Glossary 2. Corporate Information 3. Board of Directors of the Manager 4 7. Analysis of Unitholdings 8. Top 30 Unitholders Listing 9 10

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2 0 CONTENTS Glossary 2 Corporate Information 3 Board of Directors of the Manager 4 7 Analysis of Unitholdings 8 Top 30 Unitholders Listing 9 10 Financial Highlights 11 Chairman s Statement Financial Statements Manager s Report Statement by Manager 28 Statutory Declaration 29 Trustee s Report 30 Report of the Auditors 31 Balance Sheet 32 Income Statement Statement of Changes in Equity Cash Flow Statement Notes to the Financial Statements Wisma UOA UOA REIT INTERIM REPORT 2007

3 02 GLOSSARY Distribution : Income Distribution of 4.43 sen per unit for the six (6) months financial period ended 31December 2007 to be paid by 29 February 2008 DPU : Distribution per unit. Financial Year : Financial year ended 31 December 2007 Manager : UOA Asset Management Sdn Bhd Properties : Wisma UOA Bangsar and the parcels within Wisma UOA Centre, UOA II and UOA Damansara. Property Manager : Colliers, Jordan Lee & Jaafar Unitholders : Unitholders of UOA REIT. UOA Holdings Group : UOA Holdings Sdn Bhd and its subsidiaries UOA REIT/ The Trust : UOA Real Estate Investment Trust

4 03 CORPORATE INFOATION MANAGER UOA Asset Management Sdn Bhd ( U) (Incorporated in Malaysia) REGISTERED ADDRESS OF THE MANAGER No. 30, Lorong 6A/91 Taman Shamelin Perkasa Kuala Lumpur Malaysia Telephone No: Facimile No: BOARD OF DIRECTORS OF THE MANAGER Tan Sri Dato Alwi bin Jantan Chan Cecelia Khor Soo Beng Kong Chong Chi Suim Alan Charles Winduss Dato Gan Boon Khuay Jeswant Natarajan Kung Beng Hong SECRETARY OF THE MANAGER Yap Kai Weng (MAICSA No: 74580) Koon Siew Chan (LS 01901) MANAGEMENT TEAM Chan Cecelia (Executive Director & Chief Executive Officer) Khor Soo Beng (Executive Director) Kong Ai Chee (Assets Management Manager) REGISTRAR OF THE TRUST IN CHARGE OF THE REGISTER OF UNITHOLDERS Symphony Share Registrars Sdn Bhd Level 26, Menara Multi-Purpose Capital Square No 8 Jalan Munshi Abdullah Kuala Lumpur Malaysia Telephone No: Facsimile No: AUDITORS Moores Rowland (AF: 0539) 7th Floor, South Block Wisma Selangor Dredging 142-A, Jalan Ampang, Kuala Lumpur Malaysia Telephone No: Facsimile No: BANKERS FOR THE TRUST CIMB Bank Berhad AmBank Berhad STOCK EXCHANGE LISTING Bursa Malaysia Securities Berhad TRUSTEE OSK Trustees Berhad ( U) 6th Floor, Plaza OSK Jalan Ampang Kuala Lumpur Malaysia PROPERTY MANAGER Colliers Jordan Lee & Jaafar Sdn Bhd (55901-U) Level 6, Block G North Pusat Bandar Damansara Damansara Heights Kuala Lumpur Malaysia Telephone No: Facsimile No:

5 04 BOARD OF DIRECTORS OF THE MANAGER PROFILE OF DIRECTORS OF THE MANAGEMENT COMPANY Name Nationality Age Position Tan Sri Dato Alwi bin Jantan Malaysian 72 Non-Independent Non-Executive Chairman Chan Cecelia Singaporean 53 Non-Independent Chief Executive Officer/ Executive Director Khor Soo Beng Malaysian 45 Non-Independent Executive Director Kong Chong Chi Suim Malaysian 66 Non-Independent Non-Executive Director Alan Charles Winduss Australian 66 Non-Independent Non-Executive Director Dato Gan Boon Khuay Malaysian 53 Independent Non-Executive Director Jeswant Natarajan Malaysian 56 Independent Non-Executive Director Kung Beng Hong Malaysian 62 Independent Non-Executive Director Further information on the Directors is set out in the ensuing paragraphs. Tan Sri Dato Alwi bin Jantan is our Non-Independent Non-Executive Chairman. He hails from Terengganu and attended the Malay College Kuala Kangsar. On leaving the college, he entered University Malaya in Singapore from where he graduated with a Bachelor of Arts (Honors in History) in Upon graduation, he joined the Administrative and Diplomatic Service ( Service ). He had a distinguished career in public service culminating as Director General of Public Service, the position he held for 3 ½ years until his retirement on 16th April His other top appointments were as Secretary General, Ministry of Agriculture ( ), Deputy Secretary General, Prime Minister s Department ( ), Secretary General, Ministry of Health ( ), Secretary General, Ministry of Local Government and Federal Territory ( ), State Secretary, Selangor ( ), Director General of National Archives and Library ( ). He concurrently served as Private Secretary to His Royal Highness the Timbalan Yang di Pertuan Agong in and Upon his retirement, after serving 32 years in the public service, he joined Resorts World Bhd as Executive Director. He joined the Board of United Overseas Australia Limited in He also sits on the Board of several public listed companies including Hiap Teck Venture Bhd and Guinness Anchor Bhd. While in service he attended the State Technique International d Archives, Paris, was a UNESCO Fellow, a recipient of an Honorary Degree from the University of Rome and attended Harvard Graduate School of Business. He is past President of the Harvard Business School Alumni Club of Malaysia.

