s reits sector aug 2014

PERFORMING A REALITY CHECK Expecting rise in interest rates

Focus on fundamentals and growth

Suntec, SGREIT and FCT as top picks

NEUTRAL

(maintain)

Analysts

Kevin Tan (Lead) +65 6531 9810

[email protected]

Eli Lee +65 6531 9112

[email protected]

Relative total return 1m 3m 12m

Sector (%) -1 8 10

STI-adjusted (%) -1 4 2

Price performance chart

Sources: Bloomberg, OIR estimates

Stock coverage ratings

BBRG Ticker Price Fair

Value Rating

AREIT SP 2.32 2.45 BUY

ART SP 1.23 1.33 BUY

CACHE SP 1.22 1.25 BUY

CCT SP 1.68 1.67 HOLD

CT SP 1.97 2.20 BUY

CRCT SP 1.48 1.55 HOLD

CDREIT SP 1.76 1.80 HOLD

FEHT SP 0.88 0.90 HOLD

FIRT SP 1.19 1.21 BUY

FRT SP 6.79 6.68 BUY

FCT SP 1.89 2.08 BUY

FCOT SP 1.36 1.45 BUY

LMRT SP 0.40 0.37 HOLD

MLT SP 1.16 1.10 HOLD

OUECT SP 0.80 0.88 BUY

OUEHT SP 0.89 0.85 HOLD

SBREIT SP 0.80 0.88 BUY

SPHREIT SP 1.02 0.99 HOLD

SGREIT SP 0.82 0.90 BUY

SUN SP 1.83 1.85 BUY

Selecting the winners

The S-REITs sector has rallied 7.3% and outperformed STI by 4ppt YTD on US Fed Chair Janet Yellens forward guidance that interest rates are likely to stay low for a considerable time. However, against this backdrop, we note that the Fed will continue to cut the bond purchases meant to suppress the long-term borrowing costs low, keeping it on track to end the stimulus programme late this year. Even the recent forecasts by the Fed officials point to a possibility that the interest rates may rise faster than previously expected. Given these developments, we now make a conscious effort to select the S-REITs that are likely able to withstand any potential correction better and outperform the rest.

Fundamentals still sound

Our findings show that the fundamentals of S-REITs have generally remained sound, and S-REITs continue to benefit from their past investments and higher secured rentals within their existing portfolios. On a relative basis, the office REIT subsector outlook looks the rosiest, as the uptrend in office rents is likely to be sustained amid strong leasing activity, low vacancy and limited supply in the near term. This is followed by retail REITs, which are poised to reap the returns of their AEIs and the positive operating landscape. For FY15, we note that Suntec REIT and CapitaCommercial Trust are expected to experience one of the fastest increases in DPU, according to Bloomberg consensus forecasts.

Assessing impact from interest rate hike

On the capital management front, S-REITs have again stepped up their efforts to repay/refinance their borrowings ahead of their maturities and over a longer term, as well as hedge their interest rate exposure in anticipation of the potential hike in interest rates. This has resulted in an improvement in gearing, debt duration and hedge ratio. In fact, for a 1ppt growth in interest rate, we estimate the greatest fall in DPU among the S-REITs is contained within 10%, while several S-REITs such as Starhill Global REIT are likely to be unscathed as a result of fixing 100% of their rates via hedges or fixed-rate notes.

Our sector picks

In view of all this, we retain Suntec REIT [BUY, S$1.85 FV] and Starhill Global REIT [BUY, S$0.90 FV] as our sector picks. CapitaCommercial Trust, our third preferred pick, has performed very well YTD, clocking a 15.9% increase in unit price. At current level, we believe most of the positives have been priced in. As such, we replace CapitaCommercial Trust with Frasers Centrepoint Trust [BUY, S$2.08 FV] as our preferred pick. The latter has a strong financial position, trades at an attractive yield of 6.1% and P/B of 1.06x and is expected to see relatively robust earnings growth over the next year. Retain NEUTRAL on broader S-REITs sector.

SINGAPORE REITS | NEUTRAL 30 Jun 2014

Sector Update

Asia Pacific Equity Research

Singapore | REITs

MCI (P) 007/06/2014 Please refer to important disclosures at the back of this document.

OCBC Investment Research Singapore Equities

2

Table of Contents

Section A. Performing a reality check

3

Section B.

Back to fundamentals

5

Section C.

Assessing financial health

11

Section D.

Various perspectives on valuation

15

Section E.

Conclusion

18

Section F.

Appendix 20


3

A. Performing a reality check

Is the upswing sustainable? The S-REITs sector has rallied 7.3% YTD on US Federal Reserve Chair Janet Yellens forward guidance that interest rates are likely to stay low for a considerable time. This surpasses the Singapore benchmark indexs gain by 4ppt over the same period of time. However, against this

backdrop, we note that the Fed will continue to cut the bond purchases which are meant to suppress long-term borrowing costs by another US$10b to US$35b, thereby keeping it on track to end the stimulus programme late this year. Even the forecasts by the Fed officials released on 18 Jun point to a possibility that interest rates may rise faster than previously expected

starting next year, contrary to the dovish comments by Yellen. Specifically, the officials are now predicting that the Fed funds rate will be 1.13% at the end of 2015 and 2.5% in 2016, as opposed to Mars forecast of 1% in 2015 and 2.25% in 2016. To this end, we attempt to address the questions that might be boggling in investors minds: What is the implication on S-REITs? How should we proceed from here?

Exhibit 1: Price performance for S-REITs and STI (%)

Source: B loomberg, OIR

2900

3020

3140

3260

3380

3500

680

724

768

812

856

900

1/1/2013 1/4/2013 1/7/2013 1/10/2013 1/1/2014 1/4/2014

FSTREI Index (LHS) FSSTI (RHS)

YTDFSTREI: 7.3%STI: 3.3%

2013FSTREI: -8.9%STI: 0%

Unexpected hike in interest rate negative for S-REITs In our opinion, the current declining bond yield phenomenon is an anomaly, given that the market should have at least priced in the

median forecast that the Fed had delivered. With that in mind, we believe that any unexpected hike in interest rate is likely to be negative for S-REITs. To put things into perspective, we look at the yield spread of the S-REITs sector over the last business cycle. As can be seen from Exhibit 2, the spread between S-REITs sector yield and Singapore 10-year government bond yield was hovering around 200bps during the boom days in 2007, but spiked up above 1,000bps during the global

financial crisis as a result of sharply lower S-REITs prices and declining bond yield arising from the commencement of QE1 in Nov 2008. The yield spread had since receded to a low in 1H13 until the US Fed mooted the idea of QE tapering in May 2013 and raised market concerns on the possibility of rising interest rates.


4

Maintaining selective stance on S-REITs At current juncture, the yield spread stands at 442 bps, lower than the

long-term average yield spread of 496bps. This is despite the Bloomberg consensus forecast that the 10-year bond yield is expected to rise from the current 2.33% to 2.81% by 2Q15. A look at the S-REITs sector P/B (now at 1.03x) also shows that it is higher than the long-term average of 0.94x. All these datapoints suggest that the S-REITs may be slightly overvalued with possible downside lurking ahead. On the flip side,

however, the growth potential of S-REITs cannot be ignored in our opinion, especially since most of them are more prepared to weather any market volatility. As such, we now make a conscious effort to pick out the winners, which are likely able to withstand any potential correction better, but at the same time are first to benefit from an upturn due to stronger-than-expected economic performance. For this purpose, we will focus on three key areas in the following sections, namely the S-REITs 1)

fundamentals; 2) financial positions; and 3) valuations to select the S-REITs that are likely to outperform in the coming quarters.

Exhibit 2: Yield spreads between S-REITs forw ard yields and SG 10-year bond yields

Source: B loomberg, OIRNOTE: Above analysis is based on appraised data

217 211

360348

1,175

760

460 504413

471

664568

489

402 395442

0

3

5

8

11

13

16

0

200

400

600

800

1,000

1,200

Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13

%bps

Yield Spread (LHS) Dividend Yield (RHS) Bond Yield (RHS)

Pre QE period

Average


5

B. Back to fundamentals

Consistent set of 1Q14 results S-REITs ended 1Q14 with little surprise on their results. Of the 20 S-REITs under our coverage, 16 of them met our expectations, 3 exceeded our forecasts and only one missed our expectations. In general, we note that S-REITs continue to benefit from their completed development

projects, asset enhancement initiatives (AEIs), acquisitions and higher secured rentals within their existing portfolios. Positive rental reversions ranging from 4.9% to as high as 79.0% were achieved during the quarter, while average occupancy rates in all subsectors but industrial and hospitality have improved QoQ on the back of healthy leasing demand. For S-REITs that reported their fiscal year-end results, net asset revaluation gains were also registered as a result of improved

performance and stable cap rates YoY.

Exhibit 3: 1Q14 results performance NPI YoY Chg Income YoY Chg DPU YoY Chg (%) available (%) (cents) (%)

OFFICE (5)

CapitaCommercial Trust S$ m 50.7 1.5 59.9 2.6 2.08 7.2 Frasers Commercial Trust S$ m 21.7 -5.8 13.8 5.6 2.05 3.1 Keppel REIT S$ m 39.5 14.7 55.1 5.5 1.97 0.0 OUE Commercial REIT S$ m 10.3 N.M. 8.6 N.M. 1.00 N.M. Suntec REIT S$ m 43.8 42.7 50.9 7.0 2.23 0.0

S$ m 166.0 12.7 188.3 4.9 9.33 2.5 RETAIL (9)

CapitaMall Trust S$ m 114.3 5.3 102.4 9.3 2.57 4.5 CapitaRetail China Trust S$ m 32.3 25.0 19.6 13.2 2.40 3.9 Fortune REIT HK$ m 289.2 32.7 193.9 26.5 10.38 15.3 Frasers Centrepoint Trust S$ m 29.3 2.0 23.8 1.4 2.88 6.7 Lippo Malls Indo Retail Trust S$ m 31.1 -16.6 16.7 -14.7 0.68 -23.6 Mapletree Commercial Trust S$ m 50.8 15.2 40.7 17.1 1.95 12.4 Mapletree GCC Trust S$ m 52.0 N.M. 42.6 N.M. 1.59 N.M. SPH REIT S$ m 38.8 N.M. 34.9 N.M. 1.39 N.M. Starhill Global REIT S$ m 39.1 -6.7 27.6 0.4 1.24 -9.5

S$ m 434.5 16.2 339.7 14.9 16.37 8.0 INDUSTRIAL (9)

AIMS AMP Capital Ind REIT S$ m 19.3 24.5 14.9 20.2 2.51 -20.1 Ascendas REIT S$ m 112.3 12.2 83.9 21.9 3.55 16.0 Cache Logistics Trust S$ m 19.6 8.2 16.7 5.5 2.14 -4.2 Cambridge Industrial Trust S$ m 19.0 -11.1 14.3 -3.7 1.25 1.4 Mapletree Industrial Trust S$ m 53.3 7.5 42.6 9.5 2.51 5.9 Mapletree Logistics Trust S$ m 68.3 4.3 46.3 10.1 1.89 9.2 Sabana REIT S$ m 18.4 -9.2 13.0 -15.8 1.88 -22.0 Soilbuild REIT S$ m 14.2 N.M. 12.6 N.M. 1.56 N.M. Viva Industrial Trust S$ m 9.9 N.M. 10.3 N.M. 1.72 N.M.

