Global Offering Important

IMPORTANT

If you are in any doubt about the contents of this Offering Circular, you should consult your stockbroker, B19(a) bank manager, solicitor, professional accountant or other independent professional adviser.

(a Hong Kong collective investment scheme authorised under section 104 of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)) Managed by RREEF China REIT Management Limited GLOBAL OFFERING

Number of Units under the Global Offering : 435,960,000 (subject to adjustment and the Over-allotment Option)

Number of Units under the Hong Kong Public : 43,596,000 (subject to adjustment and reallocation) Offering

Number of Units under the International : 392,364,000 (subject to adjustment, reallocation and the Offering Over-allotment Option)

Maximum Offer Price : HK$5.40 per Unit payable in full on application in Hong B8 Kong dollars, plus brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%, subject to refund

Stock code : 625

Joint Global Coordinators, Joint Bookrunners, Joint Lead Underwriters and Joint Listing Agents (in alphabetical order)

The Securities and Futures Commission of Hong Kong, The Stock Exchange of Hong Kong Limited and Hong Kong 10.10(u) Securities Clearing Company Limited take no responsibility for the contents of this Offering Circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Offering Circular. The Offer Price is expected to be determined by agreement among the Joint Global Coordinators (on behalf of the Underwriters), the Vendor and the Manager on the Price Determination Date. The Price Determination Date is expected to be Friday, 15 June 2007. The Offer Price will not be more than HK$5.40 and is currently expected to be not less than HK$5.00. Applicants for Hong Kong Public Offering Units are required to pay, on application, the Maximum Offer Price of HK$5.40 for each Hong Kong Public Offering Unit together with brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%, subject to refund if the Offer Price should be lower than the Maximum Offer Price. The Joint Global Coordinators (on behalf of the Underwriters), with the consent of the Vendor and the Manager, may reduce the indicative Offer Price range below that stated in this Offering Circular (which is HK$5.00 to HK$5.40 per Unit) at any time prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. In such a case, notices of the reduction in the indicative Offer Price range will be published in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese) not later than the morning of the day which is the last day for lodging applications under the Hong Kong Public Offering. If applications for Hong Kong Public Offering Units have been submitted prior to the day which is the last day for lodging applications under the Hong Kong Public Offering, then even if the indicative Offer Price range is so reduced, such applications cannot be subsequently withdrawn. In the event that the Joint Global Coordinators (on behalf of the Underwriters), the Vendor and the Manager cannot reach an agreement on the Offer Price, the Global Offering will not proceed. Further details are set forth in the sections headed “Structure of the Global Offering” and “How to apply for Hong Kong Public Offering Units” in this Offering Circular. The obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement to subscribe for, and to procure applications for the subscription of, the Hong Kong Public Offering Units, are subject to termination by the Hong Kong Underwriters if certain grounds arise prior to 8:00 a.m. on the day that trading in the Units commences on the Hong Kong Stock Exchange. Such grounds are set forth in the section headed “Underwriting” in this Offering Circular. It is important that you refer to that section for further details.

11 June 2007 B25 KEY INVESTMENT INFORMATION

— i — EXPECTED TIMETABLE(1)

Hong Kong Public Offering commences and WHITE and YELLOW ApplicationFormsavailablefrom ...... 9:00a.m.onMonday, 11 June 2007

Application lists open(2) ...... 11:45a.m.onThursday, 14 June 2007

Latest time to lodge WHITE and YELLOW ApplicationForms ....12:00noon on Thursday, 14 June 2007

Latest time to give electronic application instructions to HKSCC(3) ...... 12:00noon on Thursday, 14 June 2007

Applicationlistsclose ...... 12:00noon on Thursday, 14 June 2007

Expected Price Determination Date(4) ...... Friday,15June 2007

Announcement of the Offer Price, the level of indications of interest in the International Offering, the results of applications and allocations in the Hong Kong Public Offering, the basis of allocations of the Hong Kong Public Offering Units and the final number of Hong Kong Public Offering Units comprised in the Hong Kong Public Offering, Pool A and Pool B, respectively, to be published in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese) on or before ...... Thursday, 21 June 2007

Dispatch of Unit certificates in respect of wholly or partially successful applications on(5) ...... Thursday, 21 June 2007

Dispatch of refund cheques in respect of wholly or partially unsuccessful applications on(6)(7) ...... Thursday, 21 June 2007

Dealings in Units on the Hong Kong Stock Exchange to commence on ...... Friday,22 June 2007

Firstdistributionperiod...... ListingDateto31December 2007

First distribution payment date ...... Onorbefore29May2008

(1) All times refer to Hong Kong local time, except where otherwise stated. Details of the structure of the Global Offering, including conditions of the Hong Kong Public Offering, are set forth in the section headed “Structure of the Global Offering” in this Offering Circular.

(2) If there is a “black” rainstorm warning signal or a tropical cyclone warning signal number 8 or above in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, 14 June 2007, the application lists will not open on that day. See the section headed “How to apply for Hong Kong Public Offering Units — When to apply for the Hong Kong Public Offering Units — Effect of bad weather conditions on the opening of the application lists” in this Offering Circular for further information.

— ii — EXPECTED TIMETABLE(1)

(3) Applicants who apply for Hong Kong Public Offering Units by giving electronic application instructions to HKSCC should refer to the section headed “How to apply for Hong Kong Public Offering Units — When To Apply For The Hong Kong Public Offering Units — Electronic application instructions to HKSCC via CCASS” in this Offering Circular.

(4) The Price Determination Date for the purposes of the Global Offering is expected to be on or about Friday, 15 June 2007. Notwithstanding that the Offer Price may be fixed at below the Maximum Offer Price, applicants who apply for Hong Kong Public Offering Units must pay on application the Maximum Offer Price of HK$5.40 per Unit together with brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%. Such applicants will be refunded the surplus application monies, if any, in accordance with the section headed “Further Terms and Conditions of The Hong Kong Public Offering — Refund of Money — Additional Information” in this Offering Circular.

(5) Applicants who apply for 1,000,000 or more Hong Kong Public Offering Units by using the Application Forms and who have indicated in their Application Forms their wish to collect refund cheques or, in the case of applicants using WHITE Application Forms only, to collect Unit certificates in person may do so from the Unit Registrar, Tricor Investor Services Limited, from 9:00 a.m. to 1:00 p.m. on Thursday, 21 June 2007 (or any other dates notified by the Manager in South China Morning Post (in English) and the Hong Kong Economic Times (in Chinese) as the date of dispatch and availability of unit certificates and refund cheques). Applicants being individuals who opt for personal collection cannot authorise any other person to make collection on their behalf. Applicants being corporations who opt for personal collection must attend by personal authorised representatives each bearing a letter of authorisation from his corporation stamped with the corporation’s chop. Both individuals and authorised representatives (if applicable) must produce, at the time of collection, evidence of identity acceptable to the Unit Registrar. Uncollected unit certificates and refund cheques will be dispatched by ordinary post to the addresses specified in the relevant Application Forms at the applicants’ own risk. Details of the arrangements are set out in the section headed “How to apply for Hong Kong Public Offering Units” and “Further Terms and Conditions of the Hong Kong Public Offering” in this Offering Circular.

(6) Refund cheques will be issued in respect of wholly or partially unsuccessful applications, or in respect of successful applications if the Offer Price is less than the Maximum Offer Price.

(7) Part of the Hong Kong identity card number/passport number of an applicant, or, if there are joint applicants, part of the Hong Kong identity card number/passport number of the first-named applicant, provided by the respective applicant may be printed on the refund cheque, if any. Such data would also be transferred to a third party for refund purposes. The banker of the respective applicant may require verification of his/her Hong Kong identity card number/passport number before encashment of the refund cheque. Inaccurate completion of Hong Kong identity card number/passport number may lead to delay in encashment of or may invalidate the refund cheque.

Unit certificates are expected to be issued by Thursday, 21 June 2007 but will only B9 become valid at 8:00 a.m. on Friday, 22 June 2007, provided that (i) the Global Offering has become unconditional in all respects; and (ii) the right of termination as described in the section headed “Underwriting — Grounds for Termination by the Underwriters” in this Offering Circular has not been exercised.

Prospective investors of the Hong Kong Public Offering Units and the International Offering Units should note that the Underwriters are entitled to terminate their obligations under the Underwriting Agreements by notice in writing to be given by Joint Global Coordinators (acting on behalf of the Underwriters) upon the occurrence of any of the events set forth under “Grounds for Termination by the Underwriters” in the section headed “Underwriting” in this Offering Circular at any time prior to 8:00 a.m. (Hong Kong time) on the Listing Date (the “Termination Time”). Accordingly, any unit

— iii — EXPECTED TIMETABLE(1) certificate relating to the Hong Kong Public Offering Units and the International Offering Units issued by RREEF CCT or deposited into CCASS prior to the Termination Time will not constitute evidence of title to any Hong Kong Public Offering Units or International Offering Units until the Termination Time. Any person who trades the Units on the basis of publicly available allocation results prior to the Termination Time will do so entirely at their own risk.

— iv — CONTENTS

Page

KEY INVESTMENT INFORMATION EXPECTED TIMETABLE ...... ii CONTENTS ...... v OFFERING CIRCULAR SUMMARY ...... 1 THE GLOBAL OFFERING ...... 29 INFORMATION ABOUT THIS OFFERING CIRCULAR AND THE GLOBAL OFFERING ...... 33 PARTIES INVOLVED IN THE GLOBAL OFFERING ...... 37 RISKFACTORS ...... 40 USE OF PROCEEDS ...... 64 OWNERSHIP OF THE UNITS ...... 65 DISTRIBUTION POLICY ...... 66

INVESTMENT HIGHLIGHTS ...... 68

STRATEGY ...... 75

THE PROPERTY ...... 81

THE OFFICE PROPERTY MARKET IN BEIJING ...... 94

THE COMMERCIAL PROPERTY MARKET IN CHINA ...... 109

FINANCIAL INFORMATION AND FORECASTS SELECTED FINANCIAL INFORMATION ...... 119 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ...... 123 CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND FINANCIAL CONDITION ...... 136 PROFIT FORECAST ...... 141 STATEMENT OF DISTRIBUTION ...... 156 UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT ...... 158

STRUCTURE, MANAGEMENT AND AGREEMENTS STRUCTURE AND ORGANISATION OF RREEF CCT ...... 161 THE MANAGER ...... 163 THE PROPERTY MANAGER ...... 182 INFORMATION ABOUT THE VENDOR ...... 188 CORPORATE GOVERNANCE ...... 189 THE TRUST DEED ...... 198 MATERIAL AGREEMENTS AND OTHER DOCUMENTS ...... 215 CONNECTED PARTY TRANSACTIONS ...... 240 MODIFICATIONS, WAIVERS AND LICENSING CONDITIONS ...... 262

— v — CONTENTS

Page

OTHER INFORMATION TAXATION...... 265 UNDERWRITING ...... 269 STRUCTURE OF THE GLOBAL OFFERING ...... 275 EXPERTS ...... 284 HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS ...... 285 FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING 298

DEFINITIONS ...... 314

APPENDICES

APPENDIX I ACCOUNTANTS’ REPORT ...... I-1

APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY ...... II-1

APPENDIX III UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT . III-1

APPENDIX IV PROFIT FORECAST ...... IV-1

APPENDIX V LETTER FROM THE INDEPENDENT PROPERTY VALUER IN RELATION TO RENTAL INCOME ...... V-1

APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT . . VI-1

APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING ...... VII-1

APPENDIX VIII LETTER FROM THE PROPERTY CONSULTANT IN RELATION TO ITS BUILDING DUE DILIGENCE REPORT ...... VIII-1

APPENDIX IX OVERVIEW OF RELEVANT LAWS AND REGULATIONS IN THE PRC AND COMPARISON OF CERTAIN ASPECTS OF ITS PROPERTY LAWS AND THE LAWS OF HONG KONG ....IX-1

APPENDIX X GENERAL INFORMATION ...... X-1

— vi — OFFERING CIRCULAR SUMMARY

The following summary is derived from, and should be read in conjunction with, the full text of this Offering Circular. This section is only a general summary of the more detailed information contained elsewhere in this Offering Circular. You should read carefully the entire Offering Circular to understand RREEF CCT’s business, statement of distributions, the Trust Deed, the rights attached to the Units, and tax and other considerations that are important to your decision to invest in the Units. As an investment in the Units involves risks, you should pay particular attention to the section headed “Risk Factors” in this Offering Circular.

In making your investment decision, you should rely only on the information contained in this Offering Circular. RREEF CCT has not authorised anyone to provide you with information that is different from that contained in this Offering Circular.

Statements contained in this summary that are not historical facts may be forward- looking statements. Such statements are based on certain assumptions. While the Manager considers such assumptions to be reasonable, there are certain risks and uncertainties, which could cause actual results to differ materially from those projected. Under no circumstances should the inclusion of such information herein be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions by RREEF CCT, the Manager, the Trustee, the Vendor, the Underwriters or any other person or that these results will be achieved or are likely to be achieved. Capitalised terms not defined in this summary are defined in the section headed “Definitions” of this Offering Circular.

OVERVIEW OF RREEF CHINA COMMERCIAL TRUST

RREEF China Commercial Trust (“RREEF CCT”) is a real estate investment trust established to invest on a long-term basis in a diversified portfolio of institutional quality office and mixed-use properties (where a significant portion of the property has been designated for office use) located in major cities in China, Hong Kong and Macau.

China has been one of the world’s fastest growing economies in the past 25 years. The country’s nominal GDP ranking has moved from the 10th to the fourth position during the same period. In 2005, China was the world’s second largest economy behind the US in terms of purchasing power parity.

In tandem with its rapid economic growth, China’s commercial real estate sector, which includes office and mixed-use properties, has been experiencing strong growth in recent years. As the Chinese economy grows and modernises, the role of cities has become increasingly important. In 1980, only 19.0% of China’s population was urban. By 2005, this has increased to 43.0%. It is expected that this urbanisation trend will continue well into the future. The urbanisation trend is widespread across China and there are now 113 cities each with a population exceeding one million people. The dramatic transformation in the urban structure of the Chinese economy is driving strong demand for all forms of real estate, especially in major cities.

— 1 — OFFERING CIRCULAR SUMMARY

RREEF CCT will initially invest in a Premium Grade A office building situated in Chaoyang District, Beijing. The Property is located within Beijing’s Lufthansa area, one of the three established business districts within Beijing, and comprises two 25-storey towers totalling over 130,000 sq.m. of Gross Floor Area. As at 31 March 2007, the Property had an occupancy rate of approximately 94.2%. It currently has a diverse tenant base which includes major multinational corporations and domestic enterprises. Major tenants include the BMW Group, the Sony Group, Bank of China, the Cummins Group, Fuji-Xerox Co., Ltd, the Zurich Financial Services Group and the SK Group. The Property is considered as one of nine Premium Grade A office buildings in the entire Beijing market and the only Premium Grade A office building in the Lufthansa area. In terms of quality, the Property is considered amongst the four most superior buildings in Beijing. At the end of 2006, Beijing’s Grade A office buildings stock was estimated at 3.97 million sq.m. and of this, only approximately 20.7% is considered to be Premium Grade A.

The Lufthansa area submarket stands out as one of the most convenient locations with relative ease of access to Beijing Capital International Airport and the CBD. The Lufthansa area submarket has consistently outperformed the overall market in Beijing. For example, its vacancy rate has been consistently lower than the market average since 2001. At the end of 2006, the vacancy rate of Grade A office buildings in the Lufthansa area was approximately 7.6% — significantly lower than the Beijing market average of 12.0%. The construction moratorium that is expected to be imposed during the Summer Olympic Games has placed pressure on developers to complete projects before the end of 2007. The accelerated supply of office properties is expected to put pressure on the general office property market in Beijing. However, most new supply is outside the Lufthansa area. New supply in the Lufthansa area submarket accounts for only 13.8% of Beijing’s total new supply during the period leading up to the Olympics. There is no new Premium Grade A office building expected in the Lufthansa area submarket until at least 2009. In addition, the Property’s lease expiry profile is very defensive to the new supply. Only 4.4% of the Total Lettable Area will be subject to renewal in 2007, when most of the supply is expected to enter the market.

A key tenet of RREEF CCT is its focused strategy to invest in additional institutional quality office and mixed-use (where a significant component of the Property has been designated for office use) properties in China. The Manager intends to acquire properties which hold a competitive position in the market and are expected to maintain such a position over the long term. It is the Manager’s intention to actively pursue such acquisitions to provide the Unitholders with the benefits of diversification and long-term capital growth. Acquisition activities will be fully supported by the global resources of RREEF, with its established track record of pursuing and exercising acquisitions around the world. RREEF is the real estate and infrastructure investment management arm of the Deutsche Bank Group, and as at 31 March 2007 had more than US$78 billion in assets under management worldwide. Since 1975, RREEF has been an active manager of third-party funds which currently own assets around the world. RREEF has been active in Asia Pacific for almost a decade with real estate investments in China, Taiwan, Japan, Korea, Australia, Thailand and the Philippines. The

— 2 — OFFERING CIRCULAR SUMMARY

Manager believes that, with the support of RREEF, it will deliver to RREEF CCT and the Unitholders strong growth potential. As an experienced fiduciary, RREEF’s support to the Manager will use its best endeavour to provide the Unitholders with the highest standards of corporate governance, transparency and real estate funds management expertise.

KEY INVESTMENT HIGHLIGHTS OF RREEF CCT

The Manager believes that RREEF CCT presents the Unitholders with an attractive investment proposition.

Exposure to Institutional Quality Office and Mixed-Use Property in China

● China has been one of the world’s fastest-growing economies over the past 25 years and the growth is expected to continue. China’s real GDP growth averaged 9.8% per annum over the 25 years from 1980 to 2005, according to the Statistical Yearbook of China (2006). In 2005, China was the world’s second largest economy in terms of purchasing power parity, second only to the US, according to the World Fact Book (2006). A combination of factors including strong manufacturing activity and exports, increasing domestic wealth and rising consumption is expected to continue to drive this strong GDP growth in the future.

● China is urbanising at a rapid rate. In 2005, some 43.0% of China’s population resides in urban areas compared to just 20.0% in 1980, according to the Statistical Yearbook of China (2006). In 2005, there were 113 cities with a population exceeding one million people in China, according to the Yearbook of China’s Cities (2006). Knight Frank has identified 57 cities with a population of over one million and per-capita GDP above US$3,000. These 57 cities accounted for 14.0% of China’s population and generated 43.0% of the national GDP in 2005. Many of these cities are regional centres located in coastal regions with heavily concentrated economic activities. Increasing urbanisation will cause these cities to continue to grow into more economically developed cities. This dramatic transformation in the urban structure underpinning the Chinese economy will continue to drive the strong demand for residential and commercial real estate in these cities.

● A shift in the urban economics towards service-based activities and the continuing expansion of domestic and multinational businesses are expected to drive demand for office space in China. This transformation underpins the strong growth in demand for quality office properties, which is expected to continue.

● Institutional quality space is in high demand and supply is limited. Increased service-based activities, coupled with the relatively limited volume of institutional quality office space which has the appropriate specification or is otherwise suitable for increasingly demanding tenants, is expected to drive continued strong performance of the office real estate sector in China. To capture this growth, the Manager’s investment strategy will focus on investing in institutional quality office and mixed-use properties in

— 3 — OFFERING CIRCULAR SUMMARY

major cities within the most economically developed areas of China, such as the Bohai Rim, the Yangtze River Delta Region, and the Pearl River Delta Region. The Manager will seek to acquire properties, which are expected to maintain a competitive position over the long term.

RREEF CCT is supported by RREEF — one of the world’s leading real estate investment managers

● RREEF CCT will be managed by the Manager, RREEF China REIT Management Limited, which is 80.0% owned by Deutsche Asia Pacific Holdings Pte Ltd. (an indirect wholly owned subsidiary of Deutsche Bank AG) through its real estate investment management arm, RREEF. The Manager is part of RREEF, the real estate and infrastructure investment management arm of the Deutsche Bank Group and one of the world’s leading real estate investment managers. RREEF was ranked by the Watson Wyatt’s Alternatives Survey in September 2006 as the largest alternative investments manager in the world. RREEF manages assets across the risk and reward spectrum, from core to opportunistic real estate, and from publicly-traded real estate securities to infrastructure assets and as at 31 March 2007 had more than US$78 billion of real estate and infrastructure assets under management.

● RREEF is experienced in investing in Asia markets and currently manages assets in numerous countries around the world. Since its founding, RREEF has successfully entered numerous markets across North America, Europe and Asia Pacific. RREEF has been an active investor in Asia Pacific for almost a decade and has completed real estate investments in China, Taiwan, Japan, Korea, Australia, Thailand, Hong Kong and the Philippines. Today, RREEF has a broad geographical footprint in the region, spanning six offices. The Manager will have access to the resources of RREEF in the region, and most importantly, be supported by RREEF’s regional acquisitions professionals with an established record in investing in Asia.

● RREEF is an experienced professional fiduciary. Since 1975, RREEF has been an active manager of third-party funds in the capacity of a fiduciary and currently manages investments for its institutional and private clients worldwide. In the Manager’s view, this established track record should provide investors of RREEF CCT with the highest standard of real estate funds management expertise, corporate governance and transparency.

● The Manager’s operations are supported by the robust infrastructure of the Deutsche Bank organisation. Certain functions like internal accounting, human resources, information technology and inhouse legal will be supported by and/or outsourced to various relevant departments within the Deutsche Bank Group. It is the Manager’s view that Deutsche Bank Group’s existing robust infrastructure will provide the Manager with capability and resources that will be superior to internally built infrastructure.

— 4 — OFFERING CIRCULAR SUMMARY

Quality Property with Attractive Investment Characteristics

● Direct exposure to Beijing’s strong economic growth. RREEF CCT will initially provide the Unitholders with direct exposure to Beijing Gateway Plaza, a Premium Grade A office building in Beijing. Beijing is China’s capital and its second largest city after Shanghai in terms of GDP. Over the next decade, Beijing’s GDP is expected to increase by 7.0% to 9.0% per annum. With China’s accession to WTO, corporations are expected to continue to set up or expand their business operations in Beijing. Consequently, Beijing’s office market is expected to continue to grow in line with the economy.

● Beijing’s unique competitive advantages. Beijing has its distinct competitive advantages which are likely to deliver more sustainable economic development compared with other Chinese cities. An example is Beijing’s unrivalled talent pool. Beijing has the largest number of institutions of higher education and scientific research in the country. In addition, being the country’s capital city, Beijing enjoys additional status. A large number of domestic and foreign corporations are headquartered in Beijing due to its proximity to financial, monetary and industrial policy makers.

● Premium Grade A office building. The Property is one of only nine Premium Grade A office buildings in Beijing and is the only Premium Grade A office building in its submarket, the Lufthansa area, according to Knight Frank. The Lufthansa area is not expected to see any additional Premium Grade A office building until at least 2009. In overall market terms, of the nine Premium Grade A office buildings, just three are considered to be of superior quality to the Property, according to Knight Frank. Demand for Premium Grade A office buildings continues to exceed supply. As at 31 March 2007, the Property’s occupancy rate was approximately 94.2%. Demonstrating the Property’s premium quality, it achieved this occupancy rate within 19 months after its completion.

● Prime location. The Property is located in the Lufthansa area in Chaoyang District, which is one of the major commercial districts in Beijing. It enjoys an improving transport infrastructure and ease of access to Beijing Capital International Airport. The Lufthansa area is expected to have a limited supply of new office space. New supply in the Lufthansa area in 2007 is expected to account for only 13.8% of Beijing’s total new supply during the period. Furthermore, the quality of the new supply expected to be available prior to 2009 in the district is anticipated to be inferior to Beijing Gateway Plaza in terms of technical specifications and location, according to Knight Frank.

● High quality tenant base. The Property’s tenants currently include a number of major multinational companies and domestic enterprises, including: the BMW Group; the Sony Group; Bank of China; the Cummins Group; Fuji-Xerox Co., Ltd; the Zurich Financial Services Group and the SK Group. The Manager believes that this high quality tenant mix will offer RREEF CCT a reliable and stable income stream.

● Defensive tenancy expiry profile. Beijing is expected to see a significant supply of new office space in 2007. In that year, only a small percentage (4.4%) of the Property’s leases, based on Total Lettable Area, are due to expire. Given the limited amount of Premium Grade A office buildings supply, especially in the Lufthansa area where there will not be a Premium Grade A office building until at least 2009, the Property’s overall rental income is not likely to come under great pressure, according to Knight Frank.

— 5 — OFFERING CIRCULAR SUMMARY

● Minimal forecast capital expenditure requirement. With construction completed in 2005, the Manager and the Independent Property Consultant do not anticipate any significant capital expenditure requirements in the near term.

● Professional property management. The Property is and will continue to be managed by a professional property manager — Beijing Jones Lang LaSalle Property Management Services Co., Ltd. In China, Jones Lang LaSalle is accredited by the Ministry of Construction as a “Grade 1 Property Manager” on 1 March 2005.

The Property

Upon completion of the Global Offering, RREEF CCT will own the Property except the staff canteen and the civil defence shelter and please see the sections headed “The PropertyStaff Canteen” and “The PropertyCivil Defence Shelter” respectively for details.

The Property is a Premium Grade A office building situated at the junction of East Third Ring Road and Airport Expressway, and is located within the traditional commercial and office area known as the Lufthansa area in Beijing. Completed on 26 August 2005, the Property comprises two 25-storey towers connected by a three-storey atrium as well as three underground floors with a 675-space car park, plant rooms and ancillary facilities. The atrium is currently occupied by a branch office of Bank of China, an executive club, restaurants, a BMW Group showroom and a cafe which services tenants in the Property. Facilities including a swimming pool, gymnasium and sauna, representing 1.42% of the total Gross Floor Area, are under construction. The Manager expects such facilities to be completed by July 2007.

According to the Property’s Building Ownership Certificate, it has a Gross Floor Area of 130,488.1 sq.m. comprising 102,735.6 sq.m. above ground, 27,012.4 sq.m. below ground and 740.1 sq.m. for plant rooms and ancillary facilities. As required under PRC laws and regulations, there is a civil defence shelter in the basement of the Property with a Gross Floor Area of 8,604.8 sq.m., which belongs to the government. Through the Predecessor Property Company, the HK Property Company has obtained a permit to use the civil defence shelter for the purpose of car park space from 20 November 2006 to 19 November 2007. The HK Property Company shall have the right to apply for the renewal of the use of the civil defence shelter when the aforesaid period expires. The total Gross Floor Area (including the space comprised in the civil defence shelter) of 139,092.8 sq.m. has been configured for use in the following manner: 102,735.6 sq.m. of office and retail space as well as 36,357.2 sq.m. of car park space and space used for plant rooms and ancillary facilities.

As at 31 March 2007, the Property had an occupancy rate of approximately 94.2%. The Property enjoys a diverse tenant base with 85 leases as at 31 March 2007 representing tenants from a wide range of business sectors. The 10 largest tenants (in terms of Rental Income for the month ended 31 March 2007) contributed approximately 53.1% of Total Rental Income from the Property for the period. In addition, during the same period, no single tenant accounted for more than 10.2% of Total Rental Income from the Property.

The Property Manager is Beijing Jones Lang LaSalle Property Management Services Co., Ltd., which is independent from RREEF CCT and its connected persons.

— 6 — OFFERING CIRCULAR SUMMARY

The following table sets forth certain information with respect to the Property as at 31 March 2007.

No. of Year of original Expiry of Gross Floor Area(1) Total Lettable Area car park spaces construction(2) land use right Occupancy rate(3)

(sq.m.) (sq.m.)

139,092.8 106,393.8 675 2005 2053 94.2%

Notes: (1) This comprises the Gross Floor Area of 130,488.1 sq.m. as stated in the Building Ownership Certificate for the Property and 8,604.8 sq.m. of Gross Floor Area forming the civil defence shelter in the basement of the Property, for which the HK Property Company (through the Predecessor Property Company) has obtained a permit from the government for use as car park space from 20 November 2006 to 19 November 2007. The HK Property Company shall have the right to apply for the renewal of the use of the civil defence shelter when the aforesaid period expires.

(2) Original construction refers to the year in which the Property received its certificate of completion.

(3) As at 31 March 2007 and not including car park spaces.

Net Property Income

The Property generated Net Property Income of approximately HK$19.0 million and HK$134.3 million for the period from 1 September 2005 to 31 December 2005 and the year ended 31 December 2006, respectively.

Valuation

The Appraised Value and Acquisition Value of the Property are set out in the following table:

Based on the Minimum Based on the Maximum Offer Price of HK$5.00 Offer Price of HK$5.40

Value per Acquisition Value per Acquisition Appraised Value as at 31 March 2007 sq.m.(1) Value(2) Discount sq.m.(1) Value(2) Premium

(HK$ million) (HK$) (HK$ (%) (HK$) (HK$ (%) million) million)

3,978 35,923.1 3,822 3.9 37,746.6 4,016 1.0

Note: (1) Based on Total Lettable Area of 106,393.8 sq.m.

(2) The Acquisition Value represents the agreed acquisition value for the Property for the purpose of computing the purchase consideration for the BVI Property Company Share under the Share Purchase Agreement.

For further details, see the “Independent Property Valuer’s Valuation Report” in Appendix VI to this Offering Circular.

— 7 — OFFERING CIRCULAR SUMMARY

Tenant Profile

The major tenants of the Property are companies engaged in a diverse range of businesses spanning: industrial goods; banking and finance; IT and software; professional and business services; automotive; electronic goods and other sectors. Tenants include well- known companies such as the BMW Group; the Sony Group; Bank of China; the Cummins Group; Fuji-Xerox Co., Ltd; the Zurich Financial Services Group and the SK Group. Other notable tenants in the Property include John Deere, POSCO, Doosan, Qatar Airways and United Airlines.

The following table sets forth information as at 31 March 2007 on the 10 largest tenants of the Property in terms of the Rental Income for the month ended 31 March 2007:

Percentage Percentage of Total of Total Lettable Lettable Rental Name Business Sector Lease Expiry Date Area Area Income(1) (sq.m.) (%) (%)

Bank of China, Beijing Banking and 7 September 2015 5,875.7 5.5 10.2 Chaoyang Sub-branch finance BMW Group(2) Automotive 31 October 2011 12,739.6 12.0 9.9 Sony Group(3) Electronic goods 31 October 2008 6,414.6 6.0 6.2 SK Group(4) Conglomerate 31 May 2009 5,704.7 5.3 5.6 Cummins Group(5) Industrial goods 30 November 2008 4,586.1 4.3 5.2 Hurray Holdings Co., Ltd. IT and software 31 October 2009 4,803.6 4.5 4.7 Fuji-Xerox Co., Ltd.(6) Industrial goods 31 May 2008/ 4,485.3 4.2 4.3 31 July 2008 Zurich Financial Services Banking and 31 January 2011 2,286.3 2.2 2.4 Group(7) finance Heng An Standard Life Banking and 31 January 2011 2,286.3 2.2 2.4 Insurance Co., Ltd. finance NTT Group(8) IT and software 31 March 2009 2,286.3 2.2 2.2 Subtotal(9) 51,468.6 48.4 53.1 Other tenants 48,774.0 45.8 46.9 Vacant space 6,151.2 5.8 N/A Total 106,393.8 100.0 100.0

Notes:

(1) Excluding income derived from the leasing of advertising spaces in the Property.

(2) Comprising BMW China Automotive Trading Ltd., BMW Brilliance Automotive Ltd. and BMW Beijing Office.

(3) Comprising Sony China Ltd. and Sony Hong Kong Limited Beijing Office.

(4) Comprising SK Communications, SK Corporation Beijing Representative Office, SK Engineering & Construction and Hong Kong SK (China) Limited Beijing Office.

(5) Comprising Cummins (China) Investment Co., Ltd. and Cummins Engine Co., Ltd. Beijing Representative Office.

— 8 — OFFERING CIRCULAR SUMMARY

(6) Comprising Fuji-Xerox Industrial Development (Shanghai) Co., Ltd, Shanghai Representative Office. Three leases have been signed and one of the leases is scheduled to expire on 31 July 2008 (account for 1.1% of the Total Lettable Area and 1.1% of Rental Income for the month ended 31 March 2007 respectively), and the other two leases are scheduled to expire on 31 May 2008 (these two leases together account for 3.1% of the Total Lettable Area and 3.2% of Rental Income for the month ended 31 March 2007 respectively).

(7) Comprising Zurich Insurance Company Beijing Representative Office and Zurich Insurance Company Beijing Office, Beijing Best Harmonious Insurance Brokers Co., Ltd and Zurich Technical and Consulting Services (Beijing) Co., Ltd. Leases in relation to Zurich Technical and Consulting Services (Beijing) Co. Ltd. and Zurich Insurance Company Beijing Office are scheduled to expire on 31 January 2011 (together account for 1.5% of the Total Lettable Area and 1.6% of the Total Rental Income for the month ended 31 March 2007 respectively). Lease in relation to Zurich Insurance Company Beijing Representative Office is to expire on 31 January 2011 (accounting for 0.02% of the Total Lettable Area and 0.02% of the Total Rental Income for month ended 31 March 2007 respectively). Lease for Beijing Best Harmonious Insurance Brokers Co., Ltd is to expire on 31 January 2011 (accounting for 0.7% of the Total Lettable Area and 0.8% of the Total Rental Income for month ended 31 March 2007 respectively).

(8) Comprising Nippon Telegraph and Telephone Corporation Beijing Representative Office, NTT Communications Beijing Office, NTT Docomo Inc., Beijing Office and NTT Facilities Inc., Beijing Office.

(9) None of the top-ten tenants are connected parties of RREEF CCT.

Tenant Mix

The charts below highlight the mix of tenants within the Property by their principal business, in terms of their attributable percentages of the Total Rental Income and Total Lettable Area for the month ended and as at 31 March 2007. As indicated, the largest group of tenants consists of businesses operating in the industrial goods sector, which accounted for approximately 23.9% of the Total Rental Income of the Property. Tenants in the banking and finance sector, the IT and software sector, the professional and business services sector and automotive sector accounted for approximately 19.2%, 14.3%, 10.1% and 9.9% of the Total Rental Income respectively.

By Total Rental Income(1) By Total Lettable Area(2)

Banking and Others Banking and finance 11.0% finance Others 12.4% 14.6% Automotive 19.2% 9.9% Professional and Automotive business services 9.8% 12.7% Professional and business services IT and Software 10.1% 14.3% IT and Software 14.1% Conglomerate Industrial goods Industrial goods 5.4% 23.9% 24.4% Electronic goods Conglomerate 6.2% 5.6% Electronic goods 6.4%

Notes: (1) Excluding income derived from the leasing of advertising spaces in the Property.

(2) Excluding vacant space.

— 9 — OFFERING CIRCULAR SUMMARY

RISK FACTORS

RREEF CCT faces certain risks, many of which are beyond its control. These risks can be categorised into: (a) risks relating to RREEF CCT’s organisation and operations; (b) risks relating to investments in real estate; (c) risks relating to the Property; (d) risks relating to the PRC; and (e) risks relating to an investment in the Units.

Risks relating to RREEF CCT’s Organisation and Operations

● RREEF CCT will, initially, operate principally through the HK Property Company and its ability to make distributions to the Unitholders is dependent on the financial performance and position of the HK Property Company.

● The amount that RREEF CCT may borrow is limited and such limit may be exceeded in the event of any downward revaluation of assets.

● RREEF CCT will depend on external sources of funding which are beyond its control to finance capital expenditure and growth and faces risks associated with debt financing.

● The Manager’s operations are subject to regulation and its licensing conditions.

● The Manager may not be able to achieve its key objectives for RREEF CCT and its stated strategy for accomplishing such objectives, as outlined in the section headed “Strategy” in this Offering Circular, may change.

● Decreases in property values as a result of the annual revaluation of RREEF CCT’s properties could result in a decrease in the annual consolidated net profit of RREEF CCT for that year and may also trigger certain events of default which may lead to adverse consequences under the Facility Agreement.

● RREEF CCT depends on certain key personnel of the Manager, and the loss of any key personnel may adversely affect its business, financial condition and results of operations.

● There are potential conflicts of interests between RREEF CCT, the Manager and affiliates of the Manager arising from outsourcing, which includes general office management, human resources, inhouse legal, investor relations, information technology, marketing, internal audit, and origination and execution of acquisitions, to the Deutsche Bank Group and the client investment allocation policy within RREEF.

● The allocation of property acquisition investment opportunities to clients or managed funds according to RREEF’s client investment allocation policy may have an impact on the growth of RREEF CCT.

● RREEF CCT’s success depends on the ability of the Manager and the Property Manager to manage the Property. Failure to manage the Property in a prudent manner may have a material adverse effect on the value of the Property and RREEF CCT’s business, financial condition and results of operations.

— 10 — OFFERING CIRCULAR SUMMARY

● A downturn in the business of its tenants may have an adverse effect on RREEF CCT’s business, financial condition and results of operations.

● The loss of key tenants could have an adverse effect on RREEF CCT’s business, financial condition and results of operations.

● As at 31 March 2007, leases representing 4.4%, 26.4% and 36.4% of the Total Lettable Area of the Property are scheduled to expire in the years ending 31 December 2007, 2008 and 2009, respectively. RREEF CCT may be unable to renew leases or re-let space as leases expire.

● RREEF CCT faces competition.

● An increased rate of withholding tax to 20.0%, which would apply from 1 January 2008 unless the PRC State Council specifically reduces this withholding tax rate. HK Property Company could be deemed as having a permanent establishment in the PRC and be subject to income tax in the PRC based on its deemed or actual profits, either of which could have a material adverse effect on RREEF CCT’s income.

● RREEF CCT is a newly established entity which does not have an established operating history for prospective investors to rely on in making an investment decision.

● RREEF, the real estate and infrastructure investment management arm of the Deutsche Bank Group, has not previously managed a REIT constituted in Hong Kong that invests in properties in the PRC.

Risks relating to Investments in real estate

● There are general risks associated with investments in real estate.

● RREEF CCT may be adversely affected by the illiquidity of property investments.

● RREEF CCT may suffer material losses in excess of insurance proceeds and/or may not be able to procure appropriate insurance cover.

● The Property may be acquired compulsorily.

● RREEF CCT could incur significant costs or liability related to environmental matters.

— 11 — OFFERING CIRCULAR SUMMARY

Risks relating to the Property

● RREEF CCT presently relies on the Property for all of its Net Property Income. This exposes RREEF CCT to concentration risk and risks associated with the cyclical economic and real estate conditions in Beijing and the PRC as a whole.

● The Property has a limited operating history.

● The attractiveness of the Property may be affected if other commercial districts in Beijing develop or if another international airport is built in Beijing.

● 21 of the 85 leases as at 31 March 2007 give the relevant tenants a right to terminate their tenancies without compensation upon prior written notice.

● Failure of registration of three leases may adversely affect the HK Property Company’s ability to repatriate the relevant rental income offshore.

● The appraisal of the Property is based on various assumptions and the price at which RREEF CCT is able to sell the Property may be different from the Appraised Value or initial acquisition value of the Property.

● The market rent for the Property is expected to experience negative growth rates in 2007 and 2008 and the average vacancy rate is expected to rise in 2007.

● The due diligence exercise on the building and equipment may not have identified all material defects, breaches of laws and regulations and other deficiencies.

● Losses or liabilities from latent building or equipment defects may adversely affect earnings and cash flow.

● A majority of the Property’s leases in terms of Total Lettable Area are for a term of three years, which exposes the Property to significant rates of lease expiries in many years.

● Any recurrence of severe acute respiratory syndrome, or SARS, avian influenza (H5N1 virus) or another widespread public health problem could adversely affect RREEF CCT’s business, financial condition and results of operations.

— 12 — OFFERING CIRCULAR SUMMARY

Risks relating to the PRC

● The PRC property market is volatile.

● The PRC’s economic and other policies could affect RREEF CCT’s business.

● There is uncertainty about the quantum of land grant premium which RREEF CCT will have to pay and additional conditions which may be imposed if the Manager decides to seek an extension of the land use rights for the Property in 2053.

● Changes in foreign exchange regulations may adversely affect RREEF CCT’s ability to distribute income to the Unitholders and/or the ability of RREEF CCT to make repayments under the Facility.

● Fluctuations in the value of the Renminbi could adversely affect the value of distributions paid in respect of the Units in Hong Kong dollars and/or the ability of RREEF CCT to make repayments under the Facility.

● Interpretation of PRC laws, tax rules and regulations involves uncertainty.

● Private ownership of real estate in the PRC is at an early stage of development.

Risks relating to an Investment in the Units

● The Units have never been publicly traded and the Global Offering may not result in an active or liquid market for the Units.

● An investment in the Units presents taxation risk.

● The REIT Code has a limited history and the application and interpretation of its provisions may be uncertain.

● The Unitholders will be effectively subordinated to all existing and future claims of creditors of the HK Property Company.

● The Unitholders have no right to require the redemption of their Units.

● The price of the Units may decline after the Global Offering.

● The forward-looking information in this Offering Circular may prove to be inaccurate.

● Insufficient cash flows at the level of the HK Property Company or RREEF CCT will adversely affect RREEF CCT’s ability to pay or maintain distributions to the Unitholders.

● Property yield on real estate to be held by RREEF CCT is not equivalent to the yield on the Units.

— 13 — OFFERING CIRCULAR SUMMARY

● The number of the Units available for future sale, including future sales of the Units by Mr. Tin Lik, or other parties, could adversely affect the market price of the Units.

● The NAV per Unit will be diluted if further issues are priced below the NAV.

● The Takeovers Code does not apply to Unit acquisitions and there may be limited information in relation to the interests held by significant holders and other connected persons of RREEF CCT.

● Certain rights in relation to the Units in which a person has an interest or is deemed to have an interest may be suspended under the provisions of the Trust Deed.

● Accounting standards in Hong Kong are subject to change.

● The Units may be delisted from the Hong Kong Stock Exchange.

ACQUISITION ARRANGEMENTS

On 4 June 2007, the Manager and the Trustee (as purchaser for and on behalf of RREEF CCT) entered into a Share Purchase Agreement with the Vendor (as vendor), pursuant to which the Trustee will acquire the entire issued capital of the BVI Property Company.

The purchase consideration for the BVI Property Company Share is based on the Acquisition Value, with an adjustment (on bases agreed between the Manager and the Vendor) for the net current assets/current liabilities of the Companies on Completion, plus the Adjustment Sum.

The “Adjustment Sum” refers to the following:

(i) the aggregate amount equivalent to the Offer Price multiplied by 484,400,000 Units minus the sum of HK$2,422,000,000, which is the aggregate amount equivalent to the Minimum Offer Price of HK$5.0 multiplied by 484,400,000 Units; minus

(ii) (a) a sum of HK$22 million, which is equivalent to the amount of the up-front fee for the Facility and (b) the Issue Cost.

For further details, see the section headed “Material Agreements and Other Documents — Share Purchase Agreement” in this Offering Circular.

— 14 — OFFERING CIRCULAR SUMMARY

Structure

The following diagram depicts the ownership structure of RREEF CCT and the Property, and the primary structural and contractual relationships between RREEF CCT, the Unitholders, the Manager, the Trustee and the Property Manager upon completion of the Global Offering (before any exercise of the Over-allotment Option). Thereafter, percentages of unitholdings will vary according to whether the Over-allotment Option is exercised, and whether it is exercised in whole or in part.

Unitholders Mr. Tin Lik 10.0% RREEF through Deutsche Asia Public/Institutional investors 90.0% Pacific Holdings Pte Ltd Mr. Tin Lik Investment in 80.0% 20.0% RREEF CCT

Base Fee and Variable Fee Trustee fees Manager RREEF CCT Trustee Management Holds assets on trust services(1) for Unitholders

Ownership of shares 100.0%

BVI Property Company (BVI)*

Ownership of shares Fees and leasing 100.0% commissions HK Property Property Manager Company (Hong Kong)* Tenancy management and other 100.0% services(2)

The Property

Legend: Payments and services pursuant to contractual relationships under the Trust Deed and the Property Management Agreement Distributions/dividends Unitholding/shareholding * Place of incorporation

— 15 — OFFERING CIRCULAR SUMMARY

Notes: (1) The Manager will provide management services to RREEF CCT and will receive a Base Fee and a Variable Fee from RREEF CCT. See the section headed “The Manager — Fees, Costs and Expenses of the Manager” in this Offering Circular.

(2) The Property Manager will provide tenancy management services (including leasing services), property management services, rental collection and repatriation services and entity accounting services to the HK Property Company pursuant to the Property Management Agreement and will receive certain fees and leasing commissions. See the section headed “Material Agreements and Other Documents — Property Management Agreement” in this Offering Circular.

THE MANAGER

RREEF is the real estate and infrastructure investment management arm of the Deutsche [RC8.3] Bank Group, and is one of the world’s leading real estate investment managers. RREEF acquires and manages investments in real estate, real estate securities and infrastructure projects on behalf of its institutional and private clients worldwide. RREEF was ranked by the Watson Wyatt’s Alternatives Survey in September 2006 as the world’s largest alternative investments manager. Its product offering is global and comprehensive, including core, value-added and high yield property investments as well as investments in publicly traded real estate securities, structured products and infrastructure investments. As at 31 March 2007, RREEF had more than US$78 billion of real estate and infrastructure assets under management.

The Manager is licensed by the SFC to conduct the regulated activity of asset management, as required by the REIT Code. The Manager is responsible for RREEF CCT’s investment and financing strategies, asset enhancement, acquisition and disposal policies and overall management of RREEF CCT’s properties. A number of these functions such as internal accounting, human resources, information technology and inhouse legal will be outsourced to RREEF and Deutsche Bank Group (for the full list of outsourced functions to the Deutsche Bank Group, please refer to the section headed “The Manager — Organisational and Reporting Structure of the Manager”). The Manager is therefore supported by the robust infrastructure of the Deutsche Bank organisation. See the section headed “The Manager” in this Offering Circular for further details about the Manager. Please also see the section headed “Risk Factors — Risk Relating to RREEF CCT’s Organisation and Operations” in this Offering Circular for the associated risks or potential conflicts of interests.

— 16 — OFFERING CIRCULAR SUMMARY

CORPORATE GOVERNANCE

Corporate governance policies and procedures have been established to promote the operation of RREEF CCT in a transparent manner and with internal checks and balances. The Trustee and the Manager are independent of each other, with their respective roles in relation to RREEF CCT set out in the REIT Code and the Trust Deed. The Manager is required by the REIT Code to act in the best interests of the Unitholders, to whom the Trustee also owes fiduciary duties.

The Board comprises nine members, three of whom are INEDs.

Policies and procedures have been established for, among other things, monitoring and supervising dealings in the Units by Directors and the Manager. For further details, see the section headed “Corporate Governance” in this Offering Circular.

THE TRUSTEE

The Trustee of RREEF CCT is HSBC Institutional Trust Services (Asia) Limited. The Trustee is a wholly-owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited. The Trustee is a company incorporated in Hong Kong and registered as a trust company under section 77 of the Trustee Ordinance. The Trustee is qualified to act as a trustee for collective investment schemes authorised under the SFO pursuant to the REIT Code. As at the Latest Practicable Date, the Trustee had a paid-up share capital of HK$50.0 million.

For details of the Trustee’s obligations under the Trust Deed and the REIT Code, see the section headed “The Trust Deed” in this Offering Circular.

THE PROPERTY MANAGER

The Property Manager is Beijing Jones Lang LaSalle Property Management Services Co., Ltd., which is independent from RREEF CCT and its connected persons. Under the Property Management Agreement, the Manager has appointed the Property Manager to manage, operate, maintain and market the Property. The Property Manager is responsible, with the oversight of the Manager, for providing tenancy management services (including leasing services), property management services, rental collection and repatriation services and entity accounting services to the HK Property Company.

For further information on the Property Manager, see the section headed “The Property Manager” in this Offering Circular.

— 17 — OFFERING CIRCULAR SUMMARY

SUMMARY HISTORICAL FINANCIAL INFORMATION

The following tables set forth summary financial information on the operating results of Beijing Gateway Plaza (BVI) Limited, Beijing Bestride Estate Development Company Limited and HK Gateway Plaza Company Limited (collectively referred to as “Predecessor Group”) since 1 September 2005 (which was the date of commencement of the first lease for the Property) and prior to the completion of the acquisition of the Property by RREEF CCT. No historical information for RREEF CCT is presented because it has not undertaken any corporate activity since its formation on 28 May 2007.

The historical income statement data for the period from 1 September 2005 to 31 December 2005 and the year ended 31 December 2006 (the “Relevant Period”), the balance sheet data as at 31 December 2005 and 31 December 2006, and the cash flow data for the Relevant Period have been derived from the audited financial information and related notes thereto included in Appendix I to this Offering Circular. Such audited financial information and the related notes thereto have been prepared in accordance with Hong Kong GAAP and have been audited by KPMG, the reporting accountants.

The historical financial information for the operating results of the Predecessor Group included below and set forth in Appendix I to this Offering Circular is not necessarily indicative of RREEF CCT’s future performance. Investors should read the following summary financial information together with “The Property”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Certain Factors Affecting Future Results of Operations and Financial Condition” and the historical financial statements for the Predecessor Group prior to the completion of the acquisition of the Property by RREEF CCT and related notes thereto set forth in Appendix I to this Offering Circular.

— 18 — OFFERING CIRCULAR SUMMARY

COMBINED INCOME STATEMENTS

Period from Year ended 1 September 2005 to 1 January 2006 to 31 December 2005 31 December 2006

(HK$) (HK$)

Turnover: Rental income ...... 27,773,746 181,455,771 Car park income...... 71,077 1,510,142 Business tax...... (1,392,242) (9,148,296)

Total turnover ...... 26,452,581 173,817,617 ------

Direct costs Commission to leasing agents ...... (362,934) (13,464,465) Utilities...... (1,980,081) (1,678,711) Promotional expenses ...... (1,136,049) (6,560,618) Staff costs...... (703,979) (2,630,946) Depreciation ...... (67,378) (205,550) Stamp duty...... (477,926) (1,567,619) Urban real estate tax...... (2,505,510) (12,752,906) Property miscellaneous expenses ...... (226,986) (676,313)

Total direct costs...... (7,460,843) (39,537,128) ------

Operating profit ...... 18,991,738 134,280,489 Administrative expenses ...... (953,747) (7,211,883) Other income ...... 28,131 26,939,028 Finance costs...... (10,224,210) (72,602,234)

Profit before increase in fair value of investment property .. 7,841,912 81,405,400 Increase in fair value of investment property...... 2,099,052,128 142,795,205

Profit before taxation ...... 2,106,894,040 224,200,605 Income tax1...... (695,352,991) 494,129,247

Profit for the period/year...... 1,411,541,049 718,329,852

Note:

1. Income tax related to change in fair value of investment property was HK$514,710,303 (2005: HK$(692,687,203)).

— 19 — OFFERING CIRCULAR SUMMARY

COMBINED BALANCE SHEETS

As at As at 31 December 2005 31 December 2006 HK$ HK$

Non-current assets Investment property...... 3,452,000,000 3,780,000,000 Other fixed assets ...... 884,874 821,980

3,452,884,874 3,780,821,980 ------

Current assets Accounts receivable, deposits and prepayments and other receivables...... 8,207,434 16,406,269 Deferred assets...... 4,582,536 523,930 Amounts due from related companies ...... 3,181,473 7,258,876 Cash and cash equivalents...... 22,279,494 840,166,296

38,250,937 864,355,371 ------

Current liabilities Bank loan...... — (1,823,827,763) Receipts in advance ...... (2,879,992) (10,970,829) Tenants’ deposits ...... (25,724,184) (66,200,935) Amounts due to related companies ...... (421,346,688) (113,746,296) Creditors, accruals and other payables ...... (403,717,061) (165,224,136) Current taxation ...... — (14,646,944)

(853,667,925) (2,194,616,903) ------Net current liabilities ...... (815,416,988) (1,330,261,532) ------Total assets less liabilities ...... 2,637,467,886 2,450,560,448 ------

Non-current liabilities Bank loan...... (480,350,000) — Deferred tax liabilities...... (687,341,476) (193,195,991)

(1,167,691,476) (193,195,991) ------Net assets...... 1,469,776,410 2,257,364,457

Financed by: Issued capital...... 95,685,728 95,685,728 Reserves...... 1,374,090,682 2,161,678,729

1,469,776,410 2,257,364,457

— 20 — OFFERING CIRCULAR SUMMARY

COMBINED CASH FLOW STATEMENTS

Period from 1 September 2005 to Year ended 31 December 2005 31 December 2006

(HK$) (HK$)

Net cash generated from/(used in) operating activities ...... 14,807,777 (378,320,018)

Net cash used in investing activities ...... (79,490) (52,368,914)

Net cash (used in)/generated from financing activities ...... (10,224,202) 1,253,768,659

Increase in cash and cash equivalents...... 4,504,085 823,079,727

Cash and cash equivalents at beginning of the period/year ...... 19,056,697 22,279,494

Effect of foreign exchange rate changes ...... (1,281,288) (5,192,925)

Cash and cash equivalent at end of the period/year...... 22,279,494 840,166,296

— 21 — OFFERING CIRCULAR SUMMARY

SUMMARY PROFIT FORECAST

Statements contained in the Summary Profit Forecast set out below that are not historical facts may be forward-looking statements. Such statements are based on the assumptions set forth in the section headed “Profit Forecast — Bases and Assumptions” in this Offering Circular and are subject to certain risks and uncertainties which could cause actual results to differ materially from those projected. Under no circumstances should the inclusion of such information herein be regarded as a representation, warranty or prediction by the Vendor, RREEF CCT, the Manager, the Trustee, the Underwriters or any other person involved in the Global Offering that the underlying assumptions will materialise, nor that these results will be achieved or are likely to be achieved.

PROFIT FORECAST FOR THE FORECAST PERIOD (FOR THE PERIOD FROM THE ANTICIPATED LISTING DATE TO 31 DECEMBER 2007)

The following table sets forth the historical profit and loss data of the operations of the Property for the period from 1 September 2005 to 31 December 2005 and the year ended 31 December 2006, and RREEF CCT’s forecast income statement data and distribution for the Forecast Period.

Historical Forecast Period from 1 September 2005 to Year ended 31 December 31 December Forecast 2005 2006 Period(1) (HK$’000) (HK$’000) (HK$’000)

Turnover Rental income...... 27,774 181,456 157,579 Advertising income ...... ——19,738 Car park income ...... 71 1,510 1,538 Business tax ...... (1,392) (9,148) (8,943) Total Turnover ...... 26,453 173,818 169,912 ------

— 22 — OFFERING CIRCULAR SUMMARY

Historical Forecast Period from 1 September 2005 to Year ended 31 December 31 December Forecast 2005 2006 Period(1) (HK$’000) (HK$’000) (HK$’000)

Operating profit...... 18,992 134,280 156,613 Administrative expenses...... (954) (7,212) — Other income ...... 28 26,939 206 Manager’s management fees...... ——(13,214) Trustee’s fee ...... ——(639) Trust-related expenses ...... ——(4,081) Increase in fair value of investment property(2)...... 2,099,052 142,796 — Finance costs ...... (10,224) (72,602) (42,564) Profit before taxation and transactions with Unitholders...... 2,106,894 224,201 96,321

Income tax PRC enterprise income tax...... — (1,697) — PRC withholding income tax ...... — (13,102) (16,991) — (14,799) (16,991)

Deferred tax Origination and reversal of temporary differences (695,353) 508,928 —

(695,353) 494,129 (16,991) ------Net profit before transactions with Unitholders...... 1,411,541 718,330 79,330

Adjustments(3)...... 2,303 Distributable income ...... 81,633

Minimum Maximum Offer Price Offer Price Offer Price (HK$)(4) ...... 5.00 5.40 Units in issue (million) ...... 484.4 484.4 Forecast distribution per Unit (HK$) ...... 0.1685 0.1685 Forecast annualised profit yield after taxation(5) ...... 6.19% 5.74% Forecast annualised distribution yield after taxation(6) ...... 6.37% 5.90%

— 23 — OFFERING CIRCULAR SUMMARY

acquisition of the BVI Property Company Share over the net fair value of identifiable assets and liabilities acquired (amounting to HK$158 million based on the Maximum Offer Price of HK$5.40, before taking into account the effect of any purchase price adjustment for the current assets/liabilities of the Companies on Completion); and (b) the cost of obtaining the listing status of RREEF CCT of HK$79 million and HK$84 million respectively based on the Minimum Offer Price of HK$5.00 and the Maximum Offer Price of HK$5.40 respectively (which will be expensed immediately in the income statement). The Manager considers that these items are non-recurring in nature and arise as a result of the Acquisition and the listing of RREEF CCT. Inclusion of these items will distort the comparability of profit from period to period. (2) The Manager has made no assumption as to changes in property value in arriving at this profit forecast. (3) Refers to the following adjustment:

Forecast Period

(HK$’000)

Add: Amortisation of upfront fees on bank debt ...... 2,303

(4) Assuming an Offer Price range of HK$5.00 per Unit to HK$5.40 per Unit, being the Minimum Offer Price and Maximum Offer Price respectively.

(5) The forecast annualised profit yields for the Forecast Period is provided for illustrative purposes only and is calculated as follows: (Profit for the Forecast Period assuming no change in fair value of investment properties/number of days in the Forecast Period) x 365/number of the Units held by the public Unitholders as of the record date for the distribution for the Forecast Period/Offer Price, and excludes brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%.

(6) The annualised distribution yields for the Forecast Period is provided for illustrative purposes only and may differ from the annualised distribution yield after taxation set out in this table based on the number of the Units outstanding for the period. Annualised distribution yields have been calculated with reference to the Minimum Offer Price and Maximum Offer Price only. The annualised distribution yields is calculated as follows:

(Distributable income for the Forecast Period/number of days in the Forecast Period) x 365/ number of Units held by the public Unitholders as of the record date for the distribution for the Forecast Period/Offer Price, and excludes brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%.

THE VENDOR

Mr. Tin Lik was born in China in 1957. He is the majority shareholder of Bestride Holdings Limited, which was incorporated in Hong Kong in 1996. Bestride Holdings Limited is involved in three major businesses: real estate development, hotel, and technology.

The real estate development business of Bestride Holdings Limited focuses on real estate development and investment in the PRC. Such business is mainly carried out through Beijing Bestride Estate Development Company Limited ( ) and Hunan Bestride Estate Development Company Limited ( ). The real estate team of Bestride Holdings Limited has successfully completed projects including the Property.

— 24 — OFFERING CIRCULAR SUMMARY

Bestride Holdings Limited conducts its hotel business through Bestride Hotel Management Limited. In 2005, Bestride Hotel Management Company Limited established a joint venture named Dellisart America Hotels Limited with a hotel management group in the United States. Currently, Hunan Bestride Hotel and Yingang Bestride Hotel are managed by Dellisart America Hotels Limited. Hunan Bestride Hotel is one of the more well-known hotels in Hunan.

Bestride Holdings Limited’s technology business specialises in developing and manufacturing tax receipt printers, which are used by the PRC tax authorities to monitor and supervise tax collection. These machines are currently used in Hunan and Yunnan provinces in the PRC.

Prior to starting his own business, Mr. Tin was a general manager at Foreigners of China Origin Residential Development Company of Hunan Province ( ) where he worked for six years and was responsible for developing numerous real estate projects.

CERTAIN FEES AND CHARGES

The following is a summary of certain fees and charges payable by the Unitholders in B14(a) connection with the subscription of the Units:

Fees Amount Payable

(a) Brokerage 1.0% of Maximum Offer Price, subject to refund(1) (b) Hong Kong Stock Exchange trading fee 0.005% of Maximum Offer Price, subject to refund(1) (c) SFC transaction levy 0.004% of Maximum Offer Price, subject to refund(1)

Note:

(1) Subject to refund, if and to the extent the Offer Price should be lower than the Maximum Offer Price.

— 25 — OFFERING CIRCULAR SUMMARY

The following is a summary of certain fees payable by RREEF CCT in connection with the establishment and on-going management of RREEF CCT:

Fees Amount Payable B14(b) 9.10

(a) Manager’s management fees ● Base Fee (payable by RREEF CCT to the Manager) Currently 0.4% per annum of the value of Deposited Property (maximum of 0.4% per annum of the value of Deposited Property)

● Variable Fee 3.0% per annum of Net Property Income (before deduction therefrom of the Base Fee or the Variable Fee)

See section headed “The Manager — Fees, Costs and Expenses of the Manager” in this Offering Circular.

(b) Trustee’s fee ● On-going Fee (payable by RREEF CCT to the Trustee) Currently 0.03% per annum of the value of Deposited Property, subject to a minimum of HK$50,000 per month (maximum of 0.06% per annum of the value of Deposited Property)

● Inception fee RREEF CCT will also pay to the Trustee an one- time inception fee of no more than HK$200,000.

● Additional fees Additional fees on a time cost basis as agreed with the Manager are payable for duties of an exceptional nature or otherwise outside the scope of the Trustee’s normal duties in the ordinary and normal course of business of RREEF CCT, including but not limited to any services in relation to the acquisition or divestment or disposal of properties by RREEF CCT, provided that, unless otherwise approved by the Unitholders by way of an Ordinary Resolution:

(a) the aggregate amount of such additional fees that may be charged by the Trustee in relation to each transaction to be entered into by RREEF CCT shall not exceed 0.05% of the acquisition price (in the case of an acquisition of any property whether directly or indirectly by RREEF CCT) or the sale price (in the case of a sale or disposal of property whether directly or indirectly held by RREEF CCT); and

— 26 — OFFERING CIRCULAR SUMMARY

Fees Amount Payable

(b) the aggregate amount of such additional fees that are not related to any acquisition or sale or disposal of property as referred to in (a) above that may be charged by the Trustee for each financial year shall not exceed an amount equal to 50.0% of the Trustee’son- going fee (referred to above) for that financial year.

See the section headed “The Trust Deed — Trustee’s Fee” in this Offering Circular.

(d) Divestment fee Up to 0.5% of the sale price of property divested(1) (payable by RREEF CCT to the Manager)

(e) Property Manager’s fees and leasing ● Property management fee commissions 6.0% per annum of operating expenses, subject to (payable by the HK Property Company/RREEF a minimum of RMB40,000 (HK$40,000) per month CCT to the Property Manager)

● Tenancy management fee RMB30,000 (HK$30,000) per month

● Rental collection and repatriation fee 0.6% per annum of the Rental Income after deduction of relevant taxes

● Entity accounting fee RMB46,800 (HK$46,800) per month

● Leasing commissions

— for a new lease of one year or more secured by the Property Manager, a commission equivalent to one month’s rent shall be payable to the Property Manager

— for a new lease of less than one year, or a renewal of an existing lease (where the duration of the renewal term is at least one year), secured by the Property Manager, a commission equivalent to 0.5 month’s rent shall be payable to the Property Manager

Note (1) Any commission payment to third-party agents or brokers in connection with the acquisition or divestment of any real estate for RREEF CCT shall be paid additionally out of RREEF CCT.

— 27 — OFFERING CIRCULAR SUMMARY

Fees Amount Payable

— for a renewal of an existing lease (where the duration of the renewal term is less than one year) secured by the Property Manager, a commission equivalent to the pro-rated amount of the leasing commission payable under the paragraph immediately above shall be payable to the Property Manager

— for a new lease of one year or more secured by a third-party agent contracted by the Property Manager, a commission equivalent to 1.25 months’ rent shall be payable, of which the Property Manager will be entitled to 0.25 month’s rent and the third-party agent will be entitled to one month’s rent

— for a new lease of less than one year, or a renewal of an existing lease (where the duration of the renewal term is at least one year), secured by a third-party agent contracted by the Property Manager, a commission equivalent to 0.5 month’s rent shall be payable, all of which will be the third-party agent’s entitlement

— for a renewal of an existing lease (where the duration of the renewal term is less than one year) secured by a third-party agent contracted by the Property Manager, a commission equivalent to the pro-rated amount of the leasing commission payable under the paragraph immediately above shall be payable, all of which will be the third-party agent’s entitlement

(f) Others RREEF CCT and the Manager will also need to pay certain other on-going fees and expenses for the daily operations of RREEF CCT, such as annual listing fees, financial report printing fees, auditor’s fees, legal advisors fees, fees of its appointed independent property valuer and fees of other professional advisors. See the section headed “The Manager — Fees, Costs and Expenses of the Manager” in this Offering Circular.

— 28 — THE GLOBAL OFFERING

RREEF CCT RREEF China Commercial Trust is a collective investment scheme constituted as a unit trust by the Trust Deed and authorised under section 104 of the SFO, subject to the applicable conditions imposed by the SFC from time to time.

The Manager RREEF China REIT Management Limited. B4(a)

The Trustee HSBC Institutional Trust Services (Asia) Limited. B4(b)

The Global Offering A total offering of 435,960,000 Units and consisting of the Hong Kong Public Offering and the International Offering (subject to adjustment and the exercise of the Over- allotment Option).

The Hong Kong Public An initial offer of 43,596,000 Units to the public in Hong Offering Kong, subject to adjustment and reallocation.

The International Offering An initial offer of 392,364,000 Units to institutional, professional and other investors, subject to adjustment, reallocation and the exercise of the Over-allotment Option.

Reallocation of the Units The Units to be offered in the Hong Kong Public Offering and the International Offering may, in certain circumstances, be reallocated between these offerings. See the section headed “Structure of the Global Offering” in this Offering Circular.

Structure The Units are being offered and sold outside the United States in reliance on Regulation S. The Units have not been and will not be registered under the US Securities Act and, subject to certain exceptions, may not be offered or sold within the United States.

Offer Price Range The Offer Price of the Units (which will be denominated in Hong Kong dollars) will not be more than HK$5.40 and is currently expected to be not less than HK$5.00.

Charges Payable by In addition to the Maximum Offer Price, investors Investors applying for the Units in the Global Offering must pay brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%, subject to refund if the Offer Price is lower than the Maximum Offer Price.

— 29 — THE GLOBAL OFFERING

Over-allotment Option The Joint Global Coordinators (on behalf of the Underwriters) have been granted an Over-allotment Option by Mr. Tin Lik pursuant to the International Underwriting Agreement solely to cover over-allocation, exercisable in full or in part, on one occasion on or after the Listing Date but before the expiry of 30 days after the last day for lodging Application Forms under the Hong Kong Public Offering, to purchase from Mr. Tin Lik up to an aggregate of 48,440,000 Units. The exercise of the Over-allotment Option will not increase the total number of outstanding Units. The total number of the Units subject to the Over-allotment Option will constitute up to approximately 11.1% of the total number of the Units under the Global Offering.

Use of Proceeds See the section headed “Use of Proceeds” in this Offering Circular for details of how the proceeds from the Global Offering will be applied.

Lock-ups Mr. Tin Lik has entered or will, by the Listing Date, enter into certain lock-up arrangements with the Underwriters for a period of 180 days from and including the Listing Date, subject to certain exceptions. See the section headed “Underwriting — Undertakings” in this Offering Circular.

Market Capitalisation HK$2,616 million, based on the Maximum Offer Price or HK$2,422 million, based on the Minimum Offer Price.

NAV per Unit Upon HK$5.23, based on the Maximum Offer Price or HK$4.90, B10 Completion of the Global based on the Minimum Offer Price. Offering

Listing and Trading Prior to the Global Offering there has been no market for B28 the Units.

An in-principle approval has been granted by the Hong Kong Stock Exchange for the listing of, and permission to deal in, all the Units on the Main Board of the Hong Kong Stock Exchange. Dealings in the Units on the Hong Kong Stock Exchange are expected to commence on Friday, 22 June 2007. If the Hong Kong Stock Exchange grants formal approval for the listing of, and permission to deal in, the Units on the Main Board of the Hong Kong Stock

— 30 — THE GLOBAL OFFERING

Exchange and RREEF CCT complies with the stock admission requirements of HKSCC, the Units will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS, with effect from the date of commencement of dealings in the Units on the Hong Kong Stock Exchange or any other date that HKSCC chooses. Settlement of transactions between participants of the Hong Kong Stock Exchange is required to take place in CCASS on the second Hong Kong Stock Exchange business day after any trading day.

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

All necessary arrangements have been made for the Units to be admitted into CCASS.

Stabilisation In connection with the Global Offering, the Stabilising Manager may over-allocate or effect transactions with a view to supporting the market price of the Units at a level higher than that which might otherwise prevail for a period of 30 days after the last date for lodging Application Forms under the Hong Kong Public Offering. See the section headed “Structure of the Global Offering — Over-allotment Option and Stabilisation — Stabilising Action” for further details.

No Redemption by the The Unitholders have no right to request the Manager to B 2(f) Unitholders redeem their Units. Listing of the Units on the Hong Kong Stock Exchange does not guarantee a liquid market for the Units.

Profit Forecast (for the The Manager forecasts that, in the absence of period from the Listing Date unforeseen circumstances and on the bases and to 31 December 2007) assumptions set out in the section headed “Profit Forecast” in this Offering Circular, the net profit after tax of RREEF CCT for the period from the Listing Date to 31 December 2007 will be not less than HK$79.3 million. For further details, including the principal assumptions on which the forecast is based, see the section headed “Profit Forecast” in this Offering Circular.

— 31 — THE GLOBAL OFFERING

Distributions The Manager’s distribution policy is to distribute to the RC 7.12 Unitholders an amount equal to 100% of RREEF CCT’s Annual Distributable Income for the period from the Listing Date to 31 December 2007, and thereafter at least 90% of RREEF CCT’s Annual Distribution Income for each financial year as more fully described in the section headed “Distribution Policy” in this Offering Circular. Pursuant to the Trust Deed, RREEF CCT is in any event required to distribute at least 90.0% of its Annual Distributable Income for each financial year. Distributions will be declared in Hong Kong dollars.

See the section headed “Distribution Policy” in this Offering Circular for further information on RREEF CCT’s distribution policy. See the section headed “Risk Factors” in this Offering Circular for a discussion of factors that may adversely affect the ability of RREEF CCT to make distributions to the Unitholders.

Statement of Distributions RREEF CCT intends to achieve a total DPU of not less than HK$0.1685 in respect of the period from the Listing Date to 31 December 2007, representing a forecast annualised distribution yield after taxation of 6.37% based on the Minimum Offer Price and 5.90% based on the Maximum Offer Price (excluding other transaction costs). The forecast annualised profit yield is 6.19% based on the Minimum Offer Price and 5.74% based on the Maximum Offer Price (excluding other transaction costs). See the section headed “Profit Forecast” in this Offering Circular for a detailed calculation of the distribution yield based on the Minimum Offer Price and Maximum Offer Price.

Tax Considerations See the section headed “Taxation” in this Offering Circular for further information on the tax consequences of the purchase, ownership and disposition of the Units.

Termination of RREEF CCT RREEF CCT may be terminated by the Trustee or the B29 Manager in the circumstances set out in the Trust Deed. See the section headed “The Trust Deed” in this Offering Circular for further information.

Governing Law The Trust Deed, pursuant to which RREEF CCT is constituted, is governed by Hong Kong law.

Risk Factors Prospective investors should carefully consider the risks connected with an investment in the Units. Certain of these risks are discussed in the section headed “Risk Factors” in this Offering Circular.

— 32 — INFORMATION ABOUT THIS OFFERING CIRCULAR AND THE GLOBAL OFFERING

Manager’s and Directors’ Responsibility for the Contents of this Offering Circular

The Manager and the Directors (whose names appear in the section headed “Parties B26 Involved in the Global Offering” in this Offering Circular) collectively and individually accept full responsibility for the accuracy of the information contained in this Offering Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no material facts the omission of which would make any statement in this Offering Circular misleading.

SFC Authorisation

RREEF CCT has been authorised by the SFC under section 104 of the SFO. The SFC does not take any responsibility for the financial soundness of RREEF CCT or for the correctness of any statements made or opinions expressed in this Offering Circular and other documents relating to RREEF CCT. Authorisation by the SFC does not imply an official recommendation.

Underwriting

This Offering Circular is published solely in connection with the Hong Kong Public Offering, which forms part of the Global Offering. For applicants under the Hong Kong Public Offering, this Offering Circular and the WHITE and YELLOW Application Forms contain the terms and conditions of the Hong Kong Public Offering. The Global Offering is managed by the Underwriters. Pursuant to the Hong Kong Underwriting Agreement, the Hong Kong Public Offering is underwritten by the Hong Kong Underwriters. Further details about the Underwriters and the underwriting arrangements are contained in the section headed “Underwriting” in this Offering Circular.

Distribution and Selling Restrictions

The Hong Kong Public Offering Units are offered solely on the basis of the information contained and representations made in this Offering Circular and the Application Forms and on the terms and subject to the conditions set out herein and therein. No person is authorised to give any information in connection with the Hong Kong Public Offering or to make any representation not contained in this Offering Circular, and any information or representation not contained herein must not be relied upon as having been authorised by the Manager, the Underwriters, any of their respective directors, agents, employees or advisers or any other parties involved in the Global Offering.

No action has been or will be taken in any jurisdiction that would permit a public offering of the Units or the possession, circulation or distribution of this Offering Circular or any other offering or publicity material relating to RREEF CCT or the Units in any country or jurisdiction other than Hong Kong. The Units may not be offered or sold, directly or indirectly, and neither

— 33 — INFORMATION ABOUT THIS OFFERING CIRCULAR AND THE GLOBAL OFFERING this Offering Circular nor any other offering material, circular, form of application or advertisement in connection with the Global Offering of the Units may be distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction.

Each person acquiring the Units will be required to confirm, or by the acquisition of the Units will be deemed to have confirmed, that he is aware of the restrictions on offers of the Units described in this Offering Circular.

Applicants for the Units are recommended to consult their professional advisers if they are in any doubt as to the regulatory implications of subscribing for, purchasing, holding, disposing of or otherwise dealing in the Units.

Application for Listing on the Hong Kong Stock Exchange

Prior to the Global Offering, there has been no market for the Units. An in-principle B28 approval has been granted by the Hong Kong Stock Exchange for the listing of, and permission to deal in, the Units on the Main Board (including the Units which may be sold pursuant to the Over-allotment Option). Dealings in the Units on the Hong Kong Stock Exchange are expected to commence on Friday, 22 June 2007.

Eligibility for Admission into CCASS

Subject to the granting of formal approval for the listing of, and permission to deal in, the Units on the Hong Kong Stock Exchange and compliance with the stock admission requirements of HKSCC, the Units will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in the Units on the Hong Kong Stock Exchange or any other date that HKSCC chooses. Settlement of transactions between participants of the Hong Kong Stock Exchange is required to take place in CCASS on the second Hong Kong Stock Exchange business day after any trading day.

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

All necessary arrangements have been made for the Units to be admitted into CCASS.

Stamp Duty

No Hong Kong stamp duty is payable in connection with the initial issue of the Units to successful applicants under the Hong Kong Public Offering. Subsequent dealings in the Units will be subject to Hong Kong stamp duty.

— 34 — INFORMATION ABOUT THIS OFFERING CIRCULAR AND THE GLOBAL OFFERING

Professional Tax Advice Recommended

Persons who are unsure about the taxation implications of the subscription, purchase, holding, disposal of, dealing in, or the exercise of any rights in relation to the Units should consult a professional adviser.

RREEF CCT, the Trustee, the Manager, the Directors, the Underwriters and any other person involved in the Global Offering do not accept responsibility for any tax effects on or liabilities resulting from the subscription for, purchase, holding, disposal of, dealing in or the exercise of any rights in relation to the Units.

Offer Price

The Maximum Offer Price is HK$5.40 and the Offer Price is expected to be determined by agreement among the Joint Global Coordinators (on behalf of the Underwriters), the Vendor and the Manager on the Price Determination Date. See the section headed “Structure of the Global Offering” in this Offering Circular.

All applicants are required to pay the Maximum Offer Price of HK$5.40 per Unit (plus brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%), subject to an appropriate refund if the Offer Price is less than the Maximum Offer Price. See the sub-section headed “Procedures for Application for Hong Kong Public Offering Units” immediately below.

Procedures for Application for Hong Kong Public Offering Units

The procedures for applying for the Hong Kong Public Offering Units are set out in the sections headed “How to Apply for Hong Kong Public Offering Units” and “Further Terms and Conditions of the Hong Kong Public Offering” in this Offering Circular and in the relevant Application Forms.

The Joint Global Coordinators will have full discretion to reject any application for Hong Kong Public Offering Units in full or in part.

Conditions of the Hong Kong Public Offering

Details of the conditions of the Hong Kong Public Offering are set out in the section headed “Structure of the Global Offering — Conditions of the Hong Kong Public Offering” in this Offering Circular.

Structure of the Global Offering

Details of the structure of the Global Offering, including its conditions, are set out in the section headed “Structure of the Global Offering” in this Offering Circular.

— 35 — INFORMATION ABOUT THIS OFFERING CIRCULAR AND THE GLOBAL OFFERING

Rounding

For the purpose of consistency, where applicable and not otherwise stated, percentage figures in this Offering Circular have been rounded to up to one decimal place and certain financial figures have been rounded to the nearest thousand or million, or up to one decimal place, as applicable. Such figures and calculations derived from such figures are therefore subject to rounding adjustments.

Any discrepancies in any table between totals and sums of amounts listed therein are due to rounding adjustments.

Exchange Rates

Unless otherwise specified, relevant Renminbi amounts have been translated into, and presented as, Hong Kong dollar amounts based on an exchange rate of HK$1.00 = RMB1.00, and relevant US Dollar amounts have been translated into, and presented as, Hong Kong Dollar amounts based on an exchange rate of US$1.00 = HK$7.80.

Tenants’ Names and Business Sectors

Certain tenants in the Property do not have English names. Translations of the Chinese names of these tenants have been provided in this Offering Circular for the convenience of readers but such translations have not been approved by the relevant tenants.

This Offering Circular contains certain information with respect to the industry sectors of certain tenants in the Property. The Manager has determined the industry sectors in which these tenants are primarily involved based on the Manager’s general understanding of the business activities conducted by such tenants in the premises occupied by them. The Manager’s knowledge of the business activities of such tenants is limited and such tenants may conduct business activities that are in addition to, or different from, those indicated herein.

— 36 — PARTIES INVOLVED IN THE GLOBAL OFFERING

RREEF CCT RREEF China Commercial Trust is a collective B1 investment scheme constituted as a unit trust by the Trust Deed and authorised under section 104 of the SFO.

Vendor Mr. TIN Lik B4 (a)

Manager RREEF China REIT Management Limited B1, B4 (a) 53/F, Cheung Kong Center 2 Queen’s Road Central Hong Kong

Directors

Chairman and Non-Executive Director Mr. Kurt William ROELOFFS, Junior

Executive Director Mr. Paul Thomas KEOGH

Non-Executive Directors Mr. Brian David CHINAPPI Mr. Michael Eugene BUQUOI Mr. Niel THASSIM Mr. TIN Lik

Independent Non-Executive Directors Mr. Jack Richard RODMAN Mr. Mark Henry FORD Dr. MENG Xiaosu

Responsible Officers of the Manager Mr. Paul Thomas KEOGH Mr. LAI Wai Kit Mr. Robert Michael BYRNE

Property Manager Beijing Jones Lang LaSalle B4(c) Property Management Services Co., Ltd. 408, 4/F West Wing, China World Trade Centre 1 Jianguomenwai Avenue Beijing 100004, China

Unit Registrar Tricor Investor Services Limited B4(f) 26/F Tesbury Centre 28 Queen’s Road East Wanchai Hong Kong

Trustee HSBC Institutional Trust Services (Asia) Limited B4 (b) 1 Queen’s Road Central Hong Kong

— 37 — PARTIES INVOLVED IN THE GLOBAL OFFERING

Joint Global Coordinators, Deutsche Bank AG, Hong Kong Branch Bookrunners, Lead Underwriters 55/F, Cheung Kong Center and Listing Agents 2 Queen’s Road Central Hong Kong

The Hongkong and Shanghai Banking Corporation Limited 1 Queen’s Road Central Hong Kong

Auditors and Reporting Accountants KPMG B4 (e) Certified Public Accountants 8/F, Prince’s Building 10 Chater Road Central Hong Kong

Legal Advisers to the Manager As to Hong Kong law Paul, Hastings, Janofsky & Walker 22/F, Bank of China Tower 1 Garden Road Central Hong Kong

As to PRC law Commerce & Finance Law Offices 6F, NCI Tower A12 Jianguomenwai Avenue Chaoyang District Beijing, China

Legal Advisers to the Underwriters As to Hong Kong law Simmons & Simmons 35/F, Cheung Kong Center 2 Queen’s Road Central Hong Kong

As to PRC law King & Wood 31/F, Office Tower A Jianwai SOHO 39 Dongsanhuan Zhonglu Chaoyang District Beijing, China

— 38 — PARTIES INVOLVED IN THE GLOBAL OFFERING

Legal Advisers to the Trustee As to Hong Kong law Baker & McKenzie 14/F, Hutchison House 10 Harcourt Road Central Hong Kong

Tax Advisers KPMG Certified Public Accountants 8/F, Prince’s Building 10 Chater Road Central Hong Kong

Independent Property Valuer DTZ Debenham Tie Leung Limited 10/F, Jardine House 1 Connaught Place Central Hong Kong

Independent Property Consultant Knight Frank Petty Ltd. B4 (d) B4 (d) 4/F, Shui On Centre 6-8 Harbour Road Wanchai Hong Kong

Independent Market Consultant Knight Frank Petty Ltd. 4/F, Shui On Centre 6-8 Harbour Road Wanchai Hong Kong

Receiving Banker The Hongkong and Shanghai Banking Corporation Limited 1 Queen’s Road Central Hong Kong

— 39 — RISK FACTORS

An investment in the Units involves significant risks. You should consider carefully, B3 B21 together with all other information contained in this Offering Circular, the risk factors described below before deciding to invest in the Units.

As an investment in a collective investment scheme is meant to produce returns over B2(e) the long-term, investors should not expect to obtain short-term gains.

Investors should be aware that the price of the units in a collective investment scheme, and the income from them, may rise or fall. Investors should note that they may not get back their original investments and that they may not receive any distributions.

Before deciding to invest in the Units, you should seek professional advice from your relevant advisers about your prospective investment in the context of your particular circumstances.

RISKS RELATING TO RREEF CCT’S ORGANISATION AND OPERATIONS

RREEF CCT will, initially, operate principally through the HK Property Company and its ability to make distributions to the Unitholders is dependent on the financial performance and position of the HK Property Company

RREEF CCT will, initially, operate principally through the HK Property Company and will rely on dividend payments and other payment and/or distributions from the HK Property Company for its income and cash flows. In order to meet its payment obligations and to pay distributions to the Unitholders, RREEF CCT will rely on the receipt of dividends or other payments from the HK Property Company. The ability of the HK Property Company to make such payments to the BVI Property Company and RREEF CCT may be restricted by, among other things, the HK Property Company’s business and financial condition, the availability of distributable profits, applicable laws and regulations (which may restrict the repatriation of Rental Income by the HK Property Company out of the PRC). In particular, if the HK Property Company fails to make payments due under the Facility or any other event of default under the Facility Agreement is outstanding, it will be prohibited under the Facility Agreement from declaring and making dividend payments to the BVI Property Company and RREEF CCT. For further details, refer to the section headed ‘‘Material Agreements and Other Documents — The Facility’’ in this Offering Circular.

There can be no assurance that the HK Property Company will have sufficient distributable or realised profits in any future period to pay dividends and other payments to RREEF CCT as a result of a number of factors as described above. The financial condition and results of operations of the HK Property Company may be materially adversely affected if the Rental Income from the Property is less than expected.

The occurrence of these or other factors that affect the ability of the HK Property Company to make distributions to RREEF CCT in future periods may adversely affect the level of distributions paid to the Unitholders. See the section headed “Distribution Policy” in this Offering Circular.

— 40 — RISK FACTORS

The amount that RREEF CCT may borrow is limited and such limit may be exceeded in the event of any downward revaluation of assets

RREEF CCT is expected to use leverage in connection with its future investments. Its borrowings are limited by the REIT Code to no more than 45.0% of its total gross asset value. Upon Completion, RREEF CCT (through the HK Property Company) is expected to have aggregate external borrowings of HK$1,400 million, or 34.0% of RREEF CCT’s total gross asset value as at the Listing Date (based on Minimum Offer Price and the information in the section headed ‘‘Unaudited Pro Forma Balance Sheets of RREEF CCT’’ in this Offering Circular). There can be no assurance that RREEF CCT’s borrowings in the future will not over time exceed 45.0% of its gross asset value, whether following any downward revaluation of assets or otherwise. From time to time, RREEF CCT may need to draw down on its banking facilities and to use overdrafts but may be unable to do so due to the 45.0% borrowing limit. RREEF CCT may also face difficulties in securing timely and commercially favorable financing in asset-backed lending transactions secured by real estate. In addition, the use of leverage may increase the exposure of RREEF CCT to adverse economic factors such as rising interest rates.

RREEF CCT will depend on external sources of funding which are beyond its control to finance capital expenditure and growth and faces risks associated with debt financing

Upon Completion, RREEF CCT (through the HK Property Company) is expected to have aggregate external borrowings of HK$1,400 million. The Manager intends that the HK Property Company will use the proceeds of the Facility, together with part of the proceeds of the Global Offering (which will be made available to the HK Property Company in the form of a shareholder’s loan), to repay the Existing Borrowings and to settle the Outstanding Consideration. As a result, if the HK Property Company is unable to obtain the full amount of such debt financing under the Facility for any reason, Completion may not occur. In particular, not all of the conditions precedent to the drawdown of the Facility have been fulfilled, although it is expected such conditions precedent will be satisfied by the Listing Date.

RREEF CCT may, from time to time, require debt financing to achieve the Manager’s investment strategies. In order to maintain RREEF CCT’s qualification as a REIT, it is required under the REIT Code to annually distribute at least 90.0% of its audited annual net income after tax. Consequently, it may need to rely on external sources of funding, such as debt financing, to expand its portfolio, which may not be available on favorable terms or at all. If RREEF CCT cannot obtain capital from external sources, it may not be able to acquire properties when strategic opportunities exist, satisfy its debt service obligations or make the cash distributions to the Unitholders necessary to maintain its qualification as a REIT.

RREEF CCT will be subject to risks normally associated with debt financing. Payments of principal and interest on borrowings may leave RREEF CCT with insufficient cash resources to operate its properties or pay distributions to the Unitholders necessary to maintain its REIT qualification. RREEF CCT’s level of debt and the limitations imposed on it by its current or future loan agreements could have significant adverse consequences, including, but not limited to, the following: (a) its cash flow may be insufficient to meet its required principal and

— 41 — RISK FACTORS interest payments; (b) it may be unable to borrow additional funds as needed or on favorable terms; (c) it may be unable to refinance its indebtedness at maturity or the refinancing terms may be less favorable than the terms of the original indebtedness; (d) it may default on its obligations and the lenders or mortgagees may foreclose on its properties and/or its interests in the entities that own the properties, and require a forced sale of the mortgaged property, and/or those entities; (e) it is subject to restrictive covenants in the Facility Agreement (see the section headed “Material Agreements and Other Documents — The Facility” in this Offering Circular for details), and may be subject to similar restrictive covenants in future loan agreements, which may limit or otherwise adversely affect RREEF CCT’s or the HK Property Company’s operations, such as obtaining the prior consent of the facility agent prior to the appointment of any property manager; their ability to incur additional indebtedness, acquire properties, make capital expenditures, or make distributions to the Unitholders, and affirmative covenants, which may require them to set aside funds for maintenance or repayment of security deposits; (f) it may violate restrictive covenants under the Facility Agreement and in future loan documents, which would entitle the lenders to accelerate its debt obligations; and (g) its default under any one of its loan agreements (e.g. occurrence of event of defaults which include, among other things, the Manager ceasing to be the manager of RREEF CCT without the prior consent of the majority lenders. For details of event of defaults, please refer to the section headed “Material Agreements and Other Documents — The Facility”) could result in a cross default on other indebtedness.

If any one of these events were to occur, RREEF CCT’s business, financial condition, results of operations, cash flow, cash available for distributions to the Unitholders, per Unit trading price, and its ability to satisfy its debt service obligations could be materially adversely affected.

The Manager’s operations are subject to regulation and its licensing conditions

The Manager is required to be licensed under the SFO for the regulated activity of asset management. Although the Manager believes that it will be operated and managed in a manner so as to remain licensed, no assurance can be given that it will be able to maintain the requisite status. For example, the departure of a Responsible Officer of the Manager may result in the loss of the Manager’s licence to act as the manager of RREEF CCT. In the event that the Manager ceases to be licensed under the SFO, RREEF CCT may need to appoint another licensed management company, which may materially and adversely affect the business, financial condition and results of operations of RREEF CCT. In the event no other management company duly qualified and licensed is willing to replace the existing Manager within 60 days (or such longer period) of the removal or retirement of the Manager, the Trustee may terminate RREEF CCT.