6 05 BOARD OF DIRECTORS OF THE MANAGER (CONT D) Chan Cecelia is our Non-Independent Chief Executive Officer / Executive Director. She started her career in Singapore in several private limited companies mainly in the property development sector with the last being Chong Soon Land & Development Pte Ltd where she was principally involved in property sales and marketing of the company. After her stints in Singapore, she joined UOA Holdings Group, a property development and investment company with operations mainly in Malaysia. Over the last 11 years, she has held the positions as Group Executive Director cum Property Director of UOA Holdings Sdn Bhd where she oversees the sales and rental of property development and investment undertaken by the Group. She oversees UOA Property Division which has over 25 employees. She is a member of the senior management of UOA Holdings Group and was successful in developing over 1.5 billion worth of commercial and residential properties over the last 16 years. She plays a major role in leading and formulating the marketing and sales strategies for the UOA Holdings Group s development properties. At the same time, she also oversees and spearheads UOA Holdings Group s property investments in the residential and commercial sector where she is the key decision maker in the formulation of future strategies and rental rates. She is also presently the director of Ganda Wijaya Sdn Bhd which is an investment holding company. Khor Soo Beng is our Non-Independent Executive Director. He possesses a degree in Bachelor of Science (Hon) in Building from University of Ulster, Belfast, United Kingdom and is an Incorporated Member of The Chartered Institute of Building (CIOB), United Kingdom. Prior to his appointment as Contracts Manager at UOA Holdings in 1994, he held various managerial positions as Project Manager, Quantity Surveyor and Site Supervisor in various entities including Bandaraya Development Berhad, HC Project Management Consultancy Sdn Bhd and MCB Management Services Sdn Bhd. In his tenure in UOA Holdings Sdn Bhd, he was instrumental in setting up UOA Holdings Group s in-house building maintenance and security services in He is actively involved in the development project and property investment divisions of the UOA Holdings Group where he oversees the UOA Holdings Group s Contracts Department, M&E Design Department, New Project Development Coordination, Building Maintenance and Security Department. He also oversees 128 employees from the various departments/divisions of the UOA Holdings Group. He does not hold any directorship or equity in any private limited companies. He is the Chairman of the Management Corporation for Desa Bangsar Ria Condominium, Bangsar. Kong Chong Chi Suim is our Non-Independent Non-Executive Director. He is a graduate in civil engineering from Australia and a Member of Chartered Engineer of Australia. He has over 30 years experience in the construction and property development industry both in Singapore and Malaysia. He is a seasoned entrepreneur who started his business under Vista Engineering Enterprises (Pte) Ltd in the early 1970s in Singapore which was principally in the construction and property development business. He also played a key role as Project Advisor to Harapan Group of Companies where he was instrumental in overseeing the successful construction of 3 internationally-rated hotels in Singapore, namely Hotel Meridien, Glass Hotel and Changi Meridien Hotel, worth in excess of SGD866.0 million during the 1970s and 1980s. In 1987, he co-founded UOA Holdings Group and spearheaded UOA Holdings Group s rapid growth in Malaysia. Over the last 20 years, UOA Holdings Group has successfully completed numerous residential, industrial and commercial developments in various parts of the Klang Valley. He is a substantial shareholder and Executive Chairman cum Chief Executive Director of United Overseas Australia Limited, a company listed on the Australian Stock Exchange. He had in the past served in various capacities in several public listed companies both in Malaysia and Singapore which include Raleigh Bhd, Town and City Properties Ltd, Tuan Sing Holdings Ltd and Singapore Paper Product Ltd. He presently sits on the Boards of numerous private limited companies which principally are investment holding, property development and property management companies.

7 06 BOARD OF DIRECTORS OF THE MANAGER (CONT D) Alan Charles Winduss is our Non-Independent Non-Executive Director. He is a Director of Winduss & Associates Pty Ltd. Chartered Accountants and a member of various professional bodies including The Institute of Chartered Accountants in Australia, Certified Public Accountants Australia, Associate Fellow of the Australian Institute of Management, Fellow of Taxation Institute of Australia, Fellow of the Australian Institute of Company Directors and Registered Australian Company Auditor. He has been involved in Professional Accounting in public practice for over 26 years specialising in matters relating to corporate management, restructuring, company secretarial including Stock Exchange and Securities Commission compliance and corporate finance matters. The accounting practice of Winduss & Associates Pty. Ltd lists among its specialties matters relating to real estate development, management and ownership. He sits on the Board of public limited companies such as United Overseas Australia Limited and Alloy Steel International Inc. He also sits on the board of several private limited companies in Australia. Dato Gan Boon Khuay is our Independent Non-Executive Director. He possesses a degree in Bachelor of Science (First Class Honors) in Civil, Structural and Environmental Engineering from University College London, University of London, United Kingdom. He was awarded the Chadwick Medal & Prize in He has also successfully gone through the East Asian Executive Leadership Course from Harvard University, Massachusetts, the United States of America. He has over 30 years of experience in property and project management and property development and investment. After a three (3) year stint in Rahim & Co, Chartered Surveyors as Property and Project Manager, he co-founded the Senawang Land group of companies and served on the Board initially as its Project Director and for the last 17 years as its Managing Director. He also holds directorships in various private limited companies. Jeswant Natarajan is our Independent Non-Executive Director. He is a graduate of University Malaya majoring in Economics and Business Administration. He started his merchant banking career in the Corporate Finance department at Malaysian International Merchant Bankers Berhad until Thereafter he held various senior management positions in several private and public listed companies which included the Chamdan Property Group, Hong Hong group of companies and Paper Products (M) Berhad. In 1982, he was appointed as Group Corporate Adviser of the YTL group of companies and joined the Board as Executive Director in-charge of Corporate Finance. He was responsible for the acquisition of HongKong Tin PLC, a London-based public company, which later was re-domiciled and restructured into YTL Corporation Berhad. He was appointed to the Board of Sunrise Berhad in 1995 as Group Executive Director in charge of Corporate Finance and was instrumental in the listing of the company on Bursa Securities. In 1996 he was instrumental in the disposal of the Group s majority stake in Sunrise Berhad. He then helped establish Bukit Kiara Properties Sdn Bhd and was Group Executive Director until his resignation in Currently he is Director of UOA REIT, and Director of Hopetech Sdn Bhd, a technology company. Kung Beng Hong is our Independent Non-Executive Director. He is a graduate from University Malaya majoring in Economics and is a Fellow of the Institute of Bankers, Malaysia. He had a distinguished career in the banking industry over the last 38 years where he held numerous senior management posts including stints in United States, Singapore, Indonesia and Japan. Notable positions held include General Manager/Executive Director of United Asian Bank ( ), CEO/Director of Overseas Union Bank ( ), Managing Director/CEO of AmBank Bhd ( ) and Group CEO/Director of EON Bank Group ( ). He is currently an adviser with Fullerton Financial Holdings Pte Ltd and sits on the Board of Alliance Financial Group Berhad as a Non-Independent and Non-Executive Director and is also a council member of the Institute of Bankers, Malaysia.

