GPT GROUP - Annual Report 2007 | FinancialReports.eu

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2007 ANNUAL REPORT
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2 CHAIRMAN’S REPORT
4 OPERATIONAL HIGHLIGHTS
6 YEAR IN REVIEW
11 OWNERSHIP
12 AUSTRALIAN RETAIL
14 AUSTRALIAN OFFICE
16 AUSTRALIAN HOTEL/TOURISM
18 AUSTRALIAN INDUSTRIAL/BUSINESS PARK
20 US SENIORS HOUSING
22 JOINT VENTURE
24 FUNDS MANAGEMENT
28 DEVELOPMENT
31 INVESTOR RELATIONS
32 CORPORATE RESPONSIBILITY
36 CORPORATE GOVERNANCE
46 FINANCIAL REPORTS
47 THE GPT GROUP
- DIRECTORS’ REPORT
- FINANCIAL REPORT
163 GPT MANAGEMENT HOLDINGS
- DIRECTORS’ REPORT
- FINANCIAL REPORT

208 SUPPLEMENTARY INFORMATION 211 DIRECTORY

Melbourne Central, VIC

Great places to...

CHaIrMaN’S RepORT

ver the last year, GPT has continued to develop and Obuild upon the strong platform that we established, following internalisation of management in 2005. Since we became an independent entity, we have made signifi cant progress in our goal of achieving greater diversity and growth, assisted by the new Group structure and its expanded strategic direction.

The GPT Group remains strong, resilient, and opportunistic, despite signifi cant downward price movements for the listed property trust sector in Australia, and globally. While GPT’s size, diversity and strong balance sheet are great benefi ts, our people and their commitment to, and passion for, the wellbeing of GPT, are our greatest strength.

a distribution of 28.9 cents per security was delivered in 2007, providing growth of 5.1% on the 2006 calendar year and at the upper end of expectations for growth of 4-5%.

A distribution of 28.9 cents per security was delivered in 2007, providing growth of 5.1% on the 2006 calendar year and at the upper end of expectations for growth of 4-5%.

The dramatic changes in global credit markets that unfolded in the second half of 2007, as well as increased uncertainty in some real estate markets, has delivered a more challenging environment. In light of these changes, GPT has undertaken a full review of its operations to determine the most appropriate strate gies to be adopted going forward. W here our strategies are appropria te in the new environment we will ma intain them. Where changes are requ ired, we will adapt. As always, the int erest of our Securityholders is param ount.

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Strategically, we continued to

expand the Group’s business model, building on our key areas of focus. Our Joint Venture continued to evolve to meet our needs, with a defi ned term of fi ve years established, a new fee structure and a staged return of a portion of GPT’s preferred capital. This evolution is continuing, consistent with changing market dynamics. The US Seniors Housing portfolio acquired at the end of 2006 was expanded as our confi dence grew in the sector and especially with our US partners, Benchmark, whom we hold in very high regard. We rapidly gained scale in the funds management business, creating a second Australian wholesale fund and acquiring two platforms in Europe. We have a strong belief in our funds management model and our ability to grow it substantially.

In expanding into new markets we have been conscious to take a cautious approach, acquiring our own platforms to achieve increasing scale and diversify our exposure, without taking undue risk.

We have balanced our growth in new areas with increasing exposure to the Australian market, through our wholesale funds management business and an expanded development program to generate further quality investment exposures. Our Australian investments remain the vast majority of our real estate exposures and we have balanced our growth with our traditional approach to risk management.

2 THe GpT GROUp aNNUaL rePort 2007

We take pride in a strong governance culture and prudent risk management. We made further progress during 2007 on our long term Corporate Responsibility strategy with the establishment of a main Board Committee, closely associated with the Corporate Responsibility Steering Group.

In this regard our business focus at all levels is on, one; sustainable and environmentally responsible management and development of our assets, two; a commitment to good corporate citizenship and, three; an ethical and socially responsible organisation. This approach is refl ected in all employees’ performance assessments. Our 2007 Corporate Responsibility Report is a big step forward in our reporting in this area and contains details of our strategy, achievements and future plans. It can be found in full on our website at www.gpt.com.au.

Our focus on retaining and recruiting people aligned with our culture of performance, collaboration and professionalism has continued in line with our growth aspirations. As I have said, our people remain our greatest strength and a key driver of future outcomes. They have worked very hard to ensure GPT’s growth targets have been delivered steadily, and prudently.

With a strong and resolute focus on continuing to deliver on our strategy and fi nancial objectives, much was achieved throughout 2007. It was a remarkable year in many respects.

While the environment we are operating in began to change dramatically during the second half of 2007, we believe prudent capital management, strong governance and our diversifi ed business model will continue to provide stable income for investors.

The current period of volatile markets is disturbing and likely to continue for some time. Everyone is affected to a greater or lesser degree. This volatility has arisen after a long period of exceptionally strong performance and good times. GPT is big, it is diverse and has high quality assets and management. The well established Australian business forms a stable income base and we have modest exposure to selected international markets, where we are well positioned to access opportunities.

range of balance sheet management avenues available, we have the potential to take advantage of the opportunities that changing market conditions may generate.

I look forward to reporting to you on our progress and outlook at the GPT Group’s Annual General Meeting, to be held in Sydney on 1 May 2008.

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peter Joseph Chairman

Below: Peter Joseph, Chairman

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THe GpT GROUp aNNUaL rePort 2007

oPeratIoNaL HIGHlIGHTs

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≥16.4%
totaL aSSetS
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$million
14,000
13,000
12,000
11,000
10,000
9,000
8,000
7,000
03 04 05 06 07
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With exposure to the major australian property sectors and selected international markets, GPt offers a diversifi ed real estate exposure combined with prudent management of risk and solid capital management.

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≥8.3%
reaLISeD oPeratING INCoMe
$million
650
600
550
500
450
400
350
03 04 05 06 07
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≥5.1%
DIStrIBUtIoN Per SeCUrItY
Cents
30
25
20
15
10
5
0
03 04 05 06 07
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THe GpT GROUp aNNUaL rePort 2007

FIVe Year PerForMaNCe SUMMarY

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YeaR eNDeD 31 DeceMBeR 2003 2004 2005 2006 2007
Total assets M $7,695.1 $9,097.0 $10,431.7 $12,001.9 $13,966.9
Total liabilities M $2,379.6 $3,003.6 $4,058.4 $4,559.8 $5,671.5
Net assets M $5,315.5 $6,093.4 $6,373.3 $7,442.1 $8,295.4
Realised operating income M $420.2 $442.0 $492.3 $558.6 $605.1
Securities in issue (‘000) 1,949,717 2,016,717 2,016,717 2,041,531 2,099,614
Distribution per security cents 21.2 22.0 24.4 27.5 28.9
Distribution per security growth 3.9% 3.8% 10.9% 12.7% 5.1%
Borrowings as % of total assets 28% 30% 35% 36% 36%
Underlying earnings per security cents 21.6 21.3 24.4 27.5 29.4
Underlying earnings per 3.1% 3.1% 14.5% 12.7% 7.0%
security growth
Net asset backing per security $2.73 $3.02 $3.16 $3.60 $3.86
Closing market price at 31 December $2.99 $3.74 $4.10 $5.60 $4.04
GPT one year return 8.2% 33.6% 16.7% 45.2% -23.4%
LPT ASX one year return 8.8% 32.0% 12.5% 34.0% -8.4%
All Ordinaries one year return 15.9% 27.6% 21.1% 25.0% 18.0%
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GPt Security Price vs LPt Index
GPT Security Price (Dollars) Index
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THe GpT GROUp aNNUaL rePort 2007

Year IN ReVIeW

progress in expanding the OGroup’s business model and delivering on the strategic and fi nancial objectives for the business.

restructure undertaken in June 2005 was to enhance distribution growth without dramatically changing the risk profi le and stability of earnings for Securityholders.

Our strategy focussed on increasing GPT’s diversity and expanding the business model to incorporate greater diversity of earnings, through operations which complement each other and leverage the Group’s skills and expertise. The business is structured around three core activities – ownership, management and development of real estate. In pursuing this model GPT has not only expanded its operations in Australia, but has established a presence in selected offshore markets. In entering these markets we have been conscious to take a prudent approach, building platforms to achieve increasing scale and diversify our exposure without taking on undue risk.

In 2007 we built from the signifi cantly higher distribution base established in 2005 and 2006, with a 5.1% increase in distributions and earnings growth of 7%.

strength and expansion of GPT’s Australian business, an increased contribution from the Group’s Joint Venture with Babcock & Brown and a contribution from newly established activities. These activities include:

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the establishment of a wholesale funds management platform, which was expanded to Europe in 2007;
investment in the senior s housing sector in the US; and
increasing exposure to development in Australia.

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These opportunities leverage GPT’s core property and funds management skills, diversify earnings sources, enhance return on capital, assist balance sheet management and position GPT to continue to deliver secure earnings for investors.

Together, these activities have transformed GPT’s business model and resulted in a more diverse business mix and a broader range of income streams, capital sources and growth options both locally and internationally.

Financial performance

Over 2007 we delivered strong fi nancial results, with increases in underlying operating income, earnings and distributions for the year. This continued the trend established since internalisation, with compound distribution growth of 9.4% per annum since 2004 demonstrating enhanced returns for investors.

Realised Operating Income

GPT’s realised operating income for the year to December 2007 was up 8.3% on the 2006 year, as a result of income growth from GPT’s Australian real estate investments, and income from new initiatives including the Group’s US Seniors Housing portfolio and funds management business, the Joint Venture with Babcock & Brown (JV) and the Group’s development activities.

6 THe GpT GROUp aNNUaL rePort 2007

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DIVerSIFIeD aSSet BaSe*

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Australian Retail 41% Australian Office 24% Joint Venture Equity 15% Australian Hotel/Tourism 7% Australian Industrial/ Business Park 6% Funds Management 5% US Seniors Housing 2%

Wholesale Shopping Centre Fund, respectively. Joint Venture equity and US Seniors Housing equals contributed equity and not the value of assets owned.

DIVerSItY oF INCoMe*

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Australian Retail 38% Australian Office 24% Joint Venture 19% Australian Hotel/Tourism 9% Australian Industrial/ Business Park 6% US Seniors Housing 3% Funds Management 1%

Wholesale Shopping Centre Fund, respectively.

Earnings per security, of 29.4 cents, refl ected a higher level of growth, at 7%, due to the changing business mix and the inclusion of development profi ts from the Australian business and trading profi ts from the Joint Venture. In line with the Group’s policy to distribute large development profi ts across earnings periods, $8.1 million in earnings were retained, resulting in a payout ratio of 98.7%.

earnings and Distributions

The distribution for 2007, of 28.9 cents per security, represented a 5.1% increase on the 2006 calendar year, at the upper end of targeted growth of 4-5%, and was delivered off the signifi cantly higher growth in distributions delivered in 2005 and 2006 of 10.9% and 12.7% respectively.

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Below: 530 Collins Street, VIC
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THe GpT GROUp aNNUaL rePort 2007

Year IN ReVIeW

Total Return

GPT’s accumulation return for the 12 months ended 31 December 2007 was -23.4% (compared to the S&P/ ASX Property 200 Accumulation Index return of -8.4%). This return refl ected a signifi cant negative price movement at the end of the year, with GPT’s price closing at $4.04 following exceptionally strong performance in 2006 during which the Group delivered a total return of 45.2% and strong price appreciation. Over the past 5 years the Group has delivered a total return per annum of 13.4%.

At the closing price of $4.04 on 31 December 2007, GPT’s distribution yield (based on the 2007 distribution of 28.9 cps) was 7.2%.

Net Tangible assets (NTa)

NTA per security increased to $3.86, an increase of 26 cents on the 31 December 2006 NTA of $3.60. The allocation between the Trust Unit and GPT Management Holdings Limited Share is $3.77 and $0.09 respectively.

capital Management

Consistent with our approach to maintain funding fl exibility and actively manage the Group’s capital and funding requirements, GPT concluded 2007 with borrowings of $4,995.0 billion, or 36.3% of total assets. This level is within GPT’s policy range for gearing of 30–40%. “Look through” gearing (which consolidates the exposure to debt in the Joint Venture with Babcock & Brown and other investments which are not included on GPT’s balance sheet), at 46.8%, is also below the policy range of up to 50%.

The Group’s access to a range of capital sources was enhanced by the growth of the funds management platform, both domestically and in Europe, and the expansion of GPT’s range of capital partners.

The Group’s balance sheet was strengthened and exposure to refi nancing needs reduced with the successful completion of a EUR€2 billion funding facility in October 2007. The Facility attracted a range of lenders and increased the weighted average term to expiry of GPT’s debt. It was completed with an average margin of only 2.4 basis points above facilities already in place. These terms represented an excellent outcome in a more challenging global credit market and demonstrated the strength of GPT’s relationship with the broader banking community and strong fi nancial standing of the Group.

The Group also introduced a Distribution Reinvestment Plan (DRP) in the fi rst half of 2007. The DRP raised $165.5 million in the twelve months to December 2007 through the issue of 35.8 million Securities. A further $102.1 million was raised through the underwriting of this facility (for the September 2007 quarter).

At 31 December 2007, GPT’s headline debt had a weighted average term to expiry of 3.7 years, with only 16% of existing debt expiring in 2008. GPT’s ‘look through’ gearing is similarly well placed, with a weighted average term to expiry of 4.8 years.

GPT is substantially protected from interest rate volatility over the near term with 97% of debt hedged for an average of 4 years at an average rate of 4.53%.

At 31 December 2007 GPT had $2,823.6 million in undrawn facilities, ensuring the Group is well placed to continue to fund its operations in a more constrained credit environment.

We maintain an investment grade credit rating of BBB+ (Standard & Poor’s) and remain committed to an active fi nancing strategy to maximise the strength of the balance sheet and manage risk, particularly interest rate exposure.

Delivering on strategy

During 2007 GPT continued to evolve the Group’s business mix and build on the business platform established since internalisation in 2005. The expansion of the funds management platform, growth in the US Seniors Housing Portfolio, the expansion of the Group’s development pipeline in Australia and the delivery of the Group’s fi rst development profi ts were key achievements.

Ownership

We continued to grow our exposure to Australian assets through our Australian funds and the ownership of a quality diversifi ed portfolio. GPT’s Australian real estate investments continue to represent the vast majority of the Group’s investments, with an investment of $10.1 billion at 31 December 2007 (including GPT’s co-investment in the GPT Wholesale Offi ce Fund and the GPT Wholesale Shopping Centre Fund). This provides investors with signifi cant exposure to the strong Australian market and stability to GPT’s income. Growth was achieved through a range of acquisitions and the completion of developments which will deliver returns during 2008.

We entered the Us seniors housing sector in December 2006 with an investment in a portfolio of 19 assets located in the New England region of the United States and an interest in the manager of the Portfolio, Benchmark Assisted Living. In October 2007 we acquired an interest in an additional 15 assets which meet our return requirements, providing exposure to a portfolio of 34 assets in a market which has solid underlying fundamentals.

THe GpT GROUp aNNUaL rePort 2007

Our Joint Venture with Babcock & Brown met its target to deliver a 9.7% return on equity for GPT over 2007, delivering a 9.9% return on equity in the period. Recognising, however, the dramatic changes in debt and capital markets over the last six months, GPT and Babcock & Brown are now exploring ways to accelerate the redemption of GPT’s capital and ensure GPT’s future participation in the Joint Venture will carry less risk.

Management

The establishment of a funds management platform in Australia with the launch of the GPT Wholesale Offi ce Fund in 2006 was a major achievement and formed a strong base for growth as our second Australian wholesale fund, the GPT Wholesale Shopping Centre Fund, was successfully launched in March 2007. Both funds were grown with additional acquisitions during 2007, creating a business with $5.1 billion in assets under management.

This business was complemented by our expansion into the European market through the acquisition of GPT Halverton and an 80% interest in Hamburg Trust in the second half of the year. These businesses provide access to local expertise with experienced teams in place and established relationships. Both businesses launched funds in the second half of the year and are well positioned to grow, with access to real estate product and the ability to attract quality investors.

With over $8.5 billion in assets under management across Australia and Europe and appropriate resources in place, we have the ability to continue to grow the Group’s funds management income as existing vehicles expand and new funds are launched, and to leverage the relationships we have with investors in each market.

Development

Developments and expansions which will improve returns from existing assets and increase our portfolio’s diversity and income continued to be a major focus during 2007 as we completed developments in the Retail, Offi ce and Industrial/ Business Park Portfolios, and signifi cantly expanded our Australian development program.

Development activities complement both the investment portfolio and the funds management business, providing quality investment product and enhancing returns from existing assets and Funds, while also providing GPT with the ability to derive development profi ts on the sale of completed developments to the Group’s managed funds.

In December GPT agreed to sell workplace[6] to the GPT Wholesale Offi ce Fund. The sale, which will be fi nalised on completion of the development, realises the Group’s fi rst development profi ts, of $21.4 million (post tax and consolidation), while providing a quality asset and further diversity to the GPT Wholesale Offi ce Fund in which GPT investors maintain an interest.

Overall, current and potential projects have an estimated cost of approximately $4.9 billion in the medium term, demonstrating GPT’s ability to continue to grow its exposure to the Australian market through both ownership in quality real estate and funds management income.

Below: One One One Eagle Street, Brisbane, QLD (artist’s impression)

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THe GpT GROUp aNNUaL rePort 2007

Year IN ReVIeW

Building a strong Team

The results achieved over 2007 refl ect the commitment and calibre of a team which has been strategically expanded in line with GPT’s growth, building operational capacity and introducing additional skills and experience. Refl ecting a growing offshore presence, we now have staff in the US and Europe, who work closely with our Australian team, leveraging knowledge and skills between markets.

The level of alignment of employees with investor interests has been a key driver of our approach and the success of the Employee Incentive Scheme implemented in June 2006 has fi rmly established an ownership culture among GPT employees. Importantly, employees are aligned with and committed to the Group’s objectives. The 2006/07 Hewitts Best Employers in Australia/New Zealand study indicated that we have an extremely high level of engagement from employees, with a high 97% of respondents supporting GPT’s goals and objectives.

Disclosure and

communication

We are committed to maintaining a high level of disclosure and consistently review all methods of communication to ensure investors are kept informed of all aspects of their investment. During 2007 we surveyed investors about our communication methods and have, as a result, introduced a number of changes to our communication program. These include the introduction of a new summary of our fi nancial results, the launch of a new website and the introduction of a web-based Corporate Responsibility Report.

Outlook

Since GPT’s internalisation we have created an independent and vibrant business which has delivered stronger growth, with compound distribution growth since 2004 of 9.4% per annum signifi cantly enhancing returns to investors.

Over 2007 we continued to build on our platform and to access growth, expanding both domestically and into selected offshore markets. GPT now has a strong business model focussed around our core skills of asset, funds, property and development management with a presence in Australia, the US and Europe. This platform provides a higher level of diversity and the capacity to maintain income throughout market cycles, positioning GPT to continue to deliver stable returns to investors as the business consolidates initiatives taken over the last two and a half years.

Conscious always of risk we have grown our platform in a measured way – building on our Australian operations and experience to increase our exposure to what is a mature and stable real estate market, while accessing opportunities in new markets through relatively modest investments in smaller platforms which can achieve scale and diversity in a measured way without undue risk.

The maintenance of prudent risk management practices and solid fi nancial metrics, combined with our signifi cant exposure to the Australian market should stand us in good stead in a more volatile market globally.

Our conservative approach to gearing and active management of the Group’s capital requirements has ensured that we enter 2008 with a balance sheet which is well positioned, with minimal exposure to refi nancing risk in what is now a more challenging credit market. This positions us well to continue to fund our existing requirements and to access future opportunities.

environment, and a conservative stance in relation to the realisation of trading profi ts from the Joint Venture in 2008, we expect to maintain distributions at 28.9 cents per security in 2008.

In closing we would like to thank our team for the contribution they have made to our progress in 2007 and their commitment as we enter 2008 with a consciousness of the challenges and potential opportunities represented by a changing market.

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Nic lyons Michael O’Brien Chief Chief Executive Offi cer Operating Offi cer

In the remainder of this Report, you will fi nd information on:

our Investment Portfolio (pages 11 to 23);
our Funds Management Business (pages 24 to 27);
our Development opportunities (pages 28 to 30);
our Investor Relations activities (page 31);
our approach to Corporate Responsibility (pages 32 to 35); and
GPT’s corporate governance practices (page 36 to 45).

THe GpT GROUp aNNUaL rePort 2007

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oWNerSHIP

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Melbourne Central, VIC
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GpT’s Investment portfolio remains the Group’s largest investment, providing investors with exposure to the Group’s traditional investment market of australia, and more recently exposure to assets in selected international markets. This portfolio gives investors access to a diverse income stream derived from quality real estate held on the Group’s balance sheet and through co-investments in GpT’s managed funds.

The Group’s australian Investment portfolio, which includes interests in assets with a value of over $10.1 billion, has been built over more than 35 years. Through the Group’s own investments and an interest in the australian wholesale funds, investors have exposure to quality australian real estate, including premium and a-Grade offi ce buildings in the major cBD markets; some of australia’s most productive shopping centres; hotels and resorts located in unique and attractive tourism destinations; and a diverse portfolio of industrial and business park assets.

The Investment portfolio was expanded in 2006 to include an investment in the seniors housing market in the Us. The evolution of the portfolio into this market achieved the Group’s desire to gain exposure to the retirement living sector, a sector identifi ed as attractive due to favourable demographics of an ageing population with forecast demand growth.

Further exposure to real estate investments in the Us and europe is through the Group’s Joint Venture with Babcock and Brown, which has $7.1 billion invested predominantly in retail, residential, offi ce and industrial real estate.

With access to a range of sectors and markets, the Investment portfolio provides diversity of income and a broad range of investment opportunities.

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aUStraLIaN retaIL pORTFOlIO

Great places to VIsIT

Above: Rouse Hill Town Centre, NSW

GPT’s Australian Retail Portfolio consists of interests in 18 shopping centres and eight Homemaker City centres. As one of Australia’s largest owners, managers and developers of quality retail space, our team of retail specialists is dedicated to maximising returns through both day-to-day management and ongoing development. The retail skills and experience applied to GPT’s retail assets, from research through to retail management, design and construction, contribute to a process which is focused on managing retail centres to optimise sales performance and investor returns.

totaL SaLeS $5.5 BIllION

oVer 60.6 MIllION aNNUaL CUStoMer VISItS

Net reVaLUatIoN $246.8 MIllION

Note: Includes GPt and GWSCF assets, excludes Norton Plaza and Homemaker City centres.

Following the launch of the GPT Wholesale Shopping Centre Fund (GWSCF) in March 2007, GPT’s investment in the retail sector includes an $817 million co-investment in GWSCF. GPT’s retail team undertakes asset management for the GPT and GWSCF owned Portfolios.

In managing our assets, we focus on working in partnership with all stakeholders to ensure that our assets meet the needs and aspirations of our visitors – both now and in the future. Both day-to-day management activities and expansion and development are underpinned by a solid understanding of the needs of all stakeholders and contribute to the maintenance of sustainable assets.

Managing for performance

strong operating results from the assets and the benefi t of improved returns generated by acquisition and redevelopment.

The Portfolio has solid operating metrics as shown in the table below.

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Total centre moving annual turnover (MAT) ($sqm) $6,512
Comparable centre MAT growth 4.5%
Specialty MAT ($sqm) $8,779
Comparable specialty MAT growth 4.0%
Specialty occupancy costs 16.2%
Occupancy over 99%
Outstanding debt Less than 0.25% of
annual revenue
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THe GpT GROUp aNNUaL rePort 2007

$5.3 BIllION INVeStMeNt

The continued focus on energy, waste and water initiatives to drive both operating and environmental effi ciencies resulted in reductions in usage across the Portfolio, which continues to target increased effi ciencies through the operating centres and to introduce new technologies, often in conjunction with new developments such as Rouse Hill Town Centre. More information on these activities can be found in the Corporate Responsibility section of the Group’s website.

expanding GpT’s Retail Business

The GPT Wholesale Shopping Centre Fund (GWSCF) was established in March 2007, with interests in eight Australian retail assets (located in NSW and Victoria) with a value of $1.9 billion.

The establishment of the Fund was consistent with GPT’s stated strategy to grow its funds management business and meet the increasing demand from institutional investors for direct property exposure to quality real estate assets. GPT maintains an interest in the portfolio through its investment in the Fund and provides a range of services to the Fund, including fund development and property management.

Since inception, the Fund’s Portfolio has grown with the acquisition of Norton Plaza and the Berkelouw Complex in Sydney’s inner west and now has a value of $2.1 billion.

GPT’s Portfolio was also expanded with the completion of Rouse Hill Town Centre, a major new retail, leisure and community development in northwest Sydney. The development, which will add 65,000 sqm of newly created space to the Portfolio and sets new standards in sustainability, was completed in March 2008.

Outlook

In addition to progressing developments across the Portfolio, we will continue our intensive approach to the management of each asset over 2008, leveraging the benefi ts of:

a robust research process focussed on understanding each centre’s trade area;
a centralised leasing team focussed on ensuring occupancy is maximised;
from energy, waste and water saving initiatives across the Portfolio; and
the implementation of new marketing initiatives and the re-launch of customer focussed websites across the centres to enhance visitation.

The outlook for retail sales in 2008 is positive, with expectations that consumer demand will remain underpinned by high employment and a robust economy. The benefi ts of intensive management and proactive ongoing development will contribute to further income growth.

1.2 MIllION SQM oF HoMeMaKer aND retaIL SPaCe

Below: Melbourne Central, VIC

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THe GpT GROUp aNNUaL rePort 2007

aUStraLIaN oFFICe pORTFOlIO

Great places to WORK

Above: Darling Park, Sydney, NSW

aVeraGe WeIGHteD LeaSe eXPIrY 6 YeaRs (BY area)

566,000 sQM oF QUaLItY oFFICe SPaCe

98.7% SPaCe CoMMItteD (BY area)

Net reVaLUatIoN $460.8 MIllION

Note: Includes GPt and GWoF assets.

managed by GPT and in which GPT investors have an interest is one of the largest in Australia. Consisting of interests in 20 assets, the Portfolio comprises over 566,000 sqm of quality offi ce space, has a signifi cant weighting to Sydney and Melbourne (Australia’s largest offi ce markets), and derives income from a diverse range of Government and corporate tenants.

sector includes a $1,060.5 million investment in the GPT Wholesale Offi ce Fund (GWOF).

management for the GPT and GWOF owned Portfolios and works closely with property managers Jones Lang LaSalle and Dexus in the day-to-day operations of the individual assets to ensure that operating effi ciencies and property returns are maximised. The team is also responsible for maximising long-term investment performance through leasing strategies, asset improvements and Portfolio remixing.

Managing for performance

Solid performance was achieved over 2007, with income up for the year to 31 December 2007, as a result of improved returns from a number of assets due to additional leasing and the benefi t of a generally stronger offi ce market.

A strong focus on leasing resulted in committed space across the GPT managed Portfolio increasing to 98.7%. The Portfolio has retained a long average lease term of six years, and has limited exposure to expiry risk in any one year with the ability to benefi t from market rent reviews over 30% of the Portfolio (by area) in 2008. A total of 124,500 sqm was leased in 2007, maintaining above market occupancy, with the Portfolio continuing to attract quality tenants.

The continued focus on energy, waste and water initiatives to drive both operating and environmental effi ciencies resulted in a commitment, announced in January 2007, to purchase 25% of the energy requirement for the majority of the Portfolio from renewable energy sources. The operation of the Pringle Initiative (which reuses cooling tower water) at the Riverside

THe GpT GROUp aNNUaL rePort 2007

$3.1 BIllION INVeStMeNt

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Centre, among other water saving measures, resulted in GPT’s Offi ce Portfolio receiving a 5 Star Rating in Sydney Water’s “One-2-Five[®] Water Diagnostic”, which recognises Best Practice for water management. More information on these activities can be found in the Corporate Responsibility section of the Group’s website.

Outlook

During 2008, we will continue to focus on driving returns from existing assets and maximising development and acquisition opportunities to enhance long-term investment performance. Access to rent reviews and an ongoing focus on upcoming expiry provide the Portfolio with the opportunity to benefi t from improved market conditions. A major priority continues to be the delivery of strong operating performance through asset and property management and ongoing implementation of Portfoliowide initiatives to generate savings and enhance revenue.

expanding GpT’s Offi ce Investments

was increased with the expansion of GWOF’s Portfolio, and progress on developments. GWOF secured four additional assets during the year, providing greater diversity and scale to the Portfolio in which GPT investors have an interest.

With strong underlying fundamentals across the major offi ce markets, the offi ce assets remain well positioned to continue to deliver growth for investors.

The development of 818 Bourke Street, Melbourne, a 21,700 sqm waterfront development in the Docklands precinct, was completed and terms have been agreed with tenants to lease all of the offi ce space. Construction on workplace[6] in Sydney commenced in April 2007. The offi ce space has been leased (to Google and Accenture) and GWOF has agreed to acquire the building, delivering the Group’s fi rst development profi ts and providing a quality asset to the Fund.

oVer 124,500 sQM oF LeaSeS aND reNeWaLS

Below: Farrer Place, NSW

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THe GpT GROUp aNNUaL rePort 2007

aUStraLIaN HoteL/toUrISM pORTFOlIO

Great places to

eXpeRIeNce

Above: Bedarra Island, QLD

UNIQUe asseTs IN MaJor toUrISM DeStINatIoNS

OVeR 2,200 GUeSt rooMS

Net reVaLUatIoN $22.9 MIllION

GPT’s Hotel/Tourism Portfolio, which has been built over 11 years, includes a focus on both CBD hotels and resorts located in some of Australia’s most unique and pristine natural environments.

The Hotel/Tourism management team focusses on delivering returns through active asset and hotel management. To maximise returns, the team works closely with Voyages Hotels and Resorts (GPT’s resort management business and operator of our resort assets) and Starwood Hotels (operators of our city based hotel, the Four Points by Sheraton in Sydney).

GPT’s approach to this sector involves focussing on markets and assets which have either physical or economic barriers to entry and, therefore, provide a solid long-term investment proposition. Recognising the potential volatility of demand from inbound and domestic tourism, the Portfolio has a diverse range of assets that appeal to a range of sectors and market segments.

GPT is focussed on ensuring the assets represent a quality tourism experience and are sustainable longterm investments.

Managing for performance

and comparable income was down marginally on 2006, essentially due to the impact of changed tourism conditions on Ayers Rock Resort.

conditions generally, with the Australian tourism industry impacted by lower growth in inbound tourism, a changing market mix and the strong Australian dollar, which has reduced the affordability of Australia as a destination while supporting higher levels of outbound tourism in 2007.

The largest impact was felt at Ayers Rock Resort which is reliant on inbound demand. Although occupancy was marginally up (0.4%), room rates were down and the reduction in guests from Japan in particular impacted performance for the year.

The Four Points by Sheraton in Sydney continued to trade well with occupancy at 86.4% and a signifi cant increase in income (up 11.6%).

THe GpT GROUp aNNUaL rePort 2007

$900 MIllION PortFoLIo

The Lodges Portfolio demonstrated steady improvement, with revenue up slightly despite diffi cult tourism conditions. Occupancy and room rates increased overall and the luxury properties in particular performed well.

providing Quality

Resort experiences

GPT’s resorts occupy a leading position in the Australian naturebased experiential tourism sector.

Ayers Rock Resort, GPT’s initial investment in this sector, is located in close proximity to one of Australia’s dominant tourism icons, Uluru. Since acquiring the Resort, GPT has undertaken a range of expansions and refurbishments to ensure the Resort continues to meet market expectations and has a sound platform for growth.

Voyages Lodges, the largest portfolio of nature-based resorts in Australia, consists of a range of unique resorts, including Bedarra, Lizard and Heron Islands in Queensland, as well as Cradle Mountain Lodge in Tasmania and Wrotham Park, a luxury outback resort in North Queensland, and El Questro Resort in Western Australia. These resorts are of a high quality and many are world renowned for their luxury and unique locations.

The Portfolio owned by GPT continues to be recognised within the Australian tourism market for its quality with a number of awards, including the 2007 National Travel Industry Awards ‘Best Hotel and Resort Group in Australia’, 2007 Australian Travel and Tourism Awards ‘Best Resort Accommodation – Hall of Fame for Lizard Island’, and Luxury Travel Magazine’s ‘2007 Outstanding Sustained Environmental Achievement Award’.

Outlook

Although the factors impacting performance in 2007 are anticipated to continue into 2008, GPT has solid assets in fundamentally attractive tourism destinations which should support returns over the medium term. The medium term prospects for tourism are positive with signifi cant new seat capacity into Australia from 2009, and renewed marketing activities by Tourism Australia supporting growth in inbound demand in line with their forecasts of 4.8% growth over the next eight years.

Over 2008 we will continue to focus on maintaining occupancy levels through tactical marketing programs, cross selling of resorts to the inbound market and improving our product to ensure our assets remain attractive destinations. We retain solid assets in fundamentally attractive tourist destinations which should support long-term returns for investors.

Below: El Questro Resort, WA Bottom: Lizard Island, QLD

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THe GpT GROUp aNNUaL rePort 2007

aUStraLIaN INDUStrIaL/ BUSINeSS ParK pORTFOlIO

Great places to

DO BUsINess

Above: Quad 2, Sydney Olympic Park, NSW

oVer 110,000 sQM oF NeW LeaSeS aND reNeWaLS

PortFoLIo OccUpaNcY 93% (BY INCoMe)

Net reVaLUatIoN $24.2 MIllION

GPT’s Industrial/Business Park Portfolio consists of quality traditional industrial and business park assets located in Australia’s major industrial and business park markets. The Portfolio is focussed on owning and developing industrial and business park assets that are:

modern and located near major transport nodes;
adaptable, with good technical services;
leased to good quality tenants; and
provide for a multitude of uses, thereby increasing the range of potential tenants.

This strategy increases the Portfolio’s income security, as the assets are suitable for a large number of tenant types. In reviewing opportunities to continue to expand and develop the Portfolio, our specialist team works closely with tenants to identify and meet their accommodation needs now and into the future.

Managing for performance

The Portfolio delivered solid growth in 2007 with income up on 2006. This performance refl ected the completion of recent developments, and leasing across new and existing assets.

Over 110,000 sqm was leased across the Portfolio contributing to occupancy of 93% and a weighted average lease term of 7.6 years across the Portfolio (by income).

expanding the portfolio

expanded during the year with the completion of a range of new assets and the expansion of existing properties, which will contribute to income growth in 2008.

The 74,700 sqm Coles facility at Austrak Business Park in Somerton (VIC) was completed in late in 2006 and a 43,300 sqm facility for Linfox was constructed in 2007, increasing the scale and tenant diversity of this large inter-modal estate.

THe GpT GROUp aNNUaL rePort 2007

$740 MIllION PortFoLIo

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development at Sydney Olympic Park was completed in June 2007 and 98% of the space has now been leased to a range of tenants. The completion of an expansion for Freedom Furniture at Kings Park during the year also contributed to increased income and longer term income security through the extension of the existing 30,000 sqm lease for a further ten years. The ability to work with existing tenants to meet their expansion needs ensures quality tenants are retained, with secure income and longer lease terms benefi ting investors.

Outlook

With assets located in strong industrial and business park markets attractive to a range of tenants, the Industrial/Business Park Portfolio is well placed for future income growth. During 2008 we will continue to focus on progressing development plans and actively managing existing space. The Portfolio retains limited expiry risk, with an ongoing focus on renewals and leasing of vacant space, combined with future development completions anticipated to continue to maintain secure income.

The Portfolio now has considerable scale and diversity, with assets in a range of industrial markets and the ability to meet a wide range of tenant accommodation needs.

The Portfolio retains further embedded growth through the capacity of the Portfolio’s existing investments to deliver a further $860 million in completed developments on approximately 560,000 sqm of development land.

aVeraGe WeIGHteD lease TeRM 7.6 YeaRs (BY INCoMe)

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Below: Figtree Drive, Sydney Olympic Park, NSW
Bottom: Herb Elliott Drive, Sydney Olympic Park, NSW
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THe GpT GROUp aNNUaL rePort 2007

US SeNIorS HoUSING pORTFOlIO

Great places to lIVe

PortFoLIo OccUpaNcY 91.4%

PortFoLIo eNHaNceD WItH SeCoND aCQUISItIoN

In December 2006, GPT entered the US seniors housing market with the acquisition of a 95% interest in a portfolio of 19 seniors housing assets and an interest in the manager of the Portfolio, Benchmark Assisted Living (BAL). The Portfolio was expanded in October 2007 with a 95% interest in a further 15 assets.

This sector represents the latest evolution of the Group’s Investment Portfolio and gives GPT access to a market considered attractive due to its growth characteristics and solid investment fundamentals driven by the demographics of an aging population. The addition of this Portfolio continues the Group’s tradition of identifying and investing in real estate sectors and markets which enhance GPT’s returns, and provide access to local management expertise.

expanding the portfolio

The Group successfully expanded the Portfolio with a second acquisition settled in October 2007 at a cost of US$265 million (including costs). Consisting of an interest in 15 communities with 1,179 units

providing Independent Living, Assisted Living and Alzheimer’s Assisted Living, the assets increase GPT’s exposure to the New England region, introducing the states of Maine, Vermont and New Hampshire to the Portfolio and providing further exposure to the affl uent greater Boston area.

Managing for performance

Through an ownership interest in BAL, the largest owner-operator of service-enhanced seniors housing 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. This operating platform has a demonstrated ability to add value and deliver growth and a compelling business model which can facilitate expansion of the Portfolio and the development of additional services.

BAL, which was founded in 1997, manages 43 communities and is the number one operator in the New England market (number two operator in the Northeast Corridor).

THe GpT GROUp aNNUaL rePort 2007

PortFoLIo VaLUe $800 MIllION*

The business is well placed to manage the Portfolio and deliver value to investors, as demonstrated by the returns delivered over the fi rst year of ownership, which were in line with expectations of a 6.8% yield from the initial Portfolio.

At 31 December 2007, year to date occupancy across the 34-asset Portfolio was 91.4% with an average rent per unit per month of US$4,800. The Portfolio benefi ted from increases in average rent over the year and a high proportion of assisted living units.

Outlook

The entry into the US seniors housing sector broadened the Group’s exposure to real estate assets and related management platforms to create value for investors, giving the Group exposure to a sector with strong long-term fundamentals in an affl uent market.

While the outlook for the United States economy remains uncertain, the Portfolio is anticipated to provide stable long-term returns to investors as a result of the high quality portfolio, focussed management, and the long-term fundamentals supporting demand for seniors housing in the New England market. A high percentage of the Portfolio is focussed on the assisted living market, which is considered more resilient throughout market cycles given the needs-based nature of the offer.

at 31 December 2007 year to date occupancy across the 34-asset Portfolio was 91.4%, with an average rent per unit per month of US$4,800.

Below: Carriage Green, Milford

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GPt’s equity interest $307 million.

THe GpT GROUp aNNUaL rePort 2007

JoINt VeNTURe

Great places to

DIVeRsIFY

Above: US Retail

eXpOsURe to a raNGe oF MarKetS aND SeCtorS

retUrN oN eQUITY OF 9.9%

Since establishment in June 2005, the Joint Venture (JV) with Babcock & Brown has provided GPT with access to activities, and markets, outside those in which the Group had traditionally operated. Through the JV, GPT has accessed new markets, providing the Group with greater diversity in income streams and property exposure.

In addition to delivering on the fi nancial and strategic objectives set at inception, the JV has provided GPT with access to its own funds management platform in Europe through the acquisition of GPT Halverton and an interest in Hamburg Trust from the JV.

In June 2007, GPT and Babcock & Brown agreed revised fee arrangements, new return targets, a defi ned term for the Joint Venture of fi ve years and a staged return of a portion of GPT’s preferred equity from 2009. These changes provided greater clarity around the Joint Venture’s contribution to GPT’s earnings and a planned exit strategy from this investment as GPT’s other business operations expand.

contribution to performance

The Joint Venture Fund was expanded over the course of 2007, and at 31 December had $7.1 billion of assets in Europe and the United States.

The JV delivered a 9.9% return on GPT’s equity in 2007, above the target of 9.7%, contributing $151 million to the 2007 result (after provision for taxes) through income generated from assets (65%) and the realisation of trading profi ts.

At 31 December 2007, GPT had a total of $2,010.2 million in capital invested, including $1,636.6 million of preferred capital which derives a defi ned return.

Consistent with GPT’s approach to responsible capital management, the JV’s debt, which is non-recourse to GPT’s balance sheet, had an average term to maturity of 6.2 years. 95.6% of debt is hedged for an average duration of 5.4 years and less than 4% of debt requires refi nancing in 2008.

THe GpT GROUp aNNUaL rePort 2007

$7.1 BIllION aSSetS

Joint Venture Fund portfolio

The Joint Venture’s investments form a range of portfolios and investments focussed on different sectors and markets, delivering diversity and scale.

The major portfolios include:

A large portfolio of European Light Industrial assets ($1.5 billion), comprising 107 properties located across Germany, the Netherlands, France, Sweden and Denmark. GPT Halverton manages the portfolio, which is intended to form the basis of a new fund to be launched by GPT Halverton in 2008.
A range of retail assets located across Germany, characterised by long leases and strong tenant covenants, and shopping centres in Spain, the Czech Republic and Germany, consisting of over 446,000 square metres of retail space across 54 individual assets with a book value of $1.2 billion. GPT Halverton is undertaking asset management for the shopping centre assets on behalf of the JV. The sale of a Polish shopping centre, Galerie Pomorska from this Portfolio, realised a profi t in 2007 and further assets were sold in January 2008 at book value.
A German Residential Portfolio ($2.4 billion) comprising over 28,800 apartments, located primarily in the former western Germany and Berlin. During 2007, the sale of a portion of the Portfolio, representing some of the initial assets acquired in 2005, realised a signifi cant profi t.
of $300 million, which includes a 30% interest in the Cologne Technology Park and a range of smaller assets in cities including Bonn, Nuremburg, Bremen and Leipzig were sold in January 2008 at book value.
16 US retail assets with a book value of $950 million with over three million sqm of retail space and average occupancy of 93%.
An investment in the US multifamily sector consisting of a one third equity interest and mezzanine loan secured over a $1.2 billion Multifamily Portfolio, comprising approximately 19,500 apartments across 10 US states.

asseT secTOR BY ValUe

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Residential 39%
Retail 30%
Light industrial 22%
Offi ce 7%
Other 2%
GeOGRapHIc DIsTRIBUTION
BY ValUe
Germany 58%
United States 23%
Netherlands 6%
Europe (other) 6%
France 3%
Spain 3%
Other 1%
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Outlook

Consistent with the focus of both businesses on continually reviewing the JV’s capital requirements, operating structures and objectives, the Joint Venture revised its operating structure in June 2007. In response to changes in the market environment in which the Joint Venture operates, GPT is in discussions with Babcock & Brown with the objective of accelerating the return of GPT’s capital and reducing risk within the Joint Venture.

Continuing to evolve the JV’s strategy and capital requirements to respond to a changing market environment and the ongoing requirements of GPT investors will be a focus in 2008.

Below: European retail

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THe GpT GROUp aNNUaL rePort 2007

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FUNDS MaNaGeMeNt

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HSBC Centre, Sydney, NSW

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179 Elizabeth Street, Sydney, NSW
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GpT’s funds management platform is an integral part of the Group’s strategy. It provides the ability to enhance returns and the growth profi le of the Group, while utilising the skills and experience of GpT’s team, and providing the potential for stronger earnings growth and access to a range of capital partners.

The Group’s funds management activities also provide GpT investors with access to a broader range of property investments through a co-investment in a number of the Group’s managed funds.

since GpT’s entry into funds management in July 2006 with the launch of the GpT Wholesale Offi ce Fund, the Group has substantially expanded its fund management activities in both australia and europe through:

the acquisition of additional assets in both the GpT Wholesale Offi ce Fund and the GpT Wholesale shopping centre Fund; and
the creation of a funds management platform in europe with the acquisition of Halverton (now GpT Halverton) and an interest in Hamburg Trust.

combined, these activities have: increased assets under management to over $8.5 billion at the end of December 2007; broadened the Group’s range of capital partners; and increased the Group’s access to real estate product and markets.

The Group now has people located in europe, the UK and australia dedicated to the performance of the Group’s managed funds and the creation of additional income streams and long-term value for investors.

the launch of a second australian fund – the GpT Wholesale shopping centre Fund;

Great places to

INVesT

Above: Forestway Shopping Centre, NSW

RapID GROWTH IN aSSetS UNDer MaNaGeMeNt ($8.5 BILLIoN)

secOND aUStraLIaN FUND LaUNCHeD

CreatIoN oF eUROpeaN plaTFORM

The growth of the Group’s wholesale funds management platform to meet the increasing demand from institutional investors for direct property exposure to quality real estate assets represents an important part of GPT’s growth strategy.

In entering the funds management business and establishing our funds GPT put in place strong corporate governance and management processes and a performancebased-fee structure.

The funds management business grew signifi cantly in 2007, with the launch of new funds in Australia and Europe and the growth of existing vehicles. From $2.4 billion in assets under management in 2006, the business has expanded to include $8.5 billion in assets under management at 31 December 2007.

australian Wholesale Funds

GPT’s Australian Wholesale Funds consist of two funds focussed on the Australian real estate markets. The GPT Wholesale Offi ce Fund (GWOF), GPT’s fi rst fund, was launched in July 2006. Building on the success of this fund, the GPT Wholesale Shopping Centre Fund (GWSCF) was launched in March 2007. Both funds attracted strong institutional investor demand and are focussed on quality ‘core’ Australian real estate.

GPT has an interest in the portfolio of assets owned by each of these funds through a signifi cant co-investment.

Since the

Fund’s establishment in 2006, we have delivered solid performance for the Fund’s investors, resulting in outperformance in 2007. In addition to the Group’s base management fee in 2007, GPT earned a performance fee as a result of the strong performance delivered by the Fund. The Group also derives income from GPT’s $1,060.5 million co-investment in the Fund.

THe GpT GROUp aNNUaL rePort 2007

FUNDS MaNaGeMeNt

During 2007, the Fund’s portfolio was actively expanded with acquisitions which meet the Fund’s investment criteria and provide further diversifi cation, including:

a 50% interest in The Zenith twin tower complex at Chatswood (NSW);
545 Queen Street, Brisbane, which will be refurbished to an A-Grade standard; and
a 50% interest in 28 Freshwater Place, Melbourne, which will comprise 34,000 sqm of contemporary offi ce space on completion.

The Fund also agreed to acquire workplace[6] , a new offi ce development in Sydney which is currently being developed by GPT.

At 31 December 2007, the Fund had ownership interest in 13 offi ce assets with a value of $3.0 billion located across Australia’s CBD offi ce markets. With gearing of 12% and an active Distribution Reinvestment Plan, the Fund has the potential for further growth.

In March 2007, the GpT Wholesale shopping centre Fund was established with a $1.9 billion portfolio of quality Australian retail assets.

In addition to undertaking the funds management role, GPT also undertakes property and development management for the Fund’s assets, providing additional income streams for the Group.

Like GWOF, GWSCF has low gearing (5% at 31 December 2007) and an active Distribution Reinvestment Plan. This provides capacity for further investment, including the Fund’s substantial development opportunities, with a potential cost of $620 million.

expanding the Funds Management platform

In July 2007 the funds management business was expanded to Europe through the acquisition of a 100% interest in Halverton Real Estate Investment Management, and an interest in Hamburg Trust. Together these businesses deliver on the Group’s strategy to expand GPT’s fund and asset management activities to Europe, building on the Group’s established Australian model.

The acquisitions also represent a further evolution of GPT’s exposure to the European real estate market and give GPT an operating platform in Europe, initially focussed on the industrial, retail and offi ce sectors, which forms part of an international platform.

In addition, the investment allows GPT to capitalise on the increasingly global focus of real estate investors and the potential to facilitate capital fl ows across markets as the Australian and European teams work closely together.

GpT Halverton

GPT Halverton is a real estate investment and asset management company with expertise in the aggregation and asset management of pan European real estate. The Group, which has rapidly expanded since its inception in late 2004, employs 160 people and has ten offi ces across Europe. GPT Halverton manages the Joint Venture’s light industrial portfolio and has a strong team and track record in the European real estate markets. Since GPT’s acquisition in July 2007, two funds have successfully been established, and GPT Halverton now has total assets under management of close to $3.4 billion (€2 billion) across six funds.

GPT Halverton’s funds include:

HBI, a $1.5 billion fund focussed on pan European light industrial assets owned by GPT’s joint venture with Babcock & Brown;
BIP, a $275 million fund focussed on Dutch and German multi-let industrial assets;
EB8, a $475 million fund focussed on European warehouse assets;
GO, a $190 million fund investing in German offi ce assets;
DAF, a $490 million fund focussed on Dutch offi ce and industrial assets; and
GRP, a fund focussed on German retail assets with $150 million in assets.

The Portfolio was expanded during 2007 with the acquisition of Norton Plaza in Leichhardt, NSW. At 31 December 2007 the Fund had ownership interests in nine retail assets with a value of $2.1 billion. GPT has a co-investment of $817 million.

THe GpT GROUp aNNUaL rePort 2007

Hamburg Trust

Outlook

Hamburg Trust is a start up German closed end fund business in which GPT has an 80% investment, with management owning the remaining 20%.

While relatively modest investments, GPT Halverton and Hamburg Trust give GPT strong operating platforms with local expertise from which to deliver measured growth in the Group’s earnings in Europe.

Operating in the well established German closed end fund market, the company has an experienced management team.

Combined with the Australian business they provide the ability to create a signifi cant business and continue to evolve the Group’s exposure in both Europe and Australia, drawing on established relationships with major European and international institutional investors.

This business introduced a new capital partner to GPT, the smaller German retail investor and is focussed on creating funds around assets in Europe, Australia and the US. As the return targets for these funds, differ to those of the GPT Halverton and the Australian wholesale funds, the business provides a new capital partner and the ability to leverage acquisition opportunities developed across GPT’s business.

Over 2008 we will continue to build our relationships in this market and to focus on delivering ongoing investment performance for investors. In addition to growing established funds, the business plans to launch additional funds leveraging capital, product and skills across markets.

a $85 million fund invested in 400 apartments located outside Munich, in August 2007 and has plans to launch new funds during 2008.

GPt has rapidly grown assets under management since launching its fi rst fund in July 2006 and now manages over $8.5 billion in assets on behalf of investors in its Funds.

Below: Vareseweg distribution warehouse, Rotterdam, The Netherlands

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THe GpT GROUp aNNUaL rePort 2007

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DeVeLoPMeNt

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workplace[6] , Sydney, NSW (artist’s impression)

GpT’s development program has long been a source of quality real estate for the australian Investment portfolio, and the Group has signifi cant experience built over many years through a diverse range of complex projects.

In a tightly held real estate market such as australia, in addition to providing new investment opportunities on attractive terms, the ability to expand and redevelop existing assets to meet the evolving needs of customers and tenants ensures the ongoing investment performance of the Group’s assets.

With the evolution of GpT’s business and the addition of the Group’s australian funds management business the opportunities to leverage and expand the Group’s skills and expertise in this area have been extended. GpT now develops assets on behalf

of its managed funds, ensuring that these portfolios continue to represent quality assets attractive to a range of users and extending GpT’s fund, property management and development fees. In addition GpT has the potential to develop assets which may be sold to the funds, generating a development profi t for GpT while providing the funds with access to contemporary assets which meet their investment criteria.

With access to future projects across the retail, offi ce and industrial sectors with a potential cost of $4.9 billion, developments provide further opportunities to access investments in the stable australian real estate market while diversifying and growing the income streams generated by this area of GpT’s operations.

Developing sustainable assets

Over the course of 2007 the Group continued to expand the number of potential developments in the Australian retail, offi ce and industrial sectors, with projects with a potential cost of $4.9 billion underway or planned. These projects include assets owned by GPT and the Australian wholesale funds.

A range of current projects moved closer to completion and the Group’s fi rst development profi ts were secured.

Consistent with a commitment to creating sustainable investments, each of our developments incorporate a focus on environmental and social as well as economic outcomes.

GpT Owned

Developments

The developments owned by GPT provide the opportunity to enhance the Group’s Portfolio through improved performance of existing assets, and potentially provide an opportunity to realise development profi ts through the sale of developments to the Group’s managed funds.

The agreement to sell workplace[6] to the GPT Wholesale Offi ce Fund demonstrates the potential value of the development pipeline to investor returns and the Group’s managed funds. GPT will receive a total of $188.7 million for the building, which will be paid in two instalments. The sale results in a profi t of $21.4 million after taking into account tax and GPT’s interest in GWOF. GPT investors will benefi t from an excellent return on the sale, as well as an ongoing ownership interest in a highly specifi ed building with secure long-term income and additional fee streams through management of the Fund.

Current and potential projects across GPT’s assets have an estimated cost of $3.4 billion and include:

▪ Construction of a new $470 million retail asset, Rouse Hill Town Centre, which will create a retail, leisure and community hub within The New Rouse Hill. Located in one of New South Wales’ strongest growing regions, the development will include 65,000 sqm of retail space as part of a planned community. Major tenants include Coles, Woolworths, Big W, Target and Reading Cinemas and are combined with over 200 specialty stores. The development is forecast to achieve a yield of 7%. Stage 1 opened in September 2007 and Stage 2 will open in March 2008.

The development is targeting an ecological footprint (base building and tenants) which is 25% smaller than a traditional NSW shopping centre.

▪ At Charlestown Square in NSW, a signifi cant expansion commenced in January 2008. On completion in 2010, the Centre will increase to approximately 85,000 sqm, with new specialty retailers and a revitalised retail and leisure offer. A 7–7.5% yield is targeted on the anticipated cost of $450 million.

