26
ed-TH / sa- JC, PY Buying into value Majority of REITs continue to grind out stable or incremental rise in DPU Yield spreads still wide despite post-Brexit rally Selectively shift towards unloved office and hospitality REITs, away from REITs where investors are seeking refuge Top picks: AREIT, CDREIT, FLT and KREIT S-REITs grinding out steady returns despite weak fundamentals. The recent 2Q16 result season saw S-REITs delivering a 1.5% growth in distribution per unit (DPUs) although ongoing rental pressures persist due to the oversupply situation in various property sub-segments. We see Retail REITs delivering most steady organic growth and will likely continue, while a majority of S-REITs inch out stable or incremental rise in DPUs on the back of acquisitions and capital distributions. Looking ahead, we see increasing challenges to portfolio occupancies in industrial REITs given expected tenant consolidations resulting in higher portfolio vacancies. While the performance of Singapore-focused hospitality REITs will likely remain weak on the back of soft corporate demand and heightened price competition, we expect an improvement in 2H16 due to a seasonal uplift and delay in the completion of some new hotels. Office REITs are expected to deliver steady returns as the majority of leases expiring this year have already been renewed. Yield spreads of 4.5% to cushion valuations despite macro noises from Fed rate hikes in Sep/Dec. We expect macro noises to persist in the coming 2H16 but think that the current yield spreads of 4.5% are sufficient to buffer valuations. Even after accounting for a further 50-bp hike in benchmark 10-year bond yields to 2.3% vs the current 1.8%, spreads remain wide at 4.0%, which is appealing in our view. Better value in select office and hospitality REITs. Diving deeper, the high headline yield masks yield spreads of between 3.7-3.9% for defensive retail REITs (CMT and FCT) which investors had been “hiding in” during a period of uncertainty, especially post the Brexit referendum. While we expect the prices for both to remain elevated given their defensive nature, we believe investors should selectively pick names in the office (KREIT) and hospitality (CDREIT) sectors which offer better value in terms of (i) trading at a 12-23% discount to recent physical market transactions on an implied price per sqft or per key basis, and (ii) where investors are typically underweight. Our other top picks include: AREIT and FLT for a combination of market liquidity, decent yields, clear growth drivers and upside to earnings from deploying their strong balance sheets. STI : 2,867.21 Analyst Derek TAN +65 6682 3716 Mervin SONG CFA +65 6682 3715 [email protected] [email protected] Singapore Research Team STOCKS Source: DBS Bank Yield spread Source: DBS Bank Upgrades and downgrades post results REIT Recommendation Target Price (S$) Previous New Previous New MINT HOLD BUY 1.81 1.90 MLT HOLD BUY 1.10 1.15 CRCT BUY HOLD 1.69 1.60 IREIT BUY HOLD 0.77 0.77 Source: DBS Bank DBS Group Research . Equity 16 Aug 2016 Singapore Industry Focus Singapore REITs Refer to important disclosures at the end of this report Price Mkt Cap Target Price Performance (%) S$ US$m S$ 3 mth 12 mth Rating Ascendas REIT 2.43 4,830 2.61 3.9 6.2 BUY CapitaLand Mall Trust 2.18 5,739 2.23 5.8 10.4 HOLD CDL Hospitality Trusts 1.40 1,026 1.65 1.5 (2.8) BUY Frasers Centrepoint Trust 2.14 1,459 2.29 6.5 8.1 BUY Frasers Logistics & Industrial Trust 1.00 1,054 1.10 N.A N.A BUY Keppel REIT 1.06 2,558 1.26 1.4 3.9 BUY 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% 4.5% 3.8% 4.4% 5.3% 4.9% 4.5% 4.5% 6.3% 5.7% 6.0% 7.0% 6.7% 5.9% 6.3% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Office Retail Mixed Commercial Hospitality Industrial Healthcare Sector 10y Government Bond 10y Government Bond Yield Spread Yield Distribution Yield

Singapore REITs 16-Aug-2016 SG · Industry Focus Singapore REITs Page 4 Yield by Sector NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P.,

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Page 1: Singapore REITs 16-Aug-2016 SG · Industry Focus Singapore REITs Page 4 Yield by Sector NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P.,

ed-TH / sa- JC, PY

Buying into value

Majority of REITs continue to grind out stable or incremental rise in DPU

Yield spreads still wide despite post-Brexit rally

Selectively shift towards unloved office and hospitality REITs, away from REITs where investors are seeking refuge

Top picks: AREIT, CDREIT, FLT and KREIT

S-REITs grinding out steady returns despite weak fundamentals. The recent 2Q16 result season saw S-REITs delivering a 1.5% growth in distribution per unit (DPUs) although ongoing rental pressures persist due to the oversupply situation in various property sub-segments. We see Retail REITs delivering most steady organic growth and will likely continue, while a majority of S-REITs inch out stable or incremental rise in DPUs on the back of acquisitions and capital distributions. Looking ahead, we see increasing challenges to portfolio occupancies in industrial REITs given expected tenant consolidations resulting in higher portfolio vacancies. While the performance of Singapore-focused hospitality REITs will likely remain weak on the back of soft corporate demand and heightened price competition, we expect an improvement in 2H16 due to a seasonal uplift and delay in the completion of some new hotels. Office REITs are expected to deliver steady returns as the majority of leases expiring this year have already been renewed. Yield spreads of 4.5% to cushion valuations despite macro noises from Fed rate hikes in Sep/Dec. We expect macro noises to persist in the coming 2H16 but think that the current yield spreads of 4.5% are sufficient to buffer valuations. Even after accounting for a further 50-bp hike in benchmark 10-year bond yields to 2.3% vs the current 1.8%, spreads remain wide at 4.0%, which is appealing in our view. Better value in select office and hospitality REITs. Diving deeper, the high headline yield masks yield spreads of between 3.7-3.9% for defensive retail REITs (CMT and FCT) which investors had been “hiding in” during a period of uncertainty, especially post the Brexit referendum. While we expect the prices for both to remain elevated given their defensive nature, we believe investors should selectively pick names in the office (KREIT) and hospitality (CDREIT) sectors which offer better value in terms of (i) trading at a 12-23% discount to recent physical market transactions on an implied price per sqft or per key basis, and (ii) where investors are typically underweight. Our other top picks include: AREIT and FLT for a combination of market liquidity, decent yields, clear growth drivers and upside to earnings from deploying their strong balance sheets.

