suntec reit annual report for fy 2011

SunTec ReAL eSTATe InveSTMenT TRuST Annual Report 2011

Setting the Stage

Suntec REIT has grown from strength to strength to become one of Singapore’s largest commercial REITs with a portfolio of premier real estate assets.

We have set the stage for further growth and remain committed to deliver long-term value to our stakeholders.

1

01 About Suntec REIT03 Mission Statement10 Year In Review12 Chairman’s Report14 Financial Highlights

15 Unit Performance16 Board Of Directors20 Management Team24 Manager’s Report30 Property Portfolio

50 Market Report52 Investor Communications54 Corporate Governance64 Financial Contents

contents

AbouT SunTec ReITListed on 9 December 2004 on the Mainboard of the Singapore Exchange Securities Trading Limited (the “SGX-ST”), Suntec Real Estate Investment Trust (“Suntec REIT”) is the first composite REIT in Singapore owning income-producing real estate that is primarily used for retail and/or office purposes.

As at 31 December 2011, Suntec REIT’s portfolio comprises office and retail properties in Suntec City, Park Mall, CHIJMES, a one-third interest in One Raffles Quay and a one-third interest in Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall, all strategically located in the growth corridors of Marina Bay and the Civic and Cultural District within Singapore’s Central Business District. Suntec REIT also owns a 60.8 percent interest in Suntec Singapore International Convention & Exhibition Centre.

Suntec REIT is managed by an external manager, ARA Trust Management (Suntec) Limited (the “Manager”). The Manager is focused on delivering regular and stable distributions to Suntec REIT’s unitholders, and to achieve long-term growth in the net asset value per unit of Suntec REIT, so as to provide unitholders with a competitive rate of return on their investment.

AbouT ARA TRuST MAnAgeMenT (SunTec) LIMITed

The Manager is a wholly-owned subsidiary of ARA Asset Management Limited (“ARA”), a real estate fund management company listed on the Mainboard of the SGX-ST, and is an affiliate of the multinational conglomerate Cheung Kong Group.

ARA currently manages real estate investment trusts (“REITs”) listed in Singapore, Hong Kong and Malaysia with a diversified portfolio spanning the office, retail and industrial/office sectors, as well as private real estate funds investing in real estate in Asia. ARA also provides real estate management services, including property management services, convention & exhibition services and corporate finance advisory services. As at 31 December 2011, ARA’s total assets under management was approximately S$20.2 billion.

The Manager is responsible for the management and administration of Suntec REIT, as well as the implementation of Suntec REIT’s strategic long-term growth.

Delivering a resounding performance requires the coordinated symphony of a dedicated team of professionals with the skill set to deliver premium value to our stakeholders.

Forging ahead to create, provide and deliver premium value to all stakeholders of Suntec REIT.

MissionOur

Our single minded focus allows us to strengthen and enhance the long term value of our asset portfolio.

Casting the

ValueLight

on

Our discipline, prudence and proactive fine-tuning of our sound capital management strategies enable us to build a strong credit standing and deliver a solid financing track record.

Fine-tuning for

Execution Sound

Delivering a

Our passion, dedication and teamwork allow us to deliver a consistent and sustainable performance in the interests of our unitholders.

Performance

10 Suntec ReIT Annual Report 2011

• Unitholders approved all resolutions tabled at Suntec REIT’s annual general meeting held on 15 April 2011.

• Achieved distribution income of S$52.9 million for the period 1 January 2011 to 31 March 2011. DPU for the quarter amounted to 2.388 cents.

APRIL 2011JANUARY 2011

• Achieved distribution income of S$44.9 million for the period 1 October 2010 to 31 December 2010. Distribution per unit (“DPU”) for the quarter amounted to 2.316 cents.

Year in Review

• New issue of S$150 million medium term notes under the S$500 million Multicurrency MTN Programme.

• Announced and completed the S$114.75 million acquisition of a 51.0% interest in Harmony Partners Investments Limited which holds an 80.0% indirect interest in Suntec Singapore International Convention & Exhibition Centre (“Suntec Singapore”). This increases Suntec REIT’s effective stake in Suntec Singapore from 20.0% to 60.8%.

• Secured S$120 million term loan facility.

AUgUst 2011

S$7.7bASSeTS undeR MAnAgeMenT

S$220.7mdISTRIbuTIon IncoMe

11

• Achieved distribution income of S$56.4 million for the period 1 July 2011 to 30 September 2011. DPU for the quarter amounted to 2.533 cents.

• Suntec REIT conferred SIAS “Most Transparent Company” award 2011 (Runner-Up, REITs Category).

• Announced the divestment of CHIJMES for S$177 million, at 23.2% above the valuation as of 15 October 2011.

• Announced the S$410 million multi-phased remaking of Suntec City.

OctObeR 2011

JULY 2011

• Achieved distribution income of S$56.2 million for the period 1 April 2011 to 30 June 2011.

DPU for the quarter amounted to 2.532 cents.

• Establishment of a new S$500 million Multicurrency Medium Term Note (“MTN”)

Programme.

99.2%

offIce coMMITTed occupAncY

97.5%ReTAIL coMMITTed occupAncY


Suntec ReIT achieved a record high distribution income of S$220.7 million and a strong distribution per unit of 9.932 cents for fY 2011.

chairman’s Report

13

dear unitholders,

On behalf of the Board of ARA Trust Management (Suntec) Limited, the manager of Suntec REIT (the “Manager”), I am pleased to present the annual report of Suntec REIT for the financial year ended 31 December 2011 (“FY 2011”).

FY 2011 was a year of uncertainty, exacerbated by natural disasters in Japan, political upheavals in the Middle East and the economic crisis in Europe. Notwithstanding the global uncertainty, Suntec REIT achieved a record high distribution income of S$220.7 million for FY 2011, an increase of 20.9% over the previous year. Unitholders received a distribution per unit (“DPU”) of 9.932 cents which was 0.7% higher year-on-year and 14.2% higher than our Forecast1.

vALue enHAnceMenT And poRTfoLIo opTIMISATIon In August 2011, Suntec REIT gained strategic majority control of Suntec Singapore International Convention & Exhibition Centre (“Suntec Singapore”) through the acquisition of an additional 40.8% equity stake, raising our effective interest from 20.0% to 60.8%. Suntec City Mall and the award-winning Suntec Singapore will soon undergo an asset enhancement initiative (“AEI”). Suntec Singapore has played a major role in advancing the MICE2 industry in Singapore and with the planned enhancements, it will strengthen its foothold as Singapore’s premier MICE2 venue of choice. Levels 1 and 2 of Suntec Singapore will also be converted to retail use and integrated with Suntec City Mall which when the planned AEI is completed, would offer visitors a seamless experience in Suntec City. Suntec City Mall with its size, prime location and connectivity to two MRT stations, will transform itself into a more exciting shopping and lifestyle destination with new retail offerings, concept stores, alfresco dining complete with comprehensive amenities. The 4 phased AEI is targeted to complete in 2015 and projected to deliver an attractive 10.1% return on investment to unitholders.

As part of our proactive asset management strategies in maximising returns from our portfolio, we divested CHIJMES for a price of S$177.0 million, 23.2% higher than valuation. The sale proceeds will be deployed to partially fund the AEI and provide us the flexibility to mitigate any temporary dip in distribution per unit during the execution of the AEI.

pRudenT And pRoAcTIve cApITAL MAnAgeMenT We continued our prudent capital management strategy during the year to improve our overall financing cost and strengthen our debt maturity profile. Suntec REIT established a new S$500 million multicurrency medium term note (“MTN”) programme in July 2011 and issued a S$150 million MTN at 3.10% due 2016 to refinance Suntec REIT’s existing FY 2011 loans. In addition, we entered into a S$120 million term loan facility to finance the acquisition of the additional stake in Suntec Singapore. As at 31 December 2011, Suntec REIT’s total debt portfolio was approximately S$2.8 billion and our gearing ratio was 37.3% with an average all-in financing cost of 2.81% for FY 2011.

RobuST fInAncIAL And opeRATIng peRfoRMAnce Against the backdrop of negative rental reversions in our office portfolio in FY 2011, the continuing challenges of the retail sector and the on-going Euro crisis, our strategy and focus on protecting and preserving our high occupancies enabled Suntec REIT to achieve a record distribution income of S$220.7 million for the year, a 20.9% increase year-on-year. With the DPU of 9.932 cents for FY 2011, Suntec REIT has, since our initial public offering in December 2004, delivered 65.3 Singapore cents of DPU through the peaks and troughs of the property market.

As at 31 December 2011, we achieved strong committed occupancies of 99.2% for our office properties and 97.5% for our retail properties in FY 2011. In particular, Park Mall, CHIJMES, One Raffles Quay achieved 100% occupancies.

LooKIng AHeAdThe economic outlook for Singapore is expected to be positive but muted for 2012 with the Ministry of Trade and Industry estimating GDP growth to be only 1%-3% on the back of uncertain global macroeconomic conditions.

We are cognisant of the uncertainties ahead and have implemented pre-emptive measures to protect our income stream and minimise our risk exposure. By December 2011, we have forward renewed more than 233,000 sq ft of office leases due to expire in 2012. With a balance of approximately 10.0% of our office leases expiring in 2012 and the high committed occupancy of the REIT portfolio, we are well positioned to meet the challenges ahead. Our key priorities in 2012 are to continue our proactive leasing strategies and to ensure the smooth and successful execution of the AEI so as to continue to deliver premium value to our unitholders.

AWARd And AccoLAdeS During the year, Suntec REIT received a Runner-up Award for the “Most Transparent Company Award 2011” under the REITs category in the SIAS Investors’ Choice Awards 2011. This is the sixth year that Suntec REIT has been recognised for our high standards of corporate transparency and disclosure.

In AppRecIATIonI would like to express my appreciation to the members of the Board for their invaluable contributions during the year. I would also like to thank the management team for their hard work and dedication in delivering another year of strong performance for Suntec REIT. Last but not least, I am grateful to our unitholders, tenants, business partners and stakeholders for your continued strong support.

cHIu KWoK Hung, JuSTInChairman and Director 28 February 2012

notes:1 The forecast is based on the assumptions as set out in Suntec REIT’s circular to Unitholders dated

8 November 2010 (“Forecast”).2 Meetings, incentives, conventions and exhibitions.


conSoLIdATed pRofIT And LoSS STATeMenT foR THe fInAncIAL YeAR 2011 2010

Gross Revenue S$270.3m S$249.5mNet Property Income S$193.4m S$193.1mIncome Contribution from Jointly Controlled Entities1 S$105.8m S$45.3mIncome Available For Distribution S$220.7m S$182.5mDistribution Per Unit (“DPU”) 9.93¢ 9.86¢Fully Diluted DPU2 9.93¢ 9.61¢

notes:1 Includes 20.0% interest in Suntec Singapore for the period 1 January 2011 to 18 August 2011. Following the acquisition of additional 40.8% interest in Suntec Singapore, it has been reclassified out from interest in

jointly controlled entities and consolidated accordingly.

2 The deferred units totaling 207,002,170 units had been issued in six equal half-yearly instalments, with the first instalment issued on 9 June 2008 and the last instalment issued on 9 December 2010. The deferred units were issued at the Suntec REIT initial public offering price of S$1.00 per unit. The “Fully Diluted DPU” illustrates the pro-forma DPU assuming that all the deferred units had been issued on 9 December 2004.

conSoLIdATed bALAnce SHeeT AS AT 31 dec 2011 31 dec 2010

Investment Properties S$5,241.8m S$4,452.0mInterest In Jointly Controlled Entities1 S$2,087.3m S$2,039.7mTotal Assets S$7,516.7m S$6,652.1mDebt At Amortised Cost S$2,804.1m S$2,554.6mTotal Liabilities S$2,970.1m S$2,667.4mUnitholders’ Funds S$4,433.8m S$3,984.6mNet Asset Value Per Unit S$1.99 S$1.80Debt-to-Asset Ratio2 37.3% 38.4%

notes:1 Arising from the acquisition of a one-third interest in One Raffles Quay through the purchase of the entire issued share capital of Comina Investment Limited in 2007 and the acquisition of a one-third interest in the

Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall through the purchase of one-third of the issued share capital of BFC Development Pte. Ltd. in 2010. Following the acquisition of additional 40.8% interest in Suntec Singapore through its wholly-owned subsidiary Suntec Harmony Pte. Ltd. in August 2011, the interest in Suntec Singapore has been reclassified out from Interest in jointly controlled entities and consolidated accordingly.

2 Based on debt at amortised cost. Suntec REIT’s “Aggregate Leverage Ratio”, which refers to the ratio of the value of borrowings (inclusive of proportionate share of borrowings of jointly controlled entities) and deferred payments (if any) to the value of the Deposited Property in accordance with Appendix 6 on the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore was 39.1% and 40.4% as at 31 December 2011 and 31 December 2010 respectively.

financial Highlights

STRong gRoWTH And peRfoRMAnce TRAcK RecoRd SInce LISTIng

ASSETS UNDER MANAGEMENT

S$ bil

0

2

4

6

8

Dec 04

2.2 2.3

Sep 05

3.2

Sep 06

4.6

Sep 07

5.4

Dec 08

5.2

Dec 09

7.0

Dec 10

7.7

Dec 11

0

50

100

150

200

25010

INCOME AVAILABLE FOR DISTRIBUTION

S$ mil

FY 2005

87.1

FY 2006

99.8

FY 2007

122.1

FY 2008

167.7

FY 2009

189.6

FY 2010

182.5

FY 2011

220.7

15

Volu

me

(Dai

ly,M

illio

ns)

unIT peRfoRMAnce AS AT1 2011 2010 2009 2008 2007

Last Done Unit Price S$1.075 S$1.50 S$1.35 S$0.71 S$1.71Highest Unit Price S$1.63 S$1.56 S$1.37 S$1.69 S$2.10Lowest Unit Price S$1.065 S$1.23 S$0.495 S$0.575 S$1.55Market Capitalisation2 (mil) S$2,391 S$3,308 S$2,426 S$1,116 S$2,542Traded Volume for the Financial Year (mil) 1,664 1,618 2,244 1,782 2,149

notes:1 Unit performance statistics are for the financial years ended 31 December.

2 Based on 1,487 million units, 1,571 million units, 1,797 million units, 2,205 million units and 2,225 million units in issue as at 31 December 2007, 2008, 2009, 2010 and 2011 respectively.

coMpARATIve YIeLd STATISTIcS (%)foR THe fInAncIAL YeAR 2011 2010 2009 2008 2007

Traded Yield (based on DPU1) 9.24 6.57 8.67 15.53 4.95Traded Yield (based on Fully Diluted DPU1,2) 9.24 6.40 8.09 13.84 4.33Singapore Government 10-Year Bond3 1.63 2.71 2.66 2.05 2.68

notes:1 Based on the last done unit price (as stated in the table above) and the full year DPU based on the period from 1 January to 31 December. Calculations were based on a DPU of 8.47 cents, 11.02 cents, 11.70 cents, 9.86 cents and 9.93 cents, and a Fully Diluted DPU of 7.40 cents, 9.83 cents, 10.92 cents, 9.61 cents and 9.93 cents for FY 2007, FY 2008, FY 2009, FY 2010 and FY 2011 respectively.

2 The deferred units totaling 207,002,170 units had been issued in six equal half-yearly instalments, with the first instalment issued on 9 June 2008 and the last instalment issued on 9 December 2010. The deferred units were issued at the Suntec REIT initial public offering price of S$1.00 per unit. The “Fully Diluted DPU” illustrates the pro-forma DPU assuming that all the deferred units had been issued on 9 December 2004.

3 As at 31 December for the respective financial years.

As at 31 December 2011, Suntec REIT’s unit price stood at S$1.075, with a market capitalisation of approximately S$2.4 billion. Suntec REIT’s FY 2011 DPU yield of 9.24% has also outperformed the Singapore Government 10-year bond yield at 1.63%. As at end FY 2011, Suntec REIT unitholders would have achieved an average annual return of 9.7% since listing. As one of Singapore’s most liquid listed REITs, the overall traded volume was 1,664 million units for the 12 months ended 31 December 2011.

As at 31 December 2011, Suntec REIT is a constituent member of major global indices such as the FTSE NAREIT/EPRA Global Real Estate Index and the Global Property Research (GPR) 250 Index series. It is also a constituent of the FTSE Straits Times Mid Cap Index and FTSE Straits Times Real Estate Index in Singapore.

unIT pRIce And voLuMe cHART foR fY 2011

Uni

t Pric

e (S

$)

Volume Traded Price

unit performance

Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11

0.50 0

5

10

15

20

25

0.70

0.90

1.10

1.30

1.50

1.70


cHIu KWoK Hung, JuSTInchairman and directorMr. Chiu Kwok Hung, Justin is the Chairman of the Manager. He is also the Chairman and Non-executive Director of ARA Asset Management Limited (“ARA”), the holding company of the Manager, the Chairman of ARA Asset Management (Fortune) Limited, the manager of Fortune REIT and the Chairman of ARA Asset Management (Prosperity) Limited, the manager of Prosperity REIT. ARA is listed on Singapore Exchange Securities Trading Limited (the “SGX-ST”), Fortune REIT is dual-listed on the SGX-ST and the Main Board of The Stock Exchange of Hong Kong Limited (“SEHK”), and Prosperity REIT is listed on the Main Board of SEHK. Mr. Chiu is also a Director of ARA Fund Management (Asia Dragon) Limited, as the manager of the ARA Asia Dragon Fund. Mr. Chiu is a member of the 11th Shanghai Committee of the Chinese People’s Political Consultative Conference of the People’s Republic of China, a Fellow of The Hong Kong Institute of Directors, a Fellow of Hong Kong Institute of Real Estate Administrators and a member of the Board of Governors of Hong Kong Baptist University Foundation.

Mr. Chiu has more than 30 years of international experience in real estate in Hong Kong and various countries and is one of the most respected professionals in the property industry in Asia. Mr. Chiu is an Executive Director of Cheung Kong (Holdings) Limited (“Cheung Kong”), a company listed on the Main Board of SEHK. He joined Cheung Kong in 1997 and has been an Executive Director since 2000, heading the real estate sales, marketing and property management teams. Prior to joining Cheung Kong, Mr. Chiu was with Sino Land Company Limited from 1994 to 1997 and Hang Lung Development Company, Limited (now known as Hang Lung Group Limited) from 1979 to 1994 responsible for the leasing and property management in both companies. Both Sino Land Company Limited and Hang Lung Group Limited are listed on the Main Board of SEHK.

Mr. Chiu holds Bachelor degrees in Sociology and Economics from Trent University in Ontario, Canada.

LIM HWee cHIAng, JoHndirector Mr. Lim is a Director of the Manager. He is also the Group Chief Executive Officer and an Executive Director of ARA, the holding company of the Manager, which is listed on the SGX-ST. He has been the Group Chief Executive Officer and a Director of ARA since its establishment in 2002. He is also a Director of ARA Asset Management (Fortune) Limited, the manager of Fortune REIT, dual-listed in Singapore and Hong Kong, ARA Asset Management (Prosperity) Limited, the manager of Hong Kong-listed Prosperity REIT, Am ARA REIT Managers Sdn Bhd, the manager of Malaysia-listed AmFIRST REIT, ARA-CWT Trust Management (Cache) Limited, the manager of Singapore-listed Cache Logistics Trust, APN Property Group Limited listed in Australia and Hui Xian Asset Management Limited, the manager of Hong Kong-listed Hui Xian REIT. He is also the Chairman of APM Property Management Pte. Ltd., Suntec Singapore International Convention & Exhibition Services Pte. Ltd. and the management council of Management Corporation Strata Title Plan No. 2197 (Suntec City). In addition, Mr. Lim is an Independent Director and member of the audit committee of Singapore-listed Teckwah Industrial Corporation Limited. He is also the Vice President of the Hong Kong-Singapore Business Association, the Senior Vice President of the Asian Pacific Real Estate Association, a council member of the Singapore Chinese Chamber of Commerce & Industry and a member of the Valuation Review Board of the Ministry of Finance of Singapore.

Mr. Lim has more than 30 years of experience in real estate. Prior to founding ARA, from 1997 to 2002, he was an Executive Director of GRA (Singapore) Pte. Ltd., a wholly-owned subsidiary of Prudential (US) Real Estate Investors. From 1996 to 1997, he founded and was the Managing Director of The Land Managers (S) Pte. Ltd., a Singapore-based property and consulting firm specialising in feasibility studies, marketing and leasing management in Singapore, Hong Kong and China. He was the General Manager of the Singapore Labour Foundation Management Services Pte. Ltd. from 1991 to 1995, and was with DBS Land Limited (now part of CapitaLand Limited) from 1981 to 1990.

Mr. Lim holds a Bachelor of Engineering (First Class Honours) in Mechanical Engineering, a Master of Science in Industrial Engineering, as well as a Diploma in Business Administration, each from the National University of Singapore.

board of directors

17

Ip TAK cHuen, edMonddirectorMr. Ip Tak Chuen, Edmond is a Director of the Manager. He is also a Non-executive Director of ARA, the holding company of the Manager, a Non-executive Director of the manager of Hui Xian REIT and a Director of the manager of Fortune REIT. ARA is listed on the SGX-ST, Hui Xian REIT is listed on the Main Board of SEHK and Fortune REIT is dual-listed on the SGX-ST and the Main Board of SEHK.

Mr. Ip has been an Executive Director of Cheung Kong since 1993 and Deputy Managing Director since 2005, responsible for overseeing all financial and treasury functions of Cheung Kong and its subsidiaries, particularly in the fields of corporate and project finance. He has been an Executive Director of Cheung Kong Infrastructure Holdings Limited (“CK Infrastructure”) since its incorporation in 1996 and Deputy Chairman since 2003, and the Senior Vice President and Chief Investment Officer of CK Life Sciences Int’l., (Holdings) Inc. (“CK Life Sciences”) since 2002. He oversees matters relating to corporate finance, strategic acquisition and investment of both CK Infrastructure and CK Life Sciences. Mr. Ip is also a Non-executive Director of TOM Group Limited (“TOM”), AVIC International Holding (HK) Limited (“AVIC”), Excel Technology International Holdings Limited (“Excel”), Real Nutriceutical Group Limited (formerly known as Ruinian International Limited) (“Real Nutriceutical”) and Shougang Concord International Enterprises Company Limited (“Shougang”). Cheung Kong, CK Infrastructure, CK Life Sciences and TOM, AVIC, Real Nutriceutical and Shougang are listed on the Main Board of SEHK. Excel is listed on the Growth Enterprise Market (GEM) of SEHK. Prior to joining Cheung Kong, Mr. Ip held a number of senior financial positions in major financial institutions and has extensive experience in the Hong Kong financial market covering diverse activities such as banking, capital markets, corporate finance, securities brokerage and portfolio investments.

Mr. Ip holds a Bachelor of Arts degree in Economics and a Master of Science degree in Business Administration.

TAn KIAn cHeWIndependent directorMr. Tan is an Independent Director and Chairman of the audit committee of the Manager. He is currently the Group Chief Executive Officer of NTUC FairPrice. He served in the Republic of Singapore’s Navy from 1976 to 1983 and held the position of head of naval operations from 1980 to 1983. He left the Navy to join the Singapore Government’s elite Administrative Service in 1983 and served in the Ministry of Trade and Industry. At that time he was also appointed to the board of directors of NTUC FairPrice Co-operative Ltd. In 1988, he was posted to the Prime Minister’s Office where he served as the Principal Private Secretary to the then Deputy Prime Minister, Mr. Ong Teng Cheong.

Mr. Tan left the Administrative Service to join NTUC FairPrice in 1992 as its Assistant General Manager and was subsequently promoted to Chief Executive Officer in 1997.

Mr. Tan obtained an Honours degree (First Class) in Mechanical Engineering from the University of Aston in Birmingham, UK. He also completed the Advance Management Program at Harvard University in 2000. Mr. Tan was awarded a SAF (Overseas) Scholarship in 1972 and was a recipient of the Singapore Public Administration Medal (Silver) in 1991.


board of directors

Sng SoW MeI (ALIAS poon SoW MeI)Independent directorMrs. Sng is an Independent Director and member of the audit committee of the Manager. Mrs. Sng, who has been appointed as the Independent Non-executive Director and member of the audit committee of Cheung Kong Infrastructure Holdings Limited, is also an Independent Director and member of the audit committee of the manager of Fortune REIT, the manager of Prosperity REIT, an Independent Non-executive Director and member of the audit committee of Hutchison Port Holdings Management Pte. Limited and a Director of INFA Systems Ltd, a subsidiary of Singapore Technologies Electronics Limited. Since 2001, she has been the Senior Consultant (International Business) of Singapore Technologies Electronics Limited.

Prior to her appointments with Singapore Technologies Pte Ltd (now part of ST Engineering Limited), where she was Director, Special Projects (North East Asia) in 2000 and a Consultant in 2001, Mrs. Sng was the Managing Director of CapitaLand Hong Kong Ltd for investment in Hong Kong and the region including Japan and Taiwan. In Hong Kong from 1983 to 1997, Mrs. Sng was the Centre Director and then Regional Director of the Singapore Economic Development Board and Trade Development Board respectively. She was Singapore’s Trade Commissioner in Hong Kong from 1990 to 1997.

Mrs. Sng, with a Bachelor of Arts degree from the Nanyang University of Singapore, has wide experience in various fields of industrial investment, business development, strategic and financial management, especially in property investment and management. In 1996, Mrs. Sng was conferred the title of PPA(P) – Pingat Pentadbiran Awam (Perak), the Singapore Public Administration Medal (Silver).

LIM Lee MengIndependent directorMr. Lim is an Independent Director and member of the audit committee of the Manager. He is currently a Senior Partner of RSM Chio Lim LLP, a member firm of RSM International. Mr. Lim is also an Independent Director of Teckwah Industrial Corporation Ltd (“Teckwah”), Tye Soon Ltd, and the manager of Fortune REIT. He also serves as the Chairman of the audit committee of Teckwah and the manager of Fortune REIT.

Mr. Lim is also a practising member of the Institute of Certified Public Accountants of Singapore, an associate member of the Institute of Chartered Secretaries and Administrators and a fellow member of the Singapore Institute of Directors. He is also the Vice-Chairman of the River Valley High School Advisory Committee, the Chairman of Yio Chu Kang Citizen Consultative Committee and the Chairman of the finance committee of Ang Mo Kio Town Council. In addition, Mr. Lim serves as a member of the Casino Regulatory Authority of Singapore Board, a member of the Appeal Advisory Panels of the Monetary Authority of Singapore and a member of the Taxpayer Feedback Panel of the Inland Revenue Authority of Singapore.

Mr. Lim graduated from the Nanyang University of Singapore with a Bachelor of Commerce (Accountancy) degree in May 1980. He also has a Master of Business Administration degree from the University of Hull (1992), a Diploma in Business Law from the National University of Singapore (1989) and an ICSA qualification from the Institute of Chartered Secretaries and Administrators.

cHen WeI cHIng, vIncenTIndependent directorMr. Chen is an Independent Director and member of the audit committee of the Manager. He is currently also an Independent Director of Transpac Industrial Holdings Ltd and United Fiber System Ltd.

Mr. Chen has more than 20 years of experience in the banking and finance industry, having spent 17 years with the First National Bank of Chicago, Bank of America, and Banque Francaise du Commerce Exterieur, and subsequently co-founded a financial consulting firm in 1988. Since 1993, he has been managing his personal and family investments.

Mr. Chen holds a Bachelor of Science degree in Industrial Engineering from Cornell University, and a Master of Business Administration degree from the University of Pennsylvania.

19

cHoW WAI WAI, JoHnnon-executive directorMr. Chow is a Non-executive Director of the Manager. He is currently the Managing Director of Hong Kong-listed Winsor Properties Holdings Limited, which has operations in Hong Kong, China and Singapore. He is also the Managing Director of Winsor Industrial Corporation Limited, which has international operations spanning countries in the US, Europe and Asia, and he holds directorships in the various subsidiaries and associated companies of the Winsor companies. He is an Executive Director of Hong Kong-listed Wing Tai Properties Limited and is also a Non-executive Director of Hong Kong-listed Dah Sing Financial Holdings Limited.

