2003 Media Releases

Deutsche Diversified Trust (ASX: DDF) has delivered strong results for the half year ending 31 December 2002. Net profit was $43.7 million, up 7.6 per cent on the previous corresponding period, while income distributions were 4.6 cents per unit - an increase of 4.5 per cent compared to the previous corresponding period.

David McFadyen, General Manager of DDF largely attributes the results to significant progress in the portfolio’s leasing, development and debt management activities.

Across the portfolio, the Trust achieved some strong leasing results culminating in an increase in the occupancy level to 98 per cent (previously 96 per cent) and an extension of the average lease expiry profile to 3.8 years (previously 3.6 years), or 4 years excluding the carpark component.

“These strong results have occurred through good tenant retention levels particularly in the industrial portfolio where tenant retention rates were 92 per cent for the half-year, which are much higher than industry standards,” said Mr McFadyen.

“In addition, new leases associated with the significant development programs being undertaken in the Trust’s retail and industrial portfolios have contributed to the improved leasing profile.”

In the retail portfolio the Trust is now well advanced with its $85 million expansion of Whitford City Shopping Centre in Western Australia. The expansion is expected to yield nearly 9 per cent - well above the returns generated by most shopping centre expansions. Partial expansion of the development will be completed in April, with the balance finished in November – ahead of the forecast December 2003 completion. Leasing commitments already exceed 50 per cent and the earlier completion is estimated to add $0.3million to earnings for this financial year.

DB Real Estate

The office portfolio saw an extension to the average office lease expiry to 3.1 years brought about through an increase in the occupancy for 383 Kent Street NSW from 48 per cent to 78 per cent.

The industrial portfolio has also been very active with pre-commitments and refurbishment programs across five of the Trust’s industrial estates including pre-commitments to Coca-Cola Amatil (c/o VisyPet) at Kings Park NSW for 7,170 sq metres; and Australia Post at Axxess Corporate Park in Victoria for a 4,400 sq metre development. Leasing across the portfolio has also been active with a lease for ACI over 35,000 sq metres to December 2003, at the Trust’s Carnarvon Street property in NSW.

Mr McFadyen said one of the most encouraging results was the strong performance from the carpark component of the portfolio, which is a clear point of differentiation for the Trust.

“With consumer confidence levels remaining steady, interest rates remaining low and a strong demand for retailing and entertainment facilities, there had been a significant improvement in the performance of carparks. Turnover at our carpark in Little Collins Street Melbourne is up 7.5 per cent while our Flinders Gate carpark opposite the new Federation Square in Melbourne is up over 12.5 per cent,” said Mr McFadyen. “The strong performance from the Trust’s carparks in both Victoria and NSW should allow the Trust to exceed its forecasts from its carpark investments during the year.”

Active management of the debt facilities has also contributed to a strong half-year result. During the period the Trust reduced its average cost of debt to 6.3 per cent while increasing its hedging from 68 per cent to 82 per cent. The Manager has also further reduced interest costs for investors by entering several debt swap agreements.

“We are on track to deliver our forecast of 9.3 cpu for this financial year which would represent a 3.3 per cent growth in income distributions. In the next 6-12 months we are looking to execute numerous lease negotiations associated with existing and new lease covenants which would further extend the average lease expiry profile of the Trust.”

“We will also be very active in further development activity with a potential major expansion of our West Lakes Shopping Centre in South Australia, the refurbishment program for Chifley Square office building in Sydney CBD, as well as further pre-commitments across the industrial portfolio,” added Mr McFadyen.

Further information:

David McFadyen
General Manager, Deutsche Diversified Trust
Mobile: 0405 134 851

Kristin Silva/Ainsley Gee
Corporate Communications
Phone: (02) 9249 9568 / (02) 9249 9904

About Deutsche Diversified Trust

Deutsche Diversified Trust is listed on the Australian Stock Exchange (ASX: DDF) and has assets valued at approximately A$1.5 billion. This highly diversified trust, by sector as well as geographic allocation, has 26 properties across the retail, office, industrial and carpark property sectors in five major Australian states and the ACT. The Trust has a potential development book of around $350 million, and is currently undertaking or planning major development activities in its retail, office and industrial portfolios.