STI : 2,867.21

Analyst Derek TAN +65 6682 3716 Mervin SONG CFA +65 6682 3715 [email protected] [email protected]

Singapore Research Team

STOCKS

Source: DBS Bank

Yield spread

Source: DBS Bank

Upgrades and downgrades post results

REIT Recommendation Target Price (S$) Previous New Previous New MINT HOLD BUY 1.81 1.90 MLT HOLD BUY 1.10 1.15 CRCT BUY HOLD 1.69 1.60 IREIT BUY HOLD 0.77 0.77

Source: DBS Bank

DBS Group Research . Equity 16 Aug 2016

Singapore Industry Focus

Singapore REITs

Refer to important disclosures at the end of this report

Price Mkt Cap Target Price Performance (%)

S$ US$m S$ 3 mth 12 mth Rating

Ascendas REIT 2.43 4,830 2.61 3.9 6.2 BUY CapitaLand Mall Trust 2.18 5,739 2.23 5.8 10.4 HOLD CDL Hospitality Trusts 1.40 1,026 1.65 1.5 (2.8) BUY Frasers Centrepoint Trust

2.14 1,459 2.29 6.5 8.1 BUY

Frasers Logistics & Industrial Trust

1.00 1,054 1.10 N.A N.A BUY

Keppel REIT 1.06 2,558 1.26 1.4 3.9 BUY

1.8%

1.8%

1.8%

1.8%

1.8%

1.8%

1.8%

1.8%

4.5%

3.8%

4.4%

5.3%

4.9%

4.5%

4.5%

6.3%

5.7%

6.0%

7.0%

6.7%

5.9%

6.3%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%

Office

Retail

Mixed Commercial

Hospitality

Industrial

Healthcare

Sector

10y Government Bond

10y Government Bond Yield Spread Yield Distribution Yield

Page 2: Singapore REITs 16-Aug-2016 SG · Industry Focus Singapore REITs Page 4 Yield by Sector NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P.,

Industry Focus

Singapore REITs

Page 2

Singapore REITs Peer Comparisons (as at 12 August 2016)

REIT FYE Price Rec Target Price

Total Return Mkt Cap Yield @ Current Price P/Bk (x)

(S$) (S$) (%) S$'m FY16/17F FY17/18F FY16/17F FY17/18F Office CCT Dec 1.58 BUY 1.70 14% 4,658 5.7% 5.9% 0.89 0.90 KREIT Dec 1.06 BUY 1.26 26% 3,452 6.3% 6.3% 0.74 0.75 OUECT Dec 0.67 HOLD 0.73 17% 861 7.6% 7.5% 0.70 0.71

10,019 6.3% 6.4% 0.82 0.83 Retail CRCT Dec 1.58 HOLD 1.60 8% 1,347 6.7% 6.8% 0.98 1.01 CMT Dec 2.15 HOLD 2.23 9% 7,617 5.4% 5.4% 1.14 1.13 CRT Jun 0.85 BUY 0.90 15% 606 8.7% 8.3% 0.89 0.93 FCT Sep 2.14 BUY 2.29 12% 1,966 5.5% 5.6% 1.13 1.14 SPH REIT Aug 0.97 HOLD 0.99 8% 2,458 5.7% 5.9% 1.03 1.03

13,993 5.7% 5.7% 1.09 1.10 Commercial MAGIC Mar 1.08 BUY 1.13 12% 2,979 6.9% 7.1% 0.88 0.89 SGREIT Jun 0.81 BUY 0.87 14% 1,767 6.4% 6.5% 0.88 0.87 Suntec Dec 1.75 HOLD 1.71 3% 4,428 5.7% 5.7% 0.83 0.85

12,987 6.0% 6.1% 0.95 0.96 Industrial AIMS Mar 1.450 NR 1.52 13% 924 7.8% 7.8% 0.94 0.93 a-itrust Mar 1.075 BUY 1.07 5% 999 5.5% 5.9% 1.57 1.59 A-REIT Mar 2.430 BUY 2.61 14% 6,654 6.3% 6.2% 1.12 1.18 Cache Dec 0.885 BUY 0.93 14% 793 9.1% 8.7% 1.01 1.02 CREIT Dec 0.540 HOLD 0.60 19% 704 8.2% 8.3% 0.81 0.81 FLT Sep 1.000 BUY 1.10 16% 1,425 6.1% 6.6% 1.17 1.18 MINT Mar 1.760 BUY 1.90 14% 3,171 6.4% 6.5% 1.29 1.29 MLT Mar 1.070 BUY 1.15 14% 2,667 6.7% 6.9% 1.06 1.06 SBREIT Dec 0.665 BUY 0.79 28% 627 9.4% 9.5% 0.79 0.83

17,965 6.7% 6.8% 1.13 1.16 Hospitality ASCHT Mar 0.740 BUY 0.80 16% 830 7.5% 7.5% 0.89 0.91 ART Dec 1.140 BUY 1.31 22% 1,883 6.9% 7.0% 0.83 0.84 CDREIT Dec 1.395 BUY 1.65 25% 1,382 6.6% 6.7% 0.88 0.88 FEHT Dec 0.605 HOLD 0.65 14% 1,088 7.0% 6.7% 0.65 0.65 FHT Sep 0.770 BUY 0.88 23% 1,062 7.7% 7.8% 0.91 0.92 OUEHT Dec 0.675 BUY 0.75 18% 1,205 6.4% 7.1% 0.84 0.85

7,451 7.0% 7.1% 0.83 0.84 Healthcare P-Life Dec 2.46 BUY 2.75 17% 1,488 4.9% 5.0% 1.45 1.45

