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GPT GROUP — Regulatory Filings 2005
Aug 3, 2005
65009_rns_2005-08-03_57445927-84a7-473c-a89d-b655d75e928e.pdf
Regulatory Filings
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4 August 2005
The Manager Companies Section Australian Stock Exchange Limited (Sydney) 20 Bridge Street SYDNEY NSW 2000
By electronic lodgement
Dear Sir
GPT GROUP
1. Half Year Results for period to 30 June 2005
GPT releases the attached statement regarding the GPT Group's results for the six months to 30 June 2005. Also attached are audited financial statements of the GPT Group for the six months to 30 June 2005 and ASX Appendix 4D.
$2.$ June Quarter Distribution
GPT advises the income distribution for the quarter ended 30 June 2005 will be 5.7 cents per stapled security. This comprises:
| Trust Distribution. | 5.7 cents |
|---|---|
| Company Dividend | Nii |
| Total Amount Distributed | 5.7 cents |
$(a)$ Trust Distribution
A distribution for the three months ended 30 June 2005 of 5.7 cents per security will be paid by the Trust on 26 August 2005 (the distribution for the three months ended 30 June 2004 was 5.5 cents per security and the distribution for the three months ended 31 March 2005 was 5.7 cents per security).
$(b)$ Income Tax Deferred Component
The distribution advice for the June quarter will advise that no component of the distribution is tax deferred.
CPT RF Limited ABN 27 107 426 504 as Responsible Enlify of General Property Trust
Level 52 MLC Centre 19-29 Martin Place Sydney NSW 2000 Australia
GPT Securityholder Service Centre Freecalt 1800 025 095 Facsimile 02 9225 9318
www.gpt.com.au
$(c)$ Company Dividend
No dividend will be paid for this period.
$(d)$ Books Closing Date
In accordance with Listing Rule 3A(5), we give formal notice that the register of security holders will close at 5.00pm, 15 August 2005 for the purpose of determining those security holders entitled to participate in the distribution for the quarter ended 30 June 2005, payable on 26 August 2005.
Documents will be accepted for registration until 5.00 pm on the books closing date at the Sydney Register only:
Securities Registration Services ASX Perpetual Registrars Limited Level 8, 580 George Street SYDNEY NSW 2000
Yours faithfully
James A Coyne Company Secretary
GPT
THE GPT GROUP ANNOUNCES
Results for the six months to 30 June 2005 4 August 2005
Strong performance from core portfolio positions the new GPT Group to deliver on growth strategy and forecasts
GPT today announced a solid operating result and successful implementation of the internalisation proposal and associated joint venture investment. While the benefit of the internalisation of management and investment in the Joint Venture with Babcock & Brown did not impact financial performance in this period (as it only commenced on 30 June 2005), ongoing robust performance from GPT's established domestic portfolio was achieved. Consequently, the Group is well positioned to achieve the significant increases in income to investors forecast over 2005 and 2006.
While reported profit after tax under the new International Financial Reporting Standards (A-IFRS) is \$66.2 million, a more accurate reflection of GPT's underlying performance is the distribution paid to securityholders which is comparable to previous reported profit. This figure increased by 4.6% on the previous period to \$230.3 million (up from \$219.8) million in 2004).
A payment to security holders of 5.7 cents per security (cps) for the June quarter was announced, taking the distribution for the six months to June 2005 to 11.4 cps. This represents an increase of 4.6% on the distribution for the six months to June 2004.
Underlying earnings per security increased by 3% (compared to the previous corresponding period), in line with GPT's growth target for the core portfolio*.
* Excludes the impact of performance fee paid in 2004, costs associated with the Stockland takeover offer and internalisation proposal. Also excludes the impact of the adoption of A-IFRS on the financial statements. Earnings per security is before fair value adjustments, recognition of rent frees, amortisation of lease incentives, profit on disposal of properties, costs associated with internalisation and finance costs to securityholders.
CEO of the GPT Group. Mr Nic Lyons, said solid performance had been achieved. reflecting an excellent result from GPT's property portfolio and the positive impact of recent acquisitions and successfully completed developments.
"This is our first report under A-IFRS and as an independent stapled entity, so our financial performance is presented in a format that is different from previous results."
"Notwithstanding these changes in presentation, this is a strong result which continues to build upon our earnings and distribution growth over the past few years."
"Not only has GPT delivered a sound result from its traditional operations but, over the period, we implemented the internalisation proposal and joint venture investment. effectively positioning GPT to deliver a 16.5% increase in distributions next year and substantial distribution growth in the years ahead."
"The high quality of GPT's \$8.7 billion core Australian portfolio and the benefit of focused active management and development is illustrated by an increase in income from each of the portfolios, with significant increases in income from the Hotel/Tourism Portfolio and the Office Portfolio displaying resilience in difficult market conditions. The Retail and Industrial/Business Park Portfolios continued growth in income, reflecting not only the quality of existing assets but the benefit of recent developments." Mr Lyons said.
Internalisation Update
The internalisation of management is virtually complete, with GPT operating from new premises in the MLC Centre since 6 June 2005.
Transition costs were in line with the forecast outlined in the Notice of Meeting and Explanatory Memorandum (EM) dated 2 May 2005. In addition, a payment to Lend Lease, of \$16.5 million, was well below the \$45 million contemplated in this document.
This transition will be finalised on 15 August when the remaining members of the retail team transfer to GPT with the property management of GPT's 10 fully owned shopping centres and 11 Homemaker assets.
"We have an outstanding team of committed property professionals who are experienced with GPT's assets. On completion of the transition, we will have around 200 staff, including a retail team delivering property, leasing and development management," Mr Lyons said.
On 1 July 2005 GPT announced implementation of the Penrith and Woden Plaza transactions outlined in the EM. Westfield has replaced Lend Lease as manager of these assets. GPT will continue as a 50% owner in each of these centres. The option agreement in respect of Sunshine Plaza remains subject to certain preconditions which have not been met.
The Joint Venture agreement with Babcock & Brown was implemented as planned and the Joint Venture (JV) acquired its first assets - consisting of six German residential and office assets and one retail asset in Praque with a value of \$1.1 billion, on 30 June 2005. GPT's current equity investment in the JV represents approximately 5% of the Group's total property investments.
The General Manager for the JV, Neil Tobin, has been appointed and two additional staff are being recruited to complete GPT's resourcing. The pipeline of acquisitions, a key determinant of the future success of the JV, is strong, with \$1.5 billion in assets currently under negotiation and a range of additional opportunities progressively being reviewed.
"Although it is early days, we have been impressed with the quality of the opportunities available to the JV and our belief in the ability of the JV to deliver value to GPT investors continues to grow. We have already established an excellent working relationship with Babcock & Brown and have confidence in the platform they have developed in global property markets."
"We remain confident of having the JV fully invested in line with our target of December 2006." Mr Lvons said.
Mr Lyons said GPT was in great shape to deliver on the forecasts for distributions of 13.0 cps for the six months to 31 December 2005 and 27.5 cps for the year ending 31 December 2006, as outlined in GPT's recent EM.
"In addition to performance from GPT's quality core portfolio, developments, fee savings as a result of the internalisation and the benefit of the joint venture investment will assist in driving returns to investors. Investors will also benefit from the opportunity to recycle capital and the broader range of opportunities available to GPT as a stapled security." Mr Lyons said.
As outlined in the EM, cost savings have been achieved as a result of the internalisation and GPT's management expense ratio, previously a range of 45-60 basis points under Lend Lease's management, has now been reduced to approximately 25 basis points.
Core Portfolio Performance
Despite a range of distractions in the six months to June 2005, a number of opportunities that will contribute to medium-term earnings growth from the core portfolio were identified and implemented. The core portfolio will continue to represent at least 85% of GPT's total property assets and is a major driver of future performance.
GPT's large-scale retail development pipeline made considerable progress. At the \$260 million Melbourne Central redevelopment, only one store remains to be leased. The leisure and entertainment precinct, which was damaged by fire during construction, will be complete in September 2005.
A major expansion of Penrith Plaza will be complete in November this year and, at Macarthur Square, the first stage of the development is due to open in time for Christmas, with the second stage expected to be finalised early in 2006. Future developments, including the Rouse Hill Town Centre and an expansion of Charlestown Square, also achieved key milestones during the period.
In the Office Portfolio, work is progressing ahead of schedule on the third and final stage of the Darling Park Complex in Sydney and additional leasing has resulted in only three floors remaining to be leased.
The Industrial/Business Park Portfolio achieved additional growth with a major lease commitment to Coles Myer for a new 74,700 sqm national distribution centre at the Austrak Business Park in Somerton, Victoria. Combined with a lease to P&O Ports for the intermodal terminal and a commitment by Labelmakers to a 22,200 sqm facility, 60% of the 100 hectare park will be developed.
Operationally, the Group's property portfolios continue to deliver solid returns and income growth, with each portfolio increasing income over the previous corresponding period. High productivity levels, reasonable occupancy costs and almost full occupancy across the Retail Portfolio position it for continued robust growth over the medium term. Income from the Hotel/Tourism Portfolio increased significantly (up 13.5% on a like for like basis) despite weaker than expected domestic travel, as increased inbound tourism contributed to strong revenue growth from Ayers Rock Resort, GPT's major tourism asset.
Whilst demand across the office sector has been inconsistent. GPT's Office Portfolio has maintained its occupancy level and delivered income growth of 4.3%. The acquisition of the third stage of the Darling Park Complex reinforces management's focus on upgrading the Portfolio to contemporary assets. The Industrial/Business Park Portfolio delivered solid income growth while the acquisition of 5 Figtree Drive in Sydney's Homebush Bay (announced on 1 August), has expanded the development pipeline in this sector.
Capital Management
GPT maintains its strong balance sheet. As at 30 June 2005 (adjusted for the sale of interests in Woden and Penrith Plazas) GPT had total assets of \$9.3 billion and borrowings of \$2.8 billion, or 30.5% of total assets. This level of borrowing remains below GPT's maximum borrowing limit (of 40% of total tangible assets) and is also below the LPT sector average of 37.4%.
Following the implementation of the internalisation, GPT issued \$300 million in Medium Term Notes (MTNs), and also established a 600 million Euro debt facility. The proceeds of the MTN issue and the proceeds from the sale of interests in Penrith and Woden Plazas along with a recent drawdown of 300 million under the Euro debt facility have been used to repay short term debt and to fund GPT's equity investment in the JV with Babcock & Brown.
The pricing and term of GPT's MTN issue (at 47 basis points above the relevant benchmark) confirmed the attractiveness of GPT's debt and the Group's ability to access competitive funding.
The current weighted average interest rate of GPT's debt is 6.2% (after fees and margins).
Yield
The yield on the closing price yesterday of \$3.84 was 7.16% (based on forecast 2006 distributions).
NTA
Net Tangible Asset Backing (NTA) per security increased to \$3.03, an increase of 1 cent on the 31 December 2004 NTA.
Security Price
GPT securities closed at \$3.65 on 30 June 2005, up from \$3.49 at 30 June 2004. The price performance of GPT securities since the internalisation has been strong, with the price closing at \$3.84 on 3 August.
GPT's full year accumulation (security price movement and income) return for the year to 30 June 2005 was 11.2%, which was below the S&P/ASX Property 200 Accumulation Index return of 18.1%. GPT delivered a one year accumulation return of 33.6% for the vear ended December 2004.
Outlook
Mr Lyons said he was optimistic about GPT's outlook and remained confident in the ability of the Group to deliver the forecasts outlined in the recent EM.
"For the first time in over a year, we are not dealing with external issues. We have a clear strategy and direction, an energetic and committed team and complete control over our ability to deliver improved returns to investors. This is an exciting period for GPT and one which should deliver significant improvements in returns to our investors," Mr Lyons said.
ENDS
For further information contact:
Nic Lyons CEO 02 8239 565 0401 719 899 Michael O'Brien Chief Operating Officer 02 8239 3544 0417 691 028
Donna Byrne Head Investor Relations and Corporate Affairs 02 8239 3515 0401 711 542
ADDITIONAL INFORMATION
Retail Portfolio
Head of Retail for GPT, Mr Mark Fookes, said performance from GPT's Retail Portfolio in the six months to 30 June 2005 had been strong, with the Portfolio delivering income growth of 4% on a comparable basis and GPT's shopping centres continuing to trade above industry sales productivity benchmarks.
Regional specialty sales of \$9,520 per sqm across GPT's shopping centres remain well above the industry average and specialty occupancy costs, at 14.5%, are reasonable, enhancing the prospects for continued rental income growth. Total centre sales per square metre across GPT's shopping centres increased by 3.4% and specialty sales per square metre were up 6.5% in the year to 30 June 2005.
GPT's shopping centres continue to have high occupancy, with less than 1% of gross lettable area (GLA) vacant.
Transactions
Construction of the 16,000 sqm second stage of Fortitude Valley Homemaker City, in Brisbane, at a cost of \$53 million, was completed in July. The remaining component of the first stage of the Centre, strategically located between the two stages of the development already owned by GPT, was acquired in March 2005 for \$35.6 million. Combined with GPT's original investment, GPT now has a \$122 million bulky goods centre of significant scale, consisting of Homemaker retail and commercial facilities with associated car parking.
Following the sale of two smaller bulky goods centres last year (located at Springwood, Qld and Prospect, NSW), GPT continued to rationalise the Portfolio with the sale of Homemaker City Underwood. The sale price of \$19 million was well above the book value at 31 December 2004 of \$13 million. The asset, which was a smaller non-core component of the Portfolio, had been acquired with the original homemaker portfolio in November 2001 for approximately \$10.5 million.
On 1 July 2005. GPT implemented with Westfield the transaction regarding Woden Plaza outlined in the Notice of Meeting and Explanatory Memorandum dated 2 May 2005. Both parties are proceeding to implement the transaction in relation to Penrith Plaza.
Development Update
Across the Retail Portfolio a key driver of future growth is the significant pipeline of current and future projects with a potential value of over \$1 billion over the next four years. These projects will supplement the growth being achieved by the Portfolio in future years.
The major redevelopment of Melbourne Central was largely complete in December 2004 and the entertainment precinct, which includes the cinemas and restaurants, will be complete in September 2005. Only one store remains to be leased (less than 1% of income). More than 260 of the 287 tenancies are open and trading, including mini-major retailers such as Borders, Coles, Freedom and Bay Swiss, combined with some innovative retail concepts. The project is forecast to achieve a stabilised yield of approximately 8%.
The \$70 million expansion of Penrith Plaza (GPT's 50% share) is progressing well, and is on track for completion in November this year. Income is approximately 97% committed and the project is on track to achieve a yield in excess of the targeted 8%.
The \$109 million (GPT's 50% share) expansion of Macarthur Square is also progressing well with income 78% committed. The first stage is due to open in November 2005 and the second stage of the development, which includes the Town Square precinct, will open in early 2006. A year one yield of 8% is anticipated.
The precinct plan for the new Town Centre at the Rouse Hill Regional Centre was approved on 26 July 2005, paving the way for the development to proceed and construction to commence early in 2006. The Town Centre is one of the last major greenfield regional retail opportunities within the Sydney metropolitan area and represents a unique opportunity for the Group to develop a new retail precinct as part of a planned community. GPT will develop and own the Town Centre (shopping centre) and is in joint venture with Lend Lease to develop the remaining facilities and the residential component of this \$1.2 billion project.
At Charlestown Square, masterplanning is advanced for a proposed expansion of the 47,000 sqm Centre to 80,000 sqm. An extensive community and authority engagement program has already been conducted and Lake Macquarie Council has formally committed to discussions regarding land transactions required for the development to proceed.
"We have an excellent portfolio of Retail assets which have benefited from intensive management and prudent ongoing development. Redevelopments at Penrith Plaza, Macarthur Square and Melbourne Central will complete over the next 12 months. These, combined with future planned developments such as the expansion of Charlestown Square and the creation of a retail centre at Rouse Hill, will deliver further growth in the medium term." Mr Fookes said.
"Opportunities to extract future investment returns through development of existing assets will be a key focus of the retail team and we remain confident the Portfolio can continue to deliver long term investment performance," Mr Fookes said.
Office Portfolio
Despite challenging market conditions, characterised by soft demand in the major market of Sydney, GPT's Office Portfolio performed well, delivering income growth and increasing occupancy.
