ASCOTT RESIDENCE TRUST

Transcription

1 ASCOTT RESIDENCE TRUST CIRCULAR DATED 8 MARCH 2017

2 CIRCULAR DATED 8 MARCH 2017 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. Singapore Exchange Securities Trading Limited (the SGX-ST ) takes no responsibility for the accuracy of any statements or opinions made, or reports contained, in this circular dated 8 March 2017 (the Circular ). If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional or independent adviser immediately. If you have sold or transferred all your units ( Units ) in Ascott Residence Trust ( Ascott REIT ), you should immediately forward this Circular, together with the Notice of Extraordinary General Meeting and the accompanying Proxy Form in this Circular, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. ASCOTT RESIDENCE TRUST (a unit trust constituted on 19 January 2006 under the laws of the Republic of Singapore) MANAGED BY ASCOTT RESIDENCE TRUST MANAGEMENT LIMITED CIRCULAR TO UNITHOLDERS IN RELATION TO: THE PROPOSED ACQUISITION OF INTERESTS IN SERVICED RESIDENCE PROPERTIES IN GERMANY AT AN AGGREGATE PURCHASE CONSIDERATION OF S$97.2 MILLION FROM AN INTERESTED PERSON AND ENTRY INTO MASTER LEASE AGREEMENTS IN CONNECTION THEREWITH IMPORTANT DATES AND TIMES Last date and time for lodgement of Proxy Forms : Monday, 17 April 2017 at 11:30 a.m. Date and time of Extraordinary General Meeting : Wednesday, 19 April 2017 at 11:30 a.m. Place of Extraordinary General Meeting : The Star Gallery, Level 3, The Star Performing Arts Centre, 1 Vista Exchange Green, Singapore

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4 TABLE OF CONTENTS Contents Page FORWARD-LOOKING STATEMENTS...ii MARKET AND INDUSTRY INFORMATION...iii CERTAIN DEFINED TERMS AND CONVENTIONS...iii GLOSSARY...iv CORPORATE INFORMATION...ix SUMMARY...1 LETTER TO UNITHOLDERS OVERVIEW OF THE TRANSACTIONS SUMMARY OF APPROVALS SOUGHT THE TARGET ACQUISITIONS REQUIREMENT FOR UNITHOLDERS APPROVAL PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTIONS INTERESTS OF DIRECTORS AND SUBSTANTIAL UNITHOLDERS RECOMMENDATIONS EXTRAORDINARY GENERAL MEETING ABSTENTIONS FROM VOTING ACTION TO BE TAKEN BY UNITHOLDERS DIRECTORS RESPONSIBILITY STATEMENT CONSENTS DOCUMENTS AVAILABLE FOR INSPECTION UNITHOLDERS HELPLINE...28 APPENDIX A INDEPENDENT FINANCIAL ADVISER S LETTER...A-1 APPENDIX B SUMMARY VALUATION CERTIFICATES...B-1 NOTICE OF EXTRAORDINARY GENERAL MEETING...C-1 i

5 FORWARD-LOOKING STATEMENTS Certain statements in this Circular constitute forward-looking statements. All statements other than statements of historical facts included in this Circular, including those regarding Ascott REIT s financial position and results, business strategies, plans and objectives of management for future operations, are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Ascott REIT s actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements are based on numerous assumptions regarding Ascott REIT s present and future business strategies and the environment in which Ascott REIT will operate in the future. Forward-looking statements involve inherent risks and uncertainties. The forward-looking statements included in this Circular reflect the current views of Ascott Residence Trust Management Limited, as manager of Ascott REIT (the Manager ) with respect to future events and are not a guarantee of the future performance of Ascott REIT. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement. These factors include, but are not limited to, the following: Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š general global, regional and local political, industry, social and economic conditions; the general economic condition of, and changes in, the economy and financial markets globally; regulatory developments and changes in the industry in which Ascott REIT operates; changes in market conditions affecting Ascott REIT s ability to raise financing to fund the Target Acquisitions (as defined herein); property valuations may be subject to fluctuations and prevailing market conditions; whether Ascott REIT can successfully execute its business strategies and carry out its growth plans; competition in the real estate industry (including serviced apartments) in the Asia Pacific region and elsewhere; Ascott REIT s ability to anticipate and respond to trends concerning serviced residences or rental housing properties; changes in government regulations, including tax laws, licensing, foreign exchange rates and capital controls; war or acts of international or domestic terrorism; occurrences of catastrophic events, natural disasters and acts of God that affect Ascott REIT s properties; changes in Ascott REIT s senior management team or loss of key employees; changes in interest rates or inflation rates; changes in the value of certain currencies that are used in Ascott REIT s business, including the Singapore dollar and the Euro; other factors beyond Ascott REIT s control; and any other matters not yet known to Ascott REIT. These forward-looking statements speak only as of the date of this Circular. Although the Manager believes that the expectations reflected in the forward-looking statements are reasonable, the Manager cannot guarantee future results, levels of activity, performance or achievements. The Manager does not intend to update any of the forward-looking statements after the date of this Circular to conform those statements to actual results, subject to compliance with all applicable laws including the Securities and Futures Act, Chapter 289 of Singapore and/or the rules of the SGX-ST. ii

