GPT GROUP — Interim / Quarterly Report 2021

Aug 15, 2021

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Interim Report 2021 2021

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Introduction

Introduction

Welcome to The GPT Group 2021 Interim Financial Report.

GPT acknowledges the Traditional Custodians of the lands on which our business and assets operate, and recognise their ongoing connection to land, waters and community. We pay our respects to First Nations Elders past, present and emerging.

The GPT Group (GPT) is a stapled entity comprised of General Property Trust (the Trust) and its controlled entities and GPT Management Holdings Limited (the 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 is a company limited by shares, incorporated and domiciled in Australia. GPT RE Limited is a wholly owned entity of GPT Management Holdings Limited.

In this report references to ‘GPT’, ‘Group’, ‘we’, ‘us’ and ‘our’ refer to The GPT Group, unless otherwise stated. Information in this Report is stated as at 30 June 2021 unless otherwise indicated. All values are expressed in Australian currency unless otherwise indicated. Key statistics for the Retail and Office divisions include The GPT Group’s weighted interest in the GPT Wholesale Shopping Centre Fund (GWSCF) and the GPT Wholesale Office Fund (GWOF) respectively.

Reporting suite

The 2021 Interim Financial Report forms part of our reporting suite. Further information is available in our broader reporting suite, which includes:

Results Presentation and Data Pack

Climate Disclosure Statement

A summary of GPT’s operating and financial performance and key developments in our business and portfolio, accompanied by a data supplement released every six months.

An annual statement of the steps we are taking to identify, assess and manage climate change risks and opportunities, prepared in accordance with TCFD recommendations.

Corporate Governance Statement

Property Compendium

An annual statement of how GPT Consolidated information about addresses the ASX Corporate Governance the assets in the Group's property Council’s Corporate Governance Principles portfolio, published every six months. and Recommendations (4th Edition).

Tax Transparency Report

A report in accordance with the voluntary Tax Transparency Code as part of the Group's commitment to tax transparency.

Sustainability Report

A detailed report of our sustainability policies, priorities and progress along with future targets, released annually.

Through our website, GPT has ensured that its corporate reporting is timely, complete and available globally. All media releases, financial reports, and other information are available on GPT’s website: www.gpt.com.au

Contents

Introduction

1. About GPT

2. Group Performance

3. Financial Position

4. Office

5. Logistics

6. Retail

7. Funds Management

8. Prospects

12. Risk Management

1. Key risks

2. Climate-related risks

18. Directors’ Report

20. Auditor’s Independence Declaration

21. Financial Statements

1. Consolidated Statement of Comprehensive Income

2. Consolidated Statement of Financial Position

3. Consolidated Statement of Changes in Equity

4. Consolidated Statement of Cash Flows

5. Notes to the Financial Statements

6. Directors’ Declaration

7. Independent Auditor’s Report

8. Glossary

The GPT Group | Interim Report 2021

PERFORMANCE AND PROSPECTS

RISK MANAGEMENT

DIRECTORS' REPORT

FINANCIAL STATEMENTS

BUSINESS OVERVIEW

About GPT

GPT is a vertically integrated diversified property group that owns and actively manages its $25.3 billion portfolio of high quality Australian office, logistics and retail assets. The Group leverages its real estate management platform to enhance returns through property development and funds management.

Listed on the Australian Securities Exchange (ASX) since 1971, today The GPT Group is a constituent of the S&P/ASX 50 Index with a substantial investor base of more than 32,000 securityholders.

Our vision

To be the most respected property company in Australia in the eyes of our investors, people, customers and communities.

$25.3b assets under management

79 properties

~ 3,600 tenants

Our purpose

To create value for investors by providing high quality real estate spaces that enable people to excel and our customers and communities to prosper in a sustainable way.

Our values

Each day, our core values guide our employees as they work to deliver on our purpose.

Safety First – Everyone, Always

We care about people above everything else.

32,000+ securityholders

~ 500

employees

Deliver Today, Create Tomorrow

We focus on the present and the future to deliver consistent, dependable performance.

Value Differences, Play as a Team

We embrace our diverse backgrounds, experiences.

~ $8.9b market capitalisation

Raise the Bar

We think big, take initiative, share ideas and challenge the status quo.

Speak Up

We are courageous and speak up about things that matter.

The GPT Group | Interim Report 2021 1

Group Performance

Group Performance

Review of Operations and Operating Result

The Group delivered strong results in the first half of 2021, with a rebound in Retail sales, leasing activity and rent collection, increased valuations and improving leasing activity for the Office portfolio, and the Logistics portfolio continuing to benefit from structural tailwinds and strong valuation gains. Rent collections were high, several developments were completed and a number of new developments commenced. Further progress was made with the Group’s Logistics partnership with QuadReal. Of the initial $800 million capital target (GPT share 50 per cent), 43 per cent had been committed at 30 June 2021. The Group also maintained a strong balance sheet and liquidity position during the period.

Funds from Operations (FFO)

Funds from Operations (FFO) represents GPT’s underlying earnings from its operations. This is determined by adjusting statutory net profit after tax under Australian Accounting Standards for certain items which are non-cash, unrealised or capital in nature. FFO includes impairment losses related to uncollected trade receivables.

GPT’s statutory net profit after tax was $760.5 million, as compared to a loss of $520.4 million in the prior comparable period, predominantly due to positive investment property valuation movements of $471.7 million (30 June 2020: negative revaluation of $711.3 million).

The Group’s 12 month Total Return was 10.2 per cent (30 June 2020: negative 0.1 per cent) as a result of investment property revaluation gains driving an increase in NTA per stapled security of 29 cents to $5.86 for the six months ended 30 June 2021.

Distribution

The Group targets to distribute 95 to 105 per cent of free cash flow, defined as operating cash flow less maintenance and leasing capex and inventory movements.

Distributions to stapled securityholders relating to the half year ended 30 June 2021 totalled $254.8 million (30 June 2020: $181.2 million), representing an interim distribution of 13.3 cents per ordinary stapled security, up 43.0 per cent on 30 June 2020 (30 June 2020: 9.3 cents). The interim distribution was declared on 16 August 2021 and is expected to be paid on 31 August 2021. The payout ratio for the half year ended 30 June 2021 is 99.9 per cent of free cash flow.

1H21 Group FFO earnings composition

GPT delivered FFO of $302.3 million for the half year ended 30 June 2021, an increase of 23.6 per cent on the prior comparable period due to significantly improved performance across the Group portfolio. FFO per security increased 24.6 per cent to 15.64 cents, reflecting the improved performance and the reduction in securities from the on-market buy-back. For the half year ended 30 June 2021, the Group bought back 32.3 million securities (1.7% of securities issued) for a total consideration of $146.8 million, being an average price of $4.54 per security.

Total management and administration expenses of $39.8 million across all segments (30 June 2020: $29.9 million) and corporate overheads of $23.4 million (30 June 2020: $7.6 million) increased due to prior year withdrawal of remuneration schemes and receipt of JobKeeper assistance plus an increase in Directors and Officers insurance costs this period.

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Funds Management
6%
Office
36%
Retail
38%
Logistics
20%
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2 The GPT Group | Interim Report 2021

RISK MANAGEMENT

DIRECTORS' FINANCIAL REPORT STATEMENTS

PERFORMANCE AND PROSPECTS

BUSINESS OVERVIEW

Funds From Operations ($M)

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295.9 317.8 310.2 302.3
244.5
1H19 2H19 1H20 2H20 1H21
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FFO per ordinary stapled security (cents)

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16.36 16.32 15.93 15.64
12.55
1H19 2H19 1H20 2H20 1H21
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Distribution per ordinary stapled security (cents)

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13.11 13.37 13.2 13.3
9.3
1H19 2H19 1H20 2H20 1H21
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FFO Reconciliation

FFO Reconciliation
For the half year ended	30 Jun 21 $M 30 Jun 20 $M1 Change
Retail – Operations net income – Development net income	141.0 74.7 (0.2) 4.5
	140.8 79.2 77.8%
Offce - Operations net income - Development net income	133.3 139.4 1.2 0.5
	134.5 139.9 (3.9%)
Logistics – Operations net income – Development net income	73.5 64.7 2.0 (0.3)
	75.5 64.4 17.2%
Funds management net income Corporate management expenses Net fnance costs Income tax expense Funds from Operations (FFO)	23.9 24.2 (1.2%) (23.4) (7.6) 207.9% (44.3) (49.1) (9.8%) (4.7) (6.5) (27.7%)
	302.3 244.5 23.6%
Non-FFO items: Valuation increase/ (decrease) Financial instruments mark to market and net foreign exchange movements Other items Net proft/(loss) for the half year afer tax	471.7 (711.3) 166.3% 0.5 (51.5) 101.0% (14.0) (2.1) 566.7%
	760.5 (520.4) 246.1%
FFO per ordinary stapled security (cents) Funds from Operations (FFO) 2 Maintenance capex Lease incentives Adjusted Funds from Operations (AFFO) 2	15.64 12.55 24.6% 302.3 244.5 23.6% (12.9) (18.5) (30.3%) (23.1) (28.9) (20.1%)
	266.3 197.1 35.1%

1 The comparatives have been restated to reflect the implementation of an IFRIC agenda decision, refer to note 12 for details.

2 FFO and AFFO have been determined in accordance with the guidelines issued by the Property Council of Australia.

The GPT Group | Interim Report 2021 3

Group Performance

Group Performance (continued)

Financial Position

Financial Position
	Net Assets 30 Jun 21 $M Net Assets 31 Dec 20 $M3 Change
Portfolio assets Retail Ofce Logistics Total portfolio assets Financing and corporate assets Total assets Borrowings Other liabilities Total liabilities Net assets Total number of ordinary stapled securities (million) NTA ($ per security)4	5,713.6 5,651.4 1.1% 5,803.7 5,622.5 3.2% 3,393.9 3,010.8 12.7%
	14,911.2 14,284.7 4.4%
	783.1 1,062.2 (26.3%)
	15,694.3 15,346.9 2.3%
	4,128.0 4,087.4 1.0% 319.6 382.0 (16.3%)
	4,447.6 4,469.4 (0.5%)
	11,246.7 10,877.5 3.4%
	1,915.6 1,947.9 (1.7%)
	5.86 5.57 5.2%

Balance sheet

• » The Group independently valued 77.8 per cent of investment properties as at 30 June 2021. Valuations were conducted by valuers with appropriate experience and expertise. The independent valuations contained material valuation uncertainty clauses given the impacts of COVID-19 and reduced levels of transactional evidence. The valuations can be relied upon at the date of valuation however, a higher level of valuation uncertainty than normal is assumed.

• » The independent valuations contain judgements relating to the ongoing impact of COVID-19 in addition to a number of assumptions, estimates and judgements on the future performance of each property including market rents, growth rates, occupancy, capital expenditure and investment metrics. Total portfolio assets increased by 4.4 percent in the half year to 30 June 2021 due to positive property valuation movements and net investment in acquisitions and developments.

• » The Group’s rolling 12 month Total Return was 10.2 per cent (June 2020: negative 0.1 per cent) as a result of an increase in NTA per stapled security of 29 cents to $5.86 for the six months to 30 June.

Capital management

GPT continues to maintain a strong focus on capital management.

Key matters for the period include:

• » Net gearing[5] increased to 24.5 per cent (31 December 2020: 23.2 per cent). This was a result of development capital expenditure, the security buy-back and acquisitions, offset by an increase in asset valuations during the period.

• » Weighted average cost of debt for the half year was 2.7 per cent, down from 3.1 per cent at 31 December 2020.

• » Mark to market movements on derivatives and borrowings has increased net tangible assets by $11.6 million.

		30 Jun 21	31 Dec 20	Change
	Cost of debt	2.7%	3.1%	Down 40bps
	Net gearing	24.5%	23.2%	Up 130bps
	Weighted average debt maturity	7.4 years	7.8 years	Down 0.4 years
	Interest rate
	hedging S&P/Moody’s credit rating	73% A stable /A2 stable	88% A stable /A2 stable	Down 15% Unchanged

Sources of funds

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Domestic bank debt
Secured bank debt 2%
2%
Commercial Paper
16%
CPI Bonds
USPP
2%
41%
Foreign MTNs
12%
Domestic MTNs
25%
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• » Total borrowings increased by $88.4 million, in addition to a reduction in cash of $300.3 million, to fund

• acquisitions, developments and the security buy-back; offset by $47.8 million of non-cash movements including fair value adjustments to the carrying value of foreign currency borrowings.

3 The comparatives have been restated to reflect the implementation of an IFRIC agenda decision, refer to note 12 for details.

4 Includes all right-of-use assets of GPT Group.

5 Calculated net of cash and the cross currency derivative positions hedging the foreign bonds, lease liabilities in relation to investment properties and excludes the right-of-use assets in relation to leases.

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4 The GPT Group | Interim Report 2021

RISK DIRECTORS' FINANCIAL MANAGEMENT REPORT STATEMENTS

PERFORMANCE AND PROSPECTS

BUSINESS OVERVIEW

Going concern

Due to the uncertainty created by the COVID-19 pandemic, GPT has performed additional procedures to assess going concern. GPT believes it is able to meet its liabilities and commitments as and when they fall due for at least 12 months from the reporting date. In reaching this position, GPT has taken into account the following factors:

• » Available liquidity, through cash and undrawn facilities, of $1,323.6 million (after allowing for refinancing of $586.0 million of outstanding commercial paper as at 30 June 2021)

• » Weighted average debt expiry of 7.4 years, with less than $5.0 million of debt (excluding commercial paper outstanding) due between the date of this report and 30 June 2022

• » Interest rate hedging level of 67 per cent over the next 12 months

• » Primary covenant gearing of 24.9 per cent, compared to a covenant level of 50.0 per cent, and

• » Interest cover ratio for the six months to 30 June 2021 of 7.9 times, compared to a covenant level of 2.0 times.

Cash flows

The cash balance as at 30 June 2021 decreased to $72.2 million (31 Dec 2020: $372.5 million). The following table shows the reconciliation from FFO to the cash flow from operating activities and free cash flow:

and free cash flow:
For the half year ended	30 Jun 21 $M 30 Jun 20 $M Change
FFO Less: non-cash items included in FFO Add/(less): net movement in inventory Movements in working capital and reserves Net cash infows from operating activities6 (Less)/add: net movement in inventory Less: maintenance capex and lease incentives (excluding rent free) Free cash fow	302.3 244.5 23.6% (16.6) (15.6) 6.4% 7.3 (4.5) 262.2% (4.0) (20.3) (80.3%)
	289.0 204.1 41.6%
	(7.3) 4.5 (262.2%) (26.6) (26.6) —
	255.1 182.0 40.2%

The increase in free cash flow is a result of higher collection of trade receivables in the current period and the impact that COVID-19 had on prior period income and operating cash flows.

The Non-IFRS information included above has not been audited in accordance with Australian Auditing Standards, but has been derived from note 1 and note 9 of the accompanying financial statements.

• 6 30 June 2020 excludes restatement in relation to the implementation of an IFRIC agenda decision.

5[5]

Group Performance

Office

$5.8b Office portfolio value[7] (31 December 2020: $5.6b)

88.9%

Office portfolio occupancy (31 December 2020: 94.9%)

5.0 years Office portfolio Weighted Average Lease Expiry (31 December 2020: 5.1 years)

4.87%

Office portfolio Weighted Average Capitalisation Rate (31 December 2020: 4.89%)

$3.5b+

Estimated end value of Office development pipeline[8]

Performance

Operations net income

The Office portfolio achieved a net revaluation uplift of $121.2 million (2.2 per cent) in the first half of 2021, including GPT’s equity interest in the GPT Wholesale Office Fund (GWOF). The positive revaluation has been driven by the Group’s recently completed 32 Smith development in Parramatta along with Australia Square in the Sydney CBD.

Office occupancy at June 2021 moderated to 92.0 per cent for stabilised assets and 88.9 per cent including development completions in the period at 32 Smith, Parramatta and Queen & Collins, Melbourne. The portfolio has a WALE of 5.0 years.

Operations net income for the period ending 30 June 2021 decreased 4.4 per cent, as a result of the divestment of Governor Phillip & Governor Macquarie Towers, Sydney along with lower occupancy during the period. Comparable income growth for the portfolio was 1.8 per cent.

Levels of office attendance remain below pre-COVID levels, with many of our tenants’ employees working from home for part of their working week. Whilst hybrid work practices will be more broadly adopted, through surveys and conversations with our customers we expect the office will continue to play an important role for the majority of organisations.

To facilitate return to office plans for our customers, GPT is investing in “healthy building” initiatives including touch-free lift and building access, the delivery of improved air quality through upgrades of air filtration and the installation of ultraviolet air treatment units in air conditioning handling plant.

Across our assets we are providing a range of space offerings to augment traditional leased space. This includes the construction of fitted and furnished office suites that provide a “ready to move in” solution; the creation of additional collaboration and meeting spaces; and the expansion of our flexible workspace offering Space&Co.

Management has engaged with qualifying tenants to provide rent relief, predominantly for retail tenants in Victoria and New South Wales, and has reduced net income by $0.5 million for processed and expected rent waivers and an estimate of loss for uncollected rent for the first half of 2021. Across ~570 tenants in the managed portfolio, 73 rent relief arrangements have been agreed for the 1H 2021 period. Collection rates for the 1H 2021 were high, and we continue to engage closely with impacted customers.

Development net income

Development net income increased to $1.2 million as a result of higher fees from increased development activity in the portfolio.

Two developments were completed in the period, with 32 Smith in Parramatta reaching practical completion in January 2021. The 27,000sqm tower has achieved a 6 Star Green Star - Design rating with an As-built rating targeted. Office space is currently 75 per cent committed including heads of agreement.[9]

In Melbourne, GWOF’s Queen & Collins redevelopment reached practical completion in June 2021. The 34-level landmark tower and adjacent heritage buildings provide 34,000sqm of high quality office space, complemented by a ground floor retail offering. Leasing is progressing, with office space currently 41 per cent committed including heads of agreement.[9]

7 Includes GPT’s interest in the GPT Wholesale Office Fund.

8 Includes GPT direct and Fund opportunities.

9 Inclusive of post balance date leasing activity.

6 The GPT Group | Interim Report 2021

RISK MANAGEMENT

DIRECTORS' REPORT

FINANCIAL STATEMENTS

BUSINESS PERFORMANCE OVERVIEW AND PROSPECTS

Logistics

Performance

Operations net income

The Logistics portfolio achieved a net revaluation uplift of $314.7 million (10.6 per cent) in the first half of 2021, with uplift attributed to continued strength in investor demand for high quality logistics assets driving further firming of investment metrics.

Operations net income growth for the period ending 30 June 2021 was 13.6 per cent, as a result of development completions and asset acquisitions. Comparable income growth for the portfolio was 1.6 per cent. Logistics occupancy moderated to 96.8 per cent as a result of lease expiries at Austrak Business Park, Somerton during the period. The portfolio has a weighted average lease expiry of 6.6 years.

The Group continued to execute its Logistics growth strategy, with the portfolio now totalling $3.4 billion.

Two Melbourne fund-through acquisitions totalling approximately $270 million have exchanged in the period, with both to be held within the GPT QuadReal Logistics Trust. In addition, the development pipeline has increased through the exchange of two land parcels for approximately $34 million, including 3.9 hectares of future development land adjacent to the Group’s existing land holding at Kemps Creek in Western Sydney. A 3.2 hectare land parcel has also been secured at Coulson Street, Wacol in Queensland within the GPT QuadReal Logistics Trust.