The Manager may not be able to achieve its key objectives for RREEF CCT and its stated strategy for accomplishing such objectives as outlined in the section headed “Strategy” in this Offering Circular may change

The Manager’s key objective for RREEF CCT is to provide the Unitholders risk-adjusted, long-term total return through investing in a diversified portfolio of institutional quality office

— 42 — RISK FACTORS and mixed-use properties located in major cities in China, Hong Kong and Macau. While the Manager has formulated clear and specific strategies to accomplish these objectives, there can be no assurance that it will be able to successfully implement such strategies, or that it will be able to do so in a timely and cost effective manner.

The successful implementation of the investment strategy will depend on a number of factors, including availability and timely identification of attractive property investments that meet the investment methodology, property market conditions and fundamentals, and the successful integration of these property investments.

Furthermore, there may be significant competition for attractive investment opportunities from other property investors, including property development and investment companies, other REITs and private investment funds. There can be no assurance that RREEF CCT will be able to compete effectively against such entities.

The stated strategies of the Manager are subject to review and may change in the future subject to the requirements of the REIT Code, the Trust Deed, the Listing Agreement and the applicable laws and regulations. There can be no assurance that any departure from the stated strategies will be successful.

Decreases in property values as a result of the annual revaluation of RREEF CCT’s properties could result in a decrease in the annual consolidated net profit of RREEF CCT for that year and may also trigger certain events of default which may lead to adverse consequences under the Facility Agreement

The properties held by RREEF CCT from time to time are subject to an annual revaluation. Under RREEF CCT’s accounting policy as currently required under the REIT Code and by applicable Hong Kong financial reporting standards, any decrease in the valuation of its investment properties could result in non-cash charges to the income statement, and may give rise to a substantial decline in annual consolidated net profit. Under the Trust Deed, Annual Distributable Income for a financial year is the consolidated audited net profit after tax of RREEF CCT and the Special Purpose Vehicles for that financial year, adjusted to eliminate the effects of certain Adjustment (as defined in the section headed “Distribution Policy” in this Offering Circular) which have been recorded in the income statement for the relevant financial year. While the Manager may (but is not obliged to) include in its annual distribution amounts referable to any unrealised property revaluation losses, the Manager’s ability to do so is subject to, and may be constrained by, compliance with the gearing ratio prescribed by the REIT Code, which currently limits RREEF CCT’s borrowings to no more than 45.0% of RREEF CCT’s total gross asset value.

In the event a property revaluation results in a reduction in gross asset value and consequently RREEF CCT’s borrowings as a proportion of total gross asset value rise above the applicable borrowing limit requirement, the Manager would be required to retain funds that would otherwise be distributable to the Unitholders so as to increase RREEF CCT’s total gross asset value and RREEF CCT may be constrained from further borrowing.

— 43 — RISK FACTORS

RREEF CCT depends on certain key personnel of the Manager, and the loss of any key personnel may adversely affect its business, financial condition and results of operations

RREEF CCT’s success depends, in part, upon the continued service and performance of the Manager’s key executive officers, including the Fund Manager and the Asset Managers, who are licensed by the SFC as Responsible Officers of the Manager as required under the SFO, and certain other key personnel. These persons may leave the Manager in the future, and also may thereafter compete with it and RREEF CCT. The loss of any of these individuals could have a material adverse effect on RREEF CCT’s business, financial condition and results of operations. There can be no assurance that the Manager will be able to attract or retain personnel who hold the requisite regulatory licences.

There are potential conflicts of interest between RREEF CCT, the Manager and affiliates of the Manager arising from outsourcing, which includes general office management, human resources, inhouse legal, investor relations, information technology, marketing, internal audit and origination and execution of acquisitions (as described in the section headed “The Manager — Organisational and Reporting Structure of the Manager”), to the Deutsche Bank Group and the Client Investment Allocation Policy within RREEF

Upon completion of the Global Offering, assuming the Over-allotment Option is not exercised, Mr. Tin Lik will beneficially own, directly or indirectly, approximately 10.0% of the Units then in issue. In addition, the Manager is indirectly owned as to 80.0% by Deutsche Bank AG and directly as to 20.0% by Mr. Tin Lik. RREEF CCT has put in place various procedures and other measures to address potential conflicts of interest and the REIT Code also contains provisions regulating connected party transactions (as described in the sections headed “The Manager — Independence of Directors”, “Corporate Governance — Conflicts of Interests”, “Connected Party Transactions — Waivers for Certain Transactions”, “Connected Party Transactions — Role of the Audit, Risk and Compliance Committee for Connected Party Transactions” and “Connected Party Transactions” generally in this Offering Circular).

However, subject to the Trust Deed, the REIT Code and other applicable laws and regulations, Mr. Tin Lik will have the ability to exercise his rights as a Unitholder in respect of the affairs of RREEF CCT (insofar as such matters are subject to a vote by the Unitholders and Mr. Tin Lik is not required to abstain from voting), including in relation to the approval of significant corporate transactions, such as asset acquisitions or disposals. Moreover, Mr. Tin Lik is engaged in, among other things, investment in, and the development of, properties in the PRC. Separately, the Deutsche Bank Group, through its real estate and infrastructure investment management arm, RREEF, is involved in the real estate investment and fund management business in PRC and elsewhere and RREEF will allocate the property acquisition opportunities to its clients in accordance with its Client Investment Allocation Policy (which is based on a transparent “rotation” system) (see the section headed “The Manager — Outsourced Activities” for details of the system). As a result, there may be circumstances where RREEF CCT is not allocated a property acquisition opportunity that is identified by RREEF.

— 44 — RISK FACTORS

There can be no assurance that the interests of RREEF CCT will not conflict with those of Mr. Tin Lik and/or Deutsche Bank AG and its subsidiaries and affiliates in such circumstances.

The allocation of property acquisition opportunities to clients or managed funds according to RREEF’s client investment allocation policy may have an impact on the growth of RREEF CCT

The Manager will exclusively engage the acquisition resources within RREEF to identify and assist in executing suitable acquisition opportunities for RREEF CCT. RREEF is involved in the real estate investment and fund management business in PRC and elsewhere and RREEF will allocate property acquisition opportunities to its clients and managed funds in accordance with its “Client Investment Allocation Policy” which is based on a transparent “rotation” system to ensure that all RREEF’s clients are treated in a consistent and equitable manner. As a result, in the event RREEF is serving multiple clients or managed funds with similar investment strategies, RREEF CCT may need to queue up according to the said allocation policy for such property acquisition opportunities and this may have an impact on the growth of RREEF CCT. Furthermore, in exchange for access to RREEF’s acquisition resources, the Manager must refer any property acquisition opportunities which it becomes aware of to RREEF. Such acquisition opportunities may or may not be allocated back to RREEF CCT in accordance with the said allocation policy.

RREEF CCT’s success depends on the ability of the Manager and the Property Manager to manage the Property. Failure to manage the Property in a prudent manner may have a material adverse effect on the value of the Property and RREEF CCT’s business, financial condition and results of operations

RREEF CCT depends on the Manager to manage its operations and its portfolio of real estate assets. The Manager will depend upon the fees it will receive from RREEF CCT in connection with the purchase, management and sale of properties to conduct its operations.

The Manager in turn depends on the Property Manager to assist with the management of the Property. The Manager and the HK Property Company have entered into the Property Management Agreement with the Property Manager to perform all day-to-day property management functions for the HK Property Company, such as providing tenancy management services (including leasing services), property management services, rental collection and repatriation services and entity accounting services. The failure of the Property Manager to manage the Property may adversely affect the underlying value of the Property and RREEF CCT’s business, financial condition and results of operations.

Further, if the Property Management Agreement is terminated, the HK Property Company could face a substantial disruption to its operations and an increase in costs incurred for management of the Property, and for certain corporate and administrative services.

— 45 — RISK FACTORS

The Manager’s operations would also suffer if Deutsche Asia Pacific Holdings Pte Ltd and/or Mr. Tin Lik sell their shareholdings in the Manager and/or discontinue their involvement in the Manager’s affairs.

A downturn in the business of its tenants may have an adverse effect on RREEF CCT’s business, financial condition and results of operations

If a tenant experiences a downturn in its business or other types of financial distress, such as bankruptcy or insolvency, it may be unable to make timely rental payments. RREEF CCT’s claims for unpaid rent against a bankrupt tenant may not be paid in full. In addition, RREEF CCT would incur time and expense relating to any eviction proceedings and might not be able to collect rent during such proceedings. Further, when its tenants decide not to renew their leases or terminate early (in cases where a key tenant has termination rights exercisable by written notice), it may not be able to re-let the space. Even if tenants decide to renew or lease new space, the terms of renewals or new leases, including the cost of required renovations or concessions to tenants, may be less favorable to RREEF CCT than current lease terms. As a result of these events, RREEF CCT’s cash flow could decrease and it may not be able to meet its forecast distributions to the Unitholders. For the four months ended 31 December 2005 and the year ended 31 December 2006, the Property had an average monthly delinquency rate of 1.4% and 0.9% respectively. For further information on delinquency rates for the Property, see the section headed “The Property — Delinquency Rates” in this Offering Circular.

The loss of key tenants could have an adverse effect on RREEF CCT’s business, financial condition and results of operations

As at 31 March 2007, the 10 largest tenants in terms of Rental Income represented approximately 53.1% of the Total Rental Income generated by the Property for the month ended 31 March 2007. The three largest tenants in terms of Rental Income together as at 31 March 2007 represented approximately 26.3% of Total Rental Income generated by the Property for the month ended 31 March 2007. If these major tenants experience a downturn in their business that results in their failure to make timely rental payments or default under the leases or failure to renew their leases, RREEF CCT’s business, financial condition and results of operations could be adversely affected.

As at 31 March 2007, leases representing 4.4%, 26.4% and 36.4% of the Total Lettable Area of the Property are scheduled to expire in the years ending 31 December 2007, 2008 and 2009, respectively. RREEF CCT may be unable to renew leases or re-let space as leases expire

As at 31 March 2007, leases representing 4.4%, 26.4% and 36.4% of the Total Lettable Area of the Property are scheduled to expire in the years ending 31 December 2007, 2008 and 2009, respectively. The Manager cannot give any assurance that these leases will be renewed or that the Property will be re-let at rental rates equal to or above the current average rental

— 46 — RISK FACTORS rates. If the rental rates for the Property decrease, or RREEF CCT’s existing tenants do not renew their leases or RREEF CCT does not re-let a significant portion of the spaces for which leases are scheduled to expire, RREEF CCT’s business, financial condition and results of operations could be materially and adversely affected.

RREEF CCT faces competition

RREEF CCT competes for tenants with numerous developers, owners and operators of office properties, many of which own or operate properties similar to or competing with the Property. RREEF CCT also competes with other property companies and property funds for property acquisitions and property-related investments. An inability to compete effectively could adversely affect RREEF CCT’s business, financial condition and results of operations.

An increased rate of withholding tax to 20.0% which would apply from 1 January 2008 unless the PRC State Council specifically reduces this withholding tax rate. HK Property Company could also be deemed as having a permanent establishment in the PRC and be subject to income tax in the PRC based on its deemed or actual profits, either of which could have a material adverse effect on RREEF CCT’s income and distribution to the Unitholders.

RREEF CCT will primarily rely on dividend payments from the HK Property Company for its income. The HK Property Company is currently charged a concessionary withholding tax rate of 10.0% of its Total Rental Income (with no deductions for expenses or allowances except for business tax). If the PRC State Council does not take action to reduce the withholding tax rate, the full rate of withholding tax (20.0%)1 for the HK Property Company would apply from 1 January 2008 under the EIT Law (subject to issuance of the Detailed Implementation Rules to the EIT Law). Prior to the introduction of the EIT Law, the 20% withholding tax rate stated in the Foreign Enterprise Income Tax Law was specifically reduced to 10% by the State Council under a tax notice issued in 2000. However, as the Foreign Enterprise Income Tax Law would be repealed from 1 January 2008, the tax notice previously issued by the State Council reducing the withholding tax rate would not apply to the EIT Law.

Further, the HK Property Company is currently treated as not having a permanent establishment in the PRC in respect of its property leasing activities. If the HK Property Company is subsequently deemed as having a permanent establishment in the PRC by the PRC tax authority, it may be subject to income tax in the PRC, at the rate of 33.0% before 1 January 2008 and 25% thereafter, of its deemed or actual profits. The deemed profit rate may, at the determination of the relevant tax authority, range between 10.0% and 40.0% of its Total Rental Income.

Note: 1. The applicable withholding tax rate for rent under the newly approved EIT Law (i.e. New Enterprise Income Tax Law) is currently stated at 20% and to be applicable from 1 January 2008. However, the EIT Law specifically provides that the 20% rate can be reduced by the PRC State Council and as such there is a possibility that the PRC State Council may reduce the withholding tax to 10% from 20%, subject to the provisions of the Detailed Implementation Rules to the EIT Law to be released.

— 47 — RISK FACTORS

There can be no assurance that the profits tax rate or the rate of withholding tax in the PRC will not change in a manner which may adversely affect RREEF CCT’s income and therefore distributions to the Unitholders.

RREEF CCT is a newly established entity which does not have an established operating history for prospective investors to rely on in making an investment decision

RREEF CCT was established on 28 May 2007. Accordingly, RREEF CCT does not have an operating history by which its past performance may be judged and investors may find it difficult to evaluate its business and prospects. In particular, RREEF CCT’s historical financial information included in this Offering Circular may not necessarily reflect its financial condition, results of operations and cash flows in the future or what its results of operations, financial condition and cash flows would have been had it been a separate, stand-alone entity during each of the periods presented.

RREEF, the real estate and infrastructure investment management arm of the Deutsche Bank Group, has not previously managed a REIT constituted in Hong Kong that invests in properties in the PRC

The Manager is indirectly owned as to 80.0% by Deutsche Bank AG and directly as to 20.0% by Mr. Tin Lik. Although the Deutsche Bank Group, through its real estate and infrastructure investment management arm, RREEF, has extensive real estate investment management experience globally, it has had no prior experience in managing any REIT constituted in Hong Kong that invests in properties in the PRC.

There can therefore be no assurance that the Manager will be able to successfully operate RREEF CCT as a REIT.

RISKS RELATING TO INVESTMENTS IN REAL ESTATE

There are general risks associated with investments in real estate B2(e)/ B2(n)/ B20(a) Investments in real estate are subject to various risks, including but not limited to: (a) adverse changes in political or economic conditions; (b) adverse local market conditions; (c) the financial condition of tenants; (d) changes in availability of debt or equity financing; (e) changes in interest rates and other operating expenses; (f) changes in environmental laws and regulations and zoning laws and other Governmental rules; (g) environmental claims arising in respect of real estate; (h) changes in market rents; (i) changes in the relative popularity of property types and locations leading to an oversupply of space or a reduction in tenant demand for a particular type of property in a given market; (j) competition among property owners for tenants which may lead to vacancies or an inability to rent space on favorable terms; (k) inability to renew leases or re-let space as existing leases expire; (l) inability to collect rents from tenants on a timely basis or at all due to bankruptcy or insolvency of tenants; (m) insufficiency of insurance coverage or increases in insurance premiums; (n) increases in the rate of inflation; (o) inability of the property manager to procure the provision of adequate maintenance and other services; (p) unforeseeable capital expenditure arising from defects

— 48 — RISK FACTORS that need to be rectified or unplanned repairs and maintenance work; (q) the relative illiquidity of real estate investments; (r) considerable dependence on cash flow for the maintenance of, and improvements to, the portfolio properties; (s) increased operating costs, including real estate taxes; and (t) acts of God, uninsurable losses and other factors.

Many of these factors may cause fluctuations in occupancy rates, rental rates or B20(b) operating expenses, causing a negative effect on the value of real estate and income derived from real estate. The annual valuation of the Property will reflect such factors and as a result may fluctuate upwards or downwards. The capital value of RREEF CCT’s real estate assets may be significantly diminished as a result of the occurrence of any of the above factors.

RREEF CCT may be adversely affected by the illiquidity of property investments B2(n)

Property investments, particularly investments in high value properties such as those in which RREEF CCT intends to invest, are relatively illiquid. In addition, under existing applicable regulations, RREEF CCT is required to hold any property acquired for at least two years from the date of the acquisition. Such illiquidity may affect RREEF CCT’s ability to vary its investment portfolio or liquidate part of its assets in response to changes in economic, property market or other conditions. For example, RREEF CCT may be unable to liquidate its assets on short notice or may be forced to agree to a substantial reduction in the price that may otherwise be sought for such assets, to ensure a quick sale. These factors could have an adverse effect on RREEF CCT’s business, financial condition and results of operations, with a consequential adverse effect on RREEF CCT’s ability to make expected distributions to the Unitholders.

RREEF CCT may suffer material losses in excess of insurance proceeds and/or may not be able to procure appropriate insurance cover

The Property could suffer physical damage caused by fire or other causes and RREEF CCT or the HK Property Company may suffer public liability claims, resulting in losses (including loss of rent) which may not be fully compensated for by insurance proceeds. Also, under the Facility Agreement, upon receipt of any proceeds from property damage insurance in respect of the Property exceeding an agreed threshold amount, the relevant amount shall, unless the majority lenders otherwise agree in writing, be applied by the HK Property Company to prepay the Facility but cannot be applied for repair or reinstatement of the Property. In addition, there are other types of losses, such as from war, nuclear contamination and earthquakes, for which RREEF CCT cannot obtain insurance at a reasonable cost or at all. Should an uninsured loss or a loss in excess of insured limits occur, RREEF CCT or the HK Property Company could be required to pay compensation and/or lose the capital invested in the Property as well as anticipated future revenue from the Property. Nonetheless, RREEF CCT or the HK Property Company would remain liable for any debt or other financial obligation, such as committed capital expenditures, related to the Property. It is also possible that third-party insurance carriers will not be able to maintain reinsurance sufficient to cover any losses that may be incurred. Any material uninsured loss could materially adversely affect RREEF CCT’s business, financial condition and results of operations.

— 49 — RISK FACTORS

In addition, RREEF CCT will have to renew its policies every year and negotiate acceptable terms for coverage, exposing it to the volatility of the insurance markets, including the possibility of rate increases. The Manager will regularly monitor the state of the insurance market, but it cannot anticipate what coverage will be available on commercially reasonable terms in future policy years. Any material increase in insurance rates or decrease in available coverage in the future could adversely affect RREEF CCT’s business, financial condition and results of operations.

The Property may be acquired compulsorily

The PRC government has the power to acquire compulsorily any land in the PRC pursuant to the provisions of applicable legislation. In the event of any compulsory acquisition of property in the PRC, the amount of compensation to be awarded is based on the open market value of a property and is assessed on the basis prescribed in the relevant law. If the Property was acquired compulsorily by the PRC government, the level of compensation paid to RREEF CCT pursuant to this basis of calculation may be less than the price which RREEF CCT paid for the Property.

RREEF CCT could incur significant costs or liability related to environmental matters

RREEF CCT’s operations are subject to various environmental laws, including those relating to air pollution control, water pollution control, waste disposal, noise pollution control and the storage of dangerous goods. Under these laws, an owner or operator of real property may be subject to liability, including a fine or imprisonment, for air pollution, noise pollution or the presence or discharge of hazardous or toxic chemicals at that property. In addition, RREEF CCT may be required to make capital expenditures to comply with these environmental laws. The presence (if any) of contamination, air pollution, noise pollution or dangerous goods without a valid licence or the failure to remedy contamination, air pollution, noise pollution or dangerous goods may expose RREEF CCT to liability or materially adversely affect its ability to sell or lease the real property or to borrow using the real property as collateral.

RISKS RELATING TO THE PROPERTY

RREEF CCT presently relies on the Property for all of its Net Property Income. This PN22(b) exposes RREEF CCT to concentration risk and risks associated with the cyclical economic and real estate conditions in Beijing and the PRC as a whole

RREEF CCT currently depends only on the Property for all of its Net Property Income. This concentration may entail a higher level of risk as compared to some other REITs that have properties spread over several different locations or have a more diverse range of investments. Any circumstance that adversely affects the operations or business of the Property, or its attractiveness to tenants, may affect the Net Property Income generated by the Property, and RREEF CCT will not have income from other properties to mitigate any ensuing

— 50 — RISK FACTORS loss arising from such circumstance. A concentration of investment in the Property will cause RREEF CCT to be highly susceptible to the market conditions in Beijing. Physical damage or destruction to the Property resulting from fire, terrorism or other causes could lead to significant disruption of the business and operations of RREEF CCT.

RREEF CCT’s business, financial conditions and results of operations also depend, to a large extent, on the performance of the economy of Beijing and of the PRC as a whole. An economic downturn in Beijing and/or the PRC as a whole could adversely affect RREEF CCT. Also, the value of the Property may be adversely affected by a number of local property market conditions, such as oversupply, the performance of other competing commercial properties or reduced demand for office space. Measures introduced by the PRC government to prevent overheating of the PRC property market (for example, the circular promulgated on 24 July 2006 entitled “The Opinion on Regulating the Access and Management of Foreign Capital in the Real Estate Market” with Serial Code JZF [2006] No.171) could adversely affect the financial position of RREEF CCT in the manner aforesaid.

The Property has a limited operating history

The Property has a limited operating history, with its first tenancy having commenced in September 2005. As at 31 March 2007, the Property had an occupancy rate of 94.2%. For the year ended 31 December 2006, the Property generated Rental Income of approximately HK$173.8 million.

Given its limited operating history, there can be no assurance that the Property will be able to maintain or improve on its past performance.

The attractiveness of the Property may be affected if other commercial districts in Beijing develop or if another international airport is built in Beijing

Some of the key attractions of the Property include its location within one of the main commercial districts in Beijing known as the Lufthansa area, as well as its convenient access by road to the Beijing Capital International Airport. As other commercial districts in Beijing develop and become popular with businesses, the Lufthansa area, and hence the Property, may become less attractive to tenants. The attractiveness of the Property could also be adversely affected if an additional international airport is built at another location in Beijing. Either of these developments could cause existing tenants in the Property to relocate away from the Property, and RREEF CCT may have to lower rental rates at the Property in order to retain existing tenants or attract new tenants. As a result, RREEF CCT’s business, financial condition and results of operation could be adversely affected.

21 of the 85 leases as at 31 March 2007 give the relevant tenants a right to terminate their tenancies without compensation upon prior written notice

21 of the 85 leases as at 31 March 2007, which represent approximately 36.7% of the Total Lettable Area of the Property and 36.2% of the Total Rental Income of the Property for the month ended 31 March 2007, give the relevant tenants, which include key tenants such as

— 51 — RISK FACTORS the BMW Group, the Sony Group and the Cummins Group, a right to terminate their tenancies in respect of all or part of their leased units, after a certain period of the lease, without compensation upon prior written notice of up to six months. If a significant number of such tenants or any of the key tenants exercises such right to terminate their tenancies, and RREEF CCT is not able to re-let the vacated space, its business, financial condition and results of operations may be materially adversely affected. As at 31 March 2007, tenants of leases representing 9.9%, 12.6% and 14.1% of the Total Lettable Area of the Property (and 10.9%, 13.0% and 12.3% of the Total Rental Income of the Property) are entitled to terminate the relevant leases in 2007, 2008 and 2009 respectively. As at the date hereof, none of the tenants of the said 21 leases has exercised its right of termination in 2007.

Failure of registration of three leases may adversely affect the HK Property Company’s ability to repatriate the relevant rental income offshore

The Property was transferred to the HK Property Company from the Predecessor Property Company in April 2006. Out of the 85 leases, 12 leases were granted by the HK Property Company and 73 leases were granted by the Predecessor Property and tenants of the said 73 leases are required to enter into a tripartite agreement with the Predecessor Property Company and the HK Property Company to confirm that the HK Property Company is the new owner of the Property. In order to repatriate rental income received from the tenants, the leases and the tripartite agreements (if applicable) are required to be registered with Beijing Chaoyang District Housing Administration Bureau to reflect the HK Property Company as the landlord of the Property. Out of these 85 leases, procedures for registration of 82 leases with Beijing Chaoyang District Housing Administration Bureau have been completed and registration of two leases (representing 3.93% of the Total Lettable Area and 2.54% of the Total Rental Income), with relevant documents already submitted to the said Bureau, is in the process. Tripartite agreement relating to the remaining lease with The Research Foundation of State University of New York o/b/o The State University of New York (representing 0.2% of the Total Lettable Area and 0.2% of the Total Rental Income) is yet to be signed. The failure of registration of the remaining three leases may adversely affect the HK Property Company’s ability to repatriate the relevant rental income offshore but does not affect the legality and validity of the leases. However, according to the legal opinion provided by Commerce & Finance Law Offices (i) there is no legal impediment in registering the two of the remaining three leases; and (ii) the Predecessor Property Company has agreed to indemnify the HK Property Company from loss of rent (if any) relating to the lease with The Research Foundation of State University of New York o/b/o The State University of New York.

The appraisal of the Property is based on various assumptions and the price at which B2(n) RREEF CCT is able to sell the Property may be different from the Appraised Value or initial acquisition value of the Property

The Independent Property Valuer’s Valuation Report is contained in Appendix VI to this Offering Circular. In conducting its valuations, the Independent Property Valuer adopted the discounted cash flow approach, the investment approach and the direct comparison approach. The valuations were based on certain assumptions, which, by their nature, are subjective and uncertain and may differ materially from actual measures of the market. In addition, property

— 52 — RISK FACTORS valuations generally, and the valuation conducted by the Independent Property Valuer in particular, include a subjective determination of certain factors relating to the Property, such as its relative market position, its financial and competitive strengths, location, and its physical condition. Accordingly, there can be no assurance that the assumptions are accurate measures of the market or that the Property was valued accurately. Further, the Appraised Value of the Property is not an indication of, and does not guarantee, a sale price at that value at present or in the future. The price at which RREEF CCT may sell the Property in the future may be lower than the Appraised Value or the initial acquisition value of the Property.

The market rent for the Property is expected to experience negative growth rates in 2007 and 2008 and the average vacancy rate is expected to rise in 2007

The projected annual growth rate of the market rent for the Property for 2007 and 2008 is minus 5.0%, and 5.0% from 2009 to 2011 (see the Independent Market Consultant’s Letter in relation to its Analysis Report on the Office Property Market in Beijing in Appendix VII to this Offering Circular). Changes in the rental income of RREEF CCT or in the occupancy rate of the Property will impact on the yield of RREEF CCT. For a detailed analysis, see the section headed “Profit Forecast — Sensitivity Analysis” in this Offering Circular. The projected rental decline in 2007 and 2008 can be traced to the significant supply of new Grade A offices in Beijing in 2007 — the outcome of the market’s expectation that there will be a construction moratorium associated with the Beijing Olympics resulting in developers racing to finish their projects before the end of 2007. The 2007 supply represents the bulk of the total supply for the years 2007 to 2010, with only limited supply coming on stream between the second half of 2008 and 2010. As set out in the market consultant report, Knight Frank estimate that demand for Grade A offices in 2007 will not be able to match the abundant supply in the same period. The average vacancy rate is expected to rise in 2007 when new supply reaches a historical high at about 2.44 million sq.m. In 2007, the citywide Grade A vacancy rate is projected to be over 37% and the premium A office vacancy rate is 30%. Leases representing 4.4% and 26.4% of the Total Lettable Area of the Property will expire in 2007 and 2008, respectively. To the extent that new leases are entered into for vacated space, such new leases could be at rental rates which are lower than current rental rates and could adversely affect RREEF CCT’s business, financial condition and results of operation.

The due diligence exercise on the building and equipment may not have identified all material defects, breaches of laws and regulations and other deficiencies

In connection with the acquisition of the Property, due diligence reviews, surveys and inspections have been conducted by Knight Frank Petty Ltd, the Independent Property Consultant. A letter from Knight Frank Petty Ltd in relation to its due diligence survey report is set out in Appendix VIII to this Offering Circular. The due diligence survey comprised: (a) visual inspection of the Property; (b) verification of the current building layouts and usage against the latest approved building plans; (c) visual inspection of all accessible building elements, including the facade, roof and windows; (d) verification of existing or potential hazards; and (e) visual inspection of electrical and mechanical plans and installations, including air conditioning, fire services, plumbing and drainage. Nevertheless, the due diligence process with respect to the physical condition of the Property was limited. There can

— 53 — RISK FACTORS be no assurance that such review, survey or inspection (or the review, survey or inspection report on which RREEF CCT, the Manager and the Underwriters have relied) would have revealed all defects or deficiencies affecting the Property. In particular, there can be no assurance as to the absence of: (i) latent or undiscovered defects or deficiencies; or (ii) inaccuracies or deficiencies in such review, survey or inspection report, any of which could have a material adverse impact on RREEF CCT’s business, financial condition and results of operations.

Losses or liabilities from latent building or equipment defects may adversely affect earnings and cash flow

Design, construction or other latent property or equipment defects in the Property (or any other properties that may in the future be in RREEF CCT’s portfolio of properties) may require additional capital expenditure, special repair or maintenance expenses or the payment of damages or other obligations to third parties, other than those disclosed in this Offering Circular. Costs or liabilities arising from such property or equipment defects may involve significant and potentially unpredictable patterns and levels of expenditure which may have a material adverse effect on RREEF CCT’s earnings and cash flows.

Representations, warranties and indemnities given by any seller of real estate may not afford satisfactory protection from costs or liabilities arising from such property or equipment defects.

A majority of the Property’s leases in terms of Total Lettable Area are for a term of three years, which exposes the Property to significant rates of lease expiries in many years

A majority of the Property’s leases representing 59.2% of the Total Lettable Area of the Property are for a term of three years. As a result, the Property will experience lease cycles in which a significant number of the leases expire each year. This frequency of renewals makes RREEF CCT susceptible to rental market fluctuations, which, in a declining market, may lead to higher vacancies and lower rents and which will in turn reduce its revenues. If a large number of tenants fail to renew their leases in the same year, RREEF CCT’s business, financial condition and results of operations would be materially and adversely affected.

Any recurrence of severe acute respiratory syndrome, or SARS, avian influenza (H5N1 virus) or another widespread public health problem could adversely affect RREEF CCT’s business, financial condition and results of operations

Several countries in Asia, including the PRC (in Beijing and elsewhere), and elsewhere have suffered from outbreaks of diseases like SARS or avian influenza over the past few years, which had a significant adverse impact on the economies of many of the countries affected. Recently, there have been media reports regarding the spread of the H5N1 virus or avian influenza among birds and in particular poultry, as well as some isolated cases in some countries of transmission of the virus to humans. There can be no assurance that there will not be a serious outbreak of a contagious disease in Beijing or elsewhere in the PRC in the future.

— 54 — RISK FACTORS

A renewed outbreak of SARS, pandemic avian influenza or another widespread public health problem in Beijing or elsewhere in the PRC could have a material adverse effect on the Beijing economy and its property market generally, and on RREEF CCT’s business, financial condition and results of operations.

RISKS RELATING TO THE PRC

The PRC property market is volatile

RREEF CCT is subject to property market conditions in the PRC generally and Beijing in particular. Although there is a perception that economic growth in the PRC and the higher standard of living resulting from such growth will lead to a greater demand for commercial properties in the PRC, it is not possible to predict with certainty that such a correlation exists as many social, economic and other factors may affect the development of the property market.

The PRC property market is volatile and may experience oversupply and property price fluctuations. It is estimated by Knight Frank that from 2007 to 2008, the annual average supply of total Grade A office buildings will exceed the annual average take-up. The central and local governments may adjust monetary and other economic policies from time to time to prevent and curtail the overheating of the PRC and local economies, and such economic adjustments may affect the property market in Beijing and other parts of the PRC. The central and local governments may also make policy adjustments and adopt new regulatory measures from time to time in a direct effort to control the over-development of the property market in the PRC. Such policies may lead to changes in market conditions, including price instability and imbalance of supply and demand, which may materially and adversely affect the business, financial condition and the results of operations of RREEF CCT.

The PRC’s economic and other policies could affect RREEF CCT’s business PN22(b)

The economy of the PRC differs from the economies of most developed countries in many respects, including:

(a) structure;

(b) level of development;

(d) control of foreign exchange; and

(e) allocation of resources.

For more than two decades, the PRC government has implemented economic reform measures emphasising utilisation of market forces in the development of the PRC economy. Although the Manager believes these reforms will have a positive effect on its overall and

— 55 — RISK FACTORS long-term development, it cannot predict whether changes in the PRC’s economic and other policies will have any adverse effect on RREEF CCT’s current or future business, financial condition and results of operations. For example, measures have been introduced by the PRC government to prevent overheating of the PRC property market, including the recent announcements that the collection of land appreciation tax will be strictly enforced from 1 February 2007 as well as the measures encapsulated in “The Opinion on Regulating the Access and Management of Foreign Capital in the Real Estate Market” with Serial Code JZF [2006] No.171 (came into force on 11 July 2006) and “The Notification on Regulating the Issues Relating to the Management of Foreign Exchange in the Real Estate Market” with Serial Code HF [2006] No. 47 (came into force on 1 September 2006), which introduced the following restrictions:

(a) if a foreign institution or a foreign individual intends to acquire domestic real estate properties other than that for its own use, such institution or individual should observe the existing regulations regarding investments in real estate by foreign investors and should also apply to establish a foreign investment enterprise;

(b) for a foreign real estate investment enterprise, if its total investment is US$10.0 million or more, its registered capital must be no less than 50.0% of its total investment;

(c) if a foreign investor intends to acquire a domestic real estate firm through equity transfer or through other means, it must pay off the purchase price of the domestic firm in its entirety in a lump sum with its own funds;

(d) if a foreign real estate investment enterprise has failed to pay up the registered capital in full or to obtain the “State-Owned Land Use Right Certificate”,orthatits own capital cannot reach 35.0% of the total investment for the project, such enterprise is not allowed to apply for either domestic or overseas loans, and the foreign exchange administration authority shall not approve its foreign loans; and

(e) the branches and representative offices of foreign institutions established in the PRC (excluding the enterprises approved to undertake real estate business) and the foreign individuals who work or study in the PRC for over one year are allowed to buy houses for their own use, but not for any other purposes. The foreign institutions that have no branches or representative offices in China or the foreign individuals who study or work in China for less than a year are not allowed to buy houses.

Before the said measures came into force, the HK Property Company has obtained the PN23(d) 23(f) building ownership certificate and land use right certificate. As the said measures do not have retrospective effect to the obtaining of the Property by the HK Property Company, these requirements do not apply to the Property and the HK Property Company. These measures may be relevant for properties which RREEF CCT may seek to acquire in the future.

— 56 — RISK FACTORS

There is uncertainty about the quantum of land grant premium which RREEF CCT will PN23(c) have to pay and additional conditions which may be imposed if the Manager decides to seek an extension of the land use rights for the Property in 2053

The Property is held by the HK Property Company under a land use right granted by the PRC government for a 50-year term expiring in 2053 and, upon the expiration of such term, the land use right as well as the ownership of the Property will revert to the PRC government unless the land user applies for an extension of the term of the land use right. If such an application is granted, the land user will be required, among other things, to pay a land grant premium. As none of the land use rights granted by the PRC government thus far has run its full term, there is no precedent to provide an indication of the quantum of land grant premium which RREEF CCT will have to pay and additional conditions which may be imposed if the Manager decides to seek an extension of the land use right for the Property upon the expiry thereof.

Changes in foreign exchange regulations may adversely affect RREEF CCT’s ability to PN22(b) distribute income to the Unitholders and/or the ability of RREEF CCT to make repayments under the Facility

The HK Property Company receives all its revenue in Renminbi, which will have to be converted to Hong Kong dollars for payment as distributions to the Unitholders and to US dollars to make repayments under the Facility. Conversion of Renminbi is subject to strict government regulation in the PRC. Under the existing foreign exchange regulations in the PRC, rental received by the HK Property Company may be converted into foreign currency without the requirement for further approval from SAFE by complying with certain procedural requirements, subject to payment of the relevant PRC taxes by the HK Property Company. There is no assurance that the government policies regarding conversion of Renminbi into foreign currencies will continue in the future.

Fluctuations in the value of the Renminbi could adversely affect the value of PN22(b) distributions paid in respect of the Units in Hong Kong dollars and/or the ability of RREEF CCT to make repayments under the Facility

The HK Property Company receives all its revenue in Renminbi, which will have to be translated to Hong Kong dollars for accounting purposes and converted to (i) Hong Kong dollars for payment as distributions to the Unitholders and (ii) US dollars to make repayments under the Facility. The PRC government introduced a limited floating currency system in July 2005 under which the Renminbi is pegged against a basket of currencies. The exchange rates between the Renminbi and each of the other currencies comprised in the basket may fluctuate to a significant extent and the Renminbi may also be revalued in the future. In addition, if the PRC converts to a fully floating currency system, the Renminbi may experience wide fluctuations as a result of market forces. Any decrease in the value of Renminbi may adversely affect accounting profit and will adversely affect the value of distributions paid in respect of the Units in Hong Kong dollars and/or the ability of RREEF CCT to make repayments under the Facility.

— 57 — RISK FACTORS

Interpretation of PRC laws, tax rules and regulations involves uncertainty PN23(f)

As the Property is located in the PRC, its operations are governed principally by laws and regulations in the PRC. The PRC legal system is based on written statutes and prior court decisions may only be cited as reference. Since 1979, the PRC government has promulgated laws and regulations in relation to economic matters such as foreign investment, corporate organisation and governance, commerce, taxation and trade, with a view to developing a comprehensive system of commercial law. However, as these laws rules and regulations are continually evolving in response to changing economic and other conditions, and because of the limited volume of published cases and their non-binding nature, any particular interpretation of PRC laws and regulations may not be definitive.

The real estate laws of the PRC, including laws relating to land title and building ownership regulations and laws applicable to landlords and tenants, are still under development and reform. In recent years, the Chinese People’s Congress, the State Council, the Ministry of Land and Resources and the Ministry of Construction have promulgated a number of laws and regulations and departmental rules relating to legal problems in respect of land and real estate. In addition, the local people’s congresses and local governments in many provinces and cities also promulgated various local regulations or local rules. There may be uncertainties and inconsistencies in the interpretation and application of these laws, administrative regulations, departmental rules, local regulations and local rules.

Private ownership of real estate in the PRC is at an early stage of development

Private ownership of property in the PRC is still at an early stage of development. Although there is a perception that economic growth in the PRC and the higher standard of living resulting from such growth will lead to a greater demand for private properties in the PRC, it is not possible to predict with certainty that such a correlation exists as there are many social, political, economic and legal factors which may affect the development of the property market.

In addition, accurate analysis or prediction of the PRC property market is made difficult B2(e) due to the lack of reliable historical and up-to-date information regarding the nature and extent of property development and investment activities in the PRC, the demand for properties, the availability of newly developed properties and the availability of land and buildings suitable for development and investment.

Further information about the Beijing office property market is set out in the section headed “The Office Property Market in Beijing” in this Offering Circular.

RISKS RELATING TO AN INVESTMENT IN THE UNITS

The Units have never been publicly traded and the Global Offering may not result in an active or liquid market for the Units

Prior to the Global Offering, there has been no public market for the Units and an active public market for the Units may not develop or be sustained after the Global Offering. Although

— 58 — RISK FACTORS the Units will be listed on the Hong Kong Stock Exchange following completion of the Global Offering, this does not guarantee that a trading market for the Units will develop or, if a market does develop, the liquidity of that market. As RREEF CCT is one of the first batch of private sector REITs listed on the Hong Kong Stock Exchange, it is also unknown whether an active market for trading of the units in such REITs will develop and continue in Hong Kong. As REITs are relatively new investment products in Hong Kong, there are presently no official and few comparable benchmarks against which RREEF CCT’s performance can be measured.

An investment in the Units presents taxation risk

RREEF CCT, as a collective investment scheme constituted as a unit trust and authorised under section 104 of the SFO, is exempt from Hong Kong profits tax, although the HK Property Company is subject to taxation in the PRC and Hong Kong. Any change in the tax status of RREEF CCT, the BVI Property Company or the HK Property Company, or in taxation legislation in the PRC, Hong Kong or the BVI generally or any other jurisdiction affecting the Unitholders could affect the value of the investments held by RREEF CCT or affect RREEF CCT’s ability to achieve its investment objectives or alter after-tax returns to the Unitholders. REITs in Hong Kong may differ in significant aspects, including tax treatment, from REITs in other jurisdictions. If you have any doubt as to your tax position, you should consult your own tax advisor.

The REIT Code has a limited history and the application and interpretation of its provisions may be uncertain

The SFC is empowered under section 104(1) of the SFO to authorise collective investment schemes, subject to such conditions as it considers appropriate. The REIT Code, to which RREEF CCT is subject, was published by the SFC in August 2003 and revised in June 2005. The REIT Code does not have the force of law and, due to its limited history, there may be uncertainties in relation to the interpretation and manner of enforcement of the provisions set out therein. The SFC may, after public consultation, amend the provisions set out in the REIT Code. The SFC reserves the right to review its authorisation of the REIT and may amend the conditions of such authorisation or withdraw such authorisation as it considers appropriate. Furthermore, no assurance can be given that future legislation, administrative rulings, court decisions or changes to the REIT Code will not adversely affect the business, financial condition and results of operations of the REIT or an investment by a Unitholder.

The Unitholders will be effectively subordinated to all existing and future claims of creditors of the HK Property Company

The claims of creditors of the HK Property Company will have priority to the HK Property Company’s assets over the claims of RREEF CCT or the BVI Property Company (other than to the extent that RREEF CCT or the BVI Property Company is an unsubordinated creditor of the HK Property Company). The HK Property Company is expected to incur indebtedness under the Facility on Completion. Secured creditors of the HK Property Company would have prior rights of claim over the secured assets, and all creditors of the HK Property Company would rank ahead of the claims of RREEF CCT or the BVI Property Company (other than to the

— 59 — RISK FACTORS extent that RREEF CCT or the BVI Property Company is an unsubordinated creditor of the HK Property Company). In addition, as a condition precedent to the drawdown of the Facility, a subordination deed is required to be entered into between the BVI Property Company, the HK Property Company, and the facility agent of the Facility whereby the liabilities of the HK Property Company to the BVI Property Company will be subordinated to the liabilities of the HK Property Company to the lender. See the section headed ‘‘Management’s Discussion and Analysis of Future Results of Operations and Financial Condition — Indebtedness’’ and ‘‘Material Agreements and Other Documents — The Facility’’ in this Offering Circular for further details of the Facility and the subordination deed.

The Unitholders have no right to require the redemption of their Units

The Unitholders have no right to require the redemption of their Units. Therefore, there can be no assurance that a Unitholder will be able to dispose of its Units at the Offer Price or any price, or at all. Accordingly, the Unitholders may only be able to liquidate or dispose of their Units through a sale of such Units to third parties on the secondary market.

The price of the Units may decline after the Global Offering

The Offer Price of the Units will be determined by agreement among the Joint Global Coordinators (on behalf of the Underwriters), the Vendor and the Manager and may not be indicative of the market price for the Units after the completion of the Global Offering. The Units may trade at prices significantly below the Offer Price after the Global Offering and the price of the Units may be volatile. The price of the Units will depend on many other factors, which may change from time to time, including but not limited to: (a) the perceived prospects of RREEF CCT’s business and investments and the Beijing and the PRC real estate market; (b) differences between RREEF CCT’s actual financial and operating results and those expected by investors and analysts; (c) changes in RREEF CCT’s revenues or earnings estimates or analysts’ recommendations or projections; (d) changes in general economic or market conditions both domestically and internationally; (e) the market value of RREEF CCT’s assets; (f) changes in market valuations of similar vehicles; (g) increases in interest rates; (h) the perceived attractiveness of the Units against those of other equity securities, including those not relating to the real estate sector; (i) the future size and liquidity of the market for the Units and the Hong Kong REIT market generally; (j) any future changes to the regulatory system, including the tax system, both generally and specifically in relation to Hong Kong REITs and owners and operators of property; (k) the ability on RREEF CCT’s part to implement successfully its investment and growth strategies and to retain its key personnel; and (l) broad market fluctuations, including weakness of the equity market and increases in interest rates.

For these reasons, among others, the Units may trade at prices that are higher or lower than the attributable NAV per Unit. If RREEF CCT retains operating cash flow for investment purposes, as working capital reserves or for other purposes, these retained funds, while increasing the value of its underlying assets, may not correspondingly increase the market price of the Units. Any failure on RREEF CCT’s part to meet market expectations with regard to future earnings and cash distributions may adversely affect the market price for the Units.

— 60 — RISK FACTORS

In addition, the Units are not principal-protected products and there is no guarantee that the Unitholders can regain the amount invested. If RREEF CCT is terminated or liquidated, it is possible that investors may lose all or a part of their investment in the Units.

The forward-looking information in this Offering Circular may prove to be inaccurate B20(a)

This Offering Circular contains forward-looking statements regarding, among other things, forecast net profits and distribution levels for the period from the Listing Date to 31 December 2007. These forward-looking statements are based on a number of assumptions, which the Manager considers to be reasonable. These assumptions are subject to significant uncertainties and contingencies, many of which are beyond RREEF CCT’s control. Moreover, RREEF CCT’s turnover is dependent on a number of factors, including the receipt of dividends and/or distributions, directly or indirectly, from the HK Property Company as well as rent from the Property. Such rent, dividends and distributions may decrease for a number of reasons, including the lowering of occupancy and rental rates, and insolvency or delay in rent payment by tenants, which may adversely affect RREEF CCT’s ability to achieve the forecast distributions as some or all events and circumstances assumed may not occur as expected, or events and circumstances which are not currently anticipated may arise. No assurance can be given that the assumptions will be realised. As such statements and financial information reflect the Manager’s current views concerning future events, such statements and financial information necessarily involve risks, uncertainties and assumptions. The inclusion of such forward-looking statements and financial information cannot be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions by the Manager, the Underwriters or any other person, nor that such results will be achieved or are likely to be achieved.

Insufficient cash flows at the level of the HK Property Company or RREEF CCT will adversely affect RREEF CCT’s ability to pay or maintain distributions to the Unitholders

The net operating profit earned from property investments depends on, among other things, the amount of Rental Income received and the level of property, operating and other expenses incurred. If the Property does not generate sufficient net operating profit, RREEF CCT’s income, cash flow and ability to make distributions will be adversely affected. In addition, if the HK Property Company has insufficient cash flows or distributable profits, surplus or reserves, or if it does not make the expected level of distributions, in any financial year, RREEF CCT’s income, cash flow and ability to pay or maintain distributions to the Unitholders will be adversely affected. Further, the Facility Agreement prohibits the HK Property Company from paying dividends to the BVI Property Company and the BVI Property Company to RREEF CCT if an event of default has occurred, which would also adversely affect RREEF CCT’s ability to pay or maintain distributions to the Unitholders. Although RREEF CCT may be able to incur borrowings in order to make the expected level of distributions, in the event it faces liquidity constraints, its ability to do so is limited by the requirement in the REIT Code that its borrowings be no more than 45.0% of its total gross asset value and it may not have access to borrowings in a timely or cost-effective manner. As a result, any use of borrowings to make the expected level of distributions would only be a short term measure.

— 61 — RISK FACTORS

No assurance can be given as to RREEF CCT’s ability to pay or maintain distributions. Neither is there an assurance that the level of distributions will increase over time, that there will be contractual increases in rent under the leases of the Property nor that the receipt of Rental Income in connection with expansion of the Property or future acquisitions of properties will increase RREEF CCT’s cash flow available for distribution to the Unitholders.

Property yield on real estate to be held by RREEF CCT is not equivalent to the yield on B19(b) the Units

Generally speaking, property yield depends on the amount of Net Property Income (calculated as the amount of revenue generated by the properties concerned, less the expenses incurred in maintaining, operating, managing and leasing the properties) compared against the current value of the Property. Yield on the Units, however, depends on the dividends payable on the Units as compared with the purchase price of the Units. While there may be some correlation between these two yields, they are not equivalent and will vary.

The number of the Units available for future sale, including future sales of the Units by Mr. Tin Lik or other parties, could adversely affect the market price of the Units

No prediction can be made as to the effect, if any, that future sales of the Units by Mr. Tin Lik or other parties, or the availability of the Units for future sale, will have on the market price of the Units. Upon completion of the Global Offering, it is expected that Mr. Tin Lik will own 10.0% (assuming that the Over-allotment Option is not exercised at all) of the then outstanding Units. Although there are restrictions on the disposal of the Units held by Mr. Tin Lik until 180 days after the Listing Date, there can be no assurance that sales of substantial amounts of the Units by other parties will not occur or that Mr. Tin Lik will not dispose of a substantial portion of its Units upon the lapse of such restrictions. Sales of substantial amounts of the Units in the public market following the Global Offering, or the perception that such sales could occur, could adversely affect prevailing market prices for the Units.

The NAV per Unit will be diluted if further issues are priced below the NAV

The Trust Deed contemplates that new issues of the Units may occur, the issue price for which may be above, at or below the then current NAV of RREEF CCT. When new Units are issued at less than NAV, the NAV of existing the Units will be diluted.

The Takeovers Code does not apply to Unit acquisitions and there may be limited information in relation to the interests held by significant holders and other connected persons of RREEF CCT

The Unitholders’ rights differ from, and may be less protective in certain respects than, those granted to shareholders of public companies in Hong Kong. The Hong Kong Code on Takeovers and Mergers does not apply to acquisitions of the units in REITs, which means

— 62 — RISK FACTORS

(among other things) that a person may acquire any number of the Units without being required to make a general offer to acquire the Units held by other Unitholders. Accordingly, the Unitholders may not benefit from a possible premium price and may not receive equal prices for the Units sold.

In accordance with the REIT Code, interests in the Units held by connected persons of RREEF CCT are required to be disclosed in the annual report of RREEF CCT. However, as there is nothing in the SFO which states that the rules on disclosure of interests set out in Part XV of the SFO apply to the Units, and the provisions of the Trust Deed requiring the Unitholders to disclose their interests in RREEF CCT do not have the force of law, this may render it difficult for the Manager to enforce such provisions. Accordingly, the amount of publicly available information concerning holders of significant numbers of the Units may be limited and complete disclosure of the interests of connected persons cannot be assured.

Certain rights in relation to the Units in which a person has an interest or is deemed to have an interest may be suspended under the provisions of the Trust Deed

The Trust Deed contains provisions that require relevant persons to disclose to the Manager, who shall forward to the Trustee, information in relation to the acquisition or disposal of interests in the Units. If the Manager or the Trustee believes a person has not complied with such disclosure of interest provisions in the Trust Deed, irrespective of whether such person is a holder of the Units, the Manager or the Trustee may, in its absolute discretion, take certain actions in respect of all or a part of the Units in which such person holds or is deemed to hold an interest. Such actions may include suspending the voting rights of such Units, suspending the payment of distributions on such Units, and suspending the transfer and registration of such Units.

Accounting standards in Hong Kong are subject to change

Accounting standards in Hong Kong are subject to change. As a result, the financial statements of RREEF CCT and the HK Property Company may be affected by the introduction of any such revised accounting standards. The possibility, extent and timing of these changes in accounting standards are currently unknown and subject to confirmation by the relevant authorities. The Manager has not quantified the effects of these proposed changes and there can be no assurance that these changes will not have a significant impact on the presentation of RREEF CCT’s financial statements or on its results of operations. In addition, such changes may adversely affect the ability of RREEF CCT to make distribution to the Unitholders.

The Units may be delisted from the Hong Kong Stock Exchange

The Hong Kong Stock Exchange imposes certain requirements for the continued listing of securities, including the Units. There can be no assurance that RREEF CCT will continue to meet the requirements necessary to maintain the listing of its Units on the Hong Kong Stock Exchange or that the Hong Kong Stock Exchange will not change the listing requirements.

— 63 — USE OF PROCEEDS

The Manager estimates that the total proceeds to RREEF CCT from the Global Offering, combined with the proceeds from the subscription by Mr. Tin Lik, will be approximately HK$2,616 million (based on the Maximum Offer Price), and approximately HK$2,422 million (based on the Minimum Offer Price).

The following table sets forth the sources of RREEF CCT’s funds following completion of B2(b) the Global Offering and the intended application of those funds:

Based on the Based on the Minimum Offer Maximum Offer Price of HK$5.00 Price of HK$5.40

(HK$ million)

Sources of funds: 435,960,000 Units issued under the Global Offering ...... 2,180 2,354 48,440,000 Units issued to Mr. Tin Lik (2) ...... 242 262 Drawdown on the Facility...... 1,400 1,400

Total ...... 3,822 4,016

Uses of funds: The Acquisition(1)(2)...... 1,888 2,077 Repayment of the Existing Borrowings ...... 1,833 1,833 Issue costs(3)(4) ...... 79 84 Upfront fees for bank loan ...... 22 22

Total ...... 3,822 4,016

Notes: (1) Funds to be used for the Acquisition is being calculated by deducting the repayment of the Existing Borrowings, issue costs and upfront fees for bank loan from the total proceeds of approximately HK$3,822 million (based on the Minimum Offer Price), and approximately HK$4,016 million (based on the Maximum Offer Price). (2) Subscription monies payable by Mr. Tin Lik under the Subscription Agreement shall be deducted from the purchase consideration payable by the Trustee (on behalf of RREEF CCT) to Mr. Tin under the Share Purchase Agreement upon Completion. (3) Issue costs comprise expenses related to the Global Offering, which include underwriting commissions payable to the Underwriters (based on the final Global Offering size), legal fees, printing costs, accountants’ fees, listing costs, advertisement and marketing-related expenses (including roadshow expenses) and other administrative expenses. (4) Under the International Underwriting Agreement, the underwriting commissions and expenses (including, but not limited to stamp duty, Hong Kong Stock Exchange trading fee and SFC transaction levy) as a result of the exercise of the Over-allotment Option will be borne by Mr. Tin Lik.

Based on the table above, the proceeds (net of all fees and charges) from the Global Offering will be used for the Acquisition pursuant to the Acquisition Arrangements. See the section headed “Material Agreements and Other Documents” in this Offering Circular.

— 64 — OWNERSHIP OF THE UNITS

The Unitholders

So far as the Directors are aware, save as disclosed below, no person will, upon B5 completion of the Global Offering, hold an interest in 5.0% or more of the issued Units of RREEF CCT.

The table below details the number and percentage of the Units to be held by Mr. Tin Lik RC5.13 [8.2] and other Unitholders upon the completion of the Global Offering and also after the exercise of the Over-allotment Option in full:

Upon completion of After exercise of the Global Offering the Over-allotment Option(1) No. of % of total No. of % of total the Units Units in issue the Units Units in issue

Mr. Tin Lik ...... 48,440,000 10.0 —— Public/Institutional investors(2)(3) ...... 435,960,000 90.0 484,400,000 100.0 Total ...... 484,400,000 100.0 484,400,000 100.0

Note: (1) Assuming that the Over-allotment Option is exercised in full.

(2) The Units may be allocated to (a) Deutsche Bank Group for its proprietary position; (b) other Deutsche Bank Group funds.

(3) Including the GIC Units and please see section headed “Material Agreements and Other Documents — Corporate Investor and Placing Agreement” for details.

The Units may be allocated to the Deutsche Bank Group for its proprietary position and other Deutsche Bank Group funds. Proper Chinese Wall procedures are in place within Deutsche Bank Group to avoid conflict of interests. Also all allocation of the Units shall be conducted in a fair and orderly manner in accordance with established guidelines and market standards. See the section headed “Connected Party Transactions — Excluded Transactions” in this Offering Circular.

Subscription of the Units by Directors

The Directors and their Associates do not intend to apply for the Units under the Global Offering. In addition, none of the Directors, except for Mr. Tin Lik, will be interested (for the purposes of the disclosure requirements under the Trust Deed which deems that Part XV of the SFO applies) in the Units immediately upon listing of the Units. Save as described in the section headed “Corporate Governance — Interests of, and Dealings in the Units by, Directors, the Manager or the Significant Holders” in this Offering Circular, there is no restriction on the Directors disposing or transferring any part of their unitholding.

— 65 — DISTRIBUTION POLICY

The Manager’s policy is to distribute to the Unitholders an amount equal to 100% of RC 7.12 B2(1) RREEF CCT’s Annual Distributable Income for the period from the Listing Date to 31 December 2007 and thereafter at least 90.0% of RREEF CCT’s Annual Distributable Income for each financial year. Pursuant to the Trust Deed, RREEF CCT is in any event required to ensure that the total amount distributed to the Unitholders shall be no less than 90.0% of RREEF CCT’s Annual Distributable Income for each financial year.

For these purposes, and under the terms of the Trust Deed, “Annual Distributable Income” is the consolidated audited net profit after tax of RREEF CCT and the Special Purpose Vehicles for the relevant financial year adjusted to eliminate the effects of certain Adjustments (as defined below) which have been recorded in the profit and loss account for the relevant financial year. After eliminating these Adjustments, Annual Distributable Income may be different from the net profit recorded for the relevant financial year.

“Adjustments” means significant adjustments which are charged or credited to the profit and loss account for the relevant financial year or the relevant distribution period (as the case may be), including: (a) unrealised property revaluation gains/losses, including impairment provisions and reversals of impairment provisions; (b) impairment loss of goodwill/recognition of negative goodwill; (c) differences between cash and accounting finance costs; (d) realised gains on the disposal of properties; (e) fair value charges on financial instruments; (f) deferred tax charges/credits in respect of property valuation movements, commercial building allowances/capital allowances and other tax deductions claimed; (g) costs of any public offering of the Units that are expensed through the profit and loss statement but are funded by proceeds from the issuance of such Units; and (h) other material non-cash gains/losses.

The Manager also has the discretion to distribute any additional amounts (including capital). In determining whether to distribute any additional amounts (including capital), the Manager will consider a range of factors including but not limited to RREEF CCT’s funding requirements, its financial position, its growth strategy, compliance with relevant laws, regulations and covenants (including existing limitations on borrowings as prescribed in the REIT Code), other capital management considerations, the overall stability of distributions and prevailing industry practice.

Under the Trust Deed, the Manager must, subject to applicable law, ensure that at least one distribution shall be made in respect of each financial year and paid no later than 150 days following the end of the relevant financial year. RREEF CCT’s first distribution after the Listing Date in respect of the period from the Listing Date to 31 December 2007 will be paid on or before 29 May 2008. The Manager’s initial distribution policy is that two distributions will be made in respect of each year, being distributions with respect to the six-month periods ending 30 June and 31 December. The Directors anticipate that distributions will be paid in November and May in each year, respectively.

— 66 — DISTRIBUTION POLICY

Distributions to the Unitholders will be declared and paid in Hong Kong dollars. The Manager may also adopt such rules as it considers appropriate for the reinvestment by the Unitholders of any distributions to be made by RREEF CCT in return for new Units but no Unitholder shall be obliged to receive the Units in lieu of a cash distribution. Under current Hong Kong tax law, distributions may be made free of withholdings or deductions on account of Hong Kong tax. It is understood that, under the Inland Revenue Department’s current practice, no tax should be payable in Hong Kong in respect of distributions made by RREEF CCT. The Unitholders should take advice from their own professional advisors as to their particular tax position.

The Manager must notify each Unitholder through the annual and interim reports of RREEF CCT and the results announcements of RREEF CCT for the relevant financial periods, the extent to which a distribution made is composed of, and the types of, income and capital (which shall be determined by the Manager in its absolute discretion).

RREEF CCT’s ability to make distributions is dependent on (among other things) RREEF CCT having available sufficient cash to make the payments required. See the section headed “Risk Factors — Risks Relating to RREEF CCT’s Organisation and Operations — RREEF CCT will, initially, operate principally through the HK Property Company and its ability to make distributions to the Unitholders is dependent on the financial performance and position of the HK Property Company”. The REIT Code requires the Manager and the Trustee to ensure that each company used to hold real estate and other assets for RREEF CCT for the time being shall distribute to RREEF CCT all of such company’s income for each financial year as permitted by the laws and regulations of its relevant jurisdiction of incorporation.

— 67 — INVESTMENT HIGHLIGHTS

— 68 — INVESTMENT HIGHLIGHTS

EXPOSURE TO INSTITUTIONAL QUALITY OFFICE AND MIXED-USE PROPERTY IN CHINA

● China has been one of the world’s fastest-growing economies over the past 25 years and this growth is expected to continue. China’s real GDP growth averaged 9.8% per annum over the 25 years from 1980 to 2005, according to the Statistical Yearbook of China (2006). From 1978 to 2005, China became the world’s fourth largest economy, up from the 10th largest. Only the US, Japan and Germany had larger nominal GDP. In 2005, China had the world’s second largest purchasing power, after the US, according to the World Fact Books (2006). This strong GDP growth has been driven by factors including strong manufacturing activity and exports, increasing domestic wealth and rising consumption.

● China is urbanising at a rapid rate. In 2005, some 43.0% of China’s people live in urban areas compared with just 19.0% in 1980, according to the Statistical Yearbook of China (2006). In 2005, there were 113 cities with a population of more than one million people according to the Yearbook of China Cities (2006). Knight Frank has identified 57 cities with a population of over one million and per-capita GDP above US$3,000. These 57 cities accounted for 14.0% of China’s population and generated 43.0% of the national GDP in 2005. Many of these cities are regional centers located in coastal regions with heavy concentrations of economic activity. Increased urbanisation will see cities continue to grow, especially those which are already more economically developed. Infrastructure and public services such as transport networks, utilities, and education and healthcare facilities will need to expand to cope with the growing population. This dramatic transformation is driving the strong demand for all types of real estate, including office.

● A shift in urban economies towards service-based activities and the continuing expansion of domestic and multinational businesses are expected to drive demand for office space in China. China’s strong economic growth has been accompanied by a move away from production-based industrial activities to more service-based activities such as research and development, product design, market research, branding and positioning, marketing and advertising as well as distribution and logistics. This restructuring of economic activity has supported strong demand for office space in major urban areas, in a similar way to the strong and sustained growth experienced in North America and Japan between the 1950s and the 1980s.

Multinational service providers continue to enter China and represent another significant segment of demand for office properties in major cities particularly in Beijing and Shanghai.

● Institutional quality space is in high demand and supply is limited. Strong economic activities, coupled with a relatively limited volume of institutional quality office space, is expected to drive robust performance of the office real estate sector. Multinational corporations generally demand higher quality office space. Such quality property is generally in limited supply. Much of the existing office inventory in China is poor quality or functionally obsolete for both multinational tenants and the increasingly demanding and sophisticated local corporations. To benefit from the expansion of domestic

— 69 — INVESTMENT HIGHLIGHTS

businesses and continued entry of multinational companies, the Manager’s investment strategy will focus on investing in institutional quality office and mixed-use properties in the best locations in target cities and properties which are expected to maintain a competitive position over the long term. Target cities are in the most economically developed areas of China, such as the Bohai Rim, the Yangtze River Delta Region and the Pearl River Delta Region. Such properties should continue to experience strong demand and be able to maintain high occupancy and high rents.

● China office properties offer relative value versus other major global office markets. Occupancy costs for office property in both Beijing and Shanghai, China’stwo largest office markets, are well below that of major markets in North America, Europe and Asia. Yields are also at a much higher level.

RREEF CCT IS SUPPORTED BY RREEF — ONE OF THE WORLD’S LEADING REAL ESTATE INVESTMENT MANAGERS

● RREEF CCT will be managed by the Manager, RREEF China REIT Management Limited, which is 80.0% owned by Deutsche Asia Pacific Holdings Pte Ltd. (a wholly owned subsidiary of Deutsche Bank AG). The Manager is part of RREEF, the real estate and infrastructure investment management arm of the Deutsche Bank Group, and one of the world’s leading real estate investment managers. RREEF was ranked by the Watson Wyatt’s Alternatives Survey in September 2006 as the largest alternative investments manager globally. RREEF has over 1,400 staff in 16 offices located throughout the world. As at 31 March 2007, RREEF had more than US$78 billion of real estate and infrastructure assets under management. RREEF manages assets across the risk and reward spectrum, from core, core-plus, value added to opportunistic real estate, and from publicly-traded real estate securities, structured products to infrastructure assets. RREEF is an experienced investor in a wide range of property types including residential, industrial, retail and office.

● RREEF is experienced in investing in Asian markets and currently manages assets in numerous countries around the world. RREEF is an experienced cross border investor. Founded in 1975, RREEF is now an active investor in North America, Europe and Asia Pacific. RREEF has been an active investor in Asia Pacific for almost a decade and has completed real estate investments in China, Taiwan, Japan, Korea, Australia, Thailand, Hong Kong and the Philippines. Today, RREEF has a broad geographical footprint in the region, spanning six offices. The Manager will have access to the resources of RREEF in the region, and most importantly, it will be supported by RREEF’s professionals, who have an established record in investing in Asia.

● RREEF is an experienced professional fiduciary. Since 1975, RREEF has been an active fiduciary manager of third-party funds, and currently manages investments for its institutional and private clients worldwide. RREEF is an experienced manager of a wide

— 70 — INVESTMENT HIGHLIGHTS

range of third-party funds that span the entire risk/return spectrum including private and listed funds. In the Manager’s view, this established track record should provide investors of RREEF CCT with the highest standard of real estate funds management expertise, corporate governance and transparency.

● The Manager’s operations are supported by the robust infrastructure of the Deutsche Bank organisation. The Manager’s acquisitions activities will be supported by RREEF’s extensive experience and resources in the region. The Manager’s operational functions such as internal accounting, human resource, IT and inhouse legal will be supported by and / or outsourced to various relevant departments within the Deutsche Bank Group (for the full list of outsourced functions to Deutsche Bank Group, please refer to the section headed “The Manager — Organisational and Reporting Structure of the Manager”). It is the Manager’s view that Deutsche Bank Group’s existing robust infrastructure will provide the Manager with capability and resources that will be superior to internally built infrastructure.

QUALITY PROPERTY WITH ATTRACTIVE INVESTMENT CHARACTERISTICS

● RREEF CCT will provide direct exposure to Beijing’s strong economic growth. RREEF CCT will initially provide the Unitholders with direct exposure to Beijing Gateway Plaza, a Premium Grade A office building in Beijing. Beijing is China’s second largest city after Shanghai in terms of GDP. Beijing is the country’s third most populous city with more than 15 million citizens. In parallel with China’s economic resurgence, Beijing has undergone a rapid economic transformation in the past quarter century. In 2005, 51 Beijing-based enterprises contributed taxes of RMB103.5 billion to the country, and ranked among the top 500 corporate taxpayers. Such contribution is unmatched by any other city or province in the country. Over the next decade, Beijing’s GDP is expected to increase by 7.0% to 9.0% per annum. With China’s accession to WTO, corporations are expected to continue to set up or expand their business operations in Beijing. Consequently, the Beijing office market is expected to continue to grow in line with the economy.

Beijing will also host the Summer Olympic Games in 2008. The Beijing Municipal government has pledged to spend a total of RMB280 billion upgrading urban infrastructure by 2008. Other favorable redevelopment policies in the lead up to 2008 are likely to generate further local economic growth.

The Manager believes that the Property, situated in one of the major commercial districts in Beijing, is well-positioned to enjoy the upside from the changes described.

● Beijing’s unique competitive advantages. While many coastal cities in China have experienced rapid economic growth over the past 25 years, Beijing has distinct competitive advantages that are likely to make its economic development more sustainable than that of other Chinese cities. Among other factors, Beijing has the largest number of higher education and scientific research institutions in the country and is home to the prestigious Peking University and Tsinghua University.

— 71 — INVESTMENT HIGHLIGHTS

Beijing is also China’s capital city. Prior to economic reforms that started in the late 1970s, Beijing was home to most of the country’s national (state-owned) enterprises. Today, while most of these enterprises have been corporatised, many of them continue to be headquartered in Beijing as a result of its proximity to financial, monetary and industrial policy makers. Many multinational corporations also find it desirable to have a presence in Beijing. These factors underpin an important segment of demand for Grade A office properties in Beijing.

Beijing is also one of China’s highest generators of tourism income. In 2005, Beijing received 125 million domestic tourists, generating revenue of RMB130 billion. In the same year, Beijing’s foreign exchange revenue reached US$3.6 billion. A further jump in the number of tourists is likely in 2008 when Beijing hosts the Summer Olympic Games. The Summer Olympic Games will also support the city’s continuing growth.

● Premium Grade A office building. The Property is one of nine Premium Grade A office buildings in Beijing and the only Premium Grade A office building in its submarket, the Lufthansa area, according to Knight Frank. Judging from the planned specifications and locations of future office supply, the Lufthansa area is not expected to see any additional Premium Grade A office building at least until 2009. In the overall Beijing market, only three of the nine Premium Grade A office buildings are considered to be of superior quality to the Property, according to Knight Frank. These three buildings have a total gross floor area of 237,000 sq.m., accounting for just 6.0% of Beijing’s total Grade A office building stock as at the end of 2006. At the end of 2006, the amount of Premium Grade A office building stock stood at 820,000 sq.m., representing approximately 20.7% of the 3.97 million sq.m. of total Grade A office buildings stock. As at 31 March 2007, the Property’s occupancy rate was approximately 94.2%1. This occupancy rate was achieved in the 19 months after completion. In the Manager’s view, this demonstrates the Property’s premium quality.

● The Property is in a prime location. The Lufthansa area has been one of Beijing’s fastest developing commercial areas, largely due to convenient access to the CBD, Beijing Capital International Airport, the Olympic Village and Haidian District. The high occupancy rate of Grade A office buildings in the Lufthansa area signifies strong demand for quality office space in this area. All Grade A buildings in the area have an occupancy

Note: 1. “Occupancy rate=1-Vacancy rate”

“Vacancy rate = (Floor area of offices available for leases)/(Total floor area of the office building)”. Even if there is a binding lease, an office unit will be categorised as vacant if the lease term has not commenced and tenant occupancy date is used as the reference for calculating the vacancy rate.

— 72 — INVESTMENT HIGHLIGHTS

rate higher than or equal to 90.0%2 (Landmark Tower — 95.0%, Lufthansa Center — 95.0%, Silver Tower — 90.0%, Sunflower Tower — 97.0% and Hyundai Tower — 98.0%). The Lufthansa area is expected to have a limited supply of new office space in the next 2 years. New supply in the Lufthansa area in 2007 is expected to account for only 13.8% of Beijing’s total new supply during the period. Furthermore, the quality of the new supply expected to be available in 2007 in the district is anticipated to be inferior to Beijing Gateway Plaza in terms of technical specifications and location, according to Knight Frank.

● The Property benefits from convenient transportation access. Located at the junction of the East Third Ring Road and the Airport Expressway, a major transportation hub in the downtown area of Beijing, the Property is easily accessible by public transportation. It takes only about 15 to 20 minutes by car to Beijing Capital International Airport. The Property also enjoys convenient transportation to Jianguomen Commercial District and Zhongguancun.

In preparation for the Summer Olympic Games in 2008, the Beijing subway system is being expanded. Two stops on the new No. 10 line will be located in the Lufthansa area. These stops are expected to enhance the accessibility of the Property. A new magnetically-levitated train service linking the Lufthansa area with Beijing Capital International Airport is under construction and is targeted for completion by mid-2008. This is expected to enhance the Property’s appeal to multinational companies.

● High quality tenant base. The Property has high quality tenants, including a number of major multinational companies and domestic enterprises. The top 10 largest tenants include the BMW Group, the Sony Group, Bank of China, the Cummins Group, Fuji-Xerox Co., Ltd., the Zurich Financial Services Group and the SK Group. Other notable tenants include John Deere, POSCO, Doosan, Qatar Airways and United Airlines. The Manager believes this high quality tenant mix will offer RREEF CCT a reliable and stable income stream.

● Diverse tenant mix. The Property has a diverse tenant base, with tenants engaging in a wide range of business sectors. As a result of the low concentration in any specific business sector, the Property’s risk exposure to any single business sector during adverse economic conditions is minimised. As at 31 March 2007, no single business sector accounted for more than 25.0% of the Total Lettable Area.

Note: 2. “Occupancy rate=1-Vacancy rate”

“Vacancy rate = (Floor area of offices available for lease)/(Total floor area of the office building)”. Knight Frank collects the vacancy rate data through surveys. Knight Frank does not categorise an office unit as vacant if it is subject to a binding lease even though the lease term has not commenced. The vacancy rate defined by Knight Frank may not be identical to the ones compiled by other parties who use the lease commencement date or tenant occupancy date as the reference for calculating the vacancy rates.

— 73 — INVESTMENT HIGHLIGHTS

● The Property has a defensive lease expiry profile. The Property’s lease expiry profile indicates that only 4.4% of the Total Lettable Area is subject to renewal in 2007. As a result, the building’s overall rental income will be under little pressure from the supply hike impact in 2007, even though average market rental in Beijing is expected to drop during this period. Moreover, in line with market practice in China, the leases generally do not provide for rental review during the period of the lease. The Property’s peak tenancy expiry period will be 2008 and 2009, each accounting for 26.4% and 36.4% of the Total Lettable Area respectively. The building’s overall rental income is not likely to be under great pressure, according to Knight Frank, since there will be no or limited supply in 2008 and 2009 during or right after the Summer Olympic Games. One key consideration for tenants looking at office accommodation options is the cost of relocation. Given the quality of the office fit-out, the Manager does not expect that the benefit of relocation will compensate tenants sufficiently to write off their fit-out costs.

● The Property has minimal forecast capital expenditure requirement. With construction completed in 2005, the Manager and the Independent Property Consultant do not anticipate any significant capital expenditure requirements in the near term. The Manager also does not expect any requirements for significant expenditure for repairs and maintenance as a result of wear and tear in the near term.

● Professional property management. The Property is and will continue to be managed by Beijing Jones Lang LaSalle Property Management Services Co., Ltd. The Property Manager is a subsidiary of Jones Lang LaSalle Incorporated (“Jones Lang LaSalle”), which specialises in real estate services. Jones Lang LaSalle has more than 150 offices worldwide, operations in more than 450 cities in 50 countries on five continents, and has been named to Forbes magazine’s Platinum 400 in both 2006 and 2007. In the Manager’s view, these demonstrate that Jones Lang LaSalle is an industry leader in property management and corporate facility services, and that it manages properties according to international industry best practice. In China, Jones Lang Lasalle is accredited by the Ministry of Construction as a “Grade 1 Property Manager” on 1 March 2005.

— 74 — STRATEGY

— 75 — STRATEGY

The Manager’s key objective is to provide investors in RREEF CCT risk-adjusted, long-term total return through investing in a diversified portfolio of institutional quality office and mixed-use properties located in major cities in China, Hong Kong and Macau. Mixed-use properties will be considered for investment if a significant portion of the property has been designated for office use. The properties will be Premium Grade A through Grade B and, in all instances, will be the appropriate grade and scale for the relevant market and the existing or potential tenant base. The properties will be strategically located in commercial districts within each city and will benefit from an existing competitive position in the market and the expectation that such position can be maintained over the long-term. The investment strategy will focus on, but will not be limited to, high-growth cities in the Bohai Rim, the Yangtze River Delta and the Pearl River Delta regions. Hong Kong and Macau will also be considered in order to provide investors with diversified exposure to all of China’s major economic centers over the long term.

The Manager believes this strategy is capable of providing risk-adjusted, long-term total return for the following primary reasons:

(i) China’s urban economies are continuing to shift to serviced-based activities. The tertiary component of China’s GDP has increased from 24.0% to 40.0% over the past 30 years. The number of serviced-based workers in China increased from 124 million in 1991 to 238 million in 2005.

(ii) The central business districts in the major cities in China are maturing. This should help dampen the supply and demand imbalances and volatility in vacancy rates and rental growth which have historically occurred as a result of lack of scale and critical mass and an abundant land supply.

(iii) Quality space is generally in high demand and limited supply. Given the relative poor quality of much of the existing office stock and the increasing sophistication of both multinational and domestic tenants, historically quality assets in good locations have outperformed the broader market. This “flight to quality” is expected to continue.

(iv) Office occupancy costs and yields for China’s major markets are attractive relative to other major global office markets.

The Property will be the initial asset in RREEF CCT’s portfolio and will provide investors with immediate exposure to the Beijing office market. Beijing is China’s capital city and has the largest office market in the PRC. Although significant new office supply is expected in the Beijing office market over the next two years, the Manager believes the Property has many characteristics, including its location, technical and design specifications and quality tenancy, which should allow it to outperform the broader market. The Manager believes the Property will provide a stable base from which to grow RREEF CCT’s portfolio.

RREEF CCT’s portfolio will be constructed to provide the Unitholders with regular and stable cash distributions, with the potential for sustained long-term growth of such distributions

— 76 — STRATEGY and long-term appreciation in the value of the portfolio. The Manager aims to accomplish these objectives by optimising the performance and enhancing the overall quality of RREEF CCT’s portfolio of properties by utilising various strategies, each of which is described in detail below.

INVESTMENT STRATEGY

The Manager intends to deliver asset, geographic, tenant and tenant industry diversification through the acquisition of additional properties. The Manager will actively identify, evaluate and selectively acquire properties with the potential to contribute to the sustainable growth in distributions by RREEF CCT and/or enhance the value of its portfolio over the long-term. The proportion of total return provided by current distributions versus the long-term value growth from each potential property acquisition is expected to differ. This is largely due to the current variability in real estate market maturity among the target investment markets. Property acquisitions will be determined by a disciplined and objective methodology to appropriately balance the dual investment objectives of sustainable current income and longer-term value appreciation.

In evaluating acquisition opportunities, the Manager will also consider a number of factors including:

(i) location of the property (city, submarket and specific intersection) and access to infrastructure (roads, mass transport and other amenities and services);

(ii) the appropriateness of the property’s scale, quality, design and technical specifications for the relevant market and existing and potential tenant base;

(iii) the property’s current competitive position and its ability to maintain that position over the longer term;

(iv) the quality of the tenant profile and the manageability of the lease expiry profile;

(v) ability to add medium to long-term value through employing its asset management strategy; and

(vi) effect on RREEF CCT’s geographic, tenant and/or tenant industry diversification.

To best execute the acquisition strategy, the Manager will engage the acquisition resources within RREEF to identify and assist in executing suitable acquisition opportunities for RREEF CCT (see the section headed “The ManagerOutsourced Activities” for details of the Client Investment Allocation Policy).

The Manager believes RREEF is well positioned to identify and execute acquisition opportunities for RREEF CCT based on RREEF’s: (a) in-place acquisitions team which has a focus on originating and executing real estate investments in China; (b) ability to source

— 77 — STRATEGY investment opportunities by leveraging its relationships with key market participants in China; (c) extensive experience in identifying, evaluating and executing property acquisition opportunities in many markets throughout the world; and (d) connection with Deutsche Bank Group’s network and relationships in China.

In addition, Mr. Tin Lik will provide RREEF CCT, not subject to the Client Investment Allocation Policy, with a right of first refusal over any suitable acquisition opportunities that he develops over the next five years from the Listing Date (see the section headed “Material Agreements and Other Documents — Right of First Refusal” in this Offering Circular).

The Manager is not currently considering any specific acquisition opportunity for RREEF CCT in the 12-month period from the Listing Date, but will actively seek to grow the portfolio after Listing. The Manager will consider acquiring additional properties as and when opportunities arise which meet its investment criteria.

The Manager intends for RREEF CCT to acquire and hold properties for the purpose of long-term investment. Should the Manager consider any property to have reached a stage where it is dilutive to RREEF CCT’s overall risk adjusted return, subject to compliance with regulatory requirements and obtaining requisite Unitholders’ approval, it may sell the property through either the disposal of RREEF CCT’s interest in that property directly or of RREEF CCT’s interest in the relevant special purpose vehicles. According to the REIT Code, the holding period of a property is at least two years unless RREEF CCT has clearly communicated to its Unitholders the rationale for disposal and its Unitholders have given their consent to such sale by way of a special resolution at a general meeting. Sales proceeds would be used to invest in new properties which meet its investment criteria.

ASSET MANAGEMENT STRATEGY

The Manager will place a strong emphasis on the active asset management of RREEF CCT’s portfolio in order to maximise both current distributions and longer term capital growth. In pursuing its asset management strategy, the Manager will consider and, if appropriate, implement measures which may include the following:

Leasing

(i) proactively managing lease renewal negotiations including advance sourcing of new tenants, minimising vacant periods and maximising net effective rents;

(ii) setting and achieving optimal rental benchmarks relative to asset class and market;

(iii) enhancing building profile and attractiveness through marketing and promotional schemes;

(iv) monitoring major corporate relocation trends and expansion plans; and

(v) maintaining good relationships with leasing agencies;

— 78 — STRATEGY

Tenancy Management

(i) cultivating and managing long-term relationships with tenants; and

(ii) marketing portfolio buildings to existing tenants;

Asset Enhancement

(i) exploring opportunities to increase revenue of the portfolio through refurbishment or investment in facilities to maximise the income-producing areas of the properties; and

(ii) reconfiguring building layouts, floor plates and usage to optimise building efficiency and rental potential;

Rental Collection and Repatriation

(i) actively managing rental arrears to minimise bad debts; and

(ii) supervising the rental repatriation process by imposing effective controls on the delegates in executing tenancy registration, rental collection and repatriation;

Property Management

(i) setting high standards for the property management services to ensure building management and maintenance issues are promptly and effectively addressed to the satisfaction of the tenants;

(ii) regularly evaluating the performance of the Property Manager based on a pre- defined set of key performance indicators;

(iii) improving operational efficiencies and optimising operating costs;

(iv) adopting enhanced information technology to enable more effective and efficient operations; and

(v) working together with the Property Manager to implement energy saving initiatives and implement environmentally friendly policies.

FINANCIAL STRATEGY

The Manager will focus on optimising the capital structure of RREEF CCT within the requirements under the REIT Code with the goal to maximise distributions to the Unitholders and enhance RREEF CCT’s growth potential while maintaining appropriate levels of financial prudence. The Manager intends to use a combination of debt and equity financing to fund future acquisitions and property enhancements. The gross gearing ratio (i.e. total outstanding

— 79 — STRATEGY borrowings divided by the total gross asset value) of RREEF CCT is intended not to exceed 45.0%. In addition to its debt strategy (including the issuance of convertible instruments), the Manager intends to capitalise on opportunities to raise further equity capital through (subject to the requirement of the REIT Code) issue of additional Units, if RREEF CCT has an appropriate use for the proceeds. The Manager believes that such a capital management strategy will improve total returns while reducing risks for the Unitholders by maintaining financial flexibility to meet both growth and capital expenditure requirements. The Manager will regularly review its capital management structure to reflect RREEF CCT’s investment strategies, its operations, the general economic environment and the REIT Code requirements.

The Manager may consider utilising hedging instruments and techniques available in the market to minimise the risks of underlying interest and foreign currency exposures.

The Manager will adopt a proactive interest rate management policy to manage the risk associated with changes in interest rates on any loan facilities while also seeking to ensure that RREEF CCT’s on-going cost of debt capital remains competitive.

BUSINESS MANAGEMENT STRATEGY

The Manager will employ experienced management and staff and instill sound corporate governance practices, operating procedures and information management systems to provide effective and high-quality fund and asset management services to RREEF CCT. As an experienced real estate investment manager, RREEF (through the Directors it has appointed to the Board) and the outsourcing arrangements will enable the Manager to operate in accordance with RREEF’s proven best practices and with the highest level of integrity. Details of the Manager’s corporate governance practice and its operational standards are contained in the section headed “Structure, Management and Agreements” in this Offering Circular.

— 80 — THE PROPERTY

DETAILS OF THE PROPERTY PN 21 RC 7.1/7.2 B2 (i) Description

The Property is a Premium Grade A office building with Total Lettable Area of 106,393.8 sq.m. situated in Chaoyang District, Beijing within the Lufthansa area. Completed on 26 August 2005, the Property comprises two 25-storey towers connected by a three-storey atrium as well as three underground floors with 675 car park spaces, plant rooms and ancillary facilities. The Property comprises 94,714.7 sq.m. of office space and 11,679.1 sq.m. of retail space.

The Property has a strong tenant base with leases to multinational companies and B2 (i) domestic enterprises, including: the BMW Group; the Sony Group; Bank of China; the Cummins Group; Fuji-Xerox Co., Ltd.; the Zurich Financial Services Group and the SK Group. As at 31 March 2007, 94.2% of the Total Lettable Area has been leased under 85 leases with terms ranging from two years to 10 years.

The Property’s first three storeys constitute an atrium which is currently occupied by the B2 (d) Beijing Chaoyang Sub-branch of Bank of China, an executive club, restaurants, a BMW Group showroom and a cafe which services tenants in the Property. Facilities including a swimming pool, gymnasium and sauna, representing 1.42% of the total Gross Floor Area, are under construction. The Manager expects such facilities to be completed by July 2007.

The fourth to 25th storeys house the office portion of the Property. The office lift lobby is (VI-14) located on the 3rd level. Office floor areas range from 1,474.8 sq.m. to 2,289.0 sq.m. Duplex offices with internal staircases are located on the 12th and 13th storeys, the 14th and 15th storeys, and the 24th and 25th storeys. The 20th to 22nd storeys are designed as triplex offices with internal staircases.

A three-storey common basement is designed for 675 car park spaces, civil defence shelter, plant room and ancillary uses.

An underground staff canteen with a Gross Floor Area of 826.0 sq.m. is located within the Property boundary, separated from the main building. The canteen is open to all tenants and visitors of the Property and provides food and drink service to them (see the sub-section headed “Staff Canteen” below).

The Property was designed by the P&T Group, a leading international architecture and engineering company, and is managed by the Property Manager, a subsidiary of Jones Lang LaSalle Incorporated — a prominent international property management company. The P&T Group has been responsible for designing a number of prominent landmarks in Asia including the Chang An Avenue, Beijing Oriental Plaza, Singapore’s Standard Chartered Bank headquarters, Hong Kong’s Exchange Square I, II and III, and Bangkok, Thailand’sAll Seasons Place.

— 81 — THE PROPERTY

Awards and Accolades

The Property has received several awards and accolades, including a National Construction Award ( ) and the title of “Municipal Fabrication International Model Project” ( ) from the Ministry of Construction of China in 2006, and a “Nationwide Top 10 Landmark Construction Projects of 2004” (2004 10 ) from the China Real Estate Top 10 Research Group. The Property was also included in the 2006 list of excellent construction projects (2006 ) compiled by the China National Construction Quality Award Review Committee ( ).

Location RC 2B(i)

The Property is located in Chaoyang District, Beijing at the junction of East Third Ring Road and Airport Expressway, and is within the traditional commercial and office area known as the Lufthansa area in Beijing. The Lufthansa area is opposite the Third Embassy Area in Chaoyang District. It is one of the earliest and most important prime districts in Beijing for office, commercial and retail establishments.

Developments in the vicinity include commercial buildings, hotels, shopping arcades and embassy residences. Local landmarks include Silver Tower, situated next to the Property, Hyundai Motor Tower, CTS Plaza, Jingxin Mansion, Air China Mansion, Hilton Hotel, and well-known establishments such as Kempinski Hotel, Great Wall Sheraton Hotel, Landmark Tower, Sunflower Tower, and Lufthansa Shopping Centre, all situated within the Lufthansa area.

A map illustrating the geographical location of the Property is set out in the section headed “The Office Property Market in Beijing” in this Offering Circular.

Gross Floor Area

According to the Building Ownership Certificate, the Property has a Gross Floor Area of 130,488.1 sq.m. comprising 102,735.6 sq.m. above ground, 27,012.4 sq.m. below ground and 740.1 sq.m. for plant rooms and ancillary facilities. As required under PRC laws and regulations, there is a civil defence shelter in the basement of the Property with a Gross Floor Area of 8,604.8 sq.m., which belongs to the government. Through the Predecessor Property Company, the HK Property Company has obtained a permit to use the civil defence shelter for the purpose of car park (see the sub-section headed “Civil Defence Shelter” below). The total Gross Floor Area (including the space comprised in the civil defence shelter) of 139,092.8 sq.m. has been configured for use in the following manner: 102,735.6 sq.m. of office and retail space as well as 36,357.2 sq.m. of car park space and space used for plant rooms and ancillary facilities.

— 82 — THE PROPERTY

Ownership and Land Use Right

The HK Property Company holds the Property under a Land Use Right Certificate RC 7.7 ( (2003)0075 ) commencing 26 April 2006 which terminates on 25 February 2053 as well as a Building Ownership Certificate ( 10298 ) commencing 6 April 2006 provided that:

(a) although the staff canteen is part of the Property and the land use right of the land on which it’s situated is included in the Land Use Right Certificate, it is not comprised in the Building Ownership Certificate relating to the Property (see sub-section “Staff Canteen” below); and

(b) the ownership of the civil defence shelter belongs to the PRC government (see sub-section “Civil Defence Shelter” below) and the Land Use Right Certificate does not include civil defence shelter.

Valuation

The Appraised Value of the Property (which does not include (a) stated above) was determined by the Independent Property Valuer as at 31 March 2007. The Appraised Value and the acquisition value of the Property are set out in the following table:

Based on the Minimum Offer Price of Based on the Maximum Offer Price of HK$5.00 HK$5.40

Acquisition Acquisition Appraised Acquisition Value per Acquisition Value per Value Value(1) Discount sq.m. Value(1) Premium sq.m.

(HK$ million) (HK$ million) (%) (HK$) (HK$ million) (%) (HK$)

3,978 3,822 3.9 35,923.1 4,016 1.0 37,746.6

Note: (1) The Acquisition Value represents the agreed acquisition value for the Property for the purpose of computing the purchase consideration for the BVI Property Company Share under the Share Purchase Agreement.

