Prime Real Estate Investment Trust (Prime REIT) launches S$570 million IPO

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1 PRESS RELEASE CONTACT INFORMATION August Consulting Tel: (65) Fax: (65) Giselle LAU; Ann LIM; Prime Real Estate Investment Trust (Prime REIT) launches S$570 million IPO Offering of 581,918,000 units at an offering price of S$0.98 per unit Annualised distribution yield of 5.12% in FY2005 and 5.35% in FY Opportunity to invest in landmark properties on Orchard Road SINGAPORE 13 September Pacific Star Prime REIT Management Limited, as manager ( the Manager ) of Prime Real Estate Investment Trust ( Prime REIT ), launched today its initial public offering ( IPO ) of 581,918,000 units ( Units ) at an offering price of S$0.98 per Unit (the Offering Price ), in conjunction with its proposed listing on the Main Board of the Singapore Exchange Securities Trading Limited ( SGX- ST ). Separate from the Offering, Macquarie Real Estate Singapore Pte. Limited, as financial sponsor (the Financial Sponsor ), has agreed to subscribe for 235,750,000 Units in Prime REIT. In addition, American International Assurance Company, Limited ( AIA ), DBS Bank Ltd ( DBS Bank ) and The Great Eastern Life Assurance Company Limited have each signed separate subscription agreements with the Manager, as cornerstone investors, to subscribe for an aggregate of 125,332,000 Units in Prime REIT. Together, 1 Based on the assumptions set out in the prospectus of Prime REIT registered with the Monetary Authority of Singapore on 13 September 2005 (the Prospectus). Such yields will vary accordingly for investors who purchase Units in the secondary market at a market price different from the Offering Price.

2 Page 2 of 6 the public offer, the financial sponsor and the cornerstone investors will raise an estimated total of S$924 million for Prime REIT. Prime REIT is a Singapore-based real estate investment trust established with the principal investment strategy of investing primarily in prime real estate used mainly for retail and/or office purposes. Prime REIT s investments will generally be for the long term and will be made, depending on investment opportunities and conditions, in Singapore and overseas markets. Pacific Star Prime REIT Management Limited is the Manager of Prime REIT and Pacific Star Property Management Pte Ltd is the property manager (the Property Manager ) of the Properties (as more fully described below) to be acquired by Prime REIT. Prime REIT will initially invest in and own the Wisma Atria property, comprising 331 strata lots representing 74.23% of the total share value of the strata lots in the complex (the Wisma Atria Property ) and the Ngee Ann City property comprising 4 strata lots representing 27.23% of the total share value of the strata lots in the complex (the Ngee Ann City Property, together with the Wisma Atria Property, the Properties ). The Properties are intended to be acquired at an aggregate purchase price of approximately S$1.3 billion based on an acquisition price of S$663million 2 for the Wisma Atria Property and S$640 million² for the Ngee Ann City Property. One of the primary objectives of Prime REIT is to provide unitholders ( Unitholders ) with stable distributions on a quarterly basis. Based on a distribution of 2.51 Singapore cents per Unit for the six months from 1 July 2005 to 31 December and a projected distribution of 5.25 Singapore cents per Unit for the financial year ending 31 December 2006, Unitholders are expected to benefit from a 4.5% 4 growth in annualised distributions over the forecast period ending 31 December 2005 and the projection year ending 31 December This equates to an annualised yield of 5.12% 5 for the forecast period ending 31 December 2005 and 5.35% 6 for the projection year ending 31 2 Appraised value as at 28 February Assuming that the Units are issued on 1 July 2005 and are eligible for distributions from operations from 1 July 2005 to 31 December Since the Units will be issued at a later date, investors will only be entitled to distributions arising from operations from the date of issue of the Units to 31 December Based on annualised figures for the six months from 1 July 2005 to 31 December Annualised figure for the six months from 1 July 2005 to 31 December 2005 based on the Offering Price of S$0.98 per Unit and on the assumptions set out in the Prospectus. 6 For the full year from 1 January 2006 to 31 December 2006 based on the Offering Price of S$0.98 per Unit and based on the assumptions set out in the Prospectus.