Three assets at Sydney Olympic Park were divested, being subject to compulsory acquisition by the New South Wales Government for the Sydney Metro project. Compensation settlement is expected to be received in the second half of 2021.

There have been minimal COVID-19 impacts for the Logistics portfolio in the first half of 2021.

Development net income

Development net income has increased to $2.0 million as a result of development profit being realised from the sale of Metroplex lots.

During the period the Group delivered a 17,200sqm facility at Cox Place, Glendenning that has been leased for a 10 year term to Total Tyres. The asset has been independently valued at $51.2 million at 30 June 2021.

A further four projects are to be completed in the second half of 2021. In Brisbane, a 16,300sqm speculative facility reached completion in July 2021 at the Group’s Berrinba estate and a 17,100sqm speculative facility held within the GPT QuadReal Logistics Trust is also under construction at Metroplex Place in Wacol. In Melbourne two facilities are underway at the Gateway Logistics Hub in Truganina, with the 29,800sqm facility pre-leased to The Hut Group. Including post-balance date heads of agreement, leasing is 80 per cent progressed for second half development completions.

$3.4b

Logistics portfolio value (31 December 2020: $3.0b)

96.8%

Logistics portfolio occupancy (31 December 2020: 99.8%)

6.6 years Logistics portfolio Weighted Average Lease Expiry (31 December 2020: 6.7 years)

4.38%

Logistics portfolio Weighted Average Capitalisation Rate (31 December 2020: 4.84%)

$1.4b

Estimated end value of Logistics development pipeline[10]

The development pipeline, inclusive of projects underway, is expected to have an end value on completion of approximately $1.4 billion.[10]

10 Includes GPT direct and GPT QuadReal Logistics Trust opportunities.

The GPT Group | Interim Report 2021 7

Group Performance

Retail

$5.6b Retail portfolio value[11] (31 December 2020: $5.5 billion)

98.9%

Retail portfolio occupancy (31 December 2020: 98.0%)

3.7 years Retail portfolio Weighted Average Lease Expiry (31 December 2020: 3.6 years)

5.05%

Retail portfolio Weighted Average Capitalisation Rate (31 December 2020: 5.06%)

Performance

Operations net income

All assets in the Retail portfolio were independently valued over the six months to 30 June 2021, resulting in a positive revaluation of $35.8 million (0.6 per cent), including GPT’s equity interest in the GPT Wholesale Shopping Centre Fund (GWSCF). Given the absence of any recent comparable market transactions, core valuation metrics remain relatively unchanged across the portfolio from the prior reporting period. The valuers still remain focused on market rents and growth rates and in some instances continue to adopt stabilisation allowances although they have reduced since the December 2020 valuations.

Operations net income was $141.0 million, reflecting an increase of 88.8 per cent, given the comparison to a COVID-19 impacted six month period in 2020. This result was due to strong cash collections at 104 per cent, a reduction in COVID-19 allowances offset by a normalisation of operating expenses.

Management engaged with qualifying tenants as the Commercial Tenancy Relief Scheme in Victoria was extended to 31 March. For the half, this has resulted in a reduction in income of $11.3 million for processed and expected rent waivers and an estimate of loss for uncollected rent.[12] The asset that has been most impacted by rent relief waivers was Melbourne Central.

Portfolio occupancy as at 30 June 2021 was 98.9 per cent (31 December 2020: 98.0 per cent).

Portfolio sales have showed a strong recovery, following COVID-19 restrictions easing at the beginning of the period. Excluding Melbourne Central and travel agents, Centre sales were up 5 per cent, and Total Specialities sales were up 6.5 per cent for the six months to 30 June 2021, compared to the same period in 2019. NSW assets were particularly strong, with Centre sales excluding travel agents up 5.9 per cent.

Whilst the Victorian assets rebounded strongly this half, they were impacted by further government lockdowns and ongoing restrictions at the end of the half. The performance of Melbourne Central continues to improve, however, given the asset’s location in the Melbourne CBD, it is heavily reliant on foot traffic from office workers, students and tourists, resulting in a slower recovery compared to the rest of the portfolio.

Development net income

Development net income was -$0.2 million, reflecting reduced development activity. In addition, the previous six month period recognised profits from the sale of a super lot of land at Rouse Hill.

11 Includes GPT’s equity interest in the GPT Wholesale Shopping Centre Fund. 12 Includes tenants where no relief is required.

8 The GPT Group | Interim Report 2021

RISK MANAGEMENT

DIRECTORS' FINANCIAL REPORT STATEMENTS

PERFORMANCE AND PROSPECTS

BUSINESS OVERVIEW

Funds Management

Performance

			GPT QuadReal
Portfolio Assets under	GWOF	GWSCF	Logistics Trust	Total
management	$9.3b	$3.9b	$0.3b	$13.5b
Number of assets GPT Interest	19 21.84%	7 28.48%	3 50.10%	29
GPT Investment	$1,618.3m	$779.1m	$35.9m	$2,433.3m
One year equity IRR
(post-fees)	7.7%	3.3%	N/A
Income from Funds Funds Management fee income	$36.9m $21.8m	$22.8m $8.6m	$0.1m —	$59.8m $30.4m

GPT Wholesale Office Fund (GWOF)

The fund delivered a one year equity IRR of 7.7 per cent. GWOF’s total assets increased to $9.3 billion, up $0.3 billion from 31 December 2020. The management fee income earned from GWOF for half year ended 30 June 2021 increased by $0.7 million as compared to 30 June 2020 due to the increase in the value of the portfolio.

GPT’s ownership reduced slightly to 21.84 per cent (Dec 2020: 21.87 per cent) due to not participating in GWOF’s Distribution Reinvestment Plan (DRP).

$13.5b

Assets under management (31 December 2020: $12.9 billion)

29

Total assets (31 December 2020: 26)

$59.8m

Total income from funds (six months to 30 June 2020: $41.0 million)

$30.4m

GPT Funds Management fee income (six months to 30 June 2020: $31.2 million)

As at 30 June 2021, GWOF’s net gearing was 16.5 per cent, in the lower half of GWOF’s target gearing range of 10 to 30 per cent. GWOF has $788.8 million of available liquidity held in cash and undrawn bank facilities, with no debt maturing until May 2022. GWOF maintains an A- (Stable) credit rating from S&P.

GPT Wholesale Shopping Centre Fund (GWSCF)

The fund delivered a one year equity IRR of 3.3 per cent. GWSCF’s total assets remained steady at $3.9 billion, compared to 31 December 2020. The management fee income earned from GWSCF for the half year ended 30 June 2021 decreased $1.5 million as compared to 30 June 2020 due to the decrease in the value of the portfolio in the prior period.

GPT’s ownership in GWSCF is 28.48 per cent (Dec 2020: 28.48 per cent).

As at 30 June 2021, GWSCF’s net gearing was 26.3 per cent and remains within the target gearing range of 10 to 30 per cent. GWSCF has $305.2 million of available liquidity held in cash and undrawn bank facilities, with no debt maturing until July 2023. GWSCF’s credit rating with S&P is BBB+ (Stable).

GPT QuadReal Logistics Trust

The GPT QuadReal Logistics Trust is a new partnership announced during the period with QuadReal Property Group to create a prime Australian logistics portfolio with an initial $800 million target. A number of developments have already been secured for this partnership in Melbourne and Brisbane with an end value of $346 million (100 per cent) with $279 million in costs to complete (100 per cent).

The GPT Group | Interim Report 2021 9

Prospects

Prospects

Group

The global COVID-19 pandemic continues to disrupt the Australian economy and GPT’s operating environment causing uncertainty. In some instances, this disruption has accelerated structural trends such as the take up of online retailing and remote working practices.

After the reporting period, lockdown measures were introduced in NSW and intermittently in place in Victoria and Queensland in response to COVID-19 outbreaks. Lockdown measures remain in place in NSW and Victoria.

As was evident in the first half of 2021, when COVID-19 was contained and restrictions eased, our portfolio benefited from the strong economic conditions including improved business and consumer sentiment and a buoyant housing market. While the recent COVID-19 outbreaks have disrupted the economic recovery, we expect that this will be temporary and that we will see a return to these favourable conditions once restrictions lift.

The near-term outlook for the Group is influenced by a number of factors including the frequency and duration of COVID-19 restrictions and measures required to support tenants. Management considers that it has applied its best judgement in outlining the Group’s prospects in the current market conditions.

As at 30 June 2021, the Group’s net gearing was 24.5 per cent, with cash and undrawn bank facilities totalling $1.3 billion, and no significant loan expiries until 2023. GPT has also retained its credit ratings of ‘A stable’ and ‘A2 stable’ by S&P and Moody’s respectively.

GPT continues to focus on growing its Logistics portfolio through developments and acquisitions and activating opportunities within the broader portfolio including the Funds Management platform to facilitate further growth.

Despite the near-term disruption, GPT remains well positioned with a strong balance sheet, a diversified portfolio of high quality assets and a proactive management team.

Office

The broader adoption of hybrid working practices by businesses continued to be evident in the period. This trend follows the government requirement in 2020 and again intermittently in 2021, for many employees to work from home during the pandemic, and employees valuing the benefits to work-life balance and more effective use of time otherwise spent commuting. The physical office however remains important for the majority of businesses, facilitating collaboration, innovation and shaping of organisational culture. This is evident through the leasing enquiry particularly from technology and services businesses.

During 2021, vacancy rates in eastern seaboard markets have increased, as a result of subdued demand along with supply completions. Vacancy rates are likely to stay elevated during the remainder of 2021, with incentives remaining elevated and effective rents softening. We do however expect that there will be businesses that take the opportunity to upgrade their space and seek out accommodation in better quality office buildings. The Group’s Office portfolio of high quality, prime grade assets has a weighted average lease expiry of 5.0 years and is expected to remain resilient given the quality of our assets, our customer relationships, and the diversification of our tenant base.

Logistics

Our Logistics assets continued to deliver strong results for the Group through the half. Increasing penetration of e-commerce and growing investment in supply chain infrastructure is expected to underpin continued demand for prime logistics space. Vacancy rates remain low in the core eastern seaboard markets and investor demand for logistics assets continue to underpin valuations.

Since 2017, the value of the Logistics portfolio has more than doubled to $3.4 billion. We have a high quality portfolio, with approximately half being developed by GPT, demonstrating our focus on product creation. The Group has a Logistics development pipeline with an estimated end value of approximately $1.4 billion which positions the Group to continue its growth in this sector.[13]

Retail

The Group benefited from a solid recovery in the performance of its Retail portfolio during the first half, with high levels of rent collection and strong leasing momentum driving an increase in occupancy. The strong economic recovery evident in the first half combined with high levels of consumer confidence has delivered strong retail sales growth across most categories. This has led to many retailers opening new brands and physical stores to capture the demand. The recovery of Melbourne Central continues to lag the broader portfolio given the delayed return of workers and students to the Melbourne CBD. We expect that the recovery of Melbourne Central will accelerate as the CBD is re-activated.

Rent collection for the Retail portfolio softened to 81 per cent of net billings in July 2021.

COVID-19 restrictions continue to be disruptive but we expect that the impacts of the pandemic on the trading environment will be followed by a strong recovery as restrictions are eased.

13 Includes GPT direct and GPT QuadReal Logistics Trust opportunities.

10 The GPT Group | Interim Report 2021

RISK MANAGEMENT

DIRECTORS' REPORT

FINANCIAL STATEMENTS

BUSINESS PERFORMANCE OVERVIEW AND PROSPECTS

Funds Management

Our Funds Management platform maintained significant scale over the period, with $13.5 billion in assets under management, and provides operational leverage for the Group. It is an important part of our business that we are seeking to grow.

Organic growth of the existing platform is planned through developments and acquisitions. GWOF is progressing its extensive $3 billion development pipeline, having reached practical completion at the end of the period of its Queen & Collins, Melbourne development. GWSCF’s focus is on near term asset enhancement and longer term value creation. This includes repositioning of existing major retailers at Highpoint, aesthetic upgrades at Northland and progressing mixed-use master planning opportunities at a number of assets.

Guidance

As announced on 26 July 2021, the Group has withdrawn its FFO and distribution guidance for 2021 given the uncertainty in relation to the duration and impacts of the lockdown measures being implemented to suppress the spread of COVID-19, particularly in Greater Sydney.

While COVID-19 continues to be disruptive and provide near term uncertainty, we expect this to be transitory, and a solid recovery in economic growth will return once vaccination rates reach a level that allow restrictions to be eased on more sustained basis.

GPT remains well positioned with a strong balance sheet, a high quality diversified portfolio, an experienced management team and a strategy to create long term value for securityholders.

GPT’s capital partnership with Canadian based QuadReal is consistent with our strategic priorities of growing the Logistics portfolio and expanding our Funds Management platform, while leveraging the Group’s extensive real estate capabilities. The partnership target increased to $1 billion post the period end, having committed 53 per cent of the initial $800 million capital target in August 2021.

Risk Management

Risk Management

GPT's approach to risk management incorporates culture, people, processes and systems to enable the Group to realise potential opportunities while managing potential adverse effects.

Our commitment to integrated risk management ensures an enterprise-wide approach to the identification, assessment and management of risk, consistent with AS/NZS ISO 31000:2018.

Risk Management Framework

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----- Start of picture text -----

Risk Policy
Risk Appetite Risk Governance
Risk Culture
Risk Management Processes and Systems
Identification | Assessment | Treatment | Assurance and Reporting
Monitoring and Review
Communication and Consultation
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GPT's Risk Management Framework is overseen by the Board and consists of the following key elements:

1. Risk Policy – The Risk Policy sets out the Group’s approach to risk management, which is reviewed annually by the Sustainability and Risk Committee (a Board sub-committee). The Risk Policy is available on GPT's website.

2. Risk Appetite – The Board sets GPT’s risk appetite to align with our vision, purpose and strategy. This is articulated in the Group’s Risk Appetite Statement, against which all key investment decisions are measured.

3. Risk Governance – The Board is supported in its oversight of the Risk Management Framework by the Sustainability and Risk Committee, which reviews the effectiveness of the Framework, and by the Audit Committee, the Leadership Team and the Investment Committee.

4. Risk Culture – GPT maintains a transparent and accountable culture where risk is actively considered and managed in our day-to-day activities. Risk culture is assessed as part of all internal audits and tracked using a Risk Culture Scorecard.

5. Risk Management Processes and Systems – GPT has robust processes and systems in place for the identification, assessment, treatment, assurance and reporting of risk.

Adapting to COVID-19

The COVID-19 pandemic heightened a number of existing risks for GPT. We responded proactively at both the governance and operational levels, and have now incorporated our pandemic responses into our usual business activities. In all aspects of our approach we have prioritised health and safety, followed government guidance and directives, and been flexible as the situation continues to evolve.

The focus of our risk management response has been in the areas set out below.

Health and Safety

The health and safety of our people, customers, contractors and other users of our assets has been our priority throughout the pandemic. We have consulted widely in our industry and beyond, and implemented best practice safety initiatives across our portfolio. These include cleaning, hygiene and social distancing measures, COVID-19 awareness training, and wellbeing support for our people.

Governance

GPT’s Risk Management Framework has been reviewed to ensure that it continues to function effectively in the COVID-19 operating environment, with a large number of employees working remotely and certain operations required to be performed differently. Enhanced governance remains in place to address ongoing disruption.

12 The GPT Group | Interim Report 2021

PERFORMANCE AND PROSPECTS

DIRECTORS' REPORT

FINANCIAL STATEMENTS

RISK MANAGEMENT

BUSINESS OVERVIEW

Key risks

The following table sets out GPT’s material risks and our actions in response to them. Included in the table is an indication of the change in the level of each risk during the half year.

==> picture [503 x 562] intentionally omitted <==

----- Start of picture text -----

KEY Risk increased No change in risk Risk decreased
Change in Risk for Value Creation
Risks Our Response 6 months to June 2021 Input Affected
Portfolio Operating and » A portfolio diversified by sector and geography Our investors
Financial Performance » Structured review of market conditions twice a year, Real estate
Financial pressure
Our portfolio including briefings from economists on retail and office Our people
operating and financial » Scenario modelling and stress testing of assumptions tenants and ongoing Environment
performance is to inform decisions disruption as a
influenced by internal Our customers,
and external factors » A disciplined investment and divestment result of COVID-19 suppliers
including our investment approval process, including extensive due continues to present and communities
diligence requirements some risk to GPT’s
decisions, market conditions, interest rates, » A development pipeline to enhance asset returns and financial performance.
economic factors and maintain asset quality
potential disruption. » Active management of our assets, including leasing,
to ensure a large and diversified tenant base with
limited single tenant exposure
» Experienced and capable management,
supplemented with external capabilities
where appropriate
» A structured program of investor engagement
Development » A disciplined acquisition and development Our investors
Development provides approval process, including extensive due Real estate
the Group with access to diligence requirements GPT’s development pipeline remains Our people
new, high quality assets. » Oversight of developments through regular cross-
strong despite the Environment
functional Project Control Group meetings
Delivering assets that deferral of some retail Our customers,
exceed our risk adjusted » Scenario modelling and stress testing of assumptions and office projects suppliers
return requirements and to inform decisions in 2020 due to the and communities
meet our sustainability » Experienced management capability impacts of COVID-19.
objectives is critical » Limits on the proportion of the portfolio under Development activity
to our success. development at any time in the Logistics
» Limits on individual contractor exposure portfolio has increased
» Appropriate minimum leasing pre-commitments to during the period.
be achieved prior to construction commencement
Capital Management » Target gearing range of 25 to 35 per cent consistent Our investors
Effective capital with stable investment grade credit ratings
management is in the “A” range Prudent gearing has
been maintained
imperative to meet » Maintenance of a minimum liquidity buffer in cash and
and significant
the Group’s ongoing surplus committed credit facilities
liquidity is in place.
funding requirements » Diversified funding sources
and to withstand
» Maintenance of a long weighted average debt term,
market volatility.
with limits on the maximum amount of debt expiring
in any 12 month period
» Hedging of interest rates to keep exposure within
prescribed limits
» Limits on currency exposure
» Limits on exposure to counterparties
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The GPT Group | Interim Report 2021 13

Risk Management

Key risks (continued)

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----- Start of picture text -----