▪ The opportunity to create a major CBD retail destination in the heart of the Newcastle CBD was secured in 2007 with the acquisition of a number of sites. A development application will be prepared in 2008 for this $500 million retail, entertainment and commercial development.

Below: Detail, food terrace, Rouse Hill Town Centre, NSW

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THe GpT GROUp aNNUaL rePort 2007

DeVeLoPMeNt

In December 2007, construction was complete on a new 21,700 sqm campus-style offi ce building on the waterfront in Melbourne (818 Bourke Street). Over half of the offi ce space has been leased to Ericsson for a term of 10 years and at 31 December 2007 terms had been agreed with tenants to lease the remaining offi ce space. The $110 million development is forecast to deliver a 7.8% yield.
In April 2007, construction on workplace[6] , a major waterfront site at Darling Island in Sydney, commenced. The new building will comprise approximately 18,000 sqm over seven levels and has been certifi ed with a 6 Star Green Star rating for design, world’s best practice for this measure. The offi ce space has been fully leased to Google and Accenture, at rents above initial expectations, refl ective of the current strength of the Sydney offi ce market and the attractiveness of the building to quality tenants.
In 2008 work will commence in Brisbane on a new offi ce tower to replace the existing Indigo House. The 44-level tower, to be named One One One Eagle Street, will be constructed on a prime site in the heart of the city’s most desirable offi ce precinct.

The Industrial/Business Park Portfolio also continued its growth with a range of developments contributing to greater portfolio diversity.

integrated business park in Sydney Olympic Park was completed in June 2007. The 7,500 sqm asset is located in the popular Homebush Bay market. Samsung have taken 60% of the offi ce space and tenants for a further 38% of the space have been secured. A yield of 8.4% is forecast on the $30 million cost.
At the Austrak Business Park at Somerton in Victoria, a 43,300 sqm facility which is leased to Linfox on a 10-year term, was completed in October. The new facility will provide an initial yield of over 8.2% on GPT’s $20 million investment.
Expansions for existing tenants were also progressed. In October, a warehouse extension for Freedom at Kings Park, NSW was complete. The additional 10,200 sqm of space has been leased for ten years commensurate with a new lease over the existing 30,000 sqm facility. A 6,000 sqm expansion for Mitsubishi at Granville will be fi nalised in February 2008, delivering an 8% yield on the $8 million cost.

Developing for Funds

Fund and the GPT Wholesale Shopping Centre Fund a number of development opportunities exist. In addition to benefi ting from the growth and potentially enhanced performance of the Fund through the addition of contemporary assets, GPT will also act as development manager for many of these developments, receiving a fee for this service.

The GPT Wholesale Shopping Centre Fund has potential developments with a forecast cost of $620 million through expansion and redevelopment opportunities across a range of assets, including Highpoint Shopping Centre and Chirnside Park in Melbourne. At Wollongong Central in NSW, a formal development proposal to signifi cantly increase the scale of the Centre was lodged in 2007. The expansion, which is anticipated to move towards commencement in 2008, will represent the fi rst development for the Fund.

three developments underway at a cost of $400 million and in addition has development approval for a major development in Brisbane on the existing Transit Centre site at the end of 2007. The development, which remains subject to approvals and an appropriate tenant commitment, represents the ability to develop a new campus-style building in the Brisbane market.

Outlook

In 2008 and future years, development will be an important contributor to GPT’s earnings as current developments are completed and planned developments commence.

Despite a mature property market in Australia we continue to identify and secure compelling opportunities to create quality new real estate and to add value to existing investments.

THe GpT GROUp aNNUaL rePort 2007

INVeStor RelaTIONs

GPt is committed to ensuring the Group’s 48,000 investors are informed about the activities of the Group and have access to detailed information about their investment.

To ensure our investor relations activities continue to meet the needs of investors, a communications survey was undertaken in 2007. The feedback, received from approximately 6,500 investors, provided valuable insights which have contributed to a number of changes in investor communications, including the introduction of an annual summary of results and a new website to be launched in April 2008.

GPT will continue to provide regular communications in conjunction with quarterly distribution payments to Securityholders. These include an Annual Update (December quarter), Mid Year Update (June quarter) or Investor Newsletter providing an update on recent activities (March and September quarters).

GPT’s website, which will be relaunched in April 2008, is also a useful source of information for Securityholders. The site is regularly updated to provide upto-date information, and includes detailed information about GPT’s business activities, investment performance and payments. All ASX announcements are posted to the site, in compliance with ASX’s continuous disclosure requirements, and GPT’s internal Disclosure Policy. The new site also includes interviews with management, providing an overview of the business.

Copies of past and present Annual and Mid Year Reports, Investor Newsletters, and market update Presentations may be downloaded from the site, which houses the Group’s detailed Corporate Responsibility reporting.

You can access GPT’s website www.gpt.com.au

GPT now webcasts both Annual and Mid Year Results briefi ngs, as well as other major announcements on the Group’s website.

annual General Meeting

The Group’s 2006 Annual General Meeting was held on 9 May 2007 in Sydney. Securityholders were asked to vote on resolutions pertaining to the re-election of directors, and the adoption of the Remuneration Report. All resolutions were passed by the requisite majorities.

All GPT investors are encouraged to attend the Annual General Meeting and use the opportunity to ask questions of the Board. However, for those investors who are unable to attend, GPT’s Annual General Meetings are webcast on www.gpt.com.au and questions for the Board and management can be forwarded in advance for discussion at the Meeting.

enquiries

GPT is committed to providing a high level of service to all of our Securityholders. We encourage feedback and endeavour to resolve all enquiries and complaints in a timely and satisfactory manner.

Enquiries about your investment can be directed to our Securityholder Service Centre on Freecall 1800 025 095. This service is available from 8.30am to 5.30pm (Sydney time) on all business days. Enquiries may also be emailed via GPT’s website (www.gpt.com.au) or Link Market Services’ website (www. linkmarketservices.com.au).

Requests for changes to your holding details, payment details, or general enquires can all be directed to the Securityholder Service Centre.

Information on current investor offers at some of GPT’s hotel/tourism assets can be obtained by contacting Voyages on (toll free in Australia) 1300 134 044, or through Voyages’ website www.voyages.com.au/gpt.

THe GpT GROUp aNNUaL rePort 2007

CorPorate RespONsIBIlITY

This year, GPT’s full Corporate Responsibility Report can be found on the Group’s website www.gpt.com.au. This provides a more sustainable way of disseminating information and will enable regular updates charting the Group’s progress. The site contains information on GPT’s structure, business practices, results and performance targets as well as case studies detailing individual projects and initiatives.

By their nature, property investments have very large, long-term impacts on the environment and on the communities in which they exist. We believe GPT has an ethical responsibility to reduce the negative impacts and to enhance the lives of people affected by our business, not only through what we do but also how we do it.

progress in building GPT’s corporate responsibility framework, including the creation of a Board Committee with oversight for the Group’s Corporate Responsibility program and agenda; the appointment of a Head of Corporate Responsibility

working with the Corporate

objectives across the Group was broadened through the performance management system. The Group also received endorsement of its efforts with a number of awards.

Responsibility Steering Group and; initiating a number of projects and programs to address Corporate Responsibility across the Group.

Major milestones for 2007 were also achieved with delivery of targeted energy, water and waste reductions across the majority of operational assets and commitment to a range of initiatives to enhance the environmental performance of assets across the Group. workplace[6] , an offi ce development in Sydney, was certifi ed with a 6 Star Green Star Rating for design (world’s best practice for this measure). The Rouse Hill Town Centre retail development which is targeting a 25% reduction in its ecological footprint compared to a standard centre of this size, moved closer to completion with the opening of Stage 1 in September 2007. Our level of dedicated resources in this area was grown and the commitment to environmental and social

success against 2007 Targets

The table below shows the success of our Australian operations against our 2007 targets published in last years report. Refer to the Ownership & Management section of the website for portfolio level updates against these targets.

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2007 peRFORMaNce GOal sTaTUs cR secTION
OF WeBsITe
Comply with energy effi ciency achieved environment
opportunities (eeo) act
Undertake Corporate achieved overview
responsibility training for
Board, senior management
and employees
expand risk management achieved environment
framework to include
Climate Change
Draft Group-wide Sustainability achieved ownership &
standards for development Management
and operations
Defi ne pathways to achieve ongoing ownership &
sustainability goals Management
Case Studies
expand ecological footprinting tools Partnership environment
across the business achieved
achieve operational environmental Part-achieved GrI
targets (all portfolios)
Defi ne material social impact achieved Social
issues and a response
achieve GrI compliant reporting achieved GrI
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THe GpT GROUp aNNUaL rePort 2007

community contribution

Global Reporting Initiative (GRI)

This year we have used the London Benchmarking Group model (LBG) to measure and report our community contributions. In 2007 our contributions (in time, in-kind and in cash) made to community causes amounted to $1.12 million. This amount has been validated through an independent audit (refer to GRI EC1 and EC8 for more details).

This year, we have expanded our on-line reporting to what we believe is consistent with the GRI application level “B” (G3).

The GRI Index table on the next page provides an overview of what is reported this year; what is material but not reported; what is not material; and where to fi nd further details. Signifi cant details on each of these measures, as well as GPT’s performance targets and case studies detailing individual projects and initiatives, can be found on the Group’s website.

We plan to further expand our reporting program in 2008 and improve upon our performance in this area in line with our 2012 strategy and goals.

We will be seeking external assurance of our Corporate Responsibility Report in 2008.

Major milestones for 2007 were also achieved with delivery of targeted energy, water and waste reductions across the majority of operational assets and a commitment to a range of initiatives to enhance the environmental performance of assets across the Group.

Below: A range of environmental initiatives form part of Rouse Hill Town Centre, NSW

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THe GpT GROUp aNNUaL rePort 2007

CorPorate RespONsIBIlITY

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GRI # INDIcaTOR DescRIpTION KeY WHeRe TO FIND
ecONOMIc INDIcaTORs
eC1 economic value generated and distributed, including revenues, a annual report Financials
operating costs, employee compensation, donations and other
community investments, retained earnings, and payments to capital
providers and governments. (Core)
eC2 Financial implications and other risks and opportunities for the a Website/Marketplace and
organisation’s activities due to climate change. (Core) economic; annual report
eC8 Development and impact of infrastructure investments and services a Website/Marketplace and
provided primarily for public benefi t through commercial, in-kind, or economic; annual report
pro bono engagement. (Core)
eNVIRONMeNTal INDIcaTORs
eN3 Direct energy consumption by primary energy source. (Core) a Website/environment
eN4 Indirect energy consumption by primary source. (Core) a Website/environment
eN5 energy saved due to conservation and effi ciency improvements. a Website/environment
(additional)
eN6 Initiatives to provide energy-effi cient or renewable energy based a Website/environment
products and services, and reductions in energy requirements as a
result of these initiatives. (additional)
eN7 Initiatives to reduce indirect energy consumption and reductions a Website/environment
achieved. (additional)
eN8 total water withdrawal by source. (Core) a Website/environment
eN9 Water sources signifi cantly affected by withdrawal of water. a Website/environment
(additional)
eN11 Location and size of land owned, leased, managed in, or adjacent a Website/environment
to, protected areas and areas of high biodiversity value outside
protected areas. (Core)
eN12 Description of signifi cant impacts of activities, products, and a Website/environment
services on biodiversity in protected areas and areas of high
biodiversity value outside protected areas. (Core)
eN16 total direct and indirect greenhouse gas emissions by weight. (Core) a Website/environment
eN17 other relevant indirect greenhouse gas emissions by weight. (Core) a Website/environment
eN18 Initiatives to reduce greenhouse gas emissions and reductions a Website/environment
achieved. (additional)
eN26 Initiatives to mitigate environmental impacts of products and a Website/environment
services, and extent of impact mitigation. (Core)
eN28 Monetary value of signifi cant fi nes and total number of non- a annual report
monetary sanctions for non-compliance with environmental laws
and regulations. (Core)
laBOUR pRacTIce INDIcaTORs
La1 total workforce by employment type, employment contract and a Website/Social
region. (Core)
La2 total number and rate of employee turnover by age group, gender, a Website/Social
and region. (Core)
La12 Percentage of employees receiving regular performance and career a Website/People and Workplace
development reviews. (additional)
La13 Composition of governance bodies and breakdown of employees a annual report;
per category according to gender, age group, minority group Website/People and Workplace
membership, and other indicators of diversity. (Core)
Hr4 total number of incidents of discrimination and actions taken. (Core) a annual report;
Website/People and Workplace
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THe GpT GROUp aNNUaL rePort 2007

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GRI # INDIcaTOR DescRIpTION KeY WHeRe TO FIND
sOcIal INDIcaTORs
So2 Percentage and total number of business units analysed for risks a annual report;
related to corruption. (Core) Website/overview
So3 Percentage of employees trained in organisation’s anti-corruption a annual report;
policies and procedures. (Core) Website/overview
So4 actions taken in response to incidents of corruption. (Core) a annual report;
Website/overview
So5 Public policy positions and participation in public policy development a Website/Marketplace and
and lobbying. (Core) economic
So6 total value of fi nancial and in-kind contributions to political parties, a Website/Social
politicians, and related institutions by country. (additional)
So7 total number of legal actions for anti-competitive behaviour, anti- a annual report
trust, and monopoly practices and their outcomes. (additional)
So8 Monetary value of signifi cant fi nes and total number of non- a annual report
monetary sanctions for non-compliance with laws and regulations.
(Core)
pRODUcT INDIcaTORs
Pr1 Life cycle stages in which health and safety impacts of products a Website/Development
and services are assessed for improvement, and percentage
of signifi cant products and services categories subject to such
procedures. (Core)
Pr3 type of product and service information required by procedures, a Website/environment
and percentage of signifi cant products and services subject to such
information requirements. (Core)
OTHeR INDIcaTORs
eC5 - 9 inclusive; B N/a See Key
eN1,2,10,13-15, 19-25,30
La 3-11 inclusive, 14
Hr 3,8,9
So 1
Pr 7,8
eC 3,4 C N/a See Key
eN 24,27,29
Hr 1,2,5-7
Pr 2, 4-6, 9
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KeY
a	Included in 2007 reporting and closely
	aligned with GPt’s objectives
B	Material issue to GPt but not reported in
	2007. target to report in 2008 or 2009
C	either not materially relevant to GPt or
	under review in relation to directness of
	inf uence and relationship to GPt core
	business streams

THe GpT GROUp aNNUaL rePort 2007

CorPorate GOVeRNaNce

Introduction

The GPT Group (GPT) comprises GPT Management Holdings Limited (ACN 113 510 188) (GPTMHL) and General Property Trust (Trust). GPT RE Limited (ACN 107 426 504) (GPTRE) AFSL (286511) is the Responsible Entity of the Trust. GPT’s stapled securities are listed on the Australian Securities Exchange (ASX) and GPT is registered with the Securities Exchange Commission in the US.

The ASX Corporate Governance Council’s ‘Corporate Governance Principles and Recommendations’ (Principles) reissued in 2007, provide a framework for good corporate governance. This statement complies with the Principles as originally issued and as revised in 2007.

GPT’s website www.gpt.com.au, has a Corporate Governance section containing further information on GPT’s governance practices together with copies of relevant policies such as Board and Committee Charters, Code of Conduct, Continuous Disclosure Policy, Whistleblower Policy and Personal Dealing Policy.

corporate governance framework as at 28 February 2008.

GpT’s approach to corporate Governance

GPT regards good corporate governance as being of critical importance to all of GPT’s stakeholders and a fundamental component of our commitment to our Securityholders. The Board of GPT strives to ensure that the Group meets high standards of governance across its operations. This is an ongoing commitment, requiring continual review, modifi cation and enhancement from time to time.

GPT is also committed to operating in a sustainable manner taking into account the needs of all stakeholders and the impact on the environment and communities in which the Group operates. Further details concerning this are set out in the Corporate Responsibility section of the Annual Report (pages 32 to 35) and the Corporate Responsibility Section of GPT’s website.

principle 1: lay solid Foundations for Management and Oversight

Role and Responsibilities of the Board and Delegation to Management

The Board of GPTRE and GPTMHL is accountable to Securityholders for GPT’s performance and is responsible for the overall management and governance of GPT.

The Board is responsible for overseeing all of GPT’s businesses including:

setting strategic direction and ensuring it is followed;
approving and monitoring business plans to execute strategy;
approving major investments and commitments;
ratifying systems of risk management, internal compliance and control and legal compliance and codes of conduct;
performance and results;
approving Director and Senior Executive compensation and benefi ts; and

The Board has established a formal Charter setting out its main responsibilities and functions. A copy of the Charter can be obtained from the GPT website.

for the Board and necessary for the day-to-day management of GPT, are delegated to management. The Board has approved delegated authority limits for management in this context. These delegated authorities are reviewed on an annual basis. The Board has also delegated specifi c responsibilities to Board committees to deal with particular matters. These Committees are discussed in more detail below.

All new Directors have formal agreements governing their employment. These agreements prescribe:

term of appointment – subject to Securityholder approval;
remuneration;
expectations in relation to attendance at meetings;
expectations and procedures in relation to other directorships;
of interest;
insurance and indemnity arrangements;
compliance with governance policies (including Code of Conduct, Board and Committee Charters, Personal Dealing Policy, Confl icts Policy);
access to independent advice; and
to information.
and other reporting.

THe GpT GROUp aNNUaL rePort 2007

All Senior Executives have formal agreements governing their employment. These agreements prescribe:

job description;
remuneration*;
compliance with governance policies (including Code of Conduct, Personal Dealing Policy, Confl icts Policy, Security Trading Policy);
notice and rights on termination*.
Further details on these in relation to the Key Management Personnel are set out in the remuneration Section of the Directors’ report.

principle 2: structure of the Board to add Value

composition of the Board

The Boards of GPTRE and GPTMHL have the same Directors, comprising seven Non-Executive Directors and one Executive Director/ Managing Director.

The Board represents a broad range of skills and experience necessary for the strategic direction and progress of GPT. Members of the Board have signifi cant experience in various fi elds, including funds management, property investment, fi nancial markets, accounting and law. Details concerning period of offi ce and the experience and expertise of the Directors of the Board are set out in the Directors’ Report.

Director Independence

The Board is responsible for determining the independence of each Director. In determining each Director’s independence, the Board refers to the following criteria

adapted from the ASX Corporate Governance Principles and set out in the Board Charter:

the Director must be non-executive;
the Director cannot be a substantial Securityholder of GPT;
the Director must not have been employed in an executive capacity with GPT within the last three years;
the Director must not have been a principal or employee of a material professional adviser or consultant to GPT within the last three years;
the Director must not have been a material supplier or customer to GPT;
the Director has no material contractual relationship with GPT other than as a director;
the Director has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of GPT;
the Director is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of GPT;
the Director’s past performance (if applicable) in their role as a Director.

The Board recognises that various principles above are relevant in determining independence, but considers that independence is a matter of judgement having regard to all the facts and circumstances of particular relationships or circumstances.

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L-R: Peter Joseph (Chairman), Eric Goodwin, Malcolm Latham, Nic Lyons, Ian Martin, Ken Moss, Anne McDonald, Elizabeth Nosworthy.

THe GpT GROUp aNNUaL rePort 2007

CorPorate GOVeRNaNce

The Board considers that of the matters set out above, the most relevant consideration for determining the independence of GPT’s Directors is that a Director be free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of GPT. This principle is also used when considering issues such as the materiality of any identifi ed interest, business or relationship.

Based on the criteria above and having taken in account the matters noted below, the Board considers all Non-Executive Directors to be independent.

I Martin and E Nosworthy are both independent Non-Executive Directors of Babcock & Brown Limited with whom GPT has a joint venture, however, they are not Babcock & Brown nominees to the Board. I Martin and E Nosworthy are considered to be confl icted in respect of decisions involving Babcock & Brown Limited in accordance with GPT’s Confl icts Policy which is discussed below.

In considering this issue and making its determination that I Martin and E Nosworthy are independent, the Board has had regard to a number of factors, including: the impact the confl icts noted above have on the Directors’ ability to take part in the affairs of the Board generally; the materiality of the issues in which the Directors are unable to take part compared to the Directors who do not have these confl icts; Directors’ participation and approach at Board and Committee meetings; the fact that most day-to-day decision making with respect to GPT’s joint venture with Babcock & Brown is undertaken by Babcock and Brown executives under the terms of the Joint Venture and the fact

that E Nosworthy and I Martin do not participate in these decisions. Having regard to the above, the Board considers that the interests of these Non-Executive Directors could not reasonably be considered to materially interfere with their ability to act in GPT’s best interests.

and confl icts

Directors are required to notify the Chairman of any contract, offi ce (including other directorships) or interest which might involve a confl ict of interest and a list of interests is included at the front of the Agenda for each Board meeting.

Policy to provide guidance in the event of a confl ict of interest arising. A copy of GPT’s Confl icts Policy is available at GPT’s website. The Confl icts Policy provides guidance principally in respect of confl icts arising from the existence of obligations owed by certain Directors to other corporate entities, but also in respect of confl icts arising from any material personal interests held by the Directors. In particular, where a confl ict of interest may exist, Directors will not take part in discussions or vote on the matter being considered.

attendance at Board Meetings by Directors

The number of Board meetings and Directors’ attendance at those meetings during the fi nancial year is set out in the Directors’ Report.

access to Information and Independent advice

Each Director enters into an Access and Indemnity Deed with GPT to ensure seven years’ access to documents after their retirement as a Director.

The Board collectively, and each Director individually, has the right to seek independent professional advice in the performance of their duties as a Director.

Induction and Training

On commencement of employment, all Directors and employees undertake an induction program which includes information on GPT’s values, Code of Conduct and employment practices and procedures.

General compliance training is provided to all employees and specifi c training is provided depending on job function (ie to meet licensing requirements, or to meeting specifi c industry or professional body accreditation requirements). GPT has also built an in-house learning and development capability to support the maintenance and development of required employee capabilities.

Ongoing training for Directors involves education programs which are to be incorporated into the Board program, visits to offi ces or assets of the Group and presentations on developments impacting the business.

Review of Board performance

The Board is committed to enhancing its own and management’s effectiveness through a combined process of continuing education and performance management.

The Board considers that reviewing its performance is essential to good governance. This review process is designed to help enhance performance by providing a mechanism to raise and resolve issues and to provide recommendations to assist the Board to enhance its effectiveness.

THe GpT GROUp aNNUaL rePort 2007

The Board conducts a review of its own performance and practices each year. This review takes the form of either:

An internal review which includes: an examination of the performance of the Board, suggestions to improve the Board’s effectiveness, assessing what strategic or operational matters the Board should devote more time to in the following year, a self assessment by each Director of their performance during the year and any feedback on the Directors who are eligible for re-election at GPT’s Annual General Meeting to be held in the following year; or
An external review where the Board engages external consultants to undertake an independent review of the Board and director performance.

During 2007, the Board undertook an evaluation of its performance. This review was conducted internally in accordance with the principles outlined above.

Those directors who will be offering themselves for re-election at the 2007 Annual General Meeting have received the Board’s support for their re-election.

Review of performance of senior executives

GPT has implemented a uniform performance management system to provide employees with clear fi nancial and personal performance objectives. Components of this system include Group or business unit fi nancial and non fi nancial key performance indicators as well as an assessment of performance measured against GPT’s values and culture. These key performance indicators are initially set by the Board for the Chief Executive Offi cer and are then cascaded into the business.

The Nomination and Remuneration Committee conducts a performance review of the Chief Executive Offi cer annually and makes recommendations to the Board. In turn, the Chief Executive Offi cer conducts performance reviews of the Senior Executive team and reports on their performance to the Nomination and Remuneration Committee.

The performance of the Chief Executive Offi cer and Senior Executives during 2007 was reviewed in accordance with these principles.

committees of the Board

The Board has established the following Committees to assist it in carrying out its responsibilities:

Audit and Risk Management Committee;
Nomination and Remuneration Committee; and
Corporate Responsibility Committee.

The Chairman of each Committee is an Independent Director with the appropriate qualifi cations and experience to carry out that role. The Committees have a minimum of three members each of whom must be Non-Executive Directors.

Each of the Committees has a formal Charter setting out its responsibilities and functions. Copies of these Charters can be obtained from the GPT website.

Nomination and Remuneration committee

GPT’s Nomination and Remuneration Committee was established with responsibility for identifying and making recommendations to the Board regarding the appointment of Non-Executive Directors and reviewing and making recommendations to the Board regarding remuneration of Non-Executive Directors and Senior Executives.

Below: Rouse Hill Town Centre, NSW

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THe GpT GROUp aNNUaL rePort 2007

CorPorate GOVeRNaNce

Before making a recommendation to the Board regarding the appointment of a new Director, the Nomination and Remuneration Committee will assess the appropriate mix of skills, experience and expertise required on the Board and any future succession planning needs to identify potential candidates. An external professional recruitment search fi rm may also be employed.

Members of the Nomination and Remuneration Committee during 2007 were:

I Martin (Chairman)
P Joseph
M Latham

The attendance record for the Nomination and Remuneration Committee in 2007 is set out in the Directors’ Report.

audit and Risk Management committee

The Board has established the Audit and Risk Management Committee to give assurance regarding the quality and reliability of fi nancial information used by the Board and to review and report on fi nancial statements issued by GPT. In addition, the Audit and Risk Management Committee performs a range of advisory services to the Board, including:

review of compliance with statutory responsibilities relating to fi nancial disclosure;
review of ongoing compliance with laws and regulations;
review of ongoing compliance with the Trust’s Compliance Plan;
overseeing the establishment and implementation of internal controls and a risk management system that incorporates a system of assurance confi rming GPT’s risks are being considered and appropriate management plans are in place; and
providing advice to the Board on whether the provision of non-audit services by the external auditor is compatible with the standards of independence required by the Corporations Act.

Members of the Audit and Risk Management Committee during 2007 were:

A McDonald – Chairman from April to December
K Moss – Chairman from January to April
E Goodwin
E Nosworthy – until April

The attendance record for the Audit and Risk Management Committee in 2007 is set out in the Directors’ Report.

corporate Responsibility committee

During 2007 the Board established the Corporate Responsibility Committee to assist it in overseeing GPT’s commitment to good corporate citizenship and being an ethically and socially responsible organisation.

The Committee’s responsibilities include:

reviewing the strategic direction set by the GPT Board and ensuring that it is followed;
reviewing the Corporate Responsibility Steering Group’s business plans to execute Corporate Responsibility strategy;
making recommendations to the Board on major initiatives;
reviewing the quality and reliability of the non-fi nancial corporate responsibility reporting processes;
reviewing and reporting on nonfi nancial corporate responsibility statements issued by GPT or ratings submissions made by GPT; and
overseeing the risk management, compliance and internal control framework of GPT in the context of Corporate Responsibility initiatives and considering any Corporate Responsibility matters relating to the affairs of GPT that it determines to be desirable.

Members of the Corporate Responsibility Committee during 2007 were:

M Latham (Chairman)
E Goodwin
E Nosworthy

The attendance record for the Corporate Responsibility Committee in 2007 is set out in the Directors’ Report.

principle 3: promote ethical and Responsible Decision Making

Funds management is a business based to a large extent upon integrity and mutual trust where the interests of all stakeholders are recognised. GPT has established a Code of Conduct to assist Directors and employees to ensure that their conduct and the conduct of GPT meets the highest ethical and professional standards.

THe GpT GROUp aNNUaL rePort 2007

code of conduct

All Directors and employees are committed to, and bound by, GPT’s Code of Conduct.

The Code of Conduct does not seek to provide prescriptive rules on every ethical issue that may be faced by Directors or employees. Rather it provides a benchmark for ethical behaviour to assist GPT to maintain the trust and confi dence of all of GPT’s stakeholders. The Code also articulates the consequences for Directors and employees if they do not live up to the standards that are expected of them.

The Code of Conduct deals with:

ethical behaviour;
prohibition on insider trading;
prohibition on making unauthorised gains;
non-disclosure of confi dential information;
equal opportunity;
fair dealing;
health and safety;
protection and use of company assets;
prohibition on making unauthorised public statements.

GPT has also instituted a Whistleblower Policy dealing with reporting and investigating unethical behaviour.

All employees receive Code of Conduct training on commencement of employment with GPT and routine refresher training thereafter.

Copies of GPT’s Code of Conduct and Whistleblower Policy can be obtained from the GPT website.

Trading in securities and Hedging

In addition to its responsibilities under the Corporations Act, the Board has established a policy for Directors, offi cers and employees trading in GPT Securities. This policy provides that:

are only permitted to trade in GPT Securities in the six weeks after the announcement of GPT’s half year and full year results. In addition to this trading window, Link Market Services Limited (as administrator of the GPT Employee Incentive Scheme) may acquire Securities on behalf of executives who are participating in the GPT Employee Incentive Scheme following the Annual General Meeting of Securityholders;
even during the permitted trading window, no Director or offi cer may deal in GPT Securities if he or she has information which, if publicly available, would affect the price of those securities;
entering into transactions in products which have their primary aim of limiting the economic risk of holding GPT Securities acquired as part of the GPT Employee Incentive Scheme is prohibited;
GPT Securities created by third parties (eg options, warrants), is prohibited;
dealing in Babcock & Brown securities whilst the Joint Venture arrangement with Babcock & Brown Limited is in place, is prohibited.

A full copy of this policy can be obtained from the GPT website.

GPT’s Code of Conduct also sets out an explanation and prohibition of insider trading.

Below: Melbourne Central, VIC

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THe GpT GROUp aNNUaL rePort 2007

CorPorate GOVeRNaNce

political Donations

GPT’s policy in relation to political donations ensures that all donations made by the Group are registered and broadly bipartisan. Such donations are generally made to participate in the business forums of the major political parties. A regular review of donations made by the Group is undertaken by the Board.

Governance for externally Managed Funds

GPT recognises that as the manager of an externally managed vehicle, confl icts or potential confl icts may arise from time to time between GPT and the externally managed funds. Therefore effective and transparent governance procedures are vital to ensure that the interests of investors in the fund are being protected.

GPT has adopted the following basic principles for managing confl icts of interest that may arise:

regular reporting in relation to confl icts;
training of executives on their responsibilities in providing services to externally managed funds as part of a funds management business;
clear delineation of the matters that require investor consent in the operation of the funds; and
fees paid to GPT by the funds are as stipulated in the documentation establishing the fund or otherwise on an “arms length” basis.

GPT’s funds management business in Australia currently comprises the GPT Wholesale Offi ce Fund and the GPT Wholesale Shopping Centre Fund. GPT Funds Management Limited, a subsidiary of GPT Management Holdings Limited, is the Responsible Entity of these funds. The Board of the Responsible Entity is responsible for all decisions in respect of the Funds and, if there is a confl ict between the investors interests and the interests of GPT,

must give priority to the investors’ interests. Under the arrangements entered into between GPT and investors, it has been agreed that the Board will be comprised of a majority of independent directors and transactions between the funds and GPT are to be approved by the Board (comprised only of its independent directors).

GPT’s funds management business in Europe currently comprises funds managed by GPT Halverton and Hamburg Trust. In establishing the European funds, various supervisory boards and investor advisory boards or committees have been established as a means by which independent directors and/or a representative group of investors meet regularly with the fund manager to monitor performance and provide a transparent forum for enhanced governance. The formal role of the supervisory board/ investor advisory board/committee is set out in the documents establishing each of the funds. It includes a vote to approve transactions involving the fund and the members of the GPT Group and a vote to approve certain material transactions proposed by the fund manager.

principle 4: safeguard Integrity in Financial Reporting

audit and Risk Management committee

The Board has established the Audit and Risk Management Committee. The Audit and Risk Management Committee is comprised only of Non-Executive Directors, all of whom are independent.

At least one member of the Audit and Risk Management Committee has relevant accounting qualifi cations and experience and all members have a good understanding of fi nancial reporting and risk management.

Further details of the structure and responsibilities of the Audit and Risk Management Committee are set out under Principle 2.

external auditor

GPT’s external Auditor is PricewaterhouseCoopers (PWC).

Under the Board’s guidelines for the engagement of, and dealing with, GPT’s Auditor:

the Auditor’s appointment will be reviewed every fi ve years and the lead audit and review partner must be rotated every fi ve years;
any major non-audit work to be undertaken by the Auditor must be approved by the Audit and Risk Management Committee; and
the Audit and Risk Management Committee regularly monitors the type of non-audit work undertaken by the Auditor and the fees paid for such work and provides advice to the Board on the independence of the Auditor.

The Audit and Risk Management Committee is responsible for making recommendations to the Board on the appointment, reappointment, replacement, and remuneration of external Auditors.

All fees paid to the Auditors are disclosed in GPT’s Annual Financial Report.

In relation to the audit of the Annual Financial Report of GPT for the year ended 31 December 2007 PWC has provided written confi rmation to the Board that, to the best of its knowledge and belief, there have been no contraventions of:

the auditor independence requirements of the Corporations Act 2001; and
any applicable code of professional conduct.

THe GpT GROUp aNNUaL rePort 2007

principle 5: Make Timely and Balanced Disclosure

continuous Disclosure policy

The Board is committed to ensuring that all stakeholders are fully informed in a timely manner so that trading in GPT Securities takes place in an informed and competitive market.

GPT has a Continuous Disclosure Policy in place which is available on GPT’s website. This Policy outlines the concepts and principles of continuous disclosure, how they apply in practice, the obligations on GPT personnel to keep the market informed at all times, the procedures to be followed in the case of a disclosable event and the penalties for contravening continuous disclosure obligations.

All employees receive training on GPT’s obligations to ensure disclosure of material information.

The Company Secretary is responsible for communication with the Australian Stock Exchange in relation to listing rule obligations including continuous disclosure.

principle 6: Respect the Rights of shareholders

The Board is committed to effective communication with GPT’s stakeholders on all major developments and events concerning GPT’s operations and fi nancial results. To achieve this, GPT has designed a communications policy which outlines GPT’s procedures for disclosure of information to the market.

communication with stakeholders

In addition to complying with the continuous disclosure obligations required by the Australian Securities Exchange, timely and accurate information is made available to all stakeholders. Announcements are:

broadcast to the Australian Securities Exchange in the case of market sensitive information;
posted to the ‘News and Media’ section of the GPT website (additionally, interested parties can register for GPT’s ‘Alert Service’ to receive an emailed message following new announcements); and
distributed to major media and investor contacts.

Major communication forums, such as Annual and Mid Year results briefi ngs and the Annual General Meeting, are also webcast.

GPT maintains an extensive website which includes the following information:

copies of Annual Reports (from 1971 to 2007);
historical information in relation to distributions including all distributions paid since 1985;
detailed property information; and
Board and Committee charters and policies.

Executives also meet with investors and their representatives on a regular basis to discuss GPT’s performance.

annual General Meeting

GPT’s Annual General Meeting is held each year, typically in April/ May. In addition to formal business, the meeting is an opportunity for Securityholders to be briefed on GPT’s activities and to ask questions of the Board and management.

Below: Rouse Hill Town Centre, NSW

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THe GpT GROUp aNNUaL rePort 2007

CorPorate GOVeRNaNce

A Notice of Meeting and accompanying Explanatory Memorandum on proposed resolutions is provided to Securityholders well in advance of any meeting of Securityholders. It is also posted on GPT’s website and lodged with the ASX.

Securityholders who are not able to attend GPT’s Annual General Meeting are able to vote by proxy in accordance with the Corporations Act.

The Board encourages participation of Securityholders at the Annual General Meeting. The Chairman encourages questions and comments from Securityholders and the meeting is structured to allow ample opportunity for those present to participate.

The Auditor attends the Annual General Meeting and is available to answer Securityholder questions about the conduct of the audit and the preparation and content of the Auditor’s Report.

The Annual General Meeting is webcast via GPT’s website for those Securityholders who are unable to attend in person. Additionally, the Chairman’s address is immediately announced to the ASX.

principle 7: Recognise and Manage Risk

Risk Management/ compliance

Whilst GPT recognises that risk is inherent in all enterprises, GPT adopts a pro-active risk management approach directed toward realising potential opportunities whilst managing possible adverse effects.

The Board has adopted a Risk Management Policy outlining GPT’s objectives, strategies and resources to identify, evaluate, treat, monitor, quantify and report signifi cant risks to the Audit and Risk Management Committee and, through the Audit and Risk Management Committee, to the Board. Underpinning this system is the recognition that while the Board retains ultimate responsibility, each level of the business is responsible for risk management, not just within GPT, but also through GPT’s associated entities, service providers and business partners.

GPT’s approach to risk management follows the ‘Australian/New Zealand Standard on Risk Management AS/ NZ4360:2004’.

GPT’s risk management system incorporates a system of assurance and internal audit activities to confi rm that GPT’s risk management system is functioning, risks are being considered and management plans are being implemented to minimise key risks. GPT utilises the services of Deloitte Touche Tohmatsu to assist the Chief Risk Offi cer in undertaking these assurance and internal audit activities. An annual work program of assurance and internal audit activities is prepared based on the results of GPT’s annual risk review. Results of assurance and internal audit reviews are reported to the Audit and Risk Management Committee and, through the Committee, to the Board.

Reporting to the General Counsel, the Compliance Manager promotes a compliance culture across the GPT Group, while assisting management to comply with the regulatory framework within which GPT operates. This includes monitoring compliance with the Trust’s

Compliance Plan and other key compliance policies and procedures of GPT. Reports on compliance activities are provided to the Audit and Risk Management Committee and, through the Committee, to the Board.

With the acquisition of a number of offshore businesses during 2007, the Board is committed to ensuring that GPT’s risk management culture and systems are integrated into these businesses. In addition, GPT works with the offshore businesses and joint ventures in which it has investments but which it does not control, to obtain assurance that the material risks in those businesses and joint ventures are also being effectively managed.

The Audit and Risk Management Committee and, through it the Board, receive reports on GPT’s risk management practices and control systems and the effectiveness of GPT’s management of its material business risks. The Board has also received written assurance from the Chief Executive Offi cer and Chief Financial Offi cer that the declaration provided by them in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and control and that the system is operating effectively in relation to fi nancial reporting risks.

THe GpT GROUp aNNUaL rePort 2007

principle 8: Remunerate Fairly and Responsibly

The Board, with the assistance of the Nomination and Remuneration Committee, aims to create a remuneration system that:

is transparent;

Nomination and Remuneration committee

GPT’s Nomination and Remuneration Committee is responsible for:

reviewing and making recommendations to the Board on remuneration policies (including performance management and short and long term incentive schemes) applicable to GPT employees;
reviewing the Chief Executive Offi cer’s performance and remuneration annually, and reporting to and making recommendations to the Board thereon; and
making recommendations to the Board on remuneration policies and packages applicable to Board members.

Further information concerning the Nomination and Remuneration Committee is set out above under Principle 1.

Remuneration policy

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 also designed to demonstrate a clear and direct link between GPT’s performance and an individual’s performance and remuneration.

is fair and market competitive;
encourages superior performance by aligning employee rewards with the interests of all stakeholders;
attracts, motivates, retains and rewards talented and skilled directors, executives and employees; and
rewards employees who align their conduct and performance with the core values and culture of GPT.

Non-Executive Directors receive fees which refl ect their skills, responsibility and time commitment in the discharge of their duties. There is no performance link, in that fees are fi xed with no short or long term incentive schemes in place. Non-Executive Directors do not receive any retirement benefi ts.

GPT’s philosophy and the policies and procedures that are applied to determine the nature and amount of remuneration paid to Directors and employees of GPT are set out in the Remuneration section of the Directors’ Report. Specifi c details concerning the remuneration of Directors and specifi ed Senior Executives of GPT are also contained in this section of the Directors’ Report.

Below: Quad 4, Sydney Olympic Park, NSW Bottom: Macarthur Square, NSW

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THe GpT GROUp aNNUaL rePort 2007

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FINaNCIaL rePortS

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179 Elizabeth Street, Sydney, NSW

Highpoint Shopping Centre, Maribyrnong, VIC

ANNUAL FINANCIAL REPORT OF GENERAL PROPERTY TRUST 31 DECEMBER 2007

THE GPT GROUP

CONTENTS
Directors’ Report	48	15. Intangible assets	117
Auditor’s Independence Declaration	73	16. Payables	118
Financial Report		17. Borrowings	119
Income Statements	74	18. Provisions	123
Balance Sheets	75	19. Contributed equity	123
Statements of Changes in Equity	76	20. Reserves	124
Cash Flow Statements	77	21. Retained prof ts	126
Notes to the Financial Statements		22. Acquisition and disposal
1. Summary of signif cant		of controlled entities	127
accounting policies	78	23. Business combinations	127
2. Segment reporting (includes net prof t		24. Controlled entities	130
after income tax to realised operating income reconciliation)	92	25. Key management personnel disclosures	134
3. Distributions paid and payable to securityholders	97	26. Share based payments	136
4. Earnings per stapled security	98	27. Related party transactions	137
5. Expenses	99	28. Notes to the Statement of Cashf ow	139
6. Tax	100	29. Contingent assets and liabilities	139
7. Loans and receivables	101	30. Commitments	140
8. Inventories	103	31. Capital and f nancial risk management disclosures	141
9. Derivative f nancial instruments	103	32. Auditor’s remuneration	158
10. Non-current assets classif ed as held for sale	104	33. Net tangible asset backing	158
11. Investment properties	104	34. Events subsequent to reporting date	158
12. Equity accounted investments	108	Directors’ Declaration	159
13. Other assets	113	Independent Audit Report	160
14. Property, plant & equipment	114

The GPT Group (GPT) comprises General Property Trust (Trust) and its controlled entities and GPT Management Holdings Limited (Company) and its controlled entities.

General Property Trust is a registered scheme, registered and domiciled in Australia. GPT RE Limited is the Responsible Entity of General Property Trust. GPT Management Holdings Limited is a company limited by shares, incorporated and domiciled in Australia. GPT RE Limited is a wholly owned controlled entity of GPT Management Holdings Limited.

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, fi nancial reports and other information are available on our website: www.gpt.com.au.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

The Directors of GPT RE Limited, the Responsible Entity of General Property Trust, present their report together with the fi nancial statements of General Property Trust (the Trust) and its controlled entities (consolidated entity) for the fi nancial year ended 31 December 2007. The consolidated entity together with GPT Management Holdings Limited and its controlled entities form the stapled entity, the GPT Group (GPT or the Group).

1. OPERATIONS AND ACTIVITIES

1.1 Principal Activities

principal place of business is MLC Centre, Level 52, 19 Martin Place, Sydney NSW 2000.

housing properties;
residential property development;
property management;
funds management; and
hotel management.

operate in Australia, Europe and the United States of America.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

1. OPERATIONS AND ACTIVITIES (continued)

1.2 Review of Operations

Financial results – highlights

Distribution per stapled security increased by 5.1% (Dec 2006: 12.7%) to 28.9 cents (Dec 2006: 27.5 cents)
Realised operating income increased 8.3% to $605.1 million (Dec 2006: $558.6 million)
Total assets increased by 16.4% (Dec 2006: 15.1%) to $13,966.9 million (Dec 2006: $12,001.9 million)
Net tangible assets per stapled security increased by 7.2% (Dec 2006: 14.6%) to $3.86 (Dec 2006: $3.60)

Financial results – portfolio/operational highlights

portfolios’ operational performance.

Portfolio/Segment Note Retail 1.2(a) Off ce 1.2(b) Industrial 1.2(c) Hotel & Tourism 1.2(d) Seniors Housing 1.2(e) Funds Management 1.2(f) Joint Venture 1.2(g) Corporate Total Retail 1.2(a) Off ce 1.2(b) Industrial 1.2(c) Hotel & Tourism 1.2(d) Seniors Housing 1.2(e) Funds Management 1.2(f) Joint Venture 1.2(g) Corporate Total	Realised Operating Income Underlying Earnings adjustments Total Net prof t after tax Realised Operating Income Underlying Earnings adjustments Total Net prof t after tax 31 Dec 2007 $M 31 Dec 2007 $M 31 Dec 2007 $M 31 Dec 2006 $M 31 Dec 2006 $M 31 Dec 2006 $M	Realised Operating Income Underlying Earnings adjustments Total Net prof t after tax Realised Operating Income Underlying Earnings adjustments Total Net prof t after tax 31 Dec 2007 $M 31 Dec 2007 $M 31 Dec 2007 $M 31 Dec 2006 $M 31 Dec 2006 $M 31 Dec 2006 $M
	292.9 227.4 520.3 339.0 486.9 825.9 189.9 431.7 621.6 222.1 266.2 488.3 47.7 24.1 71.8 39.3 29.3 68.6 72.5 2.9 75.4 76.8 (23.1) 53.7 19.9 (3.3) 16.6 – – – 8.6 1.5 10.1 2.3 1.6 3.9 151.0 (41.4) 109.6 100.2 34.4 134.6 (177.4) (65.5) (242.9) (221.1) 30.1 (191.0)
	605.1 577.4 1,182.5 558.6	825.4 1,384.0
		Total Assets Total Assets 31 Dec 2007 $M 31 Dec 2006 $M
		5,324.9 5,806.5 3,147.1 2,567.6 737.8 662.3 896.1 851.1 307.2 216.5 624.7 – 2,010.2 1,507.6 918.9 390.3
		13,966.9 12,001.9

A description of each segment, further detail on the types of segment income and expenses is set out in note 2 of the fi nancial statements. The nature of the underlying earnings adjustments is set out in note 2(b) of the fi nancial statements.

portfolio, and the benefi ts of expansion of GPT’s operations into new sectors and geographies, including the establishment of GPT’s second wholesale fund.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

1. OPERATIONS AND ACTIVITIES (continued)

1.2 Review of Operations (continued)

Financial results – portfolio/operational highlights (continued)

(a) Retail portfolio

On 30 March 2007, GPT established its second wholesale fund – the GPT Wholesale Shopping Centre Fund (GWSCF). The Trust received cash proceeds of $1.2 billion on 30 March 2007 by way of a capital reduction in respect of its units in GWSCF upon entry of the new wholesale investors. These proceeds were initially used to retire existing debt. This enhanced GPT’s capacity to fund its signifi cant development pipeline, capital commitment to GPT’s joint venture arrangement with Babcock & Brown and to further invest in future opportunities across GPT’s investment portfolio. The Trust currently owns 39.92% of the GWSCF.

The retail portfolio delivered an increase in income (on a comparable basis) for the year, refl ecting improved returns from recently completed development and the benefi t of active asset management. The fi rst stage of the Rouse Hill Town Centre opened during the year.

Revaluations across the portfolio and GPT’s interest in the GWSCF resulted in a net revaluation increase of $246.8 million.

(b) Offi ce portfolio

The Offi ce portfolio delivered an increase in income (on a comparable basis after taking into account the establishment of the GPT Wholesale Offi ce Fund which occurred in July 2006) for the year of 6.3%, refl ecting the benefi t of signifi cant leasing across the portfolio and the strength of Australia’s offi ce markets. The portfolio was expanded with the completion of a new offi ce building, 818 Bourke Street, Melbourne.

Revaluations across the portfolio and GPT’s interest in GPT Wholesale Offi ce Fund (GWOF) resulted in a net revaluation increase of $460.8 million.

(c) Industrial portfolio

The Industrial portfolio was expanded during 2007 with the completion of Quad 4, Sydney Olympic Park, NSW, a facility for Linfox at the Austrak Business Park, Somerton, VIC and an expansion of a facility at Kings Park, NSW.

The Portfolio delivered an increase in income (on a comparable basis) for the year of 3.7%. Revaluations across the Portfolio resulted in a net revaluation increase of $24.2 million.

(d) Hotel & Tourism portfolio

Comparable income from the Hotel Portfolio demonstrated a slight decrease on the previous year, largely as a result of trading at Ayers Rock Resort which was negatively impacted by reduced international tourism over the period.

(e) Seniors Housing portfolio

2007, GPT through its interests in Benchmark GPT LLC and B-VII Operations Holding Co LLC, completed its second acquisition of a 95% interest in a further 11 freehold and 4 leasehold communities in the New England region in the United States of America for USD$265 million (AUD$295 million), including acquisition costs. These properties are managed by Benchmark Assisted Living LLC, in which GPT has a 20% interest.

(f) Funds management portfolio

Australian platform

GPT’s Australian Funds Management business was expanded with additional acquisitions undertaken in the GWOF and the establishment of the GWSCF in March 2007.

The GWOF acquired three additional assets, and secured further growth with an agreement to acquire workplace[6] , a development being undertaken by GPT in Sydney. The Fund now owns a $3.0 billion portfolio of offi ce assets and delivered signifi cant outperformance for investors in 2007.

On 30 March 2007, GPT established the GPT Wholesale Shopping Centre Fund (GWSCF). The Fund, which was launched with a $1.9 billion portfolio of retail assets, was expanded in 2007 with the acquisition of the Berkelouw Complex in Sydney. At 31 December 2007, the Fund’s Portfolio had a value of $2.1 billion.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

1. OPERATIONS AND ACTIVITIES (continued)

1.2 Review of Operations (continued)

Financial results – portfolio/operational highlights (continued)

(f) Funds management portfolio (continued)

European platform

platform in Europe to build both asset management and funds management opportunities:

(i) Acquisition of Halverton Real Estate Investment Management Limited

The Group agreed to terms with the joint venture arrangement with Babcock & Brown and Halverton Real Estate Investment Management Limited (Halverton) to acquire 100% of Halverton for cash consideration of EUR€53.2 million (AUD$84.9 million) in two separate tranches, as detailed below:

in June 2007, Halverton management, who own 50% of Halverton’s share capital, agreed to sell their shares to GPT UK Limited. The acquisition was completed on 10 July 2007. The purchase consideration was EUR€32.6 million (AUD$51.7 million) for ordinary equity and EUR€5.0 million (AUD$7.9 million) for an additional cash injection, and
BGP (UK) Investments Limited owned the remaining 50% of Halverton shares. BGP (UK) Investments Limited was 50% owned by GPT UK Limited, a wholly owned entity of the Group. GPT UK Limited acquired the remaining 50% interest in BGP (UK) Investments Limited on 29 November 2007 for EUR€15.6 million (AUD$25.3 million).

Halverton, which has been rebranded as GPT Halverton, is a pan European investment and asset management company now employing 160 people and operating in the United Kingdom, France, The Netherlands, Germany, Sweden and Denmark. It has assets under management of over EUR€2.0 billion (AUD$3.3 billion).

(ii) Acquisition of Hamburg Trust

On 3 July 2007, GPT acquired a 60% interest in the ordinary shares of the Hamburg Trust Grundvermogen und Anlage GmbH and its controlled entities (Hamburg Trust) from BGP Investments SARL, an entity owned 50% by GPT through the joint venture arrangement with Babcock & Brown, for cash consideration of EUR€0.3million (AUD$0.5 million).

The Hamburg Trust is a start up German closed-end funds management business which employs 15 people and undertakes property, asset and investment management activities. GPT acquired a further 20% interest in Hamburg Trust on 9 November 2007 bringing GPT’s ownership interest to 80%.

(g) Joint Venture (with Babcock & Brown) portfolio

Changes to GPT’s joint venture with Babcock & Brown (JV) were announced in June 2007, introducing an investment term of fi ve years (from July 2007), with a divestment period of up to three years. GPT will begin to redeem a portion of its preferred capital ($163 million annually) from 1 January 2009. A revised fee structure, which incorporates lower acquisition fees, and introduces base fees and incentive fees linked to the achievement of GPT’s return on equity targets was introduced.

The JV met its targeted return of 9.7% (pre-tax) on GPT’s equity in 2007.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

1. OPERATIONS AND ACTIVITIES (continued)

1.2 Review of Operations (continued)

(h) Developments

Rouse Hill Town Centre in the Retail Portfolio in September; Quad 4, Sydney Olympic Park, NSW and facilities at Somerton, VIC and Kings Park, NSW in the Industrial/Business Park Portfolio and 818 Bourke Street, Melbourne, VIC in the Offi ce Portfolio.

The Group also announced plans to develop a major new CBD retail centre in Newcastle, NSW and plans were progressed with the approval of a development application for a major expansion of Charlestown Square, NSW.

(i) Capital Management

Highlights

At 31 December 2007,

GPT’s percentage of debt to total tangible assets is 36.3% (Dec 2006: 35.8%)
Weighted average length of debt is 3.7 years (Dec 2006: 2.2 years)

Liquidity

On 26 October 2007, GPT raised a EUR€2.01 billion multi-option syndicated facility. The facility, which attracted participation from 24 domestic and offshore banks, was oversubscribed, resulting in GPT raising well above the EUR€1.5 billion originally sought. The margins (above the benchmark rate for the relevant currency and tenor at the time funds are drawn) were in line with GPT’s expectations in the prevailing environment that existed at October 2007 of a minimal increase, with the average margin across GPT’s debt increasing by 2.4 basis points. There was no material change to fees under the facility.

Equity issues

GPT introduced the Distribution Reinvestment Plan (DRP) in March 2007. The DRP fi rst applied to the March 2007 quarterly distribution, which was paid on 25 May 2007, and has subsequently been applied to the June and September quarterly distributions. The DRP will also apply to the December 2007 quarterly distribution.

Under the terms of the DRP, eligible securityholders are able to elect to reinvest all or part of their quarterly distribution in additional stapled securities, free of any brokerage or other transaction costs, rather than being paid in cash. Securities are issued and/or transferred at a predetermined price, less any discount that the Directors may elect to apply from time to time. The DRP issue price is based on the arithmetic average of the daily volume weighted average price of GPT Group stapled securities traded on the Australian Securities Exchange for the ten business days preceding the relevant quarterly distribution record date, adjusted to an ex-dividend rate, less a 1.5% discount rounded to the nearest cent.

