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Please refer to the important disclosures at the back of this document.

Recovery Cycle: The Singapore REITs sector saw good growthin the first half of 2010. The total market capitalization of S-REITs surged by 39% YoY to S$32b as of end Aug 2010.According to the recent CBRE "REITs Around Asia 1H10"report, Singapore REITs market capitalization also came insecond highest in Asia; Japan was top at S$43b (US$32b). In

addition, there was also a new S-REIT listing of Cache LogisticsTrust in Apr, which was well-received by the investmentcommunity and raised gross proceeds of S$417.2m. Previouslybattered by the credit crunch, many were now able to ride onthe sector's recovery cycle. In fact, we see several S-REITsraising capital once more to acquire assets and grow.

Acquisitions-no more sleepy backwater: The 1H10 sawacquisitions activity by S-REITs rebound sharply with a totalvalue of S$4b (Exhibit 1). The credit freeze that made financingalmost impossible two years ago has also largely thawed.Borrowing costs for most S-REITs are now sloping downwardsrather than upwards. YTD, we have seen public financing

issuances and transacted private placements amounting toS$1.4b (Exhibit 2). Moving forward, we expect S-REITs tocontinue the refinancing process to take advantage of theeasing credit market, the low interest rate environment, andopportunities to pacify investor jitters. Quality sponsors andquality assets will continue to be crucial to securingcompetitive pricing.

Regulatory risk-looming cloud on the horizon: TheSingapore government remains highly active in the real estatespace. The spate of property cooling measures announcedrecently for the residential market is a case in point. Of all thenew measures, we see the move to disallow concurrent

ownership of HDB flats and private residential properties withinthe MOP as the most significant. The market now expectsprivate home prices and sales to be hit. Even though theindirect impact on the S-REITs sector remains to be seen,this episode certainly demonstrated the extent of governmentinfluence on the real estate sector.

Focusing on value . Despite the still uncertain marketconditions, the FTSE REIT sub-index is, in fact, up 5.85%YTD. This means that valuations for several S-REITs, especiallythe larger cap plays, are trading at significant premium tobook value. But coupled with the risk of falling asset pricesshould the government decide to get tough on the non-

residential property market, we believe that these S-REITsare increasingly looking fairly priced. As such, we maintain aNEUTRAL view on the sector.

S-REITS

SINGAPORE Company Update Results MITA No. 010/06/2009

3 September 2010

Neutral

SINGAPORE Sector Update MITA No. 016/06/2010

Research Team(65) 6531 9800e-mail: info@ocbc-research.com

Bringing up to date, Maintain Neutral

1000

1500

2000

2500

3000

3500

4000

J a n - 0 8

A p r - 0

8

J u l - 0 8

O c t - 0

8

J a n - 0 9

A p r - 0

9

J u l - 0 9

O c t - 0

9

J a n - 1 0

A p r - 1

0

J u l - 1 0

200300400500

6007008009001000

STI

FSTREI

S-REIT CurrentPrice(S$)

Price/Book

*Ascendas Real Estate Inv Trust 2.16 1.15*Ascott Residence Trust 1.13 0.82Cambridge Industrial Trust 0.51 0.83*CapitaCommercial Trust 1.37 0.87*CapitaMall Trust 1.97 1.21CapitaRetail China Trust 1.24 1.09CDL Hospitality Trusts 2.03 1.23*Frasers Centrepoint Trust 1.46 1.05

Frasers Commercial Trust 0.145 0.37K-REIT Asia 1.21 0.77*Lippo-Mapletree Indonesia RE 0.47 0.57*Mapletree Logistics Trust 0.840 0.97*Starhill Global REIT 0.580 0.61*Suntec REIT 1.41 0.73

Source: Bloomberg*Note: S-REITs under OIR coverage

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Sector Update

Exhibit 1: Top REITs' acquisitions in 2010

Source: Adapted from The Edge Singapore August 30, 2010

REIT Property Value (S$m)

Ascott Residence Trust 26 properties in Europe; One in Singapore and one in Vietnam. 1,390

Mapletree Logistics Trust Seven properties in Asia 460

Starhill Global REIT Lot 10, Starhill Gallery 444.3

K-REIT Asia 50% of 275 George Street, Brisbane Australia, 77 King Street Sydney Australia 353.6