S$ m 334.2 6.8 254.5 11.2 19.02 -2.8 HOSPITALITY (4)

Ascott Residence Trust S$ m 39.2 16.0 26.7 -3.4 1.75 -22.2 CDL Hospitality Trusts S$ m 36.7 4.1 29.9 3.0 2.75 2.2 Far East Hospitality Trust S$ m 27.6 6.3 23.1 4.4 1.30 -5.8 OUE Hospitality Trust S$ m 25.6 N.M. 22.1 N.M. 1.68 N.M.

S$ m 129.1 8.9 101.7 1.2 7.48 -8.2


6

HEALTHCARE (2)

First REIT S$ m 22.2 29.6 14.2 22.3 1.99 14.4 ParkwayLife REIT S$ m 23.0 6.9 17.8 6.6 2.82 6.8

S$ m 45.2 16.9 32.0 13.0 4.81 9.8

GRAND TOTAL: S$ m 1,108.9 8.4 916.3 7.9 57.01 0.3

Source: Companies, OIR NOTE: HKD : SGD = 1 : 0.1613

Office REIT subsector outlook: positive

On a relative basis, however, the performance and outlook for the individual subsectors has been relatively mixed. Among all, the office REIT subsector outlook looks the rosiest, due to the strong leasing activity seen in the CBD core. According to CBRE 1Q14 MarketView report, the Singapore office market saw an island-wide positive net absorption of ~410,000 sqft, thus pushing up the occupancy rate to 95.7% from 95.2% in 4Q13. The positive momentum in rental rates seen

in 4Q13 has continued into 1Q14, well within our expectations. Particularly, the average Grade A rent rose by a faster 5.1% QoQ to reach S$10.25 psf pm, after clocking a 2.1% sequential increase in 4Q13. In addition, the average Grade B rent increased by 4.1% QoQ to S$7.55 psf pm, following a 2.1% QoQ rise in prior quarter. Naturally, the office S-REITs also gained from the positive operating

environment. The performance was boosted further by AEIs within the existing portfolio as well as active lease management. Looking ahead, we note that there are only two new major office developments CapitaGreen (700,000 sqft) and South Beach (527,450 sqft) due to complete this year. As such, we are keeping our view that the upward trend in office rents will remain intact, and that the rent reversions

within the office REIT subsector will remain robust for the rest of 2014.

Exhibit 4: Supply-demand dynamics for office subsector

Source: CBRE


7

Retail REIT subsector outlook: positive The retail REIT subsector has also performed well during the quarter, raking up the highest growth in DPU (see Exhibit 3), thanks to

incremental income from acquisitions (Grand Canyon by CapitaRetail China Trust, Fortune Kingswood by Fortune REIT, and Mapletree Anson by Mapletree Commercial Trust), contributions from completed AEIs and strong rental uplift upon lease renewals. While this was partially distorted by one-offs (Toshin net arrears payout in the case of Starhill Global REIT) and unfavourable forex movements (notably Lippo Malls

Indonesia Retail Trust or LMIR Trust), the underlying operating performance remains sound in our view. On the whole, overseas retail market outlook appear to be more positive, as a number of S-REITs have cited strong tenant sales, shopper traffic, growing domestic and tourist consumption, and meaningful ROI on their AEIs. Within the domestic retail landscape, datapoints were somewhat

varied. On one hand, we observe that a few local retail REITs have reported declines in tenant sales and/or shopper traffic during the first quarter. This seems to mirror the recent weakness in Singapore retail sales figures. On the other hand, S-REITs continue to see robust rental reversions and improvement in occupancy rates. We understand from a CBRE report that demand has been held up by

retailers continuing to seek new space for expansion and replacement, while landlords have been actively looking to secure new-to-market brands. According to Colliers International 1Q14 Retail Market report estimates, there will be a supply of ~2.7m sqft of new lettable retail space in 2014. Over this period, Colliers is forecasting the growth in average monthly gross rent to remain fairly stable (-1% to +2%) for

prime ground floor retail space in Orchard Road, whereas the suburban markets could potentially witness a slightly stronger rental growth of 1% to 3%. Given that the retail leasing market is expected to stay healthy and that some of the malls within the retail S-REITs portfolios are likely to command higher rents following the completion of their respective refurbishment works, our view is that retail REITs will continue to outperform the broader retail market for the rest of 2014.

Exhibit 5: Retail rental indices for Prime Orchard and Suburban markets

Source: CBRE


8

Industrial REIT subsector outlook: neutral The outlook for the industrial REIT subsector, however, is expected to be more benign. While positive rental reversions were still achieved at some

of the industrial REITs portfolios in 1Q14, there are further signs of weakness within the market. For example, Ascendas REIT disclosed that there has been a slowdown in leasing activity for the business/science park segments, and guided that operating costs could rise amid the tight labour market. This was not helped by the conversion of master leases at several industrial assets into multi-tenancies, which resulted in a drop in

occupancy and performance among some of the S-REITs, particularly Sabana REIT. According to CBRE, demand for business park space softened in 1Q14, partially due to concerns among interested prospects about qualification for business park usage, and high number of commitments made in the past half year. Coupled with an increase in supply, vacancy rates have

risen from 9.3% in 4Q13 to 10.3%. We also highlight that there has been a number of cooling measures imposed in the industrial space which resulted in a relatively subdued investment environment. Looking ahead, we believe that the industrial rental market may possibly face downward pressure in light of the continued increase in industrial supply. This may lead to a moderation in the rental growth rates or even negative rental reversions within the industrial REIT subsector. On a

more positive note, a number of industrial landlords have turned to AEIs, redevelopment and build-to-suit (BTS) projects to optimize their yields. This is likely to enhance the specifications and attractiveness of their assets, and allow them to sustain their performances.

Exhibit 6: Industrial rental index

Source: CBRE Hospitality REIT subsector outlook: neutral

The operating landscape for the hospitality sector in Singapore has remained challenging due to restrained corporate travel budget and larger supply of new hotel rooms. This is evident from the uninspiring RevPAR growth figures registered by the hospitality REITs in 1Q14. For 2014, we note that around 2,572 new hotel rooms are expected to be added to the domestic market, based on Jones Lang LaSalle estimates.

This may possibly cause the hospitality REIT subsector to remain lacklustre in the near term, even though demand is expected to rise due to biennial events and new/refreshed tourist attractions for visitors.


9

Positive outlook = better performance? Given the subsector outlooks, we categorically list the S-REITs into likely beneficiaries/casualties of the subsector performance, based on their

exposure to the respective subsectors (see Exhibit 7). However, we also acknowledge that certain S-REITs may outperform the rest in spite of the soft operating environment, due to company specific events. As such, we use the DPU growth as a proxy to gauge the performance of the individual S-REITs over the next year. The results of this exercise show that Suntec REIT, CapitaRetail China Trust, Frasers Commercial

Trust, CapitaCommercial Trust and CDL Hospitality Trusts are expected to experience one of the fastest increases in DPU in FY15. Not surprisingly, most of these S-REITs also operate in the office/retail subsectors, whose outlooks are positive.

Exhibit 7: Sector outlook and potential growth Subsector Outlook Beneficiary/casualty FY14F DPU FY15F DPU Growth

(cents) (cents) (%)

Office Positive CapitaCommercial Trust 8.2 8.8 7.3 Frasers Commercial Trust 8.9 9.6 7.9 Keppel REIT 8.0 7.3 -8.8 OUE Commercial REIT 5.4 5.5 1.3 Suntec REIT 9.4 10.4 10.6

Retail Positive CapitaMall Trust 11.0 11.2 1.8 CapitaRetail China Trust 9.8 10.8 10.2 Fortune REIT 40.5 42.1 4.0 Frasers Centrepoint Trust 11.0 11.5 4.5 Lippo Malls Indo Retail Trust 3.1 3.3 6.5 Mapletree Commercial Trust 7.8 8.0 2.6 Mapletree Greater China Com 6.1 6.3 3.3 SPH REIT 5.2 5.3 1.7 Starhill Global REIT 5.1 5.2 2.0

Industrial Neutral AIMS AMP Capital Ind REIT 11.0 11.0 0.0 Ascendas REIT 14.9 15.3 2.7 Cache Logistics Trust 8.7 9.0 3.4 Cambridge Industrial Trust 5.2 5.5 5.8 Mapletree Industrial Trust 9.8 10.0 2.0 Mapletree Logistics Trust 7.5 7.5 0.0 Sabana REIT 7.7 7.8 1.3 Soilbuild REIT 5.8 6.0 2.9 Viva Industrial Trust 6.9 7.0 2.3

Hospitality Neutral Ascott Residence Trust 8.1 8.4 3.7 CDL Hospitality Trusts 11.0 11.8 7.3 Far East Hospitality Trust 5.6 5.9 5.4 OUE Hospitality Trust 6.7 6.8 1.5

Healthcare Positive First REIT 8.3 8.5 2.4 ParkwayLife REIT 11.8 12.0 1.7

Source: Bloomberg, Managers, OIR estimates


10

Exhibit 8: FY15 DPU grow th rate forecasts (%)

Source: B loomberg, M anagers, OIR

-10.0

-5.6

-1.2

3.2

7.6

12.0

Sunte

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Office/Retail REITs


11

C. Assessing financial health

Prudent capital management led to healthy debt profile In this section, we focus on the financial health of the S-REITs. As shown in Exhibit 9, the aggregate leverages of office and retail REITs have generally improved QoQ, due to repayment of borrowings and higher asset values arising from positive asset revaluations. While the industrial,

hospitality and healthcare REIT subsectors registered increases in gearing ratios over the same period, they are still within comfortable levels (less than 35% on average). Overall, we note that the sector average gearing has fallen by 30bps QoQ to 33.3% in 1Q14, as trust managers have again stepped up their efforts to refinance their borrowings ahead of their maturities and over longer terms in anticipation of the potential hike in interest rates. This is reflected by the

extension of the sector weighted average debt to maturity from 3.0 years in 4Q13 to 3.1 years in 1Q14.

