Singapore Industry Focus

Singapore REITs
DBS Group Research . Equity 17 Dec 2010

The quest for growth

• S-REITs offer FY11 yields of 6.1%, an attractive 340
STI : 3,147.20
bps spread against long bonds
• As inflation inches higher, we prefer SREITs with Analyst
Derek TAN CPA +65 6398 7966
ability to continue delivering strong organic growth derektan@dbsvickers.com
• Strong balance sheets to leverage on in the chase for
MunYee LOCK +65 6398 7972
further acquisitions munyee@dbsvickers.com
• BUY FCT, P-Life, Cache, MLT, CDL HT, ART, CMT
Normalized FY11F yield of 6.1%. The S-REIT sector now TOP PICKS
trades at a normalized FY11F distribution yield of c6.1%, Price Mkt Cap Target Price FY11F Yield
slightly below its historical mean of c6.5%. Spreads have S$ US$m S$ (%) Rating

narrowed but still remain attractive at c340bps above the

Frasers Centrepoint 1.45 847 1.74 5.6% BUY
long-term government bond yield, currently at c2.7%. Trust
The quest for DPU growth. S-REITs offer a good hedge Mapletree Logistics 0.93 1,717 1.01 7.1% BUY
against inflation given that earnings growth can potentially Trust
Cache Logistics 0.94 453 1.11 8.7% BUY
outpace inflation, which is expected to inch higher to 3.2% CDL Hospitality 2.07 1,509 2.28 5.9% BUY
in 2011. We prefer S-REITs with the ability to deliver growing Capitamall Trust 1.92 4,652 2.09 5.4% BUY
distributions organically while having the opportunity to Parkway Life REIT 1.63 750 1.84 6.0% BUY
Ascott Residence 1.22 1,029 1.38 6.7% BUY
acquire accretively. We continue to hold the view that Trust
hospitality and retail sectors offer a more robust outlook on
the back of expected strong visitor arrivals in 2011. Office
REITs are expected to see topline pressure from negative Source: DBS Vickers
reversions in 2011 though the sector is on an uptrend.
Interest rate hikes to have minimal impact on S-REIT Yield
distributable income. Given the current low interest rate
environment, S-REITs have taken the opportunity to
14.0% S-REIT Yields
refinance, lengthen the debt maturity profile as well as widen Mean
their sources of debt, hence enjoying savings in interest. DBS 12.0% +1 SD
economist expects interest rate hikes only towards the end of -1 SD
10 yr Govt Bond
2011. Even then, our scenario analysis reveals that the impact 10.0%
on S-REITs FY11 distributable income is limited to -0.2 to -
8.0%
3.0% as majority of the S-REITs have hedged/fixed their
interest rate positions. 6.0%

Industrial & Sponsored REITs have potential for further

4.0%
accretive acquisitions. Even after acquiring cS$6bn of
assets YTD, S-REIT sector gearing remains low at 34.4%. 2.0%
Further growth from acquisitions is possible and we look
towards the industrial REITs for their ability to acquire 0.0%
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10
earnings accretive assets given the relative higher yields of
industrial assets while sponsored REITs continue to offer Source: Bloomberg, DBS Vickers
long-term portfolio growth visibility to investors from
potential asset injections in the medium term.
Stock picks. CMT, FCT, CDL HT and Ascott REIT are
expected to deliver strong organic growth potential coupled
with sponsor injection possibilities. P-Life offers downside
protection as revenue is pegged to inflation. MLT and Cache
offer potential earnings surprise given their visible sponsor
pipeline.

www.dbsvickers.com
Refer to important disclosures at the end of this report
ed: JS / sa: JC
Industry Focus
Singapore REITs

Analysts
Table of Contents
Derek TAN CPA +65 6398 7966

derektan@dbsvickers.com 1. FSTREI Index performance 3

2. The quest for further growth 3

Munyee LOCK +65 6398 7972 3. In pursuit for growth 6

munyee@dbsvickers.com
4. Upbeat on hospitality, Retail outlook 7

5. Measuring the cost of interest rate hikes 9

6. Acquisitions:

6.1 Growth and Fund raisings arm in arm 11

6.2 Sponsored REITs ahead of the acquisition

game 13

7. Appendix A: S-REITs yield spread vs 10yr bonds 14

Page 2
 Industry Focus
Singapore REITs

1. Sreits
(FSTREI index) have outperformed developers Historical yield spread (Sreits vs 10 year Govt Bond)
(FSTREH index) YTD, offers yields of 6.1% S-REIT Yields 14.0%
+1 SD
Outperforming the developers YTD. The S-REITs’ index (FSTREI) 12.0%
Mean
has risen 8% YTD, outperforming the real estate developers’ 10.0% -1 SD
index (FSTREH, +4%) but slightly underperforming the Straits
8.0%
Times Index (FSSTI, +9.1%).
6.0%
FSTREI vs FSTREH vs STI Index (YTD)
4.0%
(X )
1.15
2.0%
F STREI index

1.10 F STREH Index 0.0%

F SSTI Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10
1.05 Source: Bloomberg, DBS Vickers

1.00 Sreits P/BV –between historical mean and –1 S.D. S-REITs

currently trade at a market-cap weighted 1.05x P/Bk NAV,
0.95
slightly below the sector’s historical mean of (1.1x P/BV) and –
1 SD (0.8x P/BV) trading level.
0.90

Sreit average historical Price to book value

0.85
J an-10 Mar-10 May -10 J ul-10 Sep-10 Nov -10 1.70

Source: Bloomberg, DBS Vickers 1.50

Sreits yields at 6.1% yield, slightly below historical mean. The 1.30

S-REIT sector now trades at a normalized FY11F distribution yield

1.10
of c6.1%, slightly below its historical mean of c6.5%. Spreads
have narrowed but still remain attractive at c340 bps above the 0.90
long-term government bond yield, which is currently at c2.7%.
0.70 S-REIT P/Bk NAV
The sector has re-rated by c100 bps since the start of 2010 as Mean
S-REITs’ high yields backed by their ability to grow acquire 0.50 +1 SD
accretively continue to attract investors. -1 SD
0.30
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10
Sreit Yield vs 10 year Government bond
Source: Bloomberg, DBS Vickers
14.0% S-REIT Yields
Mean
+1 SD
Quest for further growth
12.0%
-1 SD
10.0%
10 yr Govt Bond Growing yields remain key re-rating catalysts. We believe
valuation for the S-REITs is fair given investors expectations for
8.0% robust rental growth & yield compression, coupled with
possible acquisitions going into 2011. We continue to see
6.0%
catalysts hinging on S-REITs’ ability to
4.0%
(i) Continue delivering earnings growth; and
2.0%
(ii) Acquire assets accretively.
0.0%
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10
Source: Bloomberg, DBS Vickers