— 83 — THE PROPERTY

Occupancy Rate

As at 31 March 2007, the Property had 100,242.7 sq.m. occupied by the tenants, representing an occupancy rate of 94.2%.

The following table sets forth the occupancy rates of the Property as at:

Occupancy rate(1)

(%)

31 December 2005...... 30.9 31 March 2006...... 39.8 30 June 2006...... 52.4 30 September 2006...... 60.9 31 December 2006 ...... 81.0 31 March 2007...... 94.2

Note

(1) “Occupancy rate = 1- Vacancy rate”

The Manager believes the Property’s occupancy level and the short period of time it has taken to achieve this occupancy level reflects the high demand for good quality and strategically located commercial space in Beijing.

Net Property Income

Based on the existing leases as at 31 March 2007, the average annual rental per leased B2(i) square metre is HK$3,000.5.

— 84 — THE PROPERTY

Tenant Mix

By Total Rental Income(1) By Total Lettable Area(2)

Notes:

(1) Excluding income derived from the leasing of advertising spaces in the Property.

(2) Excluding vacant space.

— 85 — THE PROPERTY

10 Largest Tenants RC 2B(i)

The 10 largest tenants (in terms of Rental Income for the month ended 31 March 2007) accounted for HK$14,521,332 in Rental Income and 51,468.6 sq.m. of Lettable Area, representing 53.1% of the Total Rental Income for the month and 48.4% of the Total Lettable Area, respectively. As at 31 March 2007, Bank of China, Beijing Chaoyang Sub-branch, the largest tenant (in terms of Rental Income for the month ended 31 March 2007) of the Property, accounted for 10.2% of the Total Rental Income of the Property. The following table sets out information pertaining to the 10 largest tenants as at 31 March 2007:

Percentage of Percentage of Total Lettable Total Rental Name Business Sector Lease Expiry Date Lettable Area Area Income(1) (sq.m.) (%) (%) Bank of China, Beijing Banking and finance 7 September 2015 5,875.7 5.5 10.2 Chaoyang Sub-branch BMW Group(2) Automotive 31 October 2011 12,739.6 12.0 9.9 Sony Group(3) Electronic goods 31 October 2008 6,414.6 6.0 6.2 SK Group(4) Conglomerate 31 May 2009 5,704.7 5.3 5.6 Cummins Group(5) Industrial goods 30 November 2008 4,586.1 4.3 5.2 Hurray Holdings Co., Ltd. IT and software 31 October 2009 4,803.6 4.5 4.7 Fuji-Xerox Co., Ltd(6) Industrial goods 31 May 2008/ 4,485.3 4.2 4.3 31 July 2008 Zurich Financial Services Banking and finance 31 January 2011 2,286.3 2.2 2.4 Group(7) Heng An Standard Life Banking and finance 31 January 2011 2,286.3 2.2 2.4 Insurance Co., Ltd. NTT Group(8) IT and software 31 March 2009 2,286.3 2.2 2.2 Subtotal 51,468.6 48.4 53.1 Other tenants 48,774.0 45.8 46.9 Vacant space 6,151.2 5.8 N/A Total 106,393.8 100.0 100.0

Notes: (1) Excluding income derived from the leasing of advertising spaces in the Property. (2) Comprising BMW China Automotive Trading Ltd., BMW Brilliance Automotive Ltd. and BMW Beijing Office. (3) Comprising Sony China Ltd. and Sony Hong Kong Limited Beijing Office. (4) Comprising SK Communications, SK Corporation Beijing Representative Office, SK Engineering & Construction and Hong Kong SK (China) Limited Beijing Office. (5) Comprising Cummins (China) Investment Co., Ltd. and Cummins Engine Co., Ltd. Beijing Representative Office. (6) Comprising Fuji-Xerox Industrial Development (Shanghai) Co., Ltd, Shanghai Representative Office. Three leases have been signed and one of the leases is scheduled to expire on 31 July 2008 (accounted for 1.1% of the Total Lettable Area and 1.1% of Rental Income for the month ended 31 March 2007 respectively) and the other two leases are scheduled to expire on 31 May 2008 (together accounted for 3.1% of the Total Lettable Area and 3.2% of Rental Income for the month ended 31 March 2007 respectively). (7) Comprising Zurich Insurance Company Beijing Representative Office, Zurich Insurance Company Beijing Office, Beijing Best Harmonious Insurance Brokers Co., Ltd. and Zurich Technical and Consulting Services (Beijing) Co., Ltd. Leases in relation to Zurich Technical and Consulting Services (Beijing) Co., Ltd. and Zurich Insurance Company Beijing Office are scheduled to expire on 31 January 2011 (together accounted for 1.5% of the Total Lettable Area and 1.6% of the Total Rental Income for the month ended 31 March 2007 respectively). Lease in relation to Zurich Insurance Company Beijing Representative Office is to expire on 31 January 2011 (accounted

— 86 — THE PROPERTY

for 0.02% of the Total Lettable Area and 0.02% of the Total Rental Income for the month ended 31 March 2007 respectively). Lease for Beijing Best Harmonious Insurance Brokers Co., Ltd is to expire on 31 January 2011 (accounted for 0.7% of the Total Lettable Area and 0.8% of the Total Rental Income for month ended 31 March 2007 respectively).

(8) Comprising Nippon Telegraph and Telephone Corporation Beijing Representative Office, NTT Communications Beijing Office, NTT Docomo Inc., Beijing Office and NTT Facilities Inc., Beijing Office.

As at 31 March 2007, the weighted average unexpired lease duration of the 10 largest tenants (considered as a group) weighted by Total Lettable Area is 4.4 years. This compares with the average term of unexpired leases of the Property of 3.1 years as at 31 March 2007.

None of the 10 largest tenants is a connected person of RREEF CCT.

Expiries

A majority of the Property’s leases, representing 59.2% of the Total Lettable Area of the Property, are for a term of three years. See also the section headed “Risk Factor — Risks Relating to RREEF CCT’s Organisation and Operations”—As at 31 March 2007, leases representing 4.4%, 26.4% and 36.4% of the Total Lettable Area of the Property are scheduled to expire in the years ending 31 December 2007, 2008 and 2009, respectively.

Lease Expiry Profile B2 (i)

The following table sets forth details of expiries in respect of leases as of 31 March 2007 which are scheduled to expire during the periods indicated:

No. of % of total no. of Total tenancies tenancies as at Lettable Area of Monthly Rental Income of Year expiring 31 March 2007 tenancies expiring tenancies expiring(1) (sq.m.) (%) (HK$)(2) (%)(3) 2007 6 7.0% 4,424.6 4.4% 1,190,114.5 4.4% 2008 27 31.8% 26,427.3 26.4% 7,580,198.1 27.7% 2009 36 42.4% 36,487.0 36.4% 9,567,969.2 35.0% 2010 6 7.0% 9,715.9 9.7% 2,196,224.9 8.0% 2011 9 10.6% 17,312.2 17.3% 4,025,403.6 14.7% 2015 1 1.2% 5,875.7 5.8% 2,783,390.8 10.2% Total 85 100.0% 100,242.7 100.0% 27,343,301.1 100.0%

Notes: (1) Excluding income derived from the leasing of advertising spaces in the Property.

(2) Calculated on the basis of the aggregate Rental Income payable under the tenancies expiring for the month ended 31 March 2007.

(3) Calculated as a percentage of the Total Rental Income for the month ended 31 March 2007.

— 87 — THE PROPERTY

Delinquency Rates

The following table sets forth a breakdown of the delinquency rate at the Property for the period from 1 September 2005 to 31 December 2005 and the year ended 31 December 2006.

1 September 2005 — 31 December 2005 Year ended 31 December 2006

Average delinquent Average Average delinquent Average balance(1) delinquent rate(2) balance(1) delinquent rate(2)

(HK$) (%) (HK$) (%)

80,357 1.4 388,699 0.9

Notes: (1) Average of delinquent balances as at the end of each month for the period from 1 September 2005 to 31 December 2005 and the year ended 31 December 2006.

(2) Average delinquency rate is calculated by dividing the average delinquency balance by the Total Rental Income for the period indicated. Delinquency refers to rental receivables that remain unpaid for 90 days or more after their due dates.

Civil Defence Shelter

As required under PRC laws and regulations, there is a civil defence shelter in the basement of the Property with a Gross Floor Area of 8,604.8 sq.m. According to the PRC legal opinion provided by Commerce & Finance Law Offices, the ownership of the civil defence shelter belongs to the government. The Predecessor Property Company has obtained a permit to use the civil defence shelter, for purposes of car park, for the period from 20 November 2006 to 19 November 2007 by paying a fee of RMB192,545 (HK$192,545). This right has been transferred to the HK Property Company, without charge, by way of an assignment dated 20 November 2006 (see the section headed “Material Agreements and Other Documents — Assignment of Right to Use the Civil Defence Shelter” in this Offering Circular). Upon expiry of the current permit, the HK Property Company has the right, through the Property Manager, to apply for a renewal thereof. The HK Property Company will start the renewal negotiation with the government before expiry and the Manager expects that the fee payable upon such renewal will be similar to the fee paid by the Predecessor Property Company.

Staff Canteen

Although the staff canteen is part of the Property, it is not comprised in the Building Ownership Certificate relating to the Property. The Predecessor Property Company applied to the authorities to use such area as a staff canteen. As such application and the construction of the staff canteen was still on-going when the Property was transferred by the Predecessor Property Company to the HK Property Company in April 2006 (see the sub-section headed “Five-Year Transaction History” below), the staff canteen was not transferred together with the Property, while the land in which the staff canteen is situated, has been transferred to HK Property Company in April 2006.

— 88 — THE PROPERTY

Since then, “The Opinion on Regulating the Access and Management of Foreign Capital in the Real Estate Market” with Serial Code JZF [2006] No. 171 was issued. This new circular introduced a new requirement that if a foreign institution or a foreign individual intends to buy domestic real estate properties not for its own use, such institution or individual should observe the regulations regarding investments in real estate by foreign investors and should apply to establish a foreign investment enterprise to hold such real estate (see “Overview of Relevant Laws and Regulations in the People’s Republic of China and Comparison of Certain Aspects of its Property Laws and the Laws of Hong Kong” in Appendix IX to this Offering Circular). With this requirement the HK Property Company, as a company incorporated in Hong Kong, may not be able to obtain the Building Ownership Certificate of the staff canteen. At the same time, as PRC regulations only permit a Building Ownership Certificate to be issued to the owner of the land in which the staff canteen is situated, i.e. the HK Property Company, no other entity (including the Predecessor Property Company) may apply for such a certificate. According to the PRC legal opinion provided by Commerce & Finance Law Offices, despite that the HK Property Company has not obtained legal title to the staff canteen, the HK Property Company has enjoyed right to use and operate the staff canteen which constitutes material interests of the Property.

The Predecessor Property Company has issued a confirmation dated 28 December 2006 acknowledging the HK Property Company’s exclusive right to use, occupy and derive benefit from the staff canteen since the date of completion of the construction work of staff canteen. The Predecessor Property Company has further confirmed and acknowledged that the HK Property Company could itself use the staff canteen or permit a third party to use and operate the same without any liability to the Predecessor Property Company for rent or fees (see the section headed “Material Agreements and Other Documents — Confirmation of Right to Use the Staff Canteen” in this Offering Circular). The parties have entered into a supplemental agreement on 31 May 2007 that the Predecessor Property Company confirmed further that in the event that the HK Property Company transfers part or whole of its ownership of the Property to any third party, the HK Property Company shall enjoy the right to assign its rights and obligations under the said confirmation dated 28 December 2006 as well as under such supplemental agreement to that such third party. Upon the occurrence of such circumstances occurs, the Predecessor Property Company shall enter into agreement with the HK Property Company and the relevant third party to effect the aforesaid assignment of rights and obligations.

By an agreement dated 27 April 2007, the HK Property Company has engaged Beijing Bestride International Club Limited, which is connected with Beijing Bestride Estate Development Company Limited to operate the staff canteen without consideration upon completion of the staff canteen. The revenue or loss and the relevant risks and liabilities generated from the operation of the staff canteen will be taken up by Beijing Bestride International Club Limited. According to the said agreement, the HK Property Company will not be held liable for the said loss, risks and liabilities. By a supplemental agreement dated 31 May 2007, an indemnity has been given by Beijing Bestride International Club Limited to the HK Property Company in this respect. The said agreement of 27 April 2007 and the relevant supplemental agreement will expire on 28 February 2010.

— 89 — THE PROPERTY

LEASES RC 2B(i)

As at 31 March 2007, the Property had an occupancy rate of 94.2%.

Rental Rates

Rental rates for the Property are generally fixed in advance for the tenure of the lease term and are subject to review and renegotiation on expiry of the lease. In line with market practice in China, most leases generally do not provide for rent reviews during the period of the lease.

Most of the 85 leases as at 31 March 2007 provide rent free periods of one month per annum of the lease to the respective tenants.

Term

Depending on factors such as the needs of tenants as well as the general practice of the PRC commercial property market, the terms of lease for the Property range from two years to 10 years. 64 of the 85 leases as at 31 March 2007 (representing 63.3% of the Total Lettable Area of the Property as at 31 March 2007) do not give the tenants the right to terminate their tenancies prior to the scheduled expiration dates. The remaining leases contain a right for tenants to terminate their tenancies without compensation upon prior written notice to the landlord three to six months before the termination. The landlord has the right to terminate a tenancy upon the occurrence of certain events, such as non-payment of rent or breach of covenants by the tenants. As at 31 March 2007, more than 86.9% of leases by Total Lettable Area were for terms of at least three years.

As at 31 March 2007, a majority of the existing leases grant to the tenants of the Property an option to renew under which, upon expiry of the lease, in the event that the existing tenant and another prospective tenant offer the same terms, the existing tenant shall have the priority to renew the lease.

Certain Other Terms and Conditions

Most of the leases contain provisions requiring the respective tenants to provide a security deposit, which is equivalent to one month to three months’ rent and property management fees, at the time of entering into the lease, either in the form of cash or in the form of a bank guarantee. Security deposits are unsecured and do not bear interest. Tenants are required to pay their monthly rent in advance.

In addition to their monthly rents, tenants are also required to pay a property management fee based on certain rates per square metre of space which they lease. Land rent and property taxes are borne by the landlord. Normal utilities charges are paid for out of the property management fees collected from the tenants, but tenants are required to make additional payments for any after-hours air-conditioning (which is anytime from 8:00 p.m. to 8:00 a.m. on Mondays to Fridays or on Saturdays, Sundays or public holidays) provided at their request. Tenants shall seek prior consent from the landlord for sub-letting or assigning their premises in most cases. In certain cases, where sub-letting or assignment to entities within the same

— 90 — THE PROPERTY group, prior consent is not required. In the event that the Property is rendered unfit for use by force majeure, or if either party is unable to continue to comply with its obligations under a lease due to force majeure, the lease(s) shall terminate without further liability on the part of either the landlord or the tenant(s) except that any deposit must be returned to the tenant(s) within 30 days of such termination.

No existing lease contains any clause in respect of the change of control of the HK Property Company. One lease stipulates that written consent from the tenant shall be obtained for the landlord to transfer or mortgage the leased property and the HK Property Company has already obtained consent from such tenant for creation of mortgage with any mortgagee bank. Some of the leases stipulate that the HK Property Company agrees not to transfer the Property to the competitors of the tenants.

ADVERTISING RIGHT AGREEMENT AND ADVERTISING RIGHT TRANSFER AGREEMENT

By an advertising right agreement dated 18 July 2006, the Predecessor Property Company granted to Beijing Shenmingda Advertise Co., LTD (the “Grantee”) the right to erect and use all of the 21 advertising spaces of the Property for a term of three years from 18 July 2006 to 17 July 2009 at annual rentals of RMB35,000,000, RMB38,000,000 and RMB40,000,000 for the first, second and third years respectively. Among the 21 advertising spaces, 19 of them are erected outdoor surrounding the Property and the remaining two are erected on the top roof of the Property. The Grantee has the right of first refusal to use the relevant advertising spaces.

By an advertising right transfer agreement entered into by the Predecessor Property Company, the Grantee and the HK Property Company on 15 May 2007, the Predecessor Property Company has agreed to transfer its rights and liabilities stated on the said advertising right agreement of 18 July 2006 to the HK Property Company. This advertising right transfer agreement became effective from 26 April 2006 and there is no early termination right.

LEASING STRATEGY

The Manager’s leasing strategy is to continue to target creditworthy multinational companies and domestic enterprises as tenants so as to provide a reliable and stable income stream. The Manager believes that such tenants will maintain the profile and attractiveness of the Property in the Beijing property market. Since the Property is approximately 94.2%1 leased as at 31 March 2007, the Manager’s short-term leasing focus will be on attaining substantially full occupancy of the Property while at the same time increasing rental rates and the length of the lease terms for new tenants and existing tenants who renew their leases to the extent commercially feasible.

Note: 1. “Occupancy rate=1-Vacancy rate”

— 91 — THE PROPERTY

MARKETING AND LEASING ACTIVITIES

The Property Manager, in conjunction with local leasing agents and in-house expertise, will identify suitable tenants for the Property. The awareness of the Property will be enhanced by marketing through local media, leasing brochures and the Property Manager’s current database of existing clients.

Upon the actual takeover of the tenancy management of the Property, the Property Manager will assist the Manager in making overall analysis of lease expiry to assess the key risks associated with the forthcoming lease expiry so as to work out a strategic tenant retention plan, including initiating early negotiation with the tenants concerning their intent to renew in order to provide the Property Manager enough time for finding a good replacement for the possible vacancy if the tenant is not considering renewal.

COMPETITION B2(d)

At the end of 2006, Beijing’s total stock of Grade A office buildings reached 3.97 million sq.m., of which only 0.82 million sq.m. were categorised as Premium Grade A office buildings. Most of this stock is located within the CBD and its vicinity, which accounted for 48.9% of total Grade A office buildings stock. The Lufthansa area, where the Property is located, accounted for 13.5% of total Grade A office buildings stock. At the end of 2006, the Property was one of the nine buildings that could be categorised as Premium Grade A office buildings. The Property is also the only Premium Grade A office building located in the Lufthansa area. As at end of 2006, there were only three office buildings in Beijing, namely Beijing Kerry Centre, China World Trade Centre II and Winland International Financial Center, that were of a better quality than Beijing Gateway Plaza, according to Knight Frank. These three buildings are ranked higher than the Property mainly because they have higher concentration of reputable international corporations as tenants. However, Beijing Kerry Centre and China World Trade Centre II are located at the CBD while the Winland International Financial Center is located at the Beijing Financial Street. These three buildings pose no direct competition to the Property because they are in other Beijing submarkets and at a considerable distance from the Lufthansa area where the Property is located.

The Manager believes that the Property’s market positioning, professional management and quality tenant base will allow it to compete effectively. The Grade A office buildings located in the Lufthansa area have consistently outperformed the overall Beijing market and the limited number of Premium Grade A office buildings in Beijing have consistently outperformed the overall Grade A office buildings market. Being the only Premium Grade A office building in the Lufthansa area, the Property has significant advantages over other buildings within its proximity and in the overall Beijing market.

Detailed analysis is contained in the “Letter from the Independent Market Consultant in Relation to its Analysis Report on the Office Property Market in Beijing” set out in Appendix VII to this Offering Circular.

INSURANCE

The HK Property Company currently maintains property all risk insurance with PICC B2(m) Property and Casualty Company Limited, Beijing Chaoyang Sub-branch, which covers, among

— 92 — THE PROPERTY other risks, property damage, fire, water and other risks for the period from 7 April 2007 to 6 April 2008. In respect of the same period, the HK Property Company has also insured the Property against, among other things, the cost of wreckage clearing and cleaning up in the event that the Property is damaged, as well as the cost of professional services incurred in the reinstatement of the Property after it is damaged. Additionally, the Manager has undertaken to obtain business interruption insurance for the HK Property Company after the Listing. Also, the Property Manager currently maintains for the Property public liability insurance with Ping An Property & Casualty Insurance Company of China Limited for the period from 1 June 2007 to 31 May 2008. The Manager believes that such insurance coverage is consistent with the general market practice in the PRC.

FIVE-YEAR TRANSACTION HISTORY

The Property was developed by the Predecessor Property Company, a company B2(g)/ B2(p) controlled by the Vendor. The Property was completed on 26 August 2005 and commenced operation in the following month. On 18 January 2006, the Predecessor Property Company entered into a sale and purchase agreement with the HK Property Company under which the former agreed to transfer the Property to the latter in accordance with the terms of such agreement for a consideration of RMB1,800,000,000. As at the Latest Practicable Date, RMB143,000,002.5, representing 7.9% of consideration remains outstanding (the “Outstanding Consideration”) and will be settled before or on Listing Date. Nonetheless, the HK Property Company obtained the Land Use Right Certificate as well as the Building Ownership Certificate for the Property on 26 April 2006 and 6 April 2006, respectively, and has become the legal and beneficial owner of the Property (except the staff canteen and the civil defence shelter and please see the sections headed “The Property — Staff Canteen” and “The Property — Civil Defence Shelter” respectively for details).

On 4 June 2007, the Trustee, as trustee of RREEF CCT and the Manager, entered into the PN23(c) Share Purchase Agreement with the Vendor to acquire the BVI Property Company Share from the Vendor. The BVI Property Company indirectly owns the entire legal and beneficial interest in the Property (except the staff canteen and the civil defence shelter and please see the sections headed “The Property — Staff Canteen” and “The Property — Civil Defence Shelter” respectively for details). For further details of the Share Purchase Agreement, see the section headed “Material Agreements and Other Documents — Share Purchase Agreement” in this Offering Circular.

Other than the transactions described above, the Manager is not aware of any transactions involving a direct or indirect sale and purchase of the Property since it was completed on 26 August 2005.

LITIGATION

As at the Latest Practicable Date, to the Manager’s knowledge, none of RREEF CCT, the Vendor, the Predecessor Property Company, the Manager, the Property Manager and the HK Property Company is currently involved in any material litigation nor, to the Manager’s knowledge, is any material litigation threatened against any of them.

— 93 — THE OFFICE PROPERTY MARKET IN BEIJING

— 94 — THE OFFICE PROPERTY MARKET IN BEIJING

Knight Frank Petty Ltd. was commissioned by the Manager to prepare a report on the B2(e) PN21 property market in Beijing. The following is a summary of the Independent Market Consultant’s letter in relation to its Analysis Report on the office property market in Beijing, the full text and sources of which are set out in Appendix VII to this Offering Circular. All views expressed in this summary are the independent views of the Independent Market Consultant. The information has not been independently verified by the Manager, the Trustee, the Underwriters or any other person. Much of this information is based on estimates and should therefore be regarded as indicative only and treated with appropriate caution.

Beijing Economic Overview

A Prosperous City

Beijing is one of the most prosperous cities in China. As China’s political and cultural centre, Beijing is one of the four autonomous municipalities along with Shanghai, Tianjin and Chongqing that enjoy similar economic and administrative autonomy of a province. In terms of GDP, Beijing is the country’s second largest city after only Shanghai. With a population of more than 15 million, Beijing is the third most populous city in China after Chongqing and Shanghai.

GDP Comparison of Major Cities in China (2005)

Shanghai 915 Beijing 689 Guangzhou 515 Shenzhen 495 Tianjin 370 Nanjing 241 Chengdu 237 Dalian 215 Shenyang 208 Jinan 188 Wuhan 168 Changsha 152

- 100 200 300 400 500 600 700 800 900 1,000 Amount (RMB bn)

Source: China Statistical Yearbook, 2006

— 95 — THE OFFICE PROPERTY MARKET IN BEIJING

Per capita total income of urban households grew by sixteen-fold from RMB1,159 to RMB19,533 between 1985 and 2005. Although Beijing’s per-capita GDP of US$5,680 in 2005 may be low compared to developed economies like the US and Japan, its standard of living has already exceeded the levels of some newly-industrialised economies (e.g. Manila, whose per-capita GDP stood at US$3,482 in 2005).

Per-Capita Income in Beijing (Urban Area)

RMB 25,000

20,000

15,000

10,000

5,000

- 1985 1990 1995 2000 2005

Source: Beijing Statistical Yearbook, 2006

— 96 — THE OFFICE PROPERTY MARKET IN BEIJING

Promising Economic Outlook

Both cyclical and structural factors are favourable to Beijing’s economic development.

Beijing will host the Summer Olympic Games in 2008. To this end, the Beijing government plans to spend a total of RMB280 billion to upgrade the urban infrastructure between 2002 and 2008. In the near term, the preparation for the Summer Olympic Games would mean a big boost to the city’s economy, as this requires large construction ranging from telecom and transport infrastructure to stadium and related facilities. As a result, many industries are expected to benefit from the upgrading. The contribution of the 2008 Summer Olympic Games to the city’s GDP is estimated to be 2.5 percentage points per year between 2002 and 2008, according to the Statistical Bureau of Beijing.

Population in Beijing

Mn 20 18.00 18

15.38 16 14.93 14.23 14.56 13.64 13.85 14 12.51 12.59 12.40 12.46 12.57 11.25 12 10.86 10.94 11.02 11.12

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2020

Source: Beijing Statistical Yearbook, 2006

Beijing’s Town Planning and Infrastructure Development

Beijing’s Planned Zoned Areas

In 2004, Beijing unveiled an ambitious blueprint with a near-term target of developing the city into a centre for international exchange in 2008 and a medium-term target of developing the city into a world-class service centre in 2020. These targets require the Beijing municipal government to rationalise land use, improve infrastructure and promote urban redevelopment.

— 97 — THE OFFICE PROPERTY MARKET IN BEIJING public institutions such as hospitals, government departments and schools. As the city continues to expand outward, the pressure on the centre intensifies, resulting in serious traffic congestion and considerable strain on urban functions including water supply and various social amenities.

In a bid to complement the development of “Multiple Centres” and to offer a more sophisticated business environment for enterprises flooding in from overseas and other parts of the country, the Beijing government has been investing heavily in the city’s internal and external transport network.

The subway system is expected to play a much more important role in intra-city transport by greatly enhancing the efficiency of traveling within the city. By providing links between major districts and the fringe areas, the expanding subway system is expected to greatly alleviate the pressure on the Ring Roads. In addition to the existing four subway lines, six more lines will be added before the Olympic Games by August 2008. More subway lines will be constructed after 2008, in line with the city’s continuous development. According to the Urban Planning Commission of Beijing government, when the subway system is fully completed people living in the Beijing suburbs will be able to get to work within an hour.

Beijing Office Market Analysis

Introduction

Beijing Gateway Plaza is one of the nine Premium Grade A office buildings in Beijing. At the end of 2006, the amount of Premium Grade A office buildings stock stood at 820,000 sq.m., representing some 20.7% of the 3.97 million sq.m. of total Grade A office building stock in Beijing.

Beijing Grade A Office Building Stock Breakdown

Premium Grade A office building 20.7%

General Grade A office building 79.3%

Source: Knight Frank

— 98 — THE OFFICE PROPERTY MARKET IN BEIJING

Grade A office buildings are defined by Knight Frank to encompass both General Grade A and Premium Grade A office buildings. These two categories are differentiated by a number of factors, including their floor plates, overall building quality, management, ownership, occupancy rates and locations. Premium Grade A office buildings are high-end office buildings of single-ownership (usually by institutional investors) with large floor plates, high building quality, international management and high occupancy rates. They are in excellent locations with easy access to all modes of public transport.

As of the end of 2006, there are only three office buildings, namely Beijing Kerry Centre (in CBD), China World Trade Centre II (in CBD) and Winland International Financial Center (at Financial Street) that are superior to Beijing Gateway Plaza. These three buildings have a total gross floor area of 237,000 sq.m., accounting for just 6.0% of Beijing’s total Grade A office buildings stock as at the end of 2006.

These three buildings are ranked higher than Beijing Gateway Plaza mainly because they have higher concentration of reputable international corporations. Also, these three buildings have easier access to the subway stations than the subject building.

A note-worthy characteristic of the Premium Grade A office buildings is their ability to maintain high and stable occupancy rates after a relatively short let up period. Knight Frank has monitored the trends of occupancy rates of the Premium Grade A office buildings in Beijing. We observed that this category of buildings on average achieved occupancy rates of over 80.0%1 within 18 months after the projects were released for leasing. Furthermore, these buildings achieved occupancy rates of approximately 90.0%2 within 24 months after their launch.

At the end of 2006, the average occupancy rate of the six Premium Grade A office buildings that were completed before 2005 was over 92.0%3. Occupancy rate for Beijing Gateway Plaza was approximately 90.0%4 at the end of 2006, outperforming the two other Premium Grade A office buildings that were also completed in the same year, according to Knight Frank. These two buildings had a combined occupancy of approximately 72.0%5. In our view, building quality and location have contributed to Beijing Gateway Plaza’s outstanding performance. Winland (at Finance Street) and LG towers (in CBD and its vicinity) were the other two new premium buildings completed in 2005.

Due to the 2008 Olympics, we expect to see a large amount of supply of Grade A stock arriving on the market in the lead up to the games. Of the estimated 2.58 million sq.m. of Grade

Notes: (1,2,3,4,5) “Occupancy rate=1-vacancy rate”

— 99 — THE OFFICE PROPERTY MARKET IN BEIJING

A office buildings space that will come on stream between 2007 and 2008, it is estimated that 510,000 sq.m. will be classified as Premium Grade A office buildings. Given the anticipated moratorium that restricts building construction during the Summer Olympic Games period in 2008 (this moratorium is discussed in details later in Knight Frank’s report) no new Premium Grade A office buildings supply is expected between 2009 and 2010. As such, the average annual supply of Premium Grade A office buildings for the period between 2007 and 2010 will amount to only 127,500 sq.m., marginally lower than the average take-up of 130,600 sq.m. between 2004 and 2006.

The take-up for 2007 and 2008 should reflect the pricing of new buildings and an improving economy. The take-up for 2007 and 2008 is expected to grow by an average rate of 5.0% per year above the average take-up for the period between 2004 and 2006. Between 2009 and 2010 the take-up will remain the same as in 2008. Based upon these assumptions the Premium Grade A office buildings submarket will reach above 95.0% occupancy in 2010.

Major Office Submarkets in Beijing

The majority of Grade A office buildings are located in Central Business District (CBD) and its vicinity. The vicinity refers to the Chaoyangmen area along the Northeast Second Ring Road and the Jianguomen area. At the end of 2006, the CBD and its vicinity together accounted for 48.9% of total Grade A office buildings stock in Beijing, followed by Beijing Financial Street (BFS), which accounted for 21.8%. Grade A office buildings stock in the Lufthansa area (the submarket where Beijing Gateway Plaza is located) accounted for 13.5% of the city total, while the Zhongguancun (ZGC) area accounted for 13.4%.

Major Office Submarkets in Beijing

Source: Knight Frank

— 100 — THE OFFICE PROPERTY MARKET IN BEIJING

Grade A Office Buildings Supply, Take-up and Vacancy

2001 to 2003 was a period of the global economic downturn with the benefits arising from China’s entry into the WTO not yet fully realised. After the SARS outbreak in 2003, the Chinese economy began to take off with expanding export growth and burgeoning capital inflows.

Between 2004 and 2006, the average annual supply of Grade A office buildings in Beijing was about 581,000 sq.m., with most of the supply coming on stream in 2004 and 2005 according to Knight Frank. Many Grade A office buildings developments that should have been released between 2001 and 2003 were put on hold due to global economic slowdown. When the global economy recovered and investors’ confidence returned, developers began to accelerate the construction and marketing of office projects. Consequently, significant amount of supply was released into the market. Office supply stood at 649,725 sq.m. and 812,680 sq.m. in 2004 and 2005 respectively, according to Knight Frank.

Between 2004 and 2006, the average annual take up of office area in Grade A office buildings in Beijing was 513,108 sq.m., 11.7% below the average annual supply in the same period, according to Knight Frank. In 2006, total Grade A office building space take-up was 505,586 sq.m., significantly higher than the year’s supply of 281,000 sq.m. Subsequently, average vacancy rate slipped from 19.0% (the end of 2005) to 12.0% (the end of 2006), according to Knight Frank.

Grade A Office Buildings Supply, Net Take-up and Vacancy Rate

sq.m. Annual Supply Takeup Vacancy Rate

900,000 20%

800,000 18%

16% 700,000 14% 600,000 12% 500,000 10% 400,000 8% 300,000 6%

200,000 4%

100,000 2%

0 0% 2001 2002 2003 2004 2005 2006

Source: Knight Frank, January 2007

— 101 — THE OFFICE PROPERTY MARKET IN BEIJING

The Premium Grade A office buildings sub-sector stock was estimated at 820,000 sq.m. by the end of 2006, accounting for 20.7% of all Grade A office buildings stock, according to Knight Frank.

There are only nine Premium Grade A office buildings in Beijing, including six in the CBD and one in Lufthansa area, Beijing Finance Street and Zhongguancun.

Grade A Office Buildings Rentals

Grade A office buildings rentals in Beijing reached a trough at the end of 2003, when the economy was still recovering from the SARS outbreak. They grew by 4.5% by December 2006 compared with December 2003, according to Knight Frank. During this three-year period, Beijing Finance Street led the market with highest rental growth of 26.3%, followed by the Lufthansa area with a healthy rental growth of 8.2%. Zhongguancun’s office rental growth achieved 3.4% during this period. CBD and its vicinity recorded the worst performance with rentals having declined by 3.1%, due to a supply hike in this area, according to Knight Frank.

Grade A Office Buildings Sales Prices

In 2000 and 2001, the estimated rental yield of Grade A office buildings in Beijing stood between 10.0% to 12.0%. The high investment yield attracted a large number of investors, who pushed up the average prices of offices by over 30% between early 2000 and mid-2002. After experiencing poor demand in 2003 and over-supply in 2004, the value of Grade A office buildings in Beijing has been increasing since early 2005. Average prices increased by 18% between the second quarter of 2005 and the fourth quarter of 2006. Rental yield hovered at around 8% in the fourth quarter of 2006, according to Knight Frank.

— 102 — THE OFFICE PROPERTY MARKET IN BEIJING

Grade A Office Buildings Tenant Profile

A survey on tenant6 profile of major Grade A office buildings in Beijing conducted by Knight Frank in December 2005 showed that apart from domestic companies (32.0%), American companies were the largest group of occupiers of office space in Beijing (28.0%), followed by European-based enterprises (22.0%). Demand for office space by multinational companies is likely to remain strong given China’s further integration with the world economy.

Grade A Office Buildings Occupancy by Tenant Origin (As at the end of 2005)

Others 13.0% Domestic Japan and South Korea 32.0% 5.0%

EU 22.0%

America 28.0% Source: Knight Frank, December 2005

In terms of business segment, Beijing’s Grade A office buildings were primarily occupied by companies in the high-tech and telecommunication sectors, which accounted for 30% of the total, followed by those in the banking and insurance industries, which contributed to 18% of the total.

Grade A Office Buildings Occupancy by Business Segment (As at the end of 2005)

Banking and Insurance 18% Others 21%

Professional Services 16%

Manufacturer 15%

Hi-tech and Telecommunication 30% Source: Knight Frank, December 2005

Note: (6) Major office tenant refers to those occupied office space over 1,000 sq.m.

— 103 — THE OFFICE PROPERTY MARKET IN BEIJING

Beijing has witnessed rapid development of its tertiary industry in recent years. Preferential policies have been in place at both state and district levels in support of the development of the financial and technology sectors. As such, demand for office space is expected to remain robust.

Grade A Office Buildings Supply

Looking ahead, there will be significant supply of Grade A office buildings in Beijing in 2007. This supply spike should be considered in the light of a likely government moratorium on construction activities aimed at reducing pollution in the city in the run-up to the Summer Olympic Games. It is expected that the government will, in 2008, put a stop to all real estate developments within the Third Ring Road, where most of the upcoming supply of Grade A office buildings is located.

In anticipation of this moratorium, most developers of office projects are trying to accelerate their development pace to complete their projects before 2008 to avoid unwanted delay of construction. A large amount of Grade A office buildings space will come on stream in 2007, with little new supply in 2008, especially in the second half of the year.

In terms of future supply, 2.44 million sq.m. of Grade A office buildings space is expected to be completed during 2007. The majority will be located within Chaoyang CBD and its vicinity, accounting for 63.0% of the total supply in the city. Total projected new Grade A office buildings supply in 2008 is 140,000 sq.m.

By the end of 2008, the CBD and vicinity will remain the major Grade A office buildings submarket in Beijing, accounting for 56.0% of the total stock of the entire city, 4.6 percentage points higher than that at the end of 2006. Projected Premium Grade A developments coming on stream in this area include China Central Place, Yintai and China World Trade Centre III.

Lufthansa area’s share will remain unchanged at about 13.0%. Due to limited land supply available for development, Beijing Finance Street and Zhongguancun will see their market shares in total Grade A office stock reduced to 18.4% and 8.1% respectively by the end of 2008.

— 104 — THE OFFICE PROPERTY MARKET IN BEIJING

Grade A Office Demand

Increasing business formation in Beijing has been the major driver of the demand for Grade A office space.

Number of Registered Companies in Beijing (1999 — 2005)

Company Type 1999 2000 2001 2002 2003 20047 2005

Foreign-invested ...... 5,514 5,818 8,284 8,547 10,140 N/A 9,221 Representative Offices ...... 6,107 6,758 7,451 7,976 8,392 9,180 10,132 Domestic ...... 69,847 72,560 133,936 137,453 156,314 N/A 250,300

Source: Beijing Statistical Yearbooks, various issues; Knight Frank

The rapid expansion of established companies amid strong economic growth has also added to the demand of Grade A offices. Knight Frank has estimated the growth in the number of domestic companies and multinational institutions in Beijing with reference to factors like foreign direct investment, export performance and economic growth. Between 2004 and 2008, the number of foreign invested companies, representative offices, and domestic companies, which are major Grade A offices tenants, is expected to increase further. In the recent years, a trend of increasing number of domestic enterprises able to afford high-end office space has been observed.

China’s strong growth momentum and the capital city’s potential as an Asian metropolis and a leader in the Bohai Rim Region will prompt increasing number of domestic and multinational companies to expand their operations in Beijing, sustaining Grade A office demand in the city.

To prepare for the Summer Olympic Games, the Beijing government has planned to spend a total of RMB280 billion to upgrade the urban infrastructure between 2002 and 2008. In the near term, the preparation for the Summer Olympic Games would mean a big boost to the city’s economy, as this requires large construction ranging from telecom and transport infrastructure to stadium and related facilities. Many industries are expected to benefit. However, construction companies and transport utilities’ expanding businesses are more likely to boost demand for Grade B offices more than Grade A offices. Unlike investment banks or law firms, construction and engineering firms are generally not keen to spend a significant amount of money for high-end office space.

Note: (7) The number of foreign-invested enterprises and domestic enterprises for 2004 have not been found on the Beijing Statistical Yearbooks

— 105 — THE OFFICE PROPERTY MARKET IN BEIJING

Grade A Office Market Forecast

Although demand for Grade A offices will continue to increase in 2007, it will not be able to match the abundant supply in the same period. The average vacancy rates will rise in 2007, when new supply reaches a historical high at about 2.44 million sq.m. In 2007, the citywide Grade A vacancy rate is projected to be over 37.0%. Intense competition will appear in CBD and the vicinity, as over 60.0% of the projected supply is coming from this submarket.

Supply and Demand in Lufthansa area

At the end of 2006, Lufthansa area’s Grade A office stock at 537,147 sq.m. accounted for only 13.5% of the market total. The area will see four new projects (21st Century Centre, Sunny Region, Pacific International Centre and TYG Centre) with a combined Gross Floor Area of 337,000 sq.m. to come on stream by the end of 2007. This new supply accounts for just 13.1% of Beijing’s total new supply in this period. No new project is expected to be launched in the Lufthansa area in 2008. Judging from the upcoming project’s planned specifications and locations, buildings released in 2007 will not be as attractive as Beijing Gateway Plaza, which will continue to remain the only Premium Grade A office in the Lufthansa area at least until the end of 2009. The locations of Sunny Region and 21st Century are not as easily accessible as Beijing Gateway Plaza; TYG Centre will be sold for strata-title but only single-owned buildings can be categorised as Premium Grade A; and Pacific International Centre is located next to a wholesale market which may have a negative impact on the grading of the neighbouring office buildings. For these reasons, the new supply in 2007 is not expected to pose any direct competition to the subject building.

The demand for quality office space in the Lufthansa area is expected to rise due to its rapidly improving transport infrastructure and excellent location. The area has convenient access to the city centre, Beijing Capital International Airport, the Olympic Village and Haidian District and is positioned to be the major beneficiary of the Subway station and the high-speed train line construction project. Subway No. 10 will have two stations in the Lufthansa area. The Beijing Capital International Airport - Dongzhimen Express Rail Link will connect Lufthansa area with the Beijing Capital International Airport and the city’s earliest subway network at Dongzhimen. The Dongzhimen interchange is only 3.0 km from the Beijing Gateway Plaza. The first phase of Subway No. 10 is expected to be completed by 2007, while the Beijing Capital International Airport - Dongzhimen Express Rail Link is expected to be completed by mid 2008. These two lines are set to significantly improve the area’s traffic condition and overall accessibility, and further enhance the Lufthansa area’s already strong appeal to a growing number of multinational companies.

With distinct tenant profiles, Beijing Finance Street and Zhongguancun are in a league of their own. As China’s Silicon Valley, Zhongguancun attracts mainly the technology companies. Beijing Finance Street primarily attracts tenants primarily in the financial services industry and those companies that want to be close to the government. Both Beijing Finance Street and Zhongguancun have limited stock and new supply in the next three years. Thus these two submarkets should place no visible competitive pressure on the Lufthansa area. The supply hike in 2007 will affect mainly the CBD and its vicinity, which will account for 63.2% of the total office supply during the year.

— 106 — THE OFFICE PROPERTY MARKET IN BEIJING

The Grade A office market in the Lufthansa area has always outperformed the market average in Beijing. For example, its vacancy rate has been consistently lower than the market average since 2001. The Lufthansa area’s ability to maintain a higher occupancy than the market average will continue with the improving transportation system in the area, its healthy tenant mix and limited supply in the next three years.

The average occupancy rate and rentals of Grade A offices in the Lufthansa are likely to edge down when the four planned projects are completed in 2007. However, most of the impact will be borne by the newly completed buildings, with minimal pressure on the quality office buildings already established in the area, such as Beijing Gateway Plaza.

Beijing Gateway Plaza will continue to be the only Premium Grade A building in the Lufthansa area until at least 2009. With an international property management firm in place, it is likely that the property will be well managed and maintained in the foreseeable future. Established companies tend to upgrade to quality offices in prime locations when there is large amount of office space available in the market. A flight to quality is expected to minimise the adverse impact of upcoming oversupply on the subject building. In addition, the subject building has attracted a large number of quality tenants with rather long lease term, including the BMW Group that moved in over the third quarter of 2006. Such tenants have already spent a large amount of fit-out cost and are unlikely to move out in the next five years. The building’s occupancy level is expected to be sustained at approximately 95.0% over the next five years, with a natural vacancy rate of approximately 5.0%.

An analysis of the expiry profile of the tenancy schedule indicates that there will be only 4.4% of the total lettable area will be subject to renewal in 2007. This indicates that the building’s overall rental income will be under little pressure from the supply hike impact in 2007, even though the average market rental is expected to drop during this period.

Moreover, in line with market practice in China, the leases generally do not provide for rental review during the period of the lease. The subject building’s peak tenancy expiry period will be in 2008 and 2009, each accounting for 26.4% and 36.4% of the total lettable area respectively. Most of these tenancies will expire in the second half of these two years. One of the salient issues a tenant considers when looking at office accommodation options is the cost of relocation. Given the quality of the office fit outs we do not expect that the benefit of relocation would be enough for these companies to write off their fit out costs.

— 107 — THE OFFICE PROPERTY MARKET IN BEIJING the average market rent in Beijing may be under downward pressure in 2007 and 2008 when the market is still absorbing the abundant supply completed in 2007, the subject building should be able to enjoy a growth in rental income from 2009 to 2011.

— 108 — THE COMMERCIAL PROPERTY MARKET IN CHINA

— 109 — THE COMMERCIAL PROPERTY MARKET IN CHINA

Knight Frank Petty Ltd. was commissioned by the Manager to prepare a report on the B2(e) PN21 property market in China. The following is a summary of the Independent Market Consultant’s letter in relation to its Analysis Report on the office property market in China, the full text and sources of which are set out in Appendix VII to this Offering Circular. All views expressed in this summary are the independent views of the Independent Market Consultant. The information has not been independently verified by the Manager, the Trustee, the Underwriters or any other person. Much of this information is based on estimates and should therefore be regarded as indicative only and treated with appropriate caution.

An Overview of China’s Commercial Real Estate Market

China’s commercial real estate sector, which includes office and retail properties, has been experiencing very strong growth in recent years. As the Chinese economy has grown and modernised, the role of cities has become increasingly important. The dramatic transformation in the urban structure of the Chinese economy is driving strong demand for all forms of real estate, especially in major cities. Currently some 43.0% of China’s population resides in urban areas compared with just about 19.0% in 1980 as shown in the following chart, according to China Statistical Yearbook (2006).

Chart 1: Accelerating Urbanisation

(Urban population as % of Total Population) 50

0 1980 1985 1990 1995 2000 2005

Source: China Statistical Yearbook, 2006

— 110 — THE COMMERCIAL PROPERTY MARKET IN CHINA national GDP per capita was only slightly above US$1,700 in 2005, there were 57 cities (including the four Tier-1 cities of Beijing, Shanghai, Shenzhen and Guangzhou) with over one million people and a GDP per capita over US$3,000. These 57 cities in aggregate only accounted for 14.0% of the total population but contributed 43.0% of the country’s GDP, according to Knight Frank (Chart 2).

Chart 2: Chinese Cities with Over 1 million People and GDP per Capita over US$3,000

Population (million) 18 Shanghai 16

Beijing 14

Wuhan Tianjin 8 Shenzhen

Dongguan Guangzhou 6 Foshan Nanjing Chengdu Shenyang 4 Harbin Hangzhou Kunming Jinan Changzhou Changchun Suzhou Xiamen Wuxi 2 Ningbo Daqing 0 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 GDP Per-capita (US$)

Source: The Yearbook of China’s Cities, 2006

A combination of factors including strong manufacturing activity and exports, and increasing domestic wealth and rising consumption means that China has, over recent years, experienced phenomenal economic growth.

In tandem with this strong economic growth, both the wealth and standard of living of Chinese families has grown and improved accordingly. Per-capita net income in the rural area grew seven-folds from RMB393 in 1985 to RMB3,255 in 2005. For those living in the urban area, per-capita disposable income expanded by 13-folds, from RMB739 to RMB10,493 between 1985 and 2005, according to China Statistical Yearbook (2006).

— 111 — THE COMMERCIAL PROPERTY MARKET IN CHINA focus. Financing consumption with bank credit is part of their consumption habit. Consumer loans have increased from almost non-existence in 1998 to 10.0% of total bank loans in June 2006. So far China’s middle-class population is mostly clustered in the urban area along the east coast, in particular the Pearl River Delta, Yangtze River Delta and Bohai Rim Economic Circle.

Pearl River Delta

The Pearl River Delta is located in Guangdong Province, embracing nine cities including Guangzhou, Shenzhen, Dongguan, Foshan, Zhuhai, Jiangmen, Zhongshan, Huizhou and Zhaoqing.

The development of the Pearl River Delta in the early stage of the reform era greatly benefited from the launch of China’s earliest Special Economic Zones (including Shenzhen, Zhuhai and Shantou) in its territory. The Delta’s proximity to Hong Kong has also given it an advantage in attracting foreign investment.

Since China opened its door in the late 1970s, Guangdong has been one of the country’s leading economic regions and is a major manufacturing base (statistics of Guangdong Province is used as a proxy for the Pearl River Delta). In 2005, Guangdong accounted for 31.3% of the country’s exports, 14.2% of gross industrial output and 11.7% of retail sales value. Key industries in Guangdong include electronics, petrochemical, building materials, textile and clothing as well as food and beverages. Guangdong is already a key manufacturing base in the global production chain. Some segments of its toy industry have a global market share in excess of 60.0%, while watches produced in Shenzhen alone accounted for more than 40.0% of the global market in 2003, according to Hong Kong Trade Development Council.

Yangtze River Delta

The Yangtze River Delta refers to Shanghai and a further 15 other cities in Jiangsu and Zhejiang, namely Nanjing, Suzhou, Wuxi, Changzhou, Yangzhou, Zhenjiang, Nantong, Taizhou, Hangzhou, Ningbo, Huzhou, Jiaxing, Shaoxing, Zhoushan and Taizhou. Combined statistics of Shanghai, Jiangsu and Zhejiang has been used as a proxy for the statistics of the Yangtze River Delta. In 2005, this region accounted for 38.1% of the country’s exports, 29.4% of gross industrial output and 19.8% of retail sales value.

In the early stage of the reform era, the Yangtze River Delta region’s development lagged behind the Pearl River Delta due to its relatively late policy initiatives. However, after the Pudong area of Shanghai was promulgated as a new Special Economic Zone in 1990, the development of the entire Yangtze River Delta area began to accelerate. So far the Yangtze River Delta has caught up with the Pearl River Delta in many areas.

The Pearl River Delta excels in the assembly of light consumer goods, while the Yangtze River Delta is more focused on heavy industries such as machinery, chemicals and other upstream industries including production of raw materials, intermediate goods and capital goods.

— 112 — THE COMMERCIAL PROPERTY MARKET IN CHINA

The Yangtze River Delta has a strong industrial base and a large pool of talent, enabling large economies of scale for production. For example, Shanghai and Jiangsu together accounted for half of the national total output of integrated circuit. In addition, Jiangsu and Zhejiang are major producers of garments, textiles and chemical fibers, while Shanghai is a major producer of chemicals, machinery and motor vehicles, according to Hong Kong Trade Development Council.

Bohai Rim Economic Circle

Bohai Rim Economic Circle encompasses the municipalities of Beijing and Tianjin, as well as the provinces of Hebei, Liaoning and Shandong. Major cities in this region include Beijing, Tianjin, Shenyang, Dalian, Jinan, Qingdao and Shijiazhuang. In 2005, this region accounted for 18.2% of the country’s exports, 25.2% of gross industrial output and 24.1% of retail sales value.

Sophisticated rail and highway networks radiating from Beijing and Tianjin, the dual lead metropolis of the region, are being developed, likely contributing to further integration of various local economies in this region.

Since the early 2000s, industries with more technology elements and added value like automobiles, electrical appliances and electronics have been playing an increasingly important role in the Bohai Rim Economic Circle.

Foreign investment in this region has been on the increase in recent years and foreign investment from Korea and Japan has been particularly strong. With its proximity to Japan, Korea and Russia the Bohai Rim is set to become an important trade platform in the northeast Asia. The recent trend of capital flows to northern China and central government’s initiatives in strengthening traditional industrialised zones in northeastern China are likely to further improve the economies of the Bohai Rim Economic Circle.

China’s Office Property Market

The scale of economic growth and the urbanisation and liberalisation of the economy have led to the rapid expansion of both domestic and international companies across the Pearl River Delta, the Yangtze River Delta and the Bohai Rim Economic Circle. This growth has been accompanied by a general shifting of the economic base within major urban areas such that there has been a move away from production-based industrial activities to more service-based activities. These pre-manufacturing and post-manufacturing services include research and development, product design, market research, branding and positioning, marketing and advertising as well as distribution and logistics. The number of services industry workers in China increased from 124 million in 1991 to 238 million in 2005. The share of services workers also rose from 18.9% to 31.4% during this period, according to China Statistical Yearbook (2006).

— 113 — THE COMMERCIAL PROPERTY MARKET IN CHINA

This restructuring of economic activity has underpinned the exceptionally strong demand for office space in the major urban areas, in a similar way to the strong and sustained growth experienced in North America and Japan between the 1950s and the 1980s.

In the face of this strong demand and, given the relative shortage of quality office space, most of China’s major cities have experienced a surge of new supply over recent years. During much of the 1990s, new construction activity in Shanghai and Beijing averaged over 20.0% of the existing stock. The scale of construction activity, coupled with the inherent cyclicality of office markets, means that vacancy rates and rental growth has tended to be fairly volatile over recent years. As the markets gain scale and critical mass, it is likely that new construction will come to represent a smaller share of the overall inventory, and this is likely to reduce the volatility of vacancy rates and rental growth.

Beyond the strong and sustained nature of demand for office space and the likely reductions in the volatility of the major markets, there are a number of additional factors that will influence the performance of office markets over the coming years.

First, despite the high levels of construction activity over recent years, much of the existing inventory is of poor quality or functionally obsolete for office occupiers that have become more sophisticated and more demanding. This has been demonstrated by the “flight to quality” in Tier-1 cities in recent years. Within this context, the prospects seem to be better for the relatively few prime quality office buildings in the best locations. Such buildings will continue to experience strong demand and be able to maintain high occupancy and high rents even when the market as a whole is experiencing considerable oversupply. In contrast, the prospects for poor quality and functionally obsolete office space are less positive, with increasing pressure for the refurbishment or redevelopment of such buildings.

A second additional feature of the maturing of the market is the marked variations within individual cities, at the submarket and asset-specific levels. The scale of many of the larger cities means that they tend to have multiple CBDs and, with the continual improvements to the transportation infrastructure and occupier preferences, the relative strength of different submarkets can vary over time within individual cities. This is clearly demonstrated for the case of Beijing, as explained below, but is also apparent within other major cities.

Demand for Grade A office space in China has so far concentrated in first-tier cities such as Shanghai, Beijing, Guangzhou and Shenzhen. In 2006, Grade A office stock in Shanghai, Beijing, Guangzhou and Shenzhen amounted to 6.5 million sq.m., 4.0 million sq.m., 1.2 million sq.m. and about 1.0 million sq.m. respectively.

The rental yields of Grade A offices in China’s first-tier cities are significantly higher than the counterparts in developed economies. Rental yields of prime offices in Beijing, Guangzhou, Shanghai and Shenzhen ranged between 7.0% and 9.0%, compared with just around 4.6% in Hong Kong in the last quarter of 2006. The high rental yields are a key factor driving foreigners’ investment in China’s office sector.

— 114 — THE COMMERCIAL PROPERTY MARKET IN CHINA

Beijing

Beijing’s office market is expecting a surge in new supply in 2007 due to the expected moratorium on new development during the hosting of the Olympic Games in 2008. This surge of new supply is, however, concentrated in particular submarkets, most particularly in the CBD where vacancies are set to rise. The new supply in other office submarkets such as Lufthansa area and Financial Street is less significant compared with the CBD. The high occupancy rates in these submarkets, coupled with strong occupier demand, means that vacancy rates are likely to remain relatively low, certainly compared with the CBD. The liberalisation of the local banking and insurance industries will underpin strong demand in Beijing office market as a whole but there will continue to be marked variations across the major submarkets.

Shanghai

In Shanghai, the short term prospects for the office market remain good due to the resilience of demand and, with limited to moderate new supply in the Puxi and Pudong area, declining vacancy rates. By the end of 2006, vacancy rates had declined to close to 6.0% and prime rents continued to grow strongly. New supply is expected to come to the market in 2008 and 2009 with the majority in the Pudong area. This is likely to push the vacancy rate up, particularly for the older and secondary office stock given the high quality of the space that is being completed. Over the medium and longer term, the outlook of the market is positive due to the strength of demand and underlying economic fundamentals of this key business centre of China.

Guangzhou

Guangzhou’s prime office market has benefited from a relative shortage of supply which, coupled with the steady economic growth and declining vacancy rates, led to strong rental growth during 2006. With the development of a new CBD in Pearl River New City, the new office space comes on stream between 2007 and 2009 will increase to 1.8 million sq.m. Over the medium term, the continuous deregulation of China’s financial market will drive Guangzhou’s economic development which, coupled with increasing demand for professional and business services, will help absorb the increased supply of prime offices. As the Guangzhou real estate market matures, there are signs that an increasing number of developers are choosing to hold their newly developed properties under sole ownership for rental income, instead of selling the property in strata title units.

Shenzhen

Consistent with other Tier-1 cities, Shenzhen is experiencing active office development, with more than 900,000 sq.m. of office space scheduled for completion during 2007. Many of the new buildings are of higher quality and have been pre-sold or pre-leased to occupiers. The demand for quality office space in Shenzhen are driven by the expansion of local businesses and the continued influx of foreign enterprises, partly due to the WTO and CEPA agreements,

— 115 — THE COMMERCIAL PROPERTY MARKET IN CHINA increased ties between Shenzhen and Hong Kong, and the Guangzhou-Shenzhen-Hong Kong Rail Link. Despite the strong demand, the office vacancy rate is expected to rise in the short term, but office rents will be likely to remain stable as a number of occupiers seek to upgrade their existing accommodation.

Other Markets

Demand for Grade A offices in many of China’s second-tier cities remains weak at the moment. Most enterprises in second tier cities cannot afford to buy or rent Grade A offices, whose construction costs are significantly higher than those of the Grade B offices or industrial buildings. However, the continual influx of multinational corporations and the take-off of China’s service sector will stimulate the demand of good-quality offices, in particular in cities that have the potential to become a regional service centre such as Tianjin, Nanjing, Wuhan, Qingdao, Dalian, Chongqing and Chengdu.

Retail Property Market in China

Although the office markets in China are highly cyclical, the retail markets are benefiting from structural changes associated with the maturing of the overall retail market (see Charts 3 and 4). Rising prosperity together with the liberalisation of the retail sector including the relaxation of restrictions on foreign retailers entering China, has boosted retailer demand for the limited amount of high quality retail space in prime location. These factors are set to continue to underpin strong rental growth for prime retail sectors and markets across China.

Chart 3: Retail Sales in China, RMB Billion

RMB Bn 7,000

6,000

5,000 1991-2005 CAGR= 15.0%

4,000

3,000

2,000

1,000

0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: China Statistical Yearbook, 2006

— 116 — THE COMMERCIAL PROPERTY MARKET IN CHINA

Chart 4: Disposable Income in China, RMB per capita per annum

RMB 12,000

10,000

1991-2005 CAGR= 13.9% 8,000

6,000

4,000

2,000

0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: China Statistical Yearbook, 2006

Strong retail sales and confidence in the performance prospects for professionally managed retail property have spurred investment interest from both investors and retailers. The introduction of a series of austerity measures to curb housing speculation in 2006 has also seen some funds being channelled into retail property. Although high quality retail space in prime location remains attractive due to their scarcity and strong demand, certain parts of the Chinese retail market are becoming oversupplied. This is particularly the case where there has been massive retail development in regional areas and second-tier cities that is likely to result in downward pressure on rents.

Prospects for prime rents in the Tier-1 cities remain more favourable. For instance, retail rents in Shanghai rose by around 30.0% in 2006 due to the strong demand, often driven by high-profile international retailers, and the limited amount of space in the downtown commercial areas. With new prime retail developments mostly pre-let, vacancy rates are expected to trend downwards during the remainder of the decade, such that positive rental growth is likely to continue. In Beijing, prime rental growth was broadly flat in 2006 due to the anticipation of a surge in new supply in 2007 and retailers’ increasing resistance to paying higher rents. The vacancy rate is expected to peak in 2007, with modest rental growth likely to return by the end of the decade with retail sales being buoyed by rising tourism, increasing disposable incomes and the 2008 Olympics. Retail markets in Shenzhen and Guangzhou were active in 2006 with major local and international retailers taking up more retail space, driven by buoyant retail sales.

A significant number of major development projects have been mixed-used properties that include both office and retail space, with the latter usually on the ground or podium levels. These mixed-used properties are usually located in city centers and the retail portion usually benefit from both a captive market of consumers that work in the property or from city centerfoot traffic.

— 117 — FINANCIAL INFORMATION AND FORECASTS

— 118 — SELECTED FINANCIAL INFORMATION

The historical income statement data for the period from 1 September 2005 to 31 December 2005 and year ended 31 December 2006 (the “Relevant Period”), the balance sheet data as at 31 December 2005 and 31 December 2006, and the cash flow data for the Relevant Period have been derived from the audited financial information and related notes thereto included in Appendix I to this Offering Circular. Such audited financial information and the related notes thereto have been prepared in accordance with Hong Kong GAAP and have been audited by KPMG, the reporting accountants.

The historical financial information for the operating results of the Predecessor Group included below and set forth in Appendix I to this Offering Circular is not necessarily indicative of RREEF CCT’s future performance. Investors should read the following summary financial information together with “The Property”, “Management’s Discussion and Analysis of Financial Condition and Results of Operation”, “Certain Factors Affecting Future Results of Operations and Financial Condition” and the historical financial statements for the Predecessor Group prior to the completion of the acquisition of the Property by RREEF CCT and related notes thereto set forth in Appendix I to this Offering Circular.

— 119 — SELECTED FINANCIAL INFORMATION

COMBINED INCOME STATEMENTS

Period from 1 September 2005 to Year ended 31 December 2005 31 December 2006

(HK$) (HK$)

Turnover: Rental income ...... 27,773,746 181,455,771 Car park income...... 71,077 1,510,142 Business tax...... (1,392,242) (9,148,296)

Total turnover ...... 26,452,581 173,817,617 ------

Total direct costs...... (7,460,843) (39,537,128) ------

Operating profit ...... 18,991,738 134,280,489 Administrative expenses ...... (953,747) (7,211,883) Other income ...... 28,131 26,939,028 Finance costs...... (10,224,210) (72,602,234)

Profit before increase in fair value of investment property .. 7,841,912 81,405,400 Increase in fair value of investment property...... 2,099,052,128 142,795,205

Profit before taxation ...... 2,106,894,040 224,200,605 Income tax1...... (695,352,991) 494,129,247

Profit for the period/year...... 1,411,541,049 718,329,852

Note:

1. Income tax related to change in fair value of investment property was HK$514,710,303 (2005: HK$(692,687,203)).

— 120 — SELECTED FINANCIAL INFORMATION

COMBINED BALANCE SHEETS

As at As at 31 December 2005 31 December 2006 HK$ HK$

Non-current assets Investment property...... 3,452,000,000 3,780,000,000 Other fixed assets ...... 884,874 821,980

3,452,884,874 3,780,821,980 ------

38,250,937 864,355,371 ------

(853,667,925) (2,194,616,903) ------

Net current liabilities...... (815,416,988) (1,330,261,532) ------

Total assets less current liabilities ...... 2,637,467,886 2,450,560,448 ------

Non-current liabilities Bank loan...... (480,350,000) — Deferred tax liabilities...... (687,341,476) (193,195,991)

(1,167,691,476) (193,195,991) ------

Net assets...... 1,469,776,410 2,257,364,457

Financed by: Issued capital...... 95,685,728 95,685,728 Reserves...... 1,374,090,682 2,161,678,729

1,469,776,410 2,257,364,457

— 121 — SELECTED FINANCIAL INFORMATION

COMBINED CASH FLOW STATEMENTS

Period from 1 September 2005 to Year ended 31 December 2005 31 December 2006

(HK$) (HK$)

Net cash generated from/(used in) operating activities ...... 14,807,777 (378,320,018)

Net cash used in investing activities ...... (79,490) (52,368,914)

Net cash (used in)/generated from financing activities ...... (10,224,202) 1,253,768,659

Increase in cash and cash equivalents...... 4,504,085 823,079,727

Cash and cash equivalents at beginning of the period/year ...... 19,056,697 22,279,494

Effect of foreign exchange rate changes ...... (1,281,288) (5,192,925)

Cash and cash equivalents at end of the period/year ...... 22,279,494 840,166,296

— 122 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion and the selected financial and operating information set forth below should be read in conjunction with the section headed “Selected Financial Information” in this Offering Circular and the Accountants’ Report on the Predecessor Group in Appendix I to this Offering Circular. Where appropriate, the following discussion includes analysis of the effects of the Global Offering and the completion of the acquisition of the Property by RREEF CCT.

BASIS OF DISCUSSION AND PRESENTATION

RREEF CCT, which will acquire the BVI Property Company that holds the Property through the HK Property Company on the Listing Date, has no operating history. The Manager has therefore set forth below a discussion of the historical operating results of the Predecessor Group. The historical financial information set out in the section headed “Selected Financial Information” and the Accountants’ Report on the Predecessor Group in Appendix I to this Offering Circular reflect the operating results of the Predecessor Group. Upon Completion, RREEF CCT will hold the ownership interest in the Property indirectly through the BVI Property Company. The Property is discussed in greater detail in the section headed “The Property” in this Offering Circular.

Given that the construction of the Property was completed on 26 August 2005, the operating history of the Property before 1 September 2005 is not available. Further, the provision of financial information during the Property’s construction stage would not be meaningful. Therefore, the following discussion has been prepared based on the operating history of the Predecessor Group from 1 September 2005 (the date of commencement of the first lease for the Property) to 31 December 2006.

Since the Property was exclusively owned and managed by the Predecessor Property Company or the HK Property Company during the Relevant Period, the audited financial information on the Property has been prepared based on the audited financial statements or, where appropriate, unaudited management accounts of the Predecessor Property Company, the HK Property Company and the BVI Property Company.

After the Listing Date, there will be certain changes to RREEF CCT’s cost and capital structure, level of indebtedness and operations. The cost structure of RREEF CCT after the Listing Date will differ in certain significant respects from the historical cost structure of the Predecessor Property Company, the BVI Property Company and the HK Property Company. For example, certain historical costs of the Predecessor Property Company and the HK Property Company will no longer be costs of RREEF CCT. Similarly, there are certain costs which were not incurred by the Predecessor Property Company or HK Property Company historically, such as the Manager’s, Property Manager’s and Trustee’s fees that will become costs to RREEF CCT going forward. Further, the presentation format of RREEF CCT’s financial information may differ from that of the audited financial information set forth in Appendix I to this Offering Circular. These variations are expected to affect the future financial results of RREEF CCT. For a discussion of the primary income statement items and other financial

— 123 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS statement items of the Predecessor Property Company, the BVI Property Company and the HK Property Company that may be affected by the acquisition of the Property by RREEF CCT and the Global Offering, see “Certain Factors Affecting Future Results of Operations and Financial Condition” in this Offering Circular.

CRITICAL ACCOUNTING POLICIES

For a discussion of the principal accounting policies used in the preparation of the consolidated financial statements relating to the Predecessor Group, refer to the Accountants’ Report on the Predecessor Group set out in Appendix I to this Offering Circular. Certain of these principal accounting policies are critical to the portrayal of the financial condition and results of operations of the Property since they required management to make complex judgments based on information which may change in future periods.

KEY FACTORS AFFECTING RESULTS OF OPERATIONS

The key factors affecting RREEF CCT’s financial condition and results of operations include the following:

Occupancy and Rental Rates

The Rental Income from the Property depends on the occupancy rates it is able to achieve and the rental rates the Property is able to command.

Factors affecting the occupancy and rental rates include the competitiveness of competing properties, tenant size, assumed tenant retention rates on expiry of the tenancy, market conditions and general macroeconomic and supply/demand trends affecting the office property market in Beijing. In addition to macroeconomic and supply/demand trends affecting the office property market in Beijing, occupancy rates depend on rental rates relative to competing properties and the ability to minimise downtime arising from lease expiries or early terminations. Two upcoming projects are likely to pose competition to the subject Property — Yin Tai Centre, which is slated for completion in later 2007, will be the second tallest building in Beijing, and China World Trade Centre III, which is expected to be completed in 2008, will be one of the best-quality complexes in Beijing. However, both of these two buildings will be located in the CBD and not the Lufthansa area.

— 124 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following table sets forth the occupancy rates of the Property as at:

Occupancy rate

(%)

31 December 2005...... 30.9 31 March 2006...... 39.8 30 June 2006...... 52.4 30 September 2006...... 60.9 31 December 2006...... 81.0 31 March 2007...... 94.2

The occupancy rate trend indicated in the table above reflects the fact that the Property was only completed on 26 August 2005 and commenced operation on 1 September 2005. Since then, as a result of the marketing and promotion of the Property as well as its high quality and prime location, the occupancy rate at the Property has been rapidly trending upwards until it achieved an occupancy rate of 94.2% as at 31 March 2007.

Lease Expiries

Depending on factors such as the needs of tenants as well as the general practice of the PRC commercial property market, the terms of lease agreements for the Property range from two years to 10 years. 64 of the 85 leases as at 31 March 2007 (representing 63.3% of the Total Lettable Area of the Property as at 31 March 2007) do not give the tenants the right to terminate their tenancies prior to the scheduled expiration dates. The remaining leases contain a right to terminate upon prior written notice of a certain period. The landlord has the right to terminate a tenancy upon the occurrence of certain events, such as non-payment of rent or breach of covenants by the tenants.

A majority of the Property’s leases representing 59.2% of the Total Lettable Area of the Property are for a term of three years. As a result, a considerable number of leases will expire between the financial years 2007 to 2009, with 4.4%, 26.4% and 36.4% of the Total Lettable Area due to expire in the financial years ending 31 December 2007, 2008 and 2009, respectively.

— 125 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following table sets forth details of expiries as of 31 March 2007 in respect of leases which are scheduled to expire during the periods indicated:

No. of % of total no. of tenancies tenancies as at Monthly Rental Income of Year expiring 31 March 2007 Lettable Area tenancies expiring(1) (sq.m.) (%) (HK$)(2) (%)(3) 2007 6 7.0% 4,424.6 4.4% 1,190,114.5 4.4% 2008 27 31.8% 26,427.3 26.4% 7,580,198.1 27.7% 2009 36 42.3% 36,487.0 36.4% 9,567,969.2 35.0% 2010 6 7.1% 9,715.9 9.7% 2,196,224.9 8.0% 2011 9 10.6% 17,312.2 17.3% 4,025,403.6 14.7% 2015 1 1.2% 5,875.7 5.8% 2,783,390.8 10.2% Total 85 100.0% 100,242.7 100.0% 27,343,301.1 100.0%

Notes: (1) Excluding income derived from the leasing of advertising spaces in the Property. (2) Calculated on the basis of the aggregate Rental Income payable under the tenancies expiring for the month ended 31 March 2007. (3) Calculated as a percentage of the Total Rental Income for the month ended 31 March 2007.

RREEF CCT’s ability to re-let expiring space will impact its financial condition and results of operations.

Changes to the Fair Value of the Property

The annual revaluation of the Property in the past has had an impact on the results of operations of the Property, and may in the future result in significant fluctuations in the results of operations of RREEF CCT. (See note 9 to the Accountants’ Report in Appendix I to this Offering Circular.) In the case of the Predecessor Property Company, the original cost of the Property was HK$1,349,744,109 (RMB1,407,156,077) (being its construction cost) and, in the case of the HK Property Company, the original cost of the Property was HK$1,794,754,868 (RMB1,854,900,000) (being the consideration for the transfer of the Property from the Predecessor Property Company to the HK Property Company and transaction costs capitalized). The appraised value of the Property were HK$3,452,000,000 (as at 31 December 2005) and HK$3,780,000,000 (as at 31 December 2006) as assessed by an independent firm of professional surveyors, Shanghai Gooray & Henry Property Valuation Chartered Surveyors Co. Ltd. The appraised value increased by HK$328,000,000, or 9.5%, from 31 December 2005 to 31 December 2006.

The PRC property market is volatile and may experience oversupply and property price fluctuations. The central and local governments adjust monetary and other economic policies from time to time to prevent and curtail the overheating of the PRC and local economies, and such economic adjustments may affect the property market in Beijing and other parts of the PRC. The central and local governments also make policy adjustments and adopt new

— 126 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS regulatory measures from time to time in a direct effort to control the over-development of the property market in the PRC. Such policies may lead to changes in market conditions, including price instability and imbalance of supply and demand, which may materially and adversely affect the business, financial condition and the results of operations of RREEF CCT. Moreover, there is no assurance that there will not be over-development in the property sector in the PRC in the future. Any future over-development in the property sector in the PRC may result in an oversupply of properties, including commercial properties, and a fall in property prices as well as rental rates, which could adversely affect the business, financial condition and the results of operations of RREEF CCT. Fair value of the Property increased by HK$143 million for the year ended 31 December 2006. For additional information on the cyclicality of the Beijing property market, see the sections headed “The Office Property Market in Beijing” and “Risk Factors — Risks Relating to Investments in Real Estate — RREEF CCT is exposed to cyclicality and volatility in the overall office rental property market in Beijing” in this Offering Circular.

See also the section headed “Certain Factors Affecting Future Results of Operations and Financial Condition” in this Offering Circular for certain other factors that will affect the business, financial condition and the results of operations of RREEF CCT.

CERTAIN COMPONENTS OF THE RESULTS OF OPERATIONS

As the Property was only completed on 26 August 2005 and commenced operation on 1 September 2005, only the results of operations for the period from 1 September 2005 to 31 December 2005 and the year ended 31 December 2006 are available for inclusion in this Offering Circular. Since the Property was ramping up its occupancy rate during the periods from 1 September 2005 to 31 December 2005 and the year ended 31 December 2006, it would not be meaningful to include a discussion and comparison of the Property’s results of operations given that the cost structure of the operations varied substantially during the above-mentioned periods as a result of the rapid growth in occupancy rate.

Generally, during the Relevant Period, the occupancy rate of the Property experienced a consistent upward trend. As at 31 March 2007, the Property had an occupancy rate of 94.2% and the average monthly rental per leased square metre for the period from 1 January 2007 to 31 March 2007 was HK$229, as compared to an occupancy rate of 30.9% as at 31 December 2005 and an average monthly rental per leased square metre of HK$331 for the period from 1 September 2005 to 31 December 2005 (see the sub-section headed “Occupancy and Rental Rates” above).

The following discussion of certain individual line items in the Combined Income Statement of the Predecessor Group extracted from the Accountants’ Report in Appendix I to this Offering Circular sets out income and expense figures which generally reflect this upward trend.

— 127 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Turnover

The Property’s Turnover comprised Rental Income and Car Park Income adjusted for business tax. The following table sets forth a breakdown of the Turnover for the periods indicated:

1 September 2005 — 1 January 2006 — 31 December 2005 31 December 2006

(HK$) (HK$)

Rental Income...... 27,773,746 181,455,771 Car Park Income ...... 71,077 1,510,142 Business tax ...... (1,392,242) (9,148,296)

Turnover (total)...... 26,452,581 173,817,617

Rental Income

Rental Income is the rent paid or payable by tenants under their leases for space in the Property, excluding any income generated from the car park in the Property, and, if applicable, means the rent as adjusted to amortise the effect of any rent free periods offered to tenants over their lease periods and of escalating rent payable by tenants over their lease periods.

Car Park Income

Car Park Income comprised income earned from the operation of the Property’s car park. Such income is generated on an hourly and monthly basis. Hourly car park charges were RMB5 (HK$5) and monthly car park charges ranged between RMB600 (HK$600) and RMB1,050 (HK$1,050) per car park lot.

Business tax

Business tax of 5.0% was levied on the Rental Income and Car Park Income.

— 128 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Direct Costs

The Property’s direct costs comprised commission paid to leasing agents, utilities, promotional expenses, staff costs, depreciation, stamp duty, urban real estate tax and property miscellaneous expenses. The following table sets forth a breakdown of the direct costs for the periods indicated:

1 September 2005 — 1 January 2006 — 31 December 2005 31 December 2006

(HK$) (HK$)

Commission to leasing agents ...... (362,934) (13,464,465) Urban real estate tax...... (2,505,510) (12,752,906) Stamp duty ...... (477,926) (1,567,619) Utilities ...... (1,980,081) (1,678,711) Promotional expenses ...... (1,136,049) (6,560,618) Staff costs ...... (703,979) (2,630,946) Depreciation...... (67,378) (205,550) Property miscellaneous expenses ...... (226,986) (676,313)

(7,460,843) (39,537,128)

Commission paid to leasing agents

This comprised commissions paid to third-party leasing agents by the Predecessor Property Company and the HK Property Company for introducing tenants to the Property. Such commissions took the form of one time payments ranging between the equivalent of one-half month’s to one month’s rent for new leases.

Urban real estate tax

Urban real estate tax at a rate of 1.2% per annum of 70.0% of the original cost of the Property was incurred by the Predecessor Property Company and the HK Property Company.

In the case of the Predecessor Property Company, the original cost of the Property was HK$1,349,744,109 (RMB1,407,156,077) (being its construction cost) and, in the case of the HK Property Company, the original cost of the Property was HK$1,794,754,868 (RMB1,854,900,000) (being the consideration for the transfer of the Property from the Predecessor Property Company to the HK Property Company and transaction costs capitalised, see the section headed “The Property — Five-Year Transaction History” in this Offering Circular).

— 129 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Stamp duty

Stamp duty was incurred at the standard rate of 0.1% of the aggregate rental payable under the leases. The tenants were liable to pay stamp duty on their respective leases at the same rate.

Utilities

Utilities comprised electricity expenses paid by the Predecessor Property Company and the HK Property Company for the electricity used in the common areas of the Property.

Promotional expenses

Promotional expenses consisted of advertising expenses, traveling expenses and other marketing expenses.

Staff costs

Staff costs were salary and welfare expenses paid by the Predecessor Property Company and the HK Property Company in respect of employees involved in the operations of the Property.

Depreciation

Depreciation was charged for furniture and fixtures and motor vehicles owned by the Predecessor Property Company and the HK Property Company.

Property miscellaneous expenses

Property miscellaneous expenses comprised, among other things, meeting expenses and other minor expenses.

— 130 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Administrative Expenses

Administrative expenses consisted of expenses such as legal and professional fees, meeting expenses, rental and office expenses, insurance premiums, communication and other administrative expenses. The following table sets forth a breakdown of the administrative expenses for the periods indicated:

1 September 2005 — 1 January 2006 — 31 December 2005 31 December 2006

(HK$) (HK$)

Legal and professional fees...... — (2,333,943) Meeting expenses ...... (220,465) (1,818,505) Rental and office expenses ...... (601,853) (674,083) Insurance...... — (361,083) Communication fee...... (33,407) (177,654) Others ...... (98,022) (1,846,615)

Administrative expenses (total) ...... (953,747) (7,211,883)

Other Income

The Property’s other income comprised interest income, foreign exchange gains and certain other income. The following table sets forth a breakdown of the other income for the periods indicated:

1 September 2005 — 1 January 2006 — 31 December 2005 31 December 2006

(HK$) (HK$)

Interest income ...... 28,131 1,289,372 Foreign exchange gains ...... — 25,467,457 Certain other income...... — 182,199

Other income (total) ...... 28,131 26,939,028

Interest income

Interest income was interest derived from cash deposited in banks.

— 131 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Foreign exchange gains

Foreign exchange gains were notional unrealised gains arising from the HK Property Company’s liabilities under the Existing Borrowings due to the appreciation of Renminbi (which is the functional currency of the HK Property Company) against US Dollars (in which the Existing Borrowings are denominated) during the Relevant Period.

Certain other income

Certain other income comprised, among other things, lease administration fees and fees for provision of property related services such as minor renovation works.

Increase in Fair Value of the Property

This reflects increase in fair value of the Property following annual revaluations thereof (see the sub-section headed “Key Factors Affecting Results of Operation — Changes to the Fair Value of the Property” above).

Finance Costs

Finance costs consisted of interest on bank loans and other borrowing costs. The following table sets forth a breakdown of finance costs for the periods indicated:

1 September 2005 — 1 January 2006 — 31 December 2005 31 December 2006

(HK$) (HK$)

Interest on bank loans...... (10,224,210) (64,197,531) Other borrowing costs ...... — (8,404,703)

Finance costs (total) ...... (10,224,210) (72,602,234)

Other borrowing costs

This comprised the upfront fee paid by the HK Property Company for the loan facility relating to the Existing Borrowings.

— 132 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Income Tax

Income tax consisted of provisions for PRC enterprise income tax, withholding income tax and deferred tax from origination and reversal of temporary differences in property valuation as at the period/year-end date. The following table sets forth a breakdown of income tax for the period/year indicated:

1 September 2005 — 1 January 2006 — 31 December 2005 31 December 2006

(HK$) (HK$)

Current tax

Enterprise income tax...... — (1,697,109) Withholding income tax ...... — (13,101,801)

Income tax (total) ...... — (14,798,910) ------

Deferred tax

Origination and reversal of temporary differences ...... (695,352,991) 508,928,157 ------

(695,352,991) 494,129,247

Enterprise income tax

Only the Predecessor Property Company, as a company incorporated in the PRC, was liable for enterprise income tax. A provision for such tax was calculated based on the statutory rate of 33.0% of the assessable profits of the Predecessor Property Company.

Income tax for the period from 1 September 2005 to 31 December 2005 represents deferred tax of HK$695,352,991 which was primarily arising by applying 33.0% tax rate on property revaluation gains offsetting prior year tax losses.

There was no provision for current tax for the period from 1 September 2005 to 31 December 2005 as the Predecessor Property Company had no assessable profits in that period.

Income tax for the period from 1 January 2006 to the time the Property was sold by the Predecessor Property Company to the HK Property Company in April 2006 represents reversal of deferred tax of HK$698,204,900 and current tax of HK$1,697,109.

— 133 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Withholding income tax

Only the HK Property Company, as a company incorporated outside the PRC, was liable for withholding income tax. A provision for such tax was calculated based on the withholding rate of 10.0% of its Total Rental Income less PRC business tax of 5.0% (see the section headed “Taxation” in this Offering Circular). As the Property was only acquired by the HK Property Company in April 2006 (see the section headed “The Property — Five-Year Transaction History” in this Offering Circular), there was no provision for withholding income tax prior to such transfer when the Property was held by the Predecessor Property Company. Withholding income tax after the date of the transfer to 31 December 2006 represents current tax of HK$13,101,801 and deferred tax of HK$189,276,743 on surplus of valuation amount as of 31 December 2006 over the acquisition price of the HK Property Company.

LIQUIDITY AND CAPITAL RESOURCES

The principal sources of funding for capital investments on the Property have historically been from cash from operating activities and bank loans. See the section headed “Certain Factors Affecting Future Results of Operations and Financial Condition” in this Offering Circular for changes to the Property’s cost structure after it is acquired by RREEF CCT.

INDEBTEDNESS

Historically, the indebtedness of the Predecessor Property Company and the HK Property Company consisted primarily of bank loans and, in the case of the HK Property Company only, also the Outstanding Consideration.

The Predecessor Property Company obtained a RMB500,000,000 (HK$480,350,000) construction loan from Bank of China, Beijing Chaoyang Sub-branch for the development of the Property. Interest on the loan was fixed at 6.336% per annum for the first year from the date of initial draw down on the loan, and was subject to revision in each subsequent year according to a specified scale. The loan amount was drawn down in one lump sum in April 2005 and was fully repaid in April 2006.

To partially meet the purchase price when the HK Property Company acquired the Property from the Predecessor Property Company, the former obtained a term loan from a syndicate of lenders led by Industrial and Commercial Bank of China (Asia) Limited for an aggregate principal amount of US$135,000,000 (HK$1,052,000,000). The loan amount has been fully drawn down and incurs interest at LIBOR plus a margin of between 1.80% and 2.80% per annum in accordance with a specified schedule. To repay such indebtedness, the HK Property Company obtained another term loan from the same syndicate of lenders (the “Existing Borrowings”).

— 134 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As at 31 December 2006, the outstanding principal under the Existing Borrowings amounted to US$235,000,000 (HK$1,828,000,000), which carried interest rate at LIBOR plus a margin of 1.25% and the Outstanding Consideration was RMB783,000,002 (HK$783,000,002).

The mortgage agreement in relation to the Existing Borrowings contains no clause in respect of the change of control of the HK Property Company but stipulated that no transfer, disposal, lease, mortgage or other dealings of the Property shall be done without prior written consent of Industrial and Commercial Bank of China (Asia) Limited. The HK Property Company has obtained such consent to lease the Property or any part thereof.

CAPITAL EXPENDITURES

As the Property was only completed on 26 August 2005, there was no material capital expenditure during the Relevant Period.

NO MATERIAL ADVERSE CHANGE

The Directors confirm that the BVI Property Company has declared dividend of HK$50 million for the year ended 31 December 2006 and that upon Listing, RREEF CCT will have a payable amount of HK$50 million to the Vendor for the dividend payment, other than that, there has been no material adverse change to the financial or trading positions of the Predecessor Group since 31 December 2006, the date to which the audited financial information of the Predecessor Group set out in Appendix I to this Offering Circular and the audited financial statements of the BVI Property Company set out in Appendix II to this Offering Circular have been made up.

— 135 — CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND FINANCIAL CONDITION

After the Listing Date, there will be certain changes to RREEF CCT’s cost structure, level of indebtedness and operations. As a result, the following discussion has been prepared to assist investors’ evaluation of the factors which may affect RREEF CCT’s future results of operations. Such statements are subject to uncertainties and assumptions, and under no circumstances should the inclusion of such information herein be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions by the Manager, the Trustee, the Underwriters or any other person. Investors are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

BACKGROUND

The audited financial information in respect of the Predecessor Group set forth in Appendix I to this Offering Circular and the other historical financial information have been prepared based on the historical operations of the Predecessor Group. The cost structure of RREEF CCT will differ in certain respects from those of the Predecessor Group in the past. For example, certain historical costs of the Predecessor Group will no longer be the costs of RREEF CCT. Similarly, there are certain costs, such as the Manager’s, Property Manager’s and Trustee’s fees, that will be costs of RREEF CCT going forward which were not costs of the Predecessor Group historically.

Further, the presentation format of RREEF CCT’s financial information may differ from that of the audited financial information set forth in Appendix I to this Offering Circular. Set forth below are details of the primary income statement items and other financial statement items of the Predecessor Group that may be affected after the Listing Date.

ADDITIONAL COST ITEMS

RREEF CCT will incur fees and expenses associated with the REIT structure that were not previously incurred by the Predecessor Group. Set out below are certain such additional cost items.

Property Manager’s Fees and Leasing Commissions

The Property Manager currently manages the Property under arrangements previously put in place by the Vendor. When the Property Management Agreement entered into between the Manager, the HK Property Company and the Property Manager comes into effect on Completion, the Property Manager will then manage the Property in accordance with the Property Management Agreement.

Under the Property Management Agreement, the Property Manager is entitled to receive certain fees from RREEF CCT for its provision of tenancy management services, rental collection and repatriation services, and entity accounting services, as well as leasing commissions for securing new leases or lease renewals for the Property. These fees and

— 136 — CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND FINANCIAL CONDITION leasing commissions will be treated as expense items in RREEF CCT’s income statement. For detailed description of the Property Manager’s fee, see the section headed “The Property Manager — Fees and Leasing Commissions of the Property Manager” in this Offering Circular.

Property Management Fee Income and Operating Expenses

Under the Property Management Agreement, the Property Manager will collect fees such as building management fees, air-conditioning charges and other management charges from tenants and maintain a property management fund for the Property. All building management- related expenses (such as cleaning and securities, utilities etc.), the Property Manager’s remuneration and repair and maintenance expenses will be paid out of the property management fund. Should the property management fund have any surplus, it will be maintained in the Operating Account for payment of direct costs in the future and will not be recognised by RREEF CCT as income. Should there be a deficit in the property management fund, such deficit will be reimbursed by the HK Property Company.

For further information on these arrangements and a detailed description of the various fees and leasing commissions, see the section headed “Material Agreements and Other Documents — Property Management Agreement” in this Offering Circular.

Manager’s Base Fee

Following the Listing Date, the Manager will receive a Base Fee from RREEF CCT, comprising 0.4% per annum of the value of Deposited Property at the relevant time or such other rate as may from time to time be fixed or otherwise determined. The Base Fee shall accrue on a monthly basis and be paid monthly. The amount accruing each month shall be a sum equal to the appropriate percentage of the value of the Deposited Property on the last day of the relevant month divided by 12. The Base Fee will be paid in cash and will be treated as an expense item in RREEF CCT’s income statement. For further information on these arrangements and a detailed description of the Manager’s fees, see the section headed “The Manager — Fees, Costs and Expenses of the Manager” in this Offering Circular.

Manager’s Variable Fee

The Manager’s Variable Fee will be recognised as an expense item in RREEF CCT’s income statement. Under the Trust Deed, the Manager will receive, in respect of each property owned by RREEF CCT, an annual Variable Fee of 3.0% per annum of the Net Property Income of that property (before deduction therefrom of the Base Fee or the Variable Fee). The Variable Fee will be paid quarterly in cash and will be treated as an expense item in RREEF CCT’s income statement. For further information on these arrangements and a detailed description of the Manager’s fees, see the section headed “The Manager — Fees, Costs and Expenses of the Manager” of this Offering Circular.

— 137 — CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Manager’s Acquisition Fee and Divestment Fee

In addition to the Base Fee and Variable Fee, under the Trust Deed, the Manager is also entitled to receive an acquisition fee not exceeding 1.0% of the acquisition price of any property acquired directly or indirectly by RREEF CCT (pro-rated if applicable to the proportion of the Trust’s interest in the property acquired). The acquisition fee will be paid to the Manager in the form of cash or cash and the Units and will be treated as an expense item in RREEF CCT’s income statement. Further, the Manager is entitled to receive a divestment fee not exceeding 0.5% of the sale price of any property sold or divested by RREEF CCT. The divestment fee will also be paid to the Manager in the form of cash or cash and the Units and will be treated as an expense item in RREEF CCT’s income statement. For further information on these arrangements and a detailed description of the Manager’s fees, see the section headed “The Manager — Fees, Costs and Expenses of the Manager” in this Offering Circular.