Across GPT's \$3.2 billion Office Portfolio, over 61,000 sam was leased in the six months to June 2005, resulting in an overall occupancy of 94.0% for the Portfolio. This represented a slight increase in the occupancy at December and is above market occupancy of 91.9%.
Mr Tony Cope, GPT's Office Portfolio Manager, said that GPT continued to be positive about the future of the Office Portfolio and growth in the medium term, despite the ongoing uncertainty about the timing of a sustainable improvement in market conditions. particularly in Sydney. GPT retains a long average lease term of 6.1 years and limited short-term expiry across the Portfolio.
"The quality of our Office Portfolio and our success in continuing to lease space across our assets underpinned solid performance from the Portfolio. Economic fundamentals are positive and should support a return to more favourable conditions across the markets with commensurate uplift in the returns from GPT's Office Portfolio," Mr Cope said.
Acquisitions and developments
The third stage of the Darling Park Complex in Sydney, acquired by GPT in April 2004, is due to be completed at the end of this year, ahead of schedule. The development, anticipated to provide a first year yield of 7.2%, consists of an 18-level (30,000 sqm) office tower and 160 car spaces. On 2 August, GPT announced terms had been agreed with Rabobank to lease 9,000 sqm of the high-rise space, leaving only three floors to be leased over the remainder of the development.
Leasing
Significant leasing was undertaken across the Portfolio, with over 61,000 sqm leased or renewed across GPT's office assets in the six months to 30 June 2005 and terms were agreed over a further 15,000 sqm. This leasing, undertaken across a range of assets within the Portfolio, included:
- At Australia Square, in Sydney, occupancy increased to 71.6%, up from 65.2% at December with 6.700 sqm leased or renewed, including leases to Westpoint Corporation (1,600 sqm), Thomson Playford Services (1,600 sqm) and Jones Day Pty Ltd (350 sqm).
- At the HSBC Centre, also in Sydney, a lease over 13,000 sqm to HSBC for a term of six years.
- At Melbourne Central, leases to Telstra (over 9,000 sqm from 1 November 2005) and the ACCC (3,000 sqm from 1 January 2006) reduced short-term expiry risk at this asset. The asset currently has only 1% vacancy.
"While we have some leasing challenges, we are continuing to focus on expiry across our assets. Overall, we are pleased with the performance and position of the Portfolio, although future performance will depend on improvements in demand over 2005 and 2006."
"Positive leading indicators in terms of job advertisements, employment gains and heightened business investment are all pointing in the right direction, so we are optimistic. The performance of the Portfolio in the medium term is expected to improve as office markets strengthen and we benefit from the completion of Darling Park 3," said Mr Cope.
Hotel / Tourism Portfolio
Mr Bruce Morris, GPT's Hotel/Tourism Portfolio Manager, said that a strong increase in inbound tourism had assisted GPT's Portfolio, with income at Ayers Rock Resort up by almost 17%.
Income to GPT from the Portfolio was up 13.5% on a like for like basis.
"Inbound tourism to Australia continued its recovery and GPT's Portfolio profited from this upturn with increased revenue at Avers Rock Resort, the Four Points by Sheraton and Brisbane Holiday Inn, driving improvements in income at these assets. We are anticipating improvements in performance to continue as we see the benefits of ongoing growth in inbound tourism," Mr Morris said.
The Four Points by Sheraton continued to increase room rate over the year and Ayers Rock Resort exhibited a return to growth following the negative impact of external shocks in previous years. At Ayers Rock Resort, occupancy increased by almost 5% on the previous period, to 60%, and the asset retains capacity for further growth as the inbound market continues to gain momentum.
The performance of the P&O resorts (now Voyages Lodges), acquired by GPT in July 2004, was adversely impacted by relatively flat domestic tourism. Opportunities to improve performance exist through increasing the proportion of inbound visitation at these assets. Voyages has now fully integrated these properties into its operations, delivering on forecast cost savings and providing the potential to market the assets in key inbound markets, a maior driver of performance for Avers Rock Resort. The Lodges portfolio, which includes Dunk, Bedarra, Brampton, Heron, Lizard and Wilson Islands as well as Silky Oaks and Cradle Mountain Lodge, was recently expanded with the acquisition in July 2005 of El Questro Resort in Western Australia. El Questro is located in a unique natural environment, the Kimberley region, and comprises 73 accommodation units. The Resort was acquired for \$17.4 million and is anticipated to deliver a year one yield of approximately 10%.
"We continue to be optimistic about the long-term outlook for inbound tourism to Australia and the prospects for GPT's Hotel/Tourism Portfolio, which has an unrivalled position in the nature-based tourism sector and a range of quality assets in major Australian tourism locations," Mr Morris said.
Industrial / Business Park Portfolio
GPT's Industrial/Business Park Portfolio grew to \$354 million at 30 June 2005 and additional growth was secured with a recent acquisition at Homebush Bay and significant leasing at the Austrak Business Park in Somerton, Victoria.
Mr Victor Georos, Industrial/Business Park Portfolio Manager, said the Portfolio was benefiting from its strategy of positioning for growth through development with significant income growth secured through recent leasing. Since January 2005, over 347,000 sqm was leased or renewed at GPT's assets. This included major leases to P&O Ports Ltd (of the terminal at the Austrak Business Park in Somerton on a 10 year term) and a precommitment by Coles Myer, announced in July, to the construction of a new 74,700 som national distribution facility, also at Somerton, on a 20 year term.
Portfolio occupancy is currently at 98.5% (including land leases) and the average lease term is 5.4 years (by income).
"We have been very active in securing future growth for the Portfolio over the last few months and are advanced with future expansion opportunities. Our presence at Homebush Bay in NSW has been further extended with the lodgement of a development application for the last stage of the Quad development and we also announced the acquisition of 5 Figtree Drive on 1 August, enhancing the long term expansion potential in this precinct," Mr Georos said.
"In addition to quality existing assets and planned developments, the Portfolio retains further expansion land across a range of assets which will facilitate medium term growth," Mr Georos said.
Masterplanned Urban Communities
Further progress was made on both the Rouse Hill Regional Centre (NSW) and the Twin Waters development (Qld) over the first half of 2005.
The precinct masterplan for Rouse Hill Town Centre, which includes the retail Town Centre and associated infrastructure, was approved in July 2005, paving the way for commencement of the project in early 2006.
A development application for Stage I of the Twin Waters development, in Mudjimba, Queensland, which increased density has now been approved. The existing Resort is trading well and a significant profit was achieved on the sale of the Golf Course during the period.
Both projects are long-term projects with the ability to stage supply in response to demand, and are continuing to progress. Major works are anticipated to commence next year at both properties.
Financial Summary
| 6 months to June 2004 | 6 months to June 2005 | |
|---|---|---|
| Earnings & Distributions | ||
| Earnings (cents per security) | 10.9 | 11.4 |
| Distribution (cents per security) | 10.9 | 11.4 |
| Tax advantaged | 44.9% | 0% |
| Total Income | ||
| Retail | \$144.0m* | \$159.0m |
| Office | \$109.2m | \$113.9m |
| Hotel/Tourism | \$24.6m | \$36.0m |
| Industrial/Business Park | \$10.7m | \$12.4m |
| Masterplanned Urban Communities | \$1.2m | \$2.2m |
| At 31 Dec 2004 | At 30 June 2005** | |
| Assets | ||
| Total assets | \$9,097.0m | \$9,316.9m |
| Borrowings | \$2,698.6m | \$2,843.0m |
| Debt to total assets | 29.7% | 30.5% |
| Securities on issue ('000) | 2,016,717 | 2,016,717 |
| Net asset backing/security | \$3.02 | \$3.03 |
| Security price | \$3.74 | \$3.65 |
| Retail | ||
| Total value | \$4,749.5m | \$4,312.6m |
| Portfolio allocation (by value) | 53% | 47% |
| Total centre sales per sqm growth | 4.4% | 3.4% |
| Specialty occupancy costs | 14.2% | 14.4% |
| Occupancy (retail centres) | 99% | 99% |
| Office | ||
| Total value | \$3,078.9m | \$3,155.7m |
| Portfolio allocation (by value) | 34% | 35% |
| Portfolio occupancy | 94% | 94% |
| Hotel/Tourism | ||
| Total value | \$776.9m | \$831.6m |
| Portfolio allocation (by value) | 9% | 9% |
| Industrial/Business Park | ||
| Total value | \$327.8m | \$354.0m |
| Portfolio allocation (by value) | 4% | 4% |
| Portfolio occupancy | 100% | 97% |
| Masterplanned Urban Communities | ||
| Total value | \$36.1m | \$41.0m |
| Equity Investment in JV | N/a | \$446.5m |
$\bar{\mathbf{x}}$
Income includes ground rent and income from deposits under retail property JVIA (Sunshine Plaza).
Adjusted for the \$17.4 million acquisition of El Questro Resort in July 2005 and the sale of 50% interests in Woden
and Penr $\star$
ENDS
Interim Financial Report The GPT Group (GPT)
$\frac{1}{2}$
comprising General Property Trust and its controlled entities
30 June 2005
ABN 58 071 755 609
Directors' Report
The directors of GPT RE Limited, the Responsible Entity of General Property Trust, present their report together with the interim financial reports of the GPT Group comprising General Property Trust and its controlled entities for the half-year ended 30 June 2005 and the Review Report thereon.
Directors
The following persons were directors of GPT RE Limited during the reporting period:
Peter Joseph (Chairman)* Malcolm Latham* lan Martin (appointed 2 June 2005) Brian Norris*
Eric Goodwin* Nic Lyons (appointed 2 June 2005) Ken Moss* Elizabeth Nosworthy*
* These persons were also directors of GPT Management Limited (now called Lend Lease Funds Management Limited), the Responsible Entity of General Property Trust until GPT RE Limited replaced GPT Management Limited on 6 June 2005.
The GPT Group (GPT)
Following unitholders approval on 2 June 2005, a stapled entity (the GPT Group (GPT)) was formed on 10 June 2005 by stapling together the units in General Property Trust (the Trust) to the shares in GPT Management Holdings Limited (the Company). The consolidated results reflect the performance of the Trust and its subsidiaries from 1 January 2005 and the addition of the Company and its subsidiaries from the date of consolidation, 2 June 2005 to 30 June 2005.
Principal Activity
The principal activity of GPT is real estate investment.
Review of Operations and Changes in the State of Affairs
First Financial Report under the Australian equivalents to International Financial Reporting Standards (AIFRSs).
This interim financial report is the first GPT interim financial report to be prepared in accordance with AIFRSs. AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards has been applied in preparing these financial statements. When preparing the GPT interim financial report for the half-year ended 30 June 2005, management has amended certain accounting and valuation methods applied in the previous AGAAP financial statements to comply with AIFRS. The comparative figures were restated to reflect these adjustments. Reconciliations and descriptions of the effect of transition from previous AGAAP to AIFRS on GPT's equity and net profit are set out in Note 19.
Financial Results
On the implementation of AIFRS, securityholder interests were required to be accounted for as liabilities. Following a change in the constitution on 2 June 2005, securityholder interests are now classified as equity. As a consequence, amounts accruing to securityholders until 2 June 2005 were accounted for as finance costs. Since 2 June 2005, amounts accruing to securityholders are accounted for as profit or movements in reserves. Therefore, total amounts accruing to securityholders recognised in the Condensed Income Statement for the period to 30 June 2005 are \$271.7m. This comprises profit after tax of \$66.2m and finance costs of \$205.5m. The period to 30 June 2004 comprised entirely of finance costs of \$230.3m.
The following table sets out a reconciliation of securityholder interests at the start of the period to those at the end of the period.
| 30 Jun 2005 | 30 Jun 2004 | |
|---|---|---|
| \$m | Sm | |
| Securityholder interests at the beginning of the period (liability) | 6.074.5 | 5308.4 |
| Securityholder interests at the end of the period (equity) | 6,123.4 | 5519.2 |
| Increase | 48.9 | 210.8 |
| The increase in securityholder interests comprises: | ||
| Finance costs to securityholders | 205.5 | 230.3 |
| Profit after income tax | 66.2 | |
| 271.7 | 230.3 | |
| Foreign Currency Translation Reserve | 72 | |
| Securities issued | 200.3 | |
| Less: amounts paid/payable to securityholders | (230.0) | (219.8) |
| 48.9 | 210.8 |
Earnings per Security
The earnings per security for the reporting period ended 30 June 2005 was 3.3 cents (Jun 2004: 0.0 cents)
The earnings per security before fair value adjustments, recognition of rent frees, amortisation of lease incentives, profit on disposal of properties, costs associated with internalisation and finance costs to securityholders for the reporting period ended 30 June 2005 was 11.4 cents (Jun 2004: 10.9 cents).
During the financial period, GPT acquired Homemaker City Fortitude Valley Stage 3, in Queensland. GPT also acquired Brampton Island and the right to operate Lizard Island Resort in Queensland from Voyages Hotels & Resorts Pty Limited before taking control of the entity on 30 June 2005. In addition, Homemaker City Underwood, a parcel of surplus land at Macarthur Square and a surplus property in Little Lonsdale Street at Melbourne Central were divested.
In June 2005, the GPT Group was formed by the stapling of the units in the Trust to the shares in the Company following unitholder approval on 2 June 2005. The Trust and the Company entered into the Stapling Deed (on 2 June 2005) which sets out the terms of the relationship between the entities with respect to the stapled securities. The Stapling Deed ensures that the entities must operate on a co-operative basis for the benefit of holders of Stapled Securities as a whole.
In conjunction with the stapling, the Company acquired GPT RE Limited to act as the responsible entity of the Trust following GPT Management Limited being replaced by GPT RE Limited as the responsible entity of the Trust.
On 30 June 2005, GPT entered into European Real Estate Joint Venture S.a.r.l, a joint venture with Babcock & Brown Limited. The joint venture will seek to identify and invest in real estate opportunities which offer superior risk adjusted returns, and establish and manage third party funds.
Finance Costs and Distributions
The Responsible Entity of the Trust has determined the payment of finance costs and distributions for the reporting period ended 30 June 2005 of 11.4 cents per unit (Jun 2004: 10.9 cents).
Events Subsequent to Balance Date
Asset Sales
On 12 February 2005 GPT announced it had entered into conditional contracts for the sale of part interests in Penrith Plaza, Woden Plaza and Sunshine Plaza to Westfield as part of its internalisation process. As at 30 June 2005, the sales of Penrith Plaza and Woden Plaza contacts had not yet been completed.
All conditional requirements on the previously announced sale of 50% of GPT's interest in Woden Plaza in Canberra were met by 1 July 2005 and as a consequence settlement of \$242m was received on that date. GPT also proceeded to implement the transaction in relation to Penrith Plaza with \$368.2m being received on 1 July 2005.
GPT is not obliged to sell the interest in Sunshine Plaza unless certain preconditions have been met. As at the date of these financial statements those conditions have not been met and GPT's interest has not been sold.
Acquisitions
On 29 June 2005 GPT announced its intention to acquire the EI Questro resort in Western Australia for \$17.4m, this acquisition was completed on 7 July 2005.
On 14 July 2005 GPT and its Austrak Business Park co-owner, Austrak, reached agreement with Coles Myer to develop a \$100m national distribution centre for Coles Myer. GPT owns 50% of the business park and the project is scheduled for completion during the first half of 2007.
On 1 August 2005 GPT announced the exchange of contracts for the purchase of 5 Figtree Drive, Homebush Bay for \$19.0m.
Rounding of Amounts
The amounts disclosed in the Directors' Report have been prepared in accordance with Class Order 98/0100 issued by the Australian Securities & Investments Commission, pursuant to which, unless otherwise indicated, the amounts in the Directors' Report have been rounded to the nearest tenth of a million dollars.
Dated at SYDNEY this $3^{10^{\circ}}$ day of August
,2005
Signed in accordance with a resolution of the directors.
Director
PriceWATERHOUSE COPERS ®
PricewaterhouseCoopers ABN 52 780 433 757
Darling Park Tower 2 201 Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia www.pwc.com/au Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999
Auditors' Independence Declaration
As lead auditor for the review of the GPT Group (comprising General Property Trust and its controlled entities) for the half year ended 30 June 2005, I declare that to the best of my knowledge and belief, the only contravention of:
- a) the auditor independence requirements of the Corporations Act 2001 in relation to the review and
- b) any applicable code of professional conduct in relation to the review;
is set out below.
