Singapore Company Focus

IREIT Global Refer to important disclosures at the end of this report

Bloomberg: IREIT SP | Reuters: IREI.SI

DBS Group Research . Equity

15 Sep 2014

BUY S$0.895 STI : 3,345.55

Riding on the German upswing

(Initiating Coverage) Price Target : 12-Month S$ 0.95 Reason for Report : Initiation report Potential Catalyst: Delivery of IPO forecasts, new acquisitions Analyst Derek TAN, CA +65 6682 3716; [email protected] Mervin SONG CFA +65 6682 8189; [email protected] Rachael Tan +65 6682 3713; [email protected]

Price Relative S$

Relative Index

1.0 209

1.0 1.0

189

0.9

169

0.9 0.9

149

0.9 0.9

129

0.8

109

0.8

89

0.8 Aug-14

IREIT Global (LHS)

Relative STI INDEX (RHS)

Forecasts and Valuation FY Dec (EUR m)

Gross Revenue Net Property Inc Total Return Distribution Inc EPU (S cts) EPU Gth (%) DPU (S cts) DPU Gth (%) NAV per shr (S cts) PE (X) Distribution Yield (%) P/NAV (x) Aggregate Leverage (%) ROAE (%)

2014F*

2015F

2016F

22 20 15 17 5.8 nm 6.6 nm 74.9 15.4 7.3 1.2 33.4 15.6

23 21 16 18 6.1 4 6.8 4 74.2 14.7 7.6 1.2 34.1 8.2

23 21 16 18 6.0 (2) 6.8 (1) 73.6 15.0 7.6 1.2 34.5 8.1

* on an annualised basis ICB Industry : Financials ICB Sector: Real Estate Investment Trusts Principal Business: IREIT is a Singapore REIT established with the investment strategy of principally investing, directly or indirectly, in a portfolio of income-producing real estate in Europe which is used primarily for office purposes.

Source of all data: Company, DBS Bank, Bloomberg Finance L.P

www.dbsvickers.com sa: TAT



Tapping into the upturn in German office rents



Organic growth driven by CPI adjustments in its lease structure



Exposure to blue chip tenants including Allianz, Deutsche Telekom and ST Microelectronics



Initiate with BUY call, TP of S$0.95

Exposure to recovering German real estate market. With an initial portfolio of four German office properties located in key cities of Bonn, Darmstadt, Münster and Munich, IREIT offers investors exposure to the most robust economy in the Eurozone and a market that is on the cusp of recovery. With an improvement in business activities, moving forward we expect an upturn in rents with the potential for further cap rate compression. Inbuilt growth pegged to CPI. More than 95% of IREIT’s leases (by gross rental income for March-2014) have rental adjustment clauses that are pegged to German CPI. We estimate that 25% of portfolio NLA is likely to be re-indexed to the CPI in FY14 and a further 33% could hit the watermark in FY15, translating to a steady 2.9% CAGR in distributions over FYP14F – 16F. Visibility over the group’s income base is also underpinned by a long WALE of 7.6 years and a tenant base consisting of blue chip firms as Allianz, Deutsche Telekom and ST Microelectronics. Furthermore, execution of IREIT’s ‘ABBA’ investment strategy, which is to invest in ‘A’ assets in second tier cities and to invest in ‘B’ assets in first tier cities, should deliver additional upside to DPU. Initiate with BUY, TP of S$0.95. We initiate with a BUY recommendation with a DCF-based TP of S$0.95 (implied target yield of 7.1%). We believe IREIT offers a cyclical recovery story with German office rents and property values at the start of an upcycle. Key risks include a global economic slowdow and depreciation of the Euro. At A Glance Issued Capital (m shrs) Mkt. Cap (S$m/US$m) Major Shareholders Jinquan Tong (%) Chap Huat Lim (%) Free Float (%) Avg. Daily Vol.(‘000)

419 375 / 297 57.3 19.0 23.7 954

Company Focus IREIT Global

Table of Contents

Analysts Derek TAN, CA [email protected]

+65 6682 3716

Mervin SONG CFA [email protected]

+65 6682 8189

Rachael Tan [email protected]

+65 6682 3713

Page 2

Investment Summary

3

Valuation

4

Regional Peer Comparison

5

S-REIT Peer Comparison

6

Summary of IREIT and other listed Office REITs

7

Property Portfolio

8

A Solid Portfolio All Around

10

Riding on Europe’s Strongest Economy

11

Growth Drivers

13

Strong Support from Sponsor and Strategic Partner

17

SWOT Analysis

19

Key Risks

20

Trust Structure

21

Key Management Team

22

Fee Structure

26

Financials - Income Statement

28

Financials - Balance Sheet

30

Financials - Cashflow Statement

31

Germany Property Market Outlook

32

Property Description

43

Company Focus IREIT Global

Investment Summary IREIT offers investors exposure to the European real estate market with an initial portfolio of office assets that are focused in Germany, the most robust of the Eurozone economies. We believe that IREIT offers a cyclical recovery story with rents on, or close to an upswing, underpinned by improved business activity in the country, and real estate values that are off previous highs. In addition to inbuilt organic growth from CPI-pegged rental escalations, there is room for inorganic improvement through acquisitions. IREIT’s initial portfolio comprises 4 properties with 121,506 sqm of NLA, valued at €284.1m. The portfolio is well located in the key German cities of Bonn, Darmstadt, Münster and Munich, which enjoy positive employment creation. With strong FDI inflows into the country over the past 2 years, this should translate to continued employment creation. IREIT portfolio is fully occupied with a long WALE of 7.6 years (by Gross Rental Income for March-2014) and backed by notable tenants such as Deutsche Telekom, ST Microelectronics, Allianz, Ebase and Yamaichi. This provides a highly visible and steady income stream for the REIT. IREIT two-pronged growth strategy is derived from organic growth as well as potentially inorganic sources. More than 95% of its leases by GRI have rental adjustment clauses that are pegged to CPI performance. We estimate that 25% of portfolio by NLA is likely to be rebased in FY14 and a further 33% could hit the hurdle rate in FY15. As such, we expect IREIT to deliver a steady 2.9% CAGR in distributions over annualised FYP14F – 16F. IREIT’s ‘ABBA’ investment strategy, which is to invest in ‘A’ assets in second tier cities and to invest in ‘B’ assets in first tier cities, will enable the REIT to optimize its returns on Unitholders’ capital. Apart from targeting higher yields on the onset, IREIT will also invest in higher yielding assets with potential for improvement via rental uplifts or through active asset management, thus improving total returns from its investment.

“ABBA” Strategy AB (‘A’ assets in ‘B’ cities)

BA (‘B’ assets in ‘A’ cities)

Assets

Core assets Core-plus assets - Modern building - Possess most but not all - Prime location of the qualities in ‘AB’ - Long term leases strategy - Tenants with good lease covenants

Cities

Second tier cities

First tier cities

Source: Manager There is also room for new acquisitions given the wide spread between current property cap rates and cost of funds. With a gearing ratio of 33%, there is further debt headroom to fund new purchases, contingent upon IREIT obtaining a credit rating. IREIT is helmed by a very experienced team comprising Mr Itzhak Sella as CEO, Ms Adina Cooper as CIO and Mr Choo Boon Poh as CFO and Head of Investors Relations. They have more than 15-25 years of experience in the real estate, financial and capital markets in Europe, US and Asia. The REIT is well placed to benefit from their extensive sector and geographical experience. Strong alignment of interest between the REIT Manager as well as Unitholders and Strategic Partner, Mr Tong Jinquan. REIT management fees are fully pegged to performance, with base fee at 10% of distributable income and performance fee at a 25% share of the yoy change in DPU. In addition, IREIT’s Strategic Partner also brings to the table his vast experience within the various property segments in the real estate sector. Initiation with BUY recommendation with TP of S$0.95. We initiate with a BUY recommendation with a DCF-based TP of S$0.95 (implied target yield of 7.1%). We believe IREIT offers a cyclical recovery story with rents and property values at the start of an upswing. Key risks include forex exposure to the Euro, sensitivity to changes in taxation treatment, overseas political and socio-economic risks.

Page 3

Company Focus IREIT Global

Valuation We have valued IREIT based on a DCF methodology, as we believe it better captures IREIT’s stable income base and portfolio WALE of 7.6 years (by GRI). Our DCF valuation of S$0.95 per share has factored in a German risk free rate of 1.4%, beta of 0.76x, cost of debt of 2.1% and cost of equity of 8.3% and 1.5% terminal growth rate. Our estimates do not factor in any acquisition growth potential from the Sponsor’s ROFR pipeline*, or third party acquisitions. * Note that there is no confirmed pipeline currently.

Discounted cashflow valuation PV of FCF PV of Terminal Value Net Cash (Debt) Equity Value (EURm)

111.8 240.9 (94.0) 258.7

Value Per Share (EUR) EURSGD Value Per Share (S$)

0.59 1.62 0.95

Risk Free Rate Equity risk premium Beta Cost of Equity % of debt financing (assumed) After tax cost of debt WACC Terminal Growth Source: DBS Bank

Page 4

1.4% 9.1% 76.0% 8.3% 40.0% 1.8% 5.7% 1.5%

Company Focus IREIT Global Regional Peer Comparison (12 September 2014) BBG Ticker

Sh Price (LC)

Mkt Cap (LC'm)

NAV/Sh (LC)

P/BK NAV (x)

Debt/Assets (x)

EV/ EBITDA

Div Yield Yr 1*

Yr 2*

Singapore CapitaCommercial Trust Keppel REIT Frasers Commercial Trust OUE Commercial REIT

CCT SP KREIT SP FCOT SP OUECT SP

1.66 1.27 1.33 0.80

4,796 3,543 910 694

1.70 1.39 1.57 1.02

0.98 0.91 0.86 0.78 0.88

0.28 0.38 0.35 0.40 0.35

25.8 42.0 20.4 35.4 30.9

5.1% 6.3% 6.2% 6.8% 6.1%

5.2% 6.1% 6.7% 6.8% 6.3%

Hong Kong Champion REIT Prosperity REIT Sunlight REIT

2778 HK 808 HK 435 HK

3.74 2.42 3.26

21,428 3,413 5,306

7.92 4.51 6.47

0.47 0.54 0.50 0.50

0.22 0.20 0.23 0.22

22.8 69.6 20.3 37.6

5.1% 6.6% 5.9% 5.9%

4.9% 7.1% 6.2% 6.1%

IOF AU

3.34

2,051

3.24

1.03

0.22

14.2

5.5%

5.6%

Malaysia Quill Capita Trust Tower REIT

QUIL MK TRET MK

1.13 1.43

441 401

1.37 1.83

0.83 0.78 0.81

0.35 0.18 0.27

14.2 12.7 13.5

7.6% 8.4% 8.0%

8.1% 8.4% 8.3%

Japan Kenedix Office Invt Corp Nomura Rel Est Office Fund

8972 JP 8959 JP

526000 473000

186,172 176,218

425,646 578,193

1.24 0.82 1.03

0.44 0.38 0.41

25.1 23.6 24.4

3.8% 4.4% 4.1%

0.0% 4.5% 2.3%

USA CommonWealth REIT City Office REIT Inc Corporate Office Properties

CWH US CIO US OFC US

26.85 12.45 27.69

3,463 82 2,426

26.08 0.91 17.29

1.03 13.64 1.60 5.42

0.42 0.82 0.52 0.59

16.6 12.8 17.1 15.5

3.7% 6.1% 4.0% 4.6%

3.7% 7.4% 4.1% 5.1%

Europe Alstria Office REIT-AG Hamborner REIT AG Prime Office AG

AOX EU HAB GR PMOX GR

9.94 7.65 3.44

785 348 621

10.69 5.97 4.39

0.93 1.28 0.78 1.00

0.46 0.48 0.65 0.53

18.9 14.6 28.4 20.6

5.2% 5.6% 5.2% 5.3%

5.3% 5.8% 5.4% 5.5%

Canada Dream Global REIT

DRG-U CN

9.73

1,061

9.49

1.03

0.52

15.7

8.2%

8.2%

Name

Australia Investa Office Fund

* Based on Bloomberg consensus estimates Source: DBS Bank, Bloomberg Finance L.P.

Page 5

Company Focus IREIT Global

S-REIT Peer Comparison Table (12 September 2014) REIT Code

FYE

Price (S$)

Rec

Target Price (S$)

Mkt Cap S$'m

FY13/14A

DPU FY14/15F

FY15/16F

P/Bk (x)

DPU Yield FY13/14A

FY14/15F

FY15/16F

P/Bk (x)

Office CCT FCOT K-REIT OUECT

Dec Sep Dec Dec

1.70 1.40 1.25 0.81

Hold Buy Hold Buy

1.67 1.49 1.29 0.85

4,981 944 3,509 699

8.2 7.8 7.8 4.4

8.5 8.3 7.9 5.4

8.7 9.0 7.5 5.5

1.0 0.9 0.9 0.8

4.8% 5.6% 6.3% 5.5% 5.4%

5.0% 5.9% 6.4% 6.7% 5.7%

5.1% 6.5% 6.0% 6.8% 5.7%

1.0 0.9 0.9 0.8

Retail CRCT CMT CRT FCT SPH REIT

Dec Dec Jun Sep Aug

1.64 2.00 0.96 1.98 1.07

Buy Hold Buy Buy Hold

1.70 2.17 1.10 2.13 1.00

1,339 6,906 490 1,808 2,690

9.0 10.3 9.0 10.9 2.6

10.8 11.0 8.2 11.2 5.9

11.9 11.4 8.3 11.5 5.4

1.1 1.1 1.3 1.2 1.2

5.5% 5.1% 9.4% 5.5% 2.4% 4.8%

6.6% 5.5% 8.6% 5.6% 5.5% 5.7%

7.3% 5.7% 8.6% 5.8% 5.0% 5.8%

1.1 1.2 1.5 1.3 1.1

Commercial MCT MAGIC SGREIT Suntec

Mar Mar Dec Dec

1.45 0.96 0.82 1.81

Buy Buy Hold Hold

1.49 1.04 0.85 1.85

3,032 2,584 1,766 4,508

7.4 6.3 5.0 9.3

8.0 6.2 5.1 9.0

8.4 6.7 5.3 9.9

1.2 0.9 0.9 0.9

5.1% 6.6% 6.1% 5.2% 5.7%

5.5% 6.5% 6.2% 5.0% 5.7%

5.8% 7.0% 6.4% 5.5% 6.0%

1.3 1.0 0.9 0.9

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

Mar Mar Dec Dec Mar Mar Dec

0.84 2.36 1.18 0.72 1.44 1.17 0.79

Hold Buy Buy Hold Buy Buy Buy

0.85 2.51 1.37 0.77 1.53 1.24 0.89

768 5,674 920 903 2,471 2,881 641

4.5 14.2 8.6 4.9 9.9 7.3 2.3

4.8 14.7 8.6 5.2 10.1 7.5 6.1

5.1 15.1 9.3 5.5 10.2 7.6 6.6

1.3 1.2 1.2 1.0 1.2 1.1 1.0

5.4% 6.0% 7.3% 6.9% 6.9% 6.3% 2.9% 6.2%

5.7% 6.2% 7.3% 7.2% 7.0% 6.4% 7.8% 6.6%

6.1% 6.4% 7.9% 7.7% 7.1% 6.5% 8.4% 6.8%

1.3 1.2 1.4 1.1 1.3 1.1 1.1

Hospitality ASCHT ART CDREIT FEHT FHT OUEHT

Mar Dec Dec Dec Sep Dec

0.72 1.24 1.70 0.83 0.89 0.90

Hold Buy Hold Hold Buy Buy

0.77 1.33 1.84 0.88 0.94 0.95

800 1,898 1,659 1,470 1,061 1,180

5.5 8.4 11.0 5.6 5.6 2.9

6.0 8.3 11.5 5.5 5.9 6.8

6.2 8.7 12.2 5.7 6.2 7.0

1.2 0.9 1.0 0.8 1.1 1.0

7.7% 6.8% 6.5% 6.8% 6.3% 3.2% 6.2%

8.3% 6.7% 6.8% 6.6% 6.6% 7.6% 7.0%

8.5% 7.0% 7.2% 6.9% 7.0% 7.8% 7.3%

1.3 0.9 1.1 0.9 1.1 1.1

Healthcare P-Life RHT

Dec Mar

2.35 0.95

Buy Hold

2.62 0.82

1,422 750

10.7 3.6

11.8 8.2

12.2 7.2

1.4 1.1

4.6% 3.8% 4.3%

5.0% 8.7% 6.3%

5.2% 7.6% 6.0%

1.6 0.9

IREIT

Nov

0.90

Buy

0.95

375

-

6.5

6.8

1.2

-

7.3%

7.6%

1.3

5.7%

6.1%

6.3%

Sector Average

* Based on DBS Research estimates Source: DBS Bank, Bloomberg Finance L.P.