Mr. Chow has more than 30 years of experience in the property, textile and clothing businesses. He has served as Chairman of the Hong Kong Garment Manufacturers Association and as a member of the Textile Advisory Board of the Hong Kong Government.

Mr. Chow received his Bachelor of Arts (Economics) degree from the University of British Columbia.

Yeo See KIATchief executive officer and directorMr. Yeo See Kiat is the Chief Executive Officer and an Executive Director of the Manager. He is also a Director of One Raffles Quay Pte Ltd., BFC Development Pte. Ltd. and Suntec Harmony Pte Ltd.

Mr. Yeo has more than 30 years of experience in the real estate industry, managing and overseeing various projects with Hwa Hong Corporation Limited, The Wharf Group, Parkway Holdings Limited, and CapitaLand Limited. He has held senior management positions over the last 20 years. Mr. Yeo started his career in Turquand Young (now Ernst & Young) and was with the firm from 1976 to 1980.

Mr. Yeo holds a Bachelor of Accountancy from the University of Singapore and a Graduate Diploma in Management Studies from the Singapore Institute of Management. He is also a fellow of the Institute of Certified Public Accountants of Singapore.

MA LAI cHee, geRALdAlternate directorMr. Ma is an Alternate Director to Mr. Ip Tak Chuen, Edmond, a Director of the Manager and the manager of Fortune REIT. He is also a Director of AMTD Financial Planning Limited, iBusiness Corporation Limited, CK Communications Limited, Beijing Net-Infinity Technology Development Company Limited and mReferral Corporation (HK) Limited. He also serves as a Non-executive Director of the manager of Prosperity REIT, and is an Alternate Director to Mr. Dominic Lai, Non-executive Director of Hutchison Telecommunications Hong Kong Holdings Limited.

Mr. Ma is currently Director, Corporate Strategy Unit and Chief Manager, Corporate Business Development at Cheung Kong. He has over 22 years of experience in banking, investment and portfolio management, real estate development and marketing, as well as managing IT related ventures and services. He is a member of the Hospitality Services Committee of Caritas Hong Kong and a member of the Finance Committee of The Scout Association of Hong Kong. He is also a member of the President’s Circle of the University of British Columbia, Canada (“UBC”) and a member of the Dean’s Advisory Board for the Faculty of Arts of UBC.

Mr. Ma holds a Bachelor of Commerce degree in Finance and a Master of Arts degree in Global Business Management.


Yeo See Kiat -Chief Executive Officer

Janice Phoon Senior Manager, Asset Management

Elaine Leong Senior Accountant, Finance

Tan Cheng ChengAssistant Manager, Finance

Ng Ee SanSenior Manager, Finance

Richard Tan Director, Finance

Yip Kam Thai Chief Operating Officer

Foo Sze Ming Assistant Manager

Thomas Wong Senior Manager, Asset Management

Julia Koh Manager, Special Projects

Lim Kim Loon Manager, Asset Management

Melissa ChowAssistant Manager, Investor Relations

Serene LuiManager, Finance

Billy Ang Assistant Manager, Asset Management

Chan Chuey Leng Manager, Asset Management

ARA Trust Management (Suntec) LimitedManagement Team


21

Yeo See KIATchief executive officer

Mr. Yeo is responsible for the performance and direction of Suntec REIT. He leads his team of managers to achieve the key mission of creating, adding and delivering premium value to all stakeholders of Suntec REIT.

With single-minded focus, he leads and supports his team of experienced professionals with a passion and drive to deliver.

His experience is highlighted in the section on the Board of Directors.

YIp KAM THAIchief operating officer

Mr. Yip assists the Chief Executive Officer on operational matters pertaining to Suntec REIT, including asset management, investment, investor relations and asset enhancement initiatives.

Mr. Yip has been with the real estate industry since 1993, and has been with ARA since 2004. Within ARA, he has held various senior positions in the listed REITs and funds under management, including Executive Director of the manager of Fortune REIT, and Acting Chief Executive Officer of the manager of Prosperity REIT. Prior to his current appointment, he was based in Hong Kong as the Director and Head of Asset Management, as well as the China and Hong Kong Representative for the ARA Asia Dragon Fund.

Mr. Yip holds a Bachelor of Science (Honours) Degree in Estate Management from the National University of Singapore.

RIcHARd TAndirector, finance

Mr. Tan heads the finance team and assists the Chief Executive Officer on all accounting, finance, treasury and capital management functions for Suntec REIT.

Mr. Tan has more than 30 years of financial management experience in the banking and IT industries. He was previously the Regional Finance Director and Business Manager for South East Asia in Hewlett-Packard’s Sales & Marketing Division.

Prior to joining the IT industry, Mr. Tan also held various senior positions in banking both in Singapore and Hong Kong for over 18 years. He was the Finance Director of Schroders Singapore and was Head of Finance & Operations for an investment bank in Hong Kong. Mr. Tan also held the position of Country Operations Manager for American Express Bank Singapore.

Mr. Tan holds a Bachelor of Accountancy Degree from the University of Singapore.

THoMAS WongSenior Manager, Asset Management

Mr. Wong is a member of the Asset Management team and assists the Chief Operating Officer in the monitoring of the performance of the assets within the existing portfolio, strategizing, implementing asset enhancement initiatives, and in business development & acquisition of properties.

Mr. Wong has more than 18 years of real estate experience in areas of property investment and asset management of residential, commercial and hospitality properties. Prior to joining the Manager, he was a Business Development Manager with Keppel Land International Limited where he was involved in the acquisition of properties for redevelopment and investment. He previously held position as Senior Business Development Executive at Sembawang Leisure Private Limited and Executive at Neptune Orient Line Limited.

Mr. Wong holds a Master Degree in Financial Management from the Macquarie University and a Bachelor Degree of Arts from the National University of Singapore..

ng ee SAnSenior Manager, finance

Ms. Ng is a member of the Finance team, responsible for the finances of Suntec REIT and provides support in areas of secretariat compliance, taxation and treasury.

Ms. Ng has more than 13 years of experience in accounting and finance. Prior to joining the Manager, she was the Finance Manager at Ascott Residence Trust Management Limited, the Manager of Ascott Residence Trust. She was also previously an Accountant at Wing Tai Holdings Limited and The Hour Glass Limited, and had held various positions with PSA Corporation Limited and Deloitte And Touche.

Ms. Ng holds a Bachelor of Accountancy (Accounting) Degree from Nanyang Technological University, Singapore, and is a Certified Public Accountant.


ARA Trust Management (Suntec) LimitedManagement Team

JAnIce pHoonSenior Manager, Asset Management

Ms. Phoon is a member of the Asset Management team, responsible for overseeing and driving the performance of the office portfolio of Suntec REIT.

Ms. Phoon has more than 15 years of experience in marketing and leasing. Prior to joining the Manager, she was the Assistant Marketing Manager of Riverwalk Promenade Pte Ltd where she played a key role in marketing and leasing the TradeMart Singapore complex.

Ms. Phoon holds a Bachelor of Commerce Degree in Marketing and Management from Murdoch University, Western Australia and a Diploma in Building Management from Ngee Ann Polytechnic, Singapore.

LIM KIM LoonManager, Asset Management

Ms. Lim is a member of the Asset Management team, responsible for monitoring the performance of the retail assets, and in strategising and implementing asset enhancement initiatives.

Ms. Lim has over 15 years of real estate experience in areas of property management and maintenance, marketing and lease management of commercial and retail properties. Prior to joining the Manager, she was with CapitaLand Retail Management Pte Ltd where she was responsible for the day-to-day management of a shopping mall. Her responsibilities included the leasing, marketing, operations, asset enhancement and financial performance. She previously held positions as Manager of the Property Department at The Great Eastern Life Assurance Co Limited and Marketing Officer of SLF Management Services Pte Ltd.

Ms. Lim holds a Bachelor of Science (Honours) Degree in Estate Management from the National University of Singapore.

cHAn cHueY LengManager, Asset Management

Ms. Chan is a member of the Asset Management team, responsible for monitoring the performance of the retail assets and overseeing the advertising and promotional activities and branding initiatives of the retail portfolio.

Ms. Chan has more than 15 years of experience in marketing and leasing of commercial, retail, industrial and residential properties. Prior to joining the Manager, she was the Marketing and Leasing Manager at Cathay Cineleisure International Pte Ltd. She was previously the Assistant Marketing Manager with Tuan Sing Holdings Limited and prior to that, was the Assistant Marketing Manager with Riverwalk Promenade Pte Ltd.

Ms. Chan holds a Bachelor of Science (Honours) Degree in Estate Management from the National University of Singapore.

JuLIA KoHManager, Special projects

Ms. Koh is a member of the Special Projects team who is involved in asset enhancement works, with more than 15 years of working experience in Quantity Surveying and Project Management.

Prior to joining the Manager, she was the Senior Project Executive at CapitaLand Retail Limited involving in the redevelopment of Clarke Quay, reconstruction of Sembawang Shopping Centre as well as the upgrading of LOT One Shoppers’ Mall. She was also the Senior Quantity Executive at Tiong Seng Contractor Limited involved in the construction of Guilin View Condominium.

Ms. Koh holds a Diploma in Building (Quantity Surveying) from the Singapore Polytechnic.

SeRene LuIManager, finance

Ms. Lui is a member of the Finance team, assisting in managing the monthly accounts and preparation of financial statements and providing support in areas of secretariat compliance, taxation and treasury.

Ms. Lui has more than 9 years of experience in accounting and finance. Prior to joining the Manager, she was Audit Manager at PricewaterhouseCoopers LLC.

Ms. Lui holds a Bachelor of Commerce (Accounting & Finance) Degree from University of Western Australia, Perth, and is a Certified Public Accountant.

23

TAn cHeng cHengAssistant Manager, finance

Ms. Tan is a member of the Finance team, assisting in managing the monthly accounts and preparation of financial statements and providing support in areas of secretariat compliance, taxation and treasury.

Ms. Tan has more than 20 years of commercial/industrial experience. Prior to joining the Manager, she was the Accountant responsible for the finance operations of property-related subsidiaries of United Industrial Corporation Limited. Ms. Tan also previously held finance positions in Euro-Asia Realty Pte Ltd, JDC Holdings (S) Pte Ltd and Singapore Shipping Corporation Pte Ltd.

Ms. Tan holds an ACCA Certificate (UK) and is a Certified Public Accountant.

bILLY AngAssistant Manager, Asset Management

Mr. Ang has over 6 years of experience in real estate. Prior to joining the Manager, he was Assistant Manager with ARA Managers (Harmony) Pte. Ltd., covering asset management and asset enhancement initiatives on Suntec Singapore International Convention and Exhibition Centre. Before that he was Assistant Vice President at AEP Investment Management where he covered investment and asset management for a private equity real estate fund. At Wing Tai, he was a project development executive involved with residential developments within Singapore. He started his career as an architectural consultant with Aedas.

Mr. Ang holds a Bachelor of Architecture from University of New South Wales.

MeLISSA cHoWAssistant Manager, Investor Relations

Ms. Chow oversees the investor relations activities of Suntec REIT. These include facilitating the timely communication of quality information to unitholders, potential investors, key stakeholders and providing the Manager with key market updates.

Ms. Chow has over 4 years of experience in the field of investor relations. Prior to joining the Manager, she was an investor relations associate at Oxley Group where she managed the communication channels between the private equity firm and the investment community. At Kaiiten Communications, she managed the investor relations function for several Singapore and China based companies listed on the Singapore Stock Exchange.

Ms. Chow holds a Bachelor of Business Management (Finance and Corporate Communications) from Singapore Management University.

foo Sze MIngAssistant Manager

Mr. Foo is responsible for developing and maintaining financial and asset models to analyse the performance of Suntec REIT. He provides support in the evaluation of potential investments and asset enhancement initiatives.

Mr. Foo has over 5 years of experience in the investment industry. Prior to joining the Manager, he was part of the Portfolio Management team at Temasek Holdings Pte. Ltd. He was also previously a Property Analyst with OCBC Investment Research and Research Analyst with NRA Capital Pte. Ltd.

Mr. Foo holds a Bachelor of Business (Banking and Finance) from Nanyang Technological University and he is a CFA Charterholder.

eLAIne LeongSenior Accountant, finance

Ms. Leong is a member of the Finance team, assisting in managing the monthly accounts and preparation of financial statements and providing support in areas of secretariat compliance, taxation and treasury.

Ms. Leong has over 4 years of experience in accounting and finance. Prior to joining the Manager, she was the Accountant at Mapletree Investments Pte Ltd where she was responsible for the finance operations of its commercial property subsidiaries. She was also previously an Auditor with KPMG LLP.

Ms. Leong holds a Bachelor of Business Management (Finance and Accounting) Degree from Singapore Management University and an ACCA Certificate (UK).


YeAR In RevIeWSuntec REIT achieved record distribution income of S$220.7 million and a strong distribution per unit (“DPU”) of 9.932 cents for the financial year ended 31 December 2011 (“FY 2011”). In FY 2011, Suntec REIT acquired strategic majority control of Suntec Singapore International Convention & Exhibition Centre (“Suntec Singapore”), divested CHIJMES at 23.2% above valuation and initiated the S$410 million asset enhancement initiative (“AEI”) for the remaking of Suntec City Mall and Suntec Singapore.

As at end FY 2011, Suntec REIT’s assets under management (“AUM”) has grown to approximately S$7.7 billion, underpinned by a strong 2.4 million sq ft of prime office portfolio and 1.1 million sq ft retail portfolio strategically-located in the heart of Singapore’s Central Business District.

fInAncIAL peRfoRMAnceSuntec REIT achieved gross revenue of S$270.3 million in FY 2011, an increase of 8.3% compared to the corresponding period in 2010 (“FY 2010”). Office revenue in FY 2011 was S$115.2 million, a dip of 2.1% year-on-year, whilst retail revenue achieved was S$127.7 million, which was 3.1% lower than in FY 2010.

In terms of revenue contribution by asset, Suntec City contributed S$210.1 million in gross revenue in FY 2011 whilst Park Mall and CHIJMES contributed S$22.3 million and S$10.5 million respectively. Suntec Singapore’s revenue contribution for the period 19 August to 31 December 2011 was S$27.4 million.

The net property income achieved in FY 2011 was S$193.4 million, up 0.2% compared to FY 2010.

The income contribution from the jointly controlled entities for FY 2011 was S$105.8 million. This comprised the income contribution of S$31.2 million from the one-third interest in One Raffles Quay and

S$73.9 million from the one-third interest in Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall (the “MBFC Properties”), and S$0.7 million from Suntec Singapore1.

The income available for distribution achieved for FY 2011 was S$220.7 million, 20.9% higher year-on-year. The DPU achieved for FY 2011 amounted to 9.932 cents, which translated to an annual yield of 9.2%2 for the year.

Compared to the Forecast3, the revenue and net property income achieved in FY 2011 was 10.9% and 6.4% higher. The distribution income and DPU were also at a significant 14.5% and 14.2% above the Forecast3 mainly due to interest cost savings and higher income contribution from the MBFC Properties.

notes:1 For the period 1 January 2011 to 18 August 2011. Following this, Suntec Singapore’s results was

consolidated with the acquisition of the additional 40.8% effective stake.2 Based on the market closing price of S$1.075 as at 31 December 2011.3 The forecast is based on the assumptions as set out in Suntec REIT’s circular to Unitholders dated 8 November 2010 (“Forecast”).

pRopeRTY poRTfoLIo On 18 August 2011, Suntec REIT successfully acquired an additional 40.8% interest in Suntec Singapore for S$114.8 million, raising Suntec REIT’s stake to 60.8%. Suntec Singapore is strategic to the

dISTRIbuTIon peR unIT fY2011 fY2010

DPU 9.932 9.859Fully Diluted DPU1 9.932 9.607

note:1 The deferred units totaling 207,002,170 units had been issued in six equal half-yearly instalments, with

the first instalment issued on 9 June 2008 and the last instalment issued on 9 December 2010. The deferred units were issued at the Suntec REIT initial public offering price of S$1.00 per unit. The “Fully Diluted DPU” illustrates the pro-forma DPU assuming that all the deferred units had been issued on

9 December 2004.

neT pRopeRTY IncoMe

Contribution by Asset

Suntec City 87.8%

Park Mall 8.5%

CHIJMES 3.7%

gRoSS Revenue

Contribution by Asset

Suntec City 87.9%

Park Mall 8.2%

CHIJMES 3.9%

fY 2011fY 2011

Manager’s Report

25

REIT’s existing portfolio being an integral part of Suntec City and offers synergistic opportunities to further unlock the underlying value through the AEI.

Suntec REIT announced the remaking of Suntec City on 31 October 2011. Scheduled to commence in mid 2012, the multi-phased AEI comprised of a S$230 million capital expenditure in remaking Suntec City Mall and a further S$180 million on Suntec Singapore, transforming Suntec City into a premier MICE1, business, shopping and lifestyle destination. Upon completion in mid-2015, Suntec City will offer almost 1 million sq ft of retail lettable space.

As part of the proactive strategies to maximize returns from the portfolio, CHIJMES was divested for S$177.0 million, a 23.2% premium over its last valuation of S$143.7 million2. CHIJMES was purchased in December 2005 for S$128 million. The sale proceeds will be used to partially fund the AEI and to mitigate any temporary dip in DPU during the execution of the AEI.

Suntec REIT’s total AUM comprising of approximately 2.4 million sq ft of attributable office space and more than 1.1 million sq ft of retail and convention space was valued at approximately S$7.7 billion as at 31 December 2011, S$654 million higher than the preceding year. The net asset value of Suntec REIT stood at S$1.987 per unit as at 31 December 2011.

pRopeRTY vALuATIon (S$M) 31 dec 2011 31 dec 2010

Suntec City3 4,336 3,980Park Mall4 370 338CHIJMES2 143.7 134Suntec Singapore3 243.2 57.6One Raffles Quay5 1,082 1,023MBFC Properties5 1,523 1,511Total 7,697.9 7,043.6

S$200 mil term loanS$50 mil bi-lateral loanS$270 mil convertible bondsS$700 mil loan facility

ASSeTS undeR MAnAgeMenT

0

2

4

6

8

7

5

3

1

3.2

Sep 06

2.3

Sep 05

4.6

Sep 07

5.4

Dec 08

5.2

Dec 09

7.0

Dec 10

7.7

Dec 11

S$1.1 bil loan facilityS$100 mil loan facilityS$150 mil medium term noteS$120 mil term loan

debT MATuRITY pRofILe (ReIT LeveL)

0

200

400

600

800

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

S$ bil S$ mil

700

900

500

300

100

9

cApITAL STRucTuRe Suntec REIT’s total consolidated debt stood at S$2,822 million, with Debt-to-Assets and Aggregate Leverage ratios of 37.3% and 39.1% respectively as at 31 December 2011. The average all-in financing cost of Suntec REIT’s debt portfolio for FY 2011 was 2.81%.

On 27 July 2011, Suntec REIT established a new S$500 million multicurrency medium term note (“MTN”) programme. Under this programme, Suntec REIT issued a S$150 million 5-year medium term notes bearing a fixed rate of 3.10%. The proceeds were used to fully refinance the REIT’s existing FY 2011 loans. This further improved Suntec REIT’s overall financing cost and strengthened our debt maturity profile.

On 15 August 2011, Suntec REIT secured a S$120 million term loan facility to finance the acquisition of the additional stake in Suntec Singapore.

Suntec REIT’s exposure to derivatives is elaborated in the Financial Statements. The fair value derivative for FY 2011, which is included in the Financial Statements as “Derivative Assets” and “Derivative Liabilities”, was S$0.3 million and S$14.0 million respectively. The net fair value derivative represented 0.3% of the net assets of Suntec REIT as at 31 December 2011.

notes:1 Meetings, incentives, conventions and exhibitions.2 Based on the valuation by DTZ Debenham Tie Leung (SEA) Pte Ltd on 15 Oct 2011.3 Based on the valuation by Colliers International Consultancy & Valuation (Singapore) Pte Ltd. Suntec

Singapore reflects the value of Suntec REIT’s 60.8% interest in the property.4 Based on the valuation by Knight Frank Pte Ltd.5 Based on the valuation by Knight Frank Pte Ltd, reflecting the value of Suntec REIT’s one-third interest

in One Raffles Quay and the MBFC Properties.

200

331.5

773.5

50

270

350

120

150350

100


coMMITTed occupAncY AS AT: dec 10 MAR 11 Jun 11 Sep 11 dec 11

Suntec City:- Office 99.1% 99.5% 99.5% 98.0% 99.2%- Retail 97.9% 97.9% 97.1% 96.5% 96.7%

Park Mall:- Office 100% 100% 100% 100% 100%- Retail 100% 100% 100% 100% 100%

CHIJMES 99.5% 97.8% 100% 100% 100%One Raffles Quay 100% 100% 100% 100% 100%MBFC Properties 96.5% 97.4% 97.4% 98.5% 98.6%office portfolio occupancy 98.8% 99.2% 99.2% 98.6% 99.2%Retail portfolio occupancy 98.0% 98.0% 97.7% 97.3% 97.5%

STRong occupAncY foR ASSeT poRTfoLIoSuntec REIT’s asset portfolio performance continued to remain strong. As at 31 December 2011, the committed occupancy of Suntec City office improved further to 99.2% compared to 99.1% in the year before, whilst Park Mall office maintained its full occupancy. The committed occupancy of Suntec City Mall stood at 96.7% as at 31 December 2011, whilst Park Mall and CHIJMES both achieved 100% committed occupancy.

For the jointly controlled entities, One Raffles Quay achieved full committed occupancy, whilst the committed occupancy for the MBFC Properties stood at 98.6% as at 31 December 2011. As such, Suntec REIT’s office and retail portfolio achieved an overall committed occupancy of 99.2% and 97.5% respectively as at 31 December 2011.

Manager’s Report

27

LeASIng AcHIeveMenTS In fY 2011For the office portfolio, a total of 647,640 sq ft of new, renewal and replacement leases were secured in FY 2011.

With the steady recovery of the Singapore office market and in tandem with the consistently strong committed occupancy of Suntec City Office during the year, renewal and replacement leases at Suntec City Office Towers were secured at an average rent of between S$9.22 psf per month in the first quarter of 2011 and S$8.72 psf per month in the fourth quarter of 2011 up from the trough of between S$7.11 psf per month and S$7.30 psf per month in the second half of 2009.

For the retail portfolio, a total of 383,756 sq ft of new, renewal and replacement leases were secured in FY 2011.

The performance of the retail portfolio was relatively stable during the year. The average committed passing rents for Suntec City Mall, Park Mall and CHIJMES stood at S$10.09 psf per month, S$7.70 psf per month and S$10.79 psf per month respectively as at 31 December 2011.

offIce LeASIng AcTIvITIeS TenAnTS nLA (SQ fT)

Renewal leases & 59 412,584lease extensions Replacement leases 80 218,511New leases 7 16,545Total 146 647,640

ReTAIL LeASIng AcTIvITIeS TenAnTS nLA (SQ fT)

Renewal leases & 139 238,554lease extensions Replacement leases 81 65,101New leases 18 80,101Total 238 383,756

coMMITTed AveRAge pASSIng RenTS - SunTec cITY MALL, pARK MALL And cHIJMeS

S$ psf pm

Suntec City Mall Park Mall CHIJMES

0

2

4

6

8

10

12

4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011

10.48 10.27 10.16 10.10 10.09

7.45 7.47 7.48

10.63 10.73 10.79 10.74 10.79

7.707.51


HIgHeR Revenue fRoM oTHeR IncoMe InITIATIveS Suntec REIT’s revenue from other income initiatives, namely atrium rentals for events and exhibitions, media sales and pushcart rentals achieved approximately S$7.3 million in FY 2011.

oTHeR IncoMe

S$ mil

0

FY 2006

6.0

FY 2007

6.2

FY 2008

7.0

FY 2009

6.5

FY 2010

7.2

FY 2011

7.3

3.0

FY 2005

4

5

6

7

8

3

2

1

Manager’s Report

29

enTeRTAInMenT And evenTS AT SunTec cITY MALLSuntec City Mall is well established as a convenient one-stop destination for shopping, dining and entertainment served by two circle line MRT stations. As one of Singapore’s largest shopping mall with events and offerings for everyone, Suntec City Mall played host to a myriad of events including Fashion Week’s Fashion in Play where notably, students from local fashion schools such as Lasalle College of the Arts, Nanyang Academy of Fine Arts, Raffles Merchandising Institute and Temasek Polytechnic collaborated with tenants in a fashion styling competition that showcased their creativity and craft. Other notable events include the launch of the hugely anticipated new “bartainer” Tiger Truck and the meet-and-greet sessions with Formula 1 drivers with their race cars leading up to the 2011 Formula 1 Singtel Singapore Grand Prix night race in September.

The monthly themed promotions, in conjunction with key events such as Chinese New Year, Great Singapore Sale, Food Festival, National Day, Mid Autumn, Children’s Day and Christmas were very well-received by shoppers.

The grand finals of the annual Suntec Dance Competition was held on 10 September 2011 and the champions of the open group category, “Elecoldxhot” represented Singapore in the eighth annual World Supremacy Battlegrounds 2011 Dance Competition in Sydney, Australia. Amidst stiff competition among an international pool of the best hip hop dance crews, Suntec Dance champions Elecoldxhot emerged Runner-up in the international open division.

There were also many activities targeted at families and children, including art and craft workshops such as balloon sculpturing, lantern-making, piggy bank painting as well as cooking workshops dedicated to kids. The meet-and-greet sessions with the Sylvanian Family and Sharity Elephant in conjunction with Children’s Day were also a hit with the kids. During the Christmas festive season, the Looney Tunes Christmas Musical event featuring Bugs Bunny, Tweety Bird and Sylvester as well as the meet-and-greet sessions with Tasmanian Devil were hugely popular with the children.


poRTfoLIo pRopeRTIeS - STATISTIcS1

As at 31 December 2011

Net Lettable Area (sq ft) 3,506,330– Office 2,415,191– Retail 1,091,1392

Number of Tenants (actual) 824– Office 307– Retail 517

Valuation (S$ million) 7,697.93

Committed Occupancy (%) – Office 99.2– Retail 97.5

notes:1 Includes CHIJMES which was divested on 20 January

2012.2 Includes 60.8% interest in the retail net lettable area in

Suntec Singapore.3 Includes the valuation of Suntec REIT’s 60.8% interest

in Suntec Singapore, the valuation of Suntec REIT’s one-third interest in One Raffles Quay and the valuation of Suntec REIT’s one-third interest in the MBFC Properties.

property portfolio

31

ReTAIL poRTfoLIo

Business Sector Analysis (By Gross Rental Income1) As at 31 December 2011

Electronics / Technology 2.1%

Fashion 21.0%

Food and Beverage 31.9%

Gifts and Speciality / Books / Hobbies / Toys 4.9%

Homeware and Home Furnishings 8.9%

Hypermarket 5.8%

Jewellery and Watches 3.2%

Leisure and Entertainment / Sports and Fitness 5.0%

Beauty and Healthcare 4.5%

Others 4.4%

Services / Educational 8.3%

HIgH QuALITY coMMeRcIAL ASSeTS STRATegIcALLY LocATed In SIngApoRe’S pRIMe dISTRIcTSuntec REIT’s portfolio comprises prime commercial properties in Suntec City, Park Mall, CHIJMES, a one-third interest in One Raffles Quay and a one-third interest in Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall (the “MBFC Properties”), all located within Singapore’s growth precincts, namely Marina Bay and the Civic and Cultural District.

