MUL414 MNZPF AR08 4pp Cover FA3 - Brookfield...

Annual Report 2008Multiplex New Zealand

Property Fund

www.brookfi eldmultiplexcapital.com

Annual Report

Annual Report 2008Multiplex New ZealandProperty FundARSN 110 281 055

Responsible EntityBrookfi eld Multiplex Capital Management Limited ACN 094 936 866, AFSL 223809

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nnual Report 20

08

About Brookfield 2

About Brookfield Multiplex Capital 4

Performance at a Glance 6

Portfolio Analysis 8

Message from the Chairman 10

Fund Manager’s Year in Review 12

Investment Portfolio 16

Board of Directors 36

Investor Relations 38

Financial Report 40

Corporate Directory IBC

Internal rate of return since inception

Portfolio occupancy

Square metres of net lettable area

14.6% 99.6% 370,671

Contents

Responsible EntityBrookfield Multiplex Capital Management Limited 1 Kent Street Sydney NSW 2000 Telephone: (02) 9256 5700 Facsimile: (02) 9256 5188

DirectorsPeter Morris Brian Motteram Robert McCuaig Brian Kingston Mark Wilson

Company SecretaryNeil Olofsson

Registered Office1 Kent Street Sydney NSW 2000 Telephone: (02) 9256 5700 Facsimile: (02) 9256 5188

CustodianBrookfield Multiplex Funds Management Limited 1 Kent Street Sydney NSW 2000 Telephone: (02) 9256 5700 Facsimile: (02) 9256 5188

Auditor KPMG 10 Shelley Street Sydney NSW 2000 Telephone: (02) 9335 7000 Facsimile: (02) 9299 7077

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Corporate Directory

The cover and first 40 pages of this document are printed on paper sourced from plantations and sustainable forests, is Elemental Chlorine Free (ECF) and holds an ISO14001 environmental accreditation. The last 48 pages are printed on an Australian-made stock which is Elemental Chlorine Free (ECF).

Net profit Increase in portfolio value

Value of total property assets

$21.27m NZ$931.8mNZ$7.3m

Multiplex New Zealand Property Fund was launched in September 2004 and is now one of the top five property vehicles in New Zealand. Launched with a quality portfolio of 11 New Zealand property assets valued at NZ$294.1 million, the fund has grown to become one of New Zealand’s largest property vehicles, with 37 property assets (office, industrial, retail and bulky goods) with a book value of NZ$931.8 million.

Annual Report 2008

Brookfield Asset Management Inc. is a global asset manager focussed on property, power and infrastructure assets with approximately US$95 billion of assets under management. Brookfield is listed on the New York and Toronto Stock Exchanges under the symbol BAM and on the Euronext under the symbol BAMA.

About Brookfield2

Brookfield’s competitive advantages

– Best-in-class operating platforms Unique ability to maximise value

– Established track record Outperformance in every fund formed to date

– Directly-held assets $15+ billion of invested capital to seed new funds

– Co-investment in funds Provides alignment of interests

– Transparency Sarbanes-Oxley compliant

– Broad product offering By asset class and across risk spectrum

Brookfield’s goal is to achieve superior, risk-adjusted returns for their clients, partners and shareholders by identifying investment opportunities across select asset classes on a value basis supported by sound fundamentals.

Brookfield has established itself as an asset manager of choice for clients with a long-term focus on capital to allocate with its areas of expertise – property, power, timber and infrastructure assets.

With over 100 years of experience investing and operating these high quality assets globally, Brookfield is uniquely positioned to offer specialty investment product to its clients. Headquartered in New York and Toronto, Brookfield has many offices and operations worldwide with an exceptional team of investment professionals and more than 10,000 employees.

Brookfield – funds managementWith decades of operating experience, Brookfield has approximately US$40 billion of property assets under management in North and South America, Europe and now Australia and New Zealand.

Brookfield has developed an expertise in real estate investments ranging from equity investments in commercial and residential real estate and development to mezzanine financing, bridge lending, and management of mortgage backed securities.

Brookfield is applying this expertise to work on behalf of its clients seeking to allocate capital into real estate related private equity funds and other investment vehicles. In addition, Brookfield provides clients with an extensive array of real estate advisory, property and investment services.

Property and specialty funds– 140 premier office properties;– more than 11 million square metres of commercial

office space;– 126,000 building lots;– US$40 billion of property assets under

management; and– $34 billion assets in fixed income and real estate

securities under management.

Power– more than US$13 billion of power assets under

management;– 161 renewable power plants on 63 river systems;

and– Canada’s largest wind farm.

Timberlands– $4 billion in assets;– 40 year track record owning, operating and

financing timberlands;– among the largest timber investment management

organisations; and– investments in 2.5 million acres of high quality

timberlands.

Transmission and infrastructure– US$3 billion of transmission assets under

management;– more than 11,000 kilometres of transmission

lines; and– owned and operated transmission asset for more

than 80 years in Canada.

3

Annual Report 2008

Fund by value

54% Brookfield Multiplex Property Trust 13% Multiplex New Zealand Property Fund 11% Multiplex Prime Property Fund 10% Multiplex European Property Fund 6% Multiplex Acumen Property Fund 3% Multiplex Development and Opportunity Fund 1% Multiplex Acumen Vale Syndicate 1% Multiplex Diversified Property Fund 1% Multiplex Property Income Fund

Funds under management ($ billion)

0

1

2

3

4

5

6

7

8

200820072006200520042003

About Brookfield Multiplex Capital

4

Brookfield Multiplex Capital offers investors a diversified range of investment products. With a demonstrated ability to source and create new products through Brookfield Multiplex’s integrated property model, the funds management business has more than $6 billion of funds under management as at 30 June 2008.

Brookfield Multiplex Capital is responsible for the creation and strategic direction of all investment products of Brookfield Multiplex. Our proven investment processes ensure investors’ returns are optimised and, where possible, leveraged off the complementary skills within other divisions of Brookfield Multiplex.

Our aim is to build investors’ wealth, delivering consistent earnings and capital growth potential, whilst expanding our operations in the markets in which we operate.

Multiplex New Zealand Property Fund

Geographic spread by value

77% Australia 13% New Zealand 10% Europe

Fund type by value

19% Listed 81% Unlisted

Brookfield Multiplex Capital Funds Under Management (FUM) Brookfield Brookfield Multiplex Multiplex Listed Open Investment Interest in FUM A$m Unlisted Closed % Manager % (30 Jun 2008)

Listed FundsMultiplex Prime Property Fund Listed Open 22 100 695 Multiplex European Property Fund Listed Open 20 100 600 Multiplex Acumen Property Fund Listed Open – 100 382 1,677

Unlisted FundsBrookfield Multiplex Property Trust Unlisted Closed 100 100 3,298 Multiplex New Zealand Property Fund Unlisted Closed 23 100 766 Multiplex Development and Opportunity Fund Unlisted Closed – 100 166 Multiplex Property Income Fund Unlisted Open – 100 86 Multiplex Diversified Property Fund Unlisted Open 73 100 63 Multiplex Acumen Vale Syndicate Unlisted Closed – 100 60 4,439Total Funds Under Management 6,116 Note: Brookfield Multiplex Limited has an indirect ownership in all of the above funds.

5

Annual Report 2008

Value of investment portfolio

NZ$m

Jun2008

Mar2008

Dec2007

Sep2007

Jun2007

Mar2007

Dec2006

Sep2006

Jun2006

Mar2006

Dec2005

Sep2005

Jun2005

Mar2005

Dec2004

Sep2004

100

0

200

400

600

800

300

500

700

900

1,000

The portfolio remains well positioned with 99.6% occupancy, 150 tenants and rental income secured by leases with a Weighted Average Lease Expiry (WALE) of 7.13 years.

6


Performance at a Glance

Foreign Exchange vs NTA

A$

0.8

0.9

1.0

1.2

1.4

1.1

1.3

Jun2008

Mar2008

Dec2007

Sep2007

Jun2007

Mar2007

Dec2006

Sep2006

Jun2006

Mar2006

Dec2005

Sep2005

Jun2005

Mar2005

Dec2004

Sep2004

NTA A$ vs NZ$

Multiplex New Zealand Property Fund statistics

FY2008 FY2007

Total assets (including cash) $765.9 million $900.0 million

Book value of property assets $739.0 million $838.6 million

Book value of property assets in NZ$ NZ$931.8 million NZ$924.6 million

Net Tangible Assets (NTA) per unit $1.20 $1.39

Foreign exchange rates 1.2609 1.1025

Cash distribution paid (for the year ended 30 June) CPU 9.50 9.50

Total investor return over the year –6.58% 25.9%

Total investor return since inception 14.60% 22.3%

Tax advantaged status 100.0% 100.0%

Portfolio occupancy 99.6% 99.9%

Portfolio weighted average lease term 7.1 years 7.3 years

Portfolio weighted average capitalisation rate 7.8% 7.6%

7

Annual Report 2008

Fund snapshot as at 30 June 2008

Total assets (including cash) $765.9 million

Book value of property assets $739.0 million

Book value of property assets in NZ$ NZ$931.8 million

Fund inception date 7 September 2004

NTA per unit $1.20

Portfolio occupancy 99.6%

Portfolio weighted average lease term 7.1 years

Portfolio weighted average capitalisation rate 7.8%

Distributions paid Quarterly

Tax advantaged status 100%

Fund gearing (total debt/total assets) 57.7%

Fund loan to value ratio (LVR) 59.8%

Management fee 0.7% (excluding GST) of gross asset value

Performance fee 2% of asset value if increased more than 50%

Number of office assets 13

Number of retail assets 21

Number of industrial assets 3

Total number of assets 37

Note: All New Zealand currency values have been converted at the exchange rate of $1.2609 adopted throughout the 30 June 2008 accounts.


8 Portfolio Analysis

Sector allocation by value

58% Office 29% Retail 13% Industrial

Geographic allocation by value

63% Auckland 17% Wellington 8% Provincial 6% Christchurch 5% New Plymouth 1% Hamilton

Lease expiry profile by income

2008

30 June

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2020 2021 20222019 20242023

%

0

4

8

12

16

20

Annual Report 2008

9

On behalf of the board, I am pleased to provide this report to investors on the operations and performance of Multiplex New Zealand Property Fund (fund) for the twelve month period to 30 June 2008.

The global credit crisis has created economic uncertainty and volatility in world financial markets.

The fund remains one of the top five largest property investment vehicles in New Zealand with a diversified, quality portfolio of 21 retail, 13 office and three industrial assets.

During the twelve month period, the fund took advantage of strong conditions in the New Zealand market by consolidating the portfolio through the disposal of five non-core assets. The sale of these assets provided a significant profit of NZ$12.6 million on the original purchase price.

The value of the fund’s portfolio increased during the twelve month period by NZ$7.2 million as a result of valuation uplifts and repositioning of assets. However, due to the New Zealand dollar depreciating significantly during the period, the value of the fund’s assets in Australian dollar terms shows a decline of A$99.6 million.

The fund paid a quarterly distribution of 9.50 cents per unit, which is the same as the previous corresponding period.

The investor total return per annum since inception is 14.6% for investors who entered the fund at a $1.00 unit price.

Brookfield Asset ManagementIn January 2008, Multiplex Group became a wholly owned subsidiary of Brookfield Asset Management Inc (Brookfield).

Brookfield is one of the top 20 companies in Canada and is listed on the New York, Toronto and Euronext stock exchanges with assets under management of approximately US$95 billion and a market capitalisation of US$20 billion.

Brookfield is focused on high-quality property, renewable power and other infrastructure assets which generate cash flow, require minimal capital expenditure and appreciate in value over time.

Brookfield and Multiplex share similar management and investment cultures and are committed to co-investing in Brookfield Multiplex Capital products.

Corporate GovernanceThe directors and management of Brookfield Multiplex Capital Management Limited (BMCML) are committed to operating within an effective, robust and transparent system of corporate governance practices. We believe good corporate governance is vital to the sustainability of our business and its performance.

Corporate governance is a dynamic force that keeps evolving and, for that reason, our systems, policies and procedures are regularly reviewed and tailored to changing circumstances.

10


Message from the Chairman

Management ChangesIt is with regret I advise that Rob Rayner has decided to pursue other interests and that he has recently resigned from the role of CEO – Funds Management. Rob joined Brookfield Multiplex Capital in 2003 and his contributions to the business over that time have been invaluable. We wish him well in his future endeavours.

Mark Wilson has taken up the position of CEO – Funds Management. Mark has been with the Brookfield Multiplex Group for more than ten years in various managerial positions and brings with him extensive industry knowledge. Mark was instrumental in establishing the Brookfield Multiplex Capital division in 2001/2002.

The BoardThe board now consists of five directors, of whom three are non-executive. Each of the non-executive directors, Peter Morris (Chairman), Robert McCuaig and Brian Motteram, is independent in accordance with the relationships affecting independent status listed by the ASX Corporate Governance Principles.

Up to the date of finalising this report, Rex Bevan (independent non-executive director), Ian O’Toole (executive director), Bob McKinnon (non-executive director) and Robert Rayner (CEO and executive director) resigned from the board.

Brian Kingston and Mark Wilson have both been appointed as executive directors of the board. Brian is Chief Financial Officer of Brookfield Multiplex Limited and is a Managing Partner of Brookfield Asset Management Inc. Mark is Chief Executive Officer – Funds Management and Infrastructure and was instrumental in a number of major equity capital markets transactions undertaken by Brookfield Multiplex.

Website EnhancementsDuring the year, we upgraded the Brookfield Multiplex Capital website. The new website provides easier navigation, increased online security and enhanced new features such as video technology, where we will showcase interviews with key representatives of our business.

We encourage investors to visit our website www.brookfieldmultiplexcapital.com for regular fund updates.

Fund Strategy and OutlookThe board and management team remain committed to a long term growth strategy for the fund and enhancing total returns for investors. We continue to monitor market conditions closely and maintain a strong focus on corporate governance and debt management.

On behalf of the board, thank you for your support.

Peter MorrisIndependent Chairman

11

Annual Report 2008

On behalf of Multiplex New Zealand Property Fund (fund) and the responsible entity of the fund, Brookfield Multiplex Capital Management Limited, I am pleased to present the Fund Manager’s Review for the financial year ended 30 June 2008.

The Year in SummaryLaunched in September 2004 with a quality portfolio of 11 New Zealand property assets, the fund remains one of New Zealand’s top five largest property investment vehicles with 37 property assets valued at $739.0 million (NZ$931.8 million). The portfolio continues to perform well with minimal vacancies, rental uplifts and a positive outcome to the June external valuations.

During the last financial year, the fund took advantage of strong New Zealand market conditions to consolidate and reposition the portfolio through the disposal of approximately NZ$52.9 million of non-core portfolio assets. The profit on purchase generated from the sales was NZ$12.6 million.

This strategy demonstrated our commitment to active management of the fund portfolio in order to maximise investor returns, consolidate portfolio weightings and progressively reduce the fund debt position in the current challenging market conditions.

The book value of the fund’s investment portfolio increased during the period by NZ$7.2 million from NZ$924.6 million to NZ$931.8 million.

Financial ResultsDuring the fund’s fourth reporting period, the NTA was impacted by the fall in the New Zealand dollar which depreciated more than 14% during the period. This significantly impacted the value of the fund’s New Zealand assets in Australian dollars.

Due to the depreciating exchange rate during the period, the value of the fund’s investment portfolio in Australian dollars fell $99.6 million from $838.6 million to $739.0 million.

The capital value of the fund assets in NZ dollars continued to rise and the disposal of a number of non-core properties enabled the repayment of debt which also assisted in funding the expansion of the Valley Mega Centre, Stage 2.

Other key financial results include:

– net income revenue of $72.6 million for the period, compared to $71.6 million for the previous corresponding period;

– net profit before unitholders’ expenses for the period was $21.27 million;

– distribution of 9.50 cents per unit representing a yield of 6.83% on the NTA start price of $1.39;

– NTA fell to $1.20 per unit which is a decrease of 13.4% during the period. This was largely due to the depreciation of the New Zealand dollar; and

– total return since inception remains at 14.6% per annum (for original investors at an entry price of $1.00) and 13.3% per annum (entry price of $1.07).

12


Fund Manager’s Year in Review

The Property PortfolioThe current portfolio of 37 properties comprises 13 office, 21 retail and three industrial assets providing investors with a quality, diversified and well leased portfolio throughout New Zealand’s North and South Islands. The portfolio remains well positioned with 99.6% occupancy, 150 tenants and rental income secured by leases with a Weighted Average Lease Expiry (WALE) of 7.13 years.