GPT also entered into an underwriting agreement on 17 October 2007. Under this agreement, GPT has the option to elect before each quarterly distribution payment whether to have that distribution underwritten. The terms of this agreement provide that the underwriter fully underwrites distribution payments from October 2007 in exchange for GPT stapled securities of the securityholders who had not elected to participate in the DRP. The stapled securities are to be issued at the same price as securities issued under the DRP to other GPT securityholders.

At 31 December 2007, 22,219,109 new stapled securities relating to the distribution for the September 2007 quarter were issued under the underwriting agreement. The March 2007 and June 2007 quarter DRPs were not underwritten.

Treasury policy

division operates within policies set by the Treasury Risk Management Committee which reports to the Audit and Risk Management Committee. The Treasury Risk Management Committee is directly responsible for ensuring management’s actions are in line with GPT policy.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

1. OPERATIONS AND ACTIVITIES (continued)

1.3 Distributions

Total distributions paid/payable to stapled securityholders for the fi nancial year ended 31 December 2007 totalled $597.0 million (Dec 2006: $559.8 million). This represented an annual distribution of 28.9 cents (Dec 2006: 27.5 cents). Included within this annual distribution is the distribution of 7.3 cents ($153.3 million) in respect of the quarter ended December 2007, which is expected to be paid on 28 March 2008. Further detail on quarterly distributions are set out in note 3 of the fi nancial statements.

year other than those set out in Section 1.2 Review of Operations and Section 1.2(i) Capital Management of this report.

1.5 Likely Developments and Expected Results of Operations

described in Section 1.2 Review of Operations. In the opinion of the Directors, disclosure of any further information would be likely to result in unreasonable prejudice to GPT.

1.6 Environmental Regulation

GPT has policies and procedures in place that are designed to ensure that where operations are subject to any particular and signifi cant environmental regulation under a law of Australia (for example property development and property management), those obligations are identifi ed and appropriately addressed. This includes obtaining and complying with conditions of relevant authority consents and approvals and obtaining necessary licences. GPT is not aware of any breaches of any environmental regulations under the laws of the Commonwealth of Australia or of a State or Territory of Australia and has not incurred any signifi cant liabilities under any such environmental legislation.

Assessment and Reporting Schedule within the legislative deadline of 31 December 2007. During 2008, GPT will undertake assessments for relevant sites across its Australian divisions of Retail, Offi ce and Hotel & Tourism.

www.gpt.com.au

1.7 Events Subsequent to Reporting Date

The Directors are not aware of any matter or circumstance occurring since 31 December 2007 not otherwise dealt with in the fi nancial report or at Section 1.3 above that has signifi cantly or may signifi cantly affect the operations of GPT, the results of those operations or the state of affairs of GPT in subsequent fi nancial years.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

2. DIRECTORS AND SECRETARY

2.1 Directors

The Directors of GPT Management Holdings Limited and GPT RE Limited at any time during or since the end of the fi nancial year are:

(i) Chairman – Non-Executive Director

Peter Joseph

(ii) Non-Executive Directors

Eric Goodwin

Malcolm Latham

Ian Martin

Anne McDonald
Ken Moss
Elizabeth Nosworthy

(iii) Executive Director

Nic Lyons

2.2 Information on Directors

Peter Joseph OAM – Chairman

Mr Joseph was appointed to the Board on 30 April 2003. Mr Joseph is a career investment banker and an experienced company director who had a close involvement with the BT Financial Group for over 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 a Medal in the Order of Australia. 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.

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 National President of the Property Council of Australia.

Eric Goodwin

Mr Goodwin was appointed to the Board on 21 November 2004. 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 (responsible entity of Diversifi ed Utility and Energy Trust No. 2). 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. Mr Goodwin 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 and Corporate Responsibility Committee.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

2. DIRECTORS AND SECRETARY (continued)

2.2 Information on Directors (continued)

Malcolm Latham AM

Mr Latham was appointed to the Board on 21 January 1992 and 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 Australia 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 chairs the Corporate Responsibility Committee and is a member of the Nomination and Remuneration Committee.

Ian Martin

Mr Martin was appointed to the Board on 2 June 2005. 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 Offi cer 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 Chair 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 Speciality Fashion Group Limited, Westpac’s Life and General Insurance companies, Health Super and Sisters of Charity Health Services. Ms McDonald is a chartered accountant and was previously a partner of Ernst & Young for fi fteen 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 and St Vincent’s and Mater Health Sydney Limited. Ms McDonald is Chair of the Audit and Risk Management Committee.

Ken Moss

Dr Moss was appointed to the Board on 7 August 2000. Dr Moss is a Director of Macquarie Capital Alliance Group, Chairman of Boral Limited and Centennial Coal Company Limited and is a board member of the Australian Brandenburg Orchestra. Prior to August 2000, Dr Moss was Managing Director of Howard Smith Limited. Dr Moss is a member of the Audit and Risk Management Committee.

Elizabeth Nosworthy AO

Ms Nosworthy was appointed to the Board on 18 March 1998 and 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 fi rm where she specialised in fi nancing work including infrastructure fi nancing. 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 Corporate Responsibility Committee.

Company Secretary – James Coyne

Mr Coyne is responsible for the legal, compliance, risk management and company secretarial activities of GPT. He was appointed the General Counsel/Company Secretary of GPT in 2004. Previous experience includes company secretarial and legal roles in construction, infrastructure and the real estate funds management industry (listed and wholesale). Mr Coyne holds a Bachelor of Arts and Bachelor of Laws (Hons) from the University of Sydney.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

2. DIRECTORS AND SECRETARY (continued)

2.3 Attendance of Directors at Meetings

number of those meetings attended by each Director is set out below:

	Board	Audit and Risk Management Committee	Nomination and Remuneration Committee	Corporate Responsibility Committee
	Meetings attended Meetings held	Meetings attended Meetings held	Meetings attended Meetings held	Meetings attended Meetings held
Peter Joseph Eric Goodwin Malcolm Latham Nic Lyons Ian Martin Anne McDonald Ken Moss Elizabeth Nosworthy	13 14 14 14 12 14 14 14 12 12 14 14 12 14 12 12	– – 6 6 – – – – – – 6 6 5 6 2* 2	7 7 – – 7 7 – – 7 7 – – – – – –	– – 3 3 3 3 – – – – – – – – 3 3

E. Nosworthy stepped down from the Audit and Risk Management Committee in April 2007.

2.4 Directors’ Relevant Interests

The relevant interests of each Director in GPT stapled securities as at the date of this Report are shown below:

	Number of GPT Stapled Securities
Peter Joseph	50,000
Eric Goodwin	11,775
Malcolm Latham	13,195
Nic Lyons	1,169,115
Ian Martin	51,241
Anne McDonald	10,500
Ken Moss	26,241
Elizabeth Nosworthy	6,537

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

2. DIRECTORS AND SECRETARY (continued)

2.5 Directors’ Directorships of Other Listed Companies

Details of all directorships of other listed entities held by each Director during the three years preceding 31 December 2007 and the period for which each directorship has been held are set out below:

Director	Directorshipof Listed Entity	Period held
Peter Joseph	Dominion MiningLimited	1980 topresent
Eric Goodwin	Nil	N/A
Malcolm Latham	Nil	N/A
Nic Lyons	Nil	N/A
Ian Martin	Babcock & Brown Limited	2004 to present
	Argo Investments Limited	2004 topresent
Anne McDonald	SpecialityFashion GroupLimited	2007 topresent
Ken Moss	Macquarie Capital Alliance Group	2005 to present
	(comprising Macquarie Capital Alliance Limited,
	Macquarie Capital Alliance Management Limited and
	Macquarie Capital Alliance Bermuda Limited)
	Boral Limited	1999 to present
	Centennial Coal Company Limited	2000 to present
	National Australia Bank Limited	2000 to 2004
	Adsteam Marine Limited	2001 to 2007
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

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT

arrangements that apply to Directors, key management personnel as defi ned in AASB 124 Related Party Disclosures and to the fi ve named executives as defi ned in section 300A of the Corporations Act 2001 (collectively ‘Senior Executives’).

3.1 The Nomination and Remuneration Committee

The GPT 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
remuneration policies and packages applicable to Board members.

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

Ian Martin (Chairman)
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)

recommendations on these to the Nomination and Remuneration Committee. The Chief Executive Offi cer’s recommendations recognise the differing experience, responsibilities, skills and contributions of executives as well as other market infl uences 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.

3.2 Remuneration – Senior Executives

GPT’s Remuneration Philosophy

GPT’s remuneration philosophy is focussed on the objective of achieving outstanding business performance by creating clear and direct links between the individual executive’s performance and their Total Remuneration and the business performance of GPT. This is achieved by a combination of:

research of remuneration market practices and benchmarks in the countries in which GPT has employees
a mixture of both fi xed and variable or ‘at risk’ pay, with both short and long term incentive components driven off challenging fi nancial and non-fi nancial key performance indicators (KPIs)
a rigorous performance management system which clearly establishes GPT’s expectations of employees and the potential rewards of superior performance, and
the use of GPT stapled securities to create an ownership culture and create direct alignment of executive and securityholder interests.

GPT’s Remuneration Strategy

In designing GPT’s remuneration strategy and policies, the Board has sought to achieve an approach which:

is transparent
is fair and market competitive
objectives – including the achievement of superior returns for stapled securityholders
attracts, aligns, retains and motivates superior talent at all levels by adequately rewarding contribution to value creation and the execution of GPT’s business strategy.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

Total Remuneration Package Composition

GPT aims to pay market competitive Total Remuneration packages comprising:

Base Salary (fi xed) – this is generally positioned around 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 signifi cant change in an employee’s responsibilities, for example, in the case of a promotion.
Short Term Incentives (STIs) (variable) – GPT provides opportunities for executives to receive short-term incentive awards on an annual basis. STI opportunities are expressed as a percentage of Base Salary and are determined by calendar year performance against agreed fi nancial and non-fi nancial KPIs.
Long Term Incentives – (LTIs) (variable) – GPT executives may receive LTI awards if the GPT Group performance meets certain fi nancial KPIs measured over three years.

Individuals may receive Total Remuneration (i.e. Base salary plus STI plus LTI) in the top quartile of the market in a particular year only if various fi nancial and non-fi nancial KPIs are achieved.

For the Chief Executive Offi cer and other key management personnel the variable or ‘at risk’ components of Total Remuneration are greater than at other levels of the business. The percentage mix of fi xed and variable components of Total Remuneration for the Chief Executive Offi cer and other Senior Executives is disclosed in Table A below.

Table A – Fixed and variable components of Total Remuneration

Senior Executives	Position	Base Salary (f xed)	Variable or “At Risk” STI	Remuneration1 LTI
Nic Lyons	Chief Executive Off cer	22.0%	35.0%	43.0%
Michael O’Brien	Chief OperatingOff cer	25.0%	37.5%	37.5%
Kieran Pryke	Chief Financial Off cer	34.0%	33.0%	33.0%
Neil Tobin	General Manager – Joint Venture	34.0%	33.0%	33.0%
Jonathan Johnstone	Head of Europe	31.0%	38.0%	31.0%
Mark Fookes	Head of Retail	34.0%	33.0%	33.0%
Nicholas Harris	Head of Wholesale	29.0%	42.0%	29.0%
James Coyne	General Counsel/Secretary	38.0%	31.0%	31.0%

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

To set appropriate Total Remuneration opportunities for GPT executives the Nomination and Remuneration Committee commissions annual benchmarking by an external expert. The benchmarking considers comparable roles in GPT’s competitors & peers both in the Listed Property Trust (LPT) sector and the broader ASX 200, with the greatest weighting being applied to LPT sector based comparisons. The Nomination and Remuneration Committee and the Chief Executive Offi cer may also draw on information available in published job matched surveys of industry peers.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

GPT’s Performance Management System and Short Term Incentives (STI) (variable component)

A uniform performance management system is used across the GPT Group which provides all employees with clear fi nancial and personal performance objectives and drives STIs on an annual basis.

Although the performance criteria may be different for each executive, the principles are similar and involve assessment of performance across the following areas:

fi nancial (in relation to GPT Group fi nancial performance, GPT Group Corporate Responsibility objectives*, and the individual’s fund/portfolio/business unit) – achievement of earnings, return on equity and other relevant fi nancial targets
achieving strategic outcomes, operational improvement, performance enhancement and personal and 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 may remove eligibility for STI.

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

infl uence particular outcomes of GPT’s objectives as well as the executive’s seniority and accountability.

objectives and relative to various measurement levels (threshold, target and stretch in the case of fi nancial goals). No STI award is made for a particular goal if performance falls below a minimum threshold level.

STI awards may be received in a number of ways:

cash

Table D shows the STI award payable to the key management personnel in March 2008 in relation to their performance for the fi nancial year ended 31 December 2007.

Long Term Incentives (LTI) (variable component)

Following approval at the Annual General Meeting on 18 April 2006, the Board implemented a LTI scheme for Senior Executives.

The LTI scheme is designed to:

provide Senior Executives with a long-term incentive to create value for stapled 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
attract, align, retain and motivate key executives.

Prior to 1 July 2006, stapled securities listed on the Australian Securities Exchange such as those issued by GPT were not included under the defi nition of ordinary securities eligible for the tax deferral and tax exemption concessions in Division 13A of the Income Tax Assessment Act 1936 . As a result, loan based schemes were considered best practice and particularly relevant in the Listed Property Trust sector where the regular distributions were used in the scheme design to pay down the loan.

allocated to Corporate Responsibility objectives and performance.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

Long Term Incentives (LTI) (variable component) (continued)

As a result, the LTI scheme consists of a loan to enable nominated employees to acquire GPT stapled securities under GPT’s Employee Incentive Scheme. The loan to purchase GPT stapled securities is full recourse** and of no fi xed term. After deducting amounts for employee income tax from the gross distributions of GPT stapled securities, net distributions are applied to the loan. The loan is subject to interest calculated at GPT’s funding cost, which in 2007 was 5.9% (2006: 5.6%). While the loan remains outstanding, the GPT stapled 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 Fringe Benefi ts Tax (FBT)).

The performance conditions that give rise to a LTI award are determined annually by the Board (refer Table B), are tested at the end of each applicable three year period and LTI awards and accruals are disclosed in GPT’s Remuneration Report (refer Table D). 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-rated awards will occur up to stretch outcomes. Where an LTI award is made, the interest attributable to the loan (the loan cost) will fi rst be deducted from that amount. If the total LTI award is insuffi cient 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 the amount of the loan equal to the remainder of the LTI award after deducting the amount payable by GPT for FBT.

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

second in 2007. The performance condition hurdles and GPT’s performance against them as at 31 December 2007 are summarised in Table B below. The overall operation of the LTIs and the positions of participating disclosed senior executives as at 31 December 2007 are detailed in Table C.

2006 and 2007 LTI Performance Conditions

In designing the LTI performance conditions, the Board determined that it was important to devise performance conditions that provided a direct link to GPT’s distributions and their rate of growth, which in turn are performance drivers of total stapled securityholders return. The Board also considered that external benchmarking against an applicable LPT Index was required.

The Board believes that these requirements have been met through adopting the LTI performance measures of Growth in Earnings per GPT stapled security, Return on Contributed Equity and Performance relative to the S&P ASX 200 Listed Property Trust Index (excluding GPT). The performance conditions, hurdles and weightings were approved by securityholders at the 2006 and 2007 Annual General Meetings. The current state of GPT’s performance against each metric is set out in Table B.

** At the discretion of the Board, the loan and outstanding interest on the loan may be waived on retirement of the employee, on death or total permanent disability of the employee, on redundancy without cause of the employee or on takeover of GPT.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

Table B – LTI Performance Conditions

Table B – LTI Performance Conditions	Table B – LTI Performance Conditions
LTI Performance Measurement Period Performance Condition Performance Condition Hurdle Weighting GPT Group Performance as at 31 December 2007 % of Maximum LTI Award Accrued per Executive2
2006 LTI Scheme
2006–2008	Growth in Earnings per GPT stapled security will be measured as the percentage increase in earnings per GPT stapled security. EPS is the base earnings per security adjusted for signif cant items and other items determined by the Board and as disclosed in GPT’s Income Statement for the f nancial years ended 31 December 2006, 2007 and 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-rated awards will occur up to a stretch outcome of 7.5%.1 50% 9.75% 80% Return on contributed equity measures the total return on equity employed and takes into account both capital appreciation of the assets of GPT 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-rated awards will occur up to a stretch outcome of 12.5%. 30% 22% Performance relative to Listed Property Trust Index (LPT Index). 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-rated awards will occur up to the stretch outcome of 2% outperformance. The Board may substitute another Index if there is a material change in the composition of the LPT Index during the measurementperiod. 20% -2.3%3

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

Table B – LTI Performance Conditions (continued)

Table B – LTI Performance Conditions(continued)	Table B – LTI Performance Conditions(continued)
LTI Performance Measurement Period Performance Condition Performance Condition Hurdle Weighting GPT Group Performance as at 31 December 2007 % of Maximum LTI Award Accrued per Executive2
2007 LTI Scheme
2007–2009	Growth in Earnings per GPT stapled security will be measured as the percentage increase in earnings per GPT stapled security. EPS is the base earnings per security adjusted for signif cant items and other items determined by the Board and as disclosed in GPT’s Income Statement for the f nancial years ended 31 December 2007, 2008 and 2009. If EPS growth is below 4% on average over the three year period, no part of LTI available for this performance measure will be awarded. If EPS growth is above 4%, pro-rated awards will occur up to a stretch outcome of 6%. 50% 7% 80% Return on contributed equity measures the total return on equity employed and takes into account both capital appreciation of the assets of GPT 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-rated awards will occur up to a stretch outcome of 12.5%. 30% 17.8% Performance relative to Listed Property Trust Index (LPT Index). 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-rated 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 measurementperiod. 20% -15%3

1 This performance hurdle recognised the one off uplift averaged over three years in Growth in Earnings per GPT stapled security embedded in the internalisation proposal.

2 As an example, under the 2006 LTI Scheme Nic Lyon’s maximum LTI award potential is $1,297,500. Based on GPT’s performance against the 2006 LTI Scheme Performance Condition Hurdles as at 31 December 2007, the Percentage of Maximum LTI Award Accrued per Executive was 80%, a potential award of $1,038,000 at the end of the scheme. This potential award is then divided by three to match the three year life of the scheme under accrual accounting to result in an LTI award accrual of $346,000. A similar process is followed to determine the amount that should be accrued for the 2007 LTI Scheme, and the fi gures combined for the 31 December 2007 LTI Award Accrual in Table D. It should be noted that the dollar amounts specifi ed are accruals only and no LTI award will be made under the 2006 or 2007 LTI Schemes if the performance hurdles specifi ed above are not met or exceeded at the end of the 2006–2008 and 2007–2009 periods respectively.

3 Based on a rolling three year average.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

Set out below are details of the operation of the LTI scheme in 2006 and 2007 for Senior Executives:

Table C – 2007 and 2006 LTIs for Senior Executives

Table C – 2007 and 2006 LTIs for Senior Executives
Senior Executives LTI Scheme Loans granted under LTI scheme GPT stapled security purchase price Number of securities acquired under LTI scheme Total net distributions applied to loans since issued	Closing loan balance GPT stapled security price at Total net value of employee equityat1 LTI Scheme award accrual2 Total ac- cumulated interest costs as at3
	31 Dec 2007 31 Dec 2007 31 Dec 2007 31 Dec 2007 31 Dec 2007
N. Lyons 2007 2,223,997 5.11 434,999 207,592 Chief Executive Off cer 2006 2,874,997 4.20 684,116	4,891,401 4.04 (370,177) 864,833 325,084 432,500
M. O’Brien 2007 1,301,977 5.11 254,658 95,114 Chief Operating Off cer 2006 1,233,333 4.20 293,476	2,440,195 4.04 (225,734) 391,000 151,926 185,000
K. Pryke 2007 403,235 5.11 78,870 69,018 Chief Financial Off cer 2006 1,055,554 4.20 251,173	1,389,771 4.04 (56,397) 255,001 104,542 158,333
N. Tobin 2007 570,689 5.11 111,623 65,409 General Manager Joint Venture 2006 944,444 4.20 224,734	1,449,724 4.04 (90,842) 251,666 101,060 141,667
J. Johnstone4 2007 218,453 5.11 42,728 48,180 Head of Europe	925,828 4.04 (26,867) 174,668 72,315
M. Fookes 2007 484,347 5.11 94,735 69,126 Head of Retail 2006 1,033,331 4.20 245,885	1,448,552 4.04 (72,447) 259,667 105,552 155,000
N. Harris 2007 256,742 5.11 50,217 43,268 Head of Wholesale 2006 888,887 4.66* 190,627	1,102,360 4.04 (129,351) 206,668 74,431 133,333
J. Coyne 2007 209,302 5.11 40,938 37,058 General Counsel/ Secretary 2006 568,888 4.20 135,369	741,132 4.04 (28,852) 136,534 56,055 85,333
B. Morris5 Hotels PM 2006 877,221 4.20 208,738 16,751	– – – – –
Total 15,145,397 3,342,886 651,516	14,388,963 (1,000,667) 3,831,203 990,965

1 Net value of employee equity at 31 December 2007 is determined by deducting the loan balance as at 31 December 2007 from the value of the securities held at the prevailing security price on that date of $4.04.

2 Table B outlines GPT’s performance against the performance conditions of the 2007 and 2006 LTI Schemes and the resulting actual dollar amount of the LTI award accrual by Senior Executive.

3 Under the LTI Scheme rules, the interest is accumulated and applied to the loan balance at the time an LTI award is payable. If the LTI award is insuffi cient to cover the interest cost in whole or in part, then the unpaid interest is added to the loan balance. The total accumulated interest costs as at 31 December 2007 is the sum of accumulated interest on the loans since commencement of the LTI scheme, which is 2006 and 2007.

4 J. Johnstone is part of the key management personnel in 2007.

5 B. Morris is not part of the key management personnel for 2007.

N. Harris commenced with GPT on 25 July 2006 and the GPT stapled securities allocated to him in the 2006 LTI Scheme were purchased later in 2006 than those obtained in the initial tranche and at the prevailing market price at the time.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

GPT’s Employee Incentive Scheme

Following approval at the Annual General Meeting on 18 April 2006, the Board implemented the GPT Employee Incentive Scheme which operates at two levels:

an LTI Scheme for certain Senior Executives – discussed at page 60; and
a General Scheme for all employees (other than Senior Executives who receive a Long Term Incentive).

The General Scheme was implemented to encourage and build a broad base of employee ownership of GPT stapled securities. It is the view of the Board that the cost of the General Scheme is more than offset by the signifi cant benefi ts that fl ow to GPT from the establishment of an ownership culture within the general employee population and the impact of that culture in terms of GPT performance and alignment of employee and stapled securityholder interests.

Under the General Scheme, employees with a minimum of twelve months service in permanent salaried employment are offered the ability to participate up to a nominated percentage of their base salary (20%). The General Scheme is based on an interest free loan of no fi xed term to enable employees to acquire GPT stapled 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 stapled securities that are acquired by the Scheme Administrator on employees’ behalf. GPT stapled 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 GPT stapled securities or by some other source of funds. For the year ended 31 December 2007, 306 employees participated in the General Scheme with total loans of $4,937,651.

Regulatory changes in 2007

design. However, amendments to the taxation legislation effective 1 July 2006 now mean that stapled securities listed on the Australian Securities Exchange such as those issued by GPT are included under the defi nition of ordinary securities in the Income Tax Assessment Act 1936 and are eligible for the tax deferral and tax exemption concessions in Division 13A. Prior to 1 July 2006, these concessions only applied to ordinary securities and not to stapled securities.

The Nomination and Remuneration Committee has considered these regulatory changes and sought external expert advice in the context of the implications for competitive market practice and GPT’s existing employee share schemes, including the LTI. At the time of writing, the following actions have been taken:

GPT’s All Employee Stapled Security Plan (AESSP) – GPT is introducing an AESSP in March 2008. The AESSP is a tax exempt plan under which employees can salary sacrifi ce $1,000 per annum to purchase GPT stapled securities. GPT stapled securities acquired under the AESSP must be held for a minimum of three years (or earlier if employment ceases) during which time they cannot be sold or otherwise dealt with.
Initial advice has been obtained on market best practice in relation to the existing loan based LTI.
Initial advice has been obtained on the deployment of tax deferred GPT stapled security purchase schemes that would allow employees and Non-Executive Directors to further build their ownership position within GPT by way of salary sacrifi ce.

If the Nomination and Remuneration Committee of GPT decides to take further steps towards implementation of the above items 2 and 3, approval will be sought from GPT investors and details included in the Explanatory Memorandum to the Notice of Meeting for GPT’s AGM in May 2008 or future AGMs.

Other Awards

Prior to the internalisation proposal being put to GPT Unitholders, the Board of GPT Management Limited, the former Responsible Entity of GPT (comprised of its Independent Directors) identifi ed certain individuals critical to business continuity and the success of the internalisation for a retention payment to be made in July 2007 should the employees remain with GPT until that time. Details of amounts allocated to the retention referred above have been included in Table D under the heading ‘Other Long Term Benefi ts – Retention’.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT (continued)

3.3 Details of Remuneration – Senior Executives

comparative year is as follows:

Table D – Senior Executives’ Remuneration

Senior Executives	Short term employee benef ts	Short term employee benef ts	Short term employee benef ts	Short term employee benef ts	Post employment	Post employment	Other long term benef ts	Other long term benef ts	Total
	Salary & Fees	STI Bonus1	STI Adjust Bonus2	Non- Monetary3	Super- annuation	Retirement Benef ts	LTI Award Accrual4	Retention5
N. Lyons Chief Executive Off cer 31 December 2007 31 December 2006	1,143,809 835,390	808,160 692,000	– 270,156	1,749 3,696	12,908 41,366	– –	864,833 432,500	297,172 675,392	3,128,631 2,950,500
M. O’Brien Chief Operating Off cer 31 December 2007 31 December 2006	724,439 540,741	465,847 277,500	– 126,131	1,839 1,921	12,908 12,413	– –	391,000 185,000	221,922 504,527	1,817,955 1,648,233
K. Pryke Chief Financial Off cer 31 December 2007 31 December 2006	648,295 462,404	272,381 237,500	– 103,011	1,749 9,804	12,908 12,413	– –	255,001 158,333	181,299 412,044	1,371,633 1,395,509
N. Tobin General Manager – Joint Venture 31 December 2007 31 December 2006	698,251 410,511	269,350 212,500	– 90,072	1,749 2,624	12,908 12,413	– –	251,666 141,667	176,142 400,324	1,410,066 1,270,111
J. Johnstone6 Head of Europe 31 December 2007 31 December 2006	943,791 –	228,588 –	– –	2,000 –	12,908 –	– –	174,668 –	– –	1,361,955 –
M. Fookes Head of Retail 31 December 2007 31 December 2006	692,528 448,078	378,332 232,500	– 78,934	1,749 3,259	12,908 40,833	– –	259,667 155,000	188,942 429,416	1,534,126 1,388,020
N. Harris Head of Wholesale 31 December 2007 31 December 2006	486,151 168,829	477,433 131,520	– –	1,504 483	12,908 5,286	– –	206,668 133,333	– –	1,184,664 439,451
J. Coyne General Counsel/ Secretary 31 December 2007 31 December 2006	408,050 304,518	145,960 128,000	– 45,937	2,087 1,891	12,908 12,413	– –	136,534 85,333	134,750 306,250	840,289 884,342
B. Morris7 PM, Hotels 31 December 2007 31 December 2006	– 378,276	– 197,375	– 76,657	– 26,090	– 12,413	– –	– 131,583	– 383,289	– 1,205,683
Total 31 December 2007 31 December 2006	5,745,314 3,548,747	3,046,051 2,108,895	– 790,898	14,426 49,768	103,264 149,550	– –	2,540,037 1,422,749	1,200,227 3,111,242	12,649,319 11,181,849

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT (continued)

3.3 Details of Remuneration – Senior Executives (continued)

Table D – Senior Executives’ Remuneration (continued)

1 The STI Bonus amounts relate to STI attributable to performance in a particular calendar year. In the 2006 Annual Report, this amount was disclosed as STI Bonus Accrued as the fi nal amounts had not been calculated.
were in relation to performance for the six months ended 31 December 2005. GPT has historically disclosed STI for the year preceding the annual report period, however in 2006 a decision was taken to adopt the practice of reporting on STI for the current calendar year. As a result, there is a one off impact in the above table where the STI disclosed for 2006 represents eighteen months of STI (i.e. both the STI Bonus and STI Adjust Bonus amounts) for the period 1 July 2005 to 31 December 2006.
3 The amount set out under Non-monetary may include administration fees associated with membership of the GPT Group Superannuation Plan, Death & Total/Permanent Disability Insurance Premiums, and/or the taxable value of the benefi t of discounted staff rates at Voyages Hotels & Resorts.
4 The LTI Award Accrual for calendar year 2007 is a substantial increase on 2006 as it now includes gross award accruals under both the 2006 and 2007 LTI Schemes, which operate concurrently. While GPT Group performance against the LTI scheme performance conditions is the driver for the accrual, no award is made to executives unless performance conditions are met or exceeded at the end of the three year period, with the fi rst such occasion at the end of calendar year 2008. It should be noted that participating executives incur an interest liability by participating in the LTI scheme which is either deducted from the gross award or, if the gross award does not cover the interest costs, capitalised onto the executive’s loan. For example, while N. Lyons 2007 LTI award accrual is $864,833 he has also accumulated interest costs on his full recourse loan of $325,084 which must be deducted from any potential award. A better refl ection of his overall total remuneration position would be to deduct the accumulated interest from the LTI award accrual and hence reduce his total compensation by $325,084 to $2,803,547.
5 The amount set out in “Other Long Term Benefi ts – Retention” represents an accrual for part of the retention award that became payable on 30 June 2007. The total amounts payable in respect of this retention award were 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 and J. Coyne $612,500.
the United Kingdom, including rental accommodation, school fees, cost of living adjustments and relocation costs. J. Johnstone was not part of the key management personnel prior to 2007.
7 B. Morris is not part of the key management personnel in 2007.

Service Agreements

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

Notice periods of one month apply to all these service agreements. 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 specifi cally capping the maximum severance payment that would be made to twelve 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.

Under the existing service agreements there are no additional payments on resignation, termination by GPT for poor performance or termination for cause other than statutory entitlements such as payment of accrued but untaken annual leave.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT (continued)

3.3 Details of Remuneration – Senior Executives (continued)

Service Agreements (continued)

Senior Executives.

	N. Lyons	M. O’Brien	K. Pryke	N. Tobin	J. Johnstone	M. Fookes	N. Harris	J. Coyne
Date of agreement	1 June 2005	1 June 2005	1 June 2005	1 June 2005	16 June 2005	1 June 2005	25 July2006	1 June 2005
Term of agreement	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended
Non-solicitation of	12 months	12 months	12 months	12 months	12 months	12 months	12 months	12 months
otherpersonnel
Retention payable	Yes*	Yes*	Yes*	Yes*	Not	Yes*	Not	Yes*
– June 2007					applicable		applicable
Termination notice	1 Month	1 Month	1 Month	1 Month	1 Month	1 Month	1 Month	1 Month

Refer to Table D.

3.4 Remuneration – Non-Executive Directors

GPT 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 fee for participation as a Director in all GPT related companies (principally GPT RE Limited, the Responsible Entity of 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 Director remuneration is set by reference to comparable entities listed on the Australian Securities 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 GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT (continued)

3.4 Remuneration – Non-Executive Directors (continued)

GPT Policy (continued)

and responsibility, but does not receive Committee fees.

Fees (including superannuation) paid to Non-Executive Directors are drawn from a remuneration pool of $1,550,000 per annum (2006: $1,450,000) which was approved by GPT stapled securityholders at the Annual General Meeting on 9 May 2007. As an executive director, Nic Lyons does not receive fees from this pool but is remunerated as one of GPT’s Senior Executives.

Annual Board and Board Committees fees (excluding superannuation) for the year ended 31 December 2007 are as follows:

		Board	Audit and Risk	Nomination and	Corporate
			Management Committee	Remuneration Committee	ResponsibilityCommittee
Chairman	2007	$315,000	$31,500	$21,000	$21,000
	2006	$300,000	$30,000	$20,000	–
Members	2007	$126,000	$15,750	$10,500	$10,500
	2006	$120,000	$15,000	$10,000	–

In addition to the above fees, all Non-Executive Directors receive reimbursement for reasonable travel, accommodation and other expenses incurred whilst undertaking GPT business.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

3. REMUNERATION REPORT (continued)

3.4 Remuneration – Non-Executive Directors (continued)

year are as follows:

Table E – Non-Executive Directors’ Remuneration

Directors	Short term employee benef ts	Short term employee benef ts	Short term employee benef ts	Short term employee benef ts	Post employment	Post employment	Other long term benef ts	Other long term benef ts	Total
	Salary & Fees1	STI Bonus	STI Bonus Accrued	Non- Monetary2	Super- annuation3	Retirement Benef ts	LTI Award Accrual4	Retention5
P. Joseph Chairman 31 December 2007 31 December 2006	315,000 300,000	– –	– –	– –	12,911 12,413	– –	– –	– –	327,911 312,413
E. Goodwin 31 December 2007 31 December 2006	149,625 63,500	– –	– –	– –	12,908 83,640	– –	– –	– –	162,533 147,140
M. Latham 31 December 2007 31 December 2006	152,250 130,000	– –	– –	2,222 –	12,807 11,685	– –	– –	– –	167,279 141,685
I. Martin 31 December 2007 31 December 2006	147,000 140,000	– –	– –	– –	12,908 17,940	– –	– –	– –	159,908 157,940
A. McDonald4 31 December 2007 31 December 2006	153,562 56,250	– –	– –	1,277 1,712	12,908 5,063	– –	– –	– –	167,747 63,025
K. Moss 31 December 2007 31 December 2006	145,688 150,000	– –	– –	– –	12,899 12,413	– –	– –	– –	158,587 162,413
B. Norris5 31 December 2007 31 December 2006	– 90,000	– –	– –	– –	– 8,092	– –	– –	– –	– 98,092
E. Nosworthy 31 December 2007 31 December 2006	137,818 135,000	– –	– –	1,252 3,816	12,545 12,136	– –	– –	– –	151,615 150,952
Total 31 December 2007 31 December 2006	1,200,943 1,064,750	– –	– –	4,751 5,528	89,886 163,382	– –	– –	– –	1,295,580 1,233,660

2 The amount set out under ‘Non-monetary’ may include administration fees associated with membership of the GPT Group Superannuation Plan and Death & Total/Permanent Disability Insurance Premiums (A. McDonald & E. Nosworthy) and parking (M. Latham).

3 In 2007, refers to compulsory SGC superannuation only.
4 A. McDonald was appointed on 2 August 2006.

5 B. Norris retired on 31 August 2006.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

4. OTHER DISCLOSURES

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 offi cer of another entity at the request of GPT. The Deed indemnifi es these persons on a full indemnity basis to the extent permitted by law for losses, liabilities, costs and charges incurred as a Director or Offi cer of GPT, its subsidiaries or such other entities.

proceedings that may be brought against directors and offi cers in their capacity as Directors and Offi cers of GPT, its subsidiary companies or such other entities, and other payments arising from liabilities incurred by the Directors and Offi cers in connection with such proceedings. The Auditors are in no way indemnifi ed out of the assets of GPT.

companies. The terms of the contract prohibit the disclosure of the premiums paid.

4.2 Proceedings on behalf of the Trust

No person has applied to the Court under section 237 of the 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 those 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 .

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

4. OTHER DISCLOSURES (continued)

4.3 Non-Audit Services

During the year PricewaterhouseCoopers, GPT’s auditor, has performed other services in addition to their statutory duties. Details of the amount paid to the auditor, which includes amounts paid for non-audit services and other assurance services, are set out in note 32 to the fi nancial statements.

The Board has considered the non-audit services and other assurance services provided by the auditor during the fi nancial year. In accordance with advice received from the Audit and Risk Management Committee, the Board is satisfi ed that the provision of these services is compatible with, and did not compromise, the auditor’s independence requirements of the Corporations Act 2001 for the following reasons:

the Audit & Risk Management Committee reviewed the non-audit services and other assurance 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 Management Committee, having regard to the Board’s policy with respect to the engagement of GPT’s auditor
the characteristics of management, decision-making, self-review, advocacy or joint sharing of risks.

4.4 Rounding of Amounts

The GPT Group is of a kind referred to in the Australian Securities & Investments Commission Class Order 98/0100. Accordingly, amounts in the Directors’ Report have been rounded to the nearest tenth of a million dollars in accordance with the Class Order, unless stated otherwise.

4.5 Auditor

Corporations Act 2001 .

4.6 Auditor’s independence declaration

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

Signed in accordance with a resolution of the Directors.

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Peter Joseph Chairman Sydney 26 February 2008

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Nic Lyons Executive Director

THE GPT GROUP ANNUAL REPORT 2007

AUDITOR’S INDEPENDENCE DECLARATION FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

==> picture [443 x 435] intentionally omitted <==

==> picture [443 x 43] intentionally omitted <==

THE GPT GROUP ANNUAL REPORT 2007

INCOME STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

Note Revenue Rent from property investments Revenue from hotel operations Property and fund management fees Distributions from controlled entities, associates and joint ventures Other income Fair value adjustments to investment properties Fair value adjustments of controlled entities, associates and joint ventures Share of after tax prof ts of equity accounted investments 12(b) Interest revenue – joint venture investment arrangements Interest revenue – cash and short term money market securities Dividend from investments Net foreign exchange gain Net gain on fair value of derivatives Net gain on disposal of assets Total revenue and other income Expenses Property expenses and outgoings Expenses from hotel operations 5(a) Management and other administration costs Depreciation and amortisation expense 5(b) Finance costs 5(c) Impairment expense 15(a) Net loss on fair value of derivatives Net loss on disposal of assets Net foreign exchange loss Responsible Entity’s fee Costs associated with internalisation/merger proposal Total Expenses Prof t before income tax expense Income tax expense 6(a) Net prof t for the year Net prof t attributable to: – Unitholders of the Trust – Securityholders of other entities stapled to the Trust (minority interest) – External minority interest Earnings per unit (cents per unit) Basic and diluted earnings per unitholder of the Trust 4(a)	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	497.0 659.7 283.3 288.6 220.3 226.6 – – 65.7 14.7 – – – – 396.3 487.4
	783.0 901.0 679.6 776.0
	458.5 670.9 212.3 298.3 – – 358.2 428.5 468.7 323.9 – – 97.8 62.6 90.8 51.1 15.1 6.7 10.2 3.2 0.4 – – – 23.0 – 32.3 5.4 0.6 89.9 – 89.9 – 10.8 – –
	1,064.1 1,164.8 703.8 876.4
	1,847.1 2,065.8 1,383.4 1,652.4
	121.1 165.3 73.1 73.4 172.2 173.8 – – 92.4 37.1 7.6 7.2 21.9 19.8 – – 242.9 225.2 222.6 226.5 1.4 28.0 – 6.9 – – 0.4 – 0.1 – – 0.3 – 17.8 – – – – 24.0 15.1 4.1 13.6 3.8 12.4
	656.1 680.6 331.5 341.8
	1,191.0 1,385.2 1,051.9 1,310.6
	8.5 1.2 – – 1,182.5 1,384.0 1,051.9 1,310.6
	1,203.7 1,362.6 1,051.9 1,310.6 (19.2) 21.4 – – (2.0) – – – 58.6 67.1

The reconciliation of net profi t after income tax expense to realised operating income is set out in note 2(b). The above Income Statements should be read in conjunction with the accompanying notes.

THE GPT GROUP ANNUAL REPORT 2007

BALANCE SHEETS AS AT 31 DECEMBER 2007

THE GPT GROUP

Note ASSETS Current Assets Cash and cash equivalents 28(b) Loans and receivables 7(a) Inventories 8 Derivative assets 9 Prepayments Non-current assets classif ed as held for sale 10 Total Current Assets Non-Current Assets Investment properties 11 Equity accounted investments 12 Property, plant & equipment 14 Loans and receivables 7(b) Other assets 13 Intangible assets 15 Deferred tax assets 6(b) Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Payables 16 Borrowings 17 Derivative liabilities 9 Provisions 18 Total Current Liabilities Non-Current Liabilities Borrowings 17 Provisions 18 Deferred tax liabilities 6(c) Total Non-Current Liabilities Total Liabilities Net Assets EQUITY Equity attributable to unitholders of the Trust (parent entity) Contributed equity 19 Reserves 20 Retained prof ts 21 Total equity of GPT Trust unitholders Equity attributable to securityholders of other entities stapled to the Trust Contributed equity 19 Reserves 20 Retained prof ts/(accumulated losses) 21 Total equity of other stapled securityholders Equity attributable to minority interests - external Contributed equity 19 Reserves 20 Retained prof ts 21 Total equity of external minority interests Total Equity	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	350.3 58.8 292.1 40.4 271.2 157.3 359.6 65.4 404.4 7.3 – – 143.4 79.4 141.8 79.4 20.6 17.3 13.8 8.5
	1,189.9 320.1 807.3 193.7 – 1,955.8 – –
	1,189.9 2,275.9 807.3 193.7
	5,987.2 5,228.6 3,779.3 3,351.3 3,519.5 2,199.2 2,603.3 1,682.0 1,221.3 891.9 – 170.4 1,841.3 1,322.2 1,448.2 1,059.1 3.6 0.7 4,248.7 4,913.4 190.9 74.1 – – 13.2 9.3 – –
	12,777.0 9,726.0 12,079.5 11,176.2
	13,966.9 12,001.9 12,886.8 11,369.9
	510.7 228.2 412.6 32.3 1,196.9 1,630.0 795.5 1,574.6 140.7 25.5 140.2 25.5 20.5 9.6 – –
	1,868.8 1,893.3 1,348.3 1,632.4
	3,798.1 2,661.7 3,740.3 2,661.7 4.6 4.1 – – – 0.7 – –
	3,802.7 2,666.5 3,740.3 2,661.7
	5,671.5 4,559.8 5,088.6 4,294.1
	8,295.4 7,442.1 7,798.2 7,075.8
	4,648.6 4,391.5 4,648.6 4,391.5 (3.6) 21.1 – – 3,341.2 2,724.1 3,149.6 2,684.3
	7,986.2 7,136.7 7,798.2 7,075.8 317.5 307.0 – – 9.5 (0.8) – – (20.0) (0.8) – –
	307.0 305.4 – – – – – – – – – – 2.2 – – –
	2.2 – – –
	8,295.4 7,442.1 7,798.2 7,075.8

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

THE GPT GROUP ANNUAL REPORT 2007

STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

Total $M	Total $M	6,086.6 – –	6,086.6 1,310.6	7,397.2 95.5 – – (416.9)	7,075.8	7,075.8 – – –	7,075.8 1,051.9	8,127.7 257.1 – – – (586.6)	7,798.2
Retained earnings $M		1,790.6 – –	1,790.6 1,310.6	3,101.2 – – – (416.9)	2,684.3	2,684.3 – – –	2,684.3 1,051.9	3,736.2 – – – – (586.6)	3,149.6
Reserves $M		– – –	– –	– – – – –	–	– – – –	– –	– – – – – –	–
Total equity Contributed equity $M $M		6,373.3 4,296.0 (4.7) – 10.9 –	6,379.5 4,296.0 1,384.0 –	7,763.5 4,296.0 100.0 95.5 (5.4) – 0.9 – (416.9) –	7,442.1 4,391.5	4,391.5 – – –	4,391.5 –	4,391.5 257.1 – – – –	4,648.6
						7,442.1 15.0 (41.1) 11.5	7,427.5 1,182.5	8,610.0 267.6 4.2 (0.1) 0.3 (586.6)	8,295.4
ers s	Total $M	– – –	– –	– – – – –	–	– – – –	– (2.0)	(2.0) – 4.2 – – –	2.2
ecurityhold ity interest	Retained earnings $M	– – –	– –	– – – – –	–	– – – –	– (2.0)	(2.0) – 4.2 – – –	2.2
Attributable to the S of external minor	Contributed equity Reserves $M $M	– – – – – –	– – – –	– – – – – – – – – –	– –	– – – –	– –	– – – – – –	–
						– – – –	– –	– – – – – –	–
of other ty Trust	Total $M	282.7 – (1.6)	281.1 21.4	302.5 4.5 (1.6) – –	305.4	305.4 – (2.6) 11.5	314.3 (19.2)	295.1 10.5 – 1.4 – –	307.0
ityholders neral Proper	Retained earnings $M	(22.2) – –	(22.2) 21.4	(0.8) – – – –	(0.8)	(0.8) – – –	(0.8) (19.2)	(20.0) – – – – –	(20.0)
to the Secur ed to the Ge	Reserves $M	2.4 – (1.6)	0.8 –	0.8 – (1.6) – –	(0.8)	(0.8) – (2.6) 11.5	8.1 –	8.1 – – 1.4 – –	9.5
						307.0 – – –	307.0 –	307.0 10.5 – – – –	317.5
						7,136.7 15.0 (38.5) –	7,113.2 1,203.7	8,316.9 257.1 – (1.5) 0.3 (586.6)	7,986.2
						2,724.1 – – –	2,724.1 1,203.7	3,927.8 holders: – – – – (586.6)	3,341.2
to the Sec neral Prope	Reserves $M	16.2 (4.7) 12.5	24.0 –	24.0 as Security – (3.8) 0.9 –	21.1	21.1 15.0 (38.5) –	(2.4) –	(2.4) as Security – – (1.5) 0.3 –	(3.6)
Attributable Ge	Contributed equity $M	4,296.0 – –	4,296.0 –	4,296.0 their capacity 95.5 – – –	4,391.5	4,391.5 – – –	4,391.5 –	4,391.5 their capacity 257.1 – – – –	4,648.6

THE GPT GROUP ANNUAL REPORT 2007

CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

Note Cash f ows from operating activities Cash receipts in the course of operations (inclusive of GST) Cash payments in the course of operations (inclusive of GST) Distributions received from associates and joint ventures Distributions received from controlled entities Interest received Income taxes paid Net receipt from derivatives Finance costs Net cash inf ows from operating activities 28(a) Cash f ows from investing activities Payments for investment properties Proceeds from disposal of investment properties/current assets held for sale Payments for properties under development Proceeds from the disposal of properties under development Deposit received for properties under development Payments for property, plant and equipment Payments for intangibles Payments for inventories Investments in joint ventures and associates Proceeds from disposal of joint ventures and associates Loan (to)/from joint ventures and associates Payments for controlled entities (net of cash acquired), associates and joint ventures Investment in controlled entities Loan advanced (to)/from controlled entities Redemption of units in subsidiary (Increase)/decrease in other loans Payments for other assets Net cash inf ows/(outf ows) from investing activities Cash f ows from f nancing activities Proceeds from net bank facilities Proceeds/(repayments) of net short and medium term notes Payment of employee incentive scheme loans, net of distributions Proceeds from the issue of securities 19 Distributions paid to securityholders 3(a) Net cash (outf ows)/inf ows from f nancing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the f nancial year Cash and cash equivalents at the end of the f nancial year 28(b)	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	807.1 971.7 296.3 319.0 (398.1) (434.4) (119.8) (126.2) 171.6 122.6 124.2 56.7 – – 253.3 399.1 125.8 30.4 108.6 26.2 (3.7) (2.9) – – 51.8 29.0 51.8 29.0
	754.5 716.4 714.4 703.8 (267.4) (237.5) (227.7) (239.0)
	487.1 478.9 486.7 464.8
	(89.5) (983.6) (203.0) (32.5) 1,243.7 1,040.6 – 218.1 (429.1) (209.1) (336.0) (168.9) – 9.0 477.3 – 106.5 – – – (42.0) (28.7) – – (4.2) (53.3) – – (611.8) – – – (180.1) (211.0) (7.7) (4.7) – 332.9 – – (450.2) (568.5) (325.2) (374.6) (37.7) – – – – – (1,211.6) (981.5) – – (306.7) (164.6) – – 1,674.0 913.7 (94.4) – (0.1) – (0.1) – – –
	(588.9) (671.7) (239.0) (595.0)
	1,545.2 481.2 1,152.8 442.6 (819.3) 154.8 (819.3) 154.8 (13.6) (27.8) – – 102.1 100.0 98.1 95.5 (421.1) (550.0) (427.6) (550.0)
	393.3 158.2 4.0 142.9
	291.5 (34.6) 251.7 12.7 58.8 93.4 40.4 27.7
	350.3 58.8 292.1 40.4

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

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01.

have been consistently applied to all the years presented, unless otherwise stated. The fi nancial report includes separate fi nancial statements for the parent entity, General Property Trust (Trust) as an individual entity and the GPT Group (GPT), consisting of the Trust and its controlled entities (Consolidated entity).

(a) Basis of preparation

equivalents to International Financial Reporting Standards (AIFRS), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

Compliance with IFRS

Standards (IFRS).

New accounting standards and interpretations

With the move to International Financial Reporting Standards in 2005, the Australian Accounting Standards Board announced that it would maintain a ‘stable platform’ of standards for the 2006 and 2007 fi scal years to allow entities to implement and ‘bed down’ the new IFRS standards. During the 2007 fi scal year, the Australian Accounting Standards Board issued new standards and numerous amendments to existing standards however none of the new standards or amendments to existing standards are mandatory for GPT until its 2008 fi nancial statements.

A list of Australian Accounting Standards newly released or existing standards to which amendments have been made in the past fi scal year are: 1, 2, 3, 4, 5, 6, 7, 8, 101, 102, 107, 108, 110, 111, 112, 114, 116, 117, 118, 119, 120, 121, 123, 127, 128, 129, 130, 131, 132, 133, 134, 136, 137, 138, 139, 141, 1023 and 1038. UIG Interpretations newly released or amended are: 4, 11, 12, 13, 14, 113 and 129.

application of the new and amended standards above however the type of information disclosed in future annual fi nancial reports will change. Management’s current assessment indicates that the most signifi cant impact will arise from some additional new disclosures required by AASB 8 Operating Segments from 1 January 2009, although it is unlikely that any new operating segments, in addition to those disclosed at note 2, will be required. GPT have also considered the option to proportionately consolidate its investments in joint venture entities in the amendment to UIG 113 and currently does not consider taking up the option.

GPT has not elected to early adopt any of the new or amended standards and has applied the following standards and interpretations which were mandatory from 1 January 2007:

AASB 7 Financial Instruments: Disclosures and all consequential amendments in AASB 2005-10 Amendments to Australian Accounting Standards (AASB 132, 101, 114, 117, 133, 139, 1, 4, 1023 and 1038) from 1 January 2007. The adoption of this standard only affected the fi nancial instrument disclosures in these fi nancial statements – refer to note 31. There has been no affect on the fi nancial position or performance of GPT or the Trust.
UIG Interpretation 8 Scope of AASB 2 Share-Based Payment
UIG Interpretation 9 Reassessment of Embedded Derivatives
UIG Interpretation 10 Interim Financial Reporting and Impairment

the Trust.

Historical cost convention

for fi nancial assets and liabilities (including derivatives) at fair value through profi t and loss, certain classes of property, plant and equipment and investment property.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(b) Accounting for the GPT Group

In accordance with AASB Interpretation 1002 Post-date of Transition Stapling Arrangement 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 entity 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.

(c) Principles of consolidation

(i) Controlled entities

all controlled entities for the fi nancial year then ended. The Trust and its controlled entities are collectively referred to in this fi nancial report as GPT or the Consolidated entity.

Controlled entities are all entities (including special purpose entities) over which GPT has the power to govern the fi nancial 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.

Controlled entities are fully consolidated from the date control commenced and de-consolidated from the date that control ceased.

The purchase method of accounting is used to account for the acquisition of controlled entities by GPT (refer to note 1(d)). All inter-entity transactions, balances and unrealised gains on transactions between GPT entities have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

statement and are presented within equity in the balance sheet, separately from the Trust’s equity.

(ii) Associates

shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the Trust’s balance sheet at cost and in the consolidated balance sheet using the equity method. Under this method, GPT’s share of the associates’ post acquisition net profi ts after income tax expense is recognised in the consolidated income statement and its share of post acquisition 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 received from associates are recognised in the Trust’s income statement while in the consolidated fi nancial statements they reduce the carrying amount of the investment. GPT’s investment in associates includes goodwill (net of any accumulated impairment loss) identifi ed on acquisition (refer note 12).

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

All balances and effects of transactions between each associate and GPT have been eliminated to the extent of GPT’s interest in the associate.

(iii) Joint Ventures

Joint venture operations

interests are held directly and jointly as tenants in common. GPT’s proportionate share of revenues, expenses, assets and liabilities in property interests held as tenants in common are included in their respective items of the consolidated balance sheet and income statement.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(c) Principles of consolidation (continued)

(iii) Joint Ventures (continued)

Joint venture entities

Investments in joint venture entities are accounted for in the Trust’s balance sheet at cost.

Investments in joint venture entities are accounted for in the consolidated balance sheet using the equity method. Under this method, GPT’s share of the joint ventures’ post acquisition net profi ts after income tax expense is recognised in the consolidated income statement and its share of post acquisition movements in reserves including cash fl ow hedge reserve, 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 received from joint ventures are recognised in the Trust’s income statement while in the consolidated fi nancial statements they reduce the carrying amount of the investment.

All balances and effects of transactions between joint ventures and GPT have been eliminated to the extent of GPT’s interest in the joint venture.

Where controlled entities, associates or joint ventures adopt accounting policies which differ from the Parent entity, adjustments have been made so as to ensure consistency within the GPT Group.