Spanning a total net lettable area (“NLA”) of about 3.5 million sq ft, the properties derive a steady stream of income from a well-diversified pool of strong office and retail tenants. The committed occupancy of Suntec REIT’s office and retail portfolio stood at 99.2% and 97.5% respectively as at 31 December 2011.

vIbRAnT TenAnT MIXSuntec REIT’s office portfolio leases are well diversified across 14 business sectors. 64.1% of the total gross office revenue for the month of December 2011 was attributable to the major business sectors of Banking, Insurance and Financial Services, and Technology, Services and Consultancy. The top 10 tenants of the office portfolio contributed 26.9% of Suntec REIT’s total gross revenue for the month

note:1 Includes one-third interest in One Raffles Quay and one-third interest in Marina Bay Financial

Centre Towers 1 and 2.

note:1 Includes one-third interest in One Raffles Quay, one-third interest in the Marina Bay Link Mall

and 60.8% interest in Suntec Singapore.

offIce poRTfoLIo

Business Sector Analysis (By Gross Rental Income1) As at 31 December 2011

Legal 2.5%

Real Estate and Property Services 2.7%

Trading 15.5%

Manufacturing 1.1%

Shipping and Freight Forwarding 4.1%

Others 0.9%

Government and Government-Linked Offices 1.0%

Banking, Insurance and Financial Services 47.7%

Technology, Services and Consultancy 16.4%

Beauty / Health 0.8%

Clinics / Laboratories 0.4%

Consultancy / Services 5.2%

Institutions / Schools 1.3%

Travel / Leisure 0.4%

of December 2011 and occupied an area representing 43.0% of Suntec REIT’s total office portfolio NLA.

For the retail portfolio, 52.9% of the total gross retail revenue for the month of December 2011 was attributable to the major business sectors of Food and Beverage, and Fashion. The top 10 tenants of the retail portfolio contributed 7.8% of Suntec REIT’s total gross revenue for the month of December 2011 and occupied an area representing 35.4% of Suntec REIT’s total retail portfolio NLA.


offIce poRTfoLIo - Top 10 TenAnTS bY gRoSS RenTAL IncoMe1


ReTAIL poRTfoLIo - Top 10 TenAnTS bY gRoSS RenTAL IncoMe1


Tenant business Sector nLA % of % of Total (sq ft) office Monthly nLA gross Rental Income

Standard Chartered Bank Banking, Insurance and Financial Services 171,252 7.4 4.9

Barclays Capital Services Ltd Banking, Insurance and Financial Services 150,072 6.5 4.1

UBS AG Banking, Insurance and Financial Services 233,053 10.0 4.1

BHP Billiton Marketing (Asia) Pte Ltd Trading 76,884 3.3 3.6

The Royal Bank of Scotland Banking, Insurance and Financial Services 63,389 2.7 2.0

Oracle Corporation Singapore Pte Ltd Technology, Services and Consultancy 84,035 3.6 1.9

Deutsche Bank Banking, Insurance and Financial Services 93,249 4.0 1.9

Nomura Singapore Ltd Banking, Insurance and Financial Services 56,859 2.4 1.6

Ernst & Young Banking, Insurance and Financial Services 46,849 2.0 1.5

Macquarie Capital Securities (Singapore) Pte. Limited Banking, Insurance and Financial Services 25,109 1.1 1.3

Total 1,000,751 43.0 26.9

note:1 Includes one-third interest in One Raffles Quay and one-third interest in Marina Bay Financial Centre Towers 1 and 2.

Tenant business Sector nLA % of % of Total (sq ft) Retail Monthly nLA gross Rental Income

Carrefour Singapore Pte Ltd Hypermarket 137,404 13.0 2.1

Rock Productions Pte Ltd Services / Educational 66,377 6.3 1.3

Lei Garden Restaurant Pte Ltd Food and Beverage 15,705 1.5 0.7

RSH (Singapore) Pte Ltd Fashion 24,763 2.3 0.7

FJ Benjamin Lifestyle Pte Ltd Fashion 12,216 1.2 0.6

Suntec Food & Leisure Pte Ltd Food and Beverage 27,008 2.6 0.5

Jay Gee Enterprises (Pte.) Ltd Fashion 17,872 1.7 0.5

True Fitness Pte. Ltd. Leisure and Entertainment / Sports and Fitness 29,708 2.8 0.5

Furniture & Furnishings Pte Ltd Homeware and Home Furnishings 20,584 1.9 0.5

X-tra Designs Pte Ltd Homeware and Home Furnishings 22,298 2.1 0.4

Total 373,935 35.4 7.8

note:1 Includes one-third interest in One Raffles Quay, one-third interest in the Marina Bay Link Mall and 60.8% interest in Suntec Singapore.

property portfolio

33

offIce poRTfoLIo

Lease Expiry Profile1 As at 31 December 2011

% of Total Monthly Gross Office Rental Income

% of Total Office NLA

LeASe eXpIRY pRofILeIn FY 2011, approximately 631,095 sq ft of office space was renewed and signed, including a pre-commitment of approximately 233,000 sq ft of office leases expiring in FY 2012. As at 31 December 2011, 10.1%, 22.6% and 19.8% of the total office NLA are due to expire in FY 2012, FY 2013 and FY 2014 respectively, whilst 46.7% is due to expire in FY 2015 and beyond.

For the retail portfolio, as at 31 December 2011, 28.5%, 32.7% and 17.1% of the total retail NLA1 are due to expire in FY 2012, FY 2013 and FY 2014 respectively, whilst 6.0% is due to expire in FY 2015 and beyond.

ReTAIL poRTfoLIo

Lease Expiry Profile1,2


% of Total Monthly Gross Retail Rental Income

% of Total Retail NLA

0 0

35 35

45 45

40 40

30 30

25 25

20 20

15 15

10 10

5 5

FY2012FY2012 FY2013FY2013 FY2014FY2014 FY2015FY2015 FY2016 & Beyond

FY2016 & Beyond

note:1 Includes one-third interest in One Raffles Quay and one-third interest in Marina Bay Financial

Centre Towers 1 and 2.

notes:1 Includes one-third interest in One Raffles Quay, one-third interest in the Marina Bay Link Mall and

60.8% interest in Suntec Singapore.2 Adjusted for leases that will be affected by Phase 1 of the AEI in Suntec City Mall.

% %

note:1 Adjusted for leases that will be affected by Phase 1 of the AEI in

Suntec City Mall.

10.1

22.6

8.2

20.321.9

19.8

9.5

40.1

10.8

35.9

17.6 17.1

2.4 3.61.2 0.9

26.428.5

33.4 32.7


Suntec city

SunTec cITY - pRopeRTY STATISTIcSAs at 31 December 2011

Location 3, 5, 6, 7, 8 and 9 Temasek Boulevard, Singapore

Title Leasehold 99 years from 1989

Total Net Lettable Area (sq ft) 2,129,804– Office 1,295,216– Retail 834,5881

Number of Tenants (actual) 563

Car Park Lots 3,0732

Purchase Price (S$) 2,383 million3

Market Valuation (S$) 4,579 million4 (31 December 2010: 4,038 million)

Gross Revenue (S$) 237.5 million5,6 (2010: 216.7 million)

Net Property Income (S$) 169.8 million6 (2010: 169.3 million)

Committed Occupancy (%) 98.21 (31 December 2010: 98.6)

notes:1 Includes 60.8% interest in the retail NLA in Suntec

Singapore.2 Owned and managed by the Management Corporation

Strata Title Plan No. 2197 (MCST).3 Includes the purchase price of 73,561.2 sq ft of strata

office space amounting to S$136.3 million, and the investment of S$139.8 million for a 60.8% interest in Suntec Singapore.

4 Includes 60.8% interest in Suntec Singapore.5 Comprises gross rental income of S$201.3 million and

other income of S$8.8 million from Suntec City and S$27.4 million from Suntec Singapore.

6 Gross revenue and net property income from Suntec Singapore had been consolidated since 19 August 2011 following the acquisition of the increased stake.

property portfolio

35

Suntec City is an iconic integrated commercial development located in the Marina Bay Precinct within Singapore’s Central Business District.

Developed by a consortium of successful business leaders from Hong Kong with a vision of making the complex “The Business Capital of Asia”, Suntec City is a landmark development which comprises five Grade A office towers, a world-class convention and exhibition centre, and one of Singapore’s largest shopping mall, all of which are interlinked by street level plazas and underground walkways. The world-famous Fountain of Wealth, which sits in the heart of Suntec City, embodies an abundance of life and an endless variety of bustling activity.

Suntec REIT owns 57% of Suntec City Office and 100% of Suntec City Mall, and in 2011 increased its interest in Suntec Singapore International Convention and Exhibition Centre to 60.8% from 20% previously. Easily accessible by car and public transport networks, Suntec City houses a total of 3,073 carparks over two basement levels, and is directly linked to the Esplanade Station and Promenade Station on the new Circle MRT line.

The Manager’s objective for Suntec city is to enhance the properties held and reposition Suntec city into a premier MIce, business, shopping and lifestyle destination.


Suntec city

SunTec cITY offIce

Business Sector Analysis (By Gross Rental Income) As at 31 December 2011

Legal 2.1%

Real Estate and Property Services 3.1%

Trading 18.4%

Manufacturing 2.2%

Shipping and Freight Forwarding 8.3%

Others 1.0%

Government and Government-Linked Offices 2.0%

Banking, Insurance and Financial Services 21.7%

Technology, Services and Consultancy 31.2%

Consultancy / Services 10.0%

SunTec cITY offIce

Lease Expiry Profile As at 31 December 2011

% of Monthly Gross Office Rental Income

% of Office NLA

FY2012 FY2013 FY2014 FY2015 FY2016 & Beyond

0

35

40

30

25

20

15

10

5

%

property portfolio

34.736.2

39.1

33.8

15.413.113.813.1

37

SunTec cITY offIceSuntec REIT owns a NLA of approximately 1.3 million sq ft in Suntec City Office Towers, comprising strata units in Towers One, Two and Three, and all strata units in Towers Four and Five. Towers One to Four are 45-storey buildings of column-free floor space, whilst Tower Five is an 18-storey building with large floor plates of up to 28,000 sq ft.

With quality buildings fronting the Marina Bay skyline and complemented by a wealth of amenities from the integrated shopping mall, Suntec City Offices draw a good stream of diverse multinational firms ranging from sectors such as Banking, Insurance and Financial Services, Technology, Services and Consultancy, Trading, Shipping and Freight Forwarding.

dIveRSe TenAnT MIXFor the month of December 2011, 31.2% of the total gross office revenue was attributable to the Technology, Services and Consultancy sector, followed by 21.7% and 18.3% from the Banking, Insurance and Financial Services sector and the Trading sector respectively.

In terms of NLA, as at 31 December 2011, 29.0% of Suntec City’s office NLA for the month of December 2011 was attributable to the Technology, Services and Consultancy sector, followed by 26.0% and 17.6% from the Banking, Insurance and Financial Services sector and the Trading sectors respectively.

The top 10 office tenants of Suntec City Office contributed 17.6% of Suntec City’s total gross revenue for the month of December 2011 and occupied an area representing 33.8% of the Suntec City office NLA owned by Suntec REIT.

LeASe eXpIRY pRofILeBased on the committed leases as at 31 December 2011, 13.8%, 36.2% and 33.8% of Suntec City’s office NLA is due to expire in FY 2012, FY 2013 and FY 2014 respectively, whilst 15.4% is due to expire in FY 2015 and beyond.


SunTec cITY ReTAIL

Lease Expiry Profile1 As at 31 December 2011

% of Monthly Gross Retail Rental Income

% of Retail NLA

SunTec cITY ReTAIL

Business Sector Analysis (By Gross Rental Income) As at 31 December 2011

Electronics / Technology 2.8%

Fashion 27.6%

Food and Beverage 25.6%

Gifts and Speciality / Books / Hobbies / Toys 5.6%

Homeware and Home Furnishings 1.2%

Hypermarket 7.8%

Jewellery and Watches 4.1%

Leisure and Entertainment / Sports and Fitness 6.6%

Beauty and Healthcare 4.7%

Others 4.8%

Services / Educational 9.2%

Suntec citySunTec cITY MALL Suntec City Mall is one of Singapore’s largest malls and a leading shopping destination, with more than 370 retail establishments offering a unique one-stop shopping, dining, recreation and entertainment experience for many. It caters to the needs of the working population from the five office towers within Suntec City and office buildings in the vicinity, the daily flow of tourists and locals, as well as the vast network of local and international delegates who convene at Suntec Singapore International Convention & Exhibition Centre for exhibitions, seminars and conferences.

Comprising approximately 822,000 sq ft of net lettable retail space across three levels and a basement, Suntec City Mall is segmented into four thematic mall zones namely Galleria, the Tropics, the Fountain Terrace and the Entertainment Centre, each offering a variety of shopping, dining and entertainment options to appeal to the different market segments. In addition, there are five specialty zones, namely Happy Kidz, Tasty Treatz, e-life@Suntec, MPG and Galleria, which target various customer profiles and provide greater appeal to shoppers through a wider range of brands and enhanced shopping ambience.

The exciting new tenants introduced into Suntec City Mall during the year included restaurants such as Marutama Ramen, Olive Vine and Paradise Inn; fashion stores such as Benjamin Barker, Cotton Amour, Elisa Litz, Glitter Glam, Hypnosis, Pachelbel, Payless Shoesource and Rockport; and lifestyle and concept stores such as

FY2012 FY2013 FY2014 FY2015 FY2016 & Beyond

%

0

35

40

30

25

20

15

10

5

31.529.8

16.814.2

2.5 3.81.0 0.1

27.624.4

note:1 Adjusted for leases that will be affected by Phase 1 of the AEI in Suntec City Mall.

property portfolio

39

Alienware, Bottles & Bottles, Enavose, Flight Centre, Kiitos The Lifestyle Shop, Slumberland, amongst others.

vIbRAnT TenAnT MIXFor the month of December 2011, 53.2% of the total gross retail revenue was attributable to the Fashion and Food and Beverage sectors, and the remaining from other varied sectors such as the services / educational, hypermarket, leisure and entertainment and electronics sectors.

In terms of NLA, as at 31 December 2011, 19.2% of Suntec City Mall’s NLA was attributable to the Food and Beverage sector, followed

by 17.5% and 16.1% from the Hypermarket sector and Leisure and Entertainment/Sports and Fitness sector respectively.

The top 10 retail tenants of Suntec City Mall contributed 12.5% of Suntec City’s total gross revenue for the month of December 2011, representing 40.6% of the mall’s total NLA.

LeASe eXpIRY pRofILeBased on the committed leases as at 31 December 2011, 27.6%, 29.8% and 14.2% of Suntec City’s total retail NLA is due to expire in FY 2012, FY 2013 and FY 2014 respectively, whilst 6.3% is due to expire in FY 2015 and beyond.


property portfolio

Suntec Singapore International Convention and Exhibition Centre (“Suntec Singapore”) is a world-class meeting, convention and exhibition venue. With more than one million sq ft of versatile floor space over six levels, this award-winning facility can cater to events from 10 to 20,000 persons, offering direct access to 5,200 hotel rooms, 1,000 retail outlets, 300 restaurants within close proximity to Singapore’s entertainment and cultural attractions.

On 18 August 2011, Suntec REIT secured strategic majority control of Suntec Singapore through the acquisition of an additional 40.8% equity stake, raising the effective stake from 20.0% to 60.8%.

Since 1995, Suntec Singapore has hosted more than 18,000 events within its premier convention facility, including key notable events such as the World Trade Organization Ministerial Meetings in 1996,

Suntec Singapore International convention & exhibition centre

the Annual Meetings of the Board of Governors of the International Monetary Fund and World Bank Group in 2006 and the APEC Leaders Week in 2009. It served as one of the largest sporting venues for the inaugural Youth Olympic Games in 2010.

Suntec Singapore has received numerous international, regional and local accolades and awards since its inception, in recognition of its high standards of service excellence, dedication and passion. In 2011, it has garnered 11 major industry awards including the “Asia’s Leading Meetings and Conference Centre” award at the World Travel Awards 2011, “Best International Venue” award at the Exhibition News Awards 2011, “AIPC Innovation Award” at the AIPC Innovation Award 2011 and “Best Convention and Exhibition Centre” & “Best MICE Sales Team” awards at the CEI Asia Industry Awards 2011.


pARK MALL - pRopeRTY STATISTIcSAs at 31 December 2011

Location 9 Penang Road, Singapore 238459


Total Net Lettable Area (sq ft) 269,959 (existing Park Mall area)

- Office 126,043

- Retail 143,916

Permissible Gross Lettable Area

from acquired land (sq ft) 65,454


Car Park Lots 346

Purchase Price (S$) 245.1 million1

Market Valuation (S$) 370 million1 (31 December 2010: 338 million)

Gross Revenue (S$) 22.3 million2 (2010: 22.5 million)

Net Property Income (S$) 16.4 million (2010: 16.7 million)


park Mall

property portfolio

notes:1 Includes the purchase price of 1,316.2 sq m of land

along Penang Road amounting to S$15.1 million.2 Comprises gross rental income of S$20.7 million and

other income of S$1.5 million.

43

Park Mall is an integrated office, lifestyle and home furnishing mall situated within the Orchard Road shopping belt. It is located next to Dhoby Ghaut MRT interchange station, a key transit hub for many commuters shuttling between the North-South line and the North-East line, and the new Circle MRT Line. Park Mall comprises a 15-storey office cum retail complex and has been conceptualised and launched as a premier furniture and lifestyle shopping mall.

Major tenants at Park Mall’s offices include SSTC Education Centre, Nu Skin Enterprise Singapore Pte Ltd, NUS Extension, Altron Education Group and Star Cruise Pte Ltd, whilst major tenants at Park Mall’s retail area include Furniture & Furnishings Pte Ltd, X-tra Designs Pte Ltd, Furniture Club Holdings Pte Ltd and OB Singapore Operations Pte Ltd.

As part of the future asset enhancement plan for Park Mall, the Manager acquired from the Singapore Government two strips of land along Penang Road in July 2007 and in March 2008 amounting to approximately 14,167 sq ft for amalgamation with Park Mall, at a total acquisition cost of S$15.1 million. The purchase prices of the two strips of land are based on the development charges rates issued by the Singapore Government. Together, the two strips of land will create an additional floor area of about 65,454 sq ft for the property, and increase the total permissible gross floor area for Park Mall to approximately 450,000 sq ft.

The Manager’s objective for park Mall is to continue to optimise the current business returns and to position park Mall for the future.


cHIJMeS - pRopeRTY STATISTIcSAs at 31 December 2011

Location 30 Victoria Street, Singapore 187996


Net Lettable Area (sq ft) 79,794


Car Park Lots 97

Purchase Price (S$) 128 million

Market Valuation (S$) 143.7 million1 (31 December 2010: 134 million)

Gross Revenue (S$) 10.5 million2 (2010: 10.3 million)

Net Property Income (S$) 7.2 million (2010: 7.1 million)


notes:1 As of 15 October 2011.2 Comprises gross rental income of S$9.9 million and

other income of S$0.6 million.

cHIJMeS

property portfolio

45

CHIJMES is an award-winning gazetted national monument recognised by UNESCO as an Asia Pacific Culture Heritage Conservation development with two historic buildings, Caldwell House and the CHIJMES Hall. A premier dining and entertainment establishment in the heart of Singapore’s Civic and Cultural District, CHIJMES offers a variety of culinary delights, as well as a unique venue for selective performances and special events.

The key events held at CHIJMES include the third annual AsiaOne Adventure Race, the annual New Year Countdown party, as well as live screenings of the English Premier League and UEFA Champions League

soccer matches by tenants. CHIJMES also played host to patrons of Singapore’s Formula One Grand Prix night race held in late September with a range of promotional activities and entertainment.

Major tenants at CHIJMES include Lei Garden Restaurant Pte Ltd, Watabe Singapore Pte Ltd, Maracana Group Pte Ltd and Prime Cuisine Pte Ltd.

on 27 october 2011, Suntec ReIT announced the divestment of cHIJMeS for S$177 million and the transaction was completed on 20 January 2012.


one RAffLeS QuAY - pRopeRTY STATISTIcSAs at 31 December 2011

Location One Raffles Quay, Singapore 048583


Total Net Lettable Area (sq ft) 1,335,360



Car Park Lots 713

Purchase Price (S$) 941.5 million1


Net Property Income (S$) 29.6 million2 (2010: 38.7 million)


notes:1 Reflects one-third interest.2 Comprises other income, dividend income and interest

income from the jointly controlled entity net of all taxes.

one Raffles Quay

property portfolio

47

% of Monthly Gross Rental Income % of NLA

One Raffles Quay is a prime landmark commercial development located in Singapore’s Central Business District comprising a 50-storey office tower (the “North Tower”), a 29-storey office tower (the “South Tower”), an underground link to the Raffles Place MRT station with excellent connectivity and accessibility along the North-South and East-West MRT lines, a sheltered plaza serving as a drop-off point and a hub car park with 713 car park lots.

Designed by internationally renowned architectural firm Kohn Pedersen Fox Associates of New York, its state-of-the-art building services and management systems cater to the needs of global financial tenants.

One Raffles Quay has a large and diversified tenant base comprising 24 office tenants and five retail tenants. The major office tenants include Barclays PLC, Credit Suisse (Singapore) Limited, Deutsche Bank Aktiengesellschaft, Ernst & Young Services Pte. Ltd., Societe Generale, The Royal Bank of Scotland and UBS AG.

In equal partnership with reputable property companies Hongkong Land and K-REIT Asia, Suntec REIT holds a one-third interest in One Raffles Quay through the acquisition of the entire issued share capital of Comina Investment Limited, a special purpose company holding one-third of the issued share capital of One Raffles Quay Pte Ltd, the developer and owner of the property.

A prestigious iconic prime grade ‘A’ office development with long term growth potential, One Raffles Quay is well-positioned to capitalise on the future growth of the Marina Bay area, given its proximity to Marina Bay.

STRong TenAnT MIXFor the month of December 2011, 92.3% of the total gross revenue was attributable to the Banking, Insurance and Financial Services sector.

one RAffLeS QuAY one RAffLeS QuAYBusiness Sector Analysis (By Gross Rental Income1)As at 31 December 2011

Lease Expiry Profile1


Legal 4.1% Real Estate and Property Services 1.8% Others 1.0% Banking, Insurance and Financial Services 92.3% Clinics / Laboratories 0.3% Food and Beverage 0.4% Services / Educational 0.1%

0

20

40

60

80

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016& Beyond

100

10

90

70

50

30

%

LeASe eXpIRY pRofILeBased on the committed leases as at 31 December 2011, 27.5% of One Raffles Quay’s total NLA is due to expire during the period from FY 2012 to FY 2015, whilst 72.5% is due to expire in FY 2016 and beyond.

The Manager’s objective for one Raffles Quay is to generate sustainable growth from its interest in the property for Suntec ReIT unitholders.

note:1 Reflects one-third interest.

note:1 Reflects one-third interest.

0.9 0.87.5 8.2 6.2 5.1

13.9

71.5

13.4

72.5


Mbfc pRopeRTIeS - pRopeRTY STATISTIcSAs at 31 December 2011

Location 8 Marina Boulevard, Singapore 018981


Total Net Lettable Area (sq ft) 1,744,959



Car Park Lots 695

Purchase Price (S$) 1,495.81 million


Net Property Income (S$) 70.3 million2 (9 to 31 December 2010: 2.3 million)


notes:1 Reflects one-third interest.2 Comprises other income, dividend income and interest

income from the jointly controlled entity net of all taxes.

Mbfc properties

property portfolio

49

The Marina Bay Financial Centre is a prime landmark commercial development strategically located in the heart of Marina Bay.

Designed by the internationally renowned architectural firm Kohn Pedersen Fox Associates of New York, Phase 1 of the development comprises a 33-storey office tower (“Tower 1”), a 50-storey office tower (“Tower 2”), Marina Bay Residences, the Marina Bay Link Mall which consists of approximately 94,508 sq ft of NLA for retail use including the ground levels of Tower 1 and Tower 2 and the Ground Plaza, and 695 car park lots. There is an underground link from Marina Bay Link Mall to the Raffles Place MRT Station, and is directly connected to the future Downtown MRT Station when it is operational around 2013.

The MBFC Properties has a premier tenant base, with major office tenants including American Express International, Bank Pictet, Barclays Capital, BHP Billiton, ICAP, Macquarie Capital Securities, Murex Southeast Asia Pte Ltd, Nomura Singapore, Prudential Asset Management and Standard Chartered Bank.

In equal partnership with reputable property companies Hongkong Land and K-REIT Asia, Suntec REIT holds a one-third interest in the MBFC Properties through the acquisition of one-third of the issued share capital of BFC Development Pte. Ltd. The MBFC Properties comprises the office and retail properties under Phase 1 but does not include the Marina Bay Residences.

The Marina Bay Sands Integrated Resort, Singapore Flyer, Gardens by the Bay, Esplanade Theatres, international and boutique hotels, residential apartments and waterside food and beverage outlets are all within close proximity.

Mbfc pRopeRTIeS Mbfc pRopeRTIeSBusiness Sector Analysis (By Gross Rental Income1)As at 31 December 2011

Lease Expiry Profile1


Legal 2.4%Real Estate and 2.6% Property Services Trading 19.4%Banking, Insurance 66.1% and Financial Services Technology, Services 2.6% and ConsultancyElectronics / Technology 0.1%

Fashion 0.5%Food and Beverage 3.3%Gifts & Speciality / 0.2% Books / Hobbies / Toys Jewellery and Watches 0.1%Beauty / Health 0.4%Services / Educational 1.9%Others 0.4%

0

20

40

60

80

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016& Beyond

100

% of Monthly Gross Rental Income % of NLA

%

10

90

70

50

30

STRong TenAnT MIXFor the month of December 2011, 66.1% of the total gross revenue was attributable to the Banking, Insurance and Financial Services sector.

LeASe eXpIRY pRofILeBased on the committed leases as at 31 December 2011, 5.7% of the total NLA of the MBFC Properties is due to expire during the period from FY 2012 to FY 2015, whilst 92.9% is due to expire in FY 2016 and beyond.

The Manager’s objective for the Mbfc properties is to generate sustainable growth from its interest in the property for Suntec ReIT unitholders.

note: 1 Reflects one-third interest.

note: 1 Reflects one-third interest.

1.83.0 2.24.2 0.91.0

92.992.6


THe SIngApoRe offIce pRopeRTY MARKeToveRvIeWPersistent weakness in the United States and Europe dampened outputs across most industries in Singapore, resulting in a moderated Gross Domestic Product (“GDP”) growth in 2011. Notwithstanding, the GDP growth for the whole year of 2011 is still in line with market expectation at 4.9%. However, GDP growth in 2012 may be moderated following challenges from the lack-luster macroeconomic growth and global uncertainties. Muted growth between 1%-3% is expected for the next two years as both the public and private sectors have indicated lower businesses expectations, net profits and fewer hires in 2012. The brooding market sentiments are expected to have a negative trickledown effect on the office sector.

Unlike previous years, where office supply was relatively limited, the current office market is swinging in favour of tenants as new office supply is completed and available. Since 2009, the annual new office supply average to about 2.06 million sq ft, which is a stark difference to the 10-year average annual new supply prior 2009 (from 1998 to 2008) of 1.01 million sq ft.

Though the island-wide occupancy rate inched up marginally by 0.4% in 4Q 2011 to 88.7%, the office market, especially in the Downtown Core Area, is still absorbing the additional new supply that was released in the past three years. Whilst the total office new supply in the last three years (2009 to 2011) amounted to about 6.1 million sq ft, new demand has been lagging, with only a total of 3.7 million sq ft.

This shift in the office dynamics towards office tenants’ favour is made more prominent by waning office demand resulting from softening economic conditions. Whilst demand from smaller office space users kept up, many bigger office space users adopted a “wait and see” stance. Some had reportedly sub-let their excess office space to streamline

their operation costs. Though the emergence of such shadow office space is not as rampant as 2008/2009, such phenomena is likely to intensify the current challenges faced by landlords.

Expectations for Grade A+ office buildings in Raffles Place have moderated as monthly gross office rents dipped 3.9% quarter-on-quarter from $13.50 per sq ft in previous quarter to about $13.00 per sq ft in 4Q 2011. Traditional Grade A office spaces in Raffles Place were also affected as average monthly gross office rents fell from $10.50 to $10.25 per sq ft.

ouTLooKThe emergence of shadow space, generous rents incentives from landlords and dropping office rents seem to indicate early signs of market softening. The year of 2012 looks challenging for the office sector. New supply completed offers more options for tenants thus shifting the office market in their favour. Landlords may face greater competition from the additional supply released since 2009, amounting to some 1.7 million sq ft to be completed in 2012. The softening market condition may be further exacerbated by declining office demand in view of the global uncertainty.