3 Page 3 of 6 December 2006 respectively. As the Units will be issued at a date after 1 July 2005, Unitholders will only be entitled to distributions arising from operations from the date of issue of the Units to 31 December 2005 for the year ending 31 December Commenting on the growth potential of the Properties, Mr Franklin Heng, Chief Executive Officer of Pacific Star Prime REIT Management Limited, said, The stable income underpinned by strong portfolio fundamentals reflect the strength of the Properties. We are well positioned to drive rental growth through active management of the Properties. Similarly, we believe we have a viable acquisition strategy as well as the capability to grow the asset base of Prime REIT. The Properties are landmark properties located in Orchard Road, the heart of Singapore s premier shopping and tourist precinct. The Ngee Ann City Property targets a wide demographic segment including the affluent with luxury retailers such as Louis Vuitton, Chanel, Piaget and Burberry; the young and upwardly mobile with trendy retail stores such as Guess, Zara and Max Mara; and the family crowd with tenants such as Books Kinokuniya and stores offering children s apparel and toys. The Ngee Ann City Property also distinguishes itself with a wide variety of dining offerings to encourage a wide selection of local and tourist market to visit the complex. The Wisma Atria Property is positioned as a cosmopolitan lifestyle centre that offers shopping, dining and entertainment for the young, trendy and fashion conscious. Its retail stores include Bebe, BCBG, Karen Millen, FCUK, Nine West, Topshop, Topman, Nike Women, Warehouse and Forever 21. The Properties are easily accessible via public transport and are well served by a network of major roads. Direct access from the Orchard MRT station exists via an underground walkway which also connects the Wisma Atria Property to the Ngee Ann City Property. Not only do these Properties form the largest retail space with the longest frontage on Orchard Road, they also provide exposure to the Singapore office market. Mr Heng added, Office space is projected to contribute 14.0% and 13.9% respectively to the gross rent of Prime REIT for the financial year ending 31 December 2005 and financial

4 Page 4 of 6 year ending 31 December 2006 respectively. Such exposure provides Prime REIT with enhanced earnings diversification and the potential for future earnings growth with the Singapore office sector expected to enter a cyclical upturn. As at 31 January 2005, the committed occupancy rate for retail space in the Wisma Atria Property and the Ngee Ann City Property was approximately 96.9% and 100% respectively. As at that date, committed occupancy rate for office space of the Wisma Atria Property and the Ngee Ann City Property was approximately 94.0% and 88.5% respectively. Commenting on the IPO, Antony Green, Executive Director and Head of the Property Industry Group within Macquarie Bank s Corporate Finance Division said, Prime REIT brings together two of the most prominent retail properties in Orchard Road with compelling growth potential. It s a rare opportunity for investors and this has been reflected in the enthusiasm and strong response we have received from international and local institutions we met during our two-week roadshows in Singapore, Hong Kong, United Kingdom, Netherlands, Germany and Australia. The investors were impressed with the quality of the Properties, management and their focused strategy for Prime REIT. Underwriting Syndicates and Investors Macquarie Securities (Singapore) Pte. Limited ( Macquarie Securities ) has been appointed Sole Global Co-ordinator for the IPO. Macquarie Securities (Asia) Pte. Limited, DBS Bank and J.P. Morgan (S.E.A.) Limited ( JP Morgan ) have been appointed Joint Financial Advisors. Macquarie Securities, DBS Bank, JP Morgan and Deutsche Bank AG, Singapore Branch ( Deutsche Bank ) have been appointed Joint Lead Underwriters and Bookrunners for the Offering. The Oversea-Chinese Banking Corporation Limited ( OCBC ) is the sub-underwriter for the Offering. The Offering will be fully underwritten at the Offering Price by Macquarie Securities, DBS Bank, JP Morgan and Deutsche Bank AG. Separate from the Offering, the Financial Sponsor, has entered into a subscription agreement with the Manager to subscribe for 235,750,000 Units at the Offering Price, representing approximately 25% of the Units in issue immediately after the completion of the Offering (assuming the over-allotment option of up to 47,150,000 Units granted