8 07 BOARD OF DIRECTORS OF THE MANAGER (CONT D) OTHER INFOATION Relationship There is no family relationship among the Directors of the Manager as well as between the Directors of the Manager and the major unitholders of UOA REIT. Conflict of Interest There was no conflict of interest during the Financial Year, save for the Director s interest in UOA REIT as disclosed under Directors Interest in the Manager s Report and the transactions with companies related to the Manager as disclosed in Note 28 of the financial statements. Conviction of Offences None of the Directors of the Manager have been convicted for any offence other than traffic offences within the past (10) years. Training Attended During the Financial Year, the following Director has attended the training and seminars as follows:- Directors Training and seminars attended Tan Sri Dato Alwi bin Jantan Directors Continuing Education Programme 2007 Other Directorships in Public Companies in Malaysia During the Financial Year, the following Directors have held directorships in other public companies in Malaysia:- Directors Tan Sri Dato Alwi bin Jantan Kung Beng Hong Company - Resorts World Bhd - Guinness Anchor Berhad - Hiap Teck Venture Berhad - Alliance Financial Group Berhad Remuneration of Directors The remuneration paid by the Manager to its Directors for the year ended 31 December 2007 are as follows:- Fees Salaries Others Total Executive Directors - 334, , ,237 Non-Executives Directors 60, ,000 Range of Remuneration Per Annum () Executive Non-Executive 50,000 and below ,000 to 100, ,000 to 150,

9 08 ANALYSIS OF UNITHOLDINGS Distribution of Unitholders as at 31 December 2007: Unit Class No. of Unitholders % No of Units held % Less than to 1,000 units , ,001 to 10,000 units ,041, ,001 to 100,000 units ,355, ,001 to less than 5% of issued units ,512, % and above of issued units ,864, ,948, Classification of Unitholders as at 31 December 2007: No. of Unitholders No. of Units Category of Unitholders Malaysian Malaysian Foreign Malaysian Malaysian Foreign Bumiputra Non-Bumiputra Bumiputra Non-Bumiputra 1) Individual ,400 8,765, ,400 2) Body Corporate a) Banks/Finance Company 1 2-1,948,900 10,000 - b) Investment Trusts/ Foundations ,000 - c) Other types of companies ,875, ,675,100 5,250,000 3) Government Agencies/ Institutions ) Nominees ,851,000 5,557,700 12,193,700 5) Others Total ,922, ,127,800 17,898,100 Grand Total ,948,700

10 09 TOP 30 UNITHOLDERS LISTING Thirty (30) Largest Unitholders as at 31 December 2007 Unitholders No of Units % 1) Wisma UOA Sdn Bhd 02,000, ) Damai Positif Sdn Bhd 48,000, ) Dynasty Portfolio Sdn Bhd 7,864, ) Amanah Raya Nominees (Tempatan) Sdn Bhd Kumpulan Wang Bersama 6,380, ) TM Asia Life Malaysia Bhd As Beneficial Owner (PF) 5,250, ) CitiGroup Nominees (Asing) Sdn Bhd Exempt An for Mellon Bank (ABNAMRO Mellon) 4,398, ) Cimsec Nominees (Tempatan) Sdn Bhd CIMB Bank Berhad (ETP) 4,353, ) LTG Development Sdn Bhd 4,049, ) HSBC Nominees (Asing) Sdn Bhd Exempt An for the HongKong And Shanghai Banking Corporation Limited (HBFS-I CLT ACCT) 4,043, ) MayBan Securities Nominees (Tempatan) Sdn Bhd Pledged securities account for Choo Thye (Rem 110-Margin) 4,030, ) Uni.Asia General Insurance Berhad 3,000, ) Kencana Capital Sdn Bhd 3,000, ) Mayban Nominees (Tempatan) Sdn Bhd Avenue Invest Berhad for Kumpulan Wang Amanah Pencen (E ) 2,745,000.12

11 010 TOP 30 UNITHOLDERS LISTING (CONT D) Unitholders No of Units % 14) Amanah Raya Nominees (Tempatan) Sdn Bhd Amanah Saham Nasional 2,954, ) ValueCap Sdn Bhd,948, ) Kurnia Insurans (Malaysia) Berhad,853, ) Amsec Nominees (Tempatan) Sdn Bhd Eng Guan Chan Sdn Berhad ( ),380, ) Kurnia Insurans (Malaysia) Berhad,276, ) Mayban Securities Nominees (Tempatan) Sdn Bhd Pledged securities account for Labuan Reinsurance (L) Ltd) (Dealer 001),000, ) CitiGroup Nominees (Tempatan) Sdn Bhd Uni. Asia Life Assurance Berhad (Life Fund) 987, ) HSBC Nominees (Tempatan) Sdn Bhd HSBC (M) Trustee Bhd for MAAKL Progress Fund (4082) 838, ) HSBC Nominees (Tempatan) Sdn Bhd HSBC (M) Trustee Bhd for MAAKL Asia Pacific REIT Fund 820, ) Mayban Nominees (Tempatan) Sdn Bhd Mayban Life Assurance Berhad (Non-Par Fund) 765, ) Cartaban Nominees (Tempatan) Sdn Bhd Allianz General Insurance Company (Malaysia) Berhad (Insf) 700, ) Kong Pak Lim 689, ) HDM Nominees (Asing) Sdn Bhd Phillip Securities Pte Ltd for Mitchell William David 650, ) Mayban Nominees (Tempatan) Sdn Bhd Mayban Life Assurance Berhad (Par Fund) 649, ) AMSEC Nominees (Tempatan) Sdn Bhd Sieh Kok Swee ( ) 628, ) PM Nominees (Tempatan) Sdn Bhd PCB Asset Management Sdn Bhd for MUI Continental Insurance Berhad 600, ) HSBC Nominees (Asing) Sdn Bhd BNY Lux For International Opportunities Funds Asian Property Securities 583, TOTAL 226,440,

