Treasury China Trust

Treasury China Trust (a business trust registered in the Republic of Singapore) (managed by Treasury Holdings Real Estate Pte. Ltd.) FORECAST CONSOLIDATED NET PROPERTY INCOME STATEMENT Treasury Holdings Real Estate Pte Ltd, as Trustee Manager of Treasury China Trust ( TCT ), is pleased to provide to unitholders of TCT ( Unitholders ) the forecast consolidated Net Property Income Statement ( NPI Forecast or Profit Forecast ) for the remainder of the financial year from 1 July 2011 to 31 December 2011 (the Update Forecast ) by way of update to the Year 2011 full year forecast that was previously issued on 9 December 2010 ( Year 2011 Prior Forecast ). The NPI Forecast includes the financial impact of the acquisitions of Central Avenue Mall Qingdao and Huai Hai Mall Shanghai ( the Acquisitions ) on 1 April 2011 and 10 May 2011 respectively. The full year forecast from 1 January 2011 to 31 December 2011 ( Year 2011 Update Forecast ) takes into account the half yearly results for TCT as at 30 June 2011 (the details of which are the subject of a separate announcement issued on SGXNET today) and the forecast for the remainder of the financial year from 1 July 2011 to 31 December 2011. The Year 2011 Update Profit Forecast shows an increase of 6.4% in TCT s Net Property Income ( NPI ) from 1 January 2011 to 31 December 2011 on the following basis: 1. TCT s Prior Forecast included the assumption that average committed occupancy for the Properties (excluding Central Avenue Mall and Huai Hai Mall) would equate to 88.0% and as at 30 June 2011 had reached 95.9% and had in fact remained above the forecast committed occupancy since 1 January 2011; 2. Rents secured for new leases are substantially higher on a per square metre basis than that originally forecast, which reflects the improving market conditions in the Shanghai commercial real estate sector; and 3. Recognises the delay in the final settlement of the Acquisitions which the Prior Forecast estimated to occur on 1 January 2011. In June 2010, J.P. Morgan (S.E.A.) Limited was the financial adviser and issue manager in relation to the listing of the Units on the Main Board of the SGX-ST by way of an introduction. 1

Richard David, Chief Executive Office of TCT commented, We are pleased to be in a position to inform our unitholders of improved trading conditions for the second half of 2011, which reflects the proactive nature of TCT s management program. In addition, our earlier predictions for favorable market circumstances have been realized and the overall operating environment is expected to deliver an 18.7% increase in gross revenues for the second half of the year compared with the June 2011 result. The Profit Forecast for the period 1 July 2011 to 31 December 2011 and the assumptions underlying such forecast have been examined by the Independent Reporting Accountants, KPMG LLP, and should be read together with their report contained herein. The Profit Forecast has been stated by the directors of the Trustee Manager after due and careful enquiry. BY ORDER OF THE BOARD Treasury Holdings Real Estate Pte. Ltd (as Trustee-Manager of Treasury China Trust) (Company registration no: 201003233M) Richard David Director 26 July 2011 2

PROFIT FORECAST Statements contained in this announcement, which are not historical facts, may be forward-looking statements. Such statements are based on the assumptions set forth in this announcement and are subject to certain risks and uncertainties which could cause actual results to differ materially from those forecasted. Under no circumstances should the inclusion of such information herein be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions by the Trustee-Manager or any other person nor that these results will be achieved or are likely to be achieved. The following tables set out the forecast consolidated Net Property Income Statement for the Year 2011 Update Forecast and Year 2011 Prior Forecast. The Profit Forecast for the period 1 July 2011 to 31 December 2011 has been examined by the Independent Reporting Accountants and should be read together with their report which is set out in this announcement as well as the assumptions set out below. Exchange Rate used: Actual figures from Jan to June 2011 SGD 1 = RMB 5.1939 Forecast figures from July to Dec 2011 SGD 1 = RMB 5.2430 3