2,304 Others IREIT Dec 0.77 HOLD 0.77 9% 471 8.3% 8.3% 1.21 1.23 KDCREIT Dec 1.19 BUY 1.22 9% 1,047 5.8% 6.2% 1.28 1.28 MUST Dec 0.85 BUY 0.93 17% 712 6.6% 7.2% 1.10 1.12

2,230 Sector Average 6.3% 6.4% 1.02 1.03

Source: Bloomberg Finance L.P., DBS Bank

Page 3: Singapore REITs 16-Aug-2016 SG · Industry Focus Singapore REITs Page 4 Yield by Sector NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P.,

Industry Focus

Singapore REITs

Page 3

REITs outperform amid market volatility

Performance Divergence: Singapore REITs vs STI and Developers Remarks

S-REITs have outperformed STI by 11.2% over one year and by 7.0% YTD2016. Performance in 2016 reinforces S-REITs’ attractiveness for their resilience amid broad market uncertainties. S-REITs’ prices to remain steady given persistent market volatility while the wider-than-historical average yield spreads are likely to cushion downside to share prices.

Source: Bloomberg Finance L.P, Corporates, DBS Bank.

Singapore REIT yields spreads at 4.5%, 100bps higher than mean Remarks

DBS Forecast

in next 6-12 months

12-Aug-16 Historical

Mean1 Difference Change Interest Rate

SREITs Yield 6.3% 6.0% +0.3%

10Y SG Gvt Bond Yield 1.8% 2.5% -0.7%

+ 0.4% to 0.5%

2.2% to 2.3%

SREITs Yield Spread

4.5% 3.5% +1.00%

S-REITs are offering a yield of 6.3% which was c.30bps above the historical mean (ex-GFC) of 6.0%. Yield spread is 4.5% based on spot 10-year bond yield of 1.8%. This remains close to its – 1SD historical trading range and is above the historical yield spread of 3.5% (2005-current). DBS forecasts a 40-50bps potential rise in 10Y bond yield subsequent to Fed rate hikes in the next 6-12 months, pushing Singapore 10Y bond yield to 2.20-2.30%. Hence, the rich yield spread of 100bps currently gives an ample cushion for REIT price risks resulting from spread compression.

Note 1: Historical mean since 2005, ex-GFC. Note 2&3: 10Y Singapore Government Bond Yield Source: Bloomberg Finance L.P., Corporates, DBS Bank.

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%SREITs Yield Spread

Yield Yield Spread Mean Spread (ex-GFC) Mean Spread +1SD (ex-GFC)

Page 4: Singapore REITs 16-Aug-2016 SG · Industry Focus Singapore REITs Page 4 Yield by Sector NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P.,

Industry Focus

Singapore REITs

Page 4

Yield by Sector

NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P., companies, DBS Bank. Operational Outlook

Market Segment Office Retail Mixed

Commercial Industrial Hospitality Healthcare

Market Outlook

Declining Moderate decline

Moderate decline

Declining Moderate

decline Stable

Rental Outlook

Acquisitions Limited Limited Singapore, Overseas

Singapore, Overseas Overseas Overseas

Source: DBS Bank

6.3%

5.7%

6.0%

6.7%7.0%

5.9%

8.3%

6.1%

9.8%

8.9%

9.8%

7.3%

3.0% 3.1% 3.0%

4.1%

2.4%

4.9%

5.7%

5.1%

6.0%

6.6% 6.3% 6.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

Office Retail Mixed Commercial

Industrial Hospitality Healthcare

Max

Current

Mean

Low

Page 5: Singapore REITs 16-Aug-2016 SG · Industry Focus Singapore REITs Page 4 Yield by Sector NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P.,

Industry Focus

Singapore REITs

Page 5

Salient Operational Highlights Retail REITs

Decline in footfall and tenant sales – early sign or false alarm? Remarks

Most retailers registered low, if

not negative, y-o-y growth in footfall and sales in 2Q16.

While it is too early to conclude that this could spark further weakness going forward, we see challenges in Orchard road-focused malls given the 11.3% y-o-y increase in visitor arrivals1 has not appeared to spur spending for malls like (Vivocity and Wisma Atria and Paragon).

DPU growths fell to low single digits; occupancy rate, though was still above 90% but there was greater dispersion between retail malls.

The higher vacancy rates seen across selected malls (especially in Central Singapore) may provide more bargaining power to tenants, hence we expect flat to low rental reversions, as Managers aim for tenant retention.

Many S-REIT Managers have been utilising the soft environment as an opportunity to refresh their offerings by introducing some new brands and concepts. Major developments have also taken off, for instance, AEI works at Northpoint (FCT) commenced in March, and the redevelopment of Funan started in July.

Source: Bloomberg Finance L.P., Corporates, Singapore Tourism Boards, DBS Bank Only Wisma Atria’s occupancy data is used for SGREIT as it is non-master lease. VivoCity contributes c.65% of MCT’s top line. FCT’s occupancy data excludes Northpoint which is undergoing major AEI since Mar 2016. SGREIT’s top line consists of 50% Singapore retail. Note 1: international visitor arrivals in the first five months of 2016.

Most retailers suffered

from poor operations in 2Q16

Page 6: Singapore REITs 16-Aug-2016 SG · Industry Focus Singapore REITs Page 4 Yield by Sector NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P.,

Industry Focus

Singapore REITs

Page 6

Office REITs

Near-term bottom in capital value due to recent transactions in physical market

with minimal lease expiry risk in FY16

Remarks

REIT Code Price Enterprise

Value (S$m)

Attributed

GFA

(m sqft)

Implied psf

(Grade A)*

CapitaLand Commercial Trust

CCT 1.575 6,976 3.1 1,929

Keppel REIT KREIT 1.055 6,761 2.6 2,365 OUE Commercial Trust

OUECT 0.665 2,669 1.0 2,341

Suntec REIT Suntec 1.75 7,674 2.3 2,228

Date Property Tenure Price (S$m) NLA (sqft) Implied psf

(Grade A)

May-16 Remaining

60%

interest in

CapitaGreen

57 years

remaining

expiring

31Mar2073

1,600 703,122 2,276

(2,700

assuming

99-year

leasehold)

Jun-16 Straits

Trading

Building

999 year

leasehold

560 158,897 3,520

Jun-16 Asia Square

Tower 1

99 year

leasehold

3,400 1,200,000 2,668

Near-term bottom in capital

values following recent sale of Asia Square Tower 1, Straits Trading Building and 60% stake in CapitaGreen.

