received from GPT	15,392	4,388		4,388
Development management fees received from GPT	14,075	4,010		4,010
Interest revenue received from GPT Overhead revenue received from GPT	2,385	5,078	2,385	5,078
	5,058	1,387	995	1,387
Expenses
Cost associated with internalisation advanced to GPT	(11, 253)	(15, 301)
Rent paid to GPT	(61, 577)	(32,092)	(809)	(63)
Interest paid to GPT	(3,236)	(962)
Superannuation contributions
Contributions to superannuation funds on behalf of employees	(7,481)	(3,841)	(1,899)	(849)
Other transactions Loan advanced to GPT
Loan repayments from GPT	110,485	(302, 508) 192,023	110.485	(302, 508)
Loan advanced from GPT	(6,081)		(6,081)	192,023
Employee incentive security scheme payments on behalf of employees	30,195		30,195
Transactions with GPT Wholesale Office Fund (GWOF)
Revenue
Responsible Entity fees received from GWOF	8.676
Directors fees recharged to GWOF	77
Transactions with subsidiaries
Revenue
Overhead revenue received from subsidiary			35,912	2,247
Expenses
Cost associated with internalisation advanced to GPT			(11, 253)	(15, 301)
Other transactions
Loan advanced from subsidiary			11.000	3,000
Loan repayments to subsidiary			(230)	(150)
Loan advanced to subsidiary			79,699
Investment in subsidiary			(63, 023)	(141, 486)

	Consolidated \$'000	\$'000	Parent entity 31 Dec 2006 31 Dec 2005 31 Dec 2006 31 Dec 2005 \$'000	\$'000
23. Related party transactions (continued)
Transactions with related parties (d).
Transactions with joint ventures and associates
Revenue Distributions from joint venture Distributions from associate	159	343
Other transactions Investment in BGP Investment S.a.r.t. Investment in B&B GPT Alliance I LLC Investment in BGP SPV UK Limited Investment in Benchmark Assisted Living, LLC Investment in B-VII Operations Holding Co. LLC	(52, 413) (2,034) (3,079) (5,399) (3,901)	(169, 460)

(e) Terms and conditions

Transactions relating to distributions were on the same terms and conditions that applied to other Securityholders.

The loan receivable/payable from/to the related party is at a floating interest rate which is reset each reporting period, the average rate of interest charged is 7.25% (Dec 2005: 6.63%) with no fixed term for the repayment of the loan between the parties. The loan is repayable on
demand but it is not expected to be recalled. Outstanding balances are unsecured an

24. Reconciliation of profit after income tax to net cash inflow from operating activities

	Consolidated		Parent entity
	31 Dec 2006	31 Dec 2005 31 Dec 2006 31 Dec 2005
	\$'000	\$'000	\$'000	\$,000
Profit / (loss) for the year	21,437	(22, 237)	5,835	(39,992)
Depreciation of property, plant and equipment	4,835	1,104	521	141
Costs associated with internalisation		4,854		4,854
Impairment expense	31,685	42,325	8,848	42,325
Employee incentive security scheme expense	953		861
Share of after tax profits of equity accounted entities	(63, 526)	(22, 461)	۰
Dividend from subsidiary			(16, 119)	(5,800)
Foreign exchange loss		3,180		3,180
Overhead recharges		(1,387)		(1, 387)
Interest on related party loan	(2,385)	(5,077)	(2, 385)	(5,077)
(Increase) / decrease in receivables	(17, 430)	(38,053)	7,478	(6, 535)
Increase in payables	24,115	39,796	17,659	14,481
Net cash (outflow)/inflow from operating activities	(316)	2,044	22.698	6,190

		Consolidated 31 Dec 2006 31 Dec 2005
	25. Earnings per share
{€).	Basic earnings per share	0.01	(0.01)
	Net operating income including book profits divided by weighted average number of shares
	(d) Weighted average number of shares used as the denominator
	Weighted average number of ordinary shares used as the denominator in calculating basic earnings $per share - (thousands)$	2.016.716	2.016.716
	Adjustments for calculation of diluted earnings per share:
	Issued capital
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share - (thousands)		2,030,721	2,016,716

26. Financial risk management

(a) Foreign exchange risk

Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency which is not GPT's functional currency, being Australian dollars. The Company is exposed to foreign exchange risk arising from investments denominated in Euro and US dollars.

(b) Credit risk

The Company has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. Derivative counterparties and cash transactions are limited to high credit quality financial institutions. The Company has policies that limit the amount of credit exposure to any one financial institution.

