(Constituted in the Republic of Singapore pursuant to a trust deed dated 19 January 2006 (as amended and supplemented)) ANNOUNCEMENT

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1 (Constituted in the Republic of Singapore pursuant to a trust deed dated 19 January 2006 (as amended and supplemented)) ANNOUNCEMENT PROPOSED ACQUISITION OF INTERESTS IN THREE SERVICED RESIDENCE PROPERTIES IN THE PEOPLE S REPUBLIC OF CHINA AND 11 RENTAL HOUSING PROPERTIES IN JAPAN 1. INTRODUCTION Ascott Residence Trust Management Limited (the Manager ), as manager of Ascott Residence Trust ( Ascott REIT ), wishes to announce that DBS Trustee Limited (the Trustee ), as trustee of Ascott REIT, has today, 2 May 2013, directly and/or through its wholly-owned subsidiaries, entered into various conditional sale and purchase agreements, to acquire, through the acquisition of shareholding interests (the Target Acquisitions ), three serviced residence properties in China and 11 rental housing properties in Japan (collectively, the Target Properties ) for an aggregate purchase consideration of S$ The Target Properties will be acquired from subsidiaries and/or associated companies of The Ascott Limited ( TAL ), the sponsor and controlling unitholder 1 of Ascott REIT Further details in respect of the three serviced residence properties in China, Somerset Heping Shenyang (the Somerset Heping Shenyang Target ), Citadines Biyun Shanghai (the Citadines Biyun Shanghai Target ), Citadines Xinghai Suzhou (the Citadines Xinghai Suzhou Target ) (collectively, the China Target Properties ) and the 11 rental housing properties in Japan (the Japan Target Properties ) are set out in Appendix A to this announcement. Further details regarding the Target Acquisitions, comprising the acquisitions of the China Target Properties (collectively, the China Target Acquisitions ) and the Japan Target Properties (the Japan Target Acquisitions ) can be found in the circular to unitholders of Ascott REIT ( Unitholders ) dated 2 May 2013 (the Circular ). 1 Controlling Unitholder means a person who: (a) holds directly or indirectly 15.0% or more of the nominal amount of Units. The Monetary Authority of Singapore (the MAS ) may determine that such a person is not a controlling unitholder; or (b) in fact exercises control over the property fund. 1

2 2. RATIONALE FOR THE TARGET ACQUISITIONS The Manager believes that the Target Acquisitions will bring, among others, the following key benefits to Ascott REIT and its Unitholders: (i) (ii) (iii) (iv) (v) (vi) the Target Acquisitions represent an attractive opportunity for Ascott REIT to grow. The Target Acquisitions are expected, on a pro forma basis, to contribute additional annual earnings before net interest expense, tax, depreciation and amortisation ( EBITDA ) of S$15.6 and increase the distributable income by S$14.0 for the financial year ended 31 December 2012 ( FY2012 ), translating to an increase in pro forma distribution per Unit ( DPU ) by 2.9% from 8.76 cents to 9.01 cents. Ascott REIT expects to acquire the Target Properties at an EBITDA yield of 5.4% on a pro forma basis for FY2012; the Target Acquisitions will broaden Ascott REIT s earning base and increase Ascott REIT s portfolio scale. Following the completion of the Target Acquisitions, Ascott REIT s asset base will increase by 11% from S$2.8 billion to S$3.1 billion, thereby raising the profile of Ascott REIT among global investors. Ascott REIT s portfolio would immediately increase by 1,576 available apartment units to 8,632 apartment units and from 25 cities to 32 cities; the Target Acquisitions will strengthen Ascott REIT s presence in Asia, as exposure to these markets will increase from 59% to 63% of share of assets. The Target Acquisitions will also provide Ascott REIT with a good opportunity to acquire strategically located quality assets and will strengthen Ascott REIT s presence in two of the world s largest economies, namely China and Japan; the Target Acquisitions will deepen Ascott REIT s existing presence in its key growth market of China. The acquisition of the Citadines Biyun Shanghai Target (the Citadines Biyun Shanghai Target Acquisition ) will strengthen the existing presence of Ascott REIT in the city of Shanghai. In addition, the acquisition of the Somerset Heping Shenyang Target and the Citadines Xinghai Suzhou Target will enable Ascott REIT to expand its footprint into the growing cities of Shenyang and Suzhou, respectively; the Japan Target Acquisitions will enable Ascott REIT to expand its footprint in the stable Japanese market through the acquisition of a stable portfolio of 11 rental housing properties across six cities of Fukuoka, Sapporo, Kyoto, Hiroshima, Saga and Sendai; and the Japan Target Acquisitions are expected to improve the stability of Ascott REIT s income stream, which is further enhanced by the five Underlying Master Leases 2 in the Japan Target Acquisitions. 2 Underlying Master Leases means each of the underlying master lease agreements entered into between J.S.B., Co., Ltd. ( JSB KK ) and Japan Residence One YK (the Master Lessee ) in relation to Grand E terna Nijojomae, Grand E terna Chioninmae, Grand E terna Saga and Grand E terna Saga Idaidori, and the underlying master lease agreement entered into between Apamanshop Sublease Co., Ltd. ( Apaman ) and the Master Lessee in relation to Grand Mire Shintera. 2