The increase in value of the portfolio of NZ$7.2 million, from NZ$924.6 million to NZ$931.8 million reflects the disposals, valuation uplifts and repositioning of existing assets during the period.

Independent valuations were obtained for 30 of the fund’s 37 properties during the period which resulted in a portfolio uplift of NZ$31.0 million before disposals.

The fund’s retail portfolio was valued as at 30 June 2008 and increased by NZ$4.9 million. The commercial portfolio was valued as at December 2007 and increased by NZ$26.125 million.

Significant activities during the period include:

– committed occupancy of 99.6% as at 30 June 2008;

– two major leases: 6,000 sqm to Farmers at The Hub and 4,250 sqm to Woolworths at the expanded Valley Mega Centre;

– first stage retail portfolio rent reviews with Woolworths achieved an average rental uplift of 28.5% for the three-year review period;

– industrial portfolio rent reviews with Woolworths achieved an average rental uplift of 14% for the three-year review period;

– due to our strategy to focus on debt management and the consolidation and repositioning the existing portfolio, there were no acquisitions during the period; and

– the overall portfolio value decreased by A$99.6 million from A$838.6 million to A$739 million primarily due to unfavourable currency movements.

Disposals of fund properties during the period were:

– Telco Building, Auckland sold for NZ$21.1 million which was a premium to purchase of NZ$6.4 million. Settlement took place on 5 July 2007;

– Farmers Car Parks, Auckland sold for NZ$1.95 million which was a premium to purchase of NZ$0.55 million. Settlement took place on 5 July 2007;

– SAP Building, Auckland sold for NZ$23.75 million which was a premium to purchase of NZ$4.35 million. Settlement took place on 21 September 2007;

The top ten tenants occupy more than 78% of the fund’s portfolio and contribute approximately 70% of the portfolio’s net property income.

13

Annual Report 2008

– 573–579 Colombo Street, Christchurch sold for NZ$5.25 million which was a premium to purchase of NZ$1.15 million. Settlement took place on 19 February 2008; and

– We entered into a conditional contract to sell 12 Whitaker Place, Auckland for NZ$0.85 million, which is a premium to purchase of $0.15 million. The building is a small vacant house that was previously on the same title as Uniservices House.

A key feature of the fund has been the security of income provided by major tenants in the portfolio. The portfolio’s largest tenants include well known names such as Woolworths, Telecom New Zealand Limited, ASB Bank, University of Auckland, EDS, Bunnings, Department of Conservation, Inland Revenue Department, Farmers and The Warehouse. The top ten tenants occupy more than 78% of the fund’s portfolio and contribute approximately 70% of the portfolio’s net property income.

The portfolio is well leased and committed occupancy across the portfolio is 99.6% (by area). This represents less than 1,000sqm of vacancy in a portfolio totalling 370,671sqm. The portfolio also has a relatively low lease expiry profile with less than 10% of leases (by income) expiring each year during the next three years.

DebtThe fund debt rollover in August 2009 remains a primary focus for the fund. We are currently in active dialogue with our financiers regarding the rollover. The current fund portfolio is also being reviewed in order to identify properties with characteristics which might expose them to value deterioration, or properties which offer potential for disposal in order to assist the re-financing process.

OutlookThe fund’s outlook remains steady. During the past four years, the fund has grown to become one of the top five property vehicles in New Zealand and is well positioned to capitalise on rental income growth prospects in New Zealand’s major property markets. While improvements in capital value may slow during the forthcoming periods, this is considered to be a normal part of the property cycle. Please be assured that the fund continues to target a long term growth strategy.

With the recent volatility in investment markets, we are committed to an active review of the fund portfolio, in order to maximise benefits to investors.

I would like to take this opportunity to thank all of our investors for their ongoing support.

Chris Sutton Fund Manager Multiplex New Zealand Property Fund

14


Fund Manager’s Year in Review

AIA HouseAuckland

Annual Report 2008

15

Property name Location

Capitalisation rate

%% of

portfolio

Purchase price

(NZ$m)

Current valuation (NZ$m)

Current valuation

(A$m)

OfficeASB Bank Centre Auckland 7.13 16.2 113.9 150.1 119.0AIA House Auckland 8.18 3.2 24.6 30.0 23.8Gen-i Tower Auckland 7.75 9.4 63.7 87.0 69.0University Building Auckland 8.38 1.3 9.6 12.1 9.6Telecom House Auckland 8.25 6.8 55.5 63.0 50.0Uniservices House Auckland 8.13 2.3 17.5 21.0 16.712 Whitaker Place Auckland 5.00 0.1 0.7 0.9 0.7The Plaza Auckland 8.38 1.4 10.5 13.0 10.3ANZ Business Centre Auckland 7.75 3.0 26.7 27.5 21.8EDS House Wellington 7.50 4.1 26.1 37.8 30.0143 Willis Street Wellington 8.13 2.0 19.0 18.8 14.9Conservation House Wellington 7.25 4.4 37.7 41.0 32.5180 Molesworth Street NZ Police Headquarters Wellington 7.25 4.6 38.2 42.7 33.0

58.7 443.7 544.9 432.2

IndustrialMangere Distribution Centre Auckland 7.63 8.6 55.5 80.0 63.4Christchurch Distribution Centre Christchurch 7.50 2.1 15.4 19.3 15.3Wiri Distribution Centre Auckland 8.75 2.6 20.5 24.2 19.2

13.3 91.4 123.5 97.9

16


Investment Portfolio

Property name Location

Capitalisation rate

%% of

portfolio

Purchase price

(NZ$m)

Current valuation (NZ$m)

Current valuation

(A$m)

RetailCountdown Botany Auckland 8.25 2.3 14.8 20.9 16.6Woolworths Grey Lynn Auckland 7.88 1.5 8.7 13.7 10.9Countdown Lynfield Auckland 8.99 2.0 12.1 18.4 14.6Woolworths Papakura Auckland 8.63 0.6 3.9 5.7 4.5South City Shopping Centre Christchurch 8.25 4.5 35.9 41.5 32.9Foodtown Hamilton Hamilton 8.00 0.5 2.8 4.4 3.5Countdown Porirua Wellington 8.00 1.5 6.5 14.0 11.1Howick Shopping Centre Auckland 7.94 1.4 10.7 12.6 10.0Woolworths New Plymouth New Plymouth 8.50 1.0 7.5 8.7 6.9Woolworths Dargaville Provincial 8.38 0.6 5.2 5.5 4.3Woolworths Invercargill Provincial 9.13 0.5 3.6 4.4 3.4Woolworths Marton Provincial 9.25 0.1 1.4 1.4 1.1Countdown Oamaru Provincial 9.25 0.5 3.7 4.6 3.6Woolworths Paeroa + Cov Dairy Provincial 9.50 0.4 2.9 3.5 2.8Foodtown Pukekohe Auckland 8.50 1.0 8.2 9.4 7.5Woolworths Putararu Provincial 9.25 0.3 2.5 2.6 2.1Woolworths Te Awamutu Provincial 8.75 0.6 5.5 5.6 4.4Woolworths Wanganui Provincial 9.00 0.7 4.2 6.3 5.0Valley Mega Centre Stage 1 New Plymouth 7.88 2.7 24.1 25.2 20.0Valley Mega Centre Stage 2 New Plymouth 0.00 1.1 8.3 9.9 7.9The Hub Provincial 8.63 4.4 43.3 41.1 32.6

28.0 215.8 259.2 205.7

Total Portfolio 7.78 100.0 750.9 927.6 735.8

17

Annual Report 2008

AIA HouseAuckland

Property details

Property type Commercial Office

Building completion date 1989

Net lettable area (sqm) 9,471

Land area (sqm) 2,868

Car bays 194

Purchase date 4 May 2005

Purchase price (NZ$) $24,600,000

Current valuation (NZ$) $30,000,000

Current valuation date 1 March 2007

Valuer Colliers International New Zealand

Tenancy profile

Occupancy (%) 100

Weighted average lease expiry (years) 3.5

Major tenants IRD


Net lettable area (%) 79

Lease expiry January 2011

Property locationThe property is located in the suburb of Takapuna, approximately eight kilometres from the Auckland CBD. Takapuna is a commercial and retail centre located on Auckland’s North Shore.

Property descriptionThe property comprises a 17 level office tower completed in 1989, with 13 office floors and four levels of parking providing 194 car spaces. Two of the parking levels also comprise retail accommodation. The building’s service core is centrally positioned to the western elevation, providing good natural light and exceptional views across urban areas to the ocean.

ANZ CentreAuckland

Property details

Property type Business Park/Retail




Car bays 225

Purchase date 23 December 2005





Tenancy profile

Occupancy (%) 100


Major tenants ANZ Westpac Justice

Net lettable area (sqm) 910 830 829

Net lettable area (%) 16 15 15

Lease expiry July 2014 July 2014 July 2014

Property locationThe Albany area has been developed extensively over the past decade. The immediate area includes such facilities as the North Harbour Stadium, Westfield Albany, and Massey University’s Albany Campus.

Property descriptionThe building comprises of a five level commercial office building with ground level retail completed in 2004. The concrete superstructure is incorporated with extensive blue glass to give a modern appearance. The remaining vacancy is underwritten by vendors until December 2008.

18


ASB CentreAuckland

Property details

Property type Prime Commercial Office




Car bays 299

Purchase date 1 September 2004



Current valuation date 10 December 2007

Valuer CBRE

Tenancy profile

Occupancy (%) 100


Major tenants ASB



Lease expiry June 2013

Property locationThe landmark ASB Bank Centre occupies a prominent position in the Auckland CBD. The building is located on the upper end of Albert Street, and with visual dominance of the city and harbour, it makes an imposing contribution to Auckland’s skyline. The site has frontages to Albert, Wellesley and Federal Streets and is close to key city services.

Property descriptionASB Bank Centre is a premium quality landmark property. The building features four levels of basement parking, a prestige quality entry foyer and 30 levels of column-free office accommodation. The building has a central core allowing for tenant flexibility. Services are premium grade, including a full back-up emergency generator.

Gen-i TowerAuckland

Property details





Car bays 199





Valuer CBRE

Tenancy profile

Occupancy (%) 100


Major tenants Gulliver’s Gen-i BAT

Net lettable area (sqm) 2,116 3,074 2,118


Lease expiry Aug 2011 Feb 2014 Jul 2011

Property locationThe property is located in a prominent CBD location close to the Queen Street retail centre which is widely recognised as the core of the Auckland CBD. The property is also close to the Viaduct Harbour precinct and Princess Wharf which provides entertainment areas, office accommodation, apartment dwellings and marina.

Property descriptionCompleted in 1990, the building has 19 levels of office accommodation, ground floor retail and three basement levels of parking for 199 cars. The building has a large canopy and colonnade area surrounding the ground floor and water feature on the corner of Wyndham and Hobson Streets. The upper floors enjoy excellent views of the harbour.

19

Annual Report 2008

The PlazaAuckland

Property details

Property type Commercial Office/Retail

Building completion date Early 1900s Refurbished 1980s



Car bays 34






Tenancy profile

Occupancy (%) 100


Major tenants Telecom



Lease expiry December 2010

Property locationThe property is situated to the northern side of Karangahape Road on the southern fringe of the Auckland CBD. The property has considerable street frontage and enjoys significant exposure to pedestrian and vehicle traffic.

Property descriptionThe property comprises a historic strip shop complex completed in the early 1900s and recently had a major refurbishment. It contains 22 street level retail and restaurant tenancies and two levels of high specification office space. The building also provides basement level parking for 34 cars.

Telecom HouseAuckland

Property details





Car bays 463






Tenancy profile

Occupancy (%) 100


Major tenants Telecom




Property locationThe property is situated on the eastern side of Hereford Street and the south side of Hopetown Street approximately one kilometre from the Auckland CBD. The building has extensive street frontage and enjoys significant exposure to both pedestrian and vehicle traffic.

Property descriptionCompleted in 1989, the 15 level office building has extensive panoramic views. The interior has been extensively refurbished according to high specifications.

20


Uniservices Building and 12 Whitaker PlaceAuckland

Property details





Car bays 119





Valuer CBRE

Tenancy profile

Occupancy (%) 100


Major tenants UOA Stats NZ

Net lettable area (sqm) 5,393 2,101

Net lettable area (%) 72 28

Lease expiry October 2010 October 2010

Property locationThe property is situated on the eastern side of Symonds Street on the southern fringe of the Auckland CBD, being a short distance from the main campus of Auckland University. The property has easy access to the main transport routes and motorway networks, with access to the southern motorway being approximately 400 metres to the south.

Property descriptionThe property comprises an 11 level office building which was completed in 1986. In addition there are three levels of basement parking providing 119 car spaces.

12 Whitaker PlaceTo the rear of the office is a two storey dwelling which is currently vacant and is subject to a conditional sale.

University BuildingAuckland

Property details





Car bays 46






Tenancy profile

Occupancy (%) 100


Major tenants UOA




Property locationThe property is situated on the eastern fringe of the Auckland CBD. The main campus of the University of Auckland is located a short distance away and Auckland University of Technology is within reasonable proximity. The property has good access to main arterial roads providing links to the motorway systems and is close to public transport.

Property descriptionThe property comprises a nine level office tower originally completed in 1971, with seven office floors and two levels of parking for 46 cars. The building was refurbished in circa 1995 for educational use. The upper office floors enjoy views over the Auckland port area.

21

Annual Report 2008

143 Willis StreetWellington

Property details




Land area (sqm) N/A

Car bays 15





Valuer CBRE

Tenancy profile

Occupancy (%) 100


Major tenants Telecom Medical Council

Nursing Council

Net lettable area (sqm) 5,487 1,380 727


Lease expiry May 2013 April 2009 April 2009

Property locationThe property is situated off the western side of Willis Street and is located in the southern sector of the Wellington CBD.

Property descriptionThe property is a 14 level office building located above a podium that is Conservation House.

Conservation HouseWellington

Property details





Car bays 34 plus 20 bike bays





Valuer CBRE

Tenancy profile

Occupancy (%) 100


Major tenants Department of Conservation



Lease expiry October 2018

Property locationThe property is situated on the southern side of Manners Street. The property is located in the southern sector of the Wellington CBD.

Property descriptionThe building is Wellington’s newest 5 Star equivalent Green Building, having undergone extensive refurbishment in 2007. The property’s design is focussed on environmental sustainability and has recently won a NZ Institute of Architecture Supreme Award Citation.

22


EDS HouseWellington

Property details





Car bays 33





Valuer CBRE

Tenancy profile

Occupancy (%) 100


Major tenants EDS IRD



Lease expiry April 2015 January 2012

Property locationThe property is situated on the eastern side of Gilmer Terrace, Wellington, a short cul-de-sac running off the western side of Boulcott Street. Boulcott Street bisects The Terrace and Willis Street on the southern fringe of the Wellington CBD.

Property descriptionThe property comprises 14 office levels and a basement car park, providing a good standard of accommodation after being extensively refurbished during the past 12 months.

New Zealand PoliceWellington

Property details





Car bays 65






Tenancy profile

Occupancy (%) 100


Major tenants NZ Police



Lease expiry April 2017

Property locationThe property, located in Wellington, is situated at the northern end of Molesworth Street, immediately before it crosses over the motorway.

Property descriptionThe property comprises a 17 storey office building completed in 1979. The building is a freestanding tower with strong vertical concrete columns with vertical glazing panels. Entry to the building is from Molesworth Street via a short flight of stairs.

The property is currently undergoing an extensive internal refurbishment

23

Annual Report 2008

Mangere Distribution CentreAuckland

Property details

Property type Distribution Centre


Net lettable area (sqm) 59,447.7


Car bays 200





Valuer CBRE

Tenancy profile

Occupancy (%) 100


Major tenants General Distributors



Lease expiry August 2024

Property locationThe property is located on the northern side of Favona Road, approximately five minutes travel from Auckland International Airport. The property will benefit from increased accessibility to Manukau and Wiri with the proposed extensions and redirections of State Highway 20. The area immediately surrounding Favona Road comprises residential development and established industrial and commercial premises.

Property descriptionThe property comprises a large integrated distribution centre and head office complex. It includes a new office building, completed to a high standard and extensive car parking. The total building area of 65,273sqm provides a site coverage of approximately 49%.

Wiri Distribution Centre Auckland

Property details




Land area (leasehold site) (sqm) 155,116

Car bays 309





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is located on the southern side of Kerrs Road, approximately one kilometre from the Great South Road intersection and close to the Southern and Mangere Onehunga motorways. Auckland CBD is approximately 25 minutes drive from the property and Auckland International Airport is approximately 10 minutes drive.