Exhibit 9: Debt profile

Aggregate Leverage (%) Debt duration (years)

Mar 2014

Dec 2013

Sep 2013

Jun 2013

Mar 2014

Dec 2013

Sep 2013

Jun 2013

OFFICE (5)

CapitaCommercial Trust 30.0 29.3 29.5 28.9 3.7 3.4 3.7 2.8 Frasers Commercial Trust 37.8 37.9 37.7 39.5 1.8 2.0 2.3 2.5 Keppel REIT 42.4 42.1 43.9 44.2 3.9 3.6 3.8 3.6 OUE Commercial REIT 40.8 42.3 N.A. N.A. 3.7 3.8 N.A. N.A. Suntec REIT 38.4 39.1 38.6 38.0 4.2 2.4 2.3 2.3 AVERAGE: 37.9 38.1 37.4 37.7 3.4 3.0 3.0 2.8

RETAIL (9)

CapitaMall Trust 35.1 35.3 34.8 34.9 4.0 3.6 3.6 3.8 CapitaRetail China Trust 31.8 32.6 25.8 23.5 2.5 2.4 2.0 2.5 Fortune REIT 32.9 32.7 20.1 20.9 3.0 2.8 2.3 2.5 Frasers Centrepoint Trust 27.7 29.7 27.6 30.4 2.8 2.7 2.9 3.1 Lippo Malls Indo Retail Trust 26.7 34.3 28.2 24.2 2.3 2.0 2.0 2.3

Mapletree Commercial Trust 38.7 40.8 40.8 40.8 2.5 2.7 3.0 3.2

Mapletree GCC Trust 38.0 40.5 40.1 41.5 3.0 3.2 3.5 4.0 SPH REIT 26.9 26.7 27.3 N.A. 4.5 4.8 4.8 N.A. Starhill Global REIT 29.6 29.0 30.6 30.3 3.3 3.2 3.4 1.2 AVERAGE: 31.9 33.5 30.6 30.8 3.1 3.0 3.1 2.8

INDUSTRIAL (9)

AIMS AMP Capital Ind REIT 31.7 26.5 25.2 25.4 3.1 2.5 2.8 3.0

Ascendas REIT 30.0 30.1 29.7 28.6 3.3 3.2 3.5 3.6 Cache Logistics Trust 29.1 29.1 29.2 29.2 1.6 1.9 2.1 2.4 Cambridge Industrial Trust 29.9 28.7 27.9 35.8 2.2 2.6 2.7 1.4 Mapletree Industrial Trust 34.4 36.3 36.2 35.8 2.6 2.8 3.2 2.5 Mapletree Logistics Trust 33.3 33.9 34.4 34.0 3.6 3.4 3.6 4.0 Sabana REIT 37.0 36.9 37.5 37.1 2.7 2.3 2.1 2.7 Soilbuild REIT 29.1 29.3 29.4 N.A. 2.4 2.6 2.9 N.A.


12

Viva Industrial Trust 38.9 38.8 40.9 N.A. 3.1 3.4 3.2 N.A. AVERAGE: 32.6 32.2 32.3 32.3 2.7 2.7 2.9 2.8

HOSPITALITY (4)

Ascott Residence Trust 35.9 34.0 41.1 40.2 3.8 4.2 3.4 3.1 CDL Hospitality Trusts 29.9 29.7 28.1 29.7 2.4 2.6 3.2 2.0 Far East Hospitality Trust 30.9 30.9 31.6 29.3 3.1 3.3 3.6 3.5 OUE Hospitality Trust 32.2 32.0 32.0 N.A. 3.3 3.6 3.8 N.A. AVERAGE: 32.2 31.7 33.2 33.1 3.2 3.4 3.5 2.9

HEALTHCARE (2)

First REIT 32.1 32.3 32.9 33.4 4.1 3.2 3.0 3.2 ParkwayLife REIT 35.0 33.0 35.2 31.2 3.1 3.2 3.1 2.1 AVERAGE: 33.6 32.7 34.1 32.3 3.6 3.2 3.0 2.7

SECTOR AVERAGE: 33.3 33.6 32.7 32.8 3.1 3.0 3.1 2.8

Source: Managers, OIR

Potential impact on rising interest rates In tandem with the lower gearing ratio, the average interest coverage for the S-REITs sector has improved sequentially to 5.9x. Additionally, the cost of debt was kept at 2.9% while a larger portion of S-REITs interest rate exposure has been hedged into fixed rates on average, as compared to a quarter ago. To assess the magnitude of the fall in DPU for a

hypothetical increase in funding costs, we have also performed a sensitivity test on the S-REITs. As shown in Exhibit 10, for a 1ppt growth in interest rate, the greatest fall in DPU among the S-REITs is contained within 10%, while several S-REITs such as First REIT, Lippo Malls Indonesia Retail Trust, OUE Hospitality Trust, Parkway Life REIT, Soilbuild REIT and Starhill Global REIT are likely to be unscathed as a result of fixing 100% of their rates via hedges or fixed-rate notes.

Exhibit 10: Potential impact on DPU due to a 1ppt increase in interest rate

Source: OIR estimates

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

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13

Exhibit 11: Other debt statistics

Debt cost (%)

Interest coverage (x)

Fixed rate debt (%) Debt rating

1Q14 4Q13 1Q14 4Q13 1Q14 4Q13 OFFICE (5)

CapitaCommercial Trust 2.4 2.6 6.6 5.5 81.0 80.0 Baa1 with stable outlook by Moody's / BBB+ with stable outlook by S&P

Frasers Commercial Trust 2.7 2.7 4.2 4.2 51.0 51.0 Baa3 with stable outlook by Moody's

Keppel REIT 2.2 2.2 5.4 5.5 68.0 70.0 Baa2 with stable outlook by Moody's / BBB by S&P

OUE Commercial REIT 2.5 2.5 3.9 3.5 50.3 50.0 Ba1 with a stable outlook by Moody's

Suntec REIT 2.5 2.5 4.0 3.7 65.0 60.0 Baa2 with stable outlook by Moody's

AVERAGE: 2.4 2.5 4.8 4.5 63.1 62.2

RETAIL (9)

CapitaMall Trust 3.5 3.4 4.4 4.2 98.3 98.5 A2 with stable outlook by Moody's

CapitaRetail China Trust 3.6 2.6 5.3 8.1 72.1 61.0 No rating Fortune REIT 2.2 2.6 5.1 4.8 55.0 63.0 No rating

Frasers Centrepoint Trust 2.7 2.7 6.4 6.0 94.0 95.0

BBB+ with stable outlook by S&P, Baa1 with stable outlook by Moodys

Lippo Malls Indo Retail Trust 5.3 5.8 3.3 3.5 100.0 88.4 No rating

Mapletree Commercial Trust 2.2 2.2 5.0 4.9 64.3 74.5 Baa2 with positive outlook by Moody's

Mapletree GCC Trust 2.0 2.0 4.6 4.5 71.0 71.0 Baa1 with stable outlook by Moody's

SPH REIT 2.3 2.3 7.9 7.4 54.7 54.7 No rating

Starhill Global REIT 3.2 3.0 5.4 5.4 100.0 94.0 BBB+ with stable outlook by S&P

AVERAGE: 3.0 3.0 5.3 5.4 78.8 77.8

INDUSTRIAL (9)

AIMS AMP Capital Ind REIT 4.1 4.1 5.2 6.3 72.1 83.5 BBB- with stable outlook by S&P

Ascendas REIT 2.7 2.7 6.0 5.9 65.3 57.1 A3 with stable outlook by Moody's

Cache Logistics Trust 3.5 3.5 6.5 6.4 70.0 70.0 Baa3 with stable outlook by Moody's

Cambridge Industrial Trust 3.9 3.9 5.5 5.4 78.3 82.8 BBB- with stable outlook by S&P

Mapletree Industrial Trust 2.0 2.3 8.1 7.3 73.0 81.0 BBB+ with stable outlook by Fitch

Mapletree Logistics Trust 1.9 1.9 8.7 8.6 75.0 73.0 Baa1 with stable outlook by Moody's

Sabana REIT 4.1 4.1 4.5 4.8 91.0 93.3 BBB- with stable outlook by S&P

Soilbuild REIT 3.1 3.1 5.9 5.5 100.0 100.0 BBB- with stable outlook by S&P


14

Viva Industrial Trust 3.5 3.5 5.6 5.5 76.7 76.7 BB+ with stable outlook from S&P

AVERAGE: 3.2 3.2 6.2 6.2 77.9 79.7

HOSPITALITY (4)

Ascott Residence Trust 3.0 3.2 4.7 4.0 80.0 80.0 Baa3 with stable outlook by Moodys

CDL Hospitality Trusts 2.5 2.5 9.1 8.8 57.0 57.0 BBB- with stable outlook by Fitch

Far East Hospitality Trust 2.2 2.2 6.5 7.0 62.0 62.0

BBB- with stable outlook by Fitch/ Baa2 with stable outlook by Moody's

OUE Hospitality Trust 2.2 2.2 7.1 6.7 100.0 100.0 No rating AVERAGE: 2.5 2.5 6.9 6.6 74.8 74.8

HEALTHCARE (2)

First REIT 4.0 4.4 6.3 5.6 100.0 53.5 No rating

ParkwayLife REIT 1.5 1.5 10.7 9.5 100.0 79.0 BBB with stable outlook by Fitch/ Baa2 with stable outlook by Moody's

AVERAGE: 2.7 2.9 8.5 7.6 100.0 66.3

OVERALL: 2.9 2.9 5.9 5.8 76.7 74.5



15

D. Various perspectives on valuation

Comparison of subsector P/B Lastly, we compare the relative attractiveness of the S-REITs by looking at their P/B ratios and DPU yields. Based on the last transacted prices, the office REIT subsector is still the most attractive on a P/B basis, as it is trading at the largest discount relative to its book value and other subsectors. At the other end of the spectrum, healthcare REITs are

trading at the highest premium to book value on average, followed behind by industrial S-REITs. On the other hand, the P/B ratios of both the retail REITs and hospitality REITs are comparable and lie between the valuations of office REITs and industrial REITs.