Page 6

Company Focus IREIT Global Summary of IREIT and other listed Office REITs There are 4 other office REITs listed on the SGX. Below is a summary of salient differences between IREIT when compared

against other office REITs. Details such as portfolio mix, lease expiry profile and balance sheet metrics are covered below.

Comparison of listed Office REITs (11 September 2014) IREIT

CapitaCommercial Trust

Keppel REIT

Frasers Commercial Trust

OUE Commercial REIT

Market Cap (S$'bn)

375

4,796

3,543

910

694

Total Asset Value (S$'bn)

€ 0.29m (S$’0.5bn) Dec

7.22

6.78

1.86

1.63

Dec

Dec

Sep

Dec

CapitaLand

Keppel Land

Singapore

No. of Assets

4

10

Singapore Australia 9

Frasers Centrepoint Land Singapore Australia 6

OUE Limited

Geographical Exposure

Sella Holdings Pte Ltd Germany

Singapore China 2

NLA ('m sqft)

1.3

3.0

3.1

2.3

0.8

WALE (years)

7.6

8.0

6.5

4.1

2.8

Gearing

33%

30%

40%

37%

42%

Interest Costs

2.1%

2.4%

2.2%

2.7%

2.5%

% of Debt Hedged

100%

81%

68%

51%

50%

Debt Rating

NA

Baa1

Baa2

BB

Ba1

FY-end Sponsor

*Based on an exchange rate of €1: S$1.70 Note: Percentages are shown to the nearest whole number Source: Various listed S-REITs, Manager, DBS Group

Comparison of listed REITs in Europe

Market Cap (€'bn)

IREIT

Alstria Office REIT AG

Hamborner REIT AG

Prime Office AG

0.2

0.78

0.35

0.62

Total Asset Value (€'bn)

0.29

1.78

0.63

1.99

Geographical Exposure

Germany

Germany

Germany

Germany

No. of Assets

4

75

70

57

NLA ('m sqft)

1.3

9.6

3.8

10.2

WALE (years)

7.6

6.6

7.1

4.9

Gearing

33%

50%

53%

55%

Average Cost of Debt

2.1%

3.0%

3.9%

3.7%

Average Debt Years

5.0

5.9

7.2

5.0

*Based on an exchange rate of €1: S$1.70 Note: Percentages are shown to the nearest whole number Source: Various listed REITs, Manager, DBS Group

Page 7

Company Focus IREIT Global

Property Portfolio Location of IREIT IPO Portfolio

Overview of IREIT IPO Portfolio Germany

Germany

Berlin

Münster Name Address Tenure NLA Car Parks Valuation

Bonn Campus Friedrich-Ebert-Allee, 71, 73, 75, 77 Bonn Freehold 32,736 sq m (352,367 sq ft) 656 € 100.0 million

Bonn Frankfurt

Name Address Tenure NLA Car Parks Valuation

Münster Campus Gartenstraβe, 215, 217 Münster Freehold 27,183 sq m (292,595 sq ft) 588 € 50.9 million

Darmstadt

Name Name Address Tenure NLA Car Parks Valuation

Darmstadt Campus Heinrich-Hertz-Straβe, 3, 5, 7 Darmstadt Mina-Rees-Straβe 4, Darmstadt Freehold 30,371 sq m (326,910 sq ft) 1,189 € 74.1million

Source: Manager, DBS Bank

Page 8

Munich

Address Tenure NLA Car Parks Valuation

Concor Park Bahnhofstraße 12 and Dywidagstraße 1, Bahnhofstraße 16, 18, 20, München (borough of Dornach), Freehold 31,216 sq m (336,006 sq ft) 512 € 59.1 million

Company Focus IREIT Global

IREIT Property

Usage Land Tenure Completion Year Gross Built Area*

Bonn Campus

Darmstadt Campus

Münster Campus

Concor Park

Total / Average

Office

Office

Office

Office

-

Freehold

Freehold

Freehold

Freehold

-

2008

2007

2007

1978 and fully refurbished in 2011

-

59,585 sq m

67,123 sq m

46,148 sq m

42,021 sq m

214,877 sq m

641,367 sq ft

722,505 sq ft

496,733 sq ft

452,310 sq ft

2,312,915 sq ft

32,736 sq m

30,371 sq m

27,183 sq m

31,216 sq m

121,506 sq m

352,367 sq ft

326,910 sq ft

292,595 sq ft

336,006 sq ft

1,307,878 sq ft

656

1,189

588

512

2,945

100%

100%

100%

100%

100%

1

1

1

12

13

WALE by NLA as at 31 March 2014

9.1

8.7

5.5

5.5

7.3

WALE by GRI

9.1

8.5

5.7

5.9

7.6

Average Rent per sq m – Offices (€ / month)

15.0

11.5

11.0

10.6

12.2

Independent Appraisal (€’m)

Colliers: 100.0

Colliers: 74.1

Colliers: 50.9

C&W: 59.1

284.1

Purchase Consideration (€’m)

99.5

74.1

50.9

58.6

283.1

Purchase Consideration (S$’m)***

169.2

126.0

86.5

98.7

476.6

NLA**

Car Park Spaces Committed Occupancy as at 31 March 2014 Number of Tenants as at 31 March 2014

* Gross Built Area includes all space built above and below ground, as well as external car parks. ** NLA excludes underground parking and parking facilities ***Based on an exchange rate of €1: S$1.70 Source: Manager, DBS Bank

Page 9

Company Focus IREIT Global

were completed in 2007/08, while Concor Park was fully refurbished in 2011.

A solid portfolio all around First S-REIT with exposure to the European office real estate market. IREIT offers investors the opportunity to invest in a quality portfolio of office assets in Germany which is the fourth largest economy in the world, and the largest within the Eurozone. Each property within the portfolio is located in important regional cities that offer unique value propositions to the European and international economy, or contain specialised business divisions for large international companies. They are also highly accessible, located close to transport conveniences and infrastructure such as U-Bahn stations, train stations, or highways.

Breakdown of Portfolio by NLA and Value 100% 90%

21%

26%

80% 70%

18% 22%

60%

Concor Park

50%

26%

40%

25%

Darmstadt Bonn

30% 20%

35%

27%

10% 0%

By NLA

By Value

Source: Manager

Location of Initial Portfolio

Munster

Breakdown of FY15 NPI

Bonn Campus, 32%

Concor Park, 23%

Berlin

Münster

Münster Campus, 18% Darmstadt Campus, 27%

Bonn Frankfurt

Darmstadt

Munich

Source: Manager

The initial portfolio comprises 4 properties located in Bonn, Darmstadt, Münster and Munich, with total portfolio value of €284.1m and NLA of 121,506 sqm (1.31m sqft). IREIT’s portfolio is evenly spread across all four properties, such that no one property accounts for more than 35% of total NLA, asset value, or NPI. The Bonn property is the largest asset in IREIT’s portfolio, accounting for 27% of NLA, 35% of total asset value and 32% of NPI. Darmstadt is the second largest contributor by NPI (27%) and asset value (26%), followed by Concor Park and Münster. Furthermore, these assets are fairly new or recently refurbished – the Bonn, Darmstadt and Münster campuses

Page 10

Source: Manager, DBS Bank

The initial portfolio is 100% occupied with a long weighted lease to expiry of 7.6 years as at March 2014. Its major tenants include notable names such Deutsche Telekom, ST Microelectronics, Allianz, Ebase and Yamaichi. Apart from Deutsche Telekom, all of IREIT’s major tenants are housed in Concor Park, which is the only multi-tenanted property in IREIT’s portfolio. The strong regional and international branding of the tenants provides good income visibility for IREIT, and minimises any rental delinquencies. c.80% of the portfolio (by GRI) is anchored by Deutsche Telekom. The Bonn, Darmstadt and Münster properties are leased solely to GMG, a wholly-owned subsidiary of Deutsche Telekom, making the company IREIT’s largest tenant by revenue contribution (c.80%), NLA occupation, and longeststaying tenant by weighted average lease expiry (WALE). As at March 2014, the Bonn, Darmstadt and Münster properties will have WALE’s of 9.1, 8.5 and 5.7 years (by GRI) respectively. Deutsche Telekom is headquartered in Bonn, Germany, and is one of the world’s leading integrated telecommunications companies, with a presence in more than 50 countries and more than 230k employees as at 31 Dec 2013. The company, which is c.32% held by the German state as of 31 Dec 2013, is listed on all seven stock exchanges in Germany, and has a

Company Focus IREIT Global market capitalisation of €55.3bn. Deutsche Telekom has good international credit standing, with long term Moody’s, S&P and Fitch ratings of Baa1, BBB+ and BBB+ respectively, as of 31 Dec 2013. Breakdown of Tenant Base by GRI (for March-2014) ST Microelectronics , 7%

Allianz, 5% Deutsche Telekom Subsidiary, 80%

Ebase, 5% Yamaichi, 2% Others, 1%

Source: Manager, DBS Bank

Riding on Europe’s strongest economy IREIT’s initial portfolio is located in Bonn, Darmstadt, Münster and Munich, important regional cities within a polycentric Germany that enjoy higher per capita GDP than the German average. Per Capita GDP (2013) € 70,000 

€ 64,425 

€ 60,000 

€ 60,716  € 54,502 

€ 52,599 

€ 50,000  € 40,000 

Germany average

€ 30,000  € 20,000  € 10,000  €‐ Bonn

Darmstadt

Munster

Munich

Source: Manager

(i) Portfolio located in key regional cities of Germany. Due to its federal nature, Germany is a polycentric country – there is no single city (such as London for UK or Paris for France) where a large proportion of major businesses and economic activities are concentrated. Instead, major corporations have their offices clustered across different cities, depending on business types, specialisations or skills, and offices in smaller cities or towns may function as important business hubs for various large domestic and international corporations.

Bonn was the historical capital of Western Germany from 1949-1990 until the unification of Germany, where the capital was thereafter relocated to Berlin. It served as the official seat of the government in Germany from 1990-1999, and until today, about half of all German government jobs and their related ministries remain in Bonn. The city is host to the United Nations and its 18 related institutions, and has developed into an international hub for cooperation regarding environmental and sustainable development. Today, Bonn’s economy is bolstered by the presence of many information and telecommunications enterprises such as Deutsche Telekom, as well as reputable research organisations like the Max Planck Society. Darmstadt is located in the southern part of the Frankfurt Metropolitan Region, some 30km away from Frankfurt. Darmstadt is the administrative centre of the Grand Duchy of Hesse, and the fourth largest city in the state. The city is recognised for its strong science, education and electronics/IT sectors. Key organisations that have a presence within Darmstadt include the European Space Operations Centre of the ESA, the International Particle Accelerator Facility, Merck, P&G (Wella), Goldwell and T-Online (a subsidiary of Deutsche Telekom), which has its headquarters located in the city. Münster is the largest city in the Münsterland region. It is known as a cultural centre and a university city, with c.297k residents and 47k students enrolled across nine higher educational establishments. Münster is one of the fastest growing cities in North-Rhine Westphalia, alongside Cologne, Bonn and Düsseldorf, with c.17% growth expected in the next 10 years. Dornach is located in the Munich suburb of Aschheim, c.10.5km to the north-east of Munich city centre. The area is much sought after by tenants due to its easy accessibility to Munich, its low real estate tax status, as well as its close proximity to the Messe Munchen International, which is one of Munich’s most important convention/exhibition centres. Munich is the capital of Bavaria and the heart of Germany’s southernmost metropolitan region. With a population of 1.4m residents, it is the third most populous city in Germany, behind Berlin and Hamburg, due to its skill clusters and business environment; as such, the city attracts significant amounts of FDI from the USA and the UK in particular. Munich is home to several large German international corporations such as Siemens, BMW, Linde, Rohde & Schwarz and MAN AG. It boasts a large base of banking institutions such as HypoVereinsbank, Bayerische Landesbacnk, Allianz SE and Munich RE, and it is considered Germany’s leading hightech and media location.

Page 11

Company Focus IREIT Global

Employment market over time

(ii) Riding on the waves of Germany’s economic optimism

43

Resilient economy with strong economic fundamentals. The country’s strong financial and political institutions, as well as its commitment to fiscal discipline, helped the German economy to rebound quickly after the Global Financial Crisis (“GFC”) in 2008-2009 and avoid economic fallout from the Eurozone Crisis in 2011-2012. The German economy is characterised by stable economic growth, low volatility, and low inflation. Its GDP growth has consistently outperformed that of the Eurozone.