Property descriptionThe property is a large scale distribution centre and warehouse with offices and amenities. 32,420sqm of building area provides approximately 47% site coverage. The site also comprises 83,048sqm of vacant land valued at NZ$1.0 million. The property is subject to a perpetually renewable lease in favour of the fund (i.e. a leasehold property).

24


Hornby Distribution CentreChristchurch

Property details





Car bays 40





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is located approximately 12 kilometres from the Christchurch CBD within the south-western suburb of Hornby. Access to the city is by way of major routes along Main South Road and Blenheim Road. The Christchurch industrial market is New Zealand’s second largest (after Auckland) and serves as a central hub for the South Island. The property is also located within close proximity to Lincoln University.

Property descriptionThe property was constructed in 1999 and comprises a modern, purpose built distribution centre, with associated warehouse and office facilities and car parking for 50 vehicles.

Countdown BotanyAuckland

Property details

Property type Suburban Supermarket




Car bays 383




Current valuation date 22 May 2008

Valuer CBRE

Tenancy profile

Occupancy (%) 100


Major tenants Countdown




Property locationThe property is located on the corner of Ti Rakau Drive to the north and Te Irirangi Drive to the east, with frontages onto both boundaries. Both these arterial roads provide access to the motorway system, with the Auckland CBD being approximately 20 to 25 minutes drive time.

Property descriptionThe property comprises a large, modern, purpose built, stand-alone supermarket constructed in 2003, including offices, amenities and storage. A basement car park extends below the supermarket, with internal ramp access to the supermarket level.

25

Annual Report 2008

Countdown LynfieldAuckland

Property details


Building completion date 1980s



Car bays 325





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is located on the corner of Hillsborough Road and The Avenue and is located within the Auckland city suburb of Lynfield. Hillsborough Road is a main traffic thoroughfare between the northern end of the south-western motorway and the suburbs to the north and west of Lynfield.

Property descriptionThe property comprises a large purpose built Countdown supermarket over basement car parking, a strip of several smaller tenancies and an on-grade sealed car parking area. Along the southern boundary of the site there are several smaller retail tenancies with frontage to the main car park area.

Foodtown HowickAuckland

Property details





Car bays 142

Purchase date 1 June 2005




Valuer CBRE

Tenancy profile

Occupancy (%) 100


Major tenants Foodtown




Property locationThe property is located on the corner of Cook Street and Fencible Drive with right of way access from Moore Street, in the suburb of Howick, which is located on New Zealand’s North Island. The site is adjacent to the residential areas of Howick, Eastern Beach and Botany Downs. The area comprises of strip style retail and larger shopping centres in the surrounding suburbs of Pakuranga and Botany Downs.

Property descriptionThe property comprises a purpose built supermarket completed in 2004, together with a small retail development comprising seven specialty shops whose lease arrangements form a part of the head lease with General Distributors Limited.

26


Woolworths Grey LynnAuckland

Property details





Car bays 178





Valuer CBRE

Tenancy profile

Occupancy (%) 100


Major tenants Woolworths




Property locationThe property is located on the corner of Richmond Road and Regina Street, Grey Lynn, approximately 10 minutes drive from Auckland’s CBD. Development in the immediate locality varies from older established residential properties, to modern infill developments and some smaller pockets of light industrial and retail uses.

Property descriptionThe property was originally constructed in 1979 and was completely refurbished in 1998 for a Woolworths branded supermarket. The property also comprises a separate internal tenancy sub-leased to Unichem Pharmacy. There is also warehouse and storage space over a secure staff basement car park incorporating first level offices, staff amenities and a cafe.

Woolworths PapakuraAuckland

Property details





Car bays 269





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is located on the eastern side of Great South Road, approximately 500 metres to the north of the main retail strip of Papakura, an older established residential locality. Papakura is approximately 40 minutes drive from the Auckland CBD.

Property descriptionThe property comprises a single level supermarket with mezzanine amenities and offices above with on-site shared car parking. Two adjoining retail premises constructed circa 1960 and subsequently joined now form the Woolworths supermarket. The remainder of the site is tar sealed, providing parking for 269 cars.

27

Annual Report 2008

South City Shopping CentreChristchurch

Property details

Property type Shopping Centre


Net lettable area 14,239

Land area 34,182

Car bays 576




Current valuation date 9 June 2008

Valuer CBRE

Tenancy profile

Occupancy (%) 98


Major tenants Warehouse New World



Lease expiry April 2010 May 2011

Property locationThe property is located on the southern fringe of the Christchurch CBD and has frontages to Colombo and Durham Streets. The site has a significant profile and is well placed to serve the high volume of passing work force traffic. Colombo Street is the major commercial thoroughfare from the northern suburb of St Albans to the southern suburb of Cashmere Hills.Property descriptionThe property was originally constructed in the late 1990s and extended in 1999 to accommodate The Warehouse and a New World supermarket. It offers 31 specialty shops, a six-tenant food court, six kiosks and five ATMs. Additionally there are three tenancies in the Colombo Street building and four tenancies in the Durham Street building.

Foodtown HamiltonHamilton

Property details

Property type Leasehold Suburban Supermarket




Car bays 224





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is located on the northern corner of the intersection of Bryce and Tristram Streets on the fringe of the Hamilton City CBD. To the east of the property is the recently completed Hamilton City bus station. Tristram Street is one of the main streets in Hamilton City.

Property descriptionThe property was originally constructed in 1981 and comprises an older style Foodtown supermarket design. The building has supplementary loading areas, storerooms and mezzanine offices and amenities. The car park provides approximately 224 level car spaces. The property is subject to a perpetually renewable lease in favour of the fund (i.e. a leasehold property).

28


Valley Mega Centre Stage 1New Plymouth

Property details

Property type Bulky Goods Retail Centre




Car bays 328

Purchase date 1 January 2005




Valuer CBRE

Tenancy profile

Occupancy (%) 100


Major tenants Briscoes Rebel Sport



Lease expiry June 2015 June 2015

Property locationThe property is located in the provincial town of New Plymouth on the western coast of the North Island. It is situated approximately 450 kilometres from Auckland and 300 kilometres north of Wellington.

Property descriptionValley Mega Centre comprises a bulky goods retail development. The site is situated two kilometres west of the New Plymouth Central Business District. It comprises 11,597sqm of net lettable area, divided into retail units ranging from 135 to 1,700sqm, as well as 328 car parks.

Valley Mega Centre Stage 2New Plymouth

Property details


Building completion date Under construction



Car bays 313



Current valuation (NZ$) $9,900,000 $21,900,00 on completion

*


Valuer CBRE* “As is” – partially constructed.

Tenancy profile

Occupancy (%) 100


Major tenants Countdown Vehicle Testing NZ

Net lettable area (sqm) 4,250 739

Net lettable area (%) 51% 9%


February 2013

Property locationThe property is located in the provincial town of New Plymouth on the western coast of the North Island. It is situated approximately 450 kilometres from Auckland and 300 kilometres north of Wellington.

Property descriptionValley Mega Centre Stage 2 comprises the extension of the existing bulky goods retail development. The site comprises 20,502sqm, and is situated two kilometres west of the New Plymouth Central Business District.

On completion the extension will provide an additional 8,264sqm of lettable area and a stand-alone 4,250sqm supermarket leased to Countdown for 15 years.

29

Annual Report 2008

Woolworths New PlymouthNew Plymouth

Property details

Property type Regional Supermarket




Car bays 176





Valuer CBRE

Tenancy profile

Occupancy (%) 100

Weighted average lease expiry (years) 12





Property locationThe property is located to the northern end of the commercial area of New Plymouth with frontage to Courtenay Street and Leach Street. New Plymouth is located in the Taranaki region on the west coast of New Zealand’s North Island. The New Plymouth district has a population of almost 70,000.

Property descriptionThe property comprises a stand-alone supermarket with open and basement car parking providing 176 car spaces. In addition, a large McDonald’s Restaurant with neighbouring car park areas adjoins the property.

Countdown OamaruProvincial

Property details





Car bays 180





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThis property is located in a prominent location in the central business area of Oamaru. The City of Oamaru is located on the east coast of New Zealand’s South Island, being approximately 125 kilometres north of Dunedin. The property has frontages onto Thames Street, Coquet Street and Eden Street and is co-located with The Warehouse property situated between Coquet and Eden Streets.

Property descriptionThe property comprises a stand-alone supermarket with 180 car park spaces.

30


Foodtown PukekoheProvincial

Property details





Car bays 117





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is situated on Tobin Street towards the north-western end of the ring road system in Pukekohe around the central commercial area. Pukekohe is 52 kilometres from central Auckland and 97 kilometres from Hamilton on New Zealand’s North Island. The proximity provides an opportunity for the 1.8 million people living within one hour’s drive to visit and enjoy the unique atmosphere and service that is Pukekohe.

Property descriptionThe property comprises a purpose built, stand-alone supermarket with on site car parking for 117 vehicles, being located adjacent to additional parking within a council car park.

The Hub, WhakataneProvincial

Property details




Land area (hectares) 9.97

Car bays 900





Valuer CBRE

Tenancy profile

Occupancy (%) 100


Major tenants Bunnings Farmers



Lease expiry October 2013 November 2019

Property locationThe property is located in the provincial town of Whakatane, located in the Bay of Plenty District. Whakatane is in the North Island, approximately 310 kilometres from the Auckland CBD, 85 kilometres from Rotorua and 160 kilometres from Taupo.

Property descriptionThe Hub retail complex is a large Bulky Goods complex that is anchored by significant tenants such as Bunnings, Farmers, Harvey Norman, Briscoes and Rebel Sports. Located just outside Whakatane this complex provides the central retailing hub for the broader Bay of Plenty regional area.

31

Annual Report 2008

Woolworths DargavilleProvincial

Property details





Car bays 165





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is located in the Dargaville commercial area two and a half hours north-west of Auckland. The property is bounded by Victoria Street to the north-west and the Wairoa River to the south-east and is adjacent to the recently developed Warehouse discount department store.

Property descriptionThe property comprises a purpose built, stand-alone supermarket with 165 on site car parking spaces contiguous with a site occupied by The Warehouse and adjacent to a river-front recreation reserve.

Woolworths InvercargillProvincial

Property details





Car bays 184





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is located on a prominent site on the corner of North Road and Durham Street on the northern periphery of the provincial city of Invercargill. Invercargill is located on the southern coast of New Zealand’s South Island, being approximately two hours south-west of Dunedin.

Property descriptionThe property comprises a stand-alone supermarket with 184 car parking spaces.

32


Woolworths MartonProvincial

Property details





Car bays 93





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is situated on the northern side of Symonds Street, at the eastern end of the Auckland CBD. Symonds Street is a major arterial road carrying traffic between the downtown Auckland precinct and leading to the southern fringe commercial and residential areas.

Property descriptionThe property comprises a provincial supermarket located at the northern end of the main retail strip. The store operates checkouts at both ends of the store and 93 car parks are provided on the Stewart Street frontage.

Woolworths PaeroaProvincial

Property details





Car bays 57





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property has three street frontages and is located on the main State Highway 2 in the town of Paeroa on New Zealand’s North Island, a one and a half hour drive from Auckland.

Property descriptionThe property comprises a small provincial supermarket with three street frontages with 57 car parks provided to the front of the site.

33

Annual Report 2008

Woolworths PutaruruProvincial

Property details





Car bays 53





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is located on a prominent corner on State Highway 1 in the commercial area in the provincial town of Putaruru. Putaruru is located approximately 50 kilometres to the south-east of Hamilton on New Zealand’s North Island.

Property descriptionThe property comprises a stand-alone supermarket with 66 car parking spaces.

Woolworths Te AwamutuProvincial

Property details





Car bays 94





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is located to the southern end of the commercial area of Te Awamutu, which is located in the Waikato region on New Zealand’s North Island, approximately 30 kilometres to the south of Hamilton on State Highway 21. The property has a street frontage onto the eastern side of Sloane Street.

Property descriptionThe property comprises a stand-alone supermarket on a prominent site in the township of Te Awamutu.

34


Woolworths WanganuiProvincial

Property details

Property type Leasehold Regional Supermarket




Car bays 182





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is located on a prominent site in the commercial area on the corner of Victoria Avenue and Glasgow Street in the provincial city of Wanganui. Wanganui is located on the west coast of New Zealand’s North Island and is approximately one hour north-west of Palmerston North.

Property descriptionThe property comprises a stand-alone supermarket with 182 car parking spaces. The property is subject to a perpetually renewable lease in favour of the fund (i.e. a leasehold property).

Countdown PoriruaWellington

Property details





Car bays 228





Valuer CBRE

Tenancy profile

Occupancy (%) 100






Property locationThe property is located in central Porirua, midway between the Mega Centre to the north and North City Shopping Centre to the south. Porirua is approximately 20 kilometres north of Wellington City and is one of Wellington’s northern most commercial centres. Situated on a predominantly level island site, the property has four frontages to Jellicoe Street, Norrie Street, Lyttleton Avenue and Parumoana Street.

Property descriptionThe property comprises a purpose built stand-alone supermarket constructed in 1989 and recently refurbished to accommodate the new Countdown Supermarket design. There is provision for 228 car parks which are located within a landscaped parking area around the supermarket.

35

Annual Report 2008

Peter MorrisIndependent Chairman

Peter has over 35 years’ experience in property, initially in project and development management and more recently in funds management. He is a recognised leader in the development and project management fields, having played a major role in the growth of professional project management as a specialist skill in Australia. For 14 years he acted as Managing Director of Bovis Australia (now part of Bovis Lend Lease) and its forerunners. During this time he was responsible for the delivery of some of Australia’s largest and most high profile commercial projects. Peter acts as Independent Chairman of Brookfield Multiplex Capital Management Limited, Brookfield Multiplex Capital Investments Limited and Brookfield Multiplex Capital Securities Limited.

Board of Directors

Mark WilsonExecutive Director

Mark Wilson is the CEO of Funds Management and Infrastructure for Brookfield Multiplex. Mark has overall responsibility for the strategy and operations of the funds management business. In his eleven years at Brookfield Multiplex, Mark has held various managerial roles including Executive General Manager, Corporate Development and Group Company Secretary. Mark has been instrumental in a number of major equity capital markets transactions undertaken by Brookfield Multiplex, including the establishment of the Brookfield Multiplex Capital division and the Multiplex Group Initial Public Offering in 2003. Mark has 17 years operating and investing experience and is a Fellow of Finance with Financial Services Institute of Australasia.

3636


Brian MotteramIndependent Director

Brian has in excess of 30 years’ experience working in the area of finance and accounting. He has worked with international accounting firms, in his own private practice, and during the last 18 years in private enterprise in both the mining and property industries. He spent eight years (from 1996 to 2004) as an executive of a private Perth-based property group in positions of Chief Financial Officer and later, Finance Director.

Robert McCuaigIndependent Director

Robert is Chairman of the Advisory Board of Colliers International Property Consultants in Australia. Along with David Collier, he formed McCuaig and Collier, which in 1988 became the New South Wales office of Colliers International. He was a forerunner in the establishment of Colliers in Australia, now one of the world’s largest professional property services groups. Robert has acted as a property adviser to the University of Sydney, Westpac, Qantas Airways, Presbyterian Church, Sydney Ports Authority, Benevolent Society of NSW, the State of New South Wales and the Commonwealth of Australia.

Brian KingstonExecutive Director

Brian is the Chief Financial Officer of Brookfield Multiplex Limited. Brian joined Brookfield Asset Management Inc. in 2001 and has held various senior management positions within Brookfield and its affiliates, including mergers and acquisitions, merchant banking and real estate advisory services.

37

Annual Report 2008

DistributionsDistribution payments are payable quarterly to investors approximately four to five weeks after the record date for March, June, September and December.

Annual Taxation StatementsAn annual taxation statement is sent to unitholders in early September each year. The statement summarises the distribution/s paid for the previous financial year. Unitholders should retain this statement for their taxation records.

Online ServicesAccessing investments online is one of the many ways that Brookfield Multiplex Capital is ensuring convenience and accessibility to unitholder investment holdings. Links to the registry providers are available via the Brookfield Multiplex Capital website. Unitholders can access their account balance, transaction history and distribution details.

E-communicationsThe default for Brookfield Multiplex Capital annual and interim reports is now electronic. Online versions of the annual and interim reports are available at www.brookfieldmultiplexcapital.com.