Trustee’s Fee

Under the terms of the Trust Deed, HSBC Institutional Trust Services (Asia) Limited, as RREEF CCT’s trustee, will receive an on-going fee not exceeding 0.03% per annum of the value of the Deposited Property, subject to a minimum amount of HK$50,000 per month. This on-going fee will be paid to the Trustee in cash and will be treated as an expense item in RREEF CCT’s income statement. In addition, RREEF CCT will pay the Trustee a one-time inception fee of no more than HK$200,000. Additional fees are payable for services of an exceptional nature or otherwise outside the scope of the Trustee’s normal duties in the course of business of RREEF CCT, including but not limited to the acquisition and divestment of properties by RREEF CCT. For further information on these arrangements and a detailed description of the Trustee’s fees, see the section headed “The Trust Deed — Trustee’s Fee” in this Offering Circular.

Trust-related Expenses

The recurring trust-related expenses in respect of RREEF CCT include annual listing fees, share registrar fees, audit and tax advisor’s fees, costs associated with the preparation and distribution of reports to the Unitholders and other miscellaneous expenses.

— 138 — CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND FINANCIAL CONDITION

CHANGE IN NATURE OF EXISTING COSTS

Finance Costs

Historically, the finance costs relating to the Predecessor Group consisted of interest payments on external borrowings. Upon Completion, the HK Property Company is expected to have in place the Facility of HK$1,400 million, subject to the satisfaction of certain conditions precedent (see the section headed “Material Agreements and Other Documents — The Facility” in this Offering Circular).

The interest payable under the Facility will be at HIBOR plus a margin of 120 basis points per annum. An upfront fee of 1.5% of the amount of the Facility will be payable by the HK Property Company to the mandated sole lead arranger which will be amortised over the five-year term of the loan. This amortised amount will be charged to the income statement of RREEF CCT using the effective interest method.

Income Tax

The HK Property Company, as a company incorporated outside the PRC, is liable to withholding income tax based on the concessionary withholding rate of 10.0% of its Total Rental Income less PRC business tax of 5.0%. See the section headed “Taxation” in this Offering Circular.

LIQUIDITY AND CAPITAL RESOURCES

Upon completion of the Global Offering, net cash received from the operations of the Property through the HK Property Company will be RREEF CCT’s primary source of liquidity to fund cash distributions to the Unitholders (which the Manager intends to be 100% of RREEF CCT’s total Annual Distributable Income for the period from the Listing Date to 31 December 2007 and thereafter at least 90% of RREEF CCT’s total Annual Distributable Income for each financial year), debt servicing, repairs and maintenance and other recurring operating and capital costs. Where appropriate, RREEF CCT may also seek to issue further the Units and raise new credit facilities (under the REIT Code, RREEF CCT is only allowed to borrow up to 45.0% of total gross asset value), particularly in relation to any proposal to acquire further properties.

The Manager will only seek to incur capital expenditures or other expenses that will enhance the Property to improve the yield or long term value of the Property either by improving rental rates or occupancy rates or otherwise increasing the Total Lettable Area of the Property. Such enhancements should both increase the cash flows from the Property and increase the value of the Property which may allow the Manager further flexibility to borrow in accordance with the REIT Code.

— 139 — CERTAIN FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS AND FINANCIAL CONDITION

As at the Latest Practicable Date, the HK Property Company did not have any contractual commitments or obligations to make any capital expenditures, and the HK Property Company has no plans to make any material capital expenditures in relation to the Property.

WORKING CAPITAL STATEMENT

Having taken into consideration the financial resources available to RREEF CCT, including its internally generated funds, the estimated net proceeds of the Global Offering and the proceeds from the drawdown on the Facility, the Manager believes that RREEF CCT will have sufficient working capital to meet its working capital and operating requirements for the 12 calendar months following the Listing Date. To the extent that RREEF CCT makes any acquisition, it will be required to rely on external borrowings and equity or debt securities offerings to finance such acquisitions. The sale of additional equity or equity-linked securities may result in additional dilution to the Unitholders.

NO MATERIAL ADVERSE CHANGE

The Manager confirms that, having performed reasonable due diligence on RREEF CCT, the BVI Property Company and the HK Property Company, other than the BVI Property Company has declared dividend of HK$50 million for the year ended 31 December 2006 and that upon Listing, RREEF CCT will have a payable amount of HK$50 million to the Vendor for the dividend payment, there has been no material adverse change in the financial or trading position or prospects of RREEF CCT, the BVI Property Company and the HK Property Company since 31 December 2006, which is the end of the period covered by the Accountants’ Report on the Predecessor Group included in Appendix I to this Offering Circular.

— 140 — PROFIT FORECAST

Statements contained in this section that are not historical facts may be forward- B18 looking statements. Such statements are based on the assumptions set forth in this section and are subject to certain risks and uncertainties which could cause actual results to differ materially from those projected. Under no circumstances should the inclusion of such information herein be regarded as a representation, warranty or prediction by RREEF CCT, the Manager, the Trustee, the Vendor, the Underwriters or any other person that the underlying assumptions used in preparing the profit forecast will materialise or that the profit forecast results will be achieved or are likely to be achieved. See the section headed “Risk Factors” in this Offering Circular.

None of the Manager, the Trustee, the Vendor and the Underwriters guarantees the performance of RREEF CCT or the payment of any (or any particular) return on the Units. Investors in the Units are cautioned not to place undue reliance on any “forward-looking” statements which are made only as at the date of this Offering Circular.

The profit forecast, which was prepared by the Manager and for which the Directors are responsible, has been approved by the Board. The profit forecast has been prepared on the bases and assumptions set out below and in accordance with accounting principles generally accepted in Hong Kong and is consistent in all material respects with those accounting policies adopted in the audited financial information. The profit forecast of RREEF CCT on the following pages of this Offering Circular has been prepared on a consolidated basis, reflecting the forecast consolidated income statement of RREEF CCT, the BVI Property Company and the HK Property Company for the Forecast Period only.

The audited financial results of the Predecessor Group in this Offering Circular only cover the period from 1 September 2005 to 31 December 2006 respectively. The financial information relating to the Predecessor Group for the period from 1 January 2007 to the Listing Date has not been prepared by the Manager and the financial results of the HK Property Company for such period have neither been audited nor reviewed. In preparing this profit forecast, the Manager has made certain assumptions with respect to the operations of RREEF CCT as set out below. To the extent that the Manager has not identified events that have occurred or may occur in respect of the HK Property Company during the period from 1 January 2007 to the Listing Date, the impact of such events on the future results of RREEF CCT has not been taken into account in the profit forecast.

Investors should note that since the extent of any changes in the valuation of the Property in the future will be established by reference to the market at the end of each financial year, the Manager has not made any assumption as to property valuation movements in arriving at the profit forecast for the Forecast Period. Should the market value of the Property as at 31 December 2007 drop below or increase above the Appraised Value, the resulting deficit or surplus, along with any associated deferred taxation, would be charged to the income statement. Investors should also note that the format and individual line items in RREEF CCT’s future financial reports and statements may differ from those used for the purposes of the profit forecast and such line items should not be viewed as individual forecasts but as forming part of the bases and assumptions used in arriving at the profit forecast for the Forecast Period.

— 141 — PROFIT FORECAST

The profit forecast should be read together with the letters set out in Appendix IV headed “Profit Forecast”, Appendix V headed “Letter from the Independent Property Valuer in Relation to Rental Income” and Appendix VI headed “Independent Property Valuer’s Valuation Report” to this Offering Circular and the principal bases and assumptions set out below.

The forecast and calculations made in preparing the profit forecast have been reviewed by KPMG and the Joint Listing Agents. Refer to Appendix IV to this Offering Circular for letters from KPMG and the Joint Listing Agents on the accounting policies adopted and calculations made in arriving at the profit forecast. The Manager and the Joint Listing Agents consider the assumptions made in arriving at the profit forecast to be reasonable.

Investors should note that the audited financial information of the Predecessor Group set forth in the table below, which has been extracted from Appendix I to this Offering Circular, has been prepared based on the historical operations of the Predecessor Group. While the sources of revenue of RREEF CCT will be similar to those of the Predecessor Group, its cost structure after the Listing Date will differ in certain significant respects from the historical cost structures of the Predecessor Group. Certain historical costs of the Predecessor Group will no longer be costs of RREEF CCT and certain other new costs, such as the fees of the Trustee, the Manager and the Property Manager as well as annual listing fees, share registrar fees, audit and tax advisor’s fees, and costs associated with the preparation and distribution of reports to the Unitholders, will be costs of RREEF CCT going forward that were not costs of the Predecessor Property Company and the HK Property Company historically. See the section headed “Certain Factors Affecting Future Results of Operations and Financial Condition” in this Offering Circular.

Having regard to the various factors noted above, investors should exercise caution in relying on this profit forecast generally and, in particular, (i) investors should exercise the highest caution in making any comparison, whether as to individual line items or overall financial performance, as between the Manager’s projected income statement appearing below and any historic financial results (whether contained in this Offering Circular or in the audited financial statements of the Property as set out in Appendix I to this Offering Circular), and (ii) investors should not treat any individual line item in the Manager’s projected income statement as a forecast in its own right.

— 142 — PROFIT FORECAST

PROFIT FORECAST FOR THE FORECAST PERIOD (FOR THE PERIOD FROM THE ANTICIPATED LISTING DATE TO 31 DECEMBER 2007)

The following table sets forth the historical profit and loss data of the operations of the Predecessor Group for the period from 1 September 2005 to 31 December 2005 and year ended 31 December 2006, and RREEF CCT’s forecast income statement data and distribution for the Forecast Period.

Historical Forecast Period from 1 September 2005 to Year ended 31 December 31 December Forecast 2005 2006 Period(1) (HK$’000) (HK$’000) (HK$’000)

Direct costs Commission to leasing agents...... (363) (13,464) (687) Utilities ...... (1,980) (1,679) — Promotional expenses ...... (1,136) (6,561) (3,150) Staff costs ...... (704) (2,631) — Depreciation ...... (67) (206) — Stamp duty ...... (478) (1,568) (76) Urban real estate tax ...... (2,506) (12,753) (8,180) Urban and town land use tax...... ——(279) Property miscellaneous expenses...... (227) (676) — Property Manager’s remuneration ...... ——(927) Total direct costs ...... (7,461) (39,538) (13,299) Operating profit...... 18,992 134,280 156,613 Administrative expenses...... (954) (7,212) — Other income ...... 28 26,939 206 Manager’s management fees...... ——(13,214) Trustee’s fee ...... ——(639) Trust-related expenses ...... ——(4,081) Increase in fair value of investment property(2)...... 2,099,052 142,796 — Finance costs ...... (10,224) (72,602) (42,564) Profit before taxation and transactions with Unitholders ...... 2,106,894 224,201 96,321

Income tax PRC enterprise income tax...... — (1,697) — PRC withholding income tax ...... — (13,102) (16,991) — (14,799) (16,991)

— 143 — PROFIT FORECAST

Historical Forecast Period from 1 September 2005 to Year ended 31 December 31 December Forecast 2005 2006 Period(1) (HK$’000) (HK$’000) (HK$’000)

Deferred tax Origination and reversal of temporary differences (695,353) 508,928 —

(695,353) 494,129 (16,991) ------

Net profit before transactions with Unitholders 1,411,541 718,330 79,330

Adjustments(3)...... 2,303 Distributable income ...... 81,633

Notes: (1) In preparing this profit forecast, the Manager has excluded: (a) the excess of net fair value of identifiable assets and liabilities acquired over the cost of the acquisition of the BVI Property Company Share amounting to HK$31 million based on Minimum Offer Price of HK$5.00, and the excess of the cost of the acquisition of the BVI Property Company Share over the net fair value of identifiable assets and liabilities acquired (amounting to HK$158 million based on Maximum Offer Price of HK$5.40, before taking into account the effect of any purchase price adjustment for the current assets/liabilities of the HK Property Company on Completion); and (b) the cost of obtaining the listing status of RREEF CCT of HK$79 million and HK$84 million based on the Minimum Offer Price of HK$5.00 and the Maximum Offer Price of HK$5.40 respectively (which will be expensed immediately in the income statement). The Manager considers that these items are non-recurring in nature and arise as a result of the Acquisition and the listing of RREEF CCT. Inclusion of these items will distort the comparability of profit from period to period. (2) The Manager has made no assumption as to changes in property value in arriving at this profit forecast. (3) Refers to the following adjustment: Forecast Forecast Period (HK$’000) Add: Amortisation of upfront fees on bank debt ...... 2,303

(4) Assuming an Offer Price range of HK$5.00 per Unit to HK$5.40 per Unit, being the Minimum Offer Price and Maximum Offer Price respectively.

— 144 — PROFIT FORECAST

(5) The forecast annualised profit yields for the Forecast Period is provided for illustrative purposes only and calculated as follows: (Profit for the Forecast Period assuming no change in fair value of investment properties/number of days in the Forecast Period) x 365/number of the Units held by public the Unitholders as of the record date for the distribution for the Forecast Period/Offer Price, and excludes brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%. (6) The annualised distribution yields for the Forecast Period is provided for illustrative purposes only and may differ from the annualised distribution yield after taxation set out in this table based on the number of the Units outstanding for the period. Annualised distribution yields have been calculated with reference to the Minimum Offer Price and Maximum Offer Price only. The annualised distribution yields is calculated as follows: (Distributable income for the Forecast Period/number of days in the Forecast Period) x 365/ number of Units held by the public Unitholders as of the record date for the distribution for the Forecast Period/Offer Price, and excludes brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%.

No forecast of profits or DPU is made in respect of any period ending after 31 December 2007. None of the Manager, the Trustee, the Vendor or the Underwriters guarantees the performance of RREEF CCT or the payment of any (or any particular) return on the Units.

The forecast and projected yields stated in the table above are calculated based on the Maximum Offer Price and the Minimum Offer Price. Such yields will vary accordingly for investors who purchase the Units in the secondary market at a price that differs from the Maximum Offer Price and the Minimum Offer Price.

BASES AND ASSUMPTIONS

This profit forecast has been made on the principal bases and assumptions set out below. While the Manager considers these bases and assumptions to be appropriate and reasonable as at the date of this Offering Circular, investors should appreciate that many factors which may affect results are beyond the control of the Manager and its Directors or may not be capable of being foreseen or accurately predicted. Investor should also note that this profit forecast is not intended to be a representation that the bases and assumptions represent events that will occur. Accordingly, actual results may differ from forecasts and such differences may be material. Pursuant to paragraph 9.4(b) of the REIT Code, the published RC9.4(b) financial statements of RREEF CCT for the period ending 31 December 2007 will disclose the actual profit for the period and account for the discrepancy between the forecast and actual yield for that period. Investors should carefully consider these bases and assumptions when making an assessment of the future performance of RREEF CCT based on the profit forecast presented above.

Investors are advised to review the assumptions and profit forecast and make their own independent assessment of the future performance and prospects of RREEF CCT.

Turnover

Turnover is the aggregate of Rental Income, Advertising Income and Car Park Income adjusted for business tax. A summary of the assumptions used in calculating Turnover is set out below.

— 145 — PROFIT FORECAST

Rental Income

Rental Income comprises rent paid by tenants under their leases for space in the Property. Rent paid under the leases is generally fixed for a period of two to three years from their original commencement date, consistent with general market practice for retail and office leases in the PRC.

Advertising Income

Advertising Income comprises rent paid by a tenant under a lease for the Property’s billboards. There was no advertising income recognised during the Relevant Period as the Reporting Accountant is of the view that such advertising income did not fulfill the necessary requirement under the Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants for the Predecessor Group to recognise it as income. The HK Property Company has not received any advertising income up to the Latest Practicable Date. In the Forecast Period, given that a legally binding contract is in place and such advertising income will be indemnified by the Vendor for the entire term of the said contract, the Manager is of the view that such income should be included as revenue in the profit forecast.

The forecast Rental Income and Advertising Income for the Forecast Period comprise income from existing lease commitments which were in place as at 31 March 2007 and expected lease renewals.

Rental Income by Categories of Tenants

Existing lease commitments and expected lease renewals attribute to approximately 99.2% and 0.8% respectively of the Rental Income for the Forecast Period.

Occupancy Rates

The Manager has assessed forecast occupancy rates based on the historical occupancy rates of the Property, the occupancy rate of the Property as at 31 March 2007 and expected renewals.

The following table sets forth the historical and forecast occupancy rates for the Property for the periods indicated:

Occupancy rates

Historical Forecast

As at As at As at As at As at As at Average for 31 December 31 March 30 June 30 September 31 December 31 March the Forecast 2005 2006 2006 2006 2006 2007 Period

(%) (%) (%) (%) (%) (%) (%)

30.9 39.8 52.4 60.9 81.0 94.2 94.2

— 146 — PROFIT FORECAST

The forecast average occupancy rate takes into account a projected vacancy period for the Property with an average vacancy period of three months (see the sub-section headed “Renewal of Existing Leases and Procurement of New Leases” below). A proportion of the units in the Property were unleased as at 31 March 2007 and the Manager has assumed that these units will remain vacant during the Forecast Period. These units represent approximately 5.8% of the Total Lettable Area of the Property.

Average Length of Leases

Lease agreements are generally fixed for a period of two to three years, consistent with general market practice for retail and office leases in the PRC. The Manager projects a future average lease length of three years based on historical leasing activity for the Property.

Renewal of Existing Leases and Procurement of New Leases

There are no historical lease renewal statistics for the Property as it only commenced operation in September 2005. However, based on recent leasing activities and the Manager’s assessment of future leasing activities, the Manager has assumed that approximately 70.0% of the existing tenants on average will renew their leases and that the units occupied by the remaining 30.0% will generally experience three months vacancy period, during which no Rental Income will be received.

Growth of Rental Rates

The Manager has assessed the market rent for each unit in the Property as at 31 March 2007. The market rent is the rent which the Manager believes could be achieved if each lease was renegotiated as at its expiry date and is estimated with reference to, among other things:

● the rent payable pursuant to leases in the Property that have been negotiated since 31 March 2007;

● the rent for comparable retail and office buildings in Beijing; and

● a variety of property-specific factors, including but not limited to (a) the location of the property; (b) property type; (c) age of the Property; (d) occupancy level of the Property; (e) economic and demographic attributes; and (f) projected future developments in the area immediately surrounding the Property and the associated catchment area.

The future market rent for the Property has been estimated based on the assumed market rent for each unit in the Property as at 31 March 2007 and the assessed growth in market rent during the Forecast Period. Knight Frank, the Independent Market Consultant, in relation to the China commercial property market, has provided the Manager with an anticipated growth rate

— 147 — PROFIT FORECAST of -5% for 2007 (see the Independent Market Consultant’s Letter in relation to its Analysis Report on the Office Property Market in Beijing and in PRC in Appendix VII to this Offering Circular). The Manager has considered the same and has no basis for disagreeing with any of it, and has relied on this information in determining the future market rent for the Property.

Rent Free Periods

Leases for the Property generally grant new tenants certain rent free periods, during which the tenants will not be required to pay any rent. Historically over the four months ended 31 December 2005 and the year ended 31 December 2006, the rent free period was generally one month per annum. Based on the historic averages, recent leasing activities, the Manager’s assessment of future leasing activities, and the Manager’s business plan, the Manager has assumed rent free periods of three months for future new three-year leases. The Manager has also assumed that rent free periods will not be granted for existing tenants that renew their leases.

Car Park Income

Car Park Income includes income accruing or resulting from car park operations in the Property. A lower occupancy rate of 50% is applied in the profit forecast as the Manager is of the view that Car Park Income in general is not secured by long term tenancy contracts and therefore it would be appropriate to apply a more prudent occupancy rate. As of 31 March 2007, the Property’s car park spaces had occupancy rate of approximately 70%.

Property Operating Expenses

Property operating expenses are associated with the operation of the Property and include commission to leasing agents, utilities, promotional expenses, staff costs, depreciation, stamp duty, urban real estate tax, urban and town land use tax, property miscellaneous expenses and the Property Manager’s remuneration.

Fees and Leasing Commissions for the Property Manager

Under the Property Management Agreement, the Property Manager will be entitled to the following fees and leasing commissions from RREEF CCT:

● Tenancy Management Fee

For its provision of tenancy management services, the Property Manager will be entitled to a tenancy management fee of RMB30,000 (HK$30,000) per month.

● Rental Collection and Repatriation Fee

For its provision of rental collection and repatriation services, the Property Manager will be entitled to a rental collection and repatriation fee of 0.6% per annum of the Rental Income after deduction of relevant taxes.

— 148 — PROFIT FORECAST

● Entity Accounting Fee

For its provision of entity accounting services, the Property Manager will be entitled to an entity accounting fee of RMB46,800 (HK$46,800) per month.

● Leasing Commissions

— Secured by the Property Manager:

For a new lease of one year or more, it will be entitled to a commission equivalent to one month’s rent.

For a new lease of less than one year, or renewal of an existing lease (where the duration of the renewal term is at least one year), it will be entitled to a commission equivalent to one-half month’s rent.

For a renewal of an existing lease (where the duration of the renewal term is less than one year), it will be entitled to a commission equivalent to the pro-rated amount of the leasing commission payable under the paragraph immediately above.

— Secured by a third-party agent contracted by the Property Manager:

For a new lease of one year or more, a commission equivalent to one and a quarter months’ rent shall be payable, of which the Property Manager will be entitled to a quarter month’s rent and the third-party agent will be entitled to one month’s rent.

For a new lease of less than one year, or renewal of an existing lease (where the duration of the renewal term is at least one year), a commission equivalent to one-half month’s rent shall be payable, all of which will be the third-party agent’s entitlement.

For a renewal of an existing lease (where the duration of the renewal term is less than one year), a commission equivalent to the pro-rated amount of the leasing commission payable under the paragraph immediately above, all of which will be the third-party agent’s entitlement.

In addition to the above fees and commissions, the Property Manager will also receive remuneration from RREEF CCT for providing property management services under the Property Management Agreement (property management fee of 6.0% of the total operating expenses, subject to a minimum of RMB40,000 per month). Under the current arrangement, the Property Manager will collect fees such as building management fee, air-conditioning charges and other management charges from tenants and maintain a property management fund for the Property and such fees will be maintained in the Operating Account. All direct operating-related expenses including utilities, cleaning and securities, staff costs, repair and maintenance expenses and the Property Manager’s remuneration will be paid out of the

— 149 — PROFIT FORECAST property management fund. Should the property management fund have any surplus, it will be maintained in the Operating Account as reserve for future payments of operating expenses and will not be recognised by the HK Property Company as income. Should there be a deficit in the property management fund, such deficit will be reimbursed by the HK Property Company.

For a detailed description of the various fees and leasing commissions, see the sections headed “Material Agreements and Other Documents — Property Management Agreement” and “Certain Factors Affecting Future Results of Operations and Financial Condition — Additional Cost Items” in this Offering Circular.

Utilities

Utility charges, which includes electricity, water and air-conditioning charges will be paid out of the property management fund mentioned above.

Promotional Expenses

Promotional expenses comprise marketing and promotional expenses to be incurred by the Property Manager to carry out marketing activities for the Property.

Staff Costs

Salaries and welfare expenses for the employment of dedicated staff to operate the Property will be paid out of the property management fund mentioned above.

Depreciation

Depreciation is charged on furniture and fixtures, motor vehicles and office equipments during the reporting period, RREEF CCT does not intend to own any assets during the Forecast Period.

Stamp Duty

Stamp duty costs have been estimated based on standard stamp duty charges and the assessed rent payable under each renewed lease within the Forecast Period. Stamp duty costs are projected to be incurred on the expected commencement date of each new or renewed lease.

Urban Real Estate Tax

The urban real estate tax is assumed to be levied by reference to 70.0% of the original cost of the Property at 1.2% per annum.

— 150 — PROFIT FORECAST

Urban and town land use tax

Urban and town land use tax is charged to the owner on a per square metre basis in respect of the areas occupied under the land use right with rates ranging from RMB1.5 to RMB30.0 per sq.m. per annum.

Property Miscellaneous Expenses

Property miscellaneous expenses comprise, among other things, insurance premium, meeting expenses and other minor expenses. Property miscellaneous expenses will be covered by the property management fund mentioned above.

Administrative Expenses

Administrative expenses which consist of expenses such as office expenses, communication expenses, welfare for senior management, office rental, consultant fees and other expenses will be paid out of the property management fund mentioned above.

Other Income

Other income mainly comprises interest income to be derived from RREEF CCT’s bank deposit.

Other PRC Taxes

In addition to stamp duty, urban real estate tax and urban and town land use tax mentioned above, the HK Property Company is also subject to two types of PRC taxes namely business tax and withholding tax.

PRC business tax is calculated at 5.0% of Rental Income. The HK Property Company, as a foreign enterprise without a permanent establishment in the PRC, is currently subject to PRC withholding tax of 10.0% of Rental Income after deducting the business tax.

For further description on RREEF CCT’s tax exposure, see the section headed “Taxation” in this Offering Circular.

Non-Property Operating Expenses

These comprise the Manager’s Base Fee, Variable Fee, acquisition and divestment fee, Trustee fee and trust-related expenses. For further information see the section headed “Certain Factors Affecting Future Results of Operations And Financial Condition — Additional Cost Items” in this Offering Circular.

— 151 — PROFIT FORECAST

Manager’s management fee

Base Fee

Under the Trust Deed, the Manager will receive a Base Fee from RREEF CCT currently in the amount equal to 0.4% per annum, subject to a maximum of 0.4% per annum, of the value of the Deposited Property.

Variable Fee

Under the Trust Deed, the Manager will receive a Variable Fee, in respect of each piece of real estate, from RREEF CCT currently in the amount equal to 3.0% per annum of Net Property Income (before deduction therefrom of the Base Fee or the Variable Fee).

Trustee’s fee and Trust-related Expenses

The Trustee fee is currently set at 0.03% per annum of the value of Deposited Property subject to a minimum amount of HK$50,000 per month and are accrued daily and paid monthly in arrears in accordance with the Trust Deed. Trust-related expenses include annual listing fees, share registrar fees, audit and tax advisor’s fees, costs associated with the preparation and distribution of reports to the Unitholders and other miscellaneous expenses.

Finance Costs

For the purposes of this profit forecast, finance costs will comprise primarily interest charged on the term loan under the Facility, amortisation of the upfront fee for the term loan under the Facility. The Facility bears interest at HIBOR + 1.20%. For the purpose of the profit forecast, the Manager has assumed HIBOR will stay flat at 4.24%, being the average for the period from 9 February 2007 to 11 May 2007.

Hong Kong Taxes

The Manager has assumed that RREEF CCT is not subject to Hong Kong profits tax as the income from the Property is derived outside Hong Kong. See section headed “Taxation” in this Offering Circular.

Exchange Rate

The Manager has assumed an exchange rate of HK$1 = RMB1 in the preparation of this profit forecast.

Liquidity and Capital Resources

The proceeds from the Global Offering and the subscription for the Units by Mr. Tin Lik will be received at the time the Units are issued. Following receipt of the proceeds of such subscriptions, the Trustee will complete the acquisition of the Property in accordance with the terms of the Share Purchase Agreement as described in the section headed “Material Agreements and Other Documents” in this Offering Circular.

— 152 — PROFIT FORECAST

Fair Value of Investment Properties

The Property will be acquired for a consideration of HK$3,822 million to HK$4,016 million (through a purchase of the BVI Property Company Share), representing a discount of 3.9% (based on the Minimum Offer Price of HK$5.00) to a premium of 1.0% (based on the Maximum Offer Price of HK$5.40) to the Appraised Value of the Property of HK$3,978 million as at 31 March 2007, as determined by DTZ Debenham Tie Leung, the Independent Property Valuer.

While it is expected that the Property will be revalued annually, effective 31 December each year, the Manager considers that there is no reasonable basis to forecast the market value of the Property as of any future date. Accordingly, no change in the value of the Property is assumed for this profit forecast.

Capital Expenditure

As the Property was newly completed on 26 August 2005, no capital expenditure items for the Forecast Period has been identified by the Manager. As at 31 December 2006, the HK Property Company did not have any contractual commitments or obligations to make any capital expenditures.

Accounting Standards

The Manager has assumed no change in applicable accounting standards or other financial reporting requirements that may have a material effect on the forecast net operating profit over the Forecast Period.

Distribution Reinvestment Arrangement

The Trust Deed allows the Manager, where appropriate, the option of activating an arrangement whereby the Unitholders may elect to re-invest all or part of their distribution entitlement in return for an issue of additional the Units. It has been assumed that the Manager will not activate the distribution reinvestment arrangement for the Forecast Period.

Other Assumptions

Other assumptions made in preparing the profit forecast include:

(a) the property portfolio remains unchanged;

(b) no further equity capital will be raised by RREEF CCT during the Forecast Period;

(d) there is no change to the REIT Code;

— 153 — PROFIT FORECAST

(e) all leases are enforceable and will be performed in accordance with their contracted terms;

(f) based on historical trends, provision for bad debts and doubtful debts will not be material, if any;

(g) there is no material change in existing political, legal, fiscal, market or economic conditions in Hong Kong and China;

(h) there is no change in legislation, regulations or rules in Hong Kong and China, or any other country or territory which materially adversely affect the business of RREEF CCT;

(i) the Manager will distribute 100% of Annual Distributable Income to the Unitholders;

(j) there is no material change in the physical condition of the Property;

(k) there is no material change in the exchange rate of RMB/HK$; and

(l) there is no deferred tax in relation to the Property valuation during the Forecast Period.

SENSITIVITY ANALYSIS

The profit forecast and projected distributions included in this Offering Circular are based on a number of assumptions which are outlined in this section and are subject to a number of risks as outlined in the section headed “Risk Factors” in the Offering Circular. Prospective investors should be aware that future events cannot be predicted with any certainty and deviations from the figures forecast in this Offering Circular are to be expected.

In order to assist prospective investors in assessing the impact of some but not all assumptions on the distribution yield, the following tables demonstrate the sensitivity of the DPU yield to certain changes in assumptions as set forth below. It should also be noted that distribution yield as discussed below assumes that the Manager will distribute to the Unitholders 100% of Annual Distributable Income for the Forecast Period and the Annual Distributable Income of not less than HK$81.6 million for the Forecast Period. Accordingly, the sensitivity illustrations are based exclusively on movements in Annual Distributable Income resulting from the circumstances considered.

Prospective investors should be aware that the sensitivity analysis is not intended to be exhaustive and is limited in scope in that not all principal assumptions or other assumptions which are relevant to the figures forecast or projected in this Offering Circular have been examined or reviewed in this sensitivity analysis.

— 154 — PROFIT FORECAST

Care should be taken in interpreting these sensitivities. These sensitivities treat each movement in the variables in isolation whereas, in practice, the movements could be interdependent. The effects of movements may offset or compound each other. Accordingly, the effect on the profit forecast presented for each sensitivity is not intended to indicate the likely range of outcomes with respect to each sensitivity. No attempt is made to identify the cause of any potential variation, or to identify or quantify any consequential or related changes or variations in other lines.

For the Forecast Period(1)

Annualised Annualised Annualised Annualised distribution distribution profit yield profit yield yield based yield based based on based on on the on the Minimum Maximum Minimum Maximum Offer Price Offer Price Offer Price Offer Price

(%) (%) (%) (%)

Rental Income 5.0% increase in Rental Income ...... 6.77 6.27 6.95 6.44 Current assumptions(2) ...... 6.19 5.74 6.37 5.90 5.0% decrease in Rental Income ...... 5.62 5.20 5.80 5.37

Occupancy Rate 5.0% increase in occupancy rate ...... 6.81 6.30 6.99 6.47 Current assumptions(2) ...... 6.19 5.74 6.37 5.90 5.0% decrease in occupancy rate ...... 5.58 5.17 5.76 5.33

Operating expenses 5.0% increase in operating expenses...... 6.09 5.64 6.27 5.80 Current assumptions(2) ...... 6.19 5.74 6.37 5.90 5.0% decrease in operating expenses...... 6.30 5.83 6.48 6.00

Property valuation 5.0% increase in the fair value of the Property ...... 14.41 13.34 6.37 5.90 Current assumptions(2) ...... 6.19 5.74 6.37 5.90 5.0% decrease in the fair value of the Property ...... (2.02) (1.87) 6.37 5.90

Notes: (1) The forecast annualised profit yield and forecast annualised distribution yield for the Forecast Period is provided for illustrative purposes only. (2) Current assumptions used for preparing the profit forecast in this Offering Circular.

— 155 — STATEMENT OF DISTRIBUTION

The Unitholders will be paid, in the absence of unforeseen circumstances, a distribution per Unit of not less than HK$0.1685 in respect of the period from the Listing Date to 31 December 2007, representing a forecast annualised distribution yield after taxation of 5.90% based on the Maximum Offer Price (excluding other transaction costs) or 6.37% based on the Minimum Offer Price (excluding other transaction costs). The Unitholders who are not on record as holders of the Units as of the relevant Record Date will not be paid a distribution in respect of the period from the Listing Date to 31 December 2007.

The following table sets forth certain distribution data and forecast yields for the Forecast Period:

Forecast Period

Based on the Based on the Minimum Offer Maximum Offer Price of HK$5.00 Price of HK$5.40

Forecast DPU (HK$)(1)...... 0.1685 0.1685 Forecast annualised DPU (HK$)(2) ...... 0.3187 0.3187 Forecast annualised profit yield (%)(3) ...... 6.19 5.74 Forecast annualised distribution yield (%)(4) ...... 6.37 5.90

Notes:

(1) Assuming an Offer Price range of HK$5.00 and HK$5.40 per Unit, being the Minimum Offer Price and Maximum Offer Price, respectively.

(2) This forecast annualised DPU is for illustrative purposes only, forecast actual DPU for the Forecast Period is HK$0.1685.

(3) The forecast annualised profit yields for the period from the Listing Date to 31 December 2007 is provided for illustrative purposes only and may differ from the forecast annualised profit yield set out in this table based on the number of the Units outstanding for the period. Forecast annualised profit yields have been calculated with reference to the Minimum Offer Price and Maximum Offer Price only.

(4) The forecast annualised distribution yields for the period from the Listing Date to 31 December 2007 is provided for illustrative purposes only and may differ from the forecast annualised distribution yield set out in this table based on the number of the Units outstanding for the period. Forecast annualised distribution yields have been calculated with reference to the Minimum Offer Price and Maximum Offer Price only.

When RREEF CCT publishes its results for the Forecast Period, the published financial 9.4(b) statements shall disclose the actual yield and, if different from the forecast yield stated above, shall account for the discrepancy between the forecast and actual yields.

— 156 — STATEMENT OF DISTRIBUTION

BASES AND ASSUMPTIONS

The above projected distribution yields are calculated based on the Maximum Offer Price and Minimum Offer Price (excluding other transaction costs). The yield obtained by investors who purchase the Units in the secondary market at a market price that differs from the Maximum Offer Price or Minimum Offer Price (excluding other transaction costs), calculated using such secondary market purchase price, will accordingly differ from the distribution yields stated above.

— 157 — UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT

The following table sets out the unaudited pro forma balance sheets of RREEF CCT as B2 (r) at the Listing Date assuming that the issuance of the Units in the Global Offering, initial drawdown of approximately HK$1,400 million on borrowing from the Facility and the acquisition of the BVI Property Company Share take place on the same day. The table is prepared based on the Unaudited Pro Forma Balance Sheets of RREEF CCT in Appendix III to this Offering Circular and should be read in conjunction with the basis of preparation, the pro forma adjustments and the letter from the Reporting Accountants therein, as well as the section headed “Material Agreements and Other Documents” in this Offering Circular.

Based on Based on Maximum Offer Minimum Offer Price of HK$5.40 Price of HK$5.00

HK$’000 HK$’000

Assets

Investment property(1) ...... 3,978,000 3,978,000 Goodwill(2) ...... 158,343 — Deferred assets ...... 524 524 Accounts receivable, deposits, prepayments and other receivables 13,127 13,127 Cash and cash equivalents(3) ...... 127,419 127,170

Liabilities

Receipts in advance ...... (10,971) (10,971) Tenants’ deposits ...... (66,201) (66,201) Creditors, accruals and other payables(4) ...... (63,896) (63,896) Current taxation ...... (12,905) (12,905) Bank loan(5)...... (1,378,221) (1,378,221) Deferred tax liabilities(6) ...... (212,996) (212,996)

Net assets attributable to the Unitholders ...... 2,532,223 2,373,631

Represented by:

Proceeds from issuance of Units(7)...... (2,615,760) (2,422,000) Cost of issuance of Units(8)...... 83,537 79,177 Excess of fair value of the acquiree’s identifiable net assets and liabilities over cost of business acquisition(2) ...... — (30,808)

(2,532,223) (2,373,631)

Notes: (1) Investment property is stated at market valuation based on the valuations performed by the Independent Property Valuer on 31 March 2007.

— 158 — UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT

(2) This represents the excess/shortfall of the cost of acquisition of BVI Property Company Share over the net fair value of the identifiable assets and liabilities acquired based on the Maximum Offer Price and the Minimum Offer Price of HK$5.40 and HK$5.00 respectively. The excess of the cost of acquisition over the net fair value of the identifiable assets and liabilities of the acquired business is stated on the balance sheet at cost less accumulated impairment loss. Any excess of the net fair value of the identifiable assets and liabilities of the acquired business over the cost of acquisition is recognised immediately in profit or loss.

(3) Cash and cash equivalents represent: (a) proceeds from the issuance of the Units;

(b) drawdown on the Facility by the HK Property Company;

(c) payment of issue costs, comprising expenses related to the Global Offering, which include underwriting commission payable to the Underwriters (based on the Global Offering size), legal fees, printing costs, accountants’ fees, listing costs, advertisement and marketing-related expenses (including roadshow expenses) and other administrative expenses;

(d) payment for the acquisition of the BVI Property Company Share and settlement of the current accounts with related companies; and

(e) payment of existing bank loan.

(4) Pursuant to a board resolution of BVI Property Company passed on 2 June 2007, a final dividend of HK$50,000,000 in respect of the profit for the year ended 31 December 2006 was proposed to Mr. Tin Lik.

(5) This refers to the amount of HK$1,400 million drawn down under the Facility by the HK Property Company, net of attributable transaction costs of HK$21.8 million in respect of the Facility.

(6) Deferred tax liabilities primarily represent the tax effect, in respect of the temporary differences between the fair values of the assets and liabilities acquired and their tax bases in the business combination; and are calculated in full on such temporary differences under the liability method using a principal taxation rate of 10.0%.

(7) This refers to the proceeds received from the issue of 484,400,000 Units based on the Maximum Offer Price and the Minimum Offer Price of HK$5.40 and HK$5.00, respectively.

(8) The issue costs comprise expenses related to the Global Offering, which include underwriting commission B2 (r) payable to the Underwriters (based on the Global Offering size), legal fees, printing costs, accountants’ fees, listing costs, advertisement and marketing-related expenses (including roadshow expense) and other administrative expenses.

The NAV per Unit is expected to be HK$5.23 based on the Maximum Offer Price and HK$4.90 based on the Minimum Offer Price, in each case based on the assumptions set out above and on the 484,400,000 Units expected to be in issue immediately following the completion of the Offering.

— 159 — STRUCTURE, MANAGEMENT AND AGREEMENTS

— 160 — STRUCTURE AND ORGANISATION OF RREEF CCT

RREEF CCT was constituted by the Trust Deed entered into on 28 May 2007 between the Manager and the Trustee.

The Trustee, as trustee of RREEF CCT, entered into the Share Purchase Agreement with the Vendor on 4 June 2007 pursuant to which the Trustee will acquire the BVI Property Company Share from the Vendor. Completion of the Share Purchase Agreement will take place prior to or on the Listing Date. Under the Share Purchase Agreement, the Trustee will acquire the BVI Property Company Share from the Vendor. The purchase consideration for the BVI Property Share is based on the Acquisition Value, after making certain adjustments (on bases agreed between the Manager and the Vendor) for the net current assets/current liabilities of the Companies on Completion. RREEF CCT, through its 100.0% ownership of the BVI Property Company and the HK Property Company, will own the legal and beneficial title to the Property (except the staff canteen and the civil defence shelter and please see the sections headed “The Property — Staff Canteen” and “The Property — Civil Defence Shelter” respectively for details). See the section headed “Material Agreements and Other Documents — Share Purchase Agreement” in this Offering Circular for further details of the Share Purchase Agreement.

— 161 — STRUCTURE AND ORGANISATION OF RREEF CCT

RC 7.5 Unitholders Mr. Tin Lik 10.0% RREEF through Deutsche Asia Public/Institutional investors 90.0% Pacific Holdings Pte Ltd Mr. Tin Lik Investment in 80.0% 20.0% RREEF CCT

Base Fee and Variable Fee Trustee fees Manager RREEF CCT Trustee Management Holds assets on trust services(1) for Unitholders

Ownership of shares 100.0%

BVI Property Company (BVI)*

Ownership of shares Fees and leasing 100.0% commissions HK Property Property Manager Company (Hong Kong)* Tenancy management and other 100.0% services(2)

The Property

— 162 — THE MANAGER

OVERVIEW

RREEF CCT is organised and managed in a manner which is consistent with the PN 2 provisions and requirements of the REIT Code, subject as described in the section headed “Modifications, Waivers and Licensing Conditions” in this Offering Circular. The Manager is independent of the Trustee and possesses the skills and resources to discharge its functions in relation to RREEF CCT effectively and responsibly. In discharging such functions, the Manager is required to observe high standards of corporate governance. For details of the corporate governance policies and procedures of the Manager, see the section headed “Corporate Governance” in this Offering Circular.

THE MANAGER

The Manager, RREEF China REIT Management Limited, was incorporated in Hong Kong under the Companies Ordinance on 27 October 2006. The Manager is 80.0% owned by Deutsche Asia Pacific Holdings Pte Ltd (an indirect wholly-owned subsidiary of Deutsche Bank AG) and 20.0% owned by Mr. Tin Lik, who will also have a non-executive director seat on the Board. Mr. Tin Lik has no control over the Board as (a) he is a non-executive director; (b) apart from Mr. Tin Lik’s ordinary rights as a 20.0% shareholder, he has no veto or reserve rights; (c) he is purely a passive investor and has no direct control over the operations of the Manager; (d) he can appoint only one director while the other shareholder can appoint up to eight directors.

The Manager is an affiliate of RREEF, the real estate and infrastructure investment management arm of Deutsche Bank AG.

Deutsche Bank AG

100.0%

RREEF through Deutsche Asia Pacific Mr. Tin Lik Holdings Pte Ltd

20.0% 80.0%

Manager

Mr Tin Lik’s other involvement in the Manager and /or RREEF CCT is as follows:

● upon listing of RREEF CCT, Mr. Tin Lik will own 10.0% of its units (assuming the Over-allotment Option is not exercised);

— 163 — THE MANAGER

● Mr. Tin Lik owns 20.0% of the shares of the Manager. Under the terms of the shareholders’ agreement between Mr. Tin Lik and Deutsche Asia Pacific Holdings Pte Ltd, Mr. Tin Lik is entitled to appoint one director to the Board (which directorship he has taken up himself) and has certain other rights and obligations as set out in the said shareholders’ agreement (including but not limited to the pre-emption right, tag-along right and confidentiality obligations). Mr. Tin Lik has no control over the Board;

● Mr. Tin Lik has entered into a consultancy agreement with the Manager in its own capacity under which he will receive certain economic benefits from the Manager for sourcing and identifying suitable acquisitions for RREEF CCT. The consultancy fees payable by the Manager to Mr. Tin Lik will not be reimbursed by RREEF CCT;

● apart from the consultancy agreement mentioned above, Mr. Tin Lik has certain connected transactions with RREEF CCT (such as lease transactions and the right of first refusal granted by Mr. Tin Lik), details of which are set out in section headed “Connected Party Transactions” in this Offering Circular.

Except as described above, Mr. Tin Lik does not have other relationships with RREEF CCT and/or the Manager.

The Manager has a paid-up capital of HK$10,000,010 and its registered office is located at 53/F, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong.

The Manager will be responsible for the general management of RREEF CCT and will be responsible for functions such as investment management, asset management, financing and all other related functions necessary to effectively manage RREEF CCT for the benefit of the Unitholders. While the Manager will at all times be responsible for these functions, the performance of certain functions such as tax, inhouse legal, human resources, marketing, information technology support, and the origination of additional investments for RREEF CCT will be outsourced to RREEF and the Deutsche Bank Group pursuant to services level contracts. The service level contracts are made for an indefinite period of time and either the Manager or RREEF and the Deutsche Bank Group can terminate the contracts with two months’ written notice. Any payment under the service level contracts shall be paid by the Manager out of the fees received by the Manager and not additionally out of RREEF CCT. The Manager believes that it will benefit significantly from the Deutsche Bank Group’s existing infrastructure, which is much more robust than if the Manager were to build such infrastructure itself. Furthermore, the Manager will benefit significantly from RREEF’s established acquisitions platform, which has been and continues to be an active investor in the region, including China.

RREEF is the real estate and infrastructure investment management arm of the Deutsche Bank Group, and one of the world’s leading real estate investment managers. RREEF was ranked by the Watson Wyatt’s Alternatives Survey in September 2006 as the largest alternative investments manager globally. Headquartered in New York, RREEF employs more than 1,400 staff in 16 offices around the world. As at 31 March 2007, RREEF had more than US$78 billion

— 164 — THE MANAGER of real estate and infrastructure assets under management. RREEF has been an active investor in Asia Pacific for almost a decade and has completed investments in China, Taiwan, Korea, Japan, Australia, Thailand, Hong Kong and the Philippines. Today, it has a broad geographic footprint in the region, spanning six offices.

Since 1975, RREEF has been an active manager of third-party funds in the capacity of a fiduciary and currently manages investments for its institutional and private clients worldwide. RREEF acquires and manages investments in commercial and residential property, real estate securities, and infrastructure investments on behalf of its institutional and private clients worldwide. Its product offering is global and comprehensive, including core, value enhanced and opportunistic investments as well as investments in publicly traded real estate securities, structured products and infrastructure investments.

The Manager has general power of management over the assets of RREEF CCT. The Manager’s main responsibility is to manage the assets of RREEF CCT for the benefit of the Unitholders. The Manager will set the strategic direction and risk management policies of RREEF CCT and give recommendations to the Trustee on the acquisition, divestment or enhancement of assets of RREEF CCT in accordance with its stated investment strategy. The Manager will manage the assets of RREEF CCT in accordance with the Manager’s investment strategy as stated in the section headed “Strategy” in this Offering Circular and in accordance with the provisions of the Trust Deed and the compliance procedures set forth herein. The Manager is licensed by the SFC to conduct the regulated activity of asset management, as required by the REIT Code.

Further, the Manager intends to prepare property plans on a regular basis, 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 inflation, annual turnover, occupancy costs and any other relevant assumptions. The purpose of these plans is to explain the performance of RREEF CCT’s assets.

The Manager will also be responsible for ensuring compliance with the applicable provisions of the REIT Code, the SFO and all other relevant legislation, the Listing Rules, the Trust Deed and all relevant agreements. The Manager will be responsible for all regular communications with the Unitholders. The Manager may require the Trustee to borrow on behalf of RREEF CCT (upon such terms and conditions as the Manager deems fit, including the charging or mortgaging of all or any part of the Deposited Property) whenever the Manager considers, among other things, that such borrowings are necessary or desirable in order to enable RREEF CCT to meet any liabilities or to finance the acquisition of any property. However, the Manager will not direct the Trustee to incur a borrowing if, in doing so, would mean that RREEF CCT’s total borrowings will exceed 45.0% (or such other limit as may be stipulated under the REIT Code) of the total gross asset value of the Deposited Property as set out in RREEF CCT’s latest published audited accounts immediately prior to the time the borrowing is incurred.

— 165 — THE MANAGER

ORGANISATIONAL AND REPORTING STRUCTURE OF THE MANAGER

The following diagram sets forth the organisational and reporting structure of the Manager.

Board of Directors

Chairman and non-executive Director Mr. Kurt William Roeloffs Junior

Executive Director Non-executive Directors Mr. Paul Thomas Keogh (RO) Mr. Michael Eugene Buquoi Mr. Brian David Chinappi Mr. Niel Thassim Mr. Tin Lik Independent Non-Executive Directors Mr. Mark Henry Ford Dr. Meng Xiaosu Mr. Jack Richard Rodman

Audit, Risk and Management and Disclosures Compliance Committee Investment Committee Remuneration Committee Mr. Kurt William Mr. Kurt William Committee Mr. Kurt William Roeloffs Junior, Roeloffs Junior, Mr. Kurt William Roeloffs Junior, Mr. Mark Henry Ford, Mr. Michael Eugene Buquoi, Roeloffs Junior, Mr. Brian David Chinappi, Dr. Meng Xiaosu, Mr. Brian David Chinappi, Mr. Mark Henry Ford and Mr. Paul Thomas Keogh Mr. Jack Richard Rodman Mr. Paul Thomas Keogh and Mr. Niel Thassim and Mr. Jack Richard and Mr. Niel Thassim Mr. Niel Thassim Rodman

Fund Manager (RO) Mr. Paul Thomas Keogh

Asset Managers Business and Financial Controller Mr. Robert Michael Compliance Ms. Chan Hoi Yan Byrne (RO) Manager Mr. Lai Wai Kit (RO) Mr. Suen Chun Fai

Outsourced functions Outsourced functions (to Deutsche Bank Group): (to RREEF): • Investor relations • Origination and execution • Human resources of acquisitions • Information technology (IT) • Inhouse legal Outsourced functions • Marketing (to other parties): • Internal audit • Property management • Inhouse tax • Facilities management • General office management • Cash repatriation • Credit risk management • Company secretary

Note: “RO” means Responsible Officer.

— 166 — THE MANAGER

THE BOARD OF DIRECTORS OF THE MANAGER

The Board is responsible for the overall governance of the Manager, including B2(k) B4(a)(i) establishing goals for management and monitoring the achievement of these goals. The Board has established a framework for the management of RREEF CCT, including a system of internal control and business risk management processes.

The Board comprises nine Directors of whom three are INEDs. The Fund Manager is also PN 11(a), a member of the Board. The Fund Manager and Asset Managers are currently licensed by the (b), (c), (d) SFC as Responsible Officers of the Manager for the purposes of the SFO.

For further information on the Board and its committees, see the section headed “Corporate Governance” in this Offering Circular.

Directors

The Board is entrusted with the responsibility for the overall management of the Manager. The following table sets forth information regarding the Directors:

Name Age Position

Non-executive Directors

Mr. Kurt William ROELOFFS Junior 45 Chairman and non-executive Director

Mr. Michael Eugene BUQUOI 61 Non-executive Director

Mr. Brian David CHINAPPI 35 Non-executive Director

Mr. Niel THASSIM 33 Non-executive Director

Mr. TIN Lik 50 Non-executive Director

Executive Director

Mr. Paul Thomas KEOGH 38 Executive Director and Fund Manager

Independent non-executive Directors

Mr. Mark Henry FORD 53 INED

Dr. MENG Xiaosu 57 INED

Mr. Jack Richard RODMAN 60 INED

— 167 — THE MANAGER

Information on the business and working experience of the Directors is set out below:

Mr. Kurt William ROELOFFS Junior, aged 45, is the head of RREEF Asia Pacific and has been responsible for equity investments on behalf of RREEF and its clients. Prior to joining RREEF, Mr Roeloffs was a Managing Director of Bankers Trust’s Real Estate Investment Banking Group from 1989 to 1997, as well as founding its Asia business in 1994.

Mr. Roeloffs received a M.B.A. from The Wharton School, University of Pennsylvania in 1988. He has been a guest speaker at the Darden School of Business and Kellogg School of Management.

Prior to joining Bankers Trust, Mr. Roeloffs was a Project Manager for Trammell Crow Company in its Philadelphia, Pennsylvania office where he managed an office park including its financing, construction, leasing and property management.

Mr. Michael Eugene BUQUOI, aged 61, has worked at RREEF since 2000 and has over 35 years’ experience in real estate and financial services. Prior to joining RREEF, he served with The Palmieri Company where he managed the resolution of real estate related assets held by two failed life insurance companies. Mr. Buquoi holds an MBA and a Bachelor of Business Administration from the University of Texas at Austin and is both a Certified Public Accountant and designated Counselor of Real Estate.

Mr. Brian David CHINAPPI, aged 35, is the Head of Acquisitions for RREEF’s products and clients investing in Asia, excluding Japan and India. Such investments include real properties, property developments, non-performing loan portfolios and real estate operating companies. Prior to assuming his present role in 1999, Mr. Chinappi was a member of Bankers Trust’s Real Estate Investment Banking Group based in New York and Hong Kong. During his tenure with Bankers Trust, Mr. Chinappi completed numerous debt and equity financings, merger and acquisition assignments for clients, including REITs, public real estate operating companies and private investment partnerships.

Mr. Chinappi received a B.A. degree from Georgetown University. He is a member of the Urban Land Institute. He is also licensed by the Securities and Futures Commission to carry on Type 4 and Type 9 regulated activities in Hong Kong.

Mr. Mark Henry FORD, aged 53, retired from Deutsche Bank in 2003. Prior to then, he was Head of DB Real Estate in Australia. He joined Deutsche Bank AG following previous positions with a major Australian investment bank and one of the leading accounting firms. From 1972 to 1986, Mr. Ford was employed by PricewaterhouseCoopers in Sydney and Parramatta offices as a Director in the Tax line of service. From 1992 to 1997, he was employed by Macquarie Bank Limited.

Mr. Ford is a commerce graduate from the NSW University of Technology. He also holds a Company Directors Diploma awarded by the Australian Institute of Company Directors and is a Chartered Accountant. He is the Chairman of the International and Capital Markets Division of the Property Council of Australia.

— 168 — THE MANAGER

Mr. Paul Thomas KEOGH, aged 38, joined RREEF in 2004 and has over 14 years of experience in the real estate industry, spanning the disciplines of real estate valuations, consulting and advisory, brokerage, asset management, finance and fund management. Prior to joining RREEF, Mr. Keogh was employed by Colonial Services Pty Ltd as Portfolio Manager Private Property Syndicate and Commonwealth Property Investment Trust from 2000 to 2004. Prior to that, he was employed as a Senior Manager of Knight Frank Victoria, Australia. He was first admitted to the Australian Institute of Valuers and Land Economists as a Graduate Member in 1991.

Mr. Keogh holds a Bachelor of Business degree in Property from the Royal Melbourne Institute of Technology and is a qualified Real Estate Valuer and Licensed Estate Agent in Victoria, Australia. He also holds an Advanced Certificate in Real Estate awarded by Swinburne University of Technology.

Dr. MENG Xiaosu, aged 57, has served as the Chairman ( ) of China National Real Estate Development Group since 1992. Dr. Meng holds a Ph. D. in Economics from Peking University. He has been employed as a part-time professor at various universities, including Peking University, Renmin University of China, Ningbo University and China University of Political Science and Law. Dr. Meng received a special subsidy in recognition of his academic achievement in business administration as “An Outstanding Expert” by the State Council of China in 2005.

Currently Dr. Meng acts as the Vice President of the Seventh Board of Directors of China Enterprise Con-Federation China Enterprise Directors Association. In 1995, he received the Qualification Certificate of the Title of Speciality and Technology for Senior Economist from the Ministry of Construction of People’s Republic of China. In 2005, Dr. Meng received the Qualification Certificate for Special Class Management Personnel ( ) from the Chinese Career Manager Coalition.

Mr. Jack Richard RODMAN, aged 60, who recently retired from Ernst & Young, has over 37 years experience in real estate consulting and transaction advisory services. His career began in 1970 when he joined Kenneth Leventhal & Company, which merged with Ernst & Young in 1995. He was the founding Partner in Ernst & Young’s Asia Pacific Financial Solutions, LLC.

In 2002, Mr. Rodman was recognised by BusinessWeek magazine as a “Star of Asia” for his pioneering work in opening distressed debt markets through-out Asia. Mr. Rodman received a Bachelor degree in Business Administration from San Jose State University and a Master degree in Business Administration from the University of California at Los Angeles. He is a Certified Public Accountant in California and Washington State, and a member of the American Institute of Public Accountants. He was a visiting fellow at Harvard University Graduate School of Design in Spring 2006.

Mr. Niel THASSIM, aged 33, joined Deutsche Bank AG in 2001 as Business Manager for the bank’s Australian real estate investment management business before moving to London in 2003 as the Global Head of Technology and Business Solutions for RREEF. He recently

— 169 — THE MANAGER moved to the Singapore office as the RREEF Asia Pacific Chief Operating Officer. Prior to joining Deutsche Bank, Mr. Thassim held a number of accounting, financial and management roles for Coopers & Lybrand, Bankers Trust, Credit Suisse First Boston and Colonial First State Investments in Australia and the United Kingdom. He has over 12 years of finance, accounting and real estate investment management experience.

Mr. Thassim graduated from the University of Sydney with a Bachelor of Economics (Accounting) degree. He is a member of the Institute of Chartered Accountants in Australia.

Mr. TIN Lik, aged 50, is a majority shareholder of Bestride Holdings Limited, which was incorporated in Hong Kong in 1996. Bestride Holdings Limited is involved in three major businesses: real estate development, hotel and technology. The real estate business of Bestride Holdings Limited focuses on real estate development and investment in the PRC, and has successfully completed projects such as the Beijing Gateway Plaza.

Prior to starting his own business, Mr. Tin Lik was a general manager at Foreigners of China Origin Residential Development Company of Hunan Province ( ) where he worked for six years and was responsible for numerous residential development projects. Mr. Tin Lik holds a B.A. in Economics from Hunan Radio and Television University ( ).

Independence of INEDs

In assessing the independence of an INED, the Board will take into account the following factors, none of which is necessarily conclusive. Independence is more likely to be questioned if the Director:

(a) holds more than 1.0% of the total issued the Units in RREEF CCT (including the Units held legally or beneficially by the Director, together with the total number of the Units which may be issued to the Director or his nominee upon the exercise of any outstanding options, convertible securities and other rights (whether contractual or otherwise) to call for the issue of the Units) or more than 1.0% of the total issued share capital of the Manager or any of the companies owned more than 50.0% by Deutsche Bank AG or Mr. Tin Lik. Any candidate for appointment who holds an interest of more than 1.0% must satisfy the Audit, Risk and Compliance Committee, prior to the appointment, that he or she is independent. A candidate holding 5.0% or more would not normally be considered to be independent;

(b) has received an interest in the Units as a gift, or by means of other financial assistance, from RREEF CCT or a connected person of RREEF CCT. However, subject to the limit set out in (a) above, the Director will still be considered independent if he/she receives the Units from RREEF CCT (but not from connected persons of RREEF CCT) as part of his/her Director’s fee or pursuant to option schemes;

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(c) is a director, partner or principal of a professional advisor which currently provides or has within one year immediately prior to the date of his/her proposed appointment provided services, or is an employee of such professional advisor who is or has been involved in providing such services during the same period, to:

(i) RREEF CCT or any connected person of RREEF CCT; or

(ii) any person who was a Fund Manager or a Director (other than an INED) within one year immediately prior to the date of the proposed appointment, or any of their Associates;

(d) has a material interest in any principal business activity of or is involved in any material business dealings with RREEF CCT or any connected person of RREEF CCT;

(e) is on the Board specifically to protect the interests of an entity whose interests are not the same as those of the Unitholders as a whole;

(f) is or was connected with a Director or the Fund Manager, or a significant holder of RREEF CCT, within two years immediately prior to the date of his/her proposed appointment;

(g) is, or has at any time during the two years immediately prior to the date of his/her proposed appointment been, an executive of the Manager or a Director (other than an INED) or any other connected person of RREEF CCT; and

(h) is financially dependent on RREEF CCT or any connected person of RREEF CCT.

The factors set out in this section are included for guidance only and are not intended to be exhaustive. The Board may take into account any factors relevant to a particular case in assessing independence.

Investors should refer to the full details of the assessment of the independence of the INEDs set out in the corporate governance policy of the Manager (a copy of which is available for inspection in accordance with Appendix X to this Offering Circular).

ROLES OF THE EXECUTIVE OFFICERS OF THE MANAGER

The Fund Manager is responsible for establishing and implementing RREEF CCT’s overall strategy. The Fund Manager will also be responsible for the overall management and day-to-day operations of the Manager and will work with the Manager’s staff to ensure that RREEF CCT is operated in accordance with the stated strategy, policies and regulations.

The Fund Manager is responsible for the overall portfolio management function of RREEF CCT’s portfolio of properties. The Fund Manager is responsible for evaluating potential acquisitions or investments that are referred to the Manager by RREEF and to ensure that all

— 171 — THE MANAGER acquisitions and investments are consistent with RREEF CCT’s investment strategy. The Fund Manager will work with the Management and Investment Committee to evaluate all potential acquisitions and investments. The Fund Manager, together with the Asset Manager, will determine divestment opportunities that will maximise returns to the Unitholders or where a property is no longer strategic or fails to enhance the value of RREEF CCT’s portfolio of properties.

The Fund Manager, together with the Financial Controller, will actively monitor and manage RREEF CCT’s capital structure in order to optimise it and will consider what hedging activities against currency and interest rate risk may be appropriate in order to hedge against risk exposure arising from the investments of RREEF CCT.

The Asset Managers are primarily responsible for formulating the business plans for RREEF CCT’s properties with a view to maximising the net income and long term value of those properties. The Asset Managers will work closely with the Property Manager to implement these property-related business plans. These plans may include implementing suitable leasing and marketing policies and other asset enhancement strategies. The Asset Managers will also be responsible for monitoring any capital expenditure allocated to those plans. The Asset Managers will also have the responsibility for monitoring the performance of the Property Manager on an on-going basis.

The Financial Controller is responsible for the financial management of RREEF CCT. The Financial Controller will oversee statutory reporting, taxation, and treasury management at RREEF CCT, the BVI Property Company and the HK Property Company levels. The Financial Controller’s responsibilities include reviewing the HK Property Company’s financial statements and property management reports, the BVI Property Company’s financial statements, and RREEF CCT’s financials, coordinating with external auditors, managing the tax affairs of RREEF CCT, the BVI Property Company and the HK Property Company, and overseeing the preparation of budgets. The Financial Controller will also be responsible for financial reporting to the Unitholders.

The Financial Controller, together with the Fund Manager, will consider what hedging activities against currency and interest rate risk may be appropriate in order to hedge against risk exposure arising from the investments of RREEF CCT, and will be responsible for implementing the appropriate hedging strategy and executing the hedging agreements. Additionally, the Financial Controller will work with the Fund Manager and the Asset Manager to optimise cash management of RREEF CCT.

The Business and Compliance Manager is responsible for ensuring that the Manager complies with the Trust Deed, the REIT Code, the Listing Rules, the SFO and other applicable laws, rules and regulations.

The Business and Compliance Manager is also responsible for ensuring that the Manager is kept up-to-date with any changes in applicable rules and regulations that relate to compliance matters. He will establish an effective compliance framework and conduct regular compliance reviews to monitor its implementation.

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In addition, the Business and Compliance Manager will be responsible for the general administrative matters of the Manager.

OUTSOURCED ACTIVITIES

In order to maximise RREEF CCT’s growth opportunities, the Manager will exclusively engage the acquisition resources within RREEF to identify and assist in executing suitable acquisition opportunities for RREEF CCT. RREEF is active in the property investment and fund management businesses globally including the Asia Pacific region. RREEF’s established network and experience will provide the Manager with strong support for its future acquisitions activities.

As a manager of multiple products for multiple clients, RREEF will allocate property acquisition opportunities to its clients and managed funds in accordance with its “Client Investment Allocation Policy” which is based on a transparent “rotation” system to ensure that all RREEF’s clients are treated in a consistent and equitable manner. The rotation system means that in the event of multiple clients or managed funds having similar investment strategy, a client or managed fund that most recently invested in a transaction that was allocated to it will be moved to the bottom of the list and will have to wait until all clients or managed funds before it in the list are allocated property acquisition opportunities before it is allocated another property acquisition opportunity.

As a result, in the event RREEF is serving multiple clients or managed funds with similar investment strategies, RREEF CCT may need to queue up according to the said allocation policy for such investment opportunities. Furthermore, in exchange for access to RREEF’s acquisition resources, the Manager must refer any property acquisition opportunities which it becomes aware of to RREEF. Such acquisition opportunities may or may not be allocated back to RREEF CCT in accordance with the said allocation policy.

The Manager will inform the Unitholders if future changes to the said “Client Investment Allocation Policy” will materially and adversely affect the interests of the Unitholders.

Other functions that are outsourced to the various departments within the Deutsche Bank Group include client relations, finance and accounting, treasury, human resources, information technology, inhouse legal and internal audit (for the full list of outsourced functions to Deutsche Bank Group, please refer to the section headed “The Manager — Organisational and Reporting Structure of the Manager”). The company secretary function is outsourced to Tricor Investor Services Limited and the property management function is outsourced to the Property Manager.

In order to leverage the Manager’s relationship with RREEF and the Deutsche Bank Group, a number of functions will be outsourced to RREEF and the Deutsche Bank Group through service level agreements. It is the Manager’s view that this will provide the Manager and RREEF CCT with a much more robust infrastructure than if the Manager were to build it by itself.

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For these functions outsourced to the Deutsche Bank Group, it is expressly provided in the relevant service level agreement that the servicer is required to comply at all times with the applicable policies of the Deutsche Bank Group (including, without limitation, “Chinese Wall” policies). RREEF and the Manager will put in place appropriate operational controls to ensure that proper implementation of such policies and outsourcing of the functions are subject to the same “Chinese Wall” policies of the Deutsche Bank Group and interests of the Unitholders will not be compromised.

EXECUTIVE OFFICERS OF THE MANAGER

The following sets forth information on the working experience of the executive officers of the Manager:

Mr. Paul Thomas KEOGH, aged 38, is an executive Director and the Fund Manager of the Manager. Details of his working experience are set out in the sub-section headed “Directors” above.

Mr. Robert Michael BYRNE, aged 40, is an Asset Manager of the Manager. He has 9 years of real estate experience and is a director of Deutsche Asset Management (Hong Kong) Limited. Mr. Byrne’s responsibilities include planning and supervising asset management activities such as leasing, budgeting, property development and property sales. Prior to joining Deutsche Asset Management (Hong Kong) Limited, Mr. Byrne held the corporate title of Director at Deutsche Securities Limited, Japan where he was responsible for managing property investments in Japan and Southeast Asia.

Mr. Byrne is licensed by the SFC to undertake the regulated activity of asset management (RA 9). He holds a Master of Business Administration from Insead, France and a Bachelor degree in Electronic Engineering from University College Dublin.

Mr. LAI Wai Kit, aged 42, is an Asset Manager of the Manager. He has over 10 years of real estate experience and was formerly an Asset Manager at ARA Asset Management (Singapore) Limited, which manages Fortune Real Estate Investment Trust. Mr. Lai’s main responsibilities included retail lease management, property management and tenant relations.

Prior to joining ARA Asset Management (Singapore) Limited in 2004, Mr. Lai was a manager at Prompton Real Estate Services Corp. in Toronto, Canada. From 2000 to 2002, he was an assistant property manager responsible for leasing at Shui Pong Management Limited, also based in Toronto, Canada. Mr. Lai has previously held leasing roles at Cheung Kong (Holdings) Limited and Sino Administration Services Limited in Hong Kong.

Mr. Lai holds a B.A. from York University, Canada.

Ms. CHAN Hoi Yan, aged 26, is the Financial Controller of the Manager. She is a qualified accountant with experience in auditing financial sector clients. Prior to joining the Manager, she worked in KPMG. Ms. Chan was involved in a number of financial service clients and an IPO listing project for a bank in Hong Kong. She has extensive knowledge in the asset management, securities broking businesses as well as exposure to the regulatory regime in relation to the Main Board listing in Hong Kong.

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Ms. Chan holds a Bachelor of Business Administration degree from The Chinese University of Hong Kong. She was the Silver Medallist and a Top Score Winner in the Association of Chartered Certified Accountants exams in June 2005.

Mr. SUEN Chun Fai, aged 32, is the Business and Compliance Manager of the Manager. Mr. Suen has over 10 years’ experience in the auditing, finance and compliance field. Prior to joining the Manager, Mr. Suen was a Manager in the Investment Products Department of the Securities and Futures Commission (SFC) where he was primarily responsible for regulating REIT products. Prior to joining the SFC in 2005, he was a Manager in KPMG Hong Kong. Prior to joining KPMG, he also worked as an Assistant Manager in the Hong Kong Monetary Authority and was a Senior Associate at PricewaterhouseCoopers.

Mr. Suen holds a Master of Science from the Chinese University of Hong Kong and a Bachelor of Business Administration in Accounting and Finance from the University of Hong Kong.

He is a fellow member of the Association of Chartered Certified Accountants, a CFA Charter holder and a Financial Risk Manager granted by the Global Association of Risk Professionals.

FEES, COSTS AND EXPENSES OF THE MANAGER

The Manager is entitled to the following management fees for each financial year of B14(b) RC9.10 RREEF CCT:

(a) a Base Fee not exceeding 0.4% per annum of the value of Deposited Property (the Manager currently charges a 0.4% Base Fee per annum); and

(b) a Variable Fee of 3.0% per annum of the Net Property Income of each property owned by RREEF CCT (before deduction therefrom of the Base Fee or the Variable Fee).

Base Fee

The Manager will be entitled to receive for its own account out of the Deposited Property, on the last Business Day of the month immediately following the month in which the Base Fee accrues to the Manager, the amount of the Base Fee accrued to it, which shall be paid in the form of cash. The Manager may lower the rate of the Base Fee to some smaller percentage than the current level of 0.4% per annum of the value of Deposited Property, by notice in writing to the Trustee, provided that the Manager may increase the rate of the Base Fee to a higher percentage within the permitted level of 0.4% per annum of the value of Deposited Property, by notice in writing to all Unitholders and the Trustee not less than three months prior to the date of effect thereof.

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Any increase in the rate of the Base Fee above the rate of 0.4% per annum of the value B14(c) of Deposited Property or any change in the structure of the Base Fee must be approved by a Special Resolution of the Unitholders.

Variable Fee

The Manager will be entitled to receive for its own account out of the Deposited Property in respect of each calendar quarter the amount of the Variable Fee accrued to it, which shall be paid in the form of cash. The Variable Fee payable to the Manager in respect of property will be an annual amount equal to 3.0% per annum of the Net Property Income of that property (before deduction therefrom of the Base Fee or the Variable Fee).

Any increase in the Variable Fee above the rate of 3.0% per annum or any change in the B14(c) structure of the Variable Fee must be approved by a Special Resolution of the Unitholders.

Acquisition Fee and Divestment Fee

The Manager is also entitled to receive the following fees:

Acquisition Fee

An acquisition fee not exceeding the rate of 1.0% of the acquisition price of any real RC9.10 estate acquired directly or indirectly by RREEF CCT (pro-rated if applicable to the proportion of RREEF CCT’s interest in the real estate acquired). The acquisition fee is payable within 14 days after completion of the acquisition. No acquisition fee shall be payable out of RREEF CCT to the Manager in relation to RREEF CCT’s acquisition of the Property through its purchase of the BVI Property Company Share.

The Manager currently charges a 1.0% acquisition fee but may lower the rate from time B14(c) to time. If the lowered rate is less than the said 1.0%, the Manager may increase the relevant rate to a higher percentage than the Manager proposes to charge from time to time provided it is within the relevant permitted level prescribed above by giving the Unitholders at least one month’s prior written notice. Any increase in the acquisition fee above the permitted limited mentioned in the preceding paragraph or any change in the structure of the acquisition fee must be approved by a Special Resolution of the Unitholders. The acquisition fee will be paid to the Manager in the form of cash or, at the election of the Manager, with the prior approval of the Unitholders by an Ordinary Resolution, be paid entirely in the form of the Units or partly in cash and partly in the form of the Units. When paid in the form of the Units, the Manager shall be entitled to receive such number of the Units as may be purchased for the relevant amount of the acquisition fee at the issue price of the Units issued to finance or part finance

— 176 — THE MANAGER the acquisition of such Real Estate in respect of which the acquisition fee is payable or, where the Units are not issued to finance or part finance such acquisition, at the issue price which is equal to the highest of:

(a) the average closing price of the Units for the 10 trading days on the Hong Kong Stock Exchange immediately prior to the date of entry into of the agreement for such acquisition;

(b) the average closing price of the Units for the 10 trading days on the Hong Kong Stock Exchange immediately prior to the date of the announcement in respect of such acquisition; and

(c) the average closing price of the Units for the 10 trading days on the Hong Kong Stock Exchange immediately prior to the date of completion of such acquisition, in each case rounded down to the nearest whole number of the Units and with any remaining amount to be paid in cash. In the event any part of the acquisition fee is to be made in the form of the Units and the Unitholders’ approval is not obtained, then payment of that part of the transaction fee will be paid in the form of cash.

Divestment Fee

A divestment fee not exceeding the rate of 0.5% of the sale price of any real estate sold RC9.10 or divested directly or indirectly by RREEF CCT (pro-rated if applicable to the proportion of RREEF CCT’s interest in the real estate sold). The divestment fee is payable within 14 days after completion of the divestment.

The Manager currently charges a 0.5% divestment fee but may lower the rate from time B14(c) to time. If the lowered rate is less than the said 0.5%, the Manager may increase the relevant rate to a higher percentage than the Manager proposes to charge from time to time provided it is within the relevant permitted level prescribed above by giving the Unitholders at least one month’s prior written notice. Any increase in the divestment fee above the permitted limited mentioned in the preceding paragraph or any change in the structure of the divestment fee must be approved by a Special Resolution of the Unitholders. The divestment fee will be paid to the Manager in the form of cash or, at the election of the Manager, with the prior approval of the Unitholders by an Ordinary Resolution, be paid entirely in the form of the Units or partly in cash and partly in the Units. When paid in the form of the Units, the Manager shall be entitled to receive such number of the Units as may be purchased for the relevant amount of the divestment fee at the issue price which is equal to the highest of:

(a) the average closing price of the Units for the 10 trading days on the Hong Kong Stock Exchange immediately prior to the date of entry into of the agreement for such divestment;

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(b) the average closing price of the Units for the 10 trading days on the Hong Kong Stock Exchange immediately prior to the date of the announcement in respect of such divestment; and

(c) the average closing price of the Units for the 10 trading days on the Hong Kong Stock Exchange immediately prior to the date of completion of such divestment, in each case rounded down to the nearest whole number of the Units and with any remaining amount to be paid in cash. In the event any part of the divestment fee is to be made in the form of the Units and the Unitholders’ approval is not obtained, then payment of that part of the transaction fee will be paid in the form of cash.

The Trustee, acting in consultation with the Manager, may rely on the recommendation of tax advisors and authorise the payment of any acquisition fee or divestment fee, either at the level of RREEF CCT or at the level of the relevant special purpose vehicle.

Manager’s right to reimbursement

The Manager is entitled to apply, or to be reimbursed from, the Deposited Property (at such times and over such periods as the Trustee and the Manager may determine in any particular case) for all liabilities, as agreed with the Trustee, that may be properly suffered or incurred by the Manager in the performance of its obligations or the exercise of its powers under the Trust Deed, or otherwise arising out of or in connection with the Trust Deed or other constitutive documents and, to the extent permitted by the REIT Code or any applicable law, roadshow, marketing and promotional charges incurred in relation to any fund raising exercise by RREEF CCT or otherwise in connection with RREEF CCT.

RETIREMENT OR REMOVAL OF THE MANAGER

The Manager may retire as manager of the Trust at any time after giving 90 days’ written notice, or any other period of notice as agreed to by the Trustee, to the Trustee provided that, and subject to:

(a) the Manager selecting a new manager of the Trust which is duly qualified under the REIT Code, licensed under the SFO, and acceptable to the Trustee, the SFC and the Hong Kong Stock Exchange; and

(b) the requirement in the REIT Code that such retirement will not adversely affect the interests of the Unitholders in any material respect;

Provided further that notwithstanding the foregoing, the Manager shall in any event be entitled to retire at any time after giving not less than 180 days’ written notice to the Trustee.

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Also, the Manager may be removed by prior notice given in writing by the Trustee if:

(a) the Manager goes into liquidation (except a voluntary liquidation for the purpose of reconstruction or amalgamation upon terms previously approved in writing by the Trustee) or if a receiver is appointed over any of its assets or a judicial manager is appointed in respect of the Manager (or any analogous process occurs or any analogous person is appointed in respect of the Manager);

(b) the Manager ceases to carry on business;

(c) the Manager fails or neglects, after no less than 30 days of written notice from the Trustee, to carry out or satisfy any material obligation imposed on the Manager by the Trust Deed;

(d) the Unitholders representing at least 75.0% in value of the Units issued and outstanding (excluding those held or deemed to be held by the Manager and the Unitholders who have an interest in retaining the Manager where such interest is not the same as that of the Unitholders as a whole) deliver to the Trustee a written request to dismiss the Manager;

(e) for good and sufficient reason, the Trustee is of the opinion, and so states in writing such reason and opinion, that a change of the Manager is desirable in the interests of the Unitholders; or

(f) the SFC withdraws its approval of the Manager to act as the manager of RREEF CCT.

If the Manager is removed by the Trustee under the events mentioned above, the Trustee shall (with, for so long as RREEF CCT is authorised by the SFC, the prior written consent of the SFC) appoint another corporation to be the new manager of RREEF CCT.

If the Manager’s removal is effected at the written request of the Unitholders as described in paragraph (d) above, the Manager will have the right to deliver to the Trustee, within 14 days of the date of its removal, a written representation addressed to the Unitholders (the “Manager’s Letter of Representation”) concerning its removal. The Trustee shall, at the costs and expenses of RREEF CCT, send a copy of the Manager’s Letter of Representation to each Unitholder.

The Trustee shall give the Manager 30 days of prior written notice if it intends to remove the Manager as described in paragraph (e) above. Upon receiving such notice, the Manager may convene a general meeting for the purpose of considering the removal of the Manager, and may, at the costs and expenses of RREEF CCT, issue a Manager’s Letter of Representation to each Unitholder prior to the general meeting, and table a copy of the Manager’s Letter of Representation at the general meeting.

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Notwithstanding the foregoing, the Trustee has the right to terminate RREEF CCT if for any reason, there is no manager of RREEF CCT for a period of more than 60 days or such other longer period as the Trustee considers appropriate. See the section headed “The Trust Deed — Termination of RREEF CCT” in this Offering Circular for details in respect of the termination of RREEF CCT.

EXCLUSION OF LIABILITY

In the absence of fraud, negligence, wilful default, breach of trust, breach of the REIT Code, applicable laws or regulations, or breach of the Trust Deed or other constitutive documents by the Manager (including its employees, officers, directors, servants, agents and delegates as well as any agents and delegates appointed by the Trustee at the direction of the Manager), it shall not incur any liability by reason of any error of judgment or any matter or thing done or suffered or omitted to be done by it in good faith under the Trust Deed. In addition, the Manager shall be entitled, for the purpose of indemnity against any actions, costs, claims, damages, expenses or demands to which it may be put as Manager to have recourse to the assets of RREEF CCT or any part thereof, save where such action, cost, claim, damage, expense or demand is caused by the fraud, negligence, wilful default, breach of trust, breach of the REIT Code, applicable laws or regulations, or breach of the Trust Deed or other constitutive documents, by the Manager or any employee, officer, director, servant, agent or delegate of the Manager.

The Manager may, to the extent permitted by applicable regulatory requirements, delegate to any person as it thinks fit specific aspects (but not the whole) of the management and the administration of the assets of RREEF CCT and any of the rights, trusts and discretions granted to the Manager under the Trust Deed. Notwithstanding the foregoing, the Manager shall be fully liable to the Trustee (in its capacity as trustee of RREEF CCT), for all losses, liabilities, damages, costs and expenses suffered or incurred by RREEF CCT arising from all the acts and omissions of its delegates and agents (including delegates or agents appointed by the Trustee at the direction of the Manager) as if the relevant act or omission had been performed by the Manager itself.

HOLDING OF THE UNITS BY AND INDEPENDENCE OF THE MANAGER

The Manager aspires to be a truly independent professional real estate investment manager. Except pursuant to the option to elect to receive payment of all or part of the transaction fees (being acquisition and divestment fees payable to the Manager) in the form of the Units, it is the Manager’s intention not to otherwise acquire the Units. The Manager however has no control over other entities within or business divisions of the Deutsche Bank Group. Proper Chinese wall procedures are in place within the Deutsche Bank Group to prevent unauthorised disclosures of inside information and to control contact between or among the business divisions of the Deutsche Bank Group that could lead to inappropriate sharing of inside information or conflicts of interests. The Manager believes that the relevant procedures are sufficient to effectively maintain functional independence between the various business divisions of the Deutsche Bank Group and ensure their independence from the Manager.

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MANAGEMENT OF OTHER REITS

The Manager is not currently involved in the management of other REITs, but, to the extent not disallowed by the REIT Code or any applicable law and subject to approval of the SFC (if required), shall be entitled to act as manager of other REITs in addition to RREEF CCT. In that event, before accepting appointment as manager of other REITs, the Manager shall ensure that it is capable of performing its duties as manager to RREEF CCT and must at all times ensure that it will provide adequate resources for the management of RREEF CCT and to put in place internal procedures to address any potential conflict of interest between RREEF CCT and such other REITs. RREEF is in the business providing management services to third-party funds and the Manager has put in place various procedures and measures to address potential conflicts of interest (as described in the section headed “Corporate Governance — Conflicts of Interests” in this Offering Circular).

“RREEF” TRADEMARK LICENCE

By a licence agreement dated 1 June 2007, in consideration of HK$1.00, Deutsche Bank AG has agreed to grant the Manager (acting in its capacity as manager of RREEF CCT) a non-exclusive and non-transferable right and licence to use certain “RREEF” trademarks in connection with the business of RREEF CCT in the PRC, Hong Kong and Macau. The licence shall commence from the date of the licence agreement or such date specified therein and will continue in full force until the Manager ceases to be the manager of RREEF CCT or earlier termination in accordance with the terms of the licence agreement.

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THE PROPERTY MANAGER OF RREEF CCT

The Property Manager is Beijing Jones Lang LaSalle Property Management Services Co., B4(c) PN24 Ltd., which is independent from RREEF CCT and its connected persons. The Property Manager is a subsidiary of Jones Lang LaSalle Incorporated (“Jones Lang LaSalle”),areal estate services and money management and services firm named to Forbes magazine’s Platinum 400 in both 2006 and 2007. Jones Lang LaSalle has more than 150 offices worldwide, operations in more than 450 cities in 50 countries on five continents, and approximately 25,500 employees. Jones Lang LaSalle is an industry leader in property and corporate facility management services with a portfolio of over 1.0 billion square feet worldwide.

Jones Lang LaSalle has 12 years of experience in China, and has offices in Shanghai, Beijing and Guangzhou. It has three offices in Hong Kong.

The Property Manager currently manages the Property under arrangements previously put in place by the Vendor. When the Property Management Agreement entered into among the Manager, the HK Property Company and the Property Manager comes into effect on Completion, the Property Manager will then manage the Property subject to the overall management and supervision of the Manager, upon the terms and conditions set out in the Property Management Agreement.

Under the Property Management Agreement, the Property Manager will provide tenancy management services (including leasing services), property management services, rental collection and repatriation services and entity accounting services.

The Property Manager will have a team of full-time operational staff exclusively dedicated to providing services to RREEF CCT. Under the Property Management Agreement, the Property Manager must at all times ensure that it will provide adequate resources at both the managerial and operational levels for the property management of RREEF CCT. See the section headed “Material Agreements and Other Documents — Property Management Agreement” in this Offering Circular. Contractual provisions have been included in the Property Management Agreement to provide that each relevant party shall at all times use its best endeavours to keep confidential (and procure that its respective directors, employees and agents keep confidential) any confidential information in relation to the BVI Property Company, the HK Property Company, the Property or to each of the other parties or their respective clients, customers or suppliers, which it or they may acquire, and shall not use or disclose such confidential information except:

(i) with the prior written consent of the party whose confidential information is to be used or disclosed;

(ii) in accordance with an order of a court of competent jurisdiction or order of a competent government agency acting with lawful authority;

(iii) if such information is in the public domain;

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(iv) where the information was already within the knowledge and possession of and used by the parties in the ordinary course of business;

(v) to their respective professional advisers; or

(vi) as required by applicable law.

MANAGEMENT REPORTING STRUCTURE OF THE PROPERTY MANAGER

International Director of Management Head Office Team Solutions, Asia Pacific Mr. James Wong Ngai Ching

National Director of Investment Regional Director of Management Optimization Services Solutions, China Mr. James Andrew Clark Mr. Larry Hui Kwok Hung

Senior Manager Mr. Firminiano Dias Da Silva

On-Site Team Chief Property Manager Mr. Zhang Kai

Financial Department Technical Manager Property Manager Manager Mr. Guo Chun Ms. Ji Peining Ms. Li Guixia

Engineering Team Duty Manager Team Customer Service Team Security Team

Services to be provided by the Property Manager are:

● Property management services

● Tenancy management services

● Rental collection and repatriation services

● Entity accounting services

See the sub-section headed “Material Agreements and Other Documents — Property Manager’s Services” for details.

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EXECUTIVE OFFICERS OF THE PROPERTY MANAGER

The following sets forth the information on the working experience of the executive officers of the Property Manager:

Mr. James WONG Ngai Ching, International Director of Management Solutions, Asia Pacific, has over 24 years’ experience in property management in Hong Kong. Mr. Wong has a B.S. degree in engineering from Queen Mary College of the University of London and a Master of Housing Management from the University of Hong Kong. He was employed by Jones Lang LaSalle as Assistant Management Surveyor in the Property Management Division in 1982, and was promoted 5 times before being appointed to his current position in 2003.

Mr. James Andrew CLARK is the National Director of the Investment Optimization Services of Jones Lang LaSalle’s Management Solutions Department. He was employed by Jones Lang LaSalle’s Australian office in 2001 and was transferred to Hong Kong in 2003.

Mr. Larry HUI Kwok Hung is the Regional Director of Management Solutions, China. Mr. Hung has a M.Sc. in real estate from the University of Reading and a Master’s degree in economic law from the China University of Political Science and Law.

Mr. Firminiano Dias Da Silva is the Senior Manager of Asset Management Services. Mr. Dias Da Silva has an B.A. degree in English from Beijing Foreign Studies University.

Mr. Zhang Kai, the Chief Property Manager, joined the Property Manager in 2004 as Project Manager. He was promoted to his current position in 2006. Mr. Zhang has a B.A. degree in economics from Renmin University of China. He also has a Certificate in Energy Management, a Certificate in Risk Management, a Certificate in Customer Services and a Certificate in Management Performance Assessment, all of which were accredited by Jones Lang LaSalle’s strategic management department. Mr. Zhang has also successfully completed a course on Managing in the Hospitality Industry from the Beijing International Hotel Training Centre.

Mr. Guo Chun, the Technical Manager, has been employed by the Property Manager since 2005.

Ms. Ji Peining, the Property Manager, joined the Property Manager in 1999 as an Assistant Finance Manager. She assumed her current role in 2006. Ms. Ji has a B.S. degree in engineering from Beijing Union University and a Master’s degree in Economics with a major in human resources management from Capital University of Economics and Business.

Ms. Li Guixia, the Financial Department Manager, has been employed by the Property Manager since 2006. Ms. Li graduated from Commercial Technical Secondary School of Inner Mongolia Xi Union. Ms. Li also has an Accounting Certificate, an E-accounting Certificate as well as a Five-level Abacus Reckoning Certificate.

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FEES AND LEASING COMMISSIONS OF THE PROPERTY MANAGER

Under the Property Management Agreement, the Property Manager will be entitled to the following fees and leasing commissions:

Property Management Fee

For its provision of property management services, the Property Manager will be entitled to a property management fee of 6.0% per annum of the operating expenses of the Property, subject to a minimum of RMB40,000 (HK$40,000) per month. Such fee shall be payable monthly in arrears.

Tenancy Management Fee

For its provision of tenancy management services, the Property Manager will be entitled to a tenancy management fee of RMB30,000 (HK$30,000) per month. Such fee shall be payable monthly in arrears.

Rental Collection and Repatriation Fee

Entity Accounting Fee

For its provision of entity accounting services, the Property Manager will be entitled to an entity accounting fee of RMB46,800 (HK$46,800) per month. Such fee shall be payable monthly in arrears.

Leasing Commissions

For a new lease of one year or more secured by the Property Manager, it will be entitled to a commission equivalent to one month’s rent.

For a new lease of less than one year, or a renewal of an existing lease (where the duration of the renewal term is at least one year), secured by the Property Manager, it will be entitled to a commission equivalent to one-half month’s rent.