Against a backdrop of potential worsening Euro and US market conditions, coupled with more supply, office rents may soften up to 15% year-on-year (“y-o-y”). However, unlike the 2008/2009 global financial crisis, the expected correction is likely to be more gradual. Nonetheless, such correction is still largely pending the resolution of the Euro debt issue and the recovery of US economy. Any quick recovery or optimism in these economies is likely to encourage greater business expansion and improve current office market condition.

effecTIve gRoSS offIce RenTS offIce neW SuppLY, neW deMAnd, occupAncY RATeS

0

20

18

14

16

12

10

8

1,400

1,200

1,000

800

600

200

0

400

6

-2004

-400

-600

94

93

92

91

90

88

87

89

86

85

84

2

Suburban AreasOrchard Road Grade A Suntec/Marina/City Hall Grade ARaffles Place Grade A Shenton Way/Robinson Road/Tanjong Pagar Grade A Office Space New Demand (sq ft)

Total, Island-wide Occupancy Rate (%)

Office Space New Supply (sq ft)

‘000 sq ft %$ per sq ft per month

Source: Knight Frank Research Source: URA, Knight Frank Research

4Q 07 2Q 08 4Q 08 2Q 09 4Q 09 2Q 10 4Q 10 2Q 11 4Q 11

4Q 0

7

1Q 0

8

2Q 0

8

3Q 0

8

4Q 0

8

1Q 0

9

2Q 0

9

3Q 0

9

4Q 0

9

1Q 1

0

2Q 1

0

3Q 1

0

4Q 1

0

1Q 1

1

2Q 1

1

3Q 1

1

4Q 1

1

Raffles Place Grade A+ (New basket of office rents created in 4Q 2010)

Market Report

51

pRIMe ReTAIL MonTHLY gRoSS RenTS ReTAIL neW SuppLY, neW deMAnd, occupAncY RATeS

Shop Space New Demand (sq ft)

Total, Island-wide Occupancy Rate (%)

Shop Space New Supply (sq ft)

Source: Knight Frank Research Source: URA, Knight Frank Research

THe SIngApoRe ReTAIL pRopeRTY MARKeToveRvIeWAmid healthy economic growth and record high employment rates in 2011, the Retail Sales Index (“RSI”) excluding Motor Vehicles grew 3.9% over the course of the year. Notably, the RSI for Department Stores, Watches and Jewellery, and Recreational Goods have declined from the start of the year, signifying declining discretionary spending. Recent consumer confidence surveys have also demonstrated increased pessimism over the third quarter of 2011. With slower economic growth of 1% - 3% expected in 2012, the retail sector may see tougher times in the coming year.

Supply conditions along Orchard Road remained relatively stable compared to the last two years. However, approximately 240,000 sq ft of net lettable area from the refurbished 268 Orchard and the redeveloped Orchard Gateway (formerly Hotel Phoenix/Specialists’ Shopping Centre and Orchard Emerald) is expected to be completed in 2013.

Average island-wide retail occupancy rates in 2011 improved 0.5% against the previous year to reach a record high at 94.7%. Change in the occupancy rates y-o-y outside the Central Region accounted for most of the increase, rising by 1.0%, while Central Region saw a marginal increase of 0.2%.

Within Central Region, occupancy rates at the Orchard and City Fringe areas had declined by 0.3% and 0.9% y-o-y respectively. On the contrary, occupancy rates at Downtown Core and Rest of Central Area had improved by 3.9% and 0.4% y-o-y.

Over the next 2 years, approximately 2.5 million sq ft of new lettable retail area will be completed, of which the majority (57.0%) will be located outside the Central Region, while the remainder will be in City Fringe (19.8%) and Central Region (23.2%) areas. New lifestyle hubs will be added to the heartlands and at new growth areas where the Government is focusing on in the future.

With no major upcoming supply in Central Area in the next few years, the performance of malls in these areas will largely depend on demand conditions, i.e. domestic retail expenditure and tourism receipts.

Island-wide prime retail rents increased approximately 2.4% over the year following new market entrants looking to set up its first store in prime retail spaces, high retail spending and strong tourist arrivals and expenditure this year.

While prime retail spaces in Fringe area performed well, prime rentals in the Marina Centre, City Hall and Bugis areas registered a fall of 2.5% y-o-y. To remain relevant and to compete better with upcoming newer malls, Suntec City, the largest mall in this area, announced its S$410 million makeover, scheduled to commence in 2012. The asset enhancement initiative is projected to complete in 2015. This exercise aims to improve the shopping experience of the mall with a view to optimise returns.

ouTLooKMoving forward, the global economy is clouded by economic uncertainty. The Singapore government has forecasted that the economy may grow at modest rates of between 1% - 3% in 2012.

In tandem with the subdued economic forecast and plausible cutting back of spending by consumers, the retail property market may face a slowdown in rent escalation as retailers expect smaller takings and face rising operational costs. In addition, new upcoming retail developments slated for completion in the next few years sets the stage for a more competitive landscape. Barring a significant shock to the economy, we expect rentals island-wide to stay relatively flat over the year. Nevertheless, well-positioned malls which are well-managed will better weather any downturn.1 Singapore Department of Statistics, Press Release, Retail Sales Index; The Retail Sales Index is

seasonally adjusted and at constant prices, thus representing retail sales volume.

$ per sq ft per month

* Rents are based on pre-defined portfolio of properties; refers to prime specialty shop space on ground level with good frontage and of up to 1,500 sq ft.

4Q 07 2Q 08 4Q 08 2Q 09 4Q 09 2Q 10 4Q 10 2Q 11 4Q 11

‘000 sq ft %

95800

600

400

200

0

-200

-400

94

93

92

Marine Centre, City Hall, Bugis Orchard (Central)

15

55

50

45

40

35

30

25

20

4Q 07 2Q 08 4Q 08 2Q 09 4Q 09 2Q 10 4Q 10 2Q 11 4Q 11


The Manager is committed towards upholding the utmost standards of accountability to Suntec REIT’s unitholders. It achieves this through good corporate transparency practices, maintaining an active channel of communication for investors, analysts and other stakeholders to access accurate and timely information on Suntec REIT, and in working towards fostering good long-term relationships with its stakeholders.

The senior management team of the Manager has held regular meetings and conference calls with institutional investors throughout the year. Our participation in various key regional equity and property conferences has also enabled us to remain accessible to investors and the opportunity to provide key strategic and performance updates on Suntec REIT. The second annual general meeting of Suntec REIT unitholders in April 2011 was well-attended by retail investors. It was an opportune time for senior management of the Manager to actively engage retail investors in their enquiries and discussions about Suntec REIT.

The Manager conducts regular post-results analyst and media briefings every six months subsequent to the release of the first-half and full-year financial results. There is extensive coverage on Suntec REIT, with research coverage by analysts from 22 local and foreign brokerage firms to date, providing a global reach to shareholders and potential investors worldwide.

In recognition of its good corporate transparency practices, Suntec REIT was conferred a Runner-up Award for the “Most Transparent Company Award 2011” under the REITs category in the SIAS Investors’ Choice Awards 2011. This is the sixth year that Suntec REIT has received the award for corporate transparency.

The Suntec REIT website is regularly updated with current financial and corporate information on Suntec REIT, including press releases, announcements, corporate earnings results and other key information. Users can access the website at www.suntecreit.com to download these reports.

unITHoLdeR enQuIRIeSFor more information on Suntec REIT and its operations, please contact the Manager, ARA Trust Management (Suntec) Limited via the following:

Telephone: +65 6835 9232Fax: +65 6835 9672Email: [email protected] Website: www.suntecreit.com

ApRIL 2012• Annual General Meeting

• Announcement of the first quarter results

MAY 2012• Books closure date to determine the

first quarter distribution entitlement

• The first quarter distribution

JuLY 2012• Announcement of the second

quarter and half-year results

AuguST 2012• Books closure date to determine the

second quarter distribution entitlement

• The second quarter distribution

ocTobeR 2012• Announcement of the third quarter results

noveMbeR 2012• Books closure date to determine the

third quarter distribution entitlement

• The third quarter distribution

JAnuARY 2013• Announcement of the fourth

quarter and full year results

febRuARY 2013• Books closure date to determine the

fourth quarter distribution entitlement

• The fourth quarter distribution

pRopoSed 2012/2013 cALendAR

Investor communications

64 Report of the Trustee65 Statement by the Manager66 Independent Auditors’ Report67 Statements of Financial Position68 Statements of Total Return69 Distribution Statements

71 Statements of Movements in Unitholders’ Funds72 Portfolio Statements75 Consolidated Statement of Cash Flows76 Notes to the Financial Statements

115 Statistics of Unitholdings117 Additional Information118 Notice of Annual General Meeting121 Corporate Directory123 Proxy Form

54 Corporate Governance

Financial Contents

Corporate Governance

54 Suntec REIT Annual Report 2011


ARA Trust Management (Suntec) Limited, as the manager of Suntec REIT (the “Manager”), has adopted an overall corporate governance framework designed to meet best practice principles. The Manager also recognises that an effective corporate governance culture is critical to its performance and consequently, the success of Suntec REIT, which it manages. In particular, the Manager has an obligation to act honestly, with due care and diligence, and in the best interest of Suntec REIT unitholders (“Unitholders”).

ACHIEVEMENTThe Manager won the Most Transparent Company Award 2011 (Runner-up, REITs category) at the Investors’ Choice Awards 2011 organised by the Securities Investors Association of Singapore (“SIAS”). This affirms the Manager’s commitment to a high standard of corporate governance and accountability to Unitholders.

The following segments describe the Manager’s main corporate governance policies and practices. They encompass proactive measures for avoiding situations of conflict and potential conflict of interest, including prioritising the interests of Unitholders over the Manager’s, ensuring that applicable laws and regulations are complied with, and that the Manager’s obligations under the Trust Deed (as defined below) are properly and efficiently carried out. The Manager confirms that it has adhered to the principles and guidelines as set out in the Code of Corporate Governance 2005 (the “Code”) where applicable, and has specified and explained areas of non-compliance.

THE MANAGER OF SUNTEC REITThe Manager has general powers of management over the assets of Suntec REIT. The Manager’s main responsibility is to manage Suntec REIT’s assets and liabilities in the best interest of Unitholders.

The primary role of the Manager is to set the strategic direction of Suntec REIT and make recommendations to HSBC Institutional Trust Services (Singapore) Limited, as trustee of Suntec REIT (the “Trustee”), on the acquisition, divestment and enhancement of assets of Suntec REIT in accordance with its stated investment strategy.

Other main functions and responsibilities of the Manager include:

1. using its best endeavours to ensure that the business of Suntec REIT is carried out and conducted in a proper and efficient manner and to conduct all transactions with or for Suntec REIT at arm’s length and on normal commercial terms;

2. preparing property reports on a regular basis, which may contain forecasts on net income, capital expenditure, sales and valuations, explanations of major variances to previous forecasts, written commentary on key issues and underlying assumptions on inflation, annual turnover, occupancy costs and any other relevant assumptions. The purpose of these reports is to monitor and explain the performance of Suntec REIT’s assets;

3. ensuring compliance with the applicable provisions of the Securities and Futures Act and all other relevant legislation, the Listing Manual of the Singapore Exchange Securities Trading Limited (the “SGX-ST”), the Code on Collective Investment Schemes (“CIS Code”) issued by Monetary Authority of Singapore (“MAS”), including the Property Funds Appendix, the Trust Deed (as amended), the tax ruling dated 15 June 2004 issued by the Inland Revenue Authority of Singapore and all relevant contracts;

4. attending to all regular communications with Unitholders; and

5. supervising the property managers which provide property management, lease management, marketing and marketing co-ordination services in relation to Suntec REIT’s properties pursuant to the respective property management agreements.

Suntec REIT, constituted as a trust, is externally managed by the Manager and accordingly, it has no personnel of its own. The Manager appoints experienced and well-qualified management to handle its day-to-day operations.

The Manager is appointed in accordance with the terms of the Trust Deed dated 1 November 2004 as amended by a First Supplemental Deed dated 25 January 2006, a Second Supplemental Deed dated 20 April 2006, a Third Supplemental Deed dated 30 July 2007, a Fourth Supplemental Deed dated 11 October 2007, a Fifth Supplemental Deed dated 29 September 2008, a Sixth Supplemental Deed dated 14 April 2010 and a First Amending and Restating Trust Deed dated 7 September 2010 (collectively, the “Trust Deed”).

The Trust Deed outlines certain circumstances under which the Manager can be removed by notice in writing given by the Trustee in favour of a corporation appointed by the Trustee, upon the occurrence of certain events, including the Unitholders by a resolution passed by a simple majority of Unitholders, present and voting at a meeting of Unitholders, duly convened and held in accordance with the provisions of the Trust Deed.

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THE BOARD’S CONDUCT OF AFFAIRSPrinciple 1 Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the

success of the company. The Board works with Management to achieve this and the Management remains accountable to the Board.

The Board of Directors of the Manager (the “Board”) is entrusted with responsibility for the overall management of the Manager. The Board is responsible for the overall corporate governance of the Manager, including establishing goals for managing and monitoring the achievement of these goals. The Board is also responsible for the strategic business direction and risk management of Suntec REIT. All Board members participate in matters relating to corporate governance, business operations and risks, financial performance and the nomination and appointment of directors. The Board has established a framework for management of the Manager and Suntec REIT, including a system of internal controls and risk management processes.

The Board meets regularly to review the Manager’s key activities. Board meetings are held once every quarter (or more often if necessary) to discuss and review the strategies and policies of Suntec REIT, including any significant acquisitions and disposals, the annual budget, the financial performance of Suntec REIT and to approve the release of quarterly, half year and full year results. The Board also reviews the assessment of key risks to the assets of Suntec REIT, as well as financial and treasury management administration and acts upon any comments from the auditors of Suntec REIT.

Where necessary, additional meetings would be held to address significant transactions or issues requiring the Board’s attention. The Articles of Association of the Manager permits Directors’ participation in meetings by way of tele-conference or video conference.

Four Board meetings were held during the financial year ended 31 December 2011 (“FY 2011”).

The Board has adopted a set of internal controls which it believes is adequate in safeguarding Unitholders’ interest and Suntec REIT’s assets. Appropriate delegation of authority has been provided to management of the Manager (“Management”) to facilitate operational efficiency with oversight by the Board and this includes, among other things, approval limits for capital expenditure and operating of bank accounts. Apart from matters that specifically require approval from the Board, the Board approves transactions exceeding established threshold limits and delegates authority for transactions below those limits to Board Committees.

Changes to regulations, policies and accounting standards are monitored closely. Where the changes have an important impact on Suntec REIT and its disclosure obligations, the Directors are briefed either during a Board meeting, at specially convened sessions or via circulation of Board papers. Relevant updates, news releases issued by the SGX-ST and the Accounting and Corporate Regulatory Authority (“ACRA”) will also be circulated to the Board for information.

Newly appointed Directors are given letters explaining the terms of their appointment as well as their duties and obligations. An orientation is arranged for these Directors to be briefed on the business activities of Suntec REIT and its strategic directions and policies.

BOARD COMPOSITION AND GUIDANCEPrinciple 2 There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs

independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board’s decision making.

The Board presently comprises nine members, four of whom are independent. The Chairman of the Board is Mr. Chiu Kwok Hung, Justin.

The composition of the Board is determined using the following principles:

1. the Chairman of the Board should be a Non-executive Director;

2. the Board should comprise Directors with a broad range of commercial experience including expertise in fund management and the property industry; and

3. at least one-third of the Board should comprise Independent Directors.

The composition of the Board is reviewed regularly to ensure that the Board has the appropriate mix of expertise and experience. In particular, the Manager strives to ensure that the Board as a whole has the requisite background, experience and knowledge in business, finance and management


skills critical to Suntec REIT’s businesses. Collectively and individually, the Directors act in good faith and exercise due diligence and care in the course of deliberations and consider objectively at all times the interests of Suntec REIT and its Unitholders.

The Board is of the view that its current composition of persons, who as a group provide the necessary core competencies, is adequate and that the current Board size is appropriate, taking into consideration the nature and scope of Suntec REIT’s operations.

Profiles of the Directors and other relevant information are set out on Pages 16 to 19 of this Annual Report.

At least one-third of the Board comprises Independent Directors. The Independent Directors exercise objective judgement on Suntec REIT’s affairs and are independent from Management. The Independent Directors have no relationship with the Manager, its related companies or their officers that could interfere, or be reasonably perceived to interfere, with the exercise of their independent judgement.

Non-executive Directors contribute to the Board process by monitoring and reviewing Management’s performance against goals and objectives. Their views and opinions provide alternative perspectives to Suntec REIT’s business and enable the Board to make informed and balanced decisions. It also enables the Board to interact and work with Management to help shape the strategic process.

When reviewing Management proposals or decisions, the Non-executive and Independent Directors bring independent judgement to bear on business activities and transactions involving conflicts of interest and other complexities.

A healthy exchange of ideas and views between the Board and Management through regular meetings and updates enhances the management of Suntec REIT. This, together with a clear separation of roles between Chairman and Chief Executive Officer (“CEO”), provide a healthy and professional relationship between the Board and Management.

BOARD COMMITTEEThe Board is supported by various Board Committees, namely the audit committee and designated committee to assist the Board in discharging its responsibilities and enhance its corporate governance framework. The Board has delegated specific responsibilities to these Board Committees and their composition and terms of reference are described in this Report.

The Board accepts that while these Board Committees have the authority to examine particular issues in their specific areas respectively, the Board Committees shall report back to the Board with their decision and/or recommendations and the ultimate responsibility on all matters lies with the Board.

Designated Committee

Constituted by the Board on 26 October 2010, the designated committee (“Designated Committee”) was formed to assist the Board:

1. in reviewing Management’s proposal on the structure of financing and refinancing strategies for recommendation to the Board for approval; and

2. in reviewing and approving Management’s proposal on hedging strategies, financing and re-financing arrangements and transactions involving derivative instruments for hedging purposes.

The Designated Committee would also undertake other reviews and projects as may be requested by the Board.

The Designated Committee comprises the following members :

• Mr.ChowWaiWai,John Chairman

• Mr.TanKianChew Member

• Mr.ChenWeiChing,Vincent Member

• Ms.SeowBeeLian,Cheryl Member*

*Ms.SeowistheSeniorDirector,GroupFinanceofARAAssetManagementLimited.


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MEETING ATTENDANCEThe matrix of Board members’ participation in the various Board and its Board Committee meetings and attendance thereat for FY 2011 are as follows:

Board Members

Board Meetings Audit Committee Meetings

ParticipationAttendance/ Number

of MeetingsParticipation

Attendance/ Number of Meetings

Mr. Chiu Kwok Hung, Justin Chairman 4/4 NA NA

Mr. Lim Hwee Chiang, John Member 4/4 NA NA

Mr. Ip Tak Chuen, Edmond (Alternate Director – Mr. Ma Lai Chee, Gerald)

Member 4/4 NA NA

Mr. Tan Kian Chew Member 4/4 Chairman 5/5

Mrs. Sng Sow-Mei (alias Poon Sow Mei)

Member 4/4 Member 5/5

Mr. Lim Lee Meng Member 4/4 Member 5/5

Mr. Chen Wei Ching, Vincent Member 4/4 Member 5/5

Mr. Chow Wai Wai, John Member 4/4 NA NA

Mr. Yeo See Kiat Member and CEO 4/4 CEO NA

There were no Designated Committee meetings held in FY2011.

CHAIRMAN AND CHIEF EXECUTIVE OFFICERPrinciple 3 There should be a clear division of responsibilities at the top of the company – the working of the Board and the executive responsibility

of the company’s business – which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power.

The roles of Chairman and CEO are separate and held by Mr. Chiu Kwok Hung, Justin and Mr. Yeo See Kiat respectively. The separation of responsibilities between the Chairman and the CEO facilitates effective oversight and a clear segregation of duties. The Chairman leads the Board and ensures that its members work together with Management in a constructive manner to address strategies, business operations and enterprise issues. The CEO has full executive responsibilities over the business direction and operational decisions of managing Suntec REIT in accordance with the objectives establishd by the Board.

BOARD MEMBERSHIP AND PERFORMANCEPrinciple 4 There should be a formal and transparent process for the appointment of new directors to the Board.

Principle 5 There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board.

As the Manager is not itself a listed entity, the Manager does not consider it necessary for the Board to establish a nominating committee. The Manager believes that contributions from each Director go beyond his/her attendance at Board and its Board Committee meetings and are reflected in the long term success of Suntec REIT. The Board performs functions that a nominating committee would perform, namely, tabling nominations to the Board, reviewing the structure, size and composition of the Board and reviewing the independence of Board members.

In reviewing and recommending the appointment of new Directors, the Board takes into consideration the current Board size and mix, and the principles outlined earlier in this statement. The Board also reviews the candidate’s ability to contribute to the proper guidance of the Manager in its management of Suntec REIT.



The independence of Directors is reviewed upon appointment and thereafter the Board reviews the independence of Board members annually with reference to the guidelines set out in the Code. The Board has determined that Mr. Tan Kian Chew, Mrs. Sng Sow-Mei, Mr. Lim Lee Meng and Mr.ChenWeiChing,VincentareconsideredtobeIndependentDirectors.

Although the Directors hold multiple board representations in other companies, the Board ensures that sufficient time and attention are given by the Directors to the affairs of the Manager and Suntec REIT. The Board is of the view that such multiple board representations do not hinder the Directors from carrying out their duties in the Manager and Suntec REIT.

Reviews of Board performance as appropriate are informal. Renewal or replacement of Board members do not necessarily reflect their contributions to-date, but may be driven by the needs of Suntec REIT and its business. The Manager believes that Board performance would be better reflected and evidenced by proper guidance, diligent oversight and able leadership and support that the Board members lend to Management to steer Suntec REIT’s performance under favourable or challenging market conditions. Ultimately, the interests of Suntec REIT will be safeguarded and reflected by maximisation of Unitholder’s value.

ACCESSS TO INFORMATIONPrinciple 6 In order to fulfil their responsibilities, Board members should be provided with complete, adequate and timely information prior to

Board meetings and on an on-going basis.

Management provides complete, adequate and timely information to the Board on Suntec REIT’s affairs and issues that require the Board’s decision. Explanatory background information relating to matters brought before the Board includes quarterly results announcement, budgets, and copies of relevant disclosure documents.

The CEO keeps Board members abreast of key developments affecting Suntec REIT as well as material transactions so that the Board is kept fully aware of the affairs of Suntec REIT. All Directors have separate and independent access to Management, Company Secretary, internal and external auditors at all times.

Board meetings for each year are scheduled in advance to facilitate Directors’ individual arrangements and commitments. Board papers are generally circulated at least three days in advance of each meeting and include background explanatory information for the Directors to prepare for the meeting and make informed decisions.

The Company Secretary attends all Board meetings and assists the Board in ensuring that Board procedures and all other rules and regulations applicable to the Manager are complied with. The Company Secretary works with the Chairman to ensure that information flows within the Board and its Board Committee and between senior management and the Non-executive Directors. The Company Secretary will assist with professional development and training for Directors when required to do so.

The appointment and the removal of the Company Secretary shall be reviewed by the Board.

The Manager has in place procedures to enable Directors, whether as a group or individually, to obtain independent professional advice as and when necessary, in furtherance of their duties, at the Manager’s expense. The appointment of such independent professional advisors is subject to approval by the Board.

REMUNERATION MATTERSPrinciple 7 There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration

packages of individual directors. No director should be involved in deciding his own remuneration.

Principle 8 The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but companies should avoid paying more than is necessary for this purpose. A significant proportion of executive directors’ remuneration should be structured so as to link rewards to corporate and individual performance.

Principle 9 Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration in the company’s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key executives, and performance.


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All Directors and employees of the Manager are remunerated by the Manager from the fees it received from Suntec REIT, and not by Suntec REIT.

ACCOUNTABILITYPrinciple 10 The Board should present a balanced and understandable assessment of the company’s performance, position and prospects.

The Board seeks to keep Unitholders updated on Suntec REIT’s financial performance, position and prospects through quarterly and annual financial reports as well as timely announcements on developments in its businesses. Quarterly results are released to Unitholders within 45 days of the reporting period, while the full year results are released to Unitholders within 60 days of the financial year end. In presenting the financial reports, the Board aims to provide a balanced and understandable presentation of Suntec REIT’s financial performance, position and prospects.

Management provides the Board with a continual flow of relevant information on the performance on a timely basis in order that the Board may effectively discharge its duties.

AUDIT COMMITTEEPrinciple 11 The Board should establish an Audit Committee with written terms of reference which clearly set out its authority and duties.

The Board has established an audit committee (“Audit Committee”) to assist in the discharge of its responsibilities.

The Audit Committee comprises four Independent Directors, namely:

• Mr.TanKianChew Chairman

• Mrs.SngSow-Mei(aliasPoonSowMei) Member

• Mr.LimLeeMeng Member

• Mr.ChenWeiChing,Vincent Member

The Audit Committee members have professional expertise and experience in financial and business management fields. The Board is of the view that members of the Audit Committee are appropriately qualified, with the necessary accounting and financial management expertise and experience to discharge their responsibilities.

Five Audit Committee meetings were held for FY 2011.

In keeping with best practices in corporate governance, the Board has established that a majority of members of the Audit Committee (including the Chairman) shall be Independent Directors.

The role of the Audit Committee is to monitor and evaluate the effectiveness of the Manager’s internal controls. The Audit Committee also reviews the quality and reliability of information prepared for inclusion in financial reports and any formal announcements relating to Suntec REIT’s financial performance. The Audit Committee is responsible for the nomination of external and internal auditors for re-appointment and for reviewing the adequacy of existing audits in respect of cost, scope and performance. The Audit Committee meets with the external auditors and the internal auditors, without the presence of Management, at least once annually.

In FY 2011, the Audit Committee had met with the internal and external auditors without the presence of Management. The internal and external auditors had confirmed that they had full access to and had received the full co-operation and support of Management.

The Audit Committee has adopted a written terms of reference endorsed by the Board that defines its scope of authorities and responsibilities including:

1. reviewing external and internal audit reports to ensure that where deficiencies in internal controls have been identified, appropriate and prompt remedial action is taken by Management;

2. monitoring procedures in place to ensure compliance with applicable legislation, the Listing Manual of the SGX-ST and the Property Funds Appendix;

3. reviewing and approving the financial statements and auditors’ report; and



4. monitoring procedures established to regulate Related Party Transactions (as defined below), including ensuring compliance with the provisions of the Listing Manual of the SGX-ST relating to transactions between the Trustee and an “interested person’’, and the provisions of the Property Funds Appendix relating to transactions between the Trustee and an “interested party’’ (both such types of transactions constituting “Related Party Transactions”).

The Audit Committee is authorised to investigate any matters within its terms of reference. It is entitled to full access to and co-operation by Management and has full discretion to invite any Director or Executive Officer of the Manager to attend its meetings. The Audit Committee has full access to resources to enable it to discharge its functions fully.

The Audit Committee has also conducted a review of all non-audit services provided by the external auditors and is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors.

The audit and non-audit fees paid/payable to the external auditors for FY 2011 amount to S$309,000 and S$57,000 respectively.

The Audit Committee, with the concurrence of the Board, has recommended the re-appointment of KPMG LLP as the external auditors of Suntec REIT at the forthcoming annual general meeting. The Board, on behalf of Suntec REIT, has complied with the requirements of Rule 712 and 716 of the Listing Manual of the SGX-ST in respect of the suitability of the auditing firms of Suntec REIT and its associated companies.

Whistle-Blowing Policy

The Board has put in place a Whistle-Blowing programme for Suntec REIT whereby staff may in confidence, raise their concerns to the Audit Committee about possible improprieties in matters of financial reporting or such other matters in a responsible and effective manner.

The objective of the Whistle-Blowing programme is to ensure that arrangements are in place for independent investigation of such concerns and allow appropriate follow-up actions to be taken. There were no reports of whistle-blowing received in FY 2011.

INTERNAL CONTROLS AND AUDITPrinciple 12 The Board should ensure that the Management maintains a sound system of internal controls to safeguard the Unitholders’ investments

and the company’s assets.

