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OPTIMISING ASSETS

ASCENDAS REAL ESTATE INVESTMENT TRUSTANNUAL REPORT 2005

75 Science Park Drive, #01-03 CINTECH IISingapore Science Park I, Singapore 118255

www.a-reit.com

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CONCEPT AND DESIGN BY EQUUS

WWW.EQUUS-DESIGN.COM

Ascendas Real Estate Investment Trust(“A-REIT”) is the fi rst business space and industrial property REIT listed on Singapore Exchange Securities Trading Limited. A-REIT owns a diversifi ed portfolio of business space properties in Singapore in the following asset classes: • Business and science parks: suburban offi ce,

R&D space, business HQ buildings• Hi-tech Industrial: high offi ce content

combined with higher end industrial space• Light Industrial: low offi ce content

combined with manufacturing space• Logistics and distribution centres:

warehousing and distribution centres

These properties house a tenant base of more than 470 international and local companies from a wide range of industries.

A-REIT’s Mission

To deliver predictable distributions andachieve long term capital stability for unitholders.

Contents

Financial Highlights 02Board of Directors 04Chairman’s Message 06Manager’s Report 09Significant Events 18The A-REIT Team 20Property Portfolio 22Independent Industrial Property Market Report 32Corporate Governance 34Investor Relations 40

Financial Statements 41Unitholder Statistics 66Glossary 71

This Annual Report for the year ended 31 March 2005 has been prepared by Ascendas-MGM Funds Management Limited (200201987K) as the manager of A-REIT. Whilst every care has been taken in relation to its accuracy, no warranty is given or implied. The information provided is not investment advice and recipients should consider obtaining independent advice before making any decision that relies on this information. All values are expressed in Singapore currency unless otherwise stated. This Annual Report is issued in May 2005.

Ascendas-MGM Funds Management Limited is the manager of A-REIT (the “Manager”).

The Manager aims to deliver stable total returns to Unitholders via a three-pronged strategy of: • Yield-accretive acquisitions of suitable

properties• Organic portfolio growth through proactive

asset management• Optimisation of capital structure

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Ascendas Real Estate Investment Trust Annual Report 2005 1

Optimising AssetsDriven by our mission to deliver predictable distributions and achieve long-term stability, A-REIT has successfully achieved attractive total returns through the continual diversifi cation of tenant mix and growth of the portfolio. A-REIT’s portfolio has quadrupled since its listing to 36 properties and has constantly exceeded expectations even under challenging market conditions.

In this FY05 annual report, we give an insight into the ways in which we have optimised and managed our tangible and intangible assets in order to deliver our excellent results. We also share how we will continue to deliver reasonable returns to Unitholders in the years to come.

2 Ascendas Real Estate Investment Trust Annual Report 2005

Notes:

(1) Although A-REIT was established on 9 Oct 02, the acquisition of the properties was completed on 19 Nov 02. Consequently, the fi rst fi nancial period was from 19 Nov 02 to 31 Mar 03, a period of 133 days.

(2) Annualised based on actual EPU of 2.62 cents and DPU of 2.78 cents for the 133 days ended 31 Mar 03. (3) Based on respective closing prices on 31 Mar. (4) Before adjustment for distributable income not yet distributed.

Financial Highlights Actual Actual Actual (1) 1 Apr 04 1 Apr 03 19 Nov 02 to 31 Mar 05 to 31 Mar 04 to 31 Mar 03

Net investment income ($m) 75.2 40.6 14.3 Net investment income available for distributable ($m) 84.2 45.5 15.2 Earnings per Unit (cents) 8.66 7.27 7.19 (2) Distribution per Unit (cents) 9.56 8.16 7.63 (2)

As at 31 Mar 05 As at 31 Mar 04 As at 31 Mar 03 Total assets ($m) 2,114.4 1,020.7 636.4 Total borrowings ($m) 556.0 263.8 125.0 Total Unitholders’ funds ($m) 1,425.5 691.7 498.2 Market capitalisation ($m) (3) 2,181.8 898.2 444.2 Total borrowings to total assets (%) 26.3% 25.8% 19.6% Net asset value per Unit ($) (4) 1.23 0.98 0.91 Unit price ($) 1.88 1.27 0.815Number of Units in issue (m) 1,160.6 707.2 545.0Number of Unitholders (30 Apr) 7,032 7,691 6,545

Trading ChartUnit Price Performance: A-REIT versus the STITrading Performance from 1 April 2004 to 31 March 2005

Source: Thomson Financials (April 2005)


Notes:

(1) 2003 actual DPU is annualised. The actual DPU was 2.78 cents for the 133 days ended 31 Mar 03.

(2) The projected DPU is based on projections stated in the circular dated 18 Nov 2004, which excludes acquisitions completed in year 2005.

Unit Price for the Year Ended 31 March 2005

S$Closing Price 1.88High (28 Feb 2005) 1.98Low ( 7 April 2004) 1.28Volume Weighted Average Price 1.89

Volume Traded (million units) 381.9(1)

Note: (1) 24% of Singapore REITs’ total traded volume

Regular and predictable distributions

Comparable returns

Notes:

(1) Based on A-REIT’s IPO price of $0.88 per unit and distribution of 9.56 cents per unit for the year ended 31 Mar 05.

(2) Based on A-REIT’s closing price of $1.88 per unit and distribution of 9.56 cents per unt for the year ended 31 Mar 05.

(3) As at 31 Mar 05. Source: Singapore Government Securities (“SGS”) website

(4) Based on Bloomberg data as at 7 Apr 05.

(5) Based on interest paid on Central Provident Fund (“CPF”) ordinary account from Jan to Mar 05.Source: CPF website

(6) Interbank overnight interest rate as at 31 Mar 05. Source: MAS website

(7) Bank fi xed deposit rate (12 months) as at Mar 05. Source: MAS website


Board of Directors

1 Mr Lew Syn Pau, Chairman Mr Lew has extensive corporate and banking experience in

the public and private sectors. He is the Managing Director of international executive search consultancy, Stanbridge International Pte Ltd, and Director of fi nancial consulting and corporate search fi rm, Capital Connections Pte Ltd. He is also the President of the Singapore Manufacturers’ Federation, and sits on the boards of numerous listed companies. Previously, Mr Lew was a Member of Parliament (1988-2001) and the Chairman of the Government Parliamentary Committee for National Development (1997-2000).

2 Mr David Stuart Clarke, Deputy Chairman (retired on 14 April 2005) Mr Clarke is the Executive Chairman of Macquarie Bank

Limited. He is also the Chairman of Macquarie Offi ce Management Limited, Macquarie CountryWide Management Limited, Macquarie Goodman Group, McGuigan Simeon Wines Limited and the Sydney Advisory Board of the Salvation Army. Additionally, he is the Chairman of the Opera Australia Capital Fund and a member of the Harvard Business School Asia Advisory Committee. Previously, Mr Clarke has chaired Macquarie’s predecessor organisation, Hill Samuel Australia Limited, and the Australian Rugby Union.

3 Mr Gregory Goodman, Deputy Chairman (with effect from 15 April 2005) Mr Goodman is the Chief Executive Offi cer of ASX-listed

Macquarie Goodman Group and has over 20 years of experience in the property industry with signifi cant expertise in the industrial property arena. His expertise included spearheading the listing of A-REIT in Singapore and co-founding Macquarie Goodman Industrial Trust, which recently merged with Macquarie Goodman Management Limited to form Macquarie Goodman Group.

4 Mr David Wong Cheong Fook, Independent Director & Chairman Of Audit Committee

Mr Wong is a director on the Boards of Oversea-Chinese Banking Corporation Ltd, Pacifi c Internet Ltd, Pan-United Marine Ltd, Banking Computer Services Pte Ltd and Bank of Singapore Ltd, and is the Chairman of EM Services Pte Ltd. He is also on the Boards of the Housing & Development Board and the Civil Service College, and is a member of the Public Transport Council.

5 Ms Chong Siak Ching, Director Ms Chong is the President and Chief Executive Offi cer of Ascendas

Pte Ltd. She sits on the boards of Ascendas Pte Ltd and its subsidiaries, and is a member on the board of the Building and Construction Authority of Singapore. Ms Chong is one of three Singapore’s representative to the APEC Business Advisory Council (ABAC). Previously JTC’s Deputy Chief Executive Offi cer, she has extensive experience in business space management.

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6 Mr Thai Chee Ken, Independent Director Mr Thai was the Senior Partner of PriceWaterhouse, Singapore,

when he retired from the fi rm. He is a director of Keppel Land Limited, United Engineers Limited, Prudential Assurance Company Singapore (Pte) Ltd and Schroder Investment Management (Singapore) Ltd. Mr Thai is a member of The Presidential Council for Religious Harmony.

7 Mr Benedict Kwek Gim Song, Independent Director Mr Kwek is the Chairman of listed education provider, Auston

International Group Ltd, Chairman of Korvacs Payment Services (S) Pte Ltd, and the Chairman of the Finance and Investment Committee. He is also a director of Chemical Industries Far East Ltd and Evans & Peck, Page (Singapore) Ltd. He chairs the Audit Committees of NTUC ChoiceHomes and Jurong Port Pte Ltd, and has over 31 years of banking experience. Mr Kwek was formerly the Chief Executive Offi cer of Keppel Tat Lee Bank Singapore.

8 Mr James Hodgkinson, Director (with effect from 15 April 2005) Mr Hodgkinson is an Executive Director of Macquarie Bank

Limited. He has responsibility for the management teams of Macquarie Countrywide Trust, Macquarie DDR Trust, Macquarie ProLogisTrust and Macquarie Bank Limited’s investment in Macquarie Goodman Group. He has over 18 years experience in property fund management, investment banking and chartered accounting. Prior to his current appointment, he was the alternate director for David Clarke.

9 Mr Swee Kee Siong, Director Mr Swee is the Senior Adviser to Ascendas Pte Ltd. He is a Fellow

of the Royal Institution of Chartered Surveyors and Fellow of the Singapore Institute of Surveyors and Valuers. He has over 26 years of experience in planning, developing, marketing and managing industrial estates, business and science parks in Singapore. Mr Swee was formerly a Master Plan Committee member (1995 – 1998), the Chief Executive Offi cer of Ascendas Singapore operations and the Singapore Science Park, and the Deputy Chief Executive Offi cer of JTC.

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Dear Unitholder

On behalf of the Board, I am very pleased to provide the key highlights of A-REIT’s performance in the fi nancial year ended 31 March 2005.

Excellent resultsThe past year has been a signifi cant one for A-REIT. On the fi nancial front, A-REIT’s net investment income available for distribution registered a substantial 85% increase to $84.2 million compared to $45.5 million in the prior corresponding period. It was also 5% higher than the forecast stated in the circular dated 18 November 2004, (the “Circular”). Distributable income per unit of 9.56 cents was up by 17% compared to 8.16 cents in the prior corresponding period, and was 3% higher than the forecast of 9.30 cents stated in the Circular.

Stable and regular returnsA-REIT was the fi rst Singapore REIT to commence payment of distributions on a quarterly basis, with eff ect from its third fi scal quarter distribution payment on 24 February 2005. This decision was to enable unitholders to have the benefi t of receiving income returns on a timely and regular basis.

These stable and regular returns for A-REIT unitholders were made possible by the performance of A-REIT’s existing portfolio and its record number of 20 properties totalling $1.0 billion acquired in the last fi nancial year. As at 31 March 2005, A-REIT’s total assets stood at $2.1 billion with 36 properties, an increase of more than 100% over the previous year. A-REIT has already marked the new fi nancial year 2006 with the acquisition of another fi ve properties totalling $95.7 million in April/May 2005, and will continue to boost its portfolio in the future with acquisitions of more quality properties.

A-REIT raised a total of $720 million in new equity during the year through two private placements and one secondary off er. The fi rst private placement was issued at $1.40 per unit to raise $115 million, while the secondary off er was issued at $1.55 per unit to raise $400 million and the recent private placement in February/March 2005 was issued at $1.865 to raise $205 million.

Chairman’s Message

Global recognitionSince it’s listing on 19 November 2002, A-REIT has been included in a number of leading indices. This is an affi rmation of the markets’ confi dence in A-REIT, as it grows its market capitalisation and increases its trading liquidity. A-REIT has been included in the Straits Times Index (STI) from 18 March 2005 with a weightage of 0.6 based on market free fl oat, and the Morgan Stanley Capital International (MSCI) index from May 2004. A-REIT continues to be included in the FTSE EPRA/NAREIT series of indices.

During the year, the following accolades were received by A-REIT in recognition of its excellence in corporate governance:1 Ranked no. 9 in BT Corporate Transparency Index 2004 (the only REIT amongst the top 10)2 Most Transparent Company under the REIT category in SIAS Investors’ Choice Award3 Best Investor Relations by Institutional Investor Research Group

Reduction in taxA-REIT was the fi rst REIT to enjoy the benefi ts of the waiver of stamp duty on property purchases (eff ective from 18 February 2005 to 17 February 2010) for all listed REITs on the SGX-ST announced in the Singapore Budget 2005. The reduction in the withholding tax rate to 10% from 20% for distributions to foreign non-individual investors eff ective for the same period of time is also expected to provide more investor demand for A-REIT.

Looking aheadREITs are yield-based investment products in mature markets such as Australia, which off er total returns typically in the range of 10% to 15%. In comparison, Singapore REITs, including A-REIT, have been off ering weighted total returns which are even more attractive. This is largely due to the nascent stage of Singapore REITs which saw the fi rst listing in 2002. Other reasons for the high returns include fi rstly, the desire of the sponsors of the earlier listed REITs to off er attractive yields during the initial public off ering, partly due to the relative lack of understanding of the product; secondly, growth was


demonstrated by A-REIT and other listed REITs through either yield accretive acquisitions and / or asset enhancements and thirdly, the demand for defensive stocks made REITs a popular investment. More recently, there has been a compression of yields to the 4.5% – 5.5% range for most REITs in Singapore. This is nevertheless, still a healthy spread above the 10-year government bond benchmark rate of about 3% – 3.5%.

A-REIT aims to continue to off er stable and predictable distributions through its portfolio of diversifi ed tenants from a broad mix of industries, and to continuously enhance the lease expiry profi le. Unitholders can be confi dent of A-REIT’s continuing eff orts to achieve long term capital stability through proactive and professional asset management of the portfolio.

I would like to thank my fellow Board members for their invaluable advice and support through the last year. In particular, I thank Mr David Clarke who has retired from the Board on 14 April 2005, for his strategic counsel and wisdom in the past three years. I am pleased to inform you that Mr Gregory Goodman has accepted the appointment as our new Deputy Chairman and am also pleased to welcome Mr James Hodgkinson who was appointed as a Director on15 April 2005.

On behalf of the Board, I extend my sincere appreciation to the management and staff of Ascendas-MGM for their commitment and unwavering eff orts in delivering growth to A-REIT. Finally, I thank all Unitholders, tenants and business partners for their steadfast support and look forward to an even more successful year ahead.

Lew Syn PauChairman

6 May 2005


Manager’s Report

A-REIT delivered impressive results in the fi nancial year ended 31 March 2005 (“FY05”) as the Manager continued to pursue its three-pronged strategy of delivering yield, stability and growth.

A-REIT ScoresThe highlights of the past fi nancial year include:

• Delivered total returns of 55.6% in FY05;

• Paid out distribution per unit (“DPU”) of 9.56 cents in FY05 – 17% higher compared to 8.16 cents in the prior corresponding period (“PCP”) and 3% higher than forecast (1) of 9.30 cents;

• Acquired 20 properties worth $1.0 billion;

• Increased total assets to $2.1 billion from $1.0 billion in PCP;

• Boost in portfolio occupancy – 94.1% in FY05, up from 88.8% in PCP;

• Ranked 29th by market capitalisation amongst all listed companies and 5th amongst listed real estate companies on the Singapore Exchange Securities Trading Limited(“SGX-ST” ) on 31 March 2005;

(1) As stated in the Circular dated 18 Nov 04

Tan Ser PingChief Executive Offi cer


ExceedNet property income up from $50.3m to $96.1m

Distribution per unit (cents)

* 2003 DPU is annualised. The actual DPU was 2.78 cents for the 133 days ended 31 March 2003


We have consistently outperformed

market expectations and forecasts

to deliver distribution and capital

growth for our Unitholders. This

has been achieved through a

combination of acquiring yield-

accretive properties, raising

occupancy rates and achieving

optimal rental and expense

benchmarks for the properties

in the portfolio.

A-REIT ExceedsThe excellent fi nancial results accomplished in FY05 are attributable to the strategies undertaken by the Manager to grow, diversify and enhance the portfolio. These were achieved through yield accretive acquisitions, proactive asset management of the existing portfolio and active capital management.

In the fi nancial year ended 31 March 2005, A-REIT’s total net investment income available for distribution was $84.2 million, up 85% compared to $45.5 million (refer to Chart 1) in the prior corresponding period and 5% above the forecast (1) of $80.3 million. This equates to a DPU of 9.56 cents for FY05.

Assuming a Unitholder held A-REIT units from 1 April 2004, the Unitholder would have received total returns of 55.6%. This includes a capital gain of 48% from the increase in unit price and the DPU paid out in respect of FY05.

(1) As stated in the Circular dated 18 Nov 04

Chart 1: Net Investment Income available for distribution


ExpandPortfolio grew from 16 properties to 36 properties

Total assets


Accretive acquisitions and

specialised expertise in the business

space sector has enabled A-REIT's

portfolio to grow from 16 to 36

properties. While we have grown

aggressively, we have also focused

on building a more resilient and

diversifi ed portfolio to enhance the

stability of earnings. Our prudent

mix of debt and equity fi nancing

places A-REIT at an advantage for

future acquisitions.

A-REIT ExpandsA-REIT continued its acquisition growth strategy in FY05, expanding its portfolio in Singapore to 36, with the addition of a record 20 properties for $1.0 billion in the past fi nancial year. These acquisitions included several sale and leaseback properties from companies listed on the SGX-ST such as Singapore Telecommunications Limited (SingTel), Royal Sporting House Limited (RSH), Autron Singapore Pte Ltd and Freight Links Group.

A-REIT purchased its fi rst freehold property, Wisma Gulab, as well as two properties from the Ascendas Group in December 2004. The two properties acquired from the Ascendas Group were: Infi neon Building, a pre-commit facility with a long-term lease to Infi neon Technologies Asia Pacifi c Pte Ltd; and Techpoint, a multi-tenanted property.

As at 31 March 2005, A-REIT has over 470 tenants, with SingTel taking top place in A-REIT’s tenant ranking in terms of total gross rental income.

In April / May 2005, A-REIT announced the completion of a further

fi ve properties, namely, AEM-Evertech Building, Da Vinci Building, Hyfl ux Building, MSL Building and 7 Changi South Street 2 Building for an aggregate purchase price of $95.7 million, bringing the total number of A-REIT properties to 41 as at 5 May 2005.A-REIT has also announced four other acquisitions which have yet to be completed. They include a pre-commit project by the Ascendas Group with a lease to US multinational corporation, Hewlett Packard, expected to be acquired in April 2006; Ness Building expected to be acquired by October 2005; Weltech Building targeted to be completed by June 2005; and Pacifi c Tech Centre scheduled to be completed by September 2005.