Change in Risk for Value Creation
Risks Our Response 6 months to June 2021 Input Affected
Health and Safety » A culture of safety first and integration of safety risk Real estate
GPT is committed management across the business Our people
COVID-19 continues
to promoting and » Comprehensive health and safety to present a risk to Our customers,
protecting the health, management systems the health, safety suppliers
safety and wellbeing of » Training and education of employees and and wellbeing of our and communities
its people, customers, induction of contractors employees, customers,
contractors and all
» Engagement of specialist safety consultants to assist contractors and
users of our assets.
in identifying risks and appropriate mitigation actions users of our assets.
» Prompt and thorough investigation of all safety
incidents to ascertain root causes and prevent
future occurrences
» Participation in knowledge sharing within the industry
» Comprehensive Crisis Management and Business
Continuity Plans, tested annually
People and Culture » Active adoption and promotion of GPT’s values Our investors
Our ongoing success » A comprehensive employee Code of Conduct, Our people
GPT is adapting
depends on our ability including consequences for non-compliance
well to changing
to attract, engage and » Employee Engagement Surveys every 18 to 24 months working patterns
retain a motivated with action plans to address results triggered by COVID-19.
and high-performing
» An annual performance management process, setting
workforce to deliver
objectives and accountability
our strategic objectives
and an inclusive » Promotion of an inclusive workplace culture
culture that supports where differences are valued, supported by
GPT's core values. policies and training
» Monitoring of both risk culture and conduct risk
» An incentive system with capacity for discretionary
adjustments and clawback policy
» Benchmarking and setting competitive remuneration
» Development and succession planning
» Workforce planning
Environmental and » A portfolio of climate resilient assets that we own, Our investors
Social Sustainability develop and maintain through asset-level investment, Real estate
Delivering sustainable divestment and capital expenditure strategies COVID-19 continues to disrupt our Our people
outcomes for investors, » A world-class Environment and Sustainability
supply chains Environment
customers, communities Management System, including policies and
and the environment, procedures for managing environmental and social which may increase Our customers,
the vulnerability
today and for future sustainability risks suppliers
of workers in
generations, is essential. » Participation in the Dow Jones Sustainability Index, those supply chains. and communities
GPT understands and Global Real Estate Sustainability Benchmark and other
recognises that changes industry benchmarks
to the environment can
» Climate related risks and potential financial impacts
affect our assets and
are assessed within GPT’s enterprise-wide Risk
business operations.
Management Framework
» Climate change reporting in line with the
recommendations of the Task Force on Climate-
related Financial Disclosures
» Active community engagement via The GPT
Foundation, GPT’s Reconciliation Action Plan and
other targeted programs
» A Modern Slavery Statement and program of work in
response to Modern Slavery legislation
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14 The GPT Group | Interim Report 2021

PERFORMANCE AND PROSPECTS

DIRECTORS' FINANCIAL REPORT STATEMENTS

RISK MANAGEMENT

BUSINESS OVERVIEW

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----- Start of picture text -----

Change in Risk for Value Creation
Risks Our Response 6 months to June 2021 Input Affected
Technology and » A comprehensive technology risk management Real estate
Cyber Security framework including third party risk management Our people
Our ability to prevent procedures around cyber security Increased and sustained remote Our customers,
critical outages, ensure » Information Management policy, working during suppliers
ongoing available system guidelines and standards the pandemic has and communities
access and respond to » Privacy policy, guidelines and procedures increased the risk
major cyber security
» Compulsory cyber security awareness of cyber-attacks.
threats and breaches
training twice a year
of our information
technology systems is » Annual security testing completed by a specialist
vital to ensure ongoing external security firm, including penetration testing,
business continuity phishing exercises and social engineering testing
and the safety of » A comprehensive Cyber Security
people and assets. Incident Response Plan
» A Disaster Recovery Plan including annual disaster
recovery testing
» Technology solutions in place to monitor GPT
platforms and provide alerts to anomalous behaviour
» Regular updates to technology hardware
and software incorporating recommended
security patches
» External specialist security operations monitoring
» Annual cyber risk assessments
» An Information Security Risk and Compliance
Committee overseeing information security
» Alignment to the National Institute of Standards and
Technology (NIST) Cyber Security Framework
Compliance and Regulation » An experienced management team with Legal, Tax, Our investors
We ensure compliance Finance, Compliance and Risk Management expertise Real estate
with all applicable » Engagement of external expert advisors as required Our people
regulatory requirements » An internal and external audit program overseen by Environment
through our established the Audit Committee of the Board
policies and frameworks. Our customers,
» Active management of the Group’s Compliance suppliers
Plans, in accordance with the requirements of the and communities
Corporations Law
» Internal committees such as a Continuous Disclosure
Committee, a Data Privacy Committee and a Cyber
Security Governance Committee to monitor key
compliance risks
» An Anti-money Laundering and Counter-terrorism
Financing Policy, a Conflicts Management Policy,
a Whistleblower Policy, a Code of Conduct and
other internal policies and procedures which are
reviewed and enforced
» An ongoing program of training which addresses all
key compliance requirements
» Active involvement in the Property Council of
Australia and other industry bodies
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The GPT Group | Interim Report 2021 15

Risk Management

Climate-related risks

Climate change is a global challenge. The science is clear: ongoing carbon emissions are contributing to dangerous levels of climate change, resulting in an increase in the frequency and intensity of climate-related events around the world. Leadership and action to curb emissions is essential. In many countries, including Australia, market expectations and government policy are shifting to address this challenge.

As the owner and manager of a $25.3 billion portfolio of office, logistics and retail properties across Australia, GPT recognises the importance of identifying, managing, and transparently reporting on climate change risks and opportunities that could have a material impact on GPT’s assets and on the communities in which we operate. The proactive identification and management of key risks and opportunities, including those related to climate change, supports the achievement of the Group’s strategy.

We are undertaking further detailed analysis of climate scenarios and will incorporate the results into the Group’s five year strategic plans. Where appropriate, we will develop asset-level climate adaptation plans.

In addition, we are furthering our efforts to forecast the embodied carbon in the construction of new developments and consider ways to reduce it. This work will enable GPT to establish embodied carbon metrics and understand where opportunities exist to set targets in the future.

The Group will continue its ongoing analysis of climate change risks and opportunities, the results of which will continue to be embedded into how GPT does business.

GPT’s Climate Disclosure Statement is available on our website: www.gpt.com.au

GPT outlines the steps that we are taking to identify, assess and manage climate-related risks and opportunities in the Group’s annual Climate Disclosure Statement (Statement), which is prepared with reference to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The Statement is available on GPT’s website.

GPT has completed a number of key actions outlined in our inaugural 2019 Climate Disclosure Statement, including the carbon neutral certification of GWOF's operating buildings, setting carbon neutral certification targets for the GPT and GWSCF portfolios, and commencing a program of asset-level hazard identification and adaptation planning.

The Group continues to incorporate climate change risks and opportunities into business decision making.

16 The GPT Group | Interim Report 2021

BUSINESS PERFORMANCE OVERVIEW AND PROSPECTS

RISK DIRECTORS' FINANCIAL MANAGEMENT REPORT STATEMENTS

The GPT Group | Interim Report 2021 17

Directors’ Report

Directors’ Report

The Directors of GPT RE Limited, the Responsible Entity of General Property Trust, present their report together with the financial statements of the General Property Trust (the Trust) and its controlled entities (the trust consolidated entity) for the half year ended 30 June 2021. The trust consolidated entity together with GPT Management Holdings Limited and its controlled entities form the stapled entity, The GPT Group (GPT or The Group).

General Property Trust is a registered scheme, GPT Management Holdings Limited is a company limited by shares, and GPT RE Limited is a company limited by shares, each of which is incorporated and domiciled in Australia. The registered office and principal place of business is Level 51, 25 Martin Place, Sydney NSW 2000.

The Directors’ Report for the half year ended 30 June 2021 has been prepared in accordance with the requirements of the Corporations Act 2001 and includes the following information:

• » Operating and Financial Review, including a review of the Group’s operations and financial position, on pages 1 to 16

• » Information on the Directors on page 19, and

• » Auditor’s Independence Declaration on page 20.

Events subsequent to reporting date

The COVID-19 pandemic has created unprecedented economic and societal impacts and there remains significant uncertainty. In the event the COVID-19 impacts are more severe or prolonged than anticipated, this may have further adverse impacts to asset values and the operating results of the Group. At the reporting date a definitive assessment of the future effects of COVID-19 on the Group cannot be made, as the impact will depend on the magnitude and duration of the government restrictions, with the full range of possible effects unknown.

After the reporting period, lockdown measures were introduced in NSW and were intermittently in place in Victoria and Queensland in response to COVID-19 outbreaks. Lockdown measures remain in place in NSW and Victoria as at the date the accounts were signed.

After the balance date, the Code of Conduct was reinstated in Victoria and New South Wales to provide rent relief to qualifying small and medium tenants. GPT continues to work with tenants to provide relief as required to assist with any short-term cash flow impacts.

On 26 July 2021, GPT withdrew its FFO and distribution guidance for the 12 month period to 31 December 2021 given the uncertainty in relation to the duration and impacts of the measures being implemented to suppress the spread of COVID-19 in both Sydney and Melbourne.

Immediately prior to 30 June 2021, management consulted with the independent valuers to understand if any assumptions within their valuations required revisiting given the continued impact of the pandemic. All valuers confirmed that their valuations were appropriate as at 30 June 2021, noting that the valuations include stabilisation allowances and adjustments to market rents, downtime and incentives. On 27 July 2021, the Valuation Committee undertook a further review of the Group’s valuations with internal tolerance checks undertaken on each asset assessing the potential impact of various scenarios. Directors are of the opinion that allowances already made within the valuations are sufficient and the impact on valuations of any additional allowances that may be required as a result of the impact of trading restrictions (considered under a number of scenarios) are within the normal tolerance set out within the valuation policy. Therefore, there have been no changes to the valuations subsequent to the valuation date.

On 16 July 2021, 23,448sqm of land adjacent to the Rouse Hill Town Centre, held by the Group as inventory, was acquired by the NSW Government through a compulsory acquisition process. The final sale price to be received by the Group is yet to be determined.

Post the balance date, the Group entered into exclusive due diligence to acquire a portfolio from Ascot Capital for approximately $800 million, comprising 26 logistics and industrial assets, together with 4 office assets. There is no certainty that a transaction with Ascot Capital will be completed.

On 16 August 2021, the Directors declared a distribution for the half year ended 30 June 2021 of 13.3 cents, being $254.8 million which is expected to be paid on 31 August 2021.

Other than the above, the Directors are not aware of any matter or circumstances occurring since 30 June 2021 that has significantly or may significantly affect the operations of GPT, the results of those operations or the state of affairs of GPT in the subsequent financial years.

18 The GPT Group | Interim Report 2021

PERFORMANCE AND PROSPECTS

RISK MANAGEMENT

DIRECTORS' FINANCIAL REPORT STATEMENTS

BUSINESS OVERVIEW

Directors

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

The Directors’ Report is signed in accordance with a resolution of the Directors of the GPT Group.

Chairman, Non-Executive Director

Vickki McFadden (joined the Board in March 2018, appointed Chairman in May 2018)

Chief Executive Officer and Managing Director

Bob Johnston (joined the Board in September 2015)

Non-Executive Directors

==> picture [107 x 38] intentionally omitted <==

Vickki McFadden Chairman

==> picture [78 x 38] intentionally omitted <==

Bob Johnston Chief Executive Officer and Managing Director

Tracey Horton AO (joined the Board in May 2019)

Angus McNaughton (joined the Board in November 2018) Mark Menhinnitt (joined the Board in October 2019) Michelle Somerville (joined the Board in December 2015)

Sydney 16 August 2021

Robert Whitfield AM (joined the Board in May 2020)

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 page 20 and forms part of the Directors’ Report.

Rounding of amounts

The amounts contained in this report and in the financial statements have been rounded to the nearest hundred thousand dollars unless otherwise stated (where rounding is applicable) under the option available to GPT under ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191. GPT is an entity to which the Instrument applies.

The GPT Group | Interim Report 2021 19

Financial Statements

Auditor’s Independence Declaration

Auditor’s Independence Declaration

As lead auditor for the review of General Property Trust for the half-year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been:

• (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• (b) no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of General Property Trust and the entities it controlled during the period.

Susan Horlin Partner Sydney PricewaterhouseCoopers 16 August 2021

PricewaterhouseCoopers, ABN 52 780 433 757

One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au

Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124 T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

20 The GPT Group | Interim Report 2021

PERFORMANCE AND PROSPECTS

RISK MANAGEMENT

DIRECTORS' FINANCIAL REPORT STATEMENTS

BUSINESS OVERVIEW

Financial Statements

Contents
FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income	22
Consolidated Statement of Financial Position	23
Consolidated Statement of Changes in Equity	24
Consolidated Statement of Cash Flows	25
NOTES TO THE FINANCIAL STATEMENTS
Result for the half year	26
1. Segment information	27
OPERATING ASSETS AND LIABILITIES
2. Investment properties	31
3. Equity accounted investments	37
CAPITAL STRUCTURE
4. Equity	38
5. Earnings per stapled security	38
6. Distributions paid and payable	38
7. Borrowings	39
8. Other fair value disclosures	40
OTHER DISCLOSURE ITEMS
9. Cash fow information	40
10. Lease revenue	41
11. Commitments	41
12. Revision of previously issued fnancial statements	42
13. Accounting policies, key judgements and estimates	46
14. Events subsequent to reporting date	49
Directors’ Declaration	50
Independent Auditor’s Report	51

The GPT Group | Interim Report 2021 21 21

Financial Statements

Consolidated Statement of Comprehensive Income

Half year ended 30 June 2021

			30 Jun 20
		30 Jun 21	Restated1
	Note	$M	$M
Revenue
Rent from investment properties	10	331.4	316.2
Property and fund management fees		39.5	41.7
Development revenue		11.7	0.7
Development management fees		3.9	3.0
		386.5	361.6
Fair value adjustments and other income
Fair value gain on investment properties		445.8	—
Share of afer tax proft of equity accounted investments		145.7	—
Interest revenue		0.2	0.9
Gain on fnancial liability at amortised cost		1.2	1.1
Net gain/(loss) from foreign currency borrowings and associated hedging		9.7	(9.9)
		602.6	(7.9)
Total revenue, fair value adjustments and other income		989.1	353.7
Expenses
Fair value loss on investment properties		—	411.6
Share of afer tax loss of equity accounted investments		—	188.6
Property expenses and outgoings		96.4	79.4
Management and other administration costs		36.0	30.1
Development costs		9.8	0.7
Depreciation expense		1.2	2.7
Amortisation and impairment of sofware		1.1	1.6
Other impairment expense		14.3	0.1
Impairment loss on trade and other receivables		10.0	59.8
Finance costs		45.4	50.9
Net loss on fair value movements of derivatives		10.3	42.7
Net foreign exchange loss		0.1	—
Total expenses		224.6	868.2
Proft/(loss) before income tax expense		764.5	(514.5)
Income tax expense		4.0	5.9
Net proft/(loss) for the half year		760.5	(520.4)
Other comprehensive income
Items that may be reclassifed to proft or loss, net of tax
Movement in hedging reserve		8.4	(4.1)
Movement in fair value of cash fow hedges		2.7	1.3
Total other comprehensive income		11.1	(2.8)
Total comprehensive income/(loss) for the half year		771.6	(523.2)
Net proft/(loss) atributable to:
»Securityholders of the Trust		751.2	(540.6)
»Securityholders of other entities stapled to the Trust		9.3	20.2
Total comprehensive income/(loss) atributable to:
»Securityholders of the Trust		762.3	(543.4)
»Securityholders of other entities stapled to the Trust		9.3	20.2
Basic earnings per unit atributable to ordinary securityholders of the Trust
Earnings per unit (cents per unit) – proft/(loss) from continuing operations	5(a)	38.9	(27.8)
Basic earnings per stapled security atributable to ordinary
stapled securityholders of the GPT Group
Earnings per stapled security (cents per stapled security) –
proft/(loss) from continuing operations	5(b)	39.3	(26.7)

1. The comparatives have been restated to reflect the implementation of an IFRIC agenda decision, refer to note 12 for details.

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

22 The GPT Group | Interim Report 2021

BUSINESS PERFORMANCE RISK DIRECTORS' FINANCIAL OVERVIEW AND PROSPECTS MANAGEMENT REPORT STATEMENTS

Consolidated Statement of Financial Position

At 30 June 2021

			31 Dec 20
		30 Jun 21	Restated1
	Note	$M	$M
Assets
Current assets
Cash and cash equivalents		72.2	372.5
Trade receivables		57.3	62.7
Other receivables		138.0	30.7
Inventories		20.7	53.6
Derivative assets		15.0	19.2
Prepayments		12.1	11.1
Other assets		1.8	41.6
		317.1	591.4
Assets classifed as held for sale – investment properties	2(a)(v)	—	108.5
Total current assets		317.1	699.9
Non-current assets
Investment properties	2(a)	10,964.1	10,323.6
Equity accounted investments	3	3,834.0	3,723.8
Intangible assets		24.6	24.8
Inventories		68.1	41.9
Property, plant and equipment		9.8	10.6
Derivative assets		415.0	461.1
Right-of-use assets		36.2	40.6
Deferred tax assets		18.3	14.6
Other assets		7.1	6.0
Total non-current assets		15,377.2	14,647.0
Total assets		15,694.3	15,346.9
Liabilities
Current liabilities
Payables		135.2	180.5
Borrowings	7	589.4	519.0
Derivative liabilities		8.6	4.0
Lease liabilities – other property leases		8.8	7.5
Provisions		27.5	29.7
Current tax liabilities		7.3	2.0
Total current liabilities		776.8	742.7
Non-current liabilities
Borrowings	7	3,538.6	3,568.4
Derivative liabilities		88.6	109.6
Lease liabilities – investment properties	2(a)	7.7	7.8
Lease liabilities – other property leases		34.8	39.8
Provisions		1.1	1.1
Total non-current liabilities		3,670.8	3,726.7
Total liabilities		4,447.6	4,469.4
Net assets		11,246.7	10,877.5
Equity
Securityholders of the Trust (parent entity)
Contributed equity	4	8,526.5	8,673.2
Reserves		(36.5)	(47.6)
Retained earnings		3,195.0	2,700.9
Total equity of the Trust securityholders		11,685.0	11,326.5
Securityholders of other entities stapled to the Trust
Contributed equity	4	331.9	332.0
Reserves		21.1	19.6
Accumulated losses		(791.3)	(800.6)
Total equity of other stapled securityholders		(438.3)	(449.0)
Total equity		11,246.7	10,877.5

1. The comparatives have been restated to reflect the implementation of an IFRIC agenda decision, refer to note 12 for details.