Page 3
Industry Focus
Singapore REITs

(i) Earnings growth potential. As inflation is likely to inch higher
to 3.2%, we prefer S-REITs that can continue to deliver
growing distributions with the ability to acquire earnings
accretive assets for distribution upside surprise to unitholders.
We continue to hold the view that hospitality and retail sectors
offer a more robust outlook on the back of expected strong
visitor arrivals in 2011, translating to strong earnings for
hoteliers and higher retail spending. REITs that offer good
exposure to the buoyant tourism sector include CDL HT (BUY,
TP S$2.14) , Ascott REIT (BUY, TP S$1.38) while CapitaMall
Trust (BUY, TP S$2.09) will benefit from stronger retail sales as
Singapore largest retail landlord.
Parkway Life REIT (BUY, TP S$1.86) with its inflation- hedged
trust structure for its Singapore hospitals ensures future
earnings will continue to match the growth in CPI, while the
trust continues to deliver on acquisitions.
(ii) Acquisitions growth potential: Industrial REITs & sponsored
REITs. In terms of acquisition possibilities, we look towards the
industrial REITs for their ability to acquire earnings accretive
assets given relative higher yields of industrial assets while
sponsored REITs continue to offer long-term portfolio growth
visibility to investors from potential asset injections in the
medium term. We see possible acquisitions from:
(a) Cache (BUY, TP S$TP 1.11). Visible pipeline of quality
warehouses from sponsor CWT, low gearing level 23.4%
empowers the trust with headroom of over S$100m firepower
to acquire. (b) Fraser Centerpoint Trust (BUY, TP S$1.70) offers
twin growth drivers from a healthy organic growth profile from
its portfolio of sub-urban malls coupled with the planned
acquisition of recently completed Bedok Mall asset as a re-
rating catalyst. (c) Mapletree Logistics Trust (BUY, TP S$1.01).
Its sponsor has over S$300m of assets that could be injected in
the medium term. The trust has activated its acquisition engine
in 2010 and is likely to continue to grow its portfolio in the
coming year.

Sreit Peer Comparison Table

P/Bk
YE Price Rec'd Target Total DPU Yield NAV
Return FY10F FY11F FY12F FY10F FY11F FY12F
$ (%) (Scts) (Scts) (Scts) (%) (%) (%) (x)
Office
Frasers Commercial Trust Sep 0.17 HOLD 0.19 22% 1.1 1.2 1.2 6.7% 7.3% 7.5% 0.6
CapitaCommercial Trust Dec 1.46 HOLD 1.47 5% 7.9 6.8 6.9 5.4% 4.6% 4.7% 1.1
K-REIT Dec 1.41 HOLD 1.2 -9% 6.8 7.7 6.6 4.9% 5.5% 4.7% 1.0
Retail/Mixed

CapitaMall Trust Dec 1.92 BUY 2.09 15% 9.2 10.2 10.9 4.9% 5.4% 5.7% 1.2
CapitaRetail China Trust Dec 1.21 HOLD 1.3 14% 8.3 8.4 8.6 6.8% 7.0% 7.1% 1.1
Frasers Centrepoint Trust Sep 1.44 BUY 1.74 26% 8.2 8.1 8.5 5.7% 5.6% 5.9% 1.2
Starhill Global Reit Dec 0.61 BUY 0.76 30% 3.9 4.3 4.4 6.3% 7.0% 7.1% 0.8
Suntec REIT Dec 1.50 BUY 1.66 18% 9.8 9.7 8.7 6.6% 6.5% 5.8% 0.8
Industrial
A-REIT + Mar 2.03 HOLD 2.19 15% 13.5 14.1 14.4 6.7% 7.0% 7.1% 1.3
Ascendas India Trust + Mar 0.92 HOLD 1.16 21% 6.8 7.6 8.0 7.6% 8.7% 9.4% 1.1
Mapletree Industrial Trust + Mar 1.06 BUY 1.08 15% 7.0 8.0 8.7 6.4% 7.1% 7.5% 1.2
Mapletree Logistics Trust Dec 0.93 BUY 1.01 16% 6.1 6.6 6.8 6.5% 7.1% 7.3% 1.1
Cambridge Ind Trust Dec 0.52 BUY 0.58 21% 4.9 5.0 5.1 9.4% 9.6% 9.7% 0.9
Cache Logistics Trust Dec 0.98 BUY 1.11 25% 7.8 8.3 8.6 8.2% 8.7% 9.0% 1.1
Hospitality & Healthcare

Ascott Residence Trust Dec 1.22 BUY 1.38 21% 7.4 8.1 8.3 6.2% 6.7% 6.8% 0.9
CDL Hospitality Trust Dec 2.07 BUY 2.28 18% 10.8 12.0 13.3 5.3% 5.9% 6.5% 1.4
Parkway Life Dec 1.63 BUY 1.84 18% 8.6 9.8 10.0 5.2% 6.0% 6.1% 1.2

S-REIT Sector 5.8% 6.1% 6.3% 1.1

Source: DBS Vickers
+ A-REIT, Mapletree Industrial and Ascendas India Trust are based on FY11, FY12 , FY13 given Mar YE

Page 4
 Industry Focus
Singapore REITs

Sreit Historical trading range

Share Current Mean 1 S.D Highest Lowest Current Mean 1 S.D Highest Lowest
FY11F
price Yield Yield Yield Yield Yield P/BV P/BV P/BV P/BV P/BV

($) (%) (%) (%) (%) (%) (X) (X) (X) (X) (X)
Office
Frasers Commercial Trust 0.17 7.3% 9.0% 4.0% 26.0% 4.0% 0.6 0.6 0.3 1.1 0.2
CapitaCommercial Trust 1.46 4.6% 5.9% 3.4% 17.0% 3.0% 1.1 0.9 0.3 1.5 0.5
K-REIT 1.41 5.5% 7.0% 4.0% 20.0% 3.0% 1.0 0.8 0.3 1.6 0.3