12%

'm

42

10%

41

8%

40

6%

39

4%

38

2%

37

0%

Total Employment

German GDP (2008 = 100)

Unemployment Rate

Source: Oxford Economics, DBS Bank, Cushman & Wakefield

106

GDP growth forecasted to outperform Eurozone. As a result of these favourable economic conditions, GDP growth is expected to outpace that of the Eurozone, with forecasts of 1.8% and 2% growth in the next two years exceeding the Eurozone average of 1% and 1.4%. According to Oxford Economics, exports will remain the main growth engine in the coming years, with stable but marginal rise in contributions from domestic demand.

104 102 100 98 96 94 92 90 2008

2009

2010 Germany

2011

2012

2013

Eurozone

(iii) Direct beneficiary of strong FDI-driven job creation

Source: Oxford Economics, Cushman & Wakefield

Healthy fiscal condition spurs business confidence. Moderate public debt (80% of GDP vs. 93% in the Eurozone) and a balanced budget (7% current account balance), has boosted confidence in the country’s credit-worthiness. German government debt has an AAA credit rating from Fitch, Moody’s and Standard & Poor’s credit agencies; one of only 3 countries within the Eurozone and one of 7 in Europe, allowing the country to access debt markets at low financing costs. Positive economic sentiment drives business activity and employment. The flash composite PMI for February was 56.1, a 32 month high (vs. 52.7 for the Eurozone). As it stands, consumer confidence in Germany is at a five year high, driven in part by robust wage growth from the decline in unemployment, and implementation of a minimum wage. Healthy business activity has pushed unemployment to historical lows of 5.3% (as measured by the International Labour Organisation) which is considered low by historical standards; furthermore, there is active participation across the labour demographic – Germany boasts the lowest youth unemployment rate and the highest female participation rate within the Eurozone.

Germany is considered a safe haven for investors due to its transparent business environment, mature property market, quality infrastructure, strong research capabilities, flexible wage structures and ready pool of skilled labour. This has led to significant foreign direct investment (FDI) into the country. FDI has contributed positively to the German economy. Between January 2003 and October 2013, there has been c.€133bn of FDI into Germany, accounting for 3.7% of global FDI in the same period. There was an estimated €48bn of FDI in Germany in 2013, representing a growth of 2.9% from 2012. Looking ahead, Oxford Economics expects FDI in Germany to accelerate by a further 3.3% in 2014. FDI into Germany and Total Fixed Investment 70

15%

€'bn

60

10%

50

5%

40 0% 30 -5%

20

-10%

10 -

-15% 2008

2009

2010

2011

2012

2013 2014F 2015F 2016F 2017F 2018F

Foreign Direct Investment (Inward)

% change in total fixed investment (yoy)

Source: Oxford Economics, Cushman & Wakefield, DBS Bank

Page 12

Company Focus IREIT Global Growth Drivers The upshot of strong FDI flows into Germany has been the creation of c.342k jobs from 2003- October 2013, particularly in cities where IREIT’s portfolio assets are located. Increased business activity should be supportive of the office real estate space in the medium term. Top 10 FDI countries in Germany and jobs created Top investors into Germany

No. of jobs created (2003Jan 2014)

United States

88,448

United Kingdom

22,844

Switzerland

22,614

Netherlands

22,337

France

21,967

Austria

16,859

Japan

13,961

Sweden

13,272

Russia

12,224

Australia

9,223

IREIT has a double pronged growth strategy, derived from both organic and inorganic means. Organic growth prospects are generated from in-built rental escalation clauses that are pegged to the German CPI index, while inorganic growth can be achieved via acquisitions. We have projected a 2.2% improvement in gross revenue and net property income between annualised FY14P-16F as the triggering of the CPI hurdles at Darmstadt and Bonn campuses are expected to take place in FY14 and FY15. Projected Gross Revenue and NPI Growth (€m) 25.0

€'m

2.2% CAGR

20.0

5.2

15.0

4.1

10.0

6.0

2.6

5.2

5.2

4.1

4.1

6.2

6.2

7.4

7.4

2.0 5.0

3.0

Source: fDi Intelligence, Financial Times, Cushman & Wakefield

6.7 3.4 FYP14F

Job Creation from FDI

Bonn Campus

City

Jobs created

Jobs created

Jobs created

from FDI (2013)

from FDI

(2003-2013

(2003-2013

average)

average) 2,123

2,870

3,696

Frankfurt am

2,300

1,768

2,258

Main Munich Hamburg

FY15F Münster Campus

Projected Gross Revenue and NPI Growth (€m) €'m

2.2% CAGR

20.0 4.4 15.0 3.7

1,873 1,027

1,625 1,161

1,916

10.0

965

613

733

991

Duisburg

431

226

337

Darmstadt

97

86

157

Bonn

23

47

34

Source: Cushman & Wakefield

2.2

5.5

4.4

4.4

3.7

3.7

5.8

5.8

6.8

6.8

1.8 5.0

Düsseldorf

FY16F Concor Park

Source: Manager, DBS Bank

25.0

Berlin

Annualised 14F Darmstadt Campus

2.8

6.2

3.1 FYP14F Bonn Campus

Annualised 14F

FY15F

Darmstadt Campus

Münster Campus

FY16F Concor Park

Source: Manager, DBS Bank

(i) Organic growth through CPI-pegged rental uplift Lease clauses with inflation protection. More than 95% of the leases in IREIT’s portfolio contain rent adjustment clauses which subject the rent to indexation to the German CPI, whereupon, if the CPI crosses a prescribed point difference hurdle or a prescribed percentage hurdle, then the gross rental income would be adjusted accordingly by the same extent or percentage of the CPI change. The German CPI has been increasing steadily since 2007. This provides IREIT with a very stable and visible income stream.

Page 13

Company Focus IREIT Global

Dating back to the beginning of each lease for the individual properties, we note that the only property which has experienced a CPI-triggered rent adjustment is Münster, whose lease was signed the earliest in 2007, and the 10% CPI hurdle rate was crossed in Jan 2013, triggering a rental uplift that was of the same percentage of the CPI change. Significant rental re-indexation expected in FY14 and FY15. Based on the performance of the CPI since the leases of the Bonn, Darmstadt and Münster properties began in 20072008, we reckon that IREIT should see rental re-indexation for some properties over FY14-15. We estimate that the Bonn Campus lease has seen an accumulated CPI (till July-14) rise of 9.1% since April 08, while the Darmstadt Campus lease has experienced a consumer price inflation of 9.7% since it began in Nov-07. Hence, we believe both leases are likely to reach their respective CPI hurdles in FY15 and FY16. In addition, the Manager believes that, based on the signed leases at Concor Park, some 6% and 13% of portfolio NLA could be due for rental rebasing over FY15 and FY16 respectively.

(ii) Inorganic growth via acquisitions ABBA investment mandate is positive for IREIT in this market landscape. IREIT’s ‘ABBA’ investment strategy is to invest in ‘A’ assets in 2nd tier cities and to invest in ‘B’ assets in first tier cities. The ABBA strategy will be executed in Germany, and the Manager will look to execute the same strategy in the United Kingdom. This strategy will enable the REIT to optimise its returns on Unitholders’ capital. Apart from targeting higher yields on the onset, IREIT will also invest in higher yielding assets with potential for improvement via rental uplifts or through active asset management, thus improving total returns from its investment. “ABBA” Strategy AB (‘A’ assets in ‘B’ cities) BA (‘B’ assets in ‘A’ cities) Assets

Core assets

106.0

of the qualities in ‘AB’

- Long term leases

strategy

lease covenants

+ 9 .1%

Cities

+ 1 0.2%

104.0

- Possess most but not all

- Prime location - Tenants with good

Bonn, Darmstadt and Münster rental CPI triggers 108.0

Core-plus assets

- Modern building

Second tier cities

First tier cities

Source: Manager

+ 1 0%

102.0 Germany CPI

100.0

Munster Darmstadt

98.0 Bonn Darmstadt

96.0 94.0

Bonn

Munster

92.0

Source: Thomson Reuters, DBS Bank

Projected Lease/Rent Renewal Profile Property

Lease term

CPI Hurdle %

Bonn

15 yrs wef

10%

18/4/08 Darmstadt

15 yrs wef

15yrs wef 1/4/07

10%

c+9.1%

FY15

c+10.2%

FY14

Against this backdrop, the German property market has performed well since the onset of the global financial crisis, and has proved to be an important stabilising factor for the economy. Key players in the investment market are domestic pension funds and institutions which are attracted by its stability, as well as increasing flows of foreign capital.

from Nov 07 10%

(Münster Nth)

Concor

to date

from Apr 08

30/11/07 Münster

Est Achieved Exp next adj

Germany has the largest real estate investment market in the Eurozone, valued at €595b in 2012. The country has seen a steady increase in real estate investment on the back of improving economic prospects, driven by both domestic interest, as local investors shift their focus away from riskier overseas investments toward safer local investments; as well as overseas demand, which Oxford Economics estimates accounted for c.40% of all real estate transactions in the five years to 2012.

Reset in Jan

NA

Property Investment (Office, Retail, Industrial) 60,000

13

10yrs wef 1/4/07

50,000

(Münster Sth)

40,000

Multi tenanted

€ ' m p.a. Foreign Domestic

5%-7%*

na

Park

* %age or point difference differs from lease to lease Source: Manager, DBS Bank

6% (FY15), 13% (FY16)

30,000 20,000 10,000 2005

2006

2007

2008

2009

2010

2011

2012

Source: Oxford Economics, Cushman & Wakefield, DBS Bank

Page 14

2013

Company Focus IREIT Global Prime office supply across Germany is limited. Although Germany sees no lack of office space, supply of grade A space across the country is tight, and is expected to continue falling due to the lack of new developments – a result of risk adverse developers and strict development financing requirements. The disparity between demand and supply of prime office space has led to upward pressure on prime office rents in cities like Frankfurt and Munich.

Rent growth still slowing Rent still elevated but falling from top of market cycle Rent at or near bottom of market cycle Rent growth accelerating

S low Growth

Dusseldorf

A ccelerating

Frankfurt Munich Berlin, Hamburg

Munster Bonn

Munich-Dornach, Darmstadt

Re covering

D ownturn

Source: Cushman & Wakefield, DBS Bank

Prime avg yields across the top 10 German markets 9.0% 8.0% 7.0%

Prime Office Rent Trend 40

German office market wave (1Q14)

Ten ant favourable

Rents in tier 2 cities to rise given supply crunch in tier 1 cities. Given tight grade A office supply in tier 1 cities, demand for business space from corporations will trickle down to better tier 2 cities, and this should result in the outperformance of rents of prime office spaces in tier 2 cities relative to tier 1 cities. Furthermore, we could see an increase in developments as strong demand tilts the market in favour of landlords.

IREIT’s “ABBA” investment mandate gives it the flexibility to tap the secondary markets to acquire high quality office assets where capital values have not risen as quickly relative to similar assets in tier 1 cities. This strategy also enables it to invest in higher yielding assets with potential for improvement via rental uplifts or through active asset management.

Lan dlord favourable

Economic recovery fuelling larger scale office take-ups. Demand for office space appears to have recovered from 2H13 vs. 1H13. This is due to renewed optimism from selected expansion plans from some corporates, which has led to the resurgence of some larger floor plate deals, as occupiers take advantage of market conditions before rental growth ticks up. On the supply front, between 2013 and 2014, there has been a notable easing in overall vacancy rates. While it is anticipated that the amount of space under construction and due for completion in 2014 will be higher relative to 2013, speculative construction has not made a major return.

producing offices has resulted in compression of net yields for prime grade office assets in tier 1 German cities, but this demand has not yet expanded into other regional cities.

€ psm pm

6.0%

35

5.0%

30 25

4.0%

20

2005

15

2006

2007 2008 Retail

2009 2010 Office

2011 2012 Industrial

2013

* includes Berlin, Frankfurt, Düsseldorf, Munich, Hamburg, Stuttgart, Köln, Dresden, Essen and Leipzig Source: Cushman & Wakefield, DBS Bank

10 5 0 2005

2006

2007

2008

2009

2010

Country Average

2011

2012

2013

Frankfurt

Source: Oxford Economics, Cushman & Wakefield, DBS Bank

Office rents and growth in selected cities €/sqm/

US$/sqft/

1y CAGR

5y CAGR

year

year

(%)

(%)

Country avg

277

35.5

3.7

1.1

Frankfurt

444

56.8

8.8

-0.5

Munich

384

49.2

1.6

0.6

Source: Cushman & Wakefield, DBS Bank

IREIT will be entering the German office investment cycle at an opportune time: higher demand for stable income-

Page 15

Company Focus IREIT Global

Comparison of Asset and DPU Yield Spreads 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Singapore

HK

Germany

IREIT

Debt funded headroom for acquisition. IREIT’s estimated gearing of 33% and its non-credit rated status means that its gearing will be capped at 35%, implying a potential to fully debt fund €8m worth of acquisitions (till 35% gearing level). Should IREIT eventually obtain a credit rating, its debt funding capacity will increase by €57m for 45% gearing, and €185m assuming a 60% gearing cap. This will give IREIT more flexibility to pursue larger acquisition opportunities. Apart from strengthening market fundamentals, the large spread between office cap rates and cost of funds would make investments in this sector attractive.

Asset Yield Spread over Cost of Funds DPU Yield Spread over Risk Free Rate

Source: DBS Bank

We believe that IREIT offers investors an attractive yield of 7.8% on FY15F earnings based on proforma Unitholders’ equity of €193.4m. This is one of the highest yield amongst Singapore and HK office REITs, and more than factors in risks related to overseas exposure. More importantly, as shown in the chart above, the asset yield spread over cost of funds is wide, which makes real estate investments accretive, while the high spread between DPU yield and risk free rate, which is even wider than for Singapore-centric vehicles, more than compensates investors for any overseas exposure.

Debt funding capacity (non-rated and rated) 400

€'m

350 60% gearing: €185m headroom 300 250

284

200 150

45% gearing: €57m headroom

100 50

97

0 Total assets

Source: Manager, DBS Bank

Page 16

Total debt

Company Focus IREIT Global Strong support from Sponsor and Strategic Partner The Sponsor of IREIT is Sella Holdings Pte Ltd, which is 100% owned by Mr. Itzhak Sella, CEO of the Manager. Sella Holdings Pte Ltd owns 87.5% of IREIT Global Management Pte Ltd, which will take a 35% stake in the Manager. Group Structure of the Sponsor Mr. Itzhak Sella 100.0%

Manager. There are currently no assets in the Sponsor’s ROFR pipeline. Strong support from the Strategic Partner. The Strategic Partner of IREIT is Shanghai Summit Pte Ltd, a Singaporeincorporated company that is ultimately owned by Mr. Tong Jinquan, founder of the Shanghai Summit Group. Mr Tong intends to own 60% of IREIT and 65% of the REIT Manager. He has committed to support and grow IREIT over the long term.