On 26 July 2005 an employee of the firm who provided non-audit services to GPT during the period, reported holding an immaterial investment in GPT through a self managed superannuation fund. This investment was sold within 1 business day of reporting the holding to the firm.
This matter was identified as part of our on-going quality control system. All reasonable steps were undertaken to ensure that the matter was resolved as soon as possible. I report that this matter has been resolved, and in doing so do not believe the matter has impacted my objectivity and impartiality for the purpose of this review.
This declaration is in respect of the GPT Group during the period.
RD Deutsch Partner PricewaterhouseCoopers
Sydney 3 August 2005
Condensed Income Statement Half-Year ended 30 June 2005
÷,
| Consolidated | |||
|---|---|---|---|
| Nole | 30 Jun 2005 Sm |
30 Jun 2004 \$m |
|
| Revenue | |||
| Rent from investment properties | |||
| Net gain from fair value adjustments on investment properties | 19 | 345.5 104.4 |
313.3 |
| Interest - Joint venture Investment arrangements | 22.7 | ||
| Interest - Cash and Joans | 4.9 | 2.4 2.5 |
|
| Net gain on disposal of investment properties | 9.3 | ||
| Income and fair value movements of associates and joint ventures | 50.5 | 39.0 | |
| Total Revenue | 514.6 | 379.9 | |
| Expenses | |||
| Rates, taxes and other property outgoings | 76.1 | 71.6 | |
| Repairs and maintenance | 6.3 | 5.5 | |
| Provision for doubtful debts | 0.1 | 0.1 | |
| Responsible entity's fee | 3 | 15.4 | 19.7 |
| Management and administration costs | 1.5 | u. | |
| Audit and accounting fees | з | 0.5 | 0.5 |
| Finance costs to financial institutions | 74.2 | 52.0 | |
| Finance costs to securityholders | 12.19 | 205.5 | 230.3 |
| Net loss/(gain) on remeasurement of interest rate derivatives to fair value Net loss on remeasurement of foreign exchange derivatives to fair value |
9.6 | (2.7) | |
| Impairment loss | 7.0 | ||
| Costs associated with internalisation | 10.7 | ||
| Other expenses | 40.4 1.9 |
2.9 | |
| Total Expenses | 449.2 | 379.9 | |
| Profit before income tax | |||
| 65.4 | |||
| Income tax benefit / (expense) | 0.8 | ||
| Profit after income tax | 66.2 | ||
| Profit attributable to securityholders of GPT | 66.2 | ||
| Cents | Cents | ||
| Basic and diluted earnings per security | 3.3 | 0.0 | |
| Basic earnings per security before fair value adjustments, recognition of rent frees, amortisation of lease incentives, profit on disposal of properties, costs associated |
|||
| with internalisation and finance costs to securityholders | 11.4 | 10.9 |
The above Condensed Income Statement should be read in conjunction with the accompanying notes.
Reconciliation of amounts paid/payable to securityholders
| 66.2 | |
|---|---|
| Finance costs to securityholders 205.5 230.3 |
|
| Fair value adjustments (82.6) |
(19.9) |
| Revenue adjustments 6.2 |
6.1 |
| Net gain on disposal of properties (9.3) |
|
| Costs associated with internalisation 40.4 |
|
| Other 3.9 |
|
| Amounts payable to securityholders 230.3 |
216.5 |
| Unpaid entitlement at the beginning of the reporting period 8.6 12. |
7.6 |
| Transfer from securityholder contributions | 2.6 |
| Total available for payment 238.9 226.7 |
|
| Finance costs paid / payable and distributions payable 2 (230.0) |
(219.8) |
| Realised income entitlement at the end of the reporting period 12 8.9 |
6.9 |
$\bar{\beta}$
Condensed Balance Sheet As at 30 June 2005
| Consolidated | |||
|---|---|---|---|
| 30 Jun 2005 | 31 Dec 2004 | ||
| Note | \$m | \$m | |
| Current Assets | |||
| Cash | 79.3 | 50.9 | |
| Receivables | 67.1 | 58.9 | |
| Derivative financial instruments | 19 | 8.6 | 9.0 |
| Other Non-current assets held for sale |
13.9 | 8.2 | |
| 4 | 617.7 | $\qquad \qquad \blacksquare$ | |
| Total Current Assets | 786.6 | 127.0 | |
| Non-current Assets | |||
| Investment properties | 4 | 6,563.1 | 7,491.3 |
| Investments in associates and joint ventures | 5 | 1,335.4 | 1,215.0 |
| Property, plant and equipment | 6,19 | 824.1 | 164.7 |
| Other financial assets | 9 | 378.3 | 102.7 |
| Deferred tax asset | 5.1 | u. | |
| Other | 42.0 | ||
| Total Non Current Assets | 9,148.0 | 8,973.7 | |
| Total Assets | 9,934.6 | 9,100.7 | |
| Current Liabilities | |||
| Payables | 190.5 | 192.1 | |
| Interest bearing liabilities | 10 | 2,118.5 | 1,068.7 |
| Derivative financial instruments | 19 | 44.1 | 27.9 |
| Provisions | 119.0 | 112.9 | |
| Total Current Liabilities | 2,472.1 | 1,401.6 | |
| Non-current Liabilities | |||
| Interest bearing liabilities | 10 | 1,334.4 | 1,624.6 |
| Deferred tax liability | 1.2 | ||
| Provisions | 3.5 | ||
| Total Non Current Liabilities | 1,339.1 | 1,624.6 | |
| Liabilities (excluding amounts attributable to | |||
| securityholders) | 3,811.2 | 3,026.2 | |
| Net assets attributable to securityholders | 12,19 | 6,074.5 | |
| Net Assets | 6,123.4 | ||
| Equity | |||
| Contributed equity | 4,598.5 | ||
| Retained earnings | 1,517.7 | ||
| Foreign currency translation reserve | 7.2 | ||
| Total Equity | 12 | 6,123.4 |
The above Condensed Balance Sheet should be read in conjunction with the accompanying notes.
Condensed Statement of Changes in Equity Half-Year ended 30 June 2005
| Consolidated | ||||
|---|---|---|---|---|
| Note | 30 Jun 2005 \$m |
30 Jun 2004 \$m |
||
| Total equity at the beginning of the reporting period | ||||
| Profit for the reporting period | 66.2 | |||
| Total recognised income and expense for the reporting period | 66.2 | |||
| Transactions with GPT Group in their capactity as owners: | ||||
| Transfer of liabilities attributable to unitholders from liability to equity | 19 | 6,092.6 | ||
| Distribution payable | 2 | (35.4) | ||
| Total equity at the end of the reporting period | 6,123.4 |
J.
à,
$\sim 10^7$
à.
$\overline{a}$
$\ddot{\phantom{0}}$
$\Delta \phi = 0.01$ and $\Delta \phi$
$\bar{\beta}$
$\bar{\beta}$
The above Condensed Statement of Changes in Equity should be read in conjunction with the accompanying notes.
$\bar{z}$
Condensed Cash Flow Statement Half-Year ended 30 June 2005
| Consolidated | |||
|---|---|---|---|
| Note | 30 Jun 2005 | 30 Jun 2004 | |
| \$m | \$m | ||
| Cash flows from operating activities | |||
| Cash receipts in the course of operations (inclusive of GST) | 378.5 | 324.1 | |
| Cash payments in the course of operations (inclusive of GST) | (170.0) | (133.0) | |
| Interest received | 5.0 | 5.0 | |
| Distributions received from associates and joint venture entities | 43.3 | 48.2 | |
| Income tax expense | (0.3) | $\overline{\phantom{a}}$ | |
| 256.5 | 244.3 | ||
| Borrowing costs | (89.2) | (59.8) | |
| Net cash inflow from operating activities | 13 | 167.3 | 184.5 |
| Cash flows from investing activities | |||
| Payments for investment properties | (199.8) | (121.0) | |
| Proceeds from disposal of investment properties | 22.3 | ||
| Payments for property under construction Payments for property, plant & equipment |
(60.2) | (100.8) | |
| Payments for operating rights | (0.6) | ||
| Investment in associates and joint ventures | (39.5) | ||
| (Increase)/decrease in loans to associates and joint ventures | (105.6) | (7.5) | |
| (Increase)/decrease in other loans | (344.6) 45.2 |
(2.8) | |
| Net cash receipt on control of subsidiary | |||
| Net cash outflow from investing activities | 10.0 | ||
| (672.8) | (232.1) | ||
| Cash flows from financing activities | |||
| Net Short Term Notes (paid)/issued | (5.0) | 70.0 | |
| Net Commercial Bills issued | 868.3 | ||
| Net Medium Term Notes paid | (101.5) | ||
| Proceeds from issue of securities | 200.3 | ||
| Finance costs paid to security holders | (227.9) | (214.2) | |
| Net cash inflow from financing activities | 533.9 | 56.1 | |
| Net increase in cash | 28.4 | 8,5 | |
| Cash at the beginning of the reporting period | 50.9 | 44.0 | |
| Cash at the end of the reporting period | 79.3 | 52.5 |
$\ddagger$ . Summary of accounting policies
This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the Annual Report for the year ended 31 December 2004 and any public announcements made in respect of the GPT Group ("GPT") during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.
(a) Basis of preparation
This general purpose financial report for the half-year ended 30 June 2006 has been prepared in accordance with the GPT Constitution, Australian equivalents to International Financial Reporting Standards (AIFRSs); Accounting Standard AASB 134 Interim Financial Reporting, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001. It is prepared on the basis of the going concern and historical cost conventions, as modified by the revaluation of financial assets and liabilities (including derivative instruments), certain classes of property, plant and equipment and investment property, which have been measured at fair value.
The principal accounting policies under AIFRS and adopted in the preparation of the financial report are set out below. These policles have been consistently applied to all the periods presented, unless otherwise stated.
Application of AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards This interim financial report is the first GPT interim financial report to be prepared in accordance with AIFRSs, AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards has been applied in preparing these financial statements.
The financial statements of General Property Trust (the Trust) for the year ended 31 December 2004 were prepared in accordance with previous Australian Generally Accepted Accounting Principles (previous AGAAP). Previous AGAAP differs in certain respects from AIFRS. When preparing the GPT interim financial report for the half-year ended 30 June 2005, management has amended certain accounting and valuation methods applied in the previous AGAAP financial statements to comply with AIFRS. The comparative figures were restated to reflect these adjustments.
Reconciliations and descriptions of the effect of transition from previous AGAAP to AIFRS on GPT's equity and net profit are set out in Note 19.
Transitional exemptions
GPT elected not to apply AASB 3 Business Combinations retrospectively to all business combinations that occurred before the transition date of 1 January 2004. GPT elected not to apply any of the other AASB 1 exemptions and has elected to prepare comparative information that complies with all AIFRS including AASB 132 Financial Instruments: Presentation and Disclosure and AASB 139 Financial Instruments: Recognition and Measurement,
(b) Accounting for the GPT Group
On 10 June 2005, a stapled entity (the GPT Group 'GPT') was formed by stapling together the units in the Trust to the shares in GPT Management Holdings Limited ('the Company'). For the purposes of statutory reporting, the stapled entity reflects the consolidated entity. The parent enlity and deemed acquirer in this arrangement is the Trust. The basis of this approach is consistent with current practice in relation to the financial reporting obligations of stapled entities that were formed after 1 July 2004. The consolidated results reflect the performance of the Trust and its subsidiaries from 1 January 2005 and the addition of the Company and its subsidiaries from the date of consolidation, 2 June 2005 to 30 June 2005.
The stapled securities of GPT are quoted on the Australian Stock Exchange under the code GPT and comprise of one unit in the Trust and one share in the Company. The unit and share are stapled together under the terms of the constitution and cannot be traded separately. Each entity forming part of GPT continues as a separate legal entity in its own right under the Corporations Act 2001 and is therefore required to comply with the reporting and disclosure requirements under the Corporations Act 2001 and Australian Accounting Standards.
GPT RE Limited, the Responsible Entity of the Trust, is a wholly owned entity of the Company.
Summary of accounting policies (Continued) 1.
(c) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidaries as at the reporting period and the results for the half year then ended. The Trust and its controlled entities together are referred to in this financial report as the GPT Group or the consolidated entity. Entities are fully consolidated from the date on which control is transferred to the Trust. They are deconsolidated from the date that control ceases.
The purchase method of accounting is used to account for the acquisition of controlled entities by GPT (refer to note 1(g)).
All balances, and effects of transactions, between the subsidiaries and GPT have been eliminated in full.
Property investment vehicles where the Trust exerts significant influence but does not have a controlling interest are accounted for in accordance with Note 1(d)(ii).
(d) Property investments
GPT's Compliance Plan requires that all property investments be externally valued at intervals of not more than three years and that such valuations be reflected in the financial report of GPT. It is the policy of the Responsible Entity to review the fair value of each investment property every six months. Independent valuations of the individual investments are carried out each three years in accordance with the Corporations Act 2001 and GPT Constitution, or earlier where the Responsible Entity believes there may be a material change in the carrying value of the property.
Expenses capitalised to properties may include the cost of acquisition, additions, refurbishments, redevelopments, borrowing costs and fees incurred and are subsequently recorded at fair value at the next reporting date.
(i) Investment Property
Property (including land and buildings) held for long-term rental yields and that is not occupied by an entity in GPT, is classified as investment property.
Investment property is carried at fair value. Fair value is based on active market prices, adjusted for any difference in the nature, location or condition of the specific asset or where this is not available, an appropriate valuation method which may include discounted cashflow projections and the capitalisation method. The fair value reflects, among other things, rental income from current leases and assumptions about rental income from future leases in light of current market conditions. It also reflects any cash outflows (excluding those relating to future capital expenditure) that could be expected in respect of the property.
Subsequent expenditure is charged to the asset's carrying amount only when it is probable that future economic benefits associated with the item will flow to GPT and the cost of the item can be measured reliably.
Land and buildings (including integral plant and equipment) that comprise investment property are not depreciated. The carrying amount includes components relating to lease incentives and assets relating to fixed increases in operating lease rentals in future periods.
Changes in the fair value of an investment property are recorded in the income statement.
Some property investments are held in joint ownership arrangements (joint venture operations). The proportionate interests in the assets, liabilities and expenses of a joint venture operation have been incorporated in the financial statements under the appropriate headings.
Certain hotel investments are classified as investment property in the parent entity financial statements, and classified as owner-occupied property in the consolidated financial statements as the GPT Group own and operate the hotels (refer to note 1(d)(iii)). Property that is being constructed or developed for future use as investment property is classified as property, plant and equipment and stated at cost until construction or development is complete, at which time it is reclassified and subsequently accounted for as investment property.
Land held under an operating lease is classified and accounted for as investment property when the definition of investment property is met.
Investment property held for sale is classified within non-current asset held for sale, under AASB 5 Non-current Assets Held for Sale and Discontinued Operations.
$\overline{\mathbf{1}}$ Summary of accounting policies (Continued)
(d) Property investments (Continued)
(ii) Investments in Associates and Joint Ventures
(a) investments in Associates
Associates are those entities over which the Group has significant influence, but not control, investments in associates are accounted for in the parent entity financial statements using the cost method and in the consolidated financial statements using the equity method. Under this method, GPT's share of the associates' net profit after tax is recognised in the consolidated income statement, and the share of movement in reserves is recognised in reserves in the consolidated balance sheet. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment.
Distributions and dividends from associates are recognised in the parent entity's income statement, while in the consolidated financial statements they represent a return of GPT's investment and reduce the carrying value of the investment.
All balances, and effects of transactions, between the associates and GPT have been eliminated to the extent of GPT's ownership interest.
(b) Investments in Joint Venture Entities
The Trust's inferest in joint venture entities are carried at fair value. Where the underlying investment in the joint venture entity is investment property, the fair value is determined on the same basis as investment property (refer Note 1(d)(i)).
The Company's investments in joint venture entities are carried at cost by the parent entity and accounted for using the equity method in the consolidated financial statements. Under this method, the Company's share of the joint venture entities' net profit after tax is recognised in the consolidated income statement, and the share of movement in reserves is recognised in reserves in the consolidated balance sheet.
Investments in joint venture entities held by the Company are carried at the lower of the equity accounted carrying amount and recoverable amount.