Retail/Mixed
CapitaMall Trust 1.92 5.4% 5.1% 1.6% 11.0% 3.0% 1.2 1.4 0.3 2.1 0.7
CapitaRetail China Trust 1.21 7.0% 6.0% 3.0% 16.0% 2.0% 1.1 0.9 0.3 3.0 0.4
Frasers Centrepoint Trust 1.44 5.6% 6.5% 2.4% 13.0% 4.0% 1.2 1.1 0.3 1.7 0.5
Starhill Global Reit 0.61 7.0% 7.5% 3.0% 17.0% 5.0% 0.8 0.8 0.2 1.1 0.3
Suntec REIT 1.50 6.5% 8.0% 3.5% 21.0% 4.0% 0.8 0.8 0.3 1.1 0.3

Industrial
A-REIT 2.03 7.0% 6.8% 1.6% 11.0% 5.0% 1.3 1.4 0.3 1.8 0.8
Ascendas India Trust 0.92 7.1% 9.4% 3.2% 17.0% 5.0% 1.2 1.1 0.3 2.5 0.5
Mapletree Industrial Trust 1.06 8.3% 7.0% na na na 1.1 1.2 na na na
Mapletree Logistics Trust 0.93 7.1% 7.0% 3.0% 16.0% 4.0% 1.1 0.9 0.3 1.4 0.4
Cambridge Ind Trust 0.52 9.6% 11.0% 6.0% 22.0% 7.0% 0.9 0.9 0.3 1.3 0.3
Cache Logistics Trust 0.98 8.7% 8.0% 0.0% 8.0% 8.0% 1.1 1.1 0.1 1.1 1.1

Hospitality
Ascott Residence Trust 1.22 6.7% 7.7% 4.2% 20.0% 3.0% 0.9 0.9 0.4 1.6 0.3
CDL Hospitality Trust 2.07 5.9% 7.4% 4.2% 18.0% 3.0% 1.4 1.1 0.4 1.8 0.4

Healthcare
Parkway Life 1.63 6.0% 6.0% 1.5% 10.0% 4.0% 1.2 0.9 0.2 1.2 0.6

S-REIT Sector Average 6.1% 16.0% 4.4% 1.05 1.6 0.5

Page 5
 Industry Focus
Singapore REITs

In pursuit of growth Organic growth stronger in Hospitality REITs results. Amongst

3Q10 results – growth supported by acquisitions. S-REITs 3Q10
results continued to report sequential growth, as in prior
quarters. Topline, net property income and distributable
income grew of 10%, 13% and 11% respectively, compared
to a year ago. Growth was largely led by the contribution from
acquisitions completed in 1H10 supported by continued
organic growth from the underlying portfolio.
On a sequential basis, we saw a slight uptick with gross
revenues, NPI and distributable income rising 3%, 3% and 1%
respectively.
S-REIT sector breakdown
900
800
700
600
S$'m
the Sreits in various sub-sectors, the Hospitality S-REITs
continued to enjoy robust occupancy levels for their portfolio,
and pricing power for their rooms in Singapore, thus delivering
one of the strongest growth in distribution income (+21% yoy,
+6% qoq). Compared to a quarter ago, Hospitality REITs’
distributable income grew 6%, reflecting the positive travel
sentiment and record tourist arrivals seen in recent months.
Industrial and Retail REITs saw earnings uplift from acquisition
activities; Retail REITs see sustained positive reversions.
Industrial, Retail REITs have been active in their acquisition
activities YTD, and this contributed to the stronger yoy growth
(ranging from 5% to 9%) in distributable income. Mapletree
Logistics Trust (“MLT”) acquired S$495m of logistics properties
since beginning of 2010, A-REIT completed S$231m worth of
3Q10 acquisitions in 1Q10 while retail REITs like CapitaMall Trust
3Q09
(“CMT”) and Fraser Centerpoint Trust (“FCT”) acquired retail
2Q10
properties from the sponsor in 1Q10, Starhill Global REIT

500
400 (“SGREIT”) completed its acquisition of its Malaysian portfolio
300 in Jul’10.
200
100
However, we note that the impact of acquisitions is greater for
-
Topline NPI Distributable inc
the industrial REITs, compared to its retail peers, which are
Source: DBS Vickers, Company enjoying positive reversions and occupancy levels in their
portfolio and continue to grow strongly on a qoq basis.
S-REIT sector breakdown: 3Q10 vs 3Q09/2Q10
YoY Growth QoQ Growth Office REITs’ strong 19% yoy growth was largely acquisition
(%) (%) driven, coming from (i) improved performance of Frasers
Industrials Commercial Trust (“FCOT”) post its recapitalisation exercise in
Topline *7% 0% Aug 2009; and (ii) acquisition of 2 properties in Australia in
NPI *10% 0% 1H10 for K-REIT while CCT enjoyed interest savings from debt
Distributable inc *9% 2% repayment and refinancing into lower interest rates. Organic
performance however, was subdued – office rentals are
Office
starting to see narrowing reversions or negative in some cases
Topline 3% -3%
NPI 7% 1% given that Office REITs are starting to renew rents that were
Distributable inc 19% 2% signed during the peak periods in 2007-2008.

Retail Strengthening S$ eroded profitability for certain REITs with

Topline 10% 5% offshore exposure. REITs with offshore assets i.e. CRCT, a-itrust
NPI 12% 6% and ART felt the impact of a strengthening S$ against various
Distributable inc 5% 6% regional currencies esp. Rp and RMB in the current quarter,
with most of them reporting slightly lower growth or even
Hospitality & Others
declines in S$ terms due to translation losses even though
Topline 20% 7%
underlying performance in terms of local currency were, in
NPI 22% 7%
Distributable inc 21% 6% fact, growing yoy.
* Removed contribution from Cache, which listed on Apr 2010
Source: DBS Vickers, Company