Physical buyers likely to take a view that the current weakness in rents is a function of a cyclical oversupply in completions over 2016-2017, with the medium-term outlook remaining robust given limited completions after 2019.

At current levels, office REITs trade at a discount to the implied price of recent Grade A office transactions which we believe is unwarranted

Reduced earnings risks for FY16 as the majority of leases expiring this year for various office REITs have already been renewed.

*Calculated as EV less value of non Grade A office properties divided by attributed property Source: Bloomberg Finance LLP, Corporates, DBS Bank

0%

2%

4%

6%

8%

10%

12%

14%

16%

CCT KREIT OUECT Suntec

Dec-15 Mar-16 Jun-16

Percentage of FY16 leases yet to be renewed

Page 7: Singapore REITs 16-Aug-2016 SG · Industry Focus Singapore REITs Page 4 Yield by Sector NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P.,

Industry Focus

Singapore REITs

Page 7

Industrial REITs

Weighted Average Lease Expiry – As a % of revenues Remarks

FY16/17 FY17/18 FY18/19 >FY19/20

Ascendas REIT 15% 21% 17% 48%

Mapletree Industrial Trust 14% 30% 25% 31%

Mapletree Logistics Trust* 14% 30% 25% 31%

Cambridge REIT 14% 17% 19% 50%

Cache Logistics Trust 11% 3% 25% 61%

Soilbuild REIT 3% 15% 38% 44%

* Based on net lettable area (NLA)

Portfolio Occupancy Rates

FY16/17 FY17/18 FY18/19 >FY19/20

Ascendas REIT 89.0% 89.2% 87.6% 88.2%

Mapletree Industrial Trust 93.8% 94.7% 94.6% 93.0%

Mapletree Logistics Trust* 96.9% 96.9% 96.2% 95.4%

Cambridge REIT 95.4% 94.8% 94.1% 93.4%

Cache Logistics Trust 95.2% 94.9% 94.2% 95.8%

Soilbuild REIT 98.7% 96.8% 94.8% 92.0%

Most Industrial REITs

have been pro-active in engaging expiring leases early and have another 3-15% of income to be renewed in 2H16.

The number of

property conversions are likely to taper off from 2016 onwards and thus pressure to margins are likely to ease.

Portfolio occupancies

are expected to ease marginally but should remain substantially full.

Rental Reversionary Trend to turn flattish / negative Remarks

Rental reversions are

expected to turn more muted in 2016-2018 on the back of a weak operating outlook.

The business park

segment is expected to buck this trend and remain most resilient as compared to other industrial sub-segments.

-20%

-10%

0%

10%

20%

30%

40%

50%

2012 2013 2014 2015 2016F 2017F 2018F

Business Park Warehouse Factory

Page 8: Singapore REITs 16-Aug-2016 SG · Industry Focus Singapore REITs Page 4 Yield by Sector NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P.,

Industry Focus

Singapore REITs

Page 8

Hospitality REITs

General deterioration in 2Q16 RevPAR compared to 1Q16 but expect stronger 2H16

on seasonal boost and delay in completion of new hotels

Remarks

Source: Bloomberg Finance L.P., Corporates, DBS Bank

2Q16 RevPAR in general

fell at a faster rate than 1Q16 due to impact from AEIs (CDREIT & FEHT), lack of boost from SEA Games last year as well as continued soft corporate demand and excess supply.

FHT outperformed the sector with RevPAR increasing y-o-y largely due to the completion of AEI at Intercontinental Hotel

Going into 2H16, the decline in RevPAR could potentially decelerate as some hotels scheduled to be completed later this year have been delayed into 2017 (2,866 net new rooms to be added in 2016 versus 3,930 in the prior estimate). In addition, hotels should benefit from the general seasonal uplift.

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

ART CDREIT FEHT -Hotel

FEHT -Serviced

Residence

FHT OUEHT

1Q16 2Q16

y-o-y growth in RevPAR

Page 9: Singapore REITs 16-Aug-2016 SG · Industry Focus Singapore REITs Page 4 Yield by Sector NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P.,

Industry Focus

Singapore REITs

Page 9

Singapore REITs results for 2Q16

*Note: IREIT reporting currency in EUR. Source: Bloomberg Finance L.P, DBS Bank

KREIT 2Q16 40.6 -6% -1% 32.5 -6% -1% 39% 1.41 2% -1% 1.61 -6% -4% InlineOUECT 2Q16 45.7 132% 6% 35.2 140% 6% 40% 0.91 -17% 0% 1.36 35% 3% A bov eSuntec 2Q16 78.9 -3% 1% 52.7 -7% -2% 36% 2.13 1% -1% 2.50 0% 5% Inline

Retail/MixedCRCT 2Q16 51.5 -5% -7% 35.5 -1% -3% 29% 1.55 -6% -5% 2.61 -4% -4% BelowCMT 2Q16 170.9 7% -5% 116.1 6% -9% 35% 1.87 3% 1% 2.74 1% 0% InlineFCT 3Q16 45.0 -4% -4% 31.2 -5% -7% 29% 1.90 3% -1% 3.04 0% 0% InlineMAGIC 1Q17 85.0 12% -3% 69.4 11% -5% 40% 1.18 3% -5% 1.85 9% -4% InlineSPHREIT 3Q16 52.2 2% -2% 40.0 2% -1% 26% 0.94 1% 0% 1.36 1% -3% InlineSGREIT 4Q16 53.6 4% 0% 41.4 0% 0% 35% 0.92 1% 2% 1.29 0% 2% Inline