(d) Accounting for acquisitions and business combinations

The purchase method of accounting is used to account for all acquisitions 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.

initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. Transaction costs arising on the issue of equity instruments are recognised directly in equity. The excess of the cost of acquisition over the fair value of GPT’s share of the net identifi able assets acquired represents goodwill (refer note 1(t)(i)). If the cost of acquisition is less than GPT’s share of the fair value of the net assets of the entity acquired, the difference is recognised directly in the income statement, but only after a reassessment of the identifi cation 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 is GPT’s incremental borrowing rate at which a similar borrowing could be obtained from an independent fi nancier under comparable terms and conditions.

(e) Foreign currency translation

(i) Functional and presentation currency

economic environment in which they operate (‘the functional currency’). The consolidated fi nancial 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 profi t or loss, are reported as part of the fair value gain or loss.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(e) Foreign currency translation (continued)

(iii) Foreign operations (continued)

Exchange differences arising on monetary items that form part of the net investment in a foreign operation are taken to the profi t 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.

(f) Income Tax

(i) Trusts

Under current tax legislation, Trusts are not liable for income tax, provided their taxable income and taxable realised gains are fully distributed to securityholders each fi nancial year.

(ii) Company and other taxable entities

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 fi nancial 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 profi t or taxable profi t 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 – Australia

GPT Management Holdings Limited (the head entity) and its wholly owned Australian controlled entities implemented the tax consolidation legislation as of 1 January 2006. Each member 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. On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement, which in the opinion of the directors, limits the joint and several liability of the wholly owned entities in the case of a default of the head entity, GPT Management Holdings Limited.

The Company has 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 fi nancial statements.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(f) Income Tax (continued)

(iii) Tax consolidation – Australia (continued)

Assets and liabilities arising under the tax funding agreement with the tax consolidated entities are recognised as amounts receivables or payables and these amounts are due upon demand from the head entity. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments and the funding amounts are recognised as intercompany receivables or payables. 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.

(g) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST (or equivalent tax in overseas locations) except where the GST incurred on purchase of goods and services is not recoverable from the tax authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable. Receivables and payables are stated inclusive of the amount of GST. The net amount of GST receivable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

from investing or fi nancing activities which are recoverable from, or payable to, the taxation authority are presented as operating cash fl ows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(h) 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. Business segment is the primary reporting format.

Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, investment properties, inventories, property, plant and equipment and intangible assets, net of related provisions. Assets used jointly by two or more different segments are allocated based on a reasonable estimate of usage. Segment liabilities consist primarily of trade creditors and accruals. Segment assets and liabilities do not include income taxes.

(i) Revenue recognition

Rental revenue 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 fi xed 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 property rent revenue. Contingent rental income is recognised as revenue in the period in which it is earned.

Property and fund management fee revenue is recognised on an accruals basis, in accordance with the terms of the relevant contracts. Revenue from development projects is recognised on settlement of an unconditional contract for sale.

Revenue from dividends and distributions are recognised when they are declared. Interest income is recognised on an accruals basis using the effective interest method.

Gain or loss on disposal of assets is calculated as the difference between the carrying amount of the asset at the date of disposal and the net proceeds from disposal and is included in the income statement in the year of disposal. Where revenue is obtained from the sale of properties or assets, it is recognised when the signifi cant risks and rewards have transferred to the buyer. This will normally take place on exchange of unconditional contracts.

If not received at reporting date, revenue is included in the balance sheet as a receivable and carried at fair value.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(j) Finance costs

Finance costs include interest, amortisation of discounts or premiums relating to borrowings, amortisation of and ancillary costs incurred in connection with the arrangement of borrowings. Finance costs are expensed as incurred unless they relate to a qualifying asset. A qualifying asset is an asset which generally takes more than 12 months to get ready for its intended use or sale. In these circumstances, fi nancing costs incurred for the construction of a qualifying asset are capitalised to the cost of the asset for the period of time that is required to complete and prepare the asset for its intended use or sale. As all funds are borrowed by GPT, the capitalisation rate used to determine the amount of fi nance costs capitalised is the weighted average interest applicable to GPT’s outstanding borrowings during the year.

(k) Expenses

Property expenses and outgoings include rates, taxes and other property outgoings incurred in relation to investment properties where such expenses are the responsibility of GPT and are recognised on an accruals basis.

(l) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, at bank and short term money market deposits with original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

(m) Receivables

Trade and sundry debtors are recognised at amortised cost, which in the case of GPT, is the original invoice amount less a provision for doubtful debts. Trade debtors are due within thirty days. Collectibility of trade debtors is reviewed regularly and bad debts are written off when identifi ed. A specifi c provision for doubtful debts is made when there is objective evidence that GPT will not be able to collect the 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 fl ows.

Other loans and receivables

Loans and receivables are recognised at amortised cost using the effective interest rate method. Under this method, fees, costs, discounts and premiums directly related to the loans and receivables are recognised in the income statement over the expected life of the loans and receivables. All loans and receivables with maturities greater than 12 months after balance date are classifi ed as non-current assets.

(n) Inventory

Inventory is stated at the lower of cost and net realisable value. Hotel merchandise costs are assigned on the basis of weighted average costs and net realisable value is the estimated selling price in the ordinary course of business. A provision is raised when it is believed that the costs incurred will not be recovered on the ultimate sale of the inventory.

Warehoused investment property is investment property which has been acquired for a proposed fund by entities in the GPT Group to ultimately sell to external investors once the fi nal portfolio has been identifi ed and the terms have been agreed. Costs on the warehoused investment property include the costs of acquisition. Gains and losses on the sale of the fund is recognised in the income statement when the signifi cant risks and rewards of the fund or assets/ inventory have transferred to external investors.

be recovered principally through a sale transaction rather than through continuing use. Non current assets are not depreciated or amortised while they are classifi ed as held for sale. Non current assets and liabilities classifi ed as held for sale are presented separately from the other assets and liabilities in the balance sheet.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(p) Investment property

(i) Investment properties

Property, including land and buildings, held for long-term rental yields which are not occupied by a GPT entity is classifi ed as investment property. Land held under an operating lease is classifi ed and accounted for as investment property when the defi nition of investment property is met.

Investment property is initially recorded at cost. Cost comprises the cost of acquisition, additions, refurbishments, redevelopments, fi nance costs and fees incurred. Land and buildings (including integral plant and equipment) that comprise investment property are not depreciated. The carrying amount of investment property also includes components relating to lease incentives and assets relating to fi xed increases in operating lease rentals in future periods.

Subsequent to initial acquisition, investment property is stated at fair value with changes in fair value recorded in the income statement.

Fair value is based on active market prices, adjusted for any difference in the nature, location or condition of the specifi c asset or where this is not available, an appropriate valuation method which may include discounted cash fl ow 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 refl ects, among other things, rental income from current leases and assumptions about rental income from future leases in light of current market conditions. It also refl ects any cash outfl ows (excluding those relating to future capital expenditure) that could be expected in respect of the property.

The Responsible Entity of the Trust reviews the fair value of each investment property every six months, or earlier where the Responsible Entity believes there may be a material change in the carrying value of the property and where the carrying value differs materially from the Responsible Entity’s assessment of fair value, an adjustment to the carrying value is recorded as appropriate. Independent valuations on all investment properties are carried out at least every three years on a rolling basis to ensure that the carrying amount of each investment property does not differ materially from its fair value.

of the expenditure will fl ow to GPT and the cost can be measured reliably.

Noncurrent Assets Held for Sale and Discontinued Operations.

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 fi nancial statements under the appropriate headings (refer to note 1(c)(iii)).

(ii) Owner Occupied Property

Owner occupied property is property that is held for use by GPT entities for the supply of GPT services. Certain hotel properties are classifi ed and accounted for as investment property in the Trust’s fi nancial statements and classifi ed as owner-occupied property and accounted for as property, plant and equipment in the consolidated fi nancial statements as GPT owns and operates the hotels (refer to note 1(q)).

(iii) Property Under Development

Property under development is accounted for as property, plant and equipment and stated at historical cost until development is complete (refer to note 1(q)).

(iv) Warehoused Investment Property

Investment property which has been acquired for a proposed fund is accounted for as inventory (refer to note 1(n)).

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(q) Property, plant and equipment

In the consolidated entity, certain owner occupied hotel properties (refer note 1(p)(ii)) are classifi ed as property, plant and equipment and stated at fair value less accumulated depreciation for the buildings. The basis of fair value is the same as outlined in the investment property note 1(p). 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. To the extent that the increase reverses a decrease previously recognised in the income statement, the increase is fi rst recognised in the income statement. Decreases that reverse previous increases of the same asset are fi rst charged against the asset revaluation reserve to the extent of the remaining reserve attributable to the asset; and all other decrements are recognised in the income statement.

Property under development is carried at historical cost until development is complete. All costs of development are capitalised against the property and are not depreciated. Upon completion of development, the assets are classifi ed as investment property.

All other property, plant and equipment is 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 benefi ts associated with the item will fl ow 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 fi nancial period in which they are incurred.

Depreciation and amortisation

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:

Buildings up to 40 years
– Motor Vehicles 4 – 7 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. 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, any amount in the asset revaluation reserve in respect of those assets is transferred to retained earnings.

(r) Leases

of the agreement so as to refl ect the risks and benefi ts incidental to ownership. Leases where the lessor retains substantially all the risks and benefi ts of ownership of the asset are classifi ed as operating leases. Net rental payments, excluding contingent payments, are recognised as an expense in the income statement on a straight line basis over the period of the lease.

(s) Lease incentives

an operating lease. These incentives are capitalised and amortised on a straight line basis over the term of the lease as a reduction of rental revenue. The carrying amount of the lease incentives is refl ected in the fair value of investment properties.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(t) Intangible assets

(i) Goodwill

Goodwill on acquisition represents the excess of purchase consideration, including incidental expenses associated with the acquisition, over the fair value of GPT’s share of the identifi able net assets of the acquired. Goodwill on acquisition of controlled entities is included in intangible assets and goodwill on acquisition of associates/joint ventures is included in investments in associates/joint ventures.

Goodwill is not amortised, instead it is tested for impairment annually, whenever there is an indication that the carrying value may be impaired, and is carried at cost less accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to cash generating units (CGUs) that are expected to benefi t from the acquisition. GPT has determined that each primary reporting segment set out in note 2 is a CGU. Impairment is determined by assessing the recoverable amount of the CGU to which the goodwill relates.

Gains and losses on disposal of an entity include the carrying amount of goodwill relating to the entity disposed.

(ii) Other intangible assets

Operating lease rights relating to the resort operation at Lizard Island Resort and property management rights have been assessed to have a maximum useful life of 28 years respectively. They 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 rights and property management rights over their useful life.

Intangible assets are tested for impairment annually (refer to note 1(v))

(u) Other investments

investments are stated at the fair value of GPT’s interest in the underlying assets which approximate fair value. Gains or losses on available-for-sale investments are recognised in the asset revaluation reserve in the balance sheet until the investment is sold or impaired, at which time the cumulative changes in fair value recognised in the asset revaluation reserve are recognised in the income statement. Investments in controlled entities are held at the lower cost or recoverable amount.

(v) Impairment

All other assets, including fi nancial assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Where an indicator of impairment or objective evidence exists, an estimate of the asset’s recoverable amount is made. An impairment loss is recognised in the income statement for the amount by which the asset’s carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifi able cash infl ows that are largely independent of the cash infl ows from other assets.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(w) Financial assets and liabilities

were acquired.

Financial asset/liability	Classif cation	Valuation basis
Cash	Fair value throughprof t and loss	Fair value	Refer to note 1(l)
Receivables	Loans and receivables	Amortised cost	Refer to note 1(m)
Derivative assets	Fair value throughprof t and loss	Fair value	Refer to note 1(x)
Other assets	Available for sale f nancial assets	Fair value	Refer to note 1(u)
Investment in unlisted entities
Payables	Financial liabilityat amortised cost	Amortised cost	Refer to note 1(y)
Borrowings	Financial liabilityat amortised cost	Amortised cost	Refer to note 1(aa)
Derivative liabilities	Fair value throughprof t and loss	Fair value	Refer to note 1(x)

Financial assets are recognised on the date the consolidated or parent entity commits to purchase or sell the asset and derecognised when GPT no longer controls the contractual rights that comprise the fi nancial instrument which is normally the case when the instrument is sold or all risks and rewards of ownership have transferred to an independent third party.

(x) Derivatives

rates and the volatility of fi nancial outcomes that arise as part of normal business operations. GPT’s treasury and risk management policy sets out the policies, limits, monitoring and reporting requirements on the use of fi nancial instruments, including derivatives, to hedge the exposures and these are discussed in detail at note 31.

GPT’s major exposure is to interest rate and foreign currency risks arising from borrowings. The derivatives that GPT commonly use to reduce its exposure are forward foreign exchange contracts, interest rate swaps and options. Further details are included in note 31.

Derivatives, including those embedded in other contractual arrangements, are recognised at fair value. The fair value of interest rate swaps is calculated using the present value of the estimated future cash fl ows of these instruments. The fair values of forward foreign exchange contracts are determined using quoted forward exchange rates at reporting date. The fair value of barrier interest rate swaps and interest rate option contracts are calculated as the estimated present value of the contract using the relevant market rates and incorporating time value and implied volatility around a number of variables. The fair value of forward exchange trigger contracts are calculated as the estimated present value of the contract using the relevant forward foreign exchange rates and incorporating time value and volatility around a number of variables. Each instrument is discounted at the market interest rate appropriate to the instrument. Where the fair value of a derivative is calculated as the present value of the estimated future cash fl ows of the instrument, there are two key variables used:

Forward price curve (for the relevant underlying interest rates or foreign exchange rates)
Discount rates

Subsequent changes in the fair value of derivatives are also recognised in the income statement as GPT has not formally designated its derivative assets or liabilities as hedges however the derivatives achieve the economic outcomes of offsetting interest rate and foreign currency exposures in accordance with GPT’s treasury and risk management policy. Gains and losses on maturity or close-out of derivatives are recognised in the income statement.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(x) Derivatives (continued)

Derivatives with a positive closing fair value at reporting date are presented as assets and derivative liabilities are presented where the closing fair value is negative. All derivatives are classifi ed as current assets or liabilities given the derivatives are not part of a hedge.

(y) Payables

but which remain unpaid at reporting date. They are recognised at amortised cost, which in the case of GPT, is the fair value of consideration to be paid in the future for the goods and services received.

Loans payable

Loans payable to related parties are recognised at amortised cost using the effective interest rate method. Under this method, fees, costs, discounts and premiums directly related to the loans are recognised in the income statement over the expected life of the borrowings. Interest payable is recognised on an accruals basis. All loans payable with maturities greater than 12 months after reporting date are classifi ed as non-current liabilities.

(z) Provisions

Provisions are recognised when GPT has a present legal, equitable or constructive obligation as a result of past transactions or events, it is more likely than not that an outfl ow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Refer to note 1(ad) for provisions for distributions.

(aa) Borrowings

Borrowings are recognised at amortised cost using the effective interest rate method or at their fair value at the time of acquisition in the case of assumed liabilities in a business combination. Under the effective interest rate method, any transaction fees, costs, discounts and premiums directly related to the borrowings are recognised in the income statement over the expected life of the borrowings. All loans and receivables with maturities greater than twelve months after reporting date are classifi ed as non-current liabilities. Refer to note 1(j) on fi nance costs.

(ab) Employee benefi ts

(i) Wages, salaries, annual leave and long service leave

Liabilities for wages and salaries (including non monetary benefi ts) and annual leave are recognised in the provisions for employee benefi ts and 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.

liabilities. The non-current provision relates to entitlements, including long service leave, which are expected to be payable after twelve months from balance date and are measured as the present value of expected future payments to be made in respect of services provided by employees up to balance date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at balance date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outfl ows. Employee benefi t on-costs are recognised and included in employee benefi t liabilities and costs when the employee benefi ts to which they relate are recognised as liabilities.

(ii) Retirement benefi t obligations

Plan. The GPT Group Superannuation Plan has a defi ned contribution section within its plan. The defi ned contribution section receives fi xed contributions and GPT’s legal and constructive obligation is limited to these contributions. The employees of GPT are all members of the defi ned contribution section of the GPT Group Superannuation Plan.

contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(ab) Employee benefi ts (continued)

(iii) Profi t sharing and bonus plans

consideration the profi t attributable to GPT’s securityholders after certain adjustments. A provision is recognised where contractually obliged or where there is a past practice that has created a constructive obligation

(iv) Share based payments

Information relating to the Employee Incentive Scheme (EIS) is set out in note 26.

Employee incentive scheme

under the General Scheme, which are used to acquire GPT stapled securities on market, create a synthetic option. The notional fair value of the implied option in respect of the loans is recognised as an employee benefi t expense with a corresponding increase in the employee incentive scheme reserve in equity. The fair value at grant date is calculated using the Monte Carlo pricing model and recognised over the period during which the employees become unconditionally entitled to the GPT stapled securities.

The recourse loans issued to certain GPT employees under the Long Term Incentive (LTI) Scheme are included in non-current receivables. Any repayments of the loans by employees reduce the amount of the outstanding loans included in non-current receivables.

(ac) Contributed equity

GPT. Any transaction costs arising on the issue of ordinary securities are recognised directly in equity as a reduction, net of tax, of the proceeds received.

(ad) Distributions and dividends

Distributions and dividends are paid to GPT stapled securityholders each quarter. A provision for distribution or dividend is made for the amount of any distribution or dividend declared on or before the end of the fi nancial year but not distributed at reporting date.

(ae) Earnings per stapled security (EPS)

weighted average number of ordinary securities outstanding during the fi nancial year, adjusted for bonus elements in ordinary securities issued during the fi nancial year. Diluted earnings per security is calculated as net profi t attributable to securityholders of GPT divided by the weighted average number of ordinary securities and dilutive potential ordinary securities, adjusted for any bonus issue. Where there is no difference between basic earnings per stapled security and diluted earnings per stapled security, the term basic and diluted earnings per stapled security is used.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(af) Critical accounting estimates and judgements

that affect the reported amounts in the fi nancial statements. Management bases its judgments and estimates on historical experience and other various factors it believes to be reasonable under the circumstances, but which are inherently uncertain and unpredictable, the result of which form the basis of the carrying values of assets and liabilities. The resulting accounting estimates may differ from the actual results under different assumptions and conditions.

fi nancial year to the carrying amounts of assets and liabilities recognised in these fi nancial statements are:

(i) Valuation of property investments

Critical judgements are made by GPT in respect of the fair values of investments in associates and joint ventures (note 1(c)), investment properties (note 1(p), warehoused investment properties (note 1(n)), owner occupied hotel properties (note 1(q)) and property under development (note 1(q)). The fair value of these investments are reviewed regularly by management with reference to external independent property valuations and market conditions existing at reporting date, using generally accepted market practices. The critical assumptions underlying management’s estimates of fair values are those relating to the receipt of contractual rents, expected future market rentals, maintenance requirements, discount rates that refl ect current market uncertainties and current and recent property investment prices. If there is any change in these assumptions or regional, national or international economic conditions, the fair value of property investments may differ.

(ii) Valuation of assets acquired in business combinations

The fair value of assets acquired and liabilities assumed in a business combination as well as the goodwill and intangible assets arising from the business combination requires signifi cant estimates and assumptions particularly concerning the future performance of the assets and business(es) purchased and the fair values for contingent liabilities (if any) which had not been previously required to be recognised or valued by the seller.

Fair value of indemnities and guarantees provided by GPT are estimated based on future events which are reasonably likely, but which may not occur. The fair value of derivative assets and liabilities are based on assumptions of future events and involve signifi cant estimates. The basis of valuation for GPT’s derivatives are set out in note 1(x) however the fair values of derivatives reported at 31 December 2007 may differ if there is volatility in market rates, indexes, equity prices or foreign exchange rates in future periods.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

01. Summary of signifi cant accounting policies (continued)

(af) Critical accounting estimates and judgements (continued)

(iv) Impairment of assets

Assets, excluding goodwill, are assessed for impairment each reporting date by evaluating whether any impairment triggers exist. Where impairment triggers exist, management review the allocation of cash fl ows to those assets and estimate a fair value for the assets. Critical judgements are made by GPT in setting appropriate impairment triggers for its assets and the assumptions used when determining fair values for assets where triggers exist.

GPT also tests annually whether goodwill is impaired. As goodwill is assigned to CGUs, this requires an estimation of the recoverable amount of the CGUs to which the goodwill is assigned. The assumptions used by GPT when estimating the future cash fl ows for the CGUs, which are based on future events, are critical in supporting the carrying value of goodwill. These assumptions are detailed in note 15.

and entities. These valuations, whether performed by GPT or an independent third party, require the use of management’s assumptions, which would not refl ect unanticipated events and circumstances that may occur.

(v) Warehoused investment property assets

properties as current borrowings on the basis that the investment property assets have been acquired to ultimately sell to external investors in proposed funds. Marketing and selling the funds is anticipated to take approximately twelve months, however external factors including global economic conditions could affect the timing of any sale.

(vi) Share based payment transactions

The Group measures the cost of equity settled securities allocated to employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using the Monte Carlo method, as discussed in note 26.

(ag) Rounding of amounts

The GPT Group is of a kind referred to in the Australian Securities & Investments Commission Class Order 98/0100. Accordingly, amounts in the fi nancial report have been rounded to the nearest tenth of a million dollars in accordance with the Class Order, unless stated otherwise.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

02. Segment Reporting (includes net profi t after income tax to realised operating income reconciliation)

Primary reporting format – business segments

GPT is organised on a global basis into activities by business segment as set out below:

Income Statement – 31 December 2007

Retail Off ce Industrial Hotel & Tourism Seniors Housing Funds Management Joint Venture Corporate Total	Retail Off ce Industrial Hotel & Tourism Seniors Housing Funds Management Joint Venture Corporate Total	Retail Off ce Industrial Hotel & Tourism Seniors Housing Funds Management Joint Venture Corporate Total
$M $M $M $M $M $M $M $M $M

325.7 79.6 54.9 17.0 – 19.8 – – 497.0
– – – 220.3 – – – – 220.3
14.5 – – – – 49.9 – 1.3 65.7
340.2 79.6 54.9 237.3 – 69.7 – 1.3 783.0

231.4 179.7 24.2 23.2 – – – – 458.5

38.9 104.0 – 1.9 10.1 (1.7) 35.3 (0.2) 188.3
– – – – – – (25.6) – (25.6)
15.4 281.1 – (0.3) (0.6) – 10.4	– 306.0
– – – 0.4 – – –	– 0.4
– – – 0.1 7.1 – 89.5	1.1 97.8
– – – 0.7 – 1.1 –	13.3 15.1
– – – – – (0.2) –	23.2 23.0
– – – – – 1.0 –	(0.4) 0.6
– – – – – – –	– –
285.7 564.8 24.2 26.0 16.6 0.2 109.6	37.0 1,064.1
625.9 644.4 79.1 263.3 16.6 69.9 109.6	38.3 1,847.1

89.2 22.8 7.3 0.5 – 1.3 –	– 121.1
– – – 172.2 – – –	– 172.2
9.5 – – – – 42.6 –	40.3 92.4
6.8 – – 13.5 – 0.5 –	1.1 21.9
– – – – – 15.8 –	227.1 242.9
– – – 1.4 – – –	– 1.4
– – – – – – –	– –
– – – – – – –	– –
0.1 – – 0.3 – (0.4) –	0.1 0.1
– – – – – – –	4.1 4.1
105.6 22.8 7.3 187.9 – 59.8 –	272.7 656.1
520.3 621.6 71.8 75.4 16.6 10.1 109.6	(234.4) 1,191.0
	8.5	8.5
		1,182.5

(231.4) (179.7) (24.2) (23.2) – – –	–	(458.5)
(15.4) (281.1) – 0.3 0.6 – (10.4) –		(306.0)
– – – – – – 61.5 –		61.5
– – – – – (0.8) – (22.8) (23.6)
– – – – – – – 53.8 53.8
– – – – – – – 10.6 10.6
– – – – – – – 11.1 11.1
– – – 1.4 – – – – 1.4
6.8 – – 13.5 – – – – 20.3
0.1 – – 0.3 – – – – 0.4
– – – – – – – 4.1 4.1
14.1 7.1 0.1 – – – – – 21.3
– 21.4 – – – – – – 21.4
– – – – – 2.0 – – 2.0
(1.6) – – 4.7 (0.6) (4.5) (9.7) 9.7 (2.0)
– 0.6 – 0.1 3.3 1.8 – (1.0) 4.8
292.9 189.9 47.7 72.5 19.9 8.6 151.0 (177.4) 605.1

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

02. Segment Reporting (includes net profi t after income tax to realised operating income reconciliation) (continued)

Primary reporting format – business segments (continued)

Income Statement – 31 December 2006

Retail Off ce Industrial Hotel & Tourism Seniors Housing Funds Management Joint Venture $M $M $M $M $M $M $M	Corporate Total $M $M	Corporate Total $M $M
436.2 162.7 45.3 15.5 – – – – – – 226.6 – – – 6.0 – – – – 8.7 –	– 659.7 – 226.6 – 14.7
442.2 162.7 45.3 242.1 – 8.7 – 478.8 152.2 26.7 13.2 – – – 8.8 84.3 – 1.2 – – 25.0 – – – – – – 19.8 11.7 136.9 – – – – 33.5 – – – 3.4 – – 57.9 – – – – – – – – – – – – – – – – – – – – – 7.3 – 2.8 0.7 – – –	– 901.0 – 670.9 2.7 122.0 – 19.8 – 182.1 1.3 62.6 6.7 6.7 – – 89.9 89.9 – 10.8
506.6 373.4 29.5 18.5 – – 136.2	100.6 1,164.8
948.8 536.1 74.8 260.6 – 8.7 136.2	100.6 2,065.8
117.8 40.9 6.2 0.4 – – – – – – 173.8 – – – – – – – – 4.8 – 5.1 – – 13.2 – – – – – – – – – – – 6.9 – 19.5 – – 1.6 – – – – – – – – – – – – – – – – – – – – – – – – – – – –	– 165.3 – 173.8 32.3 37.1 1.5 19.8 225.2 225.2 – 28.0 17.8 17.8 – – – – 13.6 13.6
122.9 47.8 6.2 206.9 – 4.8 1.6	290.4 680.6
825.9 488.3 68.6 53.7 – 3.9 134.6	(189.8) 1,385.2
1.2 1.2 1,384.0 (478.8) (152.2) (26.7) (13.2) – – – – (670.9) (11.7) (136.9) – – – – (33.5) – (182.1) – – – – – – – – – – – – – – – – (72.1) (72.1) – – – – – – – 24.7 24.7 – 6.9 – 19.5 – – 1.6 – 28.0 5.1 – – 13.2 – – – 1.5 19.8 (7.3) – (2.8) (0.7) – – – – (10.8) – – – – – – – 13.6 13.6 5.6 10.8 0.2 – – – – – 16.6 – 5.3 – – – – – – 5.3 – – – 4.3 – (1.6) (2.3) (0.4) – 0.2 (0.1) – – – – (0.2) 2.6 2.5	1.2	1.2
		1,384.0
339.0 222.1 39.3 76.8 – 2.3 100.2 (221.1) 558.6

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

02. Segment Reporting (includes net profi t after income tax to realised operating income reconciliation) (continued)

Primary reporting format – business segments (continued)

Balance Sheet – 31 December 2007

Current Assets Assets classif ed as held for sale Inventories Other current assets Total Current Assets Non-Current Assets Investment properties Equity accounted investments (refer to Note 12(c)) Property, plant and equipment Loans and receivables Intangible assets Other investments Deferred tax assets Total Non-Current Assets Total Assets Current and non-current liabilities Total Liabilities Net Assets	Retail Off ce Industrial Hotel & Tourism Seniors Housing Funds Management Joint Venture Corporate Total
	$M $M $M $M $M $M $M $M $M

	– – – – – – – – –
	– – – 7.1 – 397.3 – – 404.4
	– – – – – – – 785.5 785.5
	– – – 7.1 – 397.3 – 785.5 1,189.9

	3,828.6 1,235.1 702.2 221.3 – – – – 5,987.2
	976.7 1,853.8 – 10.6 232.2 49.0 373.6 23.6 3,519.5
	477.3 58.2 35.6 629.6 – – – 20.6 1,221.3
	– – – – 75.0 56.6 1,636.6 73.1 1,841.3
	42.3 – – 26.8 – 121.8 – – 190.9
	– – – 0.7 – – – 2.9 3.6
	– – – – – – – 13.2 13.2
	5,324.9 3,147.1 737.8 889.0 307.2 227.4 2,010.2 133.4 12,777.0
	5,324.9 3,147.1 737.8 896.1 307.2 624.7 2,010.2 918.9 13,966.9
	– – – – – 310.4 – 5,361.1 5,671.5
	– – – – – 310.4 – 5,361.1 5,671.5
	5,324.9 3,147.1 737.8 896.1 307.2 314.3 2,010.2 (4,442.2) 8,295.4

Balance Sheet – 31 December 2006

Current Assets Assets classif ed as held for sale Inventories Other current assets Total Current Assets Non–Current Assets Investment properties Equity accounted investments (refer to Note 12(c)) Property, plant and equipment Loans and receivables Intangible assets Other investments Deferred tax assets Total Non-Current Assets Total Assets Current and non-current liabilities Total Liabilities Net Assets	Retail Off ce Industrial Hotel & Tourism Seniors Housing Funds Management Joint Venture Corporate Total $M $M $M $M $M $M $M $M $M
	1,955.8 – – – – – – – 1,955.8 – – – 7.3 – – – – 7.3 – – – – – – – 312.8 312.8
	1,955.8 – – 7.3 – – – 312.8 2,275.9
	3,491.7 935.7 604.1 197.1 – – – – 5,228.6 163.6 1,567.6 – 9.0 132.8 – 309.2 17.0 2,199.2 149.3 64.3 58.2 607.1 – – – 13.0 891.9 – – – 1.9 83.7 – 1,198.4 38.2 1,322.2 46.1 – – 28.0 – – – – 74.1 – – – 0.7 – – – – 0.7 – – – – – – – 9.3 9.3
	3,850.7 2,567.6 662.3 843.8 216.5 – 1,507.6 77.5 9,726.0
	5,806.5 2,567.6 662.3 851.1 216.5 – 1,507.6 390.3 12,001.9
	– – – – – – – 4,559.8 4,559.8
	– – – – – – – 4,559.8 4,559.8
	5,806.5 2,567.6 662.3 851.1 216.5 – 1,507.6 (4,169.5) 7,442.1

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

02. Segment Reporting (includes net profi t after income tax to realised operating income reconciliation) (continued)

	Retail Off ce Industrial Hotel & Tourism Seniors Housing Funds Management Joint Venture Corporate Total $M $M $M $M $M $M $M $M $M
(c) Share of joint ventures and associates’ net prof ts for the year ended 31 December 2007
Revenue	81.2 411.8 – 29.6 180.0 (1.7) 295.6 2.4 998.9
Expenses	26.9 26.7 – 28.0 170.5 – 269.3 2.6 524.0
Prof t before income tax expense	54.3 385.1 – 1.6 9.5 (1.7) 26.3 (0.2) 474.9
Income tax expense	– – – – – – 6.2 – 6.2
Share of net prof ts of joint venture	54.3 385.1 – 1.6 9.5 (1.7) 20.1 (0.2) 468.7
and associate interests

Refer to note 12(b) for an analysis by geographic segment of GPT’s share of net profi ts from joint ventures and associates.

(d) Share of joint ventures and associates’ assets and liabilities as at 31 December 2007

GPT’s share of its joint ventures and associates’ balance sheet by the business segment they operate in are set out below. Key asset and liability categories have been individually presented for further detail.

Cash and cash equivalents Other assets Property investments and loans Total assets Other liabilities Borrowings – The GPT Group – External – current – External – non-current Total liabilities Net assets	6.0 7.7 – 3.0 21.4 4.1 101.9 3.8 147.9
	2.2 63.9 – 3.3 30.9 3.4 239.9 29.2 372.8
	1,045.3 1,976.9 – 11.0 795.7 186.9 3,218.4 55.7 7,289.9
	1,053.5 2,048.5 – 17.3 848.0 194.4 3,560.2 88.7 7,810.6
	30.9 45.3 – 3.8 45.4 7.4 186.4 27.9 347.1

	– – – – 70.7 – 818.3 18.2 907.2
	– – – – – – 136.9 – 136.9
	45.9 149.5 – 2.6 499.5 138.0 2,046.4 18.9 2,900.8
	76.8 194.8 – 6.4 615.6 145.4 3,188.0 65.0 4,292.0
	976.7 1,853.7 – 10.9 232.4 49.0 372.2 23.7 3,518.6

Refer to note 12(c) for an analysis by geographic segment of GPT’s share of the joint ventures and associates’ balance sheets.

(e) Other disclosures

31 December 2007
Acquisition of investment properties	71.9	–	–	–	–	–	–	–	71.9
Acquisition of property, plant and	331.0	100.7	24.2	16.0	–	121.8	–	19.2	612.9
equipment & intangibles
Depreciation and	6.8	–	–	13.5	–	0.5	–	1.1	21.9
amortisation expense
31 December 2006
Acquisition of investment properties	621.3	–	145.3	–	–	–	–	–	766.6
Acquisition of property, plant and	–	8.6	17.8	–	–	–	–	–	26.4
equipment & intangibles
Depreciation and	5.1	–	–	13.2	–	–	–	1.5	19.8
amortisation expense

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

02. Segment Reporting (includes net profi t after income tax to realised operating income reconciliation) (continued)

Business Segments description

Retail segment includes regional, sub-regional and community shopping centres, Homemaker City (bulky goods) centres, retail re-developments and new retail developments as well as property management of retail assets. Offi ce segment includes offi ce space with associated retail space and offi ce developments. Industrial segment includes quality traditional industrial and business park assets with capacity for organic growth through the expansion of vacant land as well as industrial re-developments. Hotel & Tourism segment includes nature-based resorts and hotel assets. Seniors Housing segment includes investments in a portfolio of established seniors housing assets in the United States of America as well as an interest in the manager of these assets. 2007 is the fi rst year of revenue. Funds Management segment includes asset and funds management in Australia by GPT Funds Management Limited, the Responsible Entity for GPT Group’s wholesale fund business – GPT Wholesale Shopping Centre Fund and GPT Wholesale Offi ce Fund and asset and funds management in Europe through GPT Halverton and Hamburg Trust (refer note 23(a) and (b) respectively). GPT Wholesale Offi ce Fund was the only fund established at 31 December 2006. Joint Venture segment includes investments in the Babcock & Brown joint venture which is invested in shopping centres and retail formats, light industrial assets, residential assets and offi ce assets in Europe, the United States of America, New Zealand and Australia. Corporate segment includes inter-segment revenue and expenses, group treasury (including foreign exchange gains and losses), Group operating costs and urban communities.

Secondary reporting format – geographical segments

GPT operates its activities in three main geographical locations as set out below:

Australia Europe United States of America Unallocated Total	Segment revenues Segment assets Acquisition of property. plant and equipment,investmentproperties
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M $M $M
	725.3 901.0 10,190.8 9,972.9 637.5 1,180.7 57.7 – 2,276.8 1,279.9 – – – – 580.4 429.2 – –
	783.0 901.0 13,048.0 11,682.0 637.5 1,180.7 – – 918.9 319.9 – –
	783.0 901.0 13,966.9 12,001.9 637.5 1,180.7

Australia Property Trust, the hotel & tourism business, urban communities as well as the Australian funds management operations of GPT Management Holdings Limited.

Europe segment includes the operations carried out throughout Europe but predominantly in the Czech Republic, Denmark, Finland, France, Germany, Poland, the Netherlands, Sweden and the United Kingdom by the joint venture as well as GPT Halverton as the European platform of the funds management operations.

United States of America segment includes mainly retail and residential business, carried out by the joint venture and senior housing.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

03. Distributions paid and payable to securityholders

(a) Distributions paid Quarter ended December 2006: 7.0 cents per stapled security paid 28 March 2007 (6.6 cents paid 26 March 2006) Quarter ended March 2007: 7.0 cents per stapled security paid 25 May 2007 (6.7 cents per stapled security paid 25 May 2006) Quarter ended June 2007: 7.3 cents per stapled security paid 21 September 2007 (6.9 cents per stapled security paid 21 September 2006) Quarter ended September 2007: 7.3 cents per stapled security paid 23 November 2007 (6.9 cents per stapled security paid 17 November 2006) Total distributions paid (b) Distributions proposed and not recognised as a liability* Quarter ended December 2007: 7.3 cents per stapled security (7.0 cents per stapled security paid 28 March 2007)	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	142.9 133.1 142.9 133.1 142.9 135.1 142.9 135.1 149.9 140.9 149.9 140.9 150.9 140.9 150.9 140.9
	586.6 550.0 586.6 550.0 153.3 142.9 153.3 142.9

The December quarter distribution is expected to be paid on 28 March 2008. No provision for this distribution has been recognised in the balance sheet at 31 December 2007 as the distribution was declared after the end of the fi nancial year.

(c) Distribution Reinvestment Plan

Refer to note 19(a)(i) for information on the distribution reinvestment plan and note 28(c) for distributions satisfi ed by way of the issue of GPT stapled securities under GPT’s distribution reinvestment plan.

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

04. Earnings per stapled security

04. Earnings per stapled security
Note (a) Attributable to unitholders of the Trust Basic and diluted earnings per unitholder of the Trust (b) Attributable to stapled securityholders of the GPT Group Basic and diluted earnings per stapled security Basic and diluted earnings per stapled security using realised operating income The earnings and securities used in the calculations of basic and diluted earnings per unit/stapled security are as follows: Earnings reconciliation - basic and diluted Earnings used in calculating: Net prof t attributable to the unitholders of the Trust Basic and diluted earnings of the Trust Add: net prof t attributable to the securityholders of other stapled entities (minority interest) Basic and diluted earnings of the Trust and other entities stapled to the Trust (The GPT Group) Add: net prof t attributable to external minority interest Basic and diluted earnings Less: adjusting items in realising distribution income, net of tax 2(b) Basic and diluted realised operating income of The GPT Group 2(b) Weighted average number of units/stapled securities used as the denominator Weighted average number of ordinary securities used in calculating: Basic and diluted earnings per unit - Trust Basic and diluted earnings per stapled security - The GPT Group	Consolidated entity
	31 Dec 2007 31 Dec 2006 Cents Cents
	58.6 67.1 57.6 68.2 29.4 27.5 31 Dec 2007 31 Dec 2006 $M $M
	1,203.7 1,362.6
	1,203.7 1,362.6 (19.2) 21.4
	1,184.5 1,384.0 (2.0) –
	1,182.5 1,384.0 (577.4) (825.4)
	605.1 558.6
	No. of securities millions No. of securities millions
	2,055.8 2,030.7 2,055.8 2,030.7

At 31 December 2007, there are no units or securities on issue which are dilutive or potentially dilutive. As such, the earnings and number of units/ securities do not differ between basic and diluted earnings per unit/stapled security. Apart from the distribution reinvestment plan (DRP), there have been no other conversions to, calls of, or subscriptions for ordinary or potential ordinary securities since the reporting date and before the completion of this report.

Under the terms of the DRP, eligible securityholders are able to elect to reinvest all or part of their quarterly distribution in additional securities, free of any brokerage or other transaction costs, rather than being paid in cash. Securities are issued and/or transferred at a predetermined price, less any discount that the directors may elect to apply from time to time. Refer to note 19(a)(i) for further details.

The DRP will apply to the December 2007 quarterly distribution.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

05. Expenses

Note (a) Expenses from hotel operations Costs of sales Employee costs Property and other outgoings Other expenses Total expenses from hotel operations (b) Depreciation and amortisation Depreciation of hotel properties 14(c) Depreciation of plant and equipment 14(c) Amortisation of management rights & operating rights 15(a) Amortisation of lease incentives Total depreciation and amortisation (c) Finance costs Related parties External entities Interest capitalised* Total f nance costs	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	49.2 39.6 – – 80.6 84.1 – – 35.1 36.2 – – 7.3 13.9 – –
	172.2 173.8 – – 11.2 12.9 – – 2.9 1.6 – – 7.8 5.1 – – – 0.2 – –
	21.9 19.8 – – – – – 2.4 269.7 231.9 230.1 230.8 (26.8) (6.7) (7.5) (6.7)
	242.9 225.2 222.6 226.5

A capitalisation rate of 6.5% (Dec 2006: 6.5%) has been applied when capitalising interest on qualifying assets.

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

	Consolidated entity	Parent entity	Parent entity
	31 Dec 2007 31 Dec	2006 31 Dec 2007	31 Dec 2006
	$M	$M $M	$M
06.
Tax
(a) Income tax expense
Current income tax expense	13.2	2.6 –	–
Deferred income tax expense	(4.6)	(1.4) –	–
Income tax expense in the income statement	8.6	1.2 –	–
The prima facie tax on net prof t before income tax expense is reconciled to the income tax expense provided in the f nancial statements
as follows:
Net prof t before income tax expense	1,191.0 1,385.2 1,051.9		1,310.6
Less: prof t attributed to entities not subject to tax	(1,205.1) (1,363.6) (1,051.9)		(1,310.6)
Net prof t before income tax expense	(14.1)	21.6 –	–
Prima facie income tax expense at 30% tax rate	(4.2)	6.5 –	–
(31 December 2006: 30%)
Tax effect of amounts not deductible (taxable) in calculating income tax expense:
Overhead costs	2.8	2.0 –	–
Impairment of investment	0.4	9.5 –	–
Controlled foreign company attribution tax	10.7	1.2 –	–
Withholding tax	1.4	1.0 –	–
Share of after tax (prof ts)/losses of equity accounted investments	(4.3)	(19.0) –	–
Tax losses not recognised	1.7	– –	–
Under/(over) provided in prior f nancial years	–	– –	–
Income tax expense/(benef t)	8.5	1.2 –	–
(b) Deferred tax assets
Employee benef ts	2.3	4.5 –	–
Overhead costs	3.5	1.7 –	–
Provisions and accruals	4.9	3.1 –	–
Income received in advance	1.8	– –	–
Other	0.7	– –	–
Net deferred tax asset	13.2	9.3 –	–
Movement in temporary differences during the f nancial year
Opening balance at beginning of the f nancial year	9.3	7.4 –	–
Credited/(charged) to the income statement	3.9	1.8 –	–
Credited/(charged) to equity	–	0.1 –	–
Closing balance at end of the f nancial year	13.2	9.3 –	–
(c) Deferred Tax Liabilities
Inventories	–	0.4 –	–
Depreciation and amortisation	–	0.3 –	–
Net deferred tax liability	–	0.7 –	–
Movement in temporary differences during the f nancial year
Opening balance at beginning of the f nancial year	0.7	0.2 –	–
Credited/(charged) to the income statement	(0.7)	0.5 –	–
Closing balance at end of the f nancial year	–	0.7 –	–

100

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

Note 06. Tax(continued) (d) Tax losses Unused tax losses for which no deferred tax asset has been recognised Potential tax benef t @ 30%	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	8.1 – – –
	2.4 – – –

All unused tax losses were incurred by overseas entities.

07. Loans and receivables

(a) Current assets

(a) Current assets
Trade receivables less: provision for doubtful receivables Distributions receivable from associates Distributions receivable from joint ventures Interest receivable from joint ventures Proceeds from the sale of Dutch Active Fundco BV Proceeds from sale of investment property Other debtors Loan to German Retail Fundco SARL Loans to various GPT Halverton managed funds Loans to related parties Total current loans and receivables	73.2 38.2 5.8 1.6 (0.9) (1.5) – (0.3)
	72.3 36.7 5.8 1.3 30.5 12.4 30.5 12.4 6.0 11.2 5.5 4.8 35.0 47.9 33.2 40.8 80.0 – – – – 21.2 – – 36.9 27.9 28.6 – 10.5 – – – – – 126.9 – – – 129.1 6.1
	271.2 157.3 359.6 65.4

(b) Non-Current assets

GPT’s investment in joint ventures and associates comprise equity investments (refer note 12) and also the following loans set out below.

Australian dollar denominated loans with associates and joint ventures 161 Sussex St Pty Limited BGA Real Estate Finance Trust (i) BGA Real Estate Finance Trust (ii) Lend Lease GPT (Rouse Hill) Pty Limited New Zealand dollar denominated loans with associates and joint ventures BGA Real Estate Finance Trust (ii) Euro denominated loans with associates and joint ventures BGP lnvestment SARL (i) BGP UK Investments Limited	– 1.9 – – – 12.8 – – 29.1 – – 37.1 14.5 – –
	66.2 29.2 – – 43.7 – – – 1,334.6 991.6 1,334.6 991.6 – 19.5 – 19.5
	1,334.6 1,011.1 1,334.6 1,011.1

Australian dollar denominated loans with associates and joint ventures
161 Sussex St Pty Limited
BGA Real Estate Finance Trust
(i)
BGA Real Estate Finance Trust
(ii)
Lend Lease GPT (Rouse Hill) Pty Limited
New Zealand dollar denominated loans with associates
and joint ventures
BGA Real Estate Finance Trust
(ii)
Euro denominated loans with associates and joint ventures
BGP lnvestment SARL
(i)
BGP UK Investments Limited

–
1.9
–
–
–
12.8
–
–
29.1
–
–
37.1
14.5
–
–

66.2
29.2
–
–
43.7
–
–
–
1,334.6
991.6
1,334.6
991.6
–
19.5
–
19.5

1,334.6
1,011.1
1,334.6
1,011.1

101

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

Note 07. Loans and receivables(continued) (b) Non-Current assets(continued) US dollar denominated loans with associates and joint ventures Babcock & Brown GPT REIT Inc (i) B&B GPT Alliance 1 LLC (i) B&B GPT Alliance 2 LLC (i) B&B GPT Holdings (No. 1) LLC (i) Benchmark GPT LLC (iii) B-VII Operations Holding Co LLC (iii) Benchmark Assisted Living LLC (iii) Loans to employees 26 Loan to Babcock & Brown Residential Operating Partnership LE (iv) Loan to GPT Management Holdings Limited 27 Loan to Voyages Hotels & Resorts Pty Limited (v) Total non-current loans and receivables	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	152.7 95.6 – – 16.6 15.2 – – 57.4 63.7 – – 2.5 – – – 72.7 81.1 – – 1.6 1.8 – – 0.7 0.8 – –
	304.2 258.2 – – 36.0 23.7 – – 56.6 – – – – – 56.3 – – – 57.3 48.0
	1,841.3 1,322.2 1,448.2 1,059.1

(i) This is the preferred capital provided to entities in the Babcock & Brown joint venture as part of the funding of the joint venture arrangement (refer to note 12(a)(i)). The loans are fi xed over various periods of three years commencing from June 2005. At the end of each period the interest rate is reset to the three year swap rate prevailing at the time of the reset. The interest earned by GPT is the equivalent to the three year swap rate at the time of funding plus an average of 280 basis points which is paid quarterly in arrears in the loan’s functional currency. At 31 December 2007, the average interest rate on the EUR loans is 6.2% (Dec 2006: 5.95%), USD loans are 7.82% (Dec 2006: 7.94%) and AUD loan is 10.1% (Dec 2006: 9.1%).

(ii) The Trust was established on 20 December 2007 and is a different entity from the BGA Real Estate Finance Trust which existed in 2006 at note 12(a)(i).

(iii) These are loans provided to the Benchmark entities as part of the funding of the Benchmark joint venture arrangement. The loans are repayable on 31 December 2016 with interest payable at 9% compounded monthly.

(iv) This US dollar preferred capital of USD $50.2 million (AUD$56.6 million) has been provided for a portfolio of 22 residential properties and apartments. GPT is entitled to an 8% return with further upside to a higher internal rate of return should certain events occur. GPT has the right to put the loan back to Babcock & Brown (US) LC on 30 June 2009.

(v) The loan, which was provided for working capital purposes, is interest bearing at 7.99% and repayable on 30 June 2011, with an option to extend for three years upon issuing notice to GPT.

102

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

Note 08. Inventories Hotel merchandise: General supplies – at cost Food and beverage – at cost Retail – at cost Other – at cost Warehoused property investments*: 1(n) Scandinavian Active Fund H20 Fund Hamburg Trust Alliance Fund Total inventories	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	1.0 1.2 – – 2.5 2.3 – – 3.3 3.4 – – 0.3 0.4 – – 8.5 – – – 280.6 – – – 108.2 – – –
	404.4 7.3 – –

GPT, through its European funds management platform, has acquired investment properties in Europe (Scandinavian Active Fund Holdco AB and H20 Fund) and the United States of America (Hamburg Trust Alliance Fund) with a view to establishing a number of specialised property funds. In line with management’s strategy, the property funds are expected to be marketed and sold to external investors in the short to medium term (refer note 1(af)(v)).

09. Derivative fi nancial instruments

09. Derivative f nancial instruments
Current assets Interest rate swaps Knock-out swaps Barrier/trigger option swaps Sold interest rate options Forward foreign exchange contracts Foreign exchange trigger contracts Property derivatives Total current derivative assets Current liabilities Interest rate swaps Barrier/trigger option swaps Sold interest rate options Forward foreign currency contracts Foreign exchange trigger contracts Total current derivative liabilities	67.8 42.4 66.2 42.4 3.6 10.8 3.6 10.8 13.2 7.5 13.2 7.5 7.0 7.1 7.0 7.1 3.2 8.9 3.2 8.9 11.7 2.7 11.7 2.7 36.9 – 36.9 –
	143.4 79.4 141.8 79.4
	26.2 9.7 25.7 9.7 60.0 0.4 60.0 0.4 37.0 5.2 37.0 5.2 2.1 6.5 2.1 6.5 15.4 3.7 15.4 3.7
	140.7 25.5 140.2 25.5

are similar to the terms and conditions of the underlying items being economically hedged. Refer to note 31 for further details.

103

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

Note 10. Non-current assets classif ed as held for sale Investment properties: Carlingford Court Chirnside Park Forestway Highpoint Homemaker Maribyrnong Macarthur Square Parkmore Wollongong Central Total non-current assets classif ed as held for sale	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	– 192.0 – – – 200.0 – – – 78.1 – – – 622.5 – – – 59.0 – – – 411.5 – – – 175.0 – – – 217.7 – –
	– 1,955.8 – –

The GPT Wholesale Shopping Centre Fund (GWSCF) was established on 30 March 2007. GPT received cash proceeds of $1.2 billion by way of capital reduction in respect of its units in GWSCF upon entry of the new wholesale investors. The Trust currently owns 39.92% of the GWSCF at a value of $817.4 million at 31 December 2007. GPT’s investment in GWSCF is accounted for as an associate (refer note 12(a)(ii)) and remains in the retail segment in note 2.

11. Investment properties

and remains in the retail segment in note 2. 11. Investment properties
Retail 11(b) Off ce 11(c) Industrial 11(d) Hotel & Tourism 11(e) Total investment properties	3,828.6 3,491.7 2,637.4 2,412.7 1,235.1 935.7 733.9 604.5 702.2 604.1 408.0 334.1 221.3 197.1 – –
	5,987.2 5,228.6 3,779.3 3,351.3

** Melbourne Central has been allocated 64.6% Retail ($720.2 million) and 35.4% Offi ce ($394.4 million) (Dec 2006: 64% Retail ($577.0 million) and 36% Offi ce ($331.2 million)).