Page 6
 Industry Focus
Singapore REITs

Upbeat organic growth outlook in hospitality, retail S-REITs to deliver distributable income growth of 10% in FY11;
sectors in 2011 Brighter prospects in Hospitality and Retail sectors. DBSV
projects the S-REITS sector to deliver distributable income
Delivering growing yields. REITs are typically a good investment growth of 10% in FY11. Hospitality/Healthcare REITs are
against inflation hedge as they offer rental income that can projected to deliver the strongest growth of 33% supported by
potentially outpace inflation, dividend payouts that provide underlying organic growth. Industrial REITs is next at 16% with
shareholders with a steady income stream, and exposure to a stable earnings profile and potential earnings uplift from
assets that typically hold their value in an inflationary acquisitions. This is followed by Retail REITs (+8%). Office REITs
environment. (-3%) should see topline pressure from negative rental
reversions in 2011.
Inflation set to rise. Policy makers will continue to keep an eye
on inflation in 2011. Since the rapid turnaround of Singapore’s FY11F distributable income projections by sector
economy in the beginning of 2010, CPI has risen significantly, Distributable Distributable YoY Growth
averaging 2.5%-3%, picking up slightly towards the end of the Income Income (%)
FY10F FY11F
year. Looking ahead, DBS Economist expects Singapore’s GDP Sub-Sectors S$’m S$’m**
to expand a further 7% yoy in 2011, with inflation likely to rise Industrials REITs 515.5 598.5 +16%
to 3.2%. Against this backdrop, he expects the Monetary Office REITs 339.9 338.0 -3%
Authority of Singapore (“MAS”) to maintain a strong S$ policy. Retail REITs 675.1 726.7 +8%
Hospitality,
208.9 276.9 +33%
Headline CPI inflation rate and MAS Underlying Inflation Healthcare REITs
S-REIT sector 1,749.3 1,940.0 +10%
8.0%
* For A-REIT, a-itrust: FY11F and FY12F forecast used given Mar YE
7.0%
** Inclusive of acquisition assumptions.
CPI
6.0% Source: DBS Vickers, Company
MAS Underly ing Index
5.0%
Inflation Rate (%)

4.0% Prospects of Hospitality REITs robust : benefiting from strong

3.0%
visitor arrivals amid limited competition for rooms. Both Resorts
2.0%
World at Sentosa (“RWS”) and Universal Studios Singapore
(“USS”) are partly changing the landscape for the Singapore
1.0%
tourism industry with a slew of new attractions and rides,
0.0%
J an-07 J ul-07 J an-08 J ul-08 J an-09 J ul-09 J an-10 J ul-10 together with the continuous ramping up towards hosting
-1.0%
larger regional/ global conferences in 2011. These should
-2.0%
underpin strong visitors arrivals into Singapore. DBSV projects
13m visitors in 2011, implying a potential room demand of
Source: MAS, DBS Vickers
11.8m against a backdrop of limited room growth of c3%.
RevPAR is likely to increase by 12% but growth rate is
Keeping in mind the impact of inflation on earnings and yields,
moderating on a higher base effect.
on a real basis, we project REITs to offer an average return of
2.9% (ranging between 1.8%-4.1%), above the expected
Industrial REITs: organic performance to remain stable, earnings
inflation rate of 3.2%.
growth to driven by acquisitions. We expect demand for
industrial space to remain relatively stable – fueled by continued
DBSV Forecasted Nominal Yield vs Real Yield
expansion and more firms setting up their operations in
FY11F Inflation FY11F Singapore. Occupancy levels should continue to firm in coming
Nominal Yield Rate Real
quarters with landlords likely to seek higher average rents during
Yield
Industrial REITs 7.3% 3.2% 4.1% renewals in their bid to maximize portfolio yields.
Office REITs 5.0% 3.2% 1.8%
Retail REITs 6.0% 3.2% 2.8%
Hospitality/
6.1% 3.2% 2.9%
Healthcare REITs
S-REIT sector 6.1% 3.2% 2.9%
Source: DBS Vickers, Company

Page 7
Industry Focus
Singapore REITs

Retail Sector to remain buoyant. Consumer spending should

continue to pick up in 2011, driven by a buoyant economic
environment boosted by expectations of continuing strong
tourists arrivals. Retail REITs should continue to enjoy robust
organic growth through continued positive rental reversions. In
addition, retail REITs should be able to enjoy higher rental
income pegged to tenant sales from its % of turnover lease
structures, step-up clauses, all of which ensure sustained
growth in distributable income.

Positive data points from Office sector but earnings flow-

through will not be felt till 2012. In view of still robust GDP
growth momentum, we anticipate demand for office space to
remain strong coming from broad range of industries. We
forecast demand to reached 2msf next year. Meanwhile, news
flow on pre-commitments for new buildings is expected to
remain positive, which bodes well for the incoming office
supply, which will peak in 2011 at 3msf. Hence, we expect
vacancy rate to tighten going forward providing a catalyst for
positive rental growth by another 5–10% in 2011.

However, Office REITs are expected to continue to face topline

pressure in 2011 as they renew rents that were signed during
the peak of the previous office cycle in 2007-2008.

Rental/ RevPAR assumptions

Sub-Sectors Rental /RevPAR Rental /RevPAR
Industrials
- Business Parks Rental 2-5%
- Warehouse/Factory Rental 2-5%
Office Rental +5%
Retail Rental +2-5%
Hospitality
- Hotels RevPAR +12%
- Serviced Residence RevPAR +3-10%
Healthcare CPI CPI
Source: DBS Vickers, Company