Principle 13 The company should establish an internal audit function that is independent of the activities it audits.

The Manager has established and maintains a robust system of internal controls and risk management framework to safeguard Suntec REIT’s assets and Unitholders’ interests and to provide reasonable assurance against misstatement of loss, maintenance of reliable and proper accounting records and compliance with relevant legislation.

Internal auditors conduct audits to evaluate the effectiveness of the material internal control systems in Suntec REIT which include financial, operational, compliance and information technology controls. Any material non-compliance or lapses in internal controls together with corrective measures are reported to the Audit Committee.

The internal auditor reports directly to the Audit Committee on audit matters. The Audit Committee also reviews and approves the annual internal audit plan as well as the internal audit reports and effectiveness of the actions taken by Management on recommendations made by the internal auditor in this respect.

The internal audit function of the Manager is out-sourced to BDO Consultants Pte Ltd, a member firm of BDO International Limited. The Audit Committee is satisfied that the internal auditor has met the standards set by internationally recognized professional bodies including the International Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors.

The Audit Committee is of the view that the internal auditor has adequate resources to perform its functions and has maintained its independence from the activities that it audits.


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In addition to the work performed by the internal auditors, the external auditors also perform tests of certain controls that are relevant to the preparation of Suntec REIT’s financial statements. The external auditors report any significant deficiencies of such internal controls to the Audit Committee.

Based on the framework established and audits conducted, together with Management’s quarterly and annual undertaking confirming their responsibilities for and effectiveness of the internal controls, pursuant to Rule 1207(10) of the Listing Manual of the SGX-ST, the Board, with the concurrence of the Audit Committee, is of the opinion that the internal controls in place are adequate in addressing Suntec REIT’s material financial, operational and compliance risks in its current business environment.

COMMUNICATION WITH UNITHOLDERSPrinciple 14 Companies should engage in regular, effective and fair communication with unitholders.

Principle 15 Companies should encourage greater Unitholder participation at AGMs and allow Unitholders the opportunity to communicate their views on various matters affecting the company.

The Listing Manual of the SGX-ST requires that a listed entity discloses to the market matters that would likely have a material effect on the price of the entity’s securities. The Manager upholds a strong culture of continuous disclosure and transparent communication with Unitholders and the investing community. The Manager’s disclosure policy requires timely and full disclosure of all material information relating to Suntec REIT by way of public releases or announcements through the SGX-ST via SGXNET at first instance and subsequently, by way of release on Suntec REIT’s website at www.suntecreit.com.

The Manager also conducts regular briefings for analysts and media representatives, which will generally coincide with the release of Suntec REIT’s half year and full year results. During these briefings, Management will review Suntec REIT’s most recent performance as well as discuss the business outlook for Suntec REIT. In line with the Manager’s objective of transparent communication, briefing materials are also simultaneously released through the SGX-ST via SGXNET and also made publicly available at Suntec REIT’s website on a non-selective basis.

Unitholders are informed of meetings through notices accompanied by annual reports or circulars sent to them. Unitholders are invited at such meetings to put forth any questions they may have on the motions to be debated and decided upon. If any unitholder is unable to attend, he/she is allowed to appoint up to two proxies to vote on his/her behalf at the meeting through proxy forms sent in advance.

Members of the Board of Directors together with the Audit Committee and the auditors will be in attendance at these meetings to address questions from Unitholders.

DEALINGS IN SUNTEC REIT UNITSThe Board has adopted an internal compliance code of conduct to provide guidance to its Directors, key officers and employees in respect of dealings in Suntec REIT’s units (“Units”).

In general, the Manager’s policy encourages Directors and employees of the Manager to hold Units, but prohibits them from dealing in such Units:

1. during the period commencing one month before the public announcement of Suntec REIT’s annual, semi-annual and quarterly results and (where applicable) any property valuations, and ending on the date of announcement of the relevant results or property valuations; and

2. at any time whilst in possession of price-sensitive information.

Directors and employees of the Manager are discouraged from dealing in Units on short-term considerations.

In addition, the Manager has given an undertaking to the MAS that it will announce to the SGX-ST the particulars of its unitholdings in Suntec REIT and any changes thereto within two business days after the change. The Manager has also undertaken that it will not deal in Units during the period commencing one month before the public announcement of Suntec REIT’s annual, semi-annual and quarterly results and (where applicable) any property valuations, and ending on the date of announcement of the said information.



RISK ASSESSMENT AND MANAGEMENT OF BUSINESS RISKEffective risk management is a fundamental part of Suntec REIT’s business strategy. Recognising and managing risk is central to the business and to protecting Unitholders’ interests and value. Suntec REIT operates within overall guidelines and specific parameters set by the Board. Each transaction is comprehensively analysed to understand the risks involved and appropriate controls and measures are put in place before the Manager proceeds to execute these transactions. Key risks, process owners, risk factors, mitigating actions and risk indicators are continually identified, accessed and monitored by Management as part of Suntec REIT’s enterprise risk management framework and is documented in the risk profile maintained by the Manager and reviewed by the Board.

The Board meets quarterly or as often as necessary to review the financial performance of Suntec REIT as well as the related strategic, operational, hazard and financial risks faced by Suntec REIT. In assessing business risks, the Board also considers the economic environment and property industry risks.

DEALING WITH CONFLICTS OF INTERESTThe Manager has instituted the following procedures to deal with potential conflict of interest issues which the Manager may encounter in managing Suntec REIT:

1. the Manager will be a dedicated manager to Suntec REIT and will not manage any other REIT which invests in the same type of properties as Suntec REIT;

2. all executive officers will be employed by the Manager;

3. all resolutions in writing of the Directors of the Manager in relation to matters concerning Suntec REIT must be approved by all the Directors;

4. at least one-third of the Board shall comprise Independent Directors;

5. in respect of matters in which a Director of the Manager or his associates have an interest, direct or indirect, the interested Director will abstain from voting. In such matters, the quorum must comprise a majority of Directors of the Manager and must exclude such interested Directors;

6. under the Trust Deed, (i) the Manager and its associates are prohibited from voting at or being part of a quorum for any meeting of Unitholders convened to approve any matter in which the Manager or any of its associates has a material interest and (ii) for so long as ARA Trust Management (Suntec) Limited is the Manager of Suntec REIT and Cheung Kong (Holdings) Limited and/or Mr. Lim Hwee Chiang, John are controlling shareholders (as defined in the Listing Manual of the SGX-ST) of ARA Trust Management (Suntec) Limited, Cheung Kong (Holdings) Limited and its associates, or Mr. Lim Hwee Chiang, John and his associates, are prohibited from being part of a quorum or voting at any meeting of Unitholders convened to consider a matter in respect for which Cheung Kong (Holdings) Limited or its associates or, as the case may be,

Mr. Lim Hwee Chiang, John or his associates, has a material interest; and

7. it is also provided in the Trust Deed that if the Manager is required to decide whether or not to take any action against any person in relation to any breach of any agreement entered into by the Trustee with a related party of the Manager, the Manager shall be obliged to consult with a reputable law firm (acceptable to the Trustee) which shall provide legal advice on the matter. If the said law firm is of the opinion that the Trustee has a prima facie case against the party allegedly in breach under such agreement, the Manager shall be obliged to take appropriate action in relation to such agreement. The Directors of the Manager have a duty to ensure that the Manager so complies. Notwithstanding the foregoing, the Manager shall inform the Trustee as soon as it becomes aware of any breach of any agreement entered into by the Trustee with a related party of the Manager, and the Trustee may take such action as it deems necessary to protect the rights of Unitholders and/or which is in the interests of Unitholders. Any decision by the Manager not to take action against a related party of the Manager shall not constitute a waiver of the Trustee’s right to take such action as it deems fit against such related party.

DEALING WITH RELATED PARTY TRANSACTIONSReview Procedures for Related Party Transactions

In general, the Manager has established internal control procedures to ensure that all Related Party Transactions will be undertaken on an arm’s length basis and under normal commercial terms and will not be prejudicial to the interests of Suntec REIT and Unitholders. As a general rule, the Manager must demonstrate to the Audit Committee that such transactions satisfy the foregoing criteria, which may entail obtaining (where practicable) quotations from independent parties not related to the Manager, or obtaining one or more valuations from independent professional valuers (in accordance with the Property Funds Appendix).


63

In addition, the following procedures will be undertaken:

1. transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party during the same financial year) equal to or exceeding S$100,000 in value but below 3.0% of the value of Suntec REIT’s latest audited net tangible assets will be subject to review by the Audit Committee at regular intervals;

2. transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party during the same financial year) equal to or exceeding 3.0% but below 5.0% of the value of Suntec REIT’s latest audited net tangible assets will be subject to the review and prior approval of the Audit Committee. Such approval shall only be given if the transactions are on normal commercial terms and are consistent with similar types of transactions made by the Trustee with third parties which are unrelated to the Manager.

The Manager will, in compliance with Rule 905 of the Listing Manual of the SGX-ST, announce any related party transaction if such transaction, either individually or when aggregated with other related party transactions entered into with the same related party during the same financial year, is 3.0% or more of Suntec REIT’s latest audited net tangible assets; and

3. transactions (either individually or as part of a series or if aggregated with other transactions involving the same related party during the same financial year) equal to or exceeding 5.0% of the value of Suntec REIT’s latest audited net tangible assets will be reviewed and approved prior to such transactions being entered into, on the basis described in the preceding paragraph, by the Audit Committee which may, as it deems fit, request advice on the transaction from independent sources or advisers, including the obtaining of valuations from independent professional valuers. Further, under the Listing Manual of the SGX-ST and the Property Funds Appendix, such transactions would have to be approved by the Unitholders at a meeting of Unitholders.

Where matters concerning Suntec REIT relate to transactions entered into or to be entered into by the Trustee with a related party of the Manager or Suntec REIT, the Trustee is required to consider the terms of such transactions to satisfy itself that such transactions are conducted on arm’s length basis and on normal commercial terms, are not prejudicial to the interest of Suntec REIT and the Unitholders, and are in accordance with all applicable requirements of the Property Funds Appendix and/or the Listing Manual of the SGX-ST relating to the transaction in question. Further, the Trustee has the ultimate discretion under the Trust Deed to decide whether or not to enter into a transaction involving a related party of the Manager or Suntec REIT. If the Trustee is to sign any contract with a related party of the Manager or Suntec REIT, the Trustee will review the contract to ensure that it complies with the requirements relating to interested party transactions in the Property Funds Appendix (as may be amended from time to time) and the provisions of the Listing Manual of the SGX-ST relating to interested person transactions (as may be amended from time to time) as well as such other guidelines as may from time to time be prescribed by the MAS and the SGX-ST to apply to real estate investment trusts.

For so long as Cheung Kong (Holdings) Limited and/or Mr. Lim Hwee Chiang, John are controlling shareholders (as defined in the Listing Manual of the SGX-ST) of the Manager and the Manager is the manager of Suntec REIT, all transactions between Suntec REIT and the said controlling shareholders and/or their associates shall be considered as interested person transactions and the provisions of the Listing Manual of the SGX-ST relating to interested person transactions as well as such other guidelines as may from time to time be prescribed by the SGX-ST shall apply to such transactions.

Role of the Audit Committee for Related Party Transactions and Internal Control Procedures

All Related Party Transactions will be subject to regular periodic reviews by the Audit Committee. The Manager’s internal control procedures are intended to ensure that Related Party Transactions are conducted on an arm’s length basis and under normal commercial terms and are not prejudicial to Unitholders.

The Manager maintains a register to record all Related Party Transactions (and the bases, including any quotations from unrelated parties and independent valuations obtained to support such bases, on which they are entered into), which are entered into by Suntec REIT. The Manager will incorporate into its internal audit plan a review of all Related Party Transactions entered into by Suntec REIT. The Audit Committee shall review the internal audit reports to ascertain that the guidelines and procedures established to monitor Related Party Transactions have been complied with. In addition, the Trustee will also have the right to review such audit reports to ascertain that the Property Funds Appendix has been complied with. The Audit Committee will periodically review all Related Party Transactions to ensure compliance with the Manager’s internal control procedures and with the relevant provisions of the Listing Manual of the SGX-ST and the Property Funds Appendix. The review will include the examination of the nature of the transaction and its supporting documents or such other data deemed necessary by the Audit Committee.

If a member of the Audit Committee has an interest in a transaction, he is required to abstain from participating in the review and approval process in relation to that transaction.

The Manager will disclose in Suntec REIT’s annual report the aggregate value of Related Party Transactions conducted during the relevant financial year.



HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”) is under a duty to take into custody and hold the assets of Suntec Real Estate Investment Trust (the “Trust”) and its subsidiaries (the “Group”) in trust for the holders (“Unitholders”) of units in the Trust (the “Units”). In accordance with the Securities and Futures Act, Chapter 289, of Singapore, its subsidiary legislation, and the Code on Collective Investment Schemes, the Trustee shall monitor the activities of ARA Trust Management (Suntec) Limited (the “Manager”) for compliance with the limitations imposed on the investment and borrowing powers as set out in the trust deed dated 1 November 2004 (as amended) (the “Trust Deed”) between the Manager and the Trustee in each annual accounting period and report thereon to Unitholders in an annual report.

To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Trust during the period covered by these financial statements, set out on pages 67 to 114 in accordance with the limitations imposed on the investment and borrowing powers set out in the Trust Deed.

For and on behalf of the Trustee,HSBC Institutional Trust Services (Singapore) Limited

Antony Wade LewisDirector

Singapore7 March 2012

Report of the Trustee

65

In the opinion of the directors of ARA Trust Management (Suntec) Limited, the accompanying financial statements set out on pages 67 to 114, comprising the Statements of Financial Position, Statements of Total Return, Distribution Statements, Statements of Movements in Unitholders’ Funds, Portfolio Statements, Consolidated Statement of Cash Flows and Notes to the Financial Statements are drawn up so as to present fairly, in all material respects, the financial position of Suntec Real Estate Investment Trust (the “Trust”) and its subsidiaries (the “Group”) as at 31 December 2011, the total return, distributable income, movements in Unitholders’ funds and cash flows of the Group and the total return, distributable income and movements in Unitholders’ funds of the Trust for the financial year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Unit Trusts issued by the Institute of Certified Public Accountants of Singapore and the provisions of the Trust Deed. At the date of this statement, there are reasonable grounds to believe that the Trust will be able to meet its financial obligations as and when they materialise.

For and on behalf of the Manager,ARA Trust Management (Suntec) Limited

Lim Hwee Chiang, JohnDirector

Yeo See KiatDirector and Chief Executive Officer


Statement by the Manager


Independent Auditors’ ReportUnitholders of Suntec Real Estate Investment Trust(Constituted under a Trust Deed in the Republic of Singapore)

Report on the financial statementsWe have audited the accompanying financial statements of Suntec Real Estate Investment Trust (the “Trust”) and its subsidiaries (the “Group”), which comprise the Statements of Financial Position and Portfolio Statements of the Group and the Trust as at 31 December 2011, and the Statement of Total Return, Distribution Statement, Statement of Movements in Unitholders’ Funds and Consolidated Statement of Cash Flows of the Group and the Statement of Total Return, Distribution Statement and Statement of Movements in Unitholders’ Funds of the Trust for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 67 to 114.

Manager’s responsibility for the financial statements

The Manager of the Trust is responsible for the preparation and fair presentation of these financial statements in accordance with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Unit Trusts issued by the Institute of Certified Public Accountants of Singapore, and for such internal control as the Manager of the Trust determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Trust’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Manager of the Trust, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements of the Group and the Statement of Total Return, Distribution Statement and Statement of Movements in Unitholders’ Funds of the Trust present fairly, in all material respects, the financial position of the Group and of the Trust as at 31 December 2011 and the total return, distributable income, movements in Unitholders’ funds and cash flows of the Group, and the total return, distributable income and movements in Unitholders’ funds of the Trust for the year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Unit Trusts issued by the Institute of Certified Public Accountants of Singapore.

KPMG LLPPublic Accountants andCertified Public Accountants


67

Statements of Financial PositionAs at 31 December 2011

Group Trust Note 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Non-current assetsPlant and equipment 4 7,923 10 3 10Investment properties 5 5,098,080 4,452,000 4,706,000 4,452,000Intangible asset 6 60,744 100,029 60,744 100,029Interest in jointly controlled entities 7 2,087,311 2,039,680 1,474,417 1,474,791 Investments in subsidiaries 8 – – 649,899 535,506Derivatives assets 9 – 416 – 416 7,254,058 6,592,135 6,891,063 6,562,752Current assetsDerivatives assets 9 265 762 265 762Investment property held for sale 5 143,700 – 143,700 –Inventories 2,494 – – –Trade and other receivables 10 11,807 6,685 4,546 6,587Cash and cash equivalents 11 104,402 52,493 79,957 51,909 262,668 59,940 228,468 59,258

Total assets 7,516,726 6,652,075 7,119,531 6,622,010

Current liabilitiesInterest-bearing borrowings 12 199,967 404,585 199,967 404,585Trade and other payables 13 80,929 41,103 63,116 41,103Derivative liabilities 9 – 8,756 – 8,756Current portion of security deposits 19,628 22,452 18,654 22,452Provision for taxation 5,110 2,032 5,110 2,032 305,634 478,928 286,847 478,928Non-current liabilitiesInterest-bearing borrowings 12 2,604,103 2,150,059 2,477,777 2,150,059Non-current portion of security deposits 43,999 38,239 43,999 38,239Derivative liabilities 9 13,974 216 13,974 216Deferred tax liabilities 2,353 – – – 2,664,429 2,188,514 2,535,750 2,188,514

Total liabilities 2,970,063 2,667,442 2,822,597 2,667,442

Net assets 4,546,663 3,984,633 4,296,934 3,954,568

Represented by:

Unitholders’ funds 4,433,821 3,984,633 4,296,934 3,954,568Non-controlling interests 112,842 – – – 4,546,663 3,984,633 4,296,934 3,954,568

Units in issue (’000) 16 2,224,520 2,205,128 2,224,520 2,205,128

Net asset value per Unit (S$) 17 1.987 1.804 1.926 1.790

The accompanying notes form an integral part of these financial statements.


Statements of Total ReturnYear ended 31 December 2011

Group Trust Note 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Gross revenue 18 270,282 249,479 282,428 260,911Property expenses 19 (76,899) (56,389) (57,395) (56,389)Net property income 193,383 193,090 225,033 204,522 Other income 20 47,722 22,410 46,673 22,410Share of profit of jointly controlled entities 7 141,653 30,937 – –Finance income 21 23,506 15,963 22,057 13,402Finance costs 21 (75,284) (79,431) (74,356) (79,431)Net finance costs (51,778) (63,468) (52,299) (66,029)Amortisation of intangible asset 6 (39,285) (20,895) (39,285) (20,895)Asset management fees 22 (36,078) (27,932) (35,339) (27,932)Professional fees (2,525) (539) (529) (539)Trustee’s fees (1,135) (868) (1,135) (868)Audit fees (309) (252) (269) (252)Other charges 23 (1,320) (1,020) (1,208) (1,016)

Net income 250,328 131,463 141,642 109,401Net change in fair value of financial derivatives (5,913) 7,566 (5,913) 7,566Net change in fair value of investment properties 396,193 248,715 394,392 248,715

Total return for the year before tax 640,608 387,744 530,121 365,682Income tax expense 24 (6,013) (2,029) (5,107) (2,029)

Total return for the year after tax 634,595 385,715 525,014 363,653

Attributable to: Unitholders of the Trust 631,836 385,715 525,014 363,653Non-controlling interests 2,759 – – – 634,595 385,715 525,014 363,653 Earnings per Unit (cents) 25 Basic 28.504 20.337 23.685 19.174 Diluted 26.915 19.152 22.415 18.078


69

Distribution StatementsYear ended 31 December 2011

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Amount available for distribution to Unitholders at the beginning of the year 44,799 47,689 44,799 47,689

Net income 250,328 131,463 141,642 109,401Net tax adjustments (Note A) (64,091) 41,611 84,165 75,105Taxable income 231,036 220,763 270,606 232,195Add: Tax exempt dividend income (Note B) 39,570 11,432 – –Less: Income tax expense (Note C) (5,107) (2,029) (5,107) (2,029)Amount available for distribution to Unitholders 265,499 230,166 265,499 230,166 Distributions to Unitholders: Distribution of 2.568 cents per Unit for period

from 1/10/2009 to 21/12/2009 – (41,969) – (41,969)Distribution of 0.403 cents per Unit for period

from 9/12/2009 to 21/12/2009 – (139) – (139)Distribution of 0.318 cents per Unit for period






from 1/10/2010 to 8/12/2010 (31,830) − (31,830) −Distribution of 0.593 cents per Unit for period




from 1/7/2011 to 30/9/2011 (56,347) − (56,347) − (210,319) (185,367) (210,319) (185,367)Income available for distribution to

Unitholders at end of the year 55,180 44,799 55,180 44,799



Distribution StatementsYear ended 31 December 2011

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Note A

Net tax adjustments comprise: - Amortisation of intangible asset 39,285 20,895 39,285 20,895- Amortisation of transaction costs 14,024 29,580 14,024 29,580- Asset management fees paid/payable in Units 28,271 22,345 28,271 22,345- Interest income (1,449) (2,561) – –- Professional fees 489 254 489 254- Net profit from subsidiaries and/or jointly-controlled entities (146,807) (30,937) – –- Trustee’s fees 1,135 868 1,135 868- Other items 961 1,167 961 1,163Net tax adjustments (64,091) 41,611 84,165 75,105

Note B

This relates to the dividend income received from Comina Investment Limited, Suntec Harmony Pte. Ltd. and BFC Development Pte. Ltd..

Note C

This relates to income tax on the income support received by the Group and the Trust under the Deed of Income Support entered with Cavell Limited and Choicewide Group Limited, the vendors of the one-third interest in One Raffles Quay Pte. Ltd. and BFC Development Pte. Ltd. respectively.


71

Statements of Movements in Unitholders’ FundsYear ended 31 December 2011

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Balance at the beginning of the year 3,984,633 3,327,857 3,954,568 3,319,854 Operations

Total return for the year after tax attributable to Unitholders of the Trust 631,836 385,715 525,014 363,653

Net increase in Unitholders’ funds resulting from operations 631,836 385,715 525,014 363,653 Unitholders’ transactions Creation of Units: - asset management fees paid in Units 20,767 16,017 20,767 16,017- acquisition fee paid in Units – 14,958 – 14,958- private placement of Units – 428,810 – 428,810Units to be issued: - asset management fees payable in Units 7,504 6,328 7,504 6,328Unit issue expenses (600) (9,685) (600) (9,685)Distributions to Unitholders (210,319) (185,367) (210,319) (185,367)Net (decrease)/increase in Unitholders’ funds resulting

from Unitholders’ transactions (182,648) 271,061 (182,648) 271,061Unitholders’ funds at end of the year 4,433,821 3,984,633 4,296,934 3,954,568



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Note:Suntec City Office Towers comprise 15 strata lots in Suntec City Office Tower One, 7 strata lots in Suntec City Office Tower Two, 76 strata lots in Suntec City Office Tower Three and all the strata lots in Suntec City Office Towers Four and Five.

Suntec Singapore comprises more than one million square feet of versatile floor space over six levels as well as approximately 32,000 square feet of retail space.

Park Mall comprises a 15-storey with basement shopping cum office building.

CHIJMES comprises four retail blocks, two basement levels and a chapel.

The carrying amounts of the investment properties as at 31 December 2011 and 31 December 2010 were based on independent valuations undertakenbyKnightFrankPteLtd(“KnightFrank”),CBRichardEllis(Pte)Ltd(“CBRE”),ColliersInternationalConsultancy&Valuation(Singapore)Pte Ltd (“Colliers”) and DTZ Debenham Tie Leung (SEA) Pte Ltd (“DTZ”). The independent valuers have appropriate professional qualifications and recent experience in the location and category of the properties being valued.

ValuationDescription Valuer Valuation method 2011 2010of Property $’000 $’000 Suntec City Mall Colliers Investment method and discounted 1,725,000 1,525,000 (2010: Knight Frank) cash flow analysis Suntec City Office Towers Colliers Investment method and discounted 2,611,000 2,455,000 (2010: Knight Frank) cash flow analysis Suntec Singapore Colliers Investment method and discounted 392,080 – (2010: N/A) cash flow analysis

Park Mall Knight Frank Investment method and discounted 370,000 338,000 (2010: CBRE) cash flow analysis (2010: Capitalisation of income approach and discounted cash flow analysis) CHIJMES DTZ Capitalisation of income approach 143,700 134,000 (2010: Knight Frank) and discounted cash flow analysis (2010: Investment method and discounted cash flow analysis) The Group and the Trust entered into a property sale agreement with PRE 8 Investments Pte Ltd on 27 October 2011 for the sale of CHIJMES at a price of $177,000,000. The property has been reclassified as investment property held for sale accordingly. The property sale is scheduled to be completed in January 2012.

Investment properties comprise commercial properties that are leased to external customers. Generally, the leases contain an initial non-cancellable period of three years. Subsequent renewals are negotiated with the lessee. Contingent rents recognised upon receipt in the Statement of Total Return of both the Group and the Trust amounted to $1,309,000 (2010: $1,033,000).

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Consolidated Statement of Cash FlowsYear ended 31 December 2011

Group Note 2011 2010 $’000 $’000

Cash flows from operating activitiesNet income 250,328 131,463Adjustments for: Allowance for doubtful receivables 384 430Amortisation of intangible asset 39,285 20,895Asset management fees paid/payable in Units 28,271 22,345Depreciation of plant and equipment 1,118 38Loss on disposal of plant and equipment 80 4Negative goodwill on acquisition (1,049) –Net finance costs 51,778 63,468Share of profit of jointly controlled entities (141,653) (30,937)Operating income before working capital changes 228,542 207,706Changes in working capital: Trade and other receivables 412 466Trade and other payables (10,319) 4,401Cash generated from operating activities 218,635 212,573Income tax paid (2,029) (6,207)Net cash from operating activities 216,606 206,366 Cash flows from investing activities Acquisition of interest in a jointly controlled entity – (1,414,713)Acquisition of subsidiary, net of cash acquired 26 (92,562) –Adjustment to investment in jointly controlled entities 3,198 790Capital expenditure on investment properties (3,275) (1,285)Deposit received on investment property held for sale 26,550 –Dividend income received 40,090 11,610Interest received 22,462 15,656Loan (to)/repaid by jointly controlled entities (1,874) 300,000Purchase of intangible asset – (84,800)Purchase of plant and equipment (167) (7)Net cash used in investing activities (5,578) (1,172,749) Cash flows from financing activities Distributions to Unitholders (210,319) (185,367)Dividends paid to non-controlling interests (1,176) –Interest paid (58,750) (76,110)Proceeds from interest-bearing loans 235,000 1,805,000Proceeds from issue of units, net of expenses – 419,125Proceeds from medium term notes 150,000 –Redemptions of convertible bonds (774) –Repayment of interest-bearing loans (272,500) (975,000)Unit issue costs paid (600) –Net cash (used in)/from financing activities (159,119) 987,648

Net increase in cash and cash equivalents 51,909 21,265Cash and cash equivalents at beginning of the year 52,493 31,228Cash and cash equivalents at end of the year 11 104,402 52,493

Significant Non-Cash Transactions

The Group and the Trust had issued or will be issuing a total of 22,076,035 (2010: 15,725,881) Units to the Manager, amounting to approximately $28,271,000 (2010: $22,345,000) at unit prices ranging from $1.0834 to $1.4965 (2010: $1.3295 to $1.5039) as satisfaction of asset management fees payable in Units in respect of the year ended 31 December 2011.

In the previous year, 10,266,300 Units were issued to the Manager, amounting to approximately $14,958,000 at $1.457 per unit as satisfaction of the acquisition fee paid on the acquisition of the one-third interest in BFC Development Pte. Ltd..



These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Manager and the Trustee on 7 March 2012.

1 GeneralSuntec Real Estate Investment Trust (the “Trust”) is a Singapore-domiciled unit trust constituted pursuant to the trust deed dated 1 November 2004 (as amended) (the “Trust Deed”) between ARA Trust Management (Suntec) Limited (the “Manager”) and HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”). The Trust Deed is governed by the laws of the Republic of Singapore. The Trustee is under a duty to take into custody and hold the assets of the Trust in trust for the holders (“Unitholders”) of Units in the Trust (the “Units”).

