GPT GROUP — Capital/Financing Update 2008

Sep 9, 2008

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For Immediate Distribution 10 September 2008

DAVID JONES COMMITS TO A NEW NEWCASTLE (NSW) STORE

• David Jones has signed an Agreement For Lease (AFL) with The GPT Group (GPT) for a new department store that will anchor GPT’s proposed $500m (approx.) CBD redevelopment, adjacent to the Hunter Street Mall.

• David Jones is committed to retailing in the Newcastle CBD for the long term as it recognises the region as a vibrant growth corridor in New South Wales.

• The new David Jones Newcastle CBD department store will meet all of the Company’s FY09 – FY12 Strategic Plan financial hurdles and is one of the 11-14 strategic refurbishments announced in March 2008.

• GPT’s proposed development is subject to requisite approvals and will: � integrate retail, residential, entertainment and commercial components;

  • encompass retail and entertainment precincts spanning approximately 50,000 sq.m over 3 levels; and

  • have David Jones as it’s only department store .

• The new Newcastle CBD David Jones store will: � be a brand new, high quality department store;

  • be largely funded by external stakeholders & require limited capital investment by David Jones;

  • increase selling space by 25% creating a 12,000 sq.m premium department store;

  • deliver a 50% increase in Sales to over $30m p.a. by maturity;

  • meet all of the Company’s FY09 – FY12 Strategic Plan financial hurdles ;

  • significantly improve store profitability through increased sales, increased floor space in key high margin categories & attractive commercial terms.

• The new Newcastle CBD David Jones store is expected to open in 2012 . The existing David Jones store will continue trading until early 2010 and then close to accommodate construction of the new store.

• Current Store EBIT contribution from the Newcastle store is expected to be captured by the Company’s Kotara store (located 9 kms away) throughout the construction period. This was the Company’s experience when the David Jones Eastgardens store closed & all of Eastgardens’ store EBIT was fully transferred to the Company’s Bondi Junction store (located 8kms away).

David Jones Limited (DJS) today announced that it has committed to retailing in the Newcastle CBD retail precinct for the long term and has entered into an Agreement for Lease (AFL) with The GPT Group (GPT) to become the anchor department store in GPT’s proposed $500 million (approximately) redevelopment adjacent to the Hunter Street Mall (the Newcastle CBD Urban Renewal Project).

The agreement provides that David Jones’ Newcastle store will be the only department store in the development and will be a brand new, high quality department store.

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David Jones Limited A.C.N. 000 074 573 A.B.N. 75 000 074 573

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Newcastle is located in the heart of the Hunter region. The Hunter Region is approximately 2 hours drive from Sydney, covers an area of 31,000 sq. kms and has a catchment of 500,000 residents. Spending on Department Store Type Merchandise (DSTM) in the region is currently estimated at $2.3 billion and is forecast to grow by 65% to $3.8 billion by 2017* making the Hunter region one of the largest regional DSTM catchments in Australia.

GPT is working with Newcastle City Council to deliver a differentiated premium retail offer with a cohesive link between the retail, commercial, entertainment and residential components of the development.

Under the terms of the agreement announced today:

• the David Jones Newcastle CBD store will be a brand new, larger department store constructed within the redeveloped centre;

• the new store will meet all of the Company’s FY09 – FY12 Strategic Plan financial hurdles; and

• • David Jones has been granted a 20-year lease for its new store.

David Jones Group General Manager of Retail Development, Antony Karp said, “David Jones is committed to retailing in the Newcastle CBD. The Agreement For Lease that we have executed today demonstrates our commitment to retail in Newcastle.

“The GPT Newcastle development is complex. It encompasses four city blocks including the majority of the southern side of the Hunter Street Mall as well as the current David Jones site. The development is subject to all relevant authority approvals and GPT Board approval. GPT has provided David Jones with attractive commercial terms to sign the Agreement For Lease as an anchor tenant.

“If approved, the new Newcastle CBD store will enable David Jones to create a high quality department store that has significantly more floor space, an enhanced brand portfolio and category mix, that is part of an outstanding $500 million (approximately) integrated retail, commercial, residential and entertainment project being developed by GPT.