Exhibit 12: Peer comparison Price Market Cap Current Yield Forward Yield P/B ($) ($ m) (%) (%) (x) OFFICE (5) CapitaCommercial Trust S$ 1.680 4,930.0 4.9 5.2 1.00 Frasers Commercial Trust S$ 1.360 916.8 6.5 7.1 0.87 Keppel REIT S$ 1.275 3,571.3 6.3 5.7 0.92 OUE Commercial REIT S$ 0.800 693.7 6.8 6.9 0.76 Suntec REIT S$ 1.825 4,550.5 5.2 5.7 0.88 AVERAGE: 5.9 6.1 0.88

RETAIL (9) CapitaMall Trust S$ 1.970 6,817.5 5.6 5.7 1.13 CapitaRetail China Trust S$ 1.480 1,212.0 6.6 7.3 1.00 Fortune REIT HK$ 6.790 12,672.0 6.0 6.2 0.66 Frasers Centrepoint Trust S$ 1.885 1,724.9 5.8 6.1 1.06 Lippo Malls Indo Retail Trust S$ 0.400 983.8 7.8 8.3 0.89 Mapletree Commercial Trust S$ 1.360 2,845.6 5.7 5.9 1.17 Mapletree Greater China Com S$ 0.865 2,334.0 7.1 7.3 0.82 SPH REIT S$ 1.020 2,560.7 4.9 5.1 1.14 Starhill Global REIT S$ 0.815 1,754.9 6.3 6.4 0.88 AVERAGE: 6.2 6.5 0.97

INDUSTRIAL (9) AIMS AMP Capital Ind REIT S$ 1.445 897.6 7.6 7.6 0.98 Ascendas REIT S$ 2.320 5,577.4 6.4 6.6 1.15 Cache Logistics Trust S$ 1.215 945.9 7.2 7.4 1.24 Cambridge Industrial Trust S$ 0.775 973.0 6.7 7.1 1.12 Mapletree Industrial Trust S$ 1.420 2,422.3 6.9 7.0 1.18 Mapletree Logistics Trust S$ 1.155 2,837.5 6.4 6.5 1.19 Sabana REIT S$ 1.045 727.2 7.4 7.5 0.96 Soilbuild Business Space S$ 0.795 643.1 7.3 7.5 0.99 Viva Industrial Trust S$ 0.795 474.5 8.5 8.6 1.05 AVERAGE: 7.2 7.3 1.10

HOSPITALITY (4) Ascott Residence Trust S$ 1.225 1,872.1 6.6 6.9 0.90 CDL Hospitality Trusts S$ 1.760 1,720.1 6.3 6.8 1.09 Far East Hospitality Trust S$ 0.875 1,547.2 6.4 6.7 0.89 OUE Hospitality Trust S$ 0.885 1,164.8 7.0 7.6 0.97 AVERAGE: 6.6 7.0 0.96


16

HEALTHCARE (2) First REIT S$ 1.190 858.6 7.0 7.1 1.24 ParkwayLife REIT S$ 2.370 1,433.9 5.0 5.1 1.46 AVERAGE: 6.0 6.1 1.35

Source: Bloomberg, OIR On the yield valuation front, the industrial and hospitality REITs offer the

highest returns, while the rest of the subsectors offer returns at the 6%-handle. We also note that some of the S-REITs pay their asset and/or property management fees in units rather than in cash, and this is likely to affect their distributions and yields to unitholders. Hence, we adjust the 1Q14 distributions and units outstanding of S-REITs to strip out the effects of these management fees paid in units and to allow for comparison of yields on a more equal basis. As our estimates have

shown, the yields of Cambridge Industrial Trust, Starhill Global REIT, AIMS AMP Capital Industrial REIT, Mapletree Logistics Trust and Parkway Life REIT are least affected by the adjustment due to a large part or entire portion of their fees already paid in cash.

Exhibit 13: Comparison of annualised 1Q14 yields

Price ($)

DPU (cents)

Adjusted DPU (cents)

Annualised yield (%)

True annualised yield (%)

Change (%) DRP

CapitaCommercial 1.680 2.08 2.05 5.0 4.9 -1.4 No Frasers Com 1.360 2.05 1.92 6.1 5.7 -6.2 Yes Keppel REIT 1.275 1.97 1.70 6.3 5.4 -13.7 No

OUE C-REIT 0.800 1.00 0.90 5.1 4.5 -10.2 No Suntec REIT 1.825 2.24 1.89 5.0 4.2 -15.4 No CapitaMall 1.970 2.58 2.55 5.3 5.3 -0.8 No CapitaRetail China 1.480 2.40 2.24 6.6 6.1 -6.5 Yes Fortune REIT 6.790 10.39 9.24 6.2 5.5 -11.0 No

Frasers Centrepoint 1.885 2.88 2.81 6.2 6.0 -2.5 No Lippo Malls 0.400 0.68 0.63 6.9 6.4 -7.3 No

Mapletree Com 1.360 1.95 1.85 5.8 5.5 -5.4 Yes Mapletree GCC 0.865 1.59 1.29 7.4 6.0 -19.0 No SPH REIT 1.020 1.39 1.24 5.5 4.9 -11.0 No Starhill Global 0.815 1.20 1.20 6.0 6.0 0.0 No AA Cap Ind REIT 1.445 2.51 2.51 7.0 7.0 0.0 Yes Ascendas REIT 2.320 3.55 3.48 6.2 6.1 -2.0 No

Cache Log 1.215 2.14 1.99 7.1 6.6 -7.2 No Cambridge Ind 0.775 1.25 1.26 6.5 6.6 0.6 Yes Mapletree Ind 1.420 2.52 2.49 7.2 7.1 -1.1 Yes

Mapletree Log 1.155 1.89 1.89 6.6 6.6 0.0 Yes Sabana REIT 1.045 1.88 1.71 7.3 6.6 -9.2 Yes Soilbuild REIT 0.795 1.56 1.36 8.0 7.0 -12.8 No Viva Ind Trust 0.795 1.72 1.49 8.8 7.6 -13.0 No

Ascott Residence 1.225 1.75 1.56 5.8 5.2 -10.7 No


17

Exhibit 14: Potential impact on yield after stripping out effects of payment in units

Source: OIR

-20

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SPH

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Fortu

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Firs

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ilbuild

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Viva

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Kepp

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Map

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CDLHT 1.760 2.75 2.49 6.3 5.7 -9.4 No FEHT 0.875 1.31 1.16 6.1 5.4 -11.4 No

OUE H-REIT 0.885 1.68 1.50 7.7 6.9 -10.6 No First REIT 1.190 1.99 1.76 6.8 6.0 -11.4 Yes

PLife REIT 2.370 2.82 2.82 4.8 4.8 0.0 No


NOTE: DRP - Utilisation of distribution reinvestment plan; True annualised yield is obtained by stripping out effects of payment of fees in units


18

E. Conclusion

Fundamentals still sound Our findings show that the fundamentals of S-REITs have generally remained sound, and S-REITs continue to benefit from their completed development projects, AEIs, acquisitions and higher secured rentals within their existing portfolios. On a relative basis, the office REIT subsector outlook looks the rosiest, as the uptrend in office rents is likely

to be sustained amid strong leasing activity, low vacancy and limited supply in the near term. This is followed by retail REITs, which are poised to reap the returns of their AEIs and the positive operating landscape. On the other hand, the outlook of the industrial and hospitality REIT subsectors are expected to remain uninspiring given the continued increase in supply and pressure on rates. For FY15, we note that Suntec REIT and CapitaCommercial Trust are expected to experience one of

the fastest increases in DPU, according to Bloomberg consensus forecasts. Assessing impact from interest rate hike On the capital management front, S-REITs have again stepped up their efforts to repay/refinance their borrowings ahead of their maturities and over a longer term, as well as hedge their interest rate exposure in

anticipation of the potential hike in interest rates. This has resulted in an improvement in gearing, debt duration and hedge ratio. In fact, for a 1ppt growth in interest rate, we estimate the greatest fall in DPU among the S-REITs is contained within 10%, while several S-REITs such as Starhill Global REIT are likely to be unscathed as a result of fixing 100% of their rates via hedges or fixed-rate notes.

Retain subsector ratings Based on the last transacted prices, office REITs are trading at the largest discount to book value on average (0.88x), despite their positive outlook and decent forward yield of 6.1%. At the other end of the spectrum, healthcare REITs are trading at the highest premium to book value on average (1.35x), followed behind by industrial S-REITs (1.10x).

Retail REITs, on the other hand, are trading at undemanding P/B of 0.97x, while offering an attractive yield of 6.5%. In view of all this, we maintain our OVERWEIGHT rating on the office and retail REIT subsectors, and NEUTRAL view on the industrial, hospitality and healthcare REIT subsectors, as well as the broader S-REITs sector. Our sector picks

We also retain Suntec REIT and Starhill Global REIT as our sector picks. CapitaCommercial Trust, our third preferred pick, has performed very well YTD, clocking a 15.9% increase in unit price. At current level, we believe most of the positives have been priced in. As such, we replace CapitaCommercial Trust with Frasers Centrepoint Trust as our preferred pick. The latter has a strong financial position, trades at an

attractive yield of 6.1% and P/B of 1.06x and is expected to see relatively robust earnings growth over the next year.