Investors who have elected to receive hard copy reports will continue to receive them. Should you wish to change your preference, please contact Brookfield Multiplex Capital Customer Service on 1800 570 000.

38


Investor Relations

Contact Us Brookfield Multiplex Capital has a dedicated Customer Service Officer to assist with all investor and financial adviser enquiries.

There are several ways of accessing information about the fund and providing feedback to Customer Service:

By postGPO Box 172 Sydney NSW 2001

By phone1800 570 000 (within Australia) +61 2 9256 5700 (outside Australia)

By fax+61 2 9256 5188

By [email protected]

By internetThe Brookfield Multiplex Capital website provides investors with up-to-date information on all funds as well as reports, media releases, fund performance, unit price information and corporate governance guidelines.

www.brookfieldmultiplexcapital.com

Contact the RegistryQueries relating to individual unit holding or requests to change investment record details such as:

– change of address (issuer sponsored holdings only)– update method of payment for receiving

distributions– tax file number notification– annual report election– Distribution Reinvestment Plan (DRP)

should be addressed to: Registries Limited Level 7 207 Kent Street Sydney NSW 2000 Freecall: 1800 766 011 Email: [email protected]

Investor ComplaintsBrookfield Multiplex Capital is a member of an independent dispute scheme, the Financial Ombudsman Service. Investors wishing to register a complaint should direct it to:

The Complaints Manager Brookfield Multiplex Capital GPO Box 172 Sydney NSW 2001

39

Annual Report 2008

40


Financial Report

Directors’ Report 41

Lead Auditor’s Independence Declaration 47

Income Statements 48

Balance Sheets 49

Statements of Changes in Equity 50

Statements of Cash Flows 51

Notes to the Financial Statements 52

Directors’ Declaration 86

Independent Auditor’s Report 87

IntroductionThe Directors of Brookfield Multiplex Capital Management Limited (formerly Multiplex Capital Management Limited) (ABN 32 094 936 866), the Responsible Entity of Multiplex New Zealand Property Fund (ARSN 110 281 055) (the Fund), present their report together with the financial report of the Fund and the Consolidated Entity, being the Fund and its subsidiaries, for the year ended 30 June 2008 and the Auditor’s Report thereon.

Responsible EntityThe Responsible Entity of the Fund is Brookfield Multiplex Capital Management Limited (BMCML), which has been the Responsible Entity since the inception of the Fund. The Responsible Entity changed its name from Multiplex Capital Management Limited on 17 June 2008 subsequent to the acquisition of the Multiplex Group by Brookfield Asset Management Inc. in early 2008.

The registered office and principal place of business of the Responsible Entity and the Fund is 1 Kent Street, Sydney.

DirectorsThe following persons were Directors of the Responsible Entity at any time during or since the end of the financial year:

Name Capacity

Peter Morris (Director since 14 April 2004) Non-Executive Independent Chairman

Rex Bevan (Director since 21 February 2007 – resigned 31 January 2008)

Non-Executive Independent Director

Brian Motteram (Director since 21 February 2007) Non-Executive Independent Director

Robert McCuaig (Director since 31 March 2004) Non-Executive Independent Director

Ian O’Toole (Director since 31 March 2004 – resigned 31 October 2007)

Executive Director

Robert Rayner (Director since 31 October 2000 – resigned 22 August 2008)

Executive Director

Bob McKinnon (appointed 7 December 2007 – resigned 18 July 2008)

Non-Executive Director

Mark Wilson (appointed 27 August 2008) Executive Director

Brian Kingston (appointed 27 August 2008) Executive Director

41

Annual Report 2008

Directors’ ReportFor the year ended 30 June 2008

Information on DirectorsPeter MorrisNon-Executive Independent ChairmanPeter has more than 36 years of experience in property, initially in project and development management and more recently in funds management. He is a recognised leader in the development and project management fields, having played a major role in the growth of professional project management as a specialist skill in Australia. For 14 years he acted as Managing Director of Bovis Australia (now part of Bovis Lend Lease) and its forerunners. During this time he was responsible for the delivery of some of Australia’s largest and most high profile commercial projects.

Peter acts as Independent Chairman of BMCML.

Brian MotteramNon-Executive Independent DirectorBrian has in excess of 30 years of experience working in the area of finance and accounting. He has worked with international accounting firms, in his own private practice, and during the last 18 years in private enterprise in both the mining and property industries. He spent eight years (from 1996 to 2004) as an executive of a Perth-based property company in the position of Chief Financial Officer and, later, as Financial Director.

Robert McCuaigNon-Executive Independent DirectorRobert is Chairman of the Advisory Board of Colliers International Property Consultants in Australia. Along with David Collier, he formed McCuaig and Collier, which in 1988 became the New South Wales office of Colliers International. He was a forerunner in the establishment of Colliers in Australia, now one of the world’s largest professional property service groups. Robert has acted as a property adviser to the University of Sydney, Westpac, Qantas Airways, Presbyterian Church, Sydney Ports Authority, Benevolent Society of New South Wales, the State of New South Wales and the Commonwealth of Australia.

Mark WilsonExecutive DirectorMark Wilson is the CEO for Funds Management and Infrastructure for Brookfield Multiplex Group. Mark has overall responsibility for the strategy and operations of the funds management business. In his eleven years at Brookfield Multiplex, Mark has also held various managerial roles including Executive General Manager, Corporate Development and Group Company Secretary. Mark has been instrumental in a number of major equity capital markets transactions undertaken by Brookfield Multiplex, including the establishment of the Brookfield Multiplex Capital division and the Brookfield Multiplex Group Initial Public Offering in 2003. Mark has 17 years’ operating and investing experience and is a Fellow of Finance with Financial Services Institute of Australasia.

Brian KingstonExecutive DirectorBrian is the Chief Financial Officer of Brookfield Multiplex Limited. Brian joined Brookfield Asset Management Inc. in 2001 and has held various senior management positions within Brookfield and its affiliates, including mergers and acquisitions, merchant banking and real estate advisory services.

Company Secretary Alex Carrodus was appointed to the position of Company Secretary on 25 January 2005.

42



Information on Company SecretaryAlex CarrodusAlex has more than 13 years’ experience in the areas of company secretarial practice and compliance in the funds management industry, having worked for the ASX listed Ronin Property Group (prior to its acquisition by the Brookfield Multiplex Group), AMP and Australian Securities Exchange Limited. Prior to this period Alex worked for eight years in the insolvency and audit divisions of a number of local and international accounting firms both in Sydney and London. Alex is a Chartered Accountant and Chartered Secretary.

Principal activitiesThe principal activity of the Consolidated Entity is the investment in properties in New Zealand.

Review of operationsKey Fund highlights during the year include:

net profit after tax before distributions to unitholders for the year ended 30 June 2008 was $21,270,000 –(2007: $38,003,000);the value of investment property decreased $99,585,000 from $838,629,000 at 30 June 2007 –to $739,044,000 at 30 June 2008 primarily due to unfavourable currency movements and sale of properties;the value of investment property in New Zealand dollars increased NZ$7,200,000 from NZ$924,600,000 –at 30 June 2007 to NZ$931,800,000 at 30 June 2008 through a combination of valuation uplifts and repositioning of the existing assets;the Consolidated Entity has sold $22,550,000 of property assets; –30 of the Consolidated Entity’s 37 properties (79% of the portfolio) were independently valued within –six months of the Balance Sheets date;the property portfolio remains nearly fully let with committed occupancy of 99.6% as at 30 June 2008. –This represents less than 1,000sqm of vacancy in a portfolio totalling 370,671sqm; anddistributions to unitholders for the year ended 30 June 2008 were $20,679,000 (2007: $20,635,000). –

Significant new acquisitions for the Fund during the year are as follows:

there were no acquisitions during the year as management focused on consolidation and repositioning –of the existing portfolio.

Significant disposals for the Fund during the year are as follows:

the sale of the SAP Building, Auckland for NZ$23,900,000, which was settled on 21 September 2007; –573–579 Colombo Street, Christchurch was sold for NZ$5,250,000, with settlement achieved on –19 February 2008; andmanagement has entered into a conditional contract to sell 12 Whitaker Street, Auckland for –NZ$850,000 which is at valuation and comprises a small vacant house that was formerly on the same title as Uniservices House.

Additionally, the Fund settled in the current year the following previous year disposals:

the sale of the Telco Building, Auckland for NZ$21,100,100 was settled on 5 July 2007; and –

the sale of the Farmers Car Parks, Auckland for NZ$1,950,000 was settled on 5 July 2007. –

The Consolidated Entity has an existing facility of NZ$599,000,000 that is due to expire on 31 August 2009. The Consolidated Entity has initiated discussions with existing financiers regarding the refinancing of its facility arrangement.

43

Annual Report 2008

Movement in units on issue of the Fund for the year was as follows:

2008 2007 units units

Units on issue at 1 July 217,424,067 216,955,636Units issued during the year 417,218 468,431

Units on issue as at 30 June 217,841,285 217,424,067

$’000 $’000

Value of consolidated total assets as at 30 June 765,933 900,044

The basis for valuation of the Fund’s assets is disclosed in Note 3 to the financial statements.

Interests of the Responsible EntityThe following fees were paid to Brookfield Multiplex Capital Management Limited out of the Fund’s assets during the financial year:

Responsible Entity fees incurred by the Fund during the year were $5,812,773 (2007: $5,396,513). –Leasing fees paid by the Consolidated Entity during the year were $262,049 (2007: $704,478). –Establishment fees incurred by the Fund during the year were nil (2007: $2,947,615). –Property sale fees incurred by the Fund during the year were $940,279 (2007: nil). –

The following interests were held in the Consolidated Entity during the financial period:

ANZ Nominees Limited as custodian for Brookfield Multiplex Capital Securities Limited as responsible –entity for Multiplex Acumen Property Fund holds 51,699,755 units or 23.73% of the Fund at year end (2007: 51,699,755 units or 23.78% of the Fund).Multiplex Funds Management Limited as custodian for Brookfield Multiplex Property Trust holds –47,461,298 units or 21.79% of the Fund at year end (2007: 47,461,298 units or 21.83% of the Fund).Perpetual Trust Limited as custodian for Multiplex Tasman Property Fund holds 4,776,156 units or 2.19% –of the Fund at year end (2007: 5,028,440 units or 2.31% of the Fund).JPMorgan Nominees Australia Limited as custodian for Multiplex Diversified Property Fund holds –4,345,251 units or 1.99% of the Fund at year end (2007: 2,745,251 units or 1.26% of the Fund).JPMorgan Nominees Australia Limited as custodian for Multiplex Property Income Fund holds 1,325,635 –units or 0.61% of the Fund at year end (2007: 1,325,635 units or 0.61% of the Fund).Brookfield Multiplex Capital Management Limited holds 1,709,199 units or 0.78% of the Fund at year end –(2007: nil).

Significant changes in the state of affairsIn the opinion of the Directors there were no significant changes in the state of affairs of the Fund that occurred during the financial year not otherwise disclosed in this report or in the financial report.

44



Matters subsequent to the end of the financial yearThere are no matters or circumstances which have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity in subsequent financial years.

Likely developmentsInformation on likely developments in the operations of the Consolidated Entity in future financial years and the expected results of those operations has not been included in this report because the Directors believe that to do so would be likely to result in unreasonable prejudice to the Consolidated Entity.

Environmental regulationThe Consolidated Entity has systems in place to manage its environmental obligations. Based upon the results of inquiries made, the Responsible Entity is not aware of any significant breaches or non-compliance issues during the year covered by this report.

DistributionsDistributions paid/payable to unitholders were as follows:

Cents Total amount Date of per unit $’000 payment

Ordinary unitsJune 2008 distribution 2.375 5,174 1 August 2008March 2008 distribution 2.375 5,170 1 May 2008December 2007 distribution 2.375 5,169 1 February 2008September 2007 distribution 2.375 5,166 2 November 2007

Total distribution for the year ended 30 June 2008 9.500 20,679



Distributions paid for the year ended 30 June 2008 have been paid out of operating earnings as adjusted for non-cash transactions.

Indemnification and insurance premiumsUnder the Fund’s Constitution, the Responsible Entity’s officers and employees are indemnified out of the Fund’s assets for any loss, damage, expense or other liability incurred by it in properly performing or exercising any of its powers, duties or rights in relation to the Fund.

The Fund has not indemnified any auditor of the Consolidated Entity.

No insurance premiums are paid out of the Fund’s assets in relation to cover for the Responsible Entity, its officers and employees, the Compliance Committee or auditors of the Fund.

45

Annual Report 2008

Rounding of amountsThe Fund is of a kind referred to in ASIC Class Order 98/100, dated 10 July 1998 (updated by CO 05/641 effective 28 July 2005 and CO 06/51 effective 31 January 2006), and in accordance with that Class Order, all financial information presented in Australian dollars has been rounded to the nearest thousand dollars, unless otherwise stated.

Lead auditor’s independence declaration under Section 307C of the Corporations Act 2001The lead auditor’s independence declaration is set out on page 47 and forms part of the Directors’ Report for the year ended 30 June 2008.

Dated at Sydney this 27th day of August 2008.

Signed in accordance with a resolution of the Directors made pursuant to Section 306(3) of the Corporations Act 2001.

Brian Kingston Director Brookfield Multiplex Capital Management Limited

46



To: the directors of Brookfield Multiplex Capital Management Limited as the Responsible Entity of Multiplex New Zealand Property Fund

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2008 there have been:

(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

Tanya Gilerman Partner

Sydney, NSW 27 August 2008

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.

47

Annual Report 2008

Lead Auditor’s Independence Declarationunder Section 307C of the Corporations Act 2001

Consolidated Fund 2008 2007 2008 2007 Note $’000 $’000 $’000 $’000

RevenueProperty rental income 72,652 71,621 – –Gain on sale of investment property 234 5,003 – –Distribution income from controlled entities – – 24,917 23,179Interest income 896 1,007 76 135Realised gain on foreign exchange transactions 1,102 1,193 1,102 –Net gain on revaluation of investment property 10 12,213 25,848 – –Net (loss)/gain on revaluation of financial derivatives 5 (1,843) 7,910 – –

Total revenue and other income 85,254 112,582 26,095 23,314

ExpensesProperty expenses 17,786 15,148 – –Performance fee 17 2,102 4,281 2,102 4,281Finance costs to external parties 35,709 36,320 – –Responsible entity fees 5,813 5,396 5,813 5,396Other expenses 419 428 367 317

Total expenses 61,829 61,573 8,282 9,994

Profit before income tax 23,425 51,009 17,813 13,320Income tax expense 7 (2,155) (13,006) – –

Profit after tax before distribution to unitholders 21,270 38,003 17,813 13,320Finance costs – distribution to unitholders 8 (20,679) (20,635) (20,679) (20,635)

Change in net assets attributable to unitholders 591 17,368 (2,866) (7,315)

The Income Statements should be read in conjunction with the Notes to the Financial Statements.

48


Income StatementsFor the year ended 30 June 2008


Current assetsCash and cash equivalents 8,851 17,091 1,022 507Trade and other receivables 9 2,670 24,950 1,059 152

Total current assets 11,521 42,041 2,081 659

Non-current assetsInvestment properties 10 739,044 838,629 – –Investment in controlled entities 11 – – 208,252 208,252Fair value of financial derivatives 15 15,368 19,374 – –

Total non-current assets 754,412 858,003 208,252 208,252Total assets 765,933 900,044 210,333 208,911

Current liabilitiesTrade and other payables 12 27,353 22,589 7,893 6,322Deferred settlement – 1,842 – –Distribution payable 8 5,174 5,149 5,174 5,149Interest bearing liabilities 13 – 40,635 – –

Total current liabilities 32,527 70,215 13,067 11,471

Non-current liabilitiesPerformance fee 17 6,383 4,281 6,383 4,281Interest bearing liabilities 13 441,661 499,138 – –Deferred income tax liability 7 23,641 24,690 – –

Total non-current liabilities 471,685 528,109 6,383 4,281Total liabilities (excluding net assets attributable to unitholders’ interests) 504,212 598,324 19,450 15,752Net assets attributable to unitholders – liability 261,721 301,720 190,883 193,159

The Balance Sheets should be read in conjunction with the Notes to the Financial Statements.

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Annual Report 2008

Balance SheetsAs at 30 June 2008

As the Consolidated Entity or the Fund has no equity, no Statement of Changes in Equity for the current or comparative year is included.

