GPT GROUP — M&A Activity 2004

Dec 20, 2004

General Property Trust ASX Announcement and Media Release

GPT RECOMMENDS UNITHOLDERS

DO NOT ACCEPT STOCKLAND BID

21 December 2004

The Independent Directors of GPT today unanimously recommended that GPT unitholders DO NOT ACCEPT the Stockland takeover offer, concluding that it is not in the best interests of GPT unitholders.

The recommendation of the GPT Independent Directors will be contained in the GPT Target's Statement expected to be finalised and lodged this week with the Australian Stock Exchange.

The GPT Target's Statement will contain the Independent Expert's Report by Grant Samuel, which was released on 20 December and which concluded that there are no compelling reasons to accept the Stockland bid in its present form at the present time.

GPT's Chairman. Mr Peter Joseph, said: "GPT's Independent Directors have concluded that the Stockland offer is not in the best interests of GPT unitholders.

"GPT's great strength is the size, diversification, and quality of its \$8 billion portfolio built up over three decades. The inferior quality of Stockland's assets will only weaken this advantage. The Stockland offer does not adequately reflect the unique nature and strategic value of this portfolio." he said.

"Nor does the Stockland offer adequately compensate GPT unitholders for the risk inherent in the merged GPT/Stockland," Mr Joseph, said.

Mr Joseph also told unitholders: "Stockland has not demonstrated the ability, nor does it have a credible plan to acquire the expertise, to manage the materially different, larger and more complex GPT portfolio and associated development programme."

The recommendation of the GPT Independent Directors, to be elaborated in the Target's Statement to be sent to GPT unitholders, is that the Stockland offer:

• Undervalues GPT. The value of the Stockland offer has been below the GPT unit price at all $\Box$ times during the past six months; does not reflect GPT's strategic value; has an insufficient premium to NTA and reduces GPT's NTA per equivalent unit; and undervalues GPT's development potential.
• Reduces GPT's asset quality and value. GPT has the highest quality, diversified portfolio in $\Box$ the Australian listed property trust sector while Stockland's investment asset quality is, in the opinion of the Independent Directors, materially inferior. Combining the two portfolios would reduce portfolio asset quality, net tangible asset backing and average asset value for GPT unitholders.
• □ Involves significant integration and management risks. Stockland has not demonstrated an ability in the investment management, development management and property management of a large portfolio of regional shopping centres, premium office and high quality resort assets as

is the case with the GPT portfolio. For example, Stockland has not managed regional shopping centre developments of the scale and complexity currently underway and planned by GPT. Moreover, Stockland plans to use a team which, based on Stockland's own information, the GPT Independent Directors consider to be under-resourced and under-costed to manage. develop and integrate the GPT portfolio.

□ Significantly increases residential development risk. If successful, the Stockland offer would expose GPT unitholders to a materially higher risk residential development business. Stockland's residential development exposure has increased by 69% via its recent acquisition of Lensworth, GPT unitholders would be exposed to Stockland's residential business as the residential land development industry is slowing down, with lot sales and prices under pressure and resulting uncertainty regarding future performance compounded by Stockland's inability to provide a forecast bevond 30 June 2005.

In addition to the Independent Directors' recommendation and the Independent Expert's Report referred to above, the Target's Statement will contain other information that will be of interest to GPT unitholders, including:

• Stockland intends making distributions to unitholders half-vearly and not quarterly as is $\Box$ currently paid by GPT. This would be unattractive to many GPT unitholders as they would lose the benefit of having distributions three months earlier.
• $\Box$ Stockland's gearing will be approaching the top of its target range of 25 per cent to 35 per cent - significantly reducing the funding flexibility of the merged group after Stockland's Lensworth acquisition and the planned Optus development at North Ryde, Sydney. The merged group's development pipeline of about \$2 billion would therefore appear to be partially unfunded.
• A number of tax issues affecting GPT unitholders, including a lower tax deferred component, as a percentage of total distribution, to their GPT distributions and the possibility that GPT unitholders would not receive roll-over relief if Stockland does not acquire 80 per cent of GPT units.

The Independent Directors also announced that they have commissioned updated independent valuations of a number of assets within GPT's \$3.5 billion Retail Portfolio. The valuations are expected to materially increase GPT's net tangible assets per unit and to provide a more accurate reflection of the value of these high quality assets to investors.

The GPT Target's Statement, including the Independent Expert's Report, will be finalised and despatched to unitholders this week.

ENDS

Enquiries

For further information please contact

Nic Lvons Chief Executive Officer General Property Trust $(02)$ 9237 5816

Martin Debelle /Graham Canning Cannings $(02)$ 9252 0622

Unitholder assistance

Unitholders should contact the GPT unitholder information line for any queries:

Within Australia: 1800 350 150 and Outside Australia: +61 2 9278 9045