Sella Holdings Pte Ltd 100.0% IDOMY Ltd 1.5%

87.5% IREIT Global Management Pte Ltd

24.6% 35.0%*

Sella Capital Real Estate Ltd

Sella Capital Investments Ltd

IREIT Global Group Pte Ltd

*Post listing, IREIT Global Management will transfer 19% of IREIT Global Pte Ltd to LCH SPV which is controlled by Mr Lim Chap Huat Source: Manager

IREIT is helmed by an experienced management team comprising Mr Itzhak Sella as CEO of the REIT Manager, Ms Jeremy Adina Bard Cooper as CIO, and Mr Choo Boon Poh as CFO and Head of Investors Relations. Together, they bring to the table a more than 15-25 years of experience in the real estate, financial and capital markets of Europe, Israel and Asia. This puts IREIT in good stead to grow going forward. Sponsor well acquainted with REITs internationally. Mr. Sella has more than 25 years of experience in property management and property investment, and has been involved in over US$2bn worth of real estate acquisitions in Israel, Canada, USA and Europe. He established Sella Capital Real Estate, which was subsequently listed on the Tel Aviv Stock Exchange, and has a market cap of Israeli Shekel 540m as of May 2014. Mr. Sella was also involved in the development of REIT market and framework in Israel, advising Israeli government officials on legal and tax implications. Sponsor ROFR. The Sponsor has granted a right of first refusal (ROFR) to IREIT concerning income-producing real estate in Europe used primarily for office purposes, which are owned, either wholly or in part, by the Sponsor and/or any future subsidiaries. This is subject to the Sponsor securing the consent of third party co-owners regarding the sale, as well as the Sponsor retaining 15% ownership or more of the

Extensive experience in Asian real estate. Mr Tong has over 20 years of experience in property investment, property development and property management in PRC China. He is the founder and Chairman of the Summit Group and the Chairman of Summit Property Development Co Ltd. Having established Summit Group in 1994, Mr Tong has been responsible for overseeing the growth of Summit Group, which has total assets of RMB64.9b as at 31 Dec 2013. Mr Tong’s experience through Summit Group encompasses industrial, commercial and residential investment, investment management, trading, property development, hotel management, property management, business consultancy, convention and exhibition services, goods export and technology import, software services and maintenance of office equipment. Mr Tong also holds an indirect interest in the manager of SGX-listed Viva Industrial Real Estate Investment Trust and trustee-manager of Viva Industrial Business Trust. Strategic Partner’s ROFR. The Strategic Partner has granted a ROFR to IREIT concerning income-producing real estate in Europe used primarily for office purposes, which are owned, either wholly or in part, by the Strategic Partner and/or any future subsidiaries. This is subject to the Strategic Partner securing the consent of third party co-owners regarding the sale, as well as the Strategic Partner retaining 15% ownership or more of the Manager and 15% ownership or more of IREIT. There are currently no assets in the Strategic Partner’s ROFR pipeline. Mr Lim Chap Huat who is CEO of SoilBuild Group Holdings Ltd and who has an effective 19% stake in IREIT and IREIT’s manager has also granted a ROFR to IREIT over incomeproducing real estate in Europe used primarily for office purposes. Alignment of interest between IREIT and Unitholders. There is alignment of interests between IREIT’s Strategic Partner, the REIT Manager and unitholders. From the perspective of fee structure, IREIT will pay a base of 10% of distribution income

Page 17

Company Focus IREIT Global

and a performance fee of 25% of the yoy change in DPU of the REIT. As such, we believe that the fees payable are fully aligned to the performance to the REIT. Alignment of Interest between IREIT and Unitholders Unitholders

IREIT Global

REIT Manager

Source: Manager

Page 18

Strategic Partner

Company Focus IREIT Global

SWOT Analysis Strengths  High quality assets in key German cities. IREIT’s initial portfolio comprises four modern offices which have been fitted out to a high specification, located in key regional cities which have strong demand for office space within their respective submarkets.  Long WALE ensures long term earnings visibility. IREIT’s portfolio is 100% occupied, with a long WALE of 7.6 years (by GRI for March 2014). This provides strong income visibility for the REIT.  Strong tenant names minimises earnings risk. Key tenants in IREIT’s portfolio include Deutsche Telekom, Allianz, ST Microelectronics and Ebase, all reputable tenants within Germany, and internationally. The quality tenant base minimises delinquency risk for the REIT.  Ability to tap into secondary markets. IREIT’s ABBA investment strategy allows for investment into key regional cities, and this enables IREIT to utilise its knowledge of the German real estate market to acquire high quality assets with good lease covenants in niche markets where there is strong demand for space.

Opportunities  Thriving real estate market in Germany. IREIT’s portfolio is located in cities which are experiencing accelerating rent growth, or are on the verge of accelerating rent growth.  IREIT has the potential to make opportunistic acquisitions of higher-yielding assets where capital values have not yet fully reflected escalating rental growth prospects.

Weaknesses  High dependence on a single tenant. c.80% of IREIT’s income is derived from Generalmietgesellschaft mblt & CoKG (“GMG”), a wholly owned subsidiary of Deutsche Telekom. Any incident that hampers GMG’s or Deutsche Telekom’s ability to pay its rent would adversely affect the REIT’s earnings and distributions.  Structure of leases offers little visibility concerning rental escalations. More than 95% of IREIT’s leases (by GRI as of March 2014) are pegged to CPI hurdle rates of 510%, depending on terms of the individual leases. As CPI rates are a function of economic performance, there is uncertainty regarding when the CPI level will trigger rental increases for IREIT, resulting in uncertain upside potential.  Geographical concentration risk. As all of IREIT’s assets are located in Germany, the occurrence of any countrywide event could adversely impact IREIT’s earnings.  Management risk. As the REIT is dependent on CEO and CIO’s experience and familiarity with the German real estate market, any loss of key management personnel could adversely affect the REIT’s ability to source for accretive acquisition opportunities.

Threats  Rise in capital values could result in unfavourable acquisition prices for the REIT. The German real estate market has seen an increase in international investors who are attracted to its defensive and stable nature. As demand for high quality assets increases, IREIT could face stiffening competition for its targeted assets, resulting in higher capital values and non-DPU accretive yields.  Changes in German law regarding real estate ownership could have a negative impact on IREIT. Any change in German real estate law could negatively affect IREIT’s liquidity, or ability to acquire assets.  Currency risk. As IREIT distributes its earnings in SGD and derives its earnings in EUR, the REIT is vulnerable to volatility or long term shifts in the exchange rate, which could result in lower-than-anticipated distributions in SGD.

Source: DBS Bank

Page 19

Company Focus IREIT Global

Key Risks Country risks. IREIT is exposed to country risks including economic changes, political changes or policy changes in Europe, where its properties are located. As Europe’s economy is affected by global economic conditions, a change in the strength of the global economy, the potential for slowdown in consumer demand and the impact of the global downturn on the economy of Europe could negatively affect tenants at IREIT’s properties thereby affecting their ability to pay rent to IREIT. In addition, IREIT will be impacted by changes in the real estate market conditions in Europe. Any changes in supply or reduced demand for real estate assets will have an impact on tenant demand and the attractiveness of their properties to investors. Currency risks. Given that its portfolio is located in Europe, IREIT derives its revenues in EUR but distributions are paid in SGD. Volatility in currency movements, unless hedged fully, could impact distributions on translation and in turn distribution income for investors. On this front, the manager will take on EUR-denominated loans to act as natural hedges against asset values on the balance sheet. Interest rates risks. Interest rates are expected to increase after the US Fed’s withdraw of stimulus and are estimated to increase by middle of 2015. As such, IREIT might face higher borrowing costs and increased interest rate risk going forward, and these will have a negative impact on distributions. However, we note that the Manager intends to enter into a fixed-interest rate facility for a period of 5 years for the IPO portfolio in order to mitigate such risks.

Page 20

Single tenant leases. IREIT is reliant on GMG, a wholly-owned subsidiary of Deutsche Telekom for a substantial portion of the projected net property income through its master leases at Bonn Campus, Darmstadt Campus and Münster Campus. We estimate that net property income (NPI) contribution from the three properties to contribute c. 80% of FY15F NPI. Deutsche Telekom has entered into a profit and loss transfer agreement with GMG where Deutsche Telekom will be subject to a claim to compensate GMG for any and all losses suffered by GMG in the event that the assets of GMG are insufficient to cover the claims of IREIT under the Deutsche Telekom Leases. However, there is no assurance that Deutsche Telekom has sufficient assets, income and access funding to satisfy its obligations under the respective Deutsche Telekom leases. Risk of non-renewal and non-replacement of leases. IREIT’s financial condition and results of operations and capital growth may be adversely affected by the bankruptcy, insolvency or downturn in the businesses of one or more of the anchor tenants (particularly Deutsche Telekom, as the sole tenant of the Deutsche Telekom Properties via its whollyowned subsidiary GMG) as well as the decision by one or more of these tenants not to renew its lease at the end of a lease cycle, or terminate its lease before it expires. Lack of operating history for IREIT and the Manager. IREIT was constituted as a private trust on 1 November 2013, and the Manager was incorporated on 22 November 2013. Neither IREIT (as a REIT) nor the Manager (as the manager of the REIT) has sufficient operating history by which their past performance may be judged. The lack of a long established operating history will make it more difficult for investors to assess IREIT’s future performance.

Company Focus IREIT Global Trust Structure The Manager of IREIT is IREIT Global Group Pte. Ltd, which is 35% owned by IREIT Global Management Pte. Ltd., a subsidiary of the Sponsor, and 65% owned by the Strategic Partner.

IREIT is a Singapore-based REIT established with a principal strategy to invest in a portfolio of income-producing real estate in Europe which is primarily used for office purposes, either directly or indirectly.

Holding Structure of IREIT

Unitholders Ownership of Units

Distributions

Management Manager

Trustee Fees IREIT

Trustee Acts on behalf of Unitholders

Management Fees Ownership of assets

100%

Singapore Holding Companies

100%

Dividends

Singapore Financing Companies

100%

Loans to each Dutch Holding Company

Singapore Netherlands

Dutch Holding Companies

The Properties

Germany

Property Management Fees Property Manager Property Management Services

Source: Manager

Page 21

Company Focus IREIT Global

Key Management Team Executive Officers Name

Position

Description

Mr. Itzhak Sella (54)

Chief Executive Officer

The CEO’s responsibilities are:  Working with the board to determine REIT strategy  Ensure that the REIT operates in accordance with the Manager’s stated investment strategy.  Planning for future strategic development of the REIT.  Overseeing day-to-day management and operations of the REIT. Mr. Sella has more than 25 years of real estate experience. He was instrumental in the development of the REIT industry, framework and legislation in Israel, while serving as the Managing Director of Steer Up Investments Ltd. In November 2006, He founded Sella Capital Investments Ltd as the REIT Manager for Sella Capital Real Estate Ltd, an Israel-based REIT which had tripled its grown in real estate acquisitions in three years. Mr. Sella has also worked at Amot Investments Ltd, one of the largest real estate holding companies in Israel. Mr. Sella is certified as a Real Estate Agent in the Maryland Association of Realtors, and is also a Maryland Board certified Broker.

Ms. Jeremy Adina Bard Cooper (52)

Chief Investment Officer and Asset Manager

The Investment Officer/ Asset Manager’s responsibilities are:  Identify, research and evaluate potential acquisitions and related investments with view to enhancing the REIT’s portfolio, or divestments where a property is no longer strategic, and/or yield fails to be accretive.  Develop financial models to test financial impact of activities undertaken.  Work with Property Manager to implement the REIT’s strategies to maximise income generation potential and minimise expenses.  Supervise the Property Manager in the implementation of the REIT’s property-related strategies, including analysing and recommending asset enhancement initiatives. Ms. Cooper has more than 24 years of experience in the real estate industry, and has been involved in more than €1bn of real estate acquisitions in Europe. Prior to her joining the Manager, she was Chief Executive Officer Europe of IREIT Global Management Pte Ltd. From 2008 to 2013, she was the CEO of the International Institute of Real Estate Valuation, a real estate valuation and investment advisory firm, where she advised the Israel Securities Authority regarding international real estate valuation. She has also worked at Natam Colliers International and Natam Properties. Ms. Cooper received her Bachelors in History (with studies in Economics) at the University of California Berkeley. She also obtained a Diploma In Valuation and Real Estate Management from The Technion – Israel Institute of Technology; and a certification in real estate law and consulting for real estate professionals from the University of Tel Aviv Law School. .

Source: Manager

Page 22

Company Focus IREIT Global Name Mr. Choo Boon Poh (43)

Position Chief Financial Officer and Head of Investor Relations

Description The CFO/Head of Investor Relations responsibilities are:  Work with the management to formulate strategic plans for the REIT in accordance with stated investment strategy, including tax and treasury matters, as well as finance and accounting matters, including statutory reporting, overseeing implementation of the REIT’s short and medium term business plans, fund management activities and financial condition.  Facilitate communication and liaison with Unitholders. Mr. Choo has more than 15 years experience in audit, banking and corporate financerelated work. Since 2011, he has been providing business consultancy services. Prior to that, he served at BNP Paribas Capital (Singapore) Ltd in various capacities, including Director of Corporate Finance, South East Asia, where he was involved in several REIT IPOs in Singapore. Mr. Choo graduated from the Nanyang Technological University with a Bachelor of Accountancy (First Class Honours). He is both a Chartered Accountant of Singapore and is also a CFA Charter Holder.

Source: Manager

Page 23

Company Focus IREIT Global

IREIT Board of Directors of the Managers The Board of Directors of the Managers is entrusted with the responsibility for the overall management of the Managers. Name (Age)

Position

Description

Mr. Lim Kok Min John (73)

Chairman and Independent Non-Executive Director

Mr. Lim has more than 45 years of private and public sector experience. He has previously worked as President and Deputy Group Chairman of LMA International N.V., a global medical device company; Group Managing Director of Pan United Corporation Ltd, a marine and building materials group listed on the SGX; Group Managing Director of JC-MPH Ltd, a diversified retail and industrial group; and Chief Executive Officer at Cold Storage Holdings Ltd. He currently sits on the board of several private and public companies, including Boustead Singapore Limited and Silver Axis Ltd which are listed on the SGX. He is also lead independent director of Forterra Real Estate Pte Ltd, the trustee-manager of Forterra Trust. He was previously Chairman of the Singapore Institute of Directors and the Building Construction Authority. He was awarded the Public Service Medal by the President of Singapore in 2006. Mr. Lim graduated with a Bachelor of Economics (Honours) from the University of Malaya.

Mr. Tan Wee Peng Kelvin (49)

Independent Non-Executive Director and Chairman of Audit and Risk Committee

Mr. Tan is currently the Managing Director of GBE Holdings Pte Ltd, a private investment vehicle. He was formerly President of AETOS Security Pte Ltd, Global Head of Business Development of PSA International, and Managing Director of the Private Equity Funds Investment Unit at Temasek Holdings. Mr. Tan sits on the board of WE Holdings Ltd and Viking Offshore and Marine Ltd, which are listed on the SGX. He graduated from the National University of Singapore with a Bachelor of Accountancy (First Class Honours) and a Master of Business Administration.

