GPT GROUP — Capital/Financing Update 2003

Dec 8, 2003

General Property Trust ASX Announcement and Media Release

General Property Trust to acquire interest in Governor Phillip & Governor Macquarie Towers, Sydney

9 December 2003

GPT Management Limited (GPTML), as Responsible Entity for General Property Trust (GPT), today announced the exchange of contracts for the acquisition of a 25% interest in Governor Phillip and Governor Macquarie Towers, at 1 Farrer Place in Sydney. The Lend Lease managed Australian Prime Property Fund (Commercial) is also acquiring a 25% interest in the asset. The remaining 50% is owned by Deutsche Office Trust.

GPT is acquiring its interest in the asset for \$240 million, excluding acquisition costs. The acquisition price includes \$1.2 million in rental top-up to offset vacancies in the first year. The acquisition will be funded using existing debt facilities and will be accretive to earnings.

The acquisition gives GPT's unitholders access to a prime Sydney CBD office asset which is anticipated to deliver a year 1 yield of 6.6% (before costs) and to provide future income growth through a high proportion of structured rental increases and the ability to capitalise on current below market rents.

Mr Michael O'Brien, Fund Manager of GPT said the acquisition provided the opportunity for GPT to gain greater exposure to the office sector at a time when improving office market fundamentals are anticipated.

"Our expectation is that office markets will begin to improve in 2004 and this, combined with the review profile of the asset, provides the opportunity to deliver strong growth for investors," Mr O'Brien said.

In addition to Governor Phillip Tower and Governor Macquarie Tower, the asset includes the historic Phillip Street terraces. The office towers are located in the core of Sydney's financial district and offer a high level of services and finishes with the added attraction of exceptional harbour and city views.

"This is one of the best buildings in the strongest office market in Australia boasting a fantastic location, blue chip tenants and a very high level of services. Quality assets with such strong fundamentals are rarely available in the Sydney market and are tightly held so this is a great opportunity for GPT's portfolio.

"Governor Phillip and Governor Macquarie Tower further enhances GPT's high quality portfolio, providing additional asset and tenant diversification and extends the average lease term across the portfolio to 5.9 years." Mr O'Brien said.

Governor Phillip and Governor Macquarie Towers consist of approximately 85,000 sqm of office space over 64 and 41 levels respectively. The buildings are currently 98% leased, with over 85% of the space leased to blue chip corporate tenants and the State Government. Major tenants include the NSW State Government (24% of net lettable area), Mallesons Stephen Jaques (20%), Goldman Sachs JBWere (11%) and UBS (7%).

Tony Cope, GPT's Office Portfolio Manager, said: "The Sydney office market consistently demonstrates the strongest demand for space. As such, we believe Sydney assets will provide the best long-term returns for investors."

"This is an opportunity for GPT to acquire an interest in a prominent and well capitalised asset and to increase the Office Portfolio's weighting to the Sydney market to 62%. Governor Phillip and Governor Macquarie Towers are contemporary buildings with very high specifications and limited capital expenditure requirements."

"A large proportion of the leases benefit from structured growth and this, combined with our outlook for growth in the Sydney market, gives us confidence in delivering increased income from Governor Phillip and Governor Macquarie Tower in the medium term," Mr Cope said.

Management of the asset will be conducted under the terms of a Joint Owner's Agreement between the owners (Deutsche Office Trust and a special purpose trust owned by General Property Trust and APPF Commercial). The joint owners will each have pre-emptive rights over each owner's interest in the asset.

GPT will fund the acquisition, which is expected to be finalised in late December 2003. using existing debt facilities. On completion of this acquisition. GPT's gearing will increase to 28%.

"This asset is clearly consistent with GPT's strategy of owning premium quality assets in preferred markets with long-term leases and quality tenants. When combined with GPT's existing assets, the acquisition creates an office portfolio with a total value of over \$2.8 billion and improved tenant diversity and expiry," Mr O'Brien said.

ENDS

Enquiries For further information please contact:

Michael O'Brien Fund Manager (02) 9236 6235

Tony Cope Office Portfolio Manager (02) 9236 6003

Additional information:

Governor Phillip and Governor Macquarie Tower

Asset Overview

The office towers were completed in 1993 and 1994 respectively and offer superior services and finishes.

The office space has large floor plates (of approximately 1,500 sqm for Governor Phillip Tower and 1,200 sqm for Governor Macquarie Tower) and the upper floors boast expansive views of the city and harbour. The floor layout provides maximum flexibility for tenants and the floors are column free, with floor to ceiling heights of 2.7 metres.

The asset also includes basement parking for 654 cars and the Phillip Street terraces (1,500 sqm), which house commercial office accommodation and a restaurant and cafe.

Impact on Office Portfolio

Post-acquisition, GPT's Office Portfolio will have a total value of over \$2.8 billion. $\bullet$

Office Portfolio breakdown by Geography

	NSW	Victoria	Queensland	ACT
At 30 June 2003	58%	28%	12%	2%
Post-acquisition	62%	26%	10%	2%

Post-acquisition, GPT's Office Portfolio will have a weighted average lease term to expiry ٠ of 5.9 years.

Office Portfolio Lease Expiry

	Vacant	2003/04	2005	2006	2007	2008+
At 30 September 2003	4.2%	13.9%	16.6%	.9.7%	5.2%	50.4%
Post-acquisition	4.0%	13.4%	16.5%	9.3%	$6.0\%$	50.7%

Impact on GPT

GPT Portfolio breakdown by Sector

	Retail	Office	Hotel/Tourism	Industrial/Business Park
At 30 June 2003	51%	38%	8%	3%
Post-acquisition	49%	40%	7%	4%

ENDS