portfolio through a reduction in greenhouse gas emissions. Please visit the Corporate Responsibility section of this report and our website for more details on our many sustainability accomplishments during 2010.

Pure-Play Strategy

Based on the thesis that prime office properties in gateway cities, cities whose economies are driven by tenants in the financial services, resource/energy, and government sectors, produce the highest and most consistent demand for office space over time, and the belief this principal holds true beyond North America, we decided to reposition Brookfield Office Properties into a globally active, pure-play, premier office company. Our focus: major cities within developed English-speaking countries where our tenants have a prominent presence.

To achieve this repositioning, we are in the final stages of divesting our residential land development business for aggregate proceeds of $1.2 billion. The residential division is merging with Brookfield Homes into a new public entity, Brookfield Residential Properties. This transaction has been previously announced and is expected to be completed during the first half of 2011. Details can be found on our website.

In anticipation of the successful conclusion of the divestiture of our residential business, we have recycled $1.4 billion of capital into the acquisition of an interest in 18 premier office properties in the Australian cities of Sydney, Melbourne, and Perth — three cities that have the economic drivers previously described. This gives us a major presence and platform within Australia, a country expected to benefit greatly from the growth of the Asian economies. These properties are 99% leased with an imbedded annual rental increase of approximately 4%.

During 2010, we also established a presence in the City of London, acquiring a 50% interest in the 100 Bishopsgate development. Together with our joint venture partner Great Portland Estates, we are looking forward to securing anchor tenants and to launching this development in 2011.

We believe that the foregoing steps, together with a name change to “Brookfield Office Properties,” and the capital initiatives outlined below, enhance our brand and position the company for future growth.
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KPMG Tower
IAG House
Darling Park Complex
Ernst & Young Centre
KPMG Tower, Sydney
IAG House, Sydney
Darling Park Complex, Sydney
Ernst & Young Centre, Sydney