GPT GROUP — Regulatory Filings 2004

Jun 1, 2004

Lend Lease Corporation Limited

ABN 32 000 226 228

A fevel 1 30 The Bond 30 Hickson Road Millers Point NSW 2000 Australia

Telenhone (612) 9236 6111

Facsimile (612) 9252 2192

www.fendlease.com

The Manager Companies Section Australian Stock Exchange Limited

Pages: Two (2) pages

Dear Sir

IMPLIED VALUE OF LEND LEASE'S PROPOSED MERGER WITH GENERAL PROPERTY TRIET

In view of recent market and media discussion, Lend Lease Corporation Limited ("Lend Lease") wishes to clarify several points regarding the proposed merger of Lend Lease with General Property Trust ("GPT"), as announced on 24 May 2004.

The Manager

Companies Section

New Zealand Exchange Limited

The proposed merger would be achieved through the stapling of Lend Lease shares and GPT units and not an exchange of GPT units for Lend Lease shares. The Lend Lease proposal is not a Lend Lease scrip based offer to acquire GPT, as some in the market have suggested.

Under the terms of the merger proposal, GPT unitholders and Lend Lease shareholders will hold stapled securities (comprising Trust units and Company shares) based on the ratio of 3.8 existing GPT units to each existing Lend Lease share on issue. GPT unitholders will also receive a special distribution of 47 cents per unit at the time of the merger. As a result, the merged Group would be owned 59.1% by GPT unitholders, 40.9% by Lend Lease shareholders.

Lend Lease expects that, given the merged Group would derive 71% of earnings after tax from property asset ownership, it would trade in the Listed Property Trust Index. As a result, we believe the market would value stapled securities in the Group in the same way that it values other stapled property securities in that Index. Such stapled securities are typically valued on the expected distributions capitalised at an appropriate yield.

Based on the previously announced (24 May 2004) pro forma forecast 2005 annualised distribution of 25.5 cents per equivalent GPT unit (assuming the special distribution is reinvested) and GPT's yield of 7.3% prior to the announcement of the proposed merger, the implied value per equivalent GPT unit is \$3.46, which is broadly consistent with GPT's market price since announcement of the proposed merger.

Based on the previously announced (24 May 2004) pro forma forecast 2005 annualised distribution of 82.9 cents per Lend Lease share and using the same vield of 7.3%, the implied value per Lend Lease share is \$11.36.

2 June 2004

Lend Lease notes also that the merged Group may be re-rated to trade at a stronger vield based on the quality of the business mix; the scale and liquidity; and the growth outlook for the combined businesses. At a 7% vield, the implied value of the merger proposal to GPT unitholders is \$3.59 per GPT unit and to Lend Lease shareholders is \$11.85 per Lend Lease share.

Some commentators have used daily trading prices of Lend Lease shares to arrive at an implied value for GPT unitholders from the proposal. Such a calculation is likely to be misleading to investors because it assumes that Lend Lease shares will continue to trade separately post merger when they will not.

Nevertheless, Lend Lease recognises that until the merger is effected, investors may wish to calculate a day-to-day value of the offer, based on the market prices of the two entities. We caution that such calculations do not reflect the value of the stapled securities as we believe they would be traded after the merger.

Calculations for the day-to-day value of the offer, ahead of the merger, should take into account the three elements of the consideration to GPT unitholders, namely:

• the value of GPT units that would be retained by GPT unitholders in the stapling, $(a)$ representing 59.1% of the value of the post merger stapled securities;
• $(b)$ the value of Lend Lease shares that would be issued to GPT unitholders, based on the ratio of one Lend Lease share for every 3.8 GPT units, representing 40.9% of the value of the post merger stapled securities; and
• $(e)$ the proposed special distribution of 47 cents per unit.

Using the closing prices on 31 May 2004 of \$10.15 per Lend Lease share and \$3.46 per GPT unit, the trading price based value of the merger proposal for GPT unitholders on that day would be calculated as follows: GPT units $(\$3.46 - \$0.47) \times 59.1\% = \$1.77$ ; + Lend Lease shares $($10.15/3.8 \times 40.9\%) = $1.09$ ; + special distribution $($0.47 \text{ per unit}) = $3.33 \text{ per GPT unit.}$

This compares with the \$3.46-\$3.59 value for GPT units which would be achieved if the stapled securities trade post merger on the distribution yields of 7.3%-7.0% as discussed earlier in this letter.

Yours faithfully LEND LEASE CORPORATION LIMITED

SJSHARPE Company Secretary