Chart 2: Top 10 Tenants in A-REIT Portfolio

Note:

1 Calculated on the basis of each tenant’s percentage contribution to total Gross Rental Income for the month ended 31 March 2005

Chart 3: Asset class diversification by portfolio value

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EnhanceMulti-tenanted properties occupancy increased from 85.1% to 89.0%

Portfolio Occupancy


Given our commitment to optimising

value for our unitholders, we

have enhanced the rental earning

capacity of our properties in two

ways: fi rst, by providing a proactive

and professional asset management

team dedicated to each asset class

and second, by maximising the

returns from each property.

A-REIT EnhancesWith the successful implementation of its proactive asset management strategy, a total of 102,570 sqm of space (including expansions) was newly leased and renewed in FY05. A-REIT’s portfolio occupancy increased to 94.1% as at 31 March 2005, up from 88.8% as at 31 March 2004. The occupancy of multi-tenanted buildings was 89.0% as at end FY05 compared to 85.1% in the previous fi nancial year.

The Manager completed a $5 million asset enhancement at Trivec Building, adding 5,000 sqm of space which was already committed prior to its completion. The Manager also extracted savings from the existing portfolio by achieving economies of scale for property management with the geographical concentration of a number of properties, particularly in the east of Singapore.

The Manager has signifi cantly demonstrated its ability to improve occupancy in a number of the multi-tenanted properties as shownin Table 1.

Acquisitions with long term leases generally provide growth for the portfolio. This is due to contractual stepped rental increases incorporated into the long term leases, which will underpin future growth in earnings. Long term leases make up about 43% of A-REIT’s portfolio value. However, no single tenant accounts for more than 12.1% of A-REIT’s gross rental income.

The remaining 57% of the portfolio is represented by short term leases prevalent in the multi-tenanted properties. These multi-tenanted buildings could provide further growth opportunities with potential positive rental reversion when existing leases become due for renewal and when the remaining vacant space is leased up.

The weighted average lease to expiry (“WALE”) of A-REIT’s portfolio has increased to 7.4 years as at 31 March 2005, up from 4.6 years in April 2004 (refer to Chart 5). This signifi cant extension of WALE provides further predictability and stability to underlying portfolio revenue.

Table 1: Proactive asset management leads to increase in occupancy

Chart 4: Mix of multi-tenanted vs singletenanted properties by portfolio value


Chart 5: Weighted Lease Expiry Profi le By Income

A-REIT Sustains Capital ManagementThe Manager pursues an active capital management strategy to complement A-REIT’s acquisition and organic growth. In FY05, A-REIT raised about $720 million in new equity, through two private placements (in June 2004 and February 2005) and one secondary off ering (in November 2004), to partially fund the acquisitions of 20 properties. Demand from institutional and retail investors was particularly pleasing with existing Unitholders strongly supporting the secondary off ering.

Commercial Mortgage Backed Securities (CMBS) In August 2004, A-REIT established a $1 billion medium term note programme which will give A-REIT greater fl exibility and certainty in funding its future debt requirements and tapping a wider investor base for funds. An initial issuance of $300 million equivalent in Euros of AAA-rated CMBS was launched in August 2004 and priced at 32.5 basis points above Singapore Swap Off er Rate (‘SOR”). The proceeds have been used to refi nance A-REIT’s bank loans.

A second issuance of $350 million equivalent in Euros, priced at 26.5 basis point above SOR was completed on 12 May 2005. This issue is the fi rst 7-year Euro CMBS from Singapore.

GearingREITs in Singapore are subjected to a gearing limit of 35% of total assets. A-REIT has a gearing of 26.3% as at 31 March 2005 which increased to about 29.2% after the acquisitions of fi ve properties in April/May 2005. Interest cover ratio is at a healthy 9.8 times as at 31 March 2005. Further acquisitions could be made using the available debt facilities without exceeding the borrowing limit. Hedging policyIn addition to the gearing limit which minimises A-REIT’s exposure to interest rate fl uctuations, the Manager has established a policy to fi x interest rates for at least 50% to 75% of A-REIT’s outstanding debt by undertaking interest rate swaps of more than 2 years duration. As at 31 March 2005, A-REIT has hedged 75% of its total loans of $556 million for a remaining weighted average term of 3.2 years. The weighted average all up funding cost is 2.77%.

A-REIT AssuresA-REIT strives to improve Unitholders’ value through innovative solutions. In FY05, the Manager has initiated three such value-adding solutions.

Rounding up of units under rights issueIn the November 2004 equity fund raising, where a Singapore registered Unitholder’s provisional allocation of new units under the preferential off ering was other than a integral multiple of 1,000 units, it was increased to such number which, when added to the Unitholder’s existing unitholdings, resulted in an integral number of 1,000 units. This pioneering eff ort was favourably received as it removed the issue of odd lots for retail Unitholders.

Change in management fee structureAt A-REIT’s Extraordinary General Meeting held on 2 November 2004, Unitholders approved an extraordinary resolution whereby the Manager may, in relation to each new property acquired by A-REIT, irrevocably elect at any time to receive its base fee (“Base Fee”) and performance fee (“Performance Fee”) payable under A-REIT’s trust deed either in the form of cash and/or Units.

In respect of the 17 properties acquired by A-REIT in December 2004 and the nine properties purchased in 2005, the Manager has elected to receive its Base Fee entirely in cash and its Performance Fee entirely in Units. The change to the payment method of the Base Fee in relation to these 26 properties was eff ective from 1 April 2005.

For the other 19 properties owned by A-REIT since the initial public off ering, the Manager will continue to receive its Base Fee in equal proportions of cash and Units. The Performance Fee will continue to be paid entirely in Units.

By electing to receive some of its Base Fee in cash, the Manager will reduce any signifi cant fl uctuations to DPU when the 60-month period for the Base Fee to be paid equally in cash and units expires in November 2007. After this period, all management fees will be paid entirely in the form of cash.

Quarterly distributionsIn line with the Manager’s objective to deliver regular and consistent returns to Unitholders, A-REIT commenced distribution payments on a quarterly basis with eff ect from its third fi scal quarter distribution in FY05. This allows Unitholders to receive distributions more regularly.

A-REIT Manages Business RiskInvestment Risk One of the main sources for growth of A-REIT is the acquisition of properties. The risk involved in such investment activity is managed as follows:

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• Evaluation Criteria

All investment proposals must satisfy a stringent set of investment criteria including location, building design, specifi cations, usability and competitiveness of building, quality of rent roll, yield and internal rate of return considerations, etc.

• Stringent approval process

The investment proposals are reviewed by a Management Investment Committee. Upon its endorsement, the investment proposals are submitted to the Board or Executive Committee for approval to recommend the investment to the Trustee for its consideration. The Trustee is the fi nal approving authority for all investment decisions.

Tenancy Risk – ConcentrationConcentration risk is a common business phenomenon in many industries. A-REIT’s concentration risk is mainly in the sale and lease transactions (however, these transactions have also increased the weighted average lease expiry terms, adding more stability and security to the income stream) and this risk is mitigated in the following ways:

• Quality of underlying assets

Ensuring that the properties acquired are in strategic locations, with suitable building specifi cations that are generic for alternative uses by other tenants if the existing one vacates.

• Credit standing of vendors

Generally a security deposit is required to be paid by the tenant, either in the form of cash or banker’s guarantee in the range of multiple months’ rent, and the regular monitoring of vendors’ credit standing will ensure that in the event of tenant default, there would be suffi cient buff er time to re-lease the vacated space.

Interest Rate RiskWith a global trend of rising interest rates, it could be a matter of time before Singapore sees a similar trend. Therefore, there is some concern over the potential impact of rising interest rate risk on the REIT sector. This risk is mitigated by the following:

• The estimated 0.5 – 0.6 historical correlation between US dollar interest rates and Singapore dollar interest rates.

• Reduced exposure of REITs in Singapore as they are lowly geared with a 35% maximum gearing limit restriction .

• Trend of hedging interest rate exposure among REITs. For example, A-REIT hedges 75% of its interest exposure with a balance 3.2 years to expiry as at 31 March 2005.

• Real estate investments that have proven to be a good hedge against infl ation. Rental income is expected to rise in tandem with infl ation, albeit with a time lag. This is especially so in the case when the property cycle is on an upswing.

All the above factors point to the conclusion that rising interest rates may not necessarily lead to an absolute adverse impact on REITs in Singapore. In fact, it could be argued that given its current nascent stage of development, the positive impact may provide a balancing eff ect to the negative impact of increasing interest rates for those REITs that could demonstrate and provide growth.

A-REIT CaresWhen the tsunami struck Asia in December 2004, the Manager, together with the Ascendas Group worked to raise relief funds to aid the victims. In Singapore, collection tins from the Singapore Red Cross Society were placed at various Ascendas and A-REIT properties.

The Ascendas Group and the Manager matched the total donations dollar-for-dollar, and through the coordinated fundraising and generous donations collected, approximately $56,000 was raised to help the tsunami victims.

The Manager recognises the importance of bonding within a growing A-REIT team and its translation into enhanced working dynamics within the team. A staff retreat was organised on 25 February 2005 at Sentosa where staff got to know each other better outside of the usual working environment and in a relaxed setting.

A-REIT looks aheadA-REIT’s forecast DPU for the fi nancial year ending 31 March 2006 is 9.94 cents. This forecast does not include the fi nancial impact of the nine properties acquired or to be acquired in 2005 which will provide further accretion.

Moving ahead, we will continue to focus on further improving the portfolio occupancy rate as well as rental rates in the longer term.

At the same time, we will continue on our established acquisition trail. According to the Urban Redevelopment Authority, the existing stock of industrial space in Singapore is about 26.7 million sqm. We estimate that approximately 25% of the total supply is investment grade which translates to about 6 – 7 million sqm. In addition, in the logistics and distribution centres sector, there is a stock of 5.7 million sqm (refer to Chart 5), and we see potential opportunities in about 45 – 50% of this stock. A-REIT’s current portfolio of 41 properties has a total net lettable area of about 0.9 million sqm as at 5 May 2005. Thus, we still see signifi cant growth opportunities in Singapore.

With sustained growth in the Singapore economy and our proactive management of the existing portfolio as well as new acquisitions, Unitholders can expect a year of stable and regular returns ahead.

Chart 6: Acquisition opportunities

14 Oct 04 >2Q FY05 : Distributable income exceeds prior corresponding period by 10%

Seeks unitholders’ approval for the proposed issue of 258.1 million new units to fund acquisitions

30 Sep 04 >

Announces Unitholders to receive quarterly distribution with eff ect from third quarter distribution

Aug 04 >Initial issuance of commercial mortgage backed securities of $300 million equivalent in Euros priced at 33 basis points above EURIBOR

Jul 04 >Voted as best investor relations in Singapore by 227 sell-side analysts from 23 sell-side fi rms in a survey by Institutional Investor Research Group

15 Jun 04 >Launches placement of 82 million new units to raise $115 million to fund acquisitions (issue price determined at $1.40 on 16 June 2004)

21 Jul 04 > Acquires C&P Logistics Hub for $142.1 million (comprising two buildings)

29 Jul 04 >Acquires Progen Building for $24.8 million

15 Apr 04 >Financial year ended 31 March 2004 Distributable income exceeds forecast by 13%

Manager of A-REIT welcomes new CEO, Mr Tan Ser Ping

05 Apr 04 >Government announces tax changes in Singapore Budget Statement 2004 – tax exemption of Singapore-sourced investment income derived by individuals from fi nancial instruments on or after 1 January 2004 and reduction in corporate taxrate to 20% from Year of Assessment 2005

28 May 04 >Included in Morgan Stanley Capital International, Inc (MSCI) index

Significant Events

19 Nov 04 >ATM off ering fully subscribed within 25 minutes

31 May 04 > Acquires Nan Wah Buildingfor $23.3 million

15 Jul 04 >1Q FY04/05 : Distributable income exceeds forecast by 2%

02 Nov 04 >Second Extraordinary General Meeting held – Unitholders approved all nine resolutions

18 Nov 04 >

Private placement closes about 12 times subscribed at issue price of $1.55 per new unit


Post FY05 >Financial year ended 31 March 2005 Distributable income per unit exceeds prior corresponding period by 17%

Apr/May 05 >Properties Acquired

– AEM-Evertech Building– Da Vinci Building – Hyfl ux Building– MSL Building – 7 Changi South St 2 Building

Announces second CMBS issuance of $350 million equivalent in Euros in May.

02 Mar 05 >Acquires Telepark for $186 million; Kim Chuan Telecommunications Complex for $100 million; KA Centre for $19.2 million and KA Place for $11.1 million from SingTel

21 Feb 05 >

Launches placement of 109.9 million new units to raise $205 million to partly fund the acquisition of four properties from SingTel (issue price determined at $1.865 on 21 Feb 05)

03 Jan 05 >Acquires C&P Logistics Hub Phase Two (third building) for $82.9 million

09 Dec 04 > Acquires FedEx Building for $33.5 million

02 Dec 04 >Acquires CG Aerospace Building for $31.1 million and MacDermid Building for $5.5 million

17 Jan 05 >3Q FY04/05 : Distributable income exceeds prior corresponding period by 13%

27 Dec 04 >Acquires Autron Building for $14.0 million

26 Nov 04 >

Acquires SB Building for $17.8 million

01 Dec 04 >Acquires Infineon Building for $50.9 million; Techpoint for $75.0 million; Wisma Gulab for $55.7 million; Exklusiv Centre for $44.8 million; Steel Industries Building for $15.3 million and Volex Building for $9.4 million

28 Dec 04 >

Acquires Freight Links (Changi) Building for $32.0 million and Freight Links (Toh Guan) Building for $36.4 million



The A-REIT Team

Chief Executive Officer Tan Ser PingSer Ping works with the Manager’s Executive Committee to determine the business strategies and plans for the future strategic development of A-REIT. He works closely with the members of the A-REIT team to ensure that A-REIT is operated in accordance with the stated business strategy. Prior to this, he was the Executive Vice President of Real Estate Development & Investment (REDI) of Ascendas Pte Ltd. Before joining Ascendas, Ser Ping was the Senior General Manager for the Residential & Commercial Business Group of Singapore Suzhou Industrial Park Development Company Ltd. He also held senior positions in various banks. Ser Ping has a Masters in Business Administration from the University of Leicester, UK, and is an Honours graduate with a Bachelor of Accountancy degree from the National University of Singapore.

Portfolio ManagerPhilip PearcePhilip is responsible for the investment and asset management function of the A-REIT portfolio. He is directly responsible for identifying and evaluating potential acquisitions or divestments with a view to enhancing value to Unitholders. He analyses and recommends potential asset enhancement initiatives, develops fi nancial models for evaluating potential acquisitions and benchmarks A-REIT against comparative indices and products. Prior to joining the

Manager, Philip was working for AMP Hendersons Global Investors, where he was responsible for the AMP Industrial Trust. In this role, he was involved in evaluating acquisition opportunities, investor relationships management and trust forecasting. Philip is a member of the Australian Securities Institute and the Australian Property Institute. He holds a Bachelor of Commerce from the University of Western Sydney, Australia, and has completed various other postgraduate courses in valuation and fi nance.

Chief Financial Officer Shane HaganShane is responsible for the fi nance function of the Manager including fi nancial reporting, treasury, taxation, compliance, and matters relating to A-REIT’s debt and equity. He has over fi fteen years of fi nance experience, including ten years of property funds management experience. Prior to joining the Manager, he was responsible for the fi nancial, legal and company secretarial functions of two New Zealand Stock Exchange listed property companies. Shane also held various management roles for Fletcher Challenge, formerly New Zealand’s largest company involved in Forestry, Building and Oil & Gas exploration, and has prior working experience in the Asia Pacifi c region. Shane is a member of the Institute of Chartered Accountants in New Zealand and holds a Bachelor of Commerce and Administration degree from Victoria University in New Zealand.

Front row: Carolyn Shek (Finance Manager), Tan Shu Lin (Assistant Fund Manager), Tan Ser Ping (Chief Executive Offi cer), Shane Hagan (Chief Financial Offi cer), Soon Kah Hwee (Legal Counsel)Back row: Teo Ai Leen (Trust Analyst), Janica Tan (Finance Manager), Tay Hsiu Chieh (Company Secretary), Jeremy Chai (Investment and Research Analyst), Goh Mei Lan (Corporate Secretariat), Ho Mei Peng (Investor Relations and Communications Manager)


Assistant Fund Manager Tan Shu Lin Shu Lin’s responsibilities include working with the CEO to formulate strategic plans for A-REIT, and the implementation of short and medium term business plans. Prior to joining the Manager, Shu Lin was Assistant Vice President of Real Estate Fund Management at Ascendas Pte Ltd. She was responsible for developing property fund management activities in the region, particularly in India, Korea and China. She was also responsible for sourcing and evaluatingpotential investment opportunities in the region. Shu Lin graduated with a First Class Honours in Bachelor of Arts (Economics) from University of Portsmouth, United Kingdom and is also a Chartered Financial Analyst.

Legal CounselSoon Kah HweeKah Hwee’s responsibilities include providing legal advice in all areas within A-REIT. She negotiates the legal contracts together with the Investment Managers for acquisitions with the respective vendors’ legal fi rms. She was a practicing lawyer with previous experience as an in-house legal counsel in various organisations, particularly in the areas of litigation, corporate secretarial work and corporate work. Kah Hwee was called to the Singapore Bar and English bar after graduating with an LL.B (Hons) from the National University of Singapore and a Master of Letters of Law from University College London.

Investor Relations and Communications Manager Ho Mei PengMei Peng is responsible for the communication and liaison with Unitholders. Her role is to provide exceptional investor service and maintain continuous disclosure and transparent communication with Unitholders and the market. Together with the CEO and the Manager, she markets A-REIT to existing and prospective investors and the media through regular interaction, roadshows, events and a comprehensive A-REIT website. Mei Peng was formerly with the Corporate and Marketing Communications Department of Ascendas Pte Ltd and graduated with Honours in Japanese Studies from the National University of Singapore.

Front row: Christine Ong (Business Development Executive), Lim Kin Song (Investment Manager), Philip Pearce (Portfolio Manager), Kevin Lee (Investment Manager), Faith Soh (Asset Manager)Back row: Arthur Koo (Investment Analyst), Foo Pei Teng (Investment Manager), Jacky Chan (Investment Manager), See Ying Hwee (Investment Analyst), Alison Wong (Asset Manager), Roy Teo (Asset Manager)


Property Portfolio

The Manager’s objectives for A-REIT properties are to enhance their market positioning as the choice space in their respective areas in Singapore, to strengthen partnerships with tenants through proactive customer relationship management and to deliver stable returns to A-REIT.

