10 Prosperity Real Estate Investment Trust Annual Report 2006

Prosperity REIT Portfolio The Metropolis Tower

The Metropolis Tower is located design, raise fl oor system, backup Location within the gravity of the prime power supply, fi ber optic backbone No. 10 Metropolis Drive commercial district of Tsim Sha and satellite communication. Anchor Hunghom, Tsui. It is well connected by tenants include Canon Hongkong Year of Completion mass transportation links with its Company Limited, NEC 2001 connectivity to the Hunghom KCRC Limited, Oval Enterprises Limited, and Gross Rentable Area (“GRA”) (sq.ft.) Station, bus terminal and taxi station. Sanford International HK Ltd. 271,418 It has immediate access to the Cross No. of Carpark Spaces Harbour Tunnel, the busiest tunnel in As at 31 December 2006, 52.2% of 98 Hong Kong. the leased area is occupied by anchor Appraised Value (HK$ million) tenants of over 5,000 sq. ft. In fact, 1,910.0 The Metropolis Tower is part of a our tenant base is pronounced with Number of Tenancies 1.42 million sq. ft. conglomerate multinational corporations including 87 comprising prime retail, offi ce, those names as listed above. The hotel and service apartment. The Manager aims to upkeep and will take area. The Manager’s key objective Metropolis development is one its opportunity to further reinforce in this property is managing lease of the landmarks in Tsim Sha Tsui. the tenant base in 2007. renewal eff ectively to fully capture the The locality is a metropolitan hub market uptrend. characterized by public facilities Given The Metropolis Tower locates at such as concert hall and a university the fringe area of the commercial hub together with a cluster of world of Tsim Sha Tsui, it benefi ts directly renowned hotels and shopping malls. from the offi ce decentralization trend under surging rental in core business Modern features of The Metropolis Tower include column free fl oor plate

Trade Mix by Gross Rentable Area Lease Expiry Profile of the Metropolis Tower (As at 31 December 2006) (As at 31 December 2006)

14.4% Manufacturing/Trading 23% 2007 15.7% Textile/Garment 2% 33.6% 2008 Advertising/ Media 4% 34.3%

Logistics 3% 52.0% 2009 50.0% Electronic/Technology 59% 0% Finance/Investment 3% 2010 and Beyond 0% Others 6% By Gross Rental Income By Gross Rentable Area

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Top 5 Tenants1

Tenants Name Trade GRA* (sq.ft.) % of GRA % of GRI**

Canon Hongkong Company Limited Electronic/Technology 36,322 13.9% 13.9% NEC Hong Kong Limited Electronic/Technology 21,384 8.2% 9.3% Oval Enterprises Limited Electronic/Technology 17,361 6.6% 6.8% Tenant of Units 1605-06 (name undisclosed) Others 11,885 4.5% 5.0% Sanford International HK Ltd Manufacturing/Trading 17,755 6.8% 4.6%

* Gross rentable area ** Gross rental income

Note 1: Top 5 tenants are measured based on tenant’s contribution to the gross rental income of the property as at 31 December 2006.

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Top 5 Tenants 1

Tenants Name Trade GRA (sq.ft.) % of GRA % of GRI

The University of Hong Kong Others 15,636 7.2% 9.1% Computer and Technologies Holdings Ltd. Electronic/Technology 16,628 7.6% 7.8% Pacifi c Century Systems Ltd. Electronic/Technology 16,628 7.6% 7.2% Oracle Added Value Limited Consultancy/Research 13,173 6.0% 5.0% Excel Technology International (HK) Ltd. Electronic/Technology 11,058 5.1% 5.0%

Note 1 : Top 5 tenants are measured based on tenant’s contribution to the gross rental income of the property as at 31 December 2006.

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Prosperity REIT Portfolio MLC Millennia Plaza* (to be renamed as Prosperity Millennia Plaza)

MLC Millennia Plaza is strategically As at 31 December 2006, 55.7% of Location located in the established offi ce area the leased area is occupied by anchor No. 663 King’s Road on King’s Road in . The tenants of over 5,000 sq. ft. In fact, North Point, Hong Kong building is adjacent to Harbour Plaza our tenant base is pronounced with Year of Completion North Point Hong Kong Hotel and multinational corporations including 1999 North Point Government Offi ce. It is those names as listed above. The Gross Rentable Area (“GRA”) (sq.ft.) well connected with various kinds Manager aims to upkeep and will take 217,955 No. of Carpark Spaces of mass transportation modes and is its opportunity to further reinforce 43 within 2 minutes’ walk to Quarry Bay the tenant base in 2007. Appraised Value (HK$ million) MTR Station. The Eastern Harbour The Island East district is one of the 990.0 Crossing Tunnel is only 2 minutes’ most sought-after offi ce locations for Number of Tenancies international enterprises. The quality drive away. 72 of Grade A offi ce buildings and their Features of MLC Millennia Plaza infrastructure are comparable to include column-free fl oor plate premium buildings in core business continue to strive to manage the design with full height window. High areas but at a lower rental. Given building eff ectively and strategically fl oor units enjoy spectacular view these advantages, the building and to maximize rental income for over the . Anchor the area will continue to benefi t unitholders. tenants include The University from the decentralization of offi ce of Hong Kong, Computer and tenants from central area. Due to the * To enhance Prosperity REIT’s brand image, Technologies Holdings Ltd., Pacifi c the building name of MLC Millennia Plaza Manager’s proactive leasing eff orts, a will be changed to Prosperity Millennia Century Systems Ltd., Oracle Added Plaza, eff ective from 28 March 2007. 100% occupancy rate was achieved Value Limited and Excel Technology as at year end. The Manager will International (HK) Ltd.