Frasers Centrepoint Trust Northpoint 2; Yew Tee Point 290.2

CapitaMall Trust Clarke Quay 268

Ascendas REIT 31 Joo Koon Circle; DBS Asia Hub; Property in Jurong 228.5

CDL Hospitality Trust Five hotel properties in Brisbane & Perth 220.9

AIMS AMP Capital Industrial REIT 27 Penjuru Lane 161

Parkway Life REIT 11 nursing homes in Japan 107.3

Cambridge Industrial Trust 22 Chin Bee Drive; 1 & 2 Changi North Street 2 37.1

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Sector Update

Exhibit 2: Public Financing & Private Placement Activities in 2010

Source: Company websites

REIT Financing Initiative Value ($m) Date of Announcement

AIMS AMP Capital Industrial REIT AIMS AMP plans S$79 million rights issue S$79 24-Aug-10

CapitaCommercial Trust Issue of Convertible Bonds due 2015 successfully closed S$219.9 21-Apr-10

CDL Hospitality Trust Establishment Of S$1,000,000,000 Multicurrency Medium Term NoteProgramme

S$1,000 23-Jul-10

CDL Hospitality Trust Issue Of 116,960,000 New Stapled Securities In CDL Hospitality TrustsPursuant to The Private Placement

S$200 01-Jul-10

CapitaMall Trust Issuance Of S$150,000,000 2.85 Per Cent. Fixed Rate Notes Due 2014 And S$150,000,000 3.55 Per Cent. Fixed Rate Notes Due 2017Pursuant To The S$2,500,000,000 Multicurrency Medium Term Note

S$300 01-Sep-10

CapitaMall Trust Prices S$150,000,000 2.85 Per Cent. Fixed Rate Notes Due 2014 AndS$150,000,000 3.55 Per Cent. Fixed Rate Notes Due 2017 to Be IssuedPursuant to The S$2,500,000,000 Multicurrency Medium Term NoteProgramme

S$300 19-Aug-10

CapitaMall Trust Prices US$500.0 million 4.321% fixed rate notes due 2015. First seriesin US$2.0 billion Euro-Medium Term Note Programme

US$500 31-Mar-10

CapitaMall Trust Establishment Of US$2,000,000,000 Euro-Medium Term NoteProgramme

S$2,000 29-Mar-10

CapitaMall Trust Issuance Of S$100,000,000 3.85 Per Cent. Fixed Rate Notes Due 2017Pursuant to The S$2,500,000,000 Multicurrency Medium Term NoteProgramme

S$100 15-Mar-10

CapitaMall Trust Issuance Of S$100,000,000 3.288 Per Cent. Fixed Rate Notes Due2015 Pursuant to The S$2,500,000,000 Multicurrency Medium TermNote Programme

S$100 28-Jan-10

Cambridge Industrial Trust Private Placement Of 83,683,000 New Units In Cambridge IndustrialTrust ("CIT") to Non-Restricted investors At The issue Price Of S$0.478per New Unit And (If Applicable) In Respect Of Restricted Investors AtThe Restricted Investor Issue Price Of S$0.503 Per New Unit

S$40 27-Aug-10

Frasers Centrepoint Trust Issue Of (I) S$55 Million 2.83% Notes Due 2013 And (II) S$25 Million3.50% Notes Due 2015 Pursuant to The S$500 Million MulticurrencyMedium Term Note Programme

S$80 10-Feb-10

Frasers Centrepoint Trust Private Placement Of 137.0 Million New Units In Frasers CentrepointTrust

S$182.2 04-Feb-10

Mapletree Logistics Trust S$1,000,000,000 Multi-Currency Medium Term Note Programme - IssueOf Series 008 Notes comprising S$20,000,000 principal amount FixedRate Notes due 2015

S$20 26-Mar-10

Parkway Life REIT Issue Of S$50 Million Floating Rate Notes Due 2013 Pursuant to TheS$500 Million Multicurrency Medium Term Note Programme

S$50 23-Mar-10

Starhill Global REIT Issuance Of S$124,000,000 3.405% Notes Due 2015 Pursuant to TheS$2,000,000,000 Multicurrency Medium Term Note Programme

S$124 13-Jul-10

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Sector Update

For OCBC Investment Research Pte Ltd

Carmen LeeHead of ResearchPublished by OCBC Investment Research Pte Ltd

SHAREHOLDING DECLARATION: The analyst/analysts who wrote this report holds NIL shares in the above security.

RATINGS AND RECOMMENDATIONS: OCBC Investment Researchs (OIR) technical comments and recommendations are short-term and trading oriented.- However, OIRs fundamental views and ratings (Buy, Hold, Sell) are medium-term calls within a 12-month investment horizon. OIRs Buy = More than 10% upside from the current price; Hold = Trade within +/-10% from the current price; Sell = More than 10% downside from the current price.- For companies with less than S$150m market capitalization, OIRs Buy = More than 30% upside from the current price; Hold = Trade within +/- 30% from the current price; Sell = More than 30% downside from the current price.

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