12 011 FINANCIAL HIGHLIGHTS Year Ended Year Ended 31 December December 2006 Net Income before tax ( 000) - Realised 21,237 9,662 - Unrealised (1) 78, Income Distribution ( 000) - Realised 20,946 9,380 Earnings Per Unit (sen) (2) - Total Realised Distribution per Unit (sen) - Realised Management Expenses Ratio ( MER ) (%) (3) Distribution Yield (%) - based on the initial public offering price of based on the current market price of 1.38 per unit (4) Note: (1) Unrealised Income represents net appreciation in value of investment properties from the revaluation exercise conducted on 15 June 2007 on Wisma UOA Centre, Wisma UOA II and Wisma UOA Damansara, as well as the adjustment in fair value on Wisma UOA Bangsar to reflect its actual disposal value pursuant to the Sale & Purchase Agreement dated 29 November The fair value adjustment on Wisma UOA Bangsar is expected to realize upon the completion of the disposal in the first quarter of (2) Earnings per unit is calculated by dividing the income after taxation by the weighted average units in issue for the Financial Year. (3) MER is calculated by dividing the total administrative expenses incurred by the Trust by the average Trust size for the Financial Year. As the basis of calculation may vary among real estate investment trusts, no accurate comparison can be made between UOA REIT s MER and other real estate investment trusts. (4) Based on the closing price on the last market day of the Financial Year, i.e. 31 December As at As at 31 December December 2006 Total Assets ( 000) 431, ,943 Total Borrowings ( 000) 64,300 65,600 Net Asset Value ( 000) 341, ,963 Gearing Ratio (%) Net Asset Value per Unit () Market Price per Unit () No of Units in circulation ( 000) 245, ,949 No of Unitholders

13 012 CHAIAN S STATEMENT On behalf of the Board, I am very pleased to present UOA REIT s third annual report for the financial year ended 31 December RESULTS & OPERATIONS We are proud to report that the Fund registered another year of strong performance with total gross revenue and distributable income exceeding the corresponding year by 9.2% and 8.0% respectively. For the year, the Fund achieved a total gross revenue of 34,264,076 and distributable income of 21,236,876. During the year, the Manager was able to sustain strong occupancy in all the Fund s portfolio of properties whilst enjoying positive rental reversions. As at 31 December 2007, we are pleased to report that occupancies in all the Fund s portfolio of properties ranges from 95% to 100%. For the year, the Fund s distribution per unit ( DPU ) increased marginally from the corresponding year at 8.52 cents which is in line with the objective of providing a stable distribution to the Unitholders. As part of the Fund s asset management program to maximize the return and performance of its portfolio of properties, we had also initiated enhancement programmes together with the respective building managers in the past year. Some of the enhancements that are completed and are in progress include upgrading of the CCTV Surveillance System, Pedestrian Security Access Gate and common toilets in Wisma UOA Centre and UOA II. SIGNIFICANT EVENTS In June, the Fund conducted a Revaluation Exercise on its portfolio to better reflect the current fair market value which had resulted in the increase of the Fund s Net Asset Value from per unit to per unit. This had resulted in a revaluation surplus of 68,400,000 for the financial ended 31 December In November, the Fund made 2 major transactions as part of the Manager s strategy to deliver capital growth opportunities to the Unitholders. The Manager had accepted an offer from Makmal Capital Sdn Bhd to acquire Wisma UOA Bangsar from the Fund for a cash consideration of 32,000,000. The sale will translate to a 52% gain from the original investment cost of 21,000,000 for the Fund within a period of just over 12 months. Concurrently, the Manager had also accepted the offer pursuant to the Right of First Refusal by UOA Holdings Group, to acquire the newly completed Wisma UOA Pantai for a cash consideration of 86,000,000. The 7 storey contemporary office building has a total lettable area of 157,481 sq ft with 272 car park bays. It is located just in front of Menara TM and enjoys a wide frontage to the Federal Highway. The building has an occupancy of 86% with notable tenants such as Kementerian Perumahan & Kerajaan Tempatan, Financial Reporting Foundation and Tenaga Nasional Berhad. The acquisition price represents a 7.6% discount to the market value appraised by an independent valuer. To optimize our capital management strategy, the Manager intends to utilize the proceeds from the disposal of Wisma UOA Bangsar for part payment of Wisma UOA Pantai with the remaining via bank borrowings. Both transactions are expected to be completed by first half of 2008.