19

Exhibit 15: OIR rating on S-REIT subsectors

Rating Change

Office OVERWEIGHT Maintain Retail OVERWEIGHT Maintain Industrial NEUTRAL Maintain

Hospitality NEUTRAL Maintain

Healthcare NEUTRAL Maintain

Source: OIR

Exhibit 16: OIR coverage and rating Price Fair Value Rating Analyst

Ascendas REIT S$ 2.320 2.45 BUY Kevin Tan Ascott Residence Trust S$ 1.225 1.33 BUY Kevin Tan Cache Logistics Trust S$ 1.215 1.25 BUY Kevin Tan CapitaCommercial Trust S$ 1.680 1.67 HOLD Eli Lee CapitaMall Trust S$ 1.970 2.20 BUY Kevin Tan CapitaRetail China Trust S$ 1.480 1.55 HOLD Kevin Tan CDL Hospitality Trusts S$ 1.760 1.80 HOLD Kevin Tan Far East Hospitality Trust S$ 0.875 0.90 HOLD Kevin Tan First REIT S$ 1.190 1.21 BUY Andy Wong Fortune REIT HK$ 6.790 6.68 BUY Kevin Tan Frasers Centrepoint Trust S$ 1.885 2.08 BUY Kevin Tan Frasers Commercial Trust S$ 1.360 1.45 BUY Kevin Tan Lippo Malls Indo Retail Trust S$ 0.400 0.37 HOLD Kevin Tan Mapletree Logistics Trust S$ 1.155 1.10 HOLD Kevin Tan OUE Commercial REIT S$ 0.800 0.88 BUY Eli Lee OUE Hospitality Trust S$ 0.885 0.85 HOLD Kevin Tan Soilbuild REIT S$ 0.795 0.88 BUY Kevin Tan SPH REIT S$ 1.020 0.99 HOLD Kevin Tan Starhill Global REIT S$ 0.815 0.90 BUY Kevin Tan Suntec REIT S$ 1.825 1.85 BUY Kevin Tan

Source: Bloomberg, OIR


20

F. Appendix

Exhibit 17: Operating metrics

Occupancy (%) WALE (years) Mar 2014 Dec 2013 Sep 2013 Jun 2013 Mar 2014 Dec 2013 Sep 2013 Jun 2013

OFFICE (5)

CapitaCommercial Trust 99.4 98.7 97.6 95.8 7.9 3.1 3.4 3.6 Frasers Commercial 97.5 97.1 97.9 98.1 4.1 4.4 4.6 4.6 Keppel REIT 99.8 99.8 99.4 99.1 6.4 6.5 6.4 6.6 OUE Commercial REIT 98.2 N.A. N.A. N.A. 2.8 N.A. N.A. N.A.

Suntec REIT Office: 99.4,

Retail: 98.7

Office: 99.6,

Retail: 97.3

Office: 99.8,

Retail: 98.3

Office: 99.7,

Retail: 99.6

N.D. N.D. N.D. N.D.

RETAIL (9)

CapitaMall Trust 98.8 98.5 99.5 99.1 N.D. N.D. N.D. N.D. CapitaRetail China Trust 98.4 98.2 98.3 96.5 7.2 4.8 5.3 5.3 Fortune REIT 99.3 98.7 98.3 97.8 N.D. N.D. N.D. N.D. Frasers Centrepoint 96.8 96.7 98.4 98.4 1.6 1.6 1.5 1.6 Lippo Malls Indo Retail 95.6 95.0 95.1 95.1 4.9 4.9 5.1 5.1

Mapletree Commercial 98.2 98.7 98.9 98.3 2.0 2.2 2.5 2.5 Mapletree GCC Trust 98.5 97.9 99.0 98.3 2.5 2.6 2.6 2.7 SPH REIT 100.0 100.0 100.0 N.A. 2.2 2.1 1.6 N.A. Starhill Global REIT 99.4 99.4 99.7 99.6 5.1 5.1 5.3 5.5

INDUSTRIAL (9)

AIMS AMP Cap Ind REIT 97.0 98.2 98.0 98.0 3.3 2.9 3.1 3.1 Ascendas REIT 89.6 89.7 90.1 93.6 3.9 3.9 3.9 3.9 Cache Logistics Trust 100.0 100.0 100.0 100.0 2.9 3.1 3.4 3.6 Cambridge Industrial 97.0 97.0 97.0 98.4 3.6 3.6 3.7 3.4 Mapletree Industrial 91.3 92.5 93.9 95.5 2.5 2.5 2.5 2.5 Mapletree Logistics Trust 98.3 98.4 98.7 98.2 4.8 4.8 4.9 5.1

Sabana REIT

100% for master lease;

76.9% for multi-

tenanted


78.4% for multi-

tenanted


72.4% for multi-

tenanted


100% for multi-

tenanted

2.0 2.2 1.4 1.7

Soilbuild REIT 100.0 99.9 99.8 N.A. 3.7 3.6 3.8 N.A. Viva Industrial Trust 76.5 N.A. N.A. N.A. 3.9 3.9 3.6 N.A.

HOSPITALITY (4)

Ascott Residence Trust N.D. N.D. N.D. N.D. N.A. N.A. N.A. N.A. CDL Hospitality Trusts 88.2 87.0 87.6 87.7 N.A. N.A. N.A. N.A. Far East Hospitality Trust 83.4 86.0 86.2 87.7 N.A. N.A. N.A. N.A. OUE Hospitality Trust N.D. N.D. N.D. N.D. N.A. N.A. N.A. N.A.

HEALTHCARE (2)

First REIT 100% 100% 100% 100% N.A. N.A. N.A. N.A. ParkwayLife REIT 100% 100% 100% 100% 10.5 10.6 10.9 10.7

Source: Managers NOTE: N.D. - Not disclosed; N.A. - Not applicable; WALE - Weighted average lease to expiry


21

Exhibit 18: 1Q14 performance and outlook Key drivers Results vs.

expectations Developments/Outlook

OFFICE

CapitaCommercial Trust

Distributable income growth due to higher revenue from most portfolio properties (except One George Street), lower interest expenses and higher income from RCS Trust.

In line. Singapore Grade A office market occupancy rose 1.1ppt QoQ to 94.8%, while average rent grew 5.1% to S$10.25 psf pm. Positive leasing momentum seen, resulting in positive rental reversions. One George Street achieved full occupancy, but may still underperform YoY given that rental rates are below previous yield protected rates. CapitaGreen secured 12% NLA commitment; negotiations on-going for more tenants. Targets to achieve 50% commitment by end 2014. Has call option to acquire balance 60% interest in CapitaGreen. AEI of Capital Tower in progress, while AEI of Raffles City Tower on track for completion by 2Q14. Retained S$12.6m income from QCT; possible distributions in future. Expects to benefit from continued increase in office rental rates. S$225m 2.7% CBs due 2015 converted and cancelled.

Frasers Commercial Trust

NPI fell YoY due to continued weakness in AUD, lower occupancy at Central Park and painting works at Caroline Chisholm Centre. However, DPU was up due to savings from CPPU distribution following the net conversion/ redemption of CPPUs.

In line. Robust tenancy activities seen, with positive reversions ranging from 6.4% to 18.2%. China Square Central to benefit from AEI and better connectivity with opening of Telok Ayer MRT station. Alexandra Technopark poised for rental uplift upon expiry of master lease in Aug. Australia assets may still suffer from weaker AUD. 97,729 CPPUs shall be redeemed on 1 Jul, leaving remaining 80,750 CPPUs outstanding.

Keppel REIT NPI growth due to better performance from Ocean Financial Centre and Prudential Tower, and additional contribution from 8 Exhibition Street. Share of results from associates boosted by MBFC Phase 1. DPU flat YoY due to enlarged unit base following private placement in 3Q13.

Not rated. Maintained 100% committed occupancy for Singapore portfolio. All retail units in Ocean Financial Centre fully occupied and operational. Construction of office tower on Old Treasury Building site on track for completion in 2H15. Early refinancing of additional S$275m and S$75m borrowings due in 2015 and 2016 respectively. To focus on maintaining strong portfolio occupancy, and pursue strategic acquisitions and divestments. Entered into agreements on 15 May for the sale of 92.8% interest in Prudential Tower for S$512.0m; transaction expected to complete on 26 Sep. Gearing to drop from 42.1% to 38.8% upon divestment. May ease equity fund raising needs for potential acquisition of 33% stake in MBFC Tower 3.

OUE Commercial REIT

Higher gross revenue due to higher income from Lippo Plaza. Distributable amount higher than forecast due to higher revenue and lower finance costs arising from lower loan quantum.

In line. Renewed ~37% of leases expiring in 2014 with average office rental reversions of 13.9% at OUE Bayfront and 9.2% at Lippo Plaza. Cited that overall vacancy rate in Shanghai CBD office to fall due to lower expected supply and positive net absorption. Rental growth to be sustained, although growth rate could be constrained by competition from decentralised market.

Suntec REIT Growth in distributable income due to opening of Suntec City Phase 1 and S$1.9m contribution from its recent acquisition in Sydney. DPU flat as no capital distribution was made in 1Q14, versus S$2.7m a year ago.

In line. Over 100,000sqft of office leases due to expire in 2014 renewed at higher average rentals. Phase 1 retail space achieved full occupancy, while enlarged Phase 2 space secured 95% pre-commitment. Phase 2 to complete in 2Q, and Phase 3 to complete in 4Q. Signed S$800m loan facility to refinance existing debts due in 2014-15. Together with proceeds from Mar private placement to pre-pay its S$350m debt due in 2015, Suntec REIT no longer has any refinancing needs till 2016. Gearing to drop to 33.9% from 37.3%, while average debt term to extend to 4.2 years.


22

RETAIL

CapitaMall Trust Better performance driven by higher occupancy at Plaza Singapura and Atrium@Orchard, and completion of AEI at IMM Building. Positive rental reversion of 6.2%, but softness in tenant sales and shopper traffic seen, partially due to AEI. S$8.0m cash retained for distribution in FY14.

In line. Westgate mall saw occupancy increase from 85.8% to 92.0% after commencing operations in Dec 2013. To continue to focus on executing its AEIs at Bugis Junction and Tampines Mall. Will embark on Phase 2 AEI at IMM Building and reconfigure Level 2 of JCube to increase retail offerings and enhance shoppers' experience. Will be divesting Westgate Tower for S$579.4m; consideration to be paid progressively and sale to be completed following issuance of strata title. Issued JPY5b floating rate notes due 2021 in 1Q14, and raised S$350m in proceeds via retail bond offering; fixed interest of 3.08% p.a. Fully redeemed S$350m CBs due Apr 2014.

