Full Year Ended 31 May 2004

This report is prepared in a manner which complies with generally accepted accounting practice and gives a true and fair view of the matters to which the report relates and is based on audited accounts.

Consolidated Operating Statement

Total Operating Revenue $16.282m ($12.947m)+ 25.8% Operating Surplus before Tax $5.014m ($4.190m) +19.7% Plus Tax Benefit on Operating Surplus $843 ($1.487m) Operating Surplus after Tax $5.857m ($5.677m)+ 3.2% Unrealised gain on investment properties $6.819m ($7.012m)

Operating Surplus after tax attributable to members of the listed issuer

$12.676m ($12.718m)- 0.3%

Earnings per Unit 12.5 CPU (14.4 CPU)

Final Dividend 2.25 CPU

Record Date 20/8/04 Payable 3/9/04

Imputation Credits NIL

National Property Trust announced today an operating surplus of $5.9 million after tax and before revaluations (compared with $5.7 million last year) for the year ended 31 May 2004.

The net surplus for the year including the unrealised increase in investment property values is $12.7 million (compared with $12.7 million last year).

The net surplus represents an annualised return of 12.5 cents per unit (cpu). When this is added to the performance of the Trust over a 10 year period represents an average annual return of 12.0 cpu per year.

The Trust has declared a fourth quarter gross distribution of 2.25 cents per unit. The registry will close for the dividend calculation on 20 August 2004 and the distribution will be paid on 3 September 2004. The dividend will not have imputation credits attached. The total gross distribution for the year was 9 cents per unit as projected by the Manager at the end of last year.

The property values for the year have increased by approximately 4% with the Eastgate Shopping Centre in Christchurch and the AA Centre in Auckland showing significant gains.

The increase in property values is a reflection of a robust property market and the benefit of the growth phase iniated by the Trust as a result of concerntrating on adding value to the existing portfolio.

This year marks the 10th year of operation for the Trust and when reflecting on the progress over this period the Trust looks back with some satisfaction.

The Trust has built a credible reputation as a consistent performer with a disciplined and measured approach to growth. The Manager has remained focussed on its roles of being an active asset manager and maintaining consistent returns to Unit Holders.

The highlights for the year:

Financial

  • Net surplus for the year was $12,676,000 including revaluations representing a return of 12.9 cpu
  • Net surplus before tax increased by 19.7%
  • NTA lifted from 98.2 to 101 cpu
  • Net Valuation gains of $6,819,000
  • Distribution maintained at 9 cpu
  • Total assets increased to $233.4 million from $228.3 million last year
  • Acquisition of the Minority Interest in Newmarket Property Trust

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Property

  • AA Centre now 100% leased
  • Goddards Centre, Tauranga redevelopment commenced
  • Commercial and Industrial Portfolio 99% leased with a weighted average lease term of 3.8 years
  • Consent obtained to add a further 10,000m? to the Eastgate Shopping Centre
  • Eastgate received a Property Council Design Award
  • Acquisition of the Ocean Boulevard Shopping Centre in Napier
  • Sale of NZI House, Christchurch and Birmingham Drive, Christchurch properties

    • The Eastgate Shopping Centre has benefited from a positive retail sector and continues to meet projected levels of turnover and foot traffic count.

    The Trust has obtained resource consent to add a further 10,000m? of retail space to the existing 30,000m? and is currently preparing concept plans for this next stage of development. The concepts main emphasis will be on entertainment and bulk retail with the provision for extensive multi level carparking. The new development will add significantly to the value and turnover of the existing asset.

    Another success story for the Trust is the leasing up of the AA Centre at 99 Albert Street, Auckland.

    This property had approximately 6 floors vacant just over 12 months ago and is now 100% leased with a new weighted average lease term of 4.25 years. Tenants include The Department of Internal Affairs, Sky City, Faster Lender and Vero Insurance.

    The property revalued as at the end of May from $20 million to $25 million prior to the building being fully leased. The property currently yields an income of 12% on its original cost. We expect this property to show additional growth in value in future years.