6 MARKET AND INDUSTRY INFORMATION This Circular includes market and industry data and forecasts that have been obtained from internal surveys, reports and studies, where appropriate, as well as market research, publicly available information and industry publications. Industry publications, surveys and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of such included information. While the Manager has taken reasonable steps to ensure that the information is extracted accurately and in its proper context, the Manager has not independently verified any of the data from third party sources or ascertained the underlying economic assumptions relied upon therein. Consent has not been sought from Eurostat, IBP, Inc., Fitch Ratings Limited, Statistisches Bundesamt Deutschland, Frankfurt Economic Development GmbH and Tourismus, Congress GmbH Frankfurt am Main to the inclusion of information extracted from the relevant reports and/or publications published by them and therefore they are not liable for such information. While the Manager has taken reasonable actions to ensure that the information from the reports and/or publications published by Eurostat, IBP, Inc., Fitch Ratings Limited, Statistisches Bundesamt Deutschland, Frankfurt Economic Development GmbH and Tourismus, Congress GmbH Frankfurt am Main are reproduced in their proper form and context, and that the relevant information has been extracted accurately and fairly from such reports, neither the Manager nor any other party has conducted an independent review of the information contained in such reports nor verified the accuracy of the contents of the relevant information. CERTAIN DEFINED TERMS AND CONVENTIONS Ascott REIT publishes its financial statements in Singapore dollars. In this Circular, references to S$, Singapore dollar or Singapore cent are to the lawful currency of the Republic of Singapore, references to or Euro are to the lawful currency of member states of the European Union that adopt the single currency in accordance with the Treaty on the Functioning of the European Union, as amended, including Germany. All references to dates and times are to Singapore dates and times. References to the acquisition of the Target Properties by Ascott REIT in this Circular shall, where the context so requires, include the acquisition of interest in the German Property Holding Companies from the Vendor (each as defined herein). Capitalised terms used in this Circular shall have the meanings set out in the Glossary on pages iv to viii of this Circular. References to ownership include instances where the property is held pursuant to a long-term lease. References to an interest in a Target Property (as defined herein) shall include the leasehold interest in the Target Property. Save as otherwise provided for in this Circular, references to appraised values refer to the average of the two valuations based on the appraisals of the Independent Valuers (as defined herein). Any discrepancies in the tables included herein between the listed amounts and totals thereof are due to rounding. Where applicable, figures and percentages are rounded off to one decimal place. This Circular contains conversions of Singapore dollar amounts into Euro, and vice versa, solely for the convenience of the reader. Unless otherwise indicated, Singapore dollar amounts in this Circular have been translated into Euro, and vice versa, based on the exchange rate of 1.00 = S$ However, these translations should not be construed as representations that Singapore dollar amounts have been, would have been or could be converted into Euro or that the Euro amounts have been, would have been or could be converted into Singapore dollar at that rate or any other rate or at all. iii

7 GLOSSARY In this Circular, the following definitions apply throughout unless otherwise stated: 2016 Audited Consolidated Financial Statements : The audited consolidated financial statements of Ascott REIT for FY2016 AOS Acquisition : The acquisition of Ascott Orchard Singapore by Ascott REIT from CH Commercial Pte. Ltd. and CH Residential Pte. Ltd. Apartment Unit : An available apartment unit for lease or licence, as the case may be, in the Existing Portfolio or the Target Properties Appraised Value : The average of two independent valuations by the Independent Valuers as of 15 January 2017 in relation to the Target Properties Ascott Orchard Singapore : The serviced residence property located at 11 Cairnhill Road Singapore , possession of which is expected to be delivered to Ascott REIT by October 2017 Ascott REIT : Ascott Residence Trust, a unit trust constituted on 19 January 2006 under the laws of the Republic of Singapore Audit Committee : The audit committee of the Manager, comprising Sim Juat Quee Michael Gabriel, Zulkifli Bin Baharudin and Elaine Carole Young CapitaLand or CL : CapitaLand Limited CDP : The Central Depository (Pte) Limited Circular : This circular dated 8 March 2017 Citadines City Centre Frankfurt Property Citadines Michel Hamburg Property : Controlling Shareholder : A person who: : Citadines City Centre Frankfurt, a serviced residence property located at Europa-Allee 23, Frankfurt am Main, Germany Citadines Michel Hamburg, a serviced residence property located at Ludwig-Erhard-Straße 7, Hamburg, Germany (a) (b) Controlling Unitholder : A person who: (a) (b) holds directly or indirectly 15% or more of the total number of issued shares excluding treasury shares in the company; or in fact exercises control over a company holds directly or indirectly, 15% or more of the nominal amount of all voting units in the property fund. The MAS may determine that such a person is not a controlling unitholder; or in fact exercises control over the property fund Directors : The directors of the Manager Distributable Income : Comprises Ascott REIT s Taxable Income and Net Overseas Income DPU : Distribution per Unit EBITDA : Earnings before net interest expense, tax, depreciation and amortisation iv

8 EGM : The extraordinary general meeting of Unitholders to be held at The Star Gallery, Level 3, The Star Performing Arts Centre, 1 Vista Exchange Green, Singapore on Wednesday, 19 April 2017 at 11:30 a.m. to approve the matters set out in the Notice of EGM on pages C-1 to C-2 of this Circular Existing Portfolio : The existing portfolio of Ascott REIT, as disclosed in the annual report of Ascott REIT for FY2016 FDI : Foreign direct investment Fixed Lease Rental : Means the fixed lease rental amount as set out in the German Master Lease Agreements Frankfurt SPA : The conditional sale and purchase agreement entered into on 6 March 2017 between the Purchaser and the Vendor in relation to the acquisition of Citadines City Centre Frankfurt Property FY2016 : The financial year ended 31 December 2016 German Master Lease Agreements : The master lease agreements to be entered into between the German Property Holding Companies (as the master lessors of the Target Properties) and the German Master Lessee to grant the German Master Leases German Master Leases : The master leases granted by the German Property Holding Companies to the German Master Lessee over each of the Target Properties German (Frankfurt) Master Lessee : Citadines Betriebs (Frankfurt) GmbH, an indirect wholly owned subsidiary of TAHL German (Hamburg) Master Lessee : Citadines Betriebs GmbH, an indirect wholly owned subsidiary of TAHL German Master Lessees : The German (Frankfurt) Master Lessee and the German (Hamburg) Master Lessee German Property Holding Companies GDP : Gross Domestic Product : Citadines Hamburg Michel GmbH & Co., KG and Citadines Europaviertel (Frankfurt) GmbH & Co., KG and German Property Holding Company means any one of them Hamburg SPA : The conditional sale and purchase agreement entered into on 6 March 2017 between the Purchaser and the Vendor in relation to the acquisition of the Citadines Michel Hamburg Property IFA : The independent financial adviser, being Deloitte & Touche Corporate Finance Pte Ltd IFA Letter : The letter from the IFA to the Independent Directors and the Trustee containing its advice in relation to the Transactions Income Tax Act : Income Tax Act, Chapter 134 of Singapore Independent Directors : Tan Beng Hai, Zulkifli Bin Baharudin, Sim Juat Quee Michael Gabriel and Elaine Carole Young Independent Valuers : Cushman & Wakefield VHS Pte. Ltd. and CBRE Pte. Ltd. v