Trade Mix by Gross Rentable Area Lease Expiry Profile of the MLC Millennia Plaza (As at 31 December 2006) (As at 31 December 2006)

36.3% Manufacturing/Trading 13% 2007 36.9% Textile/Garment 1% 24.9% 2008 Advertising/Media 7% 25.0%

Electronic/Technology 40% 38.8% 2009 38.1% Finance/Investment 11% 0% Consultancy/Research 13% 2010 and Beyond 0% Others 15% By Gross Rental Income By Gross Rentable Area

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Prosperity REIT Portfolio Harbourfront Landmark Property (portion of Harbourfront Landmark, “Harbourfront Landmark Property”)

The subject property refers to the Wanchai and North Point is located Location three-storey Grade A offi ce premises within 3 minutes’ walking distance No. 11 Wan Hoi Street, Hunghom, Hong Kong on the podium level of Harbourfront from the property. Landmark, a stunning skyscraper on Year of Completion 2001 the Kowloon waterfront. It is adjacent As at 31 December 2006, Gross Rentable Area (“GRA”) (sq.ft.) to two blocks of large-scale Grade A Harbourfront Landmark Property 77,021 offi ce tower and a renowned fi ve-star has been fully leased. The total GRA No. of Carpark Spaces hotel, the Harbour Plaza Hong Kong of 77,021 sq. ft. has been leased – Hotel. With the modern curtain wall to Tremayne Investments Limited, Appraised Value (HK$ million) system, the subject property enjoys a property investment company, 350.0 panoramic views over the Victoria which is a wholly owned subsidiary Number of Tenancies Harbour. of Hutchison Whampoa Properties 1 Limited, a connected person of Tenant of Harbourfront Landmark Prosperity REIT. The lease has been Property is well supported by negotiated on an arm’s length basis, the catering, conference and taking into account of the overall accommodation facilities of the property market environment and adjoining hotel. The subject property the size of the premises. The rent is is only 2 minutes’ drive from the consistent with the prevailing market Hunghom KCRC Station which links rent at that time. It is a six-year lease up Kowloon, the and term ending 31 October 2011, with the Mainland. It is also close to the an option to renew for a further term Kowloon side of the Cross Harbour of three years. Tunnel, enjoying convenient access to and the rest of Kowloon. A ferry pier with frequent ferry services to and from the central business districts including Central,

Tenant Name Trade GRA (sq.ft.) % of GRA % of GRI

Tremayne Investments Limited Real estate 77,021 100% 100%

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Top 5 Tenants 1

Tenants Name Trade GRA (sq.ft.) % of GRA % of GRI

Holistol International Limited Manufacturing/Trading 6,992 3.0% 3.1% Evlite Electronics Co Ltd Electronic/Technology 7,475 3.2% 2.8% Robotoolz Limited Electronic/Technology 5,402 2.3% 2.5% Shinco Digital Limited Electronic/Technology 5,402 2.3% 2.3% Jssy Limited Manufacturing/Trading 4,598 2.0% 2.1%

Note 1: Top 5 tenants are measured based on tenant’s contribution to the gross rental income of the property as at 31 December 2006.

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Prosperity REIT Portfolio Modern Warehouse

Modern Warehouse is located in the not only enhance the property value, Location well-established traditional Kwun but also the rent level of the building. No. 6 Shing Yip Street, Tong business core. The building , Kowloon is close to the Kowloon side of Anchor tenants include Holistol Year of Completion the Eastern Cross Harbour Tunnel. International Limited, Evlite 1996 Kwun Tong MTR Station is just a few Electronics Co Ltd, Robotoolz Limited, Gross Rentable Area (“GRA”) (sq.ft.) minutes’ walk away. Shinco Digital Limited and Jssy 240,000 Limited. No. of Carpark Spaces Kwun Tong district is underpinned 60 by a series of vibrant transformations The Manager will continue to capture Appraised Value (HK$ million) into a commercial hub as signifi ed the market upside in Kwun Tong 577.0 by the forthcoming new retail district and will create additional Number of Tenancies space, offi ce developments and value in the building. This includes 130 redevelopment projects. the potential change of land use of portion of the existing ground fl oor Modern Warehouse will continuously spacious lobby to commercial use. take advantage from these changes In so doing, part of the lobby space and will fl edge its full wings in near will turn to be new leaseable area future with a larger pool of potential opening up new income source. quality tenant base attracted from The Manager will actively study the outside districts in hope of setting up associated costs and the market their offi ces in Kwun Tong district. An potentials. improvement in the tenant base will