Ascendas Services Pte Ltd (“Ascendas Services”), a wholly-owned subsidiary of Ascendas Land (Singapore) Pte Ltd, is the appointed lease and property manager of most of A-REIT’s properties. Headed by Mr Tan Yew Chin, Chief Executive Offi cer of Ascendas Services, the team is committed to deliver proactive and professional services. Front row: Daniel Tan (Assistant Vice President), Tan Yew Chin (Chief Executive Offi cer),

Evelyn Toh (Assistant Manager), Tan Siew Cheng (Vice President)

Back row: Steven Leow (Manager), Connie Ng (Senior Property Executive), Dennis Wong (Senior Manager), Ng Kian Tiong (Assistant Manager), Chee Han Hock (Assistant Vice President)

Tenants’ Industry Sectors by Net Lettable Area

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Tenants’ Country of Origin by Net Lettable Area

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Business and Science Park Properties

The seven business and science park properties make up 25% of the portfolio by value. Telepark, the latest addition to this asset class is largely occupied by SingTel, Asia’s leading communications group. The Honeywell Building houses most of Honeywell’s electronics business including its regional headquarters. Ultro Technologies, an electronics services provider leases all of the Ultro Building. The Alpha, The Aries, The Capricorn and The Gemini at Science Park II provide space for businesses involved in the research and development activities and information technology related business.

From Left to Right:Johnny Choo (Technician), Tay Mui Chin (Manager),Wong Tong Hock (Executive), Roy Koh (Senior Offi cer), Caroline Low (Leasing Offi cer), Freddie Thaiw (Senior Offi cer), Ong Li Li (Lease Executive)

Our service partner, Ascendas Services, is responsible for the lease and property management of our properties.


Logistics Properties

The eleven logistics and distribution centre properties constitute 31% of the portfolio by value. They are C&P Logistics Hub, Changi Logistics Centre, CG Aerospace Building, FedEx Building, Freight Links (Changi) Building, Freight Links (Toh Guan) Building, IDS Logistics Corporate HQ, MacDermid Building, Nan Wah Building, Trivec Building and TT International Tradepark. These properties are located either near to the sea port in Jurong or close to the airport in Changi. They feature a good mix of multi-national and local tenants mainly in the logistics and distribution, pharmaceutical and electronics sectors.

From Left to Right:Rickson Wong (Technician), Daniel Loh (Executive),Loh Kar Yen (Executive), Regine Foo (Executive), Aidil Bin Maon (Technician)


Hi-Tech Industrial Properties

The eight hi-tech industrial properties make up 23% of the portfolio by value. Three of the properties, namely, Infi neon Building, Kim Chuan Telecommunications Complex and Wisma Gulab are 100% leased to quality tenants, Infi neon Technologies, SingTel and Royal Sporting House, respectively. Siemens occupies the majority of the Siemens Center that is currently enjoying 100% occupancy. Techlink, Techpoint, KA Centre and KA Place are multi-tenanted properties with tenants from the electronics, electrical machinery and telecommunications industry sectors.

From Left to Right:Ng Yeow Tong (Offi cer), Irene Seah (Offi cer), Balan K V (Executive), Azlin Bin Mohd Noor(Senior Property Executive), Yeong Siew Seng (Technician),Low Yoon Chuen (Senior Property Executive), Marcus See (Executive)

Our service partner, Ascendas Services, is responsible for the lease and property management of our properties.


Light Industrial Properties

The ten light industrial properties contribute 21% of the portfolio by value. Six of the properties, Autron Building, OSIM HQ Building, Ghim Li Building, Exklusiv Centre, SB Building and Volex Building are leased to the respective tenants. The other four properties, namely Techplace I and II, Progen Building and Steel Industries Building are multi-tenanted buildings ideal for various types of light industrial activities. Tenants in these properties are largely from the electronics, machinery and information technology industry sectors.

From Left to Right:Toh Lay Gan (Manager), Chua Teck Huat (Assistant Manager), Adam Wu (Offi cer), Fiona Mah (Marketing Offi cer), Frankie Lo (Offi cer), Snain B. Johan (Technician), Dora Goh (Senior Leasing Assistant), Agnes Ong (Executive), Eunice Ow (Executive), Chua Hwee Ling (Assistant Manager)


Logistics and Distribution Centres

Business and Science Parks

Portfolio at a Glance

Purchase Acquisition Price Date (S$ mil) Vendor

01 The Alpha 19 Nov 02 52.3 Ascendas Land (S) Pte Ltd 02 The Aries 19 Nov 02 39.4 Ascendas Land (S) Pte Ltd 03 The Capricorn 19 Nov 02 71.8 Ascendas Land (S) Pte Ltd 04 The Gemini 19 Nov 02 72.9 Ascendas Land (S) Pte Ltd 05 Honeywell Building 19 Nov 02 32.8 Ascendas Land (S) Pte Ltd 06 Telepark 02 Mar 05 186.0 Singapore Telecommunications Ltd 07 Ultro Building 30 Oct 03 18.0 Ultro Technologies Ltd Sub total 473.2


08 C&P Logistics Hub 21 Jul 04 225.0 C&P Holdings Pte Ltd 09 CG Aerospace Building 02 Dec 04 31.1 CG Aerospace Warehouse (S) Pte Ltd 10 Changi Logistics Centre 09 Mar 04 45.6 Changi International Logistics Centre Ltd 11 Fedex Building 09 Dec 04 33.5 Cargo Distribution Pte Ltd 12 Freight Links 28 Dec 04 32.0 Freight Links Express (Changi) Building Districentre Pte Ltd 13 Freight Links 28 Dec 04 36.4 Freight Links Express (Toh Guan) Building Districentre Pte Ltd 14 IDS Logistics Corporate HQ 19 Feb 04 50.0 IDS Logistics Services Pte Ltd 15 MacDermid Building 02 Dec 04 5.5 Cargo Distribution Pte Ltd 16 Nan Wah Building 31 May 04 23.3 Nan Wah Marketing Pte Ltd 17 Trivec Building 04 Mar 04 32.0 Trivec (Singapore) Pte Ltd 18 TT International Tradepark 05 Mar 04 92.0 TT International Tradepark Pte Ltd Sub total 606.4

08 09

10 11

12 13

14 15

16 17

18

01 02

03 04

05 06

07


Book Value/ Gross Rental Income(1) OccupancyValuation for the year ended NLA (%) as at Major

(S$ mil) Address 31 Mar 05 (S$ mil) (sqm) 31 Mar 05 Tenants

53.5 10 Science Park Road, 3.3 16,829 66.3 National Starch & Chemical

Singapore Science Park II (Singapore) Pte Ltd; Avecia Asia Pacifi c Pte Ltd; Innomedia Pte Ltd

42.0 51 Science Park Road, 3.5 11,580 92.7 Teradyne Singapore; Singapore Science Park II MCI Worldcom Asia; Denso International Asia

82.9 1 Science Park Road, 7.9 20,361 90.3 Institute of High Singapore Science Park II Performance Computing; Lilly Systems Biology; Merlion Pharmaceutical

74.0 41 Science Park Road, 4.9 22,761 62.7 A-Bio Pharma; Singapore Science Park II International Flavours & Fragrances

45.0 17 Changi Business Park Central I 5.5 14,635 100.0 Honeywell Pte Ltd; Pall Filtration Pte Ltd

189.5 5 Tampines Central 6 1.2 24,252 98.8 SingTel

21.0 1 Changi Business Park Avenue 1 1.8 10,127 100.0 Ultro Technologies Limited

507.9 28.1 120,545

Book Value/ Gross Rental Income(1) OccupancyValuation for the year ended NLA (%) as at Major

(S$ mil) Address 31 Mar 05 (S$ mil) (sqm) 31 Mar 05 Tenants

234.2 46 Penjuru Lane 11.3 128,019 100.0 C&P Holdings Pte Ltd

32.6 3 Changi South St 2 1.2 20,788 90.2 “K” Line Air Service (S) Pte Ltd;

National Library Board; Tradeport Singapore Pte Ltd

57.0 19 Loyang Way 6.1 39,371 94.2 Zuellig Pharma Pte Ltd; Daikin Asia

35.2 6 Changi South St 2 1.1 14,358 100.0 Federal Express (Singapore) Pte Ltd; Cargo Distribution Pte Ltd

33.6 9 Changi South St 3 0.6 20,724 100.0 Freight Links Express Districentre Pte Ltd

38.2 5 Toh Guan Rd East 0.7 23,723 100.0 Freight Links Express Distripark Pte Ltd

52.0 279 Jalan Ahmad Ibrahim 4.2 21,883 100.0 IDS Logistics Services Pte Ltd

5.8 20 Tuas Ave 6 0.2 4,321 100.0 MacDermid Singapore Pte Ltd

24.5 4 Changi South Lane 2.3 16,246 100.0 Nan Wah Marketing Pte Ltd

40.0 3 Changi North Street 2 4.9 27,674 100.0 Trivec Singapore Pte Ltd; 3Com Asia Pacifi c Rim Pte Ltd

96.0 10 Toh Guan Road 6.6 42,765 100.0 TT International Tradepark Pte Ltd

649.1 39.2 359,872

(1) Represents income from the date of completion for properties acquired in FY05


Hi-Tech Industrial

Light Industrial

Portfolio at a Glance


19 Infi neon Building 01 Dec 04 50.9 Ascendas Land (S) Pte Ltd 20 KA Centre 02 Mar 05 19.2 Singapore Telecommunications Ltd 21 KA Place 02 Mar 05 11.1 Singapore Telecommunications Ltd 22 Kim Chuan 02 Mar 05 100.0 Singapore Telecommunications Telecommunications Ltd Complex 23 Siemens Center 12 Mar 04 65.8 Cobalt Asset Management Ltd 24 Techlink 19 Nov 02 69.8 Ascendas Land (S) Pte Ltd 25 Techpoint 01 Dec 04 75.0 Ascendas Land (S) Pte Ltd 26 Wisma Gulab 01 Dec 04 55.7 RSH Holdings Pte Ltd Sub total 447.5


27 Autron Building 27 Dec 04 14.0 Autron Corporation 28 Exklusiv Centre 01 Dec 04 44.8 Group Exklusiv Pte Ltd 29 Ghim Li Building 13 Oct 03 13.5 Ghim Li Holdings Co Pte Ltd 30 OSIM HQ Building 20 Jun 03 35.0 OSIM International Pte Ltd 31 Progen Building 29 Jul 04 24.8 Progen Holdings Ltd 32 SB Building 26 Nov 04 17.8 Soilbuild Group Holdings Pte Ltd 33 Steel Industries 01 Dec 04 15.3 Steel Industries Pte Ltd Building 34 Techplace I 19 Nov 02 105.3 Ascendas Land (S) Pte Ltd 35 Techplace II 19 Nov 02 128.9 Ascendas Land (S) Pte Ltd 36 Volex Building 01 Dec 04 9.4 Volex (Asia) Pte Ltd Sub total 408.8

TOTAL/ AVERAGE 1,935.9

27 28

29 30

31 32

33 34

35 36

19 20

21 22

23 24

25 26


Book Value/ Gross Rental Income(1) OccupancyValuation for the year ended NLA as at Major

(S$ mil) Address 31 Mar 05 (S$ mil) (sqm) 31 Mar 05 (%) Tenants

53.2 8 Kallang Sector 1.7 27,278 100.0 Infi neon Technologies

Asia Pacifi c Pte Ltd

19.8 150 Kampong Ampat 0.1 12,806 57.2 Speedline Technologies Asia Pte Ltd

11.5 159 Kampong Ampat 0.1 6,946 36.2 Groz-Beckert Singapore Pte Ltd

102.3 38 Kim Chuan Road 0.7 25,129 100.0 SingTel

74.0 60 MacPherson Road 6.9 27,781 100.0 Siemens Pte Ltd

76.7 31 Kaki Bukit Road 3 6.8 31,536 89.1 Federal Express Pacifi c Inc;

Areva T&D

78.4 10 Ang Mo Kio St 65 3.1 40,505 94.2 Motorola Electronics Pte Ltd Mediacorp Publishing Pte Ltd; Schneider Electric South East Asia (HQ) Pte Ltd

58.2 190 MacPherson Road 1.2 11,821 100.0 RSH Limited

474.1 20.6 183,802

Book Value/ Gross Rental Income(1) OccupancyValuation for the year ended NLA as at Major

(S$ mil) Address 31 Mar 05 (S$ mil) (sqm) 31 Mar 05 (%) Tenants

14.7 53 Serangoon North Ave 4 0.5 8,329 100.0 Autron Singapore Pte Ltd

46.8 247 Alexandra Road 0.9 10,513 100.0 Group Exklusiv Pte Ltd

15.3 41 Changi South Avenue 2 1.5 7,230 100.0 Ghim Li Global Pte Ltd

37.5 65 Ubi Avenue 1 3.0 15,068 100.0 OSIM International Ltd

26.5 12 Woodlands Loop 2.1 17,267 100.0 Venture Corporation;

Connor Manufacturing Asia; Target-Rota Malaysia

18.7 25 Changi South Street 1 0.7 11,895 100.0 Soilbuild Group Holdings Pte Ltd

16.0 5 Tai Seng Drive 0.6 11,254 100.0 Steel Industries Pte Ltd

115.2 Ang Mo Kio Avenue 10 8.8 59,024 84.6 Univac Precision Engineering; Ang Mo Kio Industrial Park I Mappin Singapore; Proway Engineering Plastics

145.3 Ang Mo Kio Avenue 5 11.2 68,499 91.2 Venture Corporation; Ang Mo Kio Industrial Park II Kinergy Pte Ltd; NEC Semiconductors Singapore; Zen Voce Manufacturing Pte Ltd

9.9 35 Tampines St 92 0.4 8,000 100.0 Volex (Asia) Pte Ltd

445.9 29.7 217,079

2,077.0 117.6 881,298 94.1

(1) Represents income from the date of completion for properties acquired in FY05


Light Industrial & Hi-Tech Space (1)

Occupancy for private factory space improved during 2004 with single-user factory and multiple-user factory’s occupancy increasing slightly to 92% and 81% respectively.

Rental values for private factory space bottomed out in 2003 and improved in 2004. Average monthly gross rents of private light industrial space grow by 6% – 9% in 2004, to $1.20 psf for fi rst storey and $0.85 psf for upper storey space. Rent for hi-tech space continued to fall after the recovery in 2000, although at a much slower rate in 2004. Average monthly gross rent fell by 5% in 2004 to $1.75 psf, compared to the 25% fall in 2003.

Going forward, the outlook for the light industrial and hi-tech industrial properties remains cautiously positive on the back of improving manufacturing performance.

A two-tier market is likely to evolve. While demand is expected to increase for hi-tech industrial space, in line with growth in the manufacturing sector, demand for conventional light industrial space is expected to be more price-driven.

Independent Industrial Property Market Report

Business & Science ParkOccupancy for private business and science park space fell from 74% to 73% from 2003 to 2004. New supply from the completion of Biopolis has contributed to the fall in occupancy in Science Park.

Rental values have fallen for private business and science park space. Compared to the average $2.80 psf in 2000, rental values have fallen by 29% – 46% to $1.50 psf to $2.00 psf in 2004. The current asking rent at business and science park ranges from $2.00 psf to $2.80 psf.

Outlook for the business and science park sector is generally positive. With offi ce rental, especially prime rents, expected to rise by as much as 10% – 15% in 2005 due to a shortage of quality accommodation, some demand for offi ce space may spill over to business and science parks. The rise in offi ce rental will further increase the gap between offi ce rents and industrial rents and encourage companies to review their accommodation strategy in favour of more cost-eff ective but quality space such as that in business parks.

The development of ‘one-north’ will add value to business and science parks market. The clustering of R&D activities in Singapore will help grow the R&D pie and benefi t not just one-north but other business park and science park facilities as well. As the occupancy for Biopolis is around 90%, the pressure on Science Park will be much alleviated.

Average Rental Value for Private Factory Space Occupancy of Business Park and Science Park Space (2)

(2) Occupancy rates for business and science parks were only available since 2002. For the purpose of reporting, URA classifi es both business parks and science parks

as “ Business Park”.

(1) As there is no information available on light industrial and hi-tech space, factory supply is taken as a proxy for light industrial and hi-tech space. Majority of factory spaces is expected to be light industrial and hi-tech space.

Source: DTZ Consulting and Research, April 2005

Source: URA, DTZ Consulting and Research, April 2005

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Logistics WarehousesThe total supply of warehouse space in 2004 is 61.6 mil sf. We estimate that some 33% (20.4 mil sf ) of this is logistics warehouse space. Trends for rental and capital values for logistics warehouses mirror that of conventional warehouses. Both rental and capital values for private logistics warehouses have been falling since 2000. In 2004, rental values turned around and improved by 10%, from $1.10 psf to $1.20 psf in 2004. Average asking rent for logistics warehouse is estimated to range from $0.70 psf – $1.50 psf for fi rst storey and $0.55 psf – $1.50 psf for upper storey.

Demand for logistics space is expected to continue to expand, in the light of Singapore’s increasing role as a regional distribution hub in the supply chain management and government incentives to enhance and strengthen Singapore as a logistics hub. In tandem with the economic focus, demand is likely to emanate from the storage of high value added and specialised goods, e.g. chemicals and pharmaceutical products.

Trends and Prospects for Industrial Real EstateSingapore is emphasising on the knowledge-based industry supported by the gradual transformation of industrial properties from conventional to hi-tech, fl exible and high quality spaces, to cater to the needs of these companies. Although some companies choose to relocate to countries with lower startup costs, e.g. China and Indonesia, others will continue to establish in Singapore. Its stable government, connectivity, high quality and reliable infrastructure, respect for intellectual property rights and highly educated work force, etc off er Singapore a competitive edge that will continue to attract MNCs to use it as a base for its R&D, outsourcing and other activities. Well-specifi ed properties with conducive environment e.g. hi-tech space and business and science parks will be needed for these activities.

Industrial rental and capital values bottomed out in 2003 witnessed an improvement in 2004, signalling the beginning of market recovery.

Compared to the total potential industrial supply of 8.2 mil sf that was completed in 2004, the annual average potential supply of 6.3 mil sf for 2005 – 2007 is 27% lower. With moderate potential supply within the next three years, the prior phenomenon of an oversupply in industrial space is expected to lessen.

MNCs are increasingly adopting an asset light approach. Many prefer leasing to owning properties. Some may choose to build-to-suit-to-lease from developers or rent ready-built industrial spaces. While they prefer not to own accommodation, many are open to paying premium rents to secure suitable accommodation and to sign on to a longer than typical lease term. This opens up the market for yield-driven investors, creating a win-win situation for both the occupier and investor.

Mrs Ong Choon FahExecutive Director

April 2005

Average Rental Value for Conventional Warehouse Spaces

Source: DTZ Consulting and Research, April 2005

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“Ascendas-MGM Funds Management Limited, in its capacity as the Manager of A-REIT recognises that an effective corporate governance culture is critical to the performance of the Manager and consequently, the success of A-REIT, which it manages. As a result, the Manager has adopted a comprehensive corporate governance framework that meets best practice principles. In particular, the Manager has an obligation to act honestly, with due care and diligence, and in the best interests of Unitholders.”

