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Manager Further Aligns With Sylvia Park Project

13 July 2005

Kiwi Income Properties Limited, the Manager of Kiwi Income Property Trust, announced today that following discussions with key institutional investors, it has elected to make a fund management fee rebate of up to $4.0 million, and to undertake Sylvia Park’s retail project management at cost, enhancing the success of the Trust’s Sylvia Park project. The fund management fee rebate of up to $4.0 million is to the extent that the retail project yield is below 7.5% for the two years post completion, which is anticipated in mid 2007. The project management fees will continue to be capped at the current fee of 3% of project cost, and will be verified by the Trust’s auditors.

Chairman of the Manager, Sean Wareing, said that the fee rebate and reduction in project management fees were further examples of the Manager aligning its interests with those of unit holders.

The fund management fee rebate and reduction in the project management fee is in addition to the significant fee reduction announced in March, following a review and restructuring of the Manager’s fund management fees. The revised structure, effective 1 April 2005, comprises a base fee of 0.55% per annum of average gross assets and a performance fee calculated on unit holder returns above 10% per annum. The total management fee payable, including both the base and performance fees, is capped at 0.70%per annum of average gross assets, yielding significant cost savings to the Trust and placing fees at the lower end of base and performance fees charged by New Zealand listed property entities.

As previously advised, the Trust has a number of parties interested in owning a part of Sylvia Park. The Manager will continue to explore the opportunity for a partner, and should a proposal be presented to the Trust that is fully acceptable and attractive, and in the best interest of unit holders, the Manager in consultation with the Trustee may consider a sale of a portion of the development. If the level of the Trust’s ownership of Sylvia Park reduces, the fee rebate will be adjusted accordingly.


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