GPT GROUP — Investor Presentation 2009

Aug 5, 2009

Attention ASX Company Announcements Platform Lodgement of Open Briefing[®]

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The GPT Group Limited Level 52, MLC Centre, 19 Martin Place, SYDNEY, NSW, 2000

Date of lodgement: 06-Aug-2009

Title: Open Briefing[®] . The GPT Group. CEO on Strategy

Record of interview:

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The GPT Group today confirmed it would move to an exclusively Australian real estate focus and drive “superior” returns by focusing on quality assets and proactive management. What will be the drivers of growth in returns going forward and what level of growth is achievable in what is a mature market?

CEO Michael Cameron

We expect solid income growth from the assets, driven by quality and diversification. We’re not providing a forecast for EPS targets however, we expect the assets will generate income growth in excess of CPI each year and we think that’s a good benchmark.

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You’ve estimated that GPT would have a WACC of 8.5 per cent “through the cycle” and that unleveraged IRRs of 8.5 to 11 per cent and 10 to 15 per cent are achievable from the ownership portfolio and development pipeline respectively. Current WACC is 10 per cent. Where are we in the current cycle? Do you expect further downside in returns?

CEO Michael Cameron

We’re in a difficult part of the cycle and it’s hard to predict where the bottom is, although we don’t think there’s too much further downside. Debt markets have repriced and become more expensive, and as refinancing is carried out across the sector, debt costs are increasing. However, with debt markets re-opening that

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margin will reduce over time and more appropriately reflect the level of risk involved in the particular enterprise.

The rental cycle in the office portfolio has been driven by excess debt as opposed to excess supply. Supply has essentially been cut off so when demand picks up on the back of an improvement in employment, there will be very little supply and that in itself will be a key driver of the business.

In the retail portfolio we see strong sales growth and continuing high occupancy with the government stimulus packages, together with low interest rates and low fuel costs, supporting a continuation in demand.

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Your strategy presentation suggests potential upside in returns from higher occupancy and higher rental returns as a percent of book value. To the extent they reflect the health of the broader economy, what power does management have to influence these outcomes?

CEO Michael Cameron

Active management of our assets is key to optimising the returns the assets deliver. That’s demonstrated by the above-market occupancy level of our office portfolio and the very low levels of arrears in our retail portfolio. By actively ensuring we understand the drivers of value and focus on them, we’ll deliver better outcomes than the sector.

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You also see potential upside in returns from achieving greater operational efficiency. Where specifically do you see opportunities for improving efficiency and what level of cost savings might be generated?

CEO Michael Cameron

The company will be streamlined as we go forward. Divesting our off-shore and non-core assets will reduce the number of roles we need and simplify the entire business. We also plan to have a close look at all our suppliers from a product and service perspective. We’ve already achieved some good savings to date but at this stage it’s too early to quantify the potential further saving.

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Do you foresee the need to re-weight/restructure the current portfolio and what would be the key determinants of any such move?

CEO Michael Cameron

We’ve been re-weighting simply by divesting our non-core assets. We’re happy we’re heading toward being 100 per cent Australian based and focused on the office, retail and industrial sectors. Realistically though, given the illiquid nature of our assets, re-weighting in a meaningful way isn’t easy to achieve. We also don’t have any reason to re-weight our remaining three portfolios.

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You’ve indicated GPT will have a more rigorous approach to acquisitions and a stronger risk overlay. What will be your acquisition criteria going forward?

CEO Michael Cameron

As set out in today’s presentation, the target IRRs you mentioned earlier will form a filter for all acquisitions going forward. Of course we’ll also be looking very closely at our WACC, the impact on earnings, any balance sheet constraints and our “quality” hurdles as well.

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Your strategy suggests GPT will maintain a conservative capital structure with a debt to asset ratio of 30 per cent “through the cycle.” How will you seek to fund new developments? What are the nearer term development opportunities?

CEO Michael Cameron

At the moment we have two developments underway; One One One Eagle Street in Brisbane and Charlestown Square in New South Wales, both of which are funded through our existing facilities. We’re not contemplating any further development at the moment given the state of the debt markets.

We’ve got a range of options for funding going forward, but it’s important to clarify that we haven’t actually said we’d maintain a debt to asset ratio of 30 per cent; we’ve said that at the end of the year we’ll articulate a target, having regard to a number of factors. What we’ve said in today’s presentation is that we wouldn’t envisage gearing in excess of 30 per cent in the short term.

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Can you provide any guidance on the likely timeline for your exit from your remaining non-core assets and the expected impact on the balance sheet?

CEO Michael Cameron

It’s important that we’re not a forced seller: we don’t have to take any price. We’ll position ourselves to get realistic prices and that may take some time. Given the diversity of the assets, which include Ayers Rock Resort and the seniors housing portfolio in New England in the US, the timeframes will vary widely. We’re committed to divesting these non-core assets but at a time when we can achieve realistic prices.

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GPT’s current constitution requires the distribution of all operating income and any capital deemed distributable by the trustee but you’ve indicated you’ll seek to revise the constitution to provide flexibility and a sustainable payout ratio. Might not this disadvantage GPT as a yield play versus its property trust peers?

CEO Michael Cameron

There are a number of considerations. We certainly aren’t flagging a change to our payout ratio, but we may amend our constitution at some point to give us flexibility so that in the future if we wanted to change our distribution policy we could do that.

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How will GPT evolve over the next five years? How might it evolve in terms of organisational structure, asset portfolio, capital base and returns to securityholders?

CEO Michael Cameron

In five years we’ll be well and truly an owner of only Australian assets in the office, retail and industrial sectors. The most important thing is to have re-built stakeholder confidence and trust in GPT. The second thing is to be generating a steady, reliable income stream with secure returns for our securityholders.

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Thank you Michael.

For more information about The GPT Group, visit www.gpt.com.au or call Donna Byrne, Head of Investor Relations and Corporate Affairs on (+61 2) 8239 3515

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