Forecast Consolidated Net Property Income Statement for Year 2011 Update Forecast RMB (million) Jan-June 2011 July-Dec 2011 Year 2011 Update Year 2011 Prior Actual Forecast Forecast Forecast ¹ Variance % Income Portfolio Gross Rental Income 219 260 479 456 23 Gross Revenue 219 260 479 456 23 5.0 Direct Property Costs -Business and Property Related Taxes (29) (32) (61) (61) (0) -Property management fees (7) (9) (16) (17) 1 -Other property operating expenses (46) (57) (103) (97) (6) Total Direct Property Costs (82) (98) (180) (175) (5) (2.9) Portfolio Net Property Income 137 162 299 281 18 6.4 Notes: 1. Year 2011 Prior Forecast was adjusted to reflect the actual acquisition dates of Central Avenue Mall and Huai Hai Mall as opposed to the assumed date of 1 January 2011 in the Year 2011 Prior Forecast. 4

PROFIT FORECAST 1. Assumptions Portfolio The Portfolio refers to the income-producing assets currently owned by TCT comprising the City Center, Central Plaza, Treasury Building, Central Avenue Mall (Square 1) and Huai Hai Mall (collectively referred to as the Properties ). The major assumptions made in preparing the Profit Forecast of the Portfolio are set out below. The Trustee-Manager considers these assumptions to be appropriate and reasonable as at the date of this announcement. 1.1 Gross Revenue Gross revenue is the aggregate of gross rental income and other income earned from the Portfolio. A summary of the assumptions used in calculating the gross revenue is set out below: 1.1.1 Gross Rent The gross rent comprises base rents, turnover rents, car park income and management fees, recoveries of utilities and signage income. The Trustee-Manager has assumed rents payable under the committed leases for the Portfolio as at 30 June 2011 to forecast the gross rent, which is expected to be RMB260 million (S$49.6 million) for the period 1 July 2011 to 31 December 2011 and RMB479 million (S$91.4 million) for the Year 2011 Update Forecast including the actual Gross Revenue for the period 1 January 2011 to 30 June 2011 of RMB219 million (S$42.7 million) as reported in the TCT accounts as at 30 June 2011 to SGXNET on 26 July 2011. Across the office portfolio, the typical lease term is three years, except for anchor tenants, which in some cases secure longer lease terms. Most leases are flat for the term of the lease, with no step-up or escalation clauses. Across the retail portfolio, tenants typically have a five-year lease (or shorter leading up to the planned refurbishment of City Center in 2012 / 2013) while the major anchor tenant, Parkson Retail Group Ltd., has a 10-year lease in City Center (expiring in middle of December 2012) and is the only tenant whose rent is comprised of 100% turnover rent, which is derived based on 5% of general merchandise and 2% of supermarket sales. Some of the leases at Central Plaza are of longer leases. For example, restaurants like Shun Feng and Yakiniku are of 8 year leases while Wagas and Lofengge are of 6 year leases. 5

For Huai Hai Mall, the majority of current leases will expire by late 2013 or early 2014. Upon the expiration, the plan is to commence the refurbishment of the retail podium to incorporate modern design and quality finish for new letting. Some of the leases for Central Avenue Mall are of longer leases. For example, Lotte Hypermarket lease is 20 years and McDonald s lease is 15 years. Gross revenue included in the year 2011 Update Forecast is based on a rental support guarantee of RMB 51 million per year till 1 April 2016. Following the expiry of a committed lease during the Year 2011, the Trustee-Manager has used the following process to forecast the gross rent: the Trustee-Manager has assessed the market rent for each portion of gross lettable area of the Properties as at 30 June, 2011. The market rent is the rent which the Trustee-Manager believes can be achieved if each lease was renegotiated as at 30 June, 2011 and is estimated with reference to the size of the net lettable area, rent payable pursuant to comparable leases for tenancies that have recently been negotiated, the effect of competing supply, assumed tenant retention rates on lease expiry, likely market conditions, inflation levels and tenant demand levels. if a committed lease expires in the Year 2011 Update Forecast, the Trustee-Manager has assumed that the rental rate for a new lease (or a lease renewal) which commences in the Year 2011 Update Forecast is the market rent as at 30 June, 2011, increased by a forecast or projected annual growth rate of 5-10% (representing an increase over the Year 2011 Prior Forecast of 3-5%), or the actual rent if the lease agreement has been entered into. The typical rent-free period extended to new leases is 1-1.5 months per every 3 years of committed lease, reduced from the Year 2011 Prior Forecast of 1 month for each year. 1.1.2 Average Occupancy The average occupancy has been determined in accordance with the following performance of the Portfolio as set out in the table below. 6