The following sections describe the Manager’s main corporate governance policies and practices. They encompass proactive measures for avoiding situations of confl ict and potential confl icts of interest, including prioritising the interests of Unitholders over the Manager’s. They also ensure that applicable laws and regulations within the listing rules of the Singapore Exchange Securities Trading Limited, the Code of Collective Investment Schemes (CIS) (including the Property Funds Guidelines) issued by the Monetary Authority of Singapore (“MAS”) and the Securities and Futures Act (SFA), are complied with, and that the Manager’s obligations under A-REIT’s Trust Deed are properly and effi ciently carried out.

THE MANAGER OF A-REITThe Manager has general power of management over the assets ofA-REIT. The Manager’s main responsibility is to manage A-REIT’s assets and liabilities for the benefi t of Unitholders.

The primary role of the Manager is to set the strategic business direction of A-REIT and make recommendations to the Trustee on acquisitions, divestments and enhancement of the assets of A-REIT in accordance with its stated business strategy. The Manager is also responsible for the risk management of A-REIT. Other main functions and responsibilities of the Manager are as follows:

(1) Using its best endeavours to carry on and conduct its business in a proper and effi cient manner and to conduct all transactions with or on behalf of A-REIT at arm’s length.

(2) Preparing property plans on an annual basis for review by the Directors of the Manager, which may contain proposals and forecasts on net income, capital expenditure, sales and valuations, explanations of major variances to previous forecasts, written commentary on key issues and underlying assumptions on rental rates, occupancy costs and any other relevant assumptions. The purpose of these plans is to explain the performance of A-REIT’s assets.

(3) Ensuring compliance with the applicable provisions of the SFA and all other relevant legislation, the listing rules of the SGX-ST, the CIS Code, the Trust Deed, the tax ruling issued by the Inland Revenue Authority of Singapore and all relevant contracts.

(4) Attending to all regular communications with Unitholders.(5) Supervising the Property Manager, which performs the property

management, lease management, marketing and co-ordination and project management services, pursuant to the property management agreement.

A-REIT is externally managed by the Manager and accordingly, it has no personnel. The Manager appoints experienced and well-qualifi ed management to handle its day-to-day operations. All directors and employees of the Manager are remunerated by the Manager, and not A-REIT.

Ascendas-MGM Funds Management Limited is appointed as manager of A-REIT in accordance with the terms of the Trust Deed dated 9 October 2002, First Supplemental Deed dated 16 January 2004, Second Supplemental Deed dated 23 February 2004, Third Supplemental Deed dated 30 September 2004 and Fourth Supplemental deed dated 17 November 2004. The Trust Deed outlines certain circumstances under which the Manager can be retired in favour of a corporation approved by the Trustee or be removed by notice given in writing from the Trustee upon the occurrence of certain events, including by a resolution proposed and passed by a majority consisting of 75.0% or more of the total number of votes validly cast at a meeting of Unitholders duly convened in accordance with the provisions of the Trust Deed.

BOARD OF DIRECTORS The Board of Directors of the Manager (the “Board’’) oversees the management and the corporate governance of the Manager including establishing goals for management and monitoring the achievement of these goals. All Board members participate in matters relating to corporate governance, business operations and risks, fi nancial performance and the nomination and review of directors. The Board has established a framework for the management of the Manager and A-REIT, including a system of internal control and a business risk management process.

The Board meets regularly, at least once every quarter, to discuss and review the strategies and policies of A-REIT, including any signifi cant acquisitions and disposals, the annual budget, the fi nancial performance of the Manager and A-REIT against a previously approved budget and to approve the release of the quarterly, half-yearly and annual results. The Board also reviews the risks to the assets of A-REIT, examines liability management and acts upon any comments from the auditors of A-REIT. Where necessary, additional Board meetings are held to address signifi cant transactions or issues.

Corporate Governance


The Board has adopted a set of internal controls which sets out approval limits for capital expenditure, investments and divestments, bank borrowings and cheque signatories, amongst others. Appropriate delegations of authority have been provided to the management to facilitate operational effi ciency.

Changes to regulations, policies and accounting standards are monitored closely. Where the changes have signifi cant impact onA-REIT and its disclosure obligations, the directors are briefed either during Board meetings, at specially-convened sessions or via circulation of Board papers.

Board CompositionThe Board presently consists of eight members, three of whom are independent directors as at 31 March 2005. The Chairman and Deputy Chairman of the Board are Mr Lew Syn Pau and Mr David Clarke respectively. Mr David Clarke retired from the Board on 14 April 2005, following which Mr Gregory Goodman was appointed as Deputy Chairman. The composition of the Board is determined using the following principles:

(1) the Chairman of the Board should be a non-executive director;(2) the Board should comprise directors with a broad range of

commercial experience including expertise in funds management and the property industry; and

(3) the Board should comprise at least two independent directors.

The composition will be reviewed regularly to ensure that the Board has the appropriate mix of expertise and experience.

The Manager held fi ve board meetings during the fi nancial year. The most recent Board Meeting was held on 14 April 2005. The attendance at the Board meetings is set out on page 38.

Chairman and Chief Executive OfficerThe positions of Chairman and Chief Executive Offi cer are held by two separate persons in order to maintain an eff ective segregation of duties.

The Chairman ensures that the members of the Board work together with management in a constructive manner to address strategy, business operations and enterprise issues.

The Chief Executive Offi cer has full executive responsibilities over the business direction and operational decisions of managing A-REIT.

At least one-third of the Board are independent directors. This enables management to benefi t from their external and objective perspective of issues that are brought before the Board. A healthy exchange of ideas and views between the Board and management through regular meetings and updates will enhance the management of A-REIT. This, together with a clear separation of roles between the Chairman and Chief Executive Offi cer, provides a healthy and professional relationship between the Board and management.

Each director of the Manager has the right to seek independent professional advice on matters relating to A-REIT at the Manager’s expense. However, prior approval of the Chairman is required, which may not be unreasonably withheld.

Board RenumerationThe renumeration of Directors is paid by the Manager, and not from A-REIT.

The renumeration of directors for the year ended 31 March 2005 is shown in the table below:

The Board has adopted a set of internal controls which sets out approval limits for capital expenditure, investments and divestments, bank borrowings and cheque signatories, amongst others. Appropriate delegations of authority have been provided to the management to facilitate operational effi ciency.

Changes to regulations, policies and accounting standards are monitored closely. Where the changes have signifi cant impact onA-REIT and its disclosure obligations, the directors are briefed either during Board meetings, at specially-convened sessions or via circulation of Board papers.

Board CompositionThe Board presently consists of eight members, three of whom are independent directors as at 31 March 2005. The Chairman and Deputy Chairman of the Board are Mr Lew Syn Pau and Mr David Clarke respectively. Mr David Clarke retired from the Board on 14 April 2005, following which Mr Gregory Goodman was appointed as Deputy Chairman. The composition of the Board is determined using the following principles:

(1) the Chairman of the Board should be a non-executive director;(2) the Board should comprise directors with a broad range of

commercial experience including expertise in funds management and the property industry; and

(3) the Board should comprise at least two independent directors.

The composition will be reviewed regularly to ensure that the Board has the appropriate mix of expertise and experience.

The Manager held fi ve board meetings during the fi nancial year. The most recent Board Meeting was held on 14 April 2005. The attendance at the Board meetings is set out on page 38.

Chairman and Chief Executive OfficerThe positions of Chairman and Chief Executive Offi cer are held by two separate persons in order to maintain an eff ective segregation of duties.

The Chairman ensures that the members of the Board work together with management in a constructive manner to address strategy, business operations and enterprise issues.

The Chief Executive Offi cer has full executive responsibilities over the business direction and operational decisions of managing A-REIT.

At least one-third of the Board are independent directors. This enables management to benefi t from their external and objective perspective of issues that are brought before the Board. A healthy exchange of ideas and views between the Board and management through regular meetings and updates will enhance the management of A-REIT. This, together with a clear separation of roles between the Chairman and Chief Executive Offi cer, provides a healthy and professional relationship between the Board and management.

Each director of the Manager has the right to seek independent professional advice on matters relating to A-REIT at the Manager’s expense. However, prior approval of the Chairman is required, which may not be unreasonably withheld.

Board RenumerationThe renumeration of Directors is paid by the Manager, and not from A-REIT.

The renumeration of directors for the year ended 31 March 2005 is shown in the table below:

Director Director Fees for FY05 Fees for FY04 Basic Chairmanship Additional(1) Total

S$’000 S$’000 S$’000 S$’000 S$’000

Mr Lew Syn Pau 40.0 15.0 5.0 60.0 (Chairman of Board)

Mr David Clarke 40.0 2.0 42.0

Mr James Hodgkinson 3.0 3.0(Alternate toDavid Clarke)

Mr Gregory Goodman 40.0 5.0 45.0

Mr David Wong 45.0 40.0 5.0 3.0 48.0(Chairman of Audit Committee)

Ms Chong Siak Ching 40.0 5.0 5.0 50.0(Chairperson ofExecutive Committee)

Mr Thai Chee Ken 40.0 40.0 3.0 43.0

Mr Benedict Kwek 40.0 40.0 4.0 44.0

Mr Swee Kee Siong 40.0 5.0 45.0

Total 125.0 320.0 25.0 35.0 380.0

(1) Additional fees is $1,000/- per meeting attendance


The Board has established various committees to assist it in discharging its responsibilities. These committees are listed below.

• Executive Committee - Compliance Sub-Committee• Audit Committee• Nomination, HR & Compensation Committee

Executive CommitteeThe Executive Committee operates under delegated authority from the Board and is represented by non-executive directors and senior executives of the Manager. The members of the Executive Committee are Ms Chong Siak Ching, Mr Gregory Goodman, Mr Tan Ser Ping (with eff ect from 1 May 2004), Mr Goh Kok Huat (up to 30 April 2004) and Mr Stephen Hawkins (up to 30 November 2004).

This committee oversees the day-to-day activities of the Manager on behalf of the Board including to:

(1) approve or make recommendations to the Board on investments, divestments, fi nancing off ers and banking facilities;

(2) recommend changes to the fi nancial limits for investment, etc, and

(3) report to the Board on decisions made by the Executive Committee.

Three formal Executive Committee meetings were held during the year. In addition, a large number of informal discussions were held with the Executive Committee members, with decisions made by circular resolution. Under the Executive Committee, there is a compliance sub-committee that reviews and monitors regulatory compliance matters in respect of the Manager’s day-to-day operations.

The current members of the Compliance Sub-Committee comprise the Executive Committee and the Manager’s Compliance Offi cer, Mr Shane Hagan.

Audit CommitteeThe Audit Committee is appointed by the Board from among the directors of the Manager and currently composes of four members, a majority of whom (including the Chairman of the Audit Committee) are independent non-executive directors. The members of the Audit Committee are Mr David Wong Cheong Fook (Chairman), Mr Thai Chee Ken, Mr Benedict Kwek Gim Song and Mr Gregory Goodman.

The role of the Audit Committee is to monitor and evaluate the eff ectiveness of the Manager’s internal controls. The Audit Committee also reviews the quality and reliability of information prepared for inclusion in fi nancial reports. The Audit Committee is responsible for the nomination of external auditors and reviewing the adequacy of existing audits in respect of cost, scope and performance.

The Audit Committee’s responsibilities also include:

(1) reviewing external audit reports to ensure that where defi ciencies in internal controls have been identifi ed, appropriate and prompt remedial action is taken by management;

(2) monitoring the procedures in place to ensure compliance with applicable legislation, the Listing Manual and the Property Funds Guidelines;

(3) reviewing and approving the fi nancial statements and the audit report; and

(4) monitoring the procedures established to regulate Related Party Transactions including ensuring compliance with the provisions of the Listing Manual.

The Audit Committee has also conducted a review of all non-audit services provided by the external auditors and is satisfi ed that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors.

Audit Committee meetings are generally held after the end of every quarter of every fi nancial year.

The Audit Committee meets with the external auditors, without the presence of management, at least once a year.

Internal AuditIn order to ensure corporate governance of the highest standard, the Audit Committee has appointed Pricewaterhouse Coopers (“PwC”) to provide internal audit services.

PwC’s scope is to provide risk assessment services and compliance audits in order to ensure internal controls are align to business objectives and related risks.

TRADING OF A-REIT’S UNITSIn general, company policy encourages the directors and employees of the Manager to hold Units but prohibits them from dealing in the Units:

(1) during the period commencing two weeks before the public announcement of A-REIT’s fi nancial statements for each of the fi rst and third quarter of its fi nancial year, or one month before the half year or full year results, as the case may be, and ending on the date of announcement of the relevant results; This is in line with the latest SGX-ST Best Practice Guide;

(2) at any time whilst in possession of price sensitive information.

The Board has established various committees to assist it in discharging its responsibilities. These committees are listed below.

• Executive Committee – Compliance Sub-Committee• Audit Committee• Nomination, HR & Compensation Committee

Executive CommitteeThe Executive Committee operates under delegated authority from the Board and is represented by non-executive directors and senior executives of the Manager. The members of the Executive Committee are Ms Chong Siak Ching, Mr Gregory Goodman, Mr Tan Ser Ping (with eff ect from 1 May 2004), Mr Goh Kok Huat (up to 30 April 2004) andMr Stephen Hawkins (up to 30 November 2004).

This committee oversees the day-to-day activities of the Manager on behalf of the Board including to:

(1) approve or make recommendations to the Board on investments, divestments, fi nancing off ers and banking facilities;

(2) recommend changes to the fi nancial limits for investment, etc, and

(3) report to the Board on decisions made by the Executive Committee.

Three formal Executive Committee meetings were held during the year. In addition, a large number of informal discussions were held with the Executive Committee members, with decisions made by circular resolution. Under the Executive Committee, there is a compliance sub-committee that reviews and monitors regulatory compliance matters in respect of the Manager’s day-to-day operations.

The current members of the Compliance Sub-Committee comprise the Executive Committee and the Manager’s Compliance Offi cer, Mr Shane Hagan.

Audit CommitteeThe Audit Committee is appointed by the Board from among the directors of the Manager and currently composes of four members, a majority of whom (including the Chairman of the Audit Committee) are independent non-executive directors. The members of the Audit Committee are Mr David Wong Cheong Fook (Chairman), Mr Thai Chee Ken, Mr Benedict Kwek Gim Song and Mr Gregory Goodman.

The role of the Audit Committee is to monitor and evaluate the eff ectiveness of the Manager’s internal controls. The Audit Committee also reviews the quality and reliability of information prepared for inclusion in fi nancial reports. The Audit Committee is responsible for the nomination of external auditors and reviewing the adequacy of existing audits in respect of cost, scope and performance.

The Audit Committee’s responsibilities also include:

(1) reviewing external audit reports to ensure that where defi ciencies in internal controls have been identifi ed, appropriate and prompt remedial action is taken by management;

(2) monitoring the procedures in place to ensure compliance with applicable legislation, the Listing Manual and the Property Funds Guidelines;

(3) reviewing and approving the fi nancial statements and the audit report; and

(4) monitoring the procedures established to regulate Related Party Transactions including ensuring compliance with the provisions of the Listing Manual.

The Audit Committee has also conducted a review of all non-audit services provided by the external auditors and is satisfi ed that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors.

Audit Committee meetings are generally held after the end of every quarter of every fi nancial year.

The Audit Committee meets with the external auditors, without the presence of management, at least once a year.

Internal AuditIn order to ensure corporate governance of the highest standard, the Audit Committee has appointed Pricewaterhouse Coopers (“PwC”) to provide internal audit services.

PwC’s scope is to provide risk assessment services and compliance audits in order to ensure internal controls are align to business objectives and related risks.

TRADING OF A-REIT’S UNITSIn general, company policy encourages the directors and employees of the Manager to hold Units but prohibits them from dealing in the Units:

(1) during the period commencing two weeks before the public announcement of A-REIT’s fi nancial statements for each of the fi rst and third quarter of its fi nancial year, or one month before the half year or full year results, as the case may be, and ending on the date of announcement of the relevant results; This is in line with the latest SGX-ST Best Practice Guide;

(2) at any time whilst in possession of price sensitive information.


The Directors and offi cers are advised not to deal in the Units on short-term considerations.

In addition, the Manager has given an undertaking to the MAS that it will announce to the SGX-ST the particulars of its holdings in the Units and any changes thereto within two days after the date on which it acquires or disposes of any Units, as the case may be. The Manager has also undertaken that it will not deal in the Units during the period commencing two weeks before the public announcement of A-REIT’s quarterly results or one month before the half year or full year results, (where applicable) property valuation, and ending on the date of announcement of the relevant results.

RISK ASSESSMENT AND MANAGEMENT OF BUSINESS RISKEff ective risk management is a fundamental part of A-REIT’s business strategy. Recognising and managing risk is central to the business and to protecting Unitholders’ interests and value. A-REIT operates within overall guidelines and specifi c parameters set by the Board. Each transaction is comprehensively analysed to understand the risk involved. Responsibility for managing risk lies initially with the business unit concerned, working within the overall strategy outlined by the Board.

The Manager has determined that signifi cant risk for A-REIT will most likely arise when making property investment decisions. Accordingly, the Manager has set out procedures to be followed when making such decisions. In accordance with this policy, the Manager ensures comprehensive due diligence is carried out in relation to the proposed investment and a suitable determination is made as to whether the anticipated return on investment is appropriate having regard to the level of risk.

The Board generally meets quarterly or more often if necessary and reviews the fi nancial performance of the Manager and A-REIT against a previously approved budget. The Board also reviews the risks to the assets of A-REIT, examines liability management and acts upon any comments of the auditors of A-REIT. In assessing business risk, the Board considers the economic environment and the property industry risk. The Board and its Executive committee reviews and approves all investment decisions. Management meets regularly to review the operations of the Manager and A-REIT and discuss continuous disclosure issues.

DEALINGS WITH CONFLICTS OF INTERESTThe Manager has established the following procedures to deal with potential confl icts of interest issues which it (including its directors, executive offi cers and employees) may encounter in managingA-REIT:

(1) The Manager will be a dedicated manager to A-REIT and will not manage any other real estate investment trust or be involved in any other real property business.

(2) All Executive Offi cers will be employed by the Manager.(3) The entry into any Related Party Transaction must be approved by

a majority vote of the directors, including the votes of at least two independent directors.

(4) The Board shall include at least two independent directors.(5) In respect of matters in which JTC and/or its subsidiaries (which

includes the Ascendas Group) has a direct or indirect interest, any nominees appointed by JTC or any of its subsidiaries to the Board will abstain from voting. In such matters, the quorum must comprise a majority of the independent directors of the Manager and must exclude the representatives or nominees of JTC and/or its subsidiaries.

The directors of the Manager are under a fi duciary duty to A-REIT to act in its best interests in relation to decisions aff ecting A-REIT when they are voting as a member of the Board. In addition, the directors and executive offi cers of the Manager are expected to act with integrity and honesty at all times.