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding from a related party.

(d) Cash flow and fair value interest rate risk

The Company has related party interest-bearing loan as an asset and liability, interest is charged at a floating interest rate reset to the market each reporting period.

27. Fair value of financial assets and liabilities

The carrying value of assets and liabilities included in the balance sheet approximates the fair value.

28. Contingent assets and liabilities

During the year GPT earned a performance fee of \$4,338 thousand from GPT Wholesale Office Fund (GWOF). An additional potential performance fee of \$9,311 thousand has not been recognised as a receivable on the balance sheet due to uncertainties surrounding timing of the receipt and its valuation.

There are no other contingencies at balance sheet date.

Directors' Declaration

In the directors' opinion:

• (a) the financial statements and notes set out on pages 18 to 51 are in accordance with the Corporations Act 2001, including:
• complying with the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting $(1)$ requirements; and
• $(ii)$ giving a true and fair view of the Company's and consolidated entity's financial position as at 31 December 2006 and of its performance, as represented by the results of their operations, changes in equity and their cashflows, for the financial year ended on that date; and
• (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and
• (c) the audited remuneration disclosures set out on pages 6 to 14 of the Directors' Report comply with Accounting Standards AASB 124 Related Party Disclosures and Class order 06/50 issued by the Australian Securities and Investments Commission.

The directors have been given the declarations by the chief executive officer and chief financial officer required by Section 295A of the Corporations Act 2001.

This declaration is made in accordance with the resolution of the directors.

senh

Peter Joséph Chairman

GPT Management Holdings Limited

Sydney 21 February 2007

Nic Lyons Executive Dire

Independent audit report to the members of GPT Management Holdings Limited

PricewaterhouseCoopers ABN 52 780 433 757

Darling Park Tower 2 201 Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia www.pwc.com/au Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999

Matters relating to the electronic presentation of the audited financial report

This audit report relates to the financial report and remuneration disclosures of GPT Management Holdings Limited and the GPT Management Holdings Group (defined below) for the financial year ended 31 December 2006 included on the GPT Group's web site. The directors of GPT Management Holdings Limited are responsible for the integrity of the GPT Group web site. We have not been engaged to report on the integrity of this web site. The audit report refers only to the financial report and remuneration disclosures identified below. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report or the remuneration disclosures. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report and remuneration disclosures to confirm the information included in the audited financial report and remuneration disclosures presented on this web site.

Audit opinion

In our opinion:

• 1. the financial report of GPT Management Holdings Limited:
• gives a true and fair view, as required by the Corporations Act 2001 in Australia, of the financial position of GPT Management Holdings Limited and the GPT Management Holdings Group (defined below) as at 31 December 2006, and of their performance for the year ended on that date, and
• is presented in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia, and the Corporations Regulations 2001, and
• 1. the remunerations disclosures that are contained in pages 6 to 14 of the directors' report comply with Accounting Standard AASB124 Related Party Disclosures (AASB124) and the Corporations Regulations 2001.

This opinion must be read in conjunction with the rest of our audit report.

Scope

The financial report, audited remunerations disclosures and directors' responsibility

The financial report comprises the balance sheet, income statement, cash flow statements, statement of changes in equity, accompanying notes to the financial statements, and the directors'

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declaration for GPT Management Holdings Limited (the company) and the GPT Management Holdings Group (the consolidated entity), for the year ended 31 December 2006. The consolidated entity comprises both the company and the entities it controlled during that year.

The company has disclosed information about the remuneration of directors and executives (remuneration disclosures) as required by AASB124, under the heading "remuneration report" on pages 6 to 14 of the directors' report, as permitted by the Corporations Regulations 2001.

The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report. The directors are also responsible for the remuneration disclosures contained in the directors' report.

Audit approach

We conducted an independent audit in order to express an opinion to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance as to whether the financial report is free of material misstatement and the remuneration disclosures comply with AASB124 and the Corporations Regulations 2001. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected. For further explanation of an audit, visit our website http://www.pwc.com/au/financialstatementaudit.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company and the consolidated entity's financial position, and of their performance as represented by the results of their operations, changes in equity and cash flows. We also performed procedures to assess whether the remuneration disclosures comply with AASB124 and the Corporations Regulations 2001.

We formed our audit opinion on the basis of these procedures, which included:

• examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report and remuneration disclosures, and
• assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Arienthoundosfers

PricewaterhouseCoopers

eott

DH Armstrong Partner

Sydney 21 February 2007