For a renewal of an existing lease (where the duration of the renewal term is less than one year) secured by the Property Manager, it will be entitled to a commission equivalent to the pro-rated amount of the leasing commission payable under the paragraph immediately above.

— 185 — THE PROPERTY MANAGER

For a new lease of one year or more secured by a third-party agent contracted by the Property Manager, a commission equivalent to one and one-quarter months’ rent shall be payable, of which the Property Manager will be entitled to one-quarter month’s rent and the third-party agent will be entitled to one month’s rent.

For a new lease of less than one year, or a renewal of an existing lease (where the duration of the renewal term is at least one year), secured by a third-party agent contracted by the Property Manager, a commission equivalent to one-half month’s rent shall be payable, all of which will be the third-party agent’s entitlement.

For a renewal of an existing lease (where the duration of the renewal term is less than one year) secured by a third-party agent contracted by the Property Manager, a commission equivalent to the pro-rated amount of the leasing commission payable under the paragraph immediately above shall be payable, all of which will be the third-party agent’s entitlement.

Manner of Payment of the Fees and Leasing Commission

The Property Manager shall, at the end of each month, compute the property management fee as well as the rental collection and repatriation fee for the month based on the management accounts of the HK Property Company, and the leasing commissions for leasing transactions concluded during the month, and thereafter submit an invoice for all its fees and leasing commissions to the Manager and the HK Property Company.

Subject to review and clearance of the Property Manager’s invoice by the Manager:

(a) the Property Manager may withdraw the amount of its property management fee from the Operating Account; and

(b) the Manager shall arrange to pay the tenancy management fee, rental collection and repatriation fee, entity accounting fee and leasing commission to the Property Manager.

All the fees and leasing commissions paid to the Property Manager shall be reconciled with the audited accounts for the relevant financial year of the HK Property Company and any balance of such fees and leasing commissions due and payable to the Property Manager or any refund due from the Property Manager respectively, shall be:

(a) in the case of the property management fee, deducted from or refunded to the Operating Account by the Property Manager (as the case may be); and

(b) in the case of the tenancy management fee and/or rental collection and repatriation fee and/or entity accounting fee and/or leasing commissions, paid by RREEF CCT or the Property Manager (as the case may be) to the other party.

— 186 — THE PROPERTY MANAGER

Reimbursements

The Property Manager will be fully reimbursed for the remuneration of its employees engaged to provide the services required of the Property Manager under the Property Management Agreement exclusively in respect of the Property, as well as the costs and expenses of third-party service providers engaged by the Property Manager to provide certain services contemplated under the Property Management Agreement but which are not provided directly by the employees of the Property Manager. Such reimbursements will be paid out of the Operating Account.

— 187 — INFORMATION ABOUT THE VENDOR

The real estate development business of Bestride Holdings Limited focuses on real estate development and investment in the PRC. Such business is mainly carried out through Beijing Bestride Estate Development Company Limited ( ) and Hunan Bestride Estate Development Company Limited ( ). The Bestride real estate team has successfully completed projects including the Property.

Bestride Holdings Limited carries out its hotel business through Bestride Hotel Management Limited. In 2005, Bestride Hotel Management Company Limited established a joint venture named Dellisart America Hotels Limited with a hotel management group in the United States of America. Currently, Hunan Bestride Hotel and Yingang Bestride Hotel are managed by Dellisart America Hotels Limited. Hunan Bestride Hotel is one of the more well-known hotels in Hunan.

Apart from this transaction and save as disclosed in this Offering Circular, Mr. Tin Lik does not currently have any other relationship with RREEF and/or the Manager and/or Deutsche Bank Group. After the completion of the Offering, the Vendor, Mr. Tin Lik will not own any interest (directly or indirectly) over the Property other than an interest in the Units if the Over-allotment Option is not exercised in full.

Potential Conflicts of Interests

Mr. Tin Lik is the majority shareholder of Bestride Holdings Limited (“Bestride”), and one of its major businesses is real estate development and investment in PRC. As a result, there may be circumstances where RREEF CCT’s investments compete directly or indirectly with other properties in PRC that Bestride develops or invests. For Mr. Tin Lik’s involvement in the Manager/RREEF CCT, please see the section headed “The Manager” in this Offering Circular.

Save as disclosed above, RREEF CCT does not have any intention to acquire any of the related business or assets of Mr. Tin Lik. If there is any change in such information after RREEF CCT is authorised, the Manager shall announce it by way of a press announcement as soon as the Manager or the Trustee become aware of such change.

All conflicts of interest shall be managed by the Board in accordance with the Articles of Association and applicable laws, rules, regulations and its corporate governance policy and please see the section headed “Corporate Governance — Conflicts of Interest”.

— 188 — CORPORATE GOVERNANCE

With the objectives of establishing and maintaining high standards of corporate B4(a)(i) B4(a)(ii) governance, certain policies and procedures have been put in place to promote the operation of RREEF CCT in a transparent manner and with internal checks and balances. Set out below is a summary of the key components of the corporate governance policies that have been adopted and are followed by the Manager and RREEF CCT.

AUTHORISATION STRUCTURE RC 11(e)(f)

RREEF CCT is a collective investment scheme authorised by the SFC under section 104 of the SFO and regulated by the provisions of the REIT Code. The Manager has been licensed by the SFC under section 116 of the SFO to conduct the regulated activity of asset management. The Manager has three persons who are approved as Responsible Officers pursuant to the requirements of section 125 of the SFO and Rule 5.4 of the REIT Code, and one of them is an executive Director pursuant to the requirements of section 125 of the SFO.

The Trustee is a wholly-owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited. It is registered as a trust company under section 77 of the Trustee Ordinance and is qualified to act as a trustee for authorised collective investment schemes under the SFO pursuant to the REIT Code. As at the Latest Practicable Date, the Trustee had a paid-up share capital of HK$50 million.

ROLES OF THE TRUSTEE AND THE MANAGER

The Trustee and the Manager are independent of each other. The Trustee is responsible B4(a)/ B4(b) under the Trust Deed for the safe custody of the assets of RREEF CCT held by it on behalf of the Unitholders. The Manager’s role under the Trust Deed is to manage RREEF CCT in accordance with the Trust Deed and, in particular, to ensure that the financial and economic aspects of RREEF CCT’s assets are professionally managed in the sole interests of the Unitholders.

FUNCTIONS OF THE BOARD

The Board comprises nine members, three of whom are INEDs.

The Board is responsible for ensuring that the fiduciary and statutory obligations of the Manager to the Unitholders are met, and that such duties have priority over all other duties including the interests of the Manager’s shareholders.

Having regard to these responsibilities, the Board ensures that:

(a) it discharges its fiduciary and statutory duties and obligations;

(b) appropriate conflict identification and management practices are in place;

— 189 — CORPORATE GOVERNANCE

(d) business plans and budgets are approved, and monitoring of performance against those plans and budgets is conducted;

(e) RREEF CCT’s financial statements are true and fair and otherwise conform with law;

(f) appropriate risk management, internal control and regulatory compliance policies are in place; and

(g) management adheres to high standards of ethics and corporate governance.

BOARD COMPOSITION

With the aim of creating a board structure that is both effective and balanced, the size of the Board has been set to provide for a minimum of five Directors and a maximum of 20 Directors. Pursuant to the Manager’s corporate governance policy, INEDs must be individuals who fulfil the independence criteria set out in the corporate governance policy adopted by the Manager.

The composition of the Board is determined using the following principles:

(a) the Chairman of the Board should be a non-executive Director;

(b) the Board should comprise Directors with ability and competence to make appropriate business recommendations and decisions, an entrepreneurial talent for contributing to the creation of investor value, relevant experience in the industry sector, high ethical standards, sound practical sense and a total commitment to the fiduciary and statutory obligations to further the interests of the Unitholders and achieve RREEF CCT’s objectives; and

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

Audit, Risk and Compliance Committee

The Audit, Risk and Compliance Committee is appointed by the Board from among the non-executive Directors of the Manager. A majority of the members of the Audit, Risk and Compliance Committee are required to be INEDs, at least one of whom must have appropriate accounting or related financial management expertise. As of the date of this Offering Circular, the members of the Audit, Risk and Compliance Committee are Mr. Jack Richard Rodman, Mr. Mark Henry Ford, Dr. Meng Xiaosu, Mr. Kurt William Roeloffs Junior and Mr. Niel Thassim, three of whom are INEDs. Mr. Mark Henry Ford has been appointed as the Chairman of the Audit, Risk and Compliance Committee. The role of the Audit, Risk and Compliance Committee is to assist the Board in fulfilling its responsibilities by monitoring the Manager’s compliance with its SFC licensing conditions, the Trust Deed, the REIT Code and other regulatory

— 190 — CORPORATE GOVERNANCE requirements, and by reviewing its compliance, operational risk management and internal audit programs. The objective of the Audit, Risk and Compliance Committee is also to assist the Board in fulfilling its responsibilities by reviewing the integrity and quality of RREEF CCT’s financial statements and disclosures, and reviewing RREEF CCT’s auditing, accounting and financial reporting processes.

The Audit, Risk and Compliance Committee’s responsibilities also include, among other things:

(a) reviewing the treatment of significant conflicts of interest arising in the business of RREEF CCT, including connected party transactions;

(b) reviewing the evaluation of the adequacy of RREEF CCT’s operational risk management processes;

(c) reviewing the accounting policies and practices adopted by the Manager and compliance with accounting standards, the REIT Code and relevant legislation;

(d) reviewing the procedures for the selection and appointment of the external auditor and for the rotation of external audit engagement partners; and

(e) approving engagements for all audit services and for non-audit services greater than or equal to HK$1,000,000.

Management and Investment Committee

The Management and Investment Committee is appointed by the Board from among the Directors. The Management and Investment Committee will consist of the Fund Manager, Mr. Paul Thomas Keogh, and four non-executive Directors, namely Mr. Kurt William Roeloffs Junior, Mr. Michael Eugene Buquoi, Mr. Brian David Chinappi and Mr. Niel Thassim. The role of the Management and Investment Committee is to assist the senior management of the Manager in the direction, implementation and monitoring of the Manager’s plans and strategies.

The Management and Investment Committee’s responsibilities also include:

(a) reviewing and recommending investment transactions to the Board;

(b) monitoring service levels with all external service providers; and

— 191 — CORPORATE GOVERNANCE

Remuneration Committee

The Remuneration Committee is appointed by the Board from among the Directors. The Remuneration Committee will consist of one INED and two non-executive Directors, namely Mr. Mark Henry Ford, Mr. Kurt William Roeloffs Junior and Mr. Niel Thassim. The role of the Remuneration Committee is to oversee all aspects of Director and executive remuneration and performance evaluation.

The Remuneration Committee’s responsibilities also include reviewing and recommending to the Board, among other things:

(a) remuneration strategy, including the design of short and long-term employee incentive schemes;

(b) Directors’, executives’ and employees’ remuneration, having regard to performance;

(d) Directors’ and executives’ succession plans.

Disclosures Committee

The Disclosures Committee is appointed by the Board from among the Directors. The Disclosures Committee will consist of the Fund Manager, Mr. Paul Thomas Keogh, and two non-executive Directors, namely Mr. Kurt William Roeloffs Junior and Mr. Brian David Chinappi and one INED, Mr. Jack Richard Rodman. The role of the Disclosures Committee is to review matters relating to the disclosure of information to the Unitholders and public announcements. The Disclosures Committee also works with the senior management of the Manager to ensure the disclosure of information is accurate and complete.

The Disclosures Committee’s responsibilities include:

(a) reviewing and recommending to the Board on matters of corporate disclosure issues and announcements, financial reporting, connected party transactions, and potential areas of conflict of interests;

(b) overseeing compliance with applicable legal requirements and the continuity, accuracy, clarity, completeness and currency of information disseminated by or on behalf of RREEF CCT to the public and applicable regulatory agencies;

(c) reviewing and approving all material non-public information and all public regulatory filings of or on behalf of RREEF CCT prior to such information being disseminated to the public or filed with applicable regulatory agencies, as applicable; and

(d) reviewing periodic and current reports, proxy statements, information statements, registration statements and any other information filed with regulatory bodies.

— 192 — CORPORATE GOVERNANCE

MANAGEMENT OF BUSINESS RISK

The Board will meet quarterly or more often if necessary and will review the financial B2(k) performance of the Manager and RREEF CCT against a previously approved budget. The Board will also review any risks to the assets of RREEF CCT, examine liability management and will act upon any comments from the auditors of RREEF CCT.

The Manager has designed a system of risk oversight, management and internal control to identify, assess, monitor and manage risk, and to enable the Manager to keep the Unitholders informed of material changes in RREEF CCT’s risk profile. This system includes the establishment of the Audit, Risk and Compliance Committee.

The Manager has also appointed experienced and well-qualified management to handle the day-to-day operations of the Manager and RREEF CCT. In assessing business risk, the Board will consider the economic environment and the property industry risk. It will review management reports and feasibility studies on individual projects prior to approving major transactions.

CONFLICTS OF INTEREST

The Manager has instituted the following procedures to deal with conflicts of interest 8.2 issues:

(a) All executive officers (other than one of the Asset Managers, Mr. Robert Michael Byrne) will be employed by the Manager on a full time basis.

(b) The INEDs will act independently for the interests of the Unitholders. Furthermore, the management structure of the Manager will include the Audit, Risk and Compliance Committee and the Disclosures Committee to promote a high level of corporate governance and address any potential conflicts of interests. The Manager has also adopted compliance policies and procedures and an operation manual which sets out detailed compliance procedures in connection with its operations.

(c) All connected party transactions shall be managed in accordance with the procedures set out in the section headed “Connected Party Transactions” in this Offering Circular.

(d) Any Director with a material interest in a transaction or arrangement will declare his interest to the Board at the meeting of the Board at which the question of entering into the contract, business or arrangement is to be discussed.

— 193 — CORPORATE GOVERNANCE

(e) A Director shall not vote (or be counted in the quorum at a meeting) in relation to any resolution concerning any contract or arrangement in which he is (to his knowledge) materially interested but this prohibition shall not apply and a Director may vote and be counted in the quorum in relation to any resolution concerning any one or more of the following matters:

(i) the giving to him of any guarantee, indemnity or security in respect of any debt or obligation incurred by him at the request of or for the benefit of the Manager (in its own capacity and not in its capacity as manager of RREEF CCT) or any of its subsidiaries;

(ii) the giving to a third party of any guarantee, indemnity or security in respect of any debt or obligation of the Manager (in its own capacity and not in its capacity as manager of RREEF CCT) or any of its subsidiaries for which he himself has assumed responsibility in whole or in part and whether alone or jointly under a guarantee or indemnity or by the giving of security;

(iii) any contract concerning the Manager (in its own capacity and not in its capacity as manager of RREEF CCT) or any of its subsidiaries and any other company (not being a company in which the Director beneficially owns 5.0% or more) in which he is interested directly or indirectly as an officer, employee or shareholder;

(iv) any contract concerning the adoption, modification or operation of a pension fund or retirement, death or disability benefits scheme which relates both to Directors and employees of the Manager or of any of its subsidiaries and does not provide in respect of any Director as such any privilege or advantage not accorded to the employees to which the fund or scheme relates;

(v) any contract for the benefit of employees of the Manager or of any of its subsidiaries under which he benefits in a similar manner to the employees and which does not accord to any Director as such any privilege or advantage not accorded to the employees to whom the contract relates; and

(vi) any contract for the purchase or maintenance for any Director or Directors of insurance against any liability.

GENERAL MEETINGS

RREEF CCT will in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year. The Trustee or the Manager may at any time convene a meeting of the Unitholders. The Manager shall also convene a meeting if requested in writing by not less than two Unitholders registered as together holding not less than 10.0% of the issued and outstanding Units for the time being. At least 14 days’ notice of the meeting will be given to the Unitholders, except that 21 days’ notice will be given to the Unitholders where a Special Resolution is proposed for consideration at such meeting, and the notice will specify the time and place of the meeting and the resolutions to be proposed.

— 194 — CORPORATE GOVERNANCE

Two or more Unitholders present in person or by proxy registered as holding not less than 10.0% of the Units for the time being in issue and outstanding will form a quorum for the transaction of all business, except for the purpose of passing a Special Resolution of the Unitholders. The quorum for passing a Special Resolution of the Unitholders will be two or more Unitholders present in person or by proxy registered as holding not less than 25.0% of the Units for the time being in issue and outstanding.

REPORTING AND TRANSPARENCY

RREEF CCT will prepare its accounts in accordance with Hong Kong GAAP with a B16/B17 financial year-end of 31 December and a financial half-year of 30 June. In accordance with the REIT Code, the annual report and accounts for RREEF CCT will be published and sent to Unitholders no later than four months following each financial year-end and the interim results no later than two months following each financial half-year.

As required by the REIT Code, the Manager will ensure that public announcements of material information and developments with respect to RREEF CCT will be made on a timely basis in order to keep the Unitholders apprised of the position of RREEF CCT. Announcements will be made by publishing them in at least one leading Hong Kong English language and one Chinese language daily newspaper or through other means permitted by the SFC.

ISSUES OF FURTHER UNITS POST-LISTING

To minimise the possible material dilution of holdings of the Unitholders, any further issue of the Units will need to comply with the pre-emption provisions contained in the REIT Code. Such provisions require that further issues of the Units be first offered on a pro rata pre-emptive basis to existing the Unitholders except that the Units may be issued (a) free of such pre-emption rights up to an aggregate maximum in any financial year of 20.0% of the number of the Units in issue at the end of the previous financial year; and (b) free of pre-emption rights in other circumstances provided that the approval of the Unitholders by way of an Ordinary Resolution is obtained.

Except pursuant to the issue of the Units under the Global Offering, an issue of the Units to a connected person of RREEF CCT (other than as part of an offer made to all Unitholders on a pro rata basis, and waivers granted by the SFC) shall require specific prior approval of the Unitholders by way of an Ordinary Resolution in respect of which the connected person shall be prohibited from voting or being counted in the quorum for the meeting of the Unitholders. Where the issue of the Units would give rise to a conflict of interest on the part of the Manager or its connected persons, the Manager and its connected persons shall abstain from voting in relation to such issuance of the Units.

RREEF CCT is also subject to certain restrictions in respect of the Units held by it, the details of which are set out in the section headed “The Global Offering” in this Offering Circular.

— 195 — CORPORATE GOVERNANCE

INTERESTS OF, AND DEALINGS IN THE UNITS BY, DIRECTORS, THE MANAGER OR THE SIGNIFICANT HOLDERS

To monitor and supervise any dealings of the Units, the Manager has adopted a code containing rules on dealings by the Directors and the Manager. Pursuant to this code, any Directors or the Manager wishing to deal in the Units must first have regard to provisions analogous to those set out in Parts XIII and XIV of the SFO with respect to insider dealing and market misconduct. In addition, a Director must not make any unauthorised disclosure of confidential information or make any use of such information for the advantage of himself or others.

Directors who are aware of or privy to any negotiations or agreements related to intended acquisitions or disposals which are significant transactions or any price-sensitive information must refrain from dealing in the Units as soon as they become aware of them or privy to them until proper disclosure of the information in accordance with the REIT Code and any applicable Listing Rules. Directors who are privy to relevant negotiations or agreements or any price-sensitive information should caution those Directors who are not so privy that there may be unpublished price-sensitive information and that they must not deal in RREEF CCT’s securities for a similar period.

Similarly, where the Manager is in possession of any unpublished price-sensitive information, it must refrain from dealing in the Unit as soon as it becomes aware of them or privy to them until proper disclosure of the information in accordance with the REIT Code and any applicable Listing Rules.

During the period commencing one month immediately preceding the earlier of:

(a) the date of the meeting of the Board for the approval of RREEF CCT’s results for any financial year, half-year, quarter or any other interim period; and

(b) the deadline for RREEF CCT to publish an announcement of its results for any financial year, half-year, quarter or any other interim period, and ending on the date of the results announcement, a Director must not deal in any Units unless the circumstances are exceptional, for example, where a pressing financial commitment has to be met as described in the immediately following paragraph. In any event, he must notify the Chairman of the Board or a designated Director of his intention to deal in the Units, and receive a written acknowledgement before any dealing.

If a Director proposes to sell or otherwise dispose of the Units under exceptional circumstances where the sale or disposal is otherwise prohibited under the code adopted by the Manager, the Director must satisfy the Chairman of the Board or a designated Director that the circumstances are exceptional and the proposed sale or disposal is the only reasonable course of action available to the Director before the Director can sell or dispose of the Units. The Manager shall give written notice of such sale or disposal to the Trustee as soon as practicable stating why it considered the circumstances to be exceptional. RREEF CCT shall

— 196 — CORPORATE GOVERNANCE publish an announcement in the newspapers immediately after any such sale or disposal and state that the Chairman of the Board or the designated Director is satisfied that there were exceptional circumstances for such sale or disposal of the Units by the Director. An example of the type of circumstances which may be considered exceptional for such purposes would be a pressing financial commitment on the part of the Director that cannot otherwise be satisfied.

The Manager is subject to the same dealing requirements as the Directors (mutatis mutandis). Such dealing requirements may also be extended to senior executives, officers and other employees of the Manager as the Board may determine.

The Manager has also adopted procedures for the monitoring of disclosure of interests by the Directors, the Fund Manager and the Manager. The provisions of Part XV of the SFO shall be deemed to apply to the Manager, the Directors and the Fund Manager, and each Unitholder and all persons claiming through or under them.

Under the Trust Deed and by virtue of the deemed application of Part XV of the SFO, the Unitholders with a holding of 5.0% or more of the Units in issue will have a notifiable interest and will be required to notify the Hong Kong Stock Exchange and the Manager of their holdings in RREEF CCT. The Manager shall keep a register for these purposes and it shall record in the register, against a person’s name, the particulars provided pursuant to the notification and the date of entry of such record. The said register shall be available for inspection by the Trustee and any Unitholder at any time during business hours upon reasonable notice to the Manager. For further details of the Trust Deed, see the section headed “The Trust Deed” in this Offering Circular.

MATTERS TO BE DECIDED BY THE UNITHOLDERS BY SPECIAL RESOLUTION

Pursuant to the Trust Deed, decisions with respect to certain matters require specific prior approval of the Unitholders by way of Special Resolution. Such matters include: (a) change in the Manager’s investment policies for RREEF CCT; (b) disposal of any land or an interest, option or right over any of the land forming part of the assets of RREEF CCT or shares in any special purpose vehicles holding such land, option or right over any of the land for RREEF CCT RC 7.8 within two years of the acquisition of such land; (c) any increase in the rate above the permitted limit or change in structure of the Manager’s management fees; (d) any increase in the rate above the permitted limit or change in structure of the Trustee’s fees; (e) certain modifications of the Trust Deed; (f) termination of RREEF CCT; and (g) merger of RREEF CCT. The Unitholders may also, by way of Special Resolution (i) remove RREEF CCT’s auditors and appoint other auditors or (ii) remove the Trustee. As stated above, the quorum for passing a Special Resolution is two or more Unitholders present in person or by proxy registered as holding together not less than 25.0% of the Units for the time being in issue and outstanding.

— 197 — THE TRUST DEED

The Trust Deed is a complex document and the following is a summary only. Investors should refer to the Trust Deed itself to confirm specific information or for a detailed understanding of RREEF CCT. The Trust Deed is available for inspection at the registered office of the Manager at 53/F, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong.

THE TRUST DEED

RREEF CCT is a real estate investment trust constituted by the Trust Deed and regulated B1 by the SFO, the REIT Code, Chapter 20 of the Listing Rules and the Listing Agreement.

The Trust Deed was entered into on 28 May 2007 between RREEF China REIT Management Limited, as the manager of RREEF CCT, and HSBC Institutional Trust Services (Asia) Limited, as the trustee of RREEF CCT.

The terms and conditions of the Trust Deed and any supplemental deed shall be binding on the Trustee and the Manager, as well as each Unitholder (and any other person with an interest in RREEF CCT and any persons claiming through or under any such Unitholder) as if such Unitholder had been a party to the Trust Deed and any supplemental deed and as if the Trust Deed contained covenants by such Unitholder to observe and be bound by all the provisions of the Trust Deed and an authorisation by each Unitholder to do all such acts and things as the Trust Deed may require the Manager or the Trustee, as the case may be, to do.

The provisions of the REIT Code prescribe certain terms of the Trust Deed and certain rights, duties and obligations of the Manager, the Trustee and the Unitholders under the Trust Deed.

REIT STRUCTURE

RREEF CCT is established in the form of a unit trust under Hong Kong law to invest in real estate, either directly or indirectly through special purpose vehicles. The Manager must manage RREEF CCT so that the principal investments of RREEF CCT are real estate or other authorised investments. For further details of the objectives and strategies of the Manager, see the section headed “Strategy” in this Offering Circular. The assets of RREEF CCT will be held by the Trustee on trust for the benefit of the Unitholders.

NAME OF THE REIT

The name of the real estate investment trust constituted by the Trust Deed is “RREEF China Commercial Trust”, which in Chinese shall be “ ”.

If the Manager ceases to be the manager of RREEF CCT, the Trustee shall as soon as possible take all necessary steps to effect a change of the name of RREEF CCT to such name which does not have the word “RREEF” (or in Chinese, “ ”) or any variation thereof forming part of the name of RREEF CCT, and the Unitholders shall be deemed to have agreed to such deletion of the word “RREEF” (or in Chinese, “ ”) or any variation thereof from the name of the real estate investment trust.

— 198 — THE TRUST DEED

THE UNITS AND THE UNITHOLDERS

The rights and interests of the Unitholders are contained in the Trust Deed. Under the Trust Deed, the Trustee must exercise all due diligence and vigilance in carrying out its functions and duties and in protecting the rights and interests of the Unitholders.

The beneficial interest in RREEF CCT is divided into the Units. A Unitholder has no equitable or proprietary interest in the underlying assets of RREEF CCT and is not entitled to the transfer to it of any asset (or any part thereof) or of any estate or interest in any assets (or any part thereof) of RREEF CCT.

Unless otherwise expressly provided in the Trust Deed, a Unitholder may not (a) interfere or seek to interfere with or question the rights, powers, obligations, authority or discretion of the Trustee or the Manager to the extent those rights, powers, obligations, authority or discretion are exercised or performed under the Trust Deed, (b) claim or exercise any right in respect of the assets of RREEF CCT (or any part thereof) or lodge any caveat or other notice affecting the real estate assets and real estate-related assets of RREEF CCT (or any part thereof), or (c) require that any asset of RREEF CCT be transferred to the Unitholder.

ISSUE OF THE UNITS

The following is a summary of the provisions of the Trust Deed relating to the issue of the Units in RREEF CCT.

The Manager has the exclusive right to effect the creation and issue of the Units for the account of RREEF CCT. The offer of the Units for the purpose of the Global Offering shall be at the Offer Price initially stated to be in the range of HK$5.00 to HK$5.40 per Unit, with the actual Offer Price to be determined by agreement among the Joint Global Coordinators (on behalf of the Underwriters), the Vendor and the Manager on the Price Determination Date.

After the Listing Date, new Units may be offered on a pro rata basis to all existing the Unitholders without the prior approval of the Unitholders, other than where any such issue increases the market capitalisation of RREEF CCT by more than 50.0%, in which case such issue shall require the prior approval of the Unitholders by Ordinary Resolution at a meeting to be convened by the Manager in accordance with the provisions of the Trust Deed.

Subject to certain restrictions in the Trust Deed on issue of new Units to a connected person, the Units may be offered otherwise than on a pro rata basis to all existing Unitholders, without the approval of the Unitholders (whether directly or pursuant to any convertible or exchangeable instruments or otherwise) if the issue of new Units does not increase the total number of the Units from the number of the Units that were outstanding at the end of the previous financial year (or that were outstanding as at the Listing Date, where such Units or the convertible or exchangeable instruments are issued or the relevant agreement is entered into in the first financial year) by more than 20% (or such other

— 199 — THE TRUST DEED percentage of outstanding Units as may, from time to time, be prescribed by the SFC). An issue of new Units exceeding this threshold will require specific prior approval of the Unitholders by Ordinary Resolution at a meeting to be convened by the Manager in accordance with the provisions of the Trust Deed.

After the Listing Date, and for so long as RREEF CCT is listed on the Hong Kong Stock Exchange, the Manager may, subject to the terms of the Trust Deed, effect the issue of the Units or convertible or exchangeable instruments on behalf of RREEF CCT on any Business Day at an issue price that is equal to the market price or, in its discretion, at a discount of no more than 20% to the market price. For this purpose and for the purpose of the calculation of the number of the Units payable to the Manager as its remuneration, ‘‘market price’’ shall mean the higher of:

(i) the closing price of the Units on the Hong Kong Stock Exchange on the date of the relevant agreement or other instrument for (a) the proposed issue of the Units, or (b) the proposed issue of any convertible or exchangeable instruments; and

(ii) the average closing price for the Units on the Hong Kong Stock Exchange for 10 trading days immediately preceding the earliest of:

(a) the date of announcement of (1) the proposed issue of the Units, and (2) the proposed issue of any convertible or exchangeable instruments;

(b) the date of the relevant agreement or other instrument for (1) the proposed issue of the Units, and (2) the proposed issue of any convertible or exchangeable instruments; and

NO REPURCHASE OR REDEMPTION OF THE UNITS

The Unitholders have no right to demand the repurchase or redemption of their Units. The Manager must not repurchase or redeem any Units unless and until permitted to do so by the relevant codes and guidelines issued by the SFC from time to time and applicable law. If such codes or guidelines are issued by the SFC, any repurchase or redemption of the Units by the Manager must be effected in accordance with such codes and guidelines and applicable law.

PUBLIC FLOAT REQUIREMENT

The Manager shall use best efforts to ensure that a minimum of 25.0% (or any other percentage specified or permitted by the SFC from time to time) (the “Public Float Percentage”) of the outstanding Units are held in public hands. In the event that the Manager becomes aware that the percentage of the outstanding Units in the public hands has fallen below the Public Float Percentage, the Manager shall use its best efforts to restore the percentage of the Units held in public hands to at least the Public Float Percentage of the

— 200 — THE TRUST DEED outstanding Units. The Manager shall adopt proper internal procedures for monitoring the public float and shall notify the Trustee and the SFC promptly if such percentage falls below the Public Float Percentage of the outstanding Units and issue an announcement regarding the same.

RIGHTS AND LIABILITIES OF THE UNITHOLDERS

The key rights of the Unitholders include rights to:

(a) receive income and other distributions attributable to the Units held;

(b) receive audited accounts and the annual reports of RREEF CCT; and

(c) participate in the termination of RREEF CCT by receiving a share of all net cash proceeds derived from the sale or realisation of the assets of RREEF CCT less any liabilities, in accordance with their proportionate interests in RREEF CCT at the date of the termination of RREEF CCT.

No Unitholder has a right to require that any asset of RREEF CCT be transferred to him.

Further, the Unitholders cannot give any directions to the Trustee or the Manager (whether at a meeting of the Unitholders or otherwise) if it would require the Trustee or the Manager to do or omit doing anything which may result in:

(a) RREEF CCT ceasing to comply with the REIT Code, the Listing Rules or any condition to the authorisation of RREEF CCT by the SFC or any applicable law; or

(b) the exercise of any discretion expressly conferred on the Trustee or the Manager by the Trust Deed or the determination of any matter which, under the Trust Deed, requires the agreement of either or both of the Trustee and the Manager.

The Trust Deed contains provisions that are designed to limit the liability of a Unitholder to the amount paid or payable for any Unit. The provisions seek to ensure that if the Issue Price of the Units held by a Unitholder has been fully paid, no such Unitholder, by reason alone of being a Unitholder, will be personally liable to indemnify the Trustee or any creditor of RREEF CCT in the event that the liabilities of RREEF CCT exceed its assets.

INVESTMENT RESTRICTION

Subject to the restrictions and requirements of the REIT Code, the Manager shall ensure that the following investment restrictions are complied with:

(a) subject as provided herein, no investment shall be made by RREEF CCT which would result in non-compliance with the REIT Code, any applicable law, the Trust Deed or applicable investment restrictions in the Listing Rules (if any);

— 201 — THE TRUST DEED

(b) RREEF CCT may only invest in Authorised Investments and other Investments permitted by the REIT Code from time to time;

(c) RREEF CCT shall not invest in vacant land or engage or participate in any property development activities (excluding, for the avoidance of doubt, refurbishment, retrofitting and renovations);

(d) RREEF CCT shall not lend, assume, guarantee, endorse or otherwise become directly or contingently liable for or in connection with any obligation or indebtedness of any person nor shall any part of the Deposited Property be used to secure the indebtedness of any person or any obligations, liabilities or indebtedness of any person without the prior written consent of the Trustee;

(e) RREEF CCT shall not acquire any Investment which involves the assumption of any liability that is unlimited; and

(f) RREEF CCT shall hold each Investment (which is in the nature Real Estate or shares in any Special Purpose Vehicle holding interest in Real Estate) for a period of at least two years, unless the Manager has clearly communicated to the Unitholders the rationale for disposal prior to the expiry of such period and the Unitholders approve the disposal of such Investment by Special Resolution at a meeting to be convened by the Manager in accordance with the Trust Deed.

AMENDMENT OF THE TRUST DEED

Save where an amendment to the Trust Deed has been approved by a Special Resolution passed at a meeting of the Unitholders duly convened and held in accordance with the provisions of the Trust Deed, no amendment may be made to the provisions of the Trust Deed unless the Trustee certifies in writing, in its opinion, that such amendment:

(a) does not materially prejudice the interests of the Unitholders, does not operate to release to any material extent the Trustee or the Manager or any other person from any liability to the Unitholders and does not increase the costs and charges payable from the Deposited Property;

(b) is necessary in order to comply with applicable fiscal, statutory or official requirements (whether or not having the force of law), including, without limitation, requirements under the SFO, the REIT Code, the Listing Rules or any other applicable rules of any other relevant Specified Stock Exchange (as defined in the Trust Deed) on which RREEF CCT may be listed; or

No such amendment shall impose upon any Unitholder any obligation to make any further payments in respect of his Units or to accept any liability in respect thereof.

— 202 — THE TRUST DEED

MEETING OF THE UNITHOLDERS

An annual general meeting of the Unitholders shall be convened by the Manager at least once in every calendar year in addition to any other meetings in that year and the Manager shall specify the meeting as such in the notice calling it. The time and place of the annual general meeting shall be determined by the Manager.

A meeting of the Unitholders may be convened at any time by the Trustee or the Manager, respectively, and the Manager shall convene such a meeting at the request in writing of not less than two Unitholders registered as holding together not less than 10.0% of the Units for the time being in issue and outstanding. The party convening the meeting may convene a meeting of the Unitholders at such time or place in Hong Kong, subject to the provisions of the Trust Deed, as such party may think fit and propose resolutions for consideration at such meeting.

The Manager or a person nominated by the Manager (if present) shall be the Chairman of any meeting of the Unitholders.

Except as otherwise provided for in the Trust Deed, at least 14 days’ notice of the meeting shall be given to the Unitholders where an Ordinary Resolution is proposed for consideration at such meeting and at least 21 days’ notice of the meeting shall be given to the Unitholders where a Special Resolution is proposed for consideration at such meeting, in each case exclusive of the day on which the notice is served or deemed to be served and of the day for which the notice is given. Each notice shall specify the place, day and hour of the meeting and the terms of any resolution to be proposed at such meeting. A copy of the notice shall be sent by post to the Trustee, unless the meeting is convened by the Trustee in which case a copy of the notice shall be sent by post to the Manager. No proceedings at any meeting shall be invalidated by the accidental omission to give notice to or the non-receipt of notice by any of the Unitholders.

Save for the purpose of passing a Special Resolution, the quorum for any meeting of the Unitholders for the transaction of business shall be two or more Unitholders present in person or by proxy registered as holding together not less than 10.0% of the Units for the time being in issue and outstanding. The quorum for passing a Special Resolution shall be two or more Unitholders present in person or by proxy registered as holding together not less than 25.0% of the Units for the time being in issue and outstanding. No business shall be transacted at any meeting unless the requisite quorum is present at the commencement of business. Split proxies shall, for the avoidance of doubt, be permitted.

For a meeting at which the Unitholders have a material interest in the business to be conducted and that interest is different from the interests of other Unitholders (as determined by the Manager (where the Unitholder(s) concerned is (are) not connected persons related to the Manager) or the Trustee (where the Unitholder(s) concerned is (are) connected persons

— 203 — THE TRUST DEED related to the Manager), if appropriate, in its absolute opinion) including an issue of new Units where a Unitholder may increase his holdings of the Units by more than his pro rata share, such Unitholders shall be prohibited from voting their own Units at such meeting or being counted in the quorum for such meeting.

At any meeting, a resolution put to the meeting shall be decided on a poll and the result of the poll shall be deemed to be the resolution of the meeting. On a poll, every Unitholder who is present in person or by proxy shall have one vote for every Unit of which he is the Unitholder provided such Units are fully paid-up. Votes cast by a Unitholder in contravention of the REIT Code or Listing Rules shall not be counted. On a poll, votes may be given either personally or by proxy. The form of the instrument of proxy used shall be in accordance with the form illustrated in the Trust Deed or in any other form which the Trustee shall approve.

Any Unitholder being a corporation may by resolution of its directors (or other governing body) authorise any person to act as its representative at any meeting of the Unitholders. A person so authorised shall be entitled to exercise the same powers on behalf of the corporation as the corporation could exercise if it were an individual Unitholder.

More than one proxy or corporate representative may be appointed by the HKSCC Nominees Limited to attend and vote at the Unitholders’ meetings and no documents of title or notarised authorisation in respect of such appointment shall be required to be produced by such representatives. Where a Unitholder is a recognised clearing house (within the meaning of the SFO) or its nominees, it may authorise such person(s) as it thinks fit to act as its representative(s) or proxy(ies) at any Unitholders’ meeting or any class of the Unitholders, provided that, if more than one person is so authorised, the authorisation or proxy form must specify the number and class of the Units in respect of which each such person is so authorised.

In accordance with the Trust Deed, a meeting of the Unitholders will be convened to pass Special Resolutions when decisions with respect to certain matters require the prior approval of the Unitholders by way of Special Resolution. Such matters include, without limitation, (a) change in the Manager’s investment policies for RREEF CCT; (b) disposal of any land or an interest, option or right over any of the land forming part of the assets of RREEF CCT or shares in any special purpose vehicle holding such land, option or right over any of the land for RC 7.8 RREEF CCT within two years of the acquisition of such land; (c) any increase in the rate above the permitted limit or change in structure of the Manager’s management fees; (d) any increase in the rate above the permitted limit or change in structure of the Trustee’s fees; (e) certain modifications of the Trust Deed; (f) termination of RREEF CCT; and (g) merger of RREEF CCT. The Unitholders may also, by way of Special Resolution (i) remove RREEF CCT’s auditors and appoint other auditors and (ii) remove the Trustee.

Any decisions to be made by resolution of the Unitholders other than the above shall be made by Ordinary Resolution, unless a Special Resolution is required by the REIT Code. Such matters include, without limitation, (a) subdivision or consolidation of the Units; (b) any issue of the Units after the Listing Date which would increase the market capitalisation of RREEF CCT by more than 50.0%; (c) any issue of the Units during any financial year that would

— 204 — THE TRUST DEED increase the total number of the Units from the number of the Units that were outstanding at the end of the previous financial year by more than 20.0% (or such other percentage of outstanding Units as may, from time to time, be prescribed by the SFC); and (d) except pursuant to an initial public offering or a rights issue, an issue of new Units to a connected person (other than as part of an offer made to all Unitholders on a pro rata basis). The Unitholders may also, by way of Ordinary Resolution, dismiss any Approved Valuer appointed by the Trustee on behalf of RREEF CCT in accordance with the Trust Deed.

POWERS, DUTIES AND OBLIGATIONS OF THE TRUSTEE B4(b)

The Trustee’s powers, duties and obligations are set out in the Trust Deed. The powers and duties of the Trustee include, but are not limited to:

(a) acting as trustee of RREEF CCT and, therefore, protecting the rights and interests of the Unitholders;

(b) holding the assets of RREEF CCT in trust for the benefit of the Unitholders;

(c) overseeing the activities of the Manager for compliance with the Trust Deed, other relevant constitutive documents and the regulatory requirements applicable to RREEF CCT; and

(d) ensuring that the assets of RREEF CCT are properly segregated and held for the benefit of the Unitholders in accordance with the provisions of the Trust Deed.

The Trustee shall exercise all due diligence and vigilance in carrying out its functions and duties and in protecting the rights and interests of the Unitholders.

In the exercise of its powers, the Trustee may, on the instructions of the Manager in writing, and subject to the provisions of the Trust Deed, acquire or dispose of any real or personal property, borrow and encumber any asset of RREEF CCT.

Although the Trustee may, upon the request of the Manager, borrow money and obtain other financial accommodation for the purpose of RREEF CCT, both on a secured and an unsecured basis, the Trustee shall take all reasonable care to ensure that the investment and borrowing provisions set out in the Trust Deed and the conditions under which RREEF CCT was authorised by the SFC are complied with. The Manager must not direct the Trustee to incur any borrowing if, in doing so, would mean that the aggregate borrowings of RREEF CCT RC 7.9 will exceed 45.0% (or such other higher or lower percentage as may be permitted by the REIT Code or as may be specifically permitted by the relevant authorities) of the total gross asset value of the assets of RREEF CCT as set out in RREEF CCT’s latest published audited accounts immediately prior to such borrowing being effected.

— 205 — THE TRUST DEED

TRUSTEE’S RIGHT TO REIMBURSEMENT

The Trustee is entitled to apply, or to be reimbursed from the Deposited Property (at such times and over such periods as the Trustee and the Manager may determine in any particular case) for all liabilities that may be properly suffered or incurred by the Trustee in the performance of its obligations or the exercise of its powers under the Trust Deed, or otherwise arising out of or in connection with, among others, the Trust Deed.

LIMITATION OF TRUSTEE’S LIABILITY

In the absence of fraud, negligence, wilful default, breach of trust, breach of the REIT Code, applicable laws and regulations, or breach of the Trust Deed or other constitutive documents to which the Trustee is a party by the Trustee or its employees, directors, servants, agents or delegates (except any agents and delegates which the Trustee appointed at the direction of the Manager), the Trustee shall not in any way be responsible to RREEF CCT, the Unitholders, the Manager or any person for any loss, costs, damage or inconvenience that may result from the exercise or non exercise of its powers or any error of judgment on the part of the Trustee.

TRUSTEE’S RIGHT OF INDEMNITY

Any liability incurred and any indemnity to be given by the Trustee shall be limited to the Deposited Property over which the Trustee has recourse, provided that the Trustee and its employees, officers, directors, servants, agents and delegates (but not including any agents or delegates appointed at the direction of the Manager) have acted without fraud, negligence, wilful default, breach of trust, breach of the REIT Code, applicable laws or regulations, or breach of the Trust Deed or other constitutive documents to which it is a party. The Trust Deed contains certain indemnities in favor of the Trustee under which it will be indemnified out of the assets of RREEF CCT for liability arising in connection with certain acts or omissions.

REPATRIATION ARRANGEMENTS

The Trustee shall be responsible for the safe custody of the Deposited Property. Cash constituting Deposited Property may, where necessary or derived directly or indirectly from Real Estate outside Hong Kong, be held in:

(i) an account in the name of a Special Purpose Vehicle and operated by the Trustee or the Manager or any agent or delegate of the Manager provided that the Trustee shall exercise due powers of oversight with regard to the same; or

(ii) in an account in the name of an agent or delegate of the Manager or a Special Purpose Vehicle for the purpose of facilitating local tax payments and/or obtaining foreign exchange approval prior to the remittance of such amount to the Trust.

— 206 — THE TRUST DEED

The Trustee shall not incur any liability in respect of or be responsible for losses incurred through the insolvency of, or any act or omission of, any agent or delegate as referred to in (ii) above.

RETIREMENT AND REPLACEMENT OF THE TRUSTEE

The Trustee may retire or be replaced under the following circumstances:

(a) the Trustee shall not be entitled to retire voluntarily except upon the appointment of a new trustee, whose appointment is subject to the prior approval of the SFC.

(b) the Trustee may be removed by prior notice in writing to the Trustee by the Manager:

(i) if the Trustee goes into liquidation (except a voluntary liquidation for the purpose of reconstruction or amalgamation upon terms previously approved in writing by the Manager) or if a receiver is appointed over any of its assets or if a judicial manager is appointed in respect of the Trustee (or any analogous process occurs or any analogous person is appointed in respect of the Trustee);

(ii) if the Trustee ceases to carry on business; or

(iii) if the Unitholders by a Special Resolution duly passed at a meeting of the Unitholders held in accordance with the provisions of the Trust Deed, and of which at least 21 days’ notice has been given to the Trustee and the Manager, shall so decide.

TRUSTEE’S FEE

RREEF CCT will pay the Trustee an on-going fee not exceeding the rate of 0.03% per B14(b) B14(c) annum of the value of Deposited Property, subject to a minimum amount of HK$50,000 per RC 9.10 month. The Trustee’s on-going fees for a broken period will be pro-rated on a time-basis. The Trustee’s on-going fees shall accrue from the date of commencement of RREEF CCT and the fees payable for the period from the date of commencement of RREEF CCT to the day prior to the Listing Date (both days inclusive) shall be HK$50,000 per month. The Trustee’s on-going fee may be further increased to a maximum of 0.06% per annum of the value of Deposited Property. The Trustee shall give at least one month’s prior written notice to the Manager and the Unitholders of any increase in the rate of the on-going fee that the Trustee proposes to charge from time to time up to (but not exceeding) the permitted limit of 0.06% per annum of the value of Deposited Property. Any increase in the rate of the on-going fee above the permitted level or any change in the structure of the Trustee’s fees must be approved by a Special Resolution of the Unitholders passed at a Unitholders’ meeting duly convened under the provisions of the Trust Deed. Subject to the limits set forth above, the rate of the Trustee’s on-going fee shall be the rate as agreed from time to time between the Trustee and the Manager.

— 207 — THE TRUST DEED

The on-going fee of the Trustee shall be paid monthly in arrears, which will be calculated by reference to the unaudited monthly management accounts of RREEF CCT. The amount of the on-going fees actually paid to the Trustee during each financial year shall be reconciled with the audited accounts for the relevant financial year of RREEF CCT within 10 days of the completion of the audited accounts (or such other period as may be agreed between the Manager and the Trustee) and any balance of on-going fees due and payable to the Trustee or any refund due from the Trustee respectively, shall be paid by RREEF CCT or the Trustee (as the case may be) in the form of cash within 14 days after completion of the said audited accounts.

RREEF CCT will pay also the Trustee a one-time inception fee of no more than HK$200,000.

If the Trustee finds it expedient or necessary or is requested by the Manager to undertake duties of an exceptional nature or otherwise outside the scope of the Trustee’s normal duties in the ordinary and normal course of business of RREEF CCT, including but not limited to any services in relation to the acquisition or divestment of properties by RREEF CCT after the Global Offering, the Trustee is entitled to charge, out of the Deposited Property, additional fees on a time cost basis as agreed with the Manager, provided that, unless otherwise approved by the Unitholders by way of an Ordinary Resolution:

(b) the aggregate amount of such additional fees that are not related to any acquisition or sale or disposal of property as referred to in (a) above that may be charged by the Trustee for each financial year shall not exceed an amount equal to 50.0% of the Trustee’s on-going fee (referred to above) for that financial year.

Such fees in connection with the Global Offering and related acquisition of the Property form part of the inception fee referred to above and accordingly the Trustee shall not charge any additional fees for services provided in connection therewith.

TERMINATION OF RREEF CCT

RREEF CCT shall terminate in the event that (a) the Units are not listed on the Hong Kong Stock Exchange by 31 December 2007 or such later date as may be agreed by the Manager and the Trustee; or (b) for any reason, there is no manager of RREEF CCT for a period of more B2(n) B29 than 60 calendar days or such longer period as the Trustee considers appropriate. Otherwise, RREEF CCT shall continue until the expiration of 80 years less one day from the date of commencement of RREEF CCT or until it is terminated in accordance with the provisions of the Trust Deed.

— 208 — THE TRUST DEED

Unless RREEF CCT is wound up by a court order or is otherwise terminated in the circumstances described above or by the operation of law, the termination of RREEF CCT shall require specific prior approval from the Unitholders by Special Resolution of the Unitholders at a meeting to be convened by the Manager in accordance with the provisions of the Trust Deed.

Where the proposal to terminate RREEF CCT is recommended by the Manager, the Manager and connected persons related to it shall abstain from voting if they hold interests in the Units and if their interest (at the sole determination of the Trustee) in terminating RREEF CCT is different from that of all other Unitholders.

The Trustee shall not be liable for any consequences arising out of such termination recommended by the Manager and approved by Special Resolution of the Unitholders in the absence of fraud, negligence or wilful default.

An announcement on the intention to terminate RREEF CCT shall be made by the Manager to the Unitholders as soon as practicable in accordance with the provisions of the Trust Deed.

The Manager shall serve on the Unitholders, within 21 Business Days of the announcement on the termination of RREEF CCT, a circular convening an extraordinary general meeting containing the following information:

(a) the rationale for the termination of RREEF CCT;

(b) the effective date of the termination;

(d) the procedures and timing for the distribution of the proceeds of the termination;

(e) a valuation report of RREEF CCT prepared by an Approved Valuer which is dated not more than three months before the date of the circular;

(f) the alternatives available to the Unitholders;

(g) the estimated costs of the termination and who is expected to bear such costs; and

(h) such other material information that the Manager determines that the Unitholders should be informed of.

No further Units shall be created, issued, cancelled or sold upon the Unitholders’ approval of the termination of RREEF CCT. No transfer of the Units may be registered and no other change to the register may be made without the sanction of the Trustee following the

— 209 — THE TRUST DEED announcement referred to above. No further investments may be made by RREEF CCT upon its termination and the obligations of the Trustee, the Manager and the property valuer shall continue until the completion of the liquidation of the assets and the termination of RREEF CCT.

Upon approval of the proposal to terminate RREEF CCT at the extraordinary general meeting referred to above, the Trustee shall:

(a) oversee the realisation of the assets of RREEF CCT by the Manager, which the Manager shall effect as soon as practicable;

(b) ensure that the Manager shall repay any outstanding borrowings effected by or for the account of RREEF CCT, together with any interest thereon but remaining unpaid; and

All assets of RREEF CCT shall be disposed of through public auction or any form of open tender. The disposal shall be conducted at arm’s length and conducted in the best interests of the Unitholders. The disposal price shall be the best available price obtained through public auction or open tender. Such sale and repayment shall be carried out and completed in such manner and within such period after the termination of RREEF CCT as the Manager in its absolute discretion deems advisable provided that, unless otherwise permitted by the REIT Code, such period may not exceed 24 months and where it exceeds 12 months, it must be in the interests of the Unitholders and the Unitholders shall be informed by way of announcement. Subject to the provisions of the Trust Deed, any net cash proceeds derived from the sale or realisation of such assets of RREEF CCT shall (at such time or times as the Trustee shall deem convenient) be distributed to the Unitholders pro rata to the number of the Units held or deemed to be held by them, respectively, at the date of the termination of RREEF CCT.

Upon the completion of the liquidation of the assets of RREEF CCT, the following shall be prepared on the instructions of the Manager, except in the case of paragraph (b) below:

(a) a Manager’s review and comment on the performance of RREEF CCT and an explanation as to how the assets of RREEF CCT have been disposed of and the transaction prices and major terms of disposal;

(b) a Trustee’s report that the Manager has managed and liquidated the assets of RREEF CCT in accordance with the REIT Code and the provisions of the Trust Deed;

(c) financial statements of RREEF CCT which shall be distributed to the Unitholders by the Manager within three months of the completion of the liquidation of the assets of RREEF CCT and a copy filed with the SFC; and

(d) an auditors’ report.

— 210 — THE TRUST DEED

Following the disposal of the assets of RREEF CCT and the distribution of the net cash proceeds derived from the sale or realisation of the assets of RREEF CCT, RREEF CCT will terminate.

MERGER OF RREEF CCT B30

The merger of RREEF CCT shall require the specific prior approval from the Unitholders by Special Resolution of the Unitholders at a meeting to be convened by the Manager in accordance with the provisions of the Trust Deed.

Where the proposal to merge RREEF CCT is recommended by the Manager, the Manager and connected persons related to it shall abstain from voting if they hold interests in the Units and if their interest (at the sole determination of the Trustee) in merging RREEF CCT is different from that of all other Unitholders.

Where upon such merger, the Trustee retires, any deed effecting the merger shall include indemnification of the Trustee to its satisfaction. In case the merger is recommended by the Manager and approved by Special Resolution of the Unitholders, the Trustee shall cease to be liable for obligations and liabilities of RREEF CCT subsisting at the time of the merger to the extent such obligations and liabilities are subsequently discharged from and out of the merged entity, and shall have no other liability for the consequences arising out of such merger of RREEF CCT, other and to the extent that any liability is caused by fraud, negligence or wilful default on the part of the Trustee.

An announcement on the intention to merge RREEF CCT shall be made by the Manager to the Unitholders as soon as practicable in accordance with the provisions of the Trust Deed. The Manager shall serve on the Unitholders, within 21 days of the announcement on the merger of RREEF CCT, a circular convening an extraordinary general meeting containing the following information:

(a) the rationale for the merger of RREEF CCT;

(b) the effective date of the merger;

(d) the procedures and timing for the issuance or exchange of new Units arising from the merger;

(e) a valuation report of RREEF CCT prepared by an Approved Valuer which is dated not more than three months before the date of the circular;

(f) the alternatives available to the Unitholders;

(g) the estimated costs of the merger and the bearer of such costs; and

— 211 — THE TRUST DEED

(h) such other material information that the Manager determines that the Unitholders should be informed of.

No further Units shall be created, issued, cancelled or sold upon the Unitholders’ approval of the merger of RREEF CCT. No transfer of the Units may be registered and no other change to the register may be made without the sanction of the Trustee following the announcement referred to above.

Upon completion of the merger of RREEF CCT, the following shall be prepared:

(a) a Manager’s review and comment on the performance of RREEF CCT and an explanation as to how the assets of RREEF CCT have been accounted for in the merged scheme;

(b) a Trustee’s report that the Manager has managed and merged RREEF CCT in accordance with the REIT Code and the provisions of the Trust Deed;

(c) financial statements of RREEF CCT which shall be distributed to the Unitholders by the Manager within three months of the completion of the merger and a copy filed with the SFC; and

(d) an auditors’ report.

Any merger of RREEF CCT pursuant to the foregoing may only take effect upon the successor entity assuming responsibility for the performance and discharge of all obligations and liabilities of RREEF CCT subsisting at the time of the merger.

DEEMED APPLICATION OF PART XV OF THE SECURITIES AND FUTURES ORDINANCE

With certain exceptions and modifications, the provisions of Part XV of the SFO, which requires shareholders of Hong Kong listed corporations to notify the Hong Kong Stock Exchange and the listed corporation if their shareholding interests reach or exceed a certain percentage (which is 5.0% as of the date of this Offering Circular), have been incorporated into the Trust Deed, mutatis mutandis, and have been made binding on the Directors and the Fund Manager, the Manager and on each Unitholder and all persons claiming through or under such person including, without limitation, each CCASS participant to whose account any Units are for the time being credited by HKSCC as if:

(a) RREEF CCT is a “listed corporation” for the purposes of Part XV of the SFO;

(b) the issued and outstanding Units of RREEF CCT and the Units which the Manager has agreed to issue either conditionally or unconditionally from time to time are the “relevant share capital” of such listed corporation;

— 212 — THE TRUST DEED

(d) a person who is interested in a Unit is interested in a share in the relevant share capital of such listed corporation;

(e) the Manager itself is a director of such listed corporation;

(f) the Directors and the Fund Manager of the Manager are the directors and chief executive officer, respectively, of such listed corporation;

(g) “percentage level”, in relation to a notifiable interest, means the percentage figure found by expressing the aggregate number of the Units in which the person is interested immediately before or, as the case may be, immediately after the relevant time as a percentage of all the Units in issue at the relevant time as published by the Manager and rounding that figure down (if it is not a whole number) to the next whole number; and

(h) “percentage level”, in relation to a short position, means the percentage figure found by expressing the aggregate number of the Units in which the person has a short position immediately before or, as the case may be, immediately after the relevant time as a percentage of all the Units in issue at the relevant time as published by the Manager and rounding that figure down (if it is not a whole number) to the next whole number.

Specifically, the Trust Deed provides that, subject to certain modifications set out in the Trust Deed:

(a) the duty of disclosure under Divisions 2 to 4 of Part XV of the SFO shall arise in respect of a person who (i) is interested in the Units, or who acquires an interest in or who ceases to be interested in the Units; or (ii) has a short position in the Units, or who comes to have or creases to have a short position in the Units; and

(b) the duty of disclosure under Divisions 7 to 9 of Part XV of the SFO shall arise in respect of the Manager and each Director and the Fund Manager who (i) is interested in the Units, or who acquires an interest in or who ceases to be interested in the Units, or (ii) has a short position in the Units, or who comes to have or ceases to have a short position in the Units.

Where a duty of disclosure arises by virtue of the deemed application of Part XV of the SFO, the relevant person shall give notice to the Manager and the Hong Kong Stock Exchange and the Manager shall promptly send a copy of the notification received by it to the Trustee.

The powers and duties of a “listed corporation” under Division 5 of Part XV of the SFO in relation to RREEF CCT shall be exercisable or carried out by the Trustee and the Manager provided that the relevant power shall solely be exercised by or the sole duty shall be carried out by the Manager, save where the interest or short position (or deemed interest or deemed short position) relates to the Units held by or in which the Manager is interested or has a short position, in which case the relevant power shall primarily be exercised by or the duty shall be carried out by the Trustee.

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If a person who has a duty of disclosure under the code for disclosure of interests in the units adopted by the Manager and the relevant provisions of the Trust Deed fails to make notification in accordance with such requirements, irrespective of whether that person is a Unitholder or not, the Units in which that person is (or is deemed to be) interested in (the “Relevant Units”) shall be subject to any or all of the following actions which (a) if the person interested in the Relevant Units is a person other than the Manager, the Manager; or (b) if the person interested in the Relevant Units is the Manager, the Trustee, may, in its absolute discretion, take in respect of any or all of the Relevant Units:

(a) declare the voting rights attached to any or all of the Relevant Units to be suspended (and, upon such declaration, such voting rights shall be suspended for all purposes in connection with RREEF CCT);

(b) suspend the payment of any distributions in respect of any or all of the Relevant Units (and, upon such suspension, any such distributions shall be retained in a trust account in the name of the Manager pending the application of such distributions);

(c) impose an administrative fee of up to HK$0.10 per Relevant Unit for each day of noncompliance from the date on which disclosure is due to be made by the person;

(d) suspend registration and/or decline to register any transfer of part or all of the Relevant Units, until the relevant notification requirements are fully complied with to the satisfaction of the Manager or the Trustee, as the case may be.

Each Unitholder and all persons claiming through or under him expressly acknowledge and agree to the grant of the rights and powers set out above to the Manager and the Trustee and agree to be bound by any action taken by the Manager or the Trustee, as the case may be, pursuant to the Trust Deed in good faith.

Investors are urged to familiarise themselves with the provisions in relation to their duty of disclosure in the Trust Deed and the deemed application of Part XV of the SFO. Notification of interest must be made in the form prescribed by the Manager.

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The agreements described in this section are complex documents and only a summary B2(f) RC 8.4(b) of the agreements is set out herein. Investors should refer to the agreements themselves to RC 7.7 confirm specific information or for a detailed understanding of RREEF CCT. The agreements are available for inspection at the registered office of the Manager at 53/F, Cheung Kong Center, 2 Queen’s Road, Central, Hong Kong during normal business hours until noon of Thursday, 14 June 2007, which is the date on which the application lists close.

SHARE PURCHASE AGREEMENT

On 4 June 2007, the Manager and the Trustee (as purchaser for and on behalf of RREEF CCT) entered into a Share Purchase Agreement (as supplemented by a supplemental deed dated 8 June 2007) with the Vendor (as vendor), pursuant to which the Trustee will acquire the entire issued capital of the BVI Property Company.

Purchase Consideration

The purchase consideration for the BVI Property Company Share is based on the Acquisition Value, with adjustment (on bases agreed between the Manager and the Vendor) for the net current assets/current liabilities of the Companies on Completion, plus the Adjustment Sum.

The “Adjustment Sum” refers to the following:

(ii) (a) a sum of HK$22 million, which is equivalent to the amount of the up-front fee for the Facility and (b) the Issue Cost.

In the event that:

(i) the actual Issue Cost shall exceed HK$79 million, the Vendor shall pay the excess amount to RREEF CCT on the same date when the Adjustment Sum is payable; or

(ii) the actual Issue Cost shall be less than HK$79 million, the Manager shall procure RREEF CCT to refund the shortfall to the Vendor on the same date when the Adjustment Sum is payable.

Under the Share Purchase Agreement, a pro forma consolidated balance sheet for the BVI Property Company (“Pro Forma Completion Balance Sheet”) will be prepared to reflect the Acquisition Value of the Property with adjustments for the net current assets/current liabilities of the Companies as at Completion, determined on bases agreed between the Manager and the Vendor. The Pro Forma Completion Balance Sheet will be extracted from unaudited management accounts of the BVI Property Company. Payment of the purchase consideration for the BVI Property Company Share will be made by reference to such Pro Forma Completion Balance Sheet.

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Retention Sum

On Completion, the Trustee will acquire the BVI Property Company Share upon payment, in cash or cash equivalent, of the purchase consideration less the Retention Sum and the subscription monies (see the section headed “Material Agreements and Other Documents — Subscription Agreement” for details of deduction of subscription monies from purchase consideration, which shall be withheld by the Trustee on Completion and released to the Vendor on the 30th day after completion of the audit of the accounts of the Companies for the 2007 financial year (or, if such a day is not a Business Day, the next Business Day thereafter) or on 31 May 2008, whichever is earlier, subject to there being no material breach of the Vendor’s representations and warranties in the Share Purchase Agreement which will have a material adverse effect on the financial condition, prospects, earnings, business, undertaking or assets of RREEF CCT or on the Property, in each case, taken as a whole. Notwithstanding the withholding of the Retention Sum, the Vendor shall not have any lien on the BVI Property Company Share after Completion and the Trustee, on Completion, will obtain the legal and beneficial ownership of such share free from encumbrance.

Completion

Completion is to take place prior to or on the Listing Date. A review of the accounts and the Pro Forma Completion Balance Sheet will be conducted by auditors after Completion, and adjustment payments are to be made by or to the Vendor, to address any overstatement or understatement (as the case may be) of the current assets / current liabilities of the BVI Property Company as at Completion as shown in the Pro Forma Completion Balance Sheet. Such adjustment payments shall be made within 30 days of the completion of the audit on the completion accounts and signing of the auditor’s adjustment statement. Upon Completion, a fee equivalent to 0.35% of the total gross asset value of RREEF CCT as at the date of Listing is payable by the Vendor to Deutsche Asset Management (Hong Kong) Limited for the structuring services in relation to the Property provided to the Vendor.

Completion of the Acquisition will be subject to the satisfaction of a number of conditions including, but not limited to:

(a) the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement becoming unconditional in all respects;

(b) the execution and delivery of the deed of tax covenant (as described in the sub-section headed “Deed of Tax Covenant” below) by the parties thereto;

(c) there being no material damage to the Property and no material breach of warranties which in the sole opinion of the Trustee, acting on the recommendation of the Manager, will have a material adverse effect on the financial condition, prospects, earnings, business, undertaking or assets of RREEF CCT or on the Property, in each case, taken as a whole; and

(d) the delivery to the Trustee of evidence reasonably satisfactory to the Trustee and the Manager that the Facility is in place at Completion and available to be drawn down by the HK Property Company at Completion.

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If the above conditions for Completion are not satisfied by a specified long stop date, the Share Purchase Agreement shall lapse and no party thereto shall have any claim against any other party thereto.

Representation, Warranties and Indemnities

The Share Purchase Agreement contains certain representations, warranties and indemnities made by the Vendor in respect of the Companies and the Property. These representations and warranties include, among others, that the Vendor is the sole legal and beneficial owner of the BVI Property Company, which in turn is the sole legal and beneficial owner of the HK Property Company, which in turn is the legal and beneficial owner of the Property (except the staff canteen and the civil defence shelter and please see the sections headed “The Property — Staff Canteen” and “The Property — Civil Defence Shelter” respectively for details); that the rentals payable under the leases to the HK Property Company can be lawfully converted into foreign currency and remitted out of the PRC in favour of the HK Property Company or persons named by it (as the case may be); that all costs and expenses in relation to the transfer of the Property and/or any shares of the Companies have been settled; that there is no outstanding fines and penalties in relation to the Property and/or the Companies; that the leases have been duly registered. The Vendor further undertakes to indemnify fully and keep the Trustee indemnified from and against any losses or damages directly suffered and any interest, cost or expenses whatsoever directly and reasonably incurred by the Trustee or any of the Companies as a result of the failure of any of the warranties and representations to be true and correct in all material respects or any material breach of any of the agreements, undertakings and covenants made by the Vendor in the Share Purchase Agreement provided that (a) the Vendor shall have no liabilities in respect of the warranties to the extent that the facts and circumstances giving rise to the claim have been fully, fairly and accurately disclosed in the disclosure letter under the Share Purchase Agreement or expressly provided for under such agreement; (b) such warranties, representations and indemnities are subject to limitations as to the timing of claims which can be made thereunder (no claim shall be brought against the Vendor unless written particulars of the claim shall have been notified in writing to the Vendor before the expiry of a period of seven years from the date of Completion). There is no minimum or maximum threshold to those warranties, representations and indemnities. As at the date hereof, the Manager is of the view that no information disclosed in the disclosure letter, which is of a material nature, has not been disclosed in this Offering Circular.

Under the Share Purchase Agreement, the Vendor also guarantees the payment of the relevant rentals under the advertising right agreement to the HK Property Company by Beijing Shenmingda Advertise Co., LTD (the “Grantee”) and further covenants to indemnify the HK Property Company for any losses, damages, costs and expenses suffered by it in the event that the Grantee fails to pay the relevant annual rentals to the HK Property Company or otherwise perform its obligations in accordance with the terms of the said advertising right agreement (Please see section headed “The Property - Advertising Right Agreement and Advertising Right Transfer Agreement” for details of the said advertising right agreement).

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Termination

If it is found prior to Completion that any of the Vendor’s representations and warranties in the Share Purchase Agreement was, when given, or will be, at Completion, not complied with or otherwise untrue or misleading in any material respect, and in the opinion of the Manager, this will have a material adverse effect on the financial condition, prospects, earnings, business, undertaking or assets of RREEF CCT or on the Property, in each case, taken as a whole, the Trustee shall (acting on the recommendation of the Manager) be entitled to terminate the Share Purchase Agreement.

Similarly, if any event occurs prior to Completion which adversely affects or is likely to affect adversely to a material degree the financial position or turnover or profitability or operations of the Companies, not being an event affecting or likely to affect generally all companies carrying on similar businesses in Beijing, PRC, and in the opinion of the Manager, this will have a material adverse effect on the financial condition, prospects, earnings, business, undertaking or assets of RREEF CCT or on the Property, in each case, taken as a whole, the Trustee shall be entitled to terminate the Share Purchase Agreement.

If the Vendor fails to comply with its obligations on Completion as set forth in the Share Purchase Agreement (including the obligation to deliver transfer documents of the BVI Property Company Share duly executed by the Vendor in favour of the Trustee and accompanied by the relevant share certificate) on the date set for Completion or the Vendor is in default under the Share Purchase Agreement, the Trustee shall be entitled (in addition to and without limiting all other rights or remedies available to it, including the right to claim damages) by written notice to the Vendor served on such date:

(a) to elect to terminate the Share Purchase Agreement without liability on the part of the Trustee;

(b) to effect Completion so far as practicable having regard to the defaults which have occurred; or

DEED OF TAX COVENANT

A separate Deed of Tax Covenant will be entered into by the Vendor in favour of the Trustee, on Completion, covenanting to indemnify the Trustee (for itself and on behalf of the Companies) in respect of:

(a) any liability for taxation resulting from or by reference to any event occurring on or before the date of the Deed of Tax Covenant or in respect of any gross receipts, income, profits or gains earned, accrued or received or alleged to have been earned, accrued or received by the either Company on or before the date of the Deed of Tax Covenant;

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(b) any liability for taxation in respect of profit resulting from the sale of all or part of the Property or the shares of the Company or Companies holding the Property, provided that the maximum amount of any claim will be the liability for taxation calculated assuming the sale proceeds are an amount equivalent to the market value of the Property at the time of Completion; and

(c) all costs (including all legal costs), expenses and interest properly incurred and payable by either Company or the Trustee in connection with a successful claim under the Deed of Tax Covenant.

The indemnity shall extend to any liability for taxation arising from change in law or interpretation of law or the implementation of any rules or regulations after the date of the Deed of Tax Covenant but having retrospective effect or resulting in liability for taxation for any period prior to the date of the Deed of Tax Covenant provided that no claim shall be brought against the Vendor unless written particulars thereof shall have been notified to the Vendor before the expiry of a period of seven years from the date of Completion. There is no minimum or maximum threshold to such indemnity.

PROPERTY MANAGEMENT AGREEMENT B4(c) PN22(c) PN24 The Property Manager was appointed under the Property Management Agreement dated 31 May 2007 entered into among the Manager, the HK Property Company and the Property Manager, to manage, operate, maintain and market the Property, subject to the overall management and supervision of the Manager.

The term of the appointment of the Property Manager is initially three years from the date of Completion. This may be extended, upon request by the Manager 30 days before the expiry of the initial term, for six months after the expiry of the initial term, provided that such extension shall be subject to the approval of the Unitholders if such approval is required pursuant to any applicable laws and regulations. If the Manager does not extend the appointment of the Property Manager for the additional six months, the appointment of the Property Manager shall terminate upon the expiry of the initial term.

Property Manager’s Services

The Property Manager is responsible under the Property Management Agreement to provide:

(a) tenancy management services, including (i) initiating lease (and tenancy for advertising spaces) renewal and/or rent review negotiations with tenants at least three months before the expiry of their leases, and finalising the same as authorised by the Manager; (ii) preparing and, with the Manager’s approval, adopting a standard form leasing proposal (including a letter of offer and a lease); (iii) negotiating with prospective tenants to conclude new leases, and finalising the same as authorised by the Manager; (iv) at the cost of the HK Property Company, taking enforcement action if directed or approved by the Manager to recover rental arrears and

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damages; (v) managing incoming and outgoing tenants; (vi) ensuring that premises are in good tenantable condition prior to hand-over to and takeover from tenants; (vii) managing and supervising the fitting out works carried out by tenants; (viii) liaising with and maintaining a good relationship with tenants; and (ix) acting as a non-exclusive agent for the marketing and leasing of the Property;

(b) property management services, including (i) arranging for all maintenance and repair works to be carried out either by the on-site technician (including ensuring compliance with building and safety regulation) or by contractors as shall be approved by the Manager; (ii) ensuring good standards of cleanliness and security at all times; (iii) advising on the most suitable method of arranging security and, if appropriate and necessary, appointing a reputable security contractor; (iv) managing and supervising the performance of all contractors providing services for the Property; (v) in coordination with insurance brokers or advisers approved by the Manager, arranging for the insurances relating to the Property; (vi) preparing an annual business plan and budget; (vii) managing and tracking all expenditures to ensure that they do not exceed the approved budget in the annual business plan and budget as approved by the Manager; and (viii) preparing and delivering monthly financial reports on the Property to the Manager;

(c) rental collection and repatriation services, including (i) requesting tenants to make payments of rental deposits and rental by electronic transfer or direct deposit into the Collection Account; (ii) monitoring tenants’ rental payments on a monthly basis, following up on cases of rental arrears, and demand and recover arrears of rental whenever necessary; (iii) arranging to repatriate, at least monthly (or more frequently if required by the Manager), the monies from time to time standing to the credit of the Collection Account, in accordance with the procedures set out in the Repatriation Account Agreement (as described in the sub-section headed “Repatriation Account Agreement” below); and (iv) for the purpose of such repatriation, preparing payment out reports and vouchers and submitting the same to the Manager for review and approval, preparing applications with supporting documents for such repatriation, arranging for the submission of the relevant documents, the payment of the relevant taxes, the collection of the relevant tax certificates and the completion of all other procedures required for such repatriation, and performing reconciliations after each such repatriation; and

(d) entity accounting services, including (i) providing financial accounting services in respect of the Companies; (ii) preparing and delivering monthly financial reports on the Companies to the Manager; and (iii) carrying out monthly reconciliation of bank statements relating to the Collection Account, the Operating Account and the Repatriation Account.

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In addition, the Property Manager shall have, among other things, the following duties:

(a) furnishing such information or documents concerning services to be provided under the Property Management Agreement as may be reasonably requested by the Manager; and

(b) providing any feedback relating to services to be provided under the Property Management Agreement as may be required by the Manager from time to time.

At the request of the Manager, the Property Manager shall, in respect of all contracts existing as at Completion entered into by or on behalf of the HK Property Company relating to the provision of services for the Property, co-ordinate with the relevant service providers to arrange for the (a) termination, (b) continuation thereof on the same terms as those existing as at the date of Completion or (c) replacement thereof on such terms as the Manager may agree with such service providers.

In the performance of its duties and the exercise of its rights, powers and authorities under the Property Management Agreement, the Property Manager shall act in the best interests of RREEF CCT and the Companies and exercise a reasonable standard of care, skill, prudence and diligence under the circumstances then prevailing that a reputable property manager in the PRC providing similar services would use in providing such services for a comparable property in the PRC.

Property Manager’s Fees and Leasing Commissions 9.10

Under the Property Management Agreement, the Property Manager will be entitled to the following fees and leasing commissions:

Property management fee

Tenancy management fee

For its provision of tenancy management services, the Property Manager will be entitled to a tenancy management fee of RMB30,000 (HK$30,000) per month. Such fee shall be payable monthly in arrears.

Rental collection and repatriation fee

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Entity accounting fee

For its provision of entity accounting services, the Property Manager will be entitled to an entity accounting fee of RMB46,800 (HK$46,800) per month. Such fee shall be payable monthly in arrears.

Leasing commissions

For a new lease of one year or more secured by the Property Manager, it will be entitled to a commission equivalent to one month’s rent.

Reimbursements

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Operating Account, Collection Account and Repatriation Account

Operating Account

Under their leases, tenants in the Property pay property management fees directly to the Property Manager. For this purpose, the Property Manager shall open and maintain in its name, with a bank approved by the Manager, a Renminbi bank account (the “Operating Account”) into which such property management fees shall be deposited.

The Property Manager will provide a monthly review of the Operating Account and propose to the Manager its estimate of the working capital requirements for the following month, based on the approved annual business plan and budget. After the Manager has evaluated the Property Manager’s estimate, the Property Manager may use such amount of funds in the Operating Account as the Manager may approve to manage, operate, maintain and market the Property in accordance with the terms of the Property Management Agreement and the approved annual business plan and budget.

The authorised signatories to the Operating Account shall be persons designated by the Property Manager and approved by the Manager. The Manager may impose such reasonable conditions as it may deem necessary to limit the rights of the designated authorised signatories to operate the Operating Account.

Collection Account

The HK Property Company shall open and maintain in its name an interest-bearing Renminbi bank account (the “Collection Account”) into which all Turnover shall be deposited. The authorised signatories to the Collection Account shall be persons approved by the HK Property Company and the Manager.

Repatriation Account

The Property Manager shall open and maintain in its name an interest-bearing Renminbi bank account (the “Repatriation Account”) which shall be used for the repatriation of monies in the Collection Account to such bank account outside the PRC as may be designated by the Manager from time to time. The Repatriation Account shall be operated in accordance with the Repatriation Account Agreement described in the sub-section headed “Repatriation Account Agreement” below.

The authorised signatories to the Repatriation Account shall be persons designated by the Property Manager and approved by the Manager. The Manager may impose such reasonable conditions as it may deem necessary to limit the rights of the designated authorised signatories to operate the Repatriation Account.

Indemnity

The Property Manager shall indemnify the Manager and the HK Property Company from and against any and all actions, proceedings, liabilities, claims, demands, losses, damages,

— 223 — MATERIAL AGREEMENTS AND OTHER DOCUMENTS charges, costs and expenses that either of them suffers or incurs, to the extent that they arise out of any breach, negligence, fraud or misconduct of the Property Manager, its employees or agents, in the performance of the Property Manager’s obligations and duties under the Property Management Agreement.

Use of Space in the Property

The Property Manager may use, free of charge, such space in the Property as may be agreed by the Manager from time to time as an office from which the Property Manager shall provide its services as contemplated under the Property Management Agreement.

Termination

The appointment of the Property Manager under the Property Management Agreement may be terminated by the Manager upon written notice to the Property Manager, if the Property Manager goes into liquidation (except a voluntary liquidation for the purpose of reconstruction or amalgamation upon terms previously approved in writing by the Manager) or if a receiver is appointed over any of its assets or a judicial manager is appointed in respect of the Property Manager (or any such analogous process occurs or any analogous person is appointed in respect of the Property Manager), or the Property Manager compounds with its creditors, or the Property Manager ceases to carry on business.

In the event of the sale of the Property, or the sale of either of the Companies, the Manager will be entitled to terminate the appointment of the Property Manager.

Any non-conformances, sub-standard performance or misconduct by the Property Manager shall be deemed to be a breach of the Property Management Agreement. In addition, if either (a) the Manager or the HK Property Company or (b) the Property Manager is in breach of any of its obligations under the Property Management Agreement, and if the breach is capable of remedy, the party in breach fails to cure the breach with 90 days of its receipt of a written notice from a party not in breach to remedy the said breach, the Property Management Agreement may also be terminated by the party not in breach.

REPATRIATION ACCOUNT AGREEMENT

An agreement (the “Repatriation Account Agreement”) was entered into among the HK Property Company, Industrial and Commercial Bank of China Co., Ltd, Beijing CBD Sub- Branch (“ICBC”) and the Property Manager to govern the operation of the Repatriation Account, being a bank account opened and maintained by the Property Manager, as well as the Collection Account.

Under the Repatriation Account Agreement, the parties acknowledged and agreed that funds in the Collection Account will only be transferred out of the Collection Account in accordance with the following procedures and for the following purposes:

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(i) subject to (a) ICBC receives certain specified documents (including, among others, the relevant tax return prepared by the Property Manager), and (b) Trustee transfers from the Collection Account to the Repatriation Account such amount (as stated in the relevant tax return submitted by the Property Manager to the competent tax authority) as sufficient for the payment of withholding taxes in the PRC, ICBC shall, at 11:00 a.m. of the eighth day of each month (the “Tax Payment Date”), forthwith, in any case before the close of business on the Tax Payment Date, transfer such funds from the Repatriation Account to the designated collection account of the relevant tax authority. If, for any reason, the funds are not so transferred before the close of business on the Tax Payment Date, ICBC shall immediately reverse the funds back into the Collection Account; and

(ii) subject to (a) ICBC receives certain specified documents (including, among others, written application of the Property Manager and Trustee’s written confirmation as to the amount specified in the Property Manager’s written application), and (b) Trustee transfers from the Collection Account to the Repatriation Account such amount as advised by the Property Manager and confirmed by the Manager as sufficient for the onward remittance to such offshore bank account maintained in Hong Kong as may be designated by the HK Property Company, ICBC shall, at 11:00 a.m. of the first day of each month (“Income Remittance Date”), forthwith, in any case before the close of business on the Income Remittance Date, transfer such funds from the Repatriation Account to the designated offshore account. If, for any reason, the funds are not so transferred before the close of business on the Income Remittance Date, ICBC shall immediately reverse the funds back into the Collection Account.

Further, ICBC agrees and undertakes that, provided the HK Property Company and the Property Manager provide the relevant specified documents in accordance with the provision of the Repatriation Account Agreement, it shall strictly perform its obligations to supervise the operations of the Collection Account and the Repatriation Account as described above unless otherwise instructed by competent authorities. If any party suffers loss as a result of any breach by the other party, the defaulting party shall bear all losses incurred by the other non-defaulting party.

The term of the Repatriation Account Agreement is one year commencing from the date of receipt of by ICBC of the written notice from the HK Property Company and the Property Manager (renewable for another year automatically upon expiry of the original term) and terminates:

(a) by the end of the relevant term if any party decides not to renew the Repatriation Account Agreement and gives 3 months’ notice to the other parties;

(b) upon receipt of notice of termination given by the HK Property Company if the Property Manager ceases to be the property manager of the Property; or

(c) upon receipt of notice of termination given by ICBC if the HK Property Company fails to pay the relevant fees to ICBC in accordance with the provision of the Repatriation Account Agreement.

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RIGHT OF FIRST REFUSAL

On 31 May 2007, Mr. Tin Lik executed a non-revocable letter of undertaking as a deed in favour of the Trustee and the Manager under which Mr. Tin Lik granted to RREEF CCT, conditional on listing of the Units on the Hong Kong Stock Exchange, a right of first refusal subject to certain terms and conditions, a summary of which is set forth below:

In the event that Mr. Tin Lik or a company which he controls (the “Relevant Owner”) proposes to dispose of or transfer to a third party any institutional quality office or mixed-use (where the predominate use in office) property that:

(a) fulfils (or would reasonably be regarded as fulfilling) the investment criteria and property characteristics and is consistent, or would reasonably be regarded as being consistent, with the investment strategy of the Manager for property investments by RREEF CCT, as stated in this Offering Circular; and

(b) is wholly-owned or developed by Mr. Tin Lik or any company which he controls; and

(each such property, a ‘‘Relevant Property’’) RREEF CCT shall have the right of first refusal to acquire the Relevant Property on and subject to the following terms and conditions.

Currently, there is no such Relevant Property owned by Mr. Tin Lik. In the event of any proposed sale of any Relevant Property, Mr. Tin Lik shall send the Manager a written notice (the ‘‘Notice of Offer’’) stating that he or the Relevant Owner proposes to dispose of or transfer the Relevant Property as well as the price and any other material terms which the prospective purchaser has offered for the Relevant Property.

RREEF CCT, through the Manager, may within 30 calendar days after the date of the Notice of Offer exercise the right of first refusal to acquire the Relevant Property by serving on Mr. Tin Lik a written notice to exercise the same (the “Notice of Exercise”). If RREEF CCT fails to, or elects not to, exercise such right of first refusal, such right shall lapse.

Completion of the sale and purchase of the Relevant Property pursuant to an exercise of the right of first refusal shall take place on a date and at a time agreed between the Manager and Mr. Tin Lik or, if later, within 30 Business Days after the date on which the last of the conditions for completion shall have been fulfilled, provided that completion shall take place not later than nine calendar months from the date of the Notice of Offer (or such other date as may be agreed between the Manager and Mr. Tin Lik in writing).

If RREEF CCT elects to exercise the right of first refusal to acquire the Relevant Property, completion of the sale and purchase of the same is conditional upon:

(a) the attainment by the Manager of all requisite approvals and consents required under the REIT Code, the Trust Deed and all other applicable laws and regulations;

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(b) satisfactory results on the completion of the due diligence review of the Relevant Property by the Manager; and

If, for any reason other than Mr. Tin Lik’s default, the sale and purchase of the Relevant Property pursuant to an exercise of the right of first refusal is not completed on or before the time specified or agreed, or the Manager does not deliver the Notice of Exercise within the stipulated time (the ‘‘Lapse Event’’), Mr. Tin Lik shall have the right to elect to:

(a) sell the Relevant Property to any third party (including the prospective purchaser) within 12 calendar months after the Lapse Event at such price and on such terms as are no more favourable than those set out in the Notice of Offer (from the perspective of RREEF CCT); or

(b) retain the Relevant Property for investment purposes.

If Mr. Tin Lik elects to sell the Relevant Property to any third party within 12 months after the Lapse Event, Mr. Tin Lik shall send to the Manager a written notice of the price and other principal terms on which the Relevant Property is proposed to be sold to the third party. If the Relevant Property is proposed to be sold on terms more favourable than those stated in the Notice of Offer (from the perspective of RREEF CCT), the right of first refusal shall apply afresh to that proposed disposal or transfer and Mr. Tin Lik shall be required to comply with the procedures specified in the letter of undertaking accordingly. If the right of first refusal starts afresh, the Manager shall have 10 Business Days within which to object to such proposed sale but solely on the ground that it is on terms more favourable than those set out in the Notice of Offer (from the perspective of RREEF CCT). In the event that there is any dispute between Mr. Tin Lik and the Manager as to whether the terms are more favourable than those set out in the Notice of Offer, the matter shall be referred to an independent valuer or other property consultant (selected by agreement between the Manager and Mr. Tin Lik) whose decision shall be final and binding on the Manager and Mr. Tin Lik.

The right of first refusal granted will commence on the Listing Date until the earlier of the following occurring:

(a) the expiration of the five-year period immediately following the Listing Date; or

(b) the Units ceasing to be listed on the Hong Kong Stock Exchange.

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THE FACILITY

General

On or before the Listing Date, the HK Property Company shall have in place the Facility in the aggregate principal amount of HK$1,400 million granted by The Royal Bank of Scotland plc, Hong Kong Branch (“RBS”) or a syndicate of banks led by RBS. RBS will also act as the mandated sole lead arranger and the security agent. The Royal Bank of Scotland plc, Singapore Branch will act as facility agent. The proceeds of the Facility will be used for the purposes of repayment of the indebtedness owed by the HK Property Company under the Existing Borrowings.

The availability of the Facility is conditional upon the satisfaction of certain conditions precedent, including, without limitation, the execution of the Trust Deed, the Property Management Agreement and other material contracts including but not limited to the security documents set out in the section “Security”. Upon the satisfaction of the applicable conditions precedent, the Facility will be available to the HK Property Company in a single advance at any time from the date of the Facility Agreement to the earlier of the Listing Date or 30 June 2007. An upfront fee of 1.5% of the amount of Facility drawn will be payable by the HK Property Company to the mandated sole lead arranger. The interest (payable quarterly or such other period as agreed by the HK Property Company and the facility agent acting on the instructions of the majority lenders) under the Facility will be at HIBOR plus a margin of 120 basis points per annum. The principal of the Facility will be due at maturity of the term of five years from the drawdown date of the Facility.

The Facility will be secured by the securities created under the documents set out in the section “Security” below. On the Listing Date, prior to repayment of the Existing Borrowings, the Property will remain mortgaged by the HK Property Company to secure the indebtedness owed by it under the Existing Borrowings. Upon the repayment of the Existing Borrowings on the drawdown date of the Facility, the lender under the Existing Borrowings will execute and deliver a release of existing mortgage over the Property and the Property will be mortgaged to the security agent for the benefit of the lenders under the terms of the Facility Agreement.

The HK Property Company may prepay any outstanding amount under the Facility in whole or in part by giving not less than 10 Business Days’ prior notice to the facility agent. The prepayment of the Facility in part but not in whole shall be made in the minimum amount of HK$100 million and an integral multiple of HK$10 million. Any such prepayment will be subject to a break costs and a prepayment fee of 0.5% of the amount prepaid if the prepayment is made on or before the date falling one year after the drawdown date of the Facility or 0.25% of the amount prepaid if the prepayment is made on any date falling one year after the drawdown date and on or before the date falling four years after the drawdown date.

Upon the receipt of any sum in respect of any sale or disposal of the Property or the nationalization, confiscation, requisition or compulsory acquisition of all or part of the Property or any proceeds from property damage insurance in respect of the Property exceeding an agreed threshold amount, the HK Property Company shall, unless the majority lenders

— 228 — MATERIAL AGREEMENTS AND OTHER DOCUMENTS otherwise agree in writing, prepay the Facility in an amount equal to the amount received on the last day of the relevant interest period. In addition, the HK Property Company shall, upon notification from the facility agent, prepay the Facility if it becomes unlawful in any applicable jurisdiction for any lender to fund or maintain the Facility.