(iii) Owner Occupied Property
Owner occupied property is property that is held for use in supplying services by entities within GPT. The investments in certain hotels are accounted for as owner occupied in the consolidated entity as GPT own and operate the hotels.
Owner occupied property is classified as property, plant and equipment (refer to note 1(f)).
(iv) Property under Construction
Properties under construction are carried at historical cost until completion. Upon completion of construction, the assets are classified as investment property (refer to note 1(d) or property, plant and equipment (refer to note 1(f)).
(e) Lease Incentives
Incentives may be provided to lessees to enter into an operating lease. These incentives may be in the form of cash, rent free periods, lessee or lessor owned fitouts. They are amortised over the term of the lease as a reduction of rental income. The carrying amount of the lease incentives is reflected in the fair value of investment properties.
(f) Property, plant & equipment
Certain hotels are owner occupied property and are stated at fair value. The basis of fair value is the same as outlined in Investment property note 1(d). The assets of the hotels are depreciated and any accumulated depreciation at the date of revaluation is eliminated against the carrying amount of the asset and the net amount is restated to the revalued amount of the asset.
Valuation increments on hotels are recognised in the asset revaluation reserve. To the extent that an increment reverses a decrement previously recognised in the income statement, the increase is first recognised in the profit and loss. Decrements that reverse previous increments of the same asset are first recognised against the asset revaluation reserve to the extent of the remaining reserve attributable to the asset; all other decrements are recognised in the income statement.
Office fixtures, fittings and operating equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to its acquisition. Subsequent costs are included in the asset's carrying amount only when it is probable that future economic benefits associated with the item will flow to GPT and the cost of the item can be measured reliably.
$\mathbf{1}$ Summary of accounting policies (Continued)
(f) Property, plant & equipment (Continued)
Depreciation
Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual values, over their expected useful lives, as follows: Motor Vehicles
| . | $ +$ $y$ $=$ $a$ $b$ |
|---|---|
| Office fixtures, fittings and operating equipment | $5 - 15$ vears |
| Buildings | 40 years |
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.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement. When revalued assets are sold, amounts included in the asset revaluation reserve in respect of those assets will be transferred to retained earnings.
(g) Accounting for acquisitions
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the net identifiable assets acquired represents goodwill (refer to Note 1(c)).
(h) Investments and financial assets
Financial assets are classified as loans and receivables - loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market and arise when GPT provide money or services to a debtor with no intention of selling the receivable.
Loans and receivables are carried at amortised cost using the effective interest rate method. Under this method, fees, costs, discounts and premiums directly related to the financial assets are spread over its expected life.
(i) Derivatives
GPT is exposed to changes in interest rates and foreign exchange rates and uses interest rate swaps, forward rate agreements, cross currency swaps, options, and forward foreign exchange contracts to hedge these risks. Such derivative financial instruments are carried on the balance sheet at fair value. Changes in fair value are recognised in the income statement.
Interest payments and receipts under interest rate swap contracts are recognised on an accrual basis in the income statement as an adjustment to interest expense during the reporting period.
(i) Impairment of assets
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
(k) Interest bearing liabilities
Interest bearing liabilities are initally measured at cost, being the fair value of the consideration received net of issue and other transaction costs associated with the borrowings.
After initial recognition, interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method. Under this method, fees, costs, discounts and premiums directly related to the financial liability are spread over its expected life.
(I) Employee Entitlements
(a) Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non monetary benefits, and annual leave expected to be settled within 12 months of reporting date, are recognised in other payables in respect of employee's services up to reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
Liabilities for non-accumulating sick leave are recognised when leave is taken and measured at the rates paid or payable.
(b) Long Service Leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
1. Summary of accounting policies (Continued)
(I) Employee Entitlements (Continued)
(c) Bonus plans
GPT recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
(m) Income tax
(a) Trusts
Under current tax legislation, Trusts are not liable for income tax, provided their taxable income and taxable realised gains are fully distributed to securityholders each financial year.
(b) Company and other taxable entities
Deferred tax balances are calculated using the balance sheet method. Under this method, temporary differences arise between the carrying amount of assets and liabilities in the financial statements and the tax base for the corresponding assets and liabilities. However, an exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Similarly, no deferred tax asset or liability is recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled.
Deferred tax assets are recognised for temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
GPT and its wholly owned Australian controlled entities have not implemented the tax consolidation legislation.
The income tax expense or revenue for the reporting period is the tax payable on the current reporting periods taxable income based on the Australian company tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
(n) Foreign Currency
Foreign currency transactions are converted to Australian dollars, being the functional and presentation currency of entities in GPT, using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at reporting period exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
Non-monetary items that are measured in terms of historical cost are converted using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Exchange differences arising on monetary items that form part of the net investment in a foreign operation are taken to the profit and loss in the parent entity and against a foreign currency translation reserve on consolidation.
Where forward foreign exchange contracts are entered into to cover any anticipated excesses of revenue less expenses within foreign joint venture entities, they are converted at the ruling rates of exchange at the reporting period. The resulting foreign exchange gains and losses are taken to the income statement. Where they relate to the current reporting period they are considered realised gains and losses. Where they relate to future periods, they are considered unrealised gains and losses.
(o) Distributions and dividends
Distributions and dividends are paid to securityholders each quarter. A provision for distribution/dividend for the amount of any distribution or dividend declared, determined or publicly recommended by the directors on or before the end of the reporting period is recognised in the balance sheet in the reporting period in which the payment remains outstanding.
(p) Cash
For the purposes of the cash flow statement, cash includes cash at bank, deposits at call and short term money market securities which are readily converted into cash.
(q) Revenue
Rental income from operating leases is recognised on a straight line basis over the lease term. An asset is recognised to represent the portion of an operating lease revenue in a reporting period relating to fixed increases in operating lease rentals in future periods. These assets are recognised as a component of investment properties. When GPT provide lease incentives to terrants, the cost of the incentives are recognised over the lease term, on a straight line basis, as a reduction of rental income.
Dividend and distribution income are recognised when declared. GPT's share of net profits from associates and joint venture entities is included in the consolidated income statement and has been separately disclosed. Revenue not received at balance date is included as a receivable in the balance sheet.
1. Summary of accounting policies (Continued)
(r) Expenses
Expenses including rates, taxes and other outgoings is brought to account on an accruals basis.
(s) Borrowing costs
Borrowing costs are expensed in the reporting period in which they are incurred, except when they are incurred in the construction of qualifying assets (an asset that takes a substantial period of time to get ready for its intended purpose) where they are capitalised in the carrying value of the asset (refer to note 1(d)).
The capitalisation rate used to determine the amount of borrowing costs to be capitalised is the weighted average interest rate applicable to the entity's development borrowings during the year, in this case 7.01% (2004: 6.92%).
Borrowing costs include:
- Interest on short term and long term borrowings,
- Amortisation of discounts or premiums relating to borrowings, and
- Amortisation of ancillary costs incurred in connection with the arrangement of borrowings. $\ddot{\phantom{a}}$
- Interest receipts and payments under interest rate swap agreements, and
- Foreign exchange differences net of hedged amounts on borrowings.
(t) Earnings per security
Basic earnings per security is calculated by dividing the net profit attributable to securityholders of GPT excluding any costs of servicing equity other than ordinary securities, by the weighted average number of ordinary securities (WANOS') outstanding during the reporting period, adjusted for bonus elements in ordinary securities issued during the reporting period. For the purpose of the calculation of the WANOS outstanding during the reporting period, securities are taken to include those classified as liabilities up until 2 June 2005.
As there are no potential ordinary shares or securities, diluted earnings per security is the same as basic earnings per security.
(u) Rounding
The financial report of GPT has been prepared in accordance with Class Order 98/0100 issued by the Australian Securities & Investments Commission, relating to the 'rounding off of amounts in the financial report to the nearest tenth of a million dollars, unless otherwise stated. Amounts have been rounded off in the financial report in accordance with that Class Order.
| Consolidated | |||
|---|---|---|---|
| 30 Jun 2005 \$m |
30 Jun 2004 \$m |
||
| 2. Finance costs and distributions paid and payable to security holders | |||
| In respect of the six months ended 30 June 2005 | |||
| Finance costs of 5.7 cents per unit paid on 20 May 2005 (23 May 2004: 5.4 cents) (23 Aug 2004; 5.5 cents) |
115.0 | 108.9 | |
| Distribution of 5.7 cents per unit payable on 26 Aug 2005 | 115.0 | 110.9 | |
| Finance costs and distributions paid and payable for the six months ended 30 June 2005 | |||
| 11.4 cents per unit (30 Jun 2004; 10.9 cents) | 230.0 | 219.8 |
On 10 June 2005, securityholders also received a 15 cents per unit capital distribution of \$302.5 million, refered to as the stapling distribution. Unitholders authorised GPT RE Limited (the new responsible enitity for the Trust) to apply the stapling distribution to subscribe for shares in the Company of \$302.5 million. For each unit held in the Trust unitholders received one share in the Company, (refer Note 15).
| \$'000 | \$'000 | |
|---|---|---|
| 3. Expenses | ||
| Expenses have been arrived at after charging the following items: | ||
| Auditors' remuneration: | ||
| Auditing the financial report | 377.8 | 369.3 |
| Other audit related work | 103.2 | 70.9 |
| Total audit and audit related work | 481.0 | 440.2 |
| Other assurance services | 1,325.0 | 380.0 |
| Total auditors' remuneration | 1.806.0 | 820.2 |
| --- |
Other assurance services in 2005 is predominantly due diligence reviews on the internalisation and establishment of joint venture with Babcock & Brown. In 2004 services were predominantly due diligence reviews on Lend Lease Corporation Ltd's merger proposal and Stockland's takeover proposal.
| Responsible Entity's fee | 15,353.0 | $19,720$ $^{\circ}$ |
|---|---|---|
| -------------------------- | ---------- | --------------------- |
GPT Management Limited, a wholly owned subsidiary of Lend Lease Corporation Limited, was the Responsible Enlity of General Property Trust until replaced on 6 June 2005. The base management fee payable by GPT to GPT Management Limited was 0.40% per annum of gross assets, with a performance component, if applicable, of 5% of GPT's outperformance compared to the S&P/ASX Property 200 Accumulation Index. The total fee payable each six months was capped at 0.275% of the gross assets of the Trust. GPT Management Limited was entitled to receive all or part of the performance fee so that earnings per unit for each six month period is not less than the earnings per unit for the previous six month period. Based on GPT's performance for the twelve months to 30 June 2004, a performance fee of \$3,468,000 was paid in respect of the six months to 30 June 2004. No performance fee was payable in respect of the period to 6 June 2005.
| Consolidated | ||||
|---|---|---|---|---|
| Note | 30 Jun 2005 \$m |
31 Dec 2004 \$m |
||
| 4. Investment properties | ||||
| Investment property | 7 | 6.563.1 | 7,491.3 | |
| Consolidated Half-Year 30 Jun 2005 \$m |
31 Dec 2004 \$m |
|||
| Reconciliation Reconciliations of the carrying amounts of investment properties at the beginning and end of the current and previous reporting period are set out below. |
||||
| Carrying amount at start of the reporting period Additions |
7.491.3 137.2 |
6,384.7 128.6 |
||
| Acquisitions Transfer from/(to) property, plant and equipment Transfer to non-current assets held for sale |
45.5 (586.5) (617.7) |
290.0 110.2 |
||
| Lease incentives Amortisation of lease incentives Other |
10.5 (9.5) |
$\overline{\phantom{a}}$ 27.4 (8.3) |
||
| Disposals Net gain from fair value adjustments |
2.9 (15.0) 104.4 |
3.0 (19.6) |
||
| Carrying amount at end of the reporting period | 6,563.1 | 575.3 7,491.3 |
$\mathcal{A}$
$\bar{z}$
$\bar{z}$
$\bar{z}$
$\bar{z}$
The fair value of investment property includes the cost of amortised lease incentives, amortised initial direct leasing costs and the impact of
straightlining lease income in accordance with Australian Accounting Standards
$\bar{z}$
$\bar{z}$
÷,
| Consolidated | |||||
|---|---|---|---|---|---|
| 30 Jun 2005 | 31 Dec 2004 | ||||
| Note | 5m | $\sin$ | |||
| 5. Investments in Associates and Joint Ventures | |||||
| (a) Joint Ventures | |||||
| Holding Investment Property | |||||
| Erina Property Trust* | 129.4 | 129.2 | |||
| Horton Trust* | 20.1 | 17.1 | |||
| Darling Park Trust* | 276.7 | 275.0 | |||
| Darling Park Property Trust* | 184.4 | 184.4 | |||
| 1 Farrer Place Trust* | 258.1 | 256.3 | |||
| 2 Park Street Trust* | 286.5 | 286.5 | |||
| Roma Street Trust* | 59.3 | 54.9 | |||
| 1,214.5 | 1,203.4 | ||||
| Managing Investment Property | |||||
| Darling Park Operator | 0.2 | ||||
| European Investments | |||||
| Europe Real Estate Joint Venture S.a.r.l. | 16 | 99.2 | |||
| Total Joint Ventures | 1,313.9 | 1,203.4 | |||
| (b) Associates | |||||
| Holding Investment Property | |||||
| Kings Canyon (Watarrka) Resort Trust* | 7.7 | ||||
| Managing Investment Property | |||||
| 161 Sussex St Pty Limited | 0.3 | 0.1 | |||
| Masterplanned Urban Communities | |||||
| Lend Lease (Twin Waters) Pty Limited | 9.5 | 8.2 | |||
| Lend Lease GPT (Rouse Hill) Pty Limited | 4.0 | 3.3 | |||
| 13.5 | 11.5 | ||||
| Total Associates | 21.5 | 11.6 | |||
| Total Investments in Associates and Joint Ventures | 1,335.4 | 1,215.0 | |||
* Investments in Associates and Joint Ventures which have investment property totaling \$1,222.2m (Dec 2004: \$1.203.5m). Details of the
investment properties held by these unlisted trusts are disclosed in Note 7.4.
i.
$\sim$
Consolidated Hotel Property Office fixtures, including fittings & Property under fixtures & operating Note Construction fittings equipment Total $$m$$ $$m$$ \$m $$m$ 6. Property, Plant and Equipment Half-Year ended 30 June 2005 Opening carrying value 164.7 164.7 Additions 63.5 $0.6$ $\ddot{\phantom{a}}$ 64.1 Disposals J. Transfer from/(to) investment properties 4,17 586.5 586.5 J. Transfer from/(to) assets held for sale Transfer from investment in associates $8.8$ $8.8$ L. Revaluations $\overline{a}$ $\overline{a}$ $\overline{a}$ Depreciation charge Closing carrying value 228.2 $586.5$ $9.4$ $824.1$ Note 7 $\overline{7}$ At 1 January 2005 Cost or fair value* Accumulated depreciation Net carrying value $\bar{a}$ $\overline{a}$ J. --------------------------------------At 30 June 2005 Cost or fair value* 228.2 586.5 14.5 829.2 Accumulated depreciation $(5.1)$ $(5.1)$ Net carrying value 228.2 586.5 $9.4$ $824.1$ Half-Year ended 31 December 2004 Opening carrying value 193.6 193.6 Additions 81.3 l. $\ddot{\phantom{1}}$ 81.3 Disposals $\overline{a}$ Transfer from/(to) investment properties $(110.2)$ $(110.2)$ i. Transfer from/(to) assets held for sale Transfer from investment in associates $\overline{a}$ Revaluations $\overline{a}$ $\overline{a}$ Depreciation charge $\overline{a}$ Closing carrying value 164,7 $164.7$ $\blacksquare$ $\overline{\phantom{a}}$ Note $\overline{7}$ $\overline{t}$ At 1 July 2004 Cost or fair value* 193.6 193.6 Accumulated depreciation Net carrying value 193.6 $193.6$ $\blacksquare$ $\ddot{\phantom{a}}$ At 31 December 2004 Cost or fair value* 164.7 164.7 $\ddot{\phantom{1}}$ Accumulated depreciation Net carrying value $164.7$ 164.7
* Property under construction and office fixtures, fittings and operating equipment are held at cost. Hotel property is held at fair value.