Indust rialAIT 1Q17 36.1 6% 1% 23.6 7% 2% 29% 0.65 2% -6% 1.36 -1% -3% InlineAREIT 1Q17 207.6 15% 2% 149.5 20% 4% 37% 2.00 0% -1% 4.00 4% 17% InlineCache 2Q16 28.1 30% 1% 22.6 22% 2% 40% 0.87 -11% -1% 1.99 -7% -2% InlineCREIT 2Q16 28.3 2% 0% 21.2 -2% -2% 37% 0.67 -1% 0% 1.08 -12% -3% InlineMINT 1Q17 84.1 3% 0% 63.8 6% 3% 28% 1.37 4% 0% 2.85 4% 1% A bov eMLT 1Q17 89.6 5% 1% 75.2 6% 4% 36% 0.98 -1% -2% 1.85 0% 3% InlineSBREIT 2Q16 19.6 0% -3% 17.3 4% 1% 36% 0.79 0% 0% 1.57 -3% 1% Inline

Hospitalit yASCHT 1Q17 52.4 -1% -1% 22.6 5% -3% 33% 0.84 18% -2% 1.29 1% -1% InlineART 2Q16 119.4 21% 13% 57.9 17% 19% 41% 1.32 -4% -1% 2.13 2% 22% BelowCDREIT 2Q16 42.5 9% -5% 31.3 -1% -7% 36% 1.57 -3% 1% 2.23 -1% 0% InlineFHT 3Q16 31.7 34% 17% 27.0 41% 21% 38% 0.80 -5% -6% 1.51 -3% 14% A bov eOUEHT 2Q16 26.9 -9% -11% 23.2 -10% -12% 31% 0.79 -12% -11% 0.92 -39% -16% Below

HealthcarePREIT 2Q16 27.4 7% 2% 25.5 6% 2% 38% 1.64 -2% -1% 3.01 0% 1% Inline

OthersKDCREIT 2Q16 24.9 -4% 0% 22.1 1% 4% 29% 0.88 4% -2% 1.67 3% 0% InlineIREIT 2Q16 8.5 57% -4% 7.6 57% 0% 42% 0.42 -13% 2% 1.60 45% 1% Inline

< - - - - - - - - - - - -> <- - - - - - - - - ->

REIT

Report ing

Rev enues % Chg % Chg NPI % Chg % Chg Gearing NA V DPU % Chg % Chg Result s

F Y (S$mio) (y -o-y ) (q-o-q) (S$mio) (y -o-y ) (q-o-q) (%) (S$) (y -o-y ) (q-o-q) Sct s (y -o-y ) (q-o-q)Of f iceCCT 2Q16 67.6 -2% 1% 51.5 -4% -1% 30% 1.72 0% 0% 2.20 0% 0% Inline

Operat ing Stat ist ics F inancial Stat ist ics

% Chg

Page 10: Singapore REITs 16-Aug-2016 SG · Industry Focus Singapore REITs Page 4 Yield by Sector NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P.,

Industry Focus

Singapore REITs

Page 10

Valuation Charts

Page 11: Singapore REITs 16-Aug-2016 SG · Industry Focus Singapore REITs Page 4 Yield by Sector NB Yield data is ranges from Jan 2005 to Jun 2016, ex-GFC. Source: Bloomberg Finance L.P.,

Industry Focus

Singapore REITs

Page 11

Charts – S-REIT (Yield and Price to Book)

Ascendas Hospitality Trust Historical Yield Spread Ascendas Hospitality Trust Historical P/BV

Ascendas REIT Historical Yield Spread Ascendas REIT Historical P/BV

Ascendas India Trust Historical Yield Spread Ascendas India Trust Historical P/BV

Source: Bloomberg Finance L.P., DBS Bank

0.0

0.5

1.0

1.5

2.0

2.5

AREIT P/BV Mean +1 SD -1 SD

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

AREIT Yield Spread AREIT Yield Mean Yield-1 SD +1 SD

0.0

0.5

1.0

1.5

2.0

2.5

2007 2008 2009 2010 2011 2012 2013 2014 2015 201

AIT P/BV Mean +1 SD -1 SD

0.5

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

2012 2013 2014 2015 2016

ASCHT P/BV Mean +1 SD -1 SD

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2012 2013 2014 2015 2016

ASCHT Yield Spread ASHT Yield Mean-1 SD +1 SD

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

AIT Yield Spread AIT Yield Mean Yield-1 SD +1 SD

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Industry Focus

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Page 12

Ascott REIT Historical Yield Spread Ascott REIT Historical P/BV

CapitaMall Trust Historical Yield Spread CapitaMall Trust Historical P/BV

CapitaCommercial Trust Historical Yield Spread CapitaCommercial Trust Historical P/BV

Source: Bloomberg Finance L.P., DBS Bank

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ascott P/BV Mean +1 SD -1 SD

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ascott Yield Spread Ascott Yield Mean Yield-1 SD +1 SD

0.0

0.5

1.0

1.5

2.0

2.5

CMT P/BV Mean +1 SD -1 SD

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

CMT Yield Spread CMT Yield Mean Yield-1 SD +1 SD

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

CCT Yield Spread CCT Yield Mean Yield-1 SD +1 SD

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

CCT P/BV Mean +1 SD -1 SD

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Singapore REITs

Page 13

CapitaRetail China Trust Historical Yield Spread CapitaRetail China Trust Historical P/BV

CDL Hospitality Trust Historical Yield Spread CDL Hospitality Trust Historical P/BV

Cambridge REIT Historical Yield Spread Cambridge REIT Historical P/BV

Source: Bloomberg Finance L.P., DBS Bank

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

CRCT P/BV Mean +1 SD -1 SD

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

CRCT Yield Spread CRCT Yield Mean Yield -1 SD +1 SD

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

CDREIT P/BV Mean +1 SD -1 SD-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

CDREIT Yield Spread CDREIT Yield Mean Yield-1 SD +1 SD

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 201

CREIT P/BV Mean +1 SD -1 SD

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 201

CREIT Yield Spread CREIT Yield Mean Yield-1 SD +1 SD

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Industry Focus

Singapore REITs

Page 14

Cache Historical Yield Spread Cache Historical P/BV

Croesus Retail Trust Historical Yield Spread Croesus Retail Trust Historical P/BV