Events of Default

The Facility Agreement contains customary events of default, the occurrence of which would allow the facility agent by itself, or upon the instructions of the majority lenders, to demand immediate repayment of the outstanding advances made under the Facility, together with accrued interest, all other sums and fees payable under the Facility. Such events of default include, among other things, each of the following events and circumstances:

● failure by the HK Property Company to pay on the due date any amount payable by it under the Finance Documents (as defined in the Facility Agreement), unless the non-payment is caused by technical or administrative error and is remedied within five Business Days of the due date;

● failure by the HK Property Company to provide evidence that the mortgage over the Property has been registered within 60 days after the drawdown date of the Facility or failure by the HK Property Company to provide amended insurance policies to the facility agent within 90 days after the drawdown date of the Facility;

● failure by the HK Property Company, within 90 days of the notification by the facility agent, to ensure the aggregate principal amount outstanding under the Facility (the “Outstanding Amount”) be restored to an amount equal to or less than 50.0% of the Security Value (as defined in the Facility Agreement);

● the Debt Service Coverage Ratio (as defined in the Facility Agreement) is less than 2:1foranyCalculationPeriod(asdefinedintheFacility Agreement);

● failure by the HK Property Company, the BVI Property Company or RREEF CCT (the HK Property Company, the BVI Property Company and in certain circumstance set out in the Facility Agreement, RREEF CCT, collectively being referred to as the “Obligors”) to comply with any term of the Finance Documents to which it is a party (other than any term in respect of the non-payment of the Facility, the failure to provide conditions subsequent, the valuation and security margin and the Debt Service Coverage Ratio) unless the non compliance is capable of remedy and is remedied within 30 days of the earlier of the facility agent giving notice of the breach to the HK Property Company and any Obligor becoming aware of such noncompliance;

● any of the representation or warranty made or deemed to be repeated by the HK Property Company, the BVI Property Company or RREEF CCT in any Finance Document to which it is a party or in any document delivered by or on behalf of an Obligor under or in connection with any Finance Document to which it is a party is or proves to have been incorrect or misleading in any material respect when made or deemed to be repeated;

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● failure by any Obligor to pay any of its Financial Indebtedness (as defined in the Facility Agreement) when due or any commitment for its Financial Indebtedness is cancelled or suspended;

● upon the occurrence of any of the following events, among others, in respect of any Obligor:

(a) it is, or is deemed to be, unable to pay its debts as they fall due or insolvent;

(b) it suspends making payments on any of its debts;

(d) the value of its assets is less than its liabilities;

(e) any of its indebtedness is subject to a moratorium;

(f) a meeting of its shareholders, directors or other officers is convened for the purpose of considering any resolution for, to petition for or to file documents with a court or any registrar for, its winding-up, administration or dissolution or any such resolution is passed;

(g) any person presents a petition, or files documents with a court or any registrar, for its winding-up, administration, dissolution or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise);

(h) an order for its winding-up, administration or dissolution is made; or

(i) any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer is appointed in respect of it or any of its assets;

● any expropriation, attachment, sequestration, distress, execution or analogous event affects any asset(s) of an Obligor and is not discharged within 21 days;

● the HK Property Company ceases, or threatens to cease, to carry on business except as a result of any disposal allowed under the Facility Agreement;

● it is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents to which it is a party or any Finance Document is not effective in accordance with its terms or an Obligor repudiates a Finance Document to which it is a party;

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● any part of the Property is compulsorily purchased or the applicable local authority makes an order for the compulsory purchase of all or any part of the Property which in the opinion of the majority lenders the compulsory purchase has or will have a material adverse effect;

● a material part of the Property is destroyed or damaged and the HK Property Company has insufficient proceeds from insurance to apply towards the reinstatement, rebuilding or replacement of any damage to the Property;

● the HK Property Company is not or ceases to be a legally and beneficially wholly owned subsidiary of the BVI Property Company or at any time after the Listing Date, the BVI Property Company ceases to be a legally and beneficially wholly owned subsidiary of RREEF CCT;

● the units in RREEF CCT cease to be listed on the Hong Kong Stock Exchange or trading of the units in RREEF CCT are suspended for more than 14 consecutive Business Days or 30 consecutive Business Days if suspension is requested by RREEF CCT in connection with an issue of new units or the entering into of a commercial transaction not prohibited by the Facility Agreement or for which the majority lenders’ approval has been obtained;

● the Manager ceases to be the manager of RREEF CCT without the prior consent of the majority lenders; and

● any event or series of events occurs which, in the reasonable opinion of the majority lenders, has or is reasonably likely to have a material adverse effect.

Covenants

The Obligors agree to provide customary affirmative and negative covenants, including without limitation, certain information covenants, general covenants, property covenants and pari passu covenant, subject to certain exceptions and carve-outs.

Information Covenants

Under the Facility Agreement, the HK Property Company shall supply to the facility agent, among other things:

● its audited financial statements for each of its financial years within 180 days of the end of the relevant financial period and its unaudited financial statements for the first half-year of each of its financial years within 120 days of the end of the relevant financial period;

● compliance certificates setting out computations as to compliance with the Debt Service Coverage Ratio;

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● details of any litigation, arbitration or administrative proceedings which are current, to its knowledge threatened or pending and which have or are reasonably likely to have, if adversely determined, a material adverse effect;

● such further information regarding its financial condition and operations as any Finance Party (as defined in the Facility Agreement) may reasonably request including but not limited to any information required in connection with a syndication of the Facility or in connection with or in contemplation of a securitisation or other transaction having a similar effect or any documentation or other evidence which is reasonably requested by any Finance Party to enable a Finance Party or prospective new lender to carry out and be satisfied with the results of all applicable know your customer requirements or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents;

● any proposed amendments to the Property Management Agreement or Trust Deed; and

● a valuation of the Property on an annual basis and, if the facility agent is of the reasonable view that the value of the Property has fallen significantly since the last annual valuation, an additional valuation to the facility agent upon its request, provided that such request may not be made more than once a year.

General Covenants

Under the Facility Agreement, the HK Property Company shall, among other things:

● obtain, maintain and comply with the terms, do all that is necessary to maintain in full force and effect of any authorisation required under any law or regulation to enable it to perform its obligations under, or for the validity or enforceability or admissibility in evidence of, any Transaction Documents (as defined in the Facility Agreement) to which it is a party and the Repatriation Account Agreement or own its assets and carry on its business as it is being conducted;

● comply in all respects with all laws to which it is subject where failure to do so has or is reasonably likely to have a material adverse effect;

● ensure that its payment obligations under the Finance Documents at all times rank at least pari passu with all its other present and future unsecured payment obligations;

● not dispose of all or any part of its assets or create or allow to exist any mortgage, pledge, lien, charge, assignment, hypothecation or security interest of any other agreement or arrangement having similar effect on any of its assets except as permitted under the terms of the Facility Agreement;

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● subject to certain permitted exceptions provided under the Facility Agreement, not incur or permit, and the BVI Property Company shall not incur or permit, to be outstanding any Financial Indebtedness (as defined in the Facility Agreement);

● not carry on any business other than the ownership and management of its interests in the Property;

● not enter into any amalgamation, demerger, merger or reconstruction or make any acquisition or investment except as permitted under the terms of the Facility Agreement;

● not issue further shares or alter any rights attaching to its issued shares as at the date of the Facility Agreement or repay or redeem any of its share capital;

● together with the BVI Property Company, pay all taxes due and payable by them prior to the accrual of any fine or penalty for late payment;

● comply with the provisions of the Repatriation Account Agreement and not open or maintain any account with any branch of any bank or other financial institution providing similar services other than the Collection Account and the Operating Account or such other account as may be approved by the facility agent from time to time;

● if the Outstanding Amount is more than 50.0% of the Security Value on any date, the HK Property Company shall provide to the facility agent a proposal on how to remedy such breach and/or to make a voluntary prepayment to ensure that the Outstanding Amount is restored to an amount equal to or less than 50.0% of the Security Value;

● provide all assistance to the lenders necessary to effect any subdivision, split, severing, modification or re-tranching proposed by the majority lenders; and

● ensure that the Debt Service Coverage Ratio will not at any time be less than2:1 for any Calculation Period.

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Property Covenants

In connection with the Property, the HK Property Company shall, among other things:

● not enter into, or agree to any amendment, waiver or surrender of any Material Lease Document (as defined in the Facility Agreement) or commence any forfeiture proceedings in respect of any Material Lease Document or grant any contractual licence or right to occupy any part of the Property without consideration or consent to any sublease or assignment of any tenant’s interest under any Material Lease Document without the consent of the facility agent;

● not without the consent of the facility agent strata sub-divide the title of the Property;

● supply to the facility agent a monthly tenancy management report in respect of the Property;

● not appoint any property manager of the Property without the prior consent of, and on terms approved by, the facility agent (acting on the instructions of the majority lenders who shall not unreasonably withhold or delay) such consent or approval;

● notify the facility agent of any change in the trustee of RREEF CCT or valuer appointed by the HK Property Company in accordance with the REIT Code;

● ensure that at all times the insurances of the Property are maintained in full force and effect to insure the HK Property Company in respect of its interests in the Property and the plant and machinery on the Property (including fixtures and improvements) for their replacement value (in the case of the Property, being full replacement value) and comply with the terms of the insurances and not do or permit anything to be done which may render any of the insurances void or voidable;

● ensure that it is, and has been, in compliance with all Environmental Law (as defined in the Facility Agreement) and Environmental Approvals (as defined in the Facility Agreement) applicable to it or to the Property, where failure to do so has or is reasonably likely to have a material adverse effect;

● permit the facility agent and/or its agents of contractors to enter on the Property, to comply with or object to any notice served on the HK Property Company relating to the Property and to take any action the facility agent may reasonably consider necessary expedient to prevent or remedy any breach of any such term or to comply with or object to any such notice in case of default by the HK Property Company;

● pay all existing and future rents, taxes, duties, fees, renewal fees, charges, assessments, impositions and outgoings, which as at the date of the Facility Agreement or at any time during the continuance of the security constituted by or pursuant to the Finance Documents are payable in respect of any part of the

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Property and the facility agent may, 30 days after the giving of notice to the HK Property Company, make payment which the HK Property Company is obliged to make and the HK Property Company shall indemnify the facility agent and the security agent against such payments; and

● procure that each Lease Document (as defined in the Facility Agreement) (together with the required ancillary documents) is lodged with the Beijing Construction Commission (or any other authority authorised by the Beijing Construction Commission to conduct such registrations) for registration within one month from the date of the relevant Lease Document.

Pari passu Covenant

If, at any time prior to the Final Maturity Date (as defined in the Facility Agreement), RREEF CCT gives any financial support for the obligations of any of its subsidiaries or affiliates, it shall give a corresponding financial support on substantially the same terms in relation to all obligations of the HK Property Company under the Facility.

Security

The Facility and the Hedging Arrangement (as defined below) are secured by, among others:

● a mortgage over the Property (including the insurances over the Property);

● a share mortgage over the entire issued share capital of the HK Property Company;

● a share mortgage over the entire issued share capital of the BVI Property Company;

● a floating charge over all assets from time to time owned by the HK Property Company, including but not limited to the charge over accounts owned by the HK Property Company; and

● a subordination agreement.

Hedging Arrangement

If at any time, the Debt Service Coverage Ratio falls below 2.5 : 1, the HK Property Company shall enter into a hedging arrangement (the “Hedging Arrangement”) to maintain fixed interest rates exposures for the loan and to ensure that it has no exposure to foreign exchange movements between Hong Kong dollars and RMB in respect of relevant amounts under the Facility Agreement. Such Hedging Arrangement shall be secured on a pari passu basis with the Facility.

— 235 — MATERIAL AGREEMENTS AND OTHER DOCUMENTS

Under the Facility Agreement, the HK Property Company is required to meet certain conditions in entering into the Hedging Arrangement including the following:

(i) the hedging counterparty shall be a bank or financial institution with specific ratings; and

(ii) the hedging counterparty shall accede to the Facility Agreement.

The HK Property Company also has the right to enter into hedging arrangements at its own discretion provided that certain conditions stipulated in the Facility Agreement are fulfilled.

ASSIGNMENT OF RIGHT TO USE THE CIVIL DEFENCE SHELTER

By an assignment agreement dated 20 November 2006, the Predecessor Property Company assigned its rights and obligations under the “Agreement for Use of Civil Defence Shelter” between itself and the Civil Defence Works Management Centre of Beijing, Chaoyang District (the “Management Centre”) relating to the Civil Defence Shelter in the Property, to the HK Property Company (as the owner of the Property), without compensation to the Predecessor Property Company and with the concurrence of the Management Centre. Accordingly, the HK Property Company has the right to use the Civil Defence Shelter in the Property for the period from 20 November 2006 to 19 November 2007 and is entitled to any income derived from the Civil Defence Shelter. It was further agreed in the aforesaid assignment agreement that upon the expiry of the “Agreement for Use of Civil Defence Shelter” on 19 November 2007, the HK Property Company has the right to apply for entering into a new agreement with the Management Centre to the same effect, either in its own name or through its agent.

CONFIRMATION OF RIGHT TO USE THE STAFF CANTEEN

By an agreement dated 28 December 2006, the Predecessor Property Company agreed that, before the Building Ownership Certificate of the staff canteen can be duly passed to the HK Property Company, the Predecessor Property Company relinquished all and any of its rights in relation to the staff canteen in the Property, and confirmed and acknowledged the HK Property Company’s exclusive right to use, occupy and derive benefit from the staff canteen since the date of completion of the construction work of staff canteen. The Predecessor Property Company further confirmed and acknowledged that the HK Property Company could itself use the staff canteen or permit a third party to use and operate the same without any liability to the Predecessor Property Company for rent or fees. The parties have entered into a supplemental agreement on 31 May 2007 where the Predecessor Property Company further confirmed that in the event that the HK Property Company transfers part or whole of its ownership of the Property to any third party, the HK Property Company shall enjoy the right to assign its rights and obligations under the said confirmation dated 28 December 2006 as well as such supplemental agreement to that such third party. Upon the occurrence of such circumstances, the Predecessor Property Company shall enter into agreement with the HK Property Company and the relevant third party to effect the aforesaid assignment of rights and

— 236 — MATERIAL AGREEMENTS AND OTHER DOCUMENTS obligations. Any benefits derived by the HK Property Company from using or permitting third parties to use the staff canteen would belong solely to the HK Property Company since the date of completion and operation of the construction work of staff canteen. According to the aforesaid agreement, the HK Property Company is not able to transfer or mortgage the staff canteen.

The Predecessor Property Company also undertook that it would not lease, transfer, use or otherwise deal with the staff canteen without the HK Property Company’s prior written consent.

If a third party raises any concerns regarding the HK Property Company’s use or permit for another person to use the staff canteen, the Predecessor Property Company will be responsible for resolving such concerns and will hold the HK Property Company free from any damage or liabilities.

Once the laws and regulations in the PRC permit, the Predecessor Property Company will use its best endeavours in assisting the HK Property Company to obtain title to the staff canteen, and the Predecessor Property Company shall bear all costs and expenses relating thereto except for fees and taxes levied by the government and the stamp duty shall be borne by both the Predecessor Property Company and the HK Property Company.

SUBSCRIPTION AGREEMENT

Under the Subscription Agreement, Mr. Tin Lik shall, not later than 12:00 noon on the day falling one Business Day immediately prior to the Listing Date (or such other date as the Manager and Mr. Tin Lik may agree in writing), pay or cause to be paid the total consideration for the Units subscribed for in Hong Kong dollars and in immediately available and freely transferable funds. Mr. Tin Lik shall not be entitled to any interest which may accrue in relation to such payment and any such interest accrued shall be for the sole benefit of RREEF CCT. By a supplemental deed dated 8 June 2007, the Manager and Mr. Tin have agreed that, notwithstanding any term or provision of the Subscription Agreement, the subscription monies payable by Mr. Tin to the Manager (for and on behalf of RREEF CCT) under the Subscription Agreement shall not be paid prior to the Settlement Date (as defined in the Subscription Agreement) and instead shall be netted-off against and be deducted from the purchase consideration payable by the Trustee (on behalf of RREEF CCT) to Mr. Tin under the Share Purchase Agreement upon Completion. Accordingly, the purchase consideration payable to Mr. Tin Lik under the Share Purchase Agreement shall be deemed reduced by the subscription amount payable by him under the Subscription Agreement.

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The rights and obligations of the Manager and Mr. Tin Lik under the Subscription Agreement are conditional upon the entry into the Underwriting Agreements by the parties thereto. If, for any reason, the Underwriting Agreements are terminated pursuant to their terms on or prior to the Listing Date, or the Units are not listed on the main board of the Hong Kong Stock Exchange by 31 December 2007:

(a) the Manager shall return to Mr. Tin Lik any subscription monies received without any interest thereon; and

(b) in the event that the Units have been issued and delivered to Mr. Tin Lik pursuant to the Subscription Agreement, Mr. Tin Lik shall cancel and/or return, or procure the cancellation of and/or return of such Units to the Manager, within three Business Days from such termination or, as the case may be, three Business Days from 31 December 2007.

UNDERWRITING AGREEMENTS

The Hong Kong Underwriting Agreement was entered into on 8 June 2007 and the International Underwriting Agreement is expected to be entered into on or about 15 June 2007. For a summary of the key terms and provisions of the Hong Kong Underwriting Agreement, see the section headed “Underwriting” in this Offering Circular.

CORPORATE INVESTOR AND PLACING AGREEMENT

The Government of Singapore Investment Corporation Pte. Ltd. (“GIC”) is a global investment management company established in 1981 to manage Singapore’s foreign reserves. With a network of eight offices in key financial capitals around the world, GIC invests internationally in equities, fixed income, foreign exchange, commodities, money markets, alternative investments, real estate and private equity. Other than in its capacity as a significant holder of RREEF CCT upon listing by virtue of its holdings in the Units, GIC is not a connected person with RREEF CCT. GIC will not have any board representation in the Manager.

As part of the International Offering, the Manager and the Joint Bookrunners have entered into a placing agreement with GIC under which GIC has agreed to subscribe for 50 million Units at the Offer Price plus the brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%. GIC’s holding in RREEF CCT will be 11.5% of the total number of the Units initially available under the Global Offering or 10.3% of the total number of the Units available under the Global Offering upon the exercise of the Over- Allotment Option.

The units subscribed for and allotted to GIC will not be subject to any clawback or reallocation in the event of an over-subscription under the Hong Kong Public Offering.

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The subscription obligation of GIC is conditional only upon the Hong Kong Underwriting Agreement and the International Underwriting Agreement being entered into and having become unconditional by the Listing Date and not being terminated in accordance with the terms of these respective agreements.

Pursuant to this placing agreement, GIC has agreed not to dispose, directly or indirectly, of its Units subscribed pursuant to the placing agreement during the period of six months following the Listing Date. For the avoidance of doubt, any allocation or crediting of the Units subscribed by GIC to GIC’s client accounts shall not constitute or be deemed a disposal as described above.

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DETAILS OF CONNECTED PARTY TRANSACTIONS B2(o)/ B2(p)

Following completion of the Global Offering, there will be continuing transactions between RREEF CCT and the following persons noted below, which will constitute connected party transactions of RREEF CCT within the meaning of the REIT Code. Details of these transactions as well as the modifications or waivers sought by RREEF CCT in relation to the relevant provisions in Chapter 8 of the REIT Code on connected party transactions are set out below.

INTRODUCTION

Following completion of the Global Offering there will be, and it is likely that there will continue to occur from time to time, a number of transactions between RREEF CCT and the other companies or entities held or controlled by RREEF CCT (collectively, the “RREEF CCT Group”) and parties which have a relationship or connection with RREEF CCT (such parties, including the Manager, collectively the “Connected Group”).

The REIT Code contains rules (the “connected party rules”) governing transactions between the RREEF CCT Group and certain defined categories of “connected persons” within the meaning given in the REIT Code. Such transactions will constitute “connected party transactions” for the purposes of the REIT Code.

As well as “significant holders” (that is, holders of 10.0% or more of the outstanding Units), RREEF CCT’s “connected persons” will include, among others:

(i) the Trustee and companies within the same group or otherwise “associated” with the Trustee (the “Trustee Connected Persons”) within the meaning given in the REIT Code. As a result, the list of “connected persons” of RREEF CCT will include HSBC Holdings plc. (“HSBC”) and other members of its group because the Trustee is an indirect wholly-owned subsidiary of HSBC;

(ii) the Manager and companies within the same group or otherwise “associated” with the Manager within the meaning given in the REIT Code. As a result, the list of “connected persons” of RREEF CCT will include Deutsche Bank AG (“DB”) and other members of its group because the Manager is indirectly owned as to 80.0% by DB, as well as Mr. Tin Lik and other companies controlled by Mr. Tin Lik because the Manager is owned as to 20.0% by Mr. Tin Lik; and

(iii) the directors of the Manager and their respective “Associates” as defined in the REIT Code. For this purpose, the “Associates” of the directors of the Manager include (among others) other companies of which they are directors.

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The Manager has applied for, and the SFC has granted, certain waivers from strict compliance with the REIT Code with respect to certain transactions (a) between the RREEF CCT Group and the Manager Group (as defined below); (b) between the RREEF CCT Group and the Tin’s Group (as defined below); and (c) between the RREEF CCT Group and the Trustee Connected Persons. These waivers are subject to the conditions mentioned under the sub-section headed “Waivers for Certain Transactions” below.

INTERNAL CONTROLS

The Manager has established an internal control system intended to ensure that connected party transactions between the RREEF CCT Group and its “connected persons” are monitored and that they are undertaken on terms in compliance with the REIT Code. As required by the REIT Code, all connected party transactions must be carried out at arm’s length terms and in the best interest of the Unitholders.

As a general rule, the Manager must demonstrate to the Audit, Risk and Compliance Committee that all connected party transactions satisfy the foregoing criteria, which may entail (where practicable) obtaining quotations from parties unrelated to the Manager, or obtaining one or more valuation from independent professional valuers.

The Manager is required to investigate and monitor all transactions by RREEF CCT in order to determine whether such transactions are connected party transactions. Furthermore, the Manager is required to maintain a register to record all connected party transactions which are entered into by RREEF CCT and the bases, including any quotations from unrelated parties and independent valuations obtained to support such bases, on which they are entered into. The Manager is also required to incorporate into its internal audit plan a review of all connected party transactions entered into by RREEF CCT. The Audit, Risk and Compliance Committee shall review the internal audit reports to ascertain that the guidelines and procedures established to monitor connected party transactions have been complied with, and among others, whether the transactions are fair and reasonable. In addition, the Trustee will also have the right to review such audit reports to ascertain that the REIT Code has been complied with.

With respect to leases of real estate by members of the RREEF CCT Group in the ordinary course of business, transactions shall be evaluated for these purposes by reference to the value of rental for the term of the lease.

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WAIVERS FOR CERTAIN TRANSACTIONS

Waivers for Certain Connected Party Transactions between the RREEF CCT Group and the Tin’s Group

The SFC has granted a waiver from strict compliance with the disclosure and the Unitholders’ approval requirements under Chapter 8 of the REIT Code in respect of the leasing and licensing transactions between the RREEF CCT Group and the Tin’s Group, including transactions that are to be entered into in the ordinary course of the leasing business of RREEF CCT and transacted on normal arm’s length commercial terms with any person who is a “connected person” of RREEF CCT as a result of its connection with Mr. Tin Lik, the significant holder of RREEF CCT (assuming the Over-allotment Option is not exercised) and the director of the Manager (but excluding the Manager Group, which is dealt with under the sub-section headed “Waivers for Certain Connected Party Transactions between the RREEF CCT Group and the Manager Group” below) (the “Tin’s Group”).

Pursuant to such waiver, any connected party transactions falling within the category 8.2 mentioned above need not be disclosed as connected party transactions and are not subject to the Unitholders’ approval subject to the conditions imposed by the SFC set out below.

Waiver Conditions

(a) Extensions or modifications

The waiver in the preceding paragraphs granted by the SFC has been granted for a period commencing from and including the Listing Date and to expire on 31 December 2009. The waiver may be extended beyond 31 December 2009, and/or the conditions of the waiver may be modified from time to time, provided that:

(i) the approval of the Unitholders (other than those who have a material interest in the relevant transactions within the meaning of Paragraph 8.11 of the REIT Code) (“Independent Unitholders”) is obtained by way of an Ordinary Resolution passed in a general meeting of the Unitholders;

(ii) disclosure of details of the proposed extension and/or modification (as the case may be) shall be made by way of an announcement by the Manager of such proposal, and a circular and notice shall be issued to the Unitholders in accordance with Chapter 10 of the REIT Code; and

(iii) any extension of the period of the waiver shall, on each occasion of such extension, be for a period which shall expire not later than the third full financial year-end date of RREEF CCT after the date on which the approval referred to in (i) above is obtained.

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(b) Annual limits

The annual value of the connected party transactions described in the above shall not exceed the annual limits set out in the following table:

For the period from the Listing For the year For the year Date1 to ending ending 31 December 31 December 31 December Category of connected party transactions 2007 2008 2009

Leases with the Tin’s Group2 ...... HK$13,384,0003 HK$16,060,0003 HK$16,060,0003

Notes:

1. Assuming the Listing Date is Friday, 22 June 2007.

2. Including the licence to use the staff canteen by Beijing Bestride International Club Limited and the supplemental agreements as set out in section headed “The Property”.

3. These proposed caps are rounded up to the nearest thousand for convenience.

In respect of such leasing transactions, an independent valuation will be conducted for each such transaction except where they are contracted on standard or published rates.

Details of the relevant connected party transactions will be disclosed in RREEF CCT’s semi-annual and annual reports, as required under paragraph 8.14 of the REIT Code.

(d) Auditors’ review procedures

In respect of each relevant financial period, the Manager shall engage and agree with the auditors of RREEF CCT to perform certain review procedures on connected party transactions. The auditors will then report to the Manager on the factual findings based on the work performed by them (and a copy of such report will be provided to the SFC), confirming whether all such connected party transactions:

(i) have received the approval of the Board (including the INEDs);

(ii) have been entered into in accordance with the pricing policies of RREEF CCT;

(iii) have been entered into in accordance with the terms of the agreements governing the transactions; and

(iv) the total value in respect of which has not exceeded the respective annual limits.

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(e) Review by the INEDs

The INEDs shall review the relevant connected party transactions annually and confirm in RREEF CCT’s annual report for the relevant financial period that such transactions have been entered into:

(i) in the ordinary and usual course of business of RREEF CCT;

(ii) on normal commercial terms (to the extent that there are comparable transactions) or, where there are not enough comparable transactions to judge whether they are on normal commercial terms, on terms no less favourable to RREEF CCT than terms available to or from (as appropriate) independent third parties; and

(iii) in accordance with the relevant agreement governing them (if any) on terms that are fair and reasonable and in the interests of the Unitholders as a whole.

(f) Auditors’ access to books and records

The Manager shall allow, and will procure the counterparty to the relevant connected party transaction to allow, the auditors of RREEF CCT sufficient access to their records for the purpose of reporting on the transactions.

(g) Notification to the SFC

The Manager shall promptly notify the SFC and publish an announcement if it knows or has reason to believe that the auditors of RREEF CCT and/or the INEDs will not be able to confirm the matters set out in paragraphs (d) and (e) above.

(h) Subsequent increase in annual limits with Independent Unitholders’ approval

If necessary, for example, where there are further asset acquisitions by RREEF CCT thereby increasing the scale of its operations generally, or where there are changes in market or operating conditions, the Manager may, from time to time in the future, seek to increase one or more of the annual limits set out in the above, provided that:

(i) the approval of Independent Unitholders is obtained by way of an Ordinary Resolution passed in a general meeting of the Unitholders;

(ii) disclosure of details of the proposal to increase the cap amounts shall be made by way of an announcement by the Manager of such proposal, and a circular and notice shall be issued to the Unitholders in accordance with Chapter 10 of the REIT Code; and

(iii) the requirements referred to in paragraphs (b) to (g) above shall continue to apply to the relevant transactions, save that the increased annual limits shall apply.

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(i) Paragraph 8.14 of the REIT Code

The Manager shall comply with all requirements under paragraph 8.14 of the REIT Code where there is any material change to the terms of the relevant connected party transactions or where there is any subsequent changes to the REIT Code which may impose stricter requirements in respect of disclosure and/or the Unitholders’ approval.

Details of the connected party transactions will be disclosed in the semi-annual and annual reports of RREEF CCT as required under paragraph 8.14 the REIT Code. The INEDs will review the connected party transactions annually and confirm whether such transactions are carried out in the ordinary and usual course of business of RREEF CCT based on normal commercial terms and in accordance with the relevant agreement governing them on terms that are fair and reasonable and in the interests of the Unitholders.

Opinion of the Board

The Board (including all the INEDs) confirms that:

(a) in its opinion, the annual limits stated above, and the basis for such annual limits, are fair and reasonable having regard to the interests of the Unitholders as a whole;

(b) for those of the continuing connected party transactions in respect of which waiver is being sought hereunder (“Continuing CPTs”) which will be subsisting as at Listing Date, in its opinion, each of such Continuing CPTs has been entered into: (i) in the ordinary and usual course of business of RREEF CCT (or its predecessor, as the case may be); and (ii) on terms which are normal commercial terms and are fair and reasonable and in the interests of the Unitholders as a whole; and

(c) for connected party transactions which are to be entered into after the Listing Date, each such connected party transaction shall be entered into: (i) in the ordinary and usual course of business of RREEF CCT; and (ii) on terms which are normal commercial terms and are fair and reasonable and in the interests of the Unitholders as a whole.

Opinion of the Joint Listing Agents

The Joint Listing Agents, in their capacity as the joint listing agents of RREEF CCT for the purposes of the authorisation of RREEF CCT under Part IV of the SFO and the listing of the Units on the Hong Kong Stock Exchange, confirm that, in their opinion, the Continuing CPTs as subsisting as at the Latest Practicable Date are in the ordinary and usual course of business of RREEF CCT, on normal commercial terms, and are fair and reasonable and in the interests of the Unitholders as a whole.

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Opinion of the Independent Property Valuer

The Independent Property Valuer confirms that the rentals/licence fees of the subject lettings were at the prevailing market levels when the leases/licences were entered into and that the other terms are normal commercial terms.

Exclusion relating to employees

A waiver is also sought from strict compliance with Rule 8.1(f) of the REIT Code such that, other than in respect of employees of the Manager itself, persons failing within the scope of “employees” in paragraphs (c) and (k) of the definition of “associate” in Schedule 1 of the SFO (such definition being imported into the REIT Code by Rule 2.1 thereof) are excluded as connected persons of RREEF CCT. In other words, the employees of the Connected Group (not including the Manager’s own employees) shall not be regarded as connected persons of RREEF CCT. For the avoidance of doubt, this exclusion would not exempt such persons from other categories of connected persons as set out in the REIT Code.

Waivers for Certain Connected Party Transactions between the RREEF CCT Group and the Manager Group

The Manager has also applied for, and the SFC has granted, waivers from strict compliance with Chapter 8 of the REIT Code in respect of certain transactions between the RREEF CCT Group and Deutsche Bank Group and other members of its group who are “connected persons” of RREEF CCT as a result of their connection with the Manager (the “Manager Group”).

For the purposes of this section, “Deutsche Bank Group” means Deutsche Bank AG and its subsidiaries and, unless otherwise expressly stated herein, excludes the Manager.

In support of the application for the waiver request, the INEDs have undertaken with the SFC to meet certain conditions, including the following general conditions (the “General Conditions”) on an on-going basis:

(a) the connected party transactions are carried out at arm’s length on normal commercial terms and in the interests of the Unitholders as a whole;

(b) the Manager must implement internal controls and compliance procedures to ensure that the connected party transactions are monitored and undertaken on terms in compliance with the REIT Code;

(c) the INEDs are satisfied with the Manager’s internal controls and compliance procedures, such as implementing Chinese walls, to ensure that the operation of the Manager is independent of other banking, financial services and other business functions and operations of the Deutsche Bank Group; and

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(d) provisions are incorporated in the trust deed that require the trustee to take action or commence proceedings as necessary (including against the Manager or its connected persons in relation to any transaction or agreement entered into for and on behalf of RREEF CCT with such persons).

Separately and for the purpose of this waiver, RC8.3(b)

(a) Deutsche Bank Group has given an undertaking to the SFC that its instruction to the Manager (that the Manager shall act in the sole interests of RREEF CCT and shall disregard any other interest of, or instructions from, Deutsche Bank AG and its subsidiaries (other than the Manager), in respect of any transactions with persons who constitute “connected persons” of RREEF CCT by virtue of their association with the Manager under the REIT Code) (“Instructions”) shall not be revoked or amended without the prior written consent of the SFC during the period in which the units of RREEF CCT are listed on Hong Kong Stock Exchange; and

(b) the Manager has given an undertaking to the SFC that it will abide by the Instructions so long as it remains an indirect subsidiary of Deutsche Bank AG and the manager of the REIT.

The waivers are given on the premises that they only apply to connected party transaction involving the persons who constitute “connected persons” of RREEF CCT solely by virtue of their association with the Manager under the REIT Code, solely and so long as Deutsche Bank AG is, directly or indirectly, a controlling shareholder of the Manager, and the Manager is in its capacity as manager of RREEF CCT. If connected party transactions arise as a result of other circumstances, they will be governed by Chapter 8 of the REIT Code.

Notwithstanding the foregoing, the SFC reserves the right to review or revise any of the terms and conditions of any of the waivers if there is any subsequent change of circumstances that affect any of them. In the event of future amendments to the REIT Code imposing more stringent requirements than those applicable at the date of the waivers granted by the SFC on transactions of the kind to which the transactions belong (including, but not limited to, a requirement that such transaction be made conditional on approval by the Independent Unitholders), the Manager shall take immediate steps to ensure compliance with such requirements within a reasonable period of time.

Ordinary Banking and Financial Services with the Deutsche Bank Group

As a general rule, the Manager must demonstrate to the Audit, Risk and Compliance Committee that such transactions satisfy the General Conditions set out above, which may entail (where practicable) obtaining quotations from parties unrelated to the Manager. For example, for non-daily “corporate finance transactions”, there should be procedures to ensure competitive “best pricing” (having regard to the nature of the services being sought and market conditions). All connected party transactions are to be reviewed by the INEDs to ensure that they are conducted in the best interests of the Unitholders as a whole.

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Based on the controls summarised above, the Manager intends to adopt and observe certain policies with respect to transactions between the RREEF CCT Group and the Deutsche Bank Group. Further, the Manager may engage the Deutsche Bank Group to provide “ordinary banking and financial services” to the RREEF CCT Group from time to time and will not be subject to any requirements for announcement, or the Unitholders’ approvals under Chapter 8 of the REIT Code. In addition, the disclosure and reporting requirements under Chapter 8 of the REIT Code with respect to such transactions shall be modified as described below. For this purpose, “ordinary banking and financial services” means:

(a) deposits and other “banking business” (as defined in the Banking Ordinance) with a Deutsche Bank Group member which is a “licensed corporation” or “registered institution” (each as defined in the SFO) or overseas equivalent (together, the “Deutsche Bank Group intermediaries”) and conducted on arm’s length commercial terms;

(b) loans extended by a Deutsche Bank Group intermediary, being a transaction in the ordinary course of business of the RREEF CCT Group and provided to, or arranged for, the RREEF CCT Group on arm’s length commercial terms; and

(c) related financial services constituting “regulated activities” (as defined in the SFO) and other banking or financial services required in the ordinary and usual course of business by the RREEF CCT Group (including foreign exchange transactions, interest rate and currency swaps and other similar derivative instruments, insurance, Occupational Retirement Scheme Ordinance (“ORSO”) retirement benefit schemes, Mandatory Provident Fund Schemes, credit cards, asset management and other such services).

For the avoidance of doubt, “ordinary banking and financial services” as described herein does not include “corporate finance transactions” which are defined in the sub-section headed “Corporate Finance Transactions” below.

Notwithstanding the above, a summary disclosure of “ordinary banking and financial services” related transactions provided by the Deutsche Bank Group to the RREEF CCT Group in each financial year has to be disclosed in the annual report of RREEF CCT. Such information shall include the nature of the transactions, types of transactions or services and identities of the connected persons of the same transactions. The INEDs shall confirm in the annual report that they have reviewed the terms of any such transactions and are satisfied that these transactions have been entered into:

(a) in the ordinary and usual course of business of RREEF CCT;

(b) on normal commercial terms (to the extent that there are comparable transactions) or, where there are not sufficient comparable transactions to judge whether they are on normal commercial terms, on terms no less favourable to RREEF CCT than terms available to or from (as appropriate) independent third parties; and

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(c) in accordance with the relevant agreement governing them on terms that are fair and reasonable and in the interests of the Unitholders as a whole.

In addition, the auditors of RREEF CCT shall be engaged to perform certain agreed upon review procedures on all such transactions and report (“Auditors’ Report”) to the Manager (which shall provide a copy of such report to the SFC) confirming that all such transactions (i) have followed the Manager’s internal procedures for such transactions and are in accordance with the terms disclosed in the offering document; (ii) have received the approval of the Board (including the INEDs); (iii) are in accordance with the pricing policies of RREEF CCT; (iv) have been entered into in accordance with the terms of the agreements governing the transactions; and (v) the total value in respect of which has not exceeded the relevant cap amount (where applicable).

Excluded Transactions

The following transactions will not be deemed connected party transactions of RREEF CCT for the purposes of Chapter 8 of the REIT Code:

(a) where the Deutsche Bank Group acts for a third party as nominee, custodian, agent or trustee and conducts “agency transactions” with the RREEF CCT Group;

(b) where a collective investment scheme (including another REIT) transacts with the RREEF CCT Group, and a company within the Deutsche Bank Group only acts as trustee of such collective investment scheme but the transaction is not a proprietary transaction of the Deutsche Bank Group; and

(c) where a member of the Deutsche Bank Group acquires, purchases, subscribes, sells or disposes of the Units on terms which are the same as available to the public or other Unitholders as a whole, and where applicable, are subject to the application and allocation rules set out in the Listing Rules. For the avoidance of doubt, any dealing by the Deutsche Bank Group (including the Manager) in the Units on the Hong Kong Stock Exchange will not be a connected party transaction.

RREEF is the real estate and infrastructure division for the asset management activities of Deutsche Bank AG, while Deutsche Bank Group has different business functions and operations, including banking, investing and financial services.

The ordinary course of business of Deutsche Bank Group includes investing in funds and there may be a possibility that Deutsche Bank Group will invest in the Units. In order to avoid any conflict of interest, each of Deutsche Bank Group and RREEF has implemented a set of “Chinese wall” procedures to ensure that the operation of RREEF is independent of the banking, investing and financial services and other business functions and operations of Deutsche Bank Group. Salient points of the Chinese wall procedures are set below:

(i) each department at RREEF and Deutsche Bank Group is under the responsibility of different staff and management teams and are located in different physical locations;

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(ii) each of RREEF and Deutsche Bank Group has imposed strict obligations of confidentiality on their respective staff members; and

(iii) each of RREEF and Deutsche Bank Group has IT firewall procedures in place restricting access to important systems and business information to authorised personnel.

Waiver for Corporate Finance Transactions with the Deutsche Bank Group

The SFC has granted a waiver from strict compliance with the requirement to make announcements and circulars (in accordance with Chapter 10 of the REIT Code) and to seek the Unitholders’ approval as set out in paragraphs 8.9 and 8.11 of the REIT Code in respect of certain “corporate finance transactions” between the RREEF CCT Group and the Deutsche Bank Group. In addition, the disclosure and reporting requirements under Chapter 8 of the REIT Code with respect to such transactions shall be modified as described in conditions (A) to (F) below. For the purpose of this waiver, “corporate finance transactions” means:

(a) underwriting, securitisation, issue of debt instruments or other securities, or other related arrangements where the Deutsche Bank Group is involved in an underwriting or arranging capacity or acts as listing agent, placing agent, stabilising manager and/or financial advisor and/or global co-coordinator to RREEF CCT, provided that these transactions are carried out at arm’s length on normal commercial terms, the primary objective of which is the offering or distribution of securities to parties outside of the Deutsche Bank Group;

(b) lending and borrowing of funds or other related arrangements in connection with any facility agreement by which the RREEF CCT Group will finance the acquisition of real estate; and

(c) “corporate advisory transactions”, namely the provision of “corporate finance advice” to the RREEF CCT Group and excludes transactions set out in (a) and (b) above provided that the aggregate fees that the Deutsche Bank Group derived from all corporate advisory transactions conducted for RREEF CCT Group during a financial year shall be capped at 6.0% of the latest published NAV of RREEF CCT.

For the avoidance of doubt, “corporate finance advice” means advice concerning:

(i) compliance with or in respect of the Listing Rules, The Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited, The Hong Kong Code on Share Repurchases or the Takeovers Code;

(ii) (I) any offer to dispose of securities to the public; (II) any offer to acquire securities from the public; or (III) acceptance of any offer referred to in (I) or (II), but only in so far as the advice is generally given to holders of securities or a class or securities; or

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(iii) corporate restructuring in respect of securities (including the issue, cancellation or variation of any rights attaching to any securities).

The above waiver is granted on condition that:

(A) the offering document and any circular for RREEF CCT includes upfront disclosure of this waiver and, with respect to those corporate finance transactions under (a) and (b) of this waiver, full disclosure of the material terms of the relevant agreements;

(B) the annual report includes disclosure of the aggregate fees paid to the Deutsche Bank Group in respect of the corporate finance transactions conducted for the RREEF CCT Group in the financial year;

(C) the annual report includes disclosure in respect of any corporate finance transaction whose fees exceed HK$1.0 million: (I) the occurrence and nature of the transaction; (II) the parties to the transaction; and (III) the date of the transaction;

(D) the annual report discloses a statement made by each of the INEDs to confirm that the corporate finance transactions described in (a), (b) and (c) have complied with the General Conditions;

(E) the annual report includes a statement by the INEDs that they have reviewed the terms of such transactions and are satisfied that they have been entered into:

(I) in the ordinary and usual course of business of RREEF CCT;

(II) on normal commercial terms (to extent that there are comparable transactions) or, where there are not sufficient comparable transactions to judge whether they are on normal commercial terms, on terms no less favourable to RREEF CCT than terms available to or from (as appropriate) independent third parties; and

(III) in accordance with the relevant agreement governing them on terms that are fair and reasonable and in the interests of the Unitholders as a whole; and

(F) the Auditors’ Report shall cover all the relevant corporate finance transactions.

Notwithstanding the above waiver, in the case where the aggregate fees that the Deutsche Bank Group generates from all “corporate advisory transactions” conducted for RREEF CCT Group during the financial year exceed 6.0% of the latest NAV of RREEF CCT as disclosed in the latest published audited accounts of RREEF CCT, the requirement in respect of connected party transactions as set out in Chapter 8 of the REIT Code shall apply. Further, for the avoidance of doubt, where by virtue of the nature of the transaction, other than the involvement of the Deutsche Bank Group in its capacity as described above under “corporate finance transactions”, an announcement has to be made pursuant to the REIT Code (and is not exempted by any waivers from announcements under the REIT Code granted by the SFC) such announcement shall disclose the role of the Deutsche Bank Group and the relevant terms of engagement in accordance with the relevant provisions of the REIT Code.

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Based on the above, the Board (including the INEDs) is of the view that:

(1) the waivers are in the interests of the Unitholders as a whole;

(2) it is satisfied with the internal control procedures of the Manager, such as implementing the Chinese walls, with respect to the independence of the Manager’s operations vis-a-vis the other banking functions/operations of the Deutsche Bank Group;

(3) each connected party transaction shall be entered into in the ordinary course of business of RREEF CCT, on normal commercial terms and in the interests of the Unitholders as a whole; and

(4) the cap amount and the basis of the cap amount in relation to the aggregate fees of the Deutsche Bank Group generated from all “corporate advisory transactions” between the Deutsche Bank Group and RREEF CCT conducted during the relevant financial year, is fair and reasonable having regard to the interest of the Unitholders as a whole.

The waiver for corporate finance transactions with the Deutsche Bank Group granted by the SFC has been granted for a period commencing from and including the Listing Date and ending on 31 December 2009. The waiver may be extended beyond 31 December 2009, and/or the conditions of the waiver may be modified from time to time, provided that:

(i) the approval of the Unitholders (other than those who have a material interest in the relevant transactions within the meaning of paragraph 8.11 of the REIT Code) (“Independent Unitholders”) is obtained by way of an Ordinary Resolution passed in a general meeting of the Unitholders;

Waivers for Certain Connected Party Transactions between the RREEF CCT Group and Trustee Connected Persons

For the purposes of this section:

(a) “HSBC Group” means The Hongkong and Shanghai Banking Corporation Limited and its subsidiaries and, unless otherwise expressly stated herein, excludes the Trustee and its proprietary subsidiaries (being the subsidiaries of the Trustee but excluding those subsidiaries formed in its capacity as the trustee of RREEF CCT);

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(b) “Trustee Connected Persons” include a director, a senior executive or an officer of the Trustee, and a controlling entity, holding company, subsidiary or associated company of the Trustee.

In support of the application for the waiver request, the Manager has undertaken with the SFC to meet certain conditions, including the following general conditions (the “HSBC General Conditions”) on an on-going basis:

(a) the connected party transactions are carried out at arm’s length on normal commercial terms and in the interests of the Unitholders as a whole;

(b) the Manager must implement internal controls and compliance procedures to ensure that the connected party transactions are monitored and undertaken on terms in compliance with the REIT Code;

(c) the Manager is satisfied with the Trustee’s internal controls and compliance procedures, such as implementing Chinese walls, to ensure that the operation of the Trustee is independent of other banking, financial services and other business functions and operations of the HSBC Group; and

(d) the Manager incorporates provisions in the Trust Deed that require the Trustee to take actions or commence proceedings on behalf of RREEF CCT, as the Manager deems necessary to protect the interest of the Unitholders, including against the Trustee Connected Persons in relation to any transaction or agreement entered into by the Trustee for and on behalf of RREEF CCT with the Trustee Connected Persons.

Separately and for the purpose of this waiver, each of the Trustee and The Hongkong and Shanghai Banking Corporation Limited (on behalf of itself and its subsidiaries) has given an undertaking to the SFC that it will act independently of one another in its dealings with RREEF CCT. The Trustee undertakes to the SFC that it will not be involved in the making of any decisions on behalf of RREEF CCT to enter into any transactions with the Trustee Connected Persons, subject only to the Trustee’s duties of oversight under the REIT Code and the Trust Deed.

The waivers are given on the premise that they only apply to connected party transactions involving the Trustee Connected Persons solely as a result of and for so long as the Trustee is in office as the trustee for RREEF CCT. If connected party transactions arise as a result of other circumstances, these will be governed by Chapter 8 of the REIT Code.

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Ordinary Banking and Financial Services with the HSBC Group

As a general rule, the Manager must demonstrate to the Audit, Risk and Compliance Committee that such transactions satisfy the HSBC General Conditions set out above, which may entail (where practicable) obtaining quotations from parties unrelated to the Trustee. For example, for non-daily “corporate finance transactions”, there should be procedures to ensure (a) competitive “best pricing” (having regard to the nature of the services being sought and market conditions) and (b) the Trustee should not be involved in the selection of the parties to the transactions. All connected party transactions are to be reviewed by the INEDs to ensure that they are conducted in the best interests of the Unitholders as a whole.

Based on the controls summarised above, the Manager intends to adopt and observe certain policies with respect to transactions between the RREEF CCT Group and the HSBC Group. Further, the Manager may engage the HSBC Group to provide “ordinary banking and financial services” to the RREEF CCT Group from time to time and will not be subject to any requirements for announcement, or the Unitholders’ approvals under Chapter 8 of the REIT Code. In addition, the disclosure and reporting requirements under Chapter 8 of the REIT Code with respect to such transactions shall be modified as described below. For this purpose, “ordinary banking and financial services” means:

(a) deposits and other “banking business” (as defined in the Banking Ordinance) with an HSBC Group member which is a “licensed corporation” or “registered institution” (as defined in the SFO) or overseas equivalent (together, the “HSBC Group intermediaries”) and conducted on arm’s length commercial terms;

(b) loans extended by an HSBC Group intermediary, being a transaction in the ordinary course of business of the RREEF CCT Group and provided to, or arranged for, the RREEF CCT Group on arm’s length commercial terms; and

(c) related financial services constituting regulated activities (as defined in the SFO) and other banking or financial services required in the ordinary and usual course of business by the RREEF CCT Group (including insurance, ORSO retirement benefit schemes, Mandatory Provident Fund Schemes, credit cards, asset management and other such services).

For the avoidance of doubt, “ordinary banking and financial services” as described herein does not include “corporate finance transactions” which are defined in the “Corporate Finance Transactions” waiver set out below.

Notwithstanding the above, a summary disclosure of “ordinary banking and financial services” related transactions provided by the HSBC Group to the RREEF CCT Group in each financial year has to be disclosed in the annual report of RREEF CCT. Such information shall include the nature of the transactions, types of transactions or services and identities of the

— 254 — CONNECTED PARTY TRANSACTIONS connected persons of the same transactions. The INEDs shall confirm in the annual report that they have reviewed the terms of any such transactions and are satisfied that these transactions have been entered into:

(a) in the ordinary and usual course of business of RREEF CCT;

(b) on normal commercial terms (to extent that there are comparable transactions) or, where there are not sufficient comparable transactions to judge whether they are on normal commercial terms, on terms no less favourable to RREEF CCT than terms available to or from (as appropriate) independent third parties; and

(c) in accordance with the relevant agreement governing them on terms that are fair and reasonable and in the interests of the Unitholders as a whole.

In addition, the auditors of RREEF CCT shall be engaged to perform certain agreed upon review procedures on and report (an “Auditors’ Report”) to the Manager (and a copy of such report shall be provided to the SFC) confirming that all such transactions (a) have followed the Manager’s internal procedures for such transactions and are in accordance with the terms disclosed in the offering document; (b) have received the approval of the Board (including the INEDs); (c) are in accordance with the pricing policies of RREEF CCT; (d) have been entered into in accordance with the terms of the agreements governing the transactions; and (e) the total value in respect of which has not exceeded the respective cap amount (where applicable).

Excluded Transactions

The following transactions will not be deemed connected party transactions of RREEF CCT for the purposes of Chapter 8 of the REIT Code:

(a) where the HSBC Group acts for a third party as nominee, custodian, agent or trustee and conducts “agency transactions” with the RREEF CCT Group;

(b) where a collective investment scheme (including another REIT) transacts with the RREEF CCT Group, and a company within the HSBC Group acts as the manager or trustee of such collective investment scheme but the transaction is not a proprietary transaction of the HSBC Group; and

(c) where a member of the HSBC Group (other than the Trustee except where the Trustee is the trustee of another collective investment scheme and is acting in that capacity) acquires, purchases, subscribes, sells or disposes of the Units on terms which are the same as available to the public or other Unitholders as a whole, and where applicable, are subject to the application and allocation rules set out in the Listing Rules. For the avoidance of doubt, any dealing by the HSBC Group in the Units on the Hong Kong Stock Exchange will not be a connected party transaction.

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Waiver for Lease or Licence Transactions with the HSBC Group

The SFC has granted a waiver from strict compliance with the requirement to make announcements and to seek the Unitholders’ prior approval as set out in paragraphs 8.9 and 8.11 of the REIT Code in respect of any lease or licence transactions entered into with the RREEF CCT Group where any member of the HSBC Group is a lessee or licensee and the disclosure and reporting requirements under Chapter 8 of the REIT Code shall be modified as described in paragraphs (c), (d) and (e) below.

The above waiver is granted on condition that:

(a) the grant of the lease or licence is negotiated and determined by the Manager and/or the Manager’s delegate on behalf of the RREEF CCT Group;

(b) an independent valuation is conducted for each of the lease or licence transactions except where they are conducted on standard or published rates;

(c) the aggregate amount of annual rent paid by the HSBC Group to the RREEF CCT Group during a financial year, together with the material terms of any lease or licence with any member of the HSBC Group under which the annual rent (per lease) exceeds HK$1 million, is disclosed in the annual report of RREEF CCT in accordance with paragraph 8.15 of the REIT Code;

(d) a statement is disclosed in the annual report by the INEDs that they have reviewed the terms of such transactions and that they are satisfied that they have been entered into:

(i) in the ordinary and usual course of business of RREEF CCT;

(ii) on normal commercial terms (to extent that there are comparable transactions) or, where there are not sufficient comparable transactions to judge whether they are on normal commercial terms, on terms no less favourable to RREEF CCT than terms available to or from (as appropriate) independent third parties; and

(iii) in accordance with the relevant agreement governing them on terms that are fair and reasonable and in the interests of the Unitholders as a whole; and

(e) the Auditors’ Report shall cover all the relevant lease transactions.

Waiver for Corporate Finance Transactions with the HSBC Group

The SFC has granted a waiver from strict compliance with the requirement under paragraphs 8.9 and 8.11 of the REIT Code to seek the Unitholders’ prior approval and to make announcements and circulars (in accordance with Chapter 10 of the REIT Code) in respect of

— 256 — CONNECTED PARTY TRANSACTIONS certain “corporate finance transactions” between the RREEF CCT Group and the HSBC Group. In addition, the disclosure and reporting requirements under Chapter 8 of the REIT Code with respect to such transactions shall be modified as described in conditions (A) to (F) below. For the purpose of this waiver, “corporate finance transactions” means:

(a) underwriting, securitisation, issue of debt instruments or other securities, or other related arrangements where the HSBC Group is involved in an underwriting or arranging capacity or acts as listing agent and/or financial advisor and/or global co-coordinator to RREEF CCT, provided that these transactions are carried out at arm’s length on normal commercial terms, the primary objective of which is the offering or distribution of securities to parties outside of the HSBC Group;

(b) lending and borrowing of funds or other related arrangements in connection with any facility agreement by which the RREEF CCT Group will finance the acquisition of real estate; and

(c) “corporate advisory transactions”, namely the provision of corporate finance advice to the RREEF CCT Group and excludes transactions set out in (a) and (b) above provided that the aggregate fees that the HSBC Group derived from all “corporate advisory transactions” conducted for the RREEF CCT Group during a financial year shall be capped at 1.0% of the latest published NAV of RREEF CCT.

For the avoidance of doubt, “corporate finance advice” means advice concerning:

(iii) corporate restructuring in respect of securities (including the issue, cancellation or variation of any rights attaching to any securities).

The above waiver is granted on condition that:

(B) the annual report includes disclosure of the aggregate fees paid to the HSBC Group in respect of the corporate finance transactions conducted for the RREEF CCT Group in the financial year;

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(D) the annual report discloses a statement made by each of the Manager and the Trustee to confirm that the corporate finance transactions described in (a), (b) and (c) have complied with the HSBC general conditions of the waiver and that the Trustee has not been involved in the making of any decision to enter into any corporate finance transaction on behalf of RREEF CCT (subject to the Trustee’s duties of oversight under the REIT Code and the Trust Deed) including the selection of the financial advisor of the transaction;

(E) the annual report includes a statement by the INEDs that they have reviewed the terms of such transactions and are satisfied that they have been entered into:

(I) in the ordinary and usual course of business of RREEF CCT;

(III) in accordance with the relevant agreement governing them on terms that are fair and reasonable and in the interests of the Unitholders as a whole; and

(F) the Auditors’ Report shall cover all the relevant corporate finance transactions.

Notwithstanding the above waiver, in the case where the aggregate fees that the HSBC Group generates from all “corporate advisory transactions” conducted for RREEF CCT Group during the financial year exceed 1.0% of the latest NAV of RREEF CCT as disclosed in the latest published audited accounts of RREEF CCT, the requirement in respect of connected party transactions as set out in Chapter 8 of the REIT Code shall apply. Further, for the avoidance of doubt, where by virtue of the nature of the transaction, other than the involvement of the HSBC Group in its capacity as described above under “corporate finance transactions”, an announcement has to be made pursuant to the REIT Code (and is not exempted by any waivers from announcements under the REIT Code granted by the SFC) such announcement shall disclose the role of the HSBC Group and the relevant terms of engagement in accordance with the relevant provisions of the REIT Code.

Based on the above, the Board (including the INEDs) is of the view that:

(1) the waivers are in the interests of the Unitholders as a whole;

(2) it is satisfied with the internal control procedures of the Trustee with respect to the independence of the Trustee’s operation vis-a-vis the other banking functions/operations of the HSBC Group;

— 258 — CONNECTED PARTY TRANSACTIONS

(3) the cap amount and the basis of the cap amount in relation to the aggregate fees of the HSBC Group generated from all “corporate advisory transactions” between the HSBC Group and RREEF CCT conducted during the relevant financial year, is fair and reasonable having regard to the interest of the Unitholders as a whole; and

(4) each connected party transaction shall be entered into in the ordinary course of business of RREEF CCT, on normal commercial terms and in the interests of the Unitholders as a whole.

THE UNITHOLDERS’ MANDATE

The Manager may at any time in the future seek a general annual mandate from the Unitholders in relation to other waivers from, or confirmations in relation to, the connected party rules for which the Manager may apply to the SFC. In order to apply to the SFC for that purpose, the general mandates must be made subject to any applicable requirements of the SFC or applicable provisions of the REIT Code. Such mandates may include continuation or extension of existing waivers (including those set out under the sub-sections headed “Waiver for Certain Connected Party Transactions between the RREEF CCT Group and the DB Connected Persons Group” and “Waiver for Certain Connected Party Transactions between the RREEF CCT Group and Trustee Connected Persons” above).

In seeking any such general mandate, the INEDs will render an opinion as to whether the methods or procedures for determining the transaction prices or other relevant terms of the transaction contemplated under the general mandate are sufficient to ensure that such transactions will be carried out on arm’s length basis and on normal commercial terms, will not be prejudicial to the interests of RREEF CCT and the Unitholders and that the terms and conditions of such transactions will be fair and reasonable.

ROLE OF THE AUDIT, RISK AND COMPLIANCE COMMITTEE FOR CONNECTED PARTY TRANSACTIONS

The Audit, Risk and Compliance Committee will periodically review (and the executive Directors or the management team of the Manager will periodically produce reports to the Audit, Risk and Compliance Committee for review of) all connected party transactions to ensure compliance with the Manager’s internal control systems and with the relevant provisions of the REIT Code. The review will include the examination of the nature of the transaction and its supporting documents or such other data deemed necessary by the Audit, Risk and Compliance Committee.

If a member of the Audit, Risk and Compliance Committee has an interest in a transaction, he or she is to abstain from participating in the review and approval process in relation to that transaction.

ANNOUNCEMENTS AND REPORTING

Connected party transactions within any of the categories referred to above will be reviewed by RREEF CCT’s auditors and will be subject to disclosure in RREEF CCT’s annual report and accounts.

— 259 — CONNECTED PARTY TRANSACTIONS

CONNECTED PARTY TRANSACTIONS IN CONNECTION WITH THE SETTING UP OF RREEF CCT AND THE GLOBAL OFFERING

The Trustee, on behalf of RREEF CCT, has entered into a number of transactions with the Manager and certain connected persons of the Manager or the Vendor in connection with the setting up of RREEF CCT and the Global Offering. These connected party transactions are as follows:

The Trust Deed

RREEF CCT is constituted by the Trust Deed entered into on 28 May 2007 between the Manager and the Trustee. For further details of the Trust Deed, see the section headed “The Trust Deed” in this Offering Circular.

Share Purchase Agreement

The Trustee (on behalf of RREEF CCT) has entered into the Share Purchase Agreement with the Vendor on 4 June 2007 for the acquisition of the BVI Property Company Share. For further details of the Share Purchase Agreement, see the section headed “Material Agreements and Other Documents” in this Offering Circular.

Deed of Tax Covenant

The Vendor will, on or before Completion, enter into the Deed of Tax Covenant in favour of the Trustee (on behalf of RREEF CCT). For further details of the Deed of Tax Covenant, see the section headed “Material Agreements and Other Documents” in this Offering Circular.

Right of First Refusal

On 31 May 2007, Mr. Tin Lik executed a letter of undertaking as a deed in favour of the Trustee and the Manager under which Mr. Tin Lik granted to RREEF CCT a right of first refusal on certain terms and conditions. For further details of the Right of First Refusal, see the section headed “Material Agreements and Other Documents” in this Offering Circular.

Subscription Agreement

By an agreement dated 31 May 2007, Mr. Tin Lik agreed to subscribe for, and the Manager agreed to issue or procure the issue of, 48,440,000 Units at a price per Unit equivalent to the Offer Price. For further details of the Subscription Agreement, see the section headed “Material Agreements and Other Documents” in this Offering Circular.

Confirmation of right to use the staff canteen

— 260 — CONNECTED PARTY TRANSACTIONS

The Predecessor Property Company has further confirmed and acknowledged that the HK Property Company could itself use the staff canteen or permit a third party to use and operate the same without any liability to the Predecessor Property Company for rent or fees. The parties have entered into a supplemental agreement on 31 May 2007 where the Predecessor Property Company further confirmed that in the event that the HK Property Company transfers part or whole of its ownership of the Property to any third party, the HK Property Company shall enjoy the right to assign its rights and obligations under the said confirmation dated 28 December 2006 as well as such supplemental agreement to that such third party. Upon the occurrence of such circumstances, the Predecessor Property Company shall enter into agreement with the HK Property Company and the relevant third party to effect the aforesaid assignment of rights and obligations.

OTHER CONTINUING TRANSACTIONS

Save as disclosed above, there are no connected transactions of which the Directors are aware of which may continue after the completion of the Global Offering.

— 261 — MODIFICATIONS, WAIVERS AND LICENSING CONDITIONS

In connection with the authorisation of RREEF CCT by the SFC, the Manager has applied to, and has received approval from, the SFC in relation to the modifications of, and waivers from, strict compliance with certain requirements of the REIT Code. A summary of such modifications and waivers is set out below.

CONNECTED PARTY TRANSACTIONS — CHAPTER 8 OF THE REIT CODE

RREEF CCT has applied to the SFC for, and has received, a waiver from strict compliance with certain provisions in Chapter 8 of the REIT Code in relation to certain continuing connected party transactions of RREEF CCT within the meaning of the REIT Code. Details of the waivers received for: (a) certain connected party transactions between RREEF CCT Group and the Manager Group; (b) certain connected party transactions between and RREEF CCT Group and the Tin’s Group; and (c) certain connected party transactions between the RREEF CCT Group and the Trustee Connected Persons, are set out in the section headed “Connected Party Transactions” in this Offering Circular.

Waiver in respect of paragraph 9.13(b) of the REIT Code

Under paragraph 9.13(b) of the REIT Code, expenses arising out of any advertising or promotional activities in connection with a real estate investment scheme (“scheme”) shall not be paid from the scheme’s property.

RREEF CCT has applied to the SFC for, and has received, a waiver from strict compliance with the requirements of paragraph 9.13(b) of the REIT Code to allow payment or reimbursement out of assets of RREEF CCT expenses on roadshow, marketing and promotional expenses incurred in relation to any fund raising exercise by or relating to RREEF CCT, any assets of RREEF CCT or otherwise in connection with RREEF CCT subject to the following conditions:

(a) The Audit, Risk and Compliance Committee shall verify periodically the amounts incurred for such roadshow, marketing or promotional expenses (collectively “PR Expenses”) by the Manager and shall confirm in the annual report of RREEF CCT that the PR Expenses are incurred (i) in accordance with the internal control procedures of the Manager; and (ii) solely for the purposes as set out in clause 2.4.1 of the Trust Deed, and review such supporting evidence that it may reasonably deem necessary;

(b) aggregate amount of the PR Expenses shall be disclosed in the relevant annual report of RREEF CCT;

(c) payment or reimbursement to the Trustee and/or the Manager of such expenses shall be made strictly in accordance with the requirements of the Trust Deed.

— 262 — MODIFICATIONS, WAIVERS AND LICENSING CONDITIONS

LICENSING CONDITIONS ON THE MANAGER

In addition to the statutory conditions set out in the SFO, the SFC has imposed the following licensing conditions upon the Manager:

(A) the Manager’s licence shall lapse and cease to have effect as and when:

(a) RREEF CCT is de-authorised; or

(b) the Manager ceases to act as the management company of RREEF CCT; and

(B) for type 9 regulated activity, the Manager shall only engage in managing RREEF CCT.

— 263 — OTHER INFORMATION

— 264 — TAXATION

The following statements are by way of a general guide to investors only and do not B15 constitute tax advice. You are therefore advised to consult your professional advisers concerning possible taxation or other consequences of purchasing, holding, selling or otherwise disposing of the Units under the laws of your country of incorporation, establishment, citizenship, residence or domicile.

You should note that the following statements are based on taxation law, regulation and practice in force at the date of this Offering Circular and may be subject to change.

PRC TAXATION OF THE HK PROPERTY COMPANY PN22(b) PN23(i) PN25(b) Withholding Income Tax

The HK Property Company is currently treated as having no permanent establishment in the PRC. As such, it is currently subject to PRC withholding tax at the rate of 10% (under a specific tax notice issued by the PRC State Council) on the Total Rental Income (with no deduction for expenses and allowances except for business tax levied on rentals). Under the New Enterprise Income Tax Law (“EIT Law”) approved by the National People’s Congress on 16 March 2007, which will be effective from 1 January 2008, the withholding tax rate applicable to rental would be increased to 20.0%, if no further action is taken by the State Council to reduce the withholding tax rate.

For gains on disposal of the Property, the HK Property Company will be subject to the PRC withholding income tax at the current prevailing rate of 10.0%, which would be increased to 20.0% from 1 January 2008 under the EIT Law (subject to reduction to be made by the State Council). The gain refers to the remaining balance after the original cost of acquisition of the property is deducted from the sale proceeds received from the transfer. The buyer of the Property has the obligation to withhold the related withholding tax before making payment to the HK Property Company.

The tax is collected by way of withholding.

Business Tax

According to the Provisional Regulations on Business Tax of the PRC, Rental Income and proceeds from the sale of the Property is subject to business tax at 5.0%.

For the business tax incurred on the Rental Income, the HK Property Company can deduct such a business tax from the Total Rental Income when calculating its PRC withholding income tax liability.

For the disposal of the second-hand Property, business tax is calculated based on the gross consideration paid for the property less the cost of the purchase of the property.

— 265 — TAXATION

The tax is collected by way of withholding. For rental income, the applicable business tax is collected by way of withholding by the Property Manager as agent of the HK Property Company. With respect to the disposal of the Property by HK Property Company, the buyer of the Property has the obligations to withhold the applicable taxes.

Urban Real Estate Tax

According to the Provisional Regulations of the PRC on Urban Real Estate Tax, landlords are subject to urban real estate tax. In Beijing, the urban real estate tax is generally imposed with reference to 70.0% of the original acquisition price of the real estate at a rate of 1.2% per annum (“the cost method”). There are however few exceptions in other PRC cities where foreign enterprises may be required to pay urban real estate tax based on their rental income at 12.0% to 18.0% (“the rental method”). The latter basis applies if the tax authorities disagree with the original cost of the real estate adopted by the taxpayer in their tax filings. Foreign enterprises, according to the local circular promulgated by the Finance Bureau of Beijing, are generally required to apply the cost method in determining their urban real estate tax liability. The HK Property Company adopts the cost method in computing urban real estate tax liability.

Urban and Town Land Use Tax

Urban and town land use tax is charged on a per square metre basis in respect of the areas occupied under the land use right with rates ranging from RMB1.5 to RMB30.0 per sq.m. per annum.

Stamp Duty

Rental contracts and property transfer contracts are subject to stamp duty at 0.1% and 0.05% of the total contract sum respectively, payable by both parties to the contracts.

Deed Tax

Deed tax is levied on the transferee (i.e the purchaser) of real properties in PRC. Deed tax is levied at the rate between 3.0% and 5.0% depending on the location and based on the transaction value of the real property.

Land Appreciation Tax

Under the Provisional Regulations of the PRC on Land Appreciation Tax, the HK Property Company is subject to land appreciation tax on the taxable gain on sale of the Property. The taxable gain is determined based on the sales proceeds after having deducted the “allowable deductions” for the building. These allowable deductions include the following items:

(a) acquisition cost of the land use right;

(b) appraised value(1) of the building; and

— 266 — TAXATION

The land appreciation tax rate is progressive, ranging from 30.0% to 60.0% of the taxable gain, depending on the appreciation value as compared with the above-mentioned “allowable deductions”.

Appreciation value Tax rates (%)

For the portion:

(a) not exceeding 50.0% of the allowable deductions...... 30.0

(b) over 50.0% but not more than 100.0% of the allowable deductions...... 40.0

(d) over 200.0% of the allowable deductions...... 60.0

Note: (1) If the “appraised value” is not available, pursuant to Caishui (2006) No. 21 and Jingcaishui (2006) No. 790, where the HK Property Company is able to provide the purchase invoice of the Property and upon confirmation by the local tax authorities, the deductible amount for calculating the appreciation value for land appreciation tax purposes can be based on the Property purchase price as stated in the purchase invoice, plus an annual 5% increase on the purchase price beginning with the year of acquisition and up to the year of disposal.

HONG KONG TAXATION OF RREEF CCT AND THE HK PROPERTY COMPANY

Profits Tax

RREEF CCT, as a collective investment scheme constituted as a unit trust and authorised under Section 104 of the Securities and Futures Ordinance, is exempt from Hong Kong profits tax. Distributions made by RREEF CCT to the Unitholders are not subject to any withholding tax in Hong Kong.

The HK Property Company is chargeable to Hong Kong profits tax in respect of any profits arising in or derived from Hong Kong from the carrying on of a trade, profession or business in Hong Kong. Rental Income derived from, and any gains arising on the disposal of, real estate located outside Hong Kong are generally regarded as income arising in or derived from outside Hong Kong and hence not subject to Hong Kong profits tax. In any event, capital gains from sale of capital assets are generally exempt from Hong Kong profits tax. Given that the HK Property Company will not generate any income subject to Hong Kong profits tax, all expenses incurred by the HK Property Company will be non-deductible for Hong Kong profits tax purposes.

The current Hong Kong profits tax rate is 17.5%.

— 267 — TAXATION

Property Tax

As the HK Property Company does not hold any real property in Hong Kong, the rental income derived by the HK Property Company is not subject to Hong Kong property tax.

Stamp Duty

No Hong Kong stamp duty is payable by RREEF CCT on the issue of new Units.

BVI TAXATION OF THE BVI PROPERTY COMPANY

The BVI Property Company is not subject to BVI taxation. There is no withholding tax imposed on dividend distribution to RREEF CCT.

HONG KONG TAXATION OF THE UNITHOLDERS

Profits Tax

It is understood that, under the Inland Revenue Department’s current practice, Hong Kong profits tax will not be payable by any investor on the distributions made by RREEF CCT. The Unitholders should take advice from their own professional advisers as to their particular tax position.

Hong Kong profits tax will not be payable by any Unitholder (other than an Unitholder carrying on a trade, profession or business in Hong Kong and holding the Units for trading purposes) on any capital gains made on the sale or other disposal of the Units.

Stamp Duty

No Hong Kong stamp duty is payable by the Unitholders in relation to the issue of the Units to them by RREEF CCT.

Hong Kong stamp duty will be payable by the purchaser on every purchase and by the seller on every sale of the Units. The duty is charged at the rate of 0.2% of the higher of the consideration paid or the value of the Units transferred (the buyer and seller each paying half of such stamp duty), regardless of whether the sale and purchase is on or off the Hong Kong Stock Exchange. In addition, a fixed duty of HK$5 is currently payable on any instrument of transfer of the Units.

— 268 — UNDERWRITING

UNDERWRITERS

Joint Global Coordinators, Bookrunners, Lead Underwriters and Listing Agents

Deutsche Bank AG, Hong Kong Branch The Hongkong and Shanghai Banking Corporation Limited

Underwriting Agreements

Pursuant to the Hong Kong Public Offering, RREEF CCT is offering the Hong Kong Public Offering Units for subscription on, and subject to, the terms and conditions of this Offering Circular and the Application Forms. Subject to the listing committee of the Hong Kong Stock Exchange granting listing of, and permission to deal in, the Units to be offered pursuant to the Global Offering as mentioned herein and to certain other conditions set out in the Hong Kong Underwriting Agreement, the Hong Kong Underwriters have agreed severally and not jointly to subscribe or procure subscribers for the Hong Kong Public Offering Units which are being offered but are not taken up under the Hong Kong Public Offering on the terms and conditions of this Offering Circular, the Application Forms and the Hong Kong Underwriting Agreement.

The Hong Kong Underwriting Agreement is conditional upon, amongst others, the execution of the International Underwriting Agreement, and vice versa.

Subject to the Joint Global Coordinators (on behalf of the Hong Kong Underwriters), the Vendor and the Manager reaching an agreement on the Offer Price, the International Underwriting Agreement is expected to be entered into on or around the Price Determination Date. The International Offering is expected to be fully underwritten by the International Underwriters on the terms of the International Underwriting Agreement.

Grounds for Termination by the Underwriters

The Joint Global Coordinators (on behalf of the Hong Kong Underwriters) may in their sole and absolute discretion terminate the Hong Kong Underwriting Agreement, and without any liability on their part, with immediate effect upon giving written notice to the Vendor and the Manager at any time at or prior to 8:00 a.m. on the Listing Date if:

(a) any of the following shall have come to the notice of the Joint Global Coordinators or the Hong Kong Underwriters after the date of the Hong Kong Underwriting Agreement:

(i) that any statement contained in this Offering Circular or any of the Application Forms (collectively, the “Hong Kong Offering Documents”) and/or any amendments or supplements thereto was or has become untrue, incorrect or misleading in any respect, the effect of which, in the judgment of the Joint Global Coordinators (on behalf of the Hong Kong Underwriters), may prejudice the successful completion of the Hong Kong Public Offering and/or the Global Offering; or

— 269 — UNDERWRITING

(ii) any matter which would, if the Hong Kong Public Offering Documents (as defined in the Hong Kong Underwriting Agreement) and/or any amendments or supplements thereto were issued at that time, constitute a material omission therefrom; or

(iii) that any of the warranties given by the Vendor or the Manager in the Hong Kong Underwriting Agreement is (or would if repeated at that time be) untrue, inaccurate, incomplete, misleading or breached in any respect, the effect of which, in the judgment of the Joint Global Coordinators (on behalf of the Hong Kong Underwriters), may prejudice the successful completion of the Hong Kong Public Offering and/or the Global Offering; or

(iv) that any event, act or omission which gives rise or is likely to give rise to any liability of any of the Vendor, the Manager or RREEF CCT under the Hong Kong Underwriting Agreement; or

(v) a demand by any creditor for repayment or payment of any indebtedness with which RREEF CCT and/or its subsidiaries are liable prior to its stated maturity; or

(vi) a petition is or maybe presented for the winding-up or liquidation of the BVI Property Company or the HK Property Company, or the BVI Property Company or the HK Property Company makes or proposes to make any composition or arrangement with its creditors or enters into a scheme or arrangement or any resolution is or is proposed to be passed for the winding-up of the BVI Property Company or the HK Property Company or a provisional liquidator, receiver or manager is appointed over all or part of the assets or undertaking of the BVI Property Company or the HK Property Company or anything analogous thereto occurs in respect of the BVI Property Company or the HK Property Company; or

(vii) any breach of any of the obligations of any party (other than the Joint Global Coordinators or either of the Underwriters) to the Hong Kong Underwriting Agreement or certain other documents including but not limited to, the Trust Deed, the International Underwriting Agreement, the Facility Agreement, the Share Purchase Agreement, the Deed of Tax Covenant and the Subscription Agreement; or

(viii) any adverse change, or any development involving a prospective adverse change, in the condition (financial or otherwise) or in the earnings, business, operations or trading position or prospects of the BVI Property Company, the HK Property Company, RREEF CCT or the Manager, or any change in capital stock or long-term debt of RREEF CCT or any of its subsidiaries, or any loss or interference with the Property from fire, explosion, flood, criminal damage or other calamity (whether or not covered by insurance) or from any labour dispute

— 270 — UNDERWRITING

or court or governmental action, order or decree, which (in any such case) in the sole and absolute opinion of the Joint Global Coordinators, impracticable or inadvisable to proceed with the Hong Kong Public Offering and/or the Global Offering; or

(ix) (1) the Trustee or the Manager seeks to retire, or is removed, as the trustee or the manager of RREEF CCT, (2) any certificate given by the Trustee or the Manager or any of their respective directors or officers to any of the Joint Global Coordinators under or in connection with the Hong Kong Underwriting Agreement or the Global Offering is false or misleading in any respect, (3) the Trustee or the Manager or any of their respective directors or senior executive officers is prosecuted for a indictable criminal offence or (4) the Trustee or the Manager is subject to any insolvency or analogous event or circumstance referred to in the Hong Kong Underwriting Agreement; or

(x) any person (other than any of the Joint Global Coordinators, the Hong Kong Underwriters, the International Underwriters or any tenants of the Property) has withdrawn or sought to withdraw its consent to being named in the Hong Kong Offering Documents, or to the issue of the Hong Kong Offering Documents; or

(xi) any matter or circumstance has arisen resulting in any forecast which appears in any of this Offering Circular or any of the Application Forms to be issued by the Manager in relation to the International Offering and other written material in connection with the Offering, becoming incapable of being met or, in the opinion of the Joint Global Coordinators, unlikely to be met.

(b) after execution of the Hong Kong Underwriting Agreement there develops, occurs, or is introduced or comes into force:

(i) any calamity or crisis or any change in financial, political or economic conditions or currency exchange rates or controls;

(ii) any new law or regulation or any change in existing law or regulation, or any change in the interpretation or application thereof by any court or other competent authority in or affecting Hong Kong, the PRC, the United States, the United Kingdom, Singapore, Australia, France, Germany, Ireland, Italy, the Netherlands, Sweden, Switzerland or the United Arab Emirates (collectively, the “Relevant Jurisdictions”); or

(iii) any event or series of events in the nature of force majeure (including without limitation, acts of government, strikes, lock-outs, fire, explosion, flooding, civil commotion, acts of war, acts of God, epidemic, accident or interruption or delay in transportation) in or affecting any of the Relevant Jurisdictions; or

— 271 — UNDERWRITING

(iv) without limiting the foregoing, any local, national, regional or international outbreak or escalation of hostilities (whether or not war is or has been declared), act of terrorism or any other state of emergency or calamity or crisis; or

(v) any tax law or other change or development involving a change or prospective change in taxation in or affecting any of the Relevant Jurisdictions having a adverse effect, or prospective adverse effect, on the Hong Kong Public Offering and/or the Global Offering, RREEF CCT or the Units (or the transfer of any Units) or an investment in the Units; or

(vi) any downgrading or the issue or giving of any notice of any intended or potential downgrading in the sovereign rating accorded to Hong Kong by any of Standard & Poor’s, Moody’s Investors Service, or Fitch Ratings, or the MSCI Real Estate Sub-Index falls by more than 1.5% below the relevant index between 5:00 p.m. on the Business Day immediately before the date of the Hong Kong Underwriting Agreement and 5:00 p.m. on the Business Day immediately preceding the Listing Date; or

(vii) the imposition or declaration of (a) any suspension or limitation on trading in shares or securities generally on the Hong Kong Stock Exchange, the New York Stock Exchange or the London Stock Exchange or (b) any moratorium on banking activities or foreign exchange trading or securities settlement or clearing services in or affecting any of the Relevant Jurisdictions (as defined above),

and which in the sole opinion of the Joint Global Coordinators acting in good faith and after consultation with the Manager, in the circumstances as set out in (b) above, (1) is, will or may be adverse to, or prejudicially affect, the business or financial or trading or other position or prospects of RREEF CCT or RREEF CCT and its subsidiaries as a whole, or (2) makes it impracticable or inadvisable to proceed with the Hong Kong Public Offering and/or the Global Offering or the delivery of the Units on the Listing Date or (3) has or will or may have a material adverse effect on the success of the Global Offering and/or make it impracticable or inadvisable for any material part of the Global Offering to be performed or implemented as envisaged.

Undertakings

RREEF CCT

Pursuant to the Hong Kong Underwriting Agreement, the Manager undertakes to the Joint Global Coordinators and the Hong Kong Underwriters that, except with the prior written consent of the Joint Global Coordinators (on behalf of themselves and the Hong Kong Underwriters) or pursuant to the Global Offering (including the Over-allotment Option) neither RREEF CCT nor any of its subsidiaries shall, during a period of 180 days from the Listing Date, and whether conditionally or unconditionally:

— 272 — UNDERWRITING

(a) allot, issue, offer, sell, contract to sell, hedge, grant any option or right to subscribe or purchase over or in respect of, or otherwise dispose of any Units or any securities exchangeable or convertible into the Units or which carry rights to subscribe for or purchase Units; or

(b) deposit Units with a depository in connection with the issue of depository receipts; or

(c) enter into a transaction (including, without limitation, a swap or other derivative transaction) that transfers, in whole or in part, any economic consequence of ownership of any Units; or

(d) offer or agree or announce any intention to do any of the foregoing.

Mr. Tin Lik

Pursuant to the Hong Kong Underwriting Agreement, Mr. Tin Lik has undertaken to the B6 Joint Global Coordinators, the Hong Kong Underwriters and RREEF CCT that, except with the prior written consent of the Joint Global Coordinators (on behalf of themselves and the Hong Kong Underwriters) or as described below, he will not, during a period of 180 days following the Listing Date, and whether conditionally or unconditionally:

(a) dispose of: (i) any Units or any direct or indirect interest therein (including, without limitation, by granting or creating any option, mortgage, pledge, charge or other security interest); or (ii) any securities exchangeable or convertible into any Units; or

(b) enter into any swap or other derivative transaction or other arrangement that transfers, in whole or in part, any economic consequence of ownership of any Units or any securities exchangeable or convertible into any Units; or

(c) dispose of any direct or indirect interest in any company or entity holding any Units or any securities exchangeable or convertible into any Units; or

(d) offer or agree or announce any intention to do any of the foregoing.

These restrictions do not apply to:

(a) the exercise of the Over-allotment Option; or

(b) the transfer of the Units pursuant to the unit borrowing agreement between Mr. Tin Lik and The Hongkong and Shanghai Banking Corporation Limited referred to under the section headed “Structure of the Global Offering”.

Commission and expenses

Under the terms and conditions of the Hong Kong Underwriting Agreement, the fees and commissions to which the Hong Kong Underwriters are entitled will comprise a gross

— 273 — UNDERWRITING underwriting commission of 2.50% on the aggregate Offer Price (which excludes brokerage, Hong Kong Stock Exchange trading fee and SFC transaction levy) of all units initially offered under the Hong Kong Public Offering. The expenses of the Global Offering (including underwriting fees and expenses, consultancy fees and expenses, legal and other professional fees and expenses and printing costs) shall be borne and paid by the relevant parties in accordance with the agreement of the Vendor, the Manager and the Underwriters.

Underwriters’ interest in RREEF CCT

Deutsche Bank AG indirectly holds 80.0% of the issued share capital of the Manager. Save for their obligations under the Hong Kong Underwriting Agreement or as otherwise disclosed in this Offering Circular or contemplated under the section headed “Ownership of the Units — the Unitholders”, the Underwriters do not own any Unit nor do they have any unitholding or shareholding interest or other ownership interest in RREEF CCT, the Trustee or the Manager or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for the Units or securities in RREEF CCT, the Trustee or the Manager.

— 274 — STRUCTURE OF THE GLOBAL OFFERING

THE GLOBAL OFFERING B8

The Global Offering comprises the Hong Kong Public Offering and the International Offering. A total of 435,960,000 Units will initially be made available under the Global Offering which consists of:

(a) the Hong Kong Public Offering of 43,596,000 Units (subject to adjustment and reallocation as mentioned below) in Hong Kong as described below under the sub-heading “The Hong Kong Public Offering”; and

(b) the International Offering of 392,364,000 Units (subject to adjustment and reallocation as mentioned below) as described below under the sub-heading “The International Offering”.

Investors may apply for the Units under the Hong Kong Public Offering or indicate an interest, if qualified to do so, for the Units under the International Offering, but not under both. Investors may only receive the Units under either the International Offering or the Hong Kong Public Offering, but not under both. The Hong Kong Public Offering is open to members of the public in Hong Kong as well as to institutional and professional investors in Hong Kong. The International Offering will involve the selective marketing of the Units to institutional and professional investors and other investors anticipated to have a sizeable demand for such Units, in each case, in Hong Kong and other jurisdictions outside the United States in offshore transactions in reliance on Regulation S. Professional investors generally include brokers, dealers and companies (including fund managers) whose ordinary business involves dealing in shares, units and other securities, and corporate entities which regularly invest in shares, units and other securities.

The number of the Units to be offered under the Hong Kong Public Offering and the International Offering may be subject to reallocation as described below in this section.

ALLOCATION

As part of the International Offering process, prospective professional, institutional and other investors will be required to specify the number of the Units they would be prepared to acquire under the International Offering either at different prices or at a particular price. This process, known as “book building”, is expected to continue up to, and to cease on or about, Thursday, 14 June 2007.

Allocation of the Units pursuant to the International Offering will be determined by Joint Global Coordinators (for and on behalf of the Underwriters) in consultation with the Manager and will be based on a number of factors including the level and timing of demand, total size of the relevant investor’s invested assets or equity assets in the relevant sector and whether or not it is expected that the relevant investors are likely to buy further Units, and/or hold or

— 275 — STRUCTURE OF THE GLOBAL OFFERING sell their Units, after the listing of the Units on the Hong Kong Stock Exchange. Such allocation is intended to result in a distribution of the International Offering Units on a basis which would lead to the establishment of a solid unitholder base to the benefit of RREEF CCT and the Unitholders as a whole.

Allocation of the Units to applicants under the Hong Kong Public Offering will be based solely on the level of valid applications received under the Hong Kong Public Offering. The basis of allocation may vary, depending on the number of Hong Kong Public Offering Units validly applied for, but, subject to that (and in accordance with the allocation of Hong Kong Public Offering Units in Pool A and Pool B described below under the subsection of “The Hong Kong Public Offering”), the allocation of Hong Kong Public Offering Units could, where appropriate, consist of balloting, which would mean that some applicants may receive a higher allocation than others who have applied for the same number of Hong Kong Public Offering Units, and those applicants who are not successful in the ballot may not receive any Hong Kong Public Offering Units.

DETERMINING THE OFFER PRICE

The Offer Price is expected to be determined by agreement among Joint Global Coordinators (on behalf of the Underwriters), the Vendor and the Manager on the Price Determination Date, following completion of the bookbuilding process for the International Offering and after assessment of the level of market demand for the Global Offering. The Price Determination Date is expected to be Friday, 15 June 2007.

The Offer Price will fall within the Offer Price range as stated in this Offering Circular unless otherwise announced, as further explained below, at any time prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. The Underwriters may, where considered appropriate, based on the level of interest expressed by prospective professional, institutional and other investors during a book building process, and with the consent of the Vendors and the Manager, reduce the indicative Offer Price range below that stated in this Offering Circular at any time prior to the morning of the last day for lodging applications under the Hong Kong Public Offering. In such a case, notices of the reduction in the indicative Offer Price range will be published in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese) not later than the morning of the day which is the last day for lodging applications under the Hong Kong Public Offering. Upon issue of such a notice, the revised Offer Price range will be final and conclusive and the Offer Price, if agreed upon by Joint Global Coordinators (on behalf of the Underwriters) with the Vendor and the Manager, will be fixed within such revised Offer Price range. Such notice will also include confirmation or revision, as appropriate, of the offer statistics as currently set out in the section headed “Offering Circular Summary” in this Offering Circular, and any other financial information which may change as a result of such reduction. If applications under the Hong Kong Public Offering have been submitted prior to the day which is the last day for lodging applications under the Hong Kong Public Offering, then if the indicative Offer Price range is so reduced, such applications cannot be subsequently withdrawn.Inthe absence of any notice being published in South China Morning Post (in English) and Hong

— 276 — STRUCTURE OF THE GLOBAL OFFERING

Kong Economic Times (in Chinese) of a reduction in the indicative Offer Price range stated in this Offering Circular on or before the morning of the last day for lodging applications under the Hong Kong Public Offering, the Offer Price will under no circumstances be set outside the Offer Price range as stated in this Offering Circular.

If the Joint Global Coordinators (on behalf of the Hong Kong Underwriters), Mr. Tin Lik and the Manager are unable to reach agreement on the Offer Price, the Global Offering will not become unconditional and will lapse.

An announcement of the Offer Price, the level of indications of interest in the International Offering, the results of applications in the Hong Kong Public Offering, the basis of allocations of the Hong Kong Public Offering Units, and the final number of Hong Kong Public Offering Units, Pool A and Pool B respectively, is expected to be published on South China Morning Post (in English) and Hong Kong Economic Times in Chinese on or before Thursday, 21 June 2007.

PRICE PAYABLE ON APPLICATION UNDER HONG KONG PUBLIC OFFERING

The Offer Price will not be more than HK$5.40 and is currently expected to be not less B8 B7 than HK$5.00. Applicants for Hong Kong Public Offering Units are required to pay, on application, the Maximum Offer Price of HK$5.40 per Hong Kong Public Offering Unit together with brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005% and SFC transaction levy of 0.004%, amounting to a total of HK$5,454.49 per board lot of 1,000 Units.

If the Offer Price, as finally determined in the manner described in the sub-section headed “Determining the Offer Price” above, is lower than the Maximum Offer Price, appropriate refund payments (including the brokerage, Hong Kong Stock Exchange trading fee and SFC transaction levy attributable to the surplus application monies) will be made to applicants, without interest. Further details are set out in the sections headed “Other Information — How to apply for Hong Kong Public Offering Units” and “Other Information — Further Terms and Conditions of the Hong Kong Public Offering” in this Offering Circular.