7. Details of Property Investments
$\frac{1}{2} \frac{1}{2}$
| Consolidated 30 Jun 2005 |
|||||
|---|---|---|---|---|---|
| Investment properties \$m |
Interests in Hotel Operations \$m |
Property under construction \$m |
Investments in Associates and Joint Ventures Sint. |
Total ŠП) |
|
| Retail Office Industrial Hotel & Tourism |
4,109.1 1,968.1 311.9 174.0 |
۰ ۰ 619.0 |
54.0 132.1 42.1 |
149.5 1,054.9 $\mathbf{u}$ 17.8 |
4,312.6 3,155.1 354.0 810.8 |
| Note | 6,563.1 7.1 |
619.0 72 |
228.2 7.3 |
1,222.2 7.4 |
8,632.5 |
| Investment properties \$m |
interests in Hotel Operations \$m |
Consolidated 31 Dec 2004 Property under construction |
Investments in Associates and Joint Ventures Sm. |
Total \$m |
|
|---|---|---|---|---|---|
| Retail | 4,561.2 | $\bullet$ | 45.1 | 146.3 | 4,752.6 |
| Office | 1,950.8 | ٠ | 81.3 | 1,047.8 | 3,079.9 |
| Industrial | 239.7 | $\blacksquare$ | 38.3 | - | 326.0 |
| Hotel & Tourism | 689.6 | - | $\mathbf{r}$ | 9.4 | 699.0 |
| 7,491.3 | 164.7 | 1,203.5 | 8,859.5 | ||
The mixed class of assets (as referred to in table 7.1) has been affocated in the table above as follows:
Melbourne Central : 63.5% Retail (\$474.4 m) and 36.5% Office (\$272.9 m) (Dec 2004: 62.0% Retail and 38.0% Office)
Brishane Transit Centre : 83.0% Office (\$49.2m) and 17.0% Hotel & Tourism (\$10.1m) (Dec 2004: 83.0% Office and 17.0% Hotel & Tourism)
Interests in hotel operations comprises \$576.5m of property, plant and equipment and \$32.5m of operating rights for Lizard Island, which has been classified as other in the balance sheet.
7.1 Property Investments - Investment Property
| Name | Ownership 40) |
Acquisition Date |
Accuisition Frice 5m |
Total Cost induding Additions and Lease incentives |
Date of Latest External Valuation |
Independent Valuer | Latest Independent Valuation |
Movement since Intependent Valuation |
Fair Value 30 Jun 05 |
|---|---|---|---|---|---|---|---|---|---|
| RETAIL | \$п | Sm | \$m | Şm | |||||
| Bonner House ACT |
50 Leaschold |
Oct 2001 | 4.6 | 4.3 | Dec 2004 | Knight Frank KL Goddard, FAPI |
$7.0$ (a) | $\overline{ }$ | 7.0 |
| Bores House NSW |
50 | Jul 2002 | 53 | 5.3 | Sep 2003 | CB Richard Ellis M Steur, AAPI |
5.4(4) | $\tilde{\phantom{a}}$ | 54 |
| Cosuarina Square NΤ |
FQO | Oct 1973 | 4.5 | 150.4 | Dec 2004 | Knight Frank KL Goddard, FAPI |
330.0 | $\overline{62}$ | 335.2 |
| Charlestown Square NSW |
100 | Dec 1977 | 7.3 | 185.4 | Dec 2034 | CB Richard Ellis J Barras, AAPI |
$385.5$ (2) | 2.9 | 358.4 |
| Pacific Highway, Charlestown nsw |
100 | Oct 2002 Jul 2003 |
7.1 5.3 |
7.1 53 |
Sep 2003 Knight Frank KL Goddard, FAPI |
7.0 | 0.9 | 7.9 | |
| Dandenong Plaza | 100 | Dec 1993 | 60.2 | 192.5 | Sep 2003 | FPDSavills (NSW) | 205.0 | 21. | 5.3 207.1 |
| ٧Ю Erina Fair |
Dec 1999 | 60.3 | 60.3 | AD Johnston, AAP! | |||||
| NSW | 33.3, Freehold | Jun 1992 | 55.1 | 164.4 | Dec 2004 | Knight Frank KI. Goddard, FAPI |
258.5 | 0.5 | 259.0 |
| Penrith Plaza including Cinemas | 50 | Jun 1971 | $\overline{84}$ | 249.8 | Dec 2004 | CB Richard Ellis | 336.4 to | 21.8 | 358.2 |
| NSW | Oct 2002 Apr 1998 |
191.5 8.7 |
M Steur, AAPI | ||||||
| High Street, Penrith | 50 | Nov 2002 | 26 | 3.1 | Sep 2003 | CB Richard Clis | $3.0$ (4) | ¥. | 3.0 |
| NSW Riley Square |
50 | Jan 2003 Jun 1994 |
0.4 5B |
8.6 | M Steur, AAPI | ||||
| NSW | Sep 2003 | CB Richard Ellis M Steur, AAPi |
$7.6 + 0$ | $\omega$ | 7.6 | ||||
| Sunshine Plaza QLD |
100 | Dec 1992 Sep 2004 |
32.8 | 183.4 | Dec 2004 | CB Richard Ellis | 265.0 | 1.9 | 256.9 |
| Plaza Parade | 100 | Jun 1999 | 130.4 4,7 |
12.0 | Dec 2004 | T Irving, AAPI CB Richard Ellis |
0.7 | $\overline{0.1}$ | 9.8 |
| QLD Woden Plaza |
50 | T Irvina, AAPI | |||||||
| ACT | Leasehold | Feb 1986 | 37.4 | 125.2 | Dec 2004 | Knight Frank KL Goddard, FAPI |
235.0 (4) | 1.1 | 236.1 |
| Carlingford Court NSW |
100 | Jul 1966 | 80.1 | 139.2 | Dec 2004 | CB Richard Ellis J Barres, AAPI |
158.0 | 1.2 | 159.2 |
| Chinaide Park VIC |
100 | Jul 1996 | 80.5 | 136.9 | Dec 2004 | Knight Frank | 166.0 | 0.6 | 166.6 |
| Wollongong Central | 100 | Jul 1996 | 54.0 | 123.0 | Dec 2004 | KL Goddard, FAP1 Knight Frank |
200.7 (8) | 3.6 | 204.3 |
| NSW Floreat Forum |
100 | Oct 1998 Jul 1990 |
34.8 33.3 |
87.9 | Mar 2004 | Kl. Goddard, FAPI Knight Frank |
95.0 | 0.9 | 85.9 |
| WA | M Crowe, AAPI | ||||||||
| Forestway Shapping Centre nsw |
100 | Jul 1956 | 27.0 | 43.5 | Sep 2024 | Knight Frank KL Goddard, FAPI |
64.0 | 0.8 | 64.8 |
| Macerthur Square NSW |
50 | Dec 1999 | 135.0 | 202.3 | Dec 2004 | CB Richard Ellis M Steur, AAPI |
233.9 | 34.8 | 263.7 |
| Parkmore Shopping Centre VIÇ |
100 | Jul 1996 | 120.0 | 131.6 | Dec 2004 | Kriight Frank | 145.0 | 0.6 | 145.6 |
| Homewicker City Aspley | 100 | Nov 2001 | 43.2 | 33,1 | Jun 2005 | KL Goddard, FAPI Knight Frank |
60.0 | 60.0 | |
| QLD Homensker City Bankstown |
100 | Nov 2001 | 38.5 | 40.3 | Sep 2003 | P Kwan, AAPI FPDSavills |
44.0 | 30 | 47.0 |
| NSW Homemaker Clty Cennon Hill |
100 | Nov 2001 | 13.9 | 14.8 | Sep 2003 | AD Johnston, AAPI Jones Lang LaSalle |
15.7 | 3.3 | |
| QLD | J Apisci, FAPI | 19.0 | |||||||
| Homemaker City Castle Hill NSW |
$100 -$ | Nov 2001 Jan 2003 |
25.4 8.7 |
38.7 | Sep 2004 | WK Watton W Wotton, FAPI |
31.2 | 2,3 | 33,5 |
| Homemaker City Epping ٧IC |
100 | Aug 2003 | 37.7 | 38.0 | $\sim$ | ٠ | à. | 30.9 | |
| Homemaker City Fortitude Valley OLD. Homemaker City Fortitude Valley |
100 100 |
Dec 2001 | 7.2 | 31.3 Sep 2003 CB Richard Ellis T Irving, AAPI |
31.6 | 2.0 | 34.5 | ||
| Slage 3, QLD | Apr 2005 | 33.7 | 33.7 | $\cdot$ | $\overline{\phantom{a}}$ | 33.7 | |||
| Homemaker City Jindalee OLD |
100 | Nov 2001 | 38.7 | 40.9 | Sep 2004 | Jones Lang LaSalle J Apieci, FAPI |
55.0 | 0.4 | 55.4 |
| Homemaker City Maribymong VЮ |
100 | Nov 2001 | 35.5 | 35.8 | Sep 2003 Knight Frank MJ Schuh, AAPI |
47.3 | 4.2 | 51.5 | |
| Homemaker City Moorabbln VIC |
100 | Jul 2002 | 33.3 | 33.4 | Jun 2005 | Knight Frank M Schin, AAPI |
34.0 | $\tilde{\phantom{a}}$ | 34.0 |
| Homemeker City Mt Gravatt GLD |
100 | Nov 2001 | 17.9 | 18.5 | Mar 2005 Knight Frank P Kwan, AAP) |
22.2 | $\blacksquare$ | 22.2 | |
| Homemaker City Windson QLD |
100 | Nov 2001 | 20.0 | 20.4 | Jun 2005 | CB Richard Ellis T Inving, AAPI |
21.0 | 21.0 | |
| Total Retail | 3,634.7 |
(†) – Freehold, unless otherwise stated.
(2) – Valuation for Charlestown was 3385m, which did not include \$0.5m of land.
(3) – Valuation for Wellongong was \$195m, which did not include land of \$5.7m.
(4) – Valuation shown
The basic of valuation of investment properties is fair value being the amounts for which the assets could be exchanged between withing parties in an arm's length transaction.
7.1 Property Investments - Investment Property
$\ddot{\phantom{a}}$
$\hat{\mathcal{A}}$
| Name OFFICE |
Ownership $X_1(1)$ |
Acquisition Date |
Acquisition Price \$m |
Total Cost including Additions and Lease Incentives \$m |
Date of Labest External Valuation |
Independent Valuer | 1.atest Independent Valuation Sm |
Movement since Independent Valuation äп |
Fair Value 30 Jun 05 Sm |
|---|---|---|---|---|---|---|---|---|---|
| Australia Square NSW |
50 | Sep 1981 | 42.6 | 148.5 | Jun 2004 | Jones Lang LaSalle J Dillon, AAPI |
178.0 | 83 | 186.3 |
| MLC Centre NSW |
30 | Apr 1987 | 233.5 | 316.5 | Mar 2004 | CB Richard Ellis S Falifax, AAPI |
284.5 | 4.1 | 288.6 |
| Riverside Centre QLD |
100 | Apr 1984 | 250.7 | 302.8 | Sep 2002 | C8 Richard Ellis (C) J Porter, FAPI |
245.0 | 10.0 | 255.0 |
| Indigo House (formerly Black Ink House) OLD |
100 | Apr 1984 | 9.1 | 15.8 | Sep 2002 CB Richard Ellis (C) J Porter, FAFI |
14,4 | 4.6 | 19.0 | |
| 179 Elizabeth Street NSW |
100 | Sep 1998 | 59.4 | 67.6 | Sep 2003 | FFDSaville A Pannifex FAPI |
01.0 | 6.1 | 07.1 |
| 10 & 12 Mort Street ACT |
700 Leaschuid |
Jul 1996 | 68.6 | 60.0 | Dec 2003 | Jones Lang LaSalle RJ Lawrie, AAPI |
60.0 | 20 | 52.0 |
| 530 Collins Street & 120 King Street VIC |
100 | Jul 1996 | 316.0 | 320.9 | Sep 2003 | Urbis RJ Scrivener, FAPI |
320.0 | 1.8 | 321.8 |
| HSBC Centre, 580 George St NSW . |
100 | Jul 1996 | 180.0 | 216.3 | Mar 2004 | CB Richard Ellis S Feirfax, AAPI |
227.0 | 2.6 | 229.8 |
| National@Docklands Building 1 Victoria Harbour, VIC |
100 | Feb 2002 | 7.4 | 133.2 | Mar 2004 | Knight Frank MJ Schuh, AAPI |
140.0 | 0.5 | 140.6 |
| National@Docklands Building 2 Victoria Harbour, VIC |
100 | Feb 2002 | 6.3 | 110.2 | Sep 2004 | Knight Frank MJ Schult, AAPI |
115.3 | $\omega$ | 115.3 |
| Total Office MIXED |
1,695.2 | ||||||||
| Melbourne Central VIC |
100 | May 1999 Mar 2001 {2} |
410.2 17.1 3.5 430.6 |
721.0 Sep 2004 Jones Long LaSalle B Sweeney, AAPI |
677.4 | 69.9 | 747.3 | ||
| Total Mixed INDUSTRIAL |
747.3 | ||||||||
| Harvey Road Kings Park NSW |
100 | May 1999 | 24.9 | 24.9 | Mar 2005 | Savills (NSW) AD Johnston, AAPI |
31.0 | $\overline{\phantom{a}}$ | 31.0 |
| Part Clil-West Industrial Estate Grieve Pde & Dohertys Road Allong North VIC |
100 | Aug 1994 | 60.0 | 69.6 | Mar 2003 | FPDSavills R Bowman, AAPI |
55.3 | 7.2 | 62.5 |
| Quad 1, Parkview Drive Homebush Bay NSW |
100 Leasehold |
Jun 2001 | 15.5 | 15.6 | Jun 2004 | Colliers International A Graham, AAPI |
16.6 | $\blacksquare$ | 16.6 |
| Quad 2, Parkview Drive Homebush Bay NSW |
100 Leasehold |
Dec 2001 | 2.3 | 15.8 | Jun 2004 | Colliers International A Graham, AAPI |
18.7 | 0.3 | 19.0 |
| Quad 3, Parkview Drive Homebush Bay NSW 8 Herb Elliott |
100 Leasehold |
Mar 2003 | 2.7 | 15.3 | × | ۰ | ٠ | 19.2 | |
| Homebush Bay NSW 7 Figures Driver |
100 Leasehold |
Aug 2004 | 0.5 | 8.5 | ÷, | ٠ | ٠ | $\blacksquare$ | 8.5 |
| Homebush Bay NSW 7 Parkwiew Drive |
100 Leasehold 100 |
Jul 2004 | 10.2 | 10.2 | ä, | $\blacksquare$ | ٠ | ÷. | 10.2 |
| Horsebush Bay NSW 11 Grand Ave, Camellia |
Leasehold 100 |
May 2002 May 1998 |
16.1 9.9 |
16.1 57.5 |
May 2005 | Knight Frank TM Pholan |
18.0 | 0.1 | 18.1 |
| Carnella NSW 15 Berry Street |
100 | Nov 2000 | 10.0 | 10.3 | Sep 2003 Knight Frank wr Relairck, FAPI Sep 2003 Knight Frank |
58.0 | 7.5 | 65.5 | |
| Granville NSW 19 Berry Street |
100 | Dec 2000 | 18.8 | 18.9 | Sep 2003 | WR Retailich, FAPI | 10.8 | 18 | 12.6 |
| Granville NSW Austrak Business Park. |
50 | Oct 2003 | 25.5 | 25.5 | ٠ | Knight Frank WR Retailich, FAPI |
20.5 ÷ |
$\overline{\phantom{a}}$ $\overline{\phantom{a}}$ |
20.5 |
| Somerton VIC Total Industrial |
28.2 311.9 |
||||||||
| HOTEL & TOURISM Four Points by Sheraton Hotel |
100 | ||||||||
| Sydney, NSW | Leaschold Security Deposit |
May 2000 | 146.1 | 109.9 | Mar 2005 | Knight Frank AFH Bell, MRICS AAPI |
181.0 | $\blacksquare$ | 131.0 $(7.0)$ (8) |
| Total Hotel & Tourism | 174,0 | ||||||||
| Total Investment Properties | 174.0 6,563.1 |
(1) Freehold, unioss otherwise stated.
(2) Anguistion costs.
(3) Security deposit held by GPT.