9 Interested Party : As defined in the Property Funds Appendix, means: (a) a director, chief executive officer or Controlling Shareholder of the manager, or the manager, the trustee or controlling unitholder of the property fund; or (b) an associate of any director, chief executive officer or Controlling Shareholder of the manager, or an associate of the manager, the trustee or controlling unitholder of the property fund Interested Party Transaction : Has the meaning ascribed to it in paragraph 5 of the Property Funds Appendix Interested Person : As stated in the Listing Manual, in the case of a real estate investment trust, has the meaning defined in the Code on Collective Investment Schemes issued by the MAS. Therefore, interested person means: (a) a director, chief executive officer or Controlling Shareholder of the manager, or the manager, the trustee or controlling unitholder of the property fund; or (b) an associate of any director, chief executive officer or Controlling Shareholder of the manager, or an associate of the manager, the trustee or controlling unitholder of the property fund Interested Person Transaction : Means a transaction between an entity at risk and an Interested Person Latest Practicable Date : 1 March 2017, being the latest practicable date prior to the printing of this Circular Listing Manual : The listing manual of the SGX-ST Manager : Ascott Residence Trust Management Limited, as manager of Ascott REIT MAS : Monetary Authority of Singapore NAV or Net Asset Value : Net asset value Net Overseas Income : The consolidated net profits (excluding any gains from the sale of property or shares, as the case may be) after applicable taxes and adjustment for non-cash items, for example depreciation, derived by Ascott REIT from its properties located outside Singapore NTA : Net tangible assets Ordinary Resolution : A resolution proposed and passed as such by a majority consisting of more than 50% of the total number of votes cast for and against such resolution at a meeting of Unitholders convened in accordance with the provisions of the Trust Deed Pan-Asian Region : All countries in Asia and the Asia-Pacific region per cent or % : Per centum or percentage Purchaser : The Ascott (Europe) N.V., a wholly owned subsidiary of Ascott REIT Property Funds Appendix : Appendix 6 of the Code on Collective Investment Schemes issued by the MAS vi

10 Real Estate : Any land, and any interest, option or other right in or over any land. For the purpose of this definition, land includes land of any tenure, whether or not held apart from the surface, and buildings or parts thereof (whether completed or otherwise and whether divided horizontally, vertically or in any other manner) and tenements and hereditaments, corporeal and incorporeal, and any estate or interest therein, and Real Estate includes shares and stocks in an unlisted company which is constituted to hold/own such real estate, such as a special purpose vehicle Rights Issue : The renounceable rights issue of 481,688,010 rights units at an issue price of S$0.919 for each rights unit, on the basis of 29 rights unit for every 100 existing units held by eligible unitholders, as announced on 6 March 2017 Sale and Purchase Agreements : The Hamburg SPA and the Frankfurt SPA SCPL : Somerset Capital Pte Ltd SFA : Securities and Futures Act, Chapter 289 of Singapore SGX-ST : Singapore Exchange Securities Trading Limited sq m : Square metres Substantial Unitholder : A Unitholder with an interest in one or more Units constituting not less than 5% of the total number of Units in issue Summary Valuation Certificates : The valuation certificates issued by the Independent Valuers (as set out in Appendix B to this Circular) TAHL : The Ascott Holdings Limited, a wholly owned subsidiary of TAL TAL : The Ascott Limited TAL Guarantee : The guarantee to be entered into by TAL in favour of the Trustee upon entry into the German Master Leases by the relevant parties Target Acquisitions : The acquisition of the Target Properties Target Properties : The Citadines Michel Hamburg Property and the Citadines City Centre Frankfurt Property (each, a Target Property ) Taxable Income : The consolidated net profits (excluding any gains from the sale of property or shares, as the case may be) after applicable taxes and adjustment for non-cash items, for example, depreciation, derived by Ascott REIT from its properties located in Singapore Transactions : The Target Acquisitions and the entry into the German Master Leases Trust Deed : The trust deed dated 19 January 2006 entered into between the Trustee and the Manager constituting Ascott REIT, as supplemented by the first supplemental deed dated 22 March 2007, the second supplemental deed dated 9 September 2009, the third supplemental deed dated 16 September 2010, the fourth supplemental deed dated 16 October 2014 and the fifth supplemental deed dated 14 April 2016 entered into between the Trustee and the Manager, as amended, varied and supplemented from time to time vii

11 Trustee : DBS Trustee Limited, in its capacity as trustee of Ascott REIT Unit : A unit representing an undivided interest in Ascott REIT Unitholder : The registered holder for the time being of a Unit, including a person so registered as a joint holder, except where a registered holder is CDP, the term Unitholder shall, in relation to Units registered in the name of CDP, mean, where the context requires, depositor whose securities account with CDP is credited with Units Vendor : Ascott Holdings (Europe) N.V. : Euro, the lawful currency of member states of the European Union that adopt the single currency in accordance with the Treaty on the Functioning of the European Union S$ : Singapore dollar, the lawful currency of the Republic of Singapore The terms Depositor and Depository Register shall have the meanings ascribed to them respectively in Section 81SF of the SFA. Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall include corporations. Any reference in this Circular to any enactment is a reference to that enactment for the time being amended or re-enacted. Any reference to a time of day in this Circular shall be a reference to Singapore time unless otherwise stated. The exchange rates used in this Circular are for reference only. No representation is made that any amounts could have been or could be converted into or from Singapore dollar amounts at any of the exchange rates used in this Circular, at any other rate or at all. Any discrepancies in the tables, graphs and charts between the listed amounts and totals thereof are due to rounding. Where applicable, figures and percentages are rounded to one decimal place. viii

12 CORPORATE INFORMATION Directors of the Manager ( Directors ) : Mr Tan Beng Hai (Chairman and Non-Executive Independent Director) Mr Lim Ming Yan (Deputy Chairman and Non-Executive Non-Independent Director) Mr (TA) Tay Boon Hwee (Chief Executive Officer and Executive Non-Independent Director) Mr Zulkifli Bin Baharudin (Non-Executive Independent Director) Mr Sim Juat Quee Michael Gabriel (Non-Executive Independent Director) Ms Elaine Carole Young (Non-Executive Independent Director) Mr Lee Chee Koon (Non-Executive Non-Independent Director) Registered Office of the Manager : 168 Robinson Road #30-01 Capital Tower Singapore Trustee of Ascott REIT (the Trustee ) : DBS Trustee Limited (in its capacity as trustee of Ascott REIT) 12 Marina Boulevard Marina Bay Financial Centre Tower 3 Singapore Legal Adviser to the Manager : Allen & Gledhill LLP One Marina Boulevard #28-00 Singapore Legal Adviser to the Trustee : Shook Lin & Bok LLP 1 Robinson Road #18-00 AIA Tower Singapore Unit Registrar and Unit Transfer Office Independent Financial Adviser (the IFA ) Independent Valuers (the Independent Valuers ) : Boardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place, #32-01 Singapore Land Tower Singapore : Deloitte & Touche Corporate Finance Pte Ltd 6 Shenton Way, OUE Downtown 2 #33-00 Singapore : Cushman & Wakefield VHS Pte. Ltd. 3 Church Street #09-03 Samsung Hub Singapore (appointed by the Trustee for the valuation of the Target Properties) CBRE Pte. Ltd. 6 Battery Road #32-01 Singapore (appointed by the Manager for the valuation of the Target Properties) ix