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

The GPT Group | Interim Report 2021 23

Financial Statements

Consolidated Statement of Changes in Equity

Half year ended 30 June 2021

General Property Trust Other entities stapled to the General Property Trust Contributed Retained Contributed Accumulated Total equity Reserves earnings Total equity Reserves losses Total equity Note $M $M $M $M $M $M $M $M $M	Equity atributable to Securityholders At 31 December 2019 8,673.2 (23.5) 3,123.5 11,773.2 332.0 37.3 (815.9) (446.6) 11,326.6	Change in acounting policy1 — — — — — — (11.6) (11.6) (11.6) At 1 January 2020 8,673.2 (23.5) 3,123.5 11,773.2 332.0 37.3 (827.5) (458.2) 11,315.0	Movement in hedging reserve — (4.1) — (4.1) — — — — (4.1) Movement in fair value of cash fow hedges — 1.3 — 1.3 — — — — 1.3	Other comprehensive income for the half year — (2.8) — (2.8) — — — — (2.8) (Loss)/proft for the half year — — (540.6) (540.6) — — 20.2 20.2 (520.4)	Total comprehensive (loss)/income for the half year — (2.8) (540.6) (543.4) — — 20.2 20.2 (523.2)	Transactions with Securityholders in their capacity as Securityholders Movement in employee incentive scheme reserve net of tax — — — — — (15.3) — (15.3) (15.3) Purchase of treasury securities for employees — — — — — (4.1) — (4.1) (4.1)	At 30 June 2020 8,673.2 (26.3) 2,582.9 11,229.8 332.0 17.9 (807.3) (457.4) 10,772.4	8,673.2 (47.6) 2,700.9 11,326.5 332.0 19.6 (800.6) (449.0) 10,877.5	— 8.4 — 8.4 — — — — 8.4 — 2.7 — 2.7 — — — — 2.7	— 11.1 — 11.1 — — — — 11.1 — — 751.2 751.2 — — 9.3 9.3 760.5	— 11.1 751.2 762.3 — — 9.3 9.3 771.6	(146.7) — — (146.7) (0.1) — — (0.1) (146.8) — — — — — 1.5 — 1.5 1.5 — — (257.1) (257.1) — — — — (257.1)	8,526.5 (36.5) 3,195.0 11,685.0 331.9 21.1 (791.3) (438.3) 11,246.7	1. Refer to Note 12. The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
								Equity atributable to Securityholders At 1 January 2021	Movement in hedging reserve Movement in fair value of cash fow hedges	Other comprehensive income for the half year Proft for the half year	Total comprehensive proft for the half year	Transactions with Securityholders in their capacity as Securityholders On-market securities buy-back 4 Movement in employee incentive scheme reserve net of tax Distributions paid and payable 6	At 30 June 2021

24 The GPT Group | Interim Report 2021

BUSINESS PERFORMANCE RISK DIRECTORS' FINANCIAL OVERVIEW AND PROSPECTS MANAGEMENT REPORT STATEMENTS

Consolidated Statement of Cash Flows

Half year ended 30 June 2021

			30 Jun 20
		30 Jun 21	Restated1
	Note	$M	$M
Cash fows from operating activities
Receipts in the course of operations (inclusive of GST)		410.1	324.9
Payments in the course of operations (inclusive of GST)		(153.7)	(145.4)
Proceeds from sale of inventories		11.7	0.7
Payments for inventories		(2.5)	(5.0)
Distributions received from equity accounted investments		73.0	77.5
Interest received		0.1	1.0
Income taxes paid		(2.5)	(2.3)
Finance costs paid		(47.2)	(51.1)
Net cash infows from operating activities	9	289.0	200.3
Cash fows from investing activities
Payments for acquisition of investment properties		(127.9)	(78.8)
Payments for operating capital expenditure on investment properties		(22.6)	(31.9)
Payments for development capital expenditure on investment properties		(80.2)	(137.5)
Proceeds from disposal of investment properties (net of transaction costs)		5.5	—
Payments for property, plant and equipment		(0.6)	(2.3)
Payments for intangibles		(1.1)	(6.6)
Investment in equity accounted investments		(41.8)	(5.8)
Net cash outfows from investing activities		(268.7)	(262.9)
Cash fows from fnancing activities
Payment for on-market buy-back of securities		(146.8)	—
Proceeds from borrowings		91.7	1,276.9
Repayment of borrowings		(4.7)	(986.7)
Repayment of principal elements of lease payments		(3.7)	(3.3)
Distributions paid to securityholders		(257.1)	(260.4)
Net cash (outfows)/infows from fnancing activities		(320.6)	26.5
Net decrease in cash and cash equivalents		(300.3)	(36.1)
Cash and cash equivalents at the beginning of the half year		372.5	104.2
Cash and cash equivalents at the end of the half year		72.2	68.1

1. The comparatives have been restated to reflect the implementation of an IFRIC agenda decision, refer to note 12 for details.

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

The GPT Group | Interim Report 2021 25

Financial Statements

Notes to the Financial Statements

Half year ended 30 June 2021

These are the consolidated financial statements of the consolidated entity, GPT Group (GPT or the Group), which consists of General Property Trust (the Trust), GPT Management Holdings Limited (the Company) and their controlled entities.

The notes to these financial statements are organised into sections to help users find and understand the information they need to know. Additional information is also provided where it is helpful to understand GPT’s performance.

The notes to the financial statements are organised into the following sections:

Note 1 – Result for the half year: focuses on results and performance of GPT.

Notes 2 to 3 – Operating assets and liabilities: provides information on the assets and liabilities used to generate GPT’s trading performance. Notes 4 to 8 – Capital structure: outlines how GPT manages its capital structure and various financial risks.

Notes 9 to 14 – Other disclosure items: provides information on other items that must be disclosed to comply with Australian Accounting Standards and other regulatory pronouncements.

Key judgements and estimates

In applying GPT’s accounting policies, management have made a number of judgements, estimates and assumptions regarding future events.

The ongoing COVID-19 pandemic has created heightened levels of economic uncertainty, resulting in management’s judgements and estimates having a greater impact on the result for the period than normal.

GPT has assessed key judgements and estimates in light of COVID-19 and adjusted underlying assumptions accordingly.

Management has made key assumptions relating to the levels of debt forgiveness (rent waivers) to be provided to tenants (including both eligible SME tenants as defined by the commercial tenancy Code of Conduct, and other impacted tenants). While the majority of leasing deals under the Code of Conduct have now been finalised, some deals still remain unresolved. Therefore, management has used their judgement to determine estimated amounts of rent waivers for the half year to 30 June 2021. These are reflected as a write-off of trade receivables. For remaining uncollected trade receivables at 30 June 2021, management has assessed that there is an increased level of risk associated with the collection of these balances due to the financial impacts of the pandemic on tenants. Management has therefore made judgements in relation to the likelihood of collecting these amounts, which are reflected in the estimated credit loss allowance for trade receivables. See note 13(c).

The social distancing and mobility restrictions implemented in response to the COVID-19 pandemic have accelerated several existing trends impacting GPT’s properties, such as online shopping and flexible working. Changes in shopping behaviours have resulted in an increase in demand for well-located logistics facilities to service increased on-line spending. This trend is also accelerating the transition to tenancies offering experience based services in our retail assets. The increased adoption of flexible working has impacted traffic at our office properties and has increased the focus on the provision of flexible work spaces within these properties. The extent and pace of the adoption of these trends in the future have the potential to impact future investment property income and prices, resulting in impacts to property valuations. Management have reviewed the investment property valuations for both accuracy and the reasonableness of assumptions used to determine fair value. See note 2(c) for information on GPT’s valuation process, and note 2(d) for a sensitivity analysis showing indicative movements in investment property valuations should certain key metrics differ from those assumed in the valuations.

The following judgements, estimates and assumptions have the potential to have a material impact on the financial statements:

Area of judgements and estimates	Assumptions underlying	Note
Lease liabilities	Lease term and incremental borrowing rate	2, 13
Investment properties *	Fair value	2
Equity accounted investments	Assessment of control versus signifcant infuence	3
IT development and sofware	Impairment trigger and recoverable amounts	13
Inventories	Lower of cost and net realisable value	13
Security based payments	Fair value	13
Trade receivables *	Measurement of expected credit loss	13
Right-of-use assets *	Recoverable amount	13

Items marked with * contain judgements and estimates which have been significantly impacted by COVID-19 in either the current or comparative periods.

26 The GPT Group | Interim Report 2021

PERFORMANCE AND PROSPECTS

RISK DIRECTORS' FINANCIAL MANAGEMENT REPORT STATEMENTS

BUSINESS OVERVIEW

RESULT FOR THE HALF YEAR

1. Segment Information

GPT’s operating segments are described in the table below. The chief operating decision makers monitor the performance of the business on the basis of Funds from Operations (FFO) for each segment. FFO represents GPT’s underlying and recurring earnings from its operations, and is determined by adjusting the statutory net profit after tax for items which are non-cash, unrealised or capital in nature. FFO includes impairment losses related to uncollected trade receivables. FFO has been determined based on guidelines established by the Property Council of Australia.

Types of products and services which generate the segment result

Segment	Types of products and services which generate the segment result
Retail	Ownership, development (including mixed use) and management of predominantly regional and sub-regional
	shopping centres as well as GPT’s equity investment in GPT Wholesale Shopping Centre Fund.
Ofce	Ownership, development (including mixed use) and management of prime CBD ofce properties with some
	associated retail space as well as GPT’s equity investment in GPT Wholesale Ofce Fund.
Logistics	Ownership, development (including mixed use) and management of logistics assets as well as GPT’s equity
	investment in the GPT QuadReal Logistics Trust.
Funds Management	Management of two Australian wholesale property funds in the retail and ofce sectors, and the GPT QuadReal
	Logistics Trust in the logistics sector.
Corporate	Cash and other assets, borrowings and associated hedges as well as net fnance costs, corporate management
	and administration expenses and income tax expense.

a) Segment financial information

30 June 2021

The segment financial information provided to the chief operating decision makers for the half year ended 30 June 2021 is set out below:

					Funds
		Retail	Offce	Logistics	Management	Corporate	Total
	Note	$M	$M	$M	$M	$M	$M
Financial performance by segment
Rent from investment properties	b(ii)	172.0	127.3	91.1	—	—	390.4
Property expenses and outgoings	b(iii)	(57.9)	(29.8)	(16.9)	—	—	(104.6)
Income from Funds	b(iv)	22.8	36.9	0.1	—	—	59.8
Management net income	b(v)	4.1	(1.1)	(0.8)	23.9	(23.4)	2.7
Operations Net Income		141.0	133.3	73.5	23.9	(23.4)	348.3
Development proft	b(vi)	—	—	1.9	—	—	1.9
Development management net income	b(vii)	(0.2)	1.2	0.1	—	—	1.1
Development Net Income		(0.2)	1.2	2.0	—	—	3.0
Interest revenue		—	—	—	—	0.2	0.2
Finance costs	b(viii)	—	—	—	—	(44.5)	(44.5)
Net Finance Costs		—	—	—	—	(44.3)	(44.3)
Segment Result Before Tax		140.8	134.5	75.5	23.9	(67.7)	307.0
Income tax expense	b(ix)	—	—	—	—	(4.7)	(4.7)
Funds from Operations (FFO)	b(i)	140.8	134.5	75.5	23.9	(72.4)	302.3
Reconciliation of segment assets and liabilities to the		Consolidated	Statement of Financial Position
Current Assets
Current assets		15.8	—	4.9	—	296.4	317.1
Total Current Assets		15.8	—	4.9	—	296.4	317.1
Non-Current Assets
Investment properties		4,801.3	2,819.9	3,342.9	—	—	10,964.1
Equity accounted investments		821.2	2,966.9	35.9	—	10.0	3,834.0
Inventories		65.1	—	3.0	—	—	68.1
Other non-current assets		10.2	16.9	7.2	—	476.7	511.0
Total Non-Current Assets		5,697.8	5,803.7	3,389.0	—	486.7	15,377.2
Total Assets		5,713.6	5,803.7	3,393.9	—	783.1	15,694.3
Current and non-current liabilities		7.7	22.2	—	—	4,417.7	4,447.6
Total Liabilities		7.7	22.2	—	—	4,417.7	4,447.6
Net Assets		5,705.9	5,781.5	3,393.9	—	(3,634.6)	11,246.7

The GPT Group | Interim Report 2021 27

Financial Statements

Notes to the Financial Statements (continued)

Half year ended 30 June 2021

1. Segment Information (continued)

a) Segment financial information (continued)

30 June 2020[ 1]

The segment financial information provided to the chief operating decision makers for the half year ended 30 June 2020 is set out below:

					Funds
		Retail	Offce	Logistics	Management	Corporate	Total
	Note	$M	$M	$M	$M	$M	$M
Financial performance by segment
Rent from investment properties	b(ii)	116.2	137.5	80.4	—	—	334.1
Property expenses and outgoings	b(iii)	(45.3)	(30.5)	(15.0)	—	—	(90.8)
Income from Funds	b(iv)	6.3	34.7	—	—	—	41.0
Management net income	b(v)	(2.5)	(2.3)	(0.7)	24.2	(7.6)	11.1
Operations Net Income		74.7	139.4	64.7	24.2	(7.6)	295.4
Development proft	b(vi)	4.6	—	—	—	—	4.6
Development management net income	b(vii)	(0.1)	0.5	(0.3)	—	—	0.1
Development Net Income		4.5	0.5	(0.3)	—	—	4.7
Interest income		—	—	—	—	0.9	0.9
Finance costs	b(viii)	—	—	—	—	(50.0)	(50.0)
Net Finance Costs		—	—	—	—	(49.1)	(49.1)
Segment Result Before Tax		79.2	139.9	64.4	24.2	(56.7)	251.0
Income tax expense	b(ix)	—	—	—	—	(6.5)	(6.5)
Funds from Operations (FFO)	b(i)	79.2	139.9	64.4	24.2	(63.2)	244.5
Reconciliation of segment assets and liabilities to the		Consolidated	Statement of Financial Position – as at			31 December	2020
Current Assets
Current assets		46.9	—	122.0	—	531.0	699.9
Total Current Assets		46.9	—	122.0	—	531.0	699.9
Non-Current Assets
Investment properties		4,753.9	2,691.8	2,877.9	—	—	10,323.6
Equity accounted investments		803.3	2,910.5	—	—	10.0	3,723.8
Inventories		37.1	—	4.8	—	—	41.9
Other non-current assets		10.2	20.2	6.1	—	521.2	557.7
Total Non-Current Assets		5,604.5	5,622.5	2,888.8	—	531.2	14,647.0
Total Assets		5,651.4	5,622.5	3,010.8	—	1,062.2	15,346.9
Current and non-current liabilities		7.8	23.9	31.9	—	4,405.8	4,469.4
Total Liabilities		7.8	23.9	31.9	—	4,405.8	4,469.4
Net Assets		5,643.6	5,598.6	2,978.9	—	(3,343.6)	10,877.5

1. Comparatives in this table have been restated to the current year presentation.

28 The GPT Group | Interim Report 2021

BUSINESS PERFORMANCE OVERVIEW AND PROSPECTS

RISK DIRECTORS' FINANCIAL MANAGEMENT REPORT STATEMENTS

1. Segment Information (continued)

• b) Reconciliation of segment result to the Consolidated Statement of Comprehensive Income

	30 Jun 21	30 Jun 201
	$M	$M
i) FFO to net proft/(loss) for the half year
Segment result
FFO	302.3	244.5
Adjustments
Fair value gain/(loss) on investment properties	445.8	(411.6)
Fair value gain/(loss) and other adjustments to equity accounted investments	51.5	(278.4)
Amortisation of lease incentives and costs	(28.5)	(26.6)
Straightlining of rental income	2.9	5.3
Valuation increase/(decrease)	471.7	(711.3)
Net loss on fair value movement of derivatives	(10.3)	(42.7)
Net gain/(loss) from foreign currency borrowings and associated hedging	9.7	(9.9)
Net foreign exchange loss	(0.1)	—
Gain on fnancial liability at amortised cost	1.2	1.1
Financial instruments mark to market and net foreign exchange movements	0.5	(51.5)
Impairment expense	(14.3)	(1.5)
Other items	0.3	(0.6)
Total other items	(14.0)	(2.1)
Consolidated Statement of Comprehensive Income
Net proft/(loss) for the half year	760.5	(520.4)
ii) Rent from investment properties
Segment result
Rent from investment properties	390.4	334.1
Less: share of rent from investment properties in equity accounted investments	(42.6)	(55.6)
Eliminations of intra-group lease payments	(0.8)	(0.8)
Adjustments
Amortisation of lease incentives and costs	(28.5)	(26.6)
Straightlining of rental income	2.9	5.3
Impairment loss on trade and other receivables	10.0	59.8
Consolidated Statement of Comprehensive Income
Rent from investment properties	331.4	316.2
iii) Property expenses and outgoings
Segment result
Property expenses and outgoings	(104.6)	(90.8)
Less: share of property expenses and outgoings in equity accounted investments	8.2	11.4
Consolidated Statement of Comprehensive Income
Property expenses and outgoings	(96.4)	(79.4)
iv) Share of afer tax proft of equity accounted investments
Segment result
Income from funds	59.8	41.0
Share of rent from investment properties in equity accounted investments	42.6	55.6
Share of property expenses and outgoings in equity accounted investments	(8.2)	(11.4)
Development revenue – equity accounted investments	—	4.6
Adjustments
Fair value gain/(loss) and other adjustments to equity accounted investments	51.5	(278.4)
Consolidated Statement of Comprehensive Income
Share of afer tax proft/(loss) of equity accounted investments	145.7	(188.6)

1. The comparatives have been restated to reflect the implementation of an IFRIC agenda decision, refer to note 12 for details.

The GPT Group | Interim Report 2021 29

Financial Statements

Notes to the Financial Statements (continued)

Half year ended 30 June 2021

1. Segment Information (continued)

b) Reconciliation of segment result to the Consolidated Statement of Comprehensive Income (continued)

	30 Jun 21	30 Jun 201
	$M	$M
v) Management net income
Segment result
Operations	2.7	11.1
Change in accounting policy	—	(1.9)
Less: expenses in development management net income	(2.8)	(2.9)
Eliminations of intra-group lease payments	0.8	0.8
Transfer to fnance costs – leases	0.9	0.9
Less: depreciation expense	1.2	2.7
Less: amortisation and impairment of sofware	1.1	1.6
Less: other impairment expense	—	0.1
Adjustments
Other	(0.4)	(0.8)
Management net income	3.5	11.6
Consolidated Statement of Comprehensive Income
Property and fund management fees	39.5	41.7
Management and other administration costs	(36.0)	(30.1)
Management net income	3.5	11.6
vi) Development proft
Segment result
Development revenue	1.9	4.6
Less: share of afer tax proft of equity accounted investments	—	(4.6)
Development proft	1.9	—
Consolidated Statement of Comprehensive Income
Development revenue	11.7	0.7
Development costs	(9.8)	(0.7)
Development proft	1.9	—
vii) Development management net income
Segment result
Development net income	1.1	0.1
Add: expenses in development net income	2.8	2.9
Consolidated Statement of Comprehensive Income
Development management fees	3.9	3.0
viii) Finance costs
Segment result
Finance costs – borrowings	(44.5)	(50.0)
Finance costs – leases	(0.9)	(0.9)
Consolidated Statement of Comprehensive Income
Finance costs	(45.4)	(50.9)
ix) Income tax expense
Segment result
Income tax expense	(4.7)	(6.5)
Adjustment
Change in accounting policy	—	0.6
Tax impact of reconciling items from segment result to net proft/(loss) for the half year	0.7	—
Consolidated Statement of Comprehensive Income
Income tax expense	(4.0)	(5.9)

1. The comparatives have been restated to reflect the implementation of an IFRIC agenda decision, refer to note 12 for details.

30 The GPT Group | Interim Report 2021

BUSINESS PERFORMANCE OVERVIEW AND PROSPECTS

RISK DIRECTORS' FINANCIAL MANAGEMENT REPORT STATEMENTS

OPERATING ASSETS AND LIABILITIES

2. Investment Properties

Basis of valuation

In line with the Valuation Policy, GPT independently values each asset (including investment property assets disclosed within equity accounted investments) at least annually.

Valuations were undertaken having regards to the following factors:

• » The government legislated the Code of Conduct for commercial tenancies, in addition to implementing various health and other economic measures which have impacted GPT’s properties, tenants and cash flows;

• » Independent valuers analyse and then reflect transaction evidence in their key valuation assumptions, including capitalisation and discount rates, when the evidence becomes available. The fair value assessment of GPT’s portfolio as at the reporting date includes an estimate of the impacts of COVID-19 using information available at the time of preparation of the financial statements, including the impact of rent relief estimated to be granted to tenants. Independent valuers have also adjusted a number of assumptions, including increasing allowances for incentives and lease up periods for current vacancies, near term lease expiries and lowering forecast market rental growth rates; and

• » Immediately prior to 30 June 2021, management consulted with the independent valuers to understand if any assumptions within their valuations required revisiting given the government mandated restrictions announced in NSW during June. All valuers confirmed that their valuations were appropriate as at 30 June 2021, noting that the valuations include stabilisation allowances and adjustments to market rents, downtime and incentives. On 27 July 2021 the Valuation Committee undertook a further review of the valuations with internal tolerance checks undertaken on each asset assessing the potential impact of various scenarios given the extensions to the restrictions to trading in NSW and the announcement of restrictions in Victoria. Management are of the opinion that allowances already made within the valuations are sufficient and the impact on valuations of any additional allowances that may be required as a result of the impact of trading restrictions (considered under a number of scenarios) are within the normal tolerance set out within the valuation policy.