3 3. PRINCIPAL TERMS OF THE SALE AND PURCHASE AGREEMENTS 3.1 Sale and Purchase Agreements The Trustee and the Trustee s wholly owned subsidiaries, Ascott Reit 3 Pte. Ltd. and Ascott REIT 3 Godo Kaisha (collectively, the TMK3 Purchasers ) have entered into the following sale and purchase agreements (collectively, the Sale and Purchase Agreements ): (i) (ii) (iii) (iv) with Heping Investments (BVI) Limited and Ascott Serviced Residence (China) Fund ( ACF ) in relation to the acquisition of Somerset Heping Shenyang Target through the acquisition of a 100% interest in Heping Investments (Hong Kong) Limited (which owns through its wholly-owned subsidiary, Somerset Heping (Shenyang) Co., Ltd., a 100% interest in the Somerset Heping Shenyang Target ) for a purchase consideration, which is subject to adjustments as at completion, of US$48.1 to approximately S$59.4 ), based on the agreed value of the Somerset Heping Shenyang Target of RMB to approximately US$69.7 or S$86.2 ) less debt to be assumed, and fully satisfied in cash (the SHS SPA ); with Biyun Investments (BVI) Limited (together with Heping Investments (BVI) Limited, the ACF Vendors ) 3 and ACF in relation to the acquisition of the Citadines Biyun Shanghai Target, through the acquisition of a 100% interest in Biyun Investments (Hong Kong) Limited (which owns through its wholly-owned subsidiary, Gain Mark Properties (Shanghai) Ltd., a 100% interest in the Citadines Biyun Shanghai Target ) for a purchase consideration, which is subject to adjustments as at completion, of US$43.5 to approximately S$53.8 ), based on the agreed value of the Citadines Biyun Shanghai Target of RMB to approximately US$51.1 or S$63.2 ) less debt to be assumed, and fully satisfied in cash (the CBS SPA ); with The Ascott Holdings Limited ( TAHL ) in relation to the acquisition of the Citadines Xinghai Suzhou Target through the acquisition of a 100% interest in Citadines SIP Pte. Ltd. (which owns through its wholly-owned subsidiary, Suzhou Chong Rui Xin Shi Ji Real Estate Co., Ltd., a 100% interest in the Citadines Xinghai Suzhou Target ) for a purchase consideration, which is subject to adjustments as at completion, of S$14.7, based on the agreed value of the Citadines Xinghai Suzhou Target of RMB to approximately S$23.2 ) less debt to be assumed, and fully satisfied in cash (the CXS SPA ); and with ACRJ3 Investments Pte. Ltd., Japan Branch, RAV Three Pte. Ltd. (together, the TMK3 Vendors ) 4, CRL Investment Pte Ltd and GPH Investments Pte Ltd in relation to the acquisition of the Japan Target Properties through the acquisition of a 100% interest in ARC-CapitaLand Three TMK, a special tokutei mokuteki kaisha incorporated on 11 April 2007 under the Japan Law Regarding Securitisation of Assets (No. 105 of 1998 as amended) ( TMK3 ), which in turn holds the trust beneficial interest ( TBI ) in respect of each of the Japan Target Properties, for a 3 Please refer to paragraph 9.3 of this announcement for further details in relation to the ACF Vendors. 4 Please refer to paragraph 9.3 of this announcement for further details in relation to the TMK3 Vendors. 3