It is also provided in the Trust Deed that if the Manager is required to decide whether or not to take any action against any person in relation to any breach of any agreement entered into by the Trustee for and on behalf of A-REIT with an affi liate of the Manager, the Manager shall be obliged to consult with a reputable law fi rm (acceptable to the Trustee) who shall provide legal advice on the matter. If the said law fi rm is of the opinion that the Trustee, on behalf of A-REIT, has a prima facie case against the party allegedly in breach under such agreements, the Manager shall be obliged to take appropriate action in relation to such agreements. The directors of the Manager will have a duty to ensure that the Manager so complies.

Notwithstanding the foregoing, the Manager shall inform the Trustee as soon as it becomes aware of any breach of any agreement entered into by the Trustee for and on behalf of A-REIT with an affi liate of the Manager. The Trustee may then take such action as it deems necessary to protect the rights of Unitholders and/or which is in the interests of Unitholders. Any decision by the Manager not to take action against an affi liate of the Manager shall not constitute a waiver of the Trustee’s right to take such action as it deems fi t against such affi liate.


Additionally, the Trustee, as trustee for A-REIT, has been granted a right of fi rst refusal by Ascendas Land (Singapore) Pte Ltd (“Ascendas”) over all properties with certain specifi ed characteristics which are either: (i) owned and intended to be sold on an en bloc basis by Ascendas or any of its wholly owned subsidiaries (if Ascendas determines that such property is suitable as an asset of A-REIT); or (ii) off ered for sale to Ascendas or any of its wholly owned subsidiaries (if Ascendas determines that such property is suitable as an asset of A-REIT) for the fi rst fi ve years with eff ect from 19 November 2002.

Under the Trust Deed, the Manager and its Associates (as defi ned in the Trust Deed) are prohibited from voting their Units at, or being part of a quorum for, any meeting of Unitholders convened to approve any matter in which the Manager or any of its Associates has a material interest in the business to be conducted.

DEALING WITH RELATED PARTY TRANSACTIONS Review Procedures for Related Party Transaction In general, the Manager has established internal control procedures to ensure that all future transactions involving the Trustee, as the trustee for A-REIT, and a related party of the Manager (“Related Party Transactions’’) are undertaken on an arm’s length basis and on normal commercial terms, which are generally no more favourable than those extended to unrelated third parties. In respect of such transactions, the Manager would have to demonstrate to the Audit Committee that the transactions would be undertaken on normal commercial terms, which may include obtaining (where practicable) quotations from parties unrelated to the Manager, or obtaining a valuation from an independent valuer (in accordance with the Property Funds Guidelines).

In addition, the following procedures have been undertaken:

(1) transactions (either individually or as part of a series or if aggregated with other transactions involving the same interested party during the same fi nancial year) equal to or exceeding $100,000 in value but below 3.0 per cent. of A-REIT’s net tangible assets will be subject to review by the Audit Committee at regular intervals;

(2) transactions (either individually or as part of a series or if aggregated with other transactions involving the same interested party during the same fi nancial year) equal to or exceeding 3.0 per cent. but below 5.0 per cent. of A-REIT’s net tangible assets will be subject to the review and approval of the Audit Committee. Such approval shall only be given if the transactions are on arm’s length commercial terms and consistent with similar types of transactions made by the Trustee, as trustee for A-REIT, with third parties which are unrelated to the Manager; and

(3) transactions (either individually or as part of a series or if aggregated with other transactions involving the same interested party during the same fi nancial year) equal to or exceeding 5.0 per cent. of A-REIT’s net tangible assets will be reviewed and approved by the Audit Committee which may, as it deems fi t, request advice on the transaction from independent sources or advisers, including obtaining valuations from professional valuers. Further, under the Listing Manual and the Property Funds Guidelines, such transactions would have to be approved by the Unitholders of A-REIT at a meeting of Unitholders.

Where matters concerning A-REIT relate to transactions entered into or to be entered into by the Trustee for and on behalf of A-REIT with a related party of the Manager, the Trustee is required to ensure that such transactions are conducted at arm’s length in accordance with all applicable requirements of the Property Funds Guidelines and/or the Listing Manual relating to the transaction in question. Further, the Trustee, as trustee for A-REIT, has the ultimate discretion under the Trust Deed to decide whether or not to enter into a transaction involving a related party of the Manager. If the Trustee is to sign any contract with a related party of the Trustee or the Manager, the Trustee will review the contract to ensure that it complies with the requirements relating to interested party transactions in the Property Funds Guidelines (as may be amended from time to time) and the provisions of the Listing Manual relating to interested person transactions (as may be amended from time to time) as well as such other guidelines as may from time to time be prescribed by the MAS and the SGX-ST to apply to real estate investment trusts.

Role of the Audit Committee for Related Party Transactions and Internal Control ProceduresAll Related Party Transactions will be subject to regular periodic reviews by the Audit Committee.

The Manager’s internal control procedures are intended to ensure that Related Party Transactions are conducted at arm’s length and on normal commercial terms and are not prejudicial to Unitholders. The Manager maintains a register to record all Related Party Transactions (and the basis, including, where practicable, the quotations obtained to support such basis, on which they are entered into) which are entered into by A-REIT. The Manager incorporates into its internal audit plan a review of all Related Party Transactions entered into by A-REIT. The Audit Committee reviews the internal audit reports to ascertain that the guidelines and procedures established to monitor Related Party Transactions have been complied with. In addition, the Trustee will also review such audit reports to ascertain that the Property Funds Guidelines have been complied with.

The Audit Committee periodically reviews all Related Party Transactions to ensure compliance with the internal control procedures and with the relevant provisions of the Listing Manual and the Property Funds Guidelines. The review includes the examination of the nature of the transaction and its supporting documents or such other data deemed necessary to the Audit Committee. If a member of the Audit Committee has an interest in a transaction, he is to abstain from participating in the review and approval process in relation to that transaction.

The Manager discloses in A-REIT’s annual report the aggregate value of Related Party Transactions conducted during the relevant fi nancial year.

Confi rmations were obtained from Singapore Exchange Limited (SGX) that Rule 905 and 906 are not applicable to A-REIT if related party transactions are made on the basis of, and in accordance with, the terms and conditions set out in the A-REIT prospectus dated 5 November 2002 and therefore do not require Audit Committee review/approval.


COMMUNICATION WITH UNITHOLDERSThe listing rules of the SGX-ST require that a listed entity discloses to the market matters that could or might be expected to have a material eff ect on the price of the entity’s securities. The Manager upholds a strong culture of continuous disclosure and transparent communication with Unitholders and the investing community. The Manager’s disclosure policy requires timely and full disclosure of all material information relating to A-REIT by way of public releases or announcements through the SGX-ST via SGXNET at fi rst instance and then including the release on A-REIT’s website at www.a-reit.com.

The Manager also conducts regular briefi ngs for analysts and media representatives, which will generally coincide with the release ofA-REIT’s results. During these briefi ngs, the Manager will review A-REIT’s most recent performance as well as discuss the business outlook for A-REIT. In line with the Manager’s objective of transparent communication, briefi ng materials are released to the SGX-ST and also made available on A-REIT’s website.

During the period under review, the Manager also met or teleconferenced with institutional investors in Singapore, Hong Kong, Europe, USA and Australia. In addition, the Manager pursues opportunities to educate and keep retail investors informed of the REIT industry through seminars organised by the SGX-ST or other public associations.

Nomination, HR andBoard Audit Executive compensationmembers committee committee (1) committee

Mr Lew Syn Pau C

Mr David Stuart Clarke(Retired on 14 Apr 05)

Mr Gregory Goodman M M M(Appointed Deputy Chairmaneff ective from 15 Apr 05)

Mr David Wong Cheong Fook C

Ms Chong Siak Ching C M

Mr Thai Chee Ken M

Mr Benedict Kwek Gim Song M

Mr James Hodgkinson,Alternate Director to David Stuart Clarke(Appointed as a Director eff ective from15 Apr 05)

Mr Swee Kee Siong

Denotes C – Chairman; M – Member(1) The other member of the Executive Committee is Mr Tan Ser Ping.

Board Audit Committee

No. of meetings No. of meetings held : 5 held : 3

Attended Attended

Mr Lew Syn Pau 5 N.A.

Mr David Stuart Clarke 2 N.A.

Mr James Hodgkinson (as alternate to Mr Clarke) 3 N.A.

Mr Gregory Goodman 5 3

Mr David Wong Cheong Fook 3 2

Ms Chong Siak Ching 5 N.A.

Mr Thai Chee Ken 3 2

Mr Benedict Kwek Gim Song 4 3

Mr Swee Kee Siong 5 N.A.

Members of the respective committees

Meeting attendance


The past year has been an exciting one forA-REIT. We continue to provide Unitholders with open and transparent communications through telephone, website, webcast of results briefi ngs, email alerts, publications, investor meetings and extraordinary general meetings. The Manager has been and will continue to be, proactive in generating awareness and promoting interest in A-REIT, particularly at seminars and roadshows locally and overseas to retail and institutional investors.

Ms Ho Mei Peng

Investor Relations and Communications Manager

Investor Relations

HOW TO CONTACT USTo fi nd out more about A-REIT, please talk to your fi nancial adviser or contact us at:

THE MANAGERContact: Ho Mei PengInvestor Relations ManagerPhone: (65) 6774 9152Fax: (65) 6775 2813Email: [email protected] Website: www.a-reit.com

THE UNIT REGISTRARLim Associates (Pte) LtdPhone: (65) 6536 5355Fax: (65) 6536 1360

For depository related matters, please contact:The Central Depository (Pte) Ltd CDP Customer: (65) 6535 7511Service phoneEmail: [email protected] Website: www.cdp.com.sg

Common Questions

(1) When are A-REIT’s distributions usually paid?

Quarterly. However, when A-REIT issues new equity, it is sometimes necessary to pay out distributions for diff erent time periods to ensure that existing Unitholders are not disadvantaged.

(2) What were the distributions A-REIT paid out in the fi nancial year ended 31 March 2005?

A-REIT has paid out a total DPU of 9.56 cents for the year ended 31 March 2005. From the third distribution for the period from 1 October to 31 December 2004, A-REIT started to pay distribution on a quarterly basis. The breakdown of distributions paid out for the respective period is listed in the table below.

Distribution per unit Period (cent) Payment Date

01 Jan 05 to 31 Mar 05 2.70 31 May 05

01 Oct 05 to 31 Dec 05 2.40 24 Feb 05

01 Apr 04 to 30 Sep 04 4.46 23 Nov 04

3) What is the total number of A-REIT units on issue currently?

A total of 1,162,742,368 Units are on issue as at 30 April 2005.

PROPOSED A-REIT 2005/2006 CALENDARJuly 2005• FY 2006 1st quarter results released• Books closure date to determine entitlement to fi rst quarter

distributionAugust 2005• First quarter distributionOctober 2005• FY 2006 2nd quarter and half-year results released• Books closure date to determine entitlement to second quarter

distributionNovember 2005• Second quarter distribution• FY 2006 interim report issuedJanuary 2006• FY 2006 3rd quarter results released• Books closure date to determine entitlement to third quarter

distributionFebruary 2006• Third quarter distributionApril 2006• Full year results released• Books closure date to determine entitlement to fourth quarter

distribution

Report of the Trustee 42

Statement by the Manager 43

Auditors’ Report 44

Balance Sheet 45

Statement of Total Return 46

Statement of Movements in Unitholders’ Funds 47

Investment Properties Portfolio Statement 48

Statement of Cash Flows 50

Statement of Financial Highlights 52

Notes to the Financial Statements 53

Financial Statements


HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”) is under a duty to take into custody and hold the assets of A-REIT in trust for the Unitholders. In accordance with the Securities and Futures Act (Cap. 289), its subsidiary legislation and the Code on Collective Investment Schemes (collectively referred to as the “laws and regulations”), the Trustee shall monitor the activities of Ascendas-MGM Funds Management Limited (the “Manager”) for compliance with the limitations imposed on the investment and borrowing powers as set out in the trust deed dated 9 October 2002 (as amended) between the Trustee and the Manager (the “Trust Deed”) in each annual accounting period and report thereon to Unitholders in an annual report which shall contain the matters prescribed by the laws and regulations as well as the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Certifi ed Public Accountants of Singapore and the provisions of the Trust Deed.

To the best knowledge of the Trustee, the Manager has, in all material respects, managed A-REIT during the period covered by these fi nancial statements in accordance with the limitations imposed on the investment and borrowing powers set out in the Trust Deed, laws and regulations and otherwise in accordance with the provisions of the Trust Deed.

For and on behalf of the Trustee,HSBC Institutional Trust Services (Singapore) Limited

Arjun BambawaleDirector

Singapore6 May 2005

Report of the Trustee


In the opinion of the directors of Ascendas-MGM Funds Management Limited, the accompanying fi nancial statements set out on pages 45 to 65 comprising the Balance Sheet, Statement of Total Return, Statement of Movements in Unitholders’ Funds, Investment Properties Portfolio Statement, Statement of Cash Flows, Statement of Financial Highlights and Notes to the Financial Statements are drawn up so as to present fairly, in all material respects, the fi nancial position of A-REIT as at 31 March 2005, the total return, distributable income, movements in Unitholders’ funds and cash fl ows for the year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Certifi ed Public Accountants of Singapore and the provisions of the Trust Deed. At the date of this statement, there are reasonable grounds to believe that A-REIT will be able to meet its fi nancial obligations as and when they materialise.

For and on behalf of the Manager,Ascendas-MGM Funds Management Limited

Chong Siak ChingDirector

Singapore6 May 2005

Statement by the Manager


We have audited the fi nancial statements of Ascendas Real Estate Investment Trust (“A-REIT”) for the year ended 31 March 2005 as set out on pages 45 to 65. These fi nancial statements are the responsibility of the Manager and the Trustee of A-REIT. Our responsibility is to express an opinion on these fi nancial statements based on our audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by the Manager, as well as evaluating the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the fi nancial statements present fairly, in all material respects, the fi nancial position of A-REIT as at 31 March 2005, the total return, distributable income, movements in Unitholders’ funds and cash fl ows for the year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Certifi ed Public Accountants of Singapore and the provisions of the Trust Deed.

KPMGCertified Public Accountants

Singapore6 May 2005

Auditor’s Report to the Unitholders


Note 2005 2004 $’000 $’000

Non-current assets Investment properties 3 2,076,893 996,431

Current assets Trade and other receivables 4 32,335 20,343Cash and cash equivalents 5 5,164 3,938 37,499 24,281 Current liabilities Trade and other payables 6 (65,602) (39,212) Net current liabilities (28,103) (14,931) Non-current liabilities Other payables 7 (67,330) (26,050)Interest-bearing borrowings 8 (556,000) (263,800) (623,330) (289,850)Net assets 1,425,460 691,650

Represented by: Unitholders’ funds 1,425,460 691,650 Units on issue (’000) 9 1,160,557 707,207 Net asset value per unit ($) 1.23 0.98

Balance Sheet as at 31 March 2005

The accompanying notes form an integral part of these fi nancial statements.


Note 2005 2004 $’000 $’000

Gross revenue 10 128,987 65,914Property operating expenses 11 (32,873) (15,604)

Net property income 96,114 50,310

Interest income 73 20Manager’s fees 12 (11,249) (5,588)Trust expenses 13 (1,215) (809)Borrowing costs (8,506) (3,342)

Net investment income before tax 75,217 40,591Income tax expense 14 – –Net investment income after tax 75,217 40,591Non-tax deductible expenses 8,948 4,945

Net investment income available for distribution 84,165 45,536Non-tax deductible expenses (8,948) (4,945)Net appreciation on revaluation of investment properties credited directly to asset revaluation reserve 21,823 7,871

Total return for the year 97,040 48,462

Earnings per unit (cents) 15 8.66 7.27

Distribution per unit (cents) 15 9.56 8.16

Statement of Total Return for the year ended 31 March 2005



Asset Accumulated net Issued equity Issue costs revaluation reserve investment income Total $’000 $’000 $’000 $’000 $’000

Net assets at 1 April 2003 478,896 (17,343) 22,317 14,290 498,160 Operations for the year ended 31 March 2004 Net investment income – – – 40,591 40,591Net appreciation on revaluation of investment properties – – 7,871 – 7,871Increase in net assets resulting from operations – – 7,871 40,591 48,462 Unitholders’ transactions Creation of Units: Equity raising 186,180 – – – 186,180 Fund manager’s fees paid in Units 1,615 – – – 1,615Distribution to Unitholders (note 16) – – – (37,260) (37,260)Issue expenses – (5,507) – – (5,507)Increase in net assets resulting from Unitholders’ transactions 187,795 (5,507) – (37,260) 145,028 Net assets at 31 March 2004 666,691 (22,850) 30,188 17,621 691,650 Operations for the year ended 31 March 2005 Net investment income – – – 75,217 75,217Net appreciation on revaluation of investment properties – – 21,823 – 21,823Increase in net assets resulting from operations – – 21,823 75,217 97,040 Unitholders’ transactions Creation of Units: Equity raising 720,000 – – – 720,000 Fund manager’s fees paid in Units 4,647 – – – 4,647Distribution to Unitholders (note 16) – – – (78,285) (78,285)Issue expenses – (9,592) – – (9,592)Increase in net assets resulting from Unitholders’ transactions 724,647 (9,592) – (78,285) 636,770

Net Assets at 31 March 2005 1,391,338 (32,442) 52,011 14,553 1,425,460

Statement of Movements in Unitholders’ Funds for the year ended 31 March 2005



Cost Including Percentage of Total Remaining Latest Acquisition At Valuation/ Cost Net Assets Description of Acquisition Term of Term of Valuation(a) Costs(b) 2005 2004(c) 2005 2004 Property Date Tenure Lease Lease Location $‘000 $‘000 $‘000 $‘000 % %

Science & Business Park Properties * The Alpha 19/11/2002 Leasehold 60 years 58 years 10 Science Park Road 53,500 – 53,500 54,500 3.75 7.88 * The Aries 19/11/2002 Leasehold 60 years 58 years 51 Science Park Road 42,000 – 42,000 41,700 2.95 6.03 * The Capricorn 19/11/2002 Leasehold 60 years 58 years 1 Science Park Road 82,900 – 82,900 80,000 5.82 11.57* The Gemini 19/11/2002 Leasehold 60 years 58 years 41 Science Park Road 74,000 – 74,000 76,500 5.19 11.06* Honeywell 19/11/2002 Leasehold 60 years(d) 54 years(d) 17 Changi Business 45,000 – 45,000 42,000 3.16 6.07 Building Park Central 1* Ultro Building 30/10/2003 Leasehold 60 years(d) 56 years(d) 1 Changi Business 21,000 – 21,000 18,800 1.47 2.72 Park Avenue 1# Telepark 01/03/2005 Leasehold 99 years 86 years 5 Tampines Central 6 – 189,495 189,495 – 13.29 –