In the event that COVID-19 impacts are more severe or prolonged than anticipated, this may have a further adverse impact on the fair value of GPT’s investment properties. Many independent valuations contained material valuation uncertainty clauses given the impacts of COVID-19. The valuations can be relied upon at the date of valuation however, because a higher level of valuation uncertainty than normal is assumed.

GPT provides factual information, including passing rent information, outstanding incentives and capital expenditure forecasts to allow the independent valuers to form their own assessment. Management has reviewed the investment property valuations for accuracy and reasonableness of the assumptions used to determine fair value. The fair values, as assessed by the independent valuers, are shown in the following tables.

• a) Investment properties

a) Investment properties
Note	Investment properties Less lease liabilities 30 Jun 21 Fair value $M $M $M	Investment properties Less lease liabilities 31 Dec 20 Fair value
		$M $M $M
Retail (i) Ofce (ii) Logistics (iii) Properties under development (iv)	4,801.3 (7.7) 4,793.6 2,819.9 — 2,819.9 2,988.4 — 2,988.4 354.5 — 354.5	4,753.9 (7.8) 4,746.1 2,437.8 — 2,437.8 2,666.7 — 2,666.7 465.2 — 465.2
Total investment properties	10,964.1 (7.7) 10,956.4	10,323.6 (7.8) 10,315.8

The GPT Group | Interim Report 2021 31

Financial Statements

Notes to the Financial Statements (continued)

Half year ended 30 June 2021

2. Investment Properties (continued)

a) Investment properties (continued)

2. Investment Properties (continued) a) Investment properties (continued)
Ownership interest1 % Acquisition date I	nvestment properties Less lease liabilities 30 Jun 21 Fair value I $M $M $M	nvestment properties Less lease liabilities 31 Dec 20 Fair value Latest Independent valuation date Valuer $M $M $M
i) Retail Casuarina Square, NT 50.0 Oct 1973 Charlestown Square, NSW 100.0 Dec 1977 Highpoint Shopping Centre, VIC 16.7 Aug 2009 Melbourne Central, VIC 100.0 ** May 1999/ – retail portion2 May 2001 Rouse Hill Town Centre, NSW 100.0 Dec 2005 Sunshine Plaza, QLD 50.0 ** Dec 1992/ Jun 1999/ Sep 2004 Westfeld Penrith, NSW 50.0 Jun 1971	210.5 — 210.5 859.0 — 859.0 358.3 — 358.3 1,483.0 (5.7) 1,477.3 669.2 — 669.2 566.3 (2.0) 564.3 655.0 — 655.0	209.8 — 209.8 Jun 2021 Urbis 869.0 — 869.0 Jun 2021 CB Richard Ellis 350.0 — 350.0 Jun 2021 Savills Australia 1,470.3 (5.7) 1,464.6 Jun 2021 Jones Lang LaSalle 645.2 — 645.2 Jun 2021 Colliers International 568.6 (2.1) 566.5 Jun 2021 Savills Australia 641.0 — 641.0 Jun 2021 Savills Australia
Total Retail	4,801.3 (7.7) 4,793.6	4,753.9 (7.8) 4,746.1
ii) Ofce Australia Square, Sydney, NSW 50.0 Sep 1981 60 Station Street, Parramata, NSW 100.0 Sep 2018 4 Murray Rose Avenue, Sydney Olympic Park, NSW 100.0 * May 2002 32 Smith, Parramata, NSW3 100.0 Mar 2017 Melbourne Central, VIC May 1999/ – ofce portion2 100.0 May 2001 181 William & 550 Bourke Streets, Melbourne, VIC 50.0 Oct 2014 One One One Eagle Street, Brisbane, QLD 33.3 Apr 1984	619.0 — 619.0 270.0 — 270.0 143.1 — 143.1 325.0 — 325.0 736.8 — 736.8 418.0 — 418.0 308.0 — 308.0	583.0 — 583.0 Jun 2021 Savills Australia 273.0 — 273.0 Jun 2021 CB Richard Ellis 143.0 — 143.0 Dec 2020 Colliers International — — — Jun 2021 Knight Frank 729.0 — 729.0 Dec 2020 Colliers International 414.5 — 414.5 Jun 2021 Savills Australia 295.3 — 295.3 Jun 2021 Cushman & Wakefeld
Total Ofce	2,819.9 — 2,819.9	2,437.8 — 2,437.8
iii) Logistics Rosehill Business Park, Camellia, NSW 100.0 May 1998 10 Interchange Drive, Eastern Creek, NSW 100.0 Aug 2012 16-34 Templar Road, Erskine Park, NSW 100.0 Jun 2008 36-52 Templar Road, Erskine Park, NSW 100.0 Jun 2008 54-70 Templar Road, Erskine Park, NSW 100.0 Jun 2008 67-75 Templar Road, Erskine Park, NSW 100.0 Jun 2008 29-55 Lockwood Road, Erskine Park, NSW 100.0 Jun 2008 57-87 & 89-99 Lockwood Rd, Erskine Park, NSW 100.0 Jul 2019 407 Pembroke Road, Minto, NSW 50.0 Oct 2008	104.6 — 104.6 47.5 — 47.5 77.0 — 77.0 148.3 — 148.3 202.2 — 202.2 31.5 — 31.5 141.3 — 141.3 124.0 — 124.0 40.3 — 40.3	104.5 — 104.5 Dec 2020 Colliers International 42.0 — 42.0 Jun 2021 Savills Australia 72.0 — 72.0 Jun 2021 CB Richard Ellis 130.0 — 130.0 Jun 2021 Savills Australia 179.0 — 179.0 Jun 2021 Colliers International 28.8 — 28.8 Jun 2021 Jones Lang LaSalle 123.7 — 123.7 Jun 2021 Savills Australia 110.5 — 110.5 Jun 2021 CB Richard Ellis 35.0 — 35.0 Jun 2021 Jones Lang LaSalle

1. Freehold, unless otherwise marked with an * which denotes leasehold and ** denotes a combination of freehold and leasehold respectively.

2. Melbourne Central: 66.7% Retail and 33.3% Office (31 Dec 2020: 66.8% Retail and 33.2% Office). Melbourne Central – Retail Includes 100% of Melbourne Central car park and 100% of 202 Little Lonsdale Street.

3. Following practical completion during the period, this property was reclassified from properties under development to investment property in the Office portfolio.

32 The GPT Group | Interim Report 2021

PERFORMANCE AND PROSPECTS

RISK MANAGEMENT

DIRECTORS' FINANCIAL REPORT STATEMENTS

BUSINESS OVERVIEW

2. Investment Properties (continued)

• a) Investment properties (continued)

2. Investment Properties (continued) a) Investment properties (continued)
Ownership interest1 % Acquisition date I	nvestment properties Less lease liabilities 30 Jun 21 Fair value I $M $M $M	nvestment properties Less lease liabilities 31 Dec 20 Fair value Latest Independent valuation date Valuer $M $M $M
iii) Logistics (continued) 4 Holker Street, Newington, NSW 100.0 Mar 2006 83 Derby Street, Silverwater, NSW 100.0 Aug 2012 Sydney Olympic Park Jun 2010/ Town Centre, NSW 100.0 * Apr 2013 Quad 1, Sydney Olympic Park, NSW 100.0 * Jun 2001 Quad 4, Sydney Olympic Park, NSW 100.0 * Jun 2004 372-374 Victoria Street, Wetherill Park, NSW 100.0 Jul 2006 38 Pine Road, Yennora, NSW 100.0 Nov 2013 18-24 Abbot Road, Seven Hills, NSW 100.0 Oct 2006 1A Huntingwood Drive, Huntingwood, NSW 100.0 Oct 2016 1B Huntingwood Drive, Huntingwood, NSW 100.0 Oct 2016 54 Eastern Creek Drive, Eastern Creek, NSW 100.0 Apr 2016 50 Old Wallgrove Road, Eastern Creek, NSW 100.0 Jun 2016 104 Vanessa Street, Kingsgrove, NSW 100.0 May 2019 64 Biloela Street, Villawood, NSW 100.0 May 2019 30-32 Bessemer Street, Blacktown, NSW 100.0 May 2019 38A Pine Road, Yennora, NSW 100.0 Nov 2013 128 Andrews Road, Penrith, NSW 100.0 Jul 2019 42 Cox Place, Glendenning, NSW2100.0 Dec 2019 Citiwest Industrial Estate, Altona North, VIC 100.0 Aug 1994 Citiport Business Park, Port Melbourne, VIC 100.0 Mar 2012 Austrak Business Park, Somerton, VIC 50.0 Oct 2003 Sunshine Business Estate, Sunshine, VIC 100.0 Jan 2018 396 Mount Derrimut Road, Derrimut, VIC 100.0 Nov 2018 399 Boundary Road, Truganina, VIC 100.0 Dec 2018 21 Shiny Drive, Truganina, VIC 100.0 Nov 2018 21-23 Wirraway Drive, Port Melbourne, VIC 100.0 Mar 2020 1 Botero Place, Truganina, VIC 100.0 May 2020 Foundation Estate, Truganina, VIC 100.0 Dec 2020 59 Forest Way, Karawatha, QLD 100.0 Dec 2012 55 Whitelaw Place, Wacol, QLD 100.0 Dec 2016 2 Ironbark Close, Wembley Business Park, Berrinba, QLD 100.0 Jun 2015 30 Ironbark Close Wembley Business Park, Berrinba, QLD 100.0 Jun 2015	42.3 — 42.3 52.5 — 52.5 49.7 — 49.7 31.1 — 31.1 55.9 — 55.9 40.2 — 40.2 83.3 — 83.3 49.4 — 49.4 54.8 — 54.8 30.0 — 30.0 71.2 — 71.2 87.0 — 87.0 31.3 — 31.3 48.0 — 48.0 46.5 — 46.5 15.5 — 15.5 105.7 — 105.7 51.2 — 51.2 135.0 — 135.0 93.8 — 93.8 238.8 — 238.8 97.0 — 97.0 16.4 — 16.4 22.8 — 22.8 47.2 — 47.2 32.6 — 32.6 50.1 — 50.1 128.0 — 128.0 147.0 — 147.0 21.9 — 21.9 61.3 — 61.3 34.2 — 34.2	42.0 — 42.0 Dec 2020 Colliers International 45.0 — 45.0 Jun 2021 Jones Lang LaSalle 49.7 — 49.7 Dec 2020 Colliers International 31.0 — 31.0 Dec 2020 Colliers International 55.0 — 55.0 Dec 2020 Colliers International 34.7 — 34.7 Jun 2021 Knight Frank 72.0 — 72.0 Jun 2021 Knight Frank 44.2 — 44.2 Jun 2021 Colliers International 52.4 — 52.4 Jun 2021 Savills Australia 28.0 — 28.0 Jun 2021 Savills Australia 60.2 — 60.2 Jun 2021 Colliers International 74.0 — 74.0 Jun 2021 Jones Lang LaSalle 27.4 — 27.4 Jun 2021 Knight Frank 42.7 — 42.7 Jun 2021 CB Richard Ellis 43.5 — 43.5 Jun 2021 CB Richard Ellis 13.6 — 13.6 Jun 2021 Colliers International 93.6 — 93.6 Jun 2021 Colliers International — — — Jun 2021 Knight Frank 115.0 — 115.0 Jun 2021 CB Richard Ellis 93.5 — 93.5 Dec 2020 Savills Australia 215.5 — 215.5 Jun 2021 CB Richard Ellis 88.0 — 88.0 Jun 2021 Jones Lang LaSalle 14.7 — 14.7 Jun 2021 Jones Lang LaSalle 20.5 — 20.5 Jun 2021 Jones Lang LaSalle 42.3 — 42.3 Jun 2021 Savills Australia 32.6 — 32.6 Dec 2020 Savills Australia 44.4 — 44.4 Jun 2021 Savills Australia 120.0 — 120.0 Jun 2021 CB Richard Ellis 137.5 — 137.5 Jun 2021 Jones Lang LaSalle 19.9 — 19.9 Jun 2021 Jones Lang LaSalle 57.0 — 57.0 Jun 2021 Savills Australia 31.3 — 31.3 Jun 2021 Savills Australia
Total Logistics	2,988.4 — 2,988.4	2,666.7 — 2,666.7

1. Freehold, unless otherwise marked with an * which denotes leasehold.

2. Following practical completion during the period, this property has been reclassified from properties under development to investment property in the Logistics portfolio.

The GPT Group | Interim Report 2021 33

Financial Statements

Notes to the Financial Statements (continued)

Half year ended 30 June 2021

2. Investment Properties (continued)

a) Investment properties (continued)

2. Investment Properties (continued) a) Investment properties (continued)
Ownership interest1 % Acquisition date I	nvestment properties Less lease liabilities 30 Jun 21 Fair value I $M $M $M	nvestment properties Less lease liabilities 31 Dec 20 Fair value Latest Independent valuation date Valuer $M $M $M
iv) Property under Development 32 Smith, Parramata, NSW2 100.0 Mar 2017 42 Cox Place, Glendenning, NSW3100.0 Dec 2019 407 Pembroke Rd, Minto, NSW 50.0 Oct 2008 Yiribana Logistics Hub, Mamre Road, Kemps Creek, NSW 100.0 Oct 2020 The Gateway Logistics Hub, Stage 2, Truganina, VIC 100.0 Nov 2018 The Gateway Logistics Hub, Stage 3, Truganina, VIC 100.0 Jul 2019 The Gateway Logistics Hub, Stage 4-6, Truganina, VIC 100.0 Jul 2019 Austrak Business Park, Somerton, VIC 50.0 Oct 2003 Foundation Estate, Truganina, VIC 100.0 Dec 2020 Wembley Business Park, Stage 3, Berrinba, QLD 100.0 Jun 2015 Wembley Business Park, Stage 4, Berrinba, QLD 100.0 Jun 2015	— — — — — — 9.8 — 9.8 145.0 — 145.0 24.5 — 24.5 39.4 — 39.4 30.1 — 30.1 56.4 — 56.4 6.6 — 6.6 13.8 — 13.8 28.9 — 28.9	254.0 — 254.0 — — 34.0 — 34.0 — — 9.8 — 9.8 Jun 2021 Jones Lang LaSalle Apr/Jun 35.0 — 35.0 2021 Knight Frank 13.9 — 13.9 Jun 2021 Savills Australia 12.1 — 12.1 Jun 2021 Savills Australia 27.5 — 27.5 Dec 2020 Savills Australia 47.6 — 47.6 Jun 2021 CB Richard Ellis 5.7 — 5.7 Jun 2021 CB Richard Ellis 12.9 — 12.9 Jun 2021 Jones Lang LaSalle 12.7 — 12.7 Jun 2021 Jones Lang LaSalle
Total Properties under development	354.5 — 354.5	465.2 — 465.2
v) Investment properties held for sale Jul 2004/ Sydney Olympic Park Aug 2004/ – Metro Assets4 100.0 * Jul 2005 142-158 Pacifc Highway, Charlestown, NSW5 100.0 Oct 2002	— — — — — —	103.0 — 103.0 — — 5.5 — 5.5 — —
Total Properties held for sale	— — —	108.5 — 108.5

1. Freehold, unless otherwise marked with an * which denotes leasehold.

2. Following practical completion during the period, this property has been reclassified from properties under development to investment property in the Office portfolio.

3. Following practical completion during the period, this property has been reclassified from properties under development to investment property in the Logistics portfolio.

4. The Metro Assets at Sydney Olympic Park were compulsorily acquired on 19 March 2021. GPT have recorded the disposal at the current offer price of $103.0 million. This amount is reflected as a receivable as the final sale price to be received from Sydney Metro is yet to be determined.

5. 142-158 Pacific Highway was sold on 30 June 2021 for a total consideration of $5.5 million.

5. 142-158 Pacifc Highway was sold on 30 June 2021 for a total consideration	of $5.5 million.
				Properties
				under
	Retail $M	Offce $M	Logistics $M	development $M	30 Jun 21 $M	31 Dec 20 $M
vi) Reconciliation
Opening balance at the beginning of the half year	4,753.9	2,437.8	2,666.7	465.2	10,323.6	10,327.5
Additions – operating capital expenditure	6.6	4.2	1.3	—	12.1	28.4
Additions – development capital expenditure	7.6	2.0	1.0	72.2	82.8	247.4
Additions – interest capitalised1	0.2	—	—	2.6	2.8	10.3
Asset acquisitions	—	—	0.1	101.4	101.5	245.7
Transfers to assets held for sale	—	—	—	—	—	(108.5)
Transfers from properties under development/other assets	—	325.0	51.2	(374.8)	1.4	—
Ground leases of investment properties	(0.1)	—	—	—	(0.1)	1.4
Disposals	—	—	—	—	—	(61.8)
Fair value adjustments	35.8	50.9	272.1	87.0	445.8	(365.6)
Lease incentives (includes rent free)	3.6	10.5	1.6	0.3	16.0	43.7
Leasing costs	2.3	1.3	0.1	0.1	3.8	6.6
Amortisation of lease incentives and costs	(7.3)	(13.1)	(8.0)	(0.1)	(28.5)	(56.9)
Straightlining of leases	(1.3)	1.3	2.3	0.6	2.9	5.4
Closing balance at the end of the half year	4,801.3	2,819.9	2,988.4	354.5	10,964.1	10,323.6

1. A capitalisation interest rate of 2.7% (31 December 2020: 3.1%) has been applied when capitalising interest on qualifying assets.