50


Statements of Changes in EquityFor the year ended 30 June 2008


Cash flows from operating activitiesCash receipts in the course of operations 74,541 72,919 – 61Cash payments in the course of operations (27,537) (13,453) (3,824) (3,955)Interest received 896 1,007 76 135Financing costs paid (34,837) (30,298) – –

Net cash flows from/(used in) operating activities 16 13,063 30,175 (3,748) (3,759)

Cash flows from investing activitiesProceeds from sale of investment properties 44,154 4,354 – –Investment in controlled entities – – – –Distributions received – – 24,917 23,179Payments for purchase of, and additions to investment properties (9,274) (68,340) – –

Net cash flows from/(used in) investing activities 34,880 (63,986) 24,917 23,179

Cash flows from financing activitiesDistributions paid (20,654) (19,998) (20,654) (19,998)Proceeds from interest bearing liabilities 7,779 60,287 – –Repayments of interest bearing liabilities (42,227) – – –Debt establishment costs paid (46) (148) – –

Net cash flows (used in)/from financing activities (55,148) 40,141 (20,654) (19,998)

Net increase/(decrease) in cash and cash equivalents (7,311) 6,330 515 (578)Impact of foreign exchange (929) 902 – –Cash and cash equivalents at 1 July 17,091 9,859 507 1,085

Cash and cash equivalents at 30 June 8,851 17,091 1,022 507

The Statements of Cash Flows should be read in conjunction with the Notes to the Financial Statements.

51

Annual Report 2008

Statements of Cash FlowsFor the year ended 30 June 2008

1 Reporting entityMultiplex New Zealand Property Fund (the Fund) is an Australian registered managed investment scheme under the Corporations Act 2001. Brookfield Multiplex Capital Management Limited, the Responsible Entity of the Fund, is incorporated and domiciled in Australia. The consolidated financial statements of the Fund as at and for the year ended 30 June 2008 comprise the Fund and its subsidiaries (together referred to as the Consolidated Entity).

2 Basis of preparation(a) Statement of ComplianceThe financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (AASBs) (including Australian interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial report of the Consolidated Entity and the financial report of the Fund comply with International Financial Reporting Standards (IFRSs) and interpretations adopted by the International Accounting Standards Boards (IASB).

The financial statements were authorised for issue by the Directors on this 27th day of August 2008.

(b) Basis of measurementThe consolidated financial statements have been prepared on the basis of historical cost, except for the following:

derivative financial instruments which are measured at fair value; and –investment property which is measured at fair value. –

The methods used to measure fair value are discussed further in Note 3.

The consolidated financial statements are presented in Australian dollars, which is the Fund’s presentation currency. The Fund’s functional currency is Australian dollars; however, the Consolidated Entity is predominantly comprised of operations that are located in New Zealand. The functional currency of the controlled entity that holds these operations is the New Zealand dollar.

The Fund is of a kind referred to in ASIC Class Order 98/100, dated 10 July 1998 (updated by CO 05/641 effective 28 July 2005 and CO 06/51 effective 31 January 2006), and in accordance with that Class Order, all financial information presented in Australian dollars has been rounded to the nearest thousand dollars, unless otherwise stated.

(c) Use of estimates and judgementsThe preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements is provided in Note 3(l), Investment property, and Note 3(m), Derivative financial instruments.

52


Notes to the Financial Statements For the year ended 30 June 2008

3 Significant accounting policiesThe significant policies set out below have been applied consistently to all periods presented in these financial statements.

(a) Principles of consolidationThe consolidated financial statements incorporate the financial statements of the Fund and entities controlled by the Fund (its subsidiaries) (referred to as “the Consolidated Entity” in these financials statements). Control is achieved where the Fund has the power to govern the financial and operation policies of an entity so as to obtain benefits from its activities.

The results of the subsidiaries acquired or disposed of during the year are included in the consolidated Income Statements from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Consolidated Entity. The assets and liabilities of foreign controlled entities are translated into Australian dollars at rates of exchange current at balance date, while their income and expenditure are translated at the exchange rate at the date of the transactions.

All intra-group transitions, balances, income and expenses, including unrealised profits arising from intra-group transactions, are eliminated in full in the consolidated financial statements. In the separate financial statements of the Fund, intra-group transactions (“common control transactions”) are generally accounted for by reference to the existing carrying value of the items. Where the transaction value of common control transactions differs from their carrying value, the difference is recognised as a contribution by or distribution to equity participants by the transacting entities.

In the Fund’s financial statements investments in controlled entities are carried at cost.

(b) Foreign and cross currency transactionsForeign and cross currency transactions of the Fund are converted to Australian dollars at the rate of exchange prevailing at the date of the transaction or at hedge rates where applicable. Amounts receivable or payable by entities within the Consolidated Entity that are outstanding as at the balance date and are denominated in foreign currencies are converted to Australian dollars using rates of exchange at the end of the period. All resulting exchange differences arising on settlement are brought to account in the consolidated Income Statements.

(c) Revenue recognitionRevenues are recognised at the fair value of the consideration received for the sale of goods and services, net of the amount of Goods and Services Tax (GST), rebates and discounts.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Consolidated Entity and the revenue can be reliably measured. The following specific criteria for the major business activities must also be met before revenue is recognised. Where amounts do not meet these recognition criteria, they are deferred and recognised in the period in which the recognition criteria are met.

53

Annual Report 2008

3 Significant accounting policies continuedProperty Rental RevenueRental income from investment property leased out under an operating lease is recognised in the Income Statements on a straight-line basis over the term of the lease.

Lease incentives granted are recognised by the Consolidated Entity as an integral part of the total rental income on a straight-line basis.

Contingent rents are recorded as income by the Consolidated Entity in the periods in which they are earned.

Dividends and distributionsRevenue from dividends and distributions is recognised when the right of the Consolidated Entity or the Fund to receive payment is established. This is generally when they have been declared.

Interest revenue Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.

(d) LeasesLeases are classified at their inception as either operating or finance leases based on the economic substance of the agreements so as to reflect the risks and benefits incidental to ownership.

Operating leasesThe minimum rental revenues of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as income on a straight-line basis over the lease term, which is considered to best represent the time pattern in which use benefit derived from the leased asset is diminished.

(e) Leasing feesLeasing fees in relation to the initial leasing of the property after a redevelopment are capitalised and amortised over the period to which the lease relates.

Costs that are directly associated with negotiating and executing the ongoing renewal of tenant lease agreements (including commissions, legal fees and costs of preparing and processing documentation for new leases) are also capitalised and amortised over the lease term in proportion to the rental revenue recognised in each financial year.

(f) Leasing incentivesLease incentives which may take the form of up-front payments, contributions to certain lease costs, relocation costs and fit-outs and improvements are recognised. The aggregate cost of incentives is recognised as a reduction of rental income over the lease term.

(g) Expense recognitionFinance costsFinance costs are recognised as expenses using the effective interest rate method, unless they relate to a qualifying asset.

Finance costs include:

interest on bank overdrafts and short-term and long-term borrowings, including amounts paid or received –on interest rate swaps; amortisation of discounts or premiums relating to borrowings; –amortisation of ancillary costs incurred in connection with the arrangement of borrowings; –finance lease charges; and –certain exchange differences arising from foreign currency borrowings. –

54



Management feesA base management fee up to 0.7% (including GST less any reduced input tax credits) per annum of the gross value of assets is payable to the Responsible Entity. The fee is payable by the Fund quarterly in arrears.

Performance feeA performance fee of 2% of the gross value of assets to the extent the net asset value exceeds the capital subscribed (less any capital returns other than amounts returned as a distribution of operating cash flow). An additional fee of 2% of the gross value of assets is payable provided unitholders have achieved a 50% premium on capital subscribed (less capital returns). The performance fee is calculated each time there is a rollover of the Fund or on sale of the Fund’s assets prior to termination of the Fund. If a performance fee is payable, then it will be paid by the Fund within two months after it is calculated.

Other expenditureExpenses are recognised by the Consolidated Entity on an accruals basis. No expense is recognised if the fees are waived by the Responsible Entity.

(h) Goods and Services Tax (GST)Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO) or the New Zealand Inland Revenue (IRD). In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an expense item.

Receivables and payables are stated with the amount of GST. The net amount of GST recoverable from, or payable to, the ATO or the IRD is included as a current asset or liability in the Balance Sheets.

Cash flows are included in the Statements of Cash Flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO or the IRD are classified as operating cash flows.

(i) Income tax – FundsUnder current income tax legislation, the Fund is not liable for Australian income tax provided that the taxable income is fully distributed to unitholders each year. The Fund fully distributes its taxable income each year, calculated in accordance with the Trust Constitution and applicable legislation to unitholders who are presently entitled to income under the Constitution. Tax allowances for buildings, plant and equipment are distributed to unitholders in the form of a tax deferred component of the distributions.

The wholly owned sub-trust of the Fund which owns properties in New Zealand is liable to pay tax under New Zealand tax legislation at the current corporate rate of 33%. Tax effect accounting principles are followed whereby the income tax expense of the controlled entity includes both current tax expense and deferred tax expense/benefit. Income tax on differences between asset and liability carrying amounts and their tax base is set aside to the deferred tax asset or deferred tax liability accounts at the rates which are expected to apply when those timing differences reverse. The future tax benefit relating to deferred tax assets will be carried forward as an asset only when the benefit is probable of realisation.

(j) Cash and cash equivalentsFor purposes of the Statements of Cash Flows, cash includes cash balances, deposits at call with financial institutions and other highly liquid investments, with short periods to maturity, which are readily convertible to cash on hand and are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts.

55

Annual Report 2008

3 Significant accounting policies continued(k) Trade and other receivablesTrade debtors and other receivables are stated at their amortised cost using the effective interest rate method less any identified impairment losses. Impairment charges are brought to account as described in Note 3(o). Non-current receivables are measured at amortised cost using the effective interest rate method.

(l) Investment propertyAn investment property is a property that is held to earn long-term rental yields and/or for capital appreciation.

An investment property acquired is initially recorded at its cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition. An investment property is subsequently carried at fair value based on the principles outlined in the paragraph below.

The costs of assets constructed/redeveloped internally include the costs of materials, direct labour, directly attributable overheads, finance costs (see Note 3(g)) and other incidental costs.

Where the contracts of purchase include a deferred payment arrangement, amounts payable are recorded at their present value, discounted at the rate applicable to the Consolidated Entity if a similar borrowing were obtained from an independent financier under comparable terms and conditions.

ValuationsInvestment property is stated at fair value at the reporting date.

The investment properties of the Consolidated Entity are internally valued at each reporting date. The Consolidated Entity’s policy is to obtain external valuations when internal valuations performed indicate the property value has changed by more than 5%, or whenever it is believed that the fair value of a property differs significantly from its carrying value, based on a material change to the assumptions and market conditions underlying the valuation. An external valuation is obtained at least every three years.

The fair value of investment property is the price at which the property could be exchanged between knowledgeable, willing parties in an arm’s length transaction, and is determined:

without any deduction for transaction costs the entity may incur on sale or other disposal; –reflecting market conditions at the reporting date; –reflecting rental income from current leases and reasonable and supportable assumptions that represent –what knowledgeable, willing parties would assume about rental income from future leases in the light of current conditions. It also reflects, on a similar basis, any cash outflows that could be expected in respect of the property;assuming simultaneous exchange and completion of the contract for sale without any variation in price –that might be made in an arm’s length transaction between knowledgeable, willing parties if exchange and completion are not simultaneous;ensuring that there is no double-counting of assets or liabilities that are recognised as separate assets –or liabilities; andwithout inclusion of future capital expenditure that will improve or enhance the property. The valuation does –not reflect the related future benefits from this future expenditure.

Any gains or losses arising from a change in the fair value of investment property are recognised in the Income Statements in the period in which they arise.

Rental income from investment property is accounted for in accordance with Note 3(c).

56



(m) Derivative financial instrumentsThe Consolidated Entity uses derivative financial instruments to hedge its exposure to interest rate risk and foreign currency risk arising from operational, financing and investment activities. The Consolidated Entity does not hold or issue derivative financial instruments for trading purposes.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value, with the changes in fair value during the period recognised in the income statement.

(n) Non-derivative financial instrumentsNon-derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at a fair value through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.

A financial instrument is recognised if the Consolidated Entity becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Consolidated Entity’s contractual rights to the cash flows from the financial assets expire or if the Consolidated Entity transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchase and sales of financial assets are accounted for at trade date, i.e., the date that the Consolidated Entity commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Consolidated Entity’s obligations specified in the contract expire or are discharged or cancelled.

Accounting policies for cash and cash equivalents (Note 3(j)), trade and other receivables (Note 3(k)), trade and other payables (Note 3(p)), and interest bearing liabilities (Note 3(q)) are discussed elsewhere within the financial report.

Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.

(o) ImpairmentFinancial assetsA financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flow of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available for sale financial asset is calculated by reference to its current fair value.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in profit and loss. Any cumulative loss in respect of an available for sale financial asset recognised previously in equity is transferred to profit and loss.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost and available for sale financial assets that are debt securities, the reversal is recognised in profit and loss. For available for sale financial assets that are equity securities, the reversal is recognised directly in equity.

57

Annual Report 2008

3 Significant accounting policies continuedNon-financial assetsThe carrying amount of the Consolidated Entity’s non-financial assets, other than investment property, and deferred tax assets, is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated at each reporting date.

An impairment loss in respect of goodwill is not reversed. In respect of all other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(p) Trade and other payablesPayables are stated at amortised cost using the effective interest rate method and represent liabilities for goods and services provided to the Consolidated Entity prior to the end of the financial period and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(q) Interest bearing liabilitiesInterest bearing liabilities are recognised initially at fair value less any attributable transaction costs. Subsequent to initial recognition, interest bearing liabilities are stated at amortised cost with any difference between cost and redemption value being recognised in the Income Statements over the period of the borrowings on an effective interest rate basis. Interest bearing loans and borrowings are classified as current liabilities unless the Consolidated Entity has an unconditional right to defer settlement of the liability to at least 12 months after the balance sheet date.

(r) DistributionsA provision for distribution is recognised in the balance sheet if the distribution has been declared prior to balance date. Distributions paid and payable on units are recognised as a reduction in net assets attributable to unitholders. Distributions paid are included in cash flows from operating activities in the Statements of Cash Flows.

(s) Net assets attributable to unitholdersNet assets attributable to unitholders consist of units on issue (less transaction costs), undistributed income and reserves.

(t) Units on issueIssued and paid up units are recognised in change in net assets attributable to unitholders at the fair value of the consideration received by the Consolidated Entity, less any incremental costs directly attributable to the issue of new units.

58



(u) New standards and interpretations not yet adoptedThe following standards, amendments to standards and interpretations have been identified as those which may impact the Consolidated Entity in the period of initial application. They are available for early adoption at 30 June 2008, but have not been applied in preparing these financial statements:

Revised AASB 3 – Business Combinations changes the application of acquisition accounting for business combinations and the accounting for non-controlling (minority) interests. Key changes include: the immediate expensing of all transaction costs; measurement of contingent consideration at acquisition date with subsequent changes through the income statement; measurement of non-controlling (minority) interests at full fair value or the proportionate share of the fair value of the underlying net assets; guidance on issues such as reacquired rights and vendor indemnities; and the inclusion of combinations by contract alone and those involving mutuals. The revised standard becomes mandatory for the Consolidated Entity’s 30 June 2010 financial statements. The Consolidated Entity has not yet determined the potential effect of the revised standard on the Consolidated Entity’s financial report. AASB 8 – Operating Segments introduces the “management approach” to segment reporting. AASB 8, which becomes mandatory for the Consolidated Entity’s 30 June 2010 financial statements, will require the disclosure of segment information based on the internal reports regularly reviewed by the Consolidated Entity’s chief operating decision maker in order to assess each segment’s performance and to allocate resources to them. The Consolidated Entity does not present information based on business or geographic segments. Information is presented to the chief operating decision maker based on the Consolidated Entity’s investment portfolio, which at present is categorised between direct property assets invested in retail, office and industrial assets. Under the management approach, it is anticipated segment information will be disclosed based on the Consolidated Entity’s investment portfolio.Revised AASB 101 – Presentation of Financial Statements introduces as a financial statement (formerly “primary” statement) the “statement of comprehensive income”. The revised standard does not change the recognition, measurement or disclosure of transactions and events that are required by other AASBs. The revised AASB 101 will become mandatory for the Consolidated Entity’s 30 June 2010 financial statements. The Consolidated Entity has not yet determined the potential effect of the revised standard on the Consolidated Entity’s disclosures.Revised AASB 123 – Borrowing Costs removes the option to expense borrowing costs and requires that an entity capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. The revised AASB 123 will become mandatory for the Consolidated Entity’s 30 June 2010 financial statements. In accordance with the transitional provisions, the Consolidated Entity will apply the revised AASB 123 to qualifying assets for which capitalisation of borrowing costs commences on or after the effective date. The Consolidated Entity has not yet determined the potential effect of the revised standard on future earnings. Revised AASB 127 – Consolidated and Separate Financial Statements changes the accounting for investments in subsidiaries. Key changes include: the re-measurement to fair value of any previous/retained investment when control is obtained/lost, with any resulting gain or loss being recognised in profit or loss; and the treatment of increases in ownership interest after control is obtained as transactions with equity holders in their capacity as equity holders. The revised standard will become mandatory for the Consolidated Entity’s 30 June 2010 financial statements. The Consolidated Entity has not yet determined the potential effect of the revised standard on the Consolidated Entity’s financial report.