Hi-Tech Industrial Properties# Infi neon Building(h) 01/12/2004 Leasehold 47 years(f ) 45 years(f ) 8 Kallang Sector – 53,170 53,170 – 3.73 – * Siemens Center 12/03/2004 Leasehold 60 years(d) 57 years(d) 60 MacPherson Road 74,000 – 74,000 68,700 5.19 9.93 * Techlink 19/11/2002 Leasehold 60 years 49 years 31 Kaki Bukit Road 3 76,700 – 76,700 74,000 5.38 10.70 # Techpoint(h) 01/12/2004 Leasehold 65 years 47 years 10 Ang Mo Kio Street 65 – 78,375 78,375 – 5.50 – # Wisma Gulab 01/12/2004 Freehold Freehold – 190 Macpherson Road – 58,207 58,207 – 4.08 – # KA Centre 01/03/2005 Leasehold 99 years 53 years 150 Kampong Ampat – 19,793 19,793 – 1.39 – # KA Place 01/03/2005 Leasehold 99 years 53 years 159 Kampong Ampat – 11,472 11,472 – 0.80 – # Kim Chuan Tele- 01/03/2005 Leasehold 99 years 86 years 38 Kim Chuan Road – 102,305 102,305 – 7.18 – communications Complex Light Industrial Properties # Autron Building 27/12/2004 Leasehold 60 years(d) 51 years(d) 53 Serangoon – 14,700 14,700 – 1.03 – North Ave 4# Exklusiv Centre 01/12/2004 Leasehold 99 years 46 years 247 Alexandra Road – 46,833 46,833 – 3.29 – * Ghim Li Building 13/10/2003 Leasehold 60 years(d) 50 years(d) 41 Changi South Ave 2 15,300 – 15,300 14,200 1.07 2.05 * OSIM 20/06/2003 Leasehold 60 years 52 years 65 Ubi Avenue 1 37,500 – 37,500 36,700 2.63 5.31 Headquarters Building # Progen Building 29/07/2004 Leasehold 60 years(d) 51 years(d) 12 Woodlands Loop 26,500 26,500 – 1.86 – # SB Building 27/11/2004 Leasehold 60 years(d) 52 years(d) 25 Changi South – 18,690 18,690 – 1.31 – Street 1 # Steel Industries 01/12/2004 Leasehold 60 years 45 years 5 Tai Seng Drive – 16,013 16,013 – 1.12 – Building * Techplace I 19/11/2002 Leasehold 65 years 47 years Blk 4008-4012 115,200 – 115,200 115,000 8.08 16.63 Ang Mo Kio Ave 10 * Techplace II 19/11/2002 Leasehold 65 years 47 years Blk 5000-5012 145,300 – 145,300 145,000 10.19 20.96 # Volex Building 01/12/2004 Leasehold 60 years(d) 47 years(d) 35 Tampines Street 92 – 9,870 9,870 – 0.69 – Distribution & Logistics Centre # C & P Logistics Hub 21/07/2004 Leasehold 48 years(g) 45 years(g) 19 Loyang Way 234,200 – 234,200 – 16.43 –# CG Aerospace 02/12/2004 Leasehold 60 years(d) 49 years(d) 3 Changi South – 32,600 32,600 – 2.29 – Building Street 2 * Changi Logistics 09/03/2004 Leasehold 60 years(d) 46 years(d) 19 Loyang Way 57,000 – 57,000 47,875 4.00 6.92 Centre * IDS Logistics 19/02/2004 Leasehold 58 years(e) 51 years(e) 279 Jalan Ahmad 52,000 – 52,000 51,875 3.65 7.50 Corporate Ibrahim Headquarters# Fedex Building 09/12/2004 Leasehold 60 years(d) 51 years(d) 6 Changi South Street 3 – 35,175 35,175 – 2.47 – # Freight Links 28/12/2004 Leasehold 60 years(d) 50 years(d) 9 Changi South Street 3 – 33,600 33,600 – 2.36 – (Changi) Building # Freight Links 28/12/2004 Leasehold 60 years(d) 45 years(d) 5 Toh Guan Road East – 38,220 38,220 – 2.68 – (Toh Guan) Building

# McDermid Building 09/12/2004 Leasehold 60 years(d) 45 years(d) 20 Tuas Avenue 6 – 5,775 5,775 – 0.41 – * Nan Wah Building 31/05/2004 Leasehold 60 years(d) 53 years(d) 4 Changi South Lane 24,500 – 24,500 – 1.72 – * Trivec Building 04/03/2004 Leasehold 60 years 52 years 3 Changi North Street 2 40,000 – 40,000 33,611 2.81 4.86 * TT International 05/03/2004 Leasehold 60 years(d) 51 years(d) 10 Toh Guan Road 96,000 – 96,000 95,970 6.73 13.88 Tradepark Investment properties 1,312,600 764,293 2,076,893 996,431 145.70 144.07 Net liabilities (651,433) (304,781) (45.70) (44.07) Net assets 1,425,460 691,650 100.00 100.00


Investment Properties PortfolioStatement As at 31 March 2005


Investment properties comprise a diverse portfolio of industrial properties that are leased to external customers. Most of the leases for the multi-tenanted buildings contain an initial non-cancellable period ranging from 1 to 3 years. Subsequent renewals are negotiated with the lessee.

(a) In February 2005, independent valuations for the nineteen properties owned at that time were undertaken by Jones Lang LaSalle Property Consultants, Colliers International Consultancy and Valuation (Singapore) Pte Ltd and DTZ Debenham Tie Leung (SEA) Pte Ltd. These fi rms are independent valuers having appropriate professional qualifi cations and recent experience in the location and category of the properties being valued. The valuation for the nineteen properties were based on Income Method, Direct Comparison Method, Replacement Cost Method and Discounted Cash Flow Analysis. The valuations adopted amounted to $1,312.6 million. The net increase in valuation has been taken to the asset revaluation reserve.

(b) In respect of properties acquired after July 2004.

(c) The carrying amounts of the eleven properties owned as at 31 March 2004 were based on an independent valuation undertaken by Jones Lang LaSalle Property Consultants, on 31 December 2003. The valuation was based on the Income Method, Direct Comparison Method, Replacement Cost Method and Discounted Cash Flow Analysis.

(d) Includes an option for A-REIT to renew the land lease for a further term of 30 years upon expiry.

(e) Includes an option for A-REIT to renew the land lease for a further term of 28 years upon expiry.

(f ) Includes an option for A-REIT to renew the land lease for a further term of 17 years upon expiry.

(g) Includes an option for A-REIT to renew the land lease for a further term of 24.4 years upon expiry.

(h) Infi neon Building and Techpoint were acquired from Ascendas Land (Singapore) Pte Ltd, a related party of the Manager, on 1 December 2004.

* Portfolio 1 – properties pledged as a security for the credit facilities granted from Emerald Assets Limited (“Emerald Assets”) in relation to the term loan of $300 million from August 2004.

# Portfolio 2 – properties to be pledged as security for the credit facilities granted from Emerald Assets in relation to the term loan of $350 million from May 2005. ( See Note 22(e)).



Note 2005 2004 $’000 $’000

Operating activities Net investment income 75,217 40,591

Adjustment for: Interest income (73) (20)Provision for doubtful receivables 37 133Borrowing costs 8,506 3,342Fund manager’s fees paid/payable in Units 7,739 3,815Operating income before working capital changes 91,426 47,861 Changes in working capital: Trade and other receivables (8,163) (18,532)Trade and other payables 2,248 5,510

Cash generated from operating activities 85,511 34,839 Investing activities Purchase of investment properties (including acquisition charges) A (848,140) (309,968)Payment for capital improvement projects (15,284) (29,272)Payment for deferred settlement (5,000) –Deposits paid for purchase of investment properties (8,223) (679)

Cash flows from investing activities (876,647) (339,919) Financing activities Equity issue costs paid (10,597) (4,101)Proceeds from issue of Units 597,904 186,180Distributions to Unitholders paid (78,285) (37,260)Borrowing costs paid (8,933) (2,185)Interest received 73 26Proceeds from borrowings 934,400 172,500Repayment of borrowings (642,200) (33,700)

Cash flows from financing activities 792,362 281,460 Net increase/(decrease) in cash and cash equivalents 1,226 (23,620)

Cash and cash equivalents at beginning of year 3,938 27,558

Cash and cash equivalents at end of year 5,164 3,938

Statement of Cash Flows for the year ended 31 March 2005



Notes: (A) Net Cash Outflow on Purchase of Investment Properties (including acquisition charges) Net cash outfl ow on purchase of investment properties (including acquisition charges) is set out below: 2005 2004 $’000 $’000

Investment properties (including acquisition charges) 1,048,988 367,421Cash 12,573 8,240Trade and other payables (73,409) (50,699)Security deposits (5,343) (6,754)Net identifi able assets acquired 982,809 318,208Purchase consideration paid in Units (122,096) –Cash consideration paid 860,713 318,208Cash acquired (12,573) (8,240)Net cash outfl ow 848,140 309,968 (B) Significant Non-Cash Transactions During the fi nancial year, there were the following signifi cant non-cash transactions:

(i) On 19 April 2004, A-REIT issued 1,572,381 new Units at the issue price of $1.2983 per unit as payment of performance fee for the year ended 31 March 2004. On 8 June 2004 and 6 December 2004, A-REIT issued 746,077 and 904,373 new Units at the issue price of $1.4347 and $1.6981 per unit as payment of the 50% of the manager’s base fee, respectively. The issue price was determined based on the volume weighted average traded price for all trades done on SGX-ST in the ordinary course of trading for 10 business days immediately preceding the respective date of issue of the Units.

(ii) On 1 December 2004, A-REIT issued 78,771,613 new Units at an issue price of $1.55 per unit as partial consideration for the acquisition of Techpoint and Infi neon Building.



2005 2004 $ $

Per Unit data (1) Net asset value at beginning of year 0.98 0.91Eff ect of creation of new Units, net of expenses 0.24 0.05Income from investment operations: – Net investment income 0.07 0.07– Net appreciation on revaluation of investment properties 0.01 0.02Total from investment operations 0.08 0.09Less: Distributions to Unitholders (0.07) (0.07)Net asset value at end of year 1.23 0.98 Total income return to the Unitholder for the year (cents) 9.56 8.16

(1) Per unit data is based on the applicable number of Units on issue during the fi nancial year.

2005 2004

Supplemental data and ratiosNet asset value at end of year ($’000) 1,425,460 691,650

Ratio of expenses to weighted average net assets (1) 0.86% 0.84%Ratio of net investment income to weighted average net assets (1) 7.89% 7.87%Portfolio turnover rate (2) – – (1) The annualised ratios are computed in accordance with guidelines of Investment Management Association of Singapore. The expenses used in

the computation relate to expenses at the Trust level only and exclude property related expenses, borrowing costs and performance component of manager’s fees.

(2) The annualised ratio is computed based on the lesser of purchases or sales of underlying investment properties of A-REIT expressed as a percentage of weighted average net asset value.

Statement of Financial Highlights for the year ended 31 March 2005


These notes form an integral part of the fi nancial statements.

The fi nancial statements were authorised for issue by the Manager and the Trustee on 6 May 2005.

1 GeneralAscendas Real Estate Investment Trust (“A-REIT”) is a Singapore-domiciled unit trust constituted pursuant to the trust deed dated 9 October 2002 between Ascendas-MGM Funds Management Limited and HSBC Institutional Trust Services (Singapore) Limited, as amended by the First Supplemental Deed dated 16 January 2004, the Second Supplemental Deed dated 23 February 2004, the Third Supplemental Deed dated 30 September 2004 and a Fourth Supplemental Deed dated 17 November 2004. The trust deed dated 9 October 2002 and the subsequent supplemental deeds (collectively, the “Trust Deed”) is governed by the laws of the Republic of Singapore. On 9 October 2002, A-REIT was declared an authorised unit trust scheme under the Trustees Act, Chapter 337. The Manager and Trustee of A-REIT are Ascendas-MGM Funds Management Limited and HSBC Institutional Trust Services (Singapore) Limited, respectively.

A-REIT was formally admitted to the Offi cial List of the Singapore Exchange Securities Trading Limited (“SGX-ST”) on 19 November 2002 and was included under the Central Provident Fund (“CPF”) Investment Scheme on 15 October 2002.

The principal activity of A-REIT is to invest in a diverse portfolio of properties with the primary objective of achieving an attractive level of return from rental income and for long-term capital growth.

A-REIT has entered into several service agreements in relation to the management of A-REIT and its property operations. The fee structure of these services is as follows:

1(a) Trustee’s Fees Trustee’s fees shall not exceed 0.25% per annum of the value of all the gross assets of A-REIT (“Deposited Property”) (subject to a minimum of $10,000 per month) or such higher percentage as may be fi xed by an Extraordinary Resolution of a meeting of Unitholders. The Trustee’s fees are payable out of the investment properties (being all the assets of A-REIT, as stipulated in the Trust Deed) of A-REIT monthly in arrears. The Trustee is also entitled to reimbursement of expenses incurred in the performance of its duties under the Trust Deed.

1(b) Management Fees The Manager is entitled to receive the following remuneration:

(i) a base fee of 0.5% per annum of the Deposited Property or such higher percentage as may be approved by an Extraordinary Resolution of a meeting of Unitholders; and

(ii) an annual performance fee of:• 0.1% per annum of the Deposited Property, provided that the annual growth in distributions per Unit in a given fi nancial

year (calculated before accounting for the performance fee in that fi nancial year) exceeds 2.5%; and

• an additional 0.1% per annum of the Deposited Property, provided that the growth in distributions per Unit in a given fi nancial year (calculated before accounting for the performance fee in that fi nancial year) exceeds 5.0%.

In relation to the 19 properties acquired before 17 November 2004, 50.0% of the base fee payable to the Manager will be paid in Units issued at the prevailing market price (as defi ned in the Trust Deed) at the time of issue of the Units, and 50% will be paid in cash. For properties acquired after 17 November 2004, the Manager may elect at any time after the acquisition of the relevant property to receive the base fee in cash and/or Units, in such proportion as may be determined by the Manager. Until such election is made, the base fee shall be paid to the Manager in equal proportions of cash and Units in respect of such property for the 60-month period after A-REIT is listed on SGX-ST, after which payment of the base fee shall be in cash.

On 21 February 2005, the Manager made an election in relation to the 17 properties acquired between 17 November 2004 and 31 March 2005 that, with eff ect from 1 April 2005, the base fee in relation to these 17 properties will be payable to the Manager wholly in cash.

Notes to the Financial Statements


1 General (cont’d)1(b) Management Fees (cont’d)

The performance fee is paid in Units issued at the prevailing market price (as defi ned in the Trust Deed) at the time of issue of the Units. For properties acquired after 17 November 2004, the Manager may elect at any time after the acquisition of the relevant property to receive performance fees in cash and/or Units, in such proportion as may be determined by the Manager. No such election has been made by the Manager to-date in relation to the payment of performance fees.

The cash component of the fees will be paid monthly in arrears and the Units component will be paid on a six-monthly basis in arrears. The performance fee will be paid within 60 days of the last day of every fi nancial year. This arrangement for the Manager to receive payment of its management fees partly in cash and partly in Units will be maintained for a period of 60 months from the date that A-REIT is listed on the SGX-ST, after which payment of the Manager’s fees will be entirely in cash.

1(c) Fees Under The Property Management Agreement(i) Property Management Services

For the property management services, the Trustee will pay Ascendas Services Pte Ltd (the “Property Manager”), for each Fiscal Year (as defi ned in the Property Management Agreement), a fee of 2.0% per annum of the gross revenue of each property.

(ii) Lease Management Services

For lease management services, the Trustee will pay the Property Manager, for each Fiscal Year, a fee of 1.0% per annum of the gross revenue of each property.

In addition, in relation to the services provided by the Property Manager in respect of property tax objections submitted to the tax authorities on any proposed annual value of a property, the Property Manager is entitled to the following fees if as a result of such objections, the proposed annual value is reduced resulting in property tax savings for the property:

• where the proposed annual value is $1.0 million or less, a fee of 7.5% of the property tax savings;

• where the proposed annual value is more than $1.0 million but does not exceed $5.0 million, a fee of 5.5% of the property tax savings; and

• where the proposed annual value is more than $5.0 million, a fee of 5.0% of the property tax savings.

The above mentioned fee is a lump sum fi xed fee based on the property tax savings calculated on a 12-month period.

(iii) Marketing Services

For the marketing services, the Trustee will pay the Property Manager, the following commissions:

• one month’s gross rent inclusive of service charge for securing a tenancy of three years or less;

• two months’ gross rent inclusive of service charge for securing a tenancy of more than three years;

• if a third party agent secures a tenancy, the Property Manager will be responsible for all commissions payable to such third party agent and the Property Manager will be entitled to a commission of:

– 1.2 months’ gross rent inclusive of service charge for securing a tenancy of three years or less; and

– 2.4 months’ gross rent inclusive of service charge for securing a tenancy of more than three years;

• one-half month’s gross rent inclusive of service charge for securing a renewal of tenancy of three years or less; and

• one month’s gross rent inclusive of service charge for securing a renewal of tenancy of more than three years.



1 General (cont’d) 1(c) Fees Under The Property Management Agreement (cont’d)

(iv) Project Management Services

For the project management services, the Trustee will pay the Property Manager the following fees for the development or redevelopment (if not prohibited by the Property Funds Guidelines or if otherwise permitted by the Monetary Authority of Singapore (“MAS”)) the refurbishment, retrofi tting and renovation works on a property:

• where the construction costs are $2.0 million or less, a fee of 3.0% of the construction costs;

• where the construction costs exceed $2.0 million but do not exceed $12.0 million, a fee of 2.15% of the construction costs;



• where the construction costs exceed $70.0 million but do not exceed $100.0 million, a fee of 1.35% of the construction costs; and

• where the construction costs exceed $100.0 million, a fee to be mutually agreed by the parties.

2 Significant Accounting Policies 2(a) Basis of Preparation

The fi nancial statements are prepared in accordance with the Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of Certifi ed Public Accountants of Singapore and the applicable requirements of the Code on Collective Investment Schemes issued by the Monetary Authority of Singapore (“MAS”) and the provisions of the Trust Deed.

The fi nancial statements, which are expressed in Singapore Dollars and rounded to the nearest thousand, have been prepared on the historical cost basis, except as modifi ed by the revaluation of investment properties.

The measurement currency of A-REIT is Singapore dollars. All revenue, expenses, receipts and payments are denominated primarily in Singapore dollars.

2(b) Investment PropertiesInvestment properties are accounted for as long term investments and are stated at initial cost on acquisition, and at valuation thereafter. Valuations are determined in accordance with the Trust Deed, which requires the investment properties to be valued by independent registered valuers in the following events:

(i) in such manner and frequency required under the Property Funds Guidelines; and

(ii) at least once in each period of 12 months following the acquisition of the investment properties.

Revaluation increments are credited to an asset revaluation reserve. Revaluation decrements are taken to the asset revaluation reserve to the extent that such decrements are reversing amounts previously credited to that reserve that are still available in that reserve. Revaluation decrements in excess of amounts available in the reserve are charged directly to net investment income in the Statement of Total Return. Subsequent revaluation increments that recover amounts previously charged directly to net investment income are, to that extent, credited directly to net investment income in the Statement of Total Return.