34 The GPT Group | Interim Report 2021

PERFORMANCE AND PROSPECTS

RISK DIRECTORS' FINANCIAL MANAGEMENT REPORT STATEMENTS

BUSINESS OVERVIEW

2. Investment Properties (continued)

b) Fair value measurement, valuation techniques and inputs

A description of the valuation techniques and key inputs are included in the following table:

		Unobservable	Unobservable
Class of	Fair value	inputs	inputs
assets	hierarchy1	Valuation technique Inputs used to measure fair value 30 Jun 21	31 Dec 20
Retail	Level 3	Discounted cash fow Gross market rent (per sqm p.a.) $1,427 – $2,294	$1,382 – $2,238
		(DCF) and income 10 year average specialty market rental growth 2.4% – 3.2%	2.4% – 3.1%
		capitalisation method Adopted capitalisation rate 4.50% – 6.25%	4.50% – 6.25%
		Adopted terminal yield 4.75% – 6.50%	4.75% – 6.50%
		Adopted discount rate 6.00% – 7.00%	6.00% – 7.00%
		Lease incentives (gross) 7.3% – 12.5%	7.3% – 12.5%
		COVID-19 allowance (% of annual income) 0% – 28.3%	7.3% – 20.1%
Ofce	Level 3	DCF and income Net market rent (per sqm p.a.) $430 – $1,400	$430 – $1,435
		capitalisation method 10 year average market rental growth 3.1% – 3.8%	2.5% – 3.7%
		Adopted capitalisation rate 4.75% – 5.63%	4.75% – 5.75%
		Adopted terminal yield 5.00% – 5.75%	5.00% – 6.00%
		Adopted discount rate 5.88% – 6.25%	6.13% – 6.50%
		Lease incentives (gross) 17.5% – 40.0%	16.7% – 37.5%
		COVID-19 allowance (% of annual income) 0% – 0.1%	0% – 15.7%
Logistics	Level 3	DCF and income Net market rent (per sqm p.a.) $70 – $530	$70 – $530
		capitalisation method 10 year average market rental growth 2.9% – 3.4%	2.6% – 3.4%
		Adopted capitalisation rate 3.88% – 5.75%	4.38% – 5.75%
		Adopted terminal yield 4.25% – 6.00%	4.63% – 6.00%
		Adopted discount rate 5.50% – 6.75%	6.00% – 6.75%
		Lease incentives (net) 10.0% – 30.0%	8.3% – 30.0%
		COVID-19 allowance (% of annual income) N/A	0% – 25.0%
Properties	Level 3	Income capitalisation Net market rent (per sqm p.a.) $80 – $113	$109 – $655
under		method, or land rate Adopted capitalisation rate 4.00% – 5.00%	5.00% – 5.25%
development		Adopted terminal yield 4.25% – 5.13%	5.00% – 5.63%
		Adopted discount rate 5.50% – 6.00%	6.00% – 6.38%
		Land rate (per sqm) $275 – $650	$250 – $500
		Proft and risk factor 0% – 15.0%	15.0% – 16.9%
1. Level 3 – inputs for the asset or		liability that are not based on observable market data (unobservable inputs).
DCF method		Under the DCF method, the fair value is estimated using explicit assumptions regarding the benefts and
		liabilities of ownership over the asset’s or liability’s life including an exit or terminal value. The DCF method
		involves the projection of a series of cash fows from the assets or liabilities. To this projected cash fow
		series, an appropriate, market-derived discount rate is applied to establish the present value of the cash fow
		stream associated with the assets or liabilities.
Income capitalisation		This method involves assessing the total net market income of the property and capitalising this in
method		perpetuity to derive a capital value, with allowances for capital expenditure and reversions.
Gross market	rent	A gross market rent is the estimated amount of rent for which a property or space within a	property should
		lease between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction,
		afer proper marketing and wherein the parties have each acted knowledgeably, prudently and without
		compulsion.
Net market rent		A net market rent is the estimated amount for which a property or space within a property	should lease
		between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction,
		afer proper marketing and wherein the parties have each acted knowledgeably, prudently and without
		compulsion and excludes the building outgoings or cleaning costs paid by the tenant.
10 year average specialty		The expected annual rate of change in market rent over a 10 year forecast period in specialty tenancy rents.
market rental	growth	Specialty tenants are those tenancies with a gross letable area of less than 400 square metres (excludes
		ATMs and kiosks).
10 year average market		The expected annual rate of change in market rent over a 10 year forecast period.
rental growth
Adopted		The rate at which net market income is capitalised to determine the value of a property. The rate is
capitalisation rate		determined with regards to market evidence.
Adopted terminal yield		The capitalisation rate used to convert income into an indication of the anticipated value of the property at
		the end of the holding period when carrying out a discounted cash fow calculation. The rate is determined
		with regards to market evidence.

35

The GPT Group | Interim Report 2021

Financial Statements

Notes to the Financial Statements (continued)

Half year ended 30 June 2021

2. Investment Properties (continued)

b) Fair value measurement, valuation techniques and inputs (continued)

Adopted discount rate	The rate of return used to convert a monetary sum, payable or receivable in the future, into present value.
	Theoretically it should refect the opportunity cost of capital, that is, the rate of return the capital can earn if
	put to other uses having similar risk. The rate is determined with regards to market evidence.
Land rate (per sqm)	The land rate is the market land value per sqm.
Proft and risk factor	The proft and risk factor is applied to the remaining costs of a development to refect a target margin required
	to complete the project. The factor will vary depending on the remaining leasing or construction required.
Lease incentives	A lease incentive is ofen provided to a lessee upon the commencement of a lease. Incentives can be a
	combination of, or, one of the following: a rent free period, a ft-out contribution, a cash contribution or
	rental abatement.
COVID-19 allowance	The COVID-19 allowance refects the anticipated prospective rent relief granted to tenants in accordance
	with the Code of Conduct principles.

c) Valuation process – investment properties

GPT manages the semi-annual valuation process to ensure that investment properties are held at fair value in GPT’s accounts and that GPT is compliant with applicable regulations (for example the Corporations Act 2001 and ASIC regulations), the GPT RE Constitution and Compliance Plan.

GPT has a Valuation Committee (committee) which is comprised of the Chief Operating Officer, Chief Financial Officer, Head of Funds Management, Head of Transactions, Deputy Chief Financial Officer and General Counsel.

The purpose of the committee is to:

• » approve the panel of independent valuers;

• » review valuation inputs and assumptions;

• » provide an escalation process where there are differences of opinion from various team members responsible for the valuation;

• » oversee the finalisation of the valuations; and

• » review the independent valuation sign-off and any comments that have been noted.

All independent valuations and internal tolerance checks are reviewed by the committee prior to these being presented to the Board for approval.

Independent valuations

GPT’s independent valuations are performed by independent valuers who hold recognised relevant professional qualifications and have specialised expertise in the investment properties being valued. Selected independent valuation firms form part of a panel approved by the committee. Each valuation firm is limited to undertaking consecutive valuations of a property for a maximum period of two years. Where exceptional circumstances arises, an extension of the valuer’s term must be approved by the relevant Board.

The Valuation Policy requires an independent valuation at least annually for all completed investment properties. Properties under development with value of $100 million or greater are independently valued at least every six months. Unimproved land is independently valued at least every three years. Additional valuations are completed in the event an internal tolerance check identifies the requirement for an independent valuation.

Internal tolerance checks

Every six months, with the exception of properties independently valued, an internal tolerance check is prepared. The internal tolerance check involves the preparation of a DCF and income capitalisation valuation for each investment property. These are produced using a capitalisation rate, terminal yield and discount rates based on comparable market evidence and recent independent valuation parameters. The tolerance measurement will typically be a mid-point of these two approaches.

These internal tolerance checks are used to determine whether the book value is in line with the fair value or whether an independent valuation is required.

d) Sensitivity information – investment properties

Critical judgements are made by GPT in respect of the fair values of investment properties (including investment properties within equity accounted investments). Fair values are reviewed regularly by management with reference to independent property valuations, recent offers, market conditions, and using generally accepted market practices. The valuation process, critical assumptions underlying the valuations and information on sensitivity are disclosed below and in note 2(b).

An independent valuer will typically conduct both an income capitalisation valuation and a discounted cash flow (DCF) valuation for each asset, which informs a range of valuation outcomes. The valuer will then apply their expertise in determining an adopted value, which may include adopting one of these specific approaches or a mid-point of these two approaches.

In conducting the sensitivity analysis, management have selected a sample of two assets for each portfolio, for which key metrics are typical of the portfolio to which they relate. For those assets, the independent valuer conducted the sensitivity analysis in the following tables. Results for individual assets may differ based on each asset’s particular attributes and market conditions.

36 The GPT Group | Interim Report 2021

BUSINESS PERFORMANCE OVERVIEW AND PROSPECTS

RISK DIRECTORS' FINANCIAL MANAGEMENT REPORT STATEMENTS

2. Investment Properties (continued)

d) Sensitivity information – investment properties (continued)

The following table shows the sensitivity of the valuation to movements in the key variables of discount rate and market rental growth rates.

i) Retail valuation sensitivity

i) Retail valuation sensitivity
Discount Rate		(0.25%)	+0.25%
Impact to valuation		2.0%	(2.0%)
10 Year Specialty Growth Rate		(0.25%)	+0.25%
Impact to valuation		(1.8%)	1.8%
ii) Ofce valuation sensitivity
Discount Rate		(0.25%)	+0.25%
Impact to valuation		2.1%	(2.1%)
10 Year Growth Rate		(0.25%)	+0.25%
Impact to valuation		(1.9%)	1.9%
iii) Logistics valuation sensitivity
Discount Rate		(0.25%)	+0.25%
Impact to valuation		2.0%	(1.9%)
10 Year Growth Rate		(0.25%)	+0.25%
Impact to valuation		(1.9%)	1.9%
3. Equity Accounted Investments
		30 Jun 21	31 Dec 20
	Note	$M	$M
Investments in joint ventures	(a)(i)	885.7	848.6
Investments in associates	(a)(ii)	2,948.3	2,875.2
Total equity accounted investments		3,834.0	3,723.8

Details of equity accounted investments

Details of equity accounted investments
Name Principal Activity	Ownership Interest 30 Jun 21 31 Dec 20 30 Jun 21 31 Dec 20 % % $M $M
i) Joint ventures 2 Park Street Trust1 Investment property Horton Trust Investment property GPT QuadReal Logistics Trust2 Investment property Lendlease GPT (Rouse Hill) Pty Limited1, 3 Property development	50.00 50.00 807.7 804.6 50.00 50.00 28.6 28.1 50.10 50.10 35.9 — 50.00 50.00 13.5 15.9
Total investment in joint venture entities	885.7 848.6
ii) Associates GPT Wholesale Ofce Fund1, 4 Investment property GPT Wholesale Shopping Centre Fund1 Investment property GPT Funds Management Limited Funds management Darling Park Trust1 Investment property DPT Operator Pty Limited1 Management DPT Operator No.2 Pty Limited1 Management	21.84 21.87 1,618.3 1,579.6 28.48 28.48 779.1 759.3 100.00 100.00 10.0 10.0 41.67 41.67 540.9 526.3 91.67 91.67 — — 91.67 91.67 — —
Total investments in associates	2,948.3 2,875.2

1. The entity has a 30 June balance date.

2. The GPT QuadReal Logistics Trust was formed in December 2020 and made its first investment in February 2021.

3. GPT has a 50% interest in Lendlease GPT (Rouse Hill) Pty Limited, a joint venture developing residential and commercial land at Rouse Hill, in partnership with Urban Growth and the NSW Department of Planning.

4. Ownership has decreased as a result of GPT not participating in the Distribution Reinvestment Plan (DRP) which occurred during the half year.

For those joint ventures and associates with investment property as the principal activity, refer to note 2 for details on key judgements and estimates relating to the valuation of these investment properties, including how COVID-19 impacts were addressed.

For those joint ventures where the principal activity is property development, refer to note 13(h) for details on key judgements and estimates.

The GPT Group | Interim Report 2021 37

Financial Statements

Notes to the Financial Statements (continued)

Half year ended 30 June 2021

CAPITAL STRUCTURE

4. Equity

				Other entities	Other entities
				stapled to
			Trust		the Trust	Total
	Number		$M		$M	$M
Ordinary stapled securities
Opening securities on issue and contributed equity at 1 January 2020	1,947,929,316		8,673.2		332.0	9,005.2
Closing securities on issue and contributed equity at 30 June 2020	1,947,929,316		8,673.2		332.0	9,005.2
Opening securities on issue and contributed equity at 1 January 2021	1,947,929,316		8,673.2		332.0	9,005.2
On-market securities buy-back1	(32,351,886)		(146.7)		(0.1)	(146.8)
Closing securities on issue and contributed equity at 30 June 2021	1,915,577,430		8,526.5		331.9	8,858.4
1. On 15 February 2021, the Group announced an on-market buy-back of GPT securities, with transactions occurring between 3 March 2021				and 1 June 2021 for an average price
of $4.54 per security.
5. Earnings Per Stapled Security
		30 Jun 21	30 Jun 21		30 June 20130 June 201
		Cents	Cents		Cents	Cents
a) Atributable to ordinary securityholders of the Trust		Basic	Diluted		Basic	Diluted
Total basic and diluted earnings per security atributable to ordinary
securityholders of the Trust		38.9		38.9	(27.8)	(27.8)
b) Atributable to ordinary stapled securityholders of the GPT Group
Total basic and diluted earnings per security atributable to stapled
securityholders of the GPT Group		39.3		39.3	(26.7)	(26.7)
The earnings and weighted average number of ordinary securities (WANOS) used in the calculations of basic and diluted earnings per
ordinary stapled security are as follows:
		$M		$M	$M	$M
c) Reconciliation of earnings used in calculating earnings per ordinary stapled security
Basic and diluted earnings of the Trust		751.2	751.2		(540.6)	(540.6)
Basic and diluted earnings of the Company		9.3		9.3	20.2	20.2
Basic and diluted earnings of the GPT Group		760.5	760.5		(520.4)	(520.4)
		Millions	Millions		Millions	Millions
d) Weighted average number of ordinary securities
WANOS used as the denominator in calculating basic earnings per ordinary stapled security		1,933.2	1,933.2		1,947.9	1,947.9
Performance security rights at weighted average basis2				0.3		—
WANOS used as the denominator in calculating diluted earnings
per ordinary stapled security			1,933.5			1,947.9

1. The comparatives have been restated to reflect the implementation of an IFRIC agenda decision, refer to note 12 for details.

2. Performance security rights granted under the employee incentive schemes are only included in dilutive earnings per ordinary stapled security when the performance hurdles are met at half year end.

6. Distributions Paid And Payable

Distributions are paid to GPT securityholders half yearly.

are met at half year end. 6. Distributions Paid And Payable Distributions are paid to GPT securityholders half yearly.
	Cents per	Total amount
	stapled security	$M
Distributions paid/payable
2021
6 month period ended 31 December 20201	13.2	257.1
Total distributions paid/payable for the half year	13.2	257.1
2020
6 month period ended 30 June 20202	—	—
Total distributions paid/payable for the half year	—	—

1. The distribution for the half year ended 31 December 2020 was declared on 15 February 2021 and paid on 26 February 2021. For the half year ended 30 June 2021, a distribution of 13.3 cents per security representing 99.9 per cent of free cashflow, was declared on 16 August 2021 and is expected to be paid on 31 August 2021. The distribution is 43.0 per cent higher than the 30 June 2020 distribution of 9.30 cents per security as a result of higher collection of trade receivables in the current period and the impact that COVID-19 had on prior period income and operating cashflows.

2. For the half year ended 30 June 2020, a distribution of 9.3 cents per security was declared on 10 August 2020 and disclosed as a subsequent event.

38 The GPT Group | Interim Report 2021

BUSINESS PERFORMANCE RISK DIRECTORS' FINANCIAL OVERVIEW AND PROSPECTS MANAGEMENT REPORT STATEMENTS

7. Borrowings

7. Borrowings
	30 Jun 21	31 Dec 20
	$M	$M
Current borrowings at amortised cost – unsecured1	586.0	514.0
Current borrowings at amortised cost – secured	3.4	5.0
Current borrowings	589.4	519.0
Non-current borrowings at amortised cost – unsecured	1,200.4	1,186.2
Non-current borrowings at fair value through proft and loss – unsecured2	2,249.9	2,294.0
Non-current borrowings at amortised cost – secured	88.3	88.2
Non-current borrowings	3,538.6	3,568.4
Total borrowings 3 – carrying amount	4,128.0	4,087.4
Total borrowing 4 – fair value	4,211.4	4,124.1

1. Represents GPT’s commercial paper program which is an uncommitted line with a maturity period of generally three months or less and is classified as current borrowings. These drawings are in addition to GPT’s committed facilities but may be refinanced by non-current undrawn bank loan facilities.

2. Cumulative fair value movements are shown in the table below.

3. Including unamortised establishment costs, fair value and other adjustments.

4. For the majority of the borrowings, the carrying amount is a reasonable approximation of fair value. Where material differences arise, the fair value is calculated using market observable inputs (level 2) and unobservable inputs (level 3). This excludes unamortised establishment costs.

All borrowings with maturities greater than 12 months after reporting date are classified as non-current liabilities.

When the terms of a financial liability are modified, AASB 9 Financial Instruments requires an entity to perform an assessment to determine whether the modified terms are substantially different from the existing financial liability. Where a modification is substantial, it will be accounted for as an extinguishment of the original financial liability and a recognition of a new financial liability. Where the modification does not result in extinguishment, the difference between the existing carrying amount of the financial liability and the modified cash flows discounted at the original effective interest rate is recognised in the Consolidated Statement of Comprehensive Income as a gain/loss on modification of financial liability. GPT management has assessed the modification of terms requirements within AASB 9 and have concluded that these do not have a material impact for the Group.

The following table outlines the cumulative amount of fair value movements that are included in the carrying amount of borrowings in the Consolidated Statement of Financial Position:

the Consolidated Statement of Financial Position:
	30 Jun 21	31 Dec 20
	$M	$M
Nominal amount	1,907.4	1,907.4
Unamortised borrowing costs	(5.7)	(6.0)
Amortised cost	1,901.7	1,901.4
Cumulative fair value movements	348.2	392.6
Carrying amount	2,249.9	2,294.0

Carrying value of cross currency interest rate swaps hedging the above foreign currency borrowings is reflected in the Consolidated Statement of Financial Position within derivative assets totalling $345.8 million (31 December 2020: $368.9 million) and within derivative liabilities totalling $17.8 million (31 December 2020: $17.3 million).

The maturity profile of borrowings as at 30 June 2021 is provided in the following table:

	Total	Used	Unused
	facility1,2,3	facility1	facility2,3
	$M	$M	$M
Due within one year	590.0	589.4	0.6
Due between one and fve years	2,365.5	843.5	1,522.0
Due afer fve years	2,657.4	2,332.4	325.0
	5,612.9	3,765.3	1,847.6
Cash and cash equivalents			72.2
Total fnancing resources available at the end of the half year			1,919.8
Less: commercial paper2			(586.0)
Less: cash and cash equivalents held for AFSLs			(10.2)
Total fnancing resources available at the end of the half year			1,323.6

1. Excluding unamortised establishment costs, fair value and other adjustments and $10.0 million bank guarantee facilities and its $2.1 million utilisation. This reflects the contractual cashflows payable on maturity of the borrowings taking into account historical exchange rates under cross currency interest rate swaps entered into to hedge the foreign currency borrowings.

2. GPT’s commercial paper program is an uncommitted line with a maturity period of generally three months or less and is classified as current borrowings. These drawings are in addition to GPT’s committed facilities but may be refinanced by non-current undrawn bank loan facilities and are therefore excluded from available liquidity.

3. Including $100.0 million of forward starting facilities available to GPT.

Cash and cash equivalents includes cash on hand, cash at bank and short term money market deposits.

The GPT Group | Interim Report 2021 39

Financial Statements

Notes to the Financial Statements (continued)

Half year ended 30 June 2021

7. Borrowings (continued)

Debt covenants

GPT’s borrowings are subject to a range of covenants, according to the specific purpose and nature of the loans. Most bank facilities include one or more of the following covenants:

• » Gearing: total debt must not exceed 50% of adjusted total tangible assets; and

• » Interest coverage: the ratio of earnings before interest and taxes (EBIT) to finance costs on borrowings is not to be less than 2 times.

A breach of these covenants may trigger consequences ranging from rectifying and/or repricing to repayment of outstanding amounts. GPT performed a review of debt covenants as at 30 June 2021 and no breaches were identified.