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14 SUMMARY The following summary is qualified in its entirety by, and should be read in conjunction with, the full text of this Circular. Meanings of defined terms may also be found in the Glossary on pages iv to viii of this Circular. Any discrepancies in the tables included herein between the listed amounts and totals thereof are due to rounding. INTRODUCTION Ascott REIT is a serviced residence real estate investment trust, established with the objective of investing primarily in real estate and real estate-related assets which are income-producing and which are used, or predominantly used, as serviced residences, rental housing properties and other hospitality assets in any country in the world. Comprising an initial asset portfolio of 12 strategically located properties with 2,068 Apartment Units in five countries in the Pan-Asian Region, Ascott REIT was listed on the SGX-ST in March 2006 with an initial asset size of about S$856.0 million. As at 31 December 2016, Ascott REIT s portfolio has grown more than five times in size to reach S$4.8 billion, comprising 90 properties with 11,627 Apartment Units in 38 cities across 14 countries in Asia Pacific, Europe and the United States of America. Ascott REIT has been assigned a Baa3 issuer grade rating by Moody s Investors Service. Ascott Residence Trust Management Limited, as manager of Ascott REIT (the Manager ), continuously identifies suitable properties for acquisition by Ascott REIT in order to provide stable, and grow distributions to unitholders of Ascott REIT ( Unitholders ). In executing its acquisition strategy, the Manager seeks to secure yield-accretive acquisitions that meet its investment criteria and leverage on the increasing popularity of serviced residences, especially in markets with scope for income or capital value growth. The Manager believes that the target acquisitions, comprising the acquisition by Ascott REIT of interests in two serviced residence properties in Germany being the Citadines Michel Hamburg Property and the Citadines City Centre Frankfurt Property, represent an attractive and accretive opportunity to expand Ascott REIT s portfolio (the Target Acquisitions ). The Target Acquisitions represent an opportunity for Ascott REIT to acquire good quality assets in the established and steadily growing hospitality markets of Hamburg and Frankfurt, enabling it to strengthen its presence in Germany where it currently owns three serviced residence properties. At the same time, the Target Acquisitions will expand Ascott REIT s footprint to a new city in Germany Frankfurt, a key gateway city in Germany and one of Europe s leading locations for both domestic and international companies. In connection with the Target Acquisitions, Ascott REIT will enter into long-term master leases for each of the Target Properties. The entry into the German Master Leases will also further enhance the income stability of Ascott REIT. The German Master Leases, which will be 100% fixed subject to indexation annually, will protect Ascott REIT from any downside risks arising from unexpected downturn in business climate. Together with the acquisition of Ascott Orchard Singapore (the AOS Acquisition ), that was approved at the extraordinary general meeting of Ascott REIT held on 27 July 2012 and which is expected to proceed for legal completion in 2017, Ascott REIT s total asset value will increase to S$5.3 billion, comprising 93 properties, with approximately 12,139 Apartment Units in 39 cities across 14 countries. 1

15 SUMMARY OF APPROVALS SOUGHT The Manager proposes to seek the approval of Unitholders for the Target Acquisitions and the entry into German Master Lease Agreements granting master leases over each of the following properties: (a) (b) the Citadines Michel Hamburg Property; and the Citadines City Centre Frankfurt Property; (collectively, the Target Properties and the entry into the master lease agreements granting the master leases over each of the Target Acquisitions, the German Master Leases and the agreements granting the German Master Leases, the German Master Lease Agreements, collectively the Transactions ). ORDINARY RESOLUTION: THE PROPOSED ACQUISITION OF INTERESTS IN SERVICED RESIDENCE PROPERTIES IN GERMANY AT AN AGGREGATE PURCHASE CONSIDERATION OF S$97.2 MILLION FROM AN INTERESTED PERSON AND ENTRY INTO NEW MASTER LEASE AGREEMENTS IN CONNECTION THEREWITH The Manager has identified the following serviced residence properties in Germany as being suitable for acquisition by Ascott REIT: (i) (ii) an effective interest of 93% in Citadines Michel Hamburg, a serviced residence property located at Ludwig-Erhard-Straße 7, Hamburg, Germany (the Citadines Michel Hamburg Property ) from Ascott Holdings (Europe) N.V. (the Vendor ) (an indirect wholly owned subsidiary of The Ascott Holdings Limited ( TAHL )) through the acquisition of 94% of the issued shares in Citadines Investments B.V. 1 for an aggregate purchase consideration of 29.7 million (equivalent to approximately S$44.1 million), subject to adjustment as at completion 2 ; and an effective interest of 93% in Citadines City Centre Frankfurt, a serviced residence property located at Europa-Allee 23, Frankfurt am Main, Germany (the Citadines City Centre Frankfurt Property ) from the Vendor through the acquisition of 94% of the issued shares in Citadines (Netherlands) B.V. 3 for an aggregate purchase consideration of 35.7 million (equivalent to approximately S$53.1 million), subject to adjustment as at completion 4. (See paragraphs 3.6 and 3.7 of the Letter to Unitholders for further details.) The German Master Leases Upon the completion of the Target Acquisitions, Citadines Hamburg Michel GmbH & Co., KG and Citadines Europaviertel (Frankfurt) GmbH & Co., KG (the German Property Holding Companies ) shall enter into separate German Master Lease Agreements with Citadines Betriebs GmbH and Citadines Betriebs (Frankfurt) GmbH respectively, both indirect wholly owned subsidiaries of TAHL, pursuant to which the relevant German Property Holding Company shall grant the German Master 1 The remaining 6% of Citadines Investments B.V. is held by the Vendor. Citadines Investments B.V. holds 99% of Citadines Hamburg Michel GmbH & Co., KG, which in turn holds the Citadines Michel Hamburg Property. The remaining 1% of Citadines Hamburg Michel GmbH & Co., KG is held by an unrelated third party. 2 Taking into account 93% of the agreed property value of the Citadines Michel Hamburg Property of 31.2 million (equivalent to approximately S$46.4 million). 3 The remaining 6% of Citadines (Netherlands) B.V. is held by the Vendor. Citadines (Netherlands) B.V. holds 99% of Citadines Europaviertel (Frankfurt) GmbH & Co., KG, which in turn holds the Citadines City Centre Frankfurt Property. The remaining 1% of Citadines Europaviertel (Frankfurt) GmbH & Co., KG is held by an unrelated third party. 4 Taking into account 93% of the agreed property value of the Citadines City Centre Frankfurt Property of 37.4 million (equivalent to approximately S$55.6 million). 2