(a) Reconciliation

(a) Reconciliation
Carrying amount at beginning of the f nancial year Additions (including capitalisations) Acquisitions Disposals Revaluations Transfers from property, plant and equipment 14(c) Transfers to property, plant and equipment 14(c) Transfers of properties to held for sale classif cation Transfers to equity accounted investments Lease Incentives Amortisation of lease incentives Leasing costs Carrying amount at end of the f nancial year	5,228.6 7,245.1 3,351.3 3,378.3 75.7 99.3 62.2 35.9 71.9 766.6 120.0 – – (1,040.6) – (218.1) 458.5 670.9 212.3 298.3 156.6 83.8 30.2 – – (22.9) – (22.9) – (1,955.8) – – – (634.8) – (134.1) 16.0 33.9 11.0 20.0 (21.7) (19.0) (8.6) (7.3) 1.6 2.1 0.9 1.2
	5,987.2 5,228.6 3,779.3 3,351.3

(a) Reconciliation

Carrying amount at beginning of the f nancial year
Additions (including capitalisations)
Acquisitions
Disposals
Revaluations
Transfers from property, plant and equipment
14(c)
Transfers to property, plant and equipment
14(c)
Transfers of properties to held for sale classif cation
Transfers to equity accounted investments
Lease Incentives
Amortisation of lease incentives
Leasing costs
Carrying amount at end of the f nancial year

5,228.6
7,245.1
3,351.3
3,378.3
75.7
99.3
62.2
35.9
71.9
766.6
120.0
–
–
(1,040.6)
–
(218.1)
458.5
670.9
212.3
298.3

156.6
83.8
30.2
–

–
(22.9)
–
(22.9)
–
(1,955.8)
–
–
–
(634.8)
–
(134.1)
16.0
33.9
11.0
20.0
(21.7)
(19.0)
(8.6)
(7.3)
1.6
2.1
0.9
1.2

5,987.2
5,228.6
3,779.3
3,351.3

104

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

11. Investment properties (continued)

Details of GPT’s Investment Properties

(b) Retail

Ownership Interest(1) Acquisition Date % Casuarina Square, NT 100.0 Oct 1973 Charlestown Square, NSW 100.0 Dec 1977 Pacif c Highway, Charlestown, NSW 100.0 Oct 2002/Jul 2003 Dandenong Plaza, VIC 100.0 Dec 1993/Dec 1999 Erina Fair, NSW(5) 33.3 Jun 1992 Floreat Forum, WA(3) 100.0 Jul 1996 Westf eld Penrith, NSW 50.0 Jun 1971 Sunshine Plaza, QLD 50.0 Dec 1992/Sep 2004 Plaza Parade, QLD 50.0 Jun 1999 Westf eld Woden, ACT 50.0 Feb 1986 Total Parent Entity Floreat Forum, WA(3) 100.0 Jul 1996 Homemaker City, Aspley, QLD 100.0 Nov 2001 Homemaker City, Bankstown, NSW 100.0 Nov 2001 Homemaker City, Cannon Hill, QLD 100.0 Nov 2001 Homemaker City, Fortitude Valley, QLD 100.0 Dec 2001 Homemaker City, Jindalee, QLD 100.0 Nov 2001 Homemaker City, Mt Gravatt, QLD 100.0 Nov 2001 Homemaker City, Windsor, QLD 100.0 Nov 2001 Newcastle CBD, NSW 100.0 Jun 2007 Melbourne Central, VIC – retail portion(2) 100.0 May 1999/May 2001 Total Consolidated Entity (c) Off ce* Australia Square, Sydney, NSW 50.0 Sep 1981 MLC Centre, Sydney, NSW 50.0 Apr 1987 77 Eagle Street, Brisbane, QLD 100.0 Apr 1984 Total Parent Entity Melbourne Central, VIC – off ce portion(2) 100.0 May 1999/May 2001 818 Bourke St, Victoria Harbour, VIC 100.0 Jun 2006 Total Consolidated Entity	Ownership Interest(1) Acquisition Date %	Fair Value Latest Independent Valuation Date Valuer 31 Dec 2007 31 Dec 2006 $M $M
	100.0 Oct 1973 100.0 Dec 1977 100.0 Oct 2002/Jul 2003 100.0 Dec 1993/Dec 1999 33.3 Jun 1992 100.0 Jul 1996 50.0 Jun 1971 50.0 Dec 1992/Sep 2004 50.0 Jun 1999 * 50.0 Feb 1986	415.0 384.6 Mar 2006 CB Richard Ellis Pty Limited 444.5 429.0 Mar 2006 Knight Frank Valuations 15.2 15.2 Mar 2006 Knight Frank Valuations 225.0 215.6 Sep 2006 Colliers Pty Limited 273.2 286.2 Mar 2006 CB Richard Ellis Pty Limited 135.0 – Sep 2007 CB Richard Ellis Pty Limited 512.2 485.0 Mar 2007 Knight Frank Valuations 332.6 313.9 Mar 2007 Knight Frank Valuations 13.6 13.5 Mar 2007 Knight Frank Valuations 271.1 269.7 Mar 2006 CB Richard Ellis PtyLimited
		2,637.4 2,412.7
		– 120.0 – – 70.0 65.9 Jun 2005 Knight Frank Valuations 50.0 51.7 Sep 2006 CB Richard Ellis Pty Limited 22.0 20.9 Sep 2006 CB Richard Ellis Pty Limited 140.0 132.3 Sep 2006 CB Richard Ellis Pty Limited 69.1 63.4 Sep 2007 CB Richard Ellis Pty Limited 25.3 25.3 Mar 2005 Knight Frank Valuations 22.7 22.5 Jun 2005 CB Richard Ellis Pty Limited 71.9 – – – 720.2 577.0 Sep 2007 CB Richard Ellis Pty Limited
		3,828.6 3,491.7
	50.0 Sep 1981 50.0 Apr 1987 100.0 Apr 1984	300.0 237.6 Jun 2007 Savills (NSW) Pty Limited 397.5 339.5 Jun 2006 Jones Lang LaSalle 36.4 27.4 Jun 2006 Jones LangLaSalle
		733.9 604.5
	100.0 May 1999/May 2001 100.0 Jun 2006	394.4 331.2 Sep 2007 CB Richard Ellis Pty Limited 106.8 – – –
		1,235.1 935.7

105

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

11. Investment properties (continued)

Details of GPT’s Investment Properties (continued)

(d) Industrial

Ownership Interest(1) Acquisition Date % 2–4 Harvey Road, Kings Park, NSW 100.0 May 1999 Citi-West Industrial Estate, Altona North, VIC 100.0 Aug 1994 Quad 1, Sydney Olympic Park, NSW 100.0 Jun 2001 Quad 2, Sydney Olympic Park, NSW 100.0 Dec 2001 Quad 3, Sydney Olympic Park, NSW 100.0 Mar 2003 Quad 4, Sydney Olympic Park, NSW 100.0 Jun 2004 8 Herb Elliott, Sydney Olympic Park, NSW 100.0 Aug 2004 5 Figtree Drive, Sydney Olympic Park, NSW 100.0 Jul 2005 7 Figtree Drive, Sydney Olympic Park, NSW 100.0 Jul 2004 7 Parkview Drive, Sydney Olympic Park, NSW 100.0 May 2002 Rosehill Business Park, Camellia, NSW 100.0 May 1998 15 Berry Street, Granville, NSW 100.0 Nov 2000 19 Berry Street, Granville, NSW 100.0 Dec 2000 973 Fairf eld Road, Yeerongpilly, QLD 100.0 Dec 2005 Total Parent Entity Austrak Business Park, Somerton, VIC 50.0 Oct 2003 134–140 Fairbairn Road, Sunshine West, VIC 100.0 Mar 2006 116 Holt Street, Pinkenba, QLD 100.0 Mar 2006 Block 1 & 4 Section 15, Sandford St, Mitchell, ACT * 100.0 Mar 2006 31 Vision Drive, Burwood East, VIC 100.0 Mar 2006 4 Holker Street, Silverwater, NSW 100.0 Mar 2006 120 Miller Road, Villawood, NSW 100.0 Apr 2006 372–374 Victoria Street, Wetherill Park, NSW 100.0 Jul 2006 18–24 Abbott Road, Seven Hills, NSW 100.0 Oct 2006 Lots 42 & 44 Ocean Steamers Drive, Port Adelaide, SA 50.0 Jul 2006 Total Consolidated Entity	Ownership Interest(1) Acquisition Date %	Fair Value Latest Independent Valuation Date Valuer 31 Dec 2007 31 Dec 2006 $M $M
		47.0 32.2 Mar 2005 Savills (NSW) Pty Limited 76.3 69.8 Mar 2006 Savills (VIC) Pty Limited 19.3 16.8 Jun 2007 CB Richard Ellis Pty Limited 21.7 19.3 Jun 2007 CB Richard Ellis Pty Limited 22.7 20.2 Mar 2006 Colliers Pty Limited 34.1 – Sep 2007 CB Richard Ellis Pty Limited 9.0 8.5 Jun 2007 CB Richard Ellis Pty Limited 20.4 20.3 – – 10.8 10.2 Jun 2007 CB Richard Ellis Pty Limited 19.1 18.4 Jun 2007 CB Richard Ellis Pty Limited 73.0 70.2 Sep 2006 CB Richard Ellis Pty Limited 14.6 14.5 Sep 2006 CB Richard Ellis Pty Limited 26.7 20.7 Sep 2006 CB Richard Ellis Pty Limited 13.3 13.0 – –
		408.0 334.1
	50.0 Oct 2003 100.0 Mar 2006 100.0 Mar 2006 * 100.0 Mar 2006 100.0 Mar 2006 100.0 Mar 2006 100.0 Apr 2006 100.0 Jul 2006 100.0 Oct 2006 50.0 Jul 2006	144.7 124.1 Sep 2006 Knight Frank Valuations 14.0 13.5 – – 15.0 14.3 – – 9.9 9.6 – – 10.5 10.5 – – 34.3 34.2 – – 20.0 18.1 – – 22.1 22.1 – – 15.5 15.4 – – 8.2 8.2 – –
		702.2 604.1

106

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

11. Investment properties (continued)

Details of GPT’s Investment Properties (continued)

(e) Hotel & Tourism

(e) Hotel & Tourism
Four Points by Sheraton Hotel, Sydney, NSW(4) Total Consolidated Entity	Ownership Interest(1) Acquisition Date %	Fair Value Latest Independent Valuation Date Valuer 31 Dec 2007 31 Dec 2006 $M $M
	* 100.0 May 2000	228.3 204.1 Mar 2005 Knight Frank Valuations (7.0) (7.0)
		221.3 197.1

(1) Freehold, unless otherwise marked with a * which denoted leasehold.

(3) Floreat Forum was internally transferred at fair value ($120.0m) on 1 April 2007 to the Trust.

(4) Security deposit held by GPT.

(5) Erina Fair is 33.3% directly owned by the Trust. A further 16.7% is owned through a 50% share of Erina Property Trust, a joint venture with APPF (refer note 12(a)(i)).

property, plant and equipment – refer note 14. Hotel investments which are owned and operated by GPT are classifi ed as property, plant and equipment – refer note 14. The basis of valuation of investment properties remains unchanged – being the amounts for which the assets could be exchanged between willing parties in an arm’s length transaction. All independent valuations have been carried out by qualifi ed valuers.

(f) Operating lease receivables from investment property tenants

The investment properties are leased to tenants under long term operating leases with rentals payable monthly. Minimum lease payments receivable under non-cancellable operating leases of investment properties are as follows:

Due within one year Due between one and f ve years Due after f ve years	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	450.4 702.7 233.3 229.4 1,207.3 1,937.0 595.9 563.9 658.6 1,066.5 253.8 256.6
	2,316.3 3,706.2 1,083.0 1,049.9

107

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

12. Equity accounted investments

12. Equity accounted investments
Investments in joint ventures Investments in associates Total equity accounted investments Details of GPT’s Joint Ventures and Associates Name Principal Activity	Note (a)(i) (a)(ii) Ownership Interest	Consolidated entity Parent entity
		31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
		1,554.0 1,266.0 951.8 828.2 1,965.5 933.2 1,651.5 853.8
		3,519.5 2,199.2 2,603.3 1,682.0
		371.1 321.1 371.1 321.1 421.4 343.5 421.4 343.5 0.8 0.3 – – 136.6 143.0 136.6 143.0 22.7 20.6 22.7 20.6 – 2.3 – – 12.1 – – – 36.8 27.2 – – – 1.0 – – 7.2 10.0 – – 215.3 115.5 – – 12.5 12.8 – – – – – – – 2.8 – – 317.5 265.9 – –
	2007 2006 % %
(a)(i) Joint Ventures Entities incorporated in Australia 1 Farrer Place Trust(1) Investment property 2 Park Street Trust(1) Investment property DPT Operator Pty Limited(1) Managing property Erina Property Trust(1) Investment property Horton Trust(1) Investment property BGA Real Estate Finance Trust(3)(4) Mezzanine loan BGA Real Estate Finance Trust(3)(4) Mezzanine loan Entities incorporated in the United States Babcock & Brown GPT REIT Inc(4) Property investment B&B GPT Alliance 1 LLC(4) Property investment B&B GPT Alliance 2 LLC(4) Mezzanine loan Benchmark GPT LLC(2) Property investment B-VII Operations Holding Co LLC(2) Property investment B&B GPT Holdings (No. 1) LLC Mezzanine loan Entities incorporated in the United Kingdom BGP UK Investments Limited(5) Property investment Entities incorporated in Luxembourg BGP Investment SARL(4) Property investment Total investment in joint ventures	50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 – 50.00 50.00 – 50.00 50.00 50.00 50.00 50.00 50.00 95.00 95.00 95.00 95.00 50.00 – – 50.00 50.00 50.00
		1,554.0 1,266.0 951.8 828.2

108

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

12. Equity accounted investments (continued)

Name Principal Activity	Ownership Interest	Consolidated entity Parent entity
	2007 2006 % %	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
(a)(ii) Associates Entities incorporated in Australia 161 Sussex St Pty Limited Property investment 40.00 40.00 GPT Wholesale Off ce Fund(1) Property investment 39.35 39.72 GPT Wholesale Shopping Centre Fund(1) Property investment 39.92 – Kings Canyon (Watarrka) Resort Trust(1) Investment property 46.00 46.00 Lend Lease GPT (Rouse Hill) Pty Limited(1) Property development49.00 49.00 Lend Lease (Twin Waters) Pty Limited(1) Property development49.00 49.00 Entities incorporated in the United States Benchmark Assisted Living LLC(2) Property management 20.00 20.00 Entities incorporated in The Netherlands Dutch Active Fund Propco BV(6) Investment property 38.00 – Total investments in associates		4.1 2.7 – – 1,060.5 902.7 855.2 853.8 817.4 – 796.3 – 6.5 6.3 – – 11.9 5.5 – – 11.7 11.5 – – 4.4 4.5 – – 49.0 – – –
		1,965.5 933.2 1,651.5 853.8

The entity has a 30 June balance date.
GPT has a 95% economic interest in Benchmark GPT LLC and B-VII Operations Holding Co LLC, entities which both own senior housing assets and a 20% interest in the manager of the portfolio, Benchmark Assisted Living LLC. GPT has equal representation and voting rights on the Board of these entities with all major decisions regarding the joint venture requiring unanimous approval from both parties, resulting in share joint control with BE Capital LLC. Accordingly, Benchmark GPT LLC and B-VII Operations Holding Co LLC has been accounted for as a joint venture. Funding of the joint venture is by way of both ordinary equity and loans (refer to note 7(b)).
On 20 December 2007, a new Trust by the same name was established. This is a different entity which conducts different principal activities than the BGA Real Estate Finance Trust which existed in 2006.
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 (refer to note 7(b)) to each of the joint venture entities within the joint venture arrangement.
In November 2007, BGP (UK) Investments Limited became a controlled entity of GPT with the acquisition of the remaining 50% interest by GPT UK Limited (refer to note 23(a)).
The Dutch Active Fund Propco BV (DAF) is a closed end unlisted fund with a expected life of seven years. GPT has a residual interest of 38% in DAF after its fi rst equity raising closed (refer to note 22). A second and fi nal equity raising is planned for mid 2008.

109

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

12. Equity accounted investments (continued)

Australia	Europe	United States	Total	Total
31 Dec 200731 Dec	200631 Dec 200731 Dec 200631 Dec 200731 Dec		200631 Dec 2007	31 Dec 2006
$M	$M $M	$M $M	$M $M	$M

(b) Share of joint ventures and associates’ net profi ts – consolidated entity

operate in:

operate in:
Revenue Expenses Prof t before income tax expense Income tax expense Share of net prof ts of joint ventures and associate interests	525.0 297.8 244.8 208.6 229.1 30.3 998.9 536.7 84.3 48.6 224.5 109.2 215.2 19.9 524.0 177.7
	440.7 249.2 20.3 99.4 13.9 10.4 474.9 359.0 – 0.1 6.2 35.0 – – 6.2 35.1
	440.7 249.1 14.1 64.4 13.9 10.4 468.7 323.9

Refer to note 2(c) for an analysis of GPT’s share of net profi ts from joint ventures and associates by business segment.

(c) Share of joint ventures and associates’ assets and liabilities – consolidated entity

GPT’s share of its equity accounted investments balance sheet by the geographic location they operate in are set out below. Key asset and liability categories have been individually presented for further detail.

Cash and cash equivalents Other assets Property investments and loans Total assets Other liabilities Borrowings – The GPT Group – External – current – External – non-current Total liabilities Net assets	20.2 16.4 93.5 266.5 34.2 22.3 147.9 305.2 100.7 24.7 237.9 161.0 34.2 76.9 372.8 262.6 3,136.0 1,821.5 2,813.2 2,660.6 1,340.6 783.9 7,289.8 5,266.0
	3,256.9 1,862.6 3,144.6 3,088.1 1,409.0 883.1 7,810.5 5,833.8 108.1 91.3 176.0 230.0 62.9 10.3 347.0 331.6 54.8 6.4 667.3 505.6 185.1 158.6 907.2 670.6 – – 62.4 – 74.5 – 136.9 – 217.0 – 1,873.7 2,095.6 810.1 547.8 2,900.8 2,643.4
	379.9 97.7 2,779.4 2,831.2 1,132.6 716.7 4,291.9 3,645.6
	2,877.0 1,764.9 365.2 256.9 276.4 166.4 3,518.6 2,188.2

Refer to note 2(d) for an analysis of GPT’s share of the joint ventures and associates’ balance sheets by business segment.

110

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

12. Equity accounted investments (continued)

(d) Share of joint ventures and associates’ assets and liabilities – consolidated entity

Further details of the property investments, investment property and mezzanine loans listed as the principal activity of equity accounted investments in note 12(a) are set out below.

Equity accounted investment Investment property/portfolio, loans and other assets	Consolidated entity
	31 Dec 2007
	$M
Australia Erina Property Trust Erina Fair, NSW Horton Trust Horton Parade, QLD Horton Trust Maroochydore Superstore Plaza, QLD GPT Wholesale Shopping Centre Fund Various retail assets (8) Total Retail 2 Park Street Trust Citigroup Centre, NSW 1 Farrer Place Trust 1 Farrer Place, NSW DPT Operator Pty Limited Property Management GPT Wholesale Off ce Fund Various off ce buildings (10) Total Off ce Kings Canyon (Watarrka) Resort Trust Kings Canyon (Watarrka) Resort, NT 161 Sussex Street Pty Limited Four Points by Sheraton Hotel Total Hotel & Tourism Lend Lease GPT (Rouse Hill) Pty Ltd Residential land – Rouse Hill, NSW Lend Lease GPT (Twin Waters) Pty Ltd Land, Twin Waters, QLD BGA Real Estate Finance Trust Mezzanine loan (international) Total Corporate & Joint Venture Total Australia Europe BGP Investment SARL German Residential European Off ce European Light Industrial European Retail UK Mezzanine Loan Dutch Active Fund Propco BV Dutch off ce, light industrial & logistics buildings (40) Total Europe United States Babcock & Brown GPT REIT Inc Shopping Centre B&B GPT Alliance I LLC Multifamily B&B GPT Alliance II LLC Multifamily mezzanine loan B&B GPT Holdings (No. 1) LLC Commercial real estate loan portfolio* Benchmark GPT LLC and B-VII Operations Holding Co LLC Seniors Housing Total United States Total property investments, investment properties and mezzanine loans
	136.8
	11.5
	11.2
	885.8
	1,045.3
	425.0
	371.6
	–
	1,180.4
	1,977.0
	7.3
	3.6
	10.9
	42.5
	13.2
	47.1
	102.8
	3,136.0

	1,122.3
	114.6
	755.4
	608.7
	25.4
	186.9
	2,813.3

	343.6
	9.3
	36.5
	155.4
	795.7
	1,340.5
	7,289.8

Investment property unless otherwise marked with a ‘*’ which denotes loans and receivables.

111

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

12. Equity accounted investments (continued)

Equity accounted inv	estments(continued)	estments(continued)
	Australia Europe United States Total
	31 Dec 200731 Dec 200631 Dec 200731 Dec 200631 Dec 200731 Dec 200631 Dec 2007	31	Dec 2006
	$M $M $M $M $M $M $M		$M
(e) Share of joint ventures and associates’ commitments
GPT’s share of its equity accounted investments’ capital expenditure commitments for the purchase of property, plant and equipment
which have been approved but not provided for at 31 December 2007 and operating lease commitments are set out below:
Capital expenditure	106.8 10.0 72.3 166.4 4.4 2.8 183.5		179.2
commitments
Operating lease	– – 79.8 51.0 114.5 – 194.3		51.0
commitments
Total joint venture and	106.8 10.0 152.1 217.4 118.9 2.8 377.8		230.2
associates’ commitments

(f) Reconciliation of the carrying amount of equity accounted investments – consolidated entity

geographic segment are set out below:

(i) Joint ventures
Carrying amount at
beginning of the
f nancial year
Additions
Acquisitions
Transfer out to
controlled entities
Disposals
Share of joint ventures’ net
operating prof t
Share of joint ventures’ fair
value adjustments
Share of increment in joint
ventures’ reserves
Impairment expense
Distributions received/
receivable from
joint ventures
Foreign exchange rate
differences on translation
Carrying amount at end of
the f nancial year

830.8
1,279.1
268.7
152.0
166.5
19.6
1,266.0
1,450.7
18.4
9.6
–
52.4
–
2.7
18.4
64.7
–
–
57.4
2.9
116.1
136.1
173.5
139.0
–
–
(1.5)
–
–
–
(1.5)
–
(2.3)
(558.5)
(10.1)
–
–
–
(12.4)
(558.5)
50.6
74.0
9.3
33.3
8.5
8.0
68.4
115.3
118.3
99.6
6.8
31.1
3.0
2.4
128.1
133.1
–
–
11.5
(1.5)
–
(0.1)
11.5
(1.6)
–
–
–
(1.5)
–
(0.1)
–
(1.6)
(51.1)
(73.0)
(24.7)
–
(9.9)
(2.1)
(85.7)
(75.1)
–
–
0.1
–
(12.4)
–
(12.3)
–

964.7
830.8
317.5
268.7
271.8
166.5
1,554.0
1,266.0

112

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

12. Equity accounted investments (continued)

	Australia Europe United States Total
	31 Dec 200731 Dec 200631 Dec 200731 Dec 200631 Dec 200731 Dec 200631 Dec 200731	Dec 2006
	$M $M $M $M $M $M $M	$M
(f) Reconciliation of the carrying amount of equity accounted investments – consolidated entity(continued)
(ii) Associates
Carrying amount at	928.7 23.4 – – 4.5 – 933.2	23.4
beginning of the f nancial year
Additions	8.3 – – – – – 8.3	–
Acquisitions	– – – – – 4.5 –	4.5
Transfers in from	795.5 860.7 – – – – 795.5	860.7
investment properties
Transfers in from	– – 49.0 – – – 49.0	–
controlled entities
Disposals	– – – – – – –	–
Share of associates’ net	93.9 26.5 – – 0.4 – 94.3	26.5
operating prof t
Share of associates’ fair	177.9 49.0 – – – – 177.9	49.0
value adjustments
Share of increment in	– – – – – – –	–
associates’ reserves
Impairment expense	– (8.4) – – – – –	(8.4)
Distributions received/	(92.2) (22.5) – – (0.4) – (92.6)	(22.5)
receivable from associates
Foreign exchange rate	– – – – (0.1) – (0.1)	–
differences on translation
Carrying amount at end of the f nancial year	1,912.1 928.7 49.0 – 4.4 4.5 1,965.5	933.2

13. Other assets

Note Available for sale investments Investments in unlisted entities - at cost* Total available for sale f nancial assets Other assets Investments in controlled entities - at cost 24 Total non-current other assets	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	3.6 0.7 0.1 –
	3.6 0.7 0.1 –
	– – 4,248.6 4,913.4
	3.6 0.7 4,248.7 4,913.4

113

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

14. Property, Plant and Equipment

14. Property, Plant and Equipment
Note Property under development At cost less: accumulated depreciation and impairment Total property under development (a) Hotel properties At fair value Total hotel properties (b) Off ce f xtures, f ttings & operating equipment At cost less: accumulated depreciation and impairment Total off ce f xtures, f ttings & operating equipment Total property, plant and equipment	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	571.1 271.8 – 170.4 – – – –
	571.1 271.8 – 170.4
	629.6 607.1 – –
	629.6 607.1 – –
	25.7 15.2 – – (5.1) (2.2) – –
	20.6 13.0 – –
	1,221.3 891.9 – 170.4

(a) Details of property under development – at cost

Quad 4, Sydney Olympic Park, NSW(2) Rouse Hill Town Centre, NSW Total Parent Entity 21 Talavera Rd, Macquarie Park, NSW Austrak Business Park, Somerton, VIC Rouse Hill Town Centre, NSW workplace6, Darling Island, NSW(3) 818 Bourke St, Victoria Harbour, VIC(4) Total Consolidated Entity	Ownership Interest(1) Acquisition Date %	Cost
		31 Dec 2007 31 Dec 2006 $M $M
	* 100.0 Jun 2004 100.0 Dec 2005	– 21.1 – 149.3
		– 170.4
	100.0 Jun 2006 50.0 Oct 2003 100.0 Dec 2005 * 100.0 Dec 2006 100.0 Jun 2006	19.2 18.6 16.4 18.5 477.3 – 58.2 32.0 – 32.3
		571.1 271.8

(1) Freehold unless otherwise marked with a ‘*’ which denotes leasehold.

(2) Practical completion on Quad 4 was achieved in June 2007 and the property was reclassifi ed to investment property (refer note 11(d)).

(3) GPT has entered into an agreement to sell this property - for further details refer to note 16(i).

(4) Practical completion on 818 Bourke Street was achieved in December 2007 and the property was reclassifi ed to investment property (refer note 11(c)).

114

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

14. Property, Plant and Equipment (continued)

(b) Details of hotel properties – at fair value

Hotel & Tourism Ayers Rock Resort, NT Bedarra Island Resort, QLD Brampton Island Resort, QLD Cradle Mountain Resort, TAS Dunk Island Resort, QLD El Questro, WA Heron Island (including Wilson Island), QLD Silky Oaks Lodge, QLD Wrotham Park, QLD Total Consolidated Entity	Ownership Interest(1) Acquisition Date %	Fair Value Latest Independent Valuation Date Valuer 31 Dec 2007 31 Dec 2006 $M $M
	100.0 Dec 1997 100.0 Jul 2004 100.0 Mar 2005 100.0 Jul 2004 100.0 Jul 2004 100.0 Jul 2005 100.0 Jul 2004 100.0 Jul 2004 * 100.0 Jul 2004	438.9 420.4 Mar 2007 Colliers Pty Limited 24.8 23.1 Jun 2007 Knight Frank Valuations 18.4 19.6 Jun 2007 Jones Lang LaSalle 22.3 21.8 Jul 2006 Knight Frank Valuations 51.8 47.1 Jun 2007 Knight Frank Valuations 18.2 17.5 – – 35.6 35.4 Jun 2007 Knight Frank Valuations 17.6 19.0 Jul 2006 Knight Frank Valuations 2.0 3.2 Jun 2007 CB Richard Ellis PtyLimited
		629.6 607.1

(1) Freehold unless otherwise marked with a ‘*’ which denotes leasehold.

115

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

14. Property, Plant and Equipment (continued)

(c) Reconciliation

year are set out below:

Consolidated entity Year ended 31 December 2006 Carrying amount at beginning of the f nancial year Additions (including capitalisations) Disposals Depreciation charge Transfer from investment properties Transfer to investment properties Revaluations/(devaluations) Carrying amount at end of the f nancial year Year ended 31 December 2007 Carrying amount at beginning of the f nancial year Additions (including capitalisations) Disposals Acquisition of controlled entities Depreciation charge Transfer to investment properties Revaluations/(devaluations) Carrying amount at end of the f nancial year Parent entity Year ended 31 December 2006 Carrying amount at beginning of the f nancial year Additions (including capitalisations) Transfer to investment properties Carrying amount at end of the f nancial year Year ended 31 December 2007 Carrying amount at beginning of the f nancial year Additions (including capitalisations) Transfer to investment properties Transfer to controlled entity Carrying amount at end of the f nancial year	Note	Property under Development Hotel Properties Off ce f xtures, f ttings and operating equipment Total $M $M $M $M
	5(b) 11(a) 11(a) 5(b) 11(a) 11(a) 11(a)	63.5 614.6 11.0 689.1 269.2 26.5 19.1 314.8 – (8.3) (15.5) (23.8) – (12.9) (1.6) (14.5) 22.9 – – 22.9 (83.8) – – (83.8) – (12.8) – (12.8)
		271.8 607.1 13.0 891.9

		271.8 607.1 13.0 891.9
		455.9 14.8 19.2 489.9
		– (10.8) (10.8)
		– – 2.1 2.1
		– (11.2) (2.9) (14.1)
		(156.6) – – (156.6)
		– 18.9 – 18.9
		571.1 629.6 20.6 1,221.3
		3.9 – – 3.9 143.6 – – 143.6 22.9 – – 22.9
		170.4 – – 170.4

		170.4 – – 170.4
		337.1 – – 337.1
		(30.2) – – (30.2)
		(477.3) – – (477.3)
		– – – –

116

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

15. Intangible assets

15. Intangible assets
		Consolidated entity		Parent entity
	Note	31 Dec 2007	31 Dec 2006	31 Dec 2007 31 Dec 2006
		$M	$M	$M	$M
Goodwill	(b)	121.8	–	–	–
Management rights
At cost		54.2	51.2	–	–
less: accumulated amortisation and impairment		(11.9)	(5.1)	–	–
Total management rights	(c)	42.3	46.1	–	–
Operating lease rights – Lizard Island Resort
At cost		43.3	42.1	–	–
less: accumulated amortisation and impairment		(16.5)	(14.1)	–	–
Total operating rights	(d)	26.8	28.0	–	–
Total intangible assets		190.9	74.1	–	–
(a) Reconciliations
Reconciliations of the carrying amount of each class of intangible at the beginning and end			of the current f nancial year are set out		below:
		Goodwill	Management	Operating	Total
			Rights	Rights
		$M	$M	$M	$M
Consolidated entity
Year ended 31 December 2006
Carrying amount at beginning of the f nancial year		7.3	–	28.3	35.6
Additions (including capitalisations)		–	–	2.2	2.2
Acquisitions		–	51.2	–	51.2
Impairment expense		(7.3)	–	(2.5)	(9.8)
Amortisation charge	5(b)	–	(5.1)	–	(5.1)
Carrying amount at end of the f nancial year		–	46.1	28.0	74.1
Year ended 31 December 2007
Carrying amount at beginning of the f nancial year		–	46.1	28.0	74.1
Additions (including capitalisations)		121.8	3.0	1.2	126.0
Acquisitions		–	–	–	–
Impairment expense		–	–	(1.4)	(1.4)
Amortisation charge	5(b)	–	(6.8)	(1.0)	(7.8)
Carrying amount at end of the f nancial year		121.8	42.3	26.8	190.9

(b) Goodwill

Goodwill arose on the acquisition of Halverton Real Estate Investment Management Limited (‘Halverton’) and Hamburg Trust Grundvermogen und Anlage GmbH (‘Hamburg Trust’) in 2007 (refer to note 23) and has been allocated to the European funds management CGU.

The recoverable amount of the goodwill has been determined based on fair value less costs to sell. Due to these entities being recently acquired and currently managing approximately AUD$3 billion in real estate along with the recent launch of two property funds, German Retail Partnership (GRP) and the Dutch Active Fund (DAF) by GPT Halverton since July 2007 with several others in the pipeline, the recoverable amount of the goodwill has been assessed to be the same as its carrying value. No goodwill was impaired or impairment losses reversed during the fi nancial year.

117

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

15. Intangible assets (continued)

(c) Management rights

The management rights include asset, property and development management rights of retail shopping centres. The useful life of the rights range between 7.5 to 10 years and are amortised over the life of the rights.

(d) Operating rights

The Lizard Island Resort operating rights were purchased on 30 June 2005 as part of the acquisition of Voyages Hotels & Resorts Pty Limited by GPT. The operating rights, under which GPT operates the Lizard Island Resort, expire on 31 August 2033. The cost of the operating rights less any impairment are amortised over the 28 year life of the lease.

16. Payables

16. Payables
Note Trade payables and accruals Payable to Babcock & Brown Limted Deposits (i) Other payables Deferred purchase consideration Related party payables Total payables	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	321.7 215.4 47.7 31.3 25.6 5.8 – – 106.5 – – – 7.0 1.7 0.5 0.6 44.8 – – – 5.1 5.3 364.4 0.4
	510.7 228.2 412.6 32.3

(i) On 18 December 2007, GPT entered into an agreement with a related party to sell the site known as workplace[6] and received a fi rst instalment by way of consideration. The agreement is conditional on GPT developing workplace[6] (refer to note 14(a)) to practical completion, at which point the related party has been provided with a call option on the long term lease of the site at practical completion. The second instalment and associated costs of approximately $82.2 million is conditional on GPT Development Pty Limited achieving practical completion. If practical completion is not achieved on the building, the deposit will be reimbursed.

118

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

17. Borrowings

17. Borrowings
Note Current – unsecured Bank facilities Multi option facility – US dollar (a)(i) Multi option facility – euro (a)(i) Multi option facility – Australian dollar (a)(i) Short term bank loan – Australian dollar (a)(iii) Overdraft facility – euro (a)(iv) Bridge facility – US dollar (a)(v) Short term notes (b) Medium term notes (b) Total current borrowings – unsecured Current – secured Bank facilities Australian dollar (a)(vi) US dollar (a)(vi) Euro (a)(vi) Danish Kroner (a)(vi) Swedish Kroner (a)(vi) Total current borrowings – secured Total current borrowings Non-Current – unsecured Bank borrowings Multi option syndicated facility – euro (a)(ii) Multi option syndicated facility – US dollar (a)(ii) Medium term notes (b) CPI coupon indexed bond (c) Total non-current borrowings – non-secured Non-Current – secured Bank facilities – Australian dollar (a)(vi) Total non-current borrowings – secured Total non-current borrowings Total borrowings The maturity prof le of the above current and non-current borrowings is: Due within one year* Due between one and f ve years Due after f ve years	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	– 433.1 – 433.1 – 275.1 – 275.1 50.0 – 50.0 – 299.8 – 299.8 – 7.8 – – – 102.4 – – – 45.8 566.5 45.8 566.5 399.9 299.9 399.9 299.9
	905.7 1,574.6 795.5 1,574.6 16.6 55.4 – – 74.4 – – – 166.0 – – – 27.9 – – – 6.3 – – –
	291.2 55.4 – –
	1,196.9 1,630.0 795.5 1,574.6
	1,891.9 1,003.7 1,891.9 1,003.7 588.9 – 588.9 – 1,134.9 1,533.5 1,134.9 1,533.5 124.6 124.5 124.6 124.5
	3,740.3 2,661.7 3,740.3 2,661.7 57.8 – – –
	57.8 – – –
	3,798.1 2,661.7 3,740.3 2,661.7
	4,995.0 4,291.7 4,535.8 4,236.3
	1,196.9 1,630.0 795.5 1,574.6 3,462.1 2,325.9 3,404.3 2,325.9 336.0 335.8 336.0 335.8
	4,995.0 4,291.7 4,535.8 4,236.3

Bank facilities of AUD$274.6 million (Dec 2006: $nil) in the consolidated entity have been classifi ed as due within one year, which is consistent with the treatment of the secured assets as current inventory. Actual maturity of these facilities is due after fi ve years. Refer note 17(a)(vi)

119

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

17. Borrowings (continued)

(a) Bank facilities

Unsecured

(i) Multi option facility

A multi-option facility of AUD$750 million, which may be drawn in AUD, Euro, USD or NZD, is available to the Trust. As at 31 December 2007, this facility is currently drawn to AUD$50 million. This facility matures on 30 June 2008 and is subject to negative pledge arrangements and requirements that GPT complies with certain minimum fi nancial requirements.

(ii) Multi option syndicated facility

A new EUR€2,010 million (AUD$3,350 million) multi option syndicated facility became available to the Trust on 26 October 2007. At 31 December 2007 the facility is drawn to EUR€1,140 million (AUD$1,900 million) and USD $515.4 million (AUD$588.9 million). The facility has three maturity tranches as follows:

1 year (EUR€335 million) maturing October 2008,
3 years (EUR€670 million) maturing October 2010, and;
5 years (EUR€1,005 million) maturing October 2012.

The 1 year tranche may be extended for an additional 2 years at GPT’s option and the current intention is to extend this tranche to 26 October 2010. Accordingly the multi option syndicated facility has been classifi ed as non-current borrowings.

A EUR€600 million (Dec 2006: AUD$1,003.7 million) syndicated bank facility was terminated early, at the request of GPT, on 2 November 2007 once the EUR€2,010 million multi option syndicated facility (above) was in place.

(iii) Short term bank loan

In October 2007, an AUD$300 million loan was arranged to refi nance the AUD$300 million Medium Term Notes which matured on 15 October 2007. The loan matures in April 2008 but may be extended for an additional 6 months at GPT’s option. The current intention is to extend the loan until October 2008.

(iv) Overdraft facility

A EUR€5.5 million (AUD$9.2 million) overdraft facility was acquired as part of GPT’s acquisition of Halverton (refer note 23). At 31 December 2007 the facility is drawn to EUR€4.7 million (AUD$7.8 million). The facility matures on 31 March 2008.

(v) Bridge facility

A USD$40.0 million (AUD$45.8 million) bridge facility acquired through the Hamburg Trust acquisition (refer note 23) is secured against assets in the Hamburg Trust Alliance Fund (refer note 8). The facility matures on 30 December 2008 and may be extended for a further year upon certain conditions being met. As at 31 December 2007, the facility is fully drawn and the current intention is to repay the facility following the close of the Hamburg Trust Alliance Fund. This facility is classifi ed as current borrowings, which is consistent with the treatment of the secured assets as current inventory.

A USD$52.5 million (AUD$59.9 million) bridge facility matures 30 December 2008 and may be extended for a further year, upon certain conditions being met. As at 31 December 2007, the facility was drawn to USD$50.5 million (AUD$57.6 million).

Secured

(vi) Bank facilities

A fl oating rate bill facility originally for AUD$115 million was established in March 2004 for the GPT/Austrak Joint Venture to fund the capital expenditure requirements of the Austrak Business Park, Somerton, VIC. In January 2007, the facility was increased by AUD$40 million to AUD$155 million (GPT 50% share: AUD$77.5 million) and comprises:

an AUD$35 million facility (GPT 50% share: $17.5 million) maturing on 31 March 2008, and;
an AUD$120 million facility (GPT 50% share: AUD$60 million) maturing on 31 May 2009.

120

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

17. Borrowings (continued)

Secured (continued)

(vi) Bank facilities (continued)

At 31 December 2007, the combined facility is drawn to AUD$148.7 million (GPT 50% share: $74.4 million). This facility is secured by a mortgage over Austrak Business Park, Somerton, VIC. The interest rate for the facility is the applicable bank bill rate.

A USD$72.0 million (AUD$82.2 million) bank facility acquired through the Hamburg Trust acquisition (refer note 23) is secured against assets in the Hamburg Trust Alliance Fund (refer note 8). As at 31 December 2007, the facility is fully drawn and matures in July 2017. This facility is subject to negative pledge requirements and requirements that the fund complies with certain minimum fi nancial requirements. When the fund closes the facility will be transferred to the new equity holders. This facility is classifi ed as current borrowings, which is consistent with the treatment of the secured assets as current inventory.

A EUR€295.5 million (AUD$492.5 million) and DKK297.6 million (AUD$66.1 million) bank facility maturing July 2014 is available to the H2O Fund, a fund which is owned by GPT and managed by GPT Halverton (refer note 8), to acquire assets. This facility is subject to negative pledge arrangements and requirements that the fund complies with certain minimum fi nancial requirements. The funds raised under this facility are secured against assets in the fund. As at 31 December 2007, this facility has been drawn to EUR€100.9 million (AUD$166.0 million) and DKK124.5 million (AUD$27.9 million) respectively. When the fund closes the facility will be transferred to the new equity holders. This facility is classifi ed as current borrowings, which is consistent with the treatment of the secured assets as current inventory.

A SEK244.0 million (AUD$43.2 million) bank facility is available to the Scandinavian Active Fund, a fund owned by GPT and managed by GPT Halverton (refer note 8), to acquire assets. This facility is subject to negative pledge arrangements and requirements that the fund complies with certain minimum fi nancial requirements. The funds raised under this facility are secured against assets in the fund. As at 31 December 2007, the facility is drawn to SEK35.7 million (AUD$6.3 million) and matures in February 2015. When the fund closes the facility will be transferred to the new equity holders. This facility is classifi ed as current borrowings, which is consistent with the treatment of the secured assets as current inventory.

(b) Short Term Notes (STNs)/Medium Term Notes (MTNs)

The Short Term and Medium Term Note Programme is a revolving, non-underwritten debt programme which was established in 1999 to provide fl exible funding to enable GPT to fund short term and medium term commitments and act promptly on investment opportunities. The value of the Notes issued under the Programme is limited by the Trust Constitution, which limits the total amount of debt including that incurred under the STN/MTN program to no more than 40% of the total assets of the General Property Trust. At 31 December 2007, STNs are in the form of commercial paper that mature within one year.

The commercial paper arrangements currently include a committed bank offer to subscribe for commercial paper under the terms of the Programme, up to a limit of AUD$500 million. This commitment has no maturity date but may be terminated at any time with six months notice.

At 31 December 2007, fi xed rate MTNs have a principal value of AUD$785 million (Dec 2006: AUD$1,081.7 million) and fl oating rate MTNs have a principal value of AUD$752 million (Dec 2006: AUD$754.6 million) with maturities ranging from June 2008 to August 2013.

As support to the STN/MTN program, standby facilities of AUD$400 million are available to GPT. These facilities are available to be drawn to provide liquidity backup in the event of a commercial paper or MTN market disruption and are subject to semi-annual or annual review. Of the AUD$400 million, AUD$200 million matures on 30 June 2008 and a further AUD$200 million matures on 22 November 2008. At 31 December 2007, these facilities are undrawn.

(c) CPI coupon indexed bonds

The Trust issued a CPI coupon indexed bond in December 1999 with a principal value of AUD$125 million and a current coupon of 7.66% p.a (Dec 2006: 7.44%) payable quarterly in arrears and is indexed by the maximum CPI since September 1999. The CPI coupon indexed bonds mature on 10 December 2029.

121

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

17. Borrowings (continued)

(d) Financing Facilities

Note Bank borrowings Multi option facility (a)(i) Short term bank loan (a)(iii) Overdraft facility – euro (a)(iv) Bridge facilities (a)(v) Bank facilities (a)(vi) Multi option syndicated facility – multi currency (a)(ii) Short term notes (b) Standby facilities on Short Term Notes/Medium Term Notes (b) Medium term notes (b) CPI coupon indexed bond (c) Total f nancing facilities Cash and cash equivalents 28(b) Total f nancing resources available at end of f nancial year	31 December 2007	31 December 2007
	Total facility Used facility*	Unused facility
	$M $M	$M

	750.0 50.0	700.0
	300.0 300.0	–
	9.2 7.8	1.4
	105.7 103.4	2.3
	761.6 356.8	404.8
	3,350.0 2,488.9	861.1
	500.0 46.0	454.0
	400.0 –	400.0
	1,537.0 1,537.0	–
	125.0 125.0	–
	7,838.5 5,014.9	2,823.6
		350.3
		3,173.9

The above facilities are stated at the face value of the facility and differ from the total borrowings presented in the balance sheet at 31 December 2007 by $20.0 million, which represents amortisation of borrowing costs (refer to note 1(j) and note 1(aa)).

Maturity prof le of f nancing facilities
Due within one year** Due between one and f ve years Due after f ve years Total f nancing facilities	Consolidated entity
	31 Dec 2007 31 Dec 2006 $M $M
	3,166.4 2,497.5 4,335.0 2,329.7 337.0 337.0
	7,838.4 5,164.2

** Bank facilities of AUD$684.0 million (Dec 2006: $nil) in the consolidated entity have been classifi ed as due within one year, which is consistent with the treatment of the secured assets as current inventory. Actual maturity of these facilities is due after fi ve years. Refer note 17(a)(vi)

Gearing Ratios

At 31 December 2007, the percentage of debt to total tangible assets is 36.3% (Dec 2006: 35.8%)

GPT is committed to a maximum of 50% debt to total assets on a ‘look through basis’. In calculating the ‘look through’ gearing, GPT’s interest in the joint ventures and associates are proportionately consolidated based on GPT’s ownership interest. At 31 December 2007, the percentage of ‘look through’ debt to total assets is 46.8% (Dec 2006: 46.7%).

122

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

18. Provisions

18. Provisions
Note Current Provisions Employee benef ts Income tax (a) Other (a) Total Current Provisions Non-Current Provisions Employee benef ts Total Non-Current Provisions	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	6.6 6.7 – – 11.4 2.0 – – 2.5 0.9 – –
	20.5 9.6 – –
	4.6 4.1 – –
	4.6 4.1 – –

(a) Reconciliations

fi nancial year are set out below:

Current Carrying amount at beginning of the f nancial year Income Tax Paid True up for prior year Current income tax expense Cash receipts Carrying amount at end of the f nancial year	Consolidated entity
	Income Tax Provision 31 Dec 2007 Other Provisions 31 Dec 2007
	$M $M

	2.0 0.9
	(3.7) –
	(0.9) –
	14.0 –
	– 1.6
	11.4 2.5

19. Contributed Equity

Current income tax expense Cash receipts Carrying amount at end of the f nancial year 19. Contributed Equity	14.0 – – 1.6 11.4 2.5
Note 1 Jan 2006 Opening securities on issue 8 Jun 2006 Issue of securities 31 Dec 2006 Closing securities on issue 1 Jan 2007 Opening securities on issue 25 May 2007 Distribution reinvestment plan issue (a)(i) 21 Sep 2007 Distribution reinvestment plan issue (a)(i) 23 Nov 2007 Distribution reinvestment plan issue (a)(i) 23 Nov 2007 Issue of stapled securities (a)(ii)	GPT Stapled Securities GPT Other entities stapled to GPT External minority interest Total Number $M $M $M $M
	2,016,716,610 4,296.0 302.5 – 4,598.5 24,813,896 95.5 4.5 – 100.0
	2,041,530,506 4,391.5 307.0 – 4,698.5
	2,041,530,506 4,391.5 307.0 – 4,698.5
	12,105,370 56.0 2.4 – 58.4
	13,169,408 56.2 2.2 – 58.4
	10,589,549 46.8 1.9 – 48.7
	22,219,109 98.1 4.0 – 102.1
	2,099,613,942 4,648.6 317.5 – 4,966.1

123

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

19. Contributed Equity (continued)

Terms and conditions of contributed equity

(a) Ordinary stapled securities

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 receive distributions/dividends as declared and, in the event of winding up GPT, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on securities held. Stapled securities entitle their holder to one vote, either in person, or by proxy, at a meeting of GPT.

Refer to note 1(b) for further details on the stapling of GPT securities.

(i) Distribution Reinvestment Plan

GPT introduced a Distribution Reinvestment Plan (DRP) to eligible securityholders in March 2007. The DRP fi rst applied to the March 2007 quarterly distribution, which was paid on 25 May 2007 and has subsequently been applied to the June and September 2007 quarterly distributions. It will also apply to the December 2007 quarterly distribution. The last date for the receipt of an election notice for participation in the DRP is 5pm (Sydney, Australia time) on the record date for the relevant distribution, which in the case of the December quarterly distribution, is 7 March 2008.

(ii) Underwriting the Distribution Reinvestment Plan

GPT also entered into an underwriting agreement on 17 October 2007. Under this agreement GPT has the option to elect before each quarterly distribution payment whether to have that distribution underwritten. The terms of the agreement provide that the underwriter fully underwrites distribution payments from October 2007 in exchange for GPT stapled securities of the securityholders who had not elected to participate in the DRP. The stapled securities are to be issued at the same price as securities issued under the DRP to other GPT securityholders.

At 31 December 2007, 22,219,109 new stapled securities relating to the distribution for the September 2007 quarter were issued under the underwriting agreement.

The March 2007 and June 2007 quarter DRPs were not underwritten.

20. Reserves

Note Asset revaluation reserve (a) Foreign currency translation reserve (b) Long term incentive scheme reserve (c) Employee incentive scheme reserve (d) Cash f ow hedge reserve (e) Total reserves	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	15.0 – – – (16.3) 24.8 – – (5.5) (5.4) – – 1.2 0.9 – – 11.5 – – –
	5.9 20.3 – –

124

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

20. Reserves (continued)

Reconciliations

Note (a) Asset revaluation reserve Balance at 1 January 2006 Revaluations/(devaluations) of assets, net of tax Balance at 31 December 2006 Balance at 1 January 2007 Revaluations/(devaluations) of assets, net of tax Balance at 31 December 2007 (b) Foreign currency translation reserve Balance at 1 January 2006 Net foreign exchange translation adjustments, net of tax Balance at 31 December 2006 Balance at 1 January 2007 Net foreign exchange translation adjustments, net of tax Balance at 31 December 2007 (c) Long term incentive scheme reserve Balance at 1 January 2006 On-market purchase of GPT stapled securities 26(i) Sale of GPT stapled securities and loan repayments 26(i) Balance at 31 December 2006 Balance at 1 January 2007 On-market purchase of GPT stapled securities Sale of GPT stapled securities and loan repayments Balance at 31 December 2007 (d) Employee incentive scheme reserve Balance at 1 January 2006 Employee incentive scheme expense, net of tax 26(i) Balance at 31 December 2006 Balance at 1 January 2007 Employee incentive scheme expense, net of tax Balance at 31 December 2007 (e) Cashf ow hedge reserve Balance at 1 January 2006 Effective portion of changes in fair value of cashf ow hedges, net of tax Balance at 31 December 2006 Balance at 1 January 2007 Effective portion of changes in fair value of cashf ow hedges, net of tax Balance at 31 December 2007	Consolidated entity
	GPT Other entities stapled to GPT External Minority Interest Total $M $M $M $M
	4.7 – – 4.7 (4.7) – – (4.7)
	– – – –
	– – – –
	15.0 – – 15.0
	15.0 – – 15.0
	11.6 2.3 – 13.9 12.5 (1.6) – 10.9
	24.1 0.7 – 24.8
	24.1 0.7 – 24.8
	(38.5) (2.6) – (41.1)
	(14.4) (1.9) – (16.3)
	– – – – (4.3) (1.8) – (6.1) 0.5 0.2 – 0.7
	(3.8) (1.6) – (5.4)
	(3.8) (1.6) – (5.4)
	(1.5) – – (1.5)
	– 1.4 – 1.4
	(5.3) (0.2) – (5.5)
	– – – – 0.9 – – 0.9
	0.9 – – 0.9
	0.9 – – 0.9
	0.3 – – 0.3
	1.2 – – 1.2
	– – – – – – – –
	– – – –
	– – – –
	– 11.5 – 11.5
	– 11.5 – 11.5

125

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

20. Reserves (continued)

Nature and purpose of reserves

Asset revaluation reserve

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

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising on translation of foreign controlled entities and associated funding of foreign controlled entities as described in note 1(e). The movement in the foreign currency reserve is recognised in the Income Statement when the net investment in the foreign controlled entity is disposed.

Long term incentive scheme reserve

The long term incentive scheme reserve is used to record the on-market purchase of GPT stapled securities for eligible senior executives, repayments of the non-recourse loans provided by GPT to eligible senior executives of the Long Term Incentive Scheme and the sale of GPT stapled securities where eligibility ceases under the scheme. Refer to note 26(ii) for further details of the Long Term Incentive Scheme.

Employee incentive scheme reserve

The employee incentive scheme reserve is used to recognise the fair value of securities issued under the Employee Incentive Scheme – General Reserve, as described in note 26(i).

qualify as an effective cash fl ow hedge, as described in note 1(x).

21.

Note Consolidated entity Balance at 1 January 2006 Net prof t for the f nancial year less: Distributions paid 3(a) Balance at 31 December 2006 Balance at 1 January 2007 Minority interest on acquisition of controlled entities Net prof t for the f nancial year less: Distributions paid 3(a) Balance at 31 December 2007 Parent entity Balance at 1 January 2006 Net prof t for the f nancial year less: Distributions paid Balance at 31 December 2006 Balance at 1 January 2007 Net prof t for the f nancial year less: Distributions paid Balance at 31 December 2007	GPT Other entities stapled to GPT External Minority Interest Total $M $M $M $M
	1,778.4 (22.2) – 1,756.2 1,362.6 21.4 – 1,384.0 (416.9) – – (416.9)
	2,724.1 (0.8) – 2,723.3
	2,724.1 (0.8) – 2,723.3
	– – 4.2 4.2
	1,203.7 (19.2) (2.0) 1,182.5
	(586.6) – – (586.6)
	3,341.2 (20.0) 2.2 3,323.4
	1,790.6 – – 1,790.6 1,310.6 – – 1,310.6 (416.9) – – (416.9)
	2,684.3 – – 2,684.3
	2,684.3 – – 2,684.3
	1,051.9 – – 1,051.9
	(586.6) – – (586.6)
	3,149.6 – – 3,149.6

126

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

22. Acquisition and disposal of controlled entities

fi nancial year are:

Hamburg Trust HTG Deutschland 1 GmbH & Co. KG EOF München GmbH & Co KG Zweite Reim KG EOF München GmbH & Co KG Wohnanlage Reim KG Dutch Active Fund Propco BV German Retail FundCo SARL GPT Wholesale Shopping Centre Fund (formerly GEM Retail Property Trust) Crown Street Trust GPT Retail Subsidiary Trust	Country of incorporation Principal activity Date of disposal Ownership interest disposed
	Germany Funds management 1 November 2007 80.0% Germany Funds management 1 November 2007 80.0% Germany Funds management 1 November 2007 80.0% The Netherlands Funds management 21 December 2007 62.0% Luxembourg Funds management 21 December 2007 92.5% Australia Property investment 30 March 2007 60.0% Australia Property investment 30 March 2007 100.0% Australia Property investment 30 March 2007 100.0%

23. Business Combinations

(a) Halverton Real Estate Investment Management Limited

GPT Management Holdings Limited acquired 100% of the issued capital of Halverton Real Estate Investment Management Limited and its controlled entities (Halverton) for cash consideration of EUR€53.1 million (AUD$84.9 million) in two separate tranches, as detailed below:

in June 2007, Halverton management, who own 50% of Halverton’s share capital, agreed to sell their shares to GPT UK Limited. The acquisition was completed on 10 July 2007. The purchase consideration for ordinary equity was EUR€32.6 million (AUD$51.7 million) and an additional cash injection of EUR€5.0 million (AUD$7.9 million), and
BGP (UK) Investments Limited owned the remaining 50% of Halverton shares. BGP (UK) Investments Limited was 50% owned by GPT International Pty Limited, a wholly owned entity of GPT. GPT UK Limited acquired the remaining 50% interest in BGP (UK) Investments Limited on 29 November 2007 for EUR€15.6 million (AUD$25.3 million).

