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Urbus Announces Major Property Aquisition

Urbus Announces Major Property Aquisition

The Chairman of Urbus Properties Limited, Denis Thom, announced today that the Company has entered into conditional sale and purchase contracts to purchase the property assets of 9 Waltus syndicates for $157 million.

The contracts are conditional upon Urbus and Syndicate shareholder approval. If the proposal is approved the Urbus property assets will increase to $380million.

Urbus intends to apply to the NZSE for full listing before 31 March 2003.

After only 20 months in operation, Urbus is exceeding operational expectations and has proved to be a robust property investment vehicle. Urbus recently reported a $15.1 million after-tax operating profit for the year to March 2002.

Independent report writers PriceWaterhouseCoopers, appointed by Urbus, and Grant Samuel appointed by the Syndicates, have stated that the terms of the offer are fair. The offer price was determined on the basis of independent valuations by DTZ, acting for Urbus, and CB Richard Ellis, acting for the Syndicates.

Bank debt and the issue of Convertible Notes will fund the acquisition of the 16 properties owned by the Syndicates. The proposed acquisition will have no effect on Urbus’ current modest debt gearing of 41%.

“Urbus made a commitment to consider merging with other Waltus syndicates at the time of the 2000 merger of 27 Waltus Syndicates which formed Urbus. This proposal is in accord with that commitment and reflects the Board’s strategy to continue to grow Urbus’ portfolio,” Mr Thom said.

“There are many advantages to investors of being a part of a larger company including: increased security of income through further diversification of properties and tenants; enhanced liquidity – through increased investor support; lower risk exposure to changing property and economic conditions – current overseas and domestic experience has shown that large property groups are better able to provide good returns through good times and bad; economies of scale – for expenses and administration costs such as insurance, investor communications, audit and trustee costs; and improved access to attractively priced debt – the larger company will be in a stronger negotiating position with banks.”

In addition, under this proposal all Syndicate investors will receive a higher cash distribution than they are forecast to receive if they remain as investors on a stand-alone basis.

Investors in Urbus and the Waltus Syndicates will vote on the proposal at Special Meetings in mid-November.

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