Singapore Industry Focus

Singapore REITs
Refer to important disclosures at the end of this report

DBS Group Research . Equity

Strengthening REIT regulations

Proposed enhancements for Singapore REIT industry

Better governance and transparency; proposals to

instill confidence for investors

Stock Picks: MAGIC, MCT, FCT, FCOT and Cache

New proposed enhancements to Singapores REIT

industry . The Monetary Authority of Singapore (MAS)
released a consultation paper highlighting potential tweaks to
the current regulatory regime governing REITs and REIT
managers. Key proposals include: (i) improving the corporate
governance and disclosures for REIT managers (ii) minimising
instances of conflicts of interests between REIT managers
and investors through refining REIT managers compensation
methodologies; and (iii) operational tweaks like having REITs
adhere to a higher leverage limit of 45% (vs 35% currently)
and eliminating the 60% cap on REITs with a credit limit. In
addition, MAS proposes to raise the development limit for
REITs to 25% from the current 10% of total assets. These
measures are likely to be implemented from 1st Jan 2016
onwards
Better governance and confidence for investors in SREITs. Some details and our views on the key proposals: (i)
REITs adopting a single-tier gearing limit of 45% (vs the
current 35%/60% limits subject to a credit-rating) would allow
more flexibility in acquisitions. This will also place S-REITs in
line with regulations in Malaysia / HK which have gearing limits
of 45% and 50%, respectively. (ii) Performance fees to be
pegged to a methodology that improves alignment of interests
and is linked to NAV or DPU to take into account unitholders
long term interests. In addition, MAS is proposing to reduce
acquisition fees to a cost recovery basis to mean that
acquisition quality of acquisitions should improve. However,
while we acknowledge that taking on development risks
generally results in higher returns, we remain cautious on
proposals to raise the development limit to 25% of deposited
properties which implies potentially higher earnings volatility
for an otherwise stable sector.
Positive boost for REIT/property sector. We see the
proposals as generally positive for the REIT sector. When
passed, these should result in (i) a reduction in fees; and (ii)
greater transparency and alignment between REITs and their
unitholders. This should increase confidence and attractiveness
of REITs to investors. A strong and functioning REIT sector is
also a long term positive for sponsor/property developers who
have another avenue to recycle assets efficiently. Our picks for
the sector are Magic, FCT, MCT , Cache and FCOT.
Potential negative impact on ARA Asset Management.
These proposals when passed could potentially have a
detrimental impact on ARA, which is estimated to derive c. 5560% of its revenues from fees from its managed REITs. When
passed, we might see earnings cut when implemented in 2016.

www.dbsvickers.com
ed-JS / sa- JC

10 Oct 2014
STI : 3,259.25
Analyst
Derek TAN +65 6682 3716
derektan@dbs.com
Mervin SONG CFA +65 6682 8189
mervinsong@dbs.com
Rachael TAN +65 6682 3713
rachaeltan@dbs.com

STOCKS

Cache Logistics Trust

Frasers Centrepoint Trust
Frasers Commercial Trust
Mapletree Commercial
Trust
Mapletree Greater China
Commercial Trust

Target Price Performance (%)

3 mth 12 mth
S$

Price

Mkt Cap

S$

US$m

1.17
1.90
1.36
1.44

713
1,362
723
2,373

1.37
2.04
1.49
1.46

(4.5)
2.2
(1.8)
5.1

0.4
3.0
11.0
18.5

BUY
BUY
BUY
BUY

0.93

1,966

1.04

3.9

4.5

BUY

Rating

Source: DBS Bank

S-REIT historical yield

16.0%

Yield Spread

S-REIT Yield

14.0%

- 1 SD

+1 SD

Mean

12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Jan-06

Jan-07

Source: DBS Bank

Jan-08

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

Jan-14

Industry Focus
Singapore REITs

Selected key proposals and our thoughts

Corporate Governance Tighter requirements
Proposed :

Current:

A. MAS seeks views on its proposal to impose a statutory duty on a

REIT manager and its individual directors to prioritise the interests of
unitholders over those of the REIT manager and its shareholders, in
the event of a conflict of interest.