Far East Hospitality Trust Historical Yield Spread Far East Hospitality Trust Historical P/BV

Source: Bloomberg Finance L.P., DBS Bank

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2010 2011 2012 2013 2014 2015 2016

Cache Yield Spread Cache Yield Mean Yield-1 SD +1 SD

0.7

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

2010 2011 2012 2013 2014 2015 2016Cache P/BV Mean +1 SD -1 SD

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20

2013 2014 2015 2016

Croesus P/BV Mean +1 SD -1 SD

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2013 2014 2015 2016Croesus Yield Spread Croesus YieldMean Yield -1 SD+1 SD

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2012 2013 2014 2015 2016FEHT Yield Spread FEHT Yield Mean -1 SD +1 SD

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

2012 2013 2014 2015 2016FEHT P/BV Mean +1 SD -1 SD

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Singapore REITs

Page 15

Frasers Centrepoint Trust Historical Yield Spread Frasers Centrepoint Trust Historical P/BV

K-REIT Historical Yield Spread K-REIT Historical P/BV

Mapletree Industrial Trust Historical Yield Spread Mapletree Industrial Trust Historical P/BV

Source: Bloomberg Finance L.P., DBS Bank

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016FCT P/BV Mean +1 SD -1 SD

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 201FCT Yield Spread FCT Yield Mean Yield-1 SD +1 SD

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

KREIT P/BV Mean +1 SD -1 SD

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

KREIT Yield Spread KREIT Yield Mean Yield-1 SD +1 SD

0.9

1.0

1.1

1.2

1.3

1.4

1.5

2010 2011 2012 2013 2014 2015MINT P/BV Mean +1 SD -1 SD

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2011 2012 2013 2014 2015 2016MINT Yield Spread MCT Yield Mean Yield-1 SD +1 SD

Source: Bloomberg Finance L.P., DBS Bank

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Industry Focus

Singapore REITs

Page 16

Mapletree Logistic Trust Historical Yield Spread Mapletree Logistic Trust Historical P/BV

Mapletree Greater China Commercial Trust Historical Yield Spread

Mapletree Greater China Commercial Trust Historical

P/BV

OUE Hospitality Trust Historical Yield Spread OUE Hospitality TrustHistorical P/BV

0.0

0.5

1.0

1.5

2.0

2.5

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

MLT P/BV Mean +1 SD -1 SD

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

MLT Yield Spread MLT Yield Mean Yield-1 SD +1 SD

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

2013 2014 2015 2016

MAGIC Yield Spread MAGIC Yield Mean

-1 SD +1 SD

0.6

0.7

0.8

0.9

1.0

1.1

1.2

1.3

2013 2014 2015 2016

MAGIC P/BV Mean +1 SD -1 SD

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

2013 2014 2015 2016OUEHT Yield Spread OUEHT Yield Mean Yield-1 SD +1 SD

0.6

0.7

0.8

0.9

1.0

1.1

1.2

2013 2014 2015 2016OUEHT P/BV Mean +1 SD -1 SD

Source: Bloomberg Finance L.P., DBS Bank

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Singapore REITs

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Parkway Life REIT Historical Yield Spread Parkway Life REIT Historical P/BV

Soilbuild Business Space REIT Historical Yield Spread Soilbuild Business Space REIT Historical P/BV

SPH REIT Historical Yield Spread SPH REIT Historical P/BV

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2008 2009 2010 2011 2012 2013 2014 2015 2016PREIT P/BV Mean +1 SD -1 SD

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016

PREIT Yield Spread PREIT Yield Mean-1 SD +1 SD

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2013 2014 2015 2016

SBREIT Yield Spread SBREIT Yield Mean Yield-1 SD +1 SD

0.70

0.80

0.90

1.00

1.10

1.20

1.30

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

Oct

-14

Dec

-14

Feb-

15

Apr

-15

Jun-

15

Aug

-15

Oct

-15

Dec

-15

Feb-

16

Apr

-16

Jun-

16

Aug

-16

SBREIT P/BV Mean +1 SD -1 SD

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2013 2014 2015 2016SPH REIT Yield Spread SPH REIT YieldMean Yield -1 SD

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

1.20

1.25

2013 2014 2015 2016

SPH REIT P/BV Mean +1 SD -1 SD

Source: Bloomberg Finance L.P., DBS Bank

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Industry Focus

Singapore REITs

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Starhill Global REIT Historical Yield Spread Starhill Global REIT Historical P/BV

Suntec REIT Historical Yield Spread Suntec REIT Historical P/BV

Source: Bloomberg Finance L.P., DBS Bank

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016SGREIT Yield Spread SGREIT Yield Mean Yield-1 SD +1 SD

0.0

0.2

0.4

0.6

0.8

1.0

1.2

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

SGREIT P/BV Mean +1 SD -1 SD

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Suntec Yield Spread Suntec Yield Mean-1 SD +1 SD

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Suntec P/BV Mean +1 SD -1 SD

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Appendix

Appendix

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Singapore REITs List

Bloomberg Code Acronyms Company Description AIT SP Equity a-iTrust Ascendas India Trust Ascendas India Trust ("a-iTrust") was listed in August

2007 as the first Indian property trust in Asia. Its principal objective is to own income-producing real estate used primarily as business space in India. a-iTrust may also develop and acquire land or uncompleted developments to be used primarily as business space, with the objective of holding the properties upon completion. a-iTrust is managed by Ascendas Property Fund Trustee Pte Ltd, a subsidiary of the Ascendas Group.

ASCHT SP Equity ASCHT Ascendas Hospitality Trust A-HTRUST is a stapled group comprising Ascendas Hospitality Business Trust (A-HBT) and Ascendas Hospitality REIT (A-HREIT), established to invest in a diversified portfolio of hotel assets in Asia, Australia and New Zealand.