4 purchase consideration, which is subject to adjustments as at completion, of JPY3.0 billion to approximately S$37.1 ), based on the agreed value of the Japan Target Properties of JPY9.2 billion to approximately S$114.8 ) less debt to be assumed, and fully satisfied in cash (the Japan SPA ). 3.2 Conditions Precedent to the Completion of the Target Acquisitions The completion of the Target Acquisitions is subject to and conditional upon, amongst others: (i) (ii) (iii) (iv) (v) the receipt by the Trustee and TMK3 Purchasers of such waivers or consents as may be necessary to enable the Trustee, the TMK3 Purchasers and/or its nominee(s) to be registered as holders of the shares of Heping Investments (Hong Kong) Limited, Biyun Investments (Hong Kong) Limited, Citadines SIP Pte. Ltd. and TMK3 respectively; there being no compulsory acquisition of the Target Properties or any part thereof, and no notice of such intended compulsory acquisition has been given, by the government or such other competent authority; in respect of the China Target Acquisitions, the assignment to the Trustee and/ or its nominees of all loan amounts outstanding under the relevant shareholder s loans and all of the rights, title and interest in such shareholder s loans as at the completion date, free of all encumbrances; and in respect of the Citadines Biyun Shanghai Target Acquisition, evidence in form and substance reasonably satisfactory to the Trustee of the discharge of the share charge between Biyun Investments (BVI) Limited and United Overseas Bank Limited, in relation to a charge over the sale share of Biyun Investments (Hong Kong) Limited; and obtaining the approval of Unitholders at an extraordinary general meeting ( EGM ) to be convened to approve the transactions contemplated in the Circular. 3.3 Vendor Guarantees The Manager has obtained the following guarantees under the Sale and Purchase Agreements: (i) ACF has agreed to, in its capacity as guarantor under the SHS SPA and CBS SPA respectively, guarantee to the Trustee the due and punctual performance and observance by Heping Investments (BVI) Limited and Biyun Investments (BVI) Limited respectively of all its obligations, commitments, undertakings, warranties and indemnities under or pursuant to the SHS SPA and CBS SPA and has agreed to indemnify the Trustee against all losses, liabilities, costs (including, without limitation, reasonable legal costs), charges, expenses, actions, proceedings, claims and demands which the Trustee may suffer through or arising from any breach by Heping Investments (BVI) Limited and Biyun Investments (BVI) Limited respectively of the obligations, commitments, undertakings, warranties and indemnities under or pursuant to the SHS SPA and CBS SPA; and 4

5 (ii) CRL Investment Pte Ltd and GPH Investments Pte Ltd have agreed to, in their capacity as guarantors under the Japan SPA, severally guarantee to the TMK3 Purchasers (in proportion to each of CRL Investment Pte Ltd and GPH Investments Pte Ltd s respective existing shareholding interest in TMK3 as at the date of the Japan SPA) the due and punctual performance and observance by the TMK3 Vendors of all their obligations, commitments, undertakings, warranties and indemnities under or pursuant to the Japan SPA and have agreed to indemnify the TMK3 Purchasers against all losses, liabilities, costs (including, without limitation, reasonable legal costs), charges, expenses, actions, proceedings, claims and demands which the TMK3 Purchasers may suffer through or arising from any breach by the TMK3 Vendors of the obligations, commitments, undertakings, warranties and indemnities under or pursuant to the Japan SPA. 3.4 Master Leases All of the Japan Target Properties are leased to the Master Lessee, as the pass-through master lessee under each of the master lease agreements in respect of each of the Japan Target Properties entered into separately between the Master Lessee and DB Trust Company Limited Japan or Sumitomo Mitsui Trust Bank, Limited (as the case may be) as the trustee in respect of the TBI (the Master Leases ). The use of the pass-through master lessee is to facilitate lease administration. Four of the properties (Grand E terna Nijojomae, Grand E terna Chioninmae, Grand E terna Saga and Grand E terna Saga Idaidori) are in turn master-leased to JSB KK, and Grand Mire Shintera is in turn master-leased to Apaman. The remaining six properties are leased to individual end tenants by the Master Lessee. In approving the Target Acquisitions, Unitholders are deemed to have also approved the Master Leases. 4. DISCLOSURE PURSUANT TO RULE 704(31) OF THE LISTING MANUAL OF THE SGX-ST The Manager also wishes to announce that: (i) (ii) (iii) Gain Mark Properties (Shanghai) Ltd. (the CBS Borrower ) had entered into an RMB 60,000,000 loan agreement and a supplementary agreement both dated 27 April 2012 (the CBS Facility ) with United Overseas Bank (China) Limited Shanghai Branch (the CBS Lender ). The CBS Facility includes conditions which (i) refer to the unitholding interests of the controlling unitholders of and/or restrict the change in control of Ascott REIT and/or (ii) refer to the shareholding interests of the controlling shareholders of and/or restrict the change in control of the Manager as the manager of Ascott REIT, (collectively, the CBS Covenants ); Suzhou Chong Rui Xin Shi Ji Real Estate Co., Ltd. (the CXS Borrower ) had entered into an RMB 35,000,000 loan agreement dated 2 November 2010 and a supplementary agreement dated 18 April 2013 (the CXS Facility ) with Hang Seng Bank (China) Co., Ltd. Shanghai Branch (the CXS Lender ). The CXS Facility includes a condition which refers to the unitholding interests of the controlling unitholders of and/or restricts the change in control of Ascott REIT (the CXS Covenant ): and TMK3 (the Japan Borrower ) had entered into a loan agreement dated 18 February 2013 (as amended from time to time) (the Japan Facility ) with The Bank of Tokyo Mitsubishi UFJ. The Japan Facility includes a condition which refers to the unitholding 5