14 013 CHAIAN S STATEMENT (CONT D) THE FUTURE Given the tight supply of office space in Kuala Lumpur city centre and major decentralized business districts, we are positive over the prospects of the Fund s performance in the coming year. Demand for well maintained and strategically located office space is expected to remain buoyant in tandem with the positive outlook of the Malaysian economy. We will continue to focus on our core strategies through active asset management of our existing portfolios, prudent capital management and yield accretive acquisitions. We intend to build on our position as one of the leading office space providers in Kuala Lumpur, diversify our geographical representation and our tenant mix from various industries. On behalf of the Board, I would like to extend our appreciation to all our staff for the hard work and dedication in producing the strong results for the year. To our tenants and business partners, I would like to extend our gratitude for their continued support. Finally, I would like to thank our Unitholders for their confidence in the Fund to deliver a sustainable income growth. Tan Sri Dato Alwi bin Jantan Chairman

15 014 MANAGER S REPORT MANAGER S REPORT FOR THE YEAR ENDED 31 DECEMBER 2007 UOA Asset Management Sdn Bhd, the Manager of UOA Real Estate Investment Trust ( UOA REIT ), has pleasure in presenting the Manager s Report on UOA REIT together with the audited financial statements of UOA REIT for the financial year ended 31 December PRINCIPAL ACTIVITY OF THE MANAGER The Manager, a company incorporated in Malaysia, is a subsidiary company of UOA Corporation Bhd (an effectively 60% owned subsidiary company of UOA Holdings Sdn Bhd which in turn is a wholly owned subsidiary company of United Overseas Australia Limited). The principal activity of the Manager is the management of real estate investment trusts. There has been no significant change in the nature of this activity during the financial year. PRINCIPAL ACTIVITIES AND INVESTMENT OBJECTIVE OF THE TRUST UOA REIT is a Malaysia-domiciled real property trust fund constituted under a Deed dated 28 November 2005 ( Deed ) by UOA Asset Management Sdn Bhd ( Manager ) and OSK Trustees Berhad ( Trustee ). UOA REIT was established on 13 December 2005 and listed on the Main Board of Bursa Malaysia Securities Berhad on 30 December The principal activity of UOA REIT is to invest in a diversified portfolio of real estate and real estate-related assets used or predominantly used for commercial purposes, whether directly or indirectly through the ownership of single-purpose companies who wholly own real estate with the objective of achieving stable return from rental income and long term capital growth. There has been no significant change in the nature of this activity during the financial year. UOA REIT will continue its operations until such time as determined by the Trustee and the Manager as provided under Clause 26 of the Deed. INVESTMENT STRATEGIES During the financial year, the management continued to adopt the following strategies in achieving UOA REIT s investment objective:- (I) Operating Strategy UOA REIT s operating strategy is to continue to enhance the performance of the Properties by increasing yields and returns from the Properties through a combination of retaining existing tenants, reducing vacancy levels, adding and/or optimising retail/office space at the Properties and minimising interruptions in rental income and operational costs. The Manager expects to apply the following key operating and management principles via the following: (a) to optimise rental rates via active management of tenancies renewals and new tenancies; (b) maintaining a close relationship with tenants to optimise tenant retentions; (c) actively working with the Property Manager to pursue new tenancy opportunities; (d) to optimise tenant mix and space configuration; (e) continuous review of tenant mix and if practicable, reconfigure lettable space; (f) continually maintaining quality of the Properties.

16 015 MANAGER S REPORT (CONT D) (II) Acquisition Strategy The Manager seeks to increase cash flow and enhance unit value through selective acquisitions. The acquisition strategy takes into consideration: (a) Location; (b) Occupancy and tenant mix; (c) Building and facilities specifications; (d) Opportunities; and (e) Yield thresholds. The Manager has access to a network of and good relationships with leading participants in the real estate industry which may assist UOA REIT in identifying (a) acquisition opportunities that have favorable returns on invested capital and growth in cash flow; and (b) under-performing assets. The Manager believes that these deal-sourcing capabilities will be an important competitive advantage of UOA REIT. The Manager intends to capitalise on the relationship with UOA Holdings Group, which is one of Malaysia s leading property development, property investment, property management services and construction group of companies. This relationship is expected to accord UOA REIT competitive advantages and benefits towards achieving its long-term objectives. The Manager intends to hold the Properties on a long-term basis. In the future where the Manager considers that any property has reached a stage that offers only limited scope for growth, they may consider selling the property and using the proceeds for alternative investments in properties that meet their investment criteria. (III) Capital Management Strategy The Manager aims to optimise UOA REIT s capital structure and cost of capital within the borrowing limits prescribed by the Guidelines on Real Estate Investment Trusts issued by the Securities Commission of Malaysia and intends to use a combination of debt and equity funding for future acquisitions and improvement works at the Properties. Our capital management strategies involve:- (a) adopting and maintaining an optimal gearing level; and (b) adopting an active interest rate management strategy to manage risk associated with changes in interest rates. while maintaining flexibility in UOA REIT s capital structure to meet future investment and/or capital requirements.

17 016 MANAGER S REPORT (CONT D) INVESTMENT POLICIES (I) Portfolio Composition UOA REIT s investments may be allocated in the following manner, as prescribed by the Securities Commission s Guidelines on Real Estate Investment Trusts: (a) (b) (c) at least 75% of UOA REIT s total assets shall be invested in real estate, single-purpose companies, real estate-related assets or liquid assets; at least 50% of UOA REIT s total assets must be invested in real estate or single-purpose companies; and the remaining 25% of UOA REIT s total assets may be invested in other assets (i.e. real estate-related assets, non-real estate-related assets or asset-backed securities). Currently, approximately 99.5% of the UOA REIT s investment is in the Properties. (II) Diversification UOA REIT will seek to diversify its real estate portfolio by property and location type. UOA REIT will focus on investing in real estates that are primarily used for office, retail and/or residential purposes and will continue to look for opportunities in these types of properties. In addition, it may also look into other properties that will provide attractive risk-adjusted returns. (III) Leverage UOA REIT will be able to leverage on its borrowings to make the permitted investments. Leveraging on its borrowings will increase the returns to Unitholders. However, UOA REIT is permitted to procure borrowings of up to 50% of its total asset value.