ART SP Equity ART Ascott Residence Trust Ascott REIT's Investment portfolio primarily comprises real estate used mainly as serviced residences or rental housing properties (including investments in real estate-related assets and/or other related value-enhancing assets or instruments).

CACHE SP Equity Cache Cache Logistics Trust Cache is a REIT which invests primarily in logistics properties located in the Pan Pacific region. It currently owns 13 assets in Singapore and China.

CREIT SP Equity CREIT Cambridge Industrial Trust Cambridge Industrial Trust is a real estate investment trust which invests primarily in income-producing industrial assets located in Singapore.

CCT SP Equity CCT CapitaLand Commercial Trust CapitaCommercial Trust (CCT) is a real investment trust investing exclusively in commercial properties in Singapore.

CT SP Equity CMT CapitaLand Mall Trust CapitaMall Trust is a real estate investment trust which owns and invests in retail properties in the suburban areas and downtown core of Singapore.

CRCT SP Equity CRCT CapitaLand Retail China Trust CapitaChina Retail Trust is a real estate investment trust which invests in income-producing retail properties located mainly in China, Hong Kong and Macau.

CDREIT SP Equity CDREIT CDL Hospitality Trusts CDL Hospitality Trusts is a stapled group comprising H-REIT and HBT. H-REIT is a real estate investment trust that invests in a portfolio of income-producing hospitality-related properties and HBT is a business trust.

FHT SP Equity FHT Frasers Hospitality Trust FHT is a hospitality stapled group comprising FH-REIT and FH-BT. FH-REIT is a Singapore-based REIT which invests in hospitality assets. FH-BT is a Singapore-based business trust which will be dormant as of the Listing Date. FHT operates 13 mid- and upper-scale hotels and serviced residences in key gateway cities located in Singapore, Japan, UK, Australia, Malaysia and Japan.

FLT SP Equity FLT Frasers Logistics & Industrial Trust

Frasers Logistics & Industrial Trust (“FLT”) is the first Singapore-listed real estate investment trust (“REIT”) with an initial pure-play Australian industrial portfolio. FLT’s investment strategy is to invest globally in logistics and/or industrial-related real estate assets, with an initial focus on Australia.

Source: DBS Bank

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Bloomberg Code Acronyms Company Description IREIT SP Equity IREIT IREIT Global 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.

KDCREIT SP Equity Keppel DC REIT Keppel DC Reit Keppel DC REIT is a Singapore-based real estate investment trust (“REIT”), established with the principal investment strategy of investing, directly or indirectly, in a portfolio of income-producing real estate assets which are used primarily for data centre purposes, with an initial focus on Asia Pacific and Europe.

KREIT SP Equity K-REIT Keppel REIT K-REIT is a real estate investment trust investing predominantly in commercial properties in Singapore and key gateway cities in Australia. It currently owns 10 commercial Grade A office assets.

MAGIC SP Equity MAGIC Mapletree Greater China Commercial Trust

MGCCT is a Singapore real estate investment trust (REIT) established with the investment strategy of principally investing, directly or indirectly, in a diversified portfolio of income-producing commercial real estate in the Greater China region.

MINT SP Equity MINT Mapletree Industrial Trust Mapletree Industrial Trust is a real estate investment trust which invests primarity in income producing industrial assets located in Singapore. Its portfolio includes a diverse mix of business parks, science parks, ramp-up warehouses and flatted factories.

MLT SP Equity MLT Mapletree Logistics Trust MapleTree Logistics is a real estate investment trust which invests in logistics warehouses in the Asia Pacific region. It currently owns warehouses in Singapore, Japan, China, South Korea, Vietnam and Hong Kong.

OUECT SP Equity OUE CT OUE Commercial REIT OUE Commercial REIT (OUE CT) is an office REIT with a portfolio of office assets in located in prime CBD locations in Singapore and China.

OUEHT SP equity OUEHT OUE Hospitality Trust OUE H-Trust is a Singapore-based REIT established with the principal investment strategy of investing, directly or indirectly, in a portfolio of income-producing hospitality assets.

PREIT SP Equity Plife REIT Parkway Life Reit Parkway Life REIT is one of Asia's largest listed healthcare REITs. It invests in income-producing real estate and real estate-related assets used primarily for healthcare and healthcare-related purposes. As at 30th Sept 2014, PLife REIT's total portfolio size stood at 47 properties totalling in excess of S$1.5bn.

Source: DBS Bank

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Singapore REITs

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Bloomberg Code Acronyms Company Description SBREIT SP Equity SBREIT Soilbuild Business Space REIT Soilbuild Business Space REIT is a real estate

investment trust that invests in income-producing real estate used primarily for business space purposes in Singapore. Its flagship asset is Solaris, located in the one-north business park. The REIT is backed by Soilbuild Group, a household name in the construction and real estate business in Singapore.

SPHREIT SP Equity SPH REIT SPH REIT SPH REIT is a real estate investment trust that invests in income-producing retail malls in Singapore. It currently owns the Paragon Mall within the Orchard Road district, as well as Clementi Mall, located in the west of Singapore.

SGREIT SP Equity SGREIT YTL Starhilll Global REIT Starhill Global REIT is a real estate investment trust that invests in income-producing upscale retail and/or office assets in the Asia Pacific region. In Singapore, it owns portions of Ngee Ann City and Wisma Atria. It also owns assets in China, Japan, Malaysia and Australia.

SUN SP Equity Suntec REIT Suntec REIT Suntec REIT is has a portfolio of office and retail properties in Singapore and Australia. Its most prominent asset is Suntec City, which comprises five office towers and a retail mall located close to the city area of Singapore.

Source: DBS Bank

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Industry Focus

Singapore REITs

Page 23

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

Completed Date: 16 Aug 2016 07:46:05 Dissemination Date: 16 Aug 2016 08:34:01

GENERAL DISCLOSURE/DISCLAIMER

This report is prepared by DBS Bank Ltd. This report is solely intended for the clients of DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd,

its respective connected and associated corporations and affiliates 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 and the DBS Group is under no obligation to update the information in this report.

