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Increases in Unit Holders Equity and Total Assets

Interim Highlights

Takeover of Newmarket Property Trust Eastgate Redevelopment leasing success Significant increases in Unit Holders Equity and Total Assets

During the six months ended 30 November 2002 The National Property Trust achieved an unaudited net surplus after tax of $1.944 million on total income of $5.316 million. Net asset value per unit as at 30 November 2002 was $0.92 and the half year earnings, when averaged against the number of units on issue during the period were an effective 1.57 cents per unit pre-tax.

The returns for the period are down on the previous year however they are in line with the Trust’s budget. Unit Holders were advised that during the Eastgate Shopping Centre redevelopment the Trust’s income flows would be affected. As expected the redevelopment has impacted on the surplus for the period. We expect the income flows to normalise once the Eastgate redevelopment is completed.

The gross turnover of the Trust in the period has increased from $6.959 million to $8.600 million and represents a 23% increase over the prior comparable period. This reflects the increased activity resulting from the consolidation of the results of the Newmarket Property Trust, from the acquisition date 1 September 2002, into National for the first time.

Financial Summary

Six Months Ended 30 Nov 2002 30 Nov 2001

Total Income $5.316m $5.048m Net Surplus before Tax $1.631m $2.516m Net Surplus after Tax $1.944m $2.180m Total Assets $205.408m $113.091m Unit Holders’ Equity $85.319m $54.018m CPU Holders’ Equity # $4.500m $4.500m Units on Issue 93.289m 54.390m CPUs on Issue 4.500m 4.500m Dividend Distribution (cents per unit) 4.50 4.00 Net Tangible Assets per Unit $0.92 $0.99 Debt Funding to Gross Value of the Trust Fund 38.7% 42.3% # CPU - Convertible Preference Unit

Dividend Distribution

The distributions to Unit Holders for the half year ended 30 November 2002 represent a total gross dividend of 4.50 cents per unit.

The Trust distributes its income to Unit Holders quarterly. The second quarter distribution represents a gross dividend of 2.25 cents per unit and will be paid to Unit Holders on 7 March 2002.

The Trust issued an Investment Statement and Prospectus dated 12 November 2001. A major assumption was included in this document stating that “Distributions to Unit Holders for the financial years ending 31 May 2002 and 2003 will be at a minimum rate of 9 cents per unit. To the extent that the distribution exceeds the surplus available for distribution, a capital distribution will be made and the Manager will direct the Trustee accordingly in terms of clause 8.2 of the NPT Trust Deed.”

Distributions for the financial year to date have been based on the above mentioned assumption.

Newmarket Property Trust

In May 2002, National announced its intention to make a takeover offer for all of the units on issue in Newmarket and offered unit holders 6 National Units for every 10 Newmarket units they held.

An Extraordinary General Meeting of Unit Holders was held on 30 July 2002 where the takeover offer was approved. The offer closed on 3 October 2002 and at 30 November 2002 National held 87.3% of the units on issue in Newmarket. As a consequence Newmarket became a subsidiary of National and its results have been included in National’s consolidated financial statements.

In the period subsequent to the takeover of Newmarket the Manager has achieved several milestones within the property portfolio.

The Rialto Centre in Newmarket has been refurbished and refreshed and now includes a number of new tenancies. The Ultimo department store replaces the Country Road tenancy, the Homestore which is a major homeware retail destination has been introduced as have the Candleman and Lorenzo Shoes. With these new tenancies and other tenant remixing the Rialto Centre is close to full occupancy and its focus is centred on food, fashion and entertainment with homeware products and décor also featuring strongly.

The AA building located at 99 Albert Street Auckland does not fit with the Manager’s long term strategic requirements and it has decided to sell this property. Negotiations are at an advanced stage with one party whose initial expression of interest represented a price that reflected the current book value of the property. Furthermore, the Manager is at an advanced stage of negotiations with a major tenant to take a significant portion of the vacant space in the building. An announcement is expected to be made shortly.

Newmarket Property Trust was delisted from the New Zealand Stock Exchange on 20 December 2002 due to non compliance with the spread of holding requirements.

Eastgate Redevelopment

By far the most significant event for the Trust over the past six months has been the progress of the redevelopment of Eastgate and the leasing successes we have enjoyed.

The project is only two months away from being completed and open for trading.

At this point we are 96% leased and completing negotiations with the final group of specialty tenants.

We expect the property to be fully leased by the Centre opening date and we are on target to achieve the rental income forecast in our project feasibility analysis.

Our anchor tenants include Countdown and The Warehouse who are trading and Farmers, which is due to open 1 April 2003. Eastgate has been an exciting project to be involved with and on completion we expect to deliver to Unit Holders a flagship investment property of the highest quality.

NZI House Nelson

NZI House was one of the initial properties purchased when the Trust was established in 1994. This property has been sold for $1,840,000 as it no longer fitted the Trust’s investment criteria.

Birmingham Drive

The vacant land on the front portion of the property has been sold for $864,750. The existing buildings and the rear section have been retained and have been fully leased.

Commercial and Industrial Property Activity

The Manager has been active during this period leasing up vacant space as it has become available.

Significant leasings to report include:

Logic Systems lease of 3300m² of factory space for 6 years at 16 Birmingham Drive Christchurch.

Logical Networks lease of 2100m² plus naming rights for 6 years in Hewlett Packard House Wellington.

Police Complaints Authority lease of 587m² in NCR House Wellington.

The weighted average lease term for the commercial and industrial portfolio is 4.5 years with a 2% vacancy level, which represents 700m² of available space. The Manager is currently pursuing leasing opportunities to fill the vacant space.

Meeting of Unit Holders

A meeting of Unit Holders was held on 18 December 2002 to review National’s annual report including the financial statements for the year ended 31 May 2002 and to hear an update of the Trust’s activities.

The Trust holds such meetings to give Unit Holders the opportunity to ask any general questions of the Manager. The attendance indicates the value Unit Holders attach to the opportunity and is appreciated by the Manager.

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