6 interests of the controlling unitholders of and/or restricts the change in control of Ascott REIT (the Japan Covenant ). Please refer to Appendix B for details on the CBS Covenants, the CXS Covenant and the Japan Covenant. The aggregate level of facilities which may be affected by a breach of the CBS Covenants, the CXS Covenant and the Japan Covenant is S$1,035 (excluding interest) as at 31 March As at the date of this announcement, there is no breach of the CBS Covenants, the CXS Covenant and the Japan Covenant respectively. 5. VALUATION Two independent property valuers, Colliers International Consultancy & Valuation (Singapore) Pte Ltd and Colliers International Pacific Limited ( Colliers ) and HVS Singapore (SG&R Singapore Pte Ltd) ( HVS and together with Colliers, the Independent Valuers ), were appointed by the Trustee and TAL and/or its affiliates, respectively, to value the Target Properties. 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 willingseller basis and derived based on the two independent valuations by the Independent Valuers as of 15 March The valuations were derived by Colliers and HVS using the discounted cash flow method. Please refer to Appendix A for details of the valuations. 6. COSTS OF THE TARGET ACQUISITIONS 6.1 Acquisition Fees and Associated Costs The estimated total costs of the Target Acquisitions are approximately S$4.7, comprising: (a) total acquisition fees of approximately S$2.9 (being 1.0% of the Enterprise Value (as defined in the trust deed dated 19 January 2006 constituting Ascott REIT (as amended, varied and supplemented from time to time) (the Trust Deed )) of S$293.0, as calculated below) payable to the Manager pursuant to the Trust Deed; and Total S$ Agreed property value Consolidated net current assets (which will be adjusted at completion) 5.6 Enterprise Value

7 (b) aggregate associated costs of approximately S$1.8 incurred or to be incurred by Ascott REIT in connection with the Target Acquisitions. As the Target Acquisitions will constitute Interested Party Transactions 5 under Appendix 6 of the Code on Collective Investment Schemes issued by the MAS (the Funds Appendix ), the total acquisition fees payable to the Manager will be in the form of units in Ascott REIT ( Units ), which shall not be sold within one year from the date of issuance. The Manager proposes to finance the acquisition costs and the aggregate purchase consideration relating to the Target Acquisitions with: (i) (ii) the net proceeds of approximately S$147.8 raised from a placement of 114,943,000 new Units completed on 6 February 2013, the close of which was announced by the Manager on 29 January 2013; and debt financing from the existing debt facilities available to Ascott REIT. The aggregate purchase consideration for the Target Acquisitions is S$ A further breakdown of the costs of the Target Acquisitions and sources of funds is set out in the table below: Costs of Target Acquisitions (S$ ) Sources of funds (S$ ) Aggregate purchase consideration for the Target Acquisitions Net proceeds raised from a placement of 114,943,000 new Units completed on 6 February 2013 (1) Associated costs (2) of the Target Acquisitions (including applicable stamp duties, legal and other professional fees and expenses) 1.8 Debt financing 19.0 Total Total Notes: (1) For the purposes of efficient capital management, approximately S$97.3 of the proceeds from the placement have been temporarily used to repay a term loan and borrowings under various revolving credit facilities and an amount equivalent to these proceeds will be drawn down from existing debt facilities for the purpose of financing the Target Acquisitions. (2) Excludes acquisition fees of approximately S$2.9, which will be payable in new Units to the Manager. 7. PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITIONS 7.1 Certain Financial Information Relating to the Target Acquisitions In preparing the pro forma DPU and net asset value ( NAV ) per Unit for FY2012, certain assumptions, including but not limited to the following general assumptions (the General Assumptions ), have been made: 5 Interested Person Transaction has the meaning ascribed to it in the Funds Appendix. 7

