GPT GROUP — Capital/Financing Update 2014

Sep 2, 2014

3 September 2014

GPT and GWOF combine to buy CBW in Melbourne for $608.1M

The GPT Group (GPT) has added another high quality office asset to its balance sheet and has continued to grow its funds under management, having partnered with the GPT Wholesale Office Fund (GWOF) to purchase CBW in Melbourne from CBUS Property for $608.1 million.

GPT and GWOF will each acquire a 50 per cent interest in CBW, otherwise known as ‘Corner of Bourke and William’, with the purchase representing a capitalisation rate of 6.5 per cent.

CBW is comprised of:

• 181 William Street - A 26 level office tower providing 49,833sqm of A-grade accommodation,

• 550 Bourke Street - A 19 level office tower with 26,257sqm of A-grade accommodation, and

• Goldsbrough Lane - 5,313sqm of ground and mezzanine retail.

GPT’s Chief Investment Officer Carmel Hourigan said the purchase demonstrates how the Group can use its balance sheet capacity and the relationship with its funds, to secure large scale, quality assets.

“This transaction takes acquisitions for the Group to $1.7 billion since the start of 2014,” Ms Hourigan said.

“Importantly, the balance sheet will secure additional property management and funds management fees on top of its 50 per cent share of the transaction, resulting in an enhanced return.

“The purchase reflects the positive view we have on the future performance of the Melbourne CBD office market. GPT now has 88 per cent of its office portfolio in Sydney and Melbourne, which is where we continue to see the most promising signs of a recovery.”

GWOF Fund Manager Martin Ritchie said CBW is a very well located, near-new asset which makes it attractive to a wide range of quality tenants.

“The acquisition increases the size of GWOF to $5.2 billion and is expected to contribute positively to fund returns. GWOF remains the number one performing wholesale office fund over one, three, five and seven years,” Mr Ritchie said.

The asset income is underpinned by leases to quality tenants including IAG, Deloitte, Ashurst, Baker & McKenzie and Crowe Horwath and it has a weighted average lease expiry of 5.2 years. Settlement of the transaction is due to occur next month.

For more information, please contact:

Brett Ward

Brett Zarb

Head of Investor Relations Group Media Manager 02 8239 3536 02 8239 3979 0437 994 451 0417 256 563

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CBW, Melbourne

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CBW is a large-scale, multi-tenanted office complex located in the Melbourne CBD providing 81,403 sqm of A-grade accommodation and ground / mezzanine retail.

CBW comprises three main components:

• 181 William Street: 26 level office tower providing 49,833 sqm of A-grade accommodation.

• 550 Bourke Street: 19 level office tower with 26,257 sqm of A-grade accommodation.

• Goldsborough Lane: 5,313 sqm of ground and mezzanine retail tenancies.

CBW is located within walking distance of Southern Cross and Flagstaff Railway Stations, with tramlines that operate along both William and Bourke Streets with pickup/drop-off points opposite the property.

General

Ownership Interest 50% GPT 50% GWOF Asset Quality A-Grade Construction 2009 Property Details Office 76,090 sqm Retail 5,313 sqm Car Parking Spaces 413 Typical Floor Plate 181 William St: 1,900 sqm 550 Bourke St: 1,500 sqm

Valuation

Valuation
Value / Price (100% interest)	$608.1m
Capitalisation Rate	6.50%
Terminal Capitalisation Rate	6.75%
Discount Rate	8.50%
Office Occupancy
Actual	99%
Including Signed Leases	99%
Including Heads of Agreement	99%

Tenant Details Number of Tenancies 46 WALE (By Income) 5.2 years

Key Tenants

Key Tenants
IAG Deloitte Ashurst	Area (sqm) Expiry Date
	28,522 June 2020 19,610 May 2020 8,897 May 2021

Lease Expiry by Income

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100%
80%
60%
40%
20%
0%
Vacant Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
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