GPT GROUP — Interim / Quarterly Report 2003

Jul 29, 2003

General Property Trust 2003 Mid Year Results

30 July 2003

GPT ANNOUNCES INCREASED DISTRIBUTION AND EARNINGS

GPT today declared earnings per unit of 10.7 cents per unit (cpu) for the six months to 30 June 2003, an increase of 5.5% over the previous corresponding period.

A distribution of 5.3 cpu for the June quarter was announced, taking the distribution for the six months to June 2003 to 10.5 cpu. This represents an increase of 4% on the distribution for the previous corresponding period and continues a positive trend in the Trust's underlying earnings and distributions.

GPT Management Limited Chief Executive, Mr Nic Lyons, said that the 5.5% increase in earnings reflected a solid result from GPT's property portfolio as well as the impact of a recent change to GPT's fee structure

"We have continued to build on the trend in earnings growth established over the last few vears and demonstrated the benefit of the Trust's key strategies of improving asset quality, enhancing diversity, leveraging core skills and accessing capital cost effectively," Mr Lyons said.

GPT's net operating result was \$208.6 million, representing an increase of 8.4% on the previous corresponding period.

"We are also well progressed with initiatives which will drive longer-term growth - our retail development pipeline has gained further momentum, with \$1 billion in developments planned over the next seven years. The major developments at Erina Fair in NSW and Melbourne Central are progressing extremely well." Mr Lyons said.

"GPT currently has \$650 million in development projects across its four property portfolios. In addition to the retail projects, current works include the National Buildings in Melbourne, Stage 2 of our Camellia industrial estate and Quad 3. Works at the Four Points in Sydney and the Cape Tribulation Resort in Queensland have recently been completed.

"The development agreement with Landcom for the Rouse Hill Regional Centre is close to being finalised and GPT is also actively reviewing other opportunities in the master planned communities sector. GPT's offer for Hamilton Island continues to progress, with shareholders due to vote on the proposal on September 1.

"Each of GPT's existing portfolios is delivering solid results, reflecting the quality of our assets and our active approach to asset and property management. Retail sales have continued to show steady growth and the strong fundamentals of GPT's Retail Portfolio have it well positioned for continued growth over the medium term. Despite the double impact of Severe Acute Respiratory Syndrome (SARS) and the war in Irag on inbound tourism to Australia. GPT's Hotel/Tourism Portfolio performed well, with income down only 1.4% on the first half of 2002. Strong forward bookings for the fourth quarter this vear support our view that a recovery will gain momentum over the remainder of this year and into 2004."

"Whilst general conditions in the office and industrial sectors remain soft. GPT's Office and Industrial/Business Park Portfolios both delivered increases in income in this period and are well positioned, with high levels of occupancy and long average lease terms." Mr Lyons said.

"Although GPT's gearing increased over the last six months (from 20% to 23% of total assets). the Trust retains significant capacity to fund existing development capital expenditure and future expansion and acquisition opportunities."

"GPT is in great shape and remains well placed to deliver strong and consistent risk-adjusted growth for investors," Mr Lyons said.

Capital Management

GPT maintains a strong balance sheet, with total assets of \$6.9 billion and borrowings of \$1.6 billion, or 23% of total assets at 30 June 2003, well below the sector's average.

Michael O'Brien, GPT's Fund Manager said that at current levels of debt GPT retains significant capacity to access future acquisition opportunities, and to fund the \$650 million in developments currently underway.

"We have maintained a very competitive cost of debt, with our current effective interest rate, after fees and margins, at 5.88%, and the Trust remains relatively protected from interest rate movements, with 85% of borrowings hedged across a range of maturities. GPT also retains the highest credit ratings in the Australian LPT sector, with Standard & Poor's ratings of A+ (longterm) and A-1 (short-term). This is a strong advantage in funding our existing capital expenditure and future acquisition and development opportunities," Mr O'Brien said.