16 Lease to the respective German Master Lessee for a term of 15 years, commencing from the date of completion of the Target Acquisitions with an option to renew for a further term of five years at the option of the German Master Lessee. The rental payable under each of the German Master Lease Agreements for the Target Properties is as follows: Š Š Citadines Michel Hamburg Property: Fixed Lease Rental (as defined herein) of 1.7 million per annum. The lease rental will be revised commencing from the second full operating year of the term based on the change in the consumer price indices published by the Federal Statistical Office of Germany as compared to the consumer price indices published at the last adjustment or the commencement of the term (for the first adjustment); and Citadines City Centre Frankfurt Property: Fixed Lease Rental of 2.0 million per annum. The lease rental will be revised commencing from the second full operating year of the term based on the change in the consumer price indices published by the Federal Statistical Office of Germany as compared to the consumer price indices published at the last adjustment or the commencement of the term (for the first adjustment). Upon entry into the German Master Leases, The Ascott Limited ( TAL ) will enter into a guarantee (the TAL Guarantee ) in favour of the Trustee under which TAL guarantees the payment of rent and other charges, fees and amounts under the German Master Leases during the lease term. Estimated Total Transaction Costs The estimated total transaction costs of the Target Acquisitions is approximately S$2.1 million, comprising: (i) (ii) total acquisition fees of approximately S$1.0 million (being 1% of the Enterprise Value 1 of S$97.2 million) payable to the Manager pursuant to the Trust Deed; and aggregate associated costs 2 of approximately S$1.1 million incurred or to be incurred by Ascott REIT in connection with the Target Acquisitions. As the Target Acquisitions will constitute Interested Party Transactions 3 under the Property Funds Appendix, the total acquisition fees payable to the Manager will be in the form of Units 4, which shall not be sold within one year from the date of issuance. Method of Financing the Target Acquisitions Ascott REIT intends to finance the total transaction costs and the aggregate purchase consideration relating to the Target Acquisitions with debt financing and proceeds from the rights issue as announced by the Manager on 6 March 2017 (the Rights Issue ), so as to ensure that the Target Acquisitions will provide overall DPU accretion to Unitholders while maintaining an optimum level of gearing. 1 Pursuant to Clause (i) of the Trust Deed, Enterprise Value means the sum of the equity value and the total net debt attributable to the shares being acquired by Ascott REIT and where the asset acquired by Ascott REIT is a Real Estate (as defined herein), Enterprise Value means the value of the Real Estate. For purposes of the Target Acquisitions, the Enterprise Value is calculated by adding the effective interest of 93% of the agreed property value of S$102.0 million and the consolidated net current assets (which will be adjusted at completion) of S$2.3 million. 2 The associated costs of $1.1 million comprises legal and other professional fees (including technical due diligence, valuation, independent financial adviser, auditors and tax advisers fees) of approximately $0.7 million and other expenses (including printing and EGM expenses) of approximately $0.4 million. 3 The term Interested Party Transaction as defined in Appendix 6 of the Code on Collective Investment Schemes issued by the MAS (the Property Funds Appendix ), refers to transactions described as such in the Property Funds Appendix. 4 The Acquisition Fee Units will be issued at an issue price equal to the volume weighted average price for a Unit for all trades on the SGX-ST, in the ordinary course of trading, for the period of five business days immediately preceding the date of payment of the Acquisition Fees pursuant to Clause 5.2.4(i) of the Trust Deed. 3

17 The final decision regarding the financing to be employed for the purposes of financing the Target Acquisitions will be made by the Manager at the appropriate time taking into account the then prevailing market conditions and interest rate environment, availability of alternative funding options, the impact on Ascott REIT s capital structure, DPU and debt expiry profile and the covenants and requirements associated with each financing option. A breakdown of the costs of the Target Acquisitions and the currently intended sources of funds is set out in the table below: Costs of Target Acquisitions (S$ million) Sources of funds (S$ million) Aggregate purchase consideration for the Target Acquisitions 97.2 Debt financing 42.3 Associated costs (1) of the Target Acquisitions (including applicable stamp duties, legal and other professional fees and expenses) 1.1 Proceeds from Rights Issue 56.0 Total 98.3 Total 98.3 Note: (1) The associated costs of S$1.1 million comprises legal and other professional fees (including technical due diligence, valuation, independent financial adviser, auditors and tax advisers fees) of approximately S$0.7 million and other expenses (including printing and EGM expenses) of approximately S$0.4 million. Excludes acquisition fees of approximately S$1.0 million, which will be payable in Units to the Manager. (See paragraph 3.10 of the Letter to Unitholders for further details.) RATIONALE FOR AND BENEFITS OF THE TARGET ACQUISITIONS AND THE GERMAN MASTER LEASES The Manager believes that the Target Acquisitions and the entry into the German Master Leases will bring, among others, the following benefits to Ascott REIT and its Unitholders: (i) Enhance DPU to Unitholders The Manager expects that the Target Acquisitions will enhance the DPU to Unitholders. The Target Acquisitions are expected, on a pro forma basis, to contribute an additional annual EBITDA of S$5.5 million and increase the distributable income by S$3.5 million 1 for FY2016, translating to an increase in pro forma DPU by 0.16 cents or 2.2% 1. Ascott REIT expects to acquire the Target Properties at an EBITDA yield of 5.4% on a pro forma basis for FY2016. (ii) Broaden Earnings Base with Increased Portfolio Scale The Target Acquisitions will enlarge the portfolio of Ascott REIT from S$5.2 billion 2 to S$5.3 billion. Post-completion of the Target Acquisitions, the number of Apartment Units will increase to 12,139 in 93 properties in 39 cities across 14 countries. This will enable Ascott REIT to benefit from a broader earnings base. (iii) Deepen Ascott REIT s Presence in Germany and the city of Hamburg The Target Acquisitions represent an opportunity for Ascott REIT to acquire good quality assets in the established and steadily growing hospitality markets of Hamburg and Frankfurt, enabling it to strengthen its presence in Germany, where it currently owns three serviced residence properties. With the AOS Acquisition 3 and the addition of the Target Acquisitions, Ascott REIT s exposure to Germany based on total assets will increase from 2.3% to 4.4%. 1 Taking into account the cost of funding and the increased number of Units which are expected to be issued from the Rights Issue. (See paragraph 5.2 of the Letter to Unitholders for further details.) 2 Based on the total asset value as at 31 December 2016 and adjusted for the AOS Acquisition. 3 The AOS Acquisition was approved at the extraordinary general meeting of Ascott REIT held on 27 July 2012 and is expected to proceed for legal completion in

