WAV/RULE: NZXR: DNZ Property Fund Limited - Waiver from Rule 7.11.1

14 Jul 2010 3:55 pm

NZXR 14/07/2010 WAV/RULE

REL: 1555 HRS NZX Regulation

WAV/RULE: NZXR: DNZ Property Fund Limited - Waiver from Rule 7.11.1

9 July 2010

NZX Markets Supervision Decision DNZ Property Fund Limited Application for Waiver from NZSX Listing Rule 7.11.1

Background 1. DNZ Property Fund Limited ("DNZ") owns, manages and develops commercial property assets in the office, industrial and retail sectors, with a property portfolio of approximately NZ$671 million. DNZ also hold the management agreement to manager Diversified NZ Property Fund, which holds a property portfolio of approximately $100 million.

2. DNZ has around 8,000 shareholders, and publicly held DNZ shares ("Shares") previously have been tradable on the Unlisted private market.

3. DNZ has restructured its business by internalising its former management contracts, restructuring its board of directors and adopting a new constitution. DNZ now intends to apply for Listing on the NZSX market and, subject to receiving shareholder approval at a meeting to be held on 8 July 2010, to undertake a pro rata capital raising by the offer of new DNZ shares ("New Shares") as set out below.

4. Subject to receiving shareholder approval, DNZ is proposing to undertake an offer of New Shares and the listing of those New Shares on the NZSX market. The terms of the Offer are set out in a combined registered prospectus and investment statement ("Offer Document"), to be dated 9 July 2010. The offer will comprise: (a) a 35 million pro rata offer to existing shareholders ("Existing Shareholders") of DNZ ("Pro Rata Offer"); (b) an excess subscriptions offer to Existing Shareholders ("Excess Subscriptions Offer"); and (c) an employee, institutional and primary market participant offer ("EIP Offer"). (together the "Offer"). DNZ may, at its discretion, accept up to a maximum of $10 million of oversubscriptions under the Excess Subscriptions Offer and the EIP Offer.

5. New Shares to the value of $35 million, will be offered to existing shareholders ("Existing Shareholders") of DNZ under the Pro Rata Offer. Existing Shareholders will subscribe for New Shares based on a dollar amount for New Shares to be issued, as the price at which the New Shares will be offered ("Offer Price") will be determined after the bookbuild occurs. The level of pro rata entitlements will be determined based on Existing Shareholder holdings on the record date for the the Pro Rata Offer, being 14 July 2010 ("Record Date").

6. To the extent that any New Shares are not taken up by Existing Shareholders, the unsubscribed shares (together with any shares made available under DNZ's discretion to accept NZX Markets Supervision Decision - DNZ Property Fund Limited Application for waiver from NZSX Listing Rule 7.11.1 oversubscriptions up to $10 million) may be applied for by Existing Shareholders under the Excess Subscriptions Offer. Existing Shareholders will be entitled to apply for the Excess Subscriptions at the time they apply for New Shares under the Pro Rata Offer.

7. New Shares not taken up under the Pro Rata Offer and the Excess Subscriptions Offer will be offered by DNZ under the EIP Offer to employees, institutions, NZX Market Participants and other financial intermediaries. There will be no public pool.

8. Institutions, selected financial intermediaries and NZX Primary Market Participants applying under the EIP offer may also be invited by Goldman Sachs JBWere (NZ) Limited ("Lead Manager") to participate in a bookbuild process ("bookbuild") by indicating a dollar amount of New Shares they wish to subscribe for at a range of prices.

9. All applicants will subscribe for New Shares at the same Offer Price. The Offer Price for all investors will be determined by DNZ and the Lead Manager, and announced following the completion of the bookbuild. An indicative Offer Price of between $0.80 and $1.05 has been provided by DNZ, but DNZ may exercise its discretion to issue the New Shares even if the Offer Price falls outside the indicative range.

10. In determining the Offer Price DNZ and the Lead Manager may consider: the level of demand for New Shares at various prices in the bookbuild, the objective of maximising the proceeds of the Offer and the desire for an orderly secondary market in the Shares.

11. The proposed timetable for the offer is as follows: (a) 14 July 2010 - Record date for the Pro Rata Offer. (b) 19 July 2010 - Opening Date for the Pro Rata Offer, Excess Subscriptions Offer and EIP Offer. (c) 4 August 2010 - Closing Date of the Pro Rata Offer and Excess Subscriptions Offer. (d) 4 August 2010 - Closing Date of the EIP Offer for applicants not participating in the bookbuild process. (e) 10 August 2010 - Closing Date for the EIP Offer for applicants participating in the bookbuild process. (f) 10 August 2010 - Bookbuild occurs. (g) 11 August 2010 - Determination and announcement of Offer Price. (h) 13 August 2010 - Allotment date of the New Shares ("Allotment Date"). (i) 16 August 2010 - Quotation and trading of the New Shares and the Existing Shares on the NZSX commences.