A. Statutory duty not imposed on REIT manager

REIT manager and any director who breaches this duty will be subject
to criminal and civil liability.
B. To enhance the independence of the board of directors through
either (i) half the Board to comprise of independent directors, if
unitholders of the REIT are not given a right to appoint the directors
and if such a right is given, the requirement that the Board to consist
of at least one-third of independent directors will continue to apply to
that REIT manager or (ii) at least a majority of the Board to comprise
of independent directors.

B. One third of the board to be independent. Currently, it is noted

that 24 out of the 33 REIT managers have Boards that are at least
half-independent, while 15 out of 33 REIT managers have Boards that
are majority-independent.

C. The REIT manager is required to disclose in the annual report, the

REIT managers remuneration policies and procedures in setting
remuneration of directors and executive officers. The remuneration of
each individual director and CEO and at least top five executive
officers in bands of S$250,000 to be disclosed.

C. No requirement to disclose remuneration bands of the REITs top

executives

D. To stipulate a minimum of three directors for the audit committee.

In the case of a sponsors nominated member, to have a minimum of
three other directors who are independent.

D. No requirement on minimum number of directors

E. A review on whether the current approach of relying on unitholders

to initiate a review on REIT managers appointment is effective.

E. Unitholders to call for a vote (general meeting) on removal of REIT

manager and will likely exercise this right only in the scenario where
the REIT manager fails in its duties

DBS View:
We believe that REIT managers already exercise strong corporate governance and transparency and have board of directors that are at least halfor-majority independent. The above proposals will further improve the transparency and independence of the REIT boards and will boost
investors confidence on the REIT managers. This will eventually benefit minorities.
The disclosure of remuneration bands for REIT managers will close the gap between requirements under CG code for listed companies. This will
enable unitholders to understand the link between remuneration paid to directors and key executive officers and their performance.

Source: DBS Bank, MAS

Page 2

Industry Focus
Singapore REITs

Alignment of incentives - Pegging fees to long term unitholder interests

Fee Structure

Proposed Amendments

Current

Base fee:

Aligned with long term interest of interest of the REIT

and its unitholders

Typically based on fixed percentage of the value of the

REIT's deposited properties

Performance fees:

Crystallisation of performance fee should be no more

frequent than once a year

Most REITs usually pay a performance fee on an annual

basis

Linked to an appropriate metric which takes into

account the long term interest of the REIT and its
unitholders such as NAV or DPU/unit

Pegged to certain metrics such as REIT's gross revenue,

net property income or distributions per unit

Should not be linked to the REIT's gross revenue

Acquisition fee:

Fee determined on a cost recovery basis

Usually 1% of purchase consideration

Divestment fee:

Fee determined on a cost recovery basis

Usually between 0.5-1% of the sale consideration

DBS View

Impact on REITs

Impact on Sponsor

Generally positive as it lowers the fees for the REITs.

However, REITs may miss out on value accretive
acquisitions, as their sponsor has less incentive to find
acquisitions for the REIT.

Negative. Lower fee income

Disclosure requirements

Proposed Amendments

Current

For disposal of properties by

REIT to an interested party

Audit Committee of REIT manager to certify that if is

not aware of any other offer with, and has no reason
to believe that the divestment can be made on terms
that are more favourable than those offered by the
interested party.

Interested party transactions to be carried out on normal

commercial terms and at arms length

DBS View

Impact on REITs

Impact on Sponsor

Positive - Improved transparency and confidence in

divestment process

Positive - Increased confidence in alignment of interest

between REIT, interested parties, sponsor and
unitholders

Source: DBS Bank, MAS

Page 3

Industry Focus
Singapore REITs

Alignment of incentives - Pegging fees to long term unitholder interests

Remuneration

Proposed Amendments

Current

Directors and executive

officers

Prohibit directors of the REIT manager to be

(1) paid in the form of shares or interests in the
Sponsor or its related entities
(2) linked in any way to the performance of any
entities other than the REIT

Due to the limited disclosure on how directors are paid,

we are unable to ascertain whether the remuneration
structure of REIT managers is inconsistent with the
proposed changes.