The Trust was formally admitted to the Official List of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) on 9 December 2004 and was included in the Central Provident Fund (“CPF”) Investment Scheme on 9 December 2004.

The principal activity of the Trust and its subsidiaries is to invest in income producing real estate and real estate related assets, which are used or substantially used for commercial purposes, with the primary objective of achieving an attractive level of return from rental income and for long-term capital growth.

The financial statements of the Trust as at and for the year ended 31 December 2011 comprise the Trust and its subsidiaries (together referred to as the “Group” and individually as “Group entities”) and the Group’s interest in jointly controlled entities.

The Trust has entered into several service agreements in relation to management of the Trust and its property operations. The fee structures of these services are as follows:

(i) Property management fees

APM Property Management Pte Ltd (“APM”), the property manager of Suntec City Mall and Suntec City Office Towers, is entitled to receive 3.0% per annum of gross revenue for provision of lease management services, marketing and marketing co-ordination services and property management services. In addition, where the aggregate of all (1) licence fees; (2) media sales; and (3) other advertising and promotion income derived from the property for each financial year exceeds $5,520,000, APM is entitled to receive a commission of 10.0% of the said licence fees, media sales and other advertising and promotion income which exceeds $5,520,000 for each financial year.

APAC Investment Management Pte Ltd, the property manager of Park Mall and CHIJMES, is entitled to receive 3.0% per annum of gross revenue for provision of lease management, property management, marketing and marketing co-ordination services.

Suntec Singapore International Convention and Exhibition Services Pte Ltd, the property manager of Suntec Singapore, is entitled to received 3.0% per annum of gross revenue for provision of convention and exhibition management, lease management, property management, marketing and marketing co-ordination services.

The property management fees are payable monthly in arrears.

(ii) Asset management fees

Pursuant to the Trust Deed, asset management fees comprise the following:

(a) a base fee not exceeding 0.3% per annum of the value of the Deposited Property (being all the assets of the Trust (including all its Authorised Investments) as defined in the Trust Deed) of the Trust or such higher percentage as may be approved by an Extraordinary Resolution of a meeting of Unitholders; and

(b) an annual performance fee equal to a rate of 4.5% per annum of the Net Property Income (as defined in the Trust Deed) of the TrustandanySpecialPurposeVehicles(asdefinedintheTrustDeed)foreachfinancialyear,orsuchlowerpercentageasmaybe determined by the Manager in its absolute discretion or such higher percentage as may be approved by an Extraordinary Resolution at a meeting of Unitholders.

Notes to the Financial Statements

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1 General (continued)(ii) Asset management fees (continued)

Based on the current agreement between the Manager and the Trustee, the base fee is agreed to be 0.3% per annum of the value of the Deposited Property.

For a period of seven years commencing from the listing of the Units on the SGX-ST, 80.0% of the asset management fees payable to the Manager will be paid in the form of Units issued at the volume weighted average traded price for a unit for all trades on the SGX-ST on the ordinary course of trading on the SGX-ST for the last ten Business Days (as defined in the Trust Deed) of the relevant period in which the management fees accrue, and 20.0% of the management fees will be paid in the form of cash. Thereafter, the asset management fees shall be in the form of Units and/or cash as the Manager may elect. The portion of the asset management fees payable in the form of Units will be made on a quarterly basis, in arrears. The portion of the asset management fees payable in cash will be made on a monthly basis, in arrears.

The Manager is also entitled to receive an acquisition fee at the rate of 1.0% of the acquisition price and a divestment fee of 0.5% of the sale price on all future acquisition or disposal of properties.

(iii) Trustee’s fee

Pursuant to the Trust Deed, the Trustee’s fee shall not exceed 0.25% per annum of the value of the Deposited Property (subject to a minimum sum of $9,000 per month) or such higher percentage as may be approved by an Extraordinary Resolution of a meeting of Unitholders.

The Trustee’s fee is payable out of the Deposited Property of the Trust on a monthly basis, in arrears. The Trustee is also entitled to reimbursement of all reasonable out-of-pocket expenses incurred in the performance of its duties under the Trust Deed.

2 Basis of preparation2.1 Statement of compliance

The financial statements have been prepared in accordance with the Statement of Recommended Accounting Practice (“RAP”) 7 Reporting Framework for Unit Trusts issued by the Institute of Certified Public Accountants of Singapore, and the applicable requirements of the Code on Collective Investment Schemes (the “CIS Code”) issued by the Monetary Authority of Singapore (“MAS”) and the provisions of the Trust Deed. RAP 7 requires the accounting policies to generally comply with the recognition and measurement principles of Singapore Financial Reporting Standards (“FRS”).

2.2 Basis of measurement

These financial statements are prepared on the historical cost basis except for certain financial assets and liabilities which are measured at fair value.

2.3 Functional and presentation currency

The financial statements are presented in Singapore dollars which is the Trust’s functional currency. All financial information presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated.

2.4 Use of estimates and judgements

The preparation of financial statements in conformity with RAP 7 requires the Manager to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.




2 Basis of preparation (continued)Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements and information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes:

• Note5 – Valuationofinvestmentproperties

• Note15 – Valuationoffinancialinstruments

2.5 Changes in accounting policies

Identification of related party relationships and related party disclosures

From 1 January 2011, the Group has applied the revised FRS 24 Related Party Disclosures (2010) to identify parties that are related to the Group and to determine the disclosures to be made on transactions and outstanding balances, including commitments, between the Group and its related parties. FRS 24 (2010) improved the definition of a related party in order to eliminate inconsistencies and ensure symmetrical identification of relationships between two parties.

The adoption of FRS 24 (2010) does not result in additional parties being identified as related to the Group. Transactions and outstanding balances, including commitments, with these related parties for the current and comparative years have been disclosed accordingly in note 31 to the financial statements.

The adoption of FRS 24 (2010) affects only the disclosures made in the financial statements. There is no financial effect on the results and financial position of the Group for the current and previous financial years. Accordingly, the adoption of FRS 24 (2010) has no impact on earnings per share.

3 Significant accounting policiesThe accounting policies set out below have been applied consistently to all periods presented in these financial statements and have been applied consistently by Group entities.

3.1 Basis of consolidation

Business combinations

Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in Statement of Total Return.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in Statement of Total Return.

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3 Significant accounting policies (continued)3.1 Basis of consolidation (continued)

Business combinations (continued)

For non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the acquiree’s net assets in the event of liquidation, the Group elects on a transaction-by-transaction basis whether to measure them at fair value, or at the non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets, at the acquisition date. All other non-controlling interests are measured at acquisition-date fair value or, when applicable, on the basis specified in another standard.

Subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Loss of control

Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in Statement of Total Return. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

Jointly controlled entities

Jointly controlled entities are entities whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions.

Investments in jointly controlled entities are accounted for using the equity method and are recognised initially at cost. The cost of the investments includes transaction costs.

The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the jointly controlled entities after adjustments to align the accounting policies with those of the Group, from the date that joint control commences until the date that joint control ceases.

When the Group’s share of losses exceeds its interest in the jointly controlled entities, the carrying amount of that interest, including any long-term investments, is reduced to zero and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the jointly controlled entities. Acquisition of non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore the carrying amounts of assets and liabilities are not changed and goodwill is not recognised as a result of such transactions. The adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. Any difference between the adjustment to non-controlling interests and the fair value of consideration paid is recognised directly in equity and presented as part of equity attributable to Unitholders of the Trust.



3 Significant accounting policies (continued)3.1 Basis of consolidation (continued)

Transactions eliminated on consolidation

Intra-group balances and transactions and any unrealised income or expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with the jointly controlled entities are eliminated against the investment to the extent of the Group’s interest in the jointly controlled entities. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Accounting for subsidiaries and jointly controlled entities

Investments in subsidiaries and jointly controlled entities are stated in the Trust’s Statement of Financial Position at cost less accumulated impairment losses.

3.2 Plant and equipment

Plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Gains or losses arising from the retirement or disposal of plant and equipment are determined as the difference between the estimated net disposal proceeds and the carrying amount of the asset, and are recognised in the Statement of Total Return.

Depreciation is recognised in Statement of Total Return on a straight-line basis so as to write off items of plant and equipment over their estimated useful lives as follows:

Equipment - 3 - 5 yearsFurniture and fittings - 5 yearsMotor vehicles - 10 years

Depreciation methods, useful lives and residual values are reviewed at each reporting period and adjusted if appropriate.

3.3 Investment properties

Investment properties are properties held either to earn rental income or capital appreciation or for both. Investment properties are measured at cost on initial recognition and subsequently at fair value. Fair value is determined in accordance with the Trust Deed, which requires the investment properties to be valued by independent registered valuers in the following events:

• insuchmannerandfrequencyrequiredunderthePropertyFundsAppendixoftheCISCodeissuedbytheMAS;and

• wheretheManagerproposestoissuenewUnitsforsubscriptionortoredeemexistingUnitsunlesstheinvestmentpropertieshave been valued not more than 6 months ago.

Fair value changes are recognised in the Statement of Total Return.

When an investment property is disposed of, the resulting gain or loss is recognised in the Statement of Total Return as the difference between net disposal proceeds and the carrying amount of the property.

For taxation purposes, the Group and the Trust may claim capital allowances on assets that qualify as plant and machinery under the Income Tax Act.

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3 Significant accounting policies (continued)3.4 Intangible asset

Intangible asset acquired by the Group and the Trust is measured initially at cost. Following initial recognition, the intangible asset is measured at cost less any accumulated amortisation and accumulated impairment losses.

The intangible asset is amortised in the Statement of Total Return on a systematic basis over its estimated useful life. Intangible asset is tested for impairment as described in Note 3.7.

3.5 Inventories

Inventories are measured at the lower of cost and net realisable value.

Inventories consist of food and beverages, general stocks and operating supplies. Cost of food and beverages and general stocks is calculated using the weighted average cost formula and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Operating supplies is the amount of stocks held above the minimum level required to be maintained for the operations. Cost of operating supplies is determined on a first-in, first-out basis and comprises all costs of purchase and other costs incurred in bringing the supplies to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

3.6 Financial instruments

Non-derivative financial assets

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through the Statement of Total Return) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the Statement of Financial Position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group has the following non-derivative financial assets: loans and receivables.

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses.

Loans and receivables comprise trade and other receivables and cash and cash equivalents.

Cash and cash equivalents comprise cash balances and bank deposits.



3 Significant accounting policies (continued)3.6 Financial instruments (continued)

Non-derivative financial liabilities

The Group initially recognises all other financial liabilities (including liabilities designated at fair value through the Statement of Total Return) on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.

The Group classifies non-derivative financial liabilities into other financial liabilities category. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method.

Other financial liabilities comprise interest bearing borrowings, security deposits and trade and other payables.

Derivative financial instruments

The Group holds derivative financial instruments to hedge its interest rate risk exposure.

Derivative financial instruments are recognised initially at fair value; attributable transaction costs are recognised in the Statement of Total Return when incurred. Subsequent to initial recognition, derivatives are measured at fair value, changes therein are accounted for as described below.

Separable embedded derivatives

Changes in the fair value of separated embedded derivatives are recognised immediately in Statement of Total Return.

Other non-trading derivatives

When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge accounting, all changes in its fair value are recognised immediately in Statement of Total Return.

Convertible bonds

The convertible bonds comprise a liability for the interest and principal amount and a derivative liability. The derivative liability is recognised at fair value at inception. The carrying amount of the convertible bonds at initial recognition is the difference between the gross proceeds from the convertible bonds issue and the fair value of the derivative liability. Any directly attributable transaction costs are allocated to the convertible bonds and derivative liability in proportion to their initial carrying amounts.

Subsequent to initial recognition, the convertible bonds are measured at amortised cost using the effective interest method. The derivative liability is measured at fair value through the Statement of Total Return.

3.7 Impairment

Non-derivative financial assets

A financial asset not carried at fair value through total return is assessed at the end of each reporting period to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event has a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy or economic conditions that correlate with defaults.

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3 Significant accounting policies (continued) 3.7 Impairment (continued)

Loans and receivables

The Group considers evidence of impairment for loans and receivables at both a specific asset and collective level. All individually significant loans and receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Loans and receivables that are not individually significant are collectively assessed for impairment by grouping together loans and receivables with similar risk characteristics.

In assessing collective impairment, the Group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for Manager’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows, discounted at the asset’s original effective interest rate. Losses are recognised in Statement of Total Return and reflected in an allowance account against loans and receivables. Interest on the impaired asset continues to be recognised. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through the Statement of Total Return.

Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than investment properties, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit (CGU) exceeds its estimated recoverable amount.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis.

Impairment losses recognised in prior periods in respect of other assets are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

3.8 Non-current assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter, the assets, or disposal group, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets and investment property, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in Statement of Total Return. Gains are not recognised in excess of any cumulative impairment loss.

3.9 Issue expenses

Issue expenses relate to expenses incurred in connection with the issue of Units. Such expenses are deducted directly against Unitholders’ funds.



3 Significant accounting policies (continued)3.10 Revenue recognition

Rental income from operating leases

Rental income receivable under operating leases is recognised in the Statement of Total Return on a straight-line basis over the term of the lease, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased assets. Lease incentives granted are recognised as an integral part of the total rental to be received. Contingent rentals, which include gross turnover rental, are recognised as income in the accounting period on a receipt basis. No contingent rentals are recognised if there are uncertainties due to the possible return of amounts received.

Dividend income

Dividend income is recognised on the date that the right to receive payment is established.

3.11 Expenses

Property expenses

Property expenses consist of advertising and promotion expenses, property tax, property management fees (using the applicable formula stipulated in Note 1(i)), maintenance charges and other property outgoings in relation to investment properties where such expenses are the responsibility of the Group.

Property expenses are recognised on an accrual basis.

Asset management fees

Asset management fees are recognised on an accrual basis using the applicable formula stipulated in Note 1(ii).

Trustee’s fee

Trustee’s fee is recognised on an accrual basis using the applicable formula stipulated in Note 1(iii).

3.12 Finance income and finance costs

Finance income comprises interest income on funds invested, that are recognised in the Statement of Total Return. Interest income is recognised as it accrues, using the effective interest method.

Finance costs comprise interest expense on borrowings and amortisation of transaction costs incurred on borrowings that are recognised in the Statement of Total Return. All borrowing costs are recognised in the Statement of Total Return using the effective interest method.

3.13 Tax

Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in the Statement of Total Return except to the extent that it relates to items directly related to Unitholders’ funds, in which case it is recognised in Unitholders’ funds.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and for differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future.

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3 Significant accounting policies (continued)3.13 Tax (continued)

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority (i) on the same taxable entity; or (ii) on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits, against which the temporary differences can be utilised, will be available. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

The Inland Revenue Authority of Singapore (“IRAS”) has issued a tax ruling on the taxation of the Trust for income earned and expenditure incurred after its listing on the SGX-ST. Subject to meeting the terms and conditions of the tax ruling which includes a distribution of at least 90% of the taxable income of the Trust, the Trustee will not be taxed on the portion of taxable income of the Trust that is distributed to Unitholders. Any portion of the taxable income that is not distributed to Unitholders will be taxed on the Trustee. In the event that there are subsequent adjustments to the taxable income when the actual taxable income of the Trust is finally agreed with the IRAS, such adjustments are taken up as an adjustment to the taxable income for the next distribution following the agreement with the IRAS.

Although the Trust is not taxed on its taxable income distributed, the Trustee and the Manager are required to deduct income tax from distributions of such taxable income of the Trust (i.e. which has not been taxed in the hands of the Trustee) to certain Unitholders. However, the Trustee and the Manager will not deduct tax from distributions made out of the Trust’s taxable income to the extent that the beneficial Unitholder is:

• Anindividual(excludingapartnershipinSingapore);

• AtaxresidentSingapore-incorporatedcompany;

• AbodyofpersonsregisteredorconstitutedinSingapore(e.g.atowncouncil,astatutoryboard,aregisteredcharity,aregisteredcooperative society, a registered trade union, a management corporation, a club or a trade and industry association);

• ASingaporebranchofaforeigncompanywhichhasbeenpresentedaletterofapprovalfromtheComptrollerofIncomeTaxgranting waiver from tax deducted at source in respect of distributions from the Trust; or

• AnagentbankactingasanomineeforindividualswhohavepurchasedUnitswithintheCentralProvidentFundInvestmentScheme (“CPFIS”) and the distributions received from the Trust are returned to CPFIS.

The above tax transparency ruling does not apply to gains from sale of properties. Where the gains are trading gains, the Trustee will be assessed for tax. Where the gains are capital gains, the Trustee will not be assessed for tax and may distribute the capital gains without tax being deducted at source.

3.14 Earnings per share

The Group presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the total return for the year after tax attributable to Unitholders of the Trust by the weighted average number of units outstanding during the year. Diluted earnings per share is determined by adjusting the total return for the year after tax attributable to Unitholders of the Trust and the weighted average number of units outstanding, for the effects of all dilutive potential units, which comprise convertible bonds.



3 Significant accounting policies (continued)3.15 Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the Group’s CEO, who is the Group’s chief operating decision maker, to make decisions about resources to be allocated to the segment and assess the segment’s performance, and for which discrete financial information is available.

3.16 New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2011, and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the financial statements of the Group and the Trust, except for FRS 111 Joint Arrangements and the amendments to FRS 28 Investments in Associates and Joint Ventures which will become mandatory for the Group and the Trust’s financial statements for 2013. The new standard classifies joint arrangements into two types - joint operations and joint ventures, and requires (1) a joint operator to recognise and measure the assets and liabilities (and recognise the related revenues and expenses) in relation to its interest in the arrangement in accordance with relevant FRSs applicable to the particular assets, liabilities, revenues and expenses and (2) a joint venturer to recognise an investment and to account for that investment using the equity method in accordance with FRS 28 Investments in Associates and Joint Ventures, using the equity method. The adoption of the new standard and amendments would require the Group to assess its rights and obligations arising from its joint venture arrangements so as to determine the type of joint arrangement in which it is involved. The adoption of the new standard and amendments would only affect the presentation of the joint ventures in the financial statements. Since the change in accounting policy only impacts presentation aspects, there is no impact on earnings per unit. The Group does not plan to adopt these amendments early.

4 Plant and equipment Furniture Motor Note and fittings Equipment vehicles Total $’000 $’000 $’000 $’000 Group

Cost At 1 January 2010 – 489 – 489Additions – 7 – 7Disposal – (7) – (7)At 31 December 2010 – 489 – 489Acquisition through business combinations 26 8,702 223 19 8,944Additions 73 94 – 167Disposal (119) (2) – (121)At 31 December 2011 8,656 804 19 9,479 Accumulated depreciation At 1 January 2010 – 444 – 444Charge for the year – 38 – 38Disposal – (3) – (3)At 31 December 2010 – 479 – 479Charge for the year 1,015 98 5 1,118Disposal (39) (2) – (41)At 31 December 2011 976 575 5 1,556 Carrying amount At 1 January 2010 – 45 – 45At 31 December 2010 – 10 – 10At 31 December 2011 7,680 229 14 7,923

87


4 Plant and equipment (continued) Equipment $’000 Trust

CostAt 1 January 2010 489Additions 7Disposal (7)At 31 December 2010 489Additions –Disposal (2)At 31 December 2011 487

Accumulated depreciation At 1 January 2010 444Charge for the year 38Disposal (3)At 31 December 2010 479Charge for the year 7Disposal (2)At 31 December 2011 484 Carrying amount At 1 January 2010 45At 31 December 2010 10At 31 December 2011 3

5 Investment properties Group Trust Note 2011 2010 2011 2010 $’000 $’000 $’000 $’000

At 1 January 4,452,000 4,202,000 4,452,000 4,202,000Acquisition through business combinations 26 390,312 – – –Capital expenditure capitalised 3,275 1,285 3,308 1,285 4,845,587 4,203,285 4,455,308 4,203,285Changes in fair value of investment properties 396,193 248,715 394,392 248,715Investment property reclassified to held for sale (143,700) – (143,700) –At 31 December 5,098,080 4,452,000 4,706,000 4,452,000

The investment properties, Suntec City Mall, part of Suntec City Office Tower 3 and Suntec Singapore, with a total carrying value of $2,383,880,000 (2010: Suntec City Mall and part of Suntec City Office Tower 3, with a total carrying value of $1,773,200,000), have been mortgaged as security for credit facilities granted to the Group (Note 12).

Following the approval of the Board and Trustee on 27 October 2011 for the sale of CHIJMES, the carrying value has been reclassified as investment property held for sale in the Statement of Financial Position.

Investment properties are stated at fair value based on valuations performed by independent professional valuers. The fair value is based on market value, being the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after property marketing wherein the parties had acted knowledgeably, prudently and without compulsion.



5 Investment properties (continued)In determining the fair value, the valuers have used valuation methods which involve certain estimates. The valuation methods used are in the Portfolio Statements. The Manager is of the view that the valuation methods and estimates are reflective of the market condition at the date of the valuation. The key assumptions used to determine the fair value of the investment properties include estimated net cash flows expected to be received on renting out the properties, market-corroborated capitalisation yield, terminal yield and discount rate.

6 Intangible asset Group and Trust 2011 2010 $’000 $’000

Cost Balance at 1 January 176,298 91,498Addition during the year – 84,800Balance at 31 December 176,298 176,298 Amortisation Balance at 1 January 76,269 55,374Amortisation for the year 39,285 20,895Balance at 31 December 115,554 76,269 Carrying amounts At 1 January 2010 36,124At 31 December 2010 100,029At 31 December 2011 60,744

Intangible asset represents the unamortised income support receivable by the Group and the Trust under the Deeds of Income Support entered into with Cavell Limited and Choicewide Group Limited, the vendors of the one-third interest in One Raffles Quay Pte. Ltd. and BFC Development Pte. Ltd. respectively.

7 Interest in jointly controlled entities Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Investment in jointly controlled entities 1,481,089 1,412,332 868,195 870,443Loans to jointly controlled entities 606,222 627,348 606,222 604,348 2,087,311 2,039,680 1,474,417 1,474,791

The loans to jointly controlled entities are unsecured. Included in the loans is an amount of $606,222,000 (2010: $604,348,000) which bears interest between 3.0% to 3.3% (2010: 3.0% to 3.3%) per annum above the three-month Singapore Dollar Swap Offer Rate and settlement is neither planned nor likely to occur in the foreseeable future. As the amount is, in substance, a part of the Group’s and the Trust’s net investment in the entities it is stated at cost less accumulated impairment loss.

At Group level, the remaining amount of $23,000,000 as at 31 December 2010, bears interest at 10.0% per annum and is repayable on 30 September 2014. During the year, this amount has been reclassified to investment in subsidiaries after the Trust acquired a 51.0% interest in Harmony Partners Investment Limited on 18 August 2011 (Note 26).

Included in investment in jointly controlled entities of the Group are non-audit fees paid to auditors of the Trust capitalised of $677,000 (2010: $677,000).

89


7 Interest in jointly controlled entities (continued)Details of the jointly controlled entities are as follows:

Name of jointly Country of Effective equity held controlled entities incorporation by the Group 2011 2010 % % One Raffles Quay Pte. Ltd. (1) Singapore 33.33 33.33BFC Development Pte. Ltd. (1) Singapore 33.33 33.33Harmony Investors Group Limited (2) BritishVirginIslands – 20.00

One Raffles Quay Pte. Ltd. owns the property One Raffles Quay.

BFC Development Pte. Ltd. owns Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall.

(1) Audited by Ernst & Young LLP. The Manager’s Board of Directors and Audit Committee are satisfied that the appointment will not compromise the standard and effectiveness of the audit.

(2) Not required to be audited under the laws of the country in which it is incorporated.

Acquisition of one-third interest in BFC Development Pte. Ltd.

On 9 December 2010, the Group completed the acquisition of a one-third interest in BFC Development Pte. Ltd..

The following table summarises the proportion of the amounts of net assets recognised as of the acquisition date and the fair value of the total consideration transferred:

Identifiable assets acquired and liabilities assumed

2010 $’000 Investment property 4,289,111Loans (1,677,782)Total identifiable net assets 2,611,329 One-third interest 870,443

Fair value of total consideration transferred at acquisition date

2010 $’000 Purchase consideration for share of net assets acquired 1,495,800Shareholders’ loan assumed (559,261)Acquisition fee and other related expenses 18,704Total consideration transferred 955,243 Represented by: Share of identifiable net assets acquired 870,443Intangible asset 84,800 955,243



7 Interest in jointly controlled entities (continued)The summarised financial information of the Group’s interest in the jointly controlled entities, adjusted for the percentage of ownership held by the Group, is as follows:

Group 2011 2010 $’000 $’000

Assets and liabilities Non-current assets 1,890,895 1,864,598Current assets 518,875 518,964Total assets 2,409,770 2,383,562 Current liabilities 22,619 14,478Non-current liabilities 906,062 956,752Total liabilities 928,681 971,230 Results Revenue 107,144 39,208Expenses (73,213) (32,195)Net change in fair value of investment properties 107,722 23,924Net profit for the year 141,653 30,937

8 Investments in subsidiaries Trust 2011 2010 $’000 $’000

Equity investment at cost 649,899 535,506 Details of the subsidiaries are as follows:

Country of Effective equity held Name of subsidiaries incorporation by the Group 2011 2010 % %

Held by the Trust CominaInvestmentLimited BritishVirginIslands 100.0 100.0Suntec Harmony Pte. Ltd. (2) Singapore 100.0 100.0

Held through subsidiaries Held by Suntec Harmony Pte. Ltd. Harmony Partners Investments Limited (1) (3) BritishVirginIslands 51.0 –

Held by Harmony Partners Investment Ltd. Harmony Investors Group Limited (1) (3) BritishVirginIslands 60.8 –

Held by Harmony Investors Group Limited Harmony Investors Holding Limited (1) (3) BritishVirginIslands 60.8 –

91


8 Investments in subsidiaries (continued) Country of Effective equity held Name of subsidiaries incorporation by the Group 2011 2010 % %

Held by Harmony Investors Holding Limited Harmony Convention Holding Pte Ltd (1) (2) Singapore 60.8 –

Harmony Convention Holding Pte Ltd owns the property Suntec Singapore.

(1) On 18 August 2011, the Group completed the acquisition of 51.0% share capital of Harmony Partners Investments Limited (Note 26), which holds

80.0% interest in Harmony Investors Group Limited, Harmony Investors Holding Limited and Harmony Convention Holding Pte Ltd.

(2) Audited by KPMG LLP Singapore.

(3) Not required to be audited under the laws of the country in which it is incorporated.

9 Financial derivatives

Group and Trust 2011 2010 $’000 $’000

Derivative assets - Interest rate swaps at fair value through Statement of Total Return 265 1,178 Current 265 762Non-current – 416 265 1,178 Derivative liabilities - Interest rate swaps at fair value through Statement of Total Return 12,876 513- Embedded derivatives relating to convertible bonds 1,098 8,459 13,974 8,972 Current – 8,756Non-current 13,974 216 13,974 8,972

The Group uses interest rate swaps to manage its exposure to interest rate movements on its floating rate interest-bearing term loans and short term borrowings by swapping the interest expense on a proportion of these term loans and short term borrowings from floating rates to fixed rates and vice versa.

Interest rate swaps with a total notional amount of $1,275,000,000 (2010: $675,000,000) have been entered into at the reporting date to provide fixed and floating rate funding for terms of 2 to 3 years (2010: 3 to 5 years) at an average interest rate of -0.09278% to 1.82% (2010: 0.27009% to 3.725%) per annum.



10 Trade and other receivables Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Trade receivables 8,114 4,965 3,827 4,965Impairment losses (2,582) (2,551) (2,352) (2,551)Net receivables 5,532 2,414 1,475 2,414Deposits 451 – – –Amounts due from: - jointly controlled entities 1,586 3,419 – –- subsidiaries – – 1,415 3,320Loans and receivables 7,569 5,833 2,890 5,734Prepayments and other receivables 4,238 852 1,656 853 11,807 6,685 4,546 6,587

The trade receivables in respect of Suntec City Mall, part of Suntec City Office Tower 3 and Suntec Singapore amounting to $7,704,000 (2010: Suntec City Mall and part of Suntec City Office Tower 3 amounting to $4,086,000) are charged or assigned by way of security for credit facilities granted to the Group (Note 12).