Outlook

Mr Lyons said: "The fundamentals which underpin GPT's earnings remain robust."

"In the last two years we have improved the quality of GPT's portfolio and enhanced its diversity, and have leveraged our core skills and strong balance sheet to add value for GPT's unitholders.

"We anticipate an improvement in both the tourism and office sectors into 2004, and this in conjunction with our strong development pipeline and quality assets across each of our portfolios, will deliver future growth," Mr Lyons said.

Yield

The yield on the closing price yesterday of \$2.93 was approximately 7.1%.

NTA

The Trust's Net Tangible Asset Backing (NTA) increased to \$2.62, an increase of 2 cents on the 31 December 2002 NTA of \$2,60.

ENDS

For further information please call:

Nic Lyons	Chief Executive	02 9237 5816
Michael O'Brien	Fund Manager	02 9236 6235
Donna Byrne	Investor Relations Manager	02 9237 5844

ADDITIONAL INFORMATION

Development Activity

Significant progress on GPT's development pipeline was made in the six months to June 2003. with a number of existing developments moving closer to completion. Further masterplanning across the Retail Portfolio has identified a potential \$1 billion in developments over the next seven years, and expansion of the Industrial/Business Park Portfolio was achieved with agreement to develop assets at the Quad site in Homebush Bay (NSW) and GPT's Citiwest Industrial Estate (Melbourne).

Mr O'Brien said that these developments would contribute to future earnings growth for the Trust.

In March 2003. GPT increased its investment in Homebush Bay (NSW) with the acquisition of the leasehold over the Quad 3 site. Construction on Quad 3 will commence in the second half of 2003. Combined with the existing Quad 1 and 2 buildings and the adjacent Samsung Building, Quad 3 increases GPT's investment at Homebush Bay to \$65 million.

In July 2003, GPT acquired a 3-hectare site adiacent to GPT's existing Citiwest Industrial Estate in Altona in Melbourne. A 12,200 sqm warehouse and office facility will be constructed for the Just Jeans Group on the site, which also includes an additional 7,000 sqm of surplus land for expansion. The facility, which will be leased by Just Jeans for a period of 10 years, is due to be completed in late 2003.

In the Hotel/Tourism Portfolio, minor works were undertaken at Ayers Rock Resort, following completion of a major refurbishment and expansion in 2002. The works include the upgrade and expansion of the Resort's laundry, an upgrade of the kitchen and restaurant at Sails in the Desert and the refurbishment of the bathrooms at the Outback Pioneer Hotel. A refurbishment and services upgrade at Cape Tribulation Resort and the refurbishment of the Four Points Hotel were recently completed.

In the Office Portfolio the first of the two National Buildings being constructed at Docklands in Melbourne is due to be occupied in October this year. The project program, which is on time and budget, anticipates completion of the second building in July 2004. The total cost of \$242 million will achieve an 8% yield. At Australia Square in Sydney, an \$11 million (\$5.5 million GPT share) upgrade of the public spaces and the Plaza Building has commenced. The works, which will enhance the asset's appearance in preparation for a major leasing campaign, are due to be complete in early 2004. An extension and upgrade of the office lobby at Melbourne Central is also well underway, in conjunction with the significant redevelopment of the retail centre.

In the Retail Portfolio, significant progress has been made on a number of development projects and with plans for future developments that will ensure GPT's retail assets continue to deliver income growth.

Following an expansion of the cinema and restaurant precinct and the opening of a new supermarket in December 2002, Sunshine Plaza's position as the dominant centre on the Sunshine Coast has been reinforced and is trading well.

Works due for completion this year include the Town Square precinct at Floreat Forum in Perth and the major redevelopment of Erina Fair on the NSW Central Coast. The \$46 million Floreat Forum development is 96% leased and due for completion in August. The Erina Fair development, at a total cost of \$210 million (\$105 million GPT share) is due for completion at the end of the year and is over 90% leased, indicating the strong demand from retailers.