Halverton, which has been rebranded as GPT Halverton, is a pan European investment and asset management company employing 125 people and operating in the United Kingdom, France, The Netherlands, Germany, Sweden and Denmark. It has assets under management of over EUR€1.3 billion (AUD$2.2 billion). The entities acquired are set out in note 24.

127

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

23. Business Combinations (continued)

(a) Halverton Real Estate Investment Management Limited (continued)

The fair values of the identifi able assets and liabilities of Halverton and BGP (UK) Investments Limited as at the date of their respective acquisitions were:

acquisitions were:
Fair value of net assets acquired Cash and cash equivalents Loans and receivables Property, plant and equipment Other assets Total assets Payables Borrowings Total liabilities Fair value of identif able net assets Fair value adjustment to net assets of the 50% interest in BGP (UK) Investments Limited Net fair value of identif able net assets acquired Goodwill arising on acquisition Total identif able net assets and goodwill Consideration Purchase consideration - October 2006* Purchase consideration - July 2007 Purchase consideration - November 2007** Costs directly attributable to acquisition Total consideration Net cash outf ow on acquisition Net cash acquired with controlled entity Cash paid Net cash (outf ow)/inf ow	Halverton/BGP(UK)Investments Limited
	Recognised on acquisition Carrying amounts recognised by consolidated entity $M $M
	8.2 8.2 5.8 5.8 1.5 1.5 0.4 0.4
	15.9 15.9
	16.8 16.8 4.3 4.3
	21.1 21.1
	(5.2) (5.2) 1.1 1.1
	(4.1) (4.1)
	117.7 117.7
	113.6 113.6
	22.6 59.6 25.3 6.1 113.6 8.2 48.4 (40.2)

In October 2006, GPT purchased 50% of BGP (UK) Investments Limited for a cash consideration of AUD$22.6 million. GPT’s investment was by way of ordinary equity of EUR€2.4 million (AUD$3.9 million) and loans of EUR€11.2 million (AUD$18.7 million). As a result of the business combination on 10 July 2007, BGP (UK) Investments Limited became a controlled entity.

The AUD$1.1 million increase in net assets is the result of a fair value adjustment to the net assets of GPT’s 50% interest in BGP (UK) Investments Limited at 10 July 2007 and 29 November 2007, which were the dates of the fi rst and second tranches of the business combination.

** The consideration paid for the fi rst tranche on 10 July 2007 was in the form of cash consideration of EUR€37.6 million (AUD$59.6 million) by way of ordinary equity of EUR€10.7 million (AUD$17.0 million) and loans of EUR€26.9 million (AUD$42.6 million). In November 2007, the cash consideration of EUR€15.6 million (AUD$25.3 million) was by way of ordinary equity.

*** Includes cash injection of EUR€5.0 million (AUD$7.9 million) in July 2007.

128

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

23. Business Combinations (continued)

(b) Hamburg Trust

On 3 July 2007, GPT International Pty Limited acquired 60% of the ordinary shares of Hamburg Trust Grundvermogen und Anlage GmbH and its controlled entities (Hamburg Trust) from BGP Investments SARL, an entity owned 50% by GPT through the joint venture arrangement with Babcock & Brown, for cash consideration of EUR€0.3 million (AUD$0.5 million). GPT previously reported this acquisition was estimated to cost AUD$5.1 million on the assumption that a loan facility of Hamburg Trust was fully drawn down. The loan facility was not drawn and this resulted in a AUD$4.6 million reduction of the purchase consideration. The entities acquired are set out in note 24.

GPT acquired a further 20% interest in Hamburg Trust on 9 November 2007, which is not included below, bringing GPT’s ownership interest to 80%.

The Hamburg Trust is a start up German closed-end funds management business which employs 15 people and undertakes property, asset and investment management activities.

(c) H2O Fund

On 30 August 2007, GPT Europe 2 SARL acquired 94.8% of the ordinary shares of H20 Fundco SARL (H20). The entities acquired are set out in note 24.

Fair value of net assets acquired Cash and cash equivalents Loans and receivables Inventories Property, plant and equipment Other assets Total assets Payables Borrowings Provisions Other liabilities Total liabilities Minority interests Net fair value of identif able net assets acquired Goodwill arising on acquisition Total identif able net assets and goodwill Consideration Purchase consideration Costs directly attributable to acquisition Total consideration Net cash outf ow on acquisition Net cash acquired with controlled entity Cash paid Net cash (outf ow)/inf ow	Other acquisitions
	Recognised on acquisition Carrying amounts recognised by consolidated entity $M $M
	6.0 6.0 20.3 20.3 328.8 328.8 0.5 0.5 7.5 7.5
	363.1 363.1
	5.6 5.6 350.8 350.8 0.1 0.1 4.0 4.0
	360.5 360.5
	2.7 2.7
	(0.1) (0.1) 0.7 0.7
	0.6 0.6
	0.5 0.1 0.6 6.0 0.6 5.4

Since acquisition, Halverton, Hamburg Trust and the H20 Fund have contributed a loss of AUD$11.2 million to GPT’s net profi t after income tax expense. It is impractical to estimate the total revenues and net profi t after income tax expense had the acquisitions occurred on 1 January 2007 as none of the entities were required to report under IFRS prior to acquisition by GPT.

Due to the timing of certain business combinations and audits which were incomplete at the date of this report, certain business combinations were determined using provisional information.

129

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

24. Controlled entities

liabilities and results of the following controlled entities in accordance with the accounting policy described in note 1(c).

Name of entity
Country of
incorporation

Consolidated Entity
Parent Entity

2007
2006
2007
2006
%
%
%
%

Australian Resorts Pty Limited
Australia
Ayers Rock Resort Trust
Australia
Bedarra Hideaway Pty Limited
Australia
Bedarra Island Pty Limited
Australia
Brampton Island Pty Limited
Australia
Crown Street Trust(2)
Australia
Dunk Island Pty Limited
Australia
Destinations & Voyages Travel Pty Limited
Australia
GPT BM Loan Trust
Australia
GPT BM Investment Trust
Australia
GPT Commercial Subsidiary Trust
Australia
GPT Development Pty Limited
Australia
GPT Finance Pty Limited
Australia
GPT Funds Management Limited
Australia
GPT Funds Management 2 Pty Limited
Australia
GPT Hamilton Island Trust
Australia
GPT Hotel Trust
Australia
GPT Hotel (Darling Harbour) Trust
Australia
GPT Hotels Pty Limited
Australia
GPT Industrial Trust
Australia
GPT Industrial (Somerton) Trust
Australia
GPT Industrial Subsidiary Trust
Australia
GPT Industrial Subsidiary Trust No.2
Australia
GPT International Pty Limited
Australia
GPT Investment Trust No 1
Australia
GPT Management Custodian Pty Limited
Australia
GPT Management Holdings Limited
Australia
GPT Nominees Pty Limited
Australia
GPT Property Management Pty Limited
Australia
GPT Pty Limited
Australia
GPT RE Limited
Australia
GPT Residential Trust (formerly GPT Off ce Trust)
Australia
GPT Residential Pty Limited
Australia
GPT Residential (Rouse Hill) Trust
Australia
GPT Residential (Twin Waters) Trust
Australia
GPT Retail Subsidiary Trust(2)
Australia
GPT Retail (Rouse Hill) Trust
Australia
GPT Subsidiary Holding Trust
Australia
GPT Wholesale Shopping Centre Fund
(formerly GEM Retail Property Trust)(2)
Australia
Hamburg Trust Australia 1
Australia
Heron Island Pty Limited
Australia

100.0
100.0
–
–
100.0
100.0
–
–
100.0
100.0
–
–
100.0
100.0
–
–
100.0
100.0
–
–
–
100.0
–
–
100.0
100.0
–
–
100.0
100.0
–
–
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
–
–
100.0
100.0
100.0
100.0
100.0
100.0
–
–
100.0
100.0
100.0
100.0
100.0
100.0
–
–
100.0
100.0
99.9
99.9
100.0
100.0
–
–
100.0
–
–
–
100.0
100.0
99.9
99.9
100.0
100.0
–
–
100.0
100.0
–
–
100.0
100.0
–
–
100.0
100.0
–
–
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
–
–
100.0
100.0
100.0
100.0
100.0
100.0
–
–
100.0
100.0
100.0
100.0
100.0
100.0
–
–
100.0
100.0
99.9
99.9
100.0
–
–
–
100.0
100.0
–
–
100.0
100.0
–
–
–
100.0
–
–
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
–
100.0
–
99.9
80.0
–
–
–
100.0
100.0
–
–

130

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

24. Controlled entities (continued)

24. Controlled entities(continued)
Name of entity Country of incorporation	Consolidated Entity Parent Entity
	2007 2006 2007 2006 % % % %
Homemaker Retail Property Trust No 2 Australia Homemaker Retail Property Trust Australia Homemaker Retail Management Pty Limited Australia Homemaker Property Management Pty Limited Australia Hunter Trust Australia Lizard Island Pty Limited Australia Melbourne Central Unit Trust Australia Melbourne Central Custodian Pty Ltd Australia Melbourne Central Holdings Pty Ltd Australia Silky Oaks Pty Limited Australia Subsidiary Trust Australia The Mutitjulu Foundation Limited Australia Voyages Pty Limited Australia Voyages Hotels & Resorts Pty Limited Australia Voyages Lodges Pty Limited Australia Voyages Mountain & Marine Pty Limited Australia Wrotham Park Lodge Pty Limited Australia 818 Bourke Street Trust Australia Alliance HT Limited Partnership United States Alliance HT Mezz, LLC United States Alliance HT Mezz Limited Partnership United States Alliance HTTX Limited Partnership United States Alliance HTFL Limited Partnership United States Alliance HT GP, LLC United States Alliance HTTX GP, LLC United States Alliance HTFL GP, LLC United States GPT BM Investment LLC United States GPTMH BM Investment LLC United States GPT US Inc United States BGP (UK) Investments Limited(3) United Kingdom Colinsco Limited Partnership(1) United Kingdom EB8 Investments 1 Limited(1) United Kingdom GPT Halverton Limited (formerly Halverton Real Estate Investment Management Limited)(1) United Kingdom GPT Halverton Financial Services Limited (formerly Halverton Financial Services Limited)(1) United Kingdom GPT UK Limited United Kingdom Halverton Co-investment Limited(1) United Kingdom Halverton EB8 Limited(1) United Kingdom Halverton Investments Limited United Kingdom Halverton Investments (GO) Limited(1) United Kingdom Halverton Investment (GRP) Limited (formerly H20 Weert PropCo Limited)(1) United Kingdom Halverton Management Limited(1) United Kingdom Halverton Secretaries Limited(1) United Kingdom	100.0 – 100.0 – 100.0 100.0 – – 100.0 100.0 99.9 99.9 100.0 100.0 – – 100.0 – – – 100.0 100.0 – – 100.0 100.0 50.0 50.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 – – 100.0 – 100.0 – 100.0 100.0 – – 100.0 100.0 – – 100.0 100.0 – – 100.0 100.0 – – 100.0 100.0 – – 100.0 100.0 – – 100.0 100.0 – – 74.4 – – – 74.4 – – – 74.4 – – – 74.4 – – – 74.4 – – – 74.4 – – – 74.4 – – – 74.4 – – – 100.0 100.0 – – 100.0 100.0 – – 100.0 100.0 – – 100.0 – – – 100.0 – – – 100.0 – – – 100.0 – – – 100.0 – – – 100.0 100.0 – – 100.0 – – – 100.0 – – – 100.0 – – – 100.0 – – – 100.0 – – – 100.0 – – – 100.0 – – –

131

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

24. Controlled entities (continued)

24. Controlled entities(continued)
Name of entity Country of incorporation	Consolidated Entity Parent Entity
	2007 2006 2007 2006 % % % %
Roofgold Limited(1) United Kingdom JO Property Consulting Limited United Kingdom EOF München GmbH & Co KG Zweite Reim KG(4) Germany EOF München GmbH & Co KG Wohnanlage Reim KG(4) Germany GPT Halverton GmbH (formerly Halverton Real Estate Investment Management GmbH)(1) Germany Hamburg Trust Asset Management HTAM GmbH(1)Germany Hamburg Trust Beteiligungsmanagement HTB GmbH(1) Germany Hamburg Trust Grundvermögen and Anlage GmbH(1) Germany Hamburg Trust HTG Australien 1 GmbH & Co KG(1)Germany Hamburg Trust HTG Australien 2 GmbH & Co KG(1)Germany Hamburg Trust HTG Australien 3 GmbH & Co KG(1)Germany Hamburg Trust HTG Deutschland 1 GmbH & Co KG(4) Germany Hamburg Trust HTG Deutschland 2 GmbH & Co KG(1) Germany Hamburg Trust HTG Deutschland 3 GmbH & Co KG(1) Germany Hamburg Trust HTG USA 1 GmbH & Co KG(1) Germany Hamburg Trust HTG USA 3 GmbH & Co KG(1) Germany Hamburg Trust HTG USA 4 GmbH & Co KG(1) Germany Hamburg Trust Treuhand HTT GmbH(1) Germany Hamburg Trust Verwaltung HTV USA GmbH(1) Germany Hamburg Trust Verwaltung HTV Europa GmbH(1) Germany Hamburg Trust Verwaltung HTV Asien GmbH(1) Germany HT HTG Australien 1 Beteiligungs GmbH & Co KG(1) Germany HT HTG Australien 2 Beteiligungs GmbH & Co KG(1) Germany GPT Halverton ApS (formerly Halverton Real Estate Investment Management ApS)(1) Denmark H20 Am Moosf eld ApS(1) Denmark H20 Berlin Charlottenburg ApS(1) Denmark H20 Denmark PropCo ApS(1) Denmark H20 France HoldCo ApS(1) Denmark H20 France PropCo ApS(1) Denmark H20 Gaertringen ApS(1) Denmark H20 Germany HoldCo ApS(1) Denmark H20 Krefeld Fichtenhain ApS(1) Denmark H20 Munster ApS(1) Denmark H20 Offenburg ApS(1) Denmark	100.0 – – – 100.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 80.0 – – – 51.0 – 94.8 – – – 94.8 – – – 94.8 – – – 94.8 – – – 94.8 – – – 94.8 – – – 94.8 – – – 94.8 – – – 94.8 – – – 94.8 – – –

132

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

24. Controlled entities (continued)

24. Controlled entities(continued)
Name of entity Country of incorporation	Consolidated Entity Parent Entity
	2007 2006 2007 2006 % % % %
H20 Puchheim ApS(1) Denmark H20 Sinisheim ApS(1) Denmark GPT Europe SARL Luxembourg GPT Europe 2 SARL Luxembourg GPT Europe Finance SA Luxembourg H20 Finland LuxCo SARL(1) Luxembourg H20 FundCo SARL(1) Luxembourg HBI Lux PropCo A SARL(1) Luxembourg H20 LuxCo SARL(1) Luxembourg H20 Finland HoldCo OY(1) Finland H20 Propco One OY(1) Finland H20 Amsterdam BV (formerly H20 Dutch II BV)(1) The Netherlands H20 Dutch BV(1) The Netherlands GPT Halverton BV (formerly Halverton Real Estate Investment Management BV)(1) The Netherlands Wooloomooloo Investments BV The Netherlands Benelux Industrial Partnership General Partner BV(1) The Netherlands Benelux Industrial Partners German Holdco BV(1) The Netherlands Halverton SAS (formerly Halverton Real Estate Investment Management SAS)(1) France GPT Halverton AB (formerly Halverton Real Estate Investment Management AB)(1) Sweden GPT Halverton AB(1) Sweden GPT MaltaCo 1 Limited Malta GPT MaltaCo 2 Limited Malta	94.8 – – – 94.8 – – – 100.0 100.0 – – 100.0 – – – 100.0 100.0 – – 94.8 – – – 94.8 – – – 100.0 – – – 94.8 – – – 94.8 – – – 94.8 – – – 94.8 – – – 94.8 – – – 100.0 – – – 100.0 – – – 100.0 – – – 100.0 – – – 100.0 – – – 100.0 – – – 100.0 – – – 100.0 100.0 – – 100.0 100.0 – –

2 Controlled entities disposed of during the current fi nancial year (refer to note 22).

3 Controlled entity was previously a joint venture.

4 Controlled entities acquired and disposed of during the current fi nancial year (refer to note 22). The proportion of ownership interest is equal to the proportion of voting power held.

133

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

25. Key management personnel disclosures

(a) Details of Key Management Personnel

(i) Directors

Peter Joseph

Eric Goodwin Malcolm Latham Nic Lyons Ian Martin Anne McDonald Ken Moss

Elizabeth Nosworthy

(ii) Other key management personnel

In addition to the Directors, the following persons also had the greatest authority for the strategic direction and management of GPT, directly or indirectly, during the fi nancial year:

Michael O’Brien Kieran Pryke Chief Financial Offi cer Neil Tobin General Manager – Joint Venture Jonathan Johnstone Head of Europe Mark Fookes Head of Retail Nicholas Harris Head of Wholesale James Coyne General Counsel and Secretary

(b) Key management personnel compensation

(b) Key management personnel compensation
Short term employee benef ts Post employment benef ts Other long term benef ts Total key management personnel compensation	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $‘000 $‘000 $‘000 $‘000
	10,011.4 7,568.6 10,011.4 7,568.6 193.1 312.9 193.1 312.9 3,740.3 4,534.0 3,740.3 4,534.0
	13,944.8 12,415.5 13,944.8 12,415.5

GPT has applied the exemption under the Corporation Amendments Regulation 2006 which exempts listed entities from duplicating key management personnel disclosures in the annual fi nancial statements. As such, detailed remuneration disclosures are provided in Sections 3.3 and 3.4 of the Remuneration Report at Tables D and E.

134

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

25. Key management personnel disclosures (continued)

(c) Equity instrument disclosures relating to key management personnel

related parties, are set out below:

Directors
Peter Joseph
Eric Goodwin
Malcolm Latham
Nic Lyons
Ian Martin
Anne McDonald
Ken Moss
Brian Norris1
Elizabeth Nosworthy
Senior Executives
Michael O’Brien
Kieran Pryke
Neil Tobin
Mark Fookes
Jonathan Johnstone3
Nicholas Harris
James Coyne
Bruce Morris2

Balance
1 Jan 2006
Purchases/
(Sales)
Balance
31 Dec 2006
Purchases/
(Sales)
Balance
31 Dec 2007

50,000
–
50,000
–
50,000
10,000
1,241
11,241
534
11,775
13,195
–
13,195
–
13,195
50,000
684,116
734,116
434,999
1,169,115
50,000
1,241
51,241
–
51,241
–
10,500
10,500
–
10,500
25,000
1,241
26,241
–
26,241
4,097
–
–
–
–
5,000
1,241
6,241
296
6,537
–
298,476
298,476
254,658
553,134
5,053
246,173
251,226
78,922
330,148
5,000
225,975
230,975
111,623
342,598
3,500
248,385
251,885
94,735
346,620
–
–
179,287
42,728
222,015
–
190,627
190,627
50,217
240,844
–
135,369
135,369
40,938
176,307
–
208,738
208,738
–
–

1 B. Norris resigned during the year and his holdings at 31 December 2006 are not shown.
2 B. Morris is not part of the key management personnel for 2007.
3 J. Johnstone is part of the key management personnel in 2007.

(d) Loans to key management personnel

below:

Nic Lyons
Michael O’Brien
James Coyne
Kieran Pryke
Neil Tobin
Mark Fookes
Jonathan Johnstone
Nicholas Harris
Bruce Morris1

Opening
Balance
1 Jan 2007
Loans made
during the
year
Interest
charged for
the year
Interest not
charged for
the year*
Closing
Balance
31 Dec 2007
Highest
indebtedness
during the year
$ $ $ $ $ $

2,820,098
2,223,997
243,229
162,840
4,891,401
5,016,684
1,209,782
1,301,977
116,811
78,204
2,440,195
2,500,000
558,025
209,302
39,858
26,684
741,132
761,903
1,035,398
403,235
74,488
49,870
1,389,771
1,428,569
926,410
570,689
74,170
49,657
1,449,724
1,488,095
1,013,600
484,347
76,132
50,969
1,448,552
1,488,095
741,133
218,453
50,803
34,012
925,828
952,377
881,834
256,742
60,432
40,459
1,102,360
1,130,948
860,471
–
–
–
–
–

have been charged on an arm’s length basis.

1 B. Morris is not part of the key management personnel for 2007.

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

135

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

25. Key management personnel disclosures (continued)

(e) Other transactions with key management personnel

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

26. Share based payments

GPT has an employee incentive scheme that contains two qualifying levels, as detailed below.

Employee Incentive Scheme

The Employee Incentive Scheme (EIS), which was approved by shareholders at the 2005 annual general meeting, is a scheme under which GPT stapled securities are issued or purchased on-market on behalf of GPT employees for no cash consideration.

The EIS has two qualifying levels – the ‘General Scheme’ which applies to all GPT employees (other than certain Senior Executives) and the ‘Long Term Incentive (LTI) Scheme’ where participation is only offered to certain Senior Executives by the GPT Board.

Under the General Scheme, all permanent employees (excluding Non-Executive Directors) who are continuously employed by GPT for greater than one year are eligible to participate. Purchase of GPT stapled securities is by employee loan, which is made available to participating employees by the Scheme Administrator, to fund the acquisition of GPT stapled securities. The Scheme Administrator must use the loan proceeds to acquire GPT stapled securities on-market or to subscribe for the issue of new GPT stapled securities.

All GPT stapled securities are acquired on-market at the market price prevailing at the time of acquisition or when new GPT stapled securities are issued. The market price is determined as the weighted average of GPT stapled securities traded on the ASX during the fi ve trading days up to and including the day the GPT stapled securities are issued.

(i) The General Scheme

Under the General Scheme, employees may participate in the EIS up to a nominated percentage of their Total Package Value (TPV). TPV includes cash, superannuation, other salary sacrifi ce items and FBT. When an employee’s TPV is increased following a remuneration review, the employee loan may increase up to the nominated percentage % of the new TPV. As at 31 December 2007, the nominated percentage is 20%.

component is a cost to GPT. After deducting amounts for tax on the participating employee’s income, the loans are repaid using net distributions from GPT stapled securities and while the employee loan remains outstanding, the GPT stapled securities are held subject to a holding lock and are not able to be transferred or otherwise dealt with.

136

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

26. Share based payments (continued)

Employee Incentive Scheme (continued)

(ii) The Long Term Incentive (LTI) Scheme

The Board of GPT, on the recommendation of the Nomination and Remuneration Committee, determines the GPT Senior Executives eligible to participate in the LTI Scheme and, for each participating Senior 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.

(Dec 2006: 5.6%). After deducting amounts for tax on the participating employee’s income, the loans are repaid using net distributions from GPT stapled securities and while the employee loan remains outstanding, the GPT stapled securities are held subject to a holding lock and are not able to be transferred or otherwise dealt with.

of providing the loan at that time must be repaid (either by the sale of securities or some other source of funds).

However, at the discretion of the Board, the loan and outstanding interest may be waived on retirement of the employee, or on death or total permanent disability of the employee, on redundancy without cause of the employee; or on takeover.

Fair value of security based payment

Under the requirements of AASB 2, loans granted under the General Scheme are accounted for as ‘options’ because the loans are nonrecourse. The assessed fair value is expensed to the Income Statement as the stapled securities vest immediately. Fair value at grant date has been independently determined using the Monte Carlo pricing model that takes into account grant date, security price at grant date, the current price of the GPT stapled securities, staff turnover rate, voluntary exercise rate, the risk free interest rate, expected dividend yield, impact of dilution and expected volatility of the GPT stapled securities for the term of the GPT stapled security. The fair value of the ‘options’ was calculated as 95.0c per stapled security (Dec 2006: 95.0c per security).

Employee Incentive Scheme

The GPT stapled securities issued under the Employee Incentive Scheme to participating employees are set out below:

GPT stapled securities issued under the ‘General Scheme’ GPT stapled securities issued under the ‘Long Term Incentive Scheme’	Number of GPT stapled securities issued duringtheyear Total number of GPT stapled securities issued
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006
	394,569 1,296,815 1,691,384 1,296,815 2,735,376 5,710,332 8,445,708 5,710,332

27. Related party transactions

(a) Ultimate Parent

General Property Trust is the ultimate parent entity.

(b) Controlled entities, joint ventures and associates

Equity interests in controlled entities, joint ventures and associates are set out in notes 24 and 12. Loans provided to joint ventures and associates as part of the funding of those arrangements are set out in note 7. Details of the parent entity interests in controlled entities are set out in note 24.

(c) Key management personnel

Disclosures relating to key management personnel are set out in note 25 and remuneration paid to directors of the ultimate parent entity is set out in the Remuneration Report within the Directors’ Report. Included within note 25(a) in ‘other key management personnel’ is Elizabeth Nosworthy and Ian Martin who are directors of Babcock & Brown Limited, with whom GPT has a joint venture arrangement. The remuneration they received was transacted at arms length.

137

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

27. Related party transactions (continued)

(d) Transactions with related parties

(d) Transactions with related parties
	Consolidated entity Parent	entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007	31 Dec 2006
	$M $M $M		$M
Transactions with related parties other than associates and joint ventures
Revenues
Distributions received from controlled entities	– – 253.4		544.5
Rent revenue from the Company	– – 0.9		0.8
Expenses
Cost associated with internalisation paid to GPT RE Limited	– – (3.8)		(11.2)
Interest paid on loan from the Company	– – –		(2.4)
Responsible Entity fees paid to GPT RE Limited	– – (24.0)		(15.1)
Responsible Entity fees paid to GPT RE Limited capitalised	– – (7.0)		(6.6)
Property management fee to the Company	– – (16.7)		(15.4)
Development management fee to the Company	– – (13.5)		(14.1)
Management costs recharged to the Company	– – (5.3)		(5.1)
Payroll costs recharged from the Company	– – (5.8)		(14.0)
Contributions to superannuation funds on behalf of employees	(7.7) (7.5) –		–
Other transactions
Loan repayments to the Company	– – –		(110.5)
Loan advanced to the Company	– – (42.2)		(14.9)
Loans advanced to controlled entities	– – (20.9)		(48.0)
Interest received on loan from the Company	– – 7.2		–
Interest received on loans from controlled entities	– – 4.6		3.4
Increase in units in controlled entities	– – (1,211.6)		(981.5)
Redemption of units in controlled entities	– – 1,674.0		913.7
Acquisition of Floreat Forum from controlled entity	– – (120.0)		–
Disposal of Rouse Hill Town Centre to controlled entity	– – 477.3		–
Transactions with associates and joint ventures
Revenues
Distributions received from joint ventures	85.7 75.1 50.7		49.5
Distributions from associates	92.6 22.5 92.2		22.5
Interest revenue from joint ventures	96.6 57.9 79.0		47.7
Interest revenue from associates	1.2 4.7 –		–
Other transactions
Loans advanced to joint ventures	(465.0) (577.2) (325.2)		(374.6)
Loan repayments from joint ventures	12.8 – –		–
Loan repayments from associates	1.9 25.1 –		–
Increase in units in joint ventures	(192.9) 203.7 (7.7)		(4.7)
Decrease in units in joint ventures	1.0 – –		–
Increase in units in associates	(8.3) 4.5 –		–
Deposit received from GWOF for workplace6	106.5 – –		–

138

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

28. (a) Reconciliation of net profi t after income tax expense to net cash infl ows from operating activities

Net prof t for the f nancial year Fair value adjustments to investment properties Fair value adjustments to equity accounted investments Fair value adjustments to derivatives Net foreign exchange (gain)/loss Impairment expense Net (gain)/loss on disposal of investment properties Depreciation and amortisation Amortisation of leasing fees Non cash revenue adjustments Non-cash employee benef ts – share based payments Interest capitalised Provision for doubtful debts Change in operating assets and liabilities (Increase)/decrease in receivables Increase/(decrease) in payables Net cash inf ows from operating activities	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $M $M $M $M
	1,182.5 1,384.0 1,051.9 1,310.6 (458.5) (670.9) (212.3) (298.3) (296.5) (182.1) (358.2) (428.5) 51.3 (60.9) 52.2 (60.9) (23.0) 17.8 (32.3) (5.4) 1.4 28.0 – 6.9 0.4 (10.8) – (11.1) 21.9 19.8 – – – 2.4 – 1.0 23.6 18.8 9.7 7.0 3.8 0.9 – – (26.8) (6.7) (7.5) (6.7) (0.2) (0.2) (0.2) (0.5) (81.7) (54.4) (46.7) (52.9) 88.9 (6.8) 30.1 3.6
	487.1 478.9 486.7 464.8

(b) Reconciliation of cash

Reconciliation of cash at the end of the fi nancial year (as shown in the Statement of Cashfl ow) to the related item in the fi nancial statements as follows:

statements as follows:
Cash at bank and on hand Total cash at end of the f nancial year	350.3 58.8 292.1 40.4
	350.3 58.8 292.1 40.4

(c) Non-cash fi nancing and investing activities

Consolidated Entity

$165.5 million (Dec 2006: $nil) of distributions satisfi ed by way of the issue of 35,864,327 GPT stapled securities under the distribution reinvestment plan (DRP) (refer to note 19).

Parent Entity

$159.0 million (Dec 2006: $nil) of distributions satisfi ed by way of the issue of 35,864,327 GPT stapled securities under the distribution reinvestment plan (DRP) (refer to note 19).

29. Contingent Assets and Liabilities

Except for the matters below, there are no other material contingent assets or liabilities at reporting date.

At 31 December 2007, the GWOF outperformed the benchmark. Due to the fee cap, the performance fee was limited to $11,380,384 (Dec 2006: $4,338,000) for the twelve months to 31 December 2007. The discounted outperformance of $44,590,570 (Dec 2006: $9,311,000) has been carried forward to future periods. As the amount of the outperformance may fl uctuate in future periods, the amount is contingent on future events not wholly within the control of the Company and as such has not been recognised as income/a receivable on the balance sheet at 31 December 2007.

139

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

30. Commitments

30. Commitments
	Consolidated entity Parent	entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007	31 Dec 2006
	$M $M $M	$M
(a) Capital expenditure commitments
At 31 December 2007, GPT has commitments principally	relating to the purchase of property, plant and equipment which have been
approved but not recognised as liabilities in the balance sheet, as set out below:
Due within 1 year	444.8 587.7 205.0	294.1
Due between 1 and 5 years	12.4 153.1 12.4	42.8
Total capital expenditure commitments	457.2 740.8 217.4	336.9

(b) Operating lease commitments

At 31 December 2007, future minimum rentals payable under non-cancellable operating leases are as follows:

Due within 1 year Due between 1 and 5 years Over 5 years and expiry date of leases. Total operating lease commitments	27.1 10.5 0.1 0.4 94.6 33.5 0.5 1.3 187.0 108.4 2.0 4.9
	308.7 152.4 2.6 6.6

properties and hereditary building rights.

$31.0 million (Dec 2006: $28.8 million) for three (Dec 2006: four) leasehold properties in Germany held in the joint venture, BGP Investment SARL, with durations between 4 to 31 years, and
$51.6 million (Dec 2006: $53.6 million) for the use of Lizard Island, QLD until 2033. The lease payments comprise a turnover rent of 10% of all beverages sold and 20% of all accommodation and meal revenues, calculated semi-annually and a standard monthly rental which is increased every 2 years by an amount that is contingent on movements in the consumer price index relevant for Brisbane, QLD. At 31 December 2007, the contingent rents payable have not been included in the above operating lease commitments.

The hereditary building rights of $76.5 million (Dec 2006: $21.8 million) relate to six (Dec 2006: three) properties in Germany which are held in the joint venture, BGP Investment SARL, with durations between 41 and 197 years and have been discounted in the above operating lease commitments.

(c) Commitments relating to associate and joint venture investments

The above commitments include GPT’s share of commitments relating to associate and joint venture investments. Refer to note 12(e) for the share of associates and joint venture entities’ commitments.

140

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31.

GPT’s Treasury Risk Management Committee (TRMC) oversees the establishment and implementation of the capital and fi nancial risk management system which identifi es, evaluates, classifi es, monitors, qualifi es and reports signifi cant risks to the Audit and Risk Management Committee (ARMC) and, through the ARMC, to the GPT Group Board. The Trust and all controlled entities in the GPT Group apply this risk management system to manage their own risks.

(a) Capital management

GPT’s objective when managing capital is to optimise the cost of capital having regard to the relevant real estate market in which it is invested.

Capital management is monitored in two main ways:

Balance Sheet management – fundamentally concerned with the capital mix of equity and debt and maintaining its gearing levels in line with its desired investment grade credit rating, as discussed below. GPT is able to alter the capital mix by issuing new stapled securities, turning on the DRP and/or electing to have the DRP underwritten, adjusting the amount of distributions paid to stapled securityholders or selling assets to reduce borrowings.
Protection of GPT’s equity in foreign denominated assets and liabilities is achieved by borrowing in the same functional currency as the investments to form a natural economic hedge against any foreign currency fl uctuations and by using forward foreign exchange contracts where funds were borrowed in a different currency.

GPT also protects its equity in assets by taking out insurance cover with credit worthy insurers.

exposure to net foreign income and interest rate volatility through the use of forward foreign exchange contracts and interest rate derivatives.

(i) Rating agency capital guidelines and gearing levels

ratings agencies. The ratings are important as they refl ect the investment grade credit rating of GPT which allows access global capital markets to fund in particular its development pipeline, the operational capital expenditure needs of the business and future investment opportunities. The stronger ratings improves both the availability of capital and the cost at which it can be secured.

The objective is to retain the fi nancial strength rating of ‘BBB+’ from S&P and ‘Baa1’ from Moodys. As part of the strategy to achieve this objective, GPT is committed to ensuring:

a maximum of 40% debt to total tangible assets. At 31 December 2007, the percentage of debt to total tangible assets is 36.3% (Dec 2006: 35.8%)
a maximum of 50% debt to total tangible assets on a ‘look through’ gearing basis. In calculating ‘look through’ gearing, GPT’s interest in joint ventures and associates are proportionately consolidated to the extent of GPT’s current ownership interests. At 31 December 2007, the percentage of ‘look through’ debt to total assets is 46.8% (Dec 2006: 46.7%)

(b) Financial risk management

The fi nancial risks that result from GPT’s activities are credit risk, liquidity risk, refi nancing risk and market risk (interest rate risk, foreign exchange risk and price risk). GPT manages its exposures to these key fi nancial risks in accordance with its treasury risk management policy which forms part of the capital risk management system which focuses on mitigating the impact of volatility in fi nancial markets.

GPT uses various methods to measure and manage these types of risks. The main methods include monitoring levels of exposure and conducting sensitivity analysis in the case of interest rate and foreign exchange risks. Ageing analysis, monitoring of credit allowances and dealing with fi nancial institutions that have at least a credit rating of AA- (or its equivalent) from one of S&P, Moody’s or Fitch are methods undertaken to manage credit risk. Liquidity risk is monitored through the development of future rolling cash fl ow forecasts. The use of these methods may vary from entity to entity within the Group. Derivative fi nancial instruments and non-fi nancial instruments are used to manage these risks, as discussed in (c) to (h) below. GPT’s principal fi nancial instruments are set out in note 1(w).

141

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(c) Credit risk

result in a fi nancial loss. GPT and the parent entity has exposure to credit risk on all fi nancial assets included in their balance sheets.

GPT manages this risk by:

establishing credit limits for customers that GPT trades with and managing its exposure to individual entities
transacting with multiple derivative counterparties that have a long term credit rating of at least AA- (or its equivalent) from S&P, Moodys or Fitch
utilising ISDA agreements with derivative counterparties in order to limit exposure to credit risk through the netting of amounts receivable from and amounts payable to individual counterparties
providing loans as an investment into joint ventures, associates and third parties where it is comfortable with the underlying property exposure within that entity
regularly monitoring loans and receivables balances on an ongoing basis
regularly monitoring the performance of its associates, joint ventures and third parties on an ongoing basis, and
obtaining collateral as security (where appropriate).

in the balance sheets of the consolidated entity and parent entity. The consolidated entity and parent entity holds no signifi cant collateral as security and the credit quality of all fi nancial assets that are neither past due nor impaired is consistently monitored in order to identify any potential adverse changes in the credit quality.

management policy’s minimum credit rating criteria. Credit risk arising on loans and receivable balances is monitored on an ongoing basis with the result that the exposure to bad debts by GPT or the parent entity is not signifi cant. There are no signifi cant fi nancial assets that have had renegotiated terms that would otherwise have been past due or impaired.

For the consolidated entity, the ageing analysis of loans and receivables at 31 December 2007 is as follows: $222.8 million (0-30 days), $7.8 million (31-60 days), $1.9 million (61-90 days), $38.5 million (90+ days). The amounts 61 days and over are past due but no receivables are impaired. For the parent entity, the ageing analysis of trade receivables at 31 December 2007 is as follows: $75.0 million (0-30 days), $nil (31-60 days), $nil (61-90 days), $284.6 million (90+ days). The amounts 61 days and over are past due but no receivables are impaired.

through basis of loans and receivables balances to the underlying property exposures, with the aggregate exposure to tenancies across the portfolio. The major concentrations of credit risk for GPT arise from transactions in money market instruments, forward foreign currency contracts, cross currency and interest rate swaps, however fi nancial instruments are spread amongst a number of fi nancial institutions to minimise the risk of default of counterparties.

(d) Liquidity risk

Liquidity risk includes the risk that GPT, as a result of its operations:

adequate amount of committed credit facilities (refer to note 17(a)), the ability to close out market positions, and the option to raise funds through the issue of new stapled securities or DRP, as discussed in note 19(a)(i) and (ii).

to support the refi nancing of its facilities as the Trust is required to distribute its taxable income and GPT’s policy is to distribute the majority of its realised operating income. The table below shows an analysis of the contractual maturities of key assets, liabilities and capital expenditure commitments which forms part of GPT’s assessment of liquidity risk. The funding required to meet contracted maturities in 2008 is available through existing unused facilities which mature from 2009 onwards and the funds available through the issue of new stapled securities through the DRP.

142

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(d) Liquidity risk (continued)

Consolidated entity Assets Cash and cash equivalents Warehoused property Loans and Receivables Available for sale investments Total assets Liabilities Payables Borrowings Capital commitments Total liabilities Parent entity Assets Cash and cash equivalents Loans and Receivables Available for sale investments Total assets Liabilities Payables Borrowings Capital commitments Total liabilities	31 December 2007 31 December 2006
	1 Year or less Over 1 year to 5 years Over 5 years Total 1 Year or less Over 1 year to 5 years Over 5 years Total $M $M $M $M $M $M $M $M
	350.3 – – 350.3 58.8 – – 58.8 – – 397.3 397.3 – – – – 271.2 – 1,841.3 2,112.5 157.3 – 1,322.2 1,479.5 – – 3.6 3.6 – – 0.7 0.7
	621.5 – 2,242.2 2,863.7 216.1 – 1,322.9 1,539.0
	510.7 – – 510.7 228.2 – – 228.2 922.3 3,462.1 610.6 4,995.0 1,630.0 2,325.9 335.8 4,291.7 444.8 12.4 – 457.2 587.7 153.1 – 740.8
	1,877.8 3,474.5 610.6 5,962.9 2,445.9 2,479.0 335.8 5,260.7
	(1,256.3) (3,474.5) 1,631.6 (3,099.2) (2,229.8) (2,479.0) 987.1 (3,721.7)
	292.1 – – 292.1 40.4 – – 40.4 359.6 – 1,448.2 1,807.8 65.4 – 1,059.1 1,124.5 – – 0.1 0.1 – – – –
	651.7 – 1,448.3 2,100.0 105.8 – 1,059.1 1,164.9
	412.6 – – 412.6 32.3 – – 32.3 795.5 3,615.7 124.6 4,535.8 1,574.6 2,325.9 335.8 4,236.3 205.0 12.4 – 217.4 294.1 42.8 – 336.9
	1,413.1 3,628.1 124.6 5,165.8 1,901.0 2,368.7 335.8 4,605.5
	(761.4) (3,628.1) 1,323.7 (3,065.8) (1,795.2) (2,368.7) 723.3 (3,440.6)

The contractual maturities of borrowings differ from note 17 as borrowings associated with the warehoused property investments have been reclassifi ed to their contractual maturities. In addition to the above table, the notional amount and maturity profi le of swaps and foreign exchange contracts are set out in note 31(f)(i) and (g)(ii) respectively.

(e) Refi nancing risk

margins and interest cost. Refi nancing risk arises when GPT is required to obtain debt to fund existing and new debt positions.

fi nancing 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.

143

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(f) Interest rate risk

to changes in market interest rates.

(i) Interest rate risk exposures and maturity profi le

GPT’s exposure to interest rate risk, categorised by the earlier of contractual repricing dates or maturity dates, together with the face value of interest rate swaps currently in place is set out in the following table.

31 December 2007, the consolidated entity had 83.8% of fi nancial assets and 97.2% of fi nancial liabilities are fi xed (Dec 2006: 94.9% of fi nancial assets and 78.2% of fi nancial liabilities), and the parent entity 91.8% of fi nancial assets and 101.9% of fi nancial liabilities (Dec 2006: 98.5% of fi nancial assets and 78.2% of fi nancial liabilities).

Consolidated entity 31 December 2007	Floating interest rate	Fixed interest maturingin Non- interest bearing Total 1 year or less Over 1 to 2 years Over 2 to 3 years Over 3 to 4 years Over 4 to 5 years Over 5 years
	$M	$M $M $M $M $M $M $M $M
Financial assets Cash and cash equivalents – Australian dollar 305.7 – – – – – – – 305.7 – Euro 30.9 – – – – – – – 30.9 – United States dollar 13.7 – – – – – – – 13.7 Loans and Receivables – Australian dollar 73.1 – – 29.1 – – – 111.9 214.1 – New Zealand dollar – – – 43.7 – – – – 43.7 – Euro – 634.1 363.2 347.8 – – – 118.1 1,463.2 – United States dollar – 71.8 141.2 72.8 – – 75.0 30.7 391.5 Other assets – Australian dollar – – – – – – – 0.7 0.7 – Euro – – – – – – – 2.9 2.9 – United States dollar – – – – – – – – – Derivative f nancial instruments – – – – – – – 143.4 143.4 Total f nancial assets 423.4 705.9 504.4 493.4 – – 75.0 407.7 2,609.8 Financial liabilities Payables – Australian dollar – – – – – – – 425.6 425.6 – Euro – – – – – – – 74.9 74.9 – United States dollar – – – – – – – 10.2 10.2 Borrowings – Australian dollar* 1,580.7 – 324.4 99.6 – – 124.6 – 2,129.3 – Euro 2,065.8 – – – – – – – 2,065.8 – United States dollar 691.3 74.4 – – – – – – 765.7 – Danish Kroner 27.9 – – – – – – – 27.9 – Swedish Kroner 6.3 – – – – – – – 6.3 Derivative f nancial instruments – – – – – – – 140.7 140.7 Total f nancial liabilities 4,372.0 74.4 324.4 99.6 – – 124.6 651.4 5,646.4 Interest rate swaps – Australian dollar (1,625.0) 250.0 150.0 375.0 200.0 50.0 600.0 – – – Euro (1,918.2) 1,101.5 166.7 83.0 167.0 166.7 233.3 – – – United States dollar (639.9) (159.9) 228.5 228.5 57.2 91.4 194.2 – – – Danish Kroner (27.9) 27.9 – – – – – – – Total f nancial liabilities adjusted for interest rate swaps 161.0 1,293.9 869.6 786.1 424.2 308.1 1,152.1 651.4 5,646.4

	305.7	– – – – – – – 305.7
	30.9	– – – – – – – 30.9
	13.7	– – – – – – – 13.7

	73.1	– – 29.1 – – – 111.9 214.1
	–	– – 43.7 – – – – 43.7
	–	634.1 363.2 347.8 – – – 118.1 1,463.2
	–	71.8 141.2 72.8 – – 75.0 30.7 391.5

	–	– – – – – – 0.7 0.7
	–	– – – – – – 2.9 2.9
	–	– – – – – – – –
	–	– – – – – – 143.4 143.4
	423.4	705.9 504.4 493.4 – – 75.0 407.7 2,609.8


	–	– – – – – – 425.6 425.6
	–	– – – – – – 74.9 74.9
	–	– – – – – – 10.2 10.2

	1,580.7	– 324.4 99.6 – – 124.6 – 2,129.3
	2,065.8	– – – – – – – 2,065.8
	691.3	74.4 – – – – – – 765.7
	27.9	– – – – – – – 27.9
	6.3	– – – – – – – 6.3
	–	– – – – – – 140.7 140.7
	4,372.0	74.4 324.4 99.6 – – 124.6 651.4 5,646.4

	(1,625.0) 250.0 150.0 375.0 200.0 50.0 600.0 – –
	(1,918.2) 1,101.5 166.7 83.0 167.0 166.7 233.3 – –
	(639.9) (159.9) 228.5 228.5 57.2 91.4 194.2 – –
	(27.9) 27.9 – – – – – – –

144

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

Capital and f nancial risk mana	Capital and f nancial risk mana	gement disclosures(continued)
(f) Interest rate risk(continued) Floating interest rate Consolidated entity 31 December 2006 $M		Fixed interest maturingin Non- interest bearing Total 1 year or less Over 1 to 2 years Over 2 to 3 years Over 3 to 4 years Over 4 to 5 years Over 5 years $M $M $M $M $M $M $M $M
Financial Assets Cash and cash equivalents – Australian dollar 50.2 – – – – – – – 50.2 – Euro 0.6 – – – – – – – 0.6 – United States dollar 8.0 – – – – – – – 8.0 Loans and Receivables – Australian dollar 23.7 16.4 12.8 – – – – 109.3 162.2 – Euro – – 615.3 395.8 – – 40.8 1,051.9 – United States dollar – – 79.8 94.7 – – 83.7 7.0 265.2 Other assets – Australian dollar – – – – – – – 0.7 0.7 Derivative f nancial assets – – – – – – – 79.4 79.4 Total f nancial assets 82.5 16.4 707.9 490.5 – – 83.7 237.2 1,618.2 Financial liabilities Payables – Australian dollar – – – – – – – 228.2 228.2 Borrowings – Australian dollar* 2,032.7 – – 323.2 99.4 – 124.5 – 2,579.8 – Euro 1,278.7 – – – – – – – 1,278.7 – United States dollar 433.2 – – – – – – – 433.2 Derivative f nancial libilities – – – – – – – 25.5 25.5 Total f nancial liabilities 3,744.6 – – 323.2 99.4 – 124.5 253.7 4,545.4 Interest rate swaps – Australian dollar (1,650.0) 25.0 50.0 300.0 425.0 250.0 600.0 – – – Euro (837.2) 167.5 184.2 167.4 83.7 167.4 67.0 – – – United States dollar (266.2) – 76.1 126.7 – 63.4 – – – Total f nancial liabilities adjusted for interest rate swaps 991.2 192.5 310.3 917.3 608.1 480.8 791.5 253.7 4,545.4	50.2 0.6 8.0 23.7 – – – –	– – – – – – – 50.2 – – – – – – – 0.6 – – – – – – – 8.0 16.4 12.8 – – – – 109.3 162.2 – 615.3 395.8 – – 40.8 1,051.9 – 79.8 94.7 – – 83.7 7.0 265.2 – – – – – – 0.7 0.7 – – – – – – 79.4 79.4
	82.5	16.4 707.9 490.5 – – 83.7 237.2 1,618.2
	– 2,032.7 1,278.7 433.2 –	– – – – – – 228.2 228.2 – – 323.2 99.4 – 124.5 – 2,579.8 – – – – – – – 1,278.7 – – – – – – – 433.2 – – – – – – 25.5 25.5
	3,744.6	– – 323.2 99.4 – 124.5 253.7 4,545.4
	(1,650.0) 25.0 50.0 300.0 425.0 250.0 600.0 – – (837.2) 167.5 184.2 167.4 83.7 167.4 67.0 – – (266.2) – 76.1 126.7 – 63.4 – – –

145

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(f) Interest rate risk(continued) Floating interest rate Parent entity 31 December 2007 $M	(f) Interest rate risk(continued) Floating interest rate Parent entity 31 December 2007 $M
	Floating interest rate	Fixed interest maturingin Non- interest bearing Total 1 year or less Over 1 to 2 years Over 2 to 3 years Over 3 to 4 years Over 4 to 5 years Over 5 years
	$M	$M $M $M $M $M $M $M $M
Financial assets Cash and cash equivalents – Australian dollar – Euro – United States dollar Loans and Receivables – Australian dollar – Euro Other assets – Australian dollar Derivative f nancial assets Total f nancial assets Financial liabilities Payables – Australian dollar Borrowings – Australian dollar* – Euro – United States dollar Derivative f nancial liabilities Total f nancial liabilities Interest rate swaps – Australian dollar – Euro – United States dollar Total f nancial liabilities adjusted for interest rate swaps

	267.1	– – – – – – – 267.1
	11.3	– – – – – – – 11.3
	13.7	– – – – – – – 13.7

	242.7	– – – – – – 64.9 307.6
	–	750.5 363.2 347.8 – – – 38.7 1,500.2

	–	– – – – – – 4,248.7 4,248.7
	–	– – – – – – 141.8 141.8
	534.8	750.5 363.2 347.8 – – – 4,494.1 6,490.4


	–	– – – – – – 412.6 412.6

	1,506.4	– 324.4 99.6 – – 124.6 – 2,055.0
	1,891.9	– – – – – – – 1,891.9
	588.9	– – – – – – – 588.9
	–	– – – – – – 140.2 140.2
	3,987.2	– 324.4 99.6 – – 124.6 552.8 5,088.6

	(1,625.0) 250.0 150.0 375.0 200.0 50.0 600.0 – –
	(1,817.3) 1,000.6 166.7 83.0 167.0 166.7 233.3 – –
	(639.9) (159.9) 228.5 228.5 57.2 91.4 194.2 – –
	(95.0) 1,090.7 869.6 786.1 424.2 308.1 1,152.1 552.8 5,088.6

146

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

Capital and f nancial risk mana	Capital and f nancial risk mana	gement disclosures(continued)
(f) Interest rate risk(continued) Floating interest rate Parent entity 31 December 2006 $M		Fixed interest maturingin Non- interest bearing Total 1 year or less Over 1 to 2 years Over 2 to 3 years Over 3 to 4 years Over 4 to 5 years Over 5 years $M $M $M $M $M $M $M $M
Financial assets Cash and cash equivalents – Australian dollar – Euro – United States dollar Loans and Receivables – Australian dollar – Euro Other assets – Australian dollar Derivative f nancial assets Total f nancial assets Financial liabilities Payables – Australian dollar Borrowings – Australian dollar* – Euro – United States dollar Derivative f nancial libilities Total f nancial liabilities Interest rate swaps – Australian dollar – Euro – United States dollar Total f nancial liabilities adjusted for interest rate swaps	31.8 0.6 8.0 54.1 – – –	– – – – – – – 31.8 – – – – – – – 0.6 – – – – – – – 8.0 – – – – – – 59.3 113.4 – 615.4 395.7 – – – – 1,011.1 – – – – – – 4,913.4 4,913.4 – – – – – – 79.4 79.4
	94.5	– 615.4 395.7 – – – 5,052.1 6,157.7
	– 1,977.3 1,278.7 433.2 –	– – – – – – 32.3 32.3 – – 323.2 99.4 – 124.5 – 2,524.4 – – – – – – – 1,278.7 – – – – – – – 433.2 – – – – – – 25.5 25.5
	3,689.2	– – 323.2 99.4 – 124.5 57.8 4,294.1
	(1,650.0) 25.0 50.0 300.0 425.0 250.0 600.0 – – (837.2) 167.5 184.2 167.4 83.7 167.4 67.0 – – (266.2) – 76.1 126.7 – 63.4 – – –
	935.8 192.5 310.3 917.3 608.1 480.8 791.5 57.8 4,294.1

147

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(f) Interest rate risk (continued)

(ii) Interest rate risk contracts – loan receivables

GPT’s loans are primarily provided to investments in joint ventures and associates as a means of obtaining an underlying property exposure. Loans are at arms length fi xed rates and reset every 3 years in the case of the joint venture arrangement with Babcock & Brown Limited, and reset every 10 years in the case of the joint venture arrangement with Benchmark. Loans are also provided to associates on a long term basis where all investors contribute to the associate in the same debt and equity ratio. Refer to note 7 for terms and interest rates.

investment portfolio and the cash fl ow at risk as a result of interest rate fl uctuations on scheduled interest rate resets for the next reporting period. The cash fl ow at risk in the consolidated entity for the next reporting period is $6.0 million (Dec 2006: $0.8 million). The parent entity’s cash fl ow at risk is the same when taking into account the effect of its controlled entities, which impacts the distributions it receives. Refer to section (iv) for the assumptions used in calculating the cash fl ow at risk.