18 017 MANAGER S REPORT (CONT D) PERFOANCE OF THE TRUST As at As at 31 December December 2006 Total Net Asset Value ( 000) 341, ,963 Units in circulation ( 000) 245, ,949 Net Asset Value per unit () Market value per unit () Highest traded price for the year () Lowest traded price for the year () OPERATING RESULTS For the year ended For the year ended 31 December December Total Gross Income 34,264 31,380 Property operating expenses 7,836 6,858 Non-property expenses 2,273,883 Borrowing costs 2,918 2,977 Income before taxation and net appreciation on fair value of investment properties 21,237 9,662 Net appreciation on fair value of investment properties 78, Income before taxation 99,987 20,312 Taxation - 62 Income after taxation 99,987 20,250 The Manager is pleased to report that total gross income for the financial year was 34,264,076 comprising rental income of 34,095,640, interest income of 36,985 and other income of 131,451. Total gross income for the financial year was 9.19% higher than the previous financial year. Realised income before taxation was 21,236,876, posted an 8.01% increase over the previous financial year and was attributed mainly to the improvement in rental rates as well as contribution from the newly acquired property. During the financial year, a valuation was conducted by PPC International Sdn Bhd, an independent professional valuer on the investment properties to determine their fair value in compliance with the Financial Reporting Standard 140. The valuation brought a net appreciation on fair value of the investment properties by 68,400,000 and was incorporated into the Income Statement as an unrealised gain. For Wisma UOA Bangsar, which has been disposed off with a Sale and Purchase Agreement executed on 29 November 2007 and for which the transaction is expected to be completed by first quarter of 2008, a fair value adjustment has been incorporated into the Income Statement as an unrealised gain to reflect its actual disposal value. The capital gain is expected to realise in year 2008 upon the completion of the transaction.

19 018 MANAGER S REPORT (CONT D) INCOME DISTRIBUTION The Trust has on 30 August 2007 paid an interim distribution of 4.09 sen per unit for the six months ended 30 June On 14 January 2008, the Manager has recommended and the Trustee has approved a final income distribution of 4.43 sen per unit totaling 10,886,403 for the financial year to be paid by 29 February 2008 ( Distribution ). The Distribution comprises a taxable income of approximately 3.62 sen per unit and a tax-exempt income of approximately 0.81 sen per unit. Against the corresponding period last year, the DPU has registered an improvement of approximately 0.24% or 0.02 sen per unit and is in line with the UOA REIT s objective to achieve stable and attractive returns for its unitholders. Pursuant to the amended Section 109D(2) of the Income Tax Act, 1967 under the Finance Act 2006 and the announced Budget 2008, the following withholding tax rates would be applicable on distribution of income which is tax exempt at the Trust s level: a) Non-corporate investors and local institutional investors are subject to a final withholding tax at the rate of 15% from year 2007 to b) Foreign institutional investors are subject to a final withholding tax at the rate of 20% from year 2007 to c) Foreign corporate investors are subject to a final withholding tax at the rate of 27% for year 2007 and 26% for year d) Local corporate investors are subject to the existing tax treatment and tax rates (corporate tax rate is 27% for year 2007 and 26% for year 2008). BENCHMARK RELEVANT TO THE REIT As at As at 31 December December 2006 Income distribution per unit - Gross (sen) Distribution yield based on Issued Price of 1.15 per unit (%) Distribution yield based on market price of 1.38 (2006 : 1.09) per unit as at 31 December 2007 (2006: 29 December 2006) (%) Management expense ratio ( MER ) (%)* Portfolio turnover ratio ( PTR ) (times)** * MER is calculated based on the total administrative expenses incurred by the Trust divided by the average value of the Trust fund for the financial year calculated on a weekly basis. As the basis of calculation may vary among real estate investment trusts, no accurate comparison can be made between UOA REIT s MER and other real estate investment trusts. ** PTR is the ratio of the average sum of acquisition and disposal of the Trust fund for the financial year to the average value of the Trust fund for the financial year calculated on weekly basis. There was no acquisition and disposal during the financial year.

20 019 MANAGER S REPORT (CONT D) COMPOSITION OF INVESTMENT PORTFOLIO As at 31 December 2007, the UOA REIT s investment portfolio comprised the following:- 000 % REAL ESTATE PROPERTIES Commercial UOA Centre Parcels 70, UOA II Parcels 222, UOA Damansara Parcels 01, Wisma UOA Bangsar 32, OTHERS Deposits with licensed financial institution 2, ,

21 020 MANAGER S REPORT (CONT D) The details of the real estate properties are as follows:- 1 UOA Centre Parcels Address/Location Title Details Strata Title Property Type Description Net Lettable Area Parking spaces Age Existing use Status of holding Tenancy period Major tenants (based on monthly rental receivable) Within UOA Centre at No. 19 Jalan Pinang, Kuala Lumpur Master Title: Geran 46212, Lot No. 1312, Section 57, Town and District of Kuala Lumpur, State of Wilayah Persekutuan. The application for the issuance of strata titles was submitted to the Wilayah Persekutuan Land Registry on 2 June 2005 and is now awaiting approval. Office Parcels Parcels within the 33 storey office building known as UOA Centre inclusive of 6-levels of car parking space. 39,572 sq ft 208 bays Approximately 13 years Commercial Freehold to 2 years subject to rental review at the expiration of each tenancy. a) Dats Management Sdn Bhd b) UOA Holdings Sdn Bhd c) Cartrade Sdn Bhd Occupancy rate 95.7% Rental received Maintenance costs and capital expenditure Encumbrances 6,408,579 Maintenance costs amount to 2,003,757. No major capital expenditure was incurred during the financial year. Date of acquisition 29 November 2005 Cost of acquisition Last valuation The Sale and Purchase Agreement relating to UOA Centre parcels and UOA II parcels was assigned to AmBank Berhad and upon issuance of strata titles, a first party legal charge over UOA Centre parcels and UOA II parcels will be effected in favor of AmBank Berhad as part of the securities for the loan facility granted to part-finance the acquisition of UOA Centre parcels and UOA II parcels. 57,600,000 70,000,000 Date of last valuation 5 June 2007 Basis of valuation Independent Valuer Net Book Value Investment and Comparison Method PPC International Sdn Bhd 70,000,000