At Melbourne Central the major redevelopment (\$226.5 million) has achieved significant leasing success, with close to 60% of the centre now committed. The first stages of the development are anticipated to be complete later this year, with the railway concourse due to open in August fully leased and the lower ground level, on track for completion as planned.

Smaller developments in the portfolio include a \$3.5 million remix of the foodhall at Chirnside Park and the introduction of Aldi to the centre (opened fully leased in May 2003) and commencement of a \$5 million upgrade at Forestway in NSW, which will introduce a second supermarket to this neighbourhood centre.

Development applications were lodged for a major expansion of Macarthur Square (NSW) and for the expansion of GPT's Castle Hill Homemaker City centre, also in NSW. These developments, which are part of the next wave of developments across the Portfolio, are both anticipated to commence in 2004. Masterplanning across the Portfolio has identified \$1 billion in expansion and redevelopment opportunities over the next seven years, including expansions at Penrith Plaza and Charlestown Square in NSW and the creation of a town centre at the Rouse Hill Regional Centre (NSW).

In the Industrial/Business Park Portfolio, Stage 2 of 11 Grand Avenue, Camellia (NSW), which consists of a 12,000 sqm office and warehouse facility, has commenced, with an agreement to lease 5,400 sqm of the space in place. Expansions at the Citiwest Industrial Estate in Melbourne and the Quad Business Park have also been secured.

Property Portfolios

GPT has:

• a Retail Portfolio which is demonstrating steady sales growth and has significant accretive development opportunities;
• an Office Portfolio with high quality tenants, long term leases, and limited expiry risk;
• an Industrial/Business Park Portfolio which is 100% leased, with long-term leases and opportunities for further development;
• and a Hotel/Tourism Portfolio that has demonstrated resilience in the recent adverse market conditions and has largely been refurbished, positioning it to benefit from future market arowth.

Retail Portfolio

Total centre sales for the year to 30 June 2003 across GPT's retail centres totalled over \$3.6 billion.

Sales per square metre were up 2.1% across GPT's retail centres for the year ended 30 June 2003 (compared to 2.4% for the year to June 2002). Specialty sales per square metre were also up, by 1.9%, for the year ended 30 June 2003, representing a continued trend in sales growth.

General Manager, Retail Investments, Mr Mark Fookes, said the Retail Portfolio was in a very strong position and performing well.

"Across the portfolio key indicators, including income and sales growth are demonstrating the potential for continued strong performance."

"The sales productivity across our centres continues to be high, at \$8,249 per square metre for specialities, well above industry benchmarks. Importantly, the level of specialty occupancy costs across GPT's shopping centres has increased, to 14.4%, but remains reasonable. The low vacancy rate of less than 1% across the Portfolio and our success with rental increases at renewal in a number of our stronger centres in this period further consolidates our outlook for continued Retail Portfolio income growth," Mr Fookes said.

Income from the Retail Portfolio was up 12.5% on the same period last year, reflecting the strong performance of GPT's retail assets, an increase of 55% in income from Penrith Plaza following the unwinding of the joint venture agreement last year and the successful implementation of GPT's strategy to grow the assets and income from the Homemaker Portfolio. The Homemaker strategy has delivered strong results, with continued increases in rents across the assets, the inclusion of two new centres last year and a further expansion opportunity secured with the addition of land adjacent to the Castle Hill Centre.

"The outlook for future growth is positive. We have begun to see the benefits of the expanded offer at Sunshine Plaza which was completed in December last year and next year we will start to

see earnings flow from the \$150 million redevelopment program currently underway at Floreat Forum and Erina Fair (both due for completion in 2003). Melbourne Central is progressing well, and planning for future developments across the Portfolio is continuing to proceed, with a DA now lodged at Macarthur and the proposal for an expansion at Penrith Plaza also expected to be lodged this year," Mr Fookes said.