The basis of valuation of investment properties is fair value being the excurats for which the assets could be exchanged between willing parties in an erm's length transaction.
$\sim$ $\sim$
$\bar{z}$
7.2 Property Investments - Interest in Notel Operations
| Name | Cwnership $\times(3)$ |
Acquisition Dale |
Acquisition Price 5m |
Total Cest including Additions and Lease Incentives 5m |
Date of Latest External Valuation |
Independent Valuer | Latest Independent Valuation $S_{\rm IR}$ |
Movement since Independent Valuation \$m |
Fair Value 30 Jun 06 ٠ |
|---|---|---|---|---|---|---|---|---|---|
| OWNER ODGUPIED HOTEL PROPERTY | |||||||||
| Ayers Reck Resort NT |
100 | Dec 1997 | 231.9 | 358.0 | Mar 2004 | JLL Hotels MA Cooper, AAPI |
$353.8$ (2) | 38.8 | 392.6 |
| Cape Tributation Resorts QLD |
100 Part leaschold |
Mar 2002 | 11.5 | 20.1 | Mar 2004 | Colliers International MD Thomson, AAPI |
12.0 | $\blacksquare$ | 12.0 |
| Wildman River NT. |
100 Part leesehold |
Jun 2001 | 0.5 | 1,1 | Mar 2004 | JEL Hotels MA Cooper, AAPE |
0.5 | 0.1 | 0.6 |
| Bedarra Island Resort GLD |
100 | Jul 2004 | 25.6 | 25.7 | ٠ | ×. | $\overline{\phantom{a}}$ | 24.3 | |
| Brampton Island Resort GLD |
100 Leasehold |
Mar 2005 | 11.8 | 11.8 | $\bullet$ | ٠ | ٠ | ٠ | 20.6 |
| Cradle Mountain Resort TAS Dunk Island Resort |
100 Part leasehold |
Jul 2004 | 11.2 | 11.7 | z. | $\blacksquare$ | $\blacksquare$ | $\blacksquare$ | 14.0 |
| OLD. | $100 -$ Part leasehold |
Jul 2004 | 55.3 | 58.7 | $\overline{\phantom{a}}$ | ×, | $\Delta$ | ۰ | 55.5 |
| Heron Island (Including Wilson Island QLD |
100 Leasehold |
Jul 2004 | 44.7 | 44.8 | ٠ | $\overline{\phantom{a}}$ | $\blacksquare$ | 44.8 | |
| Silky Oaks Lodge OLD |
100 | Jul 2004 | 18.5 | 18.6 | $\tilde{\mathbf{u}}$ | ٠ | ٠ | $\overline{a}$ | 17.9 |
| Wrotham Park GLD |
100 Leasehold |
Jul 2004 | 7,3 | 6,9 | $\overline{\phantom{a}}$ | 41 | |||
| Total Owner Occupied Hotel Property OPERATING RIGHTS |
586.5 | ||||||||
| Lizard Island QLD |
100 Leasehold |
Jun 2005 (3) |
39.5 | 39.5 | ٠ | ۰ | ÷ | 32.5 | |
| Total Operating Rights | 32.5 | ||||||||
| Total Interests in Hotel Operations | 613.0 |
$(2)$ Freebold, unless otherwise stated.
t. 7 - waters, attace construct amou.
(2) - Valuation for Ayers Rock Resort was \$360m, of which \$6.2m related to plant and equipment owned by Viryages Holefs & Resorts Ply Limited.
(3) - Purchase of lease expliing in 2009,
7.3 Property Investments - Property under Construction
| Name | Ownership 55 (1) |
Acquisition Date |
Acquisition Price \$m |
Total Cost including Additions and Lease incentives \$m |
Date of Latest External Valuation |
Independent Valuer | Latest Independent Valuation \$m |
Movement since Independent Valuation Sm. |
Book Value 30 Jun 05 \$m |
|---|---|---|---|---|---|---|---|---|---|
| PROPERTY UNDER CONSTRUCTION | |||||||||
| RETAIL | |||||||||
| Homemaker City Fortflude Valley Stage 2, OLD |
100 | Mar 2004 | 12.7 | 54.0 | - | 54.0 | |||
| OFFICE | |||||||||
| Darling Park 3 | 100 | Apr 2004 | 32.1 | 132.1 | ٠ | $\mathbf{r}$ | $\overline{\phantom{a}}$ | ٠ | 132.1 |
| INDUSTRIAL | |||||||||
| Quad 4, Parkview Drive | 100 | Jun 2004 | 27 | 3.4 | ۰ | $\overline{\phantom{a}}$ | ٠ | ||
| Homebush Bay NSW | Leaschoid | 34 | |||||||
| Austrak Business Park, Somerton VIC |
50 | $0$ ct 2003 | 22.3 | 38.7 | $\blacksquare$ | ٠ | ×. | 38.7 | |
| Total Property Under Construction | 228.2 |
7.4 Property Investments - Investments in Associates and Joint Ventures
| Name | Ownership $\mathcal{S}_1(\mathbf{1})$ |
Acquisition Date |
Acquisition Price Sm |
Total Cost including Additions and Leasu Incentives Sm |
Date of Latest External Valuation |
Independent Valuer | Lafest Independent Valuation \$п. |
Movement since independent Valuation \$п |
Fair Value 30 Jun 05 Sm. |
|
|---|---|---|---|---|---|---|---|---|---|---|
| RETAR Ering Fair |
||||||||||
| NSW | 16.7 Units in Trust |
Jun 1992 | 55.1 | 70.7 | Dec 2004 | Knight Fronk KL Goddard, FAPI |
129.2 | 0.2 | 129.4 | æ |
| Horton Parade | 50 | Jun 1993 | 3.8 | 7.9 | Dec 2004 CB Richard Ellis | 9.7 | 0.1 | ۳ $9.8$ $(2)$ |
||
| QLD | Units in Trust | T Irving, AAPI | ||||||||
| Maroochydore Superstore | Feb 1999 | 5,5 | 8.4 | Dec 2004 | CB Richard Ettis | 7.2 | 3,1 | $10.3 - a$ | ||
| Piaza QLO | 16.3 | T Irving, AAPI | 20.1 | |||||||
| Total Retail | 149.5 | |||||||||
| OFFICE | ||||||||||
| Citigroup Centre | 50 | Jul 2001 | 61.2 | 268.5 Dec 2003 FPDSavils (NSW) | ||||||
| NSW | Units in Trusts | Dec 2001 | 212.4 | |||||||
| (4) | 0.6 | A Pannifex, FAPI | ||||||||
| 268.5 | 287.5 | 0.7 | 283.2 0 | |||||||
| 1 Farrer Place | 25 | Dec-2003 | 253.6 | $(1.7)$ $\beta$ | ||||||
| NSW | Units in Trust | 262.0 | Dec 2004 Knight Frank KL Goddard, FAPI |
256.3 | 23 | 258.4 0 | ||||
| Darling Park Complex | 50 | Jun 2000 | 269.1 | 467.6 | $(0.3)$ (a | |||||
| NSW | Units In Trusts | Mar 2001 | 100.0 | |||||||
| ${^{(n)}}$ | 12.0 | |||||||||
| 467.6 | Jan 2005 FPDSavills (NSW) | 462.8 | 0.3 | $463.1$ (z | ||||||
| A Fonnifex, FAPI | $(2.0)$ (3 | |||||||||
| Total Office | 1.005.7 | |||||||||
| MIXED | ||||||||||
| Brisbane Transit Centre | 50 | |||||||||
| OLD | Units in Trust | Nov 1997 | 42.6 | 47.3 Jun 2005 Jones Lang LaSalle | 59.3 (5) | 59.3 (2 | ||||
| J Apted, FAPI | ٠ | $\mathfrak{g}$ | ||||||||
| Total Mixed | 59.3 | |||||||||
| HOTEL & TOURISM | ||||||||||
| Kings Canyon (Watanka) Resort | ||||||||||
| Trust | 46 | Jun 2005 | 7.7 | 7.7 | ú | 7.7 4 | ||||
| Units in Trust | ||||||||||
| Total Hotel & Tourism | 7.7 | |||||||||
| Total Equity Accounted Investments | 1.222.2 |
(1) Freehold, unject citamine stated.
(2) Share of Associate's properly assets. The value of the Trust's internatin the Associale's property assets is included in the valustion.
(3) Share of Associates offer properly relat
(4) Acquisition costs.
(5)
(5) Velualors for Brisbane Transk Contre was \$60m, which included \$0.7m for plant and equipment owned by Roma Street Operations Pty Limited
The basis of valuation of investment properties in felt value being the amounts for which the sassit could be exchanged between willing perties in an ansite length framescribes.
7.5 Additions to existing Property Investments
During the hall-year ended 30 June 2005 the following additions and lease incentives were made to existing properly investments:
| Consolidated - Half-Year 30 Jun 2005 |
|||||
|---|---|---|---|---|---|
| Investment properties Sm. |
Interests in Hotal Operations \$m |
Property under construction \$m |
Investments in Associates and Joint Ventures \$m |
Total Sm. |
|
| Retail | 100.2 | - | 8.9 | 3.2 | 112.3 |
| Office | 9.5 | - | 50.8 | 2.1 | 62.4 |
| Nixed | 32.1 | - | $\overline{\phantom{a}}$ | 0.3 | 32.4 |
| Industrial | 0.8 | - | 3.8 | 4.6 | |
| Hotel & Tourism | 5.1 | 7.9 | 13.0 | ||
| 147.7 | 63.5 | 13.5 | 224.7 |
| Consolidated - Half-Year 31 Dec 2004 |
|||||
|---|---|---|---|---|---|
| invastment properties \$m |
Interests in Hotel Operations \$m |
Property under construction |
investments in Associates and Joint Ventures \$m |
Total \$m |
|
| Retail | 83.0 | $\cdot$ | 25.2 | 0.9 | 109.1 |
| Office | 14.7 | $\mathbf{r}$ | 52.1 | 2.8 | 69.6 |
| Mixed | 78.0 | ۰ | $\blacksquare$ | 78.0 | |
| Industrial | 0.3 | ٠ | 2.0 | $\overline{\phantom{0}}$ | 2.3 |
| Hotel & Tourism | 11.3 | - | 0.2 | 11.5 | |
| 187.3 | - | 79.3 | 3.9 | 270.5 |
Additions to property investments include capitalised interest on redevelopment of \$9.9 million using an interest rate of 7.01% (Dec 2004: \$10.4 million using 6.92%).
Melbourne Central
Construction commenced in November 2002 on the \$260 million redevelopment of Melbourne Central. The development has opened in progressive stages and the final level 3 leisure and entertainment precinct is programmed for completion in the second half of 2005.
Macarthur Square
Construction commenced in September 2004 on the \$200 million (GPT's share \$100 million) expansion of Macarthur Square. The first stage of the development is programmed for completion in late 2005 and the second stage in early 2006.
Penrith Plaza
Construction commenced in June 2004 on the \$140 million expansion of Penrith Plaza, and is programmed for completion in late 2005.
Rouse Hill Town Centre
A Masterplan Development Application was approved in March 2004 for the Rouse Hill Regional Centre. Construction on the town centre component is expected to commence in early 2006 and is programmed for completion late 2007.
Homemaker City Fortitude Valley - Stage 2
In March 2004, GPT acquired a land parcel on which Stage 2 of the Homemaker City Fortitude Valley has been developed. The centre will be completed in the second half of 2005 at a total cost of \$53.0 million including acquisition costs.
Darling Park Stage 3
In April 2004, GPT purchased the Darling Park 3 leasehold and entered into a development agreement with Lend Lease Development to develop the 29,000 som final tower of the Darling Park complex. Approximately 60% of the space has been precommitted to Marsh and Mercer. Forecast cost to completion in December 2005 is \$234 million.
The Quad, Parkview Drive, Homebush Bay
The Quad 4 leasehold title was acquired in June 2004 for \$2.7 million including acquisition costs. Quad 4 site forms part of the Quad Business Park complex which is being developed by GPT.
7.5 Additions to existing Property Investments (Continued)
Ayers Rock Resort
Works have commenced on the refurbishment of 60 guest rooms at Desert Gardens Hotel. These works are scheduled for completion in September 2005 with a total budget of \$2.8 million.
Voyages Lodges (previously P&O Resorts)
A refurbishment of Cradie Mountain Lodge has commenced and is programmed for completion in November 2005. The works include a mixture of full and soft refurbishment of 83 guest rooms as well as the restaurant at a cost of approximately \$3.7 million.
Purchase of Investments
Homemaker City Fortitude Valley - Stage 3
In March 2005, GPT acquired the remaining component of Fortitude Valley for \$33.7 million.
Disposal of Investments
Homemaker City Underwood
Homemaker City Underwood was divested in June 2005 for \$19.0 million.
Macarthur
In June 2005, GPT divested a parcel of surplus land for \$2.4 million (50% Interest).
Melbourne Central - Heritage Building
In June 2005, GPT divested a surplus property in Little Lonsdale St for \$2.9 million.
7.6 Other information
Four Points by Sheraton Hotel
The property is wholly owned by GPT. GPT also has a 40% interest in an associated company, 161 Sussex Street Pty Limited (161 Sussex) which leases and operates the hotel. Starwood Pacific Hotels Pty Limited ('Starwood'), a wholly owned subsidiary of Starwood Hotels and Resorts Worldwide Inc. owns the remaining 60% Interest.
In May 2000, 161 Sussex leased the hotel from GPT for ten years, with 161 Sussex having an option to extend the lease for a further term of five years. After May 2005 the lease may be terminated by GPT if the hotel is sold. The 161 Sussex has provided a security deposit of \$7.0 million.
At the time of acquisition, GPT provided a loan to 161 Sussex to fund its purchase of business assets, the payment of the security deposit and initial working capital requirements. The loan balance at June 2005 was \$2.8 million. Since acquisition GPT has invested an additional \$2.6 million in equity in 161 Sussex.
| Consolidated | |||
|---|---|---|---|
| 30 Jun 2005 | 31 Dec 2004 | ||
| \$m | Şm. | ||
| 8. Commitments | |||
| (a) Capital expenditure | |||
| At balance date capital expenditure approved but not provided for in the financial report: | |||
| Due within 1 year | 206.7 | 321.9 | |
| Due between 1 and 5 years | 0.2 | 70.6 | |
| 206.9 | 392.5 | ||
| (b) | Operating leases | ||
| Estimated aggregate amount of operating lease expenditure agreed or contracted but not provided for in the tinancial report: |
| Due within 1 year | 3,3 | 0.2 |
|---|---|---|
| Due between 1 and 5 years | 13.1 | 0.9 |
| Due between 5 years and expiry date of teases | 48.7 | |
| 65. | 3.3 |
Of the total operating lease commitments, \$56.6m relates to an operating lease with SEA Island Holdings for the use of Lizard Island. The calculation is based on the current monthly rental. The rental payment increases eve
(c) Other commitments
Estimated aggregate amount of other commitments agreed or contracted but not provided for in the financial report:
| Due within 1 year | 2.0 | ||
|---|---|---|---|
| Due between 1 and 5 years | 23.1 | $^{\tiny{+}}$ | |
| Due between 5 years and expiry date of leases | |||
| 25. | $\overline{\phantom{a}}$ |
These include medium term retention arrangements for certain GPT employees that were entered into at the time of the transition of GPT employees from Lend Lease to GPT.
| Consolidated | |||
|---|---|---|---|
| Note | 30 Jun 2005 \$m |
31 Dec 2004 \$m |
|
| 9. Other financial assets | |||
| Loans to Joint Ventures and Associates | |||
| 161 Sussex St Pty Limited | 2.8 | 2.8 | |
| Lend Lease (Twin Waters) Pty Limited | 17.1 | 16.5 | |
| Lend Lease GPT (Rouse HIII) Pty Limited | 10.4 | 8.1 | |
| Europe Real Estate Joint Venture S.a.r.l. | 16 | 347.3 | |
| 377.6 | 27.4 | ||
| Loans to Voyages Hotels & Resorts Pty Limited | |||
| Working Capital Loan | 17 | 18.5 | |
| Acquisition Loan | 17 | $\blacksquare$ | 48.1 |
| ш | 66.6 | ||
| Unlisted shares in corporations | |||
| Voyages Hotels & Resorts Pty Limited | ۰ | 8.0 | |
| Roma St Operations Pty Limited | 0.7 | 0.7 | |
| 0.7 | 8.7 | ||
| 378.3 | 102.7 |
| Consolidated | ||||
|---|---|---|---|---|
| Note | 30 Jun 2005 \$m |
31 Dec 2004 \$m |
||
| 10. Interest bearing liabilities | ||||
| Current | ||||
| Short and Medium Term Notes Commercial Bills |
1(k), 11 | 1,118.7 | 937.1 | |
| $1(k)$ , 11 | 999.8 2.118.5 |
131.6 1,068.7 |
||
| Non current | ||||
| Medium Term Notes CPI Coupon |
1(k), 11 | 1,209.9 | 1,500.1 | |
| 1(k), 11 | 124.5 1,334.4 |
124.5 1,624.6 |
||
| 11. Finance facilities | ||||
| Bank stand-by facilities | 600.0 | 400.0 | ||
GPT has unused stand-by facilities of \$600 million (Dec 2004: \$400 million) at balance date to provide liquidity backup for the Short Term/Medium Term Note Programme. \$400 million matures on 31 January 2006 and a further \$200 million matures on 22 May 2006. It is anticipated that it will be possible to extend all facilities.