Prohibit remuneration of executive directors of a REIT

manager from being linked to revenue of the REIT.
Fees payable to the non-executive directors of a REIT
manager to be a fixed sum
DBS View

Impact on REITs

Impact on Sponsor

Positive - Increases alignment between REIT, Sponsor

and unitholders

Negative. However, we are unaware of any sponsors

who have consistently acted against the best interest
unitholders by only acquiring properties solely to boost
their assets under management.

Source: DBS Bank, MAS

Operational flexibility Higher gearing limits for all un-rated REITs/doing away with a need for credit rating.
Proposed Amendment

Current

Single tier gearing limit of 45%, regardless of whether credit limit is

obtained

35% gearing limit for REITs without a credit rating

60% gearing limit if a credit rating is obtained

REITs may engage in development activities up to 25% of deposited

properties, contingent upon (a) receipt of approval by unitholders for
the higher development limit, and (b) the additional 15% allowance is
used only to refurbish existing properties that have been held for at
least three years, and will be held for at least three years thereafter

Property development activities should not exceed 10% of the REIT's

deposited property

DBS View:
We are positive about the new gearing limits, as these will streamline and limit the amount of leverage that a REIT may take; this reinforces the
notion that all REITs must employ the same level of stringency when it comes to capital management, regardless of whether the REIT has
obtained a credit rating or not.. That said, the sector has maintained an average gearing of c.33-34% over the years, with the exception of
certain REITs (K-REIT, which is nearer to the 43% level). We also note that Croesus gearing is c. 50% but it is a business trust with REIT-like
features. There might be changes when the new policies are in place.
We are slightly cautious about higher development limits, as this could increase the amount of risk associated with a REIT, which, by virtue of its
structure, is meant to provide stable dividends to unitholders. While higher development limits may be positive for smaller REITs, which
occasionally may have to complete a development project in phases in order to comply with existing limits, we think that the additional 15%
development allowance for existing properties is a little high - most asset redevelopment works rarely require such a steep capex requirement,
and large ticket redevelopments could in turn adversely impact distributions as operations are disrupted.

Source: DBS Bank, MAS

Page 4

Industry Focus
Singapore REITs

REIT Structuring Further tightening and clarity from income support arrangements
Proposed amendments

Current

REITs must disclose total operating expenditure (a) in absolute terms;

(b) as a percentage of NAV; and ( c) as a percentage of distributions
declared for the FY in their annual reports

Although REITs are compelled to disclose total operating expenses,

the level and manner of disclosure is not regulated and may vary
among different REITs

All REITs must both report and provide a detailed explanation of any
material deviation of actual DPU from forecast DPU in their annual
reports

While REITs are required to highlight any deviation of actual DPU

from forecast DPU, no explanation for the deviation is mandated

REITs must disclose the WALE of new leases entered into in the past
year (and their % of contribution to total revenue), as well as debt
maturity profile in their annual reports

No requirements for disclosure of average WALE or debt expiry

profile

Where there is income support, REITs must disclose (a) the amount of
income support received by the REIT for the year, and (b) the difference
between underlying rents and the implied rents under income support,
in their annual reports

There are no mandatory disclosure guidelines for master leases

embedded with income support (i.e. where underlying rents are
lower than master lease rent)

DBS view:

We are upbeat on the enhanced disclosure guidelines concerning income support, as these would encourage REITs to only consider
acquisitions where the underlying rent levels could eventually be DPU accretive on a sustained basis, and discourage REITs from purchasing
assets whose underlying NPI yield is not and may not be accretive to unitholders.
Disclosure of WALE and debt expiry profile could also help investors make more informed investment decisions based on their risk appetite
concerning these additional categories

Source: DBS Bank, MAS

Page 5

Industry Focus
Singapore REITs

REIT Regulations across the Asia Pacific region

Gearing limits

Tax transparency

REIT manager

Development limit

Australia

"Safe harbour" debt limit

of 60% of adjusted
Australian asset base for
income years

REIT is taxed on a "flowthrough" basis, i.e. at the

hands of unitholders rather
than the trust.