“David Jones will be closing its current Newcastle CBD store in early 2010. If all approvals are obtained, construction is expected to commence and be completed by 2012. If all requisite approvals are not obtained, David Jones will proceed with the closure of its Newcastle CBD store in early 2010 and will focus on capturing all Store EBIT from its Newcastle store at its near-by Kotara store. Importantly, David Jones has secured an option to open a department store in any future development of the Newcastle CBD site that occurs within the next five years,” Mr Karp said.

THE GPT GROUP’S NEWCASTLE CBD PROJECT

The Newcastle CBD Urban Renewal Project will be developed and managed by GPT. Upon completion, the project will deliver a proposed Gross Lettable Area of approximately 50,000 square metres of retail space. It will incorporate a new retail and entertainment centre over three levels, with further commercial and residential components. Whilst David Jones will be the only department store in the development, other tenancies will include a supermarket, a fresh food precinct, restaurants, cinemas , several mini majors and approximately 20,000 square metres of specialty stores.

From a consumer perspective the project will deliver an enhanced, world-class retail and fashion precinct to the Hunter Region catchment area, that will be able to capitalise on the growing number of high income households and the strong economic base of the broader Hunter Region.*

GPT’s Head of Retail, Mark Fookes said GPT was pleased to have secured the commitment of David Jones to its urban renewal proposal for the Newcastle CBD. "The signing of the Agreement for lease

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David Jones Limited A.C.N. 000 074 573 A.B.N. 75 000 074 573

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with David Jones is a key milestone for an inspiring new development that will benefit the local community and the broader Hunter Region” said Mr Fookes.

THE NEW DAVID JONES NEWCASTLE STORE

The new David Jones Newcastle CBD store is targeted to open in 2012. In order to enable construction to take place the existing David Jones store will close for approximately two years, commencing in 2010.

Whilst the Newcastle store is closed for construction, current Store EBIT is expected to be captured by the Company’s Kotara store which is located 9 kilometres away. The Company experienced a similar trend when the David Jones Eastgardens store closed and all of Eastgardens’ store EBIT was fully captured by the nearby David Jones Bondi Junction store (located 8 kilometres away).

The new Newcastle CBD David Jones store will deliver:

• A brand new 12,000 sq.m department store over two levels located on the Ground floor and Level 1 of the new centre;

• A 25% increase in incremental selling floor space ;

• Deliver a 50% increase in store sales to over $30m p.a. by maturity;

• Satisfaction of all of the Company’s FY09 – FY12 Strategic Plan financial criteria;

• Significantly improved store profitability through increased sales, increased floor space in key high margin categories and attractive commercial terms.

Importantly also, the new David Jones Newcastle store will provide greater employment opportunities than the current store and will secure David Jones' commitment to Newcastle for the long term. David Jones is currently working through redeployment opportunities (within its existing store portfolio) for all of its current Newcastle store staff to address the fact that the store will close for a two-year period whilst the new Newcastle store is being built.

David Jones CEO Mr Mark McInnes said, “We are delighted to be the anchor department store in the proposed GPT development. If the development is approved, David Jones will be able to continue its long heritage in the Newcastle CBD. We are equally pleased that this new store meets the company’s financial refurbishment hurdles. We expect the new store to deliver a 50% increase in sales, to over $30 million p.a. by maturity.

“The new Newcastle David Jones department store is one of the 11-14 stores that our Company will redevelop and renew as part of the FY09 – FY12 Strategic Plan. Other stores that fall into this category include our Bourke Street Mall Melbourne CBD redevelopment, Elizabeth and Market Street Sydney CBD Stores, Bondi Junction, NSW, Robina Town Centre, QLD and Claremont, WA,” Mr McInnes concluded.

ENDS

* Source: Department of State and Regional Development, ABS & Dimasi

FOR FURTHER INFORMATON CONTACT:

Helen Karlis General Manager Corporate Affairs and Investor Relations David Jones Limited 02 9266 5960 0404 045 325

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David Jones Limited A.C.N. 000 074 573 A.B.N. 75 000 074 573