Retail Portfolio Highlights

• a 12.5% increase in income for the Portfolio over the same period last year:
• an increase in income of 55% from Penrith Plaza, reflecting the removal of the joint venture $\bullet$ investment structure at this asset:
• Strong performance from assets developed and acquired in 2002, including:
• Sunshine Plaza with an increase in specialty sales per square metre to \$8,670 (up 1.4%) following the recently completed \$40 million (GPT share \$20 million) expansion of Plaza Parade and the Riverwalk, which opened fully leased in December 2002
• The Moorabbin Homemaker Centre, which was completed and commenced trading, fully leased, in July 2002
• Stage 1 of the Fortitude Valley (formerly Citygate) Homemaker Centre which was fully leased on completion and commenced trading in August 2002
• A \$3.5 million foodhall remix at Chirnside Park completed in May 2003;
• Significant progress on a number of existing developments, including:
• Floreat Forum a \$46 million redevelopment is scheduled for completion in August 2003 and is 96% leased
• Erina Fair the \$210 million (GPT share \$105 million) expansion, due for completion at the end of 2003, is currently over 90% leased.
• the \$226.5 million development of Melbourne Central, where a staged two-year program is already 60% leased and is forecast to be complete at the end of 2004;
• Future plans for developments have been progressed, with Development Applications for $\bullet$ expansions of Macarthur Square and the Castle Hill Homemaker City lodged and significant progress on masterplanning at Penrith Plaza, Wollongong Central and Charlestown Square (all in NSW);
• The announcement in March, that four of GPT's centres (Penrith Plaza, Erina Fair, Sunshine $\bullet$ . Plaza and Woden Plaza) were named in the Shopping Centre News 'Big Guns' Top Ten list of Australia's most productive centres.

Office Portfolio

Despite a slow leasing market, reflecting relatively soft tenant demand since the second quarter of 2001. GPT's Office Portfolio performed well over the period, delivering an increase in income and retaining high occupancy. Significant forward leasing over the past two years contributed to the removal of potential expiry in the medium term and positioned the portfolio well for the current environment, with an overall occupancy of 97% and a solid average lease term of 5 years across GPT's office assets.

Mr Tony Cope, Office Portfolio Manager, said the performance of the Office Portfolio was underpinned by low vacancy, with an increase in income (of 5% over the previous corresponding period) from the Portfolio despite the weak demand for office space.

"This largely reflects intensive asset management, rent reviews in the Sydney and Melbourne assets and increased occupancy at the Riverside Centre in Brisbane and the Citigroup Centre in Sydney."

"Whilst we believe the market retains solid long-term fundamentals and we maintain our outlook for growth from the Office Portfolio as the office markets begin to recover in 2004, rental growth is likely to remain subdued in the short term."

"Fortunately the work we have done on forward leasing and the extension of Lend Lease's tenancy at Australia Square have provided us with a low level of vacancy over 2003 and we are now focussed on leasing space which is due to become vacant next year and on continuing our strategy of securing early renewals with our larger tenants," said Mr Cope.

Office Portfolio Highlights

• An increase in occupancy (to 99.5%) at the Riverside Centre in Brisbane:
• The announcement that terms had been agreed with Lend Lease for an extension at Australia Square which provides income over 16,700 sqm for the majority of 2004 and extends the lead time for leasing and the completion of the upgrade works at this asset;
• Progress on construction on the National Buildings at Victoria Harbour in Melbourne, with the works on the two-campus style office buildings due to be complete in October 2003 and July 2004 respectively.

Hotel/Tourism Portfolio

Mr Bruce Morris, GPT's Hotel/Tourism Portfolio Manager, said GPT's hotel assets delivered a solid result despite the negative impacts of the war in Irag and the incidence of Severe Acute Respiratory Syndrome (SARS) on inbound tourism from the second quarter.