REIT must be managed

by a corporate trustee,
responsible entity or
fund manager

Hong Kong

45% of the gross asset

value

No tax transparency

Property manager must

be considered
acceptable to the
Securities and Futures
Commission

Japan

All loans must be

borrowed from qualified
institutional investors

20% withholding tax

Asset management
must be outsourced

If a REIT undertakes
development
activity, it will be
subject to
Australian
corporate tax
No development
activity is permitted
save for
refurishments,
retrofitting or
renovations
NA

Malaysia

50% of total asset value

All borrowings must be
through licensed
institutions, or through
issuance of debentures

Tax deduction allowed for

initial expenses pertaining
to the establishment of a
REIT

Asset must be
managed by a qualified
property manager

NA

Philippines

35% of Deposited
Properties for non-credit
rated REITs
70% gearing limit for
REITs with an investment
grade credit rating

REIT is not subject to

minimum corporate income
tax

N.A

35% of Deposited
Properties for non-credit
rated REITs
60% gearing limit for
REITs which have
disclosed its credit rating

REIT is taxed on a "flowthrough" basis

REIT manager must

have a physical office in
Singapore and
minimum shareholders'
funds of S$1m

REIT is not
permitted to
undertake property
development unless
it plans to hold the
completed property
for three years
Development cap
of 10% of
Deposited
Properties

Singapore

South Korea

Borrowings may not

exceed two times net
equity without an
extraordinary resolution
of shareholders' meeting,
and capped at 10 times

No tax transparency

N.A

NA

Taiwan

35% of total asset value

without a credit-rating;
50% of asset value if the
REIT discloses its credit
rating

REIT funds are taxed on a

"flow through" basis

NA

35% of Deposited
Properties for non-credit
rated REITs
60% gearing limit for
REITs which have
disclosed their credit
rating

Income is taxed at the

unitholder level, but there is
no regulation concerning
taxation of cash dividends
yet.

REIT funds must be

managed by a trust
enterprise, which has
been established for
more than three years
and is rated above a
certain level by a
recognised credit rating
institution
REIT manager must be
approved and licensed
by the Securities and
Exchange Commission

NA

Thailand

Source: DBS Bank, APREA

Page 6

Industry Focus
Singapore REITs

Peer Comparisons
REIT Code

FYE

Price

Rec

Target
Price

(S$)

Total
Return

Mkt
Cap

Yield

Yield

Yield

DPU
Growth

CAGR

P/Bk

(%)

S$'m

FY14/15F

FY15/16F

FY16/17F

FY13-15

FY14-16

(x)