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Annual Report 2008

4 Segment reportingThe Consolidated Entity operates in a single, primary business and geographical segment, being investment in income producing property assets in New Zealand.

5 Net unrealised (loss)/gain on revaluation of financial derivatives Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Interest rate swaps (8,005) 16,391 – –Forward foreign exchange contracts 6,162 (8,481) – –

Net unrealised gain on revaluation of financial derivatives (1,843) 7,910 – –

6 Auditor’s remuneration Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Audit services:Auditors of the Fund – KPMG Australia:

Audit and review of the financial report 93,000 75,000 93,000 75,000

Total auditor’s remuneration 93,000 75,000 93,000 75,000

Fees paid to the auditors of the Fund in relation to compliance plan audits are borne by the Responsible Entity.

60



7 Income tax(a) Major components of income tax expense Consolidated 2008 2007 $’000 $’000

Current income tax – –

Total current income tax – –

Deferred income taxRelating to origination and reversal of temporary differences 7,510 13,006Benefit arising from previously unrecognised tax losses (5,355) –

Total deferred income tax 2,155 –Total income tax expense reported in the Income Statements 2,155 13,006

(b) Income tax expenseNumerical reconciliation between tax expense and pre-tax net profit Consolidated 2008 2007 $’000 $’000

Profit for the year after tax 21,270 38,003Total income tax expense 2,155 13,006

Profit before income tax 23,425 51,009Loss attributable to the Australian Fund and not subject to taxation1 7,104 9,859

Profit before income tax attributable to Multiplex Albert Street Landowning Trust (MASLT) 30,529 60,868Prima facie income tax expense on profit using the MASLT tax rate of 33% (2007: 33%) 10,075 20,086Current year losses for which no deferred tax asset was recognised – 1,888Recognition of previously unrecognised tax losses (5,355) –Non-assessable income – fair value adjustments (3,422) (11,140)Permanent differences on sale of properties 62 (837)Non-assessable income – Australian sourced interest income (158) (119)Other 953 3,128

Total income tax expense reported in the Income Statements 2,155 13,006

Note:1 Under current income tax legislation, the Fund is not liable for Australian income tax provided that the taxable income is fully

distributed to unitholders each year. The Fund fully distributes its taxable income each year, calculated in accordance with the Trust Constitution and applicable legislation to unitholders who are presently entitled to income under the Constitution.

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Annual Report 2008

7 Income tax continued(c) Tax assets and liabilities Consolidated 2008 2007 $’000 $’000

Tax liability – current – –Deferred tax assets 5,355 –

Deferred income tax liability – non-current (28,996) (24,690)

(d) Recognised deferred tax assets and liabilitiesDeferred tax assets and liabilities are attributable to the following:

Assets Liabilities Net 2008 2007 2008 2007 2008 2007 $’000 $’000 $’000 $’000 $’000 $’000

ConsolidatedDepreciation – – (24,365) (24,690) (24,365) (24,690)Fair value adjustments – – (4,610) – (4,610) –Tax losses 5,333 – – – 5,333 –Other 22 – (21) – 1 –

Total 5,355 – (28,996) (24,690) (23,641) (24,690)

As the Consolidated Entity and the Fund have no equity, there are no tax amounts recognised directly in equity for the current or prior year.

The New Zealand corporate tax rate changed from 33% to 30% for tax years commencing on or after 1 April 2008. This will impact the results of the Consolidated Entity in future years.

62



8 Finance costs – distributions to unitholdersDistributions paid/payable to unitholders were as follows:

Cents Total amount Date of per unit $’000 payment





9 Trade and other receivables Consolidated Fund 2008 2007 2008 2007 Note $’000 $’000 $’000 $’000

CurrentTrade receivables 47 1,479 – –Accrued settlement on investment properties – 20,908 – –Prepayments and accrued income 2,469 2,047 – –Receivables due from controlled entities 17 – – 1,000 –Other receivables 154 516 59 152

2,670 24,950 1,059 152

63

Annual Report 2008

10 Investment propertiesThe Consolidated Entity holds the following properties at the reporting date:

Consolidated4

Cost Latest Latest June 2008 June 2007 including external external book book additions1 valuation valuation2 value3 value3 Description Title $’000 date $’000 $’000 $’000

RetailWoolworths Dargaville Freehold 4,192 Jun 08 4,322 4,322 5,170Woolworths Invercargill Freehold 2,884 Jun 08 3,450 3,450 3,764Woolworths Marton Freehold 1,115 Jun 08 1,071 1,071 1,633Woolworths New Plymouth Freehold 6,042 Jun 08 6,900 6,900 7,982Countdown Oamaru Freehold 3,029 Jun 08 3,648 3,648 3,991Woolworths Paeroa Freehold 2,359 Jun 08 2,776 2,776 2,993Foodtown Pukekohe Freehold 6,624 Jun 08 7,455 7,455 8,777Woolworths Putaruru Freehold 2,060 Jun 08 2,062 2,062 2,540Woolworths Te Awamutu Freehold 4,419 Jun 08 4,441 4,441 5,533Woolworths Wanganui Leasehold 6,422 Jun 08 4,957 4,957 3,356Countdown Botany Freehold 11,932 Jun 08 16,575 16,575 17,596Howick Shopping Centre Freehold 8,571 Jun 08 9,993 9,993 12,880Woolworths Grey Lynn Freehold 7,017 Jun 08 10,865 10,865 11,519Countdown Porirua Freehold 8,318 Jun 08 11,103 11,103 7,619Foodtown Hamilton Leasehold 2,274 Jun 08 3,490 3,490 3,719Countdown Lynfield Freehold 9,757 Jun 08 14,593 14,593 16,102Woolworths Papakura Freehold 3,144 Jun 08 4,521 4,521 5,170The Hub – Whakatane Freehold 37,689 Jun 08 32,596 32,596 38,809Valley Mega Centre – Stage 1 Freehold 20,749 Jun 08 19,986 19,986 24,127South City Shopping Centre Freehold 29,592 Jun 08 32,913 32,913 44,095Valley Mega Centre – Stage 2 Freehold 9,085 Jun 08 7,852 7,852 7,537

187,274 205,569 205,569 234,912

OfficeAIA Building Freehold 20,060 Mar 07 23,793 23,850 27,334Gen-i Tower Freehold 51,924 Dec 07 68,998 69,544 74,004University Building Freehold 7,756 Mar 07 9,596 9,596 10,975Telecom House Freehold 45,053 Mar 07 49,964 49,982 57,143SAP Centre Freehold – Mar 07 – – 20,135Uniservices House Freehold 14,338 Dec 07 16,655 16,611 18,82612 Whitaker Place Freehold 667 Mar 07 674 674 771The Plaza Freehold 8,700 Mar 07 10,310 10,344 11,838ASB Bank Centre Freehold 92,743 Dec 07 119,042 119,542 128,215ANZ Business Centre Freehold 22,325 Mar 07 21,810 21,939 24,977EDS House Freehold 25,435 Dec 07 29,979 29,979 30,523143 Willis Street Freehold 15,969 Dec 07 14,910 14,998 16,145Conservation House Freehold 30,770 Dec 07 32,516 32,520 37,275NZ Police – 180 Molesworth Freehold 31,770 Mar 07 33,904 35,930 38,799

367,510 432,151 435,509 496,960

64



Consolidated Cost including June 2008 June 2007 additions1 Valuation Valuation2 book value3 book value3 Description Title $’000 date $’000 $’000 $’000

IndustrialMangere Distribution Centre Freehold 44,973 Dec 07 63,447 63,447 67,302Christchurch Distribution Centre Freehold 12,467 Dec 07 15,326 15,326 16,326Wiri Distribution Centre Leasehold 16,528 Dec 07 19,193 19,193 23,129

73,968 97,966 97,966 106,757Total investment properties 628,752 735,686 739,044 838,629

Notes:1 Included in the cost of investment properties is $17,304,232 of acquisition costs.2 Last valuation in NZD is converted at the 30 June 2008 exchange rate $1AUD = $1.2609NZD.3 Book value represents the last valuation plus capital expenditure since the last valuation. June 2007 book value in NZD is converted

at the 30 June 2007 exchange rate $1AUD = $1.1025NZD. 4 There are no investment properties held by the Fund.

Independent valuationsThe investment properties of the Consolidated Entity are internally valued at each reporting date. The Consolidated Entity’s policy is to obtain external valuations when internal valuations performed indicate the property value has changed by more than 5%, or whenever it is believed that the fair value of a property differs significantly from its carrying value, based on a material change to the assumptions and market conditions underlying the valuation. An external valuation is obtained at least every three years.

At 30 June 2008, the entire retail property portfolio was valued by independent valuers CB Richard Ellis. All properties have been independently valued within the last 15 months. At 30 June 2008, all valuations (both independent and internal valuations) have been undertaken using a discounted cash flow (DCF) approach and a capitalisation method.

Consolidated 2008 2007 $’000 $’000

Reconciliation of the carrying amount of investment properties is set out below:

Investment propertiesCarrying amount at beginning of year 838,629 692,096Acquisition of investment property – 62,818Sale of investment property (22,550) (20,208)Capital expenditure 18,118 2,955Acquisition costs – 3,104Net gains from fair value adjustments to investment properties 12,213 25,848Foreign currency translation exchange adjustment (107,366) 72,016

Carrying amount at end of year 739,044 838,629

Foreign currency translation exchange adjustments arise due to changes in opening and closing foreign exchange rates. NZD balances at 30 June 2008 have been translated at a rate of $1AUD = $1.2609NZD. NZD balances at 30 June 2007 have been translated at a rate of $1AUD = $1.1025NZD.

65

Annual Report 2008

10 Investment properties continuedLeasing arrangementsCompleted investment properties are leased to tenants under long-term operating leases with rentals receivable monthly.

Minimum lease payments under non-cancellable operating leases of investment properties not recognised in the financial statements are receivable as follows:

Consolidated 2008 2007 $’000 $’000

Within one year 55,673 56,383Later than one year but not later than five years 178,848 202,164Later than five years 193,734 224,015

428,255 482,562

Minimum lease payments in NZD has been converted at the 30 June 2008 exchange rate of NZD$1.2609 to AUD$1.

Annual rent receivable by the Consolidated Entity under current leases from tenants is from commercial, industrial, retail and car park assets held. The average lease term is 7.13 years and rent reviews are generally performed on a three yearly basis and are based on market rent.

11 Investment in controlled entities Consolidated Fund Ownership 2008 2007 2008 2007 % $’000 $’000 $’000 $’000

Investment in Multiplex Albert Street Investment Trust 99 – – 207,993 207,993Investment in Multiplex Albert Street Landowning Trust 1 – – 259 259

Investment in controlled entities – – 208,252 208,252

12 Trade and other payables Consolidated Fund 2008 2007 2008 2007 Note $’000 $’000 $’000 $’000

Trade payables 11,150 1,731 – –Interest payable 6,482 7,675 – –Establishment fees 17 – 2,948 – –Distributions received in advance from controlled entity – – – 1,285Management fee payable 4,229 4,914 4,229 4,914Other payables and accruals 5,492 5,321 3,664 123

27,353 22,589 7,893 6,322

66



13 Interest bearing liabilities Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

CurrentSecured bank debt1 – 40,635 – –

Non-currentSecured bank debt 442,411 500,602 – –Debt establishment fees (750) (1,464) – –

441,661 499,138 – –Total interest bearing liabilities 441,661 539,773 – –

Consolidated Fund Expiry 2008 2007 2008 2007 date $’000 $’000 $’000 $’000

Finance arrangementsFacilities availableBank debt facility2 31 August 2009 475,057 543,311 – –Less: Facilities utilised (442,411) (541,237) – –

Facilities not utilised 32,646 2,074 – –

Notes:1 Proceeds from the sale of the Telco, IRD and Farmers Car Parks, investment properties and the post balance sheet sale of the SAP

building in August 2007, and Colombo Street in February 2008, were used to repay $42.2 million of bank debt. No other repayments within 12 months have been forecast hence all other debt is classified as non-current.

2 This facility consists of NZ$299.5 million financed by Commonwealth Bank of Australia and NZ$299.5 million financed by ANZ National Bank Limited. NZ$557.8 million has been drawn down on the facility.

The security provided for the debt facility is a first registered fixed and floating charge over all assets and an undertaking by BMCML (as Responsible Entity for Multiplex New Zealand Property Fund), Multiplex Albert Street Investment Pty Ltd (in its capacity and as trustee for Albert Street Investment Trust), the Borrower (in its capacity as trustee for Albert Street Landowning Trust) and the Custodian (as custodian for each of Multiplex New Zealand Property Fund, Albert Street Investment Trust and Albert Street Landowning Trust) in favour of the Security Trustee.

The Consolidated Entity has an existing facility of NZ$599 million that is due to expire on 31 August 2009. The Consolidated Entity has initiated discussions with existing financiers regarding the refinancing of its facility arrangement.

As at 30 June 2008 the weighted average interest rate in respect of the amounts drawn under the facilities, including margin, was 9.26% (2007: 8.43%). The amount does not include the effect of swaps. The effect after swaps is an interest rate of 6.75% (2007: 6.81%).

67

Annual Report 2008

13 Interest bearing liabilities continuedThe Consolidated Entity has entered into interest rate swap agreements to hedge the interest rate risk on the floating rate interest bearing liabilities detailed above. Fair value movements of the interest rate swap assets are recognised in the Income Statements. The Fund does not hold interest rate swap derivatives. The Consolidated Entity’s holdings in interest rate derivatives as at 30 June 2008 and 30 June 2007 are detailed below:

Notional amount of contracts Fair value Fair value Underlying Fixed rate outstanding (assets) (assets) Expiry date instrument % NZ$’000 NZ$’000 A$’000

31 August 2009 Floating to fixed 6.720 189,413 338,742 268,65131 August 2009 Floating to fixed 6.825 150,000 4,289,907 3,402,25831 August 2009 Floating to fixed 6.490 17,500 345,690 274,16231 August 2009 Floating to fixed 6.520 17,500 3,256,687 2,582,82731 August 2011 Floating to fixed 6.765 198,567 2,406,390 1,908,470

572,980 10,637,416 8,436,368

14 Net assets attributable to unitholders Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Units on issue 203,131 202,541 203,131 202,541Foreign currency translation reserve (47,326) (6,146) – –Undistributed income 105,916 105,325 (12,248) (9,382)

Net assets attributable to unitholders 261,721 301,720 190,883 193,159

Opening balance of net assets attributable to unitholders 301,720 256,938 193,159 199,848

Units on issueUnits reinvested 590 626 590 626

Foreign currency translation reserveMovements in foreign currency translation reserve (41,180) 26,788 – –

Undistributed incomeNet profit/(loss) from operations attributable to unitholders 591 17,368 (2,866) (7,315)

Closing balance of net assets attributable to unitholders 261,721 301,720 190,883 193,159

68



Ordinary unitsOrdinary units entitle the holder to participate in distributions and the proceeds on winding up of the Fund in proportion to the number of units held. On a show of hands, every holder of units present at a meeting of unitholders in person or by proxy is entitled to one vote, and upon a poll each unit is entitled to one vote.

All units in the Fund are of the same class and carry equal rights.