Mr. Nir Ellenbogen (53)

Independent Non-Executive Director

Mr. Ellenbogen has more than 13 years experience in the medical and research and development industries. He is currently the Chief Executive Officer of CeePro Pte Ltd, a medical devices manufacturer; Senior Vice President of Eye Lens Pte Ltd, a medical devices distributor; and Managing Director of FocalPoint Asia, a sole proprietorship providing medical consultancy services. He previously worked at Neurovision, a medical devices manufacturer specialising in visual learning programme, where he as Chief Executive Officer. Mr. Ellenbogen graduated from the Technion – Israel Institute of Technology with a Bachelor of Science, and a Master of Business Administration from Tel Aviv University.

Mr. Tong Jinquan (59)

Non-Executive Director

Mr. Tong has more than 20 years of experience in property investment, property development and property management in China. He is founder and Chairman of the Summit Group, which had total assets of RMB 65bn as of December 2013. Through the Group, his experience encompasses industrial, commercial and residential investment, trading, property development, hotel and property management, business consultancy, convention and exhibition services, goods export and technology import, software services and maintenance of office equipment. Mr. Tong holds an indirect interest in the Manager of Viva Industrial REIT, and the trustee-manager of Viva Industrial Business Trust.

Mr. Itzhak Sella (54)

Source: Manager

Page 24

Executive Director and Chief Executive Officer

See “Key Management Team” for details

Company Focus IREIT Global Organization Structure of the REIT Manager

Board of Directors Mr. Lim Kok Min (John) (Chairman and Independent Non-Executive Director) Mr. Tan Wee Peng Kelvin (Independent Non-Executive Director and Chairman of Audit and Risk Committee) Mr. Nir Ellenbogen (Independent Non-Executive Director) Mr. Tong Jinquan (Non-Executive Director) Mr. Itzhak Sella (Executive Director and Chief Executive Officer)

Chief Executive Officer Mr. Itzhak Sella

Chief Investment and Asset Manager Ms. Jeremy Adina Bard Cooper

Chief Financial Officer and Head of Investor Relations Mr. Choo Boon Poh

Source: Manager

Page 25

Company Focus IREIT Global

Fee Structure IREIT’s fees are within the peer band. IREIT’s fee structure is highly aligned to unitholders’ interests and is in line with that in the S-REIT space. The REIT manager will take 10.0% of distributable income as base management fees and 25% of the growth in DPU vs the previous financial year, as performance fees. Other fees include trustee fees, acquisition and divestment fees as well as property management fees.

S-REIT Manager Fees as a % of Total Property Value 0.90% 0.80% 0.70% 0.60% 0.50% 0.40%

a-iTrust

MINT CRT FCOT

MLT

SBREIT RHT IRE IT Cache PREIT KREIT CDLHT PCRT FCT MAGIC SPHREIT CRCT ART SGREIT OUEHT FEHT AREIT CREIT Sabana MCT SUN CMT

A-HTRUST

0.30%

100% fee in units. The Manager has elected to receive 100% of the base management fee and performance fee in FYP14-FY16F.

0.20%

CCT

0.10% 0.00%

Based on our estimates, IREIT’s fees payable as a percentage of total property value is approximately 0.61%.

Source: Various Companies, DBS Bank

Fees and charges in relation to IREIT Fee Type

Payable To

Payment Mode

Description

Management Fee

Manager

Cash and/or Units

Base Fee 10.0% p.a. of IREIT’s Annual Distributable Income (calculated before accounting for the Base Fee and the Performance Fee). Performance Fee 25.0% p.a. of the difference in DPU between a financial year and the prior year, multiplied by the weighted average number of Units in issue for the financial year. Note: The Manager has elected to receive 100% of Base Fees and Performance Fees in Units for Forecast Period FY14, and Projection Years 2015 and 2016.

Trustee’s fee

Trustee

Cash

Trustee’s Fee payable shall be determined between the Manager and Trustee, shall not exceed 0.1% p.a. of value of Deposited Property,subject to a minimum of S$10,000. Any changes to the fee to be determined by the Manager and Trustee. The Trustee is entitled to a one-time inception fee of maximum S$60,000, the actual value to be agreed by the Manager and Trustee.

Acquisition Fee

Manager

Cash and/or Units

Whether directly or indirectly,  For the acquisition of any SPV or holding entities holding real estate, 1.0% of the underlying value of the real estate.  1.0% of the acquisition price of any investment in any debt securities of any property cooperation or other SPV owning or acquiring real estate. The Manager will receive an Acquisition fee of S$4.8m for acquisition of the initial portfolio, to be paid in cash.

Divestment Fee

Page 26

Manager

Cash and/or Units.

Whether directly or indirectly,  0.5% of the sale price of any real estate sold or divested, in addition to any other payments related to the asset not reflected in the sale price.  For divestment or sale of real estate-related assets, 0.5% of the underlying of any real estate-related assets.  For divestment or sale of any investment by IREIT, 0.5% of the sale price of any investment.

Company Focus IREIT Global Fee Type

Payable To

Payment Mode

Description

Development

Manager

Cash and/or Units

3.0% of the Total Project Costs incurred in a Development project

Management Fee

undertaken by the REIT Manager. Where estimated Total Project Costs exceed S$100m. “Development Project” refers to a project involving the development of land, or buildings, or parts thereof on land which is acquired, held or leased by IREIT including development of the land or of buildings on the land, provided that the Manager abides by the Property Funds Appendix, which currently allows a REIT to commit no more than 10.0% of its deposited property to development and investment in uncompleted property developments.

Property

Property

Management Fee

Manager

Cash and/or Units

For the Deutsche Telekom Properties  0.6% p.a. of the Gross Revenue excluding service charge of Bonn Campus, subject to a minimum of €3,168.87/mth  0.6% p.a. of the Gross Revenue excluding service charge of Darmstadt Campus, subject to a minimum of €2,739.57/mth  0.6% p.a. of the Gross Revenue excluding service charge of Münster North, subject to a minimum of €1,006.04/mth  0.6% p.a. of the Gross Revenue excluding service charge of Münster South, subject to a minimum of €886.67/mth For Concor Park, 2.1% p.a. of the Gross Revenue excluding service charge of Concor Park, subject to a minimum of €7,431.62/mth

Leasing and

Property

Marketing Fee

Manager

Cash and/or Units

0.5 month of Gross Revenue excluding service charge if a third party broker is involved, or 1.5 months of Gross Revenue excluding service charge if there is no third party broker involved.

Source: Manager

Page 27

Company Focus IREIT Global

Financials – Income Statement Steady annualised 2.2% growth in Gross Revenues. IREIT’s gross revenues are expected to grow by an annualised 2.2% for FY14F-16F. This is due to projected CPI-linked rent increases due to rent adjustment clauses over the forecasted period. It is estimated that c.95% of the lease agreements (by Gross Rental Income for Jan-2014) contain such Consumer Price Index (CPI)-linked rent adjustment clauses.

Long WALE of 7.6 Years (by GRI). c.76-77% of revenues for FYP14-16F will be derived from GMG, a subsidiary of Deutsche Telekom at Bonn Campus, Darmstadt Campus and Münster Campus, offering strong income visibility and earnings quality to IREIT. Given the long lease tenures of the leases and no lease renewal in the coming years, we have assumed that the portfolio remains 100% occupied in our forecasts.

Contribution to Gross Revenues (FYP14F-16F)

Contribution by topline (% by property) over FYP14F-16F

25.0

€'m

EUR 'm

2.2% CAGR

100% 90%

20.0

24%

23%

23%

23%

19%

18%

18%

18%

27%

27%

27%

27%

31%

32%

32%

32%

80% 70%

15.0

60% 50% 40%

10.0

30% 20%

5.0

10% 0%

FYP14F Bonn Campus

Annualised 14F

FY15F

Darmstadt Campus

Münster Campus

FY16F Concor Park

FYP14F Concor Park

Annualised 14F Münster Campus

FY15F Darmstadt Campus

FY16F Bonn Campus

Source: DBS Bank

Source: DBS Bank

These CPI-linked rent adjustments will be activated once the cumulative German CPI exceeds a prescribed hurdle (in this case, the hurdles are in the range of 5% and 10 %age points or point difference across the four properties, depending on terms of each lease); the gross rental income will be adjusted by the same percentage of the CPI change. Over FYP14F-16F, we forecast rental uplifts of between 5%-10% across Darmstadt Campus, Bonn Campus and Concor Park as in the following schedule listed in the chart below.

Net property income margins of 89.8%-89.9% over FYP14F – 16F. Property expenses consist of recoverable and nonrecoverable expenses. Recoverable expenses include ancillary expenses, insurance, utilities, land tax and maintenance expenses for certain equipment of the building and includes a 2.1% property management fee for Concor Park.

Projected Rental Adjustment Schedule (by % NLA) 35% 30%

6%

7% increase in GRI in 1HFY15

25% 10% increase in GRI in 1HFY14

20% 15% 25%

27%

10% increase in GRI in 1HFY15

Between 4.8-6.8% increase in GRI over the course of FY16

10% 13%

5% 0% FY14 Bonn Campus

Source: DBS Bank

Page 28

FY15 Darmstadt Campus

FY16 Concor Park

Non-recoverable expenses are the responsibility of IREIT and where applicable, include property management fees, structural repair and maintenance expenses relating to the building and car park facilities and cleaning of the glass façade, and other costs. We have estimated costs to remain fairly stable over FYP1416F. As such, net property income (NPI) margins will remain stable at c.89.8%-89.9%. Management fees – pegged to distributable income. The base fees and performance fees of IREIT are structured to motivate the Manager to grow revenues and keep costs in check, ensuring that interests of the Manager are well aligned with that of unitholders. Annual base fees are paid based on 10% of distributable income. In addition, the Manager will only be paid an annual performance fees that is based on 25% of the growth in DPU in a financial year compared to the preceding year. For FY15F, performance fees will be calculated against the annualised DPU in FYP14F. The manager has elected to receive 100% of its fees in units from FYP14F to FY16F.

Company Focus IREIT Global Interest cost fixed at c2.1%. Interest cost is expected to remain relatively stable as IREIT has obtained a 5-year fixed rate loan at an all-in rate of 2.1% per annum. Non-tax deductible expenses. Largely consists of management fee payable to the manager (100% of fees paid in units) and the amortisation of upfront fees for loan disbursement.

Distribution income – 100% till FY2016F. IREIT’s distribution policy is to distribute 100% of its taxable income and taxexempt income up to FY16F. Thereafter, IREIT will have a distribution payout of at least 90% of its distributable income. Distributions will be made on a half-yearly basis.

Income Statement FY Dec (€’m)

FYP14F

Annualised FY14F

FY15F

FY16F

Gross revenue

11.0

22.0

22.9

23.0

Property expenses

(1.1)

(2.2)

(2.3)

(2.3)

Net Property Income

9.9

19.8

20.6

20.6

Other Operating Income

-

-

-

-

Other Operating expenses

(1.5)

(3.0)

(3.2)

(3.4)

REIT Management Fees

(1.1)

(2.2)

(2.3)

(2.5)

Other expenses

(0.4)

(0.8)

(0.9)

(0.9)

8.4

16.8

17.4

17.2

EBIT Interest Inc

-

-

-

-

Interest Exp

(1.0)

(2.0)

(2.0)

(2.0)

Share of associate/JV Income

-

-

-

-

Exceptional Gain/(Loss)

-

-

-

-

Net Income

7.4

14.8

15.4

15.2

Tax

0.2

0.3

0.4

0.4

Minority Interest

-

-

-

-

Preference Dividend

-

-

-

-

7.5

15.1

15.8

15.7

Total Return

7.5

15.1

15.8

15.7

Non-tax deductible Items

0.9

1.9

2.0

2.2

Net Inc available for Dist.

8.5

16.9

17.8

17.9

Revenue Gth (%)

n/m

4%

0%

N Property Inc Gth (%)

nm

4%

0%

Net Income After Tax

Distributable Inc Gth (%) Dist. Payout Ratio (%)

n/m

5%

0%

100%

100%

100%

Source: DBS Bank

Page 29

Company Focus IREIT Global

Financials – Balance Sheet Property value of EUR 284.1m. The acquisition is priced at a 0.5% discount to the independent appraised value. This implies a net property income yield of 6.9%-7.1% over annualised FYP14F-16F. In terms of contribution by value, the properties are well diversified across the four properties – Bonn Campus (35% of value), Darmstadt Campus (26%), Münster Campus (18%) and Concor Park (21%). Asset Breakdown (%) Concor Park 21%

Total loans of EUR 96.6m. IREIT borrowings comprise of a 5year fixed interest rate onshore loan facility from Dekabank. The term loan facility obtained has a number of financial covenants including (i) ratio of net operating income to debt shall not be less than 11% (vs. 17% for FY15F), and (ii) interest coverage ratio shall not be less than 185% (c.392% for FY15F). The facility will be secured by a first ranking land charge over the properties and an assignment over rents and claims under inter-company loans and insurance claims. Interest costs. Interest expense is calculated based on a blended average all-in fixed interest cost of 2.1%per annum.

Bonn Campus 35%

Gearing level of 33%. Based on our estimates, IREIT will have an initial gearing of 33%, which is expected to remain fairly stable over FYP14F-16F.

Münster Campus 18%

Darmstadt Campus 26%

Source: DBS Bank

Balance Sheet

FY Dec (€’m)

Investment Properties Property Plant & Equipment Investment in Associates/JVs Cash & ST Invts Other Current Assets

FYP14F

FY14F

FY15F

FY16F

284.1

284.1

286.1

288.1

-

-

-

-

-

-

-

-

1.2

1.0

1.0

1.0

-

0.2

0.4

0.4

Receivables

3.1

3.1

3.8

3.8

Other Long Term Assets

2.5

2.5

2.5

2.5

290.8

290.8

293.8

295.8

Total Assets ST Debt

-

-

-

-

Other Current Liabilities

2.4

2.4

2.9

2.9

LT Debt**

95.0

95.0

97.5

99.5

-

-

-

-

193.4

193.4

193.4

193.4

-

-

-

-

Total Funds & Liabilities

290.8

290.8

293.8

295.8

Non-Cash Wkg. Capital

0.7

3.3

3.8

3.8

Other LT Liabilities Unit holders’ funds Minority Interests

Net Cash/(Debt)

(93.8)

(94.0)

(96.6)

(98.6)

Gearing Ratio

33.2%

33.2%

33.7%

34.2%

NPI/Debt ratio 17.4% * Refers to the date that the initial portfolio are acquired by IREIT ** Based on gross debt of €96.6m Source: DBS Bank

18.0%

17.4%

17.3%

Page 30

Company Focus IREIT Global Financials – Cashflow Statement Other Non-Cash Adjustments. Largely consists of management fees payable to the Manager (100% of fees paid in units) and the amortisation of upfront fees for loan disbursement.