"Our results for the last quarter of 2002 and the first quarter this year indicated a recovery was well underway in inbound tourism post the events of September 11 and the Ansett collapse in 2001, however the advent of SARS and the war created further disruption to inbound tourism and eroded this growth." Mr Morris said.

"Despite this our assets performed well, with income from the Portfolio only down 1.4% on the previous corresponding period and room rates maintained at each of the assets.

"Ayers Rock Resort is now well positioned for future growth with its recent major capital works now fully operational. Longitude 131°, the Resort's new luxury wilderness lodge style accommodation has continued its occupancy growth, with occupancy for the period at 52% - a strong result given the lodge opened in June 2002. The refurbishments at the Four Points by Sheraton Hotel, Sydney and the Cape Tribulation Resort are now complete, providing a superior standard of accommodation at both assets in preparation for a return to growth.

"Despite the current environment, we expect the market to rebound in the short term with increased forward bookings for the fourth quarter of this year supporting the view that occupancy rates will build as inbound tourism returns to its long-term growth trend.

"Our assets are well placed to benefit from a market recovery, and the opportunity represented by our offer for Hamilton Island will further enhance the Portfolio's ability to deliver income growth," Mr Morris said.

Industrial/Business Park Portfolio

Income from GPT's Industrial/Business Park Portfolio grew by over 50%, reflecting the addition of 7 Parkview Drive and Quad 2 at Homebush Bay, as well as the first full period of income from the completed Australian Pharmaceutical Industries (API) facility at Camellia (all in NSW).

Mr Victor Georos, Industrial/Business Park Portfolio Manager, said that leasing at GPT's Melbourne Industrial Estate contributed to the Portfolio's 100% occupancy and long average lease term, of 5.4 years.

"Future growth has now been secured, with the pre-lease to Just Jeans for a new facility at the Citiwest Industrial Estate in Melbourne and the commencement of the third stage of the Quad Business Park at Homebush Bay. This, combined with the progress on Stage 2 of the Camellia development, positions the Portfolio for future increases in earnings," Mr Georos said.

Financial Summary

	6 months to June 2002	6 months to June 2003
Earnings & Distributions
Earnings (cents per unit)	10.14	10.70
Distribution (cents per unit)	10.1	10.5
Tax advantaged	42.4%	40.7%
Total Income
Retail	*\$125.4m	**\$132.8m
Office	\$92.3m	\$97.1m
Hotel/Tourism	\$21.1m	\$20.8m
Industrial & Business Park	\$5.7m	\$8.6m
	At 31 Dec 2002	At 30 June 2003
Assets
Total assets	\$6,696.6m	\$6,942.9m
Borrowings	\$1,361.0m	\$1,595.0m
Debt to total assets	20.3%	23.0%
Units in issue ('000)	1,949,717	1,949,717
Net asset backing/unit	\$2.60	\$2.62
Unit price	\$2.97	\$2.92
Retail
Total value***	\$3,335.9m	\$3,477.4m
Portfolio allocation (by value)	50%	51%
Total centre sales per sqm growth	3.0%	2.1%
Specialty store occupancy costs	14.1%	14.4%
Occupancy (retail centres)	99%	99%
Office
Total value	\$2,550.8m	\$2,595.8m
Portfolio allocation (by value)	39%	38%
Portfolio occupancy	97%	97%
Hotel/Tourism
Total value	\$507.3m	\$518.0m
Portfolio allocation (by value)	8%	8%
Industrial/Business Park
Total value	\$204.1m	\$213.4m
Portfolio allocation (by value)	3%	3%
Portfolio occupancy	95%	100%

$\star$ Income includes ground rent and income from deposits under retail property JVIAs (Penrith Plaza and Sunshine Plaza).

** Income includes ground rent and income from deposits under retail property JVIA (Sunshine Plaza).

*** Includes deposits under retail property JVIA (Sunshine Plaza).

ENDS