Office
CCT
FCOT
K-REIT
OUECT

Dec
Sep
Dec
Dec

1.61
1.36
1.20
0.80

Hold
Buy
Hold
NR

1.67
1.49
1.29
0.85

10%
16%
14%
14%

4,717
920
3,602
691
9,930

5.3%
6.1%
6.4%
6.8%
5.9%

5.4%
6.7%
5.7%
6.9%
5.7%

5.9%
6.8%
5.8%
7.0%
6.0%

3%
7%
-6%
11%

2%
9%
-11%
0%

0.96
0.87
0.92
0.78

Retail
CRCT
CMT
CRT
FCT
SPH REIT

Dec
Dec
Jun
Sep
Aug

1.58
1.93
0.93
1.90
1.07

Buy
Hold
Buy
Buy
Hold

1.70
2.14
1.10
2.04
1.01

14%
17%
28%
13%
0%

1,307
6,663
472
1,735
2,678
12,855

6.8%
5.7%
8.9%
5.9%
5.5%
5.9%

7.5%
5.9%
9.0%
6.1%
5.1%
6.0%

8.3%
6.0%
9.0%
6.2%
5.1%
6.2%

15%
5%
-4%
2%
45%

10%
4%
1%
3%
-8%

1.08
1.11
1.23
1.19
1.20

Commercial
MCT
MAGIC
SGREIT
Suntec

Mar
Mar
Dec
Dec

1.44
0.93
0.79
1.80

Buy
Buy
Buy
Hold

1.46
1.04
0.90
1.85

7%
19%
21%
8%

3,021
2,503
1,701
4,483
12,310

5.5%
6.7%
6.5%
5.0%
5.4%

5.9%
7.2%
6.7%
5.5%
5.8%

6.1%
7.5%
7.0%
6.0%
6.5%

7%
3%
3%
3%

6%
8%
3%
10%

1.25
0.88
0.85
0.90

Industrial
a-itrust
A-REIT
Cache
CREIT
MINT
MLT
SBREIT

Mar
Mar
Dec
Dec
Mar
Mar
Dec

0.75
2.23
1.17
0.72
1.45
1.17
0.80

Hold
Buy
Buy
Hold
Buy
Buy
Buy

0.85
2.51
1.37
0.77
1.53
1.24
0.89

21%
19%
25%
15%
13%
13%
20%

686
5,361
908
903
2,480
2,881
645
13,863

6.4%
6.6%
7.4%
7.2%
7.0%
6.5%
7.7%
6.8%

6.9%
6.8%
8.0%
7.7%
7.1%
6.6%
8.3%
7.0%

7.0%
6.8%
8.5%
7.8%
7.1%
6.8%
8.5%
7.1%

6%
3%
4%
5%
2%
3%
71%

7%
3%
9%
6%
1%
2%
8%

1.13
1.11
1.19
1.05
1.22
1.05
1.00

Hospitality
ASCHT
ART
CDREIT
FEHT
FHT
OUEHT

Mar
Dec
Dec
Dec
Sep
Dec

0.73
1.23
1.69
0.81
0.90
0.91

Hold
Buy
Hold
Hold
Buy
Buy

0.77
1.33
1.84
0.88
0.94
0.95

14%
14%
16%
16%
12%
13%

811
1,883
1,649
1,435
1,067
1,194
8,039

8.2%
6.7%
6.8%
6.7%
6.6%
7.5%
7.0%

8.4%
7.0%
7.2%
7.0%
6.9%
7.8%
7.3%

8.8%
7.2%
7.4%
7.2%
7.0%
8.1%
7.5%

6%
2%
5%
0%
6%
55%

2%
5%
6%
4%
5%
4%

1.23
0.86
1.03
0.83
1.07
1.01

Healthcare
P-Life
RHT

Dec
Mar

2.32
0.95

Buy
Hold

2.62
0.82

18%
-5%

1,404
753
2,157

5.1%
8.6%
6.3%

5.2%
7.6%
6.1%

5.3%
7.8%
6.2%

6%
42%

3%
-12%

1.42
1.07

IREIT

Dec

0.90

Buy

0.95

13%

375
375
59,529

7.3%

7.6%

7.5%

4%

1.20

6.2%

6.4%

6.7%

Sector Average

Source: DBS Bank

Page 7

Industry Focus
Singapore REITs

DBS Bank 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

GENERAL DISCLOSURE/DISCLAIMER
This report is prepared by DBS Bank Ltd. This report is solely intended for the clients of DBS Bank Ltd and DBS Vickers Securities (Singapore) Pte
Ltd, its respective connected and associated corporations and affiliates (collectively, the DBS Vickers Group) only and no part of this document
may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBS Bank Ltd.
The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS
Bank Ltd., its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents
(collectively, the DBS Group)) 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 independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss
(including any claims for loss of profit) arising from any use of and/or reliance upon this document and/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. The DBS
Group, 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. The DBS Group 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.
Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there
can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk
assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or
condensed and it may not contain all material information concerning the company (or companies) referred to in this report.
The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and
assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on
which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from
actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE
RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that:
(a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and
(b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk
assessments stated therein.
Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies)
mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to
the commodity referred to in this report.
DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, 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.
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 the date the
report is published,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).
COMPANY-SPECIFIC / REGULATORY DISCLOSURES
1.
DBS Bank Ltd., DBS Vickers Securities (Singapore) Pte Ltd (DBSVS), their subsidiaries and/or other affiliates do not have a