The amounts due from the jointly controlled entities and the subsidiaries are non-trade in nature, unsecured, interest-free and repayable on demand.

The exposure of the Group and the Trust to credit risk and impairment losses related to trade receivables is disclosed in Note 15.

11 Cash and cash equivalents Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Cash at bank and in hand 64,697 21,405 40,252 20,821Fixed deposits with a financial institution 39,705 31,088 39,705 31,088 104,402 52,493 79,957 51,909 The weighted average effective interest rate relating to cash and cash equivalents at the reporting date for the Group and the Trust is 0.0931% and 0.1185% (2010: 0.0715% and 0.0724% for both the Group and the Trust) per annum respectively. Interest rates reprice at intervals of one month.

Cash and cash equivalents in respect of Suntec City Mall, part of Suntec City Office Tower 3 and Suntec Singapore amounting to $28,887,000 (2010: Suntec City Mall and part of Suntec City Office Tower 3 amounting to $3,731,000) are charged or assigned by way of security for credit facilities granted to the Group (Note 12).

The exposure of the Group and the Trust to interest rate risk related to financial assets are disclosed in Note 15.

93


12 Interest-bearing borrowings Group Trust Note 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Term loans - secured 917,779 788,647 791,453 788,647- unsecured 1,609,371 1,493,882 1,609,371 1,493,882 2,527,150 2,282,529 2,400,824 2,282,529 Convertible bonds - unsecured 14 276,920 272,115 276,920 272,115 2,804,070 2,554,644 2,677,744 2,554,644 Current 199,967 404,585 199,967 404,585Non-current 2,604,103 2,150,059 2,477,777 2,150,059 2,804,070 2,554,644 2,677,744 2,554,644

The exposure of the Group and the Trust to liquidity and interest rate risks related to interest-bearing borrowings are disclosed in Note 15.

Terms and debt repayment schedule

Terms and conditions of outstanding interest-bearing borrowings are as follows:

Weighted 2011 2010 average nominal Year of Face Carrying Face Carrying interest Rate maturity value amount value amount % $’000 $’000 $’000 $’000

GroupFloating rate term loans 1.54 2012 to 2,302,500 2,280,650 2,105,000 2,078,524 2016 Fixed rate term loans 4.34 2016 250,000 246,500 207,500 204,005 Convertible bonds 3.25 2013 269,250 276,920 270,000 272,115 2,821,750 2,804,070 2,582,500 2,554,644 Trust Floating rate term loans 1.52 2012 to 2,175,000 2,154,324 2,105,000 2,078,524 2016 Fixed rate term loans 4.34 2016 250,000 246,500 207,500 204,005 Convertible bonds 3.25 2013 269,250 276,920 270,000 272,115 2,694,250 2,677,744 2,582,500 2,554,644

Interest-bearing borrowings at the reporting date of $2,804,070,000 (2010: $2,554,644,000) at the Group comprise the following:

- $Nil (2010: $157,429,000) unsecured term loan from Sunshine Assets Limited;

- $1,609,371,000 (2010: $1,336,453,000) unsecured term loan from various institutional banks;

- $276,920,000 (2010: $272,115,000) convertible bonds due 2013; and

- $917,779,000 (2010: $788,647,000) secured term loan facilities from various institutional banks.



12 Interest-bearing borrowings (continued)Terms and debt repayment schedule (continued)

(a) Term loan facility with Sunshine Assets Limited

As at 31 December 2011, the Trust has in place a $Nil (2010: $157.5 million) term loan facility with Sunshine Assets Limited (“Sunshine”), a special purpose company.

(b) Secured term loan facilities with various institutional banks

As at 31 December 2011, the Group has in place secured facilities of $927.5 million (2010: $800 million) term loan facilities with a panel of banks.

The facilities are secured on the following:

- A first legal mortgage on Suntec City Mall, part of Suntec City Office Tower 3 and Suntec Singapore (the “Properties”);

- A first fixed charge over the central rental collection account in relation to the Properties (Notes 10 and 11);

- An assignment of the Group’s rights, title and interest in the tenancy documents and the proceeds in connection with the Properties;

- An assignment of the Group’s rights, title and interest in the insurance policies in relation to the Properties;

- A fixed and floating charge over the assets of the Group in relation to the Properties, agreements, collateral, as required by the financial institutions granting the facilities (Note 5); and

- An assignment of any interest swap facilities, which may be entered into by the Group in relation to the term loan facilities.

The current portion of the interest-bearing borrowings comprise term loan of $200.0 million (2010: $132.5 million) which is due in 2012.

13 Trade and other payables Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Trade and other payables 13,237 3,140 6,042 3,140Deposit received on Investment Property held for sale 26,550 - 26,550 -Accrued operating expenses 11,914 11,121 8,731 11,121Amounts due to related parties (trade) 2,724 1,393 2,079 1,393Accrued income 14,069 16,677 7,283 16,677Interest payable 12,435 8,772 12,431 8,772 80,929 41,103 63,116 41,103 The amounts due to related parties are unsecured and interest-free. Included in the amounts due to related parties for the Group is an amount due to the Trustee, the Manager and related parties of the Manager of $306,000, $1,328,000 and $1,090,000 (2010: $169,000, $716,000 and $508,000) respectively. Included in the amounts due to related parties for the Trust is an amount due to the Trustee, the Manager and a related party of the Manager of $306,000, $1,328,000 and $445,000 (2010: $169,000, $716,000 and $508,000) respectively. Transactions with related parties are priced on an arm’s length basis.

95


14 Convertible bonds – debt component Group and Trust 2011 2010 $’000 $’000

Carrying amount of debt component at 1 January 272,115 266,812Amortisation of transaction costs 860 865Redemption of convertible bonds (774) –Interest accretion 4,719 4,438Carrying amount of debt component at 31 December 276,920 272,115

In 2008, the Trust issued $270.0 million principal amounts of convertible bonds (the “Bonds”) due 2013 which carry a coupon interest at 3.25% per annum. The Bonds are convertible by bondholders into Units at the conversion price of $1.718 (2010: $1.723) at any time on or after 30 April 2008 up to 3.00 p.m. on 13 March 2013 or, if redeemed prior to 13 March 2013, then up to 3.00 p.m. on a date no later than 7 business days prior to the date fixed for redemption thereof.

As at 31 December 2011, the Trust redeemed $750,000 of convertible bonds at an exercise price of 103.164% on the principal amount.

Based on the conversion price, the Bonds are convertible into approximately 156,722,934 Units (2010: 156,703,424 Units), representing 7.0% (2010: 7.1%) of the total number of Units of the Trust in issue as at 31 December 2011. The Trust has the option to pay cash in lieu of issuing new Units on conversion of any Bonds.

The Bonds may be redeemed, in whole or in part, at the option of the bondholder of 20 March 2011 at a put price of 103.164% together with any accrued but unpaid interest up to that date. To exercise such right, the holder of the relevant bond must, within a period of three months prior to 20 March 2011, complete, sign and deposit the notice of redemption with the payment agent.

The Bonds may also be redeemed, in whole but not in part, at the option of the Trust on or at any time not less than 7 business days prior to 20 March 2013 (subject to the satisfaction of certain conditions) having given not less than 30 nor more than 60 days’ notice to the bondholders. The early redemption amount represents a gross yield to maturity of 4.25% per annum, on a semi-annual basis calculated on the basis of a 360-day year consisting of 12 months of 30 days each and, in the case of an incomplete month, the number of days elapsed.

Unless previously redeemed by the bondholders on 20 March 2011 or by the Trust at any time on or after 20 March 2011 and not less than 7 business days prior to 20 March 2013, the final redemption date of the Bonds is 20 March 2013. The redemption price upon maturity is equal to 105.5063% of the principal amount, together with any accrued but unpaid interest accrued to the date of redemption, on the final redemption date.

As at 31 December 2011, the effective interest rate for the Bonds – debt component is approximately 5.25% (2010: 5.25%) per annum.

15 Financial instrumentsCredit risk

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Group Trust Carrying amount Carrying amount Note 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Derivative assets at fair value through Statement of Total Return 9 265 1,178 265 1,178Loans and receivables 10 7,569 5,833 2,890 5,734Cash and cash equivalents 11 104,402 52,493 79,957 51,909 112,236 59,504 83,112 58,821



15 Financial instruments (continued)Credit risk (continued)

Exposure to credit risk (continued)

The maximum exposure to credit risk for trade receivables at the reporting date by type of tenants is:

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Office 45 214 45 214Retail 1,430 2,200 1,430 2,200Convention 4,057 – – – 5,532 2,414 1,475 2,414

The Group’s tenants are engaged in a wide spectrum of business activities across many industry segments. The Group’s most significant tenant accounts for $1,093,000 (2010: $1,093,000) of the trade receivables carrying amount as at the reporting date.

Impairment losses

The ageing of trade receivables at the reporting date is:

Impairment Impairment Gross losses Gross losses 2011 2011 2010 2010 $’000 $’000 $’000 $’000

Group Not past due 3,697 – 1,705 –Past due 31 – 60 days 1,566 – 461 –Past due 61 – 90 days 182 – 297 (49)More than 90 days 2,669 (2,582) 2,502 (2,502) 8,114 (2,582) 4,965 (2,551) Trust Not past due 1,011 – 1,705 –Past due 31 – 60 days 408 – 461 –Past due 61 – 90 days 48 – 297 (49)More than 90 days 2,360 (2,352) 2,502 (2,502) 3,827 (2,352) 4,965 (2,551)

The movement in the allowance for impairment in respect of trade receivables during the year was as follows:

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

At 1 January 2,551 2,982 2,551 2,982Acquisition through business combinations 20 – – –Impairment loss recognised 384 430 174 430Allowance utilised during the year (373) (861) (373) (861)At 31 December 2,582 2,551 2,352 2,551

97



Impairment losses (continued)

Based on historic default rates, the Manager believes that, apart from the above, no additional impairment allowance is necessary in respect of trade receivables as these receivables mainly arose from tenants that have a good track record with the Group, and the Group has sufficient security deposits as collateral.

The allowance account in respect of trade receivables is used to record impairment losses unless the Group and the Trust are satisfied that no recovery of the amounts owing are possible; at that point the amounts are considered irrecoverable and are written off against the financial asset directly. At 31 December 2011, the Group and the Trust do not have any collective impairment on its trade receivables (2010: nil).

Liquidity risk

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

Cash flows Carrying Contractual Within Within More than amount cash flows 1 year 1 to 5 years 5 years $’000 $’000 $’000 $’000 $’000

Group2011


Financial liabilities measured at amortised cost: - Floating rate term loans 2,280,650 (2,406,722) (239,698) (2,167,024) –- Fixed rate term loans 246,500 (299,307) (10,880) (288,427) –- Convertible bonds 276,920 (294,745) (8,775) (285,970) –- Tradeandotherpayables* 66,860 (66,860) (66,860) – –- Security deposits 63,627 (63,627) (19,628) (43,999) – 2,934,557 (3,131,261) (345,841) (2,785,420) – Derivative financial liabilities Financial liabilities at fair value through Statement of Total Return - Interest rate swaps 12,876 (17,759) (9,580) (8,179) – 2,947,433 (3,149,020) (355,421) (2,793,599) – *Exclude accrued income.




Liquidity risk (continued)

Cash flows Carrying Contractual Within Within More than amount cash flows 1 year 1 to 5 years 5 years $’000 $’000 $’000 $’000 $’000

Trust2011

Non-derivative financial liabilities Financial liabilities measured

at amortised cost: - Floating rate term loans 2,154,324 (2,272,750) (237,230) (2,035,520) –- Fixed rate term loans 246,500 (299,307) (10,880) (288,427) –- Convertible bonds 276,920 (294,745) (8,775) (285,970) –- Tradeandotherpayables* 55,833 (55,833) (55,833) – –- Security deposits 62,653 (62,653) (18,654) (43,999) –

2,796,230 (2,985,288) (331,372) (2,653,916) –

Derivative financial liabilities

Financial liabilities at fair value through Statement of Total Return - Interest rate swaps 12,876 (17,759) (9,580) (8,179) – 2,809,106 (3,003,047) (340,952) (2,662,095) –

Group and Trust2010


Financial liabilities measured

at amortised cost: - Floating rate term loans 2,078,524 (2,225,028) (34,156) (2,190,872) –- Fixed rate term loans 204,005 (243,838) (7,814) (132,949) (103,075)- Convertible bonds 272,115 (304,340) (8,775) (295,565) –- Tradeandotherpayables* 24,426 (24,426) (24,426) – –- Security deposits 60,691 (60,691) (22,452) (38,239) – 2,639,761 (2,858,323) (97,623) (2,657,625) (103,075) Derivative financial liabilities Financial liabilities at fair value through Statement of Total Return - Interest rate swaps 513 (4,108) (1,672) (2,436) – 2,640,274 (2,862,431) (99,295) (2,660,061) (103,075) *Exclude accrued income.

99


15 Financial instruments (continued)

Interest rate risk

Cash flow sensitivity analysis for variable rate instruments

For the interest rate swaps and the other variable rate financial liabilities, a change of 30 basis points (“bp”) (2010: 30 bp) in interest rate at the reporting date would increase/(decrease) total return (before any tax effects) by the amounts shown below. There is no impact on Unitholders’ funds. This analysis assumes that all other variables remain constant.

Statement of Total Return 30 bp 30 bp increase decrease $’000 $’000

Group 2011 Interest-bearing borrowings (floating rate) (6,908) 6,908Interest rate swaps 4,184 (4,184) (2,724) 2,724 Trust 2011 Interest-bearing borrowings (floating rate) (6,525) 6,525Interest rate swaps 4,184 (4,184) (2,341) 2,341

Statement of Total Return 30 bp 30 bp increase decrease $’000 $’000

Group and Trust 2010 Interest-bearing borrowings (floating rate) (6,315) 6,315Interest rate swaps 2,299 (2,262) (4,016) 4,053 Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through the Statement of Total Return, nor does the Group designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the reporting date would not affect the Statement of Total Return.



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101


15

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15 Financial instruments (continued)

Fair values

Estimation of fair values

Fair values of the financial instruments of the Group and the Trust have been determined for measurement and/or disclosure purposes based on the following methods:

Derivatives

The fair value of interest rate swaps is based on broker quotes at the reporting date. These quotes are tested for reasonableness by discounting estimated future cash flows based on the terms and maturity of each swap and using market interest rates for similar instruments at the measurement date.

The fair value of the embedded derivative component of the convertible bonds is the difference between the fair value of the convertible bonds based on broker quotes at the reporting date and the fair value of the liability component of the convertible bonds, determined using the discounted cash flow technique.


The fair values of the non-current portion of security deposits, fixed interest-bearing borrowings, borrowings which reprice after three months, which are determined for disclosure purposes, are estimated using the discounted cash flow technique. Future cash flows are based on management’s best estimates and the discount rate is based on a market-related rate for a similar instrument at the reporting date.

Other financial assets and liabilities

The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents, trade and other payables and interest-bearing borrowings which reprice within six months) are assumed to approximate their fair values because of the short period to maturity or repricing.

Interest rates used in determining fair values

The Group used the following interest rates to discount estimated cash flows:

Group and Trust 2011 2010 % %

Non-current portion of security deposits 1.951 1.907Fixed rate borrowings 3.87 – 4.50 1.237 – 4.50Convertible bonds 4.01 3.34 Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

• Level1: quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;

• Level2: inputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectly(i.e., as prices) or indirectly (i.e., derived from prices); and

• Level3: inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs).

103


15 Financial instruments (continued) Fair value hierarchy (continued)

Level 2 Level 3 Total $’000 $’000 $’000

Group and Trust2011

Derivative assets- interest rate swaps 265 – 265 Derivative liabilities - interest rate swaps (12,876) – (12,876)- embedded derivatives relating to convertible bonds – (1,098) (1,098) (12,876) (1,098) (13,974) (12,611) (1,098) (13,709) 2010 Derivative assets - interest rate swaps 1,178 – 1,178 Derivative liabilities - interest rate swaps (513) – (513)- embedded derivatives relating to convertible bonds – (8,459) (8,459) (513) (8,459) (8,972) 665 (8,459) (7,794) During the financial year ended 31 December 2011, there were no transfers between Level 1 and Level 2. The Level 3 financial instruments measured at fair value are as follows:

2011 2010 $’000 $’000

Group and Trust

Embedded derivatives relating to convertible bondsAs at 1 January (8,459) (14,992)Changes in fair value recognised in Statement of Total Return 7,361 6,533As at 31 December (1,098) (8,459) Total gain for the year included in Statement of Total Return for financial instruments held at the reporting date 7,361 6,533



15 Financial instruments (continued) Fair value hierarchy (continued)

Gain for the year included in the Statement of Total Return is presented in net change in fair value of financial derivatives as follows:

Group and Trust 2011 2010 $’000 $’000

Total gain for the year included in Statement of Total Return 7,361 6,533

Total gain for the year included in Statement of Total Return for financial instruments held at 31 December 7,361 6,533

The fair value of the embedded derivative relating to convertible bonds has been determined using the discounted cash flows approach. The valuation requires management to estimate the expected cash flows over the life of the convertible bonds to investors, which are not evidenced by observable market data. If the assumptions applied by management were 5.0% favourable or unfavourable with all other variables held constant, the fair value of the embedded derivative relating to the convertible bonds would decrease/(increase) by $815,000 (2010: $13,457,000) and ($812,000) (2010: ($13,451,000)) respectively. The analysis is performed on the same basis for 2010.

16 Units in issue

Group and Trust 2011 2010 ’000 ’000

Units in issue:

At 1 January 2,205,128 1,797,300Issue of Units: - asset management fees paid in Units 19,392 15,561- acquisition fee paid in Units – 10,266- deferred consideration on investment properties acquired – 69,001- private placement of new Units – 313,000At 31 December 2,224,520 2,205,128 Units to be issued: - asset management fees payable in Units 6,926 4,242 Total issued and issuable Units at 31 December 2,231,446 2,209,370

During the year, the Group and the Trust had issued a total of 19,391,490 (2010: 15,561,317) Units at unit prices ranging from $1.1891 to $1.4965 (2010: $1.3072 to $1.5039) per Unit, amounting to $27,094,000 (2010: $21,347,000) in satisfaction of asset management fees payable in Units.

105


16 Units in issue (continued)Each Unit in the Trust represents an undivided interest in the Trust. The rights and interests of Unitholders are contained in the Trust Deed and include the right to:

• receiveincomeandotherdistributionsattributabletotheUnitsheld;

• participateintheterminationoftheTrustbyreceivingashareofallnetcashproceedsderivedfromtherealisationoftheassetsoftheTrust and available for purposes of such distribution less any liabilities, in accordance with their proportionate interests in the Trust. However, a Unitholder has no equitable or proprietary interest in the underlying assets of the Trust and is not entitled to the transfer to it of any assets (or part thereof) or of any estate or interest in any asset (or part thereof) of the Trust; and

• attendallUnitholders’meetings.TheTrusteeortheManagermay(andtheManagershallattherequestinwritingofnotlessthan50 Unitholders or one-tenth in number of the Unitholders, whichever is the lesser) at any time convene a meeting of Unitholders in accordance with the provisions of the Trust Deed.

The Unitholders cannot give any directions to the Manager or the Trustee (whether at a meeting of Unitholders or otherwise) if it would require the Trustee or the Manager to do or omit doing anything which may result in:

• theTrustceasingtocomplywiththeListingManualissuedbySGX-STorthePropertyFundsAppendix;or

• theexerciseofanydiscretionexpresslyconferredontheTrusteeortheManagerbytheTrustDeedorthedeterminationofanymatterfor which the agreement of either or both the Trustee and the Manager is required under the Trust Deed.

A Unitholder’s liability is limited to the amount paid or payable for any Units. The provisions of the Trust Deed provide that no Unitholders will be personally liable to indemnify the Trustee or any creditor of the Trustee in the event that liabilities of the Trust exceed its assets.

17 Net asset value per Unit

Group Trust Note 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Net asset value per Unit is based on: Net assets attributable to Unitholders 4,433,821 3,984,633 4,296,934 3,954,568 ’000 ’000 ’000 ’000

Total issued and issuable Units at 31 December 16 2,231,446 2,209,370 2,231,446 2,209,370

18 Gross revenue

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Gross rental income 270,062 249,230 242,638 249,230Dividend income from subsidiaries – – 39,570 11,432Others 220 249 220 249 270,282 249,479 282,428 260,911



19 Property expenses

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Advertising and promotion expenses 5,139 4,374 4,277 4,374Allowance for doubtful receivables 384 430 174 430Depreciation of plant and equipment 1,118 38 7 38Maintenance expenses 3,078 2,169 2,172 2,169Contributions to maintenance funds 17,770 16,534 16,534 16,534Property management fees (including reimbursables) 16,182 7,277 7,286 7,277Property tax 19,978 17,617 19,336 17,617Utilities 4,208 2,378 2,557 2,378Others 9,042 5,572 5,052 5,572 76,899 56,389 57,395 56,389

Property expenses represent the direct operating expenses arising from rental of investment properties and sale of food and beverages.

20 Other incomeOther income relates to the income support received/receivable by the Group and the Trust under the Deeds of Income Support entered with Cavell Limited and Choicewide Group Limited, the vendors of the one-third interest in One Raffles Quay Pte. Ltd. and BFC Development Pte. Ltd. respectively, and negative goodwill arising on acquisition of 51.0% interest in Harmony Partners Investments Limited. One Raffles Quay Pte. Ltd. holds One Raffles Quay and BFC Development Pte. Ltd. holds Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall.

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Income support received from: - Cavell Limited 13,983 20,361 13,983 20,361- Choicewide Group Limited 32,690 2,049 32,690 2,049 46,673 22,410 46,673 22,410Negative goodwill on acquisition 1,049 − − −Other income 47,722 22,410 46,673 22,410

21 Finance income and finance costs

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Interest income: - bank deposits 42 33 42 33- interest rate swaps 895 1,958 895 1,958- loan to jointly controlled entities 22,569 13,972 21,120 11,411Finance income 23,506 15,963 22,057 13,402

107


21 Finance income and finance costs (continued) Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Interest expense: - bank loans (40,843) (36,280) (40,080) (36,280)- the convertible bonds (8,775) (8,775) (8,775) (8,775)- interest rate swaps (11,477) (4,796) (11,477) (4,796)Amortisation of transaction costs (14,189) (29,580) (14,024) (29,580)Finance costs (75,284) (79,431) (74,356) (79,431) Recognised in the Statement of Total Return (51,778) (63,468) (52,299) (66,029)

22 Asset management feesIncluded in the asset management fees of the Group and the Trust is an aggregate of 22,076,035 (2010: 15,725,881) Units, amounting to $28,271,000 (2010: $22,345,000), that have been or will be issued to the Manager in satisfaction of the asset management fees payable in Units.

23 Other chargesIncluded in other charges are the following items:

Group and Trust 2011 2010 $’000 $’000

Non-audit fees paid to auditors of the Trust 57 44 24 Income tax expense Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Tax expense Current year 6,013 2,029 5,107 2,029 Reconciliation of effective tax rate Net income 250,328 131,463 141,642 109,401Add: Net change in fair value of financial derivatives (5,913) 7,566 (5,913) 7,566Less: Share of profit of jointly controlled entities (141,653) (30,937) – –Net income before share of result of jointly controlled entities and after net change in fair value of financial derivatives 102,762 108,092 135,729 116,967 Income tax using the Singapore tax rate of 17% 17,470 18,376 23,074 19,884Non-tax deductible items 19,296 13,901 16,615 13,061Non-taxable income (1,727) (2,016) (1,302) (1,581)Tax exempt income – – (4,254) (1,103)Tax transparency (Note 3.13) (29,026) (28,232) (29,026) (28,232) 6,013 2,029 5,107 2,029



25 Earnings per UnitBasic earnings per Unit is based on:

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Total return for the year after tax 631,836 385,715 525,014 363,653

Number of Units

Group Trust 2011 2010 2011 2010 ’000 ’000 ’000 ’000

Weighted average number of Units: - outstanding during the year 2,216,661 1,896,610 2,216,661 1,896,610- to be issued as payment of asset

management fees payable in Units 19 12 19 12 2,216,680 1,896,622 2,216,680 1,896,622 In calculating diluted earnings per Unit, the total return for the year after tax and weighted average number of Units in issue are adjusted to take into account the dilutive effect arising from the dilutive Bonds, with the potential Units weighted for the year outstanding.

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Total return for the year after tax 631,836 385,715 525,014 363,653Profit impact of conversion of the dilutive potential Units 6,974 7,545 6,974 7,545Adjusted total return for the year after tax 638,810 393,260 531,988 371,198

Number of Units

Group Trust 2011 2010 2011 2010 ’000 ’000 ’000 ’000

Weighted average number of Units used in calculation of basic earnings per Unit 2,216,680 1,896,622 2,216,680 1,896,622Weighted average number of Units to be issued assuming conversion of the Bonds 156,723 156,703 156,723 156,703Weighted average number of Units used in calculation of diluted earnings per Unit 2,373,403 2,053,325 2,373,403 2,053,325 As at 31 December 2011, the Group and the Trust had Bonds which were convertible into approximately 156,722,934 (2010: 156,703,424) Units.

109


26 Acquisition of subsidiaryAcquisitions in the year ended 31 December 2011

On 18 August 2011, a subsidiary of the Group acquired of 51.0% of the issued ordinary share capital of Harmony Partners Investments Limited, which holds 80.0% interest in Harmony Investors Group Limited, Harmony Investors Holding Limited and Harmony Convention Holding Pte Ltd. As a result, the Group’s interest in Suntec Singapore increase from 20.0% to 60.8%.

The Manager believes that the acquisition will benefit the Unitholders in the long term as the acquisition fits the Manager’s principal investment strategy for the Group to invest in quality income-producing assets. The Manager believes that the increase in the Group’s interest in Suntec Singapore will be a strategic addition to the Group’s existing portfolio, providing opportunities to integrate and enlarge the Group’s existing interest in the entire Suntec City development and to unlock the underlying value of the assets.

From 19 August 2011 to 31 December 2011, Suntec Singapore contributed revenue of $27,424,000 and profit of $5,287,000 to the Group’s results. If the acquisition had occured on 1 January 2011, the Manager estimates that consolidated revenue would have been $309,114,000 and consolidated Statement of Total Return attributable to Unitholders for the year would have been $665,000,000. In determining these amount, the Manager has assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2011.

The following table summaries the major classes of consideration transferred, and the recognised amounts of assets acquired and liabilities assumed at the acquisition date:

Consideration transferred 2011 $’000

Cash 114,750 Identifiable assets acquired and liabilities assumed

Note 2011 $’000

Investment property 5 390,312Property, plant and equipment 4 8,944Trade and other receivables 11,861Cash and cash equivalents 22,188Trade and other payables (21,875)Interest bearing borrowings (126,161)Deferred tax liabilities (1,447)Non-controlling interests (56,764)Total identifiable net assets 227,058

The following fair values have been determined on a provisional basis:

• Fairvalueofinvestmentproperty.



26 Acquisition of subsidiary (continued)Negative goodwill

Negative goodwill was recognised as a result of the acquisition as follows:

2011 $’000

Total consideration transferred 114,750Non-controlling interests, that are present ownership interests and entitle the holders to a proportionate share of the acquiree’s net assets on liquidation, based on their proportionate interest in the recognised amounts of the asset and liabilities of the acquiree 111,259Fair value of identifiable net assets (227,058)Negative goodwill (1,049)

The negative goodwill has been recognised in other income in the Statement of Total Return (Note 20) and is expected to be non-deductible for tax purposes.

Acquisition-related costs

The Group incurred acquisition-related costs of approximately $1,319,000 relating to professional fees and have been included in professional fees in the Group’s Statements of Total Return.