8 (a) (b) S$147.8 of the net proceeds from the placement are used to pay for the aggregate purchase consideration of the Target Acquisitions; and the exchange rates between US$, RMB and JPY, and the Singapore dollar, are assumed to be as follows: 1 January Average rate for 31 December 2012 FY US$ RMB JPY Pro Forma DPU and Distribution Yield The table below sets out the pro forma financial effects of the Target Acquisitions on Ascott REIT s DPU and distribution yield for FY2012, as if the Target Acquisitions and the placement of 114,943,000 new Units were completed on 1 January In addition to the General Assumptions set out above, the following assumptions were made in preparing the pro forma DPU for FY2012: (a) (b) (c) the aggregate purchase consideration of the Target Acquisitions was S$182.7 (based on the exchanges rates as at 1 January 2012); additional funding of S$36.7 were used to pay for the aggregate purchase consideration of the Target Acquisitions; and the Manager s management fees payable for the Target Acquisitions were paid 50.0% in Units. FY2012 Existing Portfolio (1) Enlarged Portfolio (2) Distributable Income (S$ 000) 99,698 (3) 113,729 Units in issue ( 000) 1,142,819 (4) 1,261,686 (5) DPU (cents) Distribution yield (%) 6.4 (6) 6.6 (6) Earnings per Unit (cents) Notes: (1) The Existing Portfolio means the existing portfolio of Ascott REIT, as disclosed in the annual report of Ascott REIT for FY2012. (2) The Enlarged Portfolio means the Existing Portfolio and the Target Properties. (3) Based on the audited consolidated financial statements of Ascott REIT for the financial year ended 31 December 2012 (the 2012 Audited Consolidated Financial Statements ). (4) Number of Units in issue as at 31 December (5) Include adjustments to include (i) 114,943,000 new Units from the placement, (ii) approximately 3.4 new Units issued as payment of the acquisition fee; and (iii) approximately 0.5 new Units issued as payment of the Manager s fees for the Target Acquisitions. The Manager s acquisition fee was assumed to be paid in Units based on an issue price of S$0.99 on 1 January The Units issued as payment of 8

9 the Manager s fees were assumed to be issued at the same prices those that were actually issued as payment for management fees for the existing properties for FY2012. (6) Computed based on the closing Unit price of S$1.36 on 31 December Pro Forma Consolidated NAV The table below sets out the pro forma financial effects of the Target Acquisitions on the consolidated NAV as at 31 December 2012, as if the Target Acquisitions and the placement of 114,943,000 new Units were completed on 31 December In addition to the General Assumptions set out above, the following assumptions have been made in preparing the pro forma NAV as at 31 December 2012: (a) (b) the aggregate purchase consideration of the Target Acquisitions was S$170.6 (based on the exchange rates as at 31 December 2012); and additional funding of S$24.6 were used to pay for the aggregate purchase consideration of the Target Acquisitions. As at 31 December 2012 Existing Portfolio Enlarged Portfolio NAV (S$ 000) 1,547,373 (1) 1,697,199 (2) Units in issue ( 000) 1,142,819 (3) 1,260,067 (4) NAV per Unit (S$) Notes: (1) Based on the 2012 Audited Consolidated Financial Statements. (2) Based on Unitholders funds. (3) Number of Units in issue as at 31 December (4) Includes adjustments to include the 114,943,000 new Units from the placement and approximately 2.3 new Units issued as payment of the acquisition fee. The Manager s acquisition fee was assumed to be paid in Units based on an issue price of S$1.36 on 31 December

10 7.4 Pro Forma Capitalisation The table below sets out the pro forma capitalisation of Ascott REIT as at 31 December 2012, as if the Target Acquisitions and the placement of 114,943,000 new Units were completed on 31 December As at 31 December 2012 Actual (S$ 000) As Adjusted (S$ 000) Short-term debt: Secured debt 119,799 62,306 Unsecured Debt 44,595 44,595 Finance lease 3,371 3,371 Total short-term debt 167, ,272 Long-term debt: Secured debt 737, ,465 Unsecured Debt 249, ,583 Finance lease 16,107 16,107 Total long-term debt 1,003,056 1,224,155 Total debt: 1,170,821 1,334,427 (2) Unitholders funds 1,547,373 (1) 1,699,400 Expenses relating to the placement - (2,201) Total Unitholders funds 1,547,373 1,697,199 Total Capitalisation 2,718,194 3,031,626 Note s: (1) Based on the 2012 Audited Consolidated Financial Statements. (2) After the completion of the Target Acquisitions, the aggregate leverage of Ascott REIT would increase from 40.1% to 41.2% as at 31 December 2012, on a pro forma basis. 8. OPINION OF THE AUDIT COMMITTEE AND INDEPENDENT FINANCIAL ADVISER With the approval of the independent directors of the Manager (the Independent Directors ), the Manager has appointed the independent financial adviser, namely PricewaterhouseCoopers Corporate Finance Pte Ltd (the IFA ) to advise the Independent 10

11 Directors in relation to the Target Acquisitions. A copy of the letter from the IFA to the Independent Directors and the Trustee containing its advice in relation to the Target Acquisitions (the IFA Letter ) to the Independent Directors, containing its advice in full, is set out in Appendix A of the Circular and Unitholders are advised to read the IFA Letter carefully. Having considered the factors and the assumptions set out in its letter, and subject to the qualifications set out therein, the IFA is of the view that the Target Acquisitions are on normal commercial terms and are not prejudicial to the interests of Ascott REIT and its minority Unitholders. The IFA is of the opinion that the Independent Directors may recommend that Unitholders vote in favour of the Resolution to be proposed at the EGM. Based on the opinion of the IFA and the rationale for and benefits of the Target Acquisitions, the Independent Directors, having reviewed the opinion of the Audit Committee of the Manager believe that the Target Acquisitions are on normal commercial terms and would not be prejudicial to the interests of Ascott REIT and its minority Unitholders. Accordingly, the Independent Directors recommend that Unitholders vote in favour of the Resolution at the EGM. 11