8. Other Fair Value Disclosures

Information about how the fair value of financial instruments is calculated and other information required by the accounting standards, including the valuation process, critical assumptions underlying the valuations and information on sensitivity are disclosed in the following table:

a) Fair value measurement, valuation techniques and inputs	a) Fair value measurement, valuation techniques and inputs	a) Fair value measurement, valuation techniques and inputs	a) Fair value measurement, valuation techniques and inputs
Class of	Fair value	Valuation	Inputs used to	Unobservable inputs	Unobservable inputs
assets/liabilities	hierarchy1	technique	measure fair value	30 Jun 21	31 Dec 20
Derivative fnancial	Level 2	DCF (adjusted	Interest rates
instruments		for counterparty	Basis	Not applicable –
		credit worthiness)	CPI	all inputs are market	observable inputs
			Volatility
			Foreign exchange rates
Foreign currency	Level 2	DCF	Interest rates	Not applicable –
borrowings			Foreign exchange rates	all inputs are market	observable inputs

1. Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities.

2. Level 2 – inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

3. Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Counterparty credit worthiness Credit value adjustments are applied to derivative assets based on that counterparty’s credit

risk using the observable credit default swaps curve as a benchmark for credit risk.

Debit value adjustments are applied to derivatives liabilities based on GPT’s credit risk using GPT’s credit default swaps curve as a benchmark for credit risk.

OTHER DISCLOSURE ITEMS

9. Cash Flow Information

Reconciliation of net profit/(loss) for the half year to net cash inflows from operating activities:

OTHER DISCLOSURE ITEMS 9. Cash Flow Information Reconciliation of net proft/(loss) for the half year to net cash infows from operating activities:
	30 Jun 21	30 Jun 201
	$M	$M
Net proft/(loss) for the half year	760.5	(520.4)
Fair value (gain)/loss on investment properties	(445.8)	411.6
Fair value loss on derivatives	10.3	42.7
Net (gain)/loss impact of foreign currency borrowings and associated hedging	(9.7)	9.9
Gain on fnancial liability at amortised cost	(1.2)	(1.1)
Impairment expense	14.3	0.1
Share of afer tax (proft)/loss of equity accounted investments (net of distributions)	(68.3)	262.7
Depreciation and amortisation	2.3	4.3
Non-cash employee benefts – security based payments	1.5	—
Non-cash revenue/expense adjustments	20.8	14.0
Proft on sale of inventories	(1.9)	(0.2)
Proceeds from sale of inventories	11.7	0.7
Payment for inventories	(2.5)	(5.0)
Movements in working capital and reserves (net of impairment)	(4.7)	(16.9)
Net foreign exchange loss	0.1	—
Other	1.6	(2.1)
Net cash infows from operating activities	289.0	200.3

1. The comparatives have been restated to reflect the implementation of an IFRIC agenda decision, refer to note 12 for details.

40 The GPT Group | Interim Report 2021

BUSINESS PERFORMANCE RISK DIRECTORS' FINANCIAL OVERVIEW AND PROSPECTS MANAGEMENT REPORT STATEMENTS

10. Lease Revenue

10. Lease Revenue
Segment Result	30 Jun 21 Retail Offce Logistics Total	30 Jun 20
		Retail Offce Logistics Total
Lease revenue 131.3 71.2 84.8 287.3 Recovery of operating costs 40.0 14.2 6.3 60.5 Share of rent from investment properties in equity accounted investments 0.7 41.9 — 42.6		81.4 68.1 74.3 223.8 34.2 14.4 6.1 54.7 0.6 55.0 — 55.6
172.0 127.3 91.1 390.4 Less: Share of rent from investment properties in equity accounted investments (42.6) Amortisation of lease incentives and costs (28.5) Straightlining of leases 2.9 Eliminations of intra-group lease payments (0.8) Impairment loss on trade and other receivables 10.0		116.2 137.5 80.4 334.1 (55.6) (26.6) 5.3 (0.8) 59.8
Consolidated Statement of Comprehensive Income Rent from investment properties 331.4		316.2

Rent from investment properties

Rent from investment properties in the Consolidated Statement of Comprehensive Income is recognised and measured in accordance with AASB 16 Leases . Revenue for leases which have fixed increases is recognised on a straight line basis for the minimum contracted rent over the lease term with an asset recognised as a component of investment properties relating to the fixed increases in operating lease rentals in future periods. When GPT provides lease incentives to tenants, these costs are amortised against lease income on a straight line basis. Contingent rental income is recognised as revenue in the period in which it is earned.

In addition to revenue generated directly from the lease, rent from investment properties includes non-lease revenue earned from tenants, predominately in relation to recovery of asset operating costs, which is recognised and measured under AASB 15 Revenue from Contracts with Customers .

Management has assessed if a rent waiver constitutes a lease modification under AASB 16 and concluded that where rent waivers relate to periods after the execution of an agreement with the tenant, this constitutes a lease modification. Rent waivers relating to periods prior to the execution of an agreement are treated as write-offs under AASB 9 Financial Instruments where the rent waiver offsets a receivable from the tenant (see note 13(c)). Waivers reflected on invoices issued to tenants and which do not relate to previous outstanding debtors, are shown as a reduction to rent from investment properties on the Consolidated Statement of Financial Performance.

11. Commitments

a) Capital expenditure commitments

Commitments arising from contracts principally relating to the purchase and development of investment properties contracted for at balance date but not recognised in the Consolidated Statement of Financial Position:

balance date but not recognised in the Consolidated Statement of Financial Position:
	30 Jun 21	31 Dec 201
	$M	$M
Retail	24.5	22.0
Ofce	106.6	97.4
Logistics	17.4	17.1
Properties under development	17.6	42.8
Corporate	0.8	0.6
Total capital expenditure commitments	166.9	179.9

1. The comparatives have been restated to reflect the implementation of an IFRIC agenda decision, refer to note 12 for details.

In addition to the above, in 2019 GPT contracted to purchase a logistics development site in Truganina, Melbourne at 865 Boundary Road for which GPT paid a deposit of $5.1 million, with $28.9 million committed to be paid at settlement, which is expected to occur in 2022.

The GPT Group | Interim Report 2021 41

Financial Statements

Notes to the Financial Statements (continued)

Half year ended 30 June 2021

11. Commitments (continued)

b) Capital commitments relating to equity accounted investments

GPT’s share of equity accounted investments’ capital commitments at balance date:

	30 Jun 21	31 Dec 20
	$M	$M
Capital expenditure	145.3	76.1
Total joint ventures and associates’ commitments	145.3	76.1

In addition to the above, during the period the GPT QuadReal Trust contracted to purchase the following:

• A development site in Wacol, Queensland with settlement occurring in July 2021 for a total of $4.7 million (GPT’s 50.1% ownership).

• Development sites in Keysborough, Melbourne adjacent to its existing sites. Settlement is expected to occur in two stages. The first site settled on 9 August 2021 for a total of $3.2 million (GPT’s 50.1% ownership) and the second site is expected to settle in May 2022 for a total of $7.5 million (GPT’s 50.1% ownership).

12. Revision Of Previously Issued Financial Statements

Implementation costs relating to Software as a Service (SaaS) platforms

In March 2021, the IFRS Interpretations Committee (IFRIC) released an agenda decision relating to the application of IAS 38 Intangible Assets to Configuration or Customisation Costs in a Cloud Computing Arrangement . Based on the observations made in IFRIC’s agenda decision, the Group considers costs an organisation incurs in relation to the configuration and customisation of SaaS platforms does not meet the criteria for recognition as an intangible asset, as the supplier of the software and not the organisation, controls the software. As a result, these costs should be immediately expensed as incurred.

Under GPT’s previous accounting policy, these costs were capitalised and amortised on a straight line basis over the length of time the benefits were expected to be received (refer to note 13(g)). GPT has updated its accounting policy to comply with the IFRIC agenda decision, and applied AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors to reflect this change.

GPT has restated comparative information in the financial statements to reflect this change in accounting policy, and has adjusted opening balances in the Consolidated Statement of Financial Position as at 1 January 2020.

The notes below disclose the impact of the change in accounting policy in the financial information of the Group at the beginning of the comparative period, during and at the end of the comparative period. Note 12(c) discloses the impact during and at the end of the current period.

a) Adjustments as at 1 January 2020

Consolidated Statement of Financial Position

Consolidated Statement of Financial Position
	1 Jan 20	Increase /	1 Jan 20
	Prior year	(decrease)	Restated
(Extract)	$M	$M	$M
Assets
Non-current assets
Intangible assets	35.3	(16.6)	18.7
Deferred tax asset	20.5	5.0	25.5
Total non-current assets	15,609.0	(11.6)	15,597.4
Total assets	15,867.8	(11.6)	15,856.2
Net assets	11,326.6	(11.6)	11,315.0
Equity
Securityholders of other entities stapled to the Trust
Accumulated losses	(815.9)	(11.6)	(827.5)
Total equity of other stapled securityholders	(446.6)	(11.6)	(458.2)
Total equity	11,326.6	(11.6)	11,315.0

42 The GPT Group | Interim Report 2021

BUSINESS PERFORMANCE OVERVIEW AND PROSPECTS

RISK DIRECTORS' FINANCIAL MANAGEMENT REPORT STATEMENTS

12. Revision Of Previously Issued Financial Statements (continued)

b) Adjustments to comparative information

12. Revision Of Previously Issued Financial Statements (continued) b) Adjustments to comparative information
Consolidated Statement of Comprehensive Income	30 Jun 20	Increase /	30 Jun 20
	Prior year	(decrease)	Restated
(Extract)	$M	$M	$M
Expenses
Management and other administration costs	26.3	3.8	30.1
Amortisation and impairment of sofware	3.5	(1.9)	1.6
Total expenses	866.3	1.9	868.2
Loss before income tax	(512.6)	(1.9)	(514.5)
Income tax expense	6.5	(0.6)	5.9
Net loss for the half year	(519.1)	(1.3)	(520.4)
Total comprehensive loss for the half year	(521.9)	(1.3)	(523.2)
Net proft atributable to:
»Securityholders of other entities stapled to the Trust	21.5	(1.3)	20.2
Total comprehensive income atributable to:
»Securityholders of other entities stapled to the Trust	21.5	(1.3)	20.2
Basic earnings per stapled security atributable to the ordinary
stapled securityholders of the GPT Group
Earnings per stapled security (cents per stapled security) – loss from continuing operations	(26.6)	(0.1)	(26.7)
Consolidated Statement of Financial Position	31 Dec 20	Increase /	31 Dec 20
	Prior year	(decrease)	Restated
(Extract)	$M	$M	$M
Assets
Non-current assets
Intangible assets	41.5	(16.7)	24.8
Deferred tax asset	9.6	5.0	14.6
Total non-current assets	14,658.7	(11.7)	14,647.0
Total assets	15,358.6	(11.7)	15,346.9
Net assets	10,889.2	(11.7)	10,877.5
Equity
Securityholders of other entities stapled to the Trust
Accumulated losses	(788.9)	(11.7)	(800.6)
Total equity of other stapled securityholders	(437.3)	(11.7)	(449.0)
Total equity	10,889.2	(11.7)	10,877.5

The GPT Group | Interim Report 2021 43

Financial Statements

Notes to the Financial Statements (continued)

Half year ended 30 June 2021

12. Revision Of Previously Issued Financial Statements (continued)

b) Adjustments to comparative information (continued)

12. Revision Of Previously Issued Financial Statements (continued) b) Adjustments to comparative information (continued)
Consolidated Statement Of Changes In Equity	30 Jun 20	Increase /	30 Jun 20
	Prior year	(decrease)	Restated
(Extract)	$M	$M	$M
Equity atributable to other entities stapled to the General Property Trust
Accumulated losses
Proft for the half year	21.5	(1.3)	20.2
Total comprehensive income for the half year	21.5	(1.3)	20.2
Other entities stapled to the General Property Trust total equity
Proft for the half year	21.5	(1.3)	20.2
Total comprehensive income for the half year	21.5	(1.3)	20.2
Total equity
Loss for the half year	(519.1)	(1.3)	(520.4)
Total comprehensive loss for the half year	(521.9)	(1.3)	(523.2)
Transactions with Securityholders in their capacity as Securityholders
Other entities stapled to the General Property Trust accumulated losses
At 30 June 2020	(794.4)	(12.9)	(807.3)
Other entities stapled to the General Property Trust total equity
At 30 June 2020	(444.5)	(12.9)	(457.4)
Total equity
At 30 June 2020	10,785.3	(12.9)	10,772.4
Consolidated Statement of Cash Flows	30 Jun 20	Increase /	30 Jun 20
	Prior year	(decrease)	Restated
(Extract)	$M	$M	$M
Cash fows from operating activities
Payments in the course of operations (inclusive of GST)	(141.6)	(3.8)	(145.4)
Net cash infows from operating activities	204.1	(3.8)	200.3
Cash fows from investing activities
Payments for intangibles	(10.4)	3.8	(6.6)
Net cash outfows from investing activities	(266.7)	3.8	(262.9)

44 The GPT Group | Interim Report 2021

BUSINESS PERFORMANCE OVERVIEW AND PROSPECTS

RISK DIRECTORS' FINANCIAL MANAGEMENT REPORT STATEMENTS

12. Revision Of Previously Issued Financial Statements (continued)

c) Adjustments for the period to 30 June 2021

12. Revision Of Previously Issued Financial Statements (continued) c) Adjustments for the period to 30 June 2021
Consolidated Statement of Comprehensive Income	30 Jun 21	Increase /	30 Jun 21
	Original policy	(decrease)	New policy
(Extract)	$M	$M	$M
Expenses
Management and other administration costs	33.8	2.2	36.0
Amortisation and impairment of sofware	3.3	(2.2)	1.1
Total expenses	224.6	—	224.6
Consolidated Statement of Financial Position	30 Jun 21	Increase /	30 Jun 21
	Original policy	(decrease)	New policy
(Extract)	$M	$M	$M
Assets
Non-current assets
Intangible assets	41.3	(16.7)	24.6
Deferred tax asset	13.3	5.0	18.3
Total non-current assets	15,388.9	(11.7)	15,377.2
Total assets	15,706.0	(11.7)	15,694.3
Net assets	11,258.4	(11.7)	11,246.7
Equity
Securityholders of other entities stapled to the Trust
Accumulated losses	(779.6)	(11.7)	(791.3)
Total equity of other stapled securityholders	(426.6)	(11.7)	(438.3)
Total equity	11,258.4	(11.7)	11,246.7
Consolidated Statement of Changes In Equity	30 Jun 21	Increase /	30 Jun 21
	Original policy	(decrease)	New policy
(Extract)	$M	$M	$M
Transactions with Securityholders in their capacity as Securityholders accumulated losses
At 30 June 2021	(779.6)	(11.7)	(791.3)
Other entities stapled to the General Property Trust total equity
At 30 June 2021	(426.6)	(11.7)	(438.3)
Total equity
At 30 June 2021	11,258.4	(11.7)	11,246.7

The remaining movements relating to the period ending 30 June 2021 are immaterial for the GPT Group.

The GPT Group | Interim Report 2021 45

Financial Statements

Notes to the Financial Statements (continued)

Half year ended 30 June 2021

13. Accounting Policies, Key Judgements and Estimates

a) Basis of preparation

The financial report has been prepared:

• » in accordance with the requirements of the Trust’s Constitution, Corporations Act 2001 and Australian Accounting Standard AASB 134 Interim Financial Reporting ;

• » in accordance with the recognition and measurement requirements of the International Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board (IASB);

• » on a going concern basis. GPT has prepared an assessment of its ability to continue as a going concern, taking into account all available information for a period of 12 months from the date of these financial statements and future cashflow assessments have been made, taking into consideration appropriate probability-weighted factors. GPT is confident in the belief it will realise its assets and settle its liabilities and commitments in the normal course of business for at least the amounts stated in the financial statements. The net deficiency of current assets over current liabilities of $459.7 million arises as a result of the inclusion of borrowings due within 12 months (inclusive of $586.0 million of outstanding commercial paper). As set out in note 7, GPT has access to $1,847.6 million in undrawn financing facilities (prior to refinancing of the commercial paper). Refer to note 13(b) for further information on going concern;

• » under the historical cost convention, as modified by the revaluation for financial assets and liabilities and investment properties at fair value through the Consolidated Statement of Comprehensive Income;

• » using consistent accounting policies with adjustments to align any dissimilar accounting policies adopted by the controlled entities, associates or joint ventures; and

• » in Australian dollars with all values rounded to the nearest hundred thousand dollars in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, unless otherwise stated.

This interim financial report does not include all the notes of the type normally included within the annual financial report. Therefore, it is recommended this report be read in conjunction with the annual financial report for the year ended 31 December 2020 and any public announcements made by GPT during the interim period in accordance with the continuous disclosure requirements of the ASX Listing Rules.

Comparatives in the financial statements have been restated to the current year presentation.

In accordance with Australian Accounting Standards, the stapled entity reflects the consolidated entity. Equity attributable to other stapled entities is a form of non-controlling interest and, in the consolidated entity column, represents the contributed equity of 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.

Significant accounting policies

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period with the exception of new and amended standards and interpretations commencing 1 January 2021 that have been adopted where applicable. The Group has restated comparative information to reflect the March 2021 IFRIC agenda decision on Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Assets ). Refer to note 12.

b) Going concern

Due to the uncertainty created by the COVID-19 pandemic, GPT performed additional procedures in relation to assessing going concern. GPT is of the opinion that it is able to meet its liabilities and commitments as and when they fall due for at least a period of 12 months from the reporting date. In reaching this position, GPT has taken into account the following factors:

• » Available liquidity, through cash and undrawn facilities, of $1,323.6 million (after allowing for refinancing of $586.0 million of outstanding commercial paper as at 30 June 2021);

• » Weighted average debt expiry of 7.4 years, with less than $5.0 million of debt (excluding commercial paper outstanding) due between the date of this report and 30 June 2022;

• » Interest rate hedging level of 67 per cent over the next 12 months;

• » Primary covenant gearing of 24.9 per cent, compared to a covenant level of 50.0 per cent; and

• » Interest cover ratio for the six months to 30 June 2021 of

• 7.9 times, compared to a covenant level of 2.0 times.

c) Trade receivables

On 7 April 2020, the National Cabinet announced a mandatory commercial tenancy Code of Conduct. The Code of Conduct aims to help small and medium enterprise (SME) tenants with a turnover of less than $50 million, that qualify for the Federal Government’s JobKeeper program, and are suffering financial stress or hardship. The Code of Conduct sets out principles to guide discussions between commercial landlords and SME tenants for temporary changes to leasing arrangements during the COVID-19 period and is legislated and regulated by the states and territories.

The application of the Code of Conduct requires GPT to engage with each of our SME tenants and provide cashflow support in a fair and proportionate manner during the COVID-19 period. Importantly, the Code of Conduct allows the Group to negotiate commercial outcomes on a case by case basis for those SMEs most impacted. While the majority of leasing deals under the Code of Conduct have now been finalised, some deals still remain unresolved. GPT is also engaging with its non-SME tenants who have sought assistance but are not eligible under the Code of Conduct. Assistance provided to tenants under the Code of Conduct has taken the form of rent waivers, rent payment deferral or a combination of both.

The interim financial report was approved by the Board of Directors on 16 August 2021.

46 The GPT Group | Interim Report 2021

BUSINESS PERFORMANCE OVERVIEW AND PROSPECTS

RISK DIRECTORS' FINANCIAL MANAGEMENT REPORT STATEMENTS

13. Accounting Policies, Key Judgements and Estimates (continued)

Receivables are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method less any allowance under the ‘expected credit loss’ (ECL) model. GPT holds these financial assets in order to collect the contractual cash flows, and the contractual terms are solely payments of outstanding principal and interest on the principal amount outstanding.