5 Page 5 of 6 by the Financial Sponsor to the Sole Global Co-ordinator has not been exercised), subject to the completion of the Offering. In addition, separate from the Offering, AIA, DBS Bank Ltd and The Great Eastern Life Assurance Company Limited have each signed separate subscription agreements with the Manager, as cornerstone investors, to subscribe for an aggregate of 125,332,000 Units at the offering price, representing in aggregate approximately 13.3% of the Units in issue immediately after the completion of the Offering. Macquarie Bank Limited ( Macquarie Bank ) has been granted a call option (the Call Option ) by Pacific Star Holding Pte. Ltd., the parent company of the Manager and the Property Manager, to acquire through an intermediate holding company (which will be set up), an effective interest in 50.0% of the issued and paid-up share capital of each of the Manager and the Property Manager. The Call Option may be exercised by Macquarie Bank (or its nominated subsidiary) at any time within a period of six (6) months from and including the business day immediately following the listing date of Prime REIT upon the fulfillment of certain conditions. Macquarie Bank has indicated that its intention, as at the date of the Prospectus, is to exercise the Call Option within one week after the listing date of Prime REIT. When the Call Option is exercised and Macquarie Bank s acquisition of interests in the Manager and the Property Manager is completed, Prime REIT will be able to benefit from the network of Macquarie Bank in addition to the network and opportunities for acquisitions provided by its current shareholders, including ERGO Trust GmbH (which is a wholly-owned subsidiary of ERGO AG). The Offering The offering of 581,918,000 Units at an offering price of S$0.98 per Unit consists of: (i) an international placement of 523,918,000 Units to investors, including institutional and other investors in Singapore and (ii) an offering of 58,000,000 Units to the public in Singapore of which 28,000,000 Units will be reserved for subscription by the directors, management, employees and business associates of Pacific Star Holding Pte. Ltd. and its subsidiaries (the "Pacific Star Group") and

6 Page 6 of 6 others who have contributed to the success of the Pacific Star Group, as well as the retail tenants of the Properties. The IPO opens at 5.00 pm on 13 September 2005 and closes at 8.00 am on 16 September The closing date and time for investors applying for the Units using CPF Funds is 15 September 2005, pm. Trading in Prime REIT units on a ready basis is expected to commence at 2.00 pm on 20 September # # # IMPORTANT NOTICE The information contained in this document does not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for the Units in Singapore or any other jurisdiction. The Prospectus is available upon request and a copy may be obtained from any DBS Bank branch (including POSB), Deutsche Bank, JP Morgan, Macquarie Securities, and where applicable, from certain members of the Association of Banks in Singapore, members of the SGX-ST and merchant banks in Singapore, subject to availability. This document is qualified in its entirety by, and should be read in conjunction with, the full text of the Prospectus, including but not limited to the sections "Risk Factors", "Notice to Investors" and "Forward-Looking Statements". A prospective investor should read the Prospectus before deciding whether to subscribe for or purchase the Units. The value of the Units and the income accruing to the Units, if any, may fall or rise. Investors have no right to request the Manager to redeem or purchase their Units for so long as the Units are listed on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. Units are not obligations of, deposits in, or guaranteed by the Manager or any of its affiliates. An investment in the Units is subject to investment risks, including the possible loss of the principal amount invested. This document contains forward-looking statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Prime REIT or the Manager, or industry results, to be materially different from any future results, performance or achievements expressed or explained in the Prospectus. All past performance of the Manager is not indicative of the future performance of the manager. Predictions, productions or forecast of the economy or economic trends of the markets are not necessarily indicative of the future performance of Prime REIT. All forecasts and projections are based on the Manager's assumptions as set out in the Prospectus. Such yields will vary accordingly for investors who purchase the Units in the secondary market at a market price higher or lower than the Offering Price for each Unit. The forecast and projected financial performance of Prime REIT is not guaranteed and there is no certainty that it can be achieved. Investors should read the whole of the Prospectus for details of the forecasts and consider the assumptions used and make their own assessment of the future performance of Prime REIT or seek professional advice from the relevant advisors before deciding whether to subscribe for or purchase the Units. This document is not an offer for sale of the Units in the United States. The Units may not be offered or sold in the United States or to U.S. Persons (as defined under the U.S. Securities Act of 1933, as amended), absent registration or an exemption from registration under the U.S. Securities Act. Neither the Manager nor any other person intends to register any portion of the Offering in the United States or to conduct a public offering of Units in the United States. This document is not to be distributed or circulated outside Singapore.