The total number of units on issue at 30 June 2008 is 217,841,285 (June 2007: 217,424,067). The movement is solely due to the DRP. Reinvested distributions are as follows:

Issued $ per Units date unit $’000

Consolidated 2008 distribution reinvestment planTotal number of units on issue 1 July 2007 217,424,067 202,541March 2008 103,273 1 May 2008 1.40 145December 2007 99,178 1 Feb 2007 1.45 145September 2007 112,073 2 Nov 2007 1.34 150June 2007 102,694 3 Aug 2007 1.46 150

Total reinvested distributions for the year ended 30 June 2008 417,218 590

Total number of units on issue 30 June 2008 217,841,285 203,131

Consolidated 2007 distribution reinvestment planTotal number of units on issue 1 July 2006 216,955,636 201,915March 2007 110,943 4 May 2007 1.44 159December 2006 123,245 2 Feb 2007 1.33 164September 2006 120,743 3 Nov 2006 1.32 159June 2006 113,500 1 Aug 2006 1.27 144

Total reinvested distributions for the year ended 30 June 2007 468,431 626

Total number of units on issue 30 June 2008 217,424,067 202,541

69

Annual Report 2008

15 Financial instrumentsSignificant accounting policiesDetails of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset and financial liability, are disclosed in Note 3 to the financial statements.

(a) Capital risk managementThe Board’s intention is to maintain a strong capital base so as to maintain investor confidence and the sustainable future development of the Fund. The Board monitors the net tangible assets (NTA) of the Consolidated Entity, along with earnings per unit invested and distributions paid per unit.

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the security afforded by a sound capital position.

Neither the Fund nor any of its subsidiaries are subject to externally imposed capital requirements.

(b) Financial risk managementOverviewThe Fund and Consolidated Entity are exposed to financial risks in the course of their operations. These risks can be summarised as follows:

credit risk; –liquidity risk; and –market risk (including interest rate risk, foreign currency risk and equity price risk). –

The Responsible Entity has responsibility for the establishment and monitoring of a risk management framework. This framework seeks to minimise the potential adverse impact of the above risks on the Fund’s and Consolidated Entity’s financial performance. The Board of the Responsible Entity is responsible for developing risk management policies and the Compliance Committee (which is established by the Board) is responsible for ensuring compliance with those risk management policies.

Compliance with the Responsible Entity’s policies is reviewed by the Responsible Entity on a regular basis. The results of these reviews are reported to the Board and Compliance Committee of the Responsible Entity quarterly.

Investment mandateThe Fund’s investment mandate, as disclosed in its Constitution and Product Disclosure Statement (PDS), is to invest in property assets across New Zealand.

Derivative financial instrumentsWhilst the Fund utilises derivative financial instruments, it does not enter into or trade derivative financial instruments for speculative purposes.

70



(c) Credit riskSources of credit risk and risk management strategiesCredit risk is the risk of financial loss to the Fund or Consolidated Entity if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises principally from the Fund’s and Consolidated Entity’s customers and derivative counterparties. Other credit risk also arises for both the Fund and Consolidated Entity related to cash and cash equivalents balances held.

Trade and other receivablesThe Fund’s and Consolidated Entity’s exposures to credit risk are influenced mainly by the individual characteristics of each customer and counterparty. The Fund and Consolidated Entity manage and minimise exposure to credit risk by:

obtaining guarantees from tenants of the Consolidated Entity’s direct properties; –managing and minimising exposures to individual tenants; –monitoring receivables balances on an ongoing basis; and –obtaining other collateral as security (where appropriate). –

Fair value of financial derivativesTransactions with derivative counterparties are limited to established financial institutions. The Fund and Consolidated Entity also utilise the International Swaps and Derivatives Association’s (ISDA’s) agreements with derivative counterparties where possible to limit the credit risk exposure of such transactions by allowing settlement of derivative transaction on a net rather than gross basis.

The Fund’s and Consolidated Entity’s overall strategy of credit risk management remains unchanged from 2007.

Exposure to credit riskThe table below shows the maximum exposure to credit risk at the reporting date. The carrying amounts of these financial assets represent the maximum credit risk exposure at the reporting date.


Cash and cash equivalents 8,851 17,091 1,022 507Trade and other receivables 9 2,670 24,950 1,059 152Fair value financial derivatives 15,368 19,374 – –

Total 26,889 61,415 2,081 659

71

Annual Report 2008

15 Financial instruments continuedConcentrations of credit risk exposure – Consolidated EntityCommonwealth Bank (CBA) and ANZ are counterparties to the term debt facility, interest rate swap agreements and forward foreign exchange contracts. Therefore the Consolidated Entity has a concentration of credit risk with these parties. In assessing this risk, the Consolidated Entity has taken into account CBA’s and ANZ’s financial positions, market share and reputation, previous experience with these types of transactions, and independent ratings for various covered and uncovered securities In considering all these factors, the Consolidated Entity does not consider there to be a significant risk of default by the counterparties as at the balance date.

Concentrations of credit risk exposure – fundThe Fund does not have any significant concentrations of credit risk at the reporting date.

Collateral obtained/heldWhere applicable, the Fund and Consolidated Entity obtain collateral from counterparties to minimise the risk of default on their contractual obligations. The majority of tenants of the Consolidated Entity’s property assets have provided bank guarantees in favour of the direct property-owning entities within the Consolidated Entity. At the current and prior reporting dates the Fund and Consolidated Entity did not hold any other collateral in respect of its financial assets (2007: nil).

During the year ended 30 June 2008 neither the Fund nor the Consolidated Entity called on any collateral provided (2007: nil).

Financial assets past due but not impairedThe ageing of the Fund’s and Consolidated Entity’s receivables at the reporting date is detailed below:

Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Current 2,561 23,820 1,059 152Past due 0–30 days 22 585 – –Past due 31–120 days 87 130 – –Past due 121 days to one year – 415 – –More than one year – – – –

Total 2,670 24,950 1,059 152

For the Fund and Consolidated Entity, amounts recognised above are not deemed to be impaired. There are no significant financial assets that have had their terms renegotiated that would otherwise have rendered the financial assets past due or impaired (2007: nil). During the year ended 30 June 2008, $84,456 bad debt impairment was recognised by the Consolidated Entity (2007: $19,224). The Fund has not recognised any impairment losses during the year ended 30 June 2008 (2007: nil).

72



(d) Liquidity riskSources of liquidity risk and risk management strategiesLiquidity risk is the risk the Fund and Consolidated Entity will not be able to meet their financial obligations as and when they fall due. The main sources of liquidity risk for the Fund and Consolidated Entity are related to the refinancing of interest bearing liabilities and redemptions paid to unitholders. The Fund’s approach to managing liquidity risk is to ensure that it has sufficient cash available to meet its liabilities as and when they fall due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Fund’s reputation.

Interest bearing liabilitiesThe Consolidated Entity is exposed to liquidity risk (refinancing risk) on its interest bearing loans. The Consolidated Entity has managed this risk by ensuring debt maturity dates and loan covenants are regularly monitored and negotiations with counterparties are commenced well in advance of the debt’s maturity date.

UnitholdersThe Fund is not exposed to liquidity risk associated with unitholder redemptions in the short term as its units are not eligible for redemption until the life of the Fund has expired in 2011. Unitholder redemptions in 2011 will be managed appropriately at that time.

The Fund’s and Consolidated Entity’s liquidity risk is managed in accordance with the Fund’s and Consolidated Entity’s investment strategy as detailed in the PDS. The Consolidated Entity invests in direct property. As a result, the nature of the investments are not liquid in nature. However, the Consolidated Entity’s operations are structured to allow for sufficient rental income to enable the Fund and Consolidated Entity to meet its debts as and when they are due. The Fund and Consolidated Entity also manage liquidity risk by maintaining adequate banking facilities, through continuous monitoring of forecast and actual cash flows and matching maturity profiles of financial assets and liabilities.

Defaults and breachesDuring the financial year ended 30 June 2008, the Fund and the Consolidated Entity have not defaulted on or breached any terms of their loan amounts or covenants (2007: nil).

73

Annual Report 2008

15 Financial instruments continuedMaturity analysis of financial liabilitiesThe following are the contractual maturities of financial liabilities, including estimated interest payments. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Fund and Consolidated Entity can be required to pay.

Consolidated Carrying Contractual Greater than $’000 amount cash flows 0 to 12 months 1 to 2 years 2 to 5 years 5 years

2008Trade and other payables 20,871 20,871 20,871 – – –Interest bearing liabilities 441,661 441,661 – 441,661 – –Distributions payable 5,174 5,174 5,174 – – –Performance fee 6,383 15,346 – – 15,346 –

Interest payable on debt 8,526 57,911 50,856 7,055 – –Effect of interest rate swap (2,044) (16,011) (14,099) (1,912) – –

Net interest payable on debt 6,482 41,900 36,757 5,143 – –

Total financial liabilities 480,571 524,952 62,802 446,804 15,346 –

2007Trade and other payables 14,914 14,914 14,914 – – –Interest bearing liabilities 539,773 539,773 40,635 – 499,138 –Distributions payable 5,149 5,149 5,149 – – –Performance fee 4,281 16,741 – – 16,741 –

Interest payable on debt 9,025 111,175 56,171 47,146 7,858 –Effect of interest rate swap (1,350) (22,311) (11,024) (9,777) (1,510) –

Net interest payable on debt 7,675 88,864 45,147 37,369 6,348 –

Total financial liabilities 571,792 665,441 105,845 37,369 522,227 –

Fund Carrying Contractual Greater than $’000 amount cash flows 0 to 12 months 1 to 2 years 2 to 5 years 5 years

2008Trade and other payables 7,893 7,893 7,893 – – –Distributions payable 5,174 5,174 5,174 – – –Performance fee 6,383 15,346 – – 15,346 –

Total financial liabilities 19,450 28,413 13,067 – 15,346 –

2007Trade and other payables 6,322 6,322 6,322 – – –Distributions payable 5,149 5,149 5,149 – – –Performance fee 4,281 16,741 – – 16,741 –

Total financial liabilities 15,752 28,212 11,471 – 16,741 –

74



(e) Market riskMarket risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Fund’s and Consolidated Entity’s income or the value of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising returns.

Sources of market risk and risk management strategiesThe Fund and Consolidated Entity are exposed to market risk in the form of interest rate risk and foreign currency risk. The Consolidated Entity enters into derivatives in order to manage interest rate and foreign currency risks. Derivatives are not entered into for speculative or trading purposes.

Interest rate riskInterest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. Cash and cash equivalents balances will also fluctuate with changes in interest rates due to interest earned. The key source of interest rate risk for the Consolidated Entity is derived from interest bearing liabilities. The Consolidated Entity manages this exposure by entering into interest rate swap agreements to fix the interest rate charged on its interest bearing liabilities are on a fixed rate basis. This is achieved by entering into interest rate swaps, as detailed in Note 13.

Sources of risk and risk management strategiesInterest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. Cash and cash equivalents balances will also fluctuate with changes in interest rates due to interest earned. The key source of interest rate risk for the Consolidated Entity is derived from interest bearing liabilities. The Consolidated Entity manages this exposure by ensuring up to 100% of its interest bearing liabilities are on a fixed rate basis. This is achieved by entering into interest rate swaps, as detailed in Note 13.

75

Annual Report 2008

15 Financial instruments continuedThe table below shows the Fund’s and Consolidated Entity’s direct exposure to interest rate risk at year end.

Non-interest Floating rate bearing Total $’000 $’000 $’000

Consolidated 2008Financial assetsCash and cash equivalents 8,851 – 8,851Trade and other receivables – 2,670 2,670Financial derivatives 15,368 – 15,368

24,219 2,670 26,889

Financial liabilitiesTrade and other payables – 27,353 27,353Distributions payable – 5,174 5,174Performance fee 6,383 – 6,383Interest bearing liabilities 441,661 – 441,661

448,044 32,527 480,571

Fund 2008Financial assetsCash and cash equivalents 1,022 – 1,022Trade and other receivables – 1,059 1,059Investment in controlled entities – 208,252 208,252

1,022 209,311 210,333

Financial liabilitiesTrade and other payables – 7,893 7,893Distributions payable – 5,174 5,174Performance fee 6,383 – 6,383

6,383 13,067 19,450

76



Non-interest Floating rate bearing Total $’000 $’000 $’000

Consolidated 2007Financial assetsCash and cash equivalents 17,091 – 17,091Trade and other receivables – 24,950 24,950Financial derivatives 19,374 – 19,374

36,465 24,950 61,415

Financial liabilitiesTrade and other payables – 22,589 22,589Deferred settlement – 1,842 1,842Distributions payable – 5,149 5,149Performance fee 4,281 – 4,281Interest bearing liabilities 539,773 – 539,773

544,054 29,580 573,634

Fund 2007Financial assets Cash and cash equivalents 507 – 507Trade and other receivables – 152 152Investment in controlled entities – 208,252 208,252

507 208,404 208,911

Financial liabilitiesTrade and other payables – 6,322 6,322Distributions payable – 5,149 5,149Performance fee 4,281 – 4,281

4,281 11,471 15,752

77

Annual Report 2008

15 Financial instruments continuedSensitivity analysisFair value sensitivity analysis for fixed rate instrumentsThe Fund or Consolidated Entity does not have any fixed rate financial assets or financial liabilities, and does not designate derivatives for fixed rate instruments as hedging instruments under a fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss.

Fair value sensitivity analysis for variable rate instrumentsA change of +/– 1% in interest rates at the reporting date would have increased/(decreased) profit or loss and net assets available to unitholders by the amounts shown below. This analysis assumes that all other variables remain constant.

2008 2008 2007 2007 + 1% + 1% – 1% – 1% + 1% + 1% – 1% – 1% Profit Net Profit Profit Profit and loss Assets and loss Equity and loss Equity and loss Equity

Consolidated EntityInterest on cash 107 107 (107) (107) 102 102 (102) (102)Interest bearing liabilities 4,424 4,424 (4,424) (4,424) 5,412 5,412 (5,412) (5,412) Swap proceeds (4,424) (4,424) 4,424 4,424 (5,412) (5,412) 5,412 5,412 Fair value of derivatives 8,818 8,818 (9,077) (9,077) 13,309 13,309 (13,768) (13,768)

Total increase/ (decrease) 8,925 8,925 (9,184) (9,184) 13,411 13,411 (13,870) (13,870)

Fund Interest on cash 11 11 (11) (11) 17 17 (17) (17)

Total increase/ (decrease) 11 11 (11) (11) 17 17 (17) (17)

Foreign currency riskForeign currency risk is the risk that the market value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

Sources of risk and risk management strategiesThe Consolidated Entity undertakes the majority of their transactions in the New Zealand dollar (NZD) currency, as the assets of the Fund and Consolidated Entity are located in New Zealand. As a consequence, all activities of the Consolidated Entity are exposed to exchange rate risk. This arises due to the capital raised by the Fund (and subsequently redeemed) is in Australian dollars, and all distributions are paid to unitholders in Australian dollars.

The Fund and Consolidated Entity use the following strategies to hedge its foreign currency exposures:

for assets which earn income in a foreign currency, borrowings are sourced in the same currency –as the asset, which creates a natural hedge; andforward exchange contracts may be utilised to hedge net income earned in New Zealand which –is repatriated to Australia to pay distributions to unitholders (which are paid in Australian dollars).

78



Details of the forward foreign exchange contracts at 30 June 2008 are shown below.