The gain or loss on disposal of previously revalued properties is calculated as the diff erence between the net disposal proceeds and the carrying amount of the property at the time of disposal, and is included in net investment income in the Statement of Total Return in the year of disposal. Any amount in the asset revaluation reserve that relates to the property is transferred to net investment income in the Statement of Total Return in calculating the gain or loss.


2 Significant Accounting Policies (cont’d) 2(c) Depreciation

Investment properties are not depreciated. The properties are subject to continuing maintenance and are regularly revalued on the basis set out in note 2(b). For taxation purposes, A-REIT may claim capital allowances on assets that qualify as plant and machinery under the Income Tax Act.

2(d) Cash and Cash EquivalentsCash and cash equivalents comprise of cash at bank and in hand.

2(e) ImpairmentThe carrying amounts of A-REIT’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. An impairment loss in respect of investment property carried at revalued amount is recognised in the same way as a revaluation decrement on the basis set out in note 2(b). All other impairment losses are recognised directly in net investment income in the Statement of Total Return.

2(f) TaxationTaxation on the returns for the year comprises current and deferred tax. Income tax is recognised in the Statement of Total Return except to the extent that it relates to items directly related to Unitholders’ funds, in which case it is recognised in Unitholders’ Funds.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date.

Deferred tax is provided using the balance sheet liability method, providing for temporary diff erences between the carrying amounts of assets and liabilities for fi nancial reporting purposes and the amounts used for taxation purposes. The temporary diff erences on initial recognition of assets or liabilities that aff ect neither accounting nor taxable profi t are not provided for. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profi ts will be available against which the unused tax losses and credits can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefi t will be realised.

The Inland Revenue Authority of Singapore (“IRAS”) has issued a tax ruling on the taxation of A-REIT for income earned and expenditure incurred after its public listing. Subject to meeting the terms and conditions of the tax ruling, the Trustee will not be taxed on the taxable income of A-REIT. Instead, the Trustee and the Manager will deduct income tax (if required) at the prevailing corporate tax rate (currently 20%) from distributions to Unitholders that are made out of the taxable income of A-REIT.

However, the Trustee and the Manager will not deduct tax from distributions made out of A-REIT’s taxable income from and including 1 January 2004 that is not taxed at A-REIT’s level to the extent that the benefi cial Unitholders are:

(i) Individuals (whether resident or non-resident) who receive such distribution as investment income (excluding income received through a partnership);

(ii) Companies incorporated and tax resident in Singapore;

(iii) Singapore branches of foreign companies which have presented a letter of approval from the IRAS granting waiver from tax deducted at source in respect of distribution from A-REIT;

(iv) Non-corporate Singapore constituted or registered entities (e.g. town councils, statutory boards, charitable organisations, management corporations, clubs and trade and industry associations constituted, incorporated, registered or organised in Singapore);



2 Significant Accounting Policies (cont’d) 2(f) Taxation (cont’d)

(v) Central Provident Fund (“CPF”) members who use their CPF funds under the CPF Investment Scheme (“CPFIS”) and where the distribution received is returned to the CPF accounts; and

(vi) Individuals who use their Supplementary Retirement Scheme (“SRS”) funds and where the distribution received is returned to the SRS accounts.

Based on the 2005 Budget announcement, the Trustee and the Manager will deduct tax at the rate of 10% from distributions made out of A-REIT’s taxable income that is not taxed at the A-REIT’s level to benefi cial Unitholders who are qualifying foreign non-individual investors. A qualifying foreign non-individual investor is one who is not a resident of Singapore for income tax purposes and:

(i) Who does not have a permanent establishment in Singapore; or

(ii) Who carries on any operation in Singapore through a permanent establishment in Singapore, where the funds used to acquire the Units in A-REIT are not obtained from that operation.

2(g) Issue ExpensesIssue expenses represent expenses incurred in the issuance and placement of additional Units in A-REIT. The expenses are deducted directly against Unitholders’ funds, as stipulated in the Trust Deed.

2(h) Revenue Recognition(i) Rental income from operating leases

Rental income receivable under operating leases is recognised on a straight-line basis over the term of the lease, except where an alternative basis is more representative of the pattern of benefi ts to be derived from the leased assets. Lease incentives granted are recognised on a straight-line basis over the term of the lease.

(ii) Interest income

Interest income is recognised on an accrual basis.

2(i) Expenses (i) Property operating expenses

Property operating expenses are recognised on an accrual basis. Included in property operating expenses are fees incurred under the Property Management Agreement which are based on the applicable formula stipulated in note 1(c).

(ii) Manager’s fees

Manager’s fees are recognised on an accrual basis using the applicable formula stipulated in note 1(b).

(iii) Trust expenses

Trust expenses are recognised on an accrual basis. Included in trust expenses is the trustee’s fees which are based on the applicable formula stipulated in note 1(a).

(iv) Borrowing costs

Borrowing costs include interest expense and amortisation of ancillary costs incurred in connection with the arrangement of bank facilities and issues from time to time, of securities under the Medium Term Note programme.

Interest expense is recognised in the Statement of Total Return in the period in which it is incurred. Expenses incurred in connection with the arrangement of bank facilities are recognised in the Statement of Total Return on a straight-line basis over the period for which the facilities are granted.

2(j) Derivatives and HedgingInterest rate swaps are used to manage exposure to interest rate risk arising from fi nancing activities. Interest diff erentials under swap arrangements are accrued and recorded as adjustments to the interest expense relating to the hedged loans.


3 Investment Properties 2005 2004 $’000 $’000

At beginning of year 996,431 607,540Acquisition of investment properties 1,048,988 367,421Capital expenditure incurred 9,651 13,599 2,055,070 988,560Net appreciation on revaluation credited directly to asset revaluation reserve during the year 21,823 7,871At end of year 2,076,893 996,431

4 Trade and Other Receivables 2005 2004 $’000 $’000

Trade receivables 4,033 1,123Allowance for doubtful receivables (121) (124)Net trade receivables 3,912 999Amount owing by related company (non-trade) 98 –Deposits 1,149 –Prepayments 623 784GST receivable 18,983 15,095Other receivables 7,570 3,465 32,335 20,343

5 Cash and Cash Equivalents 2005 2004 $’000 $’000

Cash at bank and in hand 5,164 3,938

6 Trade and Other Payables 2005 2004 $’000 $’000

Trade payables and accrued operating expenses 23,460 16,514Trade amounts due to: – the Manager 7,137 3,160– the Property Manager 1,863 2,220– the Trustee 95 33– related parties 828 857Interest payable 1,171 1,827Deferred payments 15,000 5,000Security deposits 16,048 9,601 65,602 39,212

Deferred payments at 31 March 2005 relates to an amount of $5 million payable in June 2005 for the purchase of OSIM Headquarters Building and an amount of $10 million payable before March 2006 for the purchase of Kim Chuan Telecommunications Complex.



7 Other Payables 2005 2004 $’000 $’000

Deferred payments in (of greater than 12 months) in respect of the purchase of the following properties:– OSIM Headquarters Building payable in June 2005 – 5,000– TT International Tradepark payable in March 2007 8,800 8,800– Siemens Center payable between March 2007 to March 2009 12,250 12,250– SB Building payable in November 2009 3,800 –– Exklusiv Centre payable in November 2007 900 –– Wisma Gulab payable in December 2009 12,200 –– CG Aerospace Building payable in December 2006 8,100 –– Freight Links (Changi) Building payable between December 2007 to December 2010 6,400 –– Freight Links (Toh Guan) Building payable between December 2007 to December 2010 7,280 –– Telepark payable in March 2008 7,600 –

67,330 26,050 8 Interest-bearing Borrowings 2005 2004 $’000 $’000

Term loans 300,000 198,800Revolving credit facilities 256,000 65,000 556,000 263,800

The term loan of $300 million at 31 March 2005 was granted by a special purpose company, Emerald Assets Limited (“Emerald Assets”). The term loan bears a fl oating interest rate of 0.325% per annum above the three-month Singapore Swap Off er Rate and is fully repayable in August 2009.

As security for the credit facilities granted by Emerald Assets, the Trustee of A-REIT has granted in favour of Emerald Assets the following:

(i) a mortgage over the properties making up “Portfolio 1” (Portfolio 1 includes the 17 properties acquired before July 2004);

(ii) an assignment and charge of the rental proceeds and tenancy agreements in the Portfolio 1 properties;

(iii) an assignment of the insurance policies relating to the Portfolio 1 properties;

(iv) a charge creating a fi xed and fl oating charge over certain assets of A-REIT relating to the Portfolio 1 properties.

Emerald Assets has entered into an arrangement for a $1 billion Medium Term Note Programme (“MTN Programme”). Under the MTN Programme, Emerald Assets may, subject to compliance with all relevant laws, regulations and directives, from time to time issue fi xed or fl oating interest rate notes (the “Notes”). The maximum aggregate principal amount of the Notes to be issued shall be $1 billion. The Notes will be secured by the Notes Debenture. To fund the $300 million fl oating rate term loan to A-REIT, Emerald Assets has issued Euro 144 million of Medium Term Notes for a period of fi ve years to 4 August 2009.

In addition, A-REIT has the following revolving credit facilities in place:

(i) $150 million revolving credit facility granted by Oversea-Chinese Corporation Limited (2004 : $450 million in term loan and revolving credit facility);

(ii) $150 million revolving credit facility granted by BNP Paribas (2004 : Nil);

(iii) $100 million revolving credit facility granted by DBS Bank Limited (2004 : Nil);

(iv) $300 million revolving credit facility granted by United Overseas Bank Limited (2004 : Nil);

(v) $45 million letter of guarantee granted by Oversea-Chinese Banking Corporation Limited (2004 : $5 million).


8 Interest-bearing Borrowings (cont’d)As at 31 March 2005, $256 million has been drawn down under these revolving credit facilities. This amount would be refi nanced from a new loan from Emerald Assets in May 2005 (See Note 22(e)).

As at 31 March 2004, the outstanding term loans of $198.8 million and revolving credit facilities of $65 million were granted by OCBC Ltd under unsecured facilities totalling $450 million, made up of $280 million in term loans, $165 million in revolving credit facilities and a $5 million bank guarantee. Except for the bank guarantee, all of these facilities were cancelled in July/August 2004.

During the fi nancial year, A-REIT restructured existing interest rate swaps with a total notional amount of $190 million (31/3/2004: $190 million) and entered into additional interest rate swaps with total notional amount of $232.5 million so as to hedge part of A-REIT’s variable rate borrowings. Total swaps of $422.5 million have terms of two to fi ve years with a weighted average term of 3.22 years and a weighted average interest rate of 2.43%. As at 31 March 2005, the fair value of these swaps, calculated as the present value of the estimated future cash fl ows and which does not consider the off setting change in the value of the items being hedged, is $1,252,000 (31/3/2004: ($1,567,000)). The weighted average funding cost (including fl oating rate debt) as at 31 March 2005 is 2.77% (31/3/2004: 2.16%).

Eff ective interest rates and repricing analysis Fixed interest rate Effective interest Floating interest maturing 1 to 5 years Total

% $’000 $’000 $’000

2005Interest-bearing borrowings: – term loan 2.1736 300,000 – 300,000– revolving credit facility 2.3525 256,000 – 256,000Eff ect of interest rate swaps (2.7641) (422,500) 422,500 – 133,500 422,500 556,000

2004 Interest-bearing borrowings: – term loan 1.5583 198,800 – 198,800– revolving credit facility 1.5585 65,000 – 65,000Eff ect of interest rate swaps (2.6734) (190,000) 190,000 – 73,800 190,000 263,800

9 Units on issue No. of Units 2005 2004

’000 ’000

Balance at beginning of year 707,207 545,000Issue of new Units: – As payment of manager’s fees 1,651 1,707– As payment of performance fees 1,572 –– New Units issued 450,127 160,500Balance at end of year 1,160,557 707,207

On 19 April 2004, A-REIT issued 1,572,381 new Units at the issue price of $1.2983 per unit as payment of the performance fee for the year ended 31 March 2004. On 8 June 2004 and 6 December 2004, A-REIT issued 746,077 and 904,373 new Units at the issue price of $1.4347 and $1.6981 per unit respectively as payment of 50% of the manager’s base fee. The issue price was determined based on the volume weighted average traded price for all trades done on SGX-ST in the ordinary course of trading for 10 business days immediately preceding the respective date of issue of the units.

On 23 June 2004, A-REIT issued 82,142,857 new Units at an issue price of $1.40 per unit for cash to partly fi nance the acquisition of Progen Building and C & P Logistics Hub.

On 1 December 2004, A-REIT issued 179,292,903 new Units at an issue price of $1.55 per unit for cash to partly fi nance the acquisition of Autron Building, CG Aerospace Building, Exklusiv Centre, Fedex Building, Freight Links (Changi) Building, Freight Links (Toh Guan) Building, McDermid Building, SB Building, Steel Industries Building, Volex Building and Wisma Gulab.



9 Units on issue (cont’d)Also on 1 December 2004, A-REIT issued 78,771,613 new Units at an issue price of $1.55 per unit as partial consideration for the acquisition of Techpoint and Infi neon Building.

On 2 March 2005, A-REIT issued 109,919,571 new Units at an issue price of $1.865 per unit for cash to partly fi nance the acquisition of Telepark, Kim Chuan Telecommunications Complex, KA Centre and KA Place. These Units are not eligible for distributions in respect of the period from 1 January 2005 to 1 March 2005.

Each Unit in A-REIT represents an undivided interest in A-REIT. The rights and interests of Unitholders are contained in the Trust Deed and include the right to:

• Receive income and other distributions attributable to the Units held;

• Participate in the termination of A-REIT by receiving a share of all net cash proceeds derived from the realisation of the assets of A-REIT less any liabilities, in accordance with their proportionate interests in A-REIT. However, a Unitholder has no equitable or proprietary interest in the underlying assets of A-REIT and is not entitled to the transfer to it of any assets (or any part thereof ) or of any estate or interest in any asset (or any part thereof ) of A-REIT; and

• Attend all Unitholder’s meetings. The Trustee or the Manager may (and the Manager shall at the request in writing of not less than 50 Unitholders or one-tenth in number of the Unitholders, whichever is lesser) at any time convene a meeting of Unitholders in accordance with the provisions of the Trust Deed.

The restrictions of a Unitholder include the following:

• A Unitholder’s right is limited to the right to require due administration of A-REIT in accordance with the provisions of the Trust Deed; and

• A Unitholder has no right to request for redemption of their Units while the Units are listed on SGX-ST.

A Unitholder’s liability is limited to the amount paid or payable for any Units in A-REIT. The provisions of the Trust Deed provide that no Unitholders will be personally liable to indemnify the Trustee or any creditor of the Trustee in the event that liabilities of A-REIT exceed its assets.

10 Gross Revenue 2005 2004 $’000 $’000

Property rental income 117,597 57,731Other income 11,390 8,183 128,987 65,914

11 Property Operating Expenses 2005 2004 $’000 $’000

Land rent 3,743 274Maintenance & conservancy 8,359 5,275Property service fees 3,758 2,259Property tax 7,449 3,230Utilities 9,095 3,791Other operating expenses 469 775 32,873 15,604

12 Manager’s FeesManager’s fees include base management fees of $7,020,000 (2004: $3,547,000) and a performance fee of $4,229,000 (2004: $2,041,000). 50% of the base fee and 100% of the performance fee is payable in the form of Units at the prevailing market price (as defi ned in the Trust Deed) at the time of issue of units.


13 Trust Expenses 2005 2004 $’000 $’000

Auditors’ remuneration – audit fees 93 89– non-audit fees 33 7Professional fees 246 370Trustee’s fees 421 213Other expenses 422 130 1,215 809

14 Income Tax Expense

2005 2004 $’000 $’000

Reconciliation of eff ective tax rate Net investment income before taxation 75,217 40,591

Income tax using Singapore tax rate of 20% (2004: 22%) 15,043 8,930Non-tax deductible items 1,790 1,088Tax transparency (16,833) (10,018)Tax payable – –

15 Earnings and Distribution Per UnitThe calculation of basic earnings and distribution per unit for the fi nancial year are based on:

2005 2004 $’000 $’000

Net investment income 75,217 40,591 Net investment income available for distribution 84,165 45,536 Applicable number of Units on issue during the year (’000) 880,438 558,242 There were no dilutive instruments on issue during the fi nancial year.

16 Distributions to Unitholders Distributions to Unitholders during the fi nancial year comprise of: 2005 2004 $’000 $’000

Distribution of 3.47 cents per unit for the period 01/10/03 to 03/03/04 18,971 –Distribution of 5.09 cents per unit for the period 04/03/04 to 30/09/04 38,176 –Distribution of 2.40 cents per unit for the period 01/10/04 to 31/12/04 21,138 –Distribution of 2.78 cents per unit for the period 19/11/02 to 31/03/03 – 15,151Distribution of 4.05 cents per unit for the period 01/04/03 to 30/09/03 – 22,109 78,285 37,260

A-REIT’s policy is to distribute its distributable income to Unitholders on a semi-annual basis up to 30 September 2004 and on a quarterly basis from 1 October 2004.

17 Issue ExpensesThe issue costs of $9,592,000 (2004: $5,507,000) have been deducted directly against Unitholders’ funds. Included in issue costs are amounts paid/payable to the auditors of A-REIT of $148,000 (2004: $185,000) for acting as independent reporting accountants in connection with the issue of 258,064,516 new units (2004: 160,500,000 new units) in A-REIT during the fi nancial year.



18 Commitments(a) A-REIT is required to pay JTC Corporation and Housing Development Board for annual land rent in respect of certain of its properties.

The annual land rent is based on market rent in the relevant year of the current lease term and the lease provides that any increase in annual land rent from year to year shall not exceed 4% – 5.5% of the annual land rent for the immediate preceding year. The land rent amounted to approximately $6,364,000 in relation to 21 properties (2004: $575,000 in relation to 8 properties) for the fi nancial year ended 31 March 2005 (includes amounts paid on behalf of tenants that have been directly re-charged).

(b) A-REIT leases out its investment properties. Non-cancellable operating lease rentals are receivable as follows:

2005 2004 $’000 $’000

Within 1 year 168,326 81,528After 1 year but within 5 years 615,242 177,666After 5 years 753,613 180,855

1,537,181 440,049

(c) As at 31 March 2005, A-REIT had signed six put and call option agreements for the acquisition of the following properties, which had yet to be completed:

(1) AEM-Evertech Building for $14.0 million with a 10-year lease to AEM-Evertech Holdings Limited completed in April 2005.

(2) Da Vinci Building for $19.5 million with a 5-year lease to Da Vinci Collection Pte Ltd completed in April 2005.

(3) Hyfl ux Building for $19.0 million with a 15-year lease to Hydrochem (S) Pte Ltd completed in April 2005.

(4) MSL Building for $12.6 million with a 6-year lease to SGC Ventures Pte Ltd completed in April 2005.

(5) NESS Building for $21.0 million with a 15-year lease to Ness Display Singapore Limited expected to complete in June 2005.