CapitaRetail China Trust

Improved performance due to contributions from newly-acquired Grand Canyon, higher rentals from existing malls and stronger RMB, though partially offset by closure of CapitaMall Minzhongleyuan for AEI.

In line. Management shared that tenant sales increased 13.9% YoY, whereas shopper traffic grew 7.3%. AEI at CapitaMall Minzhongleyuan on track to open in 2Q14, and 90.0% of mall's NLA secured or in advanced negotiations for leasing. Remains positive on China's long-term outlook and underlying consumption growth. Confident on delivering strong performance in 2014.

Fortune REIT Strong growth due to contribution from newly-acquired Fortune Kingswood, higher secured rents across portfolio and returns from AEIs.

Above. Expects Fortune Kingswood and completed AEIs at Ma On Shan Plaza and Fortune City One to contribute to further growth. HK$80m AEI at Belvedere Square Phase 3 to commence in 2H14, with target ROI at 15%. Also opportunities for repositioning and rental growth at Fortune Metropolis and Provident Square. To continue to optimize portfolio by implementing AEIs and tenant repositioning strategies. Will closely monitor operating expenses as pressure on costs such as wage and electricity may persist. Refinanced existing HK$1.4b loan facilities ahead of maturity in Feb 2015, thereby lowering interest margin and extending average debt term.

Frasers Centrepoint Trust

Better results driven by higher revenue from Causeway Point, though partially offset by higher property taxes, maintenance costs and property manager's fees. No cash retained in quarter.

In line. Shopper traffic fell 7.6% YoY due partly to Causeway Point and on-going refurbishment works at Bedok Point. Expects occupancy at Bedok Point to recover to above 95% in 2H14. Causeway Point and Northpoint to underpin growth within existing portfolio. Completed acquisition of Changi City Point for S$305m on 16 Jun. Raised S$161.5m gross proceeds via private placement of 88m new units at S$1.835 apiece to part finance Changi City Point.

Lippo Malls Indo Retail Trust

Soft performance mainly due to expiry of rental guarantee income from Pluit Village and a 15.8% depreciation of IDR against SGD. DPU slipped 23.6% YoY, further dragged down by higher finance and other costs. In IDR terms, gross rental income grew 6.3% YoY, while rental reversion of 9.4% was achieved.

Below. Over 90% of income now covered with new hedges, which should provide greater stability to distribution. Repaid S$147.5m term loan, resulting in drop of gearing from 34.3% to 26.7% with no refinancing needs until 2015. Currently exploring at least one investment opportunity, and may conclude a deal this year. Highlighted that Indonesia expected to see increase in household consumption during the election year, and that investor confidence in Indonesia's economic fundamentals remain firm. Future retail space supply to be limited by moratorium issued by previous Jakarta Governor.


23

Mapletree Commercial Trust

New income stream from newly-acquired Mapletree Anson, and robust rental uplift and improved occupancy at existing portfolio assets. Revaluation gain of S$200.7m boosted asset value up 5.3% to S$4.03b. Cap rates ranged from 3.85% - 5.25% (FY13: 4.0% - 5.25%).

Not rated. VivoCity shopper traffic recorded new high of 53.9m (+1.4%) and tenant sales rose 5.6% to S$905.9m. Cited that demand for retail space remained steady in 1Q14 as retailers continued to seek new space for expansion and replacement, and that retail market outlook expected to remain relatively stable. However, rising business costs from manpower crunch and new retail supply in 2014 could lead to higher vacancy rates. In office market, rental recovery expected to be led by Grade A market. Refinanced the debt expiring in Apr 2014 at competitive rates and extended the average debt term to 3.5 years.

Mapletree Greater China Commercial Trust

Better performance attributable to robust rental uplift from both Festival Walk and Gateway Plaza. Net revaluation of S$269.4m led to 9.5% increase in portfolio value. Cap rates ranged from 4.5% to 6.5%.

Not rated. Flooding affected some parts of Festival Walk on 30 Mar, but the mall brought back into operations within 12 hours. Festival Walk shopper traffic and tenant sales grew 5.8% and 4.7% respectively YoY. Hong Kong's resilient domestic consumption and inbound tourism expected to provide support to retail spending in Hong Kong in near term. The office leasing market in Beijing expected to stay buoyant on the back of limited supply and continued demand from consolidation and expansion activities. Hedged 90% of HK$ distributable income for FY15 and to progressively convert RMB distributable income to SGD.

SPH REIT Growth driven by higher rental income from both Paragon and Clementi Mall, and lower utilities expenses. Positive rental reversions at 10.8%.

In line. Shopper traffic held steady at Paragon, while that at Clementi Mall increased 2.7% YoY. There was a slight decline in recent tenant sales at Paragon in tandem with the softening of the luxury market, and continued tight labour market may hamper expansion plans by retailers. However, management said situation was far from worrying. Expects portfolio to turn in steady performance. Pipeline asset The Seletar Mall on track for completion of development by Dec 2014.

Starhill Global REIT 1Q14 results saw broad based decline in performance, but was due to the absence of a one-off receipt of net rental arrears from Toshin master lease in 1Q13. Excluding the payout, growth would have been achieved, driven by improved occupancies and higher secured rentals from Singapore portfolio and Incremental income from Plaza Arcade in Australia.

In line. Wisma Atria sales efficiency of S$130 psf was slightly lower than S$138 seen in 2013 due to on-going tenant relocations/ renovations. Demand from new-to-market brands, rising consumption and growing tourist arrivals to benefit Singapore retail landscape. Looking to refine portfolio and explore AEI opportunities. Currently planning AEI to optimise connection between David Jones Building and Plaza Arcade. Divested Holon L Property in Tokyo, Japan for S$1,026m (~S$12.8m) in Mar. Do not rule out more capital recycling activities and AEI to optimise yield. Issued S$100m 3.5% notes due 2021 in Feb. Extended maturity date for A$63m term loan from 2017 to 2019. Changed FYE from 31 Dec to 30 Jun.


24

INDUSTRIAL

AIMS AMP Capital Ind REIT

Higher income due to rental contribution from Phase 1 and 2 of 20 Gul Way, higher rental rates and recoveries from 27 Penjuru Lane, higher revenue from 56 Serangoon North Ave 4 and additional property tax recovery of S$1.8m. Positive rental reversion of 4.9% on average. Asset revaluation gain of S$14.6m.

Not rated. Completed acquisition of 49.0% interest in Optus Centre, Australia for S$205.3m on 7 Feb (DPU yield of 7.79% expected post transaction). Raised gross proceeds of ~S$100.0m via 7 for 40 rights issue to fund its future growth opportunities; 2.8x subscribed. Overall 1Q14 occupancy rate for Singapore industrial property market fell 0.3ppt QoQ to 91.6% due to an increase in supply of industrial space. Rents of industrial space rose marginally by 0.4% QoQ compared to 0.2% in 4Q13. The level of leasing activity remained subdued with most being lease renewals. Firms appeared to be channelling resources towards driving productivity instead of business expansion. S&P reaffirmed BBB- credit rating. Issued S$50m 3.8% fixed rate notes due 2019 on 21 May with intention to use proceeds to repay debt due Oct 2015. Entered agreement to undertake customised AEI at 26 Tuas Ave 7; ROI of 10% expected. Achieved TOP for redevelopment at 103 Defu Lane 10 on 28 May and Phase 2E of 20 Gul Way on 14 Jun (both to start contributing in Sep).

Ascendas REIT Stronger results driven by contribution from The Galen, Four Acres Singapore, Nexus@one-north and A-REIT City@Jinqiao. Also gained S$4.9m from divestment of Block 5006 at Techplace II and distribution of income from Ascendas Z-link in China. Achieved positive rental reversion of 14.8%. No performance fee payable, vs. S$7.0m in 4QFY13. Net revaluation gain of S$131.1m; cap rates stable at 6.57% for Singapore portfolio (6.6% in FY13).

In line. Disclosed slowdown in lease activity for business/science park segments, and relatively stable performance in other property segments. Expects demand to remain healthy and positive reversion in mid-to-high single digit. However, operating costs could rise given the tight labour market. Announced 2 new AEIs, bringing total cost of committed AEIs to S$106.5m. Completed divestment of Block 5006 Techplace II on 31 Mar and 1 Kallang Place on 21 May. Proposed acquisition of Hyflux Innovation Centre for S$191.2m; NPI yield expected at 6.98%. Acquisition of Kallang Ave development possibly in short term as TOP expected in 2QCY14. Will continue to look for investment opportunities in China. Vacant space gives room for upside when it is leased out. Have already commenced renewal negotiations with leases due to expire in FY15. Secured S$200m 5-year term loan facility and issued JPY5b 7-year floating rate notes to refinance part of S$395m CMBS due May. Issued S$75m 2.5% notes due 2019 on 16 May and additional S$20m on 21 May. Revised fee structure in favour of unitholders, and changed distribution frequency from quarterly to semi-annual basis. Joined STI on 4 Jun.

Cache Logistics Trust

Growth in income due to contribution from acquisition of Precise Two and built-in rental escalation within portfolio. DPU eased marginally YoY due to enlarged unit base.

In line. Renewed master lease at Kim Heng warehouse; only 2% of portfolio GFA due to expire in 2014. Will continue to focus efforts on addressing its lease expiries and refinancing needs in 2015-16. Secured agreement to develop and lease a BTS ramp-up warehouse; completion expected in 2H15. Entered into agreement for loan facilities up to S$97m to fund the development. Cited that an increase in supply of industrial space and cost-conscious attitude could exert downward pressure on average occupancy and rental rates. Singapore, China and Malaysia remain its key acquisition markets. To continue to grow via acquisitions, and organic growth opportunities.


25

Cambridge Industrial Trust

Decrease in revenue due to straight line rent adjustment in prior period and property divestments, net of acquisitions and completion of development projects. Distributable amount up due to lower finance expenses and other non-property expenses, and increase in capital distribution.