18 As the largest market in Europe by Gross Domestic Product ( GDP ) 1, Germany is consistently ranked as one of the most attractive destinations for foreign direct investment ( FDI ) by virtue of its reliable infrastructure, a highly skilled workforce, a positive social climate, a stable legal environment, and world-class research and development 2. In September 2016, Fitch Ratings reaffirmed Germany s AAA ratings with stable outlooks due to the country s strong institutions and diversified, high value-added economy 3. Ascott REIT s existing properties in Germany have exhibited stable and strong operational performance, with occupancy exceeding 80.0% for FY2016. Hamburg is the second largest city in Germany 4 and its position as one of the most dynamic economic cities in Europe is rooted in its strategic location as a hub for international trade and Germany s gateway to the rest of the world. In the 2016 Emerging Trends in Real Estate report published by PricewaterhouseCoopers LLP and the Urban Land Institute, Hamburg was ranked the second-best European city in which to invest after Berlin. Home to the third largest container port in Europe, the port city s openness to outsiders, a quality that still draws both domestic and international investors is a key driver of corporate demand for accommodation in Hamburg. Ascott REIT s existing property, Madison Hamburg, located at Schaarsteinweg Hamburg, Germany, has exhibited stable and strong operational performance, with occupancy of about 85.0% for FY2016. The acquisition of Citadines Michel Hamburg, a second property in Hamburg, will allow Ascott REIT to increase presence and achieve greater economies of scale in the second largest city in Germany. (iv) Expand Footprint to the City of Frankfurt The Target Acquisitions will extend Ascott REIT s presence in Germany to Frankfurt, a key gateway city in Germany and one of Europe s leading locations for both domestic and international companies. Known especially for its strong financial sector where the European Central Bank is located, Frankfurt is also home to many other important sectors: the creative industry, the information technology and telecommunications sector, biotechnology and life sciences, logistics and industry 5. The city is also one of Europe s leading cities for international and regional trade fairs, attracting millions of visitors each year. In 2015, Frankfurt registered more than 5 million visitors 6, over 6.5% increase year-on-year over the last 10 years. With its reputation as a transparent business environment and boasting convenient access to the rest of Europe, Frankfurt is well-placed to benefit from the FDI activities which will in turn generate steady demand for accommodation. (v) Enhance Income Stability of Ascott REIT The German Master Leases will provide certainty to Ascott REIT s income. The German Master Leases, which are 100% fixed, will protect Ascott REIT from any downside risks arising from unexpected downturn in business climate. Post-completion of the AOS Acquisition and the Transactions, the proportion of stable income generated by Ascott REIT s master leases will increase from 32.7% to 34.2% on a pro forma basis for FY The projected weighted average remaining tenure for Ascott REIT s master leases is also expected to be extended by 24.2% from 3.3 years to 4.1 years. (See paragraph 1.2 of the Letter to Unitholders for further details.) 1 Source: Eurostat ( 2 Source: Germany Investment and Investment Guide Volume 1 Strategic and Practical Information, 2016 Edition published by IBP, Inc. 3 Source: Fitch Ratings Limited ( 4 Source: Statistisches Bundesamt Deutschland 5 Source: Frankfurt Economic Development GmbH ( 6 Source: Tourismus, Congress GmbH Frankfurt am Main 5

19 INTERESTED PERSON TRANSACTIONS AND INTERESTED PARTY TRANSACTIONS As at 1 March 2017 (the Latest Practicable Date ), TAL directly and/or through its wholly owned subsidiaries and through its interest in the Manager, has (i) direct and deemed interests of approximately 44.16% in Ascott REIT and (ii) wholly owns the Manager, and is therefore regarded as a Controlling Unitholder 1 of Ascott REIT and a Controlling Shareholder 2 of the Manager respectively under the Property Funds Appendix and the Listing Manual. TAL holds a 100% interest in the Vendor through Ascott Holdings (Europe) Pte. Ltd., a wholly owned subsidiary of TAHL. The German Master Lessees are indirect wholly owned subsidiaries of TAHL. Accordingly, for the purposes of Chapter 9 of the Listing Manual and Paragraph 5 of the Property Funds Appendix, the Vendor and the German Master Lessees are Interested Persons 3 and Interested Parties 4 of Ascott REIT. As such, the Target Acquisitions (including the entry into the German Master Lease Agreements) will constitute Interested Person Transactions under Chapter 9 of the Listing Manual and/or Interested Party Transactions under Paragraph 5 of the Property Funds Appendix for which Unitholders approval is required. (See paragraphs 4.1 and 4.2 of the Letter to Unitholders for further details.) INDEPENDENT FINANCIAL ADVISER S OPINION Having deliberated on relevant factors which it considers to be pertinent in its assessment of the Target Acquisitions (including the German Master Lease Agreements), Deloitte & Touche Corporate Finance Pte Ltd, the independent financial adviser ( IFA ), is of the opinion that the Target Acquisitions (including the German Master Lease Agreements) are on normal commercial terms and are not prejudicial to the interests of Ascott REIT and its minority Unitholders. Please refer to Appendix A of this Circular for the IFA Letter). INDEPENDENT DIRECTORS RECOMMENDATION Based on the opinion of the IFA and the rationale for and benefits of the Transactions, the Independent Directors (which include the Audit Committee), believe that the Transactions are on normal commercial terms and are not prejudicial to the interests of Ascott REIT and its minority Unitholders. Accordingly, the Independent Directors recommend that Unitholders vote at the extraordinary general meeting of Unitholders (the EGM ) in favour of the Resolution. 1 Controlling Unitholder means a person who: (a) holds directly or indirectly, 15% or more of the nominal amount of all voting units in the property fund. The MAS may determine that such a person is not a controlling unitholder; or (b) in fact exercises control over the property fund. 2 Controlling Shareholder means a person who: (a) holds directly or indirectly 15% or more of the total number of issued shares excluding treasury shares in the company; or (b) in fact exercises control over a company. 3 The Listing Manual states that in the case of a REIT, the term interested person shall have the meaning defined in the Code on Collective Investment Schemes issued by the MAS. Therefore, the definition of the term Interested Person is the same as the definition of the term Interested Party. 4 As defined in the Property Funds Appendix, the term Interested Party means: (a) (b) a director, chief executive officer or Controlling Shareholder of the manager, or the manager, the trustee or controlling unitholder of the property fund; or an associate of any director, chief executive officer or Controlling Shareholder of the manager, or an associate of the manager, the trustee or controlling unitholder of the property fund. 6