Page 8
 Industry Focus
Singapore REITs

Measuring the cost of Interest rate hikes High portion of S-REIT debts are fixed. Based on our estimates,
with the recent issues of fixed rate MTNs & through re-
Taking advantage of the low interest rate environment. S-REITs financing activities to date, a majority of S-REIT debt is now
have been pro-active in their capital management strategy secured in fixed-rate instruments. Therefore, this should limit
aiming towards extending their debt expiry profile and the impact of potential interest rate hikes on the S-REITs
refinancing existing debt ahead of expiry. Since the beginning distributable income in the future.
of the year, in view of the large proportion of debt expiring in
the coming 2 years, S-REITs have taken advantage of the Based on our sensitivity analysis in the table below, a 50 bps
improving capital markets and low interest rate environment increase in interest rates will have minimal impact (estimated at
and re-financed existing debt into loans with longer tenures. –0.2% to –3.2%) on S-REITs FY11 distributable income.
Additionally, they have also expanded their sources of debt
through the issue of multi-term notes & convertible bonds. Sensitivity of S-REIT distributions vs 50 bps hikes in
interest costs
The total S-REIT debt currently stands at of S$17.5bn, where Int % % Impact on
an estimated 19% (S$3.4 bn) and 24% (S$4.2bn) are Cost fixed* FY11
% Distributable
scheduled for renewal in 2011 and 2012 respectively, down by income
30% and 25% since the middle of the year. The average
length of debt expiry currently stands at 2.8 years. Frasers Commercial Trust 3.8% 80% -2.0%
CapitaCommercial Trust 3.8% 80% -1.0%
Breakdown of S-REIT Debt Maturity Profile K-REIT 3.1% 55% -3.0%
CapitaMall Trust 3.7% 91% -0.4%
>2015 2010 CapitaRetail China Trust 2.9% 74% -1.0%
4% 2% 2011 Frasers Centrepoint Trust 3.8% 90% -0.3%
2015
19% Starhill Global Reit 3.5% 100% 0.0%
16%
Suntec REIT 3.8% 65% -2.2%
A-REIT 3.9% 100% 0.0%
Ascendas India Trust 6.2% 67% -0.5%
Cambridge Industrial Trust 5.9% 100% 0.0%
2014
Mapletree Logistics Trust 2.6% 70% -1.1%
9%
Mapletree Industrial Trust 2.4% 70% -1.1%
Cache Logistics Trust 4.1% 89% -0.2%
2012 3.3% 70% -1.0%
Ascott Residence Trust
24% 3.0% 40% -0.8%
CDL Hospitality Trust
Parkway Life 3.2% - -3.2%
2013
26% * DBSV estimates
Source: Company releases, DBS Vickers Source: Company releases, DBS Vickers

Interest rate environment likely to stay low for now. DBS

economist believes that the current low interest rate
environment is likely to stay at least to the end of 2011, which
will be beneficial for S-REITs, as they are likely to continue to
enjoy interest savings on refinancing their debt in 2011.

Increasing financial flexibility with average gearing of 34.4%

post acquisition. Post acquisitions (including the planned
purchase of MBFC by K-REIT and Suntec REIT), the average
S-REIT sector’s aggregate leverage still remain relatively low at
c34.4% (below most S-REIT managers’ comfortable range of
between 40-45%). We note that there has been an increase in
the number of assets that are unencumbered, due to more
unsecured loan issued in the past few months. This empowers
S-REITs with more financial flexibility going forward.

Page 9
Industry Focus
Singapore REITs

S-REIT sector’s debt expiry profile

Gearing Gearing Targeted LT Avg debt Int cover Debt Maturity Profile (S$’bn)
(%) limit (%) Gearing (%) cost (%) (x) 2010 2011 2012 2013 2014 2015 >2015
Office
Frasers Commercial Trust 39.2% 60.0% 40.0% 3.8 2.5 0.00 0.00 0.83 0.00 0.00 0.00 0.00
CapitaCommercial Trust 31.5% 60.0% 45.0% 3.8 3.8 0.00 0.67 0.71 0.23 0.00 0.30 0.00
K-REIT 39.0% 60.0% 45.0% 3.1 7.4 0.00 0.19 0.16 0.10 0.10 0.75 0.00
Total 0.00 0.86 1.70 0.33 0.10 1.05 0.00

Retail/Mixed
CapitaMall Trust 39.5% 60.0% 45.0% 3.7 3.7 0.00 0.96 0.78 0.60 0.15 0.80 0.25
CapitaRetail China Trust 34.3% 35.0% 35.0% 2.4 7.5 0.05 0.03 0.09 0.15 0.10 0.00 0.00
Frasers Centrepoint Trust 30.3% 60.0% 45.0% 3.8 4.1 0.05 0.26 0.08 0.06 0.00 0.03 0.00
Lippo-Mapletree REIT* 10.2% 35.0% 35.0% 7.7 7.8 0.00 0.00 0.13 0.0 0.00 0.00 0.00
Starhill Global Reit 31.0% 60.0% 45.0% 3.5 4.0 0.00 0.00 0.05 0.53 0.00 0.27 0.00
Suntec REIT 40.6% 60.0% 45.0% 3.8 4.3 0.00 0.42 0.23 1.67 0.45 0.00 0.00
Total 0.09 1.67 1.35 3.00 0.70 1.09 0.25

Industrial
A-REIT 34.0% 60.0% 45.0% 3.9 4.7 0.07 0.35 0.00 0.26 0.40 0.30 0.30
Ascendas India Trust 17.0% 35.0% 35.0% 6.2 8.1 0.01 0.02 0.07 0.04 0.01 0.10 0.00
Mapletree Logistics Trust 34.5% 60.0% 45.0% 2.6 5.8 0.01 0.10 0.44 0.22 0.25 0.04 0.16
Mapletree Industrial Trust 38.1% 60.0% 45.0% 2.4 6.0 0.00 0.00 0.00 0.22 0.27 0.27 0.13
Cache Logistics Trust 22.5% 35.0% 35.0% 4.1 6.8 0.00 0.00 0.00 0.18 0.00 0.00 0.00
Cambridge Industrial Trust 38.1% 60.0% 45.0% 6.0 3.5 0.00 0.00 0.36 0.00 0.00 0.00 0.00
AIMS AMP Industrial Trust* 42.4% 60.0% 45.0% 5.4 4.2 0.00 0.00 0.00 0.18 0.00 0.10 0.00
Total 0.09 0.46 0.86 1.10 0.93 0.80 0.59

Hospitality
Ascott Residence Trust 32.2% 60.0% 45.0% 3.3 3.6 0.02 0.31 0.17 0.16 0.00 0.00 0.00
CDL Hospitality Trust 21.1% 60.0% 45.0% 5.5 7.6 0.00 0.00 0.00 0.26 0.00 0.00 0.00
Total 0.02 0.31 0.17 0.42 0.00 0.00 0.00

Healthcare and others

First REIT* 15.9% 35.0% 35.0% 4.0 12.1 0.00 0.00 0.06 0.00 0.00 0.00 0.00
Parkway Life 34.2% 60.0% 45.0% 3.1 5.5 0.00 0.00 0.00 0.00 0.19 0.22 0.00
Saizen REIT* 36.9% 60.0% 35.0% 5.8 2.6 0.11 0.10 0.00 0.00 0.00 0.00 0.00
Total 0.11 0.10 0.06 0.00 0.19 0.22 0.00

Total S-REIT sector 34.4% 0.31 3.40 4.14 4.85 1.92 3.16 0.84
* Not covered by DBS Vickers
Source: Company releases, DBS Vickers