Acquisition of initial portfolio. We have assumed the acquisition of the initial portfolio at €284.1m in FYP14F to be funded through (i) new debt issuance of €96.6m and (ii) Unitholders’ funds €193.4m.

Capex requirements. We have assumed €2m of maintenance capex over FY15F-16F, which is pegged to c.1% of topline. This is expected to be fully funded by debt. Cashflow Statement FY Dec (€’m)

FY14F

FY15F

FY16F

Pre-Tax Income

7.4

15.4

15.2

Dep. & Amort.

0.2

0.4

0.4

-

-

-

Tax Paid Associates &JV Inc/(Loss)

-

-

-

Other Non-Cash adjustment

0.9

2.0

2.2

Chg in Wkg.Cap.

(3.3)

(0.6)

(0.0)

Net Operating CF

5.2

17.2

17.9

Net Invt in Properties / Capex

(284.1)

(2.0)

(2.0)

Other Invts (net)

-

-

-

Invts in Assoc. & JV

-

-

-

Div from Assoc. & JVs

-

-

-

Other Investing CF

-

-

-

Net Investing CF

(284.1)

(2.0)

(2.0)

Distribution Paid

(8.5)

(17.8)

(17.9)

Chg in Gross Debt

95.0

2.5

2.0

New units issued

193.4

-

-

-

-

-

279.9

(15.3)

(15.9)

Other Financing CF Net Financing CF Net Cashflow

1.0

(0.1)

(0.0)

Starting Cash on Balance Sheet

-

1.0

1.0

Ending Cash on Balance Sheet Source: DBS Bank

1.0

1.0

1.0

Page 31

Company Focus IREIT Global

Germany Property Market Outlook Germany Economic Outlook Europe’s economic powerhouse. Germany is the fourth largest economy in the world, and the largest within the Eurozone. The German economy is characterised by stable economic growth, low volatility, and low inflation, has consistently outperformed both the Eurozone (countries within the EU that have adopted the Euro as their central currency) and the EU at large. Germany GDP vs. Eurozone and EU (2008 = 100) 106 104

European safe haven. The country’s strong financial and political institutions, as well as its commitment to fiscal discipline helped the German economy to rebound quickly after the Global Financial Crisis (“GFC”) in 2008-2009 and avoid economic fallout from the Eurozone Crisis in 20112012. Furthermore, the country is considered a safe haven for both domestic and foreign investors due to its transparent business environment, mature property market, quality infrastructure, strong research capabilities, flexible wage structures and a ready pool of skilled labour. Within Europe, Germany is the 8th most stable economy in Europe, according to the Oxford Economics’ risk index of the most stable economies in Europe. It is the fourth most stable economy in the Eurozone.

102 100 98 96

Oxford Economics' country risk rank

94

2014 to

92 90 2008

2009

2010

2011

Germany

2012

2013

Eurozone

Source: Oxford Economics, DBS Bank, Cushman & Wakefield

Key indicators: Germany vs. Eurozone Indicator

Period

Germany

Euro zone

GDP growth

2003

1.1%

0.8%

Inflation p.a.

to

1.6%

2.1%

2013

-0.1%

0.4%

Population Growth

Country

2013

2018F

Sweden

1

1

Currency SEK

Switzerland

2

2

CHF

Norway

3

3

NOK

Luxembourg

4

4

EUR

Denmark

6

5

DKK

Finland

5

6

EUR

Austria

9

7

EUR

Germany

8

8

EUR

Netherlands

7

9

EUR

United Kingdom

10

10

GBP

Source: Oxford Economics, Cushman & Wakefield, DBS Bank GDP per capita

33,512

28,880

Urbanisation

74.1%

75.8%

78

65

21

41

18

29

Corruption Score (100 = least corrupt) Ease of Doing Business

2013

(1 is best) Political Risk Score (100 = most risky)

Source: Oxford Economics, World Bank, Transparency International, EIU, Cushman & Wakefield, DBS Bank

Page 32

Services-centric economy. In terms of economic activity, services account for more than 70% of German GDP, with public administration, healthcare and social work the largest sub-sector, followed by the real estate and wholesale & retail trade. Exports account for a large proportion of GDP, with renowned brands achieving international visibility across the different sub-sectors. Corporations with huge international markets include the likes of Allianz, Audi, BASF, Bayer, Bosch, BMW, Mercedes-Benz, Deutsche Bank, Deutsche Post, Deutsche Telekom, Diezel, Grundig, E.ON, METRO, Opel, Porsche, Puma, Siemens and Volkswagen Group.

Company Focus IREIT Global

Contribution to GDP by industry

Real estate activities, 11.5%

Industry, 25.3%

Agriculture and Forestry, 0.7% Construction, 3.8%

S ervices, 70.2%

Wholesale and retail trade, 9.4% Professional, scientific & technical, 6.1% Information & communication, 5.3%

Healthcare, social work, public administration & defence, 13.5%

Financial & insurance activities, 5.3%

Arts, entertainment & recreation, 1.4% Accommodation & food services, 1.5%

Administrative & support activities, 4.7%

Transportation & storage, 4.3% Other services, Education, 4.2% 3.0%

GDP growth forecasted to outperform Eurozone. As a result of these favourable economic conditions, GDP growth is expected to outpace that of the Eurozone, with forecasts of 1.8% and 2% growth in the next two years exceeding the Eurozone average of 1% and 1.4%. According to Oxford Economics, exports will remain the main growth engine in the coming years, with stable but marginal rise in contributions from domestic demand. GDP growth forecast (Germany vs. Eurozone) 2.5% 2.0%

Source: Oxford Economics, DBS Bank, Cushman & Wakefield

1.5%

Positive economic sentiment bolstered by strong fundamentals. As it stands, consumer confidence in Germany is at a five year high, driven in part by robust wage growth from the decline in unemployment and implementation of a minimum wage. Healthy business activity has pushed unemployment to historical lows of 5.3% (as measured by the International Labour Organisation); furthermore, there is active participation across the labour demographic – Germany boasts the lowest youth unemployment rate and one of the highest female participation rate within the Eurozone.

1.0% 0.5% 0.0% 2013

2015F

2016F

2017F

2018F

-1.0%

Germany

Eurozone

Source: Oxford Economics, DBS Bank, Cushman & Wakefield

Germany: domestic vs. export demand growth 50%

Employment market over time

40% 12%

30%

42

10%

20%

41

8%

40

6%

-10%

39

4%

-20%

38

2%

37

0%

43

2014F

-0.5%

'm

10% 0% 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F 2018F

-30% -40%

Domestic demand

Net exports

-50%

Source: Oxford Economics, DBS Bank, Cushman & Wakefield Total Employment

Unemployment Rate

Source: Oxford Economics, DBS Bank, Cushman & Wakefield

Economic sentiment is also positive – flash composite PMI for February was 56.1, a 32 month high (vs. 52.7 for the Eurozone). This is largely due to (a) rise in exports from global economic recover, (b) rise in business investments in the country and (c) moderate public debt (80% of GDP vs. 93% in the Eurozone) and (d) a balanced budget (7% current account balance), which has boosted confidence in the country’s credit-worthiness. German government debt has an AAA credit rating from the Fitch, Moody’s and Standard & Poor credit agencies as of 31 Dec 2013; one of only 3 countries within the Eurozone and one of 7 in Europe, allowing the country to access debt markets at low financing costs.

Page 33

Company Focus IREIT Global German property sector overview Investment market outlook Total fixed investment in Germany has risen in tandem with the country’s improving economic outlook. Cushman & Wakefield forecasts total fixed investment within Germany to grow 3.8% in 2014, aided by the surge in foreign direct investment (FDI) into the country, which grew 2.8% between 2012 and 2013. FDI is expected to accelerate by a further 3.3% in 2014.

The German property market is characterised by stable prices, liquidity and stable growth potential – a result of a long-term oriented construction financing system which relies on fixedrate financing, long-term credit instruments and high equityto-assets ratio. As development financing is typically restricted to projects that have been pre-leased, development of real estate generally lags demand. Global office market wave (1Q14)

FDI into Germany and Total Fixed Investment 15%

€'bn

60

Rent growth still slowing Rent still elevated but falling from top of market cycle Rent at or near bottom of market cycle Rent growth accelerating

A c celerating Landlord favourable

70

S low Growth

10% G ermany

50

Asia Pacific - Growth Markets

5%

Western Europe Latin America

0%

Cenral & Eastern Europe

Africa

Middle East Asia Pacific - Developed Markets

30 -5%

20

-10%

10 -

-15% 2008

2009

2010

2011

2012

Source: Cushman & Wakefield, DBS Bank

% change in total fixed investment (yoy)

Prime avg yields across the top 10 German markets

Source: Oxford Economics, Cushman & Wakefield, DBS Bank

9.0%

FDI has contributed positively to the German economy. Between January 2003 and October 2013, there has been c. €133bn of FDI into Germany, accounting for 3.7% of global FDI in the same period, the upshot of which has been the creation of c.342k jobs, with Frankfurt and Munich being the two most popular beneficiaries.

8.0%

Top 10 FDI countries in Germany and jobs created

4.0%

7.0% 6.0% 5.0%

2005

No. of jobs created (2003-Jan 2014)

United States

88,448

United Kingdom

22,844

Switzerland

22,614

Netherlands

22,337

France

21,967

Austria

16,859

Japan

13,961

Sweden

13,272

Russia

12,224

Australia

Source: fDi Intelligence, Financial Times, Cushman & Wakefield

Page 34

Re c overing

D ownturn

2013 2014F 2015F 2016F 2017F 2018F

Foreign Direct Investment (Inward)

Top investors into Germany

Tenant favourable

North America

40

9,223

2006

2007 2008 Retail

2009 2010 Office

2011 2012 Industrial

2013

* includes Berlin, Frankfurt, Düsseldorf, Munich, Hamburg, Stuttgart, Köln, Dresden, Essen and Leipzig Source: Cushman & Wakefield, DBS Bank

Company Focus IREIT Global

Property investment (office, retail and industrial) 60,000

€'m p.a. Foreign

50,000

Domestic 40,000 30,000 20,000 10,000 2005

2006

2007

2008

2009

2010

2011

2012

2013

Source: Cushman & Wakefield, DBS Bank

Impact of government policies on the property market. There are several key government regulations pertaining to the investment or development of real estate in Germany (a) Capital Investment Regulation (b) Investment fund and brokerage regulation (c) Climate protection (d) Legislative powers and tax Capital Investment Regulation. The Capital Investment Code (Kapitalanlagegesetzbuch) came into force in July 2013, after large capital withdrawals led to liquidity problems for many open-ended real estate funds during the GFC. The Code mandates the compulsory holding of shares in any openended real estate fund for a period of 24 months before the shares can be redeemed, given an additional one-year notice period. The “Statute Revising Financial Investment Brokerage and Investment Fund Regulation” regulating close-ended funds was implemented in phases between December 2011 and January 2013. The law places stricter requirements on the content and control of investment sales prospectus in order to protect private investors, who are the main participants of such close-ended funds. Climate protection regulations that directly impact developers of new or refurbished buildings include the Energy Conservation Regulation (Energiesparverordnung), and Renewable Energy Heat Act (Erneuerbare EnergienWärmegesetz), which impose high energy conservation standards and requirements concerning the use of renewable energy within the building. This strategy impacts both newly constructed buildings, as well as existing buildings, which may be ordered to undergo renovation works, the costs of which may not be passed on to the tenant in the form of higher rents, beyond 11%.

Real estate transfer tax comes under the purview of individual states, which impose tax rates of between 3.5% and 6.5%. Matters concerning real estate property transactions, land laws and fiscal matters are under the legislative jurisdiction of both the state and federal government. Zoning laws (Bauplanungsrecht) place restrictions on a property’s use, and assess the suitability of projects and the granting of a building permit based on compliance with planning, building, and environmental laws, as well as public safety conditions. Developers must also comply with urban land-use planning laws, development freezes, development regulations, preservation statutes, redevelopment statutes and local building regulations. German office sector outlook Due to its federal nature, Germany is a polycentric country – there is no single city (such as London or Paris) where a large proportion of major businesses and economic activities are concentrated. Instead, major corporations have their offices clustered across different cities, depending on business types, specialisations or skills. Offices in smaller cities or towns may function as important business hubs, and the decentralisation of offices means that office rents are stable and fairly evenly spread across the country and not limited to merely the “big 5” tier 1 cities of Berlin, Düsseldorf, Frankfurt, Hamburg and Munich, or second tier cities such as Stuttgart, Köln, Dresden, Essen, Bonn and Leipzig. Typical office leases in Germany Factor

Description

Term (yrs)

5 or 10 years

Indexation

Leases of 10 years or more include automatic adjustment in rent, either based on a given date, or a hurdle rate associated with the German CPI.

Rent Review

Rent is typically adjusted, either upward or downward, according to the variance in CPI.

Sec. of Tenure

Office tenant is usually granted one 5-year renewal option

Break Option

Negotiable

Sub-Letting

Permitted, subject to the landlord's consent.

Source: Cushman & Wakefield, DBS Bank

Cushman & Wakefield expects that demand for office space in Germany will grow in 2014, as corporations accelerate their expansion plans in light of improving economic outlook and business sentiment. This expected increase in demand comes off the back of strong leasing activity in 2H13, which also saw a resurgence of demand for large floor plates in excess of 20k sqm.

Page 35

Company Focus IREIT Global Although Germany sees no lack of office space, supply of grade A space across the country is tight and, and is expected to continue falling due to the lack of new developments – a result of risk adverse developers and strict development financing requirements. The disparity between demand and supply of prime office space has led to upward pressure on prime office rents in cities like Frankfurt and Munich, despite there being fairly high office vacancy rates of 6.9% and 12.4% respectively. Looking ahead, prime rents in major cities such as Berlin, Hamburg, Munich and Berlin are anticipated to grow.