22 021 MANAGER S REPORT (CONT D) 2 UOA II Parcels Address/Location Title Details Strata Title Property Type Description Net Lettable Area Parking spaces Age Existing use Status of holding Tenancy period Major tenants (based on monthly rental receivable) Within UOA II at No. 21 Jalan Pinang, Kuala Lumpur Master Title: Geran 46212, Lot No. 1312, Section 57, Town and District of Kuala Lumpur, State of Wilayah Persekutuan. The application for the issuance of strata titles was submitted to the Wilayah Persekutuan Land Registry on 2 June 2005 and is now awaiting approval. Office Parcels Parcels within the 39 storey office building known as UOA II inclusive of 5-levels of car parking space. 437,608 sq ft 643 bays Approximately 9 years Commercial Freehold to 3 years subject to rental review at the expiration of each tenancy. a) Allianz Life Insurance (M) Bhd b) Dats Management Sdn Bhd c) Holiday Tours & Travel Sdn Bhd Occupancy rate 94.9% Rental received Maintenance costs and capital expenditure Encumbrances 17,145,232 Date of acquisition 29 November 2005 Cost of acquisition Last valuation Maintenance costs amount to 3,366,228. Capital expenditure of 752,973 was incurred during the financial year to improve the property. The Sale and Purchase Agreement relating to UOA Centre parcels and UOA II parcels was assigned to AmBank Berhad and upon issuance of strata titles, a first party legal charge over UOA Centre parcels and UOA II parcels will be effected in favor of AmBank Berhad as part of the securities for the loan facility granted to part-finance the acquisition of UOA Centre parcels and UOA II parcels. 180,900, ,300,000 Date of last valuation 5 June 2007 Basis of valuation Independent Valuer Net Book Value Investment and Comparison Method PPC International Sdn Bhd 222,052,973

23 022 MANAGER S REPORT (CONT D) 3 UOA Damansara Parcels Address/Location Title Details Within UOA Damansara at No. 50 Jalan Dungun, Damansara Heights, Kuala Lumpur Master Title: HSD , P.T. No. 7145, Mukim and District of Kuala Lumpur, State of Wilayah Persekutuan. Property Type Description Net Lettable Area Parking spaces Age Existing use Status of holding Tenancy period Major tenants (based on monthly rental receivable) Strata Title: The application for the issuance of strata titles was submitted to the Wilayah Persekutuan Land Registry on 19 September 2005 and is now awaiting approval. Office Parcels Parcels within the 13 storey office building known as UOA Damansara inclusive of 4-levels basement car park. 190,992 sq ft 356 bays Approximately 10 years Commercial Freehold Occupancy rate 94.3% Rental received Maintenance costs and capital expenditure Encumbrances to 2 years subject to rental review at the expiration of each tenancy. a) Skrine & Co b) Dats Management Sdn Bhd c) Moccis Trading Sdn Bhd 8,428,739 Date of acquisition 29 November 2005 Cost of acquisition Last valuation Maintenance costs amount to 1,956,081. Capital expenditure of 293,450 was incurred during the financial year to improve the property. The property is free from encumbrances. 72,000, ,000,000 Date of last valuation 5 June 2007 Basis of valuation Independent Valuer Net Book Value Investment and Comparison Method PPC International Sdn Bhd 101,293,450

24 023 MANAGER S REPORT (CONT D) 4 Wisma UOA Bangsar Address/Location Title Details Property Type Description Net Lettable Area Parking spaces Age Existing use Status of holding Tenancy period Major tenants (based on monthly rental receivable) Occupancy rate Rental received Maintenance costs and capital expenditure Encumbrances No. 7 Lorong Maarof, Bangsar, Kuala Lumpur Geran 50532, Lot 399, Seksyen 96, Mukim and District of Kuala Lumpur, State of Wilayah Persekutuan Commercial building An eight (8) storey purposed-built commercial building with a basement car park. 43,743 sq ft 33 bays Approximately 3 years Commercial Freehold to 2 years subject to rental review at the expiration of each tenancy. a) Volkswagen Group Malaysia Sdn Bhd b) Petra Equities Sdn Bhd c) Apertio Asia Pacific Sdn Bhd 00.0% 2,113,090 Date of acquisition 2 September 2006 Cost of acquisition Last valuation Maintenance costs amount to 338,404. No major capital expenditure was incurred during the financial year. The property is free from encumbrances. 21,000,000 27,000,000 Date of last valuation 0 October 2007 Basis of valuation Independent Valuer Net Book Value Investment and Comparison Method Param & Associates 32,000,000 (the net book value has taken into consideration of a fair value adjustment made in accordance to the actual disposal price pursuant to the Sale and Purchase Agreement dated 29 November 2007 between OSK Trustees Berhad (as Trustee of UOA REIT) and Makmal Capital Sdn Bhd