This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned schedule or frequency for updating research publication relating to any issuer.

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.

Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. 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, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction

in the past twelve months and does not engage in market-making.

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Page 24

ANALYST CERTIFICATION The research analyst(s) 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(s) 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 the report. The DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. As of 16 Aug 2016, the analyst(s) and his/her spouse and/or relatives who are financially dependent on the analyst(s), do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities). The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately.

COMPANY-SPECIFIC / REGULATORY DISCLOSURES

1. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates have a proprietary position in

Ascendas Hospitality Trust, Ascendas REIT, Ascott Residence Trust, Cache Logistics Trust, Cambridge Industrial Trust, CapitaLand Commercial

Trust, CapitaLand Mall Trust, CapitaLand Retail China Trust, CDL Hospitality Trusts, Croesus Retail Trust, Far East Hospitality Trust, Frasers

Centrepoint Trust, Frasers Hospitality Trust, Frasers Logistics & Industrial Trust, Keppel DC REIT, Keppel REIT, Manulife US REIT, Mapletree

Commercial Trust, Mapletree Greater China Commercial Trust, Mapletree Industrial Trust, Mapletree Logistics Trust, OUE Hospitality Trust,

Parkway Life Real Estate Investment Trust, Soilbuild Business Space Reit, SPH REIT, Suntec REIT, YTL Starhill Global REIT recommended in this

report as of 31 Jul 2016.

2. DBS Bank Ltd does not market make in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.

3. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates have a net long position

exceeding 0.5% of the total issued share capital in Ascendas REIT, Ascott Residence Trust, Cache Logistics Trust, CapitaLand Retail China

Trust, CDL Hospitality Trusts, Croesus Retail Trust, Far East Hospitality Trust, Frasers Hospitality Trust, Frasers Logistics & Industrial Trust,

Keppel DC REIT, Manulife US REIT, Mapletree Greater China Commercial Trust, Mapletree Logistics Trust, Soilbuild Business Space Reit, YTL

Starhill Global REIT recommended in this report as of 31 Jul 2016.

4. DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates beneficially own a total of 1% of any class of common equity

securities of Ascott Residence Trust, Cache Logistics Trust, Croesus Retail Trust, Far East Hospitality Trust, Frasers Hospitality Trust, Frasers

Logistics & Industrial Trust, Keppel DC REIT, Manulife US REIT, Mapletree Greater China Commercial Trust, Soilbuild Business Space Reit, YTL

Starhill Global REIT as of 31 Jul 2016.

5. DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates beneficially own a total of 5% of any class of common equity

securities of Croesus Retail Trust as of 31 Jul 2016.

Compensation for investment banking services:

6. DBS Bank Ltd, DBSVS, their subsidiaries and/or other affiliates of DBSVUSA have received compensation, within the past 12 months for

investment banking services from Ascendas REIT, Ascott Residence Trust, Cache Logistics Trust, CapitaLand Commercial Trust, CapitaLand

Mall Trust, Croesus Retail Trust, Frasers Hospitality Trust, FRASERS LOGISTICS & INDUSTRIAL TRUST, IREIT Global, Keppel REIT, Manulife US

REIT, Mapletree Greater China Commercial Trust, Mapletree Industrial Trust, Mapletree Logistics Trust, OUE Commercial REIT, OUE Hospitality

Trust, Parkway Life Real Estate Investment Trust, Soilbuild Business Space Reit, Suntec REIT as of 31 Jul 2016.

7. DBS Bank Ltd, DBSVS, their subsidiaries and/or other affiliates of DBSVUSA, within the next 3 months, will receive or intend to seek

compensation for investment banking services from Ascendas REIT, Mapletree Commercial Trust as of 31 Jul 2016.

8. DBS Bank Ltd, DBSVS, their subsidiaries and/or other affiliates of DBSVUSA have managed or co-managed a public offering of securities for

Ascendas REIT, Ascott Residence Trust, Cache Logistics Trust, CapitaLand Commercial Trust, CapitaLand Mall Trust, Croesus Retail Trust,

Frasers Hospitality Trust, FRASERS LOGISTICS & INDUSTRIAL TRUST, IREIT Global, Keppel REIT, Manulife US REIT, Mapletree Commercial Trust,

Mapletree Greater China Commercial Trust, Mapletree Industrial Trust, Mapletree Logistics Trust, OUE Commercial REIT, OUE Hospitality

Trust, Soilbuild Business Space Reit, Suntec REIT in the past 12 months, as of 31 Jul 2016.

9. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a

manager or co-manager or in any other investment banking transaction 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.

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RESTRICTIONS ON DISTRIBUTION

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

Australia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”), both of which are exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.

Hong Kong This report is being distributed in Hong Kong by or on behalf of, and is attributable to DBS Vickers (Hong Kong) Limited which is licensed and regulated by the Hong Kong Securities and Futures Commission and/or by DBS Bank (Hong Kong) Limited which is regulated by the Hong Kong Monetary Authority and the Securities and Futures Commission. Where this publication relates to a research report, unless otherwise stated in the research report(s), DBS Bank (Hong Kong) Limited is not the issuer of the research report(s). This publication including any research report(s) is/are distributed on the express understanding that, whilst the information contained within is believed to be reliable, the information has not been independently verified by DBS Bank (Hong Kong) Limited. This report is intended for distribution in Hong Kong only to professional investors (as defined in the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and any rules promulgated thereunder.) For any query regarding the materials herein, please contact Paul Yong (CE. No. ASE988) at [email protected].

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

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

Wong Ming Tek, Executive Director, ADBSR

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

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

United Kingdom This report is produced by DBS Bank Ltd which is regulated by the Monetary Authority of Singapore. This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom. In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates 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 DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.

Dubai

This research report is being distributed in The Dubai International Financial Centre (“DIFC”) by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3rd 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.

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United States This report was prepared by DBS Bank Ltd. DBSVUSA did not participate in its preparation. The research analyst(s) named on

this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. 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

e-mail: [email protected] Company Regn. No. 196800306E