Short Term Note / Medium Term Note Programme
The Short Term/Medium Term Note Programme ('the Programme') is a revolving, non-underwritten, debt programme. The Programme provides flexible short term and medium term funding to enable GPT to fund commitments and to act promptly on investment opportunities. The Programme can be terminated at the discretion of GPT and is unsecured. The value of the notes issued under the Programme is limited by the GPT constitution. The constitution limits the amount of debt to no more than 40% of the total assets. At 30 June 2005 the percentage of debt to total assets is 34.8%.
In August 2004, GPT issued \$250 million 18 month callable Medium Term Notes which GPT could call and cancel after 6 months or investors could call if GPT is downgraded to a 'BBB+' or lower. In June 2005, GPT exercised the call to repay the principal and interest on these Notes in August 2005, \$76.5 million of these Notes were purchased with the settlement of \$300 million 3 year fixed and floating Medium Term Notes issued in June 2005.
| Maximum face value of Short Term Notes on issue during the period | 615.0 | 790.0 |
|---|---|---|
| Face value of Short Term Notes outstanding at the end of the period | 610.0 | 615.0 |
| Maximum face value of Medium Term Notes on issue during the period | 1.827.0 | 1.827.0 |
| Face value of Medium Term Notes outstanding at the end of the period | 1.725.5 | 1,827.0 |
Commercial Bills
GPT converted a \$500 million Bridging Finance Facility to a \$850 million Multi Option Facility which will expire on 30 April 2008. Under this facility as GPT's rating has been downgraded to BBB+, the bank has a right to reduce the Facility to \$500 million with 120 day notice. At the date of this report the Bank has not exercised this right. As at 30 June 2005, \$550 million has been drawn down. On 1 July 2005, this balance was reduced to \$86.0 million with funds received from Westfield in connection to the partial sale of Penrith Plaza and Woden.
In June 2005, GPT obtained a \$500 million Short Term Note Facility that expires on 1 June 2006. At balance date \$442 million had been drawn down against this facility.
In June 2005, GPT obtained a 600 million Euro 3 year Syndicated Revolving Credit Facility. At balance date this facility was undrawn.
The GPT / Austrak Joint Venture has a \$16.5 million (GPT's Share \$8.3 million) Bill Facility to fund the capital expenditure requirements of Austrak Business Park, Somerton. This facility is secured by a mortgage over Austrak Business Park, Somerton. As at 30 June 2005, \$5.6 million (GPT's share \$2.8 million) has been drawn down, (Dec 2004: \$3.2 million (GPT's Share \$1.6 million)).
CPI Coupon Indexed Bonds
On 10 December 1999, the Trust issued CPI Coupon Indexed Bonds totalling \$125 million. The securities will expire on 10 December 2029 and have a current coupon of 7.05%. The coupon compounds quarterly at the rate of CPI.
| Consolidated Half-Year Ended |
|||
|---|---|---|---|
| 30 Jun 2005 \$m |
31 Dec 2004 \$m |
30 Jun 2004 \$m |
|
| 12. Total Equity / Net Assets Attributable to Securityholders | |||
| Reconciliation of the movements between the beginning and end of the current and previous reporting period are set out below: | |||
| Net assets attributable to securityholders at the beginning of the reporting | |||
| period | 6,074.5 | 5,519.2 | 5,308.4 |
| Finance costs to security holders Less: finance costs paid |
205.5 | 779.1 | 230.3 |
| Securities issued | (115.0) | (223.8) | (219.8) |
| Transfer to equity | 200.3 | ||
| Net assets attributable to securityholders at the end of the period | (6, 165.0) | ||
| ۰ | 6,074.5 | 5,519.2 | |
| Open equity at the beginning of the period | |||
| Transfer from net assets attributable to securityholders | 6,165.0 | ||
| Current year profit attributable to securityholders | 66.2 | ||
| Movement in foreign currency translation reserve | 7.2 | ||
| Distributions payable at 30 June | (115.0) | ||
| Closing equity at the end of the period | 6,123.4 |
On 10 June 2005, securityholders also received a 15 cents per unit capital distribution of \$302.5 million, refered to as the stapling distribution. Unitholders
authorised GPT RE Limited (the new responsible entity for the
On 2 April 2004, 67 million units were issued via a private placement to raise \$203 million. Units were allotted on 8 April 2004 at \$3.03 under the placement, representing a 1.5% discount to 3 day volume weighted average (VWAP) of \$3.077. The units were entitled to the full March 2004 quarter distribution and subsequent distributions.
Total equity / net assets attributable to securityholders represents
| Realised income entitlement Unrealised income entitlement |
8.9 1,508.8 |
8.6 1.467.4 |
6.9 913.9 |
|---|---|---|---|
| Foreign currency translation reserve Equity / securityholder contributions |
4.598.5 | 4.598.5 | 4.598.4 |
| 6.123.4 | 6.074.5 | 5.519.2 |
| Consolidated | ||||
|---|---|---|---|---|
| Note | 30 Jun 2005 $\mathbf{m}$ |
30 Jun 2004 \$m |
||
| 13. Notes to the Statement of Cash Flows | ||||
| (a) | Reconciliation of profit after income tax to net cash provided by operating activities | |||
| Profit after income tax expense | 66.2 | |||
| Finance costs paid/payable to security holders | 205.5 | 230.3 | ||
| Fair value adjustments | (82.6) | (20.3) | ||
| Revenue adjustments | 6.2 | 6.1 | ||
| Net loss/(gain) on disposal of properties | (9.3) | ٠ | ||
| Interest capitalised | (9.9) | (9.9) | ||
| Net cash provided by operating activities before | ||||
| changes in assets and Ilabilities | 176.1 | 206.2 | ||
| (increase)/decrease in receivables | (0.4) | (6.2) | ||
| Increase/(decrease) in payables | (8.4) | (15.5) | ||
| Net cash inflow from operating activities | 167.3 | 184.5 | ||
| (b) | Reconciliation of Cash | |||
| Disclosed in Balance Sheet as: | ||||
| Cash | 79.3 | 52.5 | ||
| (c) | Non-cash financing and investing activities | |||
| Stapling distribution issued to securityholders | 15 | (302.5) | $\overline{\phantom{a}}$ | |
| Shares in GPT Management Holding Pty Limited issued to securityholders | 15 | 302.5 |
$\bar{z}$
| Retall \$m\$ |
Office \$m |
Industrial Sm |
Hotel and Tourism \$m. |
Masterplanned Urban 5m |
Consolidated Sm |
|
|---|---|---|---|---|---|---|
| 14. Segment information | ||||||
| Primary reporting - business segments | ||||||
| Half-Year ended 30 June 2005 | ||||||
| Total segment revenue Share of net profit of associates Unallocated revenue Revenue |
220.3 4.2 |
116.9 44.5 |
36.0 a. |
89.0 0.5 |
0.9 1.3 |
463.1 50.5 1.0 514,6 |
| Segment result Responsible Entity's fee and other Financing costs to institutions Financing costs to security holders Costs associated with internalisation Profit before income tax Income tax benefit / (expense) Profit after income tax |
180.4 | 125.8 | 33.6 | 78.9 | 2.2 | 420.9 (35.4) (74.2) (205.5) (40.4) 65.4 0.8 66.2 |
| Half-Year ended 30 June 2004 | ||||||
| Total segment revenue Share of net profit of associates Unallocated revenue Revenue from ordinary activities |
212.8 4.4 |
76.4 32.6 |
16.5 a. |
33.4 1.5 |
0.7 0.5 |
339.8 39.0 1.1 379.9 |
| Segment result Responsible Entity's fee and other Financing costs to institutions Financing costs to security holders Profit before income tax Income tax benefit / (expense) Profit after income tax |
169.2 | 81.4 | 14.6 | 35.0 | 1.2 | 301.4 (22.2) (48.9) (230.3) $\blacksquare$ |
$\mathcal{L}$
$\mathcal{L}$
k,
$\sim 10^{11}$
$\sim$
$\hat{\boldsymbol{\beta}}$
$\sim$
$\sim$
$\bar{z}$
15. Stapling of the Trust to GPT Management Holdings Limited
In June 2005, the GPT Group was formed by the stapling of the units in the Trust to the shares in GPT Management Holdings Limited ('the Company') following unitholder approval on 2 June 2005.
The Trust and the Company entered into the Stapling Deed which sets out the terms of the relationship between the entities with respect to the stapled securities. The Stapling Deed ensures that the entities must operate on a co-operative basis for the benefit of holders of Stapled Securities as a whole.
As a result of the stapling the Trust is considered, for accounting purposes, to have gained control of the Company and has consolidated the Company from 2 June 2005, being the date the Stapling Deed became unconditional,
The stapling was implemented on 10 June 2004, being the date on which shares were issued to investors in GPTMH and stapled such that the GPT Group stapled securities traded as one security on the Australian Stock Exchange under the code GPT. The stapled security comprises one unit in the Trust and one share in the Company.
On implementation, the Trust unitholders received a 15 cents per unit capital distribution of \$302.5 million, refered to as the stapling distribution. Unitholders authorised GPT RE Limited (the new responsible enitity for the Trust) to apply the stapling distribution to subscribe for shares in the Company of \$302.5 million. For each unit held in the Trust unitholders received one share in the Company. The amount of the stapling distribution had regard to: the funding requirements of the Company, funding requirements of the Joint Venture with Babcock & Brown, the acquisition costs of the Company acquiring GPT RE Limited and Voyages Hotels & Resorts Pty Limited.
In conjunction with the stapling, the Company acquired GPT RE Limited to act as the responsible entity of the Trust pursuant to the Subscription Agreement following GPT Management Limited being replaced by GPT RE Limited as the responsible entity of the Trust.
As a result of the stapling investors in GPT will receive distributions from each component of the stapled security comprising distributioned from the Trust and dividends from the Company.
16. Babcock & Brown Joint Venture
The Babcock & Brown Joint Venture will seek to identify and invest in real estate opportunities which offer superior risk adjusted returns, and establish and manage third party funds. The joint venture will create a new global property vehicle, with an initial focus on Europe but encompassing other markets. Its key activities will include selective investment, active portfolio management, investment in development projects and property funds management.
On 30 June 2005, GPT invested in European Real Estate Joint Venture S.a.r.I with equity of \$99.2 million (refer Note 5) and a loan of \$347.3 million (refer Note 9), with the joint venture having investments in 7 seed assets located in Germany and the Czech Republic.
17. Control of Voyages Hotels & Resorts Pty Limited
The Company acquired all the shares in Voyages Hotels & Resorts Pty Limited (Voyages) on 30 June 2005 for a market consideration of \$4.3m from GPT Hotel Management Limited (GPTHM).
Prior to the acquisition, whilst GPT received 100% of dividend income of Voyages, Voyages was not controlled by GPT for accounting purposes and therefore not consolidated at 31 December 2004. This was due to the shares in GPTHM comprised of two classes: A dass voting shares owned by GPT Operating Company Trust (the beneficiaries of which were the GPT Unitholders) and B class income shares owned by GPT Hotel Trust (a 100% subsidiary of GPT).
With the acquisition Voyages has been consolidated from 30 June 2005. All transactions between Voyages and controlled entities in GPT have been eliminated in full from this date.
Hotel property owned by the Trust and managed by Voyages Hotels & Resorts Limited which was previously considered investment property is now considered to be owned and operated by GPT and as a result has been transferred to property, plant and equipment as owner occupied hotel property. Details of the hotel property classified as owner occupied hotel property are disclosed in Note 7.2.
18. Transactions with Lend Lease Group
$\overline{\phantom{a}}$
The Responsible Entity of the Trust up until it was replaced in June 2005 was GPT Management Limited (now Lend Lease Funds Management Limited), a wholly owned subsidiary of Lend Lease Corporation Limited.
Details of the Responsible Entity's fee are disclosed in Note 3. GPT Management Limited's immediate and ultimate holding company is Lend Lease Corporation Limited.
All dealings between the Trust and Lend Lease Corporation Limited and its controlled entities and related parties ('Lend Lease') were on normal commercial terms and conditions and material dealings are reviewed by the Audit and Risk Management Committee. All contracts are subject to commercial appraisal, on a basis acceptable to GPT Management Limited, by an external valuer or a qualified external party approved by GPT Management Limited.
The following transactions have taken place with the Lend Lease Group up until 6 June 2005:
| Consolidated | ||
|---|---|---|
| 30 Jun 2005 | 30 Jun 2004 | |
| \$m | \$m | |
| Capital expenditure in relation to contracts for development, refurbishment and upgrades |
||
| 129.5 | 134.8 | |
| Purchase of Darling Park Stage 3 | 30.0 | |
| Property management including property maintenance and | ||
| insurance | 13.7 | 14.4 |
| Rental income from Lend Lease Group | 0.1 | 5.8 |
| Income guaranteed by Lend Lease under development and | ||
| sale agreements | 0.2 | |
| GPT's share of Associates Responsible Entity fee | $0.2\,$ | |
| Agreement with Lend Lease Corporation to provide for a smooth and orderly transition of business of responsible entity of GPT from GPT Management Limited to the new responsible entity to be known as GPT RE Limited. The agreement |
||
| covered the operational and logistical matters for the transition. | 16.5 |
19. Explanation of transition to Australian equivalents to IFRSs
The impacts of transition to AIFRS on GPT Group's total equity and net profit are set out below.
(i) Reconciliation of consolidated total equity reported under previous AGAAP to consolidated total equity under AIFRS
| Note | 31 Dec 2004 \$m |
Consolidated 30 Jun 2004 \$m |
1 Jan 2004 \$m |
|
|---|---|---|---|---|
| Total equity under AGAAP | 6.093.4 | 5.523.6 | 5.315.5 | |
| AIFRS adjustments to equity: Re-classification of units from equity to liability Recognition of fair value of derivatives Total equity under AIFRS |
(a) (d) |
(6,074.5) (18.9) × |
(5,519.2) (4.4) |
(5,308.4) (7.1) |
The transition to AIFRS also resulted in the reclassification of certain balances on the balance sheet. Whilst these did not affect total equity, the significant reclassifications have been described in detail below.
(ii) Reconciliation of consolidated net profit under previous AGAAP to consolidated net profit under AIFRS
| Consolidated | |||
|---|---|---|---|
| Note | Year ended 31 Dec 2004 \$m |
Half-Year ended 30 Jun 2004 \$m |
|
| Net profit under previous AGAAP | 426.4 | 216.5 | |
| AIFRS adjustments to net profit: | |||
| Finance costs to securityholders | (a) | (1,009.4) | (230.3) |
| Fair value adjustments of Investment properties | (b) | 597.3 | 22.7 |
| Fair value adjustments to investments in associates and joint | |||
| ventures | (c) | 11.2 | (5.5) |
| Net gain/(loss) on fair value of derivatives | (d) | (11.8) | 2.7 |
| Adjustment to rental revenue including straightlining and | |||
| amortisation of lease incentives | (e) | (13.7) | (6.1) |
| Net proft under AIFRS |
(ii) Reconciliation of cashflow statement
The transition to AIFRS has not resulted in any material adjustments between the cashflow statement presented under AIFRS and previous AGAAP.