Page 10
 Industry Focus
Singapore REITs

Acquisitions and fund raisings – Arm in arm
Acquiring up to cS$5.6bn of assets YTD in tandem with
increased fund raisings. Armed with a healthy balance sheet,
and fueled by the thawing in the property markets, S-REIT
managers have been aggressive in growing their asset base
since the beginning of 2010 and have completed over
cS$5.6bn worth of acquisitions YTD.
Industrial REITs were more active in their quest for acquisitions
given that industrial property transactions are more bite-sized
in nature (c<S$50m on average) and transact at higher
properties yields (ranging between 6.8%-8.0%) compared to
other sub-sectors. However, in terms of value, they were
dwarfed by the transactions for the larger sized office and
retail properties.
Financial Centre (“MBFC”) for a consideration of S$1.4bn and
S$1.5bn respectively.
Portfolio re-constitution. S-REITs (CCT, Ascott REIT, Cambridge,
K-REIT) also divested a couple of assets and in turn deployed or
are waiting to deploy the proceeds into fresher assets with
better potential for NPI uplift.
Fund raisings of S$1.5bn YTD. With conducive capital market
conditions, S-REITs tapped the capital market for fresh equity
funds of up to S$1.5bn to fund acquisitions and at the same
time, recapitalize their balance sheets. This resulted in average
gearing levels remain relatively low at c34.4% (below most S-
REIT managers longer term target of 40-45%). This empowers
them with further financial flexibility to continue to gear up in
the near term for any opportunistic asset purchase.

Sponsor injections took center stage. We note that asset
injections by sponsors made up the majority of the value of the
assets (75%) acquired. Some of the small-mid sized
acquisitions were A-REIT’s purchase of Asia Hub from Ascendas
Group for S$112m, FCT acquisitions its 2 retail properties
(S$295m), Starhill Global REIT (“SGREIT”) acquisition of its
sponsors’ 2 Malaysian Malls for S$451m, and CMT’s purchase
of Clarke Quay asset (S$268’m) from CMA. The large scale
purchases included ART’s acquisition of Ascott Group’s
European portfolio for S$1.4bn, Suntec and K-REIT’s
acquisitions of their respective sponsor stakes in Marina Bay
Looking offshore for acquisitions –a trend that is likely to
continue. We have also noted that S-REITs further expanded
overseas (CDL HT, K-REIT) where physical property yields are
higher, more accretive to earnings and at the same time
diversifying their market exposure and earnings base.
In addition, Ascendas REIT recently guided that they are
looking to expand their portfolio regionally after keeping their
exposure in Singapore since listing; earnings will still remain
predominantly from Singapore (c80-85%) on a longer term
basis.

S-REITs acquisitions YTD

rd
Sponsor / 3 party Sector Assets Acquired Initial yield Time Cost
(%) (S$'m or
equivalent)
rd
CDL HT 3 Party Hotels Portfolio of 5 Australian hotels 7.9% 1Q10 187.0
rd
K-REIT 3 Party Office 50% interest in Brisbane office asset Est. 5.9% 1Q10 208.0
rd
K-REIT 3 Party Office 77 King Street, Sydney Grade A n.a. 2Q10 145.0
office
CMT Sponsor Retail Clarke Quay, Singapore 5.9% 2Q10 268.0
rd
SGREIT 3 Party Retail David Jones Building, Sydney 7.9% pre tax 1Q10 148.0
SGREIT Sponsor Retail Lot 10 and Starhill Gallery, Malaysia 7.0% 2Q10 451.1
FCT Sponsor Retail Northpoint II, Yew Tee Point 5.85% 1Q10 295.0
rd
P-life REIT 3 Party Healthcare 11 nursing homes, Japan 8.1%- 8.4% 1H10 107.0
rd
A- REIT Sponsor/ 3 party Industrial DBS Asia Hub & Flextronics Building, 6.8-8.0% 1Q10 131.0
Singapore
rd
MLT 3 Party / Sponsor Industrial Warehouse properties, various 6.8-8.5% 1Q-4Q10 551.0
countries
rd
Cambridge REIT 3 Party Industrial Multiple Assets, Industrial 8.0% and up 2Q-3Q10 110.3
Aims AMP Sponsor Industrial Penjuru Road Warehouse Est 7.7% 1Q, 4Q10 161.0
K-REIT Sponsor Office MBFC Phase 1 Est 4.0% 4Q10 1,400.0
Suntec REIT Sponsor Office MBFC Phase 1 Est 4.0% 4Q10 1,500.0
Total 5,662.4
Source: DBS Vickers, companies

Page 11
Industry Focus
Singapore REITs

Sreit exposure to various countries by revenue (%)

By % Revenues
Australia/
Singapore Malaysia Japan/Korea India NZ Vietnam HK/China Indonesia Philippines Europe
Office
Frasers Commercial Trust 56% 10% 34%
CapitaCommercial Trust 100%
K-REIT 90% 10%

Retail/Mixed
CapitaMall Trust 100%
CapitaRetail China Trust 100%
Frasers Centrepoint Trust 100%
Starhill Global Reit 60% 14% 6% 7% 11%
Suntec REIT 100%

Industrial
A-REIT + 100%
Ascendas India Trust + 100%
Mapletree Industrial Trust 100%
Mapletree Logistics Trust 49% 4% 25% 1% 21%
Cambridge REIT 100%
Cache Logistics Trust 100%

Hospitality
Ascott Residence Trust 19% 11% 2% 8% 7% 3% 5% 45%
CDL Hospitality Trust 85% 15%