Not rated. Expects investment activity to remain subdued going forward, given introduction of minimum occupation period for anchor tenants in sale-and-leaseback arrangements. 7 properties with head leases expiring in FY14; expects to lease one property to head lessee, divest two properties and convert four others to multi-tenancy. Completed acquisition of 30 Teban Gardens Crescent and 11 Chang Charn Road for S$73.0m. Divested 81 Defu Lane 10 for S$7.8m. AEI at 3 Pioneer Sector 3 completed ahead of schedule on 6 Jun; commenced Phase II AEI with estimated completion in 1Q15. AEI for 21B Senoko Loop and 31 Changi South Ave 2 targeted to complete in 4Q14. Issued S$30m 4.1% fixed rate notes due 2020. S&P reaffirmed BBB- rating with stable outlook. Appointed Philip Levinson as CEO.

Mapletree Industrial Trust

Increase in earnings due to higher secured rental rates across all property types except Business Park assets, and higher occupancies in flatted factories. Drop in portfolio occupancy QoQ due to exit of a large Business Park Building tenant and increase in NLA upon completion of AEI. Positive rental reversions of 9.4% to 21.7% clocked. Net revaluation gain of S$150.7m; cap rates ranging from 6.25% to 7.25%.

Not rated. Completed AEI at Woodlands Central and Toa Payoh North 1 clusters, and BTS facility for Kulicke & Soffa. BTS project for Equinix in progress; to complete in 2H14. Announced S$250m BTS facility development for HP Singapore at its existing Telok Blangah Cluster on 21 Mar. Completed acquisition of light industrial building at 2A Changi North Street 2 for S$12.0m on 28 May. Expects portfolio rent to remain stable despite anticipated increase in industrial supply. Refinanced S$243m existing borrowings after balance sheet date; debt duration to extend from 2.6 years as at 31 Mar to 3.7 years.

Mapletree Logistics Trust

NPI growth due mainly to new income stream from Mapletree Benoi Logistics Hub, contribution from The Box Centre, and positive rental reversions from Hong Kong and Singapore, though partially offset by weaker JPY. DPU boosted by currency hedging, lower finance costs and distribution of divestment gains. Net revaluation gain of S$105.3m; cap rates ranging from 5.5% to 11.5% across portfolio.

In line. Expects demand for logistics facilities in its markets to remain robust and rental reversion to stay positive, albeit at a moderate pace. Focus on driving organic growth through proactive leasing efforts and AEI. Raised possibility of overseas acquisitions; may possibly carry out capital recycling since MLT has disclosed that it has identified a few lower yielding assets for divestments. Completed redevelopment of Mapletree Benoi Logistics in Singapore and Phase 1 solar panel installation at Japan assets. Embarking on next redevelopment project at 5B Toh Guan Road East and Phase 2 solar panel installation. Reported that fire broke out at Mapletree Xi'an Distribution Centre (property contributes 0.4% of MLT's gross revenue). Proposed acquisition of warehouse in Iskandar Malaysia for S$34.3m; to complete by 4Q14. Announced acquisition of Daehwa Logistics Centre for ~S$31.2m (initial NPI yield at 8.3%); to be completed by Jul 2014.

Sabana REIT Higher revenue due to contribution from recently acquired 508 Chai Chee Lane and higher gross revenue from 151 Lorong Chuan, which was converted into multi-tenanted lease arrangement. DPU down YoY due to lower occupancy, higher expenses and larger unit base post private placement in Sep 2013.

Not rated. Cited that rents for Singapore conventional industrial space has held up, although supply-side pressures may be faced going forward. Will continue to intensify marketing and leasing efforts to improve portfolio occupancy. Also look for opportunities to recycle capital by divesting underperforming assets and using the proceeds to reinvest, pare down debt or distribute to unitholders. Another 3 properties with master leases are expiring in 4Q14. Established distribution reinvestment plan on 1 Apr. Issued S$90m 4.0% fixed periodic distribution trust certificates due 2018 to refinance the bulk of its S$100.2m borrowings due Nov 2014. S&P reaffirmed its BBB- long-term credit rating and stable outlook.


26

Soilbuild REIT Better performance attributable to higher revenue, one-off pre-termination income from a tenant, and lower property and finance expenses. Positive rental reversion of 6.6%.

Above. Portfolio occupancy reached 100% following expansion and new take up by tenants. Lease vacated by Barclays taken up by DBS. Also forward-renewed 5 leases expiring in 1Q15 at higher rates. Well placed to meet prospectus forecast, underpinned by continued focus on early lease renewals, cost containment and high level of fixed interest costs. Entered into S$100m facility agreement on 20 May. Completed acquisition of 39 Senoko Way for S$18.3m on 26 May. Assigned credit rating of BBB- by S&P on 22 Jan.

Viva Industrial Trust NPI was higher than prospectus forecast due to rental contribution from new tenancies at UE BizHub EAST, effect of recognising higher accounting income on a straight-line basis and lower marketing expenses for Technopark@Chai Chee.

Not rated. Noted that manpower crunch and rising business costs may moderate growth, and industrial asset values may remain flat for the rest of 2014. Also cited that investment sales have dwindled amid tighter government regulations, but business park segment has shown strong take-up going into 2Q14. Will continue to explore acquisition opportunities to enhance portfolio. AEI at Technopark@Chai Chee is in advanced stage of planning. On 23 Apr, IRAS issued a letter to withdraw provisional approval for tax transparency treatment for income support in respect of UE BizHub EAST; no financial impact on prospectus forecasts. Will continue to engage with IRAS to seek approval for tax transparency. S&P reaffirmed BB+ credit rating with stable outlook in Mar 2014.

HOSPITALITY

Ascott Residence Trust

Revenue climbed 16% YoY due to contribution from new acquisitions and better performance from existing properties, particularly from UK, France, Germany and Vietnam. However, DPU fell 22% YoY due to Dec 2013 right issue and one-off realized forex gain in 1Q13.

In line. RevPAU remained stable YoY and QoQ at S$124, but growth in RevPAU seen in Japan, UK, Belgium, Singapore and Vietnam. Only Australia and The Philippines were impacted by weaker market demand and unfavourable forex movements. Limited volatility in distribution expected as 60%-70% of derived income in EUR, GBP and JPY was hedged. Actively seeking acquisitions in China, Japan, Malaysia, Australia and Europe, and to continue to undertake AEIs to enhance customer experience and maximize returns. Acquired Fukuoka rental housing property in Mar and Dalian serviced residence in Jun. Expects group's performance to remain stable. Commenced discussions to refinance loan facilities due in 2014-2015.

CDL Hospitality Trusts

Positive performance due to higher contribution from Maldives resorts and stable showing from its Singapore hotels, though partially dragged down by higher operating expenses with the inclusion of Jumeirah Dhevanafushi into portfolio.

Above. Maldives resorts registered RevPAR growth of 10.4% YoY, while Singapore hotels achieved 0.5% growth in RevPAR. Australia hotels were impacted by weaker AUD and lower variable income and may continue to be impacted by slower economy and mining sector. But will benefit from exposure to Maldives tourism market. Tourism and hospitality sector in Singapore poised to grow due to biennial events. However, operating environment in Singapore remains competitive amid restrained corporate travel budget and larger supply of new hotel rooms. For the first 23 days of Apr, RevPAR for Singapore hotels eased 1.2%. AEI to continue to add value to portfolio; Claymore Link currently undergoing makeover since Dec 2013 and scheduled for completion by end-2014.


27

Far East Hospitality Trust

Higher income mainly due to new income stream from Rendezvous Hotel Singapore, but DPU dropped as a result of issue of new securities to part finance the Rendezvous Hotel Singapore acquisition. RevPAR saw 1.3% decline YoY, but serviced residence RevPAU improved 1.2%. Retail and office space are the bright spots, registering 23.6% growth in revenue.

In line. Management disclosed that Jan was especially weak, due to general weakness in upscale and mid-tier hotel segments and presence of two holidays in month. Cautions that operating landscape remain competitive in near term due to restraint in business travel budgets and concentration of hotel room supply within upscale and mid-tier segments. Stronger SGD also cast a pall for travel from several overseas markets. AEIs planned for several portfolio hotels, with a number to complete in coming quarters. Room rates may improve upon completion of AEIs. Cited that substantial 2,572 new hotel rooms to be added to Singapore market in 2014, though likely to be balanced out by increase in demand. In longer term, Singapore tourism sector to remain positive as Singapore enhances its position as regional business hub and introduces more attractions. Assigned Baa2 issuer rating with stable outlook by Moody's, while BBB- rating and stable outlook reaffirmed by Fitch.

OUE Hospitality Trust

Gross revenue above prospectus forecast due to higher income from banquet sales and corporate meetings at Mandarin Orchard Singapore, though RevPAR slightly below forecast. DPS above forecast due to higher topline, lower utilities and marketing expenses and lower trust expenses.

Above. Completed refurbishment of 64 out of total 430 guest rooms to be renovated; on track to complete in phases by end-2015. Management remains positive on corporate travel, tourism and retail segments in Singapore, and expects Singapore to benefit from bumper MICE schedule in 2014. To continue to optimize portfolio yield and seek yield-accretive acquisitions. Announced establishment of US$1b Euro MTN programme to widen refinancing options.

HEALTHCARE

First REIT Positive growth driven largely by full-quarter contribution from Siloam Hospitals Bali and Siloam Hospitals TB Simatupang, both of which were acquired in May 2013. NPI margin normalised after new rental structure struck for its Sarang Hospital (provisions made in FY13 due to payment issues by tenant).

In line. To continue to look for yield-accretive acquisitions and carry out AEI within portfolio. Focus to remain on Indonesian healthcare market. Do not foresee any major changes in regulations or policies in Indonesian healthcare sector or any impact from upcoming Indonesian presidential elections. In Singapore, government announced new healthcare policies aimed at making healthcare more affordable to Singaporeans, which may underpin increased demand for hospital and nursing home beds. Completed acquisition of Siloam Hospitals Purwakarta for S$31.0m in May; NPI yield at ~11.0%. Acquisition funded by drawdown of bank loan and issuance of 3.8m units at S$1.1826 apiece. Established DRP in Jan 2014; utilized S$3.3m from DRP in Mar and S$5m in Jun to repay existing loans. Secured S$165m transferable term loan facility in Apr to refinance existing borrowings.