Trade Mix by Gross Rentable Area Lease Expiry Profile of the Modern Warehouse (As at 31 December 2006) (As at 31 December 2006)

26.7% Manufacturing/Trading 37% 2007 25.6% Textile/Garment 8% 43.0% Advertising/Media 1% 2008 42.0% Logistics 1% 30.3% Electronic/Technology 44% 2009 32.4% Real Estate 1% 0% 2010 and Beyond Others 8% 0%

By Gross Rental Income By Gross Rentable Area

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Prosperity REIT Portfolio Trendy Centre

Trendy Centre is situated on Castle Anchor tenants include Asianthology Location Peak Road in Cheung Sha Wan International Limited, Yuen’s (HK) Co. No. 682 , district which is the heart of garment Ltd., Jakob Mueller Hong Kong China Cheung Sha Wan, Kowloon Year of Completion and fashion wholesaling industry. Limited and IP Nga Yan. 1998 The building fully benefi ts from its Gross Rentable Area (“GRA”) (sq.ft.) close proximity to manufacturers In 2006, the Manager has created 173,764 and wholesalers in the fashion and additional value to the building by No. of Carpark Spaces accessories industry. Based on this changing the top fl oor (33rd fl oor) 79 geographical advantage, tenants in catwalk venue to leaseable area. This Appraised Value (HK$ million) textile/garment industry accounted new leaseable area was leased to a 518.0 for 49.8% of the total leased area fashion jewelry manufacturer, thus Number of Tenancies while tenants in manufacturing/ generating additional revenue and 134 trading accounted for 40.4% of the distributable income for unitholders. total leased area. These two main The Manager has further changed a trade tenants occupied over 90.2% of previously customer service counter In 2007, after the completion of the the total leased area. which was portion of ground fl oor ground fl oor facelifting work, the lobby to leaseable area. This area Manager strives to establish the The distinctive competitive edge of was leased to a café operator, which building as a landmark in the locality the building would be its closeness to provides extra revenue. Finally, in year with premium building quality. It is the Container Terminal. Infrastructure end, the Manager has commenced anticipated that the tenant base and network such as Route 3 and the Tsing the facelifting work of the ground the rental income level can be uplifted Ma Bridge off ers convenient linkage to fl oor main lobby. releasing the potentials of the building both Mainland China and the airport. The building is well served by public to the fullest. transport and Lai Chi Kok MTR Station is just 5 minutes’ walk away.

Trade Mix by Gross Rentable Area Lease Expiry Profile of the Trendy Centre (As at 31 December 2006) (As at 31 December 2006)

47.8% Manufacturing/Trading 40% 2007 54.0% Textile/Garment 50% 27.3% Logistics 1% 2008 26.5% Electronic/Technology 5% 24.9% 2009 Others 4% 19.5% 0% 2010 and Beyond 0%

By Gross Rental Income By Gross Rentable Area

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Top 5 Tenants 1

Tenants Name Trade GRA (sq.ft.) % of GRA % of GRI

Asianthology International Limited Manufacturing/Trading 20,547 12.6% 9.2% Yuen’s (HK) Co. Ltd. Manufacturing/Trading 1,718 1.1% 4.1% Tenant of 32/F (name undisclosed) Manufacturing/Trading 6,849 4.2% 3.6% Jakob Mueller Hong Kong China Limited Manufacturing/Trading 5,633 3.4% 2.4% IP Nga Yan Others 708 0.4% 2.3%

Note 1: Top 5 tenants are measured based on tenant’s contribution to the gross rental income of the property as at 31 December 2006.

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Top 5 Tenants1

Tenants Name Trade GRA (sq.ft.) % of GRA % of GRI

Rhythm Industrial (Hong Kong) Limited Electronic/Technology 10,528 8.0% 7.5% Oasis Stores Limited Textile/Garment 10,528 8.0% 7.2% Ferroxcube Hong Kong Ltd. Electronic/Technology 5,545 4.2% 4.2% Cosme De Net Co. Ltd. Manufacturing/Trading 4,161 3.2% 3.5% YCH Logistics (Hong Kong) Limited Logistics 4,597 3.5% 3.4%

Note 1: Top 5 tenants are measured based on tenant’s contribution to the gross rental income of the property as at 31 December 2006. Note 2: The Manager has successfully acquired the entire 10th Floor and Units 2601-3 and Unit 2605 from independent third party vendors as stipulated in the announcements of Prosperity REIT dated 16 October 2006 and 28 November 2006 respectively.