12 9. OTHER INFORMATION 9.1 Relative Figures Computed on the Bases set out in Rule 1006 of the Listing Manual A proposed acquisition by Ascott REIT may fall into any of the categories set out in Rule 1004 of the Listing Manual depending on the size of the relative figures computed on the following bases of comparison: (i) (ii) the net profits attributable to the assets acquired, compared with Ascott REIT s net profits; and the aggregate value of the consideration given or received, compared with Ascott REIT s market capitalisation based on the total number of issued Units. Where any of the relative figures computed on the bases set out above is 20.0% or more, the transaction is classified as a major transaction under Rule 1014 of the Listing Manual which would be subject to the approval of Unitholders, unless such transaction is in the ordinary course of Ascott REIT s business. As the relative figures in relation to the Target Acquisitions computed on the bases set out above exceed 5.0% but do not exceed 20.0%, the Target Acquisitions are not major transactions, but are discloseable transactions under Chapter 10 of the Listing Manual and are therefore not subject to the approval of Unitholders. However, for the purposes of illustration to Unitholders, the relative figures for the Target Acquisitions using the applicable bases of comparison described in sub-paragraphs 9.1(i) and 9.1(ii) are set out in the table below. Criteria The net profits attributable to the assets acquired, compared with Ascott REIT s net profits The aggregate value of the consideration given, compared with Ascott REIT s market capitalisation based on the total number of issued Units Ascott REIT (S$ ) The Target Acquisitions (S$ ) Relative Percentage 22.9 (1) % 1,770.0 (2) (3) 9.3% Note s: (1) Based on the unaudited financial statements of Ascott REIT for the quarter ended 31 March (2) Based on the market capitalisation of Ascott REIT as at the date of this announcement. (3) Inclusive of debts of approximately S$128.0 on the Target Properties, the aggregate value of the consideration would be S$293.0 and the relative percentage would be 16.6%. 12

13 9.2 Interests of Directors and Substantial Unitholders Interests of Directors The interests of the Directors in Units, as recorded in the Register of Directors Unitholdings as at 25 April 2013, are set out below: Direct Interest Deemed Interest Total Interest Directors No. of Units No. of Units No. of Units % Lim Jit Poh 35,186-35, Lim Ming Yan 221, , (TA) Tay Boon Hwee Chong Kee Hiong 823, ,000 1,023, S. Chandra Das 529, , Giam Chin Jeremy Giam 26,121-26, Ku Moon Lun 31,673-31, Zulkifli Bin Baharudin Further, Mr Lim Ming Yan and Mr Chong Kee Hiong are common directors of TAL and the Manager. Mr Lim Ming Yan is the chairman of TAL Interests of Substantial Unitholders The interests of the Substantial Unitholders in Units, as recorded in the Register of Substantial Unitholders as at 25 April 2013, are set out below: Direct Interest Deemed Interest Total Interest Unitholders No. Of Units % No. of Units % No. of Units % The Ascott Limited 307,592, ,495, ,087, Somerset Capital Pte Ltd 202,931, ,931, CapitaLand Limited ,087, ,087, Temasek Holdings (Private) Limited ,032, ,032, AIA Group Limited ,673, ,673, AIA Company Limited 1,650, ,023, ,673, Notes: (1) By virtue of section 7 of the Companies Act, Chapter 50 of Singapore (the Companie s Act ). Temasek Holdings (Private) Limited ( Temasek ) is deemed to have an interest in 594,032,835 units in Ascott REIT in which its associated companies have or are deemed to have an interest. Temasek is wholly owned by the Minister for Finance. (2) TAL is a wholly-owned subsidiary of CapitaLand. Somerset Capital Pte Ltd ( SCPL ) and the Manager are wholly-owned subsidiaries of TAL. Accordingly, CapitaLand is deemed through its interests in TAL, SCPL and the Manager to have an interest in their aggregate holding of 566,087,486 units in Ascott REIT by virtue of section 7 of the Companies Act. (3) AIA Company Limited is a subsidiary of AIA Group Limited. 6 Substantial Unitholders refers to Unitholders with an interest in more than 5.0% of all Units in issue. 13