25 024 MANAGER S REPORT (CONT D) INVESTMENT PROPERTIES ACQUIRED DURING THE FINANCIAL YEAR The Trust has not acquired any real estate assets during the financial year. SUBSEQUENT EVENTS The Trust has on 16 January 2008, entered into a Sale and Purchase Agreement with Magna Tiara Development Sdn Bhd to acquire a freehold land held under PT2525 H.S. (D) , Bandar Kuala Lumpur, Dearah Kuala Lumpur, Wilayah Perseketuan measuring approximately 3,883 square metres together with a five storey building with two mezzanine floors and three levels of basement carpark known as Wisma UOA Pantai and located at No.11, Jalan Pantai Jaya, Kuala Lumpur, for a total consideration of 86,000,000. The transaction is expected to be completed in the first quarter of GEARING Pursuant to the Revised Guidelines on Real Estate Investment Trusts published by the Securities Commission on 10 July 2006 ( SC Guidelines ), the permitted limit on gearing ratio of REIT has been revised from 35% to 50%. As at 31 December 2007, the Trust has a total borrowing of 64,300,000 (2006: 65,600,000), representing a gearing ratio of 14.89% (2006: 18.80%). The debt is in the form of a revolving credit facility and is short term in nature renewable in one (1) to six (6) month terms at an interest rate as disclosed in note 10 of the financial statements. Total credit facilities available to the Trust amounted to 85,500,000 and there are unutilised facilities of 21,200,000 as at the end of the financial year. The Trust has the capacity to raise additional borrowings by 151,625,990 before reaching the 50% limit permitted under the SC Guidelines. UNITS IN ISSUE As at As at 31 December December 2006 No of units in issue 245,948, ,948,700 NET ASSET VALUE ( NAV ) As at As at 31 December December 2006 NAV ( 000) 341, ,963 NAV per unit * * Net Asset Value per unit is posted on Bursa Malaysia s website on a weekly basis. PROSPECT All the original properties of UOA REIT continue to enjoy high occupancy rates and improving average rental rates due to their strategic location and excellent facilities. The Manager will continue to pursue its acquisition strategy in year 2008 by taking advantage of the increased borrowing capacity to further improve the performance of the Trust.

26 025 MANAGER S REPORT (CONT D) BREAKDOWN OF UNITHOLDINGS Unit class No. of unitholders % No. of units held % 5,000 and below ,011, ,001 to 10, ,204, ,001 to 50, ,451, ,001 to 500, ,294, ,001 and above ,986, ,948, BOARD OF DIRECTORS OF THE MANAGER Directors Date of appointment Tan Sri Dato Alwi bin Jantan 8 June 2005 Chan Cecelia 8 June 2005 Khor Soo Beng 8 June 2005 Kong Chong Chi Suim 28 November 2005 Alan Charles Winduss 28 November 2005 Dato Gan Boon Khuay 6 November 2005 Jeswant Natarajan 6 November 2005 Kung Beng Hong 28 November 2005 MEETING ATTENDANCE Directors Board Meetings (No. of meetings held 4) Tan Sri Dato Alwi bin Jantan 4 Chan Cecelia 3 Khor Soo Beng 4 Kong Chong Chi Suim 4 Alan Charles Winduss 2 Dato Gan Boon Khuay 4 Jeswant Natarajan 2 Kung Beng Hong 4 DIRECTORS BENEFITS Neither at the end of the financial year, nor at any time during that financial year, did there subsist any arrangement to which UOA Asset Management Sdn Bhd was a party, whereby directors might acquire benefits by means of the acquisition of units in or debentures of UOA REIT or any other body corporate. During the financial year under review, no director has received or become entitled to receive any benefit by reason of a contract made by UOA Asset Management Sdn Bhd or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, except as disclosed in Note 28 of the financial statements.

27 026 MANAGER S REPORT (CONT D) DIRECTORS INTEREST No. of units As at Bought/(Sold) As at January December Direct interest Tan Sri Dato Alwi bin Jantan 00,000-00,000 Chan Cecelia 00,100 41,700 41,800 Khor Soo Beng 00,100 1,700 01,800 Kong Chong Chi Suim 462,000 (100,000) 362,000 Alan Charles Windus 00,000-00,000 Dato Gan Boon Khuay 00,000-00,000 Kung Beng Hong 00,000-00,000 Indirect interest Kong Chong Chi Suim (1) 72,328,400 (84,200) 172,244,200 Note: (1) By virtue of his interest in shares of United Overseas Australia Limited (the ultimate holding company of Wisma UOA Sdn Bhd, Damai Positif Sdn Bhd, Dynasty Portfolio Sdn Bhd, LTG Development Sdn Bhd and Kumpulan Sejahtera Sdn Bhd), he is deemed to have an interest in UOA REIT. During and at the end of the financial year, there was no material contract entered into involving any directors and major unitholders. OTHER STATUTORY INFOATION (a) Before the income statement and balance sheet of UOA REIT were made out, the directors of UOA Asset Management Sdn Bhd took reasonable steps: (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts have been written off and adequate allowance had been made for doubtful debts; and (ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise. (b) At the date of this report, the directors of UOA Asset Management Sdn Bhd are not aware of any circumstances: (i) which would render the amount written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of UOA REIT inadequate to any substantial extent; or (ii) which would render the values attributed to the current assets in the financial statements of UOA REIT misleading; or (iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of UOA REIT misleading or inappropriate. (c) As at the date of this report, there does not exist: (i) any charge on the assets of UOA REIT which has arisen since the end of the financial year which secures the liabilities ofany other person; or

28 027 MANAGER S REPORT (CONT D) (ii) any contingent liability of UOA REIT which has arisen since the end of the financial year. (d) No contingent or other liability of UOA REIT has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors of UOA Asset Management Sdn Bhd, will or may affect the ability of UOA REIT to meet its obligations as and when they fall due. (e) At the date of this report, directors of UOA Asset Management Sdn Bhd are not aware of any circumstances, not otherwise dealt with in this report or the financial statements of UOA REIT which would render any amount stated in the financial statements misleading. (f) In the opinion of the directors of UOA Asset Management Sdn Bhd: (i) (ii) the results of the operations of UOA REIT for the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of UOA REIT for the financial year in which this report is made. AUDITORS The auditors, Moores Rowland, have expressed their willingness to continue in office. Signed on behalf of the Board of Directors of UOA Asset Management Sdn Bhd in accordance with a directors resolution dated 13 February CHAN CECELIA Director KHOR SOO BENG Director Kuala Lumpur, Malaysia 13 February 2008