12. The Offer for the non-bookbuild participants closes on 4 August 2010, but DNZ does not intend to allot New Shares pursuant to the Offer until 13 August 2010, 7 Business Days after the close of the

NZX Markets Supervision Decision - DNZ Property Fund Limited Application for waiver from NZSX Listing Rule 7.11.1 Offer for the non-bookbuild participants. Rule 7.11.1 requires that an Issuer shall proceed to allotment within 5 Business Days of the closing of an offer of Securities.

Application

13. DNZ has approached NZX Markets Supervision ("NZXMS") seeking a waiver from Rule 7.11.1 to allow the allotment of New Shares under the Offer to occur 7 Business Days following the close of the Offer for the non-bookbuild participants.

14. DNZ makes the following submissions in support of its application: (a) The proposed timetable is driven by the timing of the bookbuild and the determination of the Offer Price that will occur following the close of the Offer. The Offer Structure that has been recommended to the Company by the Lead Manager involves: (i) making available the shares not taken up by shareholders under the Pro Rata and Excess Subscriptions Offers in a concentrated bookbuild process undertaken once the number of those shares are known; (ii) it is proposed that the bookbuild process will take place on the fourth day following the close of the Offer, allowing three days for cheques from the Pro Rata and Excess Subscriptions Offers to clear; (iii) institutions and others participating in the bookbuild will then settle on usual settlement timeframes (T+3) via Austraclear; (iv) this process will, in total, take seven days after the closing of the Offer. (b) DNZ considers it in the best interests of DNZ and Shareholders if all shares are alloted at the same time to provide certainty to all parties that the amount of funds to be raised as contemplated by the Offer Document are in fact raised before the shares are alloted. (c) Subscribers will be fully informed of the allotment timetable and procedures, as these are set out in the Offer Document.

Rules 7.11.1

15. Rule 7.11.1 provides: 7.11.1 ALLOTMENT 7.11.1 An Issuer making an issue shall proceed to allotment within five Business Days after the latest date on which applications for Securities close.

Decision

16. On the basis that the information provided to NZXMS is full and accurate in all material respects, NZXMS grants DNZ a waiver from Rule 7.11.1 to allow DNZ to allot the New Shares offered under

NZX Markets Supervision Decision - DNZ Property Fund Limited Application for waiver from NZSX Listing Rule 7.11.1 the Offer within 7 Business Days of the close of the Offer for the non-bookbuild participants. This waiver is granted on the condition that all New Shares issued under the Offer are alloted on the same date, within 7 Business Days of the close of the Offer for the non-bookbuild participants.

Reasons

17. In coming to the decision to grant DNZ a waiver from Rule 7.11.1, NZXMS has considered that: (a) The structure of the Offer was adopted by DNZ, based on the advice from DNZ's professional advisers, to ensure that DNZ receives the best possible price for the New Shares to be issued under the Offer. Due to the requirement for the Offer to settle before the number of shares available for the bookbuild will be known, the allotment timeframe cannot occur any more quickly than is proposed by DNZ. A waiver from Rule 7.11.1 is required for this Offer to proceed in its current structure. (b) The policy underlying Rule 7.11.1 is to ensure that subscribers for offers of Securities have the benefit of their investments without inappropriate delays. In the context of the Offer a delay of two Business Days is an appropriate, and only minor, delay in order that the Offer is best structured for the benefit of DNZ and Shareholders. (c) Shareholders investing in the Offer will be fully informed in the Offer Document of the proposed timetable for the Offer, and the slightly extended allotment period.

(d) There is precedent for granting limited waivers from Rule 7.11.1 in circumstances where Security holders are treated equally under allotment procedures, and will not be prejudiced by delayed allotment of securities. The condition to the decision will ensure that all subscribers are treated equally under the Offer.

Confidentiality

18. DNZ has submitted that this application and the information contained within it be treated confidentially until an announcement concerning the proposed Offer is made public.

19. NZXMS grants DNZ's request as it accords with Rules 1.11.2 and 1.11.4 and the footnotes to those Rules. ENDS.

NZX Markets Supervision Decision - DNZ Property Fund Limited Application for waiver from NZSX Listing Rule 7.11.1 End CA:00197259 For:NZXR Type:WAV/RULE Time:2010-07-14:15:55:55

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