Year 2011 Prior Year 2011 Update Actual Properties Forecast Average Occupancy Forecast Average Occupancy (1 July Committed Occupancy as at (1 January 2011 to 31 2011 to 31 December 30 June 2011 December 2011) 2011 City Center office 80.3% 89.8% 93.0% City Center retail 95.9% 94.5% 97.9% Central Plaza office 92.2% 97.3% 99.5% Central Plaza retail 100.0% 92.9% 89.4% Treasury Building office & retail 89.7% 100.0% 100.0% HuaiHai Mall 100.0% 73.6% 71.8% Gross rental of Central Avenue Mall is based on a rental guarantee of RMB 51 million per year till 1 April 2016. 1.1.3 Market Rent Growth Rates The growth rate assumed for market rent over the Year 2011 Update Forecast for the Properties is 5-8% compared with 3 5% under the Year 2011 Prior Forecast. This growth rate assumption reflects the Trustee-Manager s assessment of the market rent growth rate having regard to supply and demand dynamics of competing properties in the sub-markets in which the Properties are located and the outlook for the general economy. The market rent growth rates have been used to forecast the gross rent payable under the new leases (or lease renewals) signed in the Year 2011 Update Forecast. 1.1.4 Lease Renewals and Vacancy Allowances For in-place leases as of 30 June 2011 which are expiring within the Year 2011 Update Forecast and where actual vacancy periods are already known pursuant to commitments to lease, the actual vacancy periods have been used in the Profit Forecast. For the other leases expiring in the Year 2011 Update Forecast, each lease expiring is reviewed on an individual basis by taking into account current market conditions and tenant demand levels to determine their probability of renewal, based on our leasing team s market expertise. For those leases with an assumption of full termination, an approximate 2-3 months vacancy period is assumed before rent becomes payable under a new lease. 7

A summary list of change on assumptions between Year 2011 Prior Forecast and Year 2011 Update Forecast is shown below. Year 2011 Prior Forecast Year 2011 Update Forecast Annual growth rate for new/renewal lease 3%-5% 5%-10% Rent-free period 1 month per year 1-1.5 months per every 3 years Market rent growth rates 3%-5% 5%-8% Average occupancy rate see table in 1.1.2 1.2 Property Operating Expenses 1.2.1 Business and Property-related Taxes The following PRC taxes have been taken into account in the forecast: business tax (5% of gross revenue) real estate tax (Shanghai properties-0.96% of assessed property value, Qingdao property-12% of gross rental revenue and 0.58% of property value on vacant area) stamp duty urban land use tax; and local surcharges. (12%-13% of business tax depending on location) 1.2.2 Property Management Fees Under the property management agreement in respect of the Properties, the property manager will provide property management services, development management services, lease management services, marketing services and general management services in relation to the Properties. Property management fee is calculated as 2% of monthly Gross Revenue; lease management fee is 1% of monthly Gross Revenue; general management services fee is 20% of the apportioned remuneration cost which is incurred and reimbursable to the property manager (general management services fee is however, not chargeable to Central Avenue Mall in year 2011); and development management fee is 5% of development costs. However, the development management fee is capitalized in development costs. 1.2.3 Other Property Expenses (staff costs, utilities, repair and maintenance, advertising and promotion, general and administration, insurance and leasing commissions) The property expenses are estimated based on the following assumptions which are benchmarked against the operational history of the Properties: 8