14 Save as disclosed in this announcement, none of the Directors and Substantial Unitholders have any interest, direct or indirect, in relation to the Target Acquisitions, other than through their respective unitholdings in Ascott REIT. 9.3 Interested Person Transactions and Interested Party Transactions As at the date of this announcement, TAL directly and/or through its subsidiaries and through its interest in the Manager, has (i) deemed interests of approximately 44.93% in Ascott REIT and (ii) wholly-owns the Manager, and is therefore regarded as a controlling unitholder of Ascott REIT and a controlling shareholder 7 of the Manager respectively under both the Funds Appendix and the Listing Manual. TAL holds an indirect 36.1% interest in ACF through TAL s wholly-owned subsidiary, Ascott Holding (China) Limited, and the ACF Vendors are wholly-owned by ACF. For the purposes of Chapter 9 of the Listing Manual and the Funds Appendix, the ACF Vendors are therefore also Interested Persons and Interested Parties of Ascott REIT. For the purposes of Chapter 9 of the Listing Manual and the Funds Appendix, TAHL, being a wholly-owned subsidiary of TAL (which in turn is a Controlling Unitholder of Ascott REIT and a Controlling Shareholder of the Manager), is an Interested Person and Interested Party of Ascott REIT. TAL holds an indirect 88.9% interest in ACRJ3 Pte. Ltd., through TAL s wholly-owned subsidiary, CRL Investment Pte. Ltd., while the remaining 11.1% is held by GPH Investments Pte Ltd. ACRJ3 Pte. Ltd. in turn wholly-owns each of the TMK3 Vendors. Ascott REIT wholly owns, directly or indirectly, each of the TMK3 Purchasers. For the purposes of Chapter 9 of the Listing Manual and the Funds Appendix, the TMK3 Vendors are therefore also Interested Persons and Interested Parties of Ascott REIT. Given that the value of the Target Acquisitions will in aggregate exceed (i) 5.0% of Ascott REIT s latest audited NTA and (ii) 5.0% of Ascott REIT s latest audited NAV, the Target Acquisitions will constitute Interested Person Transactions 8 under Chapter 9 of the Listing Manual and Interested Party Transactions under paragraph 5 of the Funds Appendix. In compliance with the requirements of the Listing Manual and the Funds Appendix, the Manager is therefore seeking Unitholders approval for the Target Acquisitions. 9.4 Directors Service Contracts No person is proposed to be appointed as a Director as a result of the Target Acquisitions or any other transactions contemplated in relation to the Target Acquisitions. 7 Controlling Shareholder means a person who: (a) holds directly or indirectly 15.0% or more of the total number of issued shares excluding treasury shares in the company; or (b) in fact exercises control over a company. 8 Interested Person Transaction has the meaning ascribed to it in the Listing Manual. 14

15 10. DOCUMENTS FOR INSPECTION Copies of the following documents are available for inspection from a.m. to 5.00 p.m. 9 at the registered office of the Manager at 8 Shenton Way #13-01, AXA Tower, Singapore from the date of this announcement up to and including the date falling three months thereafter: (i) (ii) (iii) (iv) (v) (vi) the SHS SPA; the CBS SPA; the CXS SPA; the Japan SPA; the full valuation reports of the Target Properties; and the 2012 Audited Consolidated Financial Statements. The Trust Deed will also be available for inspection at the registered office of the Manager for so long as Ascott REIT continues to be in existence. 11. FURTHER DETAILS The Circular in relation to the Target Acquisitions, together with a notice of the EGM to be convened, will be despatched to Unitholders in due course. Approval has been received from the SGX-ST in relation to the Circular. By Order of the Board Ascott Residence Trust Management Limited (Company registration no Z) As manager of Ascott Residence Trust Kang Siew Fong / Doris Lai Joint Company Secretaries 2 May Prior appointment with the Manager will be appreciated. 15

16 Important Notice The value of Units and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors have no right to request the Manager to redeem their Units while the Units are listed. It is intended that Unitholders may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. This document is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for the Units. The past performance of Ascott REIT is not necessarily indicative of the future performance of Ascott REIT. This announcement may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses (including employee wages, benefits and training costs), property expenses and governmental and public policy changes. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on the Manager s view of future events. 16

