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Capital Properties New Zealand Announcement

25 November 2004

MEDIA RELEASE

Capital Properties New Zealand Ltd announced today that proposals would be sought for the purchase of the management rights over the Company’s property assets. Expressions of interest would be sought shortly with submission and assessment of proposals to follow. 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 the proceeds of the sale would be distributed to shareholders as a return of capital.

Chairman Colin Beyer commented that the Capital Properties board were of 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. Capital Properties is the only listed property vehicle that is internally managed. Other vehicles employ an external fund manager who typically receives management fees based on the value of the properties and for other services such as acquisitions, divestments, leasing and development.

The board acknowledge that the proposed course of action is a departure from the Company’s previous internal management philosophy but that it was considered to be in the best interests of all shareholders. The directors acknowledged their responsibility to ensure that the market values of all assets of the Company were factored into the market price of shares or otherwise realised. “We expect that there will be a high level of interest from a significant number of fund managers in the opportunity to acquire the management rights for Capital Properties.

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.”

“The board also recognises the need to ensure that the full value of the Company’s property assets is properly reflected in the share price”, said Capital Properties CEO Chris Gudgeon. The Company will shortly be commencing a revaluation of its property portfolio, which will take into account recent substantial rental growth, movement in capitalisation rates precipitated by Australian property investors, and the value of the Company’s development opportunities. Projections in relation to earnings per share growth and valuation increases, resulting from recent rental growth in the portfolio, will be sent to shareholders with the Half Year Report, due to be mailed on 10 December.

Recent Capital Properties performance highlights include:

• A gross return of 55% over the last 2 years equivalent to an average annual gross return of 24% pa.

• Capital Properties placing as third best property stock in terms of financial performance in a survey of 44 Australian and New Zealand listed property entities and the top performing New Zealand listed property stock. The survey was carried out by Australian based BDO Corporate Finance Ltd earlier this year.

• Significant rental growth experienced in recent rent reviews.

• Substantial exposure to the strongly performing government office sector, where 52% of its rental income is currently derived.

• Average annual revaluation gains of $19 million pa (5% pa) in the last 2 years, as the value of the Company’s property portfolio has steadily increased.

• Significant value upside in its undeveloped Thorndon landholdings, the new Defence headquarters office building now under construction and its recent acquisition of Centre City Shopping Centre.

ENDS

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