Healthcare
Parkway Life 63% 37%
Source: DBS Vickers, various companies

Page 12
 Industry Focus
Singapore REITs

Sponsored REITs ahead of the acquisition game CDL HT: A low gearing position of 21% gives debt-funded
headroom of up to S$600m (up to c40% gearing).
Current yield gaps between the physical market and implied Management remains keen to acquire Studio M hotel from
REIT valuations show that REITs in the industrial & hospitality sponsor M&C Holdings in addition to other hotel assets that
sectors, retail and healthcare have positive yield gaps, with they are understood to be looking to acquire in the region.
industrial offering the widest spreads. The office sector
continues to see negative yield spreads, which point to MLT: Its Sponsor, Mapletree Investments has assets worth up
continued need for income support arrangements so that to S$300m that are completed/completing which could be
assets will have time to stabilize and for earnings to catch up in injected in the near future.
the coming years, in order to make acquisitions accretive.
K-REIT could purchase One Financial Centre (understood to be
S-REITs implied vs property yield 63% pre-committed as of Sept’10) in the medium term once it
Property Yield* Implied Yield** completes in 2011.
Sub-Sectors (%) (%)
Industrials 7.0% - 8.5% 6.7%
Cache Logistics Trust: sponsor CWT limited has over 3m sqft of
Office 4.0% - 4.5% 5.0%
completing/completed warehouse space that could be offered
Retail 5.0 - 5.5% 5.3%
to Cache in the medium term.
Hospitality 6.5% - 7.5% 6.3%
Healthcare >7% 6.2%
Ascott REIT, who has a right of first refusal (“ROFR”) from its
sponsor, Ascott Group, could potentially acquire Ascott Raffles
* Based on yields on recent physical market transactions completed
Place, which is understood to be for sale.
** Calculated as sector’s FY11 NPI forecast / Enterprise value

Retail REITs like FCT, which had previously stated that they are
The positive outlook on asset values in Singapore boosted by
likely to purchase Bedok Mall from their sponsor after
the ample liquidity is likely to increase the competition for
completion. CMT and CRCT can potentially inject properties
assets from private funds/investors who could have a lower
that are currently under incubation by the sponsors, which
required rate of return, thus pricing REITs out of some property
could be offered to the trust. In the longer term Industrial REITs
deals. As such, we believe that S-REITs could continue to head
like A-REIT and a-itrust could also acquire projects currently
overseas in search for growth. While we believe it is a viable
under development from sponsor Ascendas Group.
option to diversify its earnings base, more importantly, REITs
have to address potential forex exposure and tax leakages for
SREITs acquisition possibilities from Sponsor
overseas acquisitions against the benefits of yield accretion to
its existing portfolio. Sponsor Pipeline Assets Completed/ Completing
asset
We continue to like the sponsored REIT model, CDL HT M&C Studio M Hotel Completed
notwithstanding that they continue to explore 3rd party Holdings
opportunities to remain ahead of peers. Their sponsors can CMT CapitaMalls ION Orchard Completed
offer a pipeline of assets for the REITs to purchase or it could Asia
act as a warehouse for new assets in cases where it is non- CRCT CapitaMalls Properties in China Completed/completing
accretive to purchase the asset at the onset, stabilize its Asia
earnings and then offer it to the REIT for purchase at a later
date. Thus, sponsored REITs have better growth visibility in the K-REIT Keppel Land Ocean Financial Completing
medium term. Centre
FCT F&N Bedok Mall (TOP Completing (TOP 4Q10)
In addition, industrial REITs are likely to continue to enjoy 4Q10) Estimated 2011
better acquisition growth potential given the relatively higher Changi Point (Est)
yields of industrial assets (vs current implied yields of industrial Ascendas Ascendas Assets in China, Completed/Completing
REITs) and each transaction tend to be of lower values REIT Group Singapore
compared to other asset classes. a-itrust Ascendas Ascendas Land Intl Cybervale (IT Park in
India Funds Chennai)
While we have seen several of these S-REITs purchasing from Cache Log CWT Limited Various warehouses Completed/Completing
their respective sponsors in 2010, we see several potential Trust in Singapore, China
opportunities that REITs could tap in 2011. MLT Mapletree Warehouses in Completed/Completing
Investments Vietnam, China
Source: DBS Vickers, various companies]

Page 13
Industry Focus
Singapore REITs

Appendix – S-REIT Yield spreads vs 10 year bond

Ascendas REIT Ascendas India Trust

14.0% ascendas reit MAS 10 year bond Yield Spread 20% a-itrust MAS 10 year bond Yield Spread
18%
12.0%
16%
10.0% 14%
12%
8.0%
10%
6.0% 8%

4.0% 6%
4%
2.0% 2%

0.0% 0%
J un-03 J un-04 J un-05 J un-06 J un-07 J un-08 J un-09 J un-10 J ul-07 Jan-08 Jul-08 J an-09 J ul-09 Jan-10

Cambridge REIT Cache Logistics Trust

35% 9% Cache MAS 10 year bond Yield Spread

CREIT MAS 10 year bond Yield Spread
8%
30%
7%
25%
6%

20% 5%

15% 4%

3%
10%
2%
5% 1%

0% 0%
Sep-06 J un-07 Mar-08 Dec-08 Sep-09 J un-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10

Maple Logistics Trust

18% MLT MAS 10 year bond Yield Spread
16%

14%
12%
10%

8%
6%
4%

2%
0%
Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10

Source: DBS Vickers

Page 14
 Industry Focus
Singapore REITs

CapitaCommercial Trust K-REIT Asia

20% CCT MAS 10 year bond Yield Spread
25%

K-REIT MAS 10 year Yield Spread

15% 20%

15%
10%

10%

5%
5%

0% 0%
Jun-04 Jun-05 Jun-06 Jun-07 J un-08 Jun-09 Jun-10 May-06 May-07 May-08 May-09 May-10

-5%
-5%
Frasers Commercial Trust CDL Hospitality Trust
35%
20% CDL HT MAS 10 year bond Yield Spread
FCOT MAS 10 year bond Yield Spread
30% 18%
16%
25%
14%
20% 12%
10%
15%
8%
10% 6%
4%
5%
2%
0% 0%
Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Aug-06 Feb-07 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10

Ascott REIT Parkway Life REIT

12%
25%
Parkway Life MAS 10 year bond Yield Spread
Ascott REIT MAS 10 year bond Yield Spread
10%
20%

8%
15%
6%
10%
4%
5%
2%
0%
Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 J un-10 0%
Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10
-5%
Source: DBS Vickers

Page 15
 Industry Focus
Singapore REITs

CapitaMall Trust Frasers Centerpoint Trust

14% CMT MAS 10 y ear bond Yield Spread 14%
FCT MAS 10 year bond Yield Spread

12% 12%

10% 10%

8% 8%

6% 6%

4% 4%

2% 2%

0% 0%
Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10

Starhill Global REIT Suntec REIT

20%
25% Suntec REIT MAS 10 year bond Yield Spread
SGREIT MAS 10 year bond Yield Spread
18%

16% 20%
14%

12% 15%
10%

8% 10%

6%

4% 5%

2%
0%
0%
Jan-05 Oct-05 J ul-06 Apr-07 J an-08 Oct-08 Jul-09 Apr-10
Oct-05 Jul-06 Apr-07 Jan-08 Oct-08 Jul-09 Apr-10