All loans and receivables with maturities greater than 12 months after the balance date are classified as non-current assets.

Rent waivers and other write-offs

Debts which management has determined will be subject to a rent waiver, or are otherwise uncollectible were written off at 30 June 2021, in accordance with the requirements of AASB 9 Financial Instruments . Bad debt write offs of $8.7 million (30 June 2020: $32.9 million) relating to COVID-19 abatements and other non recoverable amounts were recognised during the period. Waivers which have been reflected on invoices issued to tenants and which are not relating to previous outstanding debtors, have been shown as a reduction to rent from investment properties on the Consolidated Statement of Financial Performance.

Recoverability of receivables

At each reporting date, GPT assesses whether financial assets carried at amortised cost are 'credit-impaired' and recognises a loss allowance equal to the lifetime ECL. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset is expected to occur.

Lifetime ECLs result from all possible default events over the expected life of the trade receivable and are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the contracted cash flows due to GPT and the cash flows expected to be received). A default on trade receivables is when the counterparty fails to make contractual payments when they fall due and management determines that the debt is uncollectible, or where management forgives all or part of the debt.

GPT analyses the age of outstanding receivable balances and applies historical default percentages adjusted for other current observable data as a means to estimate lifetime ECL. Other current observable data may include:

• » forecasts of economic conditions such as unemployment, interest rates, gross domestic product and inflation;

• » financial difficulties of a counterparty or probability that a counterparty will enter bankruptcy; and

• » conditions specific to the asset to which the receivable relates.

Debts that are known to be uncollectable are written off when identified.

As a result of COVID-19 GPT has reviewed its methodology to determine an estimated lifetime ECL, with historical default percentages no longer the most appropriate means of predicting future default events. At 30 June 2021, GPT has assessed the likelihood of future defaults and debt forgiveness taking into account several factors.

These include the risk profile of the tenant, the asset location and tenant cash payment trends after the completion of rent relief agreements and other economic conditions impacting the tenants’ ability to pay.

This resulted in an ECL allowance of $19.5 million being recognised as at 30 June 2021 (31 December 2020: $19.3 million). The remaining net balance of trade receivables (excluding accrued income and related party receivables) is $21.0 million (31 December 2020: $30.9 million).

d) Revenue

Revenue from contracts with customers

Revenue is recognised over time if:

• » the customer simultaneously receives and consumes the benefits as the entity performs;

• » the customer controls the asset as the entity creates or enhances it; or

• » the seller’s performance does not create an asset for which the seller has an alternative use and there is a right to payment for performance to date.

When the above criteria is not met, revenue is recognised at a point in time. Management have assessed that there were no significant changes to the recognition of revenue as a result of the COVID-19 pandemic.

Other revenue

Revenue from dividends and distributions is recognised when they are declared.

Interest income is recognised on an accrual basis using the effective interest method.

Management have assessed that there have been no significant changes to the recognition of other revenue as a result of the COVID-19 pandemic.

e) Government grants

Government grants are accounted for under AASB 120

Accounting for Government Grants and Disclosure of Government Assistance . The standard provides the option to present these amounts as income or as a reduction in expenses.

The Group has received $1.0 million in land tax relief (30 June 2020: $0.3 million). GPT has elected to present the amounts relating to land tax relief as income or a reduction in expenses depending on the underlying substance of the transactions for GPT. For the period ended 30 June 2020, the Group had received $2.8 million and had $1.3 million receivable under the Federal Government’s JobKeeper program. GPT elected to present these amounts as a reduction in expenses.

f) Leases

Lease liabilities are initially measured at the present value of the lease payments discounted using the interest rate implicit in the lease. If that rate cannot be determined, GPT’s incremental borrowing rate is used. The incremental borrowing rate is calculated by interpolating or extrapolating secondary market yields on the Group’s domestic medium term notes (MTNs) for a term equivalent to the lease. If there are no MTNs that mature within a reasonable proximity of the lease term, indicative pricing of where the Group can price a new debt capital market issue for a comparative term will be used in the calculation.

The GPT Group | Interim Report 2021 47

Financial Statements

Notes to the Financial Statements (continued)

Half year ended 30 June 2021

13. Accounting Policies, Key Judgements and Estimates (continued)

Lease liabilities are subsequently measured by:

• » increasing the carrying amount to reflect interest on the lease liability;

• » reducing the carrying amount to reflect the lease payments made; and

• » remeasuring the carrying amount to reflect any reassessment or lease modifications.

Interest on the lease liability and any variable lease payments not included in the measurement of the lease liability are recognised in the Consolidated Statement of Comprehensive Income in the period in which they relate. Interest on lease liabilities included in finance costs in the Consolidated Statement of Comprehensive Income totalled $0.9 million for the half year (30 June 2020: $0.9 million).

There have been no changes to the lease term or incremental borrowing rate used for the measurement of lease liabilities as a result of the COVID-19 pandemic.

Right-of-use assets are measured at cost less depreciation and impairment and adjusted for any remeasurement of the lease liability. The cost of the asset includes:

• » the amount of the initial measurement of lease liability;

• » any lease payments made at or before the commencement date less any lease incentives received;

• » any initial direct costs; and

• » restoration cost.

Right-of-use assets are depreciated on a straight-line basis from the commencement date of the lease to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, unless they meet the definition of an investment property. Right-of-use assets which meet the definition of an investment property form part of the investment property balance and are measured at fair value in accordance with AASB 140 Investment Property (refer note 2 and following section on ground leases).

GPT’s right-of-use assets are all property leases.

GPT determines the lease term as the non-cancellable period of a lease together with both:

• » the periods covered by an option to extend the lease if it is reasonably certain to exercise that option; and

• » periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option.

Management considers all the facts and circumstances that create an economic incentive to exercise an extension option or not exercise a termination option. This assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.

GPT tests right-of-use assets for impairment where there is an indicator that the asset may be impaired. 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.

GPT has assessed the right-of-use assets for impairment indicators in light of the COVID-19 pandemic and has calculated the recoverable amount where indicators exist. This has resulted in an impairment expense of $0.3 million for the half year (30 June 2020: nil).

Ground leases

A lease liability reflecting the leasehold arrangements of investment properties is separately disclosed in the Consolidated Statement of Financial Position and the carrying value of the investment properties is adjusted (i.e. grossed up) so that the net of these two amounts equals the fair value of the investment properties. The lease liabilities are calculated as the net present value of the future lease payments discounted at the incremental borrowing rate.

There were no changes to the incremental borrowing rate used for the measurement of lease liabilities as a result of the COVID-19 pandemic.

g) IT development and software

Costs incurred in developing systems and acquiring software that will contribute future financial benefits and which the Group controls (therefore excluding Software as a Service) are capitalised until the software is capable of operating in the manner intended by management. These include external direct costs of materials and services and direct payroll and payroll related costs of employees’ time spent on the project. Amortisation is calculated on a straight line basis over the length of time that benefits are expected to be received, generally ranging from 5 to 10 years.

IT development and software are assessed for impairment at each reporting date by evaluating if any impairment triggers exist. When impairment indicators exist, management calculate the recoverable amount. The asset is impaired if the carrying value exceeds the recoverable amount. Critical judgements are made by GPT in setting appropriate impairment indicators and assumptions used to determine the recoverable amount.

Management have reviewed the impairment indicators for the half year including the COVID-19 pandemic and have recorded an impairment where appropriate. Management believe the carrying value reflects the recoverable amount.

h) Inventories

Development properties held as inventory to be sold are stated at the lower of costs and net realisable value.

Cost

Cost includes the cost of acquisition, development, finance costs and all other costs directly related to specific projects including an allocation of direct overhead expenses.

Net realisable value (NRV)

The NRV is the estimated selling price in the ordinary course of business less estimated costs to sell. At each reporting date, management reviews these estimates by considering:

• » the most reliable evidence; and

• » any events which confirm conditions existing at the half year end and cause any fluctuations of selling price and costs to sell.

Management have completed NRV assessments for each development for the half year taking into account COVID-19 on these estimates including its impacts on delivery timeframes and revenue assumptions, and has compared the results to the cost of each development. For the half year to 30 June 2021 an impairment expense reversal of $0.1 million (30 June 2020: $0.2 million impairment expense) was recognised.

48 The GPT Group | Interim Report 2021

PERFORMANCE AND PROSPECTS

RISK MANAGEMENT

DIRECTORS' FINANCIAL REPORT STATEMENTS

BUSINESS OVERVIEW

13. Accounting Policies, Key Judgements and Estimates (continued)

i) Security based payments

Fair value of performance rights issued under Deferred Short Term Incentive (DSTI) and Long Term Incentive (LTI)

The fair value of the performance rights is recognised as an employee benefit expense with a corresponding increase in the employee security scheme reserve in equity. For LTI, the fair value is measured at grant date. For DSTI, the fair value is measured at each reporting date until the performance rights are converted to securities. Total share based payment expense based on the fair value is recognised over the period from the service commencement date to the vesting date of the performance rights.

Fair value of the performance rights issued under LTI is determined using the Monte Carlo simulation and the Black Scholes methodologies. Fair value of the performance rights issued under DSTI is determined using the security price.

Non-market vesting conditions are included in the calculation of the number of rights that are expected to vest. At each reporting date, GPT revises its estimate of the number of performance rights that are expected to be exercisable and the employee benefit expense recognised each reporting period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised in the Consolidated Statement of Comprehensive Income with a corresponding adjustment to equity.

j) New and amended accounting standards and interpretations commencing 1 January 2021

There are no significant changes to GPT’s financial performance and position as a result of the adoption of the new and amended accounting standards and interpretations effective for annual reporting periods beginning on or after 1 January 2021.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period with the exception of new and amended standards and interpretations commencing 1 January 2021 that have been adopted where applicable. The Group has restated comparative information to reflect the March 2021 IFRIC agenda decision on Configuration or Customisation Costs in a Cloud Computing Arrangement (IAS 38 Intangible Asset ). Refer to note 12.

k) New accounting standards and interpretations issued but not yet applied

There are no new standards or amendments to standards relevant to the Group.

14. Events Subsequent to Reporting Date

The COVID-19 pandemic has created unprecedented economic and societal impacts and there remains significant uncertainty. In the event the COVID-19 impacts are more severe or prolonged than anticipated, this may have further adverse impacts to asset values and the operating results of the Group. At the reporting date a definitive assessment of the future effects of COVID-19 on the Group cannot be made, as the impact will depend on the magnitude and duration of the government restrictions, with the full range of possible effects unknown.

After the reporting period, lockdown measures were introduced in NSW and were intermittently in place in Victoria and Queensland in response to COVID-19 outbreaks. Lockdown measures remain in place in NSW and Victoria as at the date the accounts were signed.

After the balance date, the Code of Conduct was reinstated in Victoria and New South Wales to provide rent relief to qualifying small and medium tenants. GPT continues to work with tenants to provide relief as required to assist with any short-term cash flow impacts.

On 26 July 2021, GPT withdrew its FFO and distribution guidance for the 12 month period to 31 December 2021 given the uncertainty in relation to the duration and impacts of the measures being implemented to suppress the spread of COVID-19 in both Sydney and Melbourne.

Immediately prior to 30 June 2021, management consulted with the independent valuers to understand if any assumptions within their valuations required revisiting given the continued impact of the pandemic. All valuers confirmed that their valuations were appropriate as at 30 June 2021, noting that the valuations include stabilisation allowances and adjustments to market rents, downtime and incentives. On 27 July 2021, the Valuation Committee undertook a further review of the Group’s valuations with internal tolerance checks undertaken on each asset assessing the potential impact of various scenarios. Directors are of the opinion that allowances already made within the valuations are sufficient and the impact on valuations of any additional allowances that may be required as a result of the impact of trading restrictions (considered under a number of scenarios) are within the normal tolerance set out within the valuation policy. Therefore, there have been no changes to the valuations subsequent to the valuation date.

On 16 July 2021, 23,448sqm of land adjacent to the Rouse Hill Town Centre, held by the Group as inventory, was acquired by the NSW Government through a compulsory acquisition process. The final sale price to be received by the Group is yet to be determined.

Post the balance date, the Group entered into exclusive due diligence to acquire a portfolio from Ascot Capital for approximately $800 million, comprising 26 logistics and industrial assets, together with 4 office assets. There is no certainty that a transaction with Ascot Capital will be completed.

On 16 August 2021, the Directors declared a distribution for the half year ended 30 June 2021 of 13.3 cents, being $254.8 million which is expected to be paid on 31 August 2021.

Other than the above, the Directors are not aware of any matter or circumstances occurring since 30 June 2021 that has significantly or may significantly affect the operations of GPT, the results of those operations or the state of affairs of GPT in the subsequent financial years.

The GPT Group | Interim Report 2021 49

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Directors’ Declaration

Half year ended 30 June 2021

In the Directors of the Responsible Entity’s opinion:

• a) The consolidated financial statements and notes set out on pages 22 to 49 are in accordance with the Corporations Act 2001 , including:

• » complying with Australian Accounting Standard AASB 134 Interim Financial Reporting , the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

• » giving a true and fair view of GPT’s financial position at 30 June 2021 and of its performance for the half year ended on that date; and

• b) There are reasonable grounds to believe that GPT will be able to pay its debts as and when they become due and payable. The net deficiency of current assets over current liabilities at 30 June 2021 of $459.7 million arises as a result of the inclusion of borrowings due within 12 months (inclusive of $586.0 million of outstanding commercial paper). GPT has access to $1,847.6 million in undrawn financing facilities (prior to refinancing of the commercial paper) as set out in note 7 to the financial statements.

The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer as required by Section 295A of the Corporations Act 2001 .

This declaration is made in accordance with a resolution of the Directors.

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Vickki McFadden

Chairman

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Bob Johnston

Chief Executive Officer and Managing Director

GPT RE Limited Sydney 16 August 2021

50 The GPT Group | Interim Report 2021

PERFORMANCE RISK DIRECTORS' FINANCIAL AND PROSPECTS MANAGEMENT REPORT STATEMENTS

BUSINESS OVERVIEW

Independent Auditor’s Report

Independent auditor's review report to the unitholders of General Property Trust

Report on the half-year financial report

Conclusion

We have reviewed the half-year financial report of General Property Trust (the Trust) and its controlled entities and GPT Management Holdings Limited (the Company) and its controlled entities (together, the GPT Group or the Group) during the half-year, which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, significant accounting policies and explanatory notes and the directors’ declaration for the GPT Group. Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the accompanying half-year financial report of the GPT Group does not comply with the Corporations Act 2001 including: 1. giving a true and fair view of the Group's financial position as at 30 June 2021 and of its performance for the half-year ended on that date 2. complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

Basis for conclusion We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (ASRE 2410). Our responsibilities are further described in the Auditor’s responsibilities for the review of the half-year financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to the audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. Responsibilities of the directors for the half-year financial report The directors are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material misstatement whether due to fraud or error.

PricewaterhouseCoopers, ABN 52 780 433 757 One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au

Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124 T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

The GPT Group | Interim Report 2021 51

Independent Auditor’s Report (continued)

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Auditor's responsibilities for the review of the half-year financial report

Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group's financial position as at 30 June 2021 and of its performance for the half-year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

PricewaterhouseCoopers

Susan Horlin Partner

Sydney 16 August 2021

52 The GPT Group | Interim Report 2021

PERFORMANCE RISK DIRECTORS' FINANCIAL AND PROSPECTS MANAGEMENT REPORT STATEMENTS

BUSINESS OVERVIEW

Glossary

Term	Meaning
A-Grade	As per the Property Council of Australia’s ‘A Guide to Ofce Building Quality’
AFFO	Adjusted Funds From Operations, defned as FFO less maintenance capex, leasing incentives and one-of items calculated in accordance with the Property Council of Australia ‘Voluntary Best Practice Guidelines for Disclosing FFO and AFFO’
AREIT	Australian Real Estate Investment Trust
ASX	Australian Securities Exchange
AUM	Assets under management
Bps	Basis points
Capex	Capital expenditure
CBD	Central Business District
CO2	Carbon Dioxide
CPI	Consumer Price Index
cps	Cents per security
DPS	Distribution per security
EBIT	Earnings Before Interest and Tax
EPS	Earnings per security. Earnings per security is defned as Funds From Operations per security
Free Cash Flow	Operating cash fow less maintenance and leasing capex and inventory movements
FFO	Funds From Operations. Fund From Operations is defned as the underlying earnings calculated in accordance with the Property Council of Australia ‘Voluntary Best Practice Guidelines for Disclosing FFO and AFFO’
FUM	Funds under management
Gearing	The level of borrowing relative to assets
GFA	Gross Floor Area
GLA	Gross Letable Area
GWOF	GPT Wholesale Ofce Fund
GWSCF	GPT Wholesale Shopping Centre Fund
HoA	Heads of Agreement
IFRIC	IFRS Interpretations Commitee
IFRS	International Finance Reporting Standards
IPD	Investment Property Databank
IRR	Internal Rate of Return
LBP	Logistics and Business Parks
Major Tenants	Retail tenancies including Supermarkets, Discount Department Stores, Department Stores and Cinemas
MAT	Moving Annual Turnover
MER	Management Expense Ratio, defned as management expenses divided by assets under management
Mini-Major Tenants	Retail tenancies with a GLA above 400 sqm not classifed as a Major Tenant
MTN	Medium Term Notes
N/A	Not Applicable
NABERS	National Australian Built Environment Rating System
NAV	Net Asset Value
Net Gearing	Defned as debt less cash less cross currency derivative assets add cross currency derivative liabilities divided by total tangible assets less cash less cross currency derivative assets less right-of-use assets less lease liabilities - investment properties
NLA	Net Letable Area
NPAT	Net Proft Afer Tax
NTA	Net Tangible Assets

The GPT Group | Interim Report 2021 53

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Glossary

Term	Meaning
Ordinary Securities	Those that are most commonly traded on the ASX. The ASX defnes ordinary securities as those securities
	that carry no special or preferred rights. Holders of ordinary securities will usually have the right to vote at a
	general meeting of the company, and to participate in any dividends or any distribution of assets on winding
	up of the company on the same basis as other ordinary securityholders
PCA	Property Council of Australia
Premium Grade	As per the Property Council of Australia’s ‘A Guide to Ofce Building Quality’
psm	Per square metre
PV	Present Value
Retail Sales	Based on a weighted GPT interest in the assets and GWSCF portfolio. GPT reports retail sales in accordance
	with the Shopping Centre Council of Australia (SCCA) Guidelines
ROCE	Return on capital employed
Specialty Tenants	Retail tenancies with a GLA below 400 sqm
sqm	Square metre
TR	Total Return, calculated at the Group level as the change in Net Tangible Assets (NTA) per security plus
	distributions per security declared over the year, divided by the NTA per security at the beginning of the
	year
TSR	Total Securityholder Return, defned as distribution per security plus change in security price
Total Tangible Assets	Defned per the Constitution of the Trust and equals Total Assets less Intangible Assets reported in the
	Statement of Financial Position
USPP	United States Private Placement
VWAP	Volume weighted average price
WACD	Weighted average cost of dept
WACR	Weighted average capitalisation rate
WALE	Weighted average lease expiry

54 The GPT Group | Interim Report 2021

BUSINESS PERFORMANCE OVERVIEW AND PROSPECTS

RISK DIRECTORS' FINANCIAL MANAGEMENT REPORT STATEMENTS

The GPT Group | Interim Report 2021 55

Level 51 25 Martin Place Sydney NSW 2000 www.gpt.com.au

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