20 LETTER TO UNITHOLDERS ASCOTT RESIDENCE TRUST (a unit trust constituted on 19 January 2006 under the laws of the Republic of Singapore) Directors Mr Tan Beng Hai (Chairman and Non-Executive Independent Director) Mr Lim Ming Yan (Deputy Chairman and Non-Executive Non-Independent Director) Mr (TA) Tay Boon Hwee (Chief Executive Officer and Executive Non-Independent Director) Mr Zulkifli Bin Baharudin (Non-Executive Independent Director) Mr Sim Juat Quee Michael Gabriel (Non-Executive Independent Director) Ms Elaine Carole Young (Non-Executive Independent Director) Mr Lee Chee Koon (Non-Executive Non-Independent Director) Registered Office 168 Robinson Road #30-01 Capital Tower Singapore To: Unitholders of Ascott Residence Trust 8 March 2017 Dear Sir/Madam 1. OVERVIEW OF THE TRANSACTIONS 1.1 Summary of the Transactions The Manager proposes to seek the approval of the Unitholders by way of Ordinary Resolution for the Target Acquisitions, comprising the acquisition of the following interests in the Target Properties: (a) (b) an effective interest of 93% in the Citadines Michel Hamburg Property through the acquisition of 94% of the issued shares in Citadines Investments B.V. 1 ; and an effective interest of 93% in the Citadines City Centre Frankfurt Property through the acquisition of 94% of the issued shares in Citadines (Netherlands) B.V. 2, and the entry into the German Master Lease Agreements in respect of the Target Properties. 1.2 Rationale for and Benefits of the Transactions The Manager believes that the Transactions will bring the following key benefits to Ascott REIT and its Unitholders: (a) Enhance DPU to Unitholders The Manager expects that the Target Acquisitions will enhance the DPU to Unitholders. The Target Acquisitions are expected, on a pro forma basis, to contribute an additional annual EBITDA of S$5.5 million and increase the distributable income by S$3.5 million 3 for FY2016, translating to an increase in pro forma DPU by 0.16 cents or 2.2% 3. Ascott REIT expects to acquire the Target Properties at an EBITDA yield of 5.4% on a pro forma basis for FY The remaining 6% of Citadines Investments B.V. is held by the Vendor. Citadines Investments B.V. holds 99% of Citadines Hamburg Michel GmbH & Co., KG, which in turn holds the Citadines Michel Hamburg Property. The remaining 1% of Citadines Hamburg Michel GmbH & Co., KG is held by an unrelated third party. 2 The remaining 6% of Citadines (Netherlands) B.V. is held by the Vendor. Citadines (Netherlands) B.V. holds 99% of Citadines Europaviertel (Frankfurt) GmbH & Co., KG, which in turn holds the Citadines City Centre Frankfurt Property. The remaining 1% of Citadines Europaviertel (Frankfurt) GmbH & Co., KG is held by an unrelated third party. 3 Taking into account the cost of funding and the increased number of Units which are expected to be issued from the Rights Issue. (See paragraph 5.2 of the Letter to Unitholders for further details.) 7

21 (b) Broaden Earnings Base with Increased Portfolio Scale The Target Acquisitions will enlarge the portfolio of Ascott REIT from S$5.2 billion 1 to S$5.3 billion. Post-completion of the Target Acquisitions, the number of Apartment Units will increase to 12,139 in 93 properties in 39 cities across 14 countries. This will enable Ascott REIT to benefit from a broader earnings base. (c) Deepen Ascott REIT s Presence in Germany and the city of Hamburg The Target Acquisitions represent an opportunity for Ascott REIT to acquire good quality assets in the established and steadily growing hospitality markets of Hamburg and Frankfurt, enabling it to strengthen its presence in Germany, where it currently owns three serviced residence properties. With the AOS Acquisition and the addition of the Target Acquisitions, Ascott REIT s exposure to Germany based on total assets will increase from 2.3% to 4.4%. As the largest market in Europe by GDP 2, Germany is consistently ranked as one of the most attractive destinations for foreign direct investment ( FDI ) by virtue of its reliable infrastructure, a highly skilled workforce, a positive social climate, a stable legal environment, and world-class research and development 3. In September 2016, Fitch Ratings reaffirmed Germany s AAA ratings with stable outlooks due to the country s strong institutions and diversified, high value-added economy 4. Ascott REIT s existing properties in Germany have exhibited stable and strong operational performance, with occupancy exceeding 80.0% for FY2016. Hamburg is the second largest city in Germany 5 and its position as one of the most dynamic economic cities in Europe is rooted in its strategic location as a hub for international trade and Germany s gateway to the rest of the world. In the 2016 Emerging Trends in Real Estate report published by PricewaterhouseCoopers LLP and the Urban Land Institute, Hamburg was ranked the second-best European city in which to invest after Berlin. Home to the third largest container port in Europe, the port city s openness to outsiders, a quality that still draws both domestic and international investors is a key driver of corporate demand for accommodation in Hamburg. Ascott REIT s existing property, Madison Hamburg, located at Schaarsteinweg Hamburg, Germany, has exhibited stable and strong operational performance, with occupancy of about 85.0% for FY2016. The acquisition of Citadines Michel Hamburg, a second property in Hamburg, will allow Ascott REIT to increase presence and achieve greater economies of scale in the second largest city in Germany. (d) Expand Footprint to the City of Frankfurt The Target Acquisitions will extend Ascott REIT s presence in Germany to Frankfurt, a key gateway city in Germany and one of Europe s leading locations for both domestic and international companies. Known especially for its strong financial sector where the European Central Bank is located, Frankfurt is also home to many other important sectors: the creative industry, the information technology and telecommunications sector, biotechnology and life sciences, logistics and industry 6. The city is also one of Europe s leading cities for international and regional trade fairs, attracting millions of 1 Based on the total asset value as at 31 December 2016 and adjusted for the AOS Acquisition. 2 Source: Eurostat ( 3 Source: Germany Investment and Investment Guide Volume 1 Strategic and Practical Information, 2016 Edition published by IBP, Inc. 4 Source: Fitch Ratings Limited ( 5 Source: Statistisches Bundesamt Deutschland 6 Source: Frankfurt Economic Development GmbH ( 8