In terms of property specific market dynamics, prime office rents in the four cities of Bonn, Darmstadt, Münster and Munich have been stable historically, and are expected to remain so in the next 2 to 3 years, with some upward pressure in rents for quality assets. Historical and forecast office rental rates (€ psm pm) 40

€ psm pm

35 30 25 20

Office rents and growth in selected cities

15

€/sqm/

US$/sqft/

1y CAGR

5y CAGR

year

year

(%)

(%)

Country avg

277

35.5

3.7

1.1

5

Frankfurt

444

56.8

8.8

-0.5

0

Munich

384

49.2

1.6

0.6

10

2008

2009

2010

Germany Average

2011 Bonn

2012

2013

Darmstadt

2014F

2015F

Munster

2016F Munich

Source: Cushman & Wakefield, DBS Bank Source: Cushman & Wakefield, DBS Bank

Cushman & Wakefield expects that given tight grade A office supply in tier 1 cities, demand from corporations will trickle down to better tier 2 cities, and this should result in the outperformance of rents of prime office space in tier 2 cities relative to tier 1 cities. Furthermore, we could see an increase in developments as strong demand tilts the market in favour of landlords. Prime office rent growth in top tier German cities 5.0% 2003-13:1.0%

Investment market The German real estate investment market is the largest in the Eurozone, with a potential investment pool of €595bn as of 2012, according to Cushman & Wakefield. Traditional investors in the market are (a) domestic pension funds, (b) close-ended property funds, and (c) open-ended property funds, although recent years have seen an increase in foreign investors.

2013-18F:2.6%

2008-13:0.8%

In general, investors are focussed on well-let assets with long income streams and good covenants in tier 1 cities; and this has resulted in significant yield compressions in key cities like Frankfurt, Hamburg, Munich and Düsseldorf, with transactions higher than €100m are becoming increasingly common.

4.0% 3.0% 2.0% 1.0% 0.0% 2003-13 2008-13 2013

2014F

2015F

2016F

2017F

2018F

Source: Cushman & Wakefield, DBS Bank

German office market wave (1Q14) Rent growth still slowing Rent still elevated but falling from top of market cycle Rent at or near bottom of market cycle Rent growth accelerating

S low Growth

Lan dlord favourable

Dusseldorf

A ccelerating

Frankfurt Munich Berlin, Hamburg

Munster Bonn

D ownturn

Source: Cushman & Wakefield, DBS Bank

Page 36

Re covering

Ten ant favourable

Munich-Dornach, Darmstadt

Although the supply of investment grade offices is greater in secondary city, interest from investors remains subdued, and demand is generally limited to overseas opportunistic funds and selected local investors. This has led to a divergence in net property yields. Looking ahead however, Cushman & Wakefield expects demand for quality office assets in selected secondary cities with certain niche positioning to increase as capital pricing adjusts.

Company Focus IREIT Global Net investment yields in Frankfurt and Munich are at 10y lows 7.00% 6.50% 6.00% 5.50% 5.00% Country Average

4.50%

Frankfurt

4.00% Current

10y high

Munich

10y low

Source: Cushman & Wakefield, DBS Bank

Munich is currently the lowest yielding office market in Germany – net yields are 4.20% on average, representing a compression of 35bps y-o-y. Net property yields in most tier 1 cities have compressed to pre-crisis levels or lower– Frankfurt and Hamburg have seen 10-25bps yield compression to c.4.75%, in line with historical average; while yields of 4.75% in Berlin is even lower than 2007 peak of 5%. Cushman & Wakefield expect that prime office yields in tier 1 cities will compress by a further 5-10bps within the next 5 years, after adjusting for higher interest rates and rental growth cycles. Yields for secondary markets are likely to come under greater pressure due to its higher historical average of 7.0% vs. 5.1% for tier 1 cities. Cushman & Wakefield forecast 35-50bps yield compression in the next 5 years as limited supply of prime offices in tier 1 cities result in spill over demand to tier 2 cities.

Bonn Bonn was the historical capital of Western Germany from 1949-1990 until the unification of Germany, where the capital was thereafter relocated to Berlin. It served as the official seat of the government in Germany from 1990-1999, and until today, about half of all German government jobs and their related ministries remain in Bonn. The city is host to the United Nations and its 18 related institutions, and has developed into an international hub for cooperation regarding environmental and sustainable development. The city has a population of 320k inhabitants, making it the 19th largest city in Germany. It is one of the fastest growing cities according to Colliers, with a forecasted population growth of 9.2% between 2012 and 2030, bolstered by a large student population (31k) studying at the University of Bonn, the presence of many information and telecommunications enterprises such as Deutsche Telekom, as well as reputable research organisations like the Max Planck Society. Bonn has a total office market of c.3.7m sqm, the majority of which is dominated by Deutsche Telekom, which has its headquarters in the city. The rest of the market is made up of information & telecommunication SMEs, educational institutions and government ministries. Major office zones in Bonn

Historical and forecasted yields for prime office 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5%

Tier 1 cities [Germany] Tier 1 cities [Europe]

Source: Cushman & Wakefield, DBS Bank

Tier 2 cities [Germany]

Source: Colliers International, DBS Bank

Demand is driven by large corporations looking to consolidate their space, public sector organisations and SMEs. According to Cushman & Wakefield, an average of 90k sqm of office space is leased annually, with the level of leasing activity contingent upon the availability of supply rather than levels of demand.

Page 37

Company Focus IREIT Global New office supply in Bonn

Office business park rents (Bonn)

100,000

18.00

sqm

90,000

16.00

80,000

14.00

70,000

12.00

60,000

10.00

50,000

8.00

40,000

6.00

30,000

4.00

20,000

2.00

10,000

-

-

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Central locations

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Cushman & Wakefield, Bulwein Gesa, DBS Bank

Secondary locations

Source: Colliers International, Bulwein Gesa, DBS Bank

Office supply in Bonn is limited – annual completions since 2010 have been <0.5% of total office stock, resulting in historical low vacancy rates of 3.3% in 2013, one of the lowest among regional office markets. New developments are largely concentrated in the Bundesviertel, situated to the south-east of the city centre, and are characterised by modern designs and larger floor plates. As such, rents in Bundesviertel command between €14.00-16.50 psm pm, in contrast to other submarkets which typically see rents of €10.00-11.50 psm pm

Prime investment stock in Bonn is limited as a large proportion of offices within the city are owner-occupied. The last major office investment transaction was in 2013, when a 16,300 sqm property (Rheinwerk II) was sold to Deka Bank at an estimated initial yield of 6%. Looking ahead, Cushman & Wakefield expects demand for office investments to spill over from tier 1 cities to the likes of Bonn, and the scarcity of prime offices is likely to result in yield compression throughout 2014 as competition for quality assets intensify. Net yield for office assets in Bonn

Office vacancy rates

8%

7%

7%

6% 5%

6%

4%

5% 3%

4%

2% 1%

3% 2003

0% 2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2004

2005

2006

2007

Central locations

2008

2009

2010

2011

Secondary locations

Source: Colliers International, Bulwein Gesa, DBS Bank Source: Colliers International, Bulwein Gesa, DBS Bank

Looking ahead, Cushman & Wakefield estimates that c.75k sqm (2% of total stock) of new office space is currently under construction, with another 100k sqm in the planning stages. Given that majority of new office space under construction has already been prelet, supply within the city is expected to remain tight over the next few years, which should support rentals in the medium term, especially in newer locations such as Bundesviertel and Bonner Bogen.

Page 38

2012

2013

Company Focus IREIT Global Darmstadt Darmstadt is located in the southern part of the Frankfurt Metropolitan Region, some 30km away from Frankfurt, in the federal state of Hesse. Originally the capital of the Grand Duchy of Hesse until it was moved to Wisebaden after the war, Darmstadt is the administrative centre of the Grand Duchy of Hesse, and the fourth largest city in the state. The resident population of Darmstadt stands at 150k, with an additional 37k students from three universities. The city is recognised for its strong science, education and electronics/IT sectors. Key organisations that have a presence within Darmstadt include the European Space Operations Centre of the ESA, the International Particle Accelerator Facility, Merck, P&G (Wella), Goldwell and T-Online (a subsidiary of Deutsche Telekom), which has its headquarters located in the city.

Office supply is fairly limited, given the low level of new office completions since 2010. This has led to low vacancy levels of 4.4% and a general upward trajectory in rents across the board, although high quality office rents have seen the steepest increases. The most popular submarkets within Darmstadt are Europaviertel and TZ (Telekom Zentrum), given that new completions have been largely located in these business parks rather than within the city centre. The majority of office space in TZ is occupied by T-Online, which is consolidating all its operations and staff in a single location. Office vacancy rate (Darmstadt vs. Region) 12% 11% 10% 9% 8%

Major office zones in Darmstadt

7% 6% 5% 4% 3% 2% 1% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Darmstadt Regional

Source: Cushman & Wakefield, DG HYP, DBS Bank

Average office rents in Darmstadt 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0

Source: Bulwein Gesa, Colliers International, DBS Bank

2.0

Average rent city Average rent periphery

1.0

Darmstadt has c.1.8m sqm of office space, which is occupied by a range of local and international corporations in the chemicals, science and IT sectors. The office market is particularly attractive to firms due to its close proximity to the Frankfurt Metropolitan Area and relatively lower rentals for quality office assets. 2013 saw 60k sqm of office space being taken up, well above the 8 year historical average of 42k sqm. Demand for space was largely driven by the IT sector, which accounted for 54% of all leasing activity in the office market.

Average rent city edge Average rent office park

0.0 2006

2007

2008

2009

2010

2011

2012

2013

Source: Bulwein Gesa, Colliers International, DBS Bank

According to Colliers International, supply of prime office space will continue to be highly restricted in the near term there is only one office under construction – a c.22k sqm building in the TZ business park, which has already been prelet to T-Systems, part of Deutche Telekom. Upon completion of the office in 2014, T-Systems will relocate its remaining 1,300 employees working in offices outside the city to the new campus, bringing total Deutsche Telekom employees in the park to 9, 000.

Page 39

Company Focus IREIT Global In the medium term, some 200k sqm of new office space will be introduced to the market, representing c.10% of total stock, upon conversion of the Kelley Barracks, Nathan Hale Depot and Griesheim Airfield. According to Cushman & Wakefield, the Institute for Federal Real Estate plans to gradually start selling off large commercial building space in these locations from 2013. However this is a medium term prospect, and to date no construction has commenced. New office supply in Darmstadt 80,000

Münster Münster is the largest city in the Münsterland region. It is known as a cultural centre and a university city, with c.297k residents and 47k students enrolled across nine higher educational establishments. Münster is one of the fastest growing cities in North-Rhine Westphalia, alongside Cologne, Bonn and Düsseldorf. According to Oxford Economics, population is expected to grow by c.16.8% over the next 10 years.

sqm

Due to the historic nature of the city, many buildings within the city centre are protected; as a result, most offices within the city centre are smaller units located above retail outlets. Larger and more modern offices may be found in business parks at the edge of the city.

70,000 60,000 50,000 40,000 30,000 20,000 10,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Bulwein Gesa, Colliers International, DBS Bank

The office investment market in Darmstadt is dominated by local or regional investors with good knowledge of the local market, with some institutional interest in offices within the city centre. Despite a fairly active investment market, property yields have remained fairly stable at 6.2% for prime offices and 7.7% for offices in secondary areas.

Münster has a total office supply of 2.3m sqm, the majority of which is owner-occupied. Despite a higher-than-average office to inhabitant ratio, there has been steady demand for office space, largely stemming from the public sector and SMEs. The market saw record levels of office take up in 2011 and 2012, with take ups of c.96.4k sqm exceeding the 10 year average of 68.7k sqm. This was largely attributable to demand for extra large floor plates of >15k sqm. As of 2013, office vacancy hit a 10-year low of 3.5%. Major office zones in Münster

The largest transaction in Darmstadt in 2013 involved the Employment Court Building, which was part of the sale of the Hesse state portfolio to Patrizia Immobilien, which comprised of 36 assets across strong regional cities in Hesse, which are let to various departments of the Federal State on long term leases in excess of 20 years. A second transaction of a similar nature was executed in 1Q14, this time involving the police headquarters and the Tax Office, when Patrizia acquired another portfolio of 18 office buildings in Hesse for a total of €1bn. Net yield for office assets in Darmstadt 9% 8% 7% 6% 5%

Source: Bulwein Gesa, Colliers International, DBS Bank

4% 3% 2% 1% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Central locations Secondary locations

Source: Bulwein Gesa, Colliers International, DBS Bank

Page 40

Company Focus IREIT Global Münster office vacancy rate

Munich-Dornach Munich is the capital of Bavaria and the heart of Germany’s southernmost metropolitan region. With a population of 1.4m residents, it is the third largest city in Germany, behind Berlin and Hamburg due to its skill clusters and business environment; as such, the city attracts significant amounts of FDI from the USA and the UK in particular.

6% 5% 4% 3% 2% 1% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Colliers International, DBS Bank

New office developments can be found in several fringe-city business parks. Zentrum Nord, which is located to the north of the city centre, houses corporations and large public sector occupiers seeking headquarter style buildings. Another up and coming zone is Loddenheide, which offers competitive rents relative to the city centre. There are also several new smaller developments in the harbour district, close to the city centre. As offices in Münster are largely owner-occupied, the availability of good quality assets let to prime tenants are very limited. The investment market in Münster is generally dominated by local and regional investors with strong local market knowledge. Yields have remained fairly stable in the past decade; however with increasing demand from international investors focusing on good class assets in “Bclass” cities, net property yields have compressed slightly for both offices in central locations as well as secondary locations. Net yields in Münster 9% 8%

Munich is home to several large German international corporations such as Siemens, BMW, Linde, Rohde & Schwarz and MAN AG. It boasts a large base of banking institutions such as HypoVereinsbank, Bayerische Landesbank, Allianz SE and Munich RE, and it is considered Germany’s leading hightech and media location. Dornach is located in the Munich suburb of Aschheim, c.10.5km to the north-east of Munich city centre. The area is much sought after by tenants due to its easy accessibility to Munich, as well as its close proximity to the Messe Munchen International, which is one of Munich’s most important convention/exhibition centres. The attractive location of Dornach has led to significant developments in the area, with new hotels and offices being built to cater to higher anticipated demand. A key reason for strong demand for offices in the DornachAschheim market is the low real estate tax relative to Munich city. Its close proximity to the city centre makes it commercially attractive for companies looking for larger spaces to relocate to this area. Key tenants in the area include Ulla Poplken, Cecile Weddings, Yamaichi Electronics and Hewlett-Packard. Rents for new build offices in Aschheim and Dornach are c.€12-13.50 psm pm for newly developed buildings, €9-11.50 psm pm for high quality existing property and €6.50-9 psm pm for second tier space. As a tier 1 city, Munich attracts significant levels of office demand. In 2013, the city achieved 597k sqm of office take up, the highest in Germany, driven by demand for large floor plates <10 sqm. The city also saw lease-extensions and prelettings, indicating the still strong demand for large office spaces. Strong demand for office space has led to a downward trend in urban area vacancy rates. As of Dec 2013, vacancy rate stood at 6.9%, the lowest in 10 years, translating to c.1.4m sqm of available office space.

