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Conditional agreement for purchase

24 September 2004

Capital Properties New Zealand Limited announces conditional agreement for purchase of Finance Centre, excluding the Simpson Grierson Building

Capital Properties New Zealand Limited announced today that it has entered into a conditional contract with Trans Tasman Properties Ltd to acquire the Finance Centre excluding the Simpson Grierson Building. The purchase is conditional on Capital Properties being satisfied in all respects with the outcome of a due diligence investigation. If the condition is satisfied, the purchase will become unconditonal on 15 October 2004.

The purchase price of $78 million provides a forecast initial yield of 10.3%.

The acquisition comprises four office buildings, situated on Queen St and Victoria Street West, which are integrated with a multi level carpark containing 393 car parks accessed off Albert Street. The office buildings are known as Qantas House, Brookfields House, John Scott House and Durham House. The buildings are contained on 3 titles with the Qantas and Brookfield buildings situated on their own separate titles.

The integrated development comprises 24,780m2 of office space, 4,340m2 of retail space and 720m2 of storage with interconnecting retail arcades and retail shop frontage to Queen and Victoria Streets. Significant office tenants include Qantas, Telstra Clear, ANZ and Brookfields. The weighted average lease term for the Centre is 3.8 years.

"A key component of the complex is the 393 space carparking building which provides excellent carparking for office tenants as well as short term parking and loading facilities", said Capital Properties CEO Chris Gudgeon.

The buildings, which were constructed in the late 1980's, have been refurbished and upgraded since 1998, with 2 additional lifts installed into the Qantas building in 2000.

"Trans Tasman have been a responsible landlord and the current presentation and management of the complex is a credit to them. For Capital Properties, this represents an opportunity to increase our exposure to affordable B grade office space, supported by excellent carparking, at a time when the Auckland CBD office sector is starting to show signs of improvement after a few years of indifferent performance", said Chris Gudgeon.

Settlement is scheduled for 6 December 2004 and the purchase will be funded with bank debt at a cost of 7.3%.

ENDS

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