22 visitors each year. In 2015, Frankfurt registered more than 5 million visitors 1, over 6.5% increase year-on-year over the last 10 years. With its reputation as a transparent business environment and boasting convenient access to the rest of Europe, Frankfurt is well-placed to benefit from the FDI activities which will in turn generate steady demand for accommodation. (e) Enhance Income Stability of Ascott REIT The German Master Leases will provide certainty to Ascott REIT s income. The German Master Leases, which are 100% fixed, will protect Ascott REIT from any downside risks arising from unexpected downturn in business climate. Post-completion of the AOS Acquisition and the Transactions, the proportion of stable income generated by Ascott REIT s master leases will increase from 32.7% to 34.2% on a pro forma basis for FY The projected weighted average remaining tenure for Ascott REIT s master leases is also expected to be extended by 24.2% from 3.3 years to 4.1 years. 2. SUMMARY OF APPROVALS SOUGHT The following paragraphs summarise the approvals which the Manager is seeking from Unitholders. Approval by way of an Ordinary Resolution is required. 2.1 Ordinary Resolution: The Proposed Acquisition of Interests in Serviced Residence Properties in Germany at an Aggregate Purchase Consideration of S$97.2 million from an Interested Person and Entry into New Master Lease Agreements in connection therewith The Target Acquisitions The acquisition by Ascott REIT of: (i) (ii) an effective interest of 93% in Citadines Michel Hamburg Property from the Vendor through the acquisition of 94% of the issued shares in Citadines Investments B.V. 2, pursuant to a conditional sale and purchase agreement entered into between The Ascott (Europe) N.V. (the Purchaser ) and the Vendor (the Hamburg SPA ); and an effective interest of 93% in Citadines City Centre Frankfurt Property from the Vendor through the acquisition of 94% of the issued shares in Citadines (Netherlands) B.V. 3, pursuant to a conditional sale and purchase agreement entered into between the Purchaser and the Vendor (the Frankfurt SPA ) The German Master Lease Agreements Upon the completion of the Target Acquisitions, the relevant German Property Holding Company shall enter into separate German Master Lease Agreements with the relevant German Master Lessee, an indirect wholly owned subsidiary of TAHL, pursuant to which the German Property Holding Company shall grant the German Master Lease to the respective German Master Lessee for a term of 15 years, commencing from the date of completion of the Target Acquisitions with an option to renew for a further term of five years exercisable at the option of the German Master Lessee. 1 Source: Tourismus, Congress GmbH Frankfurt am Main 2 The remaining 6% of Citadines Investments B.V. is held by the Vendor. Citadines Investments B.V. holds 99% of Citadines Hamburg Michel GmbH & Co., KG, which in turn holds the Citadines Michel Hamburg Property. The remaining 1% of Citadines Hamburg Michel GmbH & Co., KG is held by an unrelated third party. 3 The remaining 6% of Citadines (Netherlands) B.V. is held by the Vendor. Citadines (Netherlands) B.V. holds 99% of Citadines Europaviertel (Frankfurt) GmbH & Co., KG, which in turn holds the Citadines City Centre Frankfurt Property. The remaining 1% of Citadines Europaviertel (Frankfurt) GmbH & Co., KG is held by an unrelated third party. 9

23 Upon entry into the German Master Leases, TAL will enter into the TAL Guarantee in favour of the Trustee under which TAL guarantees the payment of rent and other charges, fees and amounts under the German Master Leases during the lease term. 2.2 Interested Person Transactions and Interested Party Transactions The Target Acquisitions (including the entry into the German Master Lease Agreements) constitute Interested Person Transactions under Chapter 9 of the Listing Manual and/or Interested Party Transactions under Paragraph 5 of the Property Funds Appendix. The Manager is seeking Unitholders approval for the Target Acquisitions (including the entry into the German Master Lease Agreements). 3. THE TARGET ACQUISITIONS 3.1 The Target Acquisitions Following negotiations between the Manager and the Vendor, the Hamburg SPA and the Frankfurt SPA (collectively, the Sale and Purchase Agreements ) have been entered into by the relevant parties set out in paragraph above. The following table shows, among other things, the dates of signing of the Sale and Purchase Agreements and the expected dates of completion for each Target Acquisition: Target Property Entities to be Acquired Date of Signing of Agreements Type of Contract Expected Date of Completion Effective Interest Held by Ascott REIT in the Property Citadines Michel Hamburg Property 94% of Citadines Investments B.V. which holds 99% interest in Citadines Hamburg Michel GmbH & Co., KG which in turn holds the Citadines Michel Hamburg Property 6 March 2017 Conditional sale and purchase agreement 2 May % Citadines City Centre Frankfurt Property 94% of Citadines (Netherlands) B.V. which holds 99% interest in Citadines Europaviertel (Frankfurt) GmbH & Co., KG which in turn holds the Citadines City Centre Frankfurt Property 6 March 2017 Conditional sale and purchase agreement 2 May % 10

24 The purchase consideration of the Target Acquisitions takes into account the agreed property value of the Target Properties, which was arrived at on a willing-buyer and willing-seller basis and derived based on the two independent valuations by Cushman & Wakefield VHS Pte. Ltd (independently commissioned by the Trustee) and CBRE Pte. Ltd (independently commissioned by the Manager) for the Target Properties as at 15 January 2017 in relation to: (i) (ii) an effective interest of 93% in the Citadines Michel Hamburg Property through an acquisition of 94% interest in Citadines Investments B.V. (which indirectly owns 99% interest in Citadines Hamburg Michel GmbH & Co., KG which in turn holds the Citadines Michel Hamburg Property); and an effective interest of 93% in the Citadines City Centre Frankfurt Property through an acquisition of 94% interest in Citadines (Netherlands) B.V. (which indirectly owns 99% interest in Citadines Europaviertel (Frankfurt) GmbH & Co., KG which in turn holds the Citadines City Centre Frankfurt Property). The Target Acquisitions will comprise the acquisition of two serviced residence properties in Germany, which will complement Ascott REIT s existing portfolio of serviced residence properties. The Target Acquisitions will expand Ascott REIT s presence in Germany. The Target Acquisitions will also increase the absolute size of Ascott REIT s asset base by 1.9% from S$5.2 billion to S$5.3 billion. 3.2 Description of the Target Properties Map of Germany Citadines Michel Hamburg Existing Ascott REIT properties Target properties Hamburg properties Berlin 1 property Citadines City Centre Frankfurt Frankfurt 1 property Munich 1 property The Citadines Michel Hamburg Property The Citadines Michel Hamburg Property is located in the heart of Hamburg s business district, which is home to multinational companies such as aircraft manufacturer Airbus, shipbuilder and engineering company Blohm + Voss, and publishers Gruner + Jahr. It is a five-minute walk from the Rödingsmarkt metro station and close to the city s busy port located on the Elbe River as well as the major trade fair venue, Hamburg Messe. The Hamburg airport is approximately a 30-minute drive away. Other attractions in the vicinity of the property include HafenCity, a newly developed district for working, living and shopping, and Reeperbahn, the city s most popular nightlife district. 11