7% 6% 5% 4% 3% 2% 1% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Central locations Secondary locations

Source: Bulwein Gesa, Colliers International, DBS Bank

Page 41

Company Focus IREIT Global Majority of Munich’s market space lies within the city; however Cushman & Wakefield notes that c.30% of total stock is in peripheral markets, the largest of which is the north east quadrant which includes Dornach. In terms of new supply, 2013 saw 136k sqm of new office supply; looking ahead, there will be c.354k sqm of new space that is currently under construction. However, given strong leasing momentum, Cushman & Wakefield expects the incoming supply to be well absorbed by the market.

Office completions in Munich 500 450

'000 sqm

400 350

Take up, vacancy and prime rents in Munich 2000

In terms of office investment, Munich is the most active market in Germany, registering c. €4.7bn in transactions in 2013. Net property yields for prime assets are currently 4.2%, the lowest in Germany.

300 E UR psm pm 35

'000 sqm

1800

30

1600

250 200 150

25

1400 1200

20

1000 15

800 600

10

400 5

200 0

0 2004

2005

2006

2007 Take up

2008

2009

Vacant space

Source: Cushman & Wakefield, DBS Bank

Page 42

2010

2011

Prime rents

2012

2013

100 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F2015F Completions Under Construction

Source: Cushman & Wakefield, DBS Bank

Company Focus IREIT Global Properties Bonn Campus Property with good specifications. Constructed in 2008, Bonn Campus comprises four U-shape office buildings with two, four or six storeys, depending on the section of the building, with NLA of 352,367 sq ft. The property offers a high standard of office accommodation and building specification, with extensive and state-of-the-art technical equipment. It has a two-storey underground car park with 656 parking spaces, consisting of 644 underground and 12 external parking spaces. Surrounding Infrastructure. Bonn Campus is located on the main connecting road of Friedrich-Ebert-Allee (B9), a four lane dual carriage way that forms the main arterial route into the Bonn city centre approximately 5 km away. The nearest autobahn A562 junction is approximately 500m south of the property and leads to the Cologne Bonn Airport approximately 26 km to the north. Public transport connectivity is excellent with regular bus services available and the nearest train station (U-Bahn) located 100 m to the north, providing access to the city centre. The property is located in the Bundesviertel in the southern part of Gronau district, next to Dottendorf district. The immediate vicinity is a popular urban setting populated principally by a mixture of large offices and low density

residential accommodation. Other significant office tenants in the near vicinity include Deutsche Post DHL Group HQ (in the prominent Post Tower), Solar World AG HQ, Haribo HQ, Cisco, Ericsson as well as the United Nations Campus. Deutsche Telekom as the anchor Tenant. The property is fully leased to GMG, a wholly-owned subsidiary of Deutsche Telekom and is situated directly opposite the global headquarters of Deutsche Telekom, with a pedestrian bridge providing easy access between both buildings. Given the property’s proximity and connection to the global HQ building of Deutsche Telekom implies the importance of the property to the Deutsche Telekom group. Long lease with a WALE of 9.1 years (by GRI for March 2014) The initial lease term is 15 years from 18 April’08. The rent is subject to indexation to the CPI, where any changes by more than 10.0% on a cumulative basis assessed monthly, compared to the CPI as of the start of the lease term will result in a rent adjustment. Then, the gross rental income shall be adjusted accordingly by the same percentage of the CPI change, immediately applicable for the following month. In addition, the tenant, GMG, bears certain maintenance and repair costs within the Property up to a limit of 3.0% of the annual net rent (without ancillary costs) per year. The landlord bears the costs of maintenance and repair of the roof and structure and of certain building equipment and appliances, subject to certain exceptions.

Key Salient Details of Bonn Campus Address

Friedrich-Ebert Allee 71, 73, 75, 77, Bonn, Germany

Completion Year

2008

Committed Occupancy as at 31 March 2014

100%

Car Park Spaces

656

Gross Built Area

59,585 sq m (641,367 sq ft)

NLA

32,736 sq m (352,367 sq ft )

Land Area

20,199 sq m (217,420 sq ft )

Average Rent per sq m – Offices (€ / month) for March 2014

15.0

Colliers Valuation (€’ m)

100.0

Number of Tenants as at 31 March 2014

1

Land Tenure

Freehold

WALE by NLA as at 31 March 2014 (years)

9.1

WALE by Gross Rental Income for the month of March 2014 (years)

9.1

Source: Manager, DBS Bank

Page 43

Company Focus IREIT Global Bonn Campus

Source: Manager, DBS Bank

Location

Source: Manager, DBS Bank

Page 44

Company Focus IREIT Global Darmstadt Campus Property with good specifications. Constructed in 2007, Darmstadt Campus comprises six connected office buildings with seven and five storey sections in the shape of a double-H with NLA of 326,910 sq ft with 353 underground and 10 surface parking spaces, as well as a multi-storey car park located south of its office buildings, providing an additional 826 parking spaces. Surrounding Infrastructure. Darmstadt Campus is located to the south of the main road Rheinstra e (B26), which provides direct entry into the city centre towards the east and also leads to the Frankfurt Rhein Main Airport and Frankfurt city, approximately 25 km and 30 km to the north, respectively. It has excellent transparent links, being about 1 km across the main road from the Darmstadt central railway station and with a bus stop located 100 m away The property is located in the TZ (“Technologiezentrum”) Rhein Main Business Park, which is a key technology office area of Darmstadt and one of the largest and most modern business parks in the city, with a total floor area of more than 200,000 sq m. The business park is home to many companies in the same Information, Communications and Technology (ICT) industry as Deutsche Telekom.

Telekom and is situated diagonally across an upcoming new 21,620 sq m (232,716 sq ft) office building which would by next year be ready to house approximately 1,300 Detusche Telekom employees. This would bring all of Darmstadt’s approximately 9,000 Deutsche Telekom staff into one office cluster, and highlights the importance of the property to the operations of Deutsche Telekom in Darmstadt, being the city with the largest concentration of Deutsche Telekom offices outside Bonn. Long lease with a WALE of 8.5 years (by GRI for March 2014). The initial lease term is 15 years from 30 Nov’07. The rent is subject to indexation to the CPI, where any changes by more than 10.0% on a cumulative basis assessed monthly, compared to the CPI as of the start of the lease term will result in a rent adjustment. Then, the gross rental income shall be adjusted accordingly by the same percentage of the CPI change, immediately applicable for the following month. In addition, GMG, the tenant bears certain maintenance and repair costs within the Property up to a limit of 3.0% of the annual net rent (without ancillary costs) per year. The landlord bears the costs of maintenance and repair of the roof and structure and of certain building equipment and appliances, subject to certain exceptions.

Deutsche Telekom as the anchor Tenant. The property is fully leased to GMG, a wholly-owned subsidiary of Deutsche Key Salient Details of Darmstadt Campus Address

Heinrich-Hertz-Straße 3, 5, 7, Darmstadt, Germany Mina-Rees-Straβe 4, Darmstadt, Germany

Completion Year

2007

Committed Occupancy as at 31 March 2014

100%

Car Park Spaces

1,189

Gross Built Area

67,123 sq m (722,505 sq ft)

NLA

30,371 sq m (326,910 sq ft)

Land Area

18,693 sq m (201,210 sq ft)

Average Rent per sq m – Offices (€ / month) for March 2014

11.5

Colliers Valuation (€’ m)

74.1

Number of Tenants as at 31 March 2014

1

Land Tenure

Freehold

WALE by NLA as at 31 March 2014 (years)

8.7

WALE by Gross Rental Income for the month of March 2014 (years)

8.5

Source: Manager, DBS Bank

Page 45

Company Focus IREIT Global Darmstadt Campus

Source: Manager, DBS Bank

Carpark

Source: Manager, DBS Bank

Location

Source: Manager, DBS Bank

Page 46

Company Focus IREIT Global Münster Campus Property with good specifications. Constructed in 2007, Münster Campus comprises two adjacent six-storey office buildings (consisting of north and south components) with total Net Lettable Area of 292,595 sq ft and 166 parking spaces. The property has floor plates which are of modern configuration, and has undergone additional internal refurbishment with high quality finishing and fit-out specification. There is also an external six-storey car park structure next to Münster North with an additional 422 parking spaces. Surrounding Infrastructure. Münster Campus is situated in Zentrum Nord, and is linked to the Münster city centre approximately 2.5 km south via the main road K13, as well as via the railway, which is accessible from the Zentrum Nord Central Station. The Münster Osnabrück International Airport is also located within 26 km to the northeast of the property via the highway B219. Zentrum is one of the largest office locations in Münster, and is home to a range of other prominent companies and organisations such as International Business Machines Corporation (IBM), Sparda-Bank, German State Pension & Insurance, as well as a diverse range of consultancy and insurance companies.

The city has a large student population as Münster is home to many institutions of higher education, including the University of Münster and the University of Applied Sciences. Deutsche Telekom as the anchor Tenant. The property is fully leased to GMG, a wholly-owned subsidiary of Deutsche Telekom. It is noted that the property is one of the few highquality office assets with such large lot size in the Münster office market. Long lease with a WALE of 5.7 years (by GRI for March 2014). The initial lease term is 15 years from 1 April’07. The rent is subject to indexation to the CPI. If the CPI changes by more than 10.0% on a cumulative basis assessed monthly, compared to the CPI as of the start of the lease term or as of any rent adjustment due to re-indexation, then the Gross Rental Income shall be adjusted accordingly by the same percentage of the CPI change, immediately applicable in the following month. In addition, GMG, the tenant bears certain maintenance and repair costs within the Property up to a limit of 3.0% of the annual net rent (without ancillary costs) per year. The landlord bears the costs of maintenance and repair of the roof and structure and of certain building equipment and appliances, subject to certain exceptions.

Key Salient Details of Münster Campus Address

Gartenstraβe 215, 217, Münster, Germany

Completion Year

2007

Committed Occupancy as at 31 March 2014

100%

Car Park Spaces

588

Gross Built Area

46,148 sq m (496,733 sqft)

NLA

27,183 sq m (292,595 sqft)

Land Area

18,367 sq m (197,701 sq ft)

Average Rent per sq m – Offices (€ / month) for March 2014*

11.0

Colliers Valuation (€’ m)

50.9

Number of Tenants as at 31 March 2014

1

Land Tenure

Freehold

WALE by NLA as at 31 March 2014 (years)

5.5

WALE by Gross Rental Income for the month of March 2014 (years)

5.7

* Includes a legally binding lease that will commence on Listing Date Source: Manager, DBS Bank

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Company Focus IREIT Global Münster Campus

Source: Manager, DBS Bank

Location

Source: Manager, DBS Bank

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Company Focus IREIT Global Concor Park Property with good specifications. Constructed in 1978 before being fully refurbished in 2011, Concor Park is a newly refurbished business park comprising three linked five-storey buildings with NLA of 336,006 sq ft, as well as a newly built multi-storey car park with 512 parking spaces. Additionally, the property has been refurbished to a high specification and environmental standard that it has recently been invited to receive the Green Building Silver Certificate from the German Society for Sustainable Building on 1 July 2014. Surrounding Infrastructure. Munich is the capital and largest city in the state of Bavaria and the third most populous city in Germany, behind Berlin and Hamburg. The city is attractively situated in southern Bavaria, close to the Alps. With the Isar River valley and its numerous lakes, the region offers attractive recreation facilities in the immediate vicinity. The property has direct access to highway A94, which leads to the Munich city centre approximately 10.5 km towards the west. The road also links to the ring motorway A99 which leads to a 30 minute drive to the Munich International Airport 38 km northeast of the property. There is also the Riem S-

Bahn station located immediately south of the property which provides regular services to the city centre as well. Concor Park’s location in the Aschheim-Dornach district is also close to the Messe Munchen International conference / exhibition centre about 2 km towards the southeast, which is a significant driver of business demand in the area. Diversified tenant base. Concor Park is let to 12 tenants, of which the top 3 tenants by rental income are ST Microelectronics, Allianz and Ebase. The tenants are from a diverse range of industries and nationalities, and this is testament to the positive business environment and connectivity of the city. Eight out of twelve lease agreements contain provisions which subject the rent to indexation to the CPI, where if the CPI crosses a prescribed point difference hurdle (of either five or seven points), or by a prescribed hurdle of 7% depending on the terms of the lease agreement, then the Gross Rental Income would be adjusted accordingly by the same extent or percentage of the CPI change. This will be applicable starting on either the next half-year period of the following year, depending on the terms of the lease agreement.

Key Salient Details of Concor Park Address

Bahnhofstraße 12 and Dywidagstraße 1, Bahnhofstraße 16, 18, 20, München (borough of Dornach), Germany

Completion Year

2011 (fully refurbished from its original construction in 1978); Carpark

Committed Occupancy as at 31 March 2014

100%

Car Park Spaces

512

Gross Built Area

42,021 sq m (452,310 sq ft)

NLA

31,216 sq m (336,006 sq ft)

Land Area

29,886 sq m (321,690 sq ft)

Average Rent per sq m – Offices (€ / month) for March 2014

10.6

Cushaman & Wakefield Valuation (€’ m)

59.1

Number of Tenants as at 31 March 2014*

12

Land Tenure

Freehold

WALE by NLA as at 31 March 2014 (years)

5.5

WALE by Gross Rental Income for the month of March 2014 (years)

5.9

built in 2011

*including a legally binding lese that will commence on listing date Source: Manager, DBS Bank

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Company Focus IREIT Global Concor Park

Source: Manager, DBS Bank

Location

Source: Manager, DBS Bank

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Company Focus IREIT Global 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 31 Aug 2014, 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 DBS Bank Ltd., DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”), their subsidiaries and/or other affiliates do not have a 1. proprietary position in the securities recommended in this report as of 31 Jul 2014, except CapitaCommercial Trust, Keppel REIT, CapitaRetail China Trust, Capitamall Trust, Croesus Retail Trust, SPH REIT, Mapletree Commercial Trust, Mapletree Greater China Commercial Trust, Starhill Global REIT, Suntec REIT, Ascendas India Trust, Ascendas REIT, Cache Logistics Trust, Cambridge Industrial Trust, Mapletree Industrial Trust, Mapletree Logistics Trust, Soilbuild Business Space Reit, Ascendas Hospitality Trust, Ascott Residence Trust, CDL Hospitality Trusts, Far East Hospitality Trust, OUE Hospitality Trust, Parkway Life Real Estate Investment Trust, Religare Health Trust, Frasers Hospitality Trust DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates beneficially own a total of 1% or more of any class of 2. common equity securities of Keppel REIT, Croesus Retail Trust, Mapletree Greater China Commercial Trust, Starhill Global REIT, Soilbuild Business Space Reit, Ascendas Hospitality Trust, Ascott Residence Trust, Far East Hospitality Trust, Frasers Hospitality

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Company Focus IREIT Global

3.

Trust and 5% of Ascendas Hospitality Trust as of 31 Jul 2014. 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.

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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.

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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.

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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.

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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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