(6) A building along Depot Road for up to $41.3 million being developed for lease to Hewlett-Packard, expected to complete in April 2006.

The results for the year ended 31 March 2005 do not include income from any of these properties.

(d) A-REIT had the following other capital commitments: 2005 2004 $’000 $’000

Contracted but not provided for – –Authorised but not contracted for 2,000 –

2,000 –



19 Signifi cant Related Party TransactionsFor the purposes of these fi nancial statements, parties are considered to be related to A-REIT if the Manager (as manager of A-REIT) has the ability, directly or indirectly, to control the party or exercise signifi cant infl uence over the party in making fi nancial and operating decisions, or vice versa, or where the Manager and the party are subject to common signifi cant infl uence. Related parties may be individuals or other entities. The Manager is an indirect wholly-owned subsidiary of a signifi cant Unitholder of A-REIT.

In addition to the related party information shown elsewhere in the fi nancial statements, there were the following signifi cant related party transactions, which were carried out in the normal course of business on terms agreed between the parties:

2005 2004 $’000 $’000

Property service fees paid/payable to Property Manager 4,721 3,112Service charge/reimbursables paid/payable to related companies of the Manager 1,315 897Management fees paid/payable to the Manager 21,356 9,107Acquisition of properties from a related company of the Manager (approved by Unitholders at

an EGM on 2 November 2004) 125,900 – 20 Financial Instruments

Financial risk management objectives and policiesExposure to credit, interest rate and liquidity risks arises in the normal course of A-REIT’s business. A-REIT has written policies and guidelines, which set out its overall business strategies and its general risk management philosophy.

Credit risk Credit risk is the potential fi nancial loss resulting from the failure of a customer or a counterparty to settle its fi nancial and contractual obligations to A-REIT, as and when they fall due.

The Manager has established credit limits for customers and monitors their balances on an ongoing basis. Credit evaluations are performed by the Property Manager on behalf of the Manager before lease agreements are entered into with customers. Cash and fi xed deposits are placed with fi nancial institutions which are regulated.

At the balance sheet date, there was no signifi cant concentration of credit risk. The maximum exposure to credit risk is represented by the carrying value of each fi nancial asset in the balance sheet.

Interest rate riskA-REIT’s exposure to changes in interest rates relates primarily to interest-earning fi nancial assets and interest-bearing fi nancial liabilities. Interest rate risk is managed by the Manager on an ongoing basis with the primary objective of limiting the extent to which net interest expense could be aff ected by adverse movements in interest rates.

A-REIT has in place a hedging policy to minimise interest rate exposure. This involves fi xing certain portion of the interest payable on its underlying debt liabilities via fi nancial derivatives or other suitable fi nancial products.

Liquidity riskThe Manager monitors A-REIT’s liquidity risk and maintains a level of cash and cash equivalents deemed adequate to fi nance A-REIT’s operations. In addition, the Manager also monitors and observes the Code on Collective Investment Schemes issued by the MAS concerning limits on total borrowings.

Fair valueThe carrying values of recognised fi nancial assets and liabilities at the balance sheet date approximate their fair values.

21 Segment Reporting A-REIT’s business is investing in industrial properties (including science & business park, light industrial, hi-tech industrial and logistics & distribution centre properties) and all the existing properties are located in Singapore.


22 Subsequent Events(a) Since 31 March 2005, A-REIT has signed the following put and call option agreements for the acquisition of the following properties,

which have not been completed:

(1) Weltech Building for $9 million with a 8-year lease to Sunningdale Precision Industries Ltd expected to complete in May 2005.

(2) BBR Building for $6.8 million with a 10-year lease to Singapore Piling & Civil Engineering Pte Ltd expected to complete in June 2005.

(3) Pacifi c Tech Centre for $62 million expected to complete before September 2005.

(b) In April 2005, A-REIT completed the acquisitions of AEM-Evertech Building, Da Vinci Building, MSL Building and Hyfl ux Building. These properties are to be pledged as security for the term loan of $350 million to be granted by Emerald Assets and accordingly form part of Portfolio 2 (see Note 22(e) below).

(c) In April 2005, A-REIT issued 2,185,418 new Units at a issue price of $1.935 per unit as payment of the performance fee for the year ended 31 March 2005.

(d) In May 2005, A-REIT acquired 7 Changi South St 2 Building for $30.6 million with a 5-year lease to Avenue Distribution Pte Ltd.

(e) In May 2005, Emerald Assets agreed to grant to A-REIT a 7-year term loan of $350 million. Interest on this loan will be payable at a fl oating interest rate of 0.265% above the three-month Singapore Swap Off er Rate.

As security for the loan to be granted by Emerald Assets, the Trustee agreed to to grant in favour of Emerald Assets the following:

(1) a mortgage over the properties making up “Portfolio 2” (see Investment Properties Portfolio Statement on page 48 for details of these properties);

(2) an assignment and charge of the rental proceeds and tenancy agreements in the Portfolio 2 properties;

(3) an assignment of the insurance policies relating to Portfolio 2 properties; and

(4) a charge creating a fi xed and fl oating charge over certain assets of A-REIT relating to the Portfolio 2 properties.


Unitholder Statistics

Issued and fully paid-up units1,162,742,368 Units (voting rights: one vote per Unit) Market Capitalisation $2,302,229,889 (based on closing price of $1.98 per Unit on 29 April 2005) Top 20 Unitholders as at 30 April 2005 As listed in the Register of Unitholders

Ranking Unitholder No. of units % of total issued units

1 Raffl es Nominees Pte Ltd 245,493,452 21.11%2 Ascendas Land (Singapore) Pte Ltd 231,559,613 19.91%3 Citibank Nominees S’pore Pte Ltd 195,267,540 16.79%4 DBS Nominees Pte Ltd 149,260,761 12.84%5 MGM Singapore Pte Ltd 75,895,696 6.53%6 HSBC (Singapore) Noms Pte Ltd 54,518,021 4.69%7 United Overseas Bank Nominees 37,037,640 3.19%8 Morgan Stanley Asia (Singapore) Securities Pte Ltd 10,803,550 0.93%9 DB Nominees (S) Pte Ltd 10,497,000 0.90%10 DBS Vickers Secs (S) Pte Ltd 8,453,000 0.73%11 Ascendas-MGM Funds Management Limited 7,799,791 0.67%12 Oscar Oliveiro Joseph, Ridzwan; B Haji Dzafi r & Goh Chee Wee 5,750,000 0.49%13 Merrill Lynch (Singapore) Pte Ltd 4,734,254 0.41%14 E M Services Pte Ltd 3,628,000 0.31%15 Yong Wei-Woo Nee; Cheang Wei-Woo 2,530,000 0.22%16 BNP Paribas Noms Singapore Pte Ltd 2,480,000 0.21%17 Oversea-Chinese Bank Nominees Pte Ltd 2,173,000 0.19%18 Yong Loo Lin Holdings Private Limited 2,000,000 0.17%19 Yong Ying-I 1,870,000 0.16%20 Economic Development Board 1,450,000 0.12% Total 1,053,201,318 90.58% Unitholders’ distribution as at 30 April 2005 Number of % of Size of holdings Unitholders Unitholders Number of Units % of Units

1 – 999 31 0.44 12,462 0.001,000 – 10,000 5,261 74.82 21,463,529 1.8510,001 – 1,000,000 1,717 24.42 84,188,059 7.241,000,001 and above 23 0.33 1,057,078,318 90.91Grand Total 7,032 100.00 1,162,742,368 100.00


Under Rule 723 of the Listing Manual of the SGX-ST, a listed issuer must ensure that at least 10% of its listed securities is at all times held by the public. Based on the information made available to the Manager as at 30 April 2005, about 66% of A-REIT’s Units are held in public hands.

Substantial Unitholders as at 30 April 2005

Substantial Unitholders Direct Interest Deemed Interest Percentage

1. Ascendas Land (Singapore) Pte Ltd 231,559,613 – 19.91% 2. Ascendas Pte Ltd – 239,359,404 20.59% 3. MGM (Singapore) Pte. Ltd. 75,895,696 – 6.53% 4. The Capital Group Companies, Inc. – 75,668,100* 6.51%

* Includes units placed to the company during the March 2005 private placement

Unitholdings of the Directors of the Manager Director Direct Interest Deemed Interest Total Unitholdings Percentage

1. Lew Syn Pau – 6,000 6,000 0.00% 2. David Stuart Clarke – 100,000 100,000 0.01% 3. Gregory Leith Goodman – 220,000 220,000 0.01% 4. David Wong Cheong Fook 105,000 – 105,000 0.01% 5. Chong Siak Ching 165,000 152,000 317,000 0.03% 6. Benedict Kwek Gim Song 152,000 – 152,000 0.01% 7. Swee Kee Siong 79,000 – 79,000 0.01%

Mr James Hodgkinson and Mr Thai Chee Ken have declared nil unitholdings as at 30 April 2005.


Related Party TransactionsThe transactions entered into with related parties during the fi nancial year failing within the Listing Manual of the SGX-ST and the Code on Collective Investment Schemes are:

Aggrate value of all related party Transactions during the financial period Under review (excluding transactions Less than $100,000)Name of related party $’000

JTC Corporation– Land rent 6,304

Ascendas Pte Ltd and its subsidiaries– Property service fees 4,721– Service charge and reimbursables 1,315– Manager’s fees 21,356 (1)

– Acquisition of properties 125,900

HSBC Institutional Trust Services (Singapore) Ltd– Trustee fees 421Total 160,017 (1) The Manager’s fees comprise :

(i) a base fee of which 50% is paid in cash and the other 50% will be paid in Units. The cash component is paid monthly in arrears whilst the Units component will be paid on a six-monthly basis in arrears.

(ii) an annual performance fee of 0.2% per annum of the Deposited Property payable in Units within 60 days of the last day of every fi nancial year.

(iii) an acquisition fee of 1% of purchase price of the Investment Property acquired by the Trustee on behalf of the Trust.

Please also see Signifi cant Related Party Transactions in Note 19 to the fi nancial statements.

A-REIT has signed a put and call option agreements with Ascendas (Tuas) Pte Ltd for the acquisition of a building along Depot Road being developed for lease to Hewlett-Packard (expected to complete in April 2006) for up to $41.3 million.

Except as disclosed above, there were no additional related party transactions (excluding transactions of less than $100,000 each) entered into up to and including 31 March 2005.

Confi rmation in writing was obtained from Singapore Exchange Limited (SGX) that Rule 905 and 906 are not applicable if such related party transactions are made on the basis of, and in accordance with, the terms and conditions set out in the A-REIT prospectus dated 5 November 2002 and therefore would not be subjected to Audit Committee review/approval.

Listing of A-REIT new unitsAn aggregate of 453.3 million new Units were issued during the year bringing the total number of A-REIT units on issue to 1,160.6 million as at 31 March 2005.

Additional Information


Historical Balance Sheet 2005 2004 2003 $’000 $’000 $’000

Non-current assets Investment properties 2,076,893 996,431 607,540 Current assets Trade and other receivables 32,335 20,343 1,271 Cash and cash equivalents 5,164 3,938 27,558

37,499 24,281 28,829 Current liabilities Trade and other payables (65,602) (39,212) (13,209)

Net current liabilities (28,103) (14,931) 15,620 Non-current liabilities Other payables (67,330) (26,050) – Interest-bearing borrowings (556,000) (263,800) (125,000) (623,330) (289,850) (125,000) Net assets 1,425,460 691,650 498,160 Represented by: Unitholders’ funds 1,425,460 691,650 498,160

Units on issue (‘000) 1,160,557 707,207 545,000 Net asset value per unit ($) 1.23 0.98 0.91


Historical Income Statement Period from 2005 2004 9/10/02 to 31/3/03 $’000 $’000 $’000

Gross revenue 128,987 65,914 22,836 Property operating expenses (32,873) (15,604) (6,325)

Net property income 96,114 50,310 16,511

Interest income 73 20 9 Manager’s fees (11,249) (5,588) (1,145) Trust expenses (1,215) (809) (291) Borrowing costs (8,506) (3,342) (794)

Net investment income 75,217 40,591 14,290 Non-tax deductible expenses 8,948 4,945 892

Net investment income available for distribution 84,165 45,536 15,182

Earnings per unit (cents) 8.66 7.27 2.62

Distribution per unit (cents) 9.56 8.16 2.78

Additional Information


A-REIT Ascendas Real Estate Investment Trust CDP The Central Depository (Pte) Limited CIS Code The Code of Collective Investment Schemes issued by the MAS CPF Central Provident Fund EPRA European Public Real Estate Association Executive Officers The executive offi cers of the Manager FTSE Financial Times Security Exchange Gross Floor Area Net lettable area and common areas, such as common corridors Gross Rental Income Rental income (after rent rebates) and service charges Gross Revenue Gross rental income and other income earned from the properties including licence fees, car park income, utilities and miscellaneous income JTC JTC Corporation Listing Manual The Listing Manual of the SGX-ST MAS Monetary Authority of Singapore Manager Ascendas-MGM Funds Management Limited, as manager of A-REIT NAREIT National Association of Real Estate Investment Trust Net Lettable Area Consists of the total gross fl oor area less the common areas, such as corridors, amenities’ area and management offi ces Property Funds Guidelines The investment guidelines and borrowing limits for real estate investment trusts issued by MAS as Appendix 2 to the CIS Code Property Management The agreement dated 10 October 2002 made between the Manager, the Trustee and the Agreement Property Manager pursuant to which the Property Manager will provide certain property management, lease management, marketing and project management services to A-REIT. Property Manager Ascendas Services Pte Ltd Related Party Transactions Transactions between the Trustee (as the Trustee of A-REIT) and an ”interested person”, under the Listing Manual and transactions between the Trustee (as the Trustee of A-REIT) and an “interested party” under the Property Funds Guidelines (both such types of transactions constituting Related Party Transactions) Sf Square feet SFA Securities and Futures Act, Chapter 289 of Singapore SGX-ST Singapore Exchange Securities Trading Limited Sqm Square metres Trust Deed The Trust Deed dated 9 October 2002 (as amended) made between Bermuda Trust (Singapore) Limited (as trustee of A-REIT) and the Manager constituting A-REIT Trustee HSBC Institutional Trust Services (Singapore) Limited, as trustee of A-REIT Unit An undivided interest in A-REIT as provided for in the Trust Deed Unitholder(s) The registered holder for the time being of a Unit including persons so registered as joint holders, except that where the registered holder is CDP, the term “Unitholder” shall, in relation to the Units registered in the name of CDP, mean, where the context requires, the depositor whose Securities Account with CDP is credited with Units

Glossary


Ascendas Real Estate Investment TrustThe ManagerAscendas-MGM Funds Management LimitedCompany registration number: 200201987K

Registered Office75 Science Park Drive, #01-03 CINTECH IISingapore Science Park ISingapore 118255Phone: (65) 6774 1033Fax: (65) 6775 2813Email: [email protected]: www.a-reit.com

Board of Directors Mr Lew Syn Pau, Chairman Mr David Clarke, Deputy Chairman (retired on 14 April 2005)Mr Gregory Goodman, Director (Deputy Chairman, eff ective from 15 April 2005) Mr David Wong Cheong Fook, Independent Director Ms Chong Siak Ching, Director Mr Thai Chee Ken, Independent Director Mr Benedict Kwek Gim Song, Independent Director Mr James Hodgkinson, Director (eff ective from 15 April 2005)Mr Swee Kee Siong, Director Ms Tay Hsiu Chieh, Company Secretary

Compliance Sub-Committee Ms Chong Siak Ching Mr Gregory Goodman Mr Tan Ser PingMr Shane Hagan

Management Mr Tan Ser Ping, Chief Executive Offi cer Mr Philip Pearce, Portfolio ManagerMr Shane Hagan, Chief Financial Offi cer Ms Tan Shu Lin, Assistant Fund Manager

Audit Committee Mr David Wong Cheong FookMr Gregory GoodmanMr Thai Chee KenMr Benedict Kwek Gim Song

Executive CommitteeMs Chong Siak ChingMr Gregory GoodmanMr Tan Ser Ping

Unit Registrar Lim Associates (Pte) Ltd10 Collyer Quay, #19-08 Ocean Building,Singapore 049315Phone: (65) 6536 5355Fax: (65) 6536 1360

TrusteeHSBC Institutional Trust Services (Singapore) Limited21 Collyer Quay, #10-00, Singapore 049320Phone: (65) 6534 1900Fax: (65) 6533 1077

AuditorsKPMG16 Raffl es Quay #22-00, Hong Leong Building,Singapore 048581Phone: (65) 6213 3388Fax: (65) 6225 6157Partner-in-charge: Ms Eng Chin Chin(since fi nancial period ended 31 March 2003)

SGX CodeAscendasreit

Stock SymbolA17.SG

Corporate Directory

CONCEPT AND DESIGN BY EQUUS

WWW.EQUUS-DESIGN.COM

Ascendas Real Estate Investment Trust(“A-REIT”) is the fi rst business space and industrial property REIT listed on Singapore Exchange Securities Trading Limited. A-REIT owns a diversifi ed portfolio of business space properties in Singapore in the following asset classes: • Business and science parks: suburban offi ce,

R&D space, business HQ buildings• Hi-tech Industrial: high offi ce content

combined with higher end industrial space• Light Industrial: low offi ce content

combined with manufacturing space• Logistics and distribution centres:

warehousing and distribution centres

These properties house a tenant base of more than 470 international and local companies from a wide range of industries.

A-REIT’s Mission

To deliver predictable distributions andachieve long term capital stability for unitholders.

Contents

Financial Highlights 02Board of Directors 04Chairman’s Message 06Manager’s Report 09Significant Events 18The A-REIT Team 20Property Portfolio 22Independent Industrial Property Market Report 32Corporate Governance 34Investor Relations 40

Financial Statements 41Unitholder Statistics 66Glossary 71

This Annual Report for the year ended 31 March 2005 has been prepared by Ascendas-MGM Funds Management Limited (200201987K) as the manager of A-REIT. Whilst every care has been taken in relation to its accuracy, no warranty is given or implied. The information provided is not investment advice and recipients should consider obtaining independent advice before making any decision that relies on this information. All values are expressed in Singapore currency unless otherwise stated. This Annual Report is issued in May 2005.

Ascendas-MGM Funds Management Limited is the manager of A-REIT (the “Manager”).

The Manager aims to deliver stable total returns to Unitholders via a three-pronged strategy of: • Yield-accretive acquisitions of suitable

properties• Organic portfolio growth through proactive

asset management• Optimisation of capital structure

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While every effort has been taken to carry out instruction to customers satisfactionNO RESPONSIBILITY liablilty will be accepted for errorsCUSTOMERSARE THEREFOREURGEDTO CHECK THOROUGHLY BEFOREAUTHORISINGPRINT RUNSDALIM

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OPTIMISING ASSETS

ASCENDAS REAL ESTATE INVESTMENT TRUSTANNUAL REPORT 2005

75 Science Park Drive, #01-03 CINTECH IISingapore Science Park I, Singapore 118255

www.a-reit.com

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