CapitaRetail China Trust

18%
CRCT MAS 10 year bond Yield Spread
16%

14%

12%

10%

8%

6%

4%

2%

0%
Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10
-2%

Source: DBS Vickers

Page 16
 Industry Focus
Singapore REITs

DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:

STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)

BUY (>15% total return over the next 12 months for small caps, >10% for large caps)

HOLD (-10 to +15% total return over the next 12 months for small caps, -10 to +10% for large caps)

FULLY VALUED (negative total return i.e. > -10% over the next 12 months)

SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)

Share price appreciation + dividends

DBS Vickers Research is available on the following electronic platforms: DBS Vickers (www.dbsvresearch.com); Thomson
(www.thomson.com/financial); Factset (www.factset.com); Reuters (www.rbr.reuters.com); Capital IQ (www.capitaliq.com) and Bloomberg
(DBSR GO). For access, please contact your DBSV salesperson.

GENERAL DISCLOSURE/DISCLAIMER
This document is published by DBS Vickers Research (Singapore) Pte Ltd ("DBSVR"), a direct wholly-owned subsidiary of DBS Vickers
Securities (Singapore) Pte Ltd ("DBSVS") and an indirect wholly-owned subsidiary of DBS Vickers Securities Holdings Pte Ltd ("DBSVH").
[This report is intended for clients of DBSV Group only and no part of this document may be (i) copied, photocopied or duplicated in any
form by any means or (ii) redistributed without the prior written consent of DBSVR.]

The research is based on information obtained from sources believed to be reliable, but we do not make any representation or warranty as
to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for
general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial
situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken
in substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice. DBSVR accepts no liability
whatsoever for any direct or consequential loss arising from any use of this document or further communication given in relation to this
document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. DBSVH is a wholly-
owned subsidiary of DBS Bank Ltd. DBS Bank Ltd along with its affiliates and/or persons associated with any of them may from time to
time have interests in the securities mentioned in this document. DBSVR, DBSVS, DBS Bank Ltd and their associates, their directors, and/or
employees may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform
broking, investment banking and other banking services for these companies.

The assumptions for commodities in this report are for the purpose of forecasting earnings of the companies mentioned herein. They are
not to be construed as recommendations to trade in the physical commodities or in futures contracts relating to the commodities
mentioned in this report.

DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking transaction
as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information, including any clarification
on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the
companies and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of
his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of
17 Dec 2010, the analyst and his / her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the
securities recommended in this report (“interest” includes direct or indirect ownership of securities, directorships and trustee positions).

COMPANY-SPECIFIC / REGULATORY DISCLOSURES

1. DBS Vickers Securities (Singapore) Pte Ltd and its subsidiaries do not have a proprietary position in the mentioned
company as of 15-Dec-2010
2. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBS Vickers Securities (USA) Inc ("DBSVUSA"), a U.S.-registered
broker-dealer, may beneficially own a total of 1% or more of any class of common equity securities of the Frasers
Centrepoint Trust, Cambridge Industrial Trust, CDL HT as of 17 Dec 2010.
3. Compensation for investment banking services:
i. DBSVR, DBSVS, DBS Bank Ltd and/or other affiliates of DBSVUSA have received compensation, within the past 12
months, and within the next 3 months receive or intends to seek compensation for investment banking services
from the K-REIT, Capitamall Trust, Frasers Centrepoint Trust, Starhill Global REIT, Mapletree Logistics Trust, Cache
Logistics Trust, Ascott Residence Trust, CDL HT, Parkway Life REIT
ii. DBSVUSA does not have its own investment banking or research department, nor has it participated in any
investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to
obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in
any security discussed in this document should contact DBSVUSA exclusively.

Page 17
Industry Focus
Singapore REITs

RESTRICTIONS ON DISTRIBUTION
General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or
resident of or located in any locality, state, country or other jurisdiction where such distribution, publication,
availability or use would be contrary to law or regulation.

Australia This report is being distributed in Australia by DBSVR and DBSVS, which are exempted from the requirement to
hold an Australian financial services licence under the Corporation Act 2001 [“CA] in respect of financial services
provided to the recipients. DBSVR and DBSVS are regulated by the Monetary Authority of Singapore [“MAS”]
under the laws of Singapore, which differ from Australian laws. Distribution of this report is intended only for
“wholesale investors” within the meaning of the CA.

Hong Kong This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and
regulated by the Hong Kong Securities and Futures Commission.

Singapore This report is being distributed in Singapore by DBSVR, which holds a Financial Adviser’s licence and is regulated
by the MAS. This report may additionally be distributed in Singapore by DBSVS (Company Regn. No.
198600294G), which is an Exempt Financial Adviser as defined under the Financial Advisers Act. Any research
report produced by a foreign DBS Vickers entity, analyst or affiliate is distributed in Singapore only to
“Institutional Investors”, “Expert Investors” or “Accredited Investors” as defined in the Securities and Futures
Act, Chap. 289 of Singapore. Any distribution of research reports published by a foreign-related corporation of
DBSVR/DBSVS to “Accredited Investors” is provided pursuant to the approval by MAS of research distribution
arrangements under Paragraph 11 of the First Schedule to the FAA.

United Kingdom This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the
meaning of the Financial Services and Markets Act and is regulated by The Financial Services Authority. Research
distributed in the UK is intended only for institutional clients.

rd
Dubai/ This report is being distributed in Dubai/United Arab Emirates by DBS Bank Ltd, Dubai (PO Box 506538, 3 Floor,
United Arab Emirates Building 3, Gate Precinct, DIFC, Dubai, United Arab Emirates) and is intended only for clients who meet the
DFSA regulatory criteria to be a Professional Client. It should not be relied upon by or distributed to Retail
Clients. DBS Bank Ltd, Dubai is regulated by the Dubai Financial Services Authority.

United States Neither this report nor any copy hereof may be taken or distributed into the United States or to any U.S. person
except in compliance with any applicable U.S. laws and regulations.

Other jurisdictions In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for
qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such
jurisdictions.

DBS Vickers Research (Singapore) Pte Ltd – 8 Cross Street, #02-01 PWC Building, Singapore 048424
Tel. 65-6533 9688, Fax: 65-6226 8048
Company Regn. No. 198600295W

Page 18