31 December each year.

Consolidated entity

Consolidated entity
31 December 2007	2007 2008 2009 2010 2011 2012 M M M M M M
Australian dollar Loans and receivables Average f xed rate New Zealand dollar Loans and receivables Average f xed rate Euro Loans and receivables Average f xed rate US dollar Loans and receivables Average f xed rate 31 December 2006
	29.1 29.1 29.1 29.1 – –
	10.1% 10.1% 10.1% 10.1% 0.0% 0.0%

	50.0 50.0 50.0 50.0 – –
	11.0% 11.0% 11.0% 11.0% 0.0% 0.0%

	797.1 422.9 205.1 – – –
	6.2% 6.8% 7.0% 0.0% 0.0% 0.0%

	316.2 253.4 129.1 65.7 65.7 65.7
	8.1% 8.2% 8.3% 9.0% 9.0% 9.0%
	2006 2007 2008 2009 2010 2011 M M M M M M
Australian dollar Loans and receivables Average f xed rate Euro Loans and receivables Average f xed rate US dollar Loans and receivables Average f xed rate	12.8 12.8 12.8 – – –
	9.1% 9.1% 9.1% 0.0% 0.0% 0.0% 603.8 603.8 229.6 – – –
	6.0% 6.0% 6.5% 0.0% 0.0% 0.0% 203.4 203.4 140.6 65.7 65.7 65.7
	8.3% 8.3% 8.5% 9.0% 9.0% 9.0%

Parent entity

148

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(f) Interest rate risk (continued)

(iii) Interest rate risk contracts - borrowings

to cash fl ow interest rate risk. Borrowings issued at fi xed rates expose GPT to fair value interest rate risk.

to convert fl oating interest rate borrowings to fi xed interest rates. Such interest rate swaps are entered into with the objective of hedging the risk of interest rate fl uctuations in respect of underlying borrowings. Under the interest rate swaps, GPT agrees with other parties to exchange, at specifi ed intervals (mainly quarterly), the difference between fi xed contract rates and fl oating rate interest amounts calculated by reference to the agreed notional principal amounts.

amount of these swaps was $400.0 million (Dec 2006: $400.0 million). 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 fi xed interest rate exposure.

fl oating. Such interest rate swaps are entered into to give GPT the fl exibility to utilise existing hedge positions.

GPT also enters into barrier/trigger option swaps, such as knock-out swaps, caps and currency-linked swaps and sold interest rate options such as callable swaps and sold receiver swaptions, where it is comfortable with the worst case outcome on entering into these transactions on its total cost of borrowings, in return for a reduction in its cost of borrowings. GPT has recorded these interest rate derivatives on balance sheet at their fair value in accordance with AASB 139 Financial Instruments: Recognition and Measurement.

Under barrier/trigger option swaps, the payoff profi le may vary during the instrument’s life, depending on the level of a given reference rate (i.e. the ”trigger”). The reference rate may be the same as the fl oating rate received by GPT; for example GPT agrees with other parties that no exchange will occur on an underlying interest rate swap if fl oating interest rates are above a trigger level on a specifi c roll date. However this is not always the case; for example in currency linked swaps the payoff profi le is dependent on the level of a nominated currency pair.

Under a callable swap, GPT pays a known fi xed rate for an agreed term at the start of the transaction (usually 3-6 months), thereafter, the counterparty has the right to cancel (or “call”) the trade on any payment date at its discretion. Once called, the transaction is completely cancelled and ceases to exist. Under sold receiver swaptions, GPT has given other parties the right to but not the obligation, to enter into an interest rate swap at a specifi ed price on a specifi ed date whereby GPT agrees to pay fi xed interest rates and receive fl oating interest rates on the notional amount of the contract.

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(x).

borrowings in their local currency and the weighted average interest rate of those contracts in each currency at 31 December each year.

149

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

Capital and f nancial risk man	agement disclosures(continued)
(f) Interest rate risk(continued) Consolidated entity 31 December 2007	2007 2008 2009 2010 2011 2012 M M M M M M
Australian dollar Interest rate swaps Borrowings Total f xed Average f xed rate Euro Interest rate swaps Borrowings Total f xed Average f xed rate US dollar Interest rate swaps Borrowings Total f xed Average f xed rate Danish Kroner Interest rate swaps Borrowings Total f xed Average f xed rate 31 December 2006
	1,625.0 1,375.0 1,225.0 850.0 650.0 600.0
	550.0 550.0 225.0 125.0 125.0 125.0
	2,175.0 1,925.0 1,450.0 975.0 775.0 725.0
	6.0% 6.1% 6.3% 6.6% 7.1% 7.5%

	1,150.9 490.0 390.0 340.0 240.0 140.0
	– – – – – –
	1,150.9 490.0 390.0 340.0 240.0 140.0
	4.2% 3.7% 3.6% 3.6% 3.7% 3.5%

	560.0 700.0 500.0 300.0 250.0 170.0
	72.0 – – – – –
	632.0 700.0 500.0 300.0 250.0 170.0
	4.9% 5.0% 5.1% 5.4% 5.3% 5.4%

	124.5 – – – – –
	– – – – – –
	124.5 – – – – –
	5.5% – – – – –
	2006 2007 2008 2009 2010 2011 M M M M M M
Australian dollar Interest rate swaps Borrowings Total f xed Average f xed rate Euro Interest rate swaps Borrowings Total f xed Average f xed rate US dollar Interest rate swaps Borrowings Total f xed Average f xed rate	1,650.0 1,625.0 1,575.0 1,275.0 850.0 600.0 700.0 550.0 550.0 225.0 125.0 125.0
	2,350.0 2,175.0 2,125.0 1,500.0 975.0 725.0
	5.8% 5.9% 6.0% 6.1% 6.5% 7.0% 500.0 400.0 290.0 190.0 140.0 40.0 – – – – – –
	500.0 400.0 290.0 190.0 140.0 40.0
	3.4% 3.7% 3.6% 3.4% 3.2% 3.3% 210.0 210.0 150.0 50.0 50.0 – – – – – – –
	210.0 210.0 150.0 50.0 50.0 –
	5.0% 5.0% 4.5% 5.2% 5.2% 0.0%

150

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(f) Interest rate risk (continued)

Parent entity

€100.9 million in swaps and USD $72 million in borrowings for 2007 which exist in 2007 (Dec 2006: All balances held in the parent entity).

impact of interest rate swaps, barrier/trigger option swaps and sold interest rate option contracts.

Australian dollar Euro US dollar Danish Kroner Swedish Kroner Combined	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 % % % %
	6.04 5.63 6.04 5.63 4.24 3.77 4.14 3.77 5.01 5.28 4.73 5.28 5.48 – – – 5.63 – – –
	5.14 5.04 5.09 5.04

At balance date, the fair value of interest rate swaps, barrier/trigger option swaps and sold interest rate option contracts were as disclosed in note 9. In the year ended 31 December 2007, the loss in the income statement from the increase in fair value of the net asset together with the net receipts received during the year is $33.6 million (Dec 2006: profi t $80.2 million).

(iv) Cash fl ow at risk analysis

Under GPT’s Treasury Risk Management Policy hedge balances in a ‘market forecast’ scenario must be in line with hedge parameters outlined in its policy. The policy also requires a ‘cash fl ow at risk’ sensitivity analysis be performed to test the impact of upwards and downwards movements in the market interest rates on GPT’s hedge position (including the impact of any barrier/trigger option swaps and sold interest rate options) against forecast debt levels for a 5 year period and its annual profi t forecast for a three year period. The policy requires that the result of the cash fl ow at risk sensitivity analysis must be within predetermined limits against forecast realised operating income at risk.

Under GPT’s Policy, the parameters for assessing the impact of upward or downward movements in market rates is made by reference to the lower of the maximum upward/downward of the 3 month benchmark rate over a 6 month period or the maximum spread between the 3 month bills and 5 year swap rate each observed over a minimum 9 year period. This sensitivity was used as it provides a reasonable sensitivity given the level of debt and currency exposure the group has and the impact they have to group results and investor expectations. The sensitivity applied to the consolidated entity’s hedge position over a three year period at 31 December 2007 was:

AUDinterest rates increase by 210 bps and decrease by 190 bps
EUR, DKK and SEK interest rates increase by 140 bps and decease by 200 bps
USD interest rates increase by 190 bps and decrease by 280 bps
In the case of currency linked trigger swaps, AUD/EURexchange rates moved up or down by 0.04

Year 1 Year 2 Year 3	31 Dec 2007 31 Dec 2006 $M $M
	20.8 24.0 39.4 32.3 37.0 27.5

it receives.

151

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(g) Foreign exchange risk

in foreign currency rates. GPT’s foreign exchange risk arises primarily from:

borrowings denominated in foreign currencies;
dependent on foreign currencies; and
investments in foreign operations.

GPT is exposed to foreign exchange risk arising from currency exposures to the euro and US dollar.

(i) Foreign currency assets and liabilities

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 fl uctuations as well as using forward exchange contracts where funds were borrowed in local currency. GPT’s policy is not to hedge unrealised fair value increases/decreases which may have occurred in its foreign currency assets.

For accounting purposes, net foreign operations and interests in the joint ventures and associates are revalued at the end of each reporting period with the fair value movement refl ected in equity as a movement in the foreign currency translation reserve. The interests in joint ventures and associates are then equity accounted to refl ect the underlying net assets of the entities with changes refl ected in the income statement as share of after tax profi ts of equity accounted entities, refer accounting policy note 1(e)(iii).

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 refl ected in the income statement as exchange gains or losses on foreign currency borrowings and net gains or losses on derivative fi nancial instruments held at fair value respectively, refer accounting policy note 1(e)(ii).

The following table shows the Australian dollar equivalents of GPT’s investments denominated in foreign currencies.

Consolidated entity Assets Cash Warehoused property Interests in equity accounted investments Loans and receivables Other assets including goodwill Liabilities Borrowings Other liabilities Forward exchange contracts(1) Net assets/(liabilities)	Euro Unites States Dollars Danish Kroner Swedish Kroner New Zealand Dollars
	2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 $M $M $M $M $M $M $M $M $M $M
	30.9 0.6 13.7 8.0 – – – – – – 252.7 – 108.2 – 27.9 – 8.5 – – – 366.5 265.9 276.2 171.0 – – – – 7.8 – 1,463.2 1,051.9 391.5 265.2 – – – – 43.7 – 124.7 – – – – – – – – –
	2,238.0 1,318.4 789.6 444.2 27.9 – 8.5 – 51.5 –
	2,065.8 1,278.7 765.7 433.2 27.9 – 6.3 – – – 74.9 – 10.2 – – – – – – 34.6 – – – – – – – 51.8 –
	2,175.3 1,278.7 775.9 433.2 27.9 – 6.3 – 51.8 –
	62.7 39.7 13.7 11.0 – – 2.2 – (0.3) –

152

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(g) Foreign exchange risk (continued)

(i) Foreign currency assets and liabilities (continued)

(i) Foreign currency assets and liab	ilities(continued)
Parent entity Assets Cash Loans and receivables Liabilities Borrowings Forward exchange contracts(1) Net assets/(liabilities)(2)	Euro Unites States Dollars Danish Kroner Swedish Kroner New Zealand Dollars
	2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 $M $M $M $M $M $M $M $M $M $M
	11.3 0.6 13.7 8.0 – – – – – – 1,500.2 1,011.1 – – – – – – – –
	1,511.5 1,011.7 13.7 8.0 – – – – – –
	1,891.9 1,278.7 588.9 433.2 – – – – – – 34.6 – – – – – – – 51.8 –
	1,926.5 1,278.7 588.9 433.2 – – – – 51.8 –
	(415.0) (267.0) (575.2) (425.2) – – – – (51.8) –

GPT had entered into a forward exchange contract to hedge its euro and US dollar investment funded by Australian dollars as at 31 December 2007 for EUR€20.6 million and NZD $58.8 million (Dec 2006: nil). The forward exchange contract has since been replaced by euro and NZ dollars borrowings.
The foreign exchange exposure in the parent is higher than that consolidated entity as the parent entity has raised foreign currency borrowings and on lent these funds to the Company in Australian Dollars to fund its acquisitions of foreign operations and investments in joint ventures and associates.

(ii) Forward exchange contracts to hedge net foreign cash fl ows

GPT manages the foreign exchange risk of the cost of funding and income derived from its net foreign operations and investments in joint ventures and associates to have certainty over the Australian Dollars received once the euro and US Dollars are converted by entering into forward foreign exchange contracts and forward foreign exchange trigger contracts such as accumulating knock out contracts, knock in contracts and advantage contracts.

future date.
Accumulating knock out contracts are similar to forward exchange contracts, but the transaction is permanently cancelled (i.e. knocked out) when the predetermined level of accumulation points is reached.
Knock in contracts are as for forward exchange contracts but will only become an active transaction if the exchange rate reaches a pre agreed level.
Advantage contracts are as for forward exchange contracts but the agreed exchange rate may vary if the currency trades at a certain level in a certain time frame.

to mature at the end of each quarter when the distribution is expected to be received from the entities. Contracts are deferred where distributions are deferred to ensure contracts remain outstanding for the distributions outstanding.

At 31 December 2007, the details of outstanding contracts under a ‘market scenario’ are set out in the following table.

153

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(g) Foreign exchange risk (continued)

(ii) Forward exchange contracts to hedge net foreign cash fl ows (continued)

(ii) Forward exchange contracts to hedge n	et foreign cash f ows(continued)
Parent and Consolidated Entity Maturity Less than 1 year 1–2 years 2–3 years 3–4 years 4–5 years Over 5 years Total Maturity Less than 1 year 1–2 years 2–3 years 3–4 years 4–5 years Over 5 years Total	BuyAustralian Dollars Sell Euro Average exchange rate
	2007 2006 2007 2006 2007 2006 $M $M $M $M
	74.8 87.8 41.4 49.1 0.5531 0.5592 90.5 75.1 50.5 41.4 0.5575 0.5513 77.0 60.8 43.3 33.4 0.5624 0.5493 58.3 58.7 32.6 31.7 0.5591 0.5400 41.4 49.7 22.8 26.0 0.5503 0.5231 14.6 53.5 7.8 27.2 0.5360 0.5084 356.6 385.6 198.4 208.8 BuyAustralian Dollars Sell US Dollars Average exchange rate
	2007 2006 2007 2006 2007 2006 $M $M $M $M
	5.9 4.6 4.3 3.4 0.7346 0.7346 6.7 5.9 4.9 4.3 0.7346 0.7346 7.2 6.7 5.3 4.9 0.7346 0.7346 3.7 7.2 2.7 5.3 0.7346 0.7346 – 3.7 – 2.7 0.7346 – – – – 23.5 28.1 17.2 20.6

At balance date fair value of forward exchange contracts for balance sheet and net cash fl ow hedging were an asset of $14.9 million (Dec 2006: $11.6 million) and a liability of $17.5 million (Dec 2006: $10.2 million). In the year ended 31 December 2007, the gain in the income statement from the increase in fair value of the net asset together with the net receipts received is $15.0 million (Dec 2006: receipt of $9.7 million).

154

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(g) Foreign exchange risk (continued)

(iii) Equity and cash fl ow at risk analysis

GPT monitors the impact of adverse or favourable movements in foreign exchange rates and the impact this may have on its capital management and cash fl ow. Adverse versus favourable movements are determined relative to the underlying exposure. An adverse movement in exchange rates implies an increase in our foreign currency risk exposure and a worsening of our fi nancial position. A favourable movement in exchange rates implies a reduction in our foreign currency risk exposure and an improvement of our fi nancial position.

Under GPT’s treasury risk management policy net cash fl ow hedge balances in a ‘market forecast’ scenario must be in line with hedge parameters outlined in its policy. The policy also requires a ‘cash fl ow at risk’ sensitivity analysis be performed to test the impact of upwards and downwards movements in the market foreign exchange rates on GPT’s net cash fl ow hedge position (including the impact of foreign exchange trigger contracts) against it’s foreign net cash fl ow forecast for a three year period. The policy requires that the result of the sensitivity analysis must be within predetermined limits against forecast realised operating income.

Under GPT’s Policy, the parameters for assessing the impact of upward or downward movements in market rates is made by reference to each foreign currency exchange rate’s maximum move over a three month period. This sensitivity was used as it provides a reasonable sensitivity given the level of debt and currency exposure the group has and the impact they have to group results and investor expectations. The sensitivity applied to GPT’s hedge position over a three year period at 31 December 2007 was:

AUD/EURexchange rate increased/decreased by 0.0400 euro cent
AUD/USD exchange rate increased/decreased by 0.0700 United States cents
AUD/NZD exchange rate increased/decreased by 0.1500 New Zealand cents

An increase/decrease in foreign exchange rates at 31 December 2007 would have decreased/increased the net assets of the consolidated entity by $5.3 million (Dec 2006: $3.6 million) and increased/decreased the net assets of the parent entity by $80.4 million (Dec 2006: $55.6 million).

The foreign exchange exposure in the parent is higher than that consolidated entity as the parent entity has raised foreign currency borrowings and on lent these funds to the Company in Australian Dollars to fund its acquisitions of foreign operations and investments in joint ventures and associates.

Had an increase/decrease in the foreign exchange rates occurred for the entire 2007 year the impact on the consolidated entity’s realised operating income after considering the impact of net cash fl ow hedges would have resulted in a decrease/increase of $4.0 million (Dec 2006: $2.5 million). The impact on the parent entity’s realised operating income after considering the impact of the net cash fl ow hedges would have resulted in a increase/ decrease of $3.6 million (Dec 2006: $1.7 million).

This calculation is impacted by the timing of the cash receipts and payments, in particular the cash receipts from investments in joint ventures and associates. Whilst the net income hedges are in place the effect of these hedges is not refl ected in realised operating income until the cash is received. The effect however of the deferral of the net income hedges to match the forecast cash fl ows is however refl ected in fair value adjustments of the foreign exchange derivatives.

(h) Price risk

GPT and the parent entity are exposed to property derivatives and equity securities price risk. The key risk variable is the quoted price of property indexes and stocks, which is infl uenced by a range of factors, most of which are outside the control of GPT. As a result, the consolidated entity does not use fi nancial instruments to manage the price risk exposure on property derivatives but instead regularly monitors levels of exposure and conducts sensitivity analysis for fl uctuations in the property index/quoted securities prices on the these derivatives.

With regard to the property index/quoted securities volatility of 15%, the impact on net profi t after income tax expense and equity of the consolidated entity and parent entity, with all other variables held constant, would have been an increase/decrease of $42.0 million (Dec 2006: $nil).

At balance date, the fair value of the property derivatives was as disclosed in note 9. In the year ended 31 December 2007, the gain in the income statement from the increase in fair value of the net asset together with the net payments during the fi nancial year is $19.2 million (Dec 2006: $nil).

155

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(i) Fair value

Consolidated entity Carrying Ammount Fair Value Carrying Ammount Fair Value 2007 2007 2006 2006 $M $M $M $M 350.3 350.3 58.8 58.8 271.2 271.2 157.3 157.3 1,841.3 1,835.6 1,322.3 1,292.3 143.4 143.4 79.4 79.4 3.6 3.6 0.7 0.7 2,609.8 2,604.1 1,618.5 1,588.5 510.7 510.7 228.2 228.2 140.7 140.7 25.5 25.5 50.0 50.0 708.2 708.2 2,480.8 2,488.9 1,003.7 1,003.7 299.8 300.0 – – 7.8 7.8 – – 102.4 103.4 – – 349.0 356.6 55.4 55.4 45.8 46.0 566.5 566.5 1,534.8 1,503.0 1,833.4 1,837.6 124.6 144.2 124.5 163.3 5,646.4 5,651.3 4,545.4 4,588.4 (3,036.6) (3,047.2) (2,926.9) (2,999.9) (10.6) (73.0)	Parent entity	Parent entity	Parent entity
	Carrying Ammount Fair Value Carrying Ammount Fair Value 2007 2007 2006 2006 $M $M $M $M
	292.1 292.1 40.4 40.4 359.6 359.6 65.4 64.9 1,448.2 1,436.9 1,059.1 1,016.2 141.8 141.8 79.4 79.4 0.1 0.1 – –
	2,241.8 2,230.5 1,244.3 1,200.9
	412.6 412.6 32.3 32.3 140.2 140.2 25.5 25.5 50.0 50.0 708.2 708.2 2,480.8 2,488.9 1,003.7 1,003.7 299.8 300.0 – – – – – – – – – – – – – – 45.8 46.0 566.5 566.5 1,534.8 1,503.0 1,833.4 1,837.6 124.6 144.2 124.5 163.3
	5,088.6 5,084.9 4,294.1 4,337.1
	(2,846.8) (2,854.4) (3,049.8) (3,136.2)
(10.6)		(7.6)	(86.4)

The fair value of interest bearing borrowings (excluding medium term notes and CPI coupon indexed bonds) have been determined by adjusting for transaction costs. The fair value of medium term notes have been calculated by discounting the expected future cash fl ows by market swap rates applicable to relevant term of the note, adjusted for transaction costs. The discount rates applied range from 7.90% to 8.49%. The fair value of the CPI coupon indexed bonds have been calculated by discounting the cash fl ows by a rate derived by reference to a market swap rate of approximately 6.4% and with reference to the relevant Commonwealth Government indexed bond real yield and appropriate margins for liabilities with similar risk profi les.

156

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

31. Capital and fi nancial risk management disclosures (continued)

(i) Fair value (continued)

The fair value of GPT’s derivatives have been determined as follows:

forward foreign exchange contracts – fair valued using quoted forward exchange rates at reporting date
forward price curve of interest rates.
Barrier/trigger option swaps and sold interest rate option contracts – are not traded and are calculated by discounting the present value of estimated future cash fl ows of the contracts based on the forward price curve of interest rates.
an open market.

instruments.

adjusted for counterparty credit risk, where applicable. The carrying value of all other fi nancial assets and liabilities approximate their fair values due to their short term nature.

157

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

32. Auditor’s Remuneration

the consolidated entity and its related parties:

the consolidated entity and its related parties:
Audit services PricewaterhouseCoopers Australian f rm Audit and review of f nancial reports and other statutory audit work Aff liates of PricewaterhouseCoopers Australian f rm including overseas f rms Audit and review of f nancial reports and other statutory audit work Total remuneration for audit services Other assurance services PricewaterhouseCoopers Australian f rm Regulatory and contractually required audits AIFRS accounting services Accounting advice Due diligence services Other services Aff liates of PricewaterhouseCoopers Australian f rm including overseas f rms Due diligence services Total remuneration for other assurance services Total remuneration for audit and assurance services Non audit related services PricewaterhouseCoopers Australian f rm Taxation services Aff liates of PricewaterhouseCoopers Australian f rm including overseas f rms Taxation services International tax due diligence relating to acquisition entries Total remuneration for non audit related services Total auditor’s remuneration 33. Net Tangible Asset Backing Net tangible asset backing per stapled security/unit	Consolidated entity Parent entity
	31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 $‘000 $‘000 $‘000 $‘000
	1,566.0 1,541.4 909.0 1,086.9 392.0 51.9 – –
	1,958.0 1,593.3 909.0 1,086.9
	94.8 81.7 87.6 57.1 – 180.8 – 90.4 – 130.9 – 65.4 160.0 20.0 45.0 – 11.0 – – – – 27.0 – –
	265.8 440.4 132.6 212.9
	2,223.8 2,033.7 1,041.6 1,299.8
	55.8 83.9 – – 39.1 – – – – 13.6 – –
	94.9 97.5 – –
	2,318.7 2,131.2 1,041.6 1,299.8
	Consolidated entity 31 Dec 2007 31 Dec 2006 $ $ 3.86 3.60

Net tangible asset backing per security is calculated by dividing the sum of net assets less intangible assets by the number of securities on issue in note 19.

34. Events subsequent to reporting date

Declaration of December quarter distribution

On 26 February 2008, a distribution of 7.3 cents per stapled security ($153.3 million) was declared for the quarter ended 31 December 2007 (refer to note 3(b)).

158

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ DECLARATION FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

In the directors of the Responsible Entity’s opinion:

(a) the fi nancial statements and notes set out on pages 74 to 158 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
their performance for the fi nancial 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
(c) the audited remuneration disclosures set out on pages 58 to 70 of the Directors’ Report comply with Accounting Standards AASB 124 Related Party Disclosures and the Corporations Regulations 2001 ; and

Section 295A of the Corporations Act 2001 .

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

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Peter Joseph Chairman

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Nic Lyons Executive Director

GPT RE Limited Sydney 26 February 2008

159

THE GPT GROUP ANNUAL REPORT 2007

INDEPENDENT AUDIT REPORT TO THE UNITHOLDERS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

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160

THE GPT GROUP ANNUAL REPORT 2007

INDEPENDENT AUDIT REPORT TO THE UNITHOLDERS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

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161

THE GPT GROUP ANNUAL REPORT 2007

INDEPENDENT AUDIT REPORT TO THE UNITHOLDERS FOR THE YEAR ENDED 31 DECEMBER 2007

THE GPT GROUP

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162

THE GPT GROUP ANNUAL REPORT 2007

ANNUAL FINANCIAL REPORT OF GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES 31 DECEMBER 2007

CONTENTS
Directors’ Report	164
Auditor’s Independence Declaration	187
Financial Report
Management Discussion and Analysis	188
Income Statements	190
Balance Sheets	191
Statements of Changes in Equity	192
Cash Flow Statements	193
Notes to the Financial Statements
1. Basis of preparation of concise f nancial report	194
2. Segment reporting	194
3. Dividends paid and payable	198
4. Earnings per share	198
5. Equity accounted investments	199
6. Retained prof ts/(accumulated losses)	200
7. Business combinations	200
8. Auditor’s remuneration	204
9. Events subsequent to reporting date	204
Directors’ Declaration	205
Independent Audit Report	206

entity consisting of GPT Management Holdings Limited and its controlled entities. The fi nancial report is presented in Australian currency.

GPT Management Holdings Limited (Company) is a company limited by shares, incorporated and domiciled in Australia. Its registered offi ce and principal place of business is Level 52, MLC Centre, 19 Martin Place, Sydney NSW 2000.

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, fi nancial reports and other information are available on our website: www.gpt.com.au.

163

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

The Directors of GPT Management Holdings Limited (the Company) present their report on the consolidated entity consisting of GPT Management Holdings Limited and its controlled entities (the consolidated entity) for the year ended 31 December 2007. The consolidated entity together with General Property Trust and its controlled entities form part of the stapled entity, the GPT Group (GPT or the Group).

1. OPERATIONS AND ACTIVITIES

1.1 Principal Activities

GPT Management Holdings Limited is a company limited by shares, incorporated and domiciled in Australia. The registered offi ce and principal place of business is MLC Centre, Level 52, 19 Martin Place, Sydney NSW 2000.

The principal activities of GPT Management Holdings Limited remain unchanged from 31 December 2006 and are:

senior housing properties
development of commercial properties
management and administration of the General Property Trust
property management
funds management and
hotel management.

to operate in Australia, Europe and the United States of America.

1.2 Review of Operations

The net profi t/(loss) for the fi nancial year ended 31 December 2007 should be read in conjunction with the fi nancial statements of the GPT Group.

The consolidated entity loss was arrived at after allowing for the increase in professional fees, remuneration and fi nancing costs predominately attributable to the acquired business’ during the period. It is expected that the growth in assets under management will enhance revenues in future periods.

Total borrowings comprise $759 million of which $373 million has been borrowed from General Property Trust.

Prof t/(loss) before income tax expense Income tax expense Net prof t/(loss) for the f nancial year	Consolidated entity
	31 Dec 2007 $’000 31 Dec 2006 $’000
	(14,145) 21,596 (7,075) (159)
	(21,220) 21,437

164

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

1. OPERATIONS AND ACTIVITIES (continued)

1.2 Review of Operations (continued)

(a) Funds management portfolio

Australian platform

GPT’s Australian Funds Management business was expanded with additional acquisitions undertaken in the GPT Wholesale Offi ce Fund and the establishment of the GPT Wholesale Shopping Centre Fund in March 2007.

acquire workplace[6] , a development being undertaken by GPT in Sydney. The fund now owns a $3.1 billion portfolio of offi ce assets and delivered signifi cant outperformance for investors in 2007.

On 30 March 2007, GPT established the GPT Wholesale Shopping Centre Fund. The Fund, which was launched with a $1.9 billion portfolio of retail assets, was expanded in 2007 with the acquisition of the Berkelouw Complex in Sydney. At 31 December 2007, the Fund’s Portfolio had a value of $2.2 billion.)

European platform

the Company, with a highly scaleable platform in Europe to build both asset management and funds management opportunities:

(i) Acquisition of Halverton Real Estate Investment Management Limited

GPT Management Holdings Limited acquired 100% of the issued capital of Halverton Real Estate Investment Management Limited and its controlled entities (Halverton) for cash consideration of EUR€53,137,584 (AUD$84,928,868) in two separate tranches, as detailed below:

in June 2007, Halverton management, who own 50% of Halverton’s share capital, agreed to sell their shares to GPT UK Limited. The acquisition was completed on 10 July 2007. The purchase consideration for ordinary equity was EUR€32,621,700 (AUD$51,707,845) and an additional cash injection of EUR€5,000,000 (AUD$7,925,186), and
BGP (UK) Investments Limited owned the remaining 50% of Halverton shares. BGP (UK) Investments Limited was 50% owned by GPT International Pty Limited, a wholly owned entity of GPT. GPT UK Limited acquired the remaining 50% interest in BGP (UK) Investments Limited on 29 November 2007 for EUR€15,515,884 (AUD$25,295,837).

Halverton, which has been rebranded as GPT Halverton, is a pan European investment and asset management company employing 160 people and operating in the United Kingdom, France, The Netherlands, Germany, Sweden and Denmark. It has assets under management of over EUR€2.0 billion (AUD$3.3 billion).

(ii) Acquisition of Hamburg Trust

GPT acquired a further 20% interest in Hamburg Trust on 9 November 2007 bringing GPT’s ownership interest to 80%.

The Hamburg Trust is a start up German closed-end funds management business which employs 15 people and undertakes property, asset and investment management activities.

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DIRECTORS’ REPORT

FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

1. OPERATIONS AND ACTIVITIES (continued)

1.2 Review of Operations (continued)

(b) Property Management

The property management division made a loss of $2,083,367 (2006: $23,180,759). The 2006 and 2007 results were signifi cantly impacted by a $21,200,000 and $1,485,000 impairment of the consolidated entity’s management rights acquired for Highpoint Shopping Centre and Norton Street Plaza.

(c) Developments

On 18 December 2007, GPT Development Pty Limited entered into an agreement with a related party to sell the site known as workplace[6] and received a fi rst instalment by way of consideration. The agreement is conditional on GPT Development Pty Limited developing workplace[6] to practical completion, at which point the related party has been provided with a call option on the long term lease of the site at practical completion. The second instalment and associated costs of approximately $82,200,000 is conditional on GPT Development Pty Limited achieving practical completion. If practical completion is not achieved on the building, the deposit will be reimbursed.

(d) Capital Management

The Company introduced the Distribution Reinvestment Plan (DRP) in March 2007. The DRP fi rst applied to the March 2007 quarterly distribution, which was paid on 25 May 2007, and has subsequently been applied to the June and September quarterly distributions. The DRP will also apply to the December 2007 quarterly distribution.

The Company also entered into an underwriting agreement on 17 October 2007. Under this agreement, the Company has the option to elect before each quarterly distribution payment whether to have that distribution underwritten. The terms of this agreement provide that the underwriter fully underwrites distribution payments from October 2007 in exchange for GPT stapled securities of the securityholders who had not elected to participate in the DRP. The stapled securities are to be issued at the same price as securities issued under the DRP to other GPT securityholders.

Treasury policy

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DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

1. OPERATIONS AND ACTIVITIES (continued)

1.3 Dividends

The Directors have not declared any dividends for the fi nancial year (2006: nil).

fi nancial year.

1.5 Likely Developments and Expected Results of Operations

In the opinion of the Directors, disclosure of any further information would be likely to result in unreasonable prejudice to the Company.

1.6 Environmental Regulation

The Company has policies and procedures in place that are designed to ensure that where operations are subject to any particular and signifi cant environmental regulation under a law of Australia (for example property development and property management), those obligations are identifi ed and appropriate addressed. This includes obtaining and complying with conditions of relevant authority consents and approvals and obtaining necessary licences. The Company is not aware of any breaches of any environmental regulations under the laws of the Commonwealth of Australia or of a State or Territory of Australia and has not incurred any signifi cant liabilities under any such environmental legislation.

Assessment and Reporting Schedule within the legislative deadline of 31 December 2007. During 2008, the Company will undertake assessments for relevant sites across its Australian divisions of Retail, Offi ce and Hotel & Tourism.

1.7 Events Subsequent to Reporting Date

or may signifi cantly affect the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent fi nancial years.

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DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

2. DIRECTORS AND SECRETARY

2.1 Directors

(i) Chairman – Non-Executive Director

Peter Joseph

(ii) Non-Executive Directors

Eric Goodwin

Malcolm Latham Ian Martin Anne McDonald Ken Moss

Elizabeth Nosworthy

(iii) Executive Director

Nic Lyons

2.2 Information on Directors

Peter Joseph OAM – Chairman

Eric Goodwin

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GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

2. DIRECTORS AND SECRETARY (continued)

2.2 Information on Directors (continued)

Malcolm Latham AM

Mr Latham was appointed to the Board on 21 January 1992 and 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 Australia 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 chairs the Corporate Responsibility Committee and is a member of the Nomination and Remuneration Committee.

Ian Martin

Anne McDonald

Ms McDonald was appointed to the Board on 2 August 2006. Ms McDonald is currently a Non-Executive Director of Speciality Fashion Group Limited, Westpac’s Life and General Insurance companies, Health Super and Sisters of Charity Health Services. Ms McDonald is a chartered accountant and was previously a partner of Ernst & Young for fi fteen years specialising as a company auditor and advising multinational and Australian companies on transaction due diligence, risk management and accounting issues. Ms McDonald was a Board Member of Ernst & Young Australia for seven years and a previous Director of the Private Health Insurance Administration Council and St Vincent’s and Mater Health Sydney Limited. Ms McDonald is Chair of the Audit and Risk Management Committee.

Ken Moss

Elizabeth Nosworthy AO

Company Secretary – James Coyne

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GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

2. DIRECTORS AND SECRETARY (continued)

2.3 Attendance of Directors at Board Meetings and Board Committee meetings

number of those meetings attended by each Director is set out below:

	Board
	Meetings Held Meetings Attended
Peter Joseph Eric Goodwin Malcolm Latham Nic Lyons Ian Martin Anne McDonald Ken Moss Elizabeth Nosworthy	13 11 13 13 13 11 13 13 11 11 13 13 13 11 11 11

I. Martin and E. Nosworthy were not invited to two meetings of the Board pursuant to the Company’s policies with respect to confl ict.

2.4 Directors’ Relevant Interests

The relevant interests of each Director in GPT stapled securities as at the date of this Report are shown below:

	Number of GPT Stapled Securities
Peter Joseph	50,000
Eric Goodwin	11,775
Malcolm Latham	13,195
Nic Lyons	1,169,115
Ian Martin	51,241
Anne McDonald	10,500
Ken Moss	26,241
Elizabeth Nosworthy	6,537

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GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

2. DIRECTORS AND SECRETARY (continued)

2.5 Directors’ Directorships of Other Listed Companies

Director	Directorshipof Listed Entity	Period held
Peter Joseph	Dominion MiningLimited	1980 topresent
Eric Goodwin	Nil	N/A
Malcolm Latham	Nil	N/A
Nic Lyons	Nil	N/A
Ian Martin	Babcock & Brown Limited	2004 to present
	Argo Investments Limited	2004 topresent
Anne McDonald	SpecialityFashion GroupLimited	2007 topresent
Ken Moss	Macquarie Capital Alliance Group	2005 to present
	(comprising Macquarie Capital Alliance Limited,
	Macquarie Capital Alliance Management Limited and
	Macquarie Capital Alliance Bermuda Limited)
	Boral Limited	1999 to present
	Centennial Coal Company Limited	2000 to present
	National Australia Bank Limited	2000 to 2004
	Adsteam Marine Limited	2001 to 2007
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

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GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

3. REMUNERATION REPORT

remuneration arrangements that apply to Directors, key management personnel as defi ned in AASB 124 Related Party Disclosures and to the fi ve named executives as defi ned in section 300A of the Corporations Act 2001 (collectively ‘Senior Executives’).

3.1 The Nomination and Remuneration Committee

The GPT 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
remuneration policies and packages applicable to Board members.

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

Ian Martin (Chairman)
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)

3.2 Remuneration – Senior Executives

GPT’s Remuneration Philosophy

research of remuneration market practices and benchmarks in the countries in which GPT has employees
a mixture of both fi xed and variable or ‘at risk’ pay, with both short and long term incentive components driven off challenging fi nancial and non-fi nancial key performance indicators (KPIs)
a rigorous performance management system which clearly establishes GPT’s expectations of employees and the potential rewards of superior performance, and
the use of GPT stapled securities to create an ownership culture and create direct alignment of executive and securityholder interests.

GPT’s Remuneration Strategy

In designing GPT’s remuneration strategy and policies, the Board has sought to achieve an approach which:

is transparent
is fair and market competitive
objectives – including the achievement of superior returns for stapled securityholders
attracts, aligns, retains and motivates superior talent at all levels by adequately rewarding contribution to value creation and the execution of GPT’s business strategy.

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GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

Total Remuneration Package Composition

GPT aims to pay market competitive Total Remuneration packages comprising:

Base Salary (fi xed) – this is generally positioned around 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 signifi cant change in an employee’s responsibilities, for example, in the case of a promotion.
Short Term Incentives (STIs) (variable) – GPT provides opportunities for executives to receive short-term incentive awards on an annual basis. STI opportunities are expressed as a percentage of Base Salary and are determined by calendar year performance against agreed fi nancial and nonfi nancial (KPIs).
Long Term Incentives – (LTIs) (variable) – GPT executives may receive LTI awards if the GPT Group performance meets certain fi nancial KPIs measured over three years.

Individuals may receive Total Remuneration (i.e. Base salary plus STI plus LTI) in the top quartile of the market in a particular year only if various fi nancial and non-fi nancial KPIs are achieved.

Table A – Fixed and variable components of Total Remuneration

Senior Executives	Position	Base Salary (f xed)	Variable or “At Risk” STI	Remuneration1 LTI
Nic Lyons	Chief Executive Off cer	22.0%	35.0%	43.0%
Michael O’Brien	Chief OperatingOff cer	25.0%	37.5%	37.5%
Kieran Pryke	Chief Financial Off cer	34.0%	33.0%	33.0%
Neil Tobin	General Manager – Joint Venture	34.0%	33.0%	33.0%
Jonathan Johnstone	Head of Europe	31.0%	38.0%	31.0%
Mark Fookes	Head of Retail	34.0%	33.0%	33.0%
Nicholas Harris	Head of Wholesale	29.0%	42.0%	29.0%
James Coyne	General Counsel/Secretary	38.0%	31.0%	31.0%

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

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GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

GPT’s Performance Management System and Short Term Incentives (STI) (variable component)

A uniform performance management system is used across the GPT Group which provides all employees with clear fi nancial and personal performance objectives and drives STIs on an annual basis.

Although the performance criteria may be different for each executive, the principles are similar and involve assessment of performance across the following areas:

fi nancial (in relation to GPT Group fi nancial performance, GPT Group Corporate Responsibility objectives*, and the individual’s fund/portfolio/business unit) – achievement of earnings, return on equity and other relevant fi nancial targets
strategic outcomes, operational improvement, performance enhancement and personal and 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 may remove eligibility for STIs.

to infl uence particular outcomes of GPT’s objectives as well as the executive’s seniority and accountability.

STI awards may be received in a number of ways:

cash

Table D shows the STI award payable to the key management personnel in March 2008 in relation to their performance for the fi nancial year ended 31 December 2007.

Long Term Incentives (LTI) (variable component)

Following approval at the Annual General Meeting on 18 April 2006, the Board implemented a LTI scheme for Senior Executives.

The LTI scheme is designed to:

provide Senior Executives with a long-term incentive to create value for stapled 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
attract, align, retain and motivate key executives.

Prior to 1 July 2006, stapled securities listed on the Australian Securities Exchange such as those issued by GPT were not included under the defi nition of ordinary securities eligible for the tax deferral and tax exemption concessions in Division 13A of the Income Tax Assessment Act 1936 . As a result, loan based schemes were considered best practice and particularly relevant in the Listed Property Trust sector where the regular distributions were used in the scheme design to pay down the loan.

allocated to Corporate Responsibility objectives and performance.

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GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

Long Term Incentives (LTI) (variable component) (continued)

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

2006 and 2007 LTI Performance Conditions

** At the discretion of the Board, the loan and outstanding interest on the loan may be waived on retirement of the employee, on death or total permanent disability of the employee, on redundancy without cause of the employee or on takeover of GPT.

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GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

Long Term Incentives (LTI) (variable component) (continued)

Table B – LTI Performance Conditions

Table B – LTI Performance Conditions	Table B – LTI Performance Conditions
LTI Performance Measurement Period Performance Condition Performance Condition Hurdle Weighting GPT Group Performance as at 31 December 2007 % of Maximum LTI Award Accrued per Executive2
2006 LTI Scheme
2006–2008	Growth in Earnings per GPT stapled security will be measured as the percentage increase in earnings per GPT stapled security. EPS is the base earnings per security adjusted for signif cant items and other items determined by the Board and as disclosed in GPT’s Income Statement for the f nancial years ended 31 December 2006, 2007 and 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-rated awards will occur up to a stretch outcome of 7.5%.1 50% 9.75% 80% Return on contributed equity measures the total return on equity employed and takes into account both capital appreciation of the assets of GPT 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-rated awards will occur up to a stretch outcome of 12.5%. 30% 22% Performance relative to Listed Property Trust Index (LPT Index). 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-rated awards will occur up to the stretch outcome of 2% outperformance. The Board may substitute another Index if there is a material change in the composition of the LPT Index during the measurementperiod. 20% -2.3%3

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DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

Long Term Incentives (LTI) (variable component) (continued)

Table B – LTI Performance Conditions (continued)

Table B – LTI Performance Conditions(continued)	Table B – LTI Performance Conditions(continued)
LTI Performance Measurement Period Performance Condition Performance Condition Hurdle Weighting GPT Group Performance as at 31 December 2007 % of Maximum LTI Award Accrued per Executive2
2007 LTI Scheme
2007–2009	Growth in Earnings per GPT stapled security will be measured as the percentage increase in earnings per GPT stapled security. EPS is the base earnings per security adjusted for signif cant items and other items determined by the Board and as disclosed in GPT’s Income Statement for the f nancial years ended 31 December 2007, 2008 and 2009. If EPS growth is below 4% on average over the three year period, no part of LTI available for this performance measure will be awarded. If EPS growth is above 4%, pro-rated awards will occur up to a stretch outcome of 6%. 50% 7% 80% Return on contributed equity measures the total return on equity employed and takes into account both capital appreciation of the assets of GPT 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-rated awards will occur up to a stretch outcome of 12.5%. 30% 17.8% Performance relative to Listed Property Trust Index (LPT Index). 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-rated 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 measurementperiod. 20% -15%3

1 This performance hurdle recognised the one off uplift averaged over three years in Growth in Earnings per GPT stapled security embedded in the internalisation proposal.

2 As an example, under the 2006 LTI Scheme Nic Lyon’s maximum LTI award potential is $1,297,500. Based on GPT’s performance against the 2006 LTI Scheme Performance Condition Hurdles as at 31 December 2007, the Percentage of Maximum LTI Award Accrued per Executive was 80%, a potential award of $1,038,000 at the end of the scheme. This potential award is then divided by three to match the three year life of the scheme under accrual accounting to result in an LTI award accrual of $346,000. A similar process is followed to determine the amount that should be accrued for the 2007 LTI Scheme, and the fi gures combined for the 31 December 2007 LTI Award Accrual in Table D. It should be noted that the dollar amounts specifi ed are accruals only and no LTI award will be made under the 2006 or 2007 LTI Schemes if the performance hurdles specifi ed above are not met or exceeded at the end of the 2006–2008 and 2007–2009 periods respectively.

3 Based on a rolling three year average.

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GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

Long Term Incentives (LTI) (variable component) (continued)

Set out below are details of the operation of the LTI scheme in 2006 and 2007 for Senior Executives:

Table C – 2007 and 2006 LTIs for Senior Executives

Table C – 2007 and 2006 LTIs for Senior Executives
Senior Executives LTI Scheme Loans granted under LTI scheme GPT stapled security purchase price Number of securities acquired under LTI scheme Total net distributions applied to loans since issued	Closing loan balance GPT stapled security price at Total net value of employee equityat1 LTI Scheme award accrual2 Total accumulated interest costs as at3
	31 Dec 2007 31 Dec 2007 31 Dec 2007 31 Dec 2007 31 Dec 2007
N. Lyons 2007 2,223,997 5.11 434,999 207,592 Chief Executive Off cer 2006 2,874,997 4.20 684,116	4,891,401 4.04 (370,177) 864,833 325,084 432,500
M. O’Brien 2007 1,301,977 5.11 254,658 95,114 Chief Operating Off cer 2006 1,233,333 4.20 293,476	2,440,195 4.04 (225,734) 391,000 151,926 185,000
K. Pryke 2007 403,235 5.11 78,870 69,018 Chief Financial Off cer 2006 1,055,554 4.20 251,173	1,389,771 4.04 (56,397) 255,001 104,542 158,333
N. Tobin 2007 570,689 5.11 111,623 65,409 General Manager Joint Venture 2006 944,444 4.20 224,734	1,449,724 4.04 (90,842) 251,666 101,060 141,667
J. Johnstone4 2007 218,453 5.11 42,728 48,180 Head of Europe	925,828 4.04 (26,867) 174,668 72,315
M. Fookes 2007 484,347 5.11 94,735 69,126 Head of Retail 2006 1,033,331 4.20 245,885	1,448,552 4.04 (72,447) 259,667 105,552 155,000
N. Harris 2007 256,742 5.11 50,217 43,268 Head of Wholesale 2006 888,887 4.66* 190,627	1,102,360 4.04 (129,351) 206,668 74,431 133,333
J. Coyne 2007 209,302 5.11 40,938 37,058 General Counsel/ Secretary 2006 568,888 4.20 135,369	741,132 4.04 (28,852) 136,534 56,055 85,333
B. Morris5 Hotels PM 2006 877,221 4.20 208,738 16,751	– – – – –
Total 15,145,397 3,342,886 651,516	14,388,963 (1,000,667) 3,831,203 990,965

1 Net value of employee equity at 31 December 2007 is determined by deducting the loan balance as at 31 December 2007 from the value of the securities held at the prevailing security price on that date of $4.04.
2 Table B outlines GPT’s performance against the performance conditions of the 2007 and 2006 LTI Schemes and the resulting actual dollar amount of the LTI award accrual by Senior Executive.
3 Under the LTI Scheme rules, the interest is accumulated and applied to the loan balance at the time an LTI award is payable. If the LTI award is insuffi cient to cover the interest cost in whole or in part, then the unpaid interest is added to the loan balance. The total accumulated interest costs as at 31 December 2007 is the sum of accumulated interest on the loans since commencement of the LTI scheme, which is 2006 and 2007.
4 J. Johnstone is part of the key management personnel in 2007.

5 B. Morris is not part of the key management personnel for 2007.

N. Harris commenced with GPT on 25 July 2006 and the GPT stapled securities allocated to him in the 2006 LTI Scheme were purchased later in 2006 than those obtained in the initial tranche and at the prevailing market price at the time.

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GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

3. REMUNERATION REPORT (continued)

3.2 Remuneration – Senior Executives (continued)

GPT’s Employee Incentive Scheme

Following approval at the Annual General Meeting on 18 April 2006, the Board implemented the GPT Employee Incentive Scheme which operates at two levels:

an LTI Scheme for certain Senior Executives – discussed at page 174; and
a General Scheme for all employees (other than Senior Executives who receive a Long Term Incentive).

Regulatory changes in 2007

its design. However, amendments to the taxation legislation effective 1 July 2006 now mean that stapled securities listed on the Australian Securities Exchange such as those issued by GPT are included under the defi nition of ordinary securities in the Income Tax Assessment Act 1936 and are eligible for the tax deferral and tax exemption concessions in Division 13A. Prior to 1 July 2006, these concessions only applied to ordinary securities and not to stapled securities.

GPT’s All Employee Stapled Security Plan (AESSP) – GPT is introducing an AESSP in March 2008. The AESSP is a tax exempt plan under which employees can salary sacrifi ce $1,000 per annum to purchase GPT stapled securities. GPT stapled securities acquired under the AESSP must be held for a minimum of three years (or earlier if employment ceases) during which time they cannot be sold or otherwise dealt with.
Initial advice has been obtained on market best practice in relation to the existing loan based LTI.
Initial advice has been obtained on the deployment of tax deferred GPT stapled security purchase schemes that would allow employees and Non-Executive Directors to further build their ownership position within GPT by way of salary sacrifi ce.

Other Awards

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3. REMUNERATION REPORT (continued)

3.3 Details of Remuneration – Senior Executives

comparative year is as follows:

Table D – Senior Executives’ Remuneration

Senior Executives	Short term employee benef ts	Short term employee benef ts	Short term employee benef ts	Short term employee benef ts	Post employment	Post employment	Other long term benef ts	Other long term benef ts	Total
	Salary & Fees	STI Bonus1	STI Adjust Bonus2	Non- monetary3	Super- annuation	Retirement Benef ts	LTI Award Accrual4	Retention5
N. Lyons Chief Executive Off cer 31 December 2007 31 December 2006	1,143,809 835,390	808,160 692,000	– 270,156	1,749 3,696	12,908 41,366	– –	864,833 432,500	297,172 675,392	3,128,631 2,950,500
M. O’Brien Chief Operating Off cer 31 December 2007 31 December 2006	724,439 540,741	465,847 277,500	– 126,131	1,839 1,921	12,908 12,413	– –	391,000 185,000	221,922 504,527	1,817,955 1,648,233
K. Pryke Chief Financial Off cer 31 December 2007 31 December 2006	648,295 462,404	272,381 237,500	– 103,011	1,749 9,804	12,908 12,413	– –	255,001 158,333	181,299 412,044	1,371,633 1,395,509
N. Tobin General Manager – Joint Venture 31 December 2007 31 December 2006	698,251 410,511	269,350 212,500	– 90,072	1,749 2,624	12,908 12,413	– –	251,666 141,667	176,142 400,324	1,410,066 1,270,111
J. Johnstone6 Head of Europe 31 December 2007 31 December 2006	943,791 –	228,588 –	– –	2,000 –	12,908 –	– –	174,668 –	– –	1,361,955 –
M. Fookes Head of Retail 31 December 2007 31 December 2006	692,528 448,078	378,332 232,500	– 78,934	1,749 3,259	12,908 40,833	– –	259,667 155,000	188,942 429,416	1,534,126 1,388,020
N. Harris Head of Wholesale 31 December 2007 31 December 2006	486,151 168,829	477,433 131,520	– –	1,504 483	12,908 5,286	– –	206,668 133,333	– –	1,184,664 439,451
J. Coyne General Counsel/ Secretary 31 December 2007 31 December 2006	408,050 304,518	145,960 128,000	– 45,937	2,087 1,891	12,908 12,413	– –	136,534 85,333	134,750 306,250	840,289 884,342
B. Morris7 PM, Hotels 31 December 2007 31 December 2006	– 378,276	– 197,375	– 76,657	– 26,090	– 12,413	– –	– 131,583	– 383,289	– 1,205,683
Total 31 December 2007 31 December 2006	5,745,314 3,548,747	3,046,051 2,108,895	– 790,898	14,426 49,768	103,264 149,550	– –	2,540,037 1,422,749	1,200,227 3,111,242	12,649,319 11,181,849

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DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

3. REMUNERATION REPORT (continued)

3.3 Details of Remuneration – Senior Executives (continued)

1 The STI Bonus amounts relate to STI attributable to performance in a particular calendar year. In the 2006 Annual Report, this amount was disclosed as STI Bonus Accrued as the fi nal amounts had not been calculated.
were in relation to performance for the six months ended 31 December 2005. GPT has historically disclosed STI for the year preceding the annual report period, however in 2006 a decision was taken to adopt the practice of reporting on STI for the current calendar year. As a result, there is a one off impact in the above table where the STI disclosed for 2006 represents eighteen months of STI (i.e. both the STI Bonus and STI Adjust Bonus amounts) for the period 1 July 2005 to 31 December 2006.
3 The amount set out under Non-monetary may include administration fees associated with membership of the GPT Group Superannuation Plan, Death & Total/Permanent Disability Insurance Premiums, and/or the taxable value of the benefi t of discounted staff rates at Voyages Hotels & Resorts.
4 The LTI Award Accrual for calendar 2007 is a substantial increase on 2006 as it now includes gross award accruals under both the 2006 and 2007 LTI Schemes which operate concurrently. While GPT’s performance against the LTI scheme performance conditions is the driver for the accrual, no award is made to Executives unless performance conditions are met or exceeded at the end of the three year period, with the fi rst such occasion at the end of calendar year 2008. It should be noted that participating executives incur an interest liability by participating in the LTI scheme which is either deducted from the gross award or, if the gross award does not cover the interest costs, capitalised onto the Executive’s loan. For example, while N. Lyons 2007 LTI award accrual is $864,833 he has also accumulated interest costs on his full recourse loan of $325,084 which must be deducted from any potential award. A better refl ection of his overall total remuneration position would be to deduct the accumulated interest from the LTI award accrual and hence reduce his total compensation by $325,084 to $2,803,547.
5 The amount set out in “Other Long Term Benefi ts - Retention” represents an accrual for part of the retention award that became payable on 30 June 2007. The total amounts payable in respect of this retention award were 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 and J. Coyne $612,500.
the United Kingdom, including rental accommodation, school fees, cost of living adjustments and relocation costs. J. Johnstone was not part of the key management personnel prior to 2007.
7 B. Morris is not part of the key management personnel in 2007.

Service Agreements

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

Notice periods of one month apply to all these service agreements. No notice provisions apply where termination occurs as a result of misconduct or serious or persistent breach of the agreement.