27 Operating segments For the purpose of making resource allocation decisions and assessing segment performance, the Group’s chief operating decision maker reviews internal/management reports of its retail and office business segments. The nature of the leases (lease of retail, office or other space) is the factor used to determine the reportable segments. As the retail and office segments of each property are similar in economic characteristics, nature of services and type of customer, the retail and office segments of each property are aggregated accordingly to form the retail and office reportable segments. This forms the basis of identifying the operating segments of the Group under FRS 108 Operating Segments.

Other operations segment, which relates to leasing of advertising space and car park, does not meet any of the quantitative thresholds for determining reportable segments for both 2011 and 2010.

Segment revenue comprises mainly of income generated from its tenants. Segment net property income represents the income earned by each segment after allocating property operating expenses. This is the measure reported to the chief operating decision maker for the purpose of assessing segment performance.

Unallocated items comprise mainly other income, trust-related income and expenses, changes in fair value of investment properties and income tax expense.

111


27 Operating segments (continued)Information regarding the Group’s reportable segments is presented in the tables below.

Segment information in respect of the Group’s geographical segments is not presented as the Group’s activities for the year ended 31 December 2011 and 31 December 2010 related wholly to properties located in Singapore.

Information about reportable segments

Office Retail Others Total $’000 $’000 $’000 $’000

2011Gross revenue 114,842 118,347 37,093 270,282Property expenses (24,499) (27,871) (24,529) (76,899)Reportable segment net property income 90,343 90,476 12,564 193,383 2010Gross revenue 117,334 122,871 9,274 249,479Property expenses (22,982) (28,493) (4,914) (56,389)Reportable segment net property income 94,352 94,378 4,360 193,090

Reconciliation of reportable segment net property income

Group 2011 2010 $’000 $’000

Total return Reportable segment net property income 180,819 188,730Other net property income 12,564 4,360 193,383 193,090Unallocated amounts: - Other income 47,722 22,410- Net finance costs (51,778) (63,468)- Amortisation of intangible assets (39,285) (20,895)- Asset management fees (36,078) (27,932)- Other trust expenses (5,289) (2,679)- Net change in fair value of financial derivatives (5,913) 7,566- Net change in fair value of investment properties 396,193 248,715Share of profit of jointly controlled entities 141,653 30,937Consolidated total return for the year before tax 640,608 387,744



28 Commitments

Group and Trust 2011 2010 $’000 $’000

(a) Capital commitments Capital expenditure contracted but not provided for 2,798 1,359 Loan facilities to jointly controlled entities 560,778 562,652 (b) The Group and the Trust lease out their investment properties. Non-cancellable operating lease rentals receivable are as follows:

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Within 1 year 209,414 208,147 207,719 208,147After 1 year but within 5 years 206,741 236,209 206,741 236,209 416,155 444,356 414,460 444,356

29 Contingent liabilityPursuant to the tax transparency ruling from IRAS, the Trustee and the Manager have provided a tax indemnity for certain types of tax losses, including unrecovered late payment penalties that may be suffered by IRAS should IRAS fail to recover from Unitholders tax due or payable on distributions made to them without deduction of tax, subject to the indemnity amount agreed with IRAS. The amount of indemnity, as agreed with IRAS, is limited to the higher of $500,000 (2010: $500,000) or 1.0% (2010: 1.0%) of the taxable income of the Trust for the year ended 31 December 2011. Each yearly indemnity has a validity period of the earlier of seven years from the relevant year of assessment and three years from the termination of the Trust.

30 Financial ratios Group Trust 2011 2010 2011 2010 % % % %

Expenses to weighted average net assets1 - including performance component of asset management fees 2.00 1.52 1.97 1.52- excluding performance component of asset management fees 1.66 1.20 1.63 1.20 Portfolio turnover rate2 – – – – 1 The annualised ratios are computed in accordance with the guidelines of the Investment Management Association of Singapore. The expenses used in

the computation relate to expenses of the Group and the Trust, excluding property expenses, interest expense and income tax expense.

2 The annualised ratio is computed based on the lesser of purchases or sales of underlying investment properties of the Group and the Trust expressed

as a percentage of daily average net asset value.

113


31 Significant related party transactionsFor the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability to directly or indirectly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to a common significant influence. Related parties may be individuals or other entities.

During the financial year, other than the transactions disclosed elsewhere in the financial statements, there were the following related party transactions:

Group Trust 2011 2010 2011 2010 $’000 $’000 $’000 $’000

Acquisition fees paid to the Manager 1,148 14,958 1,148 14,958Asset manager fees paid/payable to a related corporation of the Manager 740 – – –Financial advisory fee paid to a related corporation of the Manager – 1,071 – 1,071Agency commission paid/payable to a related corporation of the Manager 3,058 3,298 3,058 3,298Rental income received/receivable from related corporations of the Manager 1,553 1,548 1,553 1,548Property management fees payable (including reimbursable) to related 15,199 6,500 6,303 6,500 corporations of the Manager

32 Financial risk managementThe Group has exposure to credit risk, liquidity risk and market risk.

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included throughout these financial statements.

Risk management framework

Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risk. The Manager monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

The Board of Directors of the Manager oversees how management of the Manager monitors compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Board is assisted in its oversight role by the Audit Committee. The Audit Committee undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Board.

Credit risk

Credit risk is the potential financial loss resulting from the failure of a tenant or a counterparty to settle its financial and contractual obligations to the Group as and when they fall due.

The Manager has established credit limits for tenants and monitors their balances on an on-going basis. Credit evaluations are performed by the Manager before lease agreements are entered into with tenants. The Group establishes an allowance for impairment, based on a specific loss component that relates to individually significant exposures, that represents its estimate of incurred losses in respect of trade and other receivables.

Cash and fixed deposits are placed with financial institutions which are regulated. Transactions involving derivative financial instruments are allowed only with counterparties that are credit worthy.



32 Financial risk management (continued)Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Manager monitors and maintains a level of cash and cash equivalents deemed adequate to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows. In addition, the Manager monitors and observes the CIS Code issued by the MAS concerning limits on total borrowings.

Market risk

Market risk is the risk that changes in market prices, such as interest rates, which will affect the Group’s total return or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Interest rate risk

The Group’s exposure to changes in interest rates relates primarily to interest-bearing financial liabilities. Interest rate risk is managed by the Manager on an on-going basis with the primary objective of limiting the extent to which net interest expense could be affected by adverse movements in interest rates.

As at 31 December 2011, the Group has entered into interest rate swaps with a total notional amount of $1,275 million (2010: $675 million) whereby the Group has agreed with counterparties to exchange, at specified intervals, the difference between floating rate and fixed rate interest amounts calculated by reference to the agreed notional principal amounts of the secured and unsecured term loans.

The fair value of the above swaps at 31 December 2011 is a net liability of $12,611,000 (2010: net asset of $665,000), comprising assets of $265,000 (2010: $1,178,000) and liabilities of $12,876,000 (2010: $513,000) (Note 9).

Capital management

The Board of Directors of the Manager reviews the Group’s capital management policy regularly so as to optimise Unitholders’ return through a mix of available capital sources. The Group monitors its gearing ratio and maintains it within the approved limits. The Group assesses its capital management approach as a key part of the Group’s overall strategy, and this is continuously reviewed by the Manager. The Group’s gearing stood at 37.3% (2010: 38.4%) as at 31 December 2011.

The Group is subject to the aggregate leverage limit as defined in the Property Funds Appendix. The Property Funds Appendix stipulates that the total borrowings and deferred payments (together the “Aggregate Leverage”) of a property fund should not exceed 35.0% of the fund’s deposited property. The aggregate leverage of a property fund may exceed 35.0% of the fund’s deposited property (up to a maximum of 60.0%) only if a credit rating of the property fund from Fitch Inc., Moody’s or Standard and Poor’s is obtained and disclosed to the public. The property fund should continue to maintain and disclose a credit rating so long as its aggregate leverage exceeds 35.0% of the fund’s deposited property.

In the previous year, the Group’s corporate family rating and unsecured debt rating is Baa2 and Baa3 respectively.

The Group has complied with the Aggregate Leverage limit of 60.0% and there were no changes in the Group’s approach to capital management during the financial year.

33 Subsequent eventsSubsequent to 31 December 2011, the divestment of an investment property “CHIJMES” was completed for a cash consideration of $177 million, giving rise to an estimated gain of $29.8 million, which include a divestment fee of $0.9 million paid to the Manager.

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Statistics of Unitholdings

Issued and Fully Paid-Up UnitsAs at 28 February 2012

There are 2,231,446,413 Units (voting rights: one vote per Unit) outstanding as at 28 February 2012. There is only one class of units in Suntec REIT.

There were no treasury units held.

Distribution of UnitholdingsAs at 28 February 2012 No. ofSize of Unitholdings Unitholders % No. of Units %

1 - 999 28 0.13 8,190 0.001,000 - 10,000 16,851 76.20 69,717,964 3.1210,001 - 1,000,000 5,192 23.48 267,062,555 11.971,000,001 and above 43 0.19 1,894,657,704 84.91

TOTAL : 22,114 100.00 2,231,446,413 100.00

Twenty Largest UnitholdersAs at 28 February 2012

No. Name No. of Units %

1. Citibank Nominees Singapore Pte Ltd 594,198,820 26.632. HSBC (Singapore) Nominees Pte Ltd 305,374,307 13.693. United Overseas Bank Nominees Pte Ltd 167,269,988 7.504. DBS Nominees Pte Ltd 142,356,233 6.385. Suntec City Development Pte Ltd 139,420,484 6.256. DBSN Services Pte Ltd 86,878,300 3.897. DBSVickersSecurities(S)PteLtd 63,543,604 2.858. Chinowa Group Limited 51,657,365 2.319. Bank of Singapore Nominees Pte Ltd 50,315,085 2.2510. Raffles Nominees (Pte) Ltd 48,677,352 2.1811. DB Nominees (S) Pte Ltd 41,073,129 1.8412. Winsor Properties (Overseas) Limited 26,428,295 1.1813. ARA Trust Management (Suntec) Limited 24,840,893 1.1114. BNP Paribas Nominees Singapore Pte Ltd 17,796,083 0.8015. Lee Shau Kee 11,352,304 0.5116. PCK Corporation 10,811,338 0.4817. CIMB Securities (Singapore) Pte Ltd 10,538,000 0.4718. Frank Wen-King Tsao 10,138,300 0.4519. Merrill Lynch (Singapore) Pte Ltd 9,724,578 0.4420. Chow Chung Kai 9,366,595 0.42

TOTAL: 1,821,761,053 81.63


Statistics of Unitholdings

Substantial UnitholdersAs at 28 February 2012

Number of Units Direct Interest Deemed Interest

1 Suntec City Development Pte Ltd1 139,420,484 –

Note:1 Units included 1,419,038 units held in trust for estate of deceased shareholder.

Manager’s Directors’ UnitholdingsAs at 21 January 2012As shown in the Register of Directors’ Unitholdings

Number of Units Direct Interest Deemed Interest

1 Lim Hwee Chiang, John 0 61,933,8781

2 Tan Kian Chew 250,000 0

3 ChenWeiChing,Vincent 200,000 0

4 Chow Wai Wai, John 2,221,729 0

5 Yeo See Kiat 325,000 250,0002

Notes:1 By virtue of Mr. Lim Hwee Chiang, John’s 0.61% direct interest in ARA Asset Management Limited (“ARA”) and 36.59% deemed interest in ARA through JL

Investment Group Limited (100% owned by Mr. Lim Hwee Chiang, John) and JL Philanthropy Ltd. The beneficiary of JL Philanthropy Ltd is JL Charitable Settlement and Mr. Lim Hwee Chiang, John is the settlor of JL Charitable Settlement. Mr. Lim Hwee Chiang, John is deemed to be interested in 61,933,878 units held by the Manager and its fellow subsidiary, ARA Investors II Limited (“ARA Investors II”). Both the Manager and ARA Investors II are wholly-owned subsidiaries of ARA.

2 Deemed interested in 250,000 units held by spouse.

Free FloatBased on the information made available to the Manager as at 28 February 2012, approximately 90.8% of the Units are held in the public hands. Under Rule 723 of the Listing Manual of the SGX-ST, a listed issuer must ensure that at least 10% of its listed securities are at all times held by public.

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Additional Information

Related Party TransactionsThe transactions entered with related parties during the financial period and which fall within the Listing Manual of the SGX-ST and the Property Funds Appendix are:

Aggregate Value of All Related Party Transactions During the Financial Year Under Review

(Excluding Transactions Less Than $100,000) $’000

ARA Trust Management (Suntec) Limited and its associates

Asset management fees 36,078

Rental income 1,553

Property management fees and reimbursables 15,199

Acquisition fees 1,148

Retail consultancy and project management 465

Leasing commission 3,058

HSBC Institutional Trust Services (Singapore) Limited

Trustee fees 1,135

Cavell Limited

Income Support 13,983

Choicewide Group Limited

Income Support 32,690

Subscription of Suntec REIT Units As at 31 December 2011, an aggregate of 2,224,519,933 Units were in issue. On 20 January 2012, Suntec REIT issued 6,926,480 Units to the Manager as asset management fees for the period from 1 October 2011 to 31 December 2011.


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Annual General Meeting (“AGM”) of the holders of units of Suntec Real Estate Investment Trust (“Suntec REIT”, and the holders of units of Suntec REIT, “Unitholders”) will be held at Level 2, Rooms 208 to 209, Suntec International Convention & Exhibition Centre, 1 Raffles Boulevard, Suntec City, Singapore 039593 on Thursday, 19 April 2012 at 10.30 am to transact the following business:

AS ORDINARY BUSINESS1. To receive and adopt the Report of HSBC Institutional Trust Services (Singapore) Limited, as trustee of Suntec REIT (the “Trustee”), the

Statement by ARA Trust Management (Suntec) Limited, as manager of Suntec REIT (the “Manager”) and the Audited Financial Statements of Suntec REIT for the financial year ended 31 December 2011 and the Auditors’ Report thereon.

(Resolution 1)

2. To re-appoint KPMG LLP as the Auditors of Suntec REIT to hold office until the conclusion of the next AGM of Suntec REIT and to authorise the Manager to fix their remuneration.

(Resolution 2)

AS SPECIAL BUSINESSTo consider and if thought fit, pass the following ordinary resolution, with or without any modifications:

3. GENERAL MANDATE FOR THE ISSUE OF NEW UNITS AND/OR CONVERTIBLE SECURITIES

That authority be and is hereby given to the Manager to

(a) (i) issue new units in Suntec REIT (“Units”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require Units to be issued, including but not limited to the creation and issue of (as well as adjustments to) securities, warrants, debentures or other instruments convertible into Units,

at any time and upon such terms and conditions and for such purposes and to such persons as the Manager may, in its absolute discretion deem fit; and

(b) issue Units in pursuance of any Instrument made or granted by the Manager while this Resolution was in force (notwithstanding that

the authority conferred by this Resolution may have ceased to be in force at the time such Units are issued),

provided that:

(A) the aggregate number of Units to be issued pursuant to this Resolution (including Units to be issued in pursuance of Instruments made or granted pursuant to this Resolution) shall not exceed fifty percent (50%) of the total number of issued Units (excluding treasury Units, if any) (as calculated in accordance with sub-paragraph (B) below), of which the aggregate number of Units to be issued other than on a pro rata basis to Unitholders (including Units to be issued in pursuance of Instruments made or granted pursuant to this Resolution) shall not exceed twenty percent (20%) of the total number of issued Units (excluding treasury Units, if any) (as calculated in accordance with sub-paragraph (B) below);

(B) subject to such manner of calculation as may be prescribed by Singapore Exchange Securities Trading Limited (the “SGX-ST”) for the purpose of determining the aggregate number of Units that may be issued under sub-paragraph (A) above, the total number of issued Units (excluding treasury Units, if any) shall be based on the total number of issued Units (excluding treasury Units, if any) at the time this Resolution is passed, after adjusting for:

(i) any new Units arising from the conversion or exercise of any Instruments which are outstanding as at the time this Resolution is passed; and

(ii) any subsequent bonus issue, consolidation or subdivision of Units;

119


(C) in exercising the authority conferred by this Resolution, the Manager shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the trust deed constituting Suntec REIT (as amended) (the “Trust Deed”) for the time being in force (unless otherwise exempted or waived by the Monetary Authority of Singapore);

(D) unless revoked or varied by the Unitholders in a general meeting, the authority conferred by this Resolution shall continue in force until (i) the conclusion of the next AGM of Suntec REIT or (ii) the date by which the next AGM of Suntec REIT is required by applicable regulations to be held, whichever is earlier;

(E) where the terms of the issue of the Instruments provide for adjustment to the number of Instruments or Units into which the Instruments may be converted in the event of rights, bonus or other capitalisation issues or any other events, the Manager is authorised to issue additional Instruments or Units pursuant to such adjustment notwithstanding that the authority conferred by this Resolution may have ceased to be in force at the time the Instruments or Units are issued; and

(F) the Manager and the Trustee be and are hereby severally authorised to complete and do all such acts and things (including executing all such documents as may be required) as the Manager or, as the case may be, the Trustee may consider expedient or necessary or in the interest of Suntec REIT to give effect to the authority conferred by this Resolution.

[See Explanatory Note](Resolution 3)

4. OTHER BUSINESS

To transact such other business as may be transacted at an AGM.

BY ORDER OF THE BOARDARA Trust Management (Suntec) Limitedas manager of Suntec REIT

Yvonne ChooBusarakham Kohsikaporn Company Secretaries


Notes

1. A Unitholder entitled to attend and vote at the AGM is entitled to appoint not more than two proxies to attend and vote in his/her stead. A proxy need not be a Unitholder.

2. Where a Unitholder appoints more than one proxy, the appointments shall be invalid unless he/she specifies the proportion of his/her holding (expressed as a percentage of the whole) to be represented by each proxy.

3. The proxy form must be lodged at the Unit Registrar’s office at Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles Place #32-01, Singapore Land

Tower, Singapore 048623, not later than 17 April 2012 at 10.30 a.m. being 48 hours before the time fixed for the AGM.



Explanatory Note to Resolution to be passed:

(i) Ordinary Resolution 3 above, if passed, will empower the Manager from the date of the AGM until (i) the conclusion of the next AGM of Suntec REIT or (ii) the date by which the next AGM of Suntec REIT is required by the applicable regulations to be held, whichever is earlier, or (iii) the date on which such authority is revoked or varied by the Unitholders in a general meeting, whichever is the earliest, to issue Units, to make or grant Instruments and to issue Units pursuant to such Instruments, up to a number not exceeding 50% of which up to 20% may be issued other than on a pro rata basis to Unitholders (in each case, excluding treasury Units, if any).

For determining the aggregate number of Units that may be issued, the percentage of issued Units will be calculated based on the issued Units at the time Ordinary Resolution 3 above is passed, after adjusting for new Units arising from the conversion or exercise of any Instruments which are outstanding at the time this Resolution is passed and any subsequent bonus issue, consolidation or subdivision of Units.

Fund raising by issuance of new Units may be required in instances of property acquisitions or debt repayments. In any event, if the approval of Unitholders is required under the Listing Manual of the SGX-ST and the Trust Deed or any applicable laws and regulations in such instances, the Manager will then obtain the approval of Unitholders accordingly.

121

Corporate Directory

TRUSTEE

Registered AddressHSBC Institutional Trust Services (Singapore) Limited21 Collyer Quay #14-01 HSBC BuildingSingapore 049320Telephone: +65 6534 1900Facsimile: +65 6533 1700

TrusteeHSBC Institutional Trust Services (Singapore) Limited21 Collyer Quay #03-01 HSBC BuildingSingapore 049320Telephone: +65 6658 0458Facsimile: +65 6534 5526

MANAGER

ARA Trust Management (Suntec) Limited6 Temasek Boulevard #16-02Suntec Tower Four Singapore 038986Telephone: +65 6835 9232Facsimile: +65 6835 9672

DIRECTORS OF THE MANAGER

Chiu Kwok Hung, JustinChairman and Director(Appointment since 1 October 2004)

Lim Hwee Chiang, JohnDirector(Appointment since 30 August 2004)

Ip Tak Chuen, EdmondDirector(Appointment since 28 October 2004)

Tan Kian ChewIndependent Director(Appointment since 28 October 2004)

Sng Sow-Mei (alias Poon Sow Mei)Independent Director(Appointment since 28 October 2004)

Lim Lee MengIndependent Director(Appointment since 28 October 2004)

Chen Wei Ching, VincentIndependent Director(Appointment since 1 October 2010)

Chow Wai Wai, JohnNon-executive Director(Appointment since 1 July 2007)

Yeo See KiatChief Executive Officer and Director(Appointment since 25 January 2006)

Ma Lai Chee, GeraldAlternate Director to Ip Tak Chuen, Edmond(Appointment since 24 April 2008)

AUDIT COMMITTEE

Tan Kian ChewChairman

Sng Sow-Mei (alias Poon Sow Mei)Member

Lim Lee MengMember

Chen Wei Ching, VincentMember

DESIGNATED COMMITTEE

Chow Wai Wai, JohnChairman

Tan Kian ChewMember

Chen Wei Ching, VincentMember

Seow Bee Lian, CherylMember


COMPANY SECRETARIES OF THE MANAGER

Yvonne ChooBusarakham Kohsikaporn

LEGAL ADVISER

Allen & Gledhill LLPOne Marina Boulevard #28-00Singapore 018989Telephone: +65 6890 7188Facsimile: +65 6327 3800

UNIT REGISTRAR

Boardroom Corporate & Advisory Services Pte. Ltd.50 Raffles Place #32-01Singapore Land TowerSingapore 048623Telephone: +65 6536 5355Facsimile: +65 6536 1360

AUDITOR OF THE TRUST

KPMG LLP16 Raffles Quay #22-00Hong Leong Building Singapore 048581Telephone: +65 6213 3388Facsimile: +65 6225 2230(Partner-in-charge: Karen Lee)(Appointed since Financial Year 2011)

STOCK EXCHANGE QUOTATION

BBG: SUN SP EquityRIC: SUNT.SI

WEBSITES

www.suntecreit.comwww.ara-asia.com

Corporate Directory

IMPORTANT:1. For investors who have used their CPF monies to buy Suntec REIT’s units,

this Annual Report is forwarded to them at the request of the CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

3. CPF investors who wish to attend the Annual General Meeting as observers have to submit their requests through their CPF Approved Nominees within the time frame specified. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specified to enable the CPF Approved Nominees to vote on their behalf.

4. PLEASE READ NOTES TO THE PROXY FORM.

SUNTEC REAL ESTATE INVESTMENT TRUST(Constituted in the Republic of Singapore pursuant toa trust deed dated 1 November 2004 (as amended))

PROXY FORMANNUAL GENERAL MEETING

I/We (Name) (NRIC/Passport No.)

of (Address)

being a unitholder/unitholders of Suntec Real Estate Investment Trust (“Suntec REIT”), hereby appoint:

Name NRIC/ Passport No. Proportion of Unitholdings

No. of Units %

Address

Name NRIC/ Passport No. Proportion of Unitholdings

No. of Units %

Address

or both of whom failing, the Chairman of the Annual General Meeting (“AGM”)as*my/our*proxy/proxiestoattendandvotefor*me/uson*my/ourbehalfattheAGMoftheSuntecREITtobeheldatLevel2,Rooms208to209,SuntecInternationalConvention&ExhibitionCentre,1RafflesBoulevard,SuntecCity,Singapore039593,onThursday,19April2012at10.30a.m.andatanyadjournmentthereof.*I/Wedirect*my/our*proxy/proxiestovotefororagainsttheresolutionstobeproposedattheAGMasindicatedhereunder.Ifnospecificdirectionastovotingisgiven,the*proxy/proxieswillvoteorabstainfromvotingat*his/theirdiscretion,astheywillonanyothermatterarisingattheAGM.

No. Resolutions relating to: No. of VotesFor**

No. of VotesAgainst**

AS ORDINARY BUSINESS

1. To receive and adopt the Report of the Trustee, the Statement by the Manager and the Audited Financial Statements of Suntec REIT for the year ended 31 December 2011.

2. To re-appoint KPMG LLP as Auditors of Suntec REIT and authorise the Manager to fix the Auditors’ remuneration.

AS SPECIAL BUSINESS

3. To authorise the Manager to issue Units and to make or grant convertible instruments.

OTHER BUSINESS

4. To transact any other business which may be transacted at an AGM.

* Deletewhereinapplicable** Ifyouwishtoexerciseallyourvotes“For”or“Against”,pleasetick() within the box provided. Alternatively, please indicate the number of

votes as appropriate.

Dated this day of 2012

Signature of Unitholder(s)/and, Common Seal of Corporate Unitholder

and/or (delete as appropriate)

Total number of Units held

3rd fold this flap for sealing

2nd fold here

1st fold here

AffixPostageStamp

ARA Trust Management (Suntec) Limited (as manager of Suntec Real Estate Investment Trust)

c/oUnit Registrar

Boardroom Corporate & Advisory Services Pte. Ltd.,50 Raffles Place #32-01, Singapore Land Tower

Singapore 048623

IMPORTANT: PLEASE READ THE NOTES TO PROXY FORM BELOWNotes To Proxy Form1. A unitholder of Suntec REIT (“Unitholder”) entitled to attend and vote at the Annual General Meeting (“AGM”) is entitled to appoint one or two proxies to attend and vote in his/her stead.

2. Where a Unitholder appoints more than one proxy, the appointments shall be invalid unless he/she specifies the proportion of his/her holding (expressed as a percentage of the whole) to be represented by each proxy.

3. A proxy need not be a Unitholder.

4. A Unitholder should insert the total number of Units held. If the Unitholder has Units entered against his/her name in the Depository Register maintained by The Central Depository (Pte) Limited (“CDP”), he/she should insert that number of Units. If the Unitholder has Units registered in his/her name in the Register of Unitholders of Suntec REIT, he/she should insert that number of Units. If the Unitholder has Units entered against his/her name in the said Depository Register and registered in his/her name in the Register of Unitholders, he/she should insert the aggregate number of Units. If no number is inserted, this Proxy Form (as defined in note 5 below) will be deemed to relate to all the Units held by the Unitholder.

5. The instrument appointing a proxy or proxies (the “Proxy Form”) must be deposited at the Unit Registrar’s office at Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles Place #32-01, Singapore Land Tower, Singapore 048623, not later than 17 April 2012 at 10.30 a.m., being 48 hours before the time set for the AGM.

6. Completion and return of the Proxy Form shall not preclude a Unitholder from attending and voting at the AGM.

7. The Proxy Form must be executed under the hand of the appointor or of his/her attorney duly authorised in writing. Where the Proxy Form is executed by a corporation, it must be executed under its common seal or under the hand of its attorney or a duly authorised officer.

8. Where the Proxy Form is signed on behalf of the appointor by an attorney or a duly authorised officer, the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority must (failing previous registration with the Manager) be lodged with the Proxy Form, failing which the Proxy Form may be treated as invalid.

9. The Manager shall be entitled to reject a Proxy Form which is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the Proxy Form. In addition, in the case of Units entered in the Depository Register, the Manager may reject a Proxy Form if the Unitholder, being the appointor, is not shown to have Units entered against his/her name in the Depository Register as at 48 hours before the time appointed for holding the AGM, as certified by CDP to the Manager.

10. All Unitholders will be bound by the outcome of the AGM regardless of whether they have attended or voted at the AGM.

11. At any meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded by the Chairman or by five or more Unitholders present in person or by proxy, or by one or more Unitholders present in person or by proxy holding or representing not less than one-tenth in value of the Units represented at the meeting. Unless a poll is so demanded, a declaration by the Chairman that such a resolution has been carried or carried unanimously or by a particular majority or lost shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against

such resolution.

12. On a poll, every Unitholder who is present in person or by proxy shall have one vote for every Unit of which he/she is the Unitholder. There shall be no division of votes between a Unitholder who is present in person and voting at the AGM and his/her proxy(ies). A person entitled to more than one vote need not use all his/her votes or cast them the same way.

ARA Trust Management (Suntec) Limited 6 Temasek Boulevard #16-02 Suntec Tower Four Singapore 038986Tel: (65) 6835 9232 Fax: (65) 6835 9672

www.suntecreit.com

suntec reit annual report for fy 2011

Documents