ParkwayLife REIT Revenue growth driven by rental income contribution from Japan properties acquired in Jul and Sep 2013, and higher rents from Singapore properties as a result of higher CPI growth, offset by depreciation of JPY.

Not rated. Completed acquisitions of 2 nursing homes and an extended-stay lodging facility for elderly in Japan at NPI yield of 7.3%. Secured up to JPY3.5b 6-year revolving credit facility and drew down JPY3.3b to finance the acquisitions. Expects recent investments to contribute positively to performance. Also completed another 3 AEIs in 1Q14 with ROI ranging from 10% to 21.2%. Long-term prospects of regional healthcare industry to remain robust due to rising demand from a fast-ageing population. Plan to consolidate assets in Japan to generate synergies and enjoy further cost savings. Actively seek new opportunities in regional markets, while enhancing portfolio performance. Assigned Baa2 issuer rating with stable outlook by Moody's. Locked in JPY net income hedge for next few years to mitigate volatility in distribution.



28

Exhibit 19: Fee structure

Base fee Performance fee Trustee's

fee Acquisition

fee Divestment

fee Property

management fees

CapitaCommercial Trust

0.10% p.a. of value of Deposited Property

5.25% p.a. of net income

Not exceeding

0.1% p.a. of the value of Deposited Property

1.0% of acquisition

price 0.5% of sale

price

3.0% p.a. of NPI, except for HSBC Building which is charged at 0.25%

p.a. of NPI

Frasers Commercial Trust

0.5% p.a. of value of real

estate assets

3.5% p.a. of net real estate asset

income less base fee

0.03% p.a. of gross

asset value

Not more than 1.0% of the acquisition

price

Not more than 0.5% of

sale price

3.0% p.a. of revenue of real estate assets

excluding GST

Keppel REIT 0.5% p.a. of value of all

assets 3.0% p.a. of NPI


1% of acquisition

price 0.5% of sale

price 3.0% p.a. of

property income

OUE Commercial REIT

0.3% p.a. of value of

Deposited Property

25.0% of difference in

DPU

Not exceeding


Deposited Property

0.75% of acquisition price for

related party deals and

1.0% for all other cases

0.5% of sale price

2.0% p.a. of gross revenue and 2.0%

p.a. of NPI for property

management; 0.5% p.a. of NPI for

lease management

Suntec REIT

Not exceeding


Deposited Property

4.5% p.a. of NPI

Not exceeding 0.25% p.a. of value of Deposited Property

1.0% of acquisition

price 0.5% of sale

price 3.0% p.a. of gross

revenue

CapitaMall Trust 0.25% p.a.

of Deposited Property

2.85% p.a. of gross revenue

Not exceeding

0.1% p.a. of Deposited Property

1.0% of purchase price

0.5% of sale price

2.0% p.a. of gross revenue, 2.0% p.a. of NPI and 0.5%

p.a. of NPI in lieu of leasing

commissions

CapitaRetail China Trust


4.0% p.a. of NPI

Not exceeding 0.03% p.a.


1.5% of purchase price for less than S$200m and

1.0% of purchase price for S$200m or

more

0.5% of sale price



commissions

Fortune REIT

Not exceeding

0.3% p.a. of value of properties

3.0% p.a. of NPI 0.035% p.a. of value of real estate properties

Not exceeding 1.0%

of acquisition price

Not exceeding

0.5% of sale price

3.0% p.a. of gross revenue

Frasers Centrepoint Trust


Deposited Property

5.0% p.a. of NPI

Not exceeding


1.0% of the acquisition

price 0.5% of sale

price



commissions

Lippo Malls Indo Retail Trust


4.0% p.a. of NPI



0.5% of sale price



commissions

Mapletree Commercial Trust

Not exceeding 0.25% p.a.


4.0% p.a. of NPI

Not exceeding


Not exceeding 1.0% of the acquisition

price

Not exceeding

0.5% of sale price



commissions


29

Mapletree Greater China Commercial Trust

10.0% p.a. of the

distributable income


DPU

Up to 0.02% p.a. of value of Deposited

Property




0.5% of sale price

2.0% p.a. of gross revenue and 2.0%

p.a. of NPI

SPH REIT 0.25% p.a.


5.0% p.a. of NPI Up to 0.02% p.a. of value of Deposited

Property




0.5% of sale price



commissions

Starhill Global REIT 0.5% p.a. of value of trust

property

% of amount by which

accumulated return in any six-

month period ending 30 Jun or 31 Dec exceeds

accumulated return of

benchmark index

Not exceeding


Deposited Property

1.0% of acquisition

price 0.5% of sale

price

3.0% p.a. of gross revenue and

leasing commissions for

Singapore assets, 1.8% p.a. of gross revenue for Japan assets and 1.0%

p.a. of gross sales for China asset

AIMS AMP Capital Ind REIT


Deposited Property


Deposited Property if DPU growth above

2.5%, and 0.2% p.a. if DPU

growth exceeds 5.0%

Not exceeding


Deposited Property

1.0% of acquisition

price 0.5% of sale

price

2.0% p.a. of rental income for property management, 1.0%

p.a. of rental income for lease

management, and marketing services

commission

Ascendas REIT 0.5% p.a. of

adjusted Deposited Property

Tier 1: 0.1% of adjusted

Deposited Property if DPU growth not less than 2.5%; Tier

2: 0.2% of Deposited

Property such that DPU growth

not less than amount if DPU growth at 5.0% after deducting

tier 1 performance fee


1.0% of acquisition

price 0.5% of sale

price 2.0% p.a. of

adjusted gross revenue

Cache Logistics Trust 0.5% p.a. of

value of consolidated

assets

1.5% p.a. of NPI


1.0% of acquisition

price 0.5% of sale

price

2.0% p.a. of gross revenue for

property management and 1.0% p.a. of gross revenue for lease

management

Cambridge Industrial Trust


Deposited Property

Tier 1: 5.0% of amount whereby

total return exceeds

Cambridge Benchmark Index total

return; Tier 2: 15.0% of

amount whereby total return is in excess of 2.0%

above Benchmark Index return

Not exceeding


gross assets


0.5% of sale price


property management and 1.0% p.a. of gross revenue for lease

management


30

Mapletree Industrial Trust


Deposited Property

3.6% p.a. of NPI 0.1% p.a. of value of all

assets

Not exceeding 1.0% of

acquisition price

Not exceeding

0.5% of sale price

Up to 2.0% p.a. of gross revenue for

property management; Up to 1.0% p.a. of gross revenue for lease

management

Mapletree Logistics Trust


Deposited Property

3.6% p.a. of NPI

Not exceeding


Deposited Property

Not exceeding 1.0% of

acquisition price

Not exceeding

0.5% of sale price

Up to 2.0% p.a. of gross revenue for

property management; Up to 1.0% p.a. of gross revenue for lease

management

Sabana REIT 0.5% p.a. of

value of gross assets

0.5% p.a. of NPI if DPU growth at least at 10.0%

Not exceed 0.25% p.a. of the value

of the Deposited Property

1.0% of acquisition

price 0.5% of sale

price


property management; 1.0%

p.a. of gross revenue for lease

management

Soilbuild Business Space

10.0% of distributable

income


DPU

Not exceeding


Deposited Property

1.0% of acquisition

price 0.5% of sale

price




management

Viva Industrial Trust 10.0% p.a.

of the distributable

income


DPS

Up to 0.015% p.a. of value of Deposited Property

1.0% of acquisition

price 0.5% of sale

price




management

Ascott Residence Trust

0.3% p.a. of property values

4.0% p.a. of gross profit, and

1.0% of outperformance

difference if gross profit

growth exceeds 6%

Up to 0.1% p.a. of value of Deposited

Property

1.0% of enterprise value, and

0.5% if there is payment to agents or brokers

0.5% of enterprise

value

Basic fees of 3.0% p.a. of total

revenue and 6.0% of net operating

profit, and incentive fee of 50.0% of

excess net operating profit

above hurdle rate for properties in

Belgium, Spain and UK. For other

properties, basic fees of 2.0% - 3.0%

p.a. of total revenue, and

incentive fees up to 10.0% p.a. of gross

operating profit.

CDL Hospitality Trusts

REIT: 0.25% p.a. of value of Deposited

Property; BT: 10% of

EBIT

REIT: 5.0% p.a. of NPI

REIT: Not exceeding


Deposited Property; BT: Not

exceeding 0.1% p.a. of

value of Deposited Property

REIT: 1.0% of acquisition

price; BT: Not exceeding

0.1% of acquisition

price

REIT: 0.5% of sale price N.A.


31

Far East Hospitality Trust

REIT: 0.3% p.a. of value of Deposited

Property; BT: 10.0%

of EBIT


REIT: Up to 0.02% p.a. of value of Deposited Property; BT: Not


value of Property

REIT and BT: 0.75% of

acquisition price from

related parties and 1% for all other cases

REIT: 0.5% of sale price; BT: 0.5% of sale price

REIT: 3.0% p.a. of NPI of excluded

commercial premises

OUE Hospitality Trust

REIT: Not exceeding


Deposited Property;

BT: 10.0% of EBIT


REIT: Not exceeding


Deposited Property; BT: Not


value of Property

REIT and BT: 0.75% of

acquisition price for

related parties and 1.0% for

all other cases

REIT: 0.5% of sale price

REIT: 2.0% p.a. of gross revenue and 2.0% p.a. of NPI of Mandarin Gallery

and certain commercial areas

of Mandarin Orchard Singapore; 0.5% p.a. of NPI of Mandarin Gallery in

lieu of leasing commissions

First REIT 0.4% p.a. of


5.0% p.a. of NPI

Not exceeding


Deposited Property

1.0% of acquisition

price 0.5% of sale

price N.A.

ParkwayLife REIT 0.3% p.a. of


4.5% p.a. of NPI


1.0% of enterprise

value 0.5% of sale

price

2.0% p.a. of revenue for

property management, 1.0% p.a. of revenue for

lease management, as well as other

commissions


OCBC Investment Research

Singapore Equities

Important disclosures

Asia Pacific Equity Research

SHAREHOLDING DECLARATION:

For shareholding disclosure on individual companies, please refer to the latest reports of these companies.

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