proprietary position in the securities recommended in this report as of 31 Aug 2014, except for CapitaCommercial Trust, Keppel
REIT, Capitamall Trust, CapitaRetail China Trust, SPH REIT, Starhill Global REIT, Suntec REIT, Mapletree Commercial Trust,
Mapletree Greater China Commercial Trust, Ascendas REIT, Ascendas India Trust, Mapletree Industrial Trust, Mapletree Logistics
Trust, Cambridge Industrial Trust, Cache Logistics Trust, Soilbuild Business Space Reit, Ascendas Hospitality Trust, Ascott
Residence Trust, CDL Hospitality Trusts, Far East Hospitality Trust, Frasers Hospitality Trust, OUE Hospitality Trust, Parkway Life
Real Estate Investment Trust, Religare Health Trust, Croesus Retail Trust.
2.

Page 8

DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates beneficially own a total of 1% of any class of common
equity securities of the Keppel REIT, Starhill Global REIT, Mapletree Greater China Commercial Trust, Soilbuild Business Space
Reit, Ascendas Hospitality Trust, Ascott Residence Trust, Far East Hospitality Trust, Frasers Hospitality Trust, Croesus Retail Trust as
of 31 Aug 2014.
DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates beneficially own a total of 5% of any class of common
equity securities of Ascendas Hospitality Trust as of 31 Aug 2014.

Industry Focus
Singapore REITs
3.

Compensation for investment banking services:

DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates have received compensation, within the past 12
months, and within the next 3 months may receive or intends to seek compensation for investment banking services from the
Frasers Centrepoint Trust, Suntec REIT, Soilbuild Business Space Reit, Ascott Residence Trust.
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.

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 DBS Bank Ltd. (DBS) or DBS Vickers Securities (Singapore) Pte Ltd (DBSVS),
both of 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. Both DBS and DBSVS are regulated by the Monetary
Authority of Singapore 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.

Indonesia

This report is being distributed in Indonesia by PT DBS Vickers Securities Indonesia.

Malaysia

This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR") (formerly known as HwangDBS Vickers
Research Sdn Bhd). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in
respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found
at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company
Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers,
employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in
the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory
and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation
for broking, investment banking/corporate advisory and other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR

Singapore

This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No.
198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the
Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign
entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial
Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert
Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons
only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from,
or in connection with the report.

Thailand

This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. Research reports distributed are only
intended for institutional clients only and no other person may act upon it.

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 Conduct Authority. Research distributed in the UK is
intended only for institutional clients.

Dubai

This research report is being distributed in The Dubai International Financial Centre (DIFC) by DBS Bank Ltd., (DIFC Branch)
rd
having its office at PO Box 506538, 3 Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC),
Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This
research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act upon
it.

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. It is being distributed in the United States by DBSVUSA, which
accepts responsibility for its contents. Any U.S. person receiving this report who wishes to effect transactions in any securities
referred to herein should contact DBSVUSA directly and not its affiliate.

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 Bank Ltd.
12 Marina Boulevard, Marina Bay Financial Centre Tower 3
Singapore 018982
Tel. 65-6878 8888
Company Regn. No. 196800306E

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