17 Appendix A Target Name Addre ss Number of Apartment Units Gross Floor Area Title Appraised Value (1) (sqm) 1. Somerset Heping Shenyang Target 80 Taiyuan North Street, Heping District, Shenyang, China ,030.8 Leasehold estate for 40 years ending on 30 October 2046 RMB441.0 to S$86.8 ) ( 2) 2. Citadines Biyun Shanghai Target No. 1-3, 9-12, 15-16, Lane 450 Hongfeng Road, Pudong District, Shanghai, China ,877.2 Leasehold estate for 70 years ending on 30 November 2064 RMB321.5 to S$63.3 ) (2) 3. Citadines Xinghai Suzhou Target Block 27, Jiacheng Gardens, 58 Xinghai Street, Suzhou Industrial Park, Suzhou, China ,166.4 Leasehold estate for 70 years ending on 31 December 2066 RMB120.0 to S$23.6 ) (2) 4. Actus Hakata V- Tower Target 5. Big Palace Kita 14jo Target 6. Grand Mire Miyamachi Target 7. Grand Mire Shintera Target , Hakata ekimae, Hakata-ku, Fukuoka, Japan 4-1-6, Kita14jo Nishi, Kita-ku, Sapporo, Japan , Miyamachi, Aoba-ku, Sendai, Japan , Shintera, Wakabayashi-ku, Sendai, Japan 296 9,306.4 Freehold JPY3,165.0 to S$39.5 ) ( 3) 140 5,895.7 Freehold JPY1,385.0 to S$17.3 ) (3) 91 2,310.6 Freehold JPY873.0 to S$10.9 ) (3) 59 1,711.3 Freehold JPY523.0 to S$6.5 ) (3) 8. Gravis Court Kakomachi Target 9. Gravis Court Kokutaiji Target 13-10, Kakomachi Naka-ku, Hiroshima, Japan 2-1-9, Kokutaijimachi, Naka-ku, Hiroshima, Japan 63 2,270.4 Freehold JPY534.5 to S$6.7 ) (3) 48 1,659.1 Freehold JPY400.5 to S$5.0 ) (3) 17

18 10. Gravis Court Nishiharaekimae Target 11. Grand E terna Saga Target 12. Grand E terna Saga Idaidori Target 13. Grand E terna Nijojomae Target 14. Grand E terna Chioninmae Target , Nishihara, Asaminami-ku, Hiroshima, Japan , Ipponmatsu, Honjo, Honjomachi, Saga, Japan 4-3-4, Nabeshima, Saga, Japan 469-2, Taruyacho, Nakagyo-ku, Kyoto, Japan 577-3, Inaricho Minamigumi Higashiyama-ku, Kyoto, Japan 29 1,151.2 Freehold JPY335.0 to S$4.2 ) (3) 123 4,989.9 Freehold JPY735.5 to S$9.2 ) (3) 46 1,507.4 Freehold JPY258.0 to S$3.2 ) (3) 47 1,736.0 Freehold JPY604.0 to S$7.5 ) (3) 17 1,049.0 Freehold JPY388.5 to S$4.8 ) (3) Notes: (1) Average of two independent valuations by the Independent Valuers as of 15 March 2013 in relation to the Target Properties. (2) Based on an illustrative exchange rate of RMB1.00 = S$ (3) Based on an illustrative exchange rate of JPY1.00 = S$

19 Appendix B Details of the CBS Covenants In general, the CBS Facility contains one or more of the following CBS Covenants: The CBS Borrower represents and warrants to the CBS Lender that (a) Biyun Investments (Hong Kong) Limited is the direct legal and beneficial owner of all equity interests and registered capital of the CBS Borrower, and (b) the equity interest in the CBS Borrower held by TAL directly or indirectly shall be no less than 30%. When any equity interest held by the CBS Borrower, or any equity interest in the CBS Borrower held by ACF, Biyun Investments (Hong Kong) Limited and Biyun Investments (BVI) Limited, is directly or indirectly sold to a third party, the CBS Lender may request prepayment, unless it satisfies the requirements that (a) the equity interest in the CBS Borrower held by TAL directly or indirectly shall be no less than 30%; and (b) TAL or either or its affiliates is responsible for management of the property. When TAL transfers any equity interest held in ACF, the CBS Borrower, Biyun Investments (Hong Kong) Limited and Biyun Investments (BVI) Limited to Ascott REIT and after transfer, the equity interest in the CBS Borrower held by TAL directly or indirectly is still no less than 30%, the CBS Borrower shall obtain consent from the CBS Lender on approving the transfer of rights and obligations under the relevant financing documents by ACF, Biyun Investments (BVI) Limited and/or the CBS Borrower to Ascott REIT or any of its affiliates. Details of the CXS Covenant In general, the CXS Facility contains the following CXS Covenant: It shall be considered a breach of contract if TAL changes or fails to hold 100% of the equity interest of the CXS Borrower before the full repayment of the loan without the CXS Lender s written consent (the CXS Lender shall not unreasonably refuse or delay such consent if the CXS Borrower applies for a transfer of its equity interests to ACF or Ascott REIT (even where ACF or Ascott REIT shall not hold the entire equity interest of the CXS Borrower pursuant to the proposed equity transfer)). Details of the Japan Covenant In general, the Japan Facility contains the following Japan Covenant: The Japan Borrower shall procure that TAL will directly/indirectly hold shares in the Japan Borrower. 19