CONDITIONS OF THE HONG KONG PUBLIC OFFERING

All acceptances of applications for the Hong Kong Public Offering Units in the Hong Kong Public Offering are conditional upon, among other matters:

(a) Listing

The Hong Kong Stock Exchange granting listing of, and permission to deal in, all the Units to be issued as mentioned herein;

(b) Facility Agreement unconditional

The Facility Agreement having become and remaining unconditional in accordance with its terms, and the Facility having been unconditionally made available to be drawn down in the amount of not less than HK$1,400 million;

— 277 — STRUCTURE OF THE GLOBAL OFFERING

The Share Purchase Agreement becoming and remaining unconditional in accordance with its terms;

(d) Underwriting Agreements unconditional

The obligations of the Underwriters under the Underwriting Agreements becoming and remaining unconditional (including, if relevant, as a result of the waiver of any condition(s) by the Underwriters) and neither Underwriting Agreement being terminated in accordance with its terms or otherwise;

(e) SFC authorisation

The SFC having authorised this Offering Circular and the Application Forms pursuant to section 105 of the SFO; and

(f) Pricing

The Offer Price being duly determined, in the case of each of (a) to (f) above, on or before the dates and times specified in the Underwriting Agreements (unless and to the extent such conditions are validly waived on or before such dates and times).

The consummation of each of the International Offering and the Hong Kong Public Offering is conditional upon, among other things, the other becoming unconditional and not having been terminated in accordance with their terms.

If the above conditions are not fulfilled or waived prior to the times and dates specified, the Global Offering will lapse and the Hong Kong Stock Exchange will be notified immediately. Notice of the lapse of the Global Offering will be caused to be published by the Manager in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese) on the Business Day next following such lapse.

In the above situation, all application monies will be returned to applicants, without interest and on the terms set out in the section headed “Other Information — How to apply for Hong Kong Public Offering Units” in this Offering Circular. In the meantime, all application monies will be held in a separate bank account or separate bank accounts with a receiving banker or other bank(s) licensed under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong).

Unit certificates are expected to be issued by Thursday, 21 June 2007 but will only become valid at 8:00 a.m. on Friday, 22 June 2007, provided that: (i) the Global

— 278 — STRUCTURE OF THE GLOBAL OFFERING

Offering has become unconditional in all respects; and (ii) the right of termination as described in the section headed “Other Information — Underwriting Agreements — Grounds For Termination by the Underwriters” in this Offering Circular has not been exercised.

THE HONG KONG PUBLIC OFFERING

The Hong Kong Public Offering is a fully underwritten public offer (subject to satisfaction or waiver of the other conditions described in the sub-section above headed “Conditions of the Hong Kong Public Offering”) for the subscription in Hong Kong of, initially, 43,596,000 Units (representing approximately 10.0% of the total number of the Units initially available under the Global Offering) at the Offer Price.

The total number of Hong Kong Public Offering Units available under the Hong Kong Public Offering will initially be divided equally into two pools for allocation purposes: Pool A and Pool B. All valid applications that have been received for Hong Kong Public Offering Units with a total subscription amount (excluding brokerage, Hong Kong Stock Exchange trading fee and SFC transaction levy payable thereon) of HK$5 million or below will fall into Pool A (and Hong Kong Public Offering Units will be allocated on an equitable basis to successful applicants within this pool) and all valid applications that have been received for Hong Kong Public Offering Units with a total subscription amount (excluding brokerage, Hong Kong Stock Exchange trading fee and SFC transaction levy payable thereon) of more than HK$5 million will fall into Pool B (and Hong Kong Public Offering Units will be allocated on an equitable basis to successful applicants within this pool). The number of Hong Kong Public Offering Units comprised in each of Pool A and Pool B will be initially be divided equally between the two pools.

Applicants should be aware that applications in Pool A and applications in Pool B may receive different allocation ratios. Where either of the pools is undersubscribed, the surplus Hong Kong Public Offering Units will be transferred to satisfy demand in the other Pool and be allocated accordingly. Applicants can only receive an allocation of Hong Kong Public Offering Units from Pool A or Pool B but not from both pools. Multiple or suspected multiple applications and any application for more than half of the Hong Kong Public Offering Units initially available under the Hong Kong Public Offering (that is, 21,798,000 Hong Kong Public Offering Units) will be rejected. Each applicant under the Hong Kong Public Offering will also be required to give an undertaking and confirmation in the Application Form submitted by him/her/it that he/she/it and any person(s) for whose benefit he/she/it is making the application have not indicated an interest for or taken up and will not indicate an interest for or take up any International Offering Units under the International Offering, and such applicant’s application will be rejected if the said undertaking and/or confirmation is breached and/or untrue, as the case may be.

The final number of Hong Kong Public Offering Units comprised in the Hong Kong Public Offering, Pool A and Pool B respectively will, following the determination by the Underwriters,

— 279 — STRUCTURE OF THE GLOBAL OFFERING be published in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese) on Thursday, 21 June 2007 with the announcement of the Offer Price, the level of indications of interest in the International Offering, the results of applications in the Hong Kong Public Offering, and the basis of allocations of the Hong Kong Public Offering Units.

The allocation of the Units between the Hong Kong Public Offering and the International Offering is subject to adjustment by the Underwriters. The number of the Units initially available under the Hong Kong Public Offering will be approximately 10% of the total number of the Units available under the Global Offering (before taking into account any exercise of the Over-allotment Option).

In addition, if the number of the Units validly applied for under the Hong Kong Public Offering represents 15 times or more but less than 50 times the number of the Units initially available under the Hong Kong Public Offering, then the Units (other than the GIC Units) will be reallocated to the Hong Kong Public Offering from the International Offering, so that the total number of the Units available under the Hong Kong Public Offering will be at least 130,788,000 Units (representing at least 30.0% of the Units initially available under the Global Offering). If the number of the Units validly applied for under the Hong Kong Public Offering represents 50 times or more but less than 100 times the number of the Units initially available under the Hong Kong Public Offering, then the number of the Units (other than the GIC Units) to be reallocated to the Hong Kong Public Offering from the International Offering will be increased so that the total number of the Units available under the Hong Kong Public Offering will be at least 174,384,000 Units (representing at least 40.0% of the Units initially available under the Global Offering). If the number of the Units validly applied for under the Hong Kong Public Offering represents 100 times or more the number of the Units initially available under the Hong Kong Public Offering, then the number of the Units (other than the GIC Units) to be reallocated to the Hong Kong Public Offering from the International Offering will be increased, so that the total number of the Units available under the Hong Kong Public Offering will be at least 217,980,000 Units (representing at least 50.0% of the Units initially available under the Global Offering).

The Units validly applied for under the Hong Kong Public Offering Post Post (as a multiple of the 43,596,000 Units initially available) “clawback”(1) “clawback“(2)

At least At least

At least 15 times but less than 50 times ...... 130,788,000 30.0% At least 50 times but less than 100 times...... 174,384,000 40.0% At least 100 times ...... 217,980,000 50.0%

Notes: (1) Expressed as the total number of the Units to be available under the Hong Kong Public Offering post “clawback”.

(2) The Units available under the Hong Kong Public Offering expressed as an approximate percentage of the total number of the Units available under the Global Offering, before exercise of the Over-allotment Option.

— 280 — STRUCTURE OF THE GLOBAL OFFERING

In addition, in the event of an under-subscription in the Hong Kong Public Offering, the Joint Global Coordinators (for and on behalf of the Underwriters) will have the discretion to reallocate to the International Offering such number of unsubscribed Hong Kong Public Offering Units as they may deem appropriate.

The Manager, the Directors and the Hong Kong Underwriters will take reasonable steps to identify and reject applications under the Hong Kong Public Offering from investors who have received the Units in the International Offering, and to identify and reject indications of interest in the International Offering from investors who have received the Units in the Hong Kong Public Offering.

THE INTERNATIONAL OFFERING

A total of 392,364,000 Units will initially be available to investors under the International Offering. These 392,364,000 Units represent approximately 90.0% of the Units available under the Global Offering (before taking into account any exercise of the Over-allotment Option). Pursuant to the International Offering, the International Offering Units will be offered to institutional, professional and other investors by the Underwriters or through selling agents appointed by the Underwriters. International Offering Units will be offered to and placed with professional and institutional investors and other investors anticipated to have a sizeable demand for the International Offering Units in Hong Kong and other jurisdictions outside the United States in offshore transactions in reliance on Regulation S.

In addition, the International Offering Units (other than the GIC Units) may be reallocated to the Hong Kong Public Offering in the case of over-subscription under the Hong Kong Public Offering as set out in the sub-section headed “The Hong Kong Public Offering” above.

OVER-ALLOTMENT OPTION AND STABILISATION

The Over-allotment Option

In connection with the Global Offering and in connection with over-allocations in the International Offering, if any, and other stabilising action in respect of the Units, Mr. Tin Lik will grant to Joint Global Coordinators (on behalf of the Underwriters) the Over-allotment Option, which will be exercisable on one occasion at any time from the Listing Date up to (and including) the date which is the 30th day after the last day for lodging Application Forms under the Hong Kong Public Offering. Pursuant to the Over-allotment Option, Mr. Tin Lik may be required to make available up to 48,440,000 Units, representing approximately 11.1% of the total number of the Units initially available under the Global Offering, to be offered to investors as part of the International Offering. In the event that the Over-allotment Option is exercised, an announcement will be published in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese).

Stabilising Action

In connection with the Global Offering, the Stabilising Manager (or any person acting for it), may over-allocate or effect transactions with a view to supporting the market price of the

— 281 — STRUCTURE OF THE GLOBAL OFFERING

Units at a level higher than that which might otherwise prevail for a period of 30 days after the last day for lodging Application Forms under the Hong Kong Public Offering. However, there is no obligation on the Stabilising Manager (or any person acting for it) to do this. Such transactions, if commenced, may be discontinued at any time and are required to be brought to an end upon expiry of such 30-day period. The Stabilising Manager has been or will be appointed as stabilising manager for the purposes of the Global Offering and will conduct any stabilising activities (if any) on a basis as disclosed in this section headed “Over-allotment Option and Stabilisation” and equivalent to that required under the Securities and Futures (Price Stabilising) Rules made under the SFO and, should stabilising transactions be effected in connection with the Global Offering, this will be at the absolute discretion of the Stabilising Manager in accordance with the terms of the International Underwriting Agreement.

Following any over-allocation of the Units in connection with the Global Offering, the Stabilising Manager or any person acting for it may cover such over-allocation by (among other methods) making purchases in the secondary market for a period of 30 days after the last day for lodging applications under the Hong Kong Public Offering, exercising the Over-allotment Option in full or in part, making unit borrowing arrangements or by any combination of the above. Any such secondary market purchases will be made in compliance with all applicable laws and regulatory requirements and on a basis consistent with the Securities and Futures (Price Stabilising) Rules made under the SFO as if those rules were directly applicable. The number of the Units which can be over-allocated will not exceed the number of the Units under the Over-allotment Option, being 48,440,000 Units representing approximately 11.1% of the Units initially available under the Global Offering.

The Hongkong and Shanghai Banking Corporation Limited will enter into a unit borrowing agreement with the Vendor where the Vendor will agree, if requested by The Hongkong and Shanghai Banking Corporation Limited, to lend and make available to The Hongkong and Shanghai Banking Corporation Limited up to 48,440,000 Units (“Loan Units”)heldbyhimby way of unit lending upon the said unit borrowing agreement.

In order to facilitate settlement of over-allocations in connection with the Global Offering, the Stabilising Manager is expected to enter into the Unit Borrowing Agreement where The Hongkong and Shanghai Banking Corporation Limited will agree, if requested by the Stabilising Manager, to on-lend up to the Loan Units to Stabilising Manager by way of unit lending upon the terms of the Unit Borrowing Agreement in order to cover over-allocations in connection with the Global Offering.

The possible stabilising action which may be taken by the Stabilising Manager in connection with the Global Offering may involve (among other things): (i) over-allocation of the Units for the purpose of preventing or minimising any reduction in the market price of the Units, (ii) selling or agreeing to sell the Units so as to establish a short position in them for the purpose of preventing or minimising any reduction in the market price of the Units, (iii) borrowing the Units or exercising the Over-allotment Option in order to close out any position established under (i) or (ii) above, (iv) purchasing, or agreeing to purchase the Units for the

— 282 — STRUCTURE OF THE GLOBAL OFFERING sole purpose of preventing or minimising any reduction in the market price of the Units, (v) selling or agreeing to sell the Units purchased by the Stabilising Manager in the course of primary stabilising action in order to liquidate a long position established as a result of those purchases and (vi) offering or attempting to do any of the foregoing.

Specifically, prospective applicants for and investors in the Units should note that:

(a) the Stabilising Manager may, in connection with the stabilising action, maintain a long position in the Units. There is no certainty regarding the extent to which and the time period for which the Stabilising Manager will maintain such a position;

(b) liquidation of any such long position by the Stabilising Manager may have an adverse impact on the market price of the Units;

(c) no stabilising action will be taken to support the price of the Units for longer than the stabilising period which will begin on the Listing Date, and is expected to expire at the end of 14 July 2007, being the day which is expected to be the 30th day after the last day for lodging applications under the Hong Kong Public Offering. After this date, when no further action may be taken to support the price of the Units, demand for the Units, and therefore the price of the Units, could fall;

(d) the price of any security (including the Units) cannot be assured to stay at or above its offer price by the taking of any stabilising action; and

(e) stabilising bids may be made or transactions effected in the course of the stabilising action at any price at or below the Offer Price, which means that stabilising bids may be made or transactions effected at a price below the price paid by applicants for, or investors in, the Units.

These activities by the Stabilising Manager may stabilise, maintain or otherwise affect the market price of the Units. As a result, the price of the Units may be higher than the price that otherwise might exist in the open market. Any stabilising action taken by the Stabilising Manager, or any person acting for it, may not necessarily result in the market price of the Units staying at or above the Offer Price either during or after the stabilising period. Bids for or market purchases of the Units by the Stabilising Manager, or any person acting for it, may be made at a price at or below the Offer Price and therefore at or below the price paid for the Units by investors in the Global Offering.

The Manager will ensure or procure that a public announcement, on a basis consistent with the Securities and Futures (Price Stabilising) Rules as if those rules were directly applicable, will be made within seven days of the expiration of the stabilising period.

— 283 — EXPERTS

This section sets out details of the reports prepared by various experts. The Manager B22, B23 has reviewed the reports prepared by these experts.

KPMG, DTZ Debenham Tie Leung Limited and Knight Frank Petty Ltd. have each given and have not withdrawn their respective written consents to the issue of this Offering Circular with the inclusion of their reports and/or opinions and/or memorandum and/or valuation certificates and/or summary thereof (as the case may be) and/or references to their names included herein in the form and context in which they are respectively included.

KPMG is a firm of certified public accountants and the reporting accountants and auditors for the Companies.

DTZ Debenham Tie Leung Limited was responsible for: (a) conducting a valuation of the Property; (b) producing a comprehensive report in relation to the findings thereof; and (c) reviewing the forecasts of Total Rental Income for the Property and assumptions used by the Manager for the purposes of the profit forecast of RREEF CCT for the period from the Listing Date to 31 December 2007 as set out in the section headed “Profit Forecast” in this Offering Circular.

Knight Frank Petty Ltd. was responsible for: (a) carrying out a building survey on the Property and for producing a comprehensive report and executive summary in relation to the findings thereof; (b) for carrying out a comprehensive study of the office property market in Beijing and for producing a comprehensive report and executive summary in relation to the findings thereof; and (c) carrying out a comprehensive study of the commercial property market in the PRC and for producing a comprehensive report and executive summary in relation to the findings thereof.

Deutsche Bank AG, Hong Kong Branch is a deemed registered institution under the SFO to carry on types 1, 4, 6, 7 and 9 regulated activities as defined under the SFO and a licensed bank under the Banking Ordinance.

The Hongkong and Shanghai Banking Corporation Limited is a registered institution under the SFO to carry on types 1, 4 and 6 regulated activities and is also a licensed bank under the Banking Ordinance.

— 284 — HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

1 Who can apply for the Hong Kong Public Offering Units B11

If the applicant, or any person(s) for whose benefit the applicant is applying, is an individual, the applicant can apply for Hong Kong Public Offering Units if he/she/they:

(a) is/are 18 years of age or older;

(b) has/have a Hong Kong address; and

If the applicant is a firm, the application must be in the names of the individual members, not the firm’s name. If the applicant is a body corporate, the Application Form must be signed by a duly authorised officer, who must state his or her representative capacity.

If an application is made by a person duly authorised under a valid power of attorney, the Underwriters (or their respective agents or nominees) may accept it at their discretion, and subject to any conditions they think fit, including production of evidence of the authority of the attorney.

The number of joint applicants may not exceed four.

2 Methods to apply for Hong Kong Public Offering Units

An applicant may apply for Hong Kong Public Offering Units by using one of the following methods:

(a) using a WHITE or YELLOW Application Form; or

(b) electronically instructing HKSCC via CCASS to cause HKSCC Nominees to apply for Hong Kong Public Offering Units on the applicant’s behalf.

Multiple or suspected multiple applications are liable to be rejected. Please see sub-section headed “How many applications can be made” below for further details.

— 285 — HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

3 Which application method to use

Please choose the correct Application Form carefully. If an applicant does not use the correct Application Form to apply for the Hong Kong Public Offering Units, his/her/its application is liable to be rejected.

(a) WHITE Application Forms

Use a WHITE Application Form if an applicant wants the Hong Kong Public Offering Units to be registered in his/her/its own name. An applicant may apply for the Hong Kong Public Offering Units with three other joint applicants. Use a WHITE Application Form if an applicant applies on behalf of another person and wants the Hong Kong Public Offering Units to be registered in his/her/its own name as nominee.

(b) YELLOW Application Forms

Use a YELLOW Application Form if an applicant wants the Hong Kong Public Offering Units to be registered in the name of HKSCC Nominees and deposited directly into CCASS for credit to the applicant’s CCASS Investor Participant stock account or the applicant’s designated CCASS Participant’s stock account. An applicant may apply for Hong Kong Public Offering Units with three other joint applicants.

Instead of using a YELLOW Application Form, an applicant may electronically instruct HKSCC via CCASS to cause HKSCC Nominees to apply for the Hong Kong Public Offering Units on the applicant’s behalf. Any Hong Kong Public Offering Units allocated to the applicant will be registered in the name of HKSCC Nominees and deposited directly into CCASS for credit to the applicant’s CCASS Investor Participant stock account or the applicant’s designated CCASS Participant’s stock account.

4 Where to collect the Offering Circular and the Application Forms

(a) Applicants can collect a WHITE Application Form and this Offering Circular during normal business hours from 9:00 a.m. on Monday, 11 June 2007 until 12:00 noon on Thursday, 14 June 2007 or such other time or date as may subsequently be announced from any of the addresses as set out below. For further details on the times of collection of a WHITE Application Form and an Offering Circular, please refer to the sub-section headed “When to apply for Hong Kong Public Offering Units” below:

Any participant of the Hong Kong Stock Exchange

Deutsche Bank AG, 55/F, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong Branch Hong Kong

— 286 — HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

The Hongkong and 1 Queen’s Road Central, Hong Kong. Shanghai Banking Corporation Limited

or any of the following branches of the Hongkong and Shanghai Banking Corporation Limited:

Hong Kong Island ... Hong Kong Office 1 Queen’s Road Central Pacific Place Branch Shop 401, Pacific Place, 88 Queensway Des Voeux Road Central Branch China Insurance Group Bldg, 141 Des Voeux Road Central Chai Wan Branch Shop No. 1-11, Block B, G/F, Walton Estate, Chai Wan Hay Wah Building Branch G/F, Hay Wah Bldg, 71-85B Hennessy Road Wan Chai Des Voeux Road West Branch Western Centre, 40-50 Des Voeux Road West Hopewell Centre Branch Shop No.1-2, G/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai

Kowloon ...... Mong Kok Branch 673 Nathan Road, Mong Kok Kwun Tong Branch No. 1, Yue Man Square, Kwun Tong Amoy Plaza Branch Shops G193 - 200 & 203, G/F, Amoy Plaza Phase II, 77 Ngau Tau Kok Road 238 Nathan Road Branch Shop No. 1 ,1/F & Shop No. 1-3, G/F, 238 Nathan Road Ocean Centre Branch Shop 361-5, Level 3, Ocean Centre, Harbour City

New Territories ...... Tuen Mun Town Plaza Branch Shop 1, UG/F, Shopping Arcade Phase II, Tuen Mun Town Plaza, Tuen Mun Tai Po Branch 54-62 Kwong Fuk Road, Tai Po Tai Wai Branch Shops 42-44, KCR Tai Wai Station, Sha Tin

(b) Applicants can collect a YELLOW Application Form and this Offering Circular during normal business hours from 9:00 a.m. on Monday, 11 June 2007 until 12:00 noon on Thursday, 14 June 2007 from the Depository Counter of HKSCC at 2nd Floor, Vicwood Plaza, 199 Des Voeux Road Central, Hong Kong.

— 287 — HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

5 How to apply using a WHITE or YELLOW Application Form

(a) Obtain a WHITE or YELLOW Application Form as appropriate.

(b) Applicants should read the instructions in this Offering Circular and the relevant Application Form carefully. If an applicant does not follow the instructions, his/her/its application is liable to be rejected and returned by ordinary post together with the accompanying cheque or banker’s cashier order to the applicant (or the first-named applicant in the case of joint applicants) at the applicant’s own risk to the address stated on the applicant’s Application Form.

(c) Complete the Application Form in English (save as otherwise indicated) and sign it. Only written signatures will be accepted. Applications made by corporations, whether on their own behalf, or on behalf of other persons, must be stamped with the company chop (bearing the company name) and signed by a duly authorised officer, whose representative capacity must be stated. If an applicant is applying for the benefit of someone else, the applicant, rather than that person, must sign the Application Form. If it is a joint application, all applicants must sign it. If an application is made through a duly authorised attorney, the Underwriters (or their agents or nominees) may accept it at their discretion, and subject to any conditions they think fit, including production of evidence of the authority of the attorney.

(d) Each Application Form must be accompanied by either one cheque or one banker’s cashier order, which must be stapled to the top left-hand corner of the Application Form.

If payment is made by cheque, the cheque must:

(i) be in Hong Kong dollars;

(ii) be drawn on a Hong Kong dollar bank account in Hong Kong;

(iii) show the applicant’s account name, which must either be pre-printed on the cheque, or be endorsed on the back by a person authorised by the bank. This account name must be the same as the name in the Application Form. If the application is a joint application, the account name must be the same as the name of the first-named applicant;

(iv) be made payable to “HSBC Nominees (Hong Kong) Limited — RREEF China REIT Public Offer”;

— 288 — HOW TO APPLY FOR HONG KONG PUBLIC OFFERING UNITS

(v) be crossed “Account Payee Only”; and

(vi) not be post-dated.

An application is liable to be rejected if the cheque does not meet all these requirements or is dishonoured on its first presentation.

If payment is made by banker’s cashier order, the banker’s cashier order must:

(i) be in Hong Kong dollars;

(ii) be issued by a licensed bank in Hong Kong and have the applicant’s name certified on the back by a person authorised by the bank on which it is drawn. The name on the back of the banker’s cashier order and the name on the Application Form must be the same. If the application is a joint application, the name on the back of the banker’s cashier order must be the same as the name of the first-named joint applicant;

(iii) be made payable to “HSBC Nominees (Hong Kong) Limited — RREEF China REIT Public Offer”;

(iv) be crossed “Account Payee Only”; and

(v) not be post-dated.

An application is liable to be rejected if the banker’s cashier order does not meet all these requirements.

No money shall be paid to any intermediary in Hong Kong who is not licensed or B12 registered to carry on Type 1 regulated activity under Part V of the SFO.

(e) Lodge the Application Form in one of the collection boxes by the time and at one of the locations, as respectively referred to in paragraph (a) of the sub-section headed “When to apply for the Hong Kong Public Offering Units” below.

(f) Multiple or suspected multiple applications are liable to be rejected. Please see the sub-section headed “How many applications can be made” below.

(g) In order for an application made on the YELLOW Application Form to be valid:

(i) If an applicant is applying through a designated CCASS Participant (other than a CCASS Investor Participant):

— the designated CCASS Participant or its authorised signatories must sign in the appropriate box; and

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— the designated CCASS Participant must endorse the form with its company chop (bearing its company name) and insert its participant I.D. in the appropriate box.

(ii) If an applicant is applying as an individual CCASS Investor Participant:

— the applicant must fill in the applicant’s full name and Hong Kong Identity Card number; and

— the applicant must insert the applicant’s participant I.D. and sign in the appropriate box.

(iii) If an applicant is applying as a joint individual CCASS Investor Participant:

— the applicant must insert all joint CCASS Investor Participants’ names and the Hong Kong Identity Card numbers of all joint CCASS Investor Participants; and

— the applicant must insert the applicant’s participant I.D. and the authorised signatory(ies) of the CCASS Investor Participant’s stock account must sign in the appropriate box.

(iv) if an applicant is applying as a corporate CCASS Investor Participant:

— the applicant must insert the applicant’s company name and the company’s Hong Kong business registration number; and

— the applicant must fill in the applicant’s participant I.D. and stamp the applicant’s company chop (bearing the company’s name) endorsed by the authorised signatory(ies) of the CCASS Investor Participant’s stock account, in the appropriate box.

The signature(s), number of signatories and form of chop, where appropriate, in each YELLOW Application Form should match the records kept by HKSCC. Incorrect or incomplete details of the CCASS Participant or the omission or inadequacy of authorised signatory or signatories (if applicable), CCASS Participant I.D. or other similar matters may render the application invalid.

(h) Nominees who wish to submit separate applications in their names on behalf of different beneficial owners are requested to designate on each Application Form in the box marked “For nominees” an account number or other identification code for each beneficial owner or, in the case of joint beneficial owners, for each such beneficial owner. Failure to provide the account number(s) or other identification code(s) for the beneficial owner(s) will result in the application being deemed to be submitted for the benefit of the nominee(s) in question. The attention of nominees is also drawn to the sub-section headed “How many applications can be made” below.

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6 How to apply by giving electronic application instructions to HKSCC

(a) General

CCASS Participants may give electronic application instructions to HKSCC via CCASS to apply for Hong Kong Public Offering Units and to arrange payment of the money due on application and payment of refunds. This will be in accordance with their participant agreements with HKSCC and the General Rules of CCASS and the CCASS Operational Procedures.

If an applicant is a CCASS Investor Participant, the applicant may give electronic application instructions through the CCASS Phone System by calling 2979 7888 or CCASS Internet System at https://ip.ccass.com (using the procedures contained in HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time). HKSCC can also input electronic application instructions for an applicant if the applicant goes to:

HKSCC’s Customer Service Centre 2/F Vicwood Plaza, 199 Des Voeux Road Central, Hong Kong

and complete an input request form.

Offering Circulars are available for collection from the above address.

If an applicant is not a CCASS Investor Participant, the applicant may instruct his/her/its broker or custodian who is a CCASS Broker Participant or a CCASS Custodian Participant to give electronic application instructions via CCASS terminals to apply for the Hong Kong Public Offering Units.

Applicants are deemed to have authorised HKSCC and/or HKSCC Nominees to transfer the details of their applications whether submitted by themselves or through their brokers or custodians to the Manager and the Unit Registrar.

(b) Application by HKSCC Nominees

Where a WHITE Application Form is signed by HKSCC Nominees on behalf of persons who have given electronic application instructions to apply for the Hong Kong Public Offering Units:

(i) HKSCC Nominees is only acting as nominee for those persons and shall not be liable for any breach of the terms and conditions of the WHITE Application Form or this Offering Circular; and

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(ii) HKSCC Nominees does all the things on behalf of each of such persons as stated in sub-paragraphs (a) and (c) in the section headed “Further Terms and Conditions of the Hong Kong Public Offering — Effect of making any application” in this Offering Circular.

An applicant may give electronic application instructions in respect of a minimum of 1,000 Hong Kong Public Offering Units. Each electronic application instruction in respect of more than 1,000 Hong Kong Public Offering Units must be in one of the multiples set out in the table in the Application Form.

(d) Multiple applications

If an applicant is suspected of having made multiple applications or if more than one application is made for the applicant’s benefit, the number of Hong Kong Public Offering Units applied for by HKSCC Nominees will be automatically reduced by the number of Hong Kong Public Offering Units in respect of which the applicant has given such electronic application instruction and/or in respect of which such electronic application instruction have been given for the applicant’s benefit. Any electronic instructions to make an application for Hong Kong Public Offering Units given by the applicant or for the applicant’s benefit to HKSCC shall be deemed to be an actual application.

(e) Allocation of the Hong Kong Public Offering Units

For the purpose of allocating the Hong Kong Public Offering Units, HKSCC Nominees shall not be treated as an applicant. Instead, each CCASS Participant who gives electronic application instructions or each person for whose benefit each such instruction is given shall be treated as an applicant.

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Warning

Application for Hong Kong Public Offering Units by giving electronic application instructions to HKSCC is only a facility provided to CCASS Participants. The Manager, the Underwriters and any parties involved in the Hong Kong Public Offering take no responsibility for the application and provide no assurance that any CCASS Participant will be allotted any Hong Kong Public Offering Units.

To ensure that CCASS Investor Participants can give their electronic application instructions to HKSCC through the CCASS Phone System or CCASS Internet System, CCASS Investor Participants are advised not to wait until the last minute to input instructions. If CCASS Investor Participants have problems in connecting to the CCASS Phone System or CCASS Internet System for submission of electronic application instructions, they should either:

(a) submit the WHITE or YELLOW Application Form (as appropriate); or

(b) go to HKSCC’s Customer Service Centre to complete an application instruction input request form before 12:00 noon on Thursday, 14 June 2007 or such later time as described under the paragraph headed “Effect of bad weather conditions on the opening of the application lists” in the sub-section headed “When to apply for the Hong Kong Public Offering Units” below.

7 When to apply for the Hong Kong Public Offering Units

(a) WHITE or YELLOW Application Forms

Completed WHITE or YELLOW Application Forms, with a cheque or banker’s cashier order attached, must be lodged by 12:00 noon on Thursday, 14 June 2007, or, if the application lists are not open on that day, by the time and date stated in the paragraph headed “Effect of bad weather conditions on the opening of the application lists” below.

Completed WHITE or YELLOW Application Forms, with one cheque or one banker’s cashier order attached, should be deposited in the special collection boxes provided at any of the branches of The Hongkong and Shanghai Banking Corporation Limited stated above under the paragraph headed “Where to collect the Offering Circular and the Application Forms” at the following times:

Monday, 11 June 2007 — 9:00 a.m. to 4:30 p.m. Tuesday, 12 June 2007 — 9:00 a.m. to 4:30 p.m. Wednesday, 13 June 2007 — 9:00 a.m. to 4:30 p.m. Thursday, 14 June 2007 — 9:00 a.m. to 12:00 noon

Completed WHITE and YELLOW Application Forms, with one cheque or one banker’s cashier order attached, may also be submitted to the applicant’s broker allowing sufficient time for the broker to deliver the Application Form to any of the branches of The

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Hongkong and Shanghai Banking Corporation Limited stated above under the paragraph headed “Where to collect the Offering Circular and the Application Forms” by 12:00 noon on Thursday, 14 June 2007. However, if the broker fails to deliver the applicant’s Application Form to any of the abovementioned branches by 12:00 noon on Thursday, 14 June 2007, the relevant application will not be accepted and neither RREEF CCT nor anyone else connected with the Hong Kong Public Offering will be responsible for any loss incurred thereby.

(b) Electronic application instructions to HKSCC via CCASS

CCASS Broker/Custodian Participants should input electronic application instructions at the following times:

Monday, 11 June 2007 — 9:00 a.m. to 8:30 p.m.(1) Tuesday, 12 June 2007 — 8:00 a.m. to 8:30 p.m.(1) Wednesday, 13 June 2007 — 8:00 a.m. to 8:30 p.m.(1) Thursday, 14 June 2007 — 8:00 a.m.(1) to 12:00 noon

Note:

(1) These times are subject to change as HKSCC may determine from time to time with prior notification to CCASS Broker/Custodian Participants.

CCASS Investor Participants can input electronic application instructions from 9:00 a.m. on Monday, 11 June 2007 until 12:00 noon on Thursday, 14 June 2007 (24 hours daily, except the last application day).

The latest time for inputting electronic application instructions via CCASS (if the applicant is a CCASS Participant) is 12:00 noon on Thursday, 14 June 2007 or if the application lists are not open on that day, by the time and date stated in the paragraph headed “Effect of bad weather conditions on the opening of the application lists” below.

The application lists will be open from 11:45 a.m. to 12:00 noon on Thursday, 14 June 2007, except as provided in the paragraph headed “Effect of bad weather conditions on the opening of the application lists” below. Applicants should note that cheques or banker’s cashier orders will not be presented for payment before the closing of the application lists but may be presented at any time thereafter.

(d) Effect of bad weather conditions on the opening of the application lists

The application lists will be open between 11:45 a.m. and 12:00 noon on Thursday, 14 June 2007, subject to weather conditions. The application lists will not be open in relation to the Hong Kong Public Offering if there is:

(i) a tropical cyclone warning signal number 8 or above; or

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(ii) a “black” rainstorm warning signal,

in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Thursday, 14 June 2007. Instead, the application lists will be open between 11:45 a.m. and 12:00 noon on the next Business Day.

8 How many applications can be made

Multiple or suspected multiple applications are liable to be rejected.

(a) Applicants may make more than one application for the Hong Kong Public Offering Units if and only if the applicant is a nominee, in which case the applicant may make an application as a nominee by: (i) giving electronic application instructions to HKSCC (if the applicant is a CCASS Participant); and (ii) lodging more than one application in the applicant’s own name on behalf of different beneficial owners. In the box on the Application Form marked “For nominees” the applicant must include:

(i) an account number; or

(ii) some other identification number,

for each beneficial owner or, in case of joint beneficial owners, for each such beneficial owner. If the applicant does not include this information, the application will be treated as being for the applicant’s benefit.

Otherwise, multiple applications are liable to be rejected.

(b) Save as referred to above, all of the applications of an applicant under the Hong Kong Public Offering are liable to be rejected as multiple applications if the applicant, or the applicant and any other joint applicant together:

(i) makes more than one application (whether individually or jointly with others) on a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC; or

(ii) applies on one WHITE or YELLOW Application Form (whether individually or jointly with others) or by giving electronic application instructions to HKSCC to apply for more than 21,798,000 Units, being 50.0% of the Hong Kong Public Offering Units initially made available for subscription under the Hong Kong Public Offering; or

(iii) has indicated an interest for, or has received or will receive, any International Offering Units in the International Offering.

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(c) All of the applications of an applicant are also liable to be rejected as multiple applications if more than one application is made for the applicant’s benefit (including the part of the application made by HKSCC Nominees acting on electronic application instructions). If an application is made by an unlisted company and: (i) the only business of that company is dealing in securities; and (ii) the applicant exercises statutory control over that company, then the application will be treated as being for the applicant’s benefit. Unlisted company means a company with no equity securities listed on the Hong Kong Stock Exchange. Statutory control in relation to a company means the applicant: (i) controls the composition of the board of directors of that company; or (ii) controls more than half of the voting power of that company; or (iii) holds more than half of the issued share capital of that company (not counting any part of it which carries no right to participate beyond a specified amount in a distribution of either profits or capital).

9 How much to pay for the Hong Kong Public Offering Units B14(a)

Applicants must pay the Maximum Offer Price of HK$5.40 per Hong Kong Public Offering Unit, plus brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005%, and SFC transaction levy of 0.004% in full when they apply for the Hong Kong Public Offering Units. The Application Forms have tables showing the exact amount payable for multiples of the Units applied for up to 21,798,000 Units.

If an application is successful, brokerage is paid to participants of the Hong Kong Stock Exchange, the Hong Kong Stock Exchange trading fee is paid to the Hong Kong Stock Exchange, and the SFC transaction levy is paid to the SFC.

Appropriate refund payments representing the difference (if any) between the Offer Price and the Maximum Offer Price (including brokerage, Hong Kong Stock Exchange trading fee and SFC transaction levy attributable to the surplus application monies) will be made to successful applicants without interest.

10 Publication of results

For details please refer to the section headed “Further Terms and Conditions of the Hong Kong Public Offering — Publication of results” in this Offering Circular.

11 Dispatch/collection of Unit certificates and refund of application monies

For details please refer to the sub-sections headed “If an application for the Hong Kong Public Offering Units is successful (in whole or in part)” and “Refund of money — additional information” in the section headed “Further Terms and Conditions of the Hong Kong Public Offering” in this Offering Circular.

12 Commencement of dealings in the Units on the Hong Kong Stock Exchange

Dealings in the Units on the Hong Kong Stock Exchange are expected to commence on Friday, 22 June 2007. The Units will be traded on the Hong Kong Stock Exchange in board lots of 1,000 Units each. The stock code of the Units is 625.

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Units will be eligible for CCASS

Subject to the granting of listing of, and permission to deal in, the Units on the Stock Exchange as well as the compliance with the stock admission requirements of HKSCC, the Units will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in the Units on the Hong Kong Stock Exchange or on any other date HKSCC chooses. Settlement of transactions between participants of the Hong Kong Stock Exchange is required to take place in CCASS on the second Business Day after any trading day.

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

All necessary arrangements have been made for the Units to be admitted into CCASS.

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1 General

(a) If an applicant applies for Hong Kong Public Offering Units in the Hong Kong Public Offering, the applicant will be agreeing with the Manager and the Joint Global Coordinators (on behalf of the Hong Kong Underwriters) as set out below.

(b) If an applicant electronically instructs HKSCC via CCASS to cause HKSCC Nominees to apply for the Hong Kong Public Offering Units on the applicant’s behalf, the applicant will have authorised HKSCC Nominees to apply on the terms and conditions set out below, as supplemented and amended by the terms and conditions applicable to the relevant application method.

(c) In this section, references to “applicants”, “joint applicants” and other like references shall, if the context so permits, include references to both nominees and principals on whose behalf HKSCC Nominees is applying for the Hong Kong Public Offering Units; and references to the making of an application shall, if the context so permits, include references to making applications electronically by giving instructions to HKSCC.

(d) Applicants should read this Offering Circular carefully, including other terms and conditions of the Hong Kong Public Offering, and the terms and conditions set out in the sections headed “Structure of the Global Offering” and “How to apply for Hong Kong Public Offering Units” in this Offering Circular, and the relevant Application Form or imposed by HKSCC prior to making an application.

2 Offer to acquire the Hong Kong Public Offering Units

(a) Applicants offer to subscribe for at the Offer Price the number of the Hong Kong Public Offering Units indicated in their Application Forms or in their applications inputted via CCASS electronically as the case may be (or any smaller number in respect of which the application is accepted) on the terms and conditions set out in this Offering Circular and the relevant Application Form.

(b) For applicants using Application Forms, where applicable, a refund cheque in respect of the surplus application monies (if any) representing the Hong Kong Public Offering Units applied for but not allocated to them and representing the difference (if any) between the Offer Price and the Maximum Offer Price (including, in each case, the brokerage, Hong Kong Stock Exchange trading fee and SFC transaction levy attributable thereto), is expected to be sent to them at their own risk to the address stated on their Application Forms on or before Thursday, 21 June 2007.

Details of the procedure for refunds relating to each of the Hong Kong Public Offering methods are contained below in the sub-sections headed “If an application for the Hong Kong Public Offering Units is successful (in whole or in part)” and “Refund of money — additional information” in this section.

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(d) Applicants under the Hong Kong Public Offering should note that in no circumstances can applications be withdrawn once submitted.

In addition, the number of Hong Kong Public Offering Units comprised in Pool A and Pool B will not be determined until after applications have been made. Following such determination, applications in excess of the number of Hong Kong Public Offering Units finally determined to be comprised in Pool B (but not more than the initial maximum number) will be deemed to have been made at the number of Hong Kong Public Offering Units finally determined to be in Pool B.

Further information is set out in the section headed “Structure of the Global Offering — The Hong Kong Public Offering” in this Offering Circular.

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3 Acceptance of applicants’ offer

(a) The Hong Kong Public Offering Units will be allocated after the application lists close. The Manager expects to announce the Offer Price, the level of indications of interest in the International Offering, the results of applications in the Hong Kong Public Offering, the basis of allocations of the Hong Kong Public Offering Units and the final number of the Hong Kong Public Offering Units comprised in the Hong Kong Public Offering, Pool A and Pool B respectively on Thursday, 21 June 2007, in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese).

(b) The results of allocations of the Hong Kong Public Offering Units under the Hong Kong Public Offering, including the Hong Kong Identity Card numbers, passport numbers or Hong Kong business registration numbers (where applicable) of successful applicants and the number of the Hong Kong Public Offering Units successfully applied for, will be made available through a variety of channels on the dates and in the manner described in the sub-section headed “Publication of results” below.

(c) The Manager may accept an applicant’s offer to subscribe (if the application is received, valid, processed and not rejected) by announcing the basis of allocations and/or making available the results of allocations publicly.

(d) If the Manager accepts an applicant’s offer to subscribe (in whole or in part), there will be a binding contract under which the applicant will be required to subscribe for the Hong Kong Public Offering Units in respect of which the applicant’s offer has been accepted if the conditions of the Global Offering are satisfied or the Global Offering is not otherwise terminated. Further details are contained in the section headed “Structure of the Global Offering” in this Offering Circular.

(e) Applicants will not be entitled to exercise any remedy of rescission for innocent misrepresentation at any time after acceptance of their application. This does not affect any other right they may have.

4 Effect of making any application

(a) By making any application, the applicant (and if the application is made by joint applicants, each of the joint applicants jointly and severally) for himself/herself/itself or as agent or nominee and on behalf of each person for whom the applicant acts as agent or nominee:

(i) instructs and authorises the Manager, the Trustee and/or the Underwriters (or their respective agents or nominees) to execute any documents on the applicant’s behalf and to do on the applicant’s behalf all other things necessary to effect the registration of any Hong Kong Public Offering Units allocated to the applicant in the applicant’s name(s) or HKSCC Nominees, as the case may be, as required by the Trust Deed and otherwise to give effect to the arrangements described in this Offering Circular and the relevant Application Form;

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(ii) undertakes to sign all documents and to do all things necessary to enable the applicant or HKSCC Nominees, as the case may be, to be registered as the holder of the Hong Kong Public Offering Units allocated to the applicant, and as required by the Trust Deed;

(iii) represents and warrants that he/she/it understands that the Units have not been and will not be registered under the US Securities Act and the applicant is outside the United States when completing the Application Form or giving electronic application instruction and is not a US Person;

(iv) confirms that the applicant has received a copy of this Offering Circular and has only relied on the information and representations contained in this Offering Circular in making the application, and not on any other information or representation concerning RREEF CCT and agrees that none of the Manager, the Trustee or the Underwriters nor any of their respective directors, officers, employees, partners, agents or advisers will have any liability for any such other information or representations;

(v) agrees that (without prejudice to any other rights which the applicant may have) once the application has been accepted, the applicant may not rescind it because of an innocent misrepresentation;

(vi) (if the application is made for the applicant’s own benefit) warrants that in the case of the Hong Kong Public Offering, the application is the only application which will be made for the applicant’s benefit on a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC via CCASS;

(vii) (if the application is by an agent on the applicant’s behalf) warrants that the applicant has validly and irrevocably conferred on the agent all necessary power and authority to make the application;

(viii) (if the applicant is an agent for another person) warrants that reasonable enquiries have been made of that other person that the application is the only application which will be made for the benefit of that other person on a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC via CCASS, and that the applicant is duly authorised to sign the Application Form or to give electronic application instruction as that other person’s agent;

(ix) undertakes and confirms that in the case of the Hong Kong Public Offering, the applicant (if the application is made for the applicant’s benefit) or the person(s) for whose benefit the application is made has not applied for or taken up or indicated an interest in or received or been placed or allocated (including conditionally and/or provisionally) and will not apply for or take up or indicate any interest in any International Offering Units in the International Offering, nor otherwise participate in the International Offering;

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(x) warrants the truth and accuracy of the information contained in the application;

(xi) agrees to disclose to the Manager, the Trustee, the Underwriters, the Unit Registrar, the receiving bankers and their respective agents any personal data and information which they require about the applicant or the person(s) for whose benefit the applicant has made the application;

(xii) agrees that the application, any acceptance of it and the resulting contract will be governed by and construed in accordance with the laws of Hong Kong;

(xiii) undertakes and agrees to accept the Hong Kong Public Offering Units applied for, or any lesser number allocated to the applicant under the application;

(xiv) authorises the Manager and the Trustee to place the applicant(s)’ name(s) or HKSCC Nominees, as the case may be, on the register of the Unitholders as the holder(s) of any Hong Kong Public Offering Units allocated to the applicant, and the Manager, the Trustee and/or and their respective agents to send any Unit certificate(s) (where applicable) and/or any refund cheque (where applicable) to the applicant or (in case of joint applicants) the first named applicant in the Application Form by ordinary post at the applicant’s own risk to the address stated on the applicant’s Application Form (except that if an applicant has applied for 1,000,000 Hong Kong Public Offering Units or more and has indicated in the Application Form that the applicant will collect the Unit certificate(s) (where applicable) and refund cheque (where applicable) in person, the applicant may do so from the Unit Registrar from 9:00 a.m. to 1:00 p.m. on Thursday, 21 June 2007, (or any other dates notified by the Manager in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese) as the dates of dispatch and availability of Unit certificates and refund cheques);

(xv) understands that these declarations and representations will be relied upon by the Manager and the Underwriters in deciding whether or not to allocate any Hong Kong Public Offering Units in response to the applicant’s application; and

(xvi) if the laws of any place outside Hong Kong are applicable to an applicant’s application, the applicant agrees and warrants that he/she/it has complied with all such laws and none of the Manager, the Trustee or the Underwriters nor any of their respective directors, employees, partners, agents, officers or advisers will infringe any laws outside Hong Kong as a result of the acceptance of the applicant’s offer to acquire, or any actions arising from the applicant’s rights and obligations under the terms and conditions contained in this Offering Circular.

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(b) If an applicant applies for the Hong Kong Public Offering Units using a YELLOW Application Form, in addition to the confirmations and agreements referred to in (a) above, the applicant (and in the case of joint applicants, each of the joint applicants jointly and severally) agrees that:

(i) any Hong Kong Public Offering Units allocated to the applicant shall be registered in the name of HKSCC Nominees and deposited directly into CCASS for credit to the applicant’s CCASS Investor Participant stock account or the stock account of the applicant’s designated CCASS Participant, in accordance with the applicant’s election on the Application Form;

(ii) each of HKSCC and HKSCC Nominees reserves the right at its absolute discretion: (i) not to accept any or part of the Hong Kong Public Offering Units allocated to the applicant in the name of HKSCC Nominees or not to accept such allocated Hong Kong Public Offering Units for deposit into CCASS; (ii) to cause such allocated Hong Kong Public Offering Units to be withdrawn from CCASS and transferred into the applicant’s name (or, in the case of joint applicants, to the name of the first-named applicant) at the applicant’s own risk and costs; and (iii) to cause such allocated Hong Kong Public Offering Units to be issued in the applicant’s name (or, in the case of joint applicants, to the first-named applicant) and in such a case, to post the Unit certificates for such allocated Hong Kong Public Offering Units at the applicant’s own risk to the address on the applicant’s Application Form by ordinary post or to make available the same for the applicant’s collection;

(iii) each of HKSCC and HKSCC Nominees may adjust the number of the Hong Kong Public Offering Units issued in the name of HKSCC Nominees;

(iv) neither HKSCC nor HKSCC Nominees shall have any liability for the information and representations not so contained in this Offering Circular and the Application Form; and

(v) neither HKSCC nor HKSCC Nominees shall be liable to the applicant in any way.

(c) In addition, by giving electronic application instructions to HKSCC or instructing a broker or custodian who is a CCASS Broker Participant or a CCASS Custodian Participant to give such instructions to HKSCC via CCASS, an applicant (and in the case of joint applicants, each of the joint applicants jointly and severally) is deemed to do the following additional things and neither HKSCC nor HKSCC Nominees will be liable to the Manager nor any other person in respect of such things:

(i) instruct and authorise HKSCC to cause HKSCC Nominees (acting as nominee for the CCASS Participants) to apply for the Hong Kong Public Offering Units on the applicant’s behalf;

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(ii) instruct and authorise HKSCC to arrange payment of the Maximum Offer Price, brokerage, the Hong Kong Stock Exchange trading fee and the SFC transaction levy by debiting the applicant’s designated bank account and, in the case of wholly or partly unsuccessful applications and/or if the Offer Price is less than the Maximum Offer Price, refund the appropriate portion of the application money by crediting the applicant’s designated bank account; and

(iii) (in addition to the confirmations and agreements set out in paragraph (a) above) instruct and authorise HKSCC to cause HKSCC Nominees to do on the applicant’s behalf the following and any other thing which it is stated to do on the applicant’s behalf in the WHITE Application Form:

— agree that the Hong Kong Public Offering Units to be allocated shall be registered in the name of HKSCC Nominees and deposited directly into CCASS for credit to the applicant’s CCASS Investor Participant stock account or the stock account of the CCASS Participant who has inputted electronic application instructions on the applicant’s behalf;

— undertake and agree to accept the Hong Kong Public Offering Units in respect of which the applicant has given electronic application instructions or any lesser number;

— undertake and confirm that the applicant has not applied for or taken up any International Offering Units under the International Offering nor otherwise participated in the International Offering;

— (if the electronic application instructions are given for the applicant’s own benefit) declare that only one set of electronic application instructions has been given for the applicant’s benefit;

— (if the applicant is an agent for another person) declare that the applicant has given only one set of electronic application instructions for the benefit of that other person, and that the applicant is duly authorised to give those instructions as that other person’s agent;

— understand that the above declaration will be relied upon by the Manager and the Underwriters in deciding whether or not to make any allocation of the Hong Kong Public Offering Units in respect of the electronic application instructions given by the applicant and that the applicant may be prosecuted if the applicant makes a false declaration;

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— authorise the Manager and the Trustee to place the name of HKSCC Nominees on the register of the unitholders of RREEF CCT as the holder of the Hong Kong Public Offering Units allocated in respect of the applicant’s electronic application instructions and to send Unit certificates and/or refund monies in accordance with arrangements separately agreed between the Manager or the Trustee and HKSCC;

— confirm that the applicant has read the terms and conditions and application procedures set out in this Offering Circular and agrees to be bound by them;

— confirm that the applicant has only relied on the information and representations in this Offering Circular in giving the applicant’s electronic application instructions or instructing the applicant’s broker/custodian to give electronic application instructions on the applicant’s behalf;

— agree that the Manager, the Trustee, the Underwriters and any other parties involved in the Hong Kong Public Offering are liable only for the information and representations contained in this Offering Circular;

— agree (without prejudice to any other rights which the applicant may have) that once the application of HKSCC Nominees has been accepted, the application cannot be rescinded for innocent misrepresentation;

— agree to disclose the applicant’s personal data to the Manager, the Trustee, the Underwriters, the Unit Registrar, the receiving banker(s), their respective agents and advisers together with any information about the applicant which they require;

— agree that application made by HKSCC Nominees on behalf of the applicant pursuant to electronic application instructions given by the applicant is irrevocable, such agreement to take effect as a collateral contract with the Manager and to become binding when the applicant gives the instructions and such collateral contract to be in consideration of the Manager agreeing that it will not offer any Hong Kong Public Offering Units to any person except by means of one of the procedures referred to in this Offering Circular;

— agree that once the application of HKSCC Nominees is accepted, neither that application nor the applicant’s electronic application instructions can be revoked and that acceptance of that application will be evidenced by the results of the Hong Kong Public Offering made available by the Manager; and

— 305 — FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

— agree to the arrangements, undertakings and warranties specified in the participant agreement between the applicant and HKSCC, read with the General Rules of CCASS and the CCASS Operational Procedures, in respect of the giving of electronic application instructions relating to the Hong Kong Public Offering Units.

(d) The Manager, the Trustee, the Underwriters, any other parties involved in the Hong Kong Public Offering and their respective directors, officers, employees, partners, agents and advisers are entitled to rely on any warranty, representation or declaration made by the applicants in their applications.

(e) All the warranties, representations, declarations and obligations expressed to be made given or assumed by or imposed on the joint applicants shall be deemed to have been made, given or assumed by or imposed on the applicants jointly and severally.

5 Circumstances in which applicants may not be allocated Hong Kong Public Offering Units

Details of the circumstances in which applicants may not be allocated any Hong Kong Public Offering Units under the Hong Kong Public Offering are set out in the notes attached to the Application Forms, and should be read carefully. The Underwriters and their agents or nominees have full discretion to reject or accept any application, or to accept only part of any application, without having to give any reasons for any rejection or acceptance. Applicants should note in particular the following situations in which Hong Kong Public Offering Units will not be allocated to them or their applications are liable to be rejected or satisfied only in part (as applicable):

(a) If the conditions of the Hong Kong Public Offering set out in the section headed “Structure of the Global Offering — Conditions of the Hong Kong Public Offering” in this Offering Circular remain unfulfilled by Friday, 22 June 2007.

(b) If the Underwriters or their agents or nominees exercise their discretion to reject or to accept only part of an application.

(i) the application is a multiple or a suspected multiple application; or

(ii) the application is made with more than three other joint applicants; or

(iii) the Application Form is not completed correctly; or

— 306 — FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

(iv) the payment is not made correctly or payment by cheque or banker’s cashier order and the cheque or banker’s cashier order is dishonoured on its first presentation; or

(v) the applicant or the person for whose benefit the applicant is applying has applied for and/or received or will receive the Units under the International Offering; or

(vi) either of the Underwriting Agreements does not become unconditional or it is terminated in accordance with the terms thereof; or

(vii) the applicant applies for more than 21,798,000 Units, representing 50.0% of the Hong Kong Public Offering Units initially made available for subscription under the Hong Kong Public Offering; or

(viii) the application for the Units is not in one of the numbers or multiples set out in the table in the Application Form.

6 Publication of results

The announcement of the Offer Price, the level of indications of interest in the International Offering, the results of applications and allocations in the Hong Kong Public Offering, the basis of allocations of the Hong Kong Public Offering Units, the final number of Hong Kong Public Offering Units comprised in the Hong Kong Public Offering, Pool A and Pool B, respectively, is expected to be published in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese) on or before Thursday, 21 June 2007.

If an applicant is unable to locate his/her/its allocation results, he/she/it can contact the B4 (f) Unit Registrar, Tricor Investor Services Limited at 26/F, Tesbury Centre, 28 Queen’s Road East Wanchai, Hong Kong or by calling +852 2980 1333 between (i) 9:00 a.m. and 5:30 p.m. daily from Monday to Friday; and (ii) 9:00 a.m. and 12:30 p.m. on Saturday.

7 If an application for the Hong Kong Public Offering Units is successful (in whole or in part)

(a) If applicants are applying using a WHITE Application Form and the applicants elect to receive any Unit certificate(s) in their names:

(i) For those applicants who apply for less than 1,000,000 Units, or apply for 1,000,000 or more but have not opted for personal collection, their Unit certificates and (where applicable) refund cheques are expected to be sent on or before Thursday, 21 June 2007 to the address as stated in their Application Forms by ordinary post and at their own risk. Applicants should note that there is no guarantee when he/she/it will receive his/her/its Unit

— 307 — FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

certificates by post. Therefore if such applicant sells his/her/its Units in the first few days after the Units commence trading on the Hong Kong Stock Exchange, he/she/it may not receive his/her/its Unit certificates in time for settlement.

(ii) Applicants who apply on WHITE Application Forms for 1,000,000 Units or more under the Hong Kong Public Offering and have indicated in their Application Forms that they wish to collect Unit certificates and (where applicable) refund cheques in person may do so from the Unit Registrar from 9:00 a.m. to 1:00 p.m. on Thursday, 21 June 2007 (or any other dates notified by the Manager in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese) as the dates of dispatch and availability of Unit certificates and refund cheques).

(iii) Applicants being individuals who opt for personal collection cannot authorise any other person to make collection on their behalf. Applicants being corporations who opt for personal collection must attend by personal authorised representatives each bearing a letter of authorisation from the corporation stamped with the corporation’s chop. Both individuals and authorised representatives (if applicable) must produce, at the time of collection, evidence of identity acceptable to the Unit Registrar.

(iv) Uncollected Unit certificates and refund cheques will be dispatched by ordinary post to the addresses specified in the relevant Application Forms at the applicants’ own risk.

Successful applicants will receive one Unit certificate for all the Hong Kong Public Offering Units allocated to them.

(b) If: (i) applicants are applying on a YELLOW Application Form; or (ii) applicants are giving electronic application instructions to HKSCC, and in each case the applicants elect to have allocated Hong Kong Public Offering Units deposited directly into CCASS:

If an application is wholly or partly successful, the Unit certificate(s) will be issued in the name of HKSCC Nominees and deposited into CCASS for credit to the applicant’s CCASS Investor Participant stock account or the stock account of the applicant’s designated CCASS Participant as instructed by the applicant (on the Application Form or electronically, as the case may be), at the close of business on Thursday, 21 June 2007 or, under contingent situation, on any other date HKSCC or HKSCC Nominees chooses.

(i) If an applicant is applying through a designated CCASS Participant (other than a CCASS Investor Participant) on a YELLOW Application Form:

— 308 — FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

For Hong Kong Public Offering Units credited to the stock account of the applicant’s designated CCASS Participant (other than a CCASS Investor Participant), the applicant can check the number of Hong Kong Public Offering Units allocated to him/her/it with that CCASS Participant.

(ii) If an applicant is applying as a CCASS Investor Participant on a YELLOW Application Form:

The Manager is expected to make available the results of the Hong Kong Public Offering, including the results of CCASS Investor Participants’ applications, in the manner described in the sub-section headed “Publication of results” above, on Thursday, 21 June 2007. Applicants should check the results made available by the Manager and report any discrepancies to HKSCC before 5:00 p.m. on Thursday, 21 June 2007 or such other date HKSCC or HKSCC Nominees chooses. Immediately after the credit of the Hong Kong Public Offering Units to the applicants’ stock accounts, applicants can check their new account balance via the CCASS Phone System by calling +852 2979 7888 or CCASS Internet System at https://ip.ccass.com (using the procedures contained in HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time). HKSCC will also make available to the applicants an activity statement showing the number of Hong Kong Public Offering Units credited to their stock accounts.

(iii) If an applicant has given electronic application instructions to HKSCC:

The Manager is expected to make available the application results of the Hong Kong Public Offering, including the results of applications made electronically by CCASS Participants (and in the case of CCASS Broker Participants and CCASS Custodian Participants, the Manager shall include information relating to the beneficial owner, if supplied), the applicant’s Hong Kong identity card/passport/Hong Kong business registration number or other identification code (as appropriate) in the manner described in the sub-section headed “Publication of results” above, on Thursday, 21 June 2007. Applicants should check the results made available by the Manager and report any discrepancies to HKSCC before 5:00 p.m. on Thursday, 21 June 2007 or on any other date HKSCC or HKSCC Nominees chooses.

(iv) If an applicant is instructing a CCASS Broker Participant or CCASS Custodian Participant to give electronic application instructions to HKSCC on the applicant’s behalf:

Applicants can also check the number of Hong Kong Public Offering Units allocated to them and the amount of refund (if any) payable to them with that CCASS Broker Participant or CCASS Custodian Participant.

(v) If an applicant is applying as a CCASS Investor Participant by giving electronic instruction to HKSCC:

— 309 — FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

Applicants can also check the number of the Hong Kong Public Offering Units allocated to them and the amount of refund (if any) payable to them via the CCASS Phone System by calling +852 2979 7888 or CCASS Internet System at https://ip.ccass.com (using the procedures contained in HKSCC’s “An Operating Guide for Investor Participants” in effect from time to time) on Thursday, 21 June 2007. Immediately following the credit of the Hong Kong Public Offering Units to their stock accounts and the refunds to their bank accounts, HKSCC will also make available to them an activity statement showing the number of the Hong Kong Public Offering Units credited to their stock accounts and the amount of refund (if applicable) credited to their designated bank accounts.

No receipt will be issued for application monies paid. The Manager will not issue temporary documents of title.

8 Refund of money — additional information

(a) An applicant will be entitled to a refund if:

(i) the application is not successful or the conditions of the Hong Kong Public Offering are not fulfilled in accordance with the section headed “Structure of the Global Offering — Conditions of the Hong Kong Public Offering” in this Offering Circular, in which case the Manager will refund the application money together with the brokerage, Hong Kong Stock Exchange trading fee and SFC transaction levy to the applicant, without interest;

(ii) the application is accepted only in part, in which case the Manager will refund the appropriate portion of the application money together with related brokerage, the Hong Kong Stock Exchange trading fee the SFC transaction levy, without interest; and

(iii) the Offer Price (as finally determined) is less than the price per Unit initially paid by the applicant on application, in which case the Manager will refund the surplus application money together with the appropriate portion of brokerage, the Hong Kong Stock Exchange trading fee and the SFC transaction levy, without interest.

(b) If an applicant applies on a WHITE or YELLOW Application Form for 1,000,000 Units or more under the Hong Kong Public Offering and has indicated in the Application Form that the applicant wishes to collect refund cheques (if applicable) in person from the Unit Registrar, the applicant may collect the refund cheque (if any) in person from the Unit Registrar on Thursday, 21 June 2007. The procedure for collection of refund cheques for WHITE or YELLOW Application Form applicants is the same as that for WHITE Application Form applicants set out in sub-paragraph (a) of the sub-section headed “If an application for the Hong Kong Public Offering Units is successful (in whole or in part)” in this section.

— 310 — FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

(c) If an applicant applies for 1,000,000 Units or more and has not indicated in the applicant’s Application Form that it will collect its refund cheque in person or applies for less than 1,000,000 Units, the applicant’s refund cheque will be sent to the address on the applicant’s Application Form on Thursday, 21 June 2007 by ordinary post at its own risk.

(d) If an applicant is applying by giving electronic instructions to HKSCC to cause HKSCC Nominees to apply on the applicant’s behalf, all refunds are expected to be credited to the applicant’s designated bank account (if the applicant is applying as a CCASS Investor Participant) or the designated bank account of the applicant’s broker or custodian (if the applicant is applying through a CCASS Broker/Custodian Participant) on Thursday, 21 June 2007.

(e) All refunds by cheque will be crossed “Account Payee Only”, and made out to the applicants, or if the applicants are a joint applicant, to the first-named applicant on the Application Form. Part of the applicant’s Hong Kong Identity Card number/passport number, or, if the applicants are joint applicants, part of the Hong Kong Identity Card number/passport number of the first-named applicant, provided by the applicant may be printed on the refund cheque, if any. Such data would also be transferred to a third party for refund purpose. A banker may require verification of the applicant’s Hong Kong Identity Card number/passport number before encashment of the applicant’s refund cheque. Inaccurate completion of the applicant’s Hong Kong Identity Card number/passport number may lead to delay in encashment of or may invalidate the applicant’s refund cheque.

Refund cheques are expected to be dispatched on Thursday, 21 June 2007. It is intended that when processing applications, special efforts will be made to avoid delays in refunding application monies due.

9. Personal Data

Personal information collection statement

The main provisions of the Personal Data (Privacy) Ordinance (the “Ordinance”) came into effect in Hong Kong on 20 December 1996. This Personal Information Collection Statement informs the applicant for and holder of Hong Kong Public Offering Units of the policies and practices of the Trustee, the Manager and the Unit Registrar in relation to personal data and the Ordinance.

(a) Reasons for the collection of your personal data

From time to time it is necessary for applicants for the Units or registered holders of the Units to supply their latest correct personal data to the Trustee, the Manager and the Unit Registrar when applying for the Units or transferring the Units into or out of their names or in procuring the services of the Unit Registrar.

— 311 — FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

Failure to supply the requested data may result in an applicant’s application for the Units being delayed or an applicant’s application may not be considered. It may also prevent or delay registration or transfer of the Units which an applicant has successfully applied for and/or the dispatch of Unit certificate(s), and/or the dispatch or encashment of refund cheque(s) to which an applicant is entitled.

It is important that applicants inform the Trustee, the Manager and the Unit Registrar immediately of any inaccuracies in the data supplied.

(b) Purposes

The personal data of the applicants may be used, held and/or stored (by whatever means) for the following purposes:

(i) processing of an applicant’s application and refund cheque, where applicable, and verification of compliance with the terms and application procedures set out in this Offering Circular and the Application Forms and announcing results of allocations of Hong Kong Public Offering Units;

(ii) registering new issues or transfers into or out of the name of holders of the Units including, where applicable, HKSCC Nominees;

(iii) maintaining or updating the register of the unitholders of RREEF CCT;

(iv) conducting or assisting to conduct signature verifications, any verification or exchange of information;

(v) establishing entitlements of holders of the Units of RREEF CCT, such as distributions and notices;

(vi) distributing communications from or on behalf of the Trustee or the Manager in relation to RREEF CCT;

(vii) compiling statistical information and investor profiles;

(viii) enabling compliance with all applicable laws, rules and regulations (whether statutory or otherwise) in Hong Kong or elsewhere;

(ix) disclosing relevant information to facilitate claims on entitlements; and

(x) any other incidental or associated purposes relating to the above and/or enable the Trustee, the Manager and the Unit Registrar to discharge their obligations to holders of the Units and/or regulators and/or any other purposes to which the holders of the Units may from time to time agree.

— 312 — FURTHER TERMS AND CONDITIONS OF THE HONG KONG PUBLIC OFFERING

Personal data (including Hong Kong Identity Card details) held by the Trustee, the Manager and the Unit Registrar relating to the applicants and the holders of the Units will be kept confidential but the Trustee, the Manager and the Unit Registrar may, to the extent necessary for achieving the above purposes or any of them, make such enquiries as they consider necessary to confirm the accuracy of the personal data and in particular, they may disclose, obtain or transfer (whether within or outside Hong Kong) the personal data of the applicants and the holders of Unit to, from or with any and all of the following persons and entities:

(i) the Trustee, the Manager or its appointed agents such as financial advisers, receiving banker;

(ii) where applicants for the Units request deposit into CCASS, to HKSCC and HKSCC Nominees, who will use the personal data for the purposes of operating CCASS;

(iii) any broker whose company chop or other identification number has been placed on the Application Form;

(iv) any agents, contractors or third-party service providers who offer administrative, telecommunications, computer, payment or other services to the Trustee, the Manager or the Unit Registrar in connection with the operation of their respective businesses;

(v) the Hong Kong Stock Exchange, the SFC and any other statutory, regulatory or governmental bodies in Hong Kong or elsewhere; and

(vi) any other persons or institutions with which the holders of the Units have or propose to have dealings, such as their bankers, solicitors, accountants or stockbrokers.

(d) Access to and correction of personal data

The Ordinance provides applicants with rights to ascertain whether the Trustee, the Manager or the Unit Registrar holds their personal data, to obtain a copy of that data, and to correct any data that is inaccurate. In accordance with the Ordinance, the Trustee, the Manager and the Unit Registrar have the right to charge a reasonable fee for the processing of any data access request. All requests for access to data or correction of data or for information regarding policies and practices and kinds of data held should be addressed to the Trustee, the Manager, or the Unit Registrar for the attention of the privacy compliance officer.

— 313 — DEFINITIONS

— 314 — DEFINITIONS

In this Offering Circular, unless the context otherwise requires, the following terms shall have the meanings set out below:

“Acquisition” means the acquisition by RREEF CCT of the BVI Property Company Share;

“Acquisition Arrangements” means the arrangements described in the section headed “Material Agreements and Other Documents” in this Offering Circular pursuant to which RREEF CCT will acquire the BVI Property Company Share pursuant to, and under the terms of, the Share Purchase Agreement;

“Acquisition Value” means the acquisition value of the BVI Property Company Share as stated in the Share Purchase Agreement;

“Adjustment Sum” means the following:

(ii) (a) a sum of HK$22 million, which is equivalent to the amount of the up-front fee for the Facility and (b) the Issue Cost;

“Advertising Income” means income earned from leasing out the Property’s outdoor billboards;

“Annual Distributable has the meaning given to it in the section headed Income” “Distribution Policy” in this Offering Circular;

“Application Form(s)” means the white application form(s) and yellow application form(s), or where the context so requires, any of them;

“Appraised Value” means the value of the Property, as at 31 March 2007, as appraised by the Independent Property Valuer as set out in Appendix VI in this Offering Circular;

“Approved Valuer” means the Independent Property Valuer or such person which the Trustee may appoint to provide valuations of the investments of RREEF CCT in accordance with the Trust Deed;

“Articles of Association” means the articles of association of the Manager;

— 315 — DEFINITIONS

“Asset Manager” means any asset manager of the Manager;

“Associates” has the meaning given to it under the REIT Code;

“Authorised Investments” means:

(a) any land and/or interest, option or other right in or over any land (“Real Estate”) as permitted under the REIT Code;

(b) any improvement or extension of or addition to or reconstruction or renovation or other development of any Real Estate;

(d) cash and cash equivalent items;

(e) shares in the issued share capital of, and loans to, any Special Purpose Vehicle as well as any goodwill and other intangible assets acquired in relation to the acquisition of any Special Purpose Vehicle; and

(f) investments in relation to arrangements for the purposes of enhancing the return on, or reducing the risks associated with, the Authorised Investments contemplated by paragraphs (a), (b), (c), (d) and (e) of this definition, or of other Investments, or in respect of RREEF CCT generally, including investments in the form of derivatives instruments for hedging purposes,

in each case whether held by the Trustee directly or indirectly through a Special Purpose Vehicle or otherwise pursuant to the Trust Deed;

“average occupancy rate” in respect of the Property over the relevant period, is derived by dividing the sum of the occupancy rates as at the end of each month during the relevant period for the Property by the number of months in the relevant period;

“Banking Ordinance” means the Banking Ordinance (Chapter 155 of the Laws of Hong Kong);

“Base Fee” means the fee payable to the Manager not to exceed 0.4% per annum of value of the Deposited Property at the relevant time or such other rate or may be fixed or determined pursuant to the Trust Deed;

— 316 — DEFINITIONS

“BMW Group” means BMW China Automotive Trading Ltd., BMW Brilliance Automotive Ltd. and BMW Beijing Office;

“Board” means the board of directors of the Manager;

“Business Day” means a day (excluding Saturdays, Sundays, public holidays and days on which a tropical cyclone warning no. 8 or above or a “black” rainstorm warning signal is hoisted in Hong Kong at any time between the hours of 9:00 a.m. and 5:00 p.m. on weekdays) on which licensed banks are open for general banking business in Hong Kong;

“BVI” means the British Virgin Islands;

“BVI Property Company” means Beijing Gateway Plaza (BVI) Limited, a company RC 7.5(c) and (d) incorporated in the BVI, which holds all the HK Property Company Shares;

“BVI Property Company means the one issued share of US$1.00 in the capital of Share” the BVI Property Company, being the whole of the issued share capital of the BVI Property Company;

“CAGR” means compounded annual growth rate;

“Car Park Income” means income earned from the operation of the Property’s car park space;

“CBD” means Beijing’s Central Business District which is bordered by Dongdaqiao Road to the West, Xidawang Road to the East, Tonghui River to the South and Chaoyang Road to the North, with a total area of approximately 3.99 sq.km.;

“CCASS” means the Central Clearing and Settlement System established and operated by HKSCC;

“CCASS Broker Participant” means a person admitted to participate in CCASS as a broker participant;

“CCASS Custodian means a person admitted to participate in CCASS as a Participant” custodian participant;

“CCASS Investor Participant” means a person admitted to participate in CCASS as an investor participant who may be an individual or joint individuals or a corporation;

“CCASS Participant” means a CCASS Broker Participant or a CCASS Custodian Participant or a CCASS Investor Participant;

— 317 — DEFINITIONS

“Collection Account” has the meaning ascribed thereto in the section headed “Material Agreements and Other Documents — Property Management Agreement — Operating Account, Collection Account and Repatriation Account” in this Offering Circular;

“Companies” means the BVI Property Company and the HK Property Company;

“Companies Ordinance” means the Companies Ordinance (Chapter 32 of the Laws of Hong Kong);

“Completion” means the completion of the sale and purchase of the BVI Property Company Share in accordance with the Share Purchase Agreement;

“connected person” has the meaning ascribed to it in the REIT Code;

“Cummins Group” means Cummins (China) Investment Co., Ltd. and Cummins Engine Co., Ltd. Beijing Representative Office;

“Deposited Property” means all the assets of RREEF CCT for the time being held or deemed to be held upon the trust constituted by the Trust Deed;

“Deutsche Bank Group” means Deutsche Bank AG and its subsidiaries;

“Directors” means the directors of the Manager;

“distribution yield” means DPU, on an annualised basis, divided by the market price of a Unit;

“DPU” means distribution(s) per Unit;

“Existing Borrowings” has the meaning ascribed thereto in the section headed “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Indebtedness” in this Offering Circular;

“Facility” means a term loan facility of up to HK$1,400 million granted by a syndicate of banks and financial institutions to the HK Property Company for the refinancing of the Existing Borrowings;

“Facility Agreement” means the loan agreement relating to the Facility entered into by and among the HK Property Company as borrower, The Royal Bank of Scotland plc, Hong Kong Branch as mandated sole lead arranger and agent;

— 318 — DEFINITIONS

“Forecast Period” means the period from the Listing Date to 31 December 2007;

“Fund Manager” means Fund Manager of the Manager;

“GDP” means gross domestic product;

“General Grade A office means office buildings which are located in established buildings” commercial areas with easy accessibility, good supporting facilities and typical floor sizes of over 1,500 sq.m. They are developed and managed by experienced foreign/local developers and property management companies. These buildings allow limited strata-titled sales and ownership of these strata titles usually rests with reputable state-owned enterprises or international companies;

“GIC Units” means the Units to be subscribed for and allotted to GIC as described under the sub-section headed “Corporate Investor and Placing Agreement” in the section headed “Material Agreements and Other Documents” in this Offering Circular;

“Global Offering” means the Hong Kong Public Offering and the International Offering;

“Grade A office buildings” means both General Grade A office buildings and Premium Grade A office buildings;

“Grade B office buildings” means office buildings which are located in secondary commercial areas with average accessibility, some supporting facilities in their vicinity and typical floor sizes of less than 1,500 sq.m. They are usually developed and managed by local companies of average competence. Significant strata-titles sales of these buildings are common;

“Gross Floor Area” means the area contained within the external walls of a building measured at each floor level (including any floor below ground level) including the overall area of any balcony, basement, car park space, club facilities, plant and machinery rooms, and the thickness of the external walls of the building;

“HK Property Company” means HK Gateway Plaza Company Limited, a company incorporated in Hong Kong, which holds the Property;

— 319 — DEFINITIONS

“HK Property Company means all the issued and paid up ordinary shares in the Shares” HK Property Company;

“HK$” or “Hong Kong means Hong Kong dollars, the lawful currency of Hong dollars” Kong;

“HKFRS” means Hong Kong Financial Reporting Standards promulgated by the Hong Kong Institute of Certified Public Accountants (previously known as the Hong Kong Society of Accountants);

“HKGAAP” or “Hong Kong means accounting principles generally accepted in Hong GAAP” Kong;

“HKSCC” means Hong Kong Securities Clearing Company Limited;

“HKSCC Nominees” means HKSCC Nominees Limited;

“Hong Kong” or “HK” means the Hong Kong Special Administrative Region of the PRC;

“Hong Kong Public Offering” means the offer of the Units to the public in Hong Kong at the Offer Price, on and subject to the terms and conditions described in this Offering Circular and the Application Forms;

“Hong Kong Public Offering means the 43,596,000 Units initially being offered by Units” RREEF CCT pursuant to the Hong Kong Public Offering (subject to adjustment as described in the section headed “Structure of the Global Offering” in this Offering Circular);

“Hong Kong Stock means The Stock Exchange of Hong Kong Limited; Exchange”

“Hong Kong Underwriters” means the underwriters of the Hong Kong Public Offering whose names are set out in the section headed “Underwriting — Hong Kong Underwriters” in this Offering Circular;

“Hong Kong Underwriting means the underwriting agreement dated 8 June 2007 Agreement” relating to the Hong Kong Public Offering entered into between the Manager, the Vendor and the Hong Kong Underwriters, as further described in the section headed “Underwriting” in this Offering Circular;

— 320 — DEFINITIONS

“HSBC Group” means The Hongkong and Shanghai Banking Corporation Limited and its subsidiaries and, unless otherwise expressly stated herein, excludes the Trustee and its proprietary subsidiaries;

“Independent Market means Knight Frank Petty Ltd.; Consultant”

“Independent Property means Knight Frank Petty Ltd.; Consultant”

“Independent Property means DTZ Debenham Tie Leung Limited; Valuer”

“INED(s)” means independent non-executive Director(s);

“Inland Revenue Ordinance” means the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong);

“International Offering” means the offer of International Offering Units for cash at the Offer Price to institutional, professional and other investors as further described in the section headed “Structure of the Global Offering” in this Offering Circular;

“International Offering Units” means the 392,364,000 Units (subject to adjustment) initially available to investors in the International Offering and up to an additional 48,440,000 Units which are the subject of the Over-allotment Option;

“International Underwriters” means the underwriters of the International Offering;

“International Underwriting means the underwriting agreement relating to the Agreement” International Offering expected to be entered into on or about 15 June 2007 between the Manager, the Vendor and the International Underwriters, as further described in the section headed “Underwriting” in this Offering Circular;

“Investment” means any one of the assets forming for the time being a part of the Deposited Property or, where appropriate, being considered for acquisition to form part of the Deposited Property;

— 321 — DEFINITIONS

“Issue Cost” means an amount equal to the sum of HK$79 million (based on the Minimum Offer Price of HK$5.00) which comprises expenses relating to the Global Offering, which include, without limitation, underwriting commissions payable to the Underwriters (based on the final Global Offering size) (excluding the underwriting commission and expenses incurred upon the exercise of the Over-allotment Option) and all stamp duties, Hong Kong Stock Exchange trading fees and SFC transaction levies in relation thereto), legal fees, printing costs, accountants’ fees, listing costs, advertisement and marketing-related expenses (including roadshow expenses) and other administrative expenses;

“Issue Price” means the price at which new Units may be issued pursuant to the Trust Deed;

“IT” means information technology;

“Joint Global Coordinators” means Deutsche Bank AG, Hong Kong Branch and The Hongkong and Shanghai Banking Corporation Limited (in alphabetical order);

“Joint Listing Agents” means Deutsche Bank AG, Hong Kong Branch and The Hongkong and Shanghai Banking Corporation Limited (in alphabetical order);

“Latest Practicable Date” means 30 May 2007, being the latest practicable date for the purposes of ascertaining certain information contained in this Offering Circular;

“lease” in relation to the Property, means a lease or tenancy agreement in respect of premises at the Property and “leased” shall be construed accordingly;

“Lettable Area” means any part of the Total Lettable Area;

“Listing” means listing of the Units of RREEF CCT on the Hong Kong Stock Exchange;

“Listing Agreement” means the agreement entered into between the Trustee, the Manager (as an operator of a collective investment scheme) and the Hong Kong Stock Exchange in relation to the post regulatory regime applicable to RREEF CCT;

— 322 — DEFINITIONS

“Listing Date” means the date, expected to be on Friday, 22 June 2007, on which the Units are first listed and from which dealings therein are permitted to take place on the Hong Kong Stock Exchange;

“Listing Rules” means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;

“Macau” means the Macau Special Administrative Region of the PRC;

“Main Board” means the stock exchange (excluding the option market) operated by the Hong Kong Stock Exchange which is independent from and operated in parallel with the Growth Enterprise Market of the Hong Kong Stock Exchange;

“Manager” means RREEF China REIT Management Limited, a company incorporated in Hong Kong under the Companies Ordinance on 27 October 2006;

“Maximum Offer Price” means the maximum price of HK$5.40 per Unit payable in full by applicants under the Hong Kong Public Offering;

“Minimum Offer Price” means the expected minimum price of HK$5.00 per Unit payable in full by applicants under the Hong Kong Public Offering;

“NAV” means net asset value, which is calculated as total assets minus total liabilities;

“Net Property Income” means, in relation to any period, the Property Income for that period less Property Expenses for that period;

“NTT Group” means Nippon Telegraph and Telephone Corporation Beijing Representative Office, NTT Communications Beijing Office, NTT Docomo Inc., Beijing Office and NTT Facilities Inc., Beijing Office;

“occupancy rate” in relation to the Property, means the aggregate Lettable Area under lease as a percentage of Total Lettable Area;

— 323 — DEFINITIONS

“Offer Price” means the final Hong Kong dollar price per Unit (exclusive of brokerage of 1.0%, Hong Kong Stock Exchange trading fee of 0.005%, Securities and Futures Commission transaction levy of 0.004%) at which the Units are to be issued and allotted pursuant to the Global Offering, to be determined as further described in the section headed “Structure of the Global Offering” in this Offering Circular;

“Operating Account” has the meaning ascribed thereto in the section headed “Material Agreements and Other Documents — Property Management Agreement — Operating Account, Collection Account and Repatriation Account” in this Offering Circular;

“Operating Expenses” means, for the purposes of the Property Management Agreement only, all costs and expenses incurred for the operation of the Property, including, without limitation, the operation, management, maintenance and marketing of the Property, but excluding the Property Manager’s remuneration under the Property Management Agreement and non-cash items including, without limitation, depreciation and provisions for accounts payable;

“Ordinary Resolution” means a resolution of the Unitholders proposed and passed by a simple majority of the votes of those present and entitled to vote, but with a quorum of two or more Unitholders holding 10.0% of the Units in issue;

“Outstanding Consideration” has the meaning ascribed thereto in the section headed “The Property — Five-Year Transaction History” in this Offering Circular;

“Over-allotment Option” means the option to be granted by Mr. Tin Lik to the Joint Global Coordinators (on behalf of the Underwriters) pursuant to the International Underwriting Agreement to require Mr. Tin Lik to make available up to 48,440,000 Units, to be offered to investors as part of the International Offering;

“P&T Group” means Palmer and Turner (P&T) Group;

“PRC” or “China” means the People’s Republic of China. Except where the context requires, references in this Offering Circular to the PRC or China do not apply to Hong Kong and Macau or Taiwan;

— 324 — DEFINITIONS

“Predecessor Property means Beijing Bestride Estate Development Company Company” Limited ( );

“Premium Grade A office means office buildings which are superior to General buildings” Grade A office buildings in terms of floor plates, building quality, management, ownership, occupancy rates and locations. They are high-end office buildings of single- ownership (usually by institutional investors) with large floor plates, high building quality, international management and high occupancy rates. They are in excellent locations with easy access to all modes of public transport. (Please see Appendix VII for details of definition);

“Price Determination Date” means the date, expected to be on Friday, 15 June 2007, on which the Offer Price is determined for the purposes of the Global Offering;

“profit yield” means profit per Unit, on an annualised basis, divided by the market price of a Unit;

“Property” means (English translated name “Beijing Gateway Plaza” (for identification purposes only)) located at 18 Xiaguangli Road, East Third Ring North Road, Chaoyang District, Beijing, the PRC;

“Property Expenses” means direct property related expenses, including leasing commission, utilities, repair and maintenance, promotional expenses, property management fee, staff costs, depreciation, stamp duty, urban real estate tax and property miscellaneous expenses;

“Property Income” means all rents, including percentage rents and income from car parks due to the HK Property Company from all tenants within the Property, any concessionaires or licensees authorised to utilise portions of the Property and from any other persons who owe such sums to the HK Property Company as a result of operation of the Property, all in the ordinary course of business in accordance with the terms of the Property Management Agreement;

— 325 — DEFINITIONS

“Property Management means the property management agreement dated 31 Agreement” May 2007 entered into among the Manager, the HK Property Company and the Property Manager under which the Property Manager agreed to provide tenancy management services (including leasing services, property management services, rental collection and repatriation services and entity accounting services);

“Property Manager” means Beijing Jones Lang LaSalle Property Management Services Co., Ltd. ( ), a company incorporated in the PRC and a subsidiary of Jones Lang LaSalle;

“Record Date” means the date or dates, determined by the Manager (with approval of the Trustee) as the date or dates for the purpose of determining the Unitholders of record entitled to receive any distributions of income;

“Regulation S” means Regulation S under the US Securities Act;

“REIT” means real estate investment trust;

“REIT Code” means the Code on Real Estate Investment Trusts published by the SFC;

“Relevant Period” means the period from 1 September 2005 to 31 December 2005 and the year ended 31 December 2006;

“Renminbi” or “RMB” means Renminbi, the lawful currency of the PRC;

“Rental Income” means rent paid or payable by tenants under their leases for space in the Property, excluding any income generated from the car park in the Property, and, if applicable, means the rent as adjusted to amortise the effect of any rent free periods offered to tenants over their lease periods and of escalating rent payable by tenants over their lease periods;

“Repatriation Account” has the meaning ascribed thereto in the section headed “Material Agreements and Other Documents — Property Management Agreement — Operating Account Collection Account and Repatriation Account” in this Offering Circular;

“Responsible Officer” means a responsible officer of the Manager appointed pursuant to Section 125 of the SFO;

— 326 — DEFINITIONS

“Retention Sum” means an amount of US$20 million which will be retained by the Trustee out of the purchase consideration payable for the BVI Property Company Share on Completion under the provisions of the Share Purchase Agreement;

“RREEF” means the real estate and infrastructure investment management arm of the Deutsche Bank Group;

“RREEF CCT” means RREEF China Commercial Trust, a collective investment scheme constituted as a unit trust and authorised under section 104 of the SFO subject to applicable conditions from time to time;

“SAFE” means the State Administration of Foreign Exchange in the PRC;

“SARS” means severe acute respiratory syndrome;

“SFC” means the Securities and Futures Commission of Hong Kong;

“SFO” means the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong);

“Share Purchase Agreement” means the share purchase agreement dated 4 June 2007 entered into among the Manager, the Trustee, and the Vendor, pursuant to which the Trustee will acquire the BVI Property Company Share;

“significant holder” has the meaning ascribed to it in the REIT Code;

“SK Group” means SK Communications, SK Corporation Beijing Representative Office, SK Engineering & Construction and Hong Kong SK (China) Limited Beijing Office;

“Sony Group” means Sony China Ltd. and Sony Hong Kong Limited Beijing Office;

“Special Purpose Vehicle(s)” means any corporations or companies incorporated in or outside Hong Kong through which RREEF CCT holds or owns real estate or through which RREEF CCT arranges financing and which is either (a) wholly owned by RREEF CCT; or (b) majority owned by and under control of RREEF CCT;

— 327 — DEFINITIONS

“Special Resolution” means a resolution of the Unitholders proposed and passed by 75.0% or more in value of the Units issued outstanding and entitled to vote in person or by proxy, but with a quorum of two or more Unitholders holding 25.0% of the Units in issue;

“sq.km.” means square kilometres;

“sq.m.” means square metres;

“Stabilising Manager” means Deutsche Bank AG, Hong Kong Branch;

“Subscription Agreement” means the subscription agreement dated 31 May 2007 between Mr. Tin Lik and the Manager pursuant to which Mr. Tin Lik has agreed to subscribe for an aggregate of 48,440,000 Units;

“Takeovers Code” means The Code on Takeovers and Mergers and Share Repurchases;

“tenant” in relation to the Property, means a tenant under a lease for space in the Property;

“Total Lettable Area” means the aggregate of (i) for those parts of the Property subject to existing leases, the Gross Floor Area set out in the relevant lease; (ii) for those parts of the Property not subject to existing leases, the Gross Floor Area as stated in the survey report prepared by a surveyor duly authorised by the PRC government, and excluding non- attributable area such as basement, car park space, club facilities, civil defence shelters and staff canteen;

“Total Operating Expenses” means the expenses for maintaining the operations of the Property but excluding the Property Manager’s remuneration and non-cash items including, without limitation, depreciation and provisions for accounts payable;

“Total Rental Income” means, in relation to a financial period, the gross Rental Income paid or payable for that period;

“Trust Deed” means the trust deed dated 28 May 2007 between the Trustee and the Manager constituting RREEF CCT and includes any amendments thereto);

“Trustee” means HSBC Institutional Trust Services (Asia) Limited, the trustee of RREEF CCT;

— 328 — DEFINITIONS

“Trustee Ordinance” means the Trustee Ordinance (Chapter 29 of the Laws of Hong Kong);

“Turnover” means Rental Income, Advertising Income and Car Park Income adjusted for business tax;

“Underlying Financial means the audited financial statements or, where Statements” appropriate, unaudited management accounts of the Predecessor Property Company, the HK Property Company and the BVI Property Company;

“Underwriters” means the Hong Kong Underwriters and the International Underwriters;

“Underwriting Agreements” means the Hong Kong Underwriting Agreement and the International Underwriting Agreement;

“Unit” means a unit of RREEF CCT;

“Unit Borrowing Agreement” means the unit borrowing agreement to be entered into between the Stabilising Manager and The Hongkong and Shanghai Banking Corporation Limited;

“Unit Registrar” means Tricor Investor Services Limited;

“United Kingdom” means the United Kingdom of Great Britain and Northern Ireland;

“United States” or “US” means the United States of America;

“Unitholder” means any person registered as holding a Unit;

“US dollars” or “US$” means United States dollars, the lawful currency of the United States;

“US Person” has the meaning given to it in Regulation S;

“US Securities Act” means the United States Securities Act of 1933, as amended;

“utilisation rate” means the number of tickets sold to monthly users as a percentage of the number of monthly parking spaces available (and, for the avoidance of doubt, excluding hourly car parking for which utilisation rates cannot be calculated on a comparable basis);

— 329 — DEFINITIONS

“Variable Fee” means the annual variable fee of 3.0% per annum of the Net Property Income payable to the Manager (before deduction therefrom of the Base Fee or the Variable Fee);

“Vendor” or “Mr. Tin Lik” means Mr. Tin Lik, the vendor of the BVI Property Company Share under the Share Purchase Agreement;

“WTO” means the World Trade Organisation; and

“Zurich Financial Services means Swiss Zurich Insurance Company Beijing Office, Group” Zurich Insurance Holdings (Hong Kong) Ltd. and Zurich Insurance Company Beijing Office.