Notional Notional amounts of amounts of contracts contracts Fixed outstanding Fixed outstanding Expiry date Flow rate NZ$’000 Expiry date Flow rate NZ$’000

31 Aug 2011 Sell NZD/Buy AUD 1.1333 349 31 Jul 2009 Sell NZD/Buy AUD 1.1333 637 29 Jul 2011 Sell NZD/Buy AUD 1.1333 1,588 31 Jul 2009 Sell NZD/Buy AUD 1.1000 2,949 29 Apr 2011 Sell NZD/Buy AUD 1.1333 1,623 30 Jul 2009 Sell NZD/Buy AUD 1.1000 3,174 31 Jan 2011 Sell NZD/Buy AUD 1.1333 1,533 30 Jul 2009 Buy NZD/Sell AUD 1.1000 351 29 Oct 2010 Sell NZD/Buy AUD 1.1333 1,467 30 Apr 2009 Sell NZD/Buy AUD 1.1000 2,949 30 Jul 2010 Sell NZD/Buy AUD 1.1000 3,397 30 Apr 2009 Sell NZD/Buy AUD 1.1437 57 30 Jul 2010 Sell NZD/Buy AUD 1.1333 1,483 30 Apr 2009 Sell NZD/Buy AUD 1.1333 1,307 30 Jul 2010 Sell NZD/Buy AUD 1.1437 339 30 Apr 2009 Sell NZD/Buy AUD 1.1000 3,174 30 Jul 2010 Buy NZD/Sell AUD 1.1000 348 30 Apr 2009 Buy NZD/Sell AUD 1.1000 351 30 Jul 2010 Sell NZD/Buy AUD 1.1000 3,086 30 Jan 2009 Sell NZD/Buy AUD 1.1000 2,990 30 Apr 2010 Sell NZD/Buy AUD 1.1000 3,397 30 Jan 2009 Sell NZD/Buy AUD 1.1437 317 30 Apr 2010 Sell NZD/Buy AUD 1.1437 339 30 Jan 2009 Sell NZD/Buy AUD 1.1333 1,163 30 Apr 2010 Sell NZD/Buy AUD 1.1333 1,382 30 Jan 2009 Sell NZD/Buy AUD 1.1000 3,112 30 Apr 2010 Buy NZD/Sell AUD 1.1000 348 30 Jan 2009 Buy NZD/Sell AUD 1.1000 342 30 Apr 2010 Sell NZD/Buy AUD 1.1000 3,086 31 Oct 2008 Sell NZD/Buy AUD 1.1000 2,990 29 Jan 2010 Sell NZD/Buy AUD 1.1437 251 31 Oct 2008 Sell NZD/Buy AUD 1.1437 317 29 Jan 2010 Sell NZD/Buy AUD 1.1333 1,009 31 Oct 2008 Sell NZD/Buy AUD 1.1333 1,045 29 Jan 2010 Sell NZD/Buy AUD 1.1000 3,251 31 Oct 2008 Sell NZD/Buy AUD 1.1000 3,112 29 Jan 2010 Sell NZD/Buy AUD 1.1000 3,052 31 Oct 2008 Buy NZD/Sell AUD 1.1000 342 29 Jan 2010 Buy NZD/Sell AUD 1.1000 345 31 Jul 2008 Sell NZD/Buy AUD 1.1000 2,432 30 Oct 2009 Sell NZD/Buy AUD 1.1437 251 31 Jul 2008 Sell NZD/Buy AUD 1.1437 405 30 Oct 2009 Sell NZD/Buy AUD 1.1000 3,251 31 Jul 2008 Sell NZD/Buy AUD 1.1333 980 30 Oct 2009 Sell NZD/Buy AUD 1.1333 347 31 Jul 2008 Sell NZD/Buy AUD 1.1000 3,192 30 Oct 2009 Buy NZD/Sell AUD 1.1000 345 31 Jul 2008 Buy NZD/Sell AUD 1.1000 350 30 Oct 2009 Sell NZD/Buy AUD 1.1000 3,052 31 Jul 2009 Sell NZD/Buy AUD 1.1333 349 31 Jul 2009 Sell NZD/Buy AUD 1.1437 57

The unrealised effect of movements of the AUD/NZD exchange rates are reflected in the Foreign Currency Translation Reserve. The net fair value of the forward foreign exchange contracts at 30 June 2008 is $7,022,448 (2007: $1,354,670).

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Annual Report 2008

15 Financial instruments continuedThe following table shows the direct foreign currency exposures of both the Fund and Consolidated Entity at the reporting date, based on notional amounts.

Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Australia (Australian dollar-denominated)Gross assets 59 152 210,333 208,911Gross liabilities 7,893 5,037 19,450 15,752

New Zealand (New Zealand dollar-denominated)Gross assets 765,874 899,892 – –Gross liabilities 496,319 593,287 – –

The following exchange rates were applied to transactions occurring during the year.

Consolidated Fund 2008 2007 2008 2007 Reporting date Reporting date Average Average spot rate spot rate rate rate

1 New Zealand dollar 1.2609 1.1025 1.1675 1.1476

Sensitivity analysisAn 5% strengthening/(weakening) of the Australian dollar against the New Zealand dollar would have increased/(decreased) profit and loss and net assets available to unitholders by amounts shown below. This analysis assumes all other variables remain constant.

2008 2008 2007 2007 + 5% + 5% – 5% – 5% + 5% + 5% – 5% – 5% Profit Net Profit Profit Profit and loss assets and loss Equity and loss Equity and loss Equity

Consolidated Entity 1,226 1,453 (1,355) (1,606) 2,547 2,521 (148) (120) Fund – – – – – – – –

(f) Fair valuesMethods for determining fair valuesA number of the Fund’s and Consolidated Entity’s accounting policies and disclosures require the determination of fair value for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods.

Trade and other receivablesFair value, which is determined for disclosure purposes, is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date.

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DerivativesThe fair value of forward foreign exchange contracts is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract. The fair value of interest rate swaps is estimated by discounting future cash flows based on the terms and maturity of each contract and using market interest rates for similar instruments at the reporting date. The fair value of forward exchange contracts is based on present value of future cash flows, discounted at the market rate of interest at the reporting date.

Non-derivative financial liabilitiesFair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.

Fair values versus carrying amountsThe carrying amounts of the Fund’s and Consolidated Entity’s financial assets and liabilities reasonably approximate their fair values.

16 Reconciliation of cash flows from operating activities Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Profit for the year 21,270 38,003 17,813 13,320Adjustments for:Items classified as investing activitiesDistribution income – – (24,917) –Non-cash itemsNet gain from investment property valuations (12,213) (25,848) – –Gain on sale of property (234) (5,003) – –Loss/(Gain) from revaluation of financial derivatives 1,843 (7,910) – –Amortisation of debt establishment fees 655 646 – –

Operating profit/(loss) before changes in working capital 11,321 (112) (7,104) 13,320Changes in assets and liabilities during the period:(Increase)/decrease in receivables (983) (1,143) (342) (23,118)Increase/(decrease) in payables 2,725 31,430 3,698 6,039

Net cash provided by/(used in) operating activities 13,063 30,175 (3,748) (3,759)

Cash at bank balances earns interest at floating rates based on daily bank deposit rates.

81

Annual Report 2008

17 Related partiesResponsible EntityThe responsible entity of Multiplex New Zealand Property Fund is Brookfield Multiplex Capital Management Limited (ABN 32 094 936 866) whose immediate and ultimate holding company is Multiplex Limited (ABN 96 008 687 063).

Key management personnelThe Fund is required to have an incorporated Responsible Entity to manage the activities of the Fund and the Consolidated Entity. The Directors of the Responsible Entity are key management personnel of that entity and their names are Dr Peter Morris, Mr Brian Motteram, Mr Robert McCuaig, Mr Robert Rayner, Mr Bob McKinnon, Mr Mark Wilson and Mr Brian Kingston. Messrs Rex Bevan and Ian O’Toole resigned during the year. Messrs Robert Rayner and Bob McKinnon resigned subsequent to the reporting date. Messrs Mark Wilson and Brian Kingston were appointed as Directors subsequent to the reporting date.

The Responsible Entity is entitled to a management fee which is calculated as a proportion of gross assets attributable to unitholders. Refer below for further details related to the management fee and other fees the Responsible Entity is entitled to.

No compensation is paid to any of the key management personnel of the Responsible Entity directly by the Fund or Consolidated Entity.

Directors’ interestsThe Directors have no interest in the unit capital of the Fund at the date of this report.

Responsible Entity’s fees and other transactionsIn accordance with the Fund Constitution, Brookfield Multiplex Capital Management Limited is entitled to receive:

Performance feeThe performance fee is calculated in accordance with the Constitution, which requires a fee to be paid “up to 2.0% of the Gross Value of the Assets of the Trust, to the extent that the Net Asset exceeds the capital subscribed, as at the end of the first period” (September 2011). The performance fee expense for the year ended 30 June 2008 was $2,102,274 (2007: $4,280,651). As at 30 June 2008, the performance fee payable to the Responsible Entity was $6,382,925 (2007: $4,280,651).

Management feeA base management fee up to 0.70% per annum of the gross value of assets is payable to the Responsible Entity, less a fee of NZ$1500 per week payable to Multiplex Tasman Management New Zealand Limited. The fee is payable by the Fund monthly in arrears. The management fee expense for the year ended 30 June 2008 was $5,812,773 (2007: $5,396,514). As at 30 June 2008, the management fee payable to the Responsible Entity was $4,228,939 (2007: $4,914,372).

82



Establishment feeAn establishment fee up to 5% of the gross value of assets acquired which compensates the Manager from the risks and expenses associated with raising equity acquiring assets and establishing the Fund is payable to the Responsible Entity. From this fee, the Manager will pay commissions in relation to subscriptions. This fee is payable by the Fund on the completion or purchase of assets. The establishment fees during 2007 relate to the acquisition of properties. The establishment fee for the year ended 30 June 2008 was nil (2007: $2,947,615). As at 30 June 2008, the establishment fee payable to the Responsible Entity was nil (2007: $2,947,615).

The Responsible Entity is reimbursed by the Consolidated Entity for all expenses incurred on behalf of the Consolidated Entity.

Leasing feesLeasing fees are payable to the Responsible Entity for an amount not more than 8.5% of the gross proceeds for the first year of the new or extended term of a lease of premises that form part of the property. The leasing fees incurred by the Fund in the year ended 30 June 2008 were $262,049 (2007: $704,478). As at 30 June 2008, the leasing fees payable to the Responsible Entity are $0 (2007: $728,563).

Related party unitholdersThe following related parties held units in the Fund during the year:

ANZ Nominees Limited, as custodian for Brookfield Multiplex Capital Securities Limited, as responsible –entity for Multiplex Acumen Property Fund, holds 51,699,755 units or 23.73% of the Fund at year end (2007: 51,699,755 units or 23.78% of the Fund);Brookfield Multiplex Funds Management Limited, as custodian for Brookfield Multiplex Property Trust, –holds 47,461,298 units or 21.79% of the Fund at year end (2007: 47,461,298 units or 21.83% of the Fund);Perpetual Trust Limited, as custodian for Multiplex Tasman Property Fund, holds 4,776,156 units or 2.19% –of the Fund at year end (2007: 5,028,440 units or 2.31% of the Fund);JPMorgan Nominees Australia Limited, as custodian for Multiplex Diversified Property Fund, holds –4,345,251 units or 1.99% of the Fund at year end (2007: 2,745,251 units or 1.26% of the Fund);JPMorgan Nominees Australia Limited, as custodian for Multiplex Property Income Fund, holds –1,325,635 units or 0.61% of the Fund at year end (2007: 1,325,635 units or 0.61% of the Fund); andBMCML holds 1,709,199 units or 0.78% of the Fund at year end (2007: nil). –

83

Annual Report 2008

17 Related party transactions continuedTransactions with related parties Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Transactions with controlled entitiesDistribution income – – 24,917 23,179Intercompany loans receivable – – 1,000 –Intercompany loans payable – – – 1,285

Transactions with the Responsible EntityManagement fees 5,813 5,396 5,813 5,396Performance fee 2,102 4,281 2,102 4,281Establishment fees – 2,948 – 2,948Property sale fees 940 – 940 –Expense reimbursements 164 22 164 22Management fee payable 4,229 4,914 4,229 4,914Performance fee payable 6,383 4,281 6,383 4,281Establishment fees payable 1,250 2,948 1,250 2,948Property sale fees payable 904 – 904 –

Transactions with Brookfield Multiplex Limited and its controlled entities (excluding the Responsible Entity)Custodian fees 35 33 35 33Custodian fees payable 8 8 8 8Property agent fees 62 68 – –Property agent fees payable – 48 – –Rent guaranteed income 97 132 – –Rent guaranteed income receivable – 111 – –

Right of first refusalPrior to the acquisitions by the Fund of Multiplex Albert Street Investment Trust and Albert Street Landowning Trust in September 2004, these trusts were owned by Brookfield Multiplex Property Trust. The Manager has granted rights of first refusal to the Brookfield Multiplex Property Trust, in relation to the future sale by the Consolidated Fund of any of the properties, or of a beneficial interest in them.

84



18 Net asset backing per unit Consolidated Fund 2008 2007 2008 2007 $’000 $’000 $’000 $’000

Net assets attributable to unitholders 261,721 301,720 190,883 193,159Number of ordinary units 217,841 217,424 217,841 217,424Net asset backing per unit ($) 1.20 1.39 0.88 0.89

Net asset backing is calculated by dividing the net assets attributable to unitholders of the Consolidated Entity and the Fund by the number of ordinary units on issue.

19 Contingent liabilities and assetsNo contingent liabilities or assets existed at 30 June 2008 (2007: nil).

20 Capital and other commitmentsThe Consolidated Entity had no capital or other commitments at 30 June 2008 (2007: nil).

21 Events subsequent to the reporting dateThere are no matters or circumstances which have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated Entity in subsequent financial years.

85

Annual Report 2008

Multiplex New Zealand Property FundDirectors’ DeclarationIn the opinion of the Directors of Brookfield Multiplex Capital Management Limited as Responsible Entity for Multiplex New Zealand Property Fund:

(a) The consolidated financial statements and notes, set out in pages 48 to 85, are in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the financial position of the Fund and Consolidated Entity as at 30 June 2008 and of their performance for the financial year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001;

(b) The financial report also complies with International Financial Reporting Standards as disclosed in Note 2(a).

There are reasonable grounds to believe that the Fund will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors pursuant to Section 295(5) of the Corporations Act 2001.

Dated at Sydney, this 27th day of August 2008.

Brian Kingston Director Brookfield Multiplex Capital Management Limited

86


Directors’ DeclarationFor the year ended 30 June 2008

Independent auditor’s report to the unitholders of Multiplex New Zealand Property FundReport on the financial reportWe have audited the accompanying financial report of Multiplex New Zealand Property Fund (the “Fund”) and the financial report of the Consolidated Entity, being the Fund and its controlled entities (the “Fund and the Consolidated Entity”), which comprises the balance sheets as at 30 June 2008, and the income statements, statements of changes in equity and statements of cash flows for the year ended on that date, a description of significant accounting policies and other explanatory notes 1 to 21 and the directors’ declaration.Directors’ responsibility for the financial reportThe directors of Brookfield Multiplex Capital Management Limited (the Responsible Entity) are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstancesAuditor’s responsibilityOur responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risk of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Fund and the Consolidated Entity’s preparation and fair presentation of the financial report in order to audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund and the Consolidated Entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors of the Responsible Entity, as well as evaluating the overall presentation of the financial report.We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards (including the Australia Accounting Interpretations) a view which is consistent with our understanding of the Fund and the Consolidated Entity’s financial position, and of their performance.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Annual Report 2008

Independent Auditor’s Report87

IndependenceIn conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.Auditor’s opinionIn our opinion the financial report of Multiplex New Zealand Property Fund is in accordance with the Corporations Act 2001, including:(i) giving a true and fair view of the financial position of the Fund and the Consolidated Entity as at

30 June 2008 and of their performance for the financial year ended on that date; and(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations)

and the Corporations Regulations 2001.

KPMG

Tanya Gilerman Partner

Sydney, NSW 27 August 2008

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International network. KPMG International is a Swiss cooperative.

88


Independent Auditor’s Report

About Brookfield 2

About Brookfield Multiplex Capital 4

Performance at a Glance 6

Portfolio Analysis 8

Message from the Chairman 10

Fund Manager’s Year in Review 12

Investment Portfolio 16

Board of Directors 36

Investor Relations 38

Financial Report 40

Corporate Directory IBC

Internal rate of return since inception

Portfolio occupancy

Square metres of net lettable area

14.6% 99.6% 370,671

Contents

Responsible EntityBrookfield Multiplex Capital Management Limited 1 Kent Street Sydney NSW 2000 Telephone: (02) 9256 5700 Facsimile: (02) 9256 5188

DirectorsPeter Morris Brian Motteram Robert McCuaig Brian Kingston Mark Wilson

Company SecretaryNeil Olofsson

Registered Office1 Kent Street Sydney NSW 2000 Telephone: (02) 9256 5700 Facsimile: (02) 9256 5188

CustodianBrookfield Multiplex Funds Management Limited 1 Kent Street Sydney NSW 2000 Telephone: (02) 9256 5700 Facsimile: (02) 9256 5188

Auditor KPMG 10 Shelley Street Sydney NSW 2000 Telephone: (02) 9335 7000 Facsimile: (02) 9299 7077

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Corporate Directory

The cover and first 40 pages of this document are printed on paper sourced from plantations and sustainable forests, is Elemental Chlorine Free (ECF) and holds an ISO14001 environmental accreditation. The last 48 pages are printed on an Australian-made stock which is Elemental Chlorine Free (ECF).

Annual Report 2008Multiplex New Zealand

Property Fund

www.brookfi eldmultiplexcapital.com

Annual Report

Annual Report 2008Multiplex New ZealandProperty FundARSN 110 281 055

Responsible EntityBrookfi eld Multiplex Capital Management Limited ACN 094 936 866, AFSL 223809

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