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Prosperity REIT Portfolio Prosperity Center Property (portion of Prosperity Center, “Prosperity Center Property”)

Anchor tenants include Rhythm Prosperity Center Property is well Location located in the Kowloon East core Industrial (Hong Kong) Limited, Oasis No. 25 Chong Yip Street, business centre. The building is only Stores Limited, Ferroxcube Hong Kwun Tong, Kowloon Year of Completion 3 minutes’ walk to MTR Kong Ltd., Cosme De Net Co. Ltd. and 1999 Station. YCH Logistics (Hong Kong) Limited. Gross Rentable Area (“GRA”) (sq.ft.) 134,307 Prosperity Center Property shall In view of the high occupancy rate at No. of Carpark Spaces continuously benefi t from the upscale 97.4% as at 31 December 2006, the 105 neighboring redevelopment, new Manager has successfully acquired Appraised Value (HK$ million) establishment and the long term some further units at Prosperity 2 389.0 planning in Kowloon East as heralded Center which has not only further Number of Tenancies by the Urban Renewal Authority. strengthened its management 62 The gradual transformation of the control in the building, but also entire district into a commercial hub extended its footprint in the rising has attracted more potential quality Kowloon East district and brought tenants from outside districts to set forth more opportunities to increase up their offi ces. The value of the distributable income to unitholders. building is uplifted in an environment which is full of vibrancy and business potentials.

The building is built in modern curtain wall exterior with suffi cient loading/unloading bay facilities.

Trade Mix by Gross Rentable Area Lease Expiry Profile of the Prosperity Center Property (As at 31 December 2006) (As at 31 December 2006)

26.0% Manufacturing/Trading 27% 2007 27.0% Textile/Garment 14% 29.8% Logistics 16% 2008 28.7% Electronic/Technology 36% 44.2% 2009 Finance/Investment 3% 44.3% Others 4% 0% 2010 and Beyond 0%

By Gross Rental Income By Gross Rentable Area

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Prosperity REIT Portfolio New Treasure Centre Property (portion of New Treasure Centre, “New Treasure Centre Property”)

Due to the robust import and re- New Treasure Centre Property is Location located in San Po Kong, Kowloon, export growth in 2006, the demand No. 10 Ng Fong Street, which is predominantly an industrial for industrial space has increased San Po Kong, Kowloon Year of Completion area well served by various tremendously during the year. This is 1995 transportation, including MTR, buses favorably refl ected in the sustainable Gross Rentable Area (“GRA”) (sq.ft.) and public light buses. full occupancy rate and high rental 86,168 level at New Treasure Centre Property No. of Carpark Spaces The prestigious design of the main in 2006. As the economic growth in 22 lobby distinguishes itself from other China is optimistic in 2007, HK trade Appraised Value (HK$ million) older industrial buildings in the fi gures will continue to benefi t from 130.0 vicinity. The property is within fi ve the macro economic environment. Number of Tenancies minutes’ walk to Diamond Hill MTR The Manager is assured of a 55 Station. prosperous leasing situation in New Treasure Centre Property in 2007. The building has fl exible fl oor plate to cater the needs of diff erent tenants. Anchor tenants include Goodwell Property Management Ltd2, Union Apparel International Limited, Megahope Limited, Laision (China) Company Limited and Tina Garment Factory Limited,.

Trade Mix by Gross Rentable Area Lease Expiry Profile of the New Treasure Centre Property (As at 31 December 2006) (As at 31 December 2006)

59.9% Manufacturing/Trading 25% 2007 62.6% Textile/Garment 51% 30.6% Logistics 6% 2008 28.0% Electronic/Technology 6% 9.9% 2009 Others 12% 9.4% 0% 2010 and Beyond 0%

By Gross Rental Income By Gross Rentable Area

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Top 5 Tenants1

TENANTS NAME Trade GRA (sq.ft.) % of GRA % of GRI

Goodwell Property Management Ltd Others 10,018 11.6% 9.1% Union Apparel International Limited Textile/Garment 6,291 7.3% 6.8% Megahope Limited Manufacturing/Trading 2,496 2.9% 3.5% Laision (China) Company Limited Textile/Garment 2,496 2.9% 3.1% Tina Garment Factory Limited Textile/Garment 2,496 2.9% 3.1%

Note 1: Top 5 tenants are measured based on tenant’s contribution to the gross rental income of the property as at 31 December 2006. Note 2: Goodwell Property Management Ltd. is a connected person of Prosperity REIT within the meaning of the REIT Code.

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