— 330 — APPENDICES

— 331 — APPENDIX I ACCOUNTANTS’ REPORT

The following is the text of a report, prepared for the purpose of incorporation in this Offering Circular received from the independent reporting accountants, KPMG, Certified Public Accountants, Hong Kong.

8/F Prince’s Building 10 Chater Road Central Hong Kong

11 June 2007

The Directors RREEF China REIT Management Limited Deutsche Bank AG, Hong Kong Branch The Hongkong and Shanghai Banking Corporation Limited

Dear Sirs,

Introduction

We set out below our report on the combined financial information including the combined income statements and combined cash flow statements for the period from 1 September 2005 (date of commencement of the first tenancy agreement) to 31 December 2005, and the year ended 31 December 2006 (collectively the “Relevant Period”), and the combined balance sheets as at 31 December 2005 and 31 December 2006 together with the notes thereto (the “Financial Information”) relating to Beijing Gateway Plaza (BVI) Limited (“BVI Gateway”), Beijing Bestride Estate Development Company Limited (“BJ Bestride”) and HK Gateway Plaza Company Limited (“HK Gateway”) (hereafter collectively referred to as the “Predecessor Group”) for inclusion in the offering circular dated 11 June 2007 (the “Offering Circular”)tobe issued in connection with the initial public offering of RREEF China Commercial Trust (“RREEF CCT”) and the listing of the units in RREEF CCT on the Main Board of The Stock Exchange of Hong Kong Limited pursuant to the Code on Real Estate Investment Trusts.

RREEF CCT is a collective investment scheme constituted as a unit trust and is authorised under section 104 of the Securities and Futures Ordinance. RREEF CCT was established under a trust deed dated 28 May 2007 made between RREEF China REIT Management Limited (the “Manager”) and HSBC Institutional Trust Services (Asia) Limited (the “Trustee”). RREEF CCT had not carried on any business since the date of its establishment until 28 May 2007 when it conditionally agreed to acquire from Mr. Tin Lik, the entire issued ordinary share capital of BVI Gateway. BVI Gateway, through its direct wholly owned subsidiary — HK Gateway, owns Beijing Gateway Plaza (hereinafter referred to as the “Property”) located in Beijing, the People’s Republic of China (the “PRC”).

— I-1 — APPENDIX I ACCOUNTANTS’ REPORT

The particulars of the companies comprising the Predecessor Group are as follows:

Par value of the ordinary share capital/registered capital

Place of Date of Authorised/ incorporation/ Principal Name of company incorporation registered Issued Fully paid up establishment activity

BVI Gateway 18 October 2005 US$50,000 US$1 US$1 British Virgin Investment Islands holdings

HK Gateway 10 November 2005 HK$100,000 HK$100 — Hong Kong Property investment

BJ Bestride 15 October 2001 US$12,000,000 US$12,000,000 US$12,000,000 Beijing, the Development PRC and leasing of the Property up to 25 April 2006

Prior to 26 April 2006, the Property was wholly owned and managed by BJ Bestride, which is a contractual joint venture established in the PRC and effectively wholly owned by Mr. Tin Lik. On 26 April 2006, the Property was effectively transferred from BJ Bestride to HK Gateway.

Basis of preparation of the Financial Information

Since the Property was exclusively owned and managed by the Predecessor Group during the Relevant Period, the Financial Information, which is expressed in Hong Kong dollars, has been prepared based on the audited financial statements or, where appropriate, unaudited management accounts of the companies comprising the Predecessor Group after making such adjustments as we considered appropriate (the “Underlying Financial Statements”) according to the basis set out in note 1(b) to Section A below. Adjustments have been made, for the purpose of this report, to restate these financial statements in accordance with accounting policies as referred to in note 1 to Section A below to conform with the Hong Kong Financial Reporting Standards (“HKFRS”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”) and the disclosure requirements of the Code on Real Estate Investment Trusts. HKFRSs include all individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards and Interpretation issued by the HKICPA.

The statutory financial statements of BJ Bestride have been prepared in accordance with the relevant accounting rules and regulations in the PRC for the year ended 31 December 2005 and were audited by Beijing Jinxing Accountancy Co., Ltd. ( ), a firm of certified public accountants registered in the PRC. No statutory audited financial statements of BJ Bestride for the year ended 31 December 2006 have been prepared. We have acted as auditors of HK Gateway for the period from the date of its incorporation to 31 December 2006.

— I-2 — APPENDIX I ACCOUNTANTS’ REPORT

No audited financial statements have been prepared for BVI Gateway as there are no statutory audit requirements applicable to this company. For the purpose of this report, we have, however, reviewed all material transactions of BVI Gateway since its incorporation and carried out such audit procedures as we considered necessary on the management accounts for inclusion of financial information relating to this company in this report.

Respective responsibilities of directors and reporting accountants

The preparation of the Underlying Financial Statements is the responsibility of the respective directors of the companies comprising the Predecessor Group. The directors of the companies comprising the Predecessor Group are also responsible for the preparation of the Financial Information which gives a true and fair view. In preparing the Financial Information which gives a true and fair view it is fundamental that appropriate accounting policies are selected and applied consistently, that judgements and estimates are made which are prudent and reasonable and that the reasons for any significant departure from applicable accounting standards are stated.

The directors of the Manager are responsible for the contents of the Offering Circular in which the Financial Information is included.

It is our responsibility to form an independent opinion, based on our audit, on the Financial Information.

Basis of opinion

As a basis for forming an opinion on the Financial Information, for the purpose of this report, we have carried out appropriate audit procedures in respect of the Underlying Financial Statements included in the preparation of the Financial Information for the Relevant Period in accordance with Hong Kong Standards on Auditing issued by the HKICPA and have carried out such additional procedures as we considered necessary in accordance with the Auditing Guideline “Prospectuses and the reporting accountant” (Statement 3.340) issued by the HKICPA.

An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the Financial Information. It also includes an assessment of the significant estimates and judgements made by the directors of the Predecessor Group in the preparation of the Financial Information, and of whether the accounting policies are appropriate to the Predecessor Group’s circumstances, consistently applied and adequately disclosed.

— I-3 — APPENDIX I ACCOUNTANTS’ REPORT

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance as to whether the Financial Information is free from material misstatement. In forming our opinion we also evaluated the overall adequacy of the presentation of the Financial Information. We believe that our audit provides a reasonable basis for our opinion.

We have not audited any financial statements of the companies comprising the Predecessor Group in respect of any period subsequent to 31 December 2006.

Opinion

In our opinion, for the purpose of this report, the Financial Information together with notes thereto, on the basis set out in note 1 to Section A below, gives a true and fair view of the combined state of affairs of the Predecessor Group as at 31 December 2005 and 31 December 2006 and of the Predecessor Group’s combined results and cash flows for each of the period from 1 September 2005 to 31 December 2005 and the year ended 31 December 2006.

— I-4 — APPENDIX I ACCOUNTANTS’ REPORT

A. FINANCIAL INFORMATION (Expressed in Hong Kong dollars)

Combined income statements

Period from 1 September 2005 to Year ended Note 31 December 2005 31 December 2006

HK$ HK$

Turnover ...... 4 26,452,581 173,817,617 Direct costs ...... 5 (7,460,843) (39,537,128)

Gross profit...... 18,991,738 134,280,489 Administrative expenses...... (953,747) (7,211,883) Other income ...... 6 28,131 26,939,028 Finance costs ...... 7(a) (10,224,210) (72,602,234)

Profit before increase in fair value of investment property ...... 7,841,912 81,405,400 Increase in fair value of investment property ...... 9 2,099,052,128 142,795,205

Profit before taxation ...... 7 2,106,894,040 224,200,605 Income tax...... 8(a) (695,352,991) 494,129,247

Profit for the period/year ...... 1,411,541,049 718,329,852

The accompanying notes form part of this Financial Information.

— I-5 — APPENDIX I ACCOUNTANTS’ REPORT

Combined balance sheets

As at As at Note 31 December 2005 31 December 2006

HK$ HK$

Non-current assets Investment property ...... 9 3,452,000,000 3,780,000,000 Other fixed assets...... 10 884,874 821,980

3,452,884,874 3,780,821,980 ------

Current assets Accounts receivable, deposits and prepayments and other receivables ...... 11 8,207,434 16,406,269 Deferred assets ...... 12 4,582,536 523,930 Amounts due from related companies...... 19(i) 3,181,473 7,258,876 Cash and cash equivalents ...... 13 22,279,494 840,166,296

38,250,937 864,355,371 ------

Current liabilities Bank loan ...... 14 — (1,823,827,763) Receipts in advance...... (2,879,992) (10,970,829) Tenants’ deposits ...... (25,724,184) (66,200,935) Amounts due to related companies...... 19(ii) (421,346,688) (113,746,296) Creditors, accruals and other payables...... 15 (403,717,061) (165,224,136) Current taxation ...... 8(b) — (14,646,944)

(853,667,925) (2,194,616,903) ------

Net current liabilities ...... (815,416,988) (1,330,261,532) ------

Total assets less current liabilities...... 2,637,467,886 2,450,560,448 ------

— I-6 — APPENDIX I ACCOUNTANTS’ REPORT

As at As at Note 31 December 2005 31 December 2006

HK$ HK$

Non-current liabilities Bank loan ...... 14 (480,350,000) — Deferred tax liabilities ...... 8(d) (687,341,476) (193,195,991)

(1,167,691,476) (193,195,991) ------

Net assets ...... 1,469,776,410 2,257,364,457

Financed by: Issued capital ...... 16 95,685,728 95,685,728 Reserves ...... 1,374,090,682 2,161,678,729

1,469,776,410 2,257,364,457

The accompanying notes form part of this Financial Information.

— I-7 — APPENDIX I ACCOUNTANTS’ REPORT

Combined statements of changes in equity

Foreign (Accumulated Invested exchange losses)/ capital reserve retained profits Total

HK$ HK$ HK$ HK$

As at 1 September 2005 ...... 95,685,720 — (38,274,307) 57,411,413 Issue of shares...... 8 ——8 Profit for the period...... ——1,411,541,049 1,411,541,049 Exchange differences...... — 823,940 — 823,940

As at 31 December 2005 ...... 95,685,728 823,940 1,373,266,742 1,469,776,410 Profit for the year ...... ——718,329,852 718,329,852 Exchange differences...... — 69,258,195 — 69,258,195

As at 31 December 2006 ...... 95,685,728 70,082,135 2,091,596,594 2,257,364,457

The accompanying notes form part of this Financial Information.

— I-8 — APPENDIX I ACCOUNTANTS’ REPORT

Combined cash flow statements

Period from 1 September 2005 to Year ended 31 December 2005 31 December 2006

HK$ HK$

Operating activities Profit before taxation ...... 2,106,894,040 224,200,605 Interest income ...... (28,131) (1,289,372) Finance costs...... 10,224,210 72,602,234 Depreciation...... 67,378 205,550 Foreign exchange gain ...... — (25,467,457) Increase in fair value of investment property...... (2,099,052,128) (142,795,205)

Operating profit before changes in working capital ...... 18,105,369 127,456,355

(Increase)/decrease in deferred assets ...... (4,582,536) 4,058,606 Increase in accounts receivable, deposits and prepayments and other receivables ...... (5,071,064) (7,772,323) Increase in amounts due from related companies...... (932,754) (4,077,403) Increase in tenants’ deposits ...... 9,795,403 40,476,751 Increase/(decrease) in amounts due to related companies ...... 7,355,968 (307,600,392) Decrease in creditors, accruals and other payables...... (6,671,089) (238,492,925) (Decrease)/increase in receipts in advance ...... (3,191,520) 8,090,837

Cash generated from/(used in) operations...... 14,807,777 (377,860,494)

Tax paid PRC withholding income tax paid...... — (459,524)

Net cash generated from/(used in) operating activities...... 14,807,777 (378,320,018) ------

— I-9 — APPENDIX I ACCOUNTANTS’ REPORT

Period from 1 September 2005 to Year ended 31 December 2005 31 December 2006

HK$ HK$

Investing activities Payment for the purchase of investment property...... — (53,119,868) Payment for the purchase of other fixed assets...... (107,621) (111,906) Interest received ...... 28,131 862,860

Net cash used in investing activities ...... (79,490) (52,368,914) ------

Financing activities Proceeds from shares issued...... 8 — Proceeds from new bank loans ...... — 2,849,404,616 Repayment of bank loans ...... — (1,518,602,869) Interest paid...... (10,224,210) (64,197,531) Borrowing costs paid ...... — (12,835,557)

Net cash (used in)/generated from financing activities ...... (10,224,202) 1,253,768,659 ------

Net increase in cash and cash equivalents ...... 4,504,085 823,079,727

Cash and cash equivalents at beginning of the period/year ...... 19,056,697 22,279,494

Effect of foreign exchange rate changes ...... (1,281,288) (5,192,925)

Cash and cash equivalents at end of the period/year ...... 22,279,494 840,166,296

The accompanying notes form part of this Financial Information.

— I-10 — APPENDIX I ACCOUNTANTS’ REPORT

NOTES TO THE FINANCIAL INFORMATION (Expressed in Hong Kong dollars)

1 Significant accounting policies

(a) Statement of compliance

The Financial Information has been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRSs”), which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations issued by the HKICPA, and accounting principles generally accepted in Hong Kong. The Financial Information also complies with the applicable disclosure provisions of the Code on Real Estate Investment Trusts.

At the date of issue of this report, the HKICPA has issued the following amendments, new standards and interpretations which are not yet effective for the accounting period ended 31 December 2006 and which have not been adopted in the preparation of the Financial Information.

Effective for accounting periods beginning or after

HKFRS 7 ...... Financial instruments: disclosures 1 January 2007

Amendment to HKAS 1.... Presentation of financial statements: capital disclosures 1 January 2007

HK(IFRIC) 11: ...... HKFFRS 2 — Group and treasury share transactions 1 March 2007

The Manager is in the process of making an assessment of what the impact of these amendments, new standards and new interpretations is expected to be in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a significant impact on the results of operations and financial position of the relevant companies.

(b) Basis of preparation of the Financial Information

The Predecessor Group’s current liabilities exceeded its current assets by $1,330,261,532 as at 31 December 2006 (2005: $815,416,988). BVI Gateway will be acquired by RREEF CCT, and RREEF CCT has confirmed that it will provide such financial assistance to maintain BVI Gateway and its subsidiary, HK Gateway, as a going concern. On strength of this assurance, the Financial Information has been prepared on a going concern basis.

The measurement basis used in the preparation of the Financial Information is the historical cost basis except that investment properties are stated at their fair value as explained in the accounting policies set out below.

The Property was exclusively owned and managed by the companies comprising the Predecessor Group during the Relevant Period. The Financial Information was prepared based on the accounting books and records of the companies comprising the Predecessor Group, which owned and managed the Property during the Relevant Period.

— I-11 — APPENDIX I ACCOUNTANTS’ REPORT

The Property was wholly and ultimately owned by Mr. Tin Lik throughout the Relevant Period via the Predecessor Group. The principal activities of the companies comprising the Predecessor Group throughout the Relevant Period were those of property investment relating to the Property. The combined income statements, combined statements of changes in equity and combined cash flow statements include the results of operations of the companies comprising the Predecessor Group for the Relevant Period (or where the companies were incorporated at a date later than 1 September 2005, for the period from the date of incorporation to 31 December 2006). The combined balance sheets of the companies comprising the Predecessor Group as at 31 December 2005 and 31 December 2006 have been prepared to present the state of affairs of such companies as at the respective dates. Inter-company balances and transactions and any unrealised profits arising from inter-company transactions have been eliminated in full on combination. The Financial Information has been prepared on the above basis in order to include the results of the operations and financial position of the Property as if it was operated on a stand-alone basis throughout the Relevant Period.

No comparative information has been prepared for the period prior to 1 September 2005. The provision of such information would not be meaningful as the Property was still at its construction stage prior to 1 September 2005.

The preparation of the Financial Information in conformity with HKFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Investment properties are land and/or buildings which are owned or held under a leasehold interest to earn rental income and/or for capital appreciation.

Investment properties are stated in the combined balance sheets at fair value. Any gain or loss arising from a change in fair value or from the retirement or disposal of an investment property is recognised in profit or loss. Rental income from investment properties is accounted for as described in note 1(j).

(d) Other fixed assets

Other fixed assets are stated in the combined balance sheets at cost less accumulated depreciation and impairment losses.

Depreciation is calculated to write off the cost of items of fixed assets, less their estimated residual value, using the straight-line method over their estimated useful lives as follows:

Motor vehicles 8 years Furniture, fixtures and office equipment 5 years

The carrying amounts of other fixed assets are reviewed for indications of impairment at each balance sheet date. An impairment loss is recognised to the extent that the carrying amount of an asset, or the cash-generating unit to which it belongs, is more than its recoverable amount. The recoverable amount of an asset, or of the cash generating unit to which it belongs, is the greater of its net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of time value of money and the risks specific to the assets. An impairment loss is reversed if there has been a favourable change in estimates used to determine the recoverable amount.

— I-12 — APPENDIX I ACCOUNTANTS’ REPORT

Gains or losses arising from the retirement or disposal of an item of fixed assets are determined as the difference between net disposal proceeds and the carrying amount of the item and are recognised in profit or loss on the date of retirement or disposal.

(e) Trade and other receivables

Trade and other receivables are initially recognised at fair value and thereafter stated at amortised cost less impairment losses for bad and doubtful debts, except where the receivables are interest-free loans made to related parties without any fixed repayment terms or the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less impairment losses for bad and doubtful debts.

Impairment losses for bad and doubtful debts are measured as the difference between the carrying amount of the financial asset and the estimated future cash flows, discounted where the effect of discounting is material.

(f) Trade and other payables

Trade and other payables are initially recognised at fair value and thereafter stated at amortised cost unless the effect of discounting would be immaterial, in which case they are stated at cost.

(g) Income tax

Income tax for each period comprises current tax and movements in deferred tax assets and liabilities. Current tax and movements in deferred tax assets and liabilities are recognised in profit or loss except to the extent that they relate to items recognised directly in equity, in which case they are recognised in equity.

Current tax is the expected tax payable on the taxable income for each period, using tax rates enacted or substantively enacted at the balance sheet dates, and any adjustment to tax payable in respect of previous periods.

Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets also arise from unused tax losses and unused tax credits.

Apart from certain limited exceptions, all deferred tax liabilities, and all deferred tax assets to the extent that it is probable that future taxable profits will be available against which the asset can be utilised, are recognised. Future taxable profits that may support the recognition of deferred tax assets arising from deductible temporary differences include those that will arise from the reversal of existing taxable temporary differences, provided those differences relate to the same taxation authority and the same taxable entity, and are expected to reverse either in the same period as the expected reversal of the deductible temporary difference or in periods into which a tax loss arising from the deferred tax asset can be carried back or forward. The same criteria are adopted when determining whether existing taxable temporary differences support the recognition of deferred tax assets arising from unused tax losses and credits, that is, those differences are taken into account if they relate to the same taxation authority and the same taxable entity, and are expected to reverse in a period, or periods, in which the tax loss or credit can be utilised.

The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet dates. Deferred tax assets and liabilities are not discounted.

The carrying amount of a deferred tax asset is reviewed at each balance sheet date and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the related tax benefit to be utilised. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available.

— I-13 — APPENDIX I ACCOUNTANTS’ REPORT

Current tax balances and deferred tax balances, and movements therein, are presented separately from each other and are not offset. Current tax assets are offset against current tax liabilities, and deferred tax assets against deferred tax liabilities, if the relevant companies have the legally enforceable right to set off current tax assets against current tax liabilities and the following additional conditions are met:

— in the case of current tax assets and liabilities, the relevant companies intend either to settle on a net basis, or to realise the asset and settle the liability simultaneously; or

— in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same taxation authority on either:

— the same taxable entity; or

— different taxable entities, which, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered, intend to realise the current tax assets and settle the current tax liabilities on a net basis or realise and settle simultaneously.

(h) Provisions and contingent liabilities

Provisions are recognised for liabilities of uncertain timing or amount when the Predecessor Group has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

(i) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank, demand deposits with banks and other financial institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value.

(j) Revenue recognition

Provided it is probable that the economic benefits will flow to the Predecessor Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognised in profit or loss as follows:

(i) Rental income from operating leases

Rental income receivable under operating leases is recognised in profit or loss in equal instalments over the periods covered by the lease term, except where an alternative basis is more representative of the pattern of benefits to be derived from the use of the leased asset. Lease incentives granted are recognised in profit or loss as an integral part of the aggregate net lease payments receivable. Contingent rentals are recognised as income in the accounting period in which they are earned. Rental income excludes business tax.

— I-14 — APPENDIX I ACCOUNTANTS’ REPORT

(ii) Car park income

Car park income is recognised as revenues on an accruals basis. Car park income excludes business tax.

(iii) Interest income

Interest income is recognised as it accrues using the effective interest method.

(k) Borrowing costs

Borrowing costs are expensed in profit or loss in the period in which they are incurred.

(l) Translation of foreign currencies

Foreign currency transactions during the Relevant Period are translated into Renminbi, the functional currency of the Property, at the foreign exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into Renminbi at the foreign exchange rates at the balance sheet dates. Exchange gains and losses are recognised in profit or loss.

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated into Renminbi using the foreign exchange rates ruling at the transaction dates. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated into Renminbi using the foreign exchange rates ruling at the dates the fair value was determined.

The combined financial statements are presented in Hong Kong dollars for the convenience of the financial statement readers. For the purpose of translating the combined financial statements from Renminbi into Hong Kong dollars, all assets and liabilities of the Property are translated into Hong Kong dollars at the applicable rates of exchange in effect at the balance sheet dates, and all income and expense items at the average applicable rates during the periods. All resulting exchange differences are dealt with as movements of reserves.

(m) Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in profit or loss over the period of the borrowings using the effective interest method.

(n) Defined contribution retirement plans

Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statements as incurred.

As stipulated by the regulations of the PRC, BJ Bestride participates in basic defined contribution pension plans organised by their respective Municipal Governments under which they are governed.

Employees in the PRC are entitled to retirement benefits equal to a fixed proportion of their salary at the normal retirement age. The Predecessor Group has no other material obligation for payment of basic retirement benefits beyond the annual contributions which are calculated at a rate based on the salaries, bonuses and certain allowances of its employees.

— I-15 — APPENDIX I ACCOUNTANTS’ REPORT

(o) Related parties

For the purposes of this Financial Information, a party is considered to be related to the Predecessor Group if:

(i) the party has the ability, directly or indirectly through one or more intermediaries, to control the Predecessor Group or exercise significant influence over the relevant companies in making financial and operating policy decisions, or has joint control over the relevant companies;

(ii) the Predecessor Group and the party are subject to common control;

(iii) the party is an associate of the Predecessor Group or a joint venture in which the Predecessor Group is a venturer;

(iv) the party is a member of key management personnel of the Predecessor Group or the Predecessor Group’s parent, or a close family member of such an individual, or is an entity under the control, joint control or significant influence of such individuals;

(v) the party is a close family member of a party referred to in (i) or is an entity under the control, joint control or significant influence of such individuals; or

(vi) the party is a post-employment benefit plan, which is for the benefit of employees of the relevant companies or of any entity that is a related party of the Predecessor Group.

Close family members of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the Predecessor Group.

2 Accounting estimates and judgements

The key sources of estimation uncertainty and critical accounting judgements in applying the above accounting policies are described below.

Investment property

As described in note 9, the investment property is stated at fair value based on the valuation performed by independent professional valuers. In determining the fair value, the valuers have based on a method of valuation which involves certain estimates. In relying on the valuation report, the management has exercised their judgement and are satisfied that the method of valuation is reflective of the current market conditions.

Deferred tax assets

At 31 December 2005, the Predecessor Group has recognised a deferred tax asset of HK$8,637,137 in relation to the unused tax losses as set out in Note 8. The realisability of the deferred tax asset mainly depends on whether there are sufficient future taxable profits or taxable temporary differences against which the unused tax losses will be utilised in the foreseeable future. In case where the actual future taxable profits or taxable temporary differences generated are less than expected, a reversal of deferred tax asset may arise, which would be recognised in profit or loss for the period which such a reversal takes place.

3 Segment information

A segment is a distinguishable component of the Predecessor Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

— I-16 — APPENDIX I ACCOUNTANTS’ REPORT

No analysis of the turnover and contribution to profit from operations of the Predecessor Group by geographical segment or business segment has been presented as all the operating activities of the Predecessor Group are carried out in the PRC and all of the Property’s turnover and contribution to profit from operations of the Predecessor Group were derived from the property investment and related activities. There is no other geographical or business segment with segment assets equal to or greater than 10 per cent of the total assets of the Predecessor Group.

4 Turnover

Period from 1 September 2005 to Year ended 31 December 31 December 2005 2006

HK$ HK$

Rental income ...... 27,773,746 181,455,771 Car park income...... 71,077 1,510,142 Business tax...... (1,392,242) (9,148,296)

26,452,581 173,817,617

5 Direct costs

Period from 1 September 2005 to Year ended 31 December 31 December 2005 2006

HK$ HK$

Commission to leasing agents ...... 362,934 13,464,465 Urban real estate tax (Note) ...... 2,505,510 12,752,906 Stamp duty...... 477,926 1,567,619 Utilities...... 1,980,081 1,678,711 Promotional expenses ...... 1,136,049 6,560,618 Staff costs...... 703,979 2,630,946 Depreciation...... 67,378 205,550 Property miscellaneous expenses ...... 226,986 676,313

7,460,843 39,537,128

Note: Urban real estate tax is calculated as follows:

— 1.2% on 70% of construction cost of the Property per annum from 1 September 2005 to 25 April 2006; and

— 1.2% on 70% of the acquisition cost of the Property per annum from 26 April to 31 December 2006.

— I-17 — APPENDIX I ACCOUNTANTS’ REPORT

6 Other income

Period from 1 September 2005 to Year ended 31 December 31 December 2005 2006 HK$ HK$

Interest income...... 28,131 1,289,372 Exchange gain, net...... — 25,467,457 Others...... — 182,199

28,131 26,939,028

7 Profit before taxation

Profit before taxation is arrived at after charging/(crediting):

Period from 1 September 2005 to Year ended 31 December 31 December 2005 2006 HK$ HK$

(a) Finance costs:

Interest on bank loans ...... 10,224,210 64,197,531 Other borrowing costs...... — 8,404,703

10,224,210 72,602,234

(b) Staff costs:

Contributions to defined contribution plans...... 50,717 175,147 Salaries, wages and other benefits ...... 653,262 2,455,799

703,979 2,630,946

Rental receivable from investment property...... (26,452,581) (173,817,617) Less: outgoings ...... 7,460,843 39,537,128

Net rental receivable from investment property...... (18,991,738) (134,280,489)

Auditors’ remuneration...... — 134,744 Directors’ emoluments ...... 134,428 1,337,590 Depreciation ...... 67,378 205,550 Exchange gain, net...... — (25,467,457)

— I-18 — APPENDIX I ACCOUNTANTS’ REPORT

8 Income tax

(a) Income tax in the combined income statements represents:

Period from 1 September 2005 to Year ended 31 December 31 December 2005 2006

HK$ HK$

Current tax Provision for PRC Enterprise Income Tax for the period/year...... — 1,697,109 Provision for PRC withholding income tax for the period/year...... — 13,101,801

— 14,798,910 ------

Deferred tax Origination and reversal of temporary differences...... 695,352,991 (508,928,157) ------

695,352,991 (494,129,247)

The provision for PRC Enterprise Income Tax of BJ Bestride is calculated at a statutory rate of 33% of the assessable profits of BJ Bestride.

No provision for Hong Kong Profits Tax has been made as the HK Gateway did not earn any income assessable to Hong Kong Profits Tax during the Relevant Period. HK Gateway is subject to PRC withholding income tax of 10% on the gross rental income after deducting 5% business tax.

(b) Current taxation included in the combined balance sheets represents:

As at As at 31 December 31 December 2005 2006

HK$ HK$

Provision for PRC Enterprise Income Tax for the period/year...... — 1,697,109 Provision for PRC withholding income tax for the period/year...... — 12,642,277 Exchange difference ...... — 307,558

— 14,646,944

— I-19 — APPENDIX I ACCOUNTANTS’ REPORT

Period from 1 September 2005 to Year ended 31 December 31 December 2005 2006

HK$ HK$

Profit before taxation ...... 2,106,894,040 224,200,605

Income tax computed by applying tax rates applicable to the entities (Note) ...... 695,275,033 208,002,863 Tax effect of non-deductible expenses ...... 77,958 448,869 Tax effect of temporary differences not recognised ...... — (1,387,601) Derecognition of deferred tax liabilities ...... — (701,193,378)

Actual tax expense / (credit) ...... 695,352,991 (494,129,247)

Deferred tax liabilities of BJ Bestride is derecognised upon transfer of the Property to HK Gateway.

Note: Income tax has been computed by applying tax rates applicable to the entities as follows:

— 33% PRC Enterprise Income Tax computed based on the profit before tax of BJ Bestride from 1 September 2005 to 25 April 2006; and

— 10% of PRC withholding tax computed based on gross rental income after deducting 5% business tax of rental income from 26 April to 31 December 2006.

— I-20 — APPENDIX I ACCOUNTANTS’ REPORT

(d) Deferred tax liabilities

The components of deferred tax (assets)/liabilities recognised in the balance sheet and the movements during the periods are as follows:

Revaluation of investment Tax property depreciation Tax losses Total

HK$ HK$ HK$ HK$

Deferred tax arising from: At 1 September 2005 ——(8,361,391) (8,361,391) Charged / (credited) to profit or loss ...... 692,687,203 2,929,185 (263,397) 695,352,991 Exchange difference...... 360,699 1,526 (12,349) 349,876

At 31 December 2005...... 693,047,902 2,930,711 (8,637,137) 687,341,476

At 1 January 2006...... 693,047,902 2,930,711 (8,637,137) 687,341,476 (Credited) / charged to profit or loss ...... (514,710,303) (2,944,895) 8,727,041 (508,928,157) Exchange difference...... 14,858,392 14,184 (89,904) 14,782,672

At 31 December 2006...... 193,195,991 ——193,195,991

9 Investment property

HK$

As at 1 September 2005 ...... 1,349,744,109 Increase in fair value...... 2,099,052,128 Exchange adjustment ...... 3,203,763

As at 31 December 2005...... 3,452,000,000

As at 1 January 2006 ...... 3,452,000,000 Additions...... 53,119,868 Increase in fair value...... 142,795,205 Exchange adjustment ...... 132,084,927

As at 31 December 2006...... 3,780,000,000

— I-21 — APPENDIX I ACCOUNTANTS’ REPORT

The investment property was revalued as at 31 December 2005 and 31 December 2006 on an open market value basis in its existing state by reference to comparable market transactions and where appropriate on the basis of capitalisation of the net income allowing for reversionary income potential. The valuations as at 31 December 2005 and 31 December 2006 were carried out by an independent firm of professional surveyors, Shanghai Gooray & Henry Property Valuation Chartered Surveyors Co. Ltd., who have among their staff fellows of the Royal Institution of Chartered Surveyors with recent experience in the location and category of property being valued.

The investment property was also revalued as at 31 March 2007 by an independent professional valuer, DTZ Debenham Tie Leung Limited, on an open market value basis by reference to sales evidence as available on the market and where appropriate on the basis of capitalisation of the net income allowing for reversionary income potential. The fair value of the investment property as at 31 March 2007 is HK$3,978,000,000.

The investment property is held in the PRC under medium-term lease. At 31 December 2006, the Property was pledged as security for a loan facility granted by a bank to HK Gateway to the extent of US$235 million (2005: RMB500 million).

All land and properties held under operating leases that would otherwise meet the definition of investment property are classified as investment property.

— I-22 — APPENDIX I ACCOUNTANTS’ REPORT

10 Other fixed assets

Furniture, fixtures and office Motor equipment vehicles Total

HK$ HK$ HK$

Cost: As at 1 September 2005 ...... 438,577 845,168 1,283,745 Exchange adjustments ...... 742 1,322 2,064 Additions ...... 107,621 — 107,621

As at 31 December 2005 ...... 546,940 846,490 1,393,430 Exchange adjustments ...... 22,538 31,280 53,818 Additions ...... 111,906 — 111,906

As at 31 December 2006 ...... 681,384 877,770 1,559,154 ------

Accumulated depreciation: As at 1 September 2005 ...... 128,464 311,991 440,455 Exchange adjustments ...... 217 506 723 Charge for the period...... 32,411 34,967 67,378

As at 31 December 2005 ...... 161,092 347,464 508,556 Exchange adjustments ...... 8,010 15,058 23,068 Charge for the year ...... 98,935 106,615 205,550

As at 31 December 2006 ...... 268,037 469,137 737,174 ------

Net book value: As at 31 December 2005 ...... 385,848 499,026 884,874

As at 31 December 2006 ...... 413,347 408,633 821,980

— I-23 — APPENDIX I ACCOUNTANTS’ REPORT

11 Accounts receivable, deposits and prepayments and other receivables

As at As at 31 December 31 December 2005 2006

HK$ HK$

Rental receivable...... 4,675,118 12,691,405 Deposits and other receivables and prepayments...... 3,532,316 3,714,864

8,207,434 16,406,269

Amount expected to be recovered after more than 1 year...... ——

The ageing analysis of rental receivable as of the balance sheet date (net of impairment loss for bad and doubtful debts) is as follows:

As at 31 As at 31 December 2005 December 2006

HK$ HK$

Current and up to 1 month overdue ...... 3,809,058 8,880,701 More than 1 month overdue and up to 3 months overdue ...... 866,060 2,779,894 More than 3 months overdue and up to 6 months overdue ...... — 458,225 More than 6 months overdue ...... — 572,585

4,675,118 12,691,405

The Predecessor Group’s credit policy is set out in note 18(a).

The directors consider that the carrying amount of accounts receivable approximates its fair value.

12 Deferred assets

Rental income is recognised on an accruals basis by averaging out the impact of rent-free periods, contracted rental escalations and such other items affecting the monthly cash received from rental income under each tenancy agreement. Thus, monthly rental income is recognised on a straight-line basis for the entire lease term of each tenancy agreement, which effectively amortises the impact of rent-free periods, contracted rental escalations and other relevant terms on the rental income over the relevant lease periods. The temporary difference between the monthly rental income as set out in the lease agreements and accounting monthly rental income is reflected as deferred assets or included in receipts in advance.

— I-24 — APPENDIX I ACCOUNTANTS’ REPORT

13 Cash and cash equivalents

Included in cash and cash equivalents are the following amounts denominated in a currency other than the functional currency of the Predecessor Group to which they relate:

As at As at 31 December 31 December 2005 2006

United States Dollars...... — 97,649,023

14 Bank loan

As at As at 31 December 31 December 2005 2006

HK$ HK$

Secured bank loan — principal ...... 480,350,000 1,828,258,617 Borrowing costs capitalised ...... — (4,430,854)

480,350,000 1,823,827,763

Effective interest rate of the bank loan as of 31 December 2006 is LIBOR plus 1.25% (2005: 6.336%).

The bank loan as at 31 December 2006 was secured by mortgage over the Property with a carrying value of HK$3,780,000,000 (31 December 2005: HK$3,452,000,000).

The total banking facilities of the Predecessor Group amounting to HK$1,828,258,617 (31 December 2005: HK$480,350,000) were utilised at 31 December 2006.

Included in bank loan are the following amounts denominated in a currency other than the functional currency of the relevant companies to which they relate:

As at As at 31 December 31 December 2005 2006

HK$ HK$

United States Dollars...... — 235,000,000

— I-25 — APPENDIX I ACCOUNTANTS’ REPORT

15 Creditors, accruals and other payables

As at As at 31 December 31 December 2005 2006

HK$ HK$

Trade payables...... 256,672 8,154,414 Accrual for land resettlement fees...... 113,531,827 117,720,953 Accrual for construction costs ...... 278,183,727 16,688,343 Other payables ...... 11,744,835 22,660,426

403,717,061 165,224,136

Included in trade and other payables are trade payables with the following ageing analysis as of the balance sheet date.

As at As at 31 December 31 December 2005 2006

HK$ HK$

Due within one month or on demand ...... 256,672 8,154,414

16 Issued capital

For the purpose of the Financial Information, issued capital represents the funds invested in BJ Bestride and BVI Gateway as at the respective period end dates.

17 Significant leasing arrangements

The Predecessor Group lease out the investment property under operating leases. The leases typically run for an initial period of two to ten years, with an option to renew the lease after that date at which all terms are renegotiated. Further details of the carrying value of the Property are contained in note 9.

At the balance sheet dates, the total future minimum lease payments under non-cancellable operating leases are receivable as follows:

As at As at 31 December 31 December 2005 2006

HK$ HK$

Within 1 year...... 129,560,693 309,684,241 After 1 year but within 5 years...... 314,003,499 586,470,581 After 5 years ...... 150,969,672 122,611,554

594,533,864 1,018,766,376

— I-26 — APPENDIX I ACCOUNTANTS’ REPORT

During the year ended 31 December 2006, HK$173,817,617 was recognised as rental income in the income statement (period ended 31 December 2005: HK$26,452,581). Repairs and maintenance expense, recognised in direct costs, was $Nil (period ended 31 December 2005: $Nil).

18 Financial risk management objectives and policies

Exposure to credit and interest risks arises in the normal course of the business of the relevant companies. These risks are limited by the following policies and practices described below.

(a) Credit risk

The credit risk of the relevant companies is primarily attributable to rental receivable. The management of the Predecessor Group maintained a defined credit policy and the exposures to these credit risks are monitored on an ongoing basis.

Monthly rents in respect of leasing properties are payable in advance by tenants and sufficient rental deposits are held to cover potential exposure to credit risk. Rental receivable is settled according to the payment terms as stated in the contracts. Provisions have been made for estimated irrecoverable amounts from the rental receivable.

The Predecessor Group has no concentration risk in view of its large number of customers. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the combined balance sheets.

(b) Interest risk

The relevant companies have no significant interest-bearing assets. The Predecessor Group is exposed to interest rate risk primarily through interest-bearing borrowings from financial institutions. Increase in interest rates would increase finance costs relating to the outstanding variable rate borrowings and increase the cost of new debt. The Predecessor Group has not used any derivative instruments to manage the interest risk during the Relevant Period.

The Predecessor Group is exposed to foreign currency risk primarily through cash and cash equivalents and bank loan denominated in United States Dollars. The Predecessor Group regularly monitors their exchange exposure and have not used any derivative instruments to manage the foreign exchange risk during the Relevant Period.

— I-27 — APPENDIX I ACCOUNTANTS’ REPORT

19 Related party transactions

Balances and transactions with related parties at the respective dates, as disclosed in the combined balance sheets, are as follows:

As at As at 31 December 31 December 2005 2006

HK$ HK$

(i) Unsecured non-interest bearing amount due from: ...... — 298,860 ...... 1,769,244 5,803,926 ...... 1,095,198 1,136,166 Mr. Tin Lik...... 317,031 19,924

3,181,473 7,258,876

As at As at 31 December 31 December 2005 2006

HK$ HK$

(ii) Unsecured non-interest bearing amount due to: Bestride Holdings Limited ...... — 35,067,596 ...... 281,196,890 4,859,860 ...... 133,537,300 — ...... 480,350 — ...... 1,729,260 71,726,820 ...... 2,882,100 2,092,020 ...... 1,520,788 —

421,346,688 113,746,296

Related parties balances arose primarily from payments/receipts on behalf of the Predecessor Group.

Period from 1 September 2005 to Year ended 31 December 31 December 2005 2006

HK$ HK$

(iii) Service fee paid to (Note (a))...... — $ 1,778,929

— I-28 — APPENDIX I ACCOUNTANTS’ REPORT

(iv) Identities of related parties

Name of parties Relationship

Mr. Tin Lik Ultimate shareholder

Close family member of Mr. Tin Lik

Bestride Holdings Limited Ultimate holding company of BJ Bestride

Immediate holding company of BJ Bestride

Fellow subsidiary of BJ Bestride

Related company jointly owned by and another close family member of Mr. Tin Lik

Fellow subsidiary of BJ Bestride

Note:

(a) The transaction was carried out on normal commercial terms and in the ordinary course of business.

20 Subsequent events

Subsequent to 31 December 2006,

(i) On 16 March 2007, the Fifth Plenary Session of the Tenth National People’s Congress passed the New Enterprise Income Tax Law (“EIT Law”) which will take effect on 1 January 2008. HK Gateway has been subject to PRC withholding income tax which has been levied at 10% on the gross rental income after deducting 5% business tax. As a result of the EIT Law, the withholding tax rate would be increased to 20% on the PRC-sourced income from 1 January 2008, if no further action is taken by the PRC State Council to reduce the withholding tax rate. In view of the uncertain action to be taken by the State Council, HK Gateway is not able to make an estimate of the expected financial effect of the EIT Law on its deferred tax assets and liabilities. The expected financial effect of the EIT Law, if any, will be reflected in the 2007 financial statements of the companies comprising the Predecessor Group. The enactment of the EIT Law is not expected to have any financial effect on the amounts accrued in the balance sheet in respect of current tax payable.

(ii) Pursuant to a board resolution of BVI Gateway passed on 2 June 2007, a final dividends of HK$50,000,000 was proposed to Mr. Tin Lik.

(iii) The Manager and the Trustee (as purchaser for and on behalf of RREEF CCT) entered into a share purchase agreement with Mr. Tin Lik (as vendor) for the acquisition of the entire issued capital of BVI Gateway, together with settlement of the amounts due from/to the related parties.

(iv) HK Gateway obtained bank loan facility which is a term loan facility of HK$1,400,000,000 which will be drawn down in full for funding of the acquisition of BVI Gateway.

— I-29 — APPENDIX I ACCOUNTANTS’ REPORT

However, the above arrangements are conditional upon the grant of permission to list the units in RREEF CCT on the Main Board of The Stock Exchange of Hong Kong Limited on or before the date of completion.

21 Subsequent financial statements

No audited financial statements for any of the relevant companies directly or indirectly holding the Property have been prepared in respect of any period subsequent to 31 December 2006.

Yours faithfully, KPMG Certified Public Accountants Hong Kong

— I-30 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

Auditors’ report to the director of Beijing Gateway Plaza (BVI) Limited (Incorporated in British Virgin Islands with limited liability)

We have audited the consolidated financial statements of Beijing Gateway Plaza (BVI) Limited (“the Company”) and its subsidiary (the “Group”) set out on pages II-3 to II-19 which comprise the consolidated balance sheets as at 31 December 2005 and 31 December 2006, and the consolidated income statements, the consolidated statements of changes in equity and consolidated cash flow statements for the period/year then ended, and a summary of significant accounting policies and other explanatory notes.

Director’s responsibility for the financial statements

The director of the Company is responsible for the preparation and the true and fair presentation of these financial statements in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and the true and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit, and to report our opinion to you.

We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and true and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the director, as well as evaluating the overall presentation of the financial statements.

— II-1 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the state of affairs of the Group as at 31 December 2005 and 31 December 2006 and of its profits and cash flows for the period/year then ended in accordance with Hong Kong Financial Reporting Standards.

KPMG Certified Public Accountants 8th Floor, Prince’s Building 10 Chater Road Central, Hong Kong 11 June 2007

— II-2 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

Consolidated income statements for the period from 18 October 2005 (date of incorporation) to 31 December 2005 and for the year ended 31 December 2006 (Expressed in Hong Kong dollars)

Period from 18 October 2005 (date of incorporation) Year ended Note to 31 December 2005 31 December 2006

HK$ HK$

Turnover ...... 3 — 131,018,012 Direct costs...... 4 — (26,163,745)

Gross profit ...... — 104,854,267 Administrative expenses ...... — (2,695,201) Other income ...... 5 — 27,854,327

Profit before increase in fair value of investment property and finance costs ...... — 130,013,393 Increase in fair value of investment property...... 8 — 1,892,767,435

Profit from operations ...... — 2,022,780,828 Finance costs...... 6(a) — (62,080,080)

Profit before taxation ...... 6 — 1,960,700,748 Income tax ...... 7(a) — (202,378,544)

Profit for the period/year...... — 1,758,322,204

The notes on pages II-8 to II-19 form part of these financial statements.

— II-3 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

Consolidated balance sheets at 31 December 2005 and 31 December 2006 (Expressed in Hong Kong dollars)

Note 31 December 2005 31 December 2006

HK$ HK$

Non-current asset Investment property...... 8 — 3,780,000,000 ------

Current assets Other receivables ...... — 435,384 Cash and cash equivalents...... 9 8 759,691,732

8 760,127,116 ------

Current liabilities Accruals and other payables...... — (13,895,663) Amounts due to related companies ...... 10 — (701,377,731) Bank loan...... 11 — (1,823,827,763) Current taxation ...... 7(b) — (12,905,253)

— (2,552,006,410) ------Net current assets/(liabilities) ...... 8 (1,791,879,294) ------

Total assets less current liabilities ...... 8 1,988,120,706 ------

Non-current liabilities

Deferred tax liabilities...... 7(d) — (193,195,991) ------NET ASSETS ...... 8 1,794,924,715

CAPITAL AND RESERVES Share capital...... 12 8 8 Reserves...... — 1,794,924,707

TOTAL EQUITY...... 8 1,794,924,715

The notes on pages II-8 to II-19 form part of these financial statements.

Approved and authorised for issue by the board on 11 June 2007

Tin Lik Director

— II-4 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

Consolidated statements of changes in equity for the period from 18 October 2005 (date of incorporation) to 31 December 2005 and for the year ended 31 December 2006 (Expressed in Hong Kong dollars)

Foreign Invested exchange Retained capital reserve profits Total

HK$ HK$ HK$ HK$

As at 18 October 2005 (date of incorporation)...... —— —— Issue of shares...... 8 ——8

As at 31 December 2005...... 8 ——8

Profit for the year ...... ——1,758,322,204 1,758,322,204 Exchange differences ...... — 36,602,503 — 36,602,503

As at 31 December 2006...... 8 36,602,503 1,758,322,204 1,794,924,715

The notes on pages II-8 to II-19 form part of these financial statements.

— II-5 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

Consolidated cash flow statements for the period from 18 October 2005 (date of incorporation) to 31 December 2005 and for the year ended 31 December 2006 (Expressed in Hong Kong dollars)

Period from 18 October 2005 (date of incorporation) Year ended to 31 December 2005 31 December 2006

HK$ HK$

Operating activities Profit before taxation...... — 1,960,700,748

Adjustment for: - Increase in fair value of investment property ...... — (1,892,767,435) - Finance costs ...... — 62,080,080 - Interest income ...... — (1,237,732) - Foreign exchange gain...... — (26,434,396)

Operating profit before changes in working capital ...... — 102,341,265 Increase in creditors, accruals and other payables...... — 13,895,663 Decrease in amounts due to related companies ...... — (55,383,754)

Net cash generated from operating activities...... — 60,853,174 ------

Investing activities Interest received ...... — 811,220 Payment for the purchase of investment property...... — (1,038,452,907)

Net cash used in investing activities ...... — (1,037,641,687) ------

— II-6 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

Period from 18 October 2005 (date of incorporation) Year ended to 31 December 2005 31 December 2006

HK$ HK$

Financing activities Proceeds from new bank loans...... — 2,849,404,616 Repayment of bank loan ...... — (1,030,652,869) Proceeds from share issued ...... 8 — Interest paid...... — (53,675,377) Other borrowing costs paid...... — (12,835,557)

Net cash generated from financing activities ...... 8 1,752,240,813 ------

Net increase in cash and cash equivalents ...... 8 775,452,300

Cash and cash equivalents at beginning of period/year ...... — 8

Effect of foreign exchange rate changes ...... — (15,760,576)

Cash and cash equivalents at end of period/year ...... $ 8 $ 759,691,732

The notes on pages II-8 to II-19 form part of these financial statements.

— II-7 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

Notes on the financial statements (Expressed in Hong Kong dollars)

1 Significant accounting policies

(a) Statement of compliance

These financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRSs”), which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“HKASs”) and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), accounting principles generally accepted in Hong Kong. A summary of the significant accounting policies adopted by the Group is set out below.

At the date of issue of these financial statements, the HKICPA has issued the following amendments, new standards and interpretations which are not yet effective for the accounting period ended 31 December 2006 and which have not been adopted in the preparation of the financial statements.

Effective for accounting periods beginning on or after

HKFRS 7 ...... Financial instruments: disclosures 1 January 2007 Amendments to HKAS 1 .. Presentation of financial statements: capital disclosures 1 January 2007 HK (IFRIC) 11 ...... HKFRS 2 - Group and treasury share transactions 1 March 2007

The management is in the process of making an assessment of what the impact of these amendments, new standards and new interpretations is expected to be in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a significant impact on the Group’s results of operations and financial position.

(b) Basis of preparation of the financial statements

(i) RREEF China Commercial Trust (“RREEF CCT”) is established for the purposes of acquiring the commercial property operations in Beijing Gateway Plaza (the “Property”) located in Beijing, the People’s Republic of China (the “PRC”) and for the purposes of the listing on the Stock Exchange of Hong Kong Limited pursuant to the Code on Real Estate Investment Trusts.

RREEF CCT is a collective investment scheme constituted as a unit trust and authorised under section 104 of the Securities and Futures Ordinance. RREEF CCT was established under a trust deed dated 28 May 2007 made between RREEF China REIT Management Limited (the “Manager”) and HSBC Institutional Trust Services (Asia) Limited (the “Trustee”).

RREEF CCT conditionally agreed to acquire from Mr. Tin Lik, the entire issued share capital of Beijing Gateway Plaza (BVI) Limited (the “Company”). The Company and its subsidiary — HK Gateway Plaza Company Limited (“HK Gateway”) (the “Group”) has become the beneficial owner of the Property since 26 April 2006. The Group has commenced operation since 26 April 2006.

— II-8 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

The particulars of the HK Gateway are as follows:

Par value of the ordinary share capital

Date of Authorised/ Fully Place of Principal Name of company incorporation registered Issued paid up incorporation activity

HK Gateway ...... 10 November 2005 HK$100,000 HK$100 — Hong Kong Property investment

(ii) The Group’s current liabilities exceeded its current assets by $1,791,879,294 as at 31 December 2006. BVI Gateway will be acquired by RREEF CCT, and RREEF CCT has confirmed that it will provide such financial assistance to maintain the Group as a going concern. On strength of this assurance, the financial statements have been prepared on a going concern basis.

(iii) The measurement basis used in the preparation of the financial statements is the historical cost basis except that the investment properties are stated at their fair value as explained in the accounting policies set out in note 1(c).

The preparation of financial statements in conformity with HKFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Judgements made by management in the application of HKFRSs that have significant effect on the financial statements and estimates with a significant risk of material adjustment in next year are discussed in note 2.

Investment properties are land and/or buildings which are owned or held under a leasehold interest to earn rental income and/or for capital appreciation.

Investment properties are stated in the balance sheet at fair value. Any gain or loss arising from a change in fair value or from the retirement or disposal of an investment property is recognised in profit or loss. Rental income from investment properties is accounted for as described in note 1(h).

(d) Trade and other payables

Trade and other payables are initially recognised at fair value and thereafter stated at amortised cost unless the effect of discounting would be immaterial, in which case they are stated at cost.

(e) Cash and cash equivalents

(f) Income tax

— II-9 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

Current tax balances and deferred tax balances, and movements therein, are presented separately from each other and are not offset.

(g) Provisions and contingent liabilities

Provisions are recognised for liabilities of uncertain timing or amount when the Company has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation.

(h) Revenue recognition

Provided it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognised in profit or loss as follows:

(i) Rental income from operating leases

(ii) Car park income

Car park income is recognised as revenues on an accruals basis. Car park income excludes business tax.

— II-10 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

(iii) Interest income

Interest income is recognised as it accrues using the effective interest method.

(i) Borrowing costs

Borrowing costs are expensed in profit or loss in the period in which they are incurred.

(j) Translation of foreign currencies

Foreign currency transactions during each period are translated into Renminbi, the functional currency of the Group, at the foreign exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into Renminbi at the foreign exchange rates ruling at the balance sheet dates. Exchange gains and losses are recognised in profit or loss.

The financial statements are presented in Hong Kong dollars for the convenience of the financial statement readers. For the purpose of translating the financial statements from Renminbi into Hong Kong dollars, all assets and liabilities of the Company are translated into Hong Kong dollars at the applicable rates of exchange in effect at the balance sheet dates, and all income and expense items at the average applicable rates during the periods. All resulting exchange differences are dealt with as movements of reserves.

(k) Interest-bearing borrowings

(l) Related parties

For the purposes of these financial statements, a party is considered to be related to the Group if:

(i) the party has the ability, directly or indirectly through one or more intermediaries, to control the Group or exercise significant influence over the Group in making financial and operating policy decisions, or has joint control over the Group;

(ii) the Group and the party are subject to common control;

(iii) the party is an associate of the Group or a joint venture in which the Group is a venturer;

(iv) the party is a member of key management personnel of the Group or the Group’s parent, or a close family member of such an individual, or is an entity under the control, joint control or significant influence of such individuals;

(v) the party is a close family member of a party referred to in (i) or is an entity under the control, joint control or significant influence of such individuals; or

(vi) the party is a post-employment benefit plan which is for the benefit of employees of the Group or of any entity that is a related party of the Group.

Close family members of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity.

— II-11 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

2 Accounting estimates and judgements

The key sources of estimation uncertainty and critical accounting judgements in applying the above accounting policies are described below.

Investment property

As described in note 8, the investment property is stated at fair value based on the valuation performed by independent professional valuers. In determining the fair value, the valuers have based on a method of valuation which involves certain estimates. In relying on the valuation report, the management has exercised their judgement and are satisfied that the method of valuation is reflective of the current market conditions.

3 Turnover

The principal activity of the Group is property investment in the PRC.

Turnover represents income from the following activities:

Period from 18 October 2005 (date of incorporation) Year ended to 31 December 2005 31 December 2006

HK$ HK$

Property rental income ...... — 136,567,208 Car park rental...... — 1,346,490 Less: business tax ...... — (6,895,686)

— 131,018,012

4 Direct costs

Period from 18 October 2005 (date of incorporation) Year ended to 31 December 2005 31 December 2006

HK$ HK$

Commission to leasing agents ...... — 9,496,816 Management fee ...... — 1,479,968 Urban real estate tax (Note) ...... — 10,206,430 Stamp duty ...... — 534,879 Promotional expenses ...... — 4,021,122 Property miscellaneous expenses ...... — 424,530

— 26,163,745

Note: Urban real estate tax is calculated at 1.2% on original cost of the investment property less certain deduction.

— II-12 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

5 Other income

Period from 18 October 2005 (date of Incorporation) Year ended to 31 December 2005 31 December 2006

HK$ HK$

Foreign exchange gain, net ...... — 26,434,396 Bank interest income...... — 1,237,732 Others ...... — 182,199

— 27,854,327

6 Profit before taxation

Profit before taxation is arrived at after charging/(crediting):

Period from 18 October 2005 (date of Incorporation) Year ended to 31 December 2005 31 December 2006

HK$ HK$

(a) Finance costs: Interest on bank loans...... — 53,675,377 Other borrowing costs ...... — 8,404,703

— 62,080,080

(b) Other items: Rental receivable from investment property ...... — (131,018,012) Less: outgoings...... — 26,163,745

Net rental receivable from investment property ...... — (104,854,267)

Auditors’ remuneration ...... — 60,000 Director’s emoluments...... —— Exchange gain, net ...... — (26,434,396)

— II-13 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

7 Income tax

(a) Income tax in the consolidated income statements represents:

Period from 18 October 2005 (date of incorporation) Year ended to 31 December 2005 31 December 2006

HK$ HK$

Current tax Provision for PRC withholding income tax for the period .. — 13,101,801 ------

Deferred tax Origination and reversal of temporary differences ...... — 189,276,743 ------

— 202,378,544

No provision for Hong Kong Profits Tax has been made as the Group did not earn any income assessable under Hong Kong Profits Tax during the periods presented.

The Group is subject to PRC withholding income tax of 10% on the gross rental income after deducting 5% business tax.

(b) Current taxation in the consolidated balance sheets represents withholding tax payable at the balance sheet dates.

Period from 18 October 2005 (date of Incorporation) Year ended to 31 December 2005 31 December 2006

HK$ HK$

Profit before taxation...... — 1,960,700,748

Withholding income tax computed by applying tax rate in the PRC ...... — 202,378,544

— II-14 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

(d) Deferred tax liabilities

The components of deferred tax liabilities recognised in the consolidated balance sheets and the movements during the period/year are as follows:

Revaluation of investment property

HK$

Deferred tax arising from: At 18 October 2005 and 31 December 2005...... — ------

At 1 January 2006 ...... — Charged to profit or loss ...... 189,276,743 Exchange difference ...... 3,919,248

At 31 December 2006 ...... 193,195,991

8 Investment property

HK$

At 18 October and 31 December 2005...... — Additions...... 1,741,635,000 Transaction costs capitalised...... 53,119,868 Increase in fair value...... 1,892,767,435 Exchange adjustment ...... 92,477,697

As at 31 December 2006...... 3,780,000,000

The investment property was acquired from Beijing Bestride Estate Development Company Limited (“BJ Bestride”) at a consideration of RMB1,800,000,000 (equivalent to HK$1,741,635,000) on 26 April 2006.

The investment property was revalued as at 31 December 2006 on an open market value basis in its existing state by reference to comparable market transactions and where appropriate on the basis of capitalisation of the net income allowing for reversionary income potential. The valuation as at 31 December 2006 was carried out by an independent firm of professional surveyors, Shanghai Gooray & Henry Property Valuation Chartered Surveyors Co. Ltd., who have among their staff fellows of the Royal Institution of Chartered Surveyors with recent experience in the location and category of property being valued.

— II-15 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

The investment property is held in the PRC under medium-term lease. At 31 December 2006, the investment property had been pledged as security for a loan facility granted by a bank to the Company to the extent of US$235 million (2005: Nil).

All land and properties held under operating leases that would otherwise meet the definition of investment property are classified as investment property.

9 Cash and cash equivalents

Included in cash and cash equivalents are the following amounts denominated in a currency other than the functional currency of the relevant companies to which they relate:

As at As at 31 December 2005 31 December 2006

United States Dollars ...... — 97,649,023

10 Amounts due to related companies

As at As at 31 December 2005 31 December 2006

HK$ HK$

BJ Bestride ...... — 666,320,097 Bestride Holdings Limited (“Bestride Holdings”) ...... — 35,057,634

— 701,377,731

BJ Bestride and Bestride Holdings are effectively owned by the ultimate shareholder of the Company, Mr. Tin Lik.

The amounts due to BJ Bestride arose from acquisition of the investment property from BJ Bestride, and receipts of rental proceeds, tenancy deposits and payments of operating expenses by BJ Bestride on behalf of the Group during the Relevant Period.

The amounts due to Bestride Holdings represent payments on behalf of the Company.

The amounts due to related companies are unsecured, interest-free and repayable on demand.

— II-16 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

11 Bank loan

As at As at 31 December 2005 31 December 2006

HK$ HK$

Secured bank loan — principal ...... — 1,828,258,617 Other borrowing costs capitalised ...... — (4,430,854)

— 1,823,827,763

Effective interest rate of the bank loan as of 31 December 2006 is LIBOR plus 1.25% (2005: Nil).

The bank loan is denominated in United States Dollars and the balance as of 31 December 2006 was US$235,000,000. The bank loan as at 31 December 2006 was repayable within one year and was secured by mortgage over the investment property with a carrying value of HK$3,780,000,000.

The total banking facilities of the Company amounting to HK$1,828,258,617 were utilised at 31 December 2006.

12 Share capital

As at As at 31 December 2005 31 December 2006

HK$ HK$

Authorised: 50,000 ordinary shares of US$1 each...... 390,000 390,000

Issued and fully paid: Shares issued upon incorporation (note (i)) ...... 8 8

(i) The company was incorporated with an authorised share capital of US$50,000 divided into 50,000 shares of a nominal value of US$1 each.

On the date of incorporation, one share of US$1 was issued to the subscriber at par value.

(ii) The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.

— II-17 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

13 Financial instruments

Exposure to credit and interest risks arises in the normal course of the Group’s business. These risks are limited by the following policies and practices described below.

(a) Credit risk

The Group’s credit risk is primarily attributable to other receivables. The management of the Group maintained a defined credit policy and the exposures to these credit risks are monitored on an ongoing basis.

(b) Interest risk

The Group has no significant interest-bearing assets. The Group is exposed to interest rate risk primarily through interest-bearing borrowings from financial institutions. Increase in interest rates would increase finance costs relating to the outstanding variable rate borrowings and increase the cost of new debt. The Group has not used any derivative instruments to manage the interest risk during the periods presented.

The Group is exposed to foreign currency risk primarily through cash and cash equivalents and bank loan denominated in United States Dollars. The Group regularly monitors their exchange exposure and has not used any derivative instruments to manage the foreign exchange risk during the Relevant Period.

14 Significant leasing arrangement

The Group leases out the investment property under operating leases. The leases typically run for an initial period of two to ten years, with an option to renew the lease after that date at which all terms are renegotiated.

At the balance sheet dates, the total future minimum lease payments under non-cancellable operating leases are receivable as follows:

As at As at 31 December 2005 31 December 2006

HK$ HK$

Within 1 year ...... — 309,684,241 After 1 year but within 5 years ...... — 586,470,581 After 5 years ...... — 122,611,554

— 1,018,766,376

— II-18 — APPENDIX II AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE BVI COMPANY

15 Material related party transactions

In addition to the transactions and balances disclosed elsewhere in these financial statements, the Group entered into following material related party transactions:

Period from 18 October 2005 (date of incorporation) to 31 Year ended December 2005 31 December 2006

HK$ HK$

Management fee paid to BJ Bestride (Note (a)) ...... — 1,479,968 Acquisition of the investment property from BJ Bestride (Note (b)) ...... — 1,741,635,000

Notes:

(a) The transaction was carried out on normal commercial terms and in the ordinary course of business.

(b) The amount of consideration of the investment property was determined by Mr. Tin Lik, who is the ultimate controlling party of both the Group and BJ Bestride.

16 Subsequent events

(a) On 16 March 2007, the Fifth Plenary Session of the Tenth National People’s Congress passed the New Enterprise Income Tax Law (“EIT Law”) which will take effect on 1 January 2008. The Group has been subject to PRC withholding income tax which has been levied at 10% on the gross rental income after deducting 5% business tax. As a result of the EIT Law, the withholding tax rate would be increased to 20% on the PRC-sourced income from 1 January 2008, if no further action is taken by the PRC State Council to reduce the withholding tax rate. In view of the uncertain action to be taken by the State Council, the Group is not able to make an estimate of the expected financial effect of the EIT Law on its deferred tax liabilities. The expected financial effect of the EIT Law, if any, will be reflected in the Group’s 2007 financial statements. The enactment of the EIT Law is not expected to have any financial effect on the amounts accrued in the balance sheet in respect of current tax payable.

(b) Pursuant to a board resolution passed on 2 June 2007, a final dividend of HK$50,000,000 was proposed to Mr. Tin Lik.

(c) The Manager and the Trustee (as purchaser of and on behalf of RREEF CCT) entered into a share purchase agreement with Mr. Tin Lik (as vendor) for the acquisition of the entire issued capital of BVI Gateway, together with settlement of the amounts due to related companies.

(d) The Group obtained bank loan facility which is a term loan facility of HK$1,400,000,000 which will be drawn down in full for funding of the acquisition of BVI Gateway by RREEF CCT.

— II-19 — APPENDIX III UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT

Unless otherwise defined herein, terms used in this appendix shall have the same meanings as defined in section headed “Definitions” in this Offering Circular.

For illustrative purpose only, set out below are the unaudited pro forma balance sheets of RREEF CCT as at 28 May 2007, the date of establishment of RREEF CCT, to show the effect of the issuance of the Units in the Offering, the initial drawdown of approximately HK$1,400 million in borrowings from the Facility, and the acquisition of the BVI Property Company Share as if they had taken place on the same day.

The pro forma balance sheets have been prepared for illustrative purposes only and because of their nature, they may not give a true picture of the financial position of RREEF CCT following the above transactions. Pursuant to the international underwriting agreement between the Joint Global Coordinators (on behalf of the Underwriters), the Vendor and the Manager, the Offer Price is not expected to be more than HK$5.40 (the “Maximum Offer Price”), and is not less than HK$5.00 (the “Minimum Offer Price”). Accordingly, two unaudited pro forma balance sheets have been prepared based on the Maximum and the Minimum Offer Price.

— III-1 — APPENDIX III UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT

The following unaudited pro forma balance sheets of RREEF CCT are based on the unaudited consolidated balance sheet of RREEF CCT and as adjusted as described below:

A. UNAUDITED PRO FORMA BALANCE SHEET OF RREEF CCT (BASED ON MAXIMUM OFFER PRICE OF HK$5.40)

Pro forma adjustments Acquisition of the BVI Pro forma RREEF CCT as Property Other balance of at 28 May 2007 Company adjustments Notes RREEF CCT (Note 1) (Note 2) HK$ HK$ HK$ HK$ (Unaudited) (Audited) (Unaudited) (Unaudited)

Non-current assets Investment property ...... — 3,780,000,000 198,000,000 5(i) 3,978,000,000 Goodwill ...... ——158,342,912 5(vii) 158,342,912 — 3,780,000,000 4,136,342,912 ------

Current assets Accounts receivable, deposits and prepayments and other receivables ...... — 435,384 12,691,405 5(iii) 13,126,789 Deferred assets ...... ——523,930 5(iii) 523,930 Cash and cash equivalents...... — 759,691,732 2,615,760,000 3(i) 127,419,040 (83,537,000) 3(ii) (1,828,258,617) 4(ii) 1,400,000,000 4(iii) (21,779,000) 4(iv) (637,421,302) 5(iii) (2,077,036,773) 5(v) — 760,127,116 141,069,759 ------

Current liabilities Bank loan ...... — (1,823,827,763) 1,823,827,763 4(i)&(ii) — Amounts due to related companies...... — (701,377,731) 701,377,731 5(iii) — Receipts in advance ...... ——(10,970,829) 5(iii) (10,970,829) Tenants’ deposits...... ——(66,200,935) 5(iii) (66,200,935) Creditors and accruals and other payables .... — (13,895,663) (50,000,000) 5(iv) (63,895,663) Current taxation...... — (12,905,253) (12,905,253)

— (2,552,006,410) (153,972,680) ------Net current liabilities ...... — (1,791,879,294) (12,902,921) ------Total assets less current liabilities ...... — 1,988,120,706 4,123,439,991 ------

— III-2 — APPENDIX III UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT

Non-current liabilities Bank Loan ...... (1,378,221,000) 4(iii)&(iv) (1,378,221,000) Deferred tax liabilities .... — (193,195,991) (19,800,000) 5(ii) (212,995,991)

— (193,195,991) (1,591,216,991) ------NET ASSETS ATTRIBUTABLE TO UNITHOLDERS ...... — 1,794,924,715 2,532,223,000

REPRESENTED BY: Proceeds from issuance of Units ...... ——(2,615,760,000) 3(i) (2,615,760,000) Cost of issuance of Units ...... — 83,537,000 3(ii) 83,537,000 Invested capital — the BVI Property Company...... — (8) 8 5(vi) — Reserves ...... — (1,794,924,707) 4,430,854 4(i) — 50,000,000 5(iv) 1,740,493,853 5(vi)

— (1,794,924,715) (2,532,223,000)

— III-3 — APPENDIX III UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT

B. UNAUDITED PRO FORMA BALANCE SHEET OF RREEF CCT (BASED ON MINIMUM OFFER PRICE OF HK$5.00)

Pro forma adjustments

Acquisition of the BVI Pro forma RREEF CCT as Property Other balance of at 28 May 2007 Company adjustments Notes RREEF CCT

(Note 1) (Note 2) HK$ HK$ HK$ HK$ (Unaudited) (Audited) (Unaudited) (Unaudited)

Non-current assets Investment property ...... — 3,780,000,000 198,000,000 5(i) 3,978,000,000 ------

Current assets Accounts receivable, deposits and prepayments and other receivables...... — 435,384 12,691,405 5(iii) 13,126,789 Deferred assets ...... ——523,930 5(iii) 523,930 Cash and cash equivalents .... — 759,691,732 2,422,000,000 3(i) 127,170,430 (79,177,000) 3(ii) (1,828,258,617) 4(ii) 1,400,000,000 4(iii) (21,779,000) 4(iv) (637,421,302) 5(iii) (1,887,885,383) 5(v)

— 760,127,116 140,821,149 ------

Current liabilities Bank loan...... — (1,823,827,763) 1,823,827,763 4(i)&(ii) — Amounts due to related companies ...... — (701,377,731) 701,377,731 5(iii) — Receipts in advance ...... ——(10,970,829) 5(iii) (10,970,829) Tenants’ deposits...... ——(66,200,935) 5(iii) (66,200,935) Creditors and accruals and other payables ...... — (13,895,663) (50,000,000) 5(iv) (63,895,663) Current taxation...... — (12,905,253) (12,905,253)

— (2,552,006,410) (153,972,680) ------

Net current liabilities ...... — (1,791,879,294) (13,151,531) ------

Total assets less current liabilities ...... — 1,988,120,706 3,964,848,469 ------

— III-4 — APPENDIX III UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT

Pro forma adjustments

Acquisition of the BVI Pro forma RREEF CCT as Property Other balance of at 28 May 2007 Company adjustments Notes RREEF CCT

(Note 1) (Note 2) HK$ HK$ HK$ HK$ (Unaudited) (Audited) (Unaudited) (Unaudited) Non-current liabilities Bank Loan...... (1,378,221,000) 4(iii) &(iv) (1,378,221,000) Deferred tax liabilities...... — (193,195,991) (19,800,000) 5(ii) (212,995,991)

— (193,195,991) (1,591,216,991) ------

NET ASSETS ATTRIBUTABLE TO UNITHOLDERS...... — 1,794,924,715 2,373,631,478

REPRESENTED BY: Proceeds from issuance of Units ...... ——(2,422,000,000) 3(i) (2,422,000,000) Cost of issuance of Units...... — 79,177,000 3(ii) 79,177,000 Invested capital — the BVI Property Company ...... — (8) 8 5(vi) — Reserves...... — (1,794,924,707) 4,430,854 4(i) — 50,000,000 5(iv) 1,740,493,853 5(vi) Excess of fair value of the acquiree’s identifiable net assets over cost of business acquisition ...... (30,808,478) 5(vii) (30,808,478)

— (1,794,924,715) (2,373,631,478)

Notes to the unaudited pro forma balance sheets:

1 The balances are extracted from the unaudited consolidated balance sheet of RREEF CCT as at 28 May 2007, the date of establishment of RREEF CCT.

2 The balances are extracted from the audited consolidated balance sheet of the BVI Property Company as at 31 December 2006 as set out in Appendix II to this Offering Circular.

The identifiable assets and liabilities assumed in the acquisition of the BVI Property Company Share will be measured initially at their fair values at the acquisition date. The Directors of the Manager consider the net book values of the identifiable consolidated assets and liabilities of the BVI Property Company and its subsidiary — the HK Property Company (hereafter collectively referred to as the “Target Group”)asat 31 December 2006 approximate their fair values as at the acquisition date except that (a) the unamortised loan costs in respect of the existing bank loan of the HK Property Company are written off upon repayment of the underlying loan (see 4(i) below), (b) the value of the Property is adjusted based on the fair market valuation made by the Independent Property Valuer, DTZ on 31 March 2007 (see note 5(i) below), (c) deferred tax liabilities are recognised in respect of temporary differences between the fair values of the identifiable assets and liabilities acquired and their tax bases (see note 5(ii) below) (d) payment of dividends before the acquisition date (see note 5(iv) below).

— III-5 — APPENDIX III UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT

3 (i) This represents the proceeds from the issuance of 484,400,000 Units based on Maximum and Minimum Offer Price of HK$5.40 and HK$5.00 respectively. Mr. Tin Lik agreed to subscribe for 48,440,000 units at a price per unit equivalent to the Offering Price and the subscription will be deducted from the consideration for the acquisition of the BVI Property Company Share.

(ii) This represents the payment of issuance costs, comprising expenses related to the Offering, which include underwriting commission payable to the Underwriters (based on the Offering size), legal fees, printing costs, accountants’ fees, listing costs, advertisement and marketing related expenses.

4 (i) The amount represents write off of the balances of unamortised loan costs in respect of the existing bank loan of the Target Group.

(ii) The existing bank loan of the Target Group will be repaid on the listing date.

(iii) The HK Property Company has entered into the Facility in the aggregate principal amount of HK$1,400 million representing a term loan of HK$1,400 million, which is expected to be fully drawn down upon Completion. The bank loans are recognised at fair value less attributable transaction costs of HK$21.8 million.

(iv) This represents transaction costs of bank loans drawn down.

5 Pursuant to the share purchase agreement in respect of the acquisition of the BVI Property Company Share, the purchase consideration for BVI Property Company is based on the Acquisition Value of the Property owned by that BVI Property Company, with adjustment (on bases agreed between the Manager and the Vendor) for the net current assets/current liabilities of the Companies on Completion, plus the Adjustment Sum.

The following adjustments reflect the acquisition of the BVI Property Company Share:

(i) Revaluation of the Property held by the BVI Property Company by reference to the fair market valuation made by DTZ as at 31 March 2007 as set out in Appendix VI to this Offering Circular.

(ii) Recognition of deferred taxation in respect of temporary differences between the fair values of the assets and liabilities acquired and their tax bases in the business combination.

(iii) Settlement of the current accounts with related companies after transferral of operating accounts, including deferred assets, accounts receivables, deposits, prepayments and other receivables, tenants’ deposits and receipts in advance, from the Predecessor Property Company to the HK Property Company, immediately prior to the acquisition.

(iv) Declaration of a final dividend of HK$50,000,000 to Mr. Tin Lik for the year ended 31 December 2006 prior to the acquisition. It would be settled by monthly installments after clearance of PRC withholding tax. Rent collected is maintained in an operating bank account of the HK Property Company.

(v) Payment for the acquisition of the BVI Property Company Share.

— III-6 — APPENDIX III UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT

(vi) Elimination of pre-acquisition reserves including invested capital of the BVI Property Company and retained earnings.

(vii) The amount represents the recognition of the excess/shortfall of the cost of acquisition over the net fair value of the identifiable assets, liabilities and contingent liabilities of the Target Group acquired at the Completion Date in accordance with Hong Kong Financial Reporting Standard 3, Business Combination.

Since the fair values of the assets and liabilities of the Target Group as at the Completion Date may be different from their fair values used in the preparation of the unaudited pro forma balance sheets presented above, the actual amount of goodwill arising from the Acquisition, if any, may be different from the estimated amount shown in this Appendix.

The excess of the cost of acquisition over the net fair value of the identifiable assets and liabilities of the Target Group is stated on the balance sheet at cost less accumulated impairment loss. Any excess of the net fair value of the identifiable assets and liabilities of the Target Group over the cost of acquisition is recognised immediately in profit or loss.

6 In accordance with the Trust Deed, RREEF CCT has a limited life of 80 years from the date of commencement, and RREEF CCT is required to distribute to the Unitholders not less than 90% of its Annual Distributable Income for each financial period. Accordingly, the Units contain contractual obligations to pay cash dividends and also upon the termination of RREEF CCT, a share of all net cash proceeds derived from the sale or realisation of the assets of RREEF CCT less any liabilities, in accordance with their proportionate interests in RREEF CCT at the date of its termination. The unitholders’ funds (which are represented by the net proceeds from the issuance of the Units and the excess of fair values of the acquirees’ identifiable net assets over cost of business combination) are therefore classified as financial liabilities in accordance with Hong Kong Accounting Standard 32: Financial Instruments: Disclosures and Presentation. It is shown on the balance sheet as net assets attributable to the Unitholders.

— III-7 — APPENDIX III UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT

Letter from the Accountants in Relation to Unaudited Pro Forma Balance Sheets

The following is the text of a report received from the independent reporting accountants, KPMG, Certified Public Accountants, Hong Kong for the purpose of incorporation in this Offering Circular.

8th Floor Prince’s Building 10 Chater Road Central Hong Kong

11 June 2007

The Directors RREEF China REIT Management Limited Deutsche Bank AG, Hong Kong Branch The Hongkong and Shanghai Banking Corporation Limited

Dear Sirs

We report on the unaudited pro forma balance sheets (the “Pro Forma Financial Information”) of RREEF China Commercial Trust (“RREEF CCT”) and its controlled entities as set out on pages III-1 to III-7 of the offering circular dated 11 June 2007 (the “Offering Circular”) issued in connection with the placing and public offer of the units of RREEF CCT, which has been prepared by the directors of RREEF China REIT Management Limited (the “Manager”) solely for illustrative purposes to provide information about how the issuance of the units of RREEF CCT, the initial drawdown in borrowings and the acquisition of BVI Property Company might have affected the balance sheet of RREEF CCT and its controlling entities (the “Group”) as at 28 May 2007, the date of establishment of RREEF CCT. The basis of preparation of the unaudited Pro Forma Financial Information is set out on page III-1 of the Offering Circular.

Responsibilities

It is the responsibility solely of the directors of the Manager to prepare the unaudited Pro Forma Financial Information in accordance with Paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”)asif the Listing Rules are applicable to RREEF CCT and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).

It is our responsibility to form an opinion, as required by Paragraph 4.29(7) of the Listing Rules as if the Listing Rules are applicable to RREEF CCT, on the unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

— III-8 — APPENDIX III UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT

Basis of opinion

We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial information with source documents, considering the evidence supporting the adjustments and discussing the unaudited Pro Forma Financial Information with the directors of the Manager. The engagement did not involve independent examination of any of the underlying financial information.

Our work did not constitute an audit or a review made in accordance with Hong Kong Standards on Auditing or Hong Kong Standards on Review Engagements issued by the HKICPA, and accordingly, we do not express any such audit or review assurance on the unaudited Pro Forma Financial Information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the unaudited Pro Forma Financial Information has been properly compiled by the directors of the Manager on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the unaudited Pro Forma Financial Information as disclosed pursuant to Paragraph 4.29(1) of the Listing Rules as if the Listing Rules are applicable to RREEF CCT.

The unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgements and assumptions of the directors of the Manager, and because of its hypothetical nature, it does not provide any assurance or indication that any event will take place in the future and may not be indicative of the financial position of the Group as at 28 May 2007 or at any future date. We make no comments regarding the reasonableness of the amount of net proceeds from the issuance of RREEF CCT’s units, the application of those net proceeds, or whether such use will actually take place as described under the section headed “Use of Proceeds” in the Offering Circular.

Opinion

In our opinion:

a) the unaudited Pro Forma Financial Information has been properly compiled by the directors of the Manager on the basis stated;

b) such basis is consistent with the accounting policies of the Group; and

— III-9 — APPENDIX III UNAUDITED PRO FORMA BALANCE SHEETS OF RREEF CCT

c) the adjustments are appropriate for the purposes of the unaudited Pro Forma Financial Information as disclosed pursuant to Paragraph 4.29(1) of the Listing Rules as if the Listing Rules are applicable to RREEF CCT.

Yours faithfully KPMG Certified Public Accountants Hong Kong

— III-10 — APPENDIX IV PROFIT FORECAST

A. REPORT OF THE MANAGER

The following is the text of the report from RREEF China REIT Management Limited, the manager of RREEF CCT, in relation to the forecast consolidated net profit of RREEF CCT and its controlled entities for the period from the anticipated Listing Date to 31 December 2007 as set out in the section headed “Profit Forecast” in this Offering Circular.

11 June 2007

Dear Sirs,

We have prepared the Profit Forecast and Working Capital Forecast (the “Forecast”)of RREEF China Commercial Trust (“RREEF CCT”) and its controlled entities for the period from the anticipated Listing Date to 31 December 2007 and from the Listing Date to 30 June 2008 respectively based on the assumptions as set out in these memoranda, and adopted a consistent accounting policies normally adopted by the companies comprising the Group. The Manager considers these bases, accounting policies and assumptions used in the Forecast to be appropriate and reasonable at the time of the issue of the Offering Circular and it has satisfied itself that the Forecast has been stated after due and careful inquiry.

We are satisfied that all material facts which have come to our attention have been taken into account in arriving at the Forecast and are satisfied that the Forecast has been properly considered and documented.

The memoranda have been approved by the board of directors of RREEF China REIT Management Limited.

Investors should carefully consider these bases and assumptions when making an assessment of the future performance of RREEF CCT based on the Forecast.

Yours faithfully, RREEF China REIT Management Limited

— IV-1 — APPENDIX IV PROFIT FORECAST

B. LETTER FROM KPMG

The following is the text of the letter from KPMG, the independent reporting accountants of RREEF CCT, in relation to the forecast consolidated net profit of RREEF CCT and its controlled entities for the period from the anticipated Listing Date to 31 December 2007 as set out in the section headed “Profit Forecast” in this Offering Circular.

8/F Prince’s Building 10 Chater Road Central Hong Kong

11 June 2007

The Directors RREEF China REIT Management Limited Deutsche Bank AG, Hong Kong Branch The Hongkong and Shanghai Banking Corporation Limited

Dear Sirs,

We have reviewed the accounting policies and calculations adopted in arriving at the forecast consolidated net profit of RREEF China Commercial Trust and its controlled entities (the “Group”) for the period from 22 June 2007 (the “anticipated Listing Date”) to 31 December 2007 (the “Forecast”), for which the directors (the “Directors”) of RREEF China REIT Management Limited (the “Manager”) are solely responsible, as set out in the section headed “Profit Forecast” in the offering circular dated 11 June 2007 (the “Offering Circular”).

We conducted our work in accordance with Auditing Guideline 3.341 on “Accountants’ report on profit forecasts” issued by the Hong Kong Institute of Certified Public Accountants.

The Forecast has been prepared by the Directors based on a forecast of the consolidated results of the Group for the period from the anticipated Listing Date to 31 December 2007.

In our opinion, so far as the accounting policies and calculations are concerned, the Forecast has been properly compiled on the bases and assumptions adopted by the Directors as set out in the section headed “Profit Forecast — Bases and Assumptions” in the Offering Circular and is presented on a basis consistent in all material respects with the accounting policies adopted in preparing the Accountants’ Report dated 11 June 2007, the text of which is set out in Appendix I to the Offering Circular.

— IV-2 — APPENDIX IV PROFIT FORECAST

Without qualifying our opinion above, we draw to your attention that the Manager has stated in the section headed “Profit Forecast” of the Offering Circular that in preparing the Forecast for the period from the anticipated Listing Date to 31 December 2007, the Manager has not included the impact of the movement in future valuations of investment properties as required by the Hong Kong Financial Reporting Standards since the Manager does not believe there is any reliable basis to make such forecast valuations.

We would like to point out that any adjustment on revaluation of investment properties would need to be reflected in the income statement in accordance with the accounting policies adopted in preparing the Accountants’ Report as set out in Appendix I to the Offering Circular. Any movements on the revaluation of investment properties would have the effect of increasing or reducing the consolidated results for the period from the anticipated Listing Date to 31 December 2007 by the amount of such surplus or deficit less the effect of the corresponding movement in deferred taxation and related goodwill (if any).

Yours faithfully, KPMG Certified Public Accountants Hong Kong

— IV-3 — APPENDIX IV PROFIT FORECAST

C Letter from the Joint Listing Agents

The following is the text of a letter received from Deutsche Bank AG, Hong Kong Branch and The Hongkong and Shanghai Banking Corporation Limited, the Joint Listing Agents of RREEF CCT, in relation to the forecast consolidated net profit of RREEF CCT and its controlled entities for the period from the anticipated Listing Date to 31 December 2007 as set out in the section headed “Profit Forecast” in this Offering Circular.

11 June 2007

The Directors RREEF China REIT Management Limited

Dear Sirs,

RREEF China Commercial Trust - Profit Forecast

We refer to the proposed initial public offering (the “Offering”) of the units in a real estate investment trust (namely, RREEF China Commercial Trust (“RREEF CCT”)), the units of which are proposed to be listed on The Stock Exchange of Hong Kong Limited. In particular, we refer to the forecast of the consolidated net profit of RREEF CCT and its controlled entities for the period from the anticipated Listing Date to 31 December 2007 (the “Forecast”) as set out in the offering circular of RREEF CCT dated 11 June 2007 (“Offering Circular”).

We have discussed with you the bases and assumptions upon which the Forecast (as set out in the section headed “Profit Forecast” in the Offering Circular) has been made with the directors of RREEF China REIT Management Limited (the “Manager”) and have considered the letter dated 11 June 2007 from KPMG addressed to the directors of the Manager and ourselves regarding the accounting policies and calculations upon which the Forecast has been made.

On the basis of the information comprising the Forecast and on the basis of the accounting policies of RREEF CCT and calculations adopted by the Manager, and reviewed by KPMG, we, as joint listing agents of RREEF CCT, are of the opinion that the Forecast, for which the directors of the Manager are solely responsible, has been made after due and careful enquiry.

Yours faithfully,

For and on behalf of For and on behalf of Deutsche Bank AG, The Hongkong and Shanghai Hong Kong Branch Banking Corporation Limited Douglas Morton Charles Wang Hendrick Sin Managing Director Managing Director Director Global Banking

— IV-4 — APPENDIX V LETTER FROM THE INDEPENDENT PROPERTY VALUER IN RELATION TO RENTAL INCOME

11 June 2007

RREEF China REIT Management Limited 53/F, Cheung Kong Center 2 Queen’s Road Central Hong Kong

HSBC Institutional Trust Services (Asia) Limited Level 30, HSBC Main Building 1 Queen’s Road Central Hong Kong

Deutsche Bank AG, Hong Kong Branch 55/F, Cheung Kong Center 2 Queen’s Road Central Hong Kong

The Hongkong and Shanghai Banking Corporation Limited 1 Queen’s Road Central Hong Kong

Dear Sirs,

Re: Rental Income Forecast of Beijing Gateway Plaza, 18 Xiaguangli, East 3rd Ring North Road, Chaoyang District, Beijing, the People’s Republic of China

We have reviewed the rental income forecast of the above property and the related assumptions used by RREEF China REIT Management Limited (the “Manager”)forthe purpose of the profit forecast for the period from the Listing Date to 31 December 2007 (the “Profit Forecast”) as required by Appendix F of the Code on Real Estate Investment Trusts and as set out under the section headed “Profit Forecast” in the offering circular.

— V-1 — APPENDIX V LETTER FROM THE INDEPENDENT PROPERTY VALUER IN RELATION TO RENTAL INCOME

For the purpose of our review, we have examined:

● The calculations of the Manager in relation to the rental income forecast; and

● The basic assumptions used by the Manager in making such calculations.

The Directors of the Manager are solely responsible for the Profit Forecast. We are of the opinion that the assumptions used in the said rental income forecasts for the purpose of the Profit Forecast are reasonable and the said rental income forecast has been compiled in accordance with the assumptions made.

Yours faithfully, for and on behalf of DTZ Debenham Tie Leung Limited Andrew K.F. Chan Director

— V-2 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

11 June 2007

RREEF China REIT Management Limited (as Manager of RREEF China Commercial Trust) 53/F, Cheung Kong Center 2 Queen’s Road Central Hong Kong

HSBC Institutional Trust Services (Asia) Limited (as Trustee of RREEF China Commercial Trust) Level 30, HSBC Main Building 1 Queen’s Road Central Hong Kong

Deutsche Bank AG, Hong Kong Branch 55/F, Cheung Kong Center 2 Queens Road Central Hong Kong

The Hongkong and Shanghai Banking Corporation Limited Level 15 1 Queen’s Road Central Hong Kong

Dear Sirs,

Re: Beijing Gateway Plaza (excluding the staff canteen situated in basement 1 and basement 2 and the civil defence shelter situated in basement 3), 18 Xiaguangli, East 3rd Ring North Road, Chaoyang District, Beijing, the People’s Republic of China ( 18 )

Instructions, Purpose & Date In accordance with the instructions of RREEF China of Valuation REIT Management Limited (as Manager of RREEF China Commercial Trust) (the “Manager”) for us to value the captioned property (the “Property”) situated in Beijing, the People’s Republic of China (the “PRC”), we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with

— VI-1 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

our opinion of the market value of the Property as at 31 March 2007 (the “date of valuation”). In valuing the Property, we have complied with the requirements set out in Chapter 6 of the Code on Real Estate Investment Trusts of the Securities and Futures Commission (the “SFC REIT Code”) and the requirements set out in the Valuation Standards on Properties (First Edition 2005) published by The Hