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Kiwi Income Property Trust Regulatory Action

20 January 2005

Kiwi Income Property Trust Regulatory Action

On 26 November 2004, Capital Properties New Zealand Ltd announced that proposals would be sought for the purchase of the management rights over the Company’s property assets. The Capital Properties board expressed the view that the value of the Company’s management rights, as distinct from the value of its property assets, were not properly recognised by the market.

Further, the board expressed the view that the value of the management rights, if sold following a contestable open market process, could be considerably in excess of that recognised in other circumstances. If the board considered that, following receipt of proposals, it was in the best interests of shareholders to sell the management rights then it was likely that they would be sold and the proceeds of sale distributed to shareholders as a return of capital.

On December 21, 2004, Kiwi Income Property Trust (KIP) announced that it had made applications to New Zealand Stock Exchange Ltd (NZX) and the Takeovers Panel in an attempt to procure regulatory intervention to prevent Capital Properties from proceeding with its proposed course of action.

The Takeovers Panel announced today that it has considered KIP’s complaint and has decided that it would take no further action.

Capital Properties’ Chairman, Colin Beyer commented that the Takeovers Panel decision to take no action supports the earlier view taken by the Capital Properties board that it was fully entitled to proceed with its proposed course of action. Mr Beyer confirmed again that he and his fellow directors were simply acting in the best interests of all Capital Properties shareholders. KIP’s assertion that Capital Properties were using defensive tactics lacked credibility, particularly given the absence of any announcement from KIP as to its future intentions.

ENDS

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