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THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

3. REMUNERATION REPORT (continued)

3.3 Details of Remuneration – Senior Executives (continued)

Service Agreements (continued)

	N. Lyons	M. O’Brien	K. Pryke	N. Tobin	J. Johnstone	M. Fookes	N. Harris	J. Coyne
Date of agreement	1 June 2005	1 June 2005	1 June 2005	1 June 2005	16 June 2005	1 June 2005	25 July2006	1 June 2005
Term of agreement	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended	Open-ended
Non-solicitation of	12 months	12 months	12 months	12 months	12 months	12 months	12 months	12 months
otherpersonnel
Retention payable	Yes*	Yes*	Yes*	Yes*	Not	Yes*	Not	Yes*
– June 2007					applicable		applicable
Termination notice	1 Month	1 Month	1 Month	1 Month	1 Month	1 Month	1 Month	1 Month

Refer to Table D.

3.4 Remuneration – Non-Executive Directors

GPT Policy

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

Non-Executive Directors are paid one director fee for participation as a Director in all GPT related companies (principally GPT RE Limited, the Responsible Entity of 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 Director remuneration is set by reference to comparable entities listed on the Australian Securities 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.

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THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

3. REMUNERATION REPORT (continued)

3.4 Remuneration – Non-Executive Directors (continued)

GPT Policy (continued)

responsibility, but does not receive Committee fees.

		Board	Audit and Risk	Nomination and	Corporate Responsibility
			Management Committee	Remuneration Committee	Committee
Chairman	2007	$315,000	$31,500	$21,000	$21,000
	2006	$300,000	$30,000	$20,000	–
Members	2007	$126,000	$15,750	$10,500	$10,500
	2006	$120,000	$15,000	$10,000	–

In addition to the above fees, all Non-Executive Directors receive reimbursement for reasonable travel, accommodation and other expenses incurred whilst undertaking GPT business.

183

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

3. REMUNERATION REPORT (continued)

3.4 Remuneration – Non-Executive Directors (continued)

year are as follows:

Table E – Non-Executive Directors’ Remuneration

Directors	Short term employee benef t	Short term employee benef t	Short term employee benef t	Short term employee benef t	Post employment	Post employment	Other long term benef ts	Other long term benef ts	Total
	Salary & Fees1	STI Bonus	STI Bonus Accrued	Non- Monetary2	Super- annuation3	Retirement Benef ts	LTI Award Accrual4	Retention5
P. Joseph Chairman 31 December 2007 31 December 2006	315,000 300,000	– –	– –	– –	12,911 12,413	– –	– –	– –	327,911 312,413
E. Goodwin 31 December 2007 31 December 2006	149,625 63,500	– –	– –	– –	12,908 83,640	– –	– –	– –	162,533 147,140
M. Latham 31 December 2007 31 December 2006	152,250 130,000	– –	– –	2,222 –	12,807 11,685	– –	– –	– –	167,279 141,685
I. Martin 31 December 2007 31 December 2006	147,000 140,000	– –	– –	– –	12,908 17,940	– –	– –	– –	159,908 157,940
A. McDonald4 31 December 2007 31 December 2006	153,562 56,250	– –	– –	1,277 1,712	12,908 5,063	– –	– –	– –	167,747 63,025
K. Moss 31 December 2007 31 December 2006	145,688 150,000	– –	– –	– –	12,899 12,413	– –	– –	– –	158,587 162,413
B. Norris5 31 December 2007 31 December 2006	– 90,000	– –	– –	– –	– 8,092	– –	– –	– –	– 98,092
E. Nosworthy 31 December 2007 31 December 2006	137,818 135,000	– –	– –	1,252 3,816	12,545 12,136	– –	– –	– –	151,615 150,952
Total 31 December 2007 31 December 2006	1,200,943 1,064,750	– –	– –	4,751 5,528	89,886 163,382	– –	– –	– –	1,295,580 1,233,660

3 In 2007, refers to compulsory SGC superannuation only.

4 A. McDonald was appointed on 2 August 2006.

5 B. Norris retired on 31 August 2006.

184

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

4. OTHER DISCLOSURES

The GPT Group 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 offi cer of another entity at the request of the Company. The Deed indemnifi es these persons on a full indemnity basis to the extent permitted by law for losses, liabilities, costs and charges incurred as a Director or Offi cer of the Company, its subsidiaries or such other entities.

proceedings that may be brought against directors and offi cers in their capacity as Directors and Offi cers of the Company, its subsidiary companies or such other entities, and other payments arising from liabilities incurred by the Directors and Offi cers in connection with such proceedings. The Auditors are in no way indemnifi ed out of the assets of the Company.

subsidiary companies. The terms of the contract prohibit the disclosure of the premiums paid.

4.2 Proceedings on behalf of the Trust

No person has applied to the Court under section 237 of the 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 those 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 .

185

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

4. OTHER DISCLOSURES (continued)

4.3 Non-Audit Services

During the year PricewaterhouseCoopers, the Company’s auditor, has performed certain other services in addition to their statutory duties. Details of the amount paid to the auditor, which includes amounts paid for non-audit and other assurance services, are set out in note 8 to the fi nancial statements.

the Audit & Risk Management Committee reviewed the non-audit services and other assurance 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 Management Committee, having regard to the Board’s policy with respect to the engagement of GPT’s auditor
the characteristics of management, decision-making, self-review, advocacy or joint sharing of risks.

4.4 Rounding of Amounts

The Company is of a kind referred to in the Australian Securities & Investments Commission Class Order 98/0100. Accordingly, amounts in the Directors’ Report have been rounded to the nearest thousand dollars in accordance with the Class Order, unless stated otherwise.

4.5 Auditor

Corporations Act 2001 .

4.6 Auditor’s independence declaration

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

Signed in accordance with a resolution of the Directors.

==> picture [89 x 63] intentionally omitted <==

Peter Joseph Chairman Sydney 26 February 2008

Nic Lyons Executive Director

186

THE GPT GROUP ANNUAL REPORT 2007

AUDITOR’S INDEPENDENCE DECLARATION FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

==> picture [442 x 418] intentionally omitted <==

==> picture [442 x 32] intentionally omitted <==

187

THE GPT GROUP ANNUAL REPORT 2007

MANAGEMENT DISCUSSION AND ANALYSIS

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

The following commentary is to assist the shareholders in reviewing and interpreting the results of the Company for the year ended 31 December 2007, however, as the Company and its controlled entities (the consolidated entity) forms part of the stapled entity, the balance sheet and income statement for the fi nancial year ended 31 December 2007 should be read in conjunction with the fi nancial statements of the GPT Group.

Balance Sheet

As at 31 December 2007, total assets were $1,400,405,000, total liabilities were $1,074,246,000 and net assets were $326,159,000. The increase in net assets of $20,799,000 from 31 December 2006 is primarily as a result of the acquisition of Halverton Real Estate Investment Management Limited (Halverton), Hamburg Trust Grundvermogen und Anlage GmbH and its controlled entities (Hamburg Trust), H20 Fund and GPT Residential (Rouse Hill) Trust. For further details refer to note 7.

Loans and Receivables – current loans and receivables increased primarily due to $80,022,000 of proceeds receivable from the sale of the Dutch Active Fund Propco BV, a fund which the Company established and subsequently sold 62% to third party investors by 31 December 2007. Non-current loans and receivables increased with a $56,580,000 loan to Babcock & Brown Residential Operating Partnership LE (a receivable arising from the Hamburg Trust) and a loan of $37,143,000 to Lend Lease GPT (Rouse Hill) Pty Limited, as a result of the Company’s acquisition of GPT Residential (Rouse Hill) Trust.
Inventories – increased mainly due to $397,288,000 of warehoused property investments arising from the Company’s investment in a European funds management platform. It is expected that these investments will be realised in the near term through the creation of further managed real estate funds
Derivative assets and derivative liabilities – increased as a direct result of the funding of the acquisition of Halverton.
Equity accounted investments – increased by new investments in associates in the Dutch Active Fund Propco BV for $49,043,000, an investment owned 38% and in Lend Lease GPT (Rouse Hill) Pty Limited for $11,912,000, an investment owned 25%. The Company also increased its investment by $54,591,000 in its joint venture arrangements with Babcock & Brown. Refer to note 5 for further details.
Intangibles – increased due to goodwill of $121,000,000 arising from the acquisition of Halverton and Hamburg Trust. The directors have considered the value of goodwill in respect of the businesses and are satisfi ed that it is appropriate to carry such an asset
Borrowings – current borrowings increased by $612,170,000 from the borrowings held by Halverton and Hamburg Trust largely in respect of the warehoused property investments
Payables – increased due to a $106,465,000 deposit received as consideration under an agreement between the Company and a related party to sell the site known as workplace[6] . The agreement is conditional on the Company developing workplace[6] to practical completion, at which point the related party has been provided with a call option on the long term lease of the site at practical completion. The second instalment and associated costs of approximately $82,200,000, which has not been included in the balance sheet, is conditional on achieving practical completion. If practical completion is not achieved on the building, the deposit will be reimbursed. Subsequent to balance date the company announced that all commercial space in this development had been leased.

188

THE GPT GROUP ANNUAL REPORT 2007

MANAGEMENT DISCUSSION AND ANALYSIS

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

Income Statement

The material aspects of the actual net profi t/(loss) result were:

revenue from property investments of $19,804,000 increased as a result of the acquisitions of Halverton and Hamburg Trust during the fi nancial year
fund management fees increased from a growth in assets under management from:
GPT Wholesale Shopping Centre Fund, a fund which was launched in Australia in March 2007; and
Halverton in Europe, a group of entities which was acquired by the Company.
In addition performance fees were earned based on the investment performance of GWOF and GWSCF for their investors
professional fees and remuneration expenses increased predominantly attributable to the acquisition of Halverton, Hamburg Trust and the H20 Fund. Finance costs on borrowings increased by $31,206,000 from the borrowings held by Halverton and Hamburg Trust.

affairs of the Company, including the expenses of the new entities acquired during the fi nancial year.

Net cash outfl ow from investing activities was an outfl ow of $678,959,000 relating mainly to:

the payment for the acquired entities as detailed in note 7 for $56,003,000; and
the deposit of $106,465,000 received under an agreement to sell the site known as workplace[6] .

Net cash outfl ow from fi nancing activities was an outfl ow of $650,564,000 relating to proceeds from external borrowings held in Halverton and Hamburg Trust of $333,928,000 and proceeds from higher related party borrowings which have been used to fi nance acquisitions and certain operating activities of the offshore entities in the Company.

189

THE GPT GROUP ANNUAL REPORT 2007

INCOME STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

Note Revenue Revenue from hotel operations Revenue from property investments Fund management fees Property management fees Development management fees Other income Share of after tax prof ts of equity accounted investments Management costs recharged Interest income Dividend income Net gain on disposal of assets Net gain on fair value of derivatives Other Total revenue and other income Expenses Remuneration expenses Rental expense attributable to hotel operations Cost of sales attributable to hotel operations Property rent and outgoings Repairs and maintenance Professional fees Advertising and promotion Depreciation and amortisation expense Impairment expense Finance costs Net foreign currency exchange loss Costs associated with internalisation/merger proposal Other expenses Prof t/(loss) before income tax expense Income tax expense Net prof t/(loss) for the f nancial year Net prof t attributable to: – Members of the Company – External minority interest Earnings per share (cents per share) Basic and diluted earnings per share attributable to the ordinary equity holders of the Company 4	Consolidated entity Parent entity
	31 Dec 2007 $’000 31 Dec 2006 $’000 31 Dec 2007 $’000 31 Dec 2006 $’000
	220,280 226,599 – – 19,804 – – – 68,272 32,231 21,194 14,266 31,815 15,392 – – 17,931 14,075 – –
	358,102 288,297 21,194 14,266
	13,014 63,526 – – 9,564 6,719 55,694 36,907 4,699 4,911 2,605 3,918 430 – 3,369 16,119 285 – – – 1,024 – – – 3,152 3,180 – 3,180
	32,168 78,336 61,668 60,124
	390,270 366,633 82,862 74,390
	172,613 133,458 76,949 47,992 61,405 60,293 – – 41,523 39,629 – – 36,978 39,811 749 816 9,552 11,605 (64) 1,354 19,824 6,224 1,599 2,923 6,391 5,789 – – 7,146 4,835 1,352 521 1,485 31,685 (3,009) 8,848 34,442 3,236 8,778 582 2,923 – 120 – 285 797 285 797 9,848 7,675 2,944 1,836
	404,415 345,037 89,703 65,669
	(14,145) 21,596 (6,841) 8,721
	(7,075) (159) (7,706) (2,886)
	(21,220) 21,437 (14,547) 5,835
	(19,222) 21,437 – – (1,998) – – – (0.01) 0.01 – –

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

190

THE GPT GROUP ANNUAL REPORT 2007

BALANCE SHEETS AS AT 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

Note ASSETS Current Assets Cash and cash equivalents Loans and receivables Inventories Derivative assets Prepayments Total Current Assets Non-Current Assets Equity accounted investments 5 Loans and receivables Other assets Property, plant & equipment Intangible assets Deferred tax assets Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Payables Derivative liabilities Provisions Borrowings Total Current Liabilities Non-Current Liabilities Provisions Deferred tax liabilites Borrowings Total Non-Current Liabilities Total Liabilities Net Assets EQUITY Equity attributable to members of the Company (parent entity) Contributed equity Reserves Retained prof ts/(accumulated losses) 6 Total equity of Company members Equity attributable to minority interests – external Contributed equity Reserves Retained prof ts/(accumulated losses) 6 Total equity of minority interests – external Total Equity	Consolidated entity Parent entity
	31 Dec 2007 $’000 31 Dec 2006 $’000 31 Dec 2007 $’000 31 Dec 2006 $’000
	47,875 24,354 4,986 3,320 157,486 45,621 13,797 111,675 404,441 7,290 – – 1,552 – – – 5,287 6,207 767 1,531
	616,641 83,472 19,550 116,526
	405,635 293,696 – – 130,395 24,638 35,011 22,604 9,368 5,337 353,580 203,151 78,777 45,105 6,230 3,022 146,390 27,028 – – 13,199 9,332 8,031 5,382
	783,764 405,136 402,852 234,159
	1,400,405 488,608 422,402 350,685
	289,662 120,768 44,734 67,613 497 – – – 20,425 9,658 16,024 7,330 612,170 – – –
	922,754 130,426 60,758 74,943
	4,636 4,107 3,664 3,037 – 715 – – 146,856 48,000 89,271 –
	151,492 52,822 92,935 3,037
	1,074,246 183,248 153,693 77,980
	326,159 305,360 268,709 272,705
	317,576 306,995 317,576 306,995 9,456 (835) (163) (133) (20,022) (800) (48,704) (34,157)
	307,010 305,360 268,709 272,705
	– – – – 12 – – – 19,137 – – –
	19,149 – – –
	326,159 305,360 268,709 272,705

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

191

THE GPT GROUP ANNUAL REPORT 2007

STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

ers	Total Equity $’000	268,218 –	–	–	–	4,487 – – –	272,705	272,705 – –	–	(14,547)	(14,547)	10,581 (36) 6 – –	268,709
pany memb	Retained earnings $’000	(34,157) –	–	–	–	– – – –	(34,157)	(34,157) – –	–	(14,547)	(14,547)	– – – – –	(48,704)
utable to Com	Reserves $’000	(133) –	–	–	–	– – – –	(133)	(133) – –	–	–	–	– (36) 6 – –	(163)
Attrib	Contributed Equity $’000	302,508 –	–	–	–	4,487 – – –	306,995	306,995 – –	–	–	–	10,581 – – – –	317,576
Total equity $’000		282,645 (1,629)	(1,629)	21,437	19,808	4,487 (1,623) 43 –	305,360	305,360 (2,603) 11,489	8,886	(21,220)	(12,334)	10,581 1,411 6 21,135 –	326,159
xternal	Total $’000	– –	–	–	–	– – – –	–	– 12 –	12	(1,998)	(1,986)	– – – 21,135 –	19,149
yinterests – e	Retained earnings $’000	– –	–	–	–	– – – –	–	– – –	–	(1,998)	(1,998)	– – – 21,135 –	19,137
ers Attributable to minorit Total $’000 Contributed Equity $’000 Reserves $’000 282,645 – – (1,629) – – (1,629) – – 21,437 – – 19,808 – – 4,487 – – (1,623) – – 43 – – – – – 305,360 – – 305,360 – – (2,615) – 12 11,489 – – 8,874 – 12 (19,222) – – (10,348) – 12 10,581 – – 1,411 – – 6 – – – – – – – – 307,010 – 12								– 12 –	12	–	12	– – – – –	12
								– – –	–	–	–	– – – – –	–
								305,360 (2,615) 11,489	8,874	(19,222)	(10,348)	10,581 1,411 6 – –	307,010
pany memb	Retained earnings $’000	(22,237) –	–	21,437	21,437	– – – –	(800)	(800) – –	–	(19,222)	(19,222)	– – – – –	(20,022)
utable to Com	Reserves $’000	2,374 (1,629)	(1,629)	–	(1,629)	– (1,623) 43 –	(835)	(835) (2,615) 11,489	8,874	–	8,874	– 1,411 6 – –	9,456
								306,995 – –	–	–	–	10,581 – – – –	317,576

192

THE GPT GROUP ANNUAL REPORT 2007

CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

	Consolidated entity Parent entity
	31 Dec 2007 $’000 31 Dec 2006 $’000 31 Dec 2007 $’000 31 Dec 2006 $’000
Cash f ows from operating activities Cash receipts in the course of operations (inclusive of GST) Cash payments in the course of operations (inclusive of GST) Dividends received Income tax paid Interest received Finance costs Net cash inf ows/(outf ows) from operating activities Cash f ows from investing activities Proceeds from the sale of property, plant and equipment Deposit received for property, plant and equipment Investment in controlled entities Payment for purchase of subsidiary, net of cash acquired Investment in joint ventures and associates Payment for investments Payments for intangibles Payments for inventories Payments for property, plant and equipment Net cash outf ows from investing activities Cash f ows from f nancing activities Proceeds from the issue of shares Payment of employee incentive scheme loans, net of distributions Proceeds from related party borrowings Proceeds from external borrowings Net cash inf ows from f nancing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the f nancial year Cash and cash equivalents at the end of the f nancial year	374,784 281,082 87,785 54,354 (336,368) (282,909) (97,475) (31,673) 47,464 – 46,870 – (2,206) (3,207) (2,883) (3,901) 2,670 4,718 572 3,918
	86,344 (316) 34,869 22,698 (34,428) – – –
	51,916 (316) 34,869 22,698
	592 – – – 106,465 – – – – – (149,008) (67,520) (56,003) – – – (54,685) (66,826) – – – (1,079) – (1,079) (3,000) (51,200) – – (612,022) – – – (60,306) (7,784) (4,560) (1,243)
	(678,959) (126,889) (153,568) (69,842)
	10,581 4,487 10,581 4,487 (13,582) (29,221) (13,677) (27,222) 319,637 142,301 123,461 58,388 333,928 – – –
	650,564 117,567 120,365 35,653
	23,521 (9,638) 1,666 (11,491)
	24,354 33,992 3,320 14,811
	47,875 24,354 4,986 3,320

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

193

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

01. Basis of Preparation of Concise Financial Report

Preparation of Concise Financial Report

The Concise Financial Report has been prepared in accordance with the Corporations Act 2001 and Accounting Standard AASB 1039 Concise Financial Reports . The concise fi nancial report and specifi c disclosures required by AASB 1039 have been derived from the Company’s Full Financial Report for the fi nancial year. Information included in the Concise Financial Report is consistent with the Company’s Full Financial Report, and is presented in Australian dollars. A full description of the accounting policies adopted by the consolidated entity is provided in the 2007 fi nancial statements which form part of the Full Financial Report. The Concise Financial Report does not, and cannot be expected to, provide as full an understanding of the fi nancial performance, fi nancial position and fi nancing and investing activities of the Company as the Full Financial Report.

The Company’s accounting policies have been consistently applied to all periods presented in the Concise Financial Report.

02. Segment reporting

Business Segments description

Funds Management – segment includes asset and funds management in Australia by GPT Funds Management Limited, the Responsible Entity for the Company’s wholesale fund business – GPT Wholesale Shopping Centre Fund and GPT Wholesale Offi ce Fund and asset and funds management in Europe through GPT Halverton and Hamburg Trust (refer to note 7(a) and (b) respectively). GPT Wholesale Offi ce Fund was the only fund established at 31 December 2006.

Property Management – segment includes property management of Australian retail assets including the retail assets in the GPT Wholesale Shopping Centre Fund.

Hotel & Tourism – segment includes nature-based resorts and hotel assets.

Joint Venture – segment includes investments in the Babcock & Brown joint venture which is invested in shopping centres and retail formats, llight industrial assets, residential assets and offi ce assets in Europe, the United States of America, New Zealand and Australia.

Seniors Housing – segment includes investments in a portfolio of established seniors housing assets in the United States of America as well as an interest in the manager of these assets. 2007 is the fi rst year of revenue.

Corporate – segment includes costs associated with the funds management of the General Property Trust, foreign exchange gains and losses, fi nance costs and Company operating costs.

194

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

02. Segment reporting (continued)

Primary reporting format – business segments

The Company which forms part of the GPT Group is organised into the following activities by business segment:

Income statement – 31 December 2007

Revenue Revenue from hotel operations Revenue from property investments Fund management fees Property management fees Development management fees Other income Share of after tax prof ts/(losses) of equity accounted investments Management costs recharged Interest income Dividend income Net gain on disposal of assets Net gain on fair value of derivatives Other Total segment revenue Remuneration expenses Rental expense attributable to hotel operations Cost of sales attributable to hotel operations Property rent and outgoings Repairs and maintenance Professional fees Advertising and promotion Depreciation and amortisation Finance costs Impairment expense Net foreign currency exchange loss Costs associated with internalisation/merger proposal Other expenses – internal recharges Other expenses Total segment expenses Segment result Income tax (expense)/benef t Net prof t/(loss) for the year	Funds Management Property Management Hotel & Tourism Joint Venture Seniors Housing Corporate Total
	$’000 $’000 $’000 $’000 $’000 $’000 $’000

	– – 220,280 – – – 220,280
	19,804 – – – – – 19,804
	37,900 – – – – 30,372 68,272
	8,883 22,932 – – – – 31,815
	– 16,609 – – – 1,322 17,931
	66,587 39,541 220,280 – – 31,694 358,102

	(1,672) – 245 14,139 (127) 429 13,014
	– 3,875 – – – 5,689 9,564
	1,083 4 744 – – 2,868 4,699
	– – – – – 430 430
	410 – – – – (125) 285
	1,024 – – – – – 1,024
	3,141 – – – – 11 3,152
	3,986 3,879 989 14,139 (127) 9,302 32,168
	70,573 43,420 221,269 14,139 (127) 40,996 390,270
	20,656 32,411 80,626 – – 38,920 172,613
	– – 60,004 – – 1,401 61,405
	– – 41,523 – – – 41,523
	1,432 2,039 35,147 – – (1,640) 36,978
	206 1,499 7,700 – – 147 9,552
	14,873 91 1,521 – – 3,339 19,824
	– – 5,466 – – 925 6,391
	501 3,994 1,299 – – 1,352 7,146
	22,044 – 4,580 – – 7,818 34,442
	– 1,485 – – – – 1,485
	225 – – – – 2,698 2,923
	– – – – – 285 285
	5,354 – – – – (5,354) –
	1,422 2,377 214 – – 5,835 9,848
	66,713 43,896 238,080 – – 55,726 404,415
	3,860 (476) (16,811) 14,139 (127) (14,730) (14,145)
	(4,442) (1,606) 5,095 (9,993) – 3,871 (7,075)
	(582) (2,082) (11,716) 4,146 (127) (10,859) (21,220)

195

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

02. Segment reporting (continued)

Primary reporting format – business segments (continued) Income statement – 31 December 2006

Revenue Revenue from hotel operations Fund management fees Property management fees Development management fees Other income Share of after tax prof ts/(losses) of equity accounted investments Management costs recharged Interest income Other Total segment revenue Remuneration expenses Rental expense attributable to hotel operations Cost of sales attributable to hotel operations Property rent and outgoings Repairs and maintenance Professional fees Advertising and promotion Impairment expense Depreciation and amortisation Interest expense Costs associated with internalisation Other expenses – internal recharges Other expenses Total segment expenses Segment result Income tax (expense)/benef t Net prof t/(loss) for the period	Funds Management Property Management Hotel & Tourism Joint Venture Seniors Housing Corporate Total $’000 $’000 $’000 $’000 $’000 $’000 $’000
	– – 226,599 – – – 226,599 8,676 – – – – 23,555 32,231 – 15,392 – – – – 15,392 – 14,075 – – – – 14,075
	8,676 29,467 226,599 – – 23,555 288,297 – – 184 63,366 – (24) 63,526 – 4,063 – – – 2,656 6,719 261 2 488 – – 4,160 4,911 – – – – – 3,180 3,180 261 4,065 672 63,366 – 9,972 78,336
	8,937 33,532 227,271 63,366 – 33,527 366,633
	787 24,257 84,070 1,812 – 22,532 133,458 – – 60,293 – – – 60,293 – – 39,629 – – – 39,629 73 2,549 36,233 – – 956 39,811 51 1,614 8,415 – – 1,525 11,605 228 1,395 1,942 406 – 2,253 6,224 – – 5,789 – – – 5,789 – 21,200 1,728 – – 8,757 31,685 – 2,976 1,339 – – 520 4,835 – – 3,235 – – 1 3,236 – – – – – 797 797 3,569 – – – – (3,569) – 146 2,262 1,524 – – 3,743 7,675
	4,854 56,253 244,197 2,218 – 37,515 345,037
	4,083 (22,721) (16,926) 61,148 – (3,988) 21,596
	(1,225) (459) 4,312 (1,248) – (1,539) (159)
	2,858 (23,180) (12,614) 59,900 – (5,527) 21,437

196

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

02. Segment reporting (continued)

Primary reporting format – business segments (continued) Balance Sheet – 31 December 2007

ASSETS Current assets Inventories Other current assets Total current assets Non-Current assets Equity accounted investments Loans and receivables Other assets Property, plant & equipment Intangible assets Deferred tax asset Total Non-Current assets Total Assets Total Liabilities Net Assets/(Liabilities)	Funds Management Property Management Hotel & Tourism Joint Venture Seniors Housing Corporate Total
	$’000 $’000 $’000 $’000 $’000 $’000 $’000


	397,288 – 7,153 – – – 404,441
	156,351 4,666 36,140 – – 15,043 212,200
	553,639 4,666 43,293 – – 15,043 616,641

	49,043 – 6,528 320,529 16,873 12,662 405,635
	56,580 – 1,275 – 708 71,832 130,395
	9,085 – 283 – – – 9,368
	4,665 – 9,637 – – 64,475 78,777
	121,841 24,549 – – – – 146,390
	2,502 2,033 – – – 8,664 13,199
	243,716 26,582 17,723 320,529 17,581 157,633 783,764
	797,355 31,248 61,016 320,529 17,581 172,676 1,400,405
	656,616 10,348 86,169 21,716 – 299,397 1,074,246
	140,739 20,900 (25,153) 298,813 17,581 (126,721) 326,159

Balance Sheet – 31 December 2006

ASSETS Current assets Inventories Other current assets Total current assets Non-Current assets Equity accounted investments Loans and receivables Other assets Property, plant & equipment Intangible assets Deferred tax asset Total non-current assets Total Assets Total Liabilities Net Assets/(Liabilities)	Funds Management Property Management Hotel & Tourism Joint Venture Seniors Housing Corporate Total $’000 $’000 $’000 $’000 $’000 $’000 $’000
	– – 7,290 – – – 7,290 10,708 11,258 50,760 – – 3,456 76,182
	10,708 11,258 58,050 – – 3,456 83,472
	– – 6,283 270,074 17,339 – 293,696 – – – – 790 23,848 24,638 – – 508 – – 4,829 5,337 – – 9,400 – – 35,705 45,105 – – – – – 27,028 27,028 141 1,168 1,996 – – 6,027 9,332
	141 1,168 18,187 270,074 18,129 97,437 405,136
	10,849 12,426 76,237 270,074 18,129 100,893 488,608
	1,912 6,776 82,184 – – 92,376 183,248
	8,937 5,650 (5,947) 270,074 18,129 8,517 305,360

197

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

02. Segment reporting (continued)

Secondary reporting format – geographical segments

The Company operates its activities in three main geographical locations as set out below:

	Segment revenues Segment assets Acquisition of property,	Segment revenues Segment assets Acquisition of property,
	plant and equipment
	Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 31 Dec 2007 31	Dec 2006
	$’000 $’000 $’000 $’000 $’000	$’000
Australia	320,200 288,297 995,217 200,726 41,986	50,442
Europe	37,902 – 388,315 268,783 3,368	–
United States of America	– – 16,873 19,099 –	671
Total	358,102 288,297 1,400,405 488,608 45,354	51,113
Australia	segment includes the hotel operations, property and development management of the GPT Group, urban
	communities and Australian funds management operations of GPT Management Holdings Limited.
Europe	segment includes the operations carried out throughout Europe but predominantly in the Czech Republic,
	Denmark, Finland, France, Germany, Poland, the Netherlands, Sweden and the United Kingdom by	the Joint
	Venture as well as GPT Halverton as the European platform of the funds management operations.

United States of America segment includes mainly retail and residential business, carried out by the Joint Venture and seniors housing.

03. Dividends paid and payable

No dividends have been paid or declared for the year (2006: nil).

04. Earnings per share

No dividends have been paid or declared for the year (2006: nil). 04. Earnings per share
	Consolidated entity
	31 Dec 2007	31 Dec 2006
	Cents	Cents
Basic earnings per share	(0.01)	0.01
Diluted earnings per share	(0.01)	0.01
	Number of	Number of
Weighted average number of shares used as the denominator	shares	shares
Weighted average number of ordinary shares used in calculating	2,055,767,491	2,030,721,165
basic and diluted earnings per share
The earnings and shares used in the calculations of the basic and diluted earnings per share are as follows:
	31 Dec 2007	31 Dec 2006
Earnings reconciliation - basic and diluted*	$’000	$’000
Earnings used in calculating basic and diluted earnings per share	(19,222)	21,437

At 31 December 2007, there are no shares on issue which are diluted or potentially dilutive. As such the earnings and number of shares do not differ between basic and diluted earnings per share.

198

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

05. Equity accounted investments Investments in joint ventures Investments in associates Total equity accounted investments Details of Joint Ventures and Associates Name Principal Activity	Note (i) (ii) OwnershipInterest	31 Dec 2007 $’000 31 Dec 2006 $’000
		333,801 282,908 71,834 10,788
		405,635 293,696

(i) Joint ventures Entity incorporated in Australia DPT Operator Pty Limited(1) Managing property BGA Real Estate Finance Trust(1) Mezzanine loan Entities incorporated in the United States B&B GPT Alliance 1 LLC(4) Property investment B-VII Operations Holding LLC(2) Property investment Entity incorporated in United Kingdom BGP (UK) Investments Limited(5) Managing investments Entity incorporated in Luxembourg BGP Investment SARL(4) Property investment Total investments in joint ventures (ii) Associates Entity incorporated in Australia Kings Canyon (Watarrka) Resort Trust(1) Investment property Lend Lease GPT (Rouse Hill) Pty Limited(3) Investment property Entity incorporated in The Netherlands Dutch Active Fund Propco BV(6) Property investment Entity incorporated in the United States Benchmark Assisted Living LLC(2) Property management Total investment in associates	2007 % 2006 % 50 50 50 – 50 50 95 95 – 50 50 50 46 46 25 – 38 – 20 20	750 321 2,990 – – 970 12,522 12,834 – 2,845 317,539 265,938
		333,801 282,908
		6,528 6,283 11,912 – 49,043 – 4,351 4,505
		71,834 10,788

1 The entity has a 30 June balance date.
2 The Company has a 95% economic interest in Benchmark GPT LLC and B-VII Operations Holding Co LLC, entities which both own housing assets and a 20% interest in the manager of the portfolio, Benchmark Assisted Living LLC. GPT has equal representation and voting rights on the Board of these entities with all major decisions regarding the joint venture requiring unanimous approval from both parties, resulting in share joint control with BE Capital LLC. Accordingly, Benchmark GPT LLC and B-VII Operations Holding Co LLC has been accounted for as a joint venture. Funding of the joint venture is by way of both ordinary equity and loans.
3 The Company has consolidated 49% Lend Lease GPT (Rouse Hill) Pty Limited as it owns a 52% controlling interest in GPT Residential (Rouse Hill) Trust. Economically it owns 25% of the entity after taking into account minority interest.
4 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 loans to each of the joint venture entities within the joint venture arrangement.
5 In November 2007, BGP (UK) Investments Limited became a controlled entity of the Company with the acquisition of the remaining 50% interest by GPT UK Limited (refer to note 7(a)).
6 The Dutch Active Fund PropCo B.V. (DAF) is a closed end unlisted fund with a expected life of seven years. GPT has a residual interest of 38% in DAF after its fi rst equity raising closed. A second and fi nal equity raising is planned for mid 2008.

199

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

Note 06. Retained Prof ts/(Accumulated losses) Consolidated entity Balance at 1 January 2006 Net prof t for the f nancial year Balance at 31 December 2006 Balance at 1 January 2007 Minority interest on acquisition of controlled entites Net prof t/(loss) for the f nancial year Balance at 31 December 2007 Parent entity Balance at 1 January 2006 Net prof t for the f nancial year Balance at 31 December 2006 Balance at 1 January 2007 Net prof t/(loss) for the f nancial year Balance at 31 December 2007	Company $’000 External Minority Interest $’000 Total $’000
	(22,237) – (22,237) 21,437 – 21,437 (800) – (800)
	(800) – (800)
	– 21,135 21,135
	(19,222) (1,998) (21,220)
	(20,022) 19,137 (885)
	(39,992) – (39,992) 5,835 – 5,835
	(34,157) – (34,157)
	(34,157) – (34,157)
	(14,547) – (14,547)
	(48,704) – (48,704)

07. Business combinations

(a) Halverton Real Estate Investment Management Limited

The Company acquired 100% of the issued capital of Halverton Real Estate Investment Management Limited and its controlled entities (Halverton) for cash consideration of EUR€53,137,584 (AUD$84,928,868) in two separate tranches, as detailed below:

in June 2007, Halverton management, who own 50% of Halverton’s share capital, agreed to sell their shares to GPT UK Limited. The acquisition was completed on 10 July 2007. The purchase consideration of ordinary equity EUR€32,621,700 (AUD$51,707,845) and an additional cash injection of EUR€5,000,000 (AUD$7,925,186), and
BGP UK Investments Limited owned the remaining 50% of Halverton shares. BGP (UK) Investments Limited was 50% owned by GPT International Pty Limited, a wholly owned entity of the Company. GPT UK Limited acquired the remaining 50% interest in BGP (UK) Investments Limited on 29 November 2007 for EUR€15,515,884 (AUD$25,295,837).

200

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

07. Business combinations (continued)

(a) Halverton Real Estate Investment Management Limited (continued)

The fair values of the identifi able assets and liabilities of Halverton and BGP (UK) Investments Limited as at the date of their respective acquisitions were:

acquisitions were:
Fair value of net assets acquired Cash and cash equivalents(3) Loans and receivables Property, plant and equipment Other assets Total assets Payables Borrowings Total liabilities Fair value of identif able net assets Fair value adjustment of the net assets of the 50% interest in BGP (UK) Investments Limited(1) Net fair value of identif able net assets acquired Goodwill arising on acquisition Total identif able net assets and goodwill Consideration Purchase consideration - October 2006(1) Purchase consideration - July 2007(2) Purchase consideration - November 2007(2) Costs directly attributable to acquisition Total consideration Net cash outf ow on acquisition Net cash acquired with controlled entity Cash paid Net cash (outf ow)	Halverton/BGP(UK)Investments Limited
	Recognised on acquisition $’000 Carrying amounts recognised by consolidated entity $’000
	8,229 8,229 5,801 5,801 1,458 1,458 386 386
	15,874 15,874
	16,767 16,767 4,270 4,270
	21,037 21,037
	(5,163) (5,163) 1,139 1,139
	(4,024) (4,024)
	117,632 117,632 113,608 113,608 22,580 59,632 25,295 6,101 113,608 8,229 48,392 (40,163)

1 In October 2006, the Company purchased 50% of BGP (UK) Investments Limited for a cash consideration of AUD$22,580,109. The Company’s investment was by way of ordinary equity of EUR€2,400,000 (AUD$3,984,725) and a loan payable to General Property Trust of EUR€11,200,000 (AUD$18,595,384). As a result of the business combination on 10 July 2007, BGP (UK) Investments Limited became a controlled entity.

The $1,139,000 increase in net assets is the result of a fair value adjustment to the net assets of the Company’s 50% interest in BGP (UK) Investments Limited at 10 July 2007 and 29 November 2007, which were the dates of the fi rst and second tranches of the business combination.

2 The consideration paid for the fi rst tranche on 10 July 2007 was in the form of cash consideration of EUR€37,621,700 (AUD$59,633,031) by way of ordinary equity of EUR€10,721,000 (AUD$16,994,420) and loans of EUR€26,900,700 (AUD$42,638,611). In November 2007, the cash consideration of EUR€15,515,884 (AUD$25,295,837) was by way of ordinary equity.

3 Includes cash injection of EUR€5,000,000 (AUD$7,925,186) in July 2007.

201

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

07. (b) Hamburg Trust

(c) H2O Fund

On 30 August 2007, GPT Europe 2 SARL acquired 94.8% of the ordinary shares of H20 Fundco SARL for approximately AUD$10,000.

Fair value of net assets acquired Cash and cash equivalents Loans and receivables Inventories Property, plant and equipment Other assets Total assets Payables Borrowings Provisions Other liabilities Total liabilities Minority interests Fair value of identif able net assets acquired Goodwill arising on acquisition Total identif able net assets and goodwill Consideration Purchase consideration Costs directly attributable to acquisition Total consideration Net cash outf ow on acquisition Net cash acquired with controlled entity Cash paid Net cash inf ow	Other acquisitions
	Recognised on acquisition $’000 Carrying amounts recognised by consolidated entity $’000
	6,063 6,063 20,318 20,318 328,864 328,864 534 534 7,425 7,425
	363,204 363,204
	5,606 5,606 350,853 350,853 84 84 4,000 4,000
	360,543 360,543
	2,661 2,661 (141) (141)
	681 681 540 540 496 44 540 6,063 540 5,523

202

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

07. Other acquisitions during the fi nancial year (continued)

(d) GPT Residential (Rouse Hill) Trust

On 21 December 2007, GPT Development Pty Limited acquired 52% of the units in GPT Residential (Rouse Hill) Trust for $18,318,000.

Fair value of net assets acquired Loans and receivables Equity accounted investments Total assets Borrowings Total liabilities Minority interests Fair value of identif able net assets acquired Total identif able net assets and goodwill Consideration Purchase consideration Total consideration Net cash outf ow on acquisition Net cash acquired with controlled entity Cash paid Net cash (outf ow)	GPT Residential(Rouse Hill)Trust
	Recognised on acquisition $’000 Carrying amounts recognised by consolidated entity $’000
	37,143 37,143 11,912 11,912
	49,055 49,055
	13,828 13,828
	13,828 13,828
	16,909 16,909
	18,318 18,318
	18,318 18,318 18,318 18,318 – 18,318 (18,318)

Since acquisition, Halverton, Hamburg Trust, the H20 Fund and GPT Residential (Rouse Hill) Trust have contributed a loss of AUD$11,155,000 to the Company’s net profi t/(loss) after income tax expense. It is impractical to estimate the total revenues and net profi t after income tax expense had the acquisitions occurred on 1 January 2007 as none of the entities were required to report under IFRS prior to acquisition by the Company.

Due to the timing of certain business combinations and audits which were incomplete at the date of this report, certain business combinations were determined using provisional information.

203

THE GPT GROUP ANNUAL REPORT 2007

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

08. Auditor’s Remuneration

entity in the consolidated entity and its related parties:

Audit services PricewaterhouseCoopers Australia Statutory audit andreview of f nancial reports Aff liates of PricewaterhouseCoopers Australian f rm including overseas f rms Statutory audit and review of f nancial reports Total remuneration of audit services Other assurance services PricewaterhouseCoopers Australian f rm Regulatory and contractually required audits AIFRS accounting services Due diligence services Other services Aff liates of PricewaterhouseCoopers Australian f rm including overseas f rms Due diligence services Total remuneration for other assurance services Total remuneration for audit and assurance services Non audit related services PricewaterhouseCoopers Australian f rm Taxation services Aff liates of PricewaterhouseCoopers Australian f rm including overseas f rms International tax due diligence relating to acquisition entries Taxation services Total remuneration for non audit related services Total auditors remuneration	Consolidated entity Parent entity
	31 Dec 2007 $ 31 Dec 2006 $ 31 Dec 2007 $ 31 Dec 2006 $
	584,983 454,484 239,918 176,687 – – – 392,126 31,875 – –
	977,109 486,359 239,918 176,687
	52,270 24,606 – – – 90,375 – 90,375 115,000 20,000 – 20,000 11,024 – – – – 27,036 – 27,036
	178,294 162,017 – 137,411
	1,155,403 648,376 239,918 314,098
	55,836 83,881 – 83,881 – 13,561 – 13,561 39,077 65,438 – 65,438
	94,913 162,880 – 162,880
	1,250,316 811,256 239,918 476,978

09. Events subsequent to reporting date

Declaration of December quarter distribution

On 26 February 2008, a distribution of 7.3 cents per stapled security ($153,271,818) was declared for the quarter ended 31 December 2007.

204

THE GPT GROUP ANNUAL REPORT 2007

DIRECTORS’ DECLARATION FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

31 December 2007 as set out on pages 188 to 204 complies with Accounting Standard AASB 1039: Concise Financial Reports .

The fi nancial statements and specifi c disclosures included in the concise fi nancial report have been derived from the full fi nancial report.

position and fi nancing and investing activities of the consolidated entity as the full fi nancial report, which is available on request.

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

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Peter Joseph Chairman

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Nic Lyons Executive Director

GPT Management Holdings Limited

Sydney 26 February 2008

205

THE GPT GROUP ANNUAL REPORT 2007

INDEPENDENT AUDIT REPORT TO THE MEMBERS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

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206

THE GPT GROUP ANNUAL REPORT 2007

INDEPENDENT AUDIT REPORT TO THE MEMBERS FOR THE YEAR ENDED 31 DECEMBER 2007

GPT MANAGEMENT HOLDINGS LIMITED and its controlled entities

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207

THE GPT GROUP ANNUAL REPORT 2007

SUPPLEMENTARY INFORMATION

Payments to GPT Securityholders

The table below includes payments made for the 2007 calendar year. Details of all payments made after 19 September 1985 are available from GPT’s website (at www.gpt.com.au) or from the Securityholder Service Centre on Freecall 1800 025 095.

GPT’s year end for tax purposes is 31 December, at which time the net Income of the Trust for this period is determined. As a result, the components of the Trust Distribution, against which withholding tax amounts are calculated for each quarter of the current fi nancial year, are estimates only. The fi nal components of each quarterly payment will be set out in the Annual Taxation Statement which is mailed to all investors in June, and will also be published on the website.

3 Months	Date Paid	Distribution	Dividend	Tax Deferred1
Ended		(centsper security)	(centsper security)	(centsper security)
31 Mar 07	25 May 07	7.000	0.000	0.000
30 Jun 07	21 Sep 07	7.300	0.000	2.190
30 Sep 07	23 Nov 07	7.300	0.000	0.000
31 Dec 07	28 Mar 08	7.300	0.000	0.559986

1 The Tax Deferred component, comprising the Depreciation Allowance and distribution of pre-20 September 1985 realised and unrealised capital gain, is non-assessable for income tax. However, in determining the capital gain for CGT purposes, it will reduce the cost base or indexed cost base of units acquired after 19 September 1985. In determining a capital loss, the Tax Deferred component will reduce the cost base of units acquired after 19 September 1985.

Net Asset Backing of Entities in the GPT Group

			NTA Backing per security*	General Property Trust	GPT Management
					Holdings Limited
				(unit)	(share)
30	Jun	07	$3.81	$3.66 (96.06%)	$0.15 (3.94%)
31	Dec	07	$3.86	$3.77 (97.70%)	$0.09 (2.30%)

Excludes provision for June/December quarter distributions respectively.

208

THE GPT GROUP ANNUAL REPORT 2007

SUPPLEMENTARY INFORMATION

GPT Issue of Securities

The following table lists all issues of GPT securities since 1996. A complete list of all securities issued since GPT’s inception in 1971 can be obtained from the Group’s website (at www.gpt.com.au) or by calling the Securityholder Service Centre on Freecall 1800 025 095.

Date	Description	No. of Securities	Price$	Amount$
19.01.96	Exercise of Options (1996)	2,614,035	1.89	4,930,800
19.04.96	Exercise of Options (1996)	627,294	1.93	1,209,400
27.06.96	Exercise of Options (1996–1998)	83,693,011	1.84	166,022,274
12.07.96	Exercise of Options (1996)	678,834	1.77	1,203,900
15.08.96	GEM Acquisition	312,978,299	2.25	704,201,173
03.09.96	GEM Acquisition	30,636,989	2.24	68,626,855
Various 1996	Manager’s Fee Units	3,993,662	Various	9,271,399
01.07.97	Exercise of Options (1996–1998)	76,521,770	2.01	166,053,931
27.11.97	Private Placement	60,000,000	2.50	148,875,000
03.12.97	Ayers Rock Purchase	2,850,196	2.55	7,268,000
Various 1997	Manager’s Fee Units	3,151,747	Various	7,847,684
Various 1998	Distribution Reinvestment Plan	38,874,312	Various	107,426,512
Various 1998	Manager’s Fee Units	1,763,679	Various	4,913,184
06.07.98	Exercise of Options (1996–1998)	63,808,671	2.41	166,231,132
Various 1999	Distribution Reinvestment Plan	52,208,394	Various	138,119,897
28.04.99	Manager’s Fee Units	373,816	2.78	1,039,208
21.05.99	Private Placement	88,709,678	2.48	218,762,401
Various 2000	Distribution Reinvestment Plan	61,230,010	Various	154,088,103
15.06.00	Darling Park Purchase	80,071,710	2.51	200,979,992
30.08.00	Private Placement	76,045,627	2.63	197,500,000
Various 2001	Distribution Reinvestment Plan	66,871,458	Various	175,265,269
02.01.01	Darling Park Purchase	27,600,000	2.38	65,688,000
27.03.01	Darling Park Purchase	17,660,000	2.72	47,998,114
01.01.02	Darling Park Purchase	6,100,000	2.38	14,518,000
Various 2002	Distribution Reinvestment Plan	76,561,979	Various	206,757,361
02.04.04	Private Placement	67,000,000	3.03	203,010,000
08.06.06	Security Purchase Plan	24,813,896	4.03	100,000,000
Various 2007	Distribution Reinvestment Plan	35,864,327	Various	165,527,515
23.11.07	Issue of Securities	22,219,109	4.60	102,167,909
TOTAL		2,099,613,942		4,971,375,792

Spread of Securityholders as at 29 February 2008

Holding	GPT
	No. of Securityholders
1–1,000	5,748
1,001–5,000	23,918
5,001–10,000	11,457
10,001–100,000	7,331
100,001 and over	217
Total number of Securityholders	48,671

209

THE GPT GROUP ANNUAL REPORT 2007

SUPPLEMENTARY INFORMATION

Substantial Holders in GPT as at 29 February 2008

Securityholder	Number of Securities
Barclays Group	152,080,409
Commonwealth Bank of Australia	139,945,325
ING Australia Holdings Limited	107,185,777

20 Largest GPT Securityholders as at 29 February 2008

Securityholder	Number of Securities	Percentage of total
		issued Securities
1. HSBC Custody Nominees (Australia) Limited	521,723,525	24.85%
2. National Nominees Limited	358,101,067	17.06%
3. JP Morgan Nominees Australia Limited	277,922,213	13.24%
4. Citicorp Nominees Pty Limited	170,280,586	8.11%
5. Citicorp Nominees Pty Limited (CFS WSLE Property Secs A/C)	93,668,452	4.46%
6. ANZ Nominees Limited (Cash Income A/C)	47,531,970	2.26%
7. AMP Life Limited	43,132,302	2.05%
8. Cogent Nominees Pty Limited	34,280,045	1.63%
9. Cogent Nominees Pty Limited	31,486,219	1.50%
10. Bond Street Custodians Limited	20,523,463	0.98%
11. Citicorp Nominees Pty Limited (CFSIL CFS WS INDX PROP 1 A/C)	9,903,825	0.47%
12. Citicorp Nominees Pty Limited (CFSIL Cwlth Property 1 A/C)	9,656,794	0.46%
13. Citicorp Nominees Pty Limited (CFSIL Cwlth Property 6 A/C)	8,202,772	0.39%
14. Queensland Investment Corporation C/- National	7,883,419	0.38%
Nominees Limited
15. Bond Street Custodians Limited	7,816,397	0.37%
16. Credit Suisse Securities (Europe) Ltd	7,445,000	0.35%
17. Merrill Lynch (Australia) Nominees Pty Limited	7,165,382	0.34%
18. Perpetual Trustee Company Limited	6,573,591	0.31%
19. RBC Dexia Investor Services Australia Nominees Pty Ltd	6,364,235	0.30%

20. SuncorpCustodian Services PtyLimited	5,989,555	0.29%
Total	1,675,650,812	79.81%
Total Securities	2,099,613,942	100.00%

Voting

Securityholders in The GPT Group are entitled to one vote for each dollar of the value of the total Securities they hold in the Group.

210

THE GPT GROUP ANNUAL REPORT 2007

The GPT Group

comprising

GPT Management Holdings Limited ACN 113 510 188 and

GPT RE Limited

ACN 107 426 504 AFSL 286511 As Responsible Entity for General Property Trust ARSN 090 110 357

Level 52 MLC Centre 19 Martin Place Sydney NSW 2000

Directors

Peter Joseph OAM (Chairman) Eric Goodwin Malcolm Latham AM Nic Lyons Anne McDonald Ian Martin Ken Moss Elizabeth Nosworthy AO

Auditors

PricewaterhouseCoopers 201 Sussex Street Sydney NSW 2000

Lawyers

Allens Arthur Robinson Deutsche Bank Place Cnr Hunter and Phillip Streets Sydney NSW 2000

Principal Registry

Link Market Services Limited Level 12 680 George Street Sydney NSW 2000

Mail to:

GPT Security Registrar Locked Bag A14 Sydney South NSW 1235

Stock Exchange Quotation

GPT is listed on Australian Securities Exchange under ASX Listing Code GPT

Secretary

James Coyne

Audit and Risk Management Committee

Anne McDonald (Chairman) Eric Goodwin Ken Moss

Corporate Responsibility Committee

Malcolm Latham (Chairman) Eric Goodwin Elizabeth Nosworthy AO

Nomination and Remuneration Committee

Ian Martin (Chairman) Peter Joseph OAM Malcolm Latham

For further information, contact GPT’s Securityholder Service Centre or visit GPT’s website at: www.gpt.com.au

To arrange changes of address, or changes in registration of securities, please call GPT’s Securityholder Service Centre on 1800 025 095.
Please quote your Securityholder Reference Number (SRN)/Holder Identifi cation Number (HIN) in all correspondence. The SRN/HIN is found at the top right hand corner of your holding statement.
All Securityholders must sign any written enquiries or amendments to holdings.

211

THE GPT GROUP ANNUAL REPORT 2007

SUPPLEMENTARY INFORMATION

212

THE GPT GROUP ANNUAL REPORT 2007

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AI assistant

GPT GROUP — Annual Report 2007

65009_rns_2008-03-25_28699668-9d68-49a7-9f9b-c6b490b2419a.pdf

CONTENTS

CHaIrMaN’S RepORT

oPeratIoNaL HIGHlIGHTs

FIVe Year PerForMaNCe SUMMarY

Year IN ReVIeW

Financial performance

Realised Operating Income

DIVerSIFIeD aSSet BaSe*

DIVerSItY oF INCoMe*

earnings and Distributions

Total Return

Net Tangible assets (NTa)

capital Management

Delivering on strategy

Ownership

Management

Development

Building a strong Team

Disclosure and

communication

Outlook

oWNerSHIP

aUStraLIaN retaIL pORTFOlIO

Great places to VIsIT

Net reVaLUatIoN $246.8 MIllION

Managing for performance

$5.3 BIllION INVeStMeNt

expanding GpT’s Retail Business

Outlook

aUStraLIaN oFFICe pORTFOlIO

Great places to WORK

Managing for performance

$3.1 BIllION INVeStMeNt

Outlook

expanding GpT’s Offi ce Investments

Great places to

eXpeRIeNce

Managing for performance

$900 MIllION PortFoLIo

providing Quality

Resort experiences

Outlook

aUStraLIaN INDUStrIaL/ BUSINeSS ParK pORTFOlIO

Great places to

DO BUsINess

Managing for performance

expanding the portfolio

$740 MIllION PortFoLIo

Outlook

aVeraGe WeIGHteD lease TeRM 7.6 YeaRs (BY INCoMe)

US SeNIorS HoUSING pORTFOlIO

Great places to lIVe

expanding the portfolio

Managing for performance

PortFoLIo VaLUe $800 MIllION*

Outlook

JoINt VeNTURe

Great places to

DIVeRsIFY

contribution to performance

$7.1 BIllION aSSetS

Joint Venture Fund portfolio

asseT secTOR BY ValUe

Outlook

FUNDS MaNaGeMeNt

Great places to

INVesT

australian Wholesale Funds

Since the

expanding the Funds Management platform

GpT Halverton

Hamburg Trust

Outlook

DeVeLoPMeNt

Developing sustainable assets

GpT Owned

Developments

GPT GROUP Annual Report 2007