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Macquarie Goodman to raise approximately $458 mn

ASX Release – Macquarie Goodman Group (“Macquarie Goodman”)
Macquarie Goodman to raise approximately $458 million

Date: 12 April 2005
Release: Immediate

Macquarie Goodman is pleased to announce a one for 10 non-renounceable Priority Entitlement Offer and Public Offer at an application price of $3.64 to raise approximately $458 million (the “Offer”).

The proceeds will be used partially to fund a number of recently announced acquisitions of interests in properties and to fund the ongoing development pipeline. The Offer will reduce gearing to 34%, which is marginally below Macquarie Goodman’s target gearing range of 35% to 40%.

Chief Executive Officer Gregory Goodman said, “The Offer follows a recent period of intense activity that has seen the formation of Macquarie Goodman from the merger of MGI and MGM, the restructuring of our New Zealand operations, the purchase of a number of further properties in Australia and New Zealand and the acquisition of our first property in Hong Kong.

“The Offer gives existing Securityholders the opportunity to participate in and share the rewards from an exciting period of growth – both in the size and diversity of our portfolio and also in the returns to Securityholders.”

The expected benefits to Securityholders include:

- increasing the forecast earnings per security by 0.8 cents (3.2%) to 25.8 cents for the year ending 30 June 2006, which represents growth of 9.1% over pro forma earnings of 23.65 cents for the year ending 30 June 2005;

- increasing the pro forma net tangible assets per security from $1.97 to $2.11;

- reducing gearing to 34% to provide greater flexibility to fund future acquisitions and development opportunities;

- acquiring an interest in a seed property in Hong Kong to facilitate the potential expansion of the Asian funds management business; and

- increasing Macquarie Goodman’s market capitalisation and index weighting as well as potentially improving the trading liquidity of securities.

As part of the transaction, Macquarie Goodman reaffirmed its released forecast for the year ending 30 June 2005 of a pro forma annualised distribution of 25.9 cents per security or 6.475 cents per security for the quarter ending 30 June 2005.

Application of funds

In addition to the proceeds of the Offer, the acquisitions also facilitate the re-investment of the net cash proceeds of $169 million received as part of the restructure of NZX-listed Macquarie Goodman Property Trust (“MGP”).

The sources and applications of the funds to be raised are outlined below:

Sources of funds $M

Proceeds from issue of New Securities 458 Proceeds from sale of certain interests in properties to MGP 256 Drawdown of additional debt from existing facilities 7

Total sources of funds 721 Use of funds $M

Additional property acquisitions and development expenditure 434 Hong Kong acquisition (Global Gateway) 122 Investment in MGP units 87 Reset Preference Units cashout 68 Issue costs 10

Total application of funds 721

One of the additional property acquisitions includes a transaction under which Macquarie Goodman has secured Air New Zealand House, which is a significant development property located in the rapidly growing Viaduct Harbour in Auckland, for approximately $48.9 million.

Air New Zealand House, which has been fully leased to Air New Zealand, will comprise a 15,600 sqm office park split into two separate but integrated six level office buildings. Full details of the acquisition appear in Appendix 1.

Entitlement details

The Offer comprises the Priority Entitlement Offer and Public Offer. The Priority Entitlement Offer includes the Institutional Entitlement Offer and the Retail Entitlement Offer to existing eligible Securityholders with registered addresses in Australia and New Zealand.

Under the Priority Entitlement Offer, Macquarie Goodman is making a non-renounceable offer to eligible Securityholders of a total of approximately 126 million new securities at the application price of $3.64 per new security. Securities not taken up under the Priority Entitlement Offer will be offered under the Public Offer at the same application price to Australian investors only. The Public Offer may be subject to scale back.

The new securities will rank equally with all other securities, including entitlement to the distribution for the quarter ending 30 June 2005. New securities are forecast to deliver a cash yield of 7.6% on the application price for the year ending 30 June 2006. A timetable providing details of the key dates is set out in Appendix 2.

Macquarie Bank Limited and Goodman Holdings Group have confirmed that they will support the Offer and take up their full entitlements, equating to a total of 16.4% or approximately $75 million.

The issue is fully underwritten by Macquarie Equity Capital Markets Limited, UBS AG, Australia Branch and J.P. Morgan Australia Limited.

Mr Goodman said, “This transaction will assist in delivering our objective of pursuing expansion opportunities in Australia, New Zealand and Asia. During 2005, we will continue to progress our development pipeline in Australia and New Zealand and roll out our Customer Service Model in Asia.”

__ __ __

All values are expressed in Australian currency unless otherwise denominated.

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