utilities, mechanical and engineering based on historical consumption levels of the Properties, adjusted for inflation. The forecast has assumed certain increases in electricity and water rates due to increase in occupancy that has occurred in the first half of 2011; repair & maintenance based on typical level of routine repair and maintenance expenses of the Properties historically; advertising & promotion, market research based on historical rates, adjusted for inflation; property upkeep costs include costs associated with the property s general operations and upkeep; general & administration based on typical level of miscellaneous administrative expenses for the Properties, adjusted for inflation, and comprises expenses such as statutory fees, printing and stationery expenses, computer equipment and entertainment; insurance based on current insurance contracts for the Portfolio; and leasing commission - based on a defined percentage of base rent according to the respective tenure of the renewed/ new leases. 1.3 Other Assumptions The following additional assumptions have been made in preparing the Profit Forecast: the existing property portfolio remains unchanged throughout the Year 2011 Update Forecast; there will be no material changes in taxation legislation or other legislation; there will be no material change to the tax ruling; and all leases and licenses are enforceable and will be performed in accordance with their terms (with no allowances for bad and doubtful debts). 2. Exchange Rate An exchange rate of SGD1.00 = RMB 5.243 is assumed in the Year 2011 Update Forecast. 9

3. Accounting Standards and Policies A summary of the significant accounting policies adopted by the Trustee-Manager in the preparation of the Profit Forecast is set out in Appendix 1. The accounting policies used in the preparation of the Profit Forecast are consistent with those normally adopted by TCT. There is no change in applicable accounting standards or other financial reporting requirements that may have a material effect on the Profit Forecast. IMPORTANT NOTICE The value of units ( Units ) in Treasury China Trust ( TCT ) and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, TCT, the Trustee-Manager, or any of its affiliates. The past performance of TCT is not indicative of the future performance of TCT. Certain statements in this announcement constitute forward-looking statements. Such forward-looking statements and financial information are based on numerous assumptions regarding TCT s present and future business, and its strategies and the environment in which TCT will operate in the future. Such forward-looking statements and financial information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of TCT, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements and financial information. These forward-looking statements and financial information speak only as at the date of this announcement. TCT expressly disclaims any obligation or undertaking to release publicly any updates of or revisions to any forward-looking statement or financial information contained herein to reflect any change in TCT s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement or information is based, subject to compliance with all applicable laws and regulations and/or the rules of the SGX-ST and/or any other relevant regulatory or supervisory body or agency. 10

Appendix 1 Treasury China Trust Summary of Significant Accounting Policies (relevant to Net Property Income) (a) (i) Basis of consolidation Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss. When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree s employees (acquiree s awards) and relate to past services, then all or a portion of the amount of the acquirer s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree s awards and the extent to which the replacement awards relate to past and/or future service. (ii) Subsidiaries Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. 11

(iii) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of the Group s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. (b) Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date. The foreign exchange differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured at cost are translated using the exchange rate at the date of the transaction. Foreign exchange differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments effective, or qualifying cash flow hedges, which are recognised in other comprehensive income. (ii) Foreign operations The assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on acquisition, are translated to Singapore dollars at exchange rates at the end of the reporting period. The income and expenses of foreign operations are translated to Singapore dollars at exchange rates at the dates of the transactions. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or 12

loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation. These are recognised in other comprehensive income, and are presented in the translation reserve in equity. (c) Investment properties Investment properties are properties held either to earn rental income or for capital appreciation or for both, or are being constructed or developed for future use as investment property. Investment properties are stated at initial cost on acquisition, and at fair value thereafter, with any change therein recognised in profit or loss. Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs. Valuations are determined in accordance with the Trust Deed, which requires the investment properties to be valued by independent registered valuers at least once a year. (d) Property, Plant and equipment Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net within other income in profit or loss. 13

Subsequent costs The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Depreciation Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful life of 5 to 20 years. Depreciation methods, useful lives and residual values are reviewed at each reporting date. (e) Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. (f) Revenue recognition Rental income receivable under operating leases is recognised in profit or loss on a straight-line basis over the term of the lease, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased assets. Lease incentives granted are recognised as an integral part of the total rental to be received. Contingent rentals are recognised as income in the accounting period on a receipt basis. No contingent rentals are recognised if there are uncertainties due to the possible return of amounts received. 14

(g) Expenses (i) Trustee s fees and manager s fees Trustee s and manager s fees are recognised on an accrual basis based on the applicable formula stipulated in Note 1. (ii) Property and administrative expenses Property and administrative expenses are recognised on an accrual basis. 15