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Colonial Secures New Cornerstone Unitholder

Colonial First State Property Trust Secures New Cornerstone Unitholder and Manager

Auckland (Tuesday, December 16) – Colonial First State Property (NZ) Limited (CFSP), manager of the Colonial First State Property Trust (the Trust) announced today that conditional arrangements have been entered into which, if completed, will lead to the Trust having a new cornerstone unitholder and manager.

CFSP said Macquarie Goodman Management Limited (MGM) is acquiring 20 per cent of the units in the Trust from Sovereign Assurance Limited (Sovereign). In addition, Sovereign will make available to institutional investors its remaining 33 per cent unitholding. CFSP is a related company to Sovereign and as a result of the diminished holding has agreed to transfer its management contract in respect of the Trust to MGM.

The NZX has, at the request of the manager, agreed to halt trading in the Trust’s units for two business days commencing Tuesday, December 16. The shares will re-commence trading upon the market opening on Thursday, 18 December 2003.

The transfer of the management contract is conditional upon the approval of the Overseas Investment Commission (OIC), the Trust’s bankers and Sovereign holding less than 15% of the units on issue in the Trust after completion of MGM’s purchase of units in the Trust from Sovereign and after completion of the placement referred to above. Perpetual Trust, in its capacity as Trustee of the Trust, has provided its approval to the change in management.

Geoff McWilliam, Chairman of CFSP and Executive General Manager of Colonial First State Property Group, said that Sovereign advised its intention to reduce its weighting in the Trust, as having a majority position was not consistent with its diversified portfolio investment philosophy.

“An outcome of this decision was that the size of Sovereign’s investment in the Trust no longer fitted with its philosophy, and the transactions announced today are the natural consequence of that,” Mr McWilliam said.

“As manager of the Trust our primary goal was to ensure that the outcome was in the best interest of all unitholders in the trust, and I believe we have achieved that through the involvement of MGM.”

The transaction achieves a number of goals for the Trust and its investors including increasing liquidity by spreading the main shareholding across a larger number of investors. In addition, MGM plans to increase the Trust’s investment exposure across a greater number of industrial assets, and this will provide more diversity of income for investors. Like the Colonial First State Property Group, MGM is one of the leading property fund managers across Australia and New Zealand.

Mr McWilliam said he is confident the new direction outlined for the Trust, combined with new and active management by MGM, will be a good outcome for all investors in the Trust in conjunction with achieving Sovereign’s goal of liquidating its holding.

He pointed out that Colonial First State Property remains strongly committed to New Zealand through its ownership of the manager of the Kiwi Income Property Trust (KIP), Kiwi Income Properties Limited. The Commonwealth Bank of Australia, which is Colonial’s parent company, also remains a substantial shareholder in KIP.

Mr McWilliam said unitholders in the Trust can look forward to MGM continuing the high quality of management that they have seen under Colonial’s stewardship.

A detailed summary of the transaction is attached at Schedule 1, provided by MGM.

Also attached with this announcement is an investor presentation also provided by MGM.

About Colonial First State Property Trust

The Colonial First State Property Trust is a unit trust listed on the New Zealand Exchange. The Trust listed on the NZX on June 3, 1999. The Trust’s investment strategy has been to invest in a portfolio of good quality, well-tenanted properties with a bias toward suburban office accommodation. As of September 30 2003 the Trust had 13 properties with a total portfolio value of $216 million.

About Colonial First State Property

Colonial First State Property Group is an integrated property services business combining specialist operations in property funds management and corporate real estate.

Part of the Colonial First State Group, a wholly owned subsidiary of the Commonwealth Bank of Australia, Colonial First State Property Group has operations in both Australia and New Zealand.

With combined assets under management in excess of A$15 billion, Colonial First State Property Group combines the talents and expertise of in excess of 200 people, creating one of the largest and most innovative teams of property and funds management professionals in Australasia.

About Macquarie Goodman Management Ltd.

Macquarie Goodman Management is an integrated property company listed on the Australian Stock Exchange, with $4.3 billion in funds under management. It specialises in the delivery and management of approximately 140 warehouse/distribution centres, industrial estates, business parks and office parks, located throughout Australasia. Its managed funds include the Ascendas Real Estate Investment Trust (“A-REIT”), which is listed on the Singapore Exchange (S$694 million) and Macquarie Goodman Industrial Trust (“MGI”), which is listed on the Australian Stock Exchange (A$3.5 billion).

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