Notes to reconciliations
(a) Classification of units/securities
Under previous AGAAP, units issued by GPT were classified as equity on the consolidated balance sheet. At the date of transition and in accordance with AASB 132 Financial Instruments: Disclosure and Presentation, unitholders' funds met the criteria of a liability. The effect of this was to recognise a liability attributable to unitholders for \$5,308.4m and a decrease in contributed equity by \$4,400.8m and \$907.6m of retained earnings. At 31 December 2004, the liability attributed to unitholders was \$6,074.5m, a decrease in contributed equity of \$4,598.5m and retained earnings of \$1,476.0m. This adjustment resulted in net assets at 31 December 2004 being zero.
On 2 June 2005, amendments were made to clauses regarding the life of the trust within the GPT trust deed, resulting in the reclassification of units from a liability to equity from that date.
During 1 January 2004 to 1 June 2005, when unitholders' funds were classified a liability, the return to unitholders was disclosed as finance costs (comprising amounts paid to securityholders and undistributed net assets attributable to securityholders) on the income statement rather than as distributions and an increase in retained earnings respectively. The effect of this was at 30 June 2004, finance costs were \$219.8m and \$10.5m respectively. At 31 December 2004 finance costs were \$443.6m and \$565.8m respectively. The significant components of undistributed net assets attributable to securityholders is mostly made up of changes in the fair value of investment properties and derivative financial instruments. The amendment to the GPT trust deed on 2 June 2005, has resulted in net assets attributable to securityholders being reclassified as equity and the return to unitholders being disclosed as a distribution payable at reporting date (refer Note $2)$ .
19. Explanation of transition to Australian equivalents to IFRSs (Continued)
Notes to reconciliations (Continued)
(b) Investment property
Under previous AGAAP, the GPT Group recognised valuation increments and decrements on investment property in the asset revaluation reserve. Under AASB 140 Investment Property, all movements in investment property are recognised directly in the income statement.
As a result, the net increase in the fair value of the investment properties of \$22.7m for the six month period ended 30 June 2004 and \$597.3m for the twelve months ended 31 December 2004 has been recognised directly in the income statement. This includes a revaluation adjustment referred to in note 19(e) in regard to lease incentives of \$6.1m to 30 June 2004 and \$13.7m at 31 December 2004.
At the date of transition on 1 January 2004, the effect of this was to reduce the asset revaluation reserve by \$907.1m and increase opening retained earnings by \$907.1m. (The effect at 30 June 2004 and 31 December 2004 was \$918.2m and \$1,486.3m respectively.) There was no effect on total equity.
(c) Investments in associates and joint ventures
Under previous disclosure, certain associates which own investment property were classified as investment properties in the balance sheet. At the date of transition, these associates were reclassified in the balance sheet as investments in associates and joint ventures in accordance with AASB 128 Investments in Associates and AASB 131 Interests in Joint Ventures.
The effect of this was to reduce investment properties by:
- \$1,183.2m and increase investments in associates and joint ventures by \$1,183.2m at 1 January 2004
- \$1,182.8m and increase investments in associates and joint ventures by \$1,182.8m at 30 June 2004
- \$1,203.5m and increase investments in associates and joint ventures by \$1,203.5m at 31 December 2004 There was no effect on total or net assets.
Under previous AGAAP, investments in associates were equity accounted with movements being recognised against the asset revaluation reserve. At transition date, the directors elected to account for investments in joint ventures at fair value, with movements in fair value recognised in the income statement. There was no effect on total equity. Investments in associates will continue to be equity accounted.
The fair value adjustment to investments in associates and joint ventures was \$5.5m loss for the six month period ended 30 June 2004 and \$11.2m profit for the twelve month period ended 31 December 2004. These balances were transferred from asset revaluation reserve to the income statement for the respective periods.
(d) Derivatives
Under previous AGAAP, derivatives were not recorded on balance sheet but disclosed in the notes to the accounts. Under AASB 139 Financial Instruments: Recognition and Measurement, derivatives not meeting hedging criteria are required to be measured at fair value through the income statement and recognised on balance sheet.
The effect of this was to recognise the fair value of derivatives on the balance sheet as:
- a \$13.6m derivative financial asset and \$20.7m derivative financial liability at 1 January 2004
- a \$17.1m derivative financial asset and \$21.5m derivative financial liability at 30 June 2004
- a \$9.0m derivative financial asset and \$27.9m derivative financial liability at 31 December 2004
This adjustment was recorded as a \$7.1m decrease against opening retained earnings. The movement in the net gain/(loss) on the fair value of derivatives of \$2.7m for the six month period ended 30 June 2004 and (\$11.8m) for the full year ended 31 December was recognised directly in the income statement. The value of the derivative financial asset and derivative financial liability in the balance sheet were adjusted accordingly for the respective periods.
(e) Rental revenue
Under previous AGAAP, rental revenue was recognised in the income statement on an accruals basis reflecting the payment terms of the underlying lease. Lease incentives were capitalised into the investment property and not amortised. Under AIFRS, rental income under leases which contain fixed increases will be recognised on a straight line basis over the lease term. Rental income will also be adjusted for the amortisation of lease incentives, including rent free incentives, over the lease term.
The effect of this, at the date of transition, was to create a lease incentives asset of \$56.9m and an impact of straightlining asset of \$0.5m and to decrease investment properties by \$57.4m (30 June 2004;\$64.3m, 31 December 2004:\$83.5m). Both of these assets are included as part of investment properties for disclosure purposes and as a result there is no impact on the face of the balance sheet. The amortisation of these balances reduced rental revenue by \$6.1m in the six month period ended 30 June 2004 and \$13.7m in the twelve months ended 31 December 2004. This was offset by the recognition of a revaluation increase of \$6.1m in the six month period ended 30 June 2004 and \$13.7m in the twelve months ended 31 December 2004 in the income statement to ensure the property remained at fair value (refer Note $19(d)$ ).
19. Explanation of transition to Australian equivalents to IFRSs (Continued)
Other significant reclassifications on transition to AIFRS
(i) Properties under construction classified as property, plant and equipment
Under previous AGAAP, properties under construction were included in, and accounted for, as investment properties. At the date of transition, properties under construction have been reclassified in the balance sheet as property, plant and equipment in accordance with AASB 140 Investment Property and AASB 116 Property, Plant and Equipment.
The effect of this was to reduce investment properties by:
-
\$101.2m and increase property, plant and equipment by \$101.2m at 1 January 2004
-
\$211.9m and increase property, plant and equipment by \$211.9m at 30 June 2004
-
\$164.7m and increase property, plant and equipment by \$164.7m at 31 December 2004
There was no effect on total or net assets.
(ii) Loans and unlisted shares reclassified from investment property
Under previous disclosure, loans to 161 Sussex St Pty Ltd and investments in unlisted shares were included within investment properties in the balance sheet. At the date of transition, these loans and unlisted shares were reclassified in the balance sheet from investment properties to 'other financial assets'. These loans and unlisted shares will be classified as loans and receivables in accordance with AASB 139 Financial Instruments: Recognition and Measurement and carried at amortised cost,
The effect of this was to reduce investment properties by \$2.8m for loans and \$8.7m for unlisted shares and increase 'other financial assets' by \$11.5m at 1 January 2004, 30 June 2004 and 31 December 2004. There was no effect on total or net assets.
(iii) Loans to Voyages Hotels & Resorts Pty Limited (VHR)
Under previous AGAAP, loans to VHR were classified as 'other assets' in the balance sheet. At transition date and in accordance with AASB 132 Financial Instruments: Disclosure and Presentation, these loans were reclassified to 'other financial assets', classified as loans and receivables and valued at amortised cost in accordance with AASB 139 Financial instruments: Recognition and Measurement.
The effect of this was to reduce 'other assets' and increase 'other financial assets' by \$10.9m at 1 January 2004, by \$17.9m at 30 June 2004 and by \$66.6m at 31 December 2004. There was no effect on total or net assets.
(iv) Interest bearing liabilities carried at amortised cost
Under previous AGGAP, discounts, premiums and ancillary costs relating to borrowings were recorded as an asset and amortised, and the principal amount of the borrowing was recorded as a liability. Under AIFRS, interest bearing liabilities are recorded at amortised cost, where the principal amount is reduced by the amount of their associated discounts, premiums and ancillary costs.
The adjustment to state the amortised cost of interest bearing liabilities was to reduce 'other current assets' and reduce 'interest bearing liabilities' (both current and non current) by \$7.3m at 1 January 2004, \$5.1m at 30 June 2004 and \$5.3m at 31 December 2004.
20. Matters subsequent to the end of the reporting period
Asset Sales
On 12 February 2005 GPT announced it had entered into conditional contracts for the sale of part interests in Penrith Plaza, Woden Plaza and Sunshine Plaza to Westfield as part of its Internalisation process. As at 30 June 2005, the sales of Penrith Plaza and Woden Plaza contacts had not yet been completed.
I conditional requirements on the previously announced sale of 50% of GPT's interest in Woden Plaza in Canberra were met by 1 July 2005 and as a consequence settlement of \$242m was received on that date. GPT also proceeded to implement the transaction in relation to Penrith Plaza with \$368.2m being received on 1 July 2005.
GPT is not obliged to sell the interest in Sunshine Plaza unless certain preconditions have been met. As at the date of these financial statements those conditions have not been met and GPT's interest has not been sold.
Acquisitions
On 29 June 2005 GPT announced its intention to acquire the El Questro Resort in Western Australia for \$17.4m, this acquisition was completed on 7 July 2005.
On 14 July 2005 GPT and its Austrak Business Park co-owner, Austrak, reached agreement with Coles Myer to develop a\$100m national distribution centre for Coles Myer. GPT owns 50% of the business park and the project is scheduled for completion during the first half of 2007.
On 1 August 2005 GPT announced the exchange of contracts for the purchase of 5 Figtree Drive, Homebush Bay for \$19.0m.
Directors' Declaration
The directors of the Responsible Entity declare that the financial statements and notes of the GPT Group set out on pages 5 to 35:
- (a) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements and
- (b) give a true and fair view of the GPT Group's financial position as at 30 June 2005, and of its performance as represented by the results of its operations and its cash flows, for the half year ended on that date.
In the directors' opinion:
- (a) the financial statements and notes are in accordance with the Corporations Act 2001, and
- (b) there are reasonable grounds to believe that the GPT Group will be able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the directors.
un
Director
GPT RE Limited
Sydney $\overline{2}$ August 2005
| 19 | ||
|---|---|---|
| Director |
PRICEWATERHOUSE COPERS ®
PricewaterhouseCoopers ABN 52 780 433 757
Darling Park Tower 2 201 Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia www.pwc.com/au Telephone +61 2 8266 0000 Facsimile +61 2 8266 9999
Independent review report to the security holders of The GPT Group
Matters relating to the electronic presentation of the reviewed financial report
This review report relates to the financial report of the GPT Group (the Company) for the half-year ended 30 June 2005 included on the GPT Group's web site. The Company's directors are responsible for the integrity of the GPT Group web site. We have not been engaged to report on the integrity of this web site. The review report refers only to the financial report identified below. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the reviewed financial report to confirm the information included in the reviewed financial report presented on this web site.
Statement
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the financial report of the GPT Group:
- does not give a true and fair view, as required by the Corporations Act 2001 in Australia, of the financial position of the GPT Group (defined below) as at 30 June 2005 and of its performance for the half-year ended on that date, and
- is not presented in accordance with the Corporations Act 2001, Accounting Standard AASB 134: Interim Financial Reporting and other mandatory financial reporting requirements in Australia, and the Corporations Regulations 2001.
This statement must be read in conjunction with the rest of our review report.
Scope
The financial report and directors' responsibility
The financial report comprises the balance sheet, income statement, statement of changes in equity, cash flow statement, accompanying notes to the financial statements, and the directors' declaration for the GPT Group (the consolidated entity), for the half-year ended 30 June 2005. The consolidated entity comprises both the General Property Trust Group (the company) and the entities it controlled during that half-year.
The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent
RICEWATERHOUSE COPERS ®
and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.
Review approach
We conducted an independent review in order for the company to lodge the financial report with the Australian Securities and Investments Commission. Our review was conducted in accordance with Australian Auditing Standards applicable to review engagements. For further explanation of a review, visit our website http://www.pwc.com/au/financialstatementaudit.
We performed procedures in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report does not present fairly, in accordance with the Corporations Act 2001, Accounting Standard AASB 134: Interim Financial Reporting and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the consolidated entity's financial position, and its performance as represented by the results of its operations and cash flows.
We formed our statement on the basis of the review procedures performed, which included:
- inquiries of company's personnel, and ٠
- analytical procedures applied to financial data.
Our procedures include reading the other information included with the financial report to determine whether it contains any material inconsistencies with the financial report.
These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than that given in an audit. We have not performed an audit, and accordingly, we do not express an audit opinion.
While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our review was not designed to provide assurance on internal controls.
Our review did not involve an analysis of the prudence of business decisions made by directors or management.
Independence
In conducting our review, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.
MoratelyCoare
PricewaterhouseCoopers
RD Deutsch Partner
Sydney $\mathcal{Z}$ August 2005
Appendix 4D
Half yearly report
| Introduced 30/6/2003. | |||||
|---|---|---|---|---|---|
| Name of entity | |||||
| The GPT Group (GPT) comprising General Property Trust and its controlled entities | |||||
| ABN or equivalent company reference |
Half year ended ('current period') | ||||
| 58 071 755 609 | 30 June 2005 | ||||
| Results for announcement to the market | \$A'm | ||||
| Revenues from ordinary activities | up | 35.5% | ŧο | 514.6 | |
| Explanation - Refer Directors' Report | |||||
| Profit (loss) from ordinary activities after tax attributable to members |
up | ∞% | ю | 66.2 | |
| Explanation - Refer Directors' Report | |||||
| Net profit (loss) for the period attributable to members | up | ∞% | to | 66.2 | |
| Explanation - Refer Directors' Report | |||||
| Distributions | Amount per security | Franked amount per security |
|||
| Final distributions | N/A | N/A | |||
| Interim distributions (six months) | 11.4 | 0.02 | |||
| Record date for determining entitlements to the June quarter distribution |
15 August 2005 | ||||
| Date on which the June quarter distribution is payable | 26 August 2005 | ||||
| Distribution Reinvestment Programme The Distribution Reinvestment Programme does not currently apply. |
|||||
$\mathop{!}\rule{0pt}{.1ex}\hspace{-0.1ex}\mathop{!}\hspace{-0.25em}$
Î.
Control gained or lost over entities during period
Name of entity (or group of entities)
GPT Management Holdings Ltd, GPT RE Ltd, Voyages Hotels & Resorts Pty Ltd
Date of gain or loss of control
2 June 2005, 2 June 2005, 30 June 2005
Interests in entities which are not controlled entities
| Name of entity | Percentage of ownership interest held at end of period or date of disposal |
Contribution to net profit (loss) | ||
|---|---|---|---|---|
| Equity accounted associates and joint venture entities |
Current Period $\mathbf{v}$ |
Previous corresponding period |
Current period \$A'm |
Previous corresponding period - \$A'm |
| Roma Street Trust | 50% | 50% | 6.8 | 6.5 |
| Erina Property Trust | 50% | 50% | 3.8 | 3.8 |
| Horton Trust | 50% | 50% | 0.6 | 0.6 |
| Darling Park Trust | 50% | 50% | 11.7 | 5.7 |
| Darling Park Property | ||||
| Trust | 50% | 50% | 8.0 | 3.2 |
| 2 Park Street Trust | 50% | 50% | 10.3 | 10.4 |
| 1 Farrer Place Trust | 50% | 50% | 7.8 | 7.9 |
| Lend Lease GPT (Rouse | ||||
| Hill) Pty Limited | 49% | 49% | 0.0 | 0.0 |
| Lend Lease Twin Waters | ||||
| Resort Pty Limited | 49% | 49% | 1.3 | 0.5 |
| 161 Sussex Street | 40% | 40% | 0.2 | 0.4 |
| European Real Estate | ||||
| Joint Venture S.a.r.l. | 50% | $0\%$ | 0.0 | 0.0 |
| Total | 50.5 | 39.0 |
If this is a half yearly report it is to be read in conjunction with the most recent annual financial report.
$\sim$