There are better examples out there (which I can't find at the moment): but here are the tops of two different .pp2's; the second has external geometry:

version
    {
    number 4.01
    }
prop landspeeder_1
    {
    geomCustom
        {
        numbVerts    2764
        numbTVerts    0
        numbTSets     0
        numbElems   2556
        numbSets    10465
        v 0.001402 -0.015198 -0.010265
        v 0.001295 -0.015390 -0.010766
        v 0.000992 -0.015554 -0.011190 ...
   
    ....    f 2763 2764 2754 2753
        f 2764 2755 2745 2754
        usemtl Body
        f 2756 2757 2758 2759 2760 2739 2740 2761 2762 2763 2764 2755
        }

    }

prop landspeeder_1
    {
    name    landspeeder
    on
    bend 1...

Obviously the "v 0.001402 -0.015198 -0.010265" lines are geometry. So are the "f 2764 2755 2745 2754" lines. In the original file this went on for many pages.

Select and delete EVERYTHING until you get to that statement "Prop so_and_so_1" In the new file, insert instead of "geomCustom" the lines "storageOffset" and "objFileGeom" as in the file example below;

{

version
    {
    number 4.2
    }
prop City block_1
    {
    storageOffset 0 0.3487 0
    objFileGeom 0 0 :Runtime:Geometries:Dystopia:004.obj
    }

prop City block_1
    {
    name    City block_1
    on
    bend 1...

The numbers after "storageOffset," just copy. No-one seems really sure what they mean but it works best if you put them in! For the "objFileGeom" line you have to, again obviously, put in the directory and name of your actual object file; ":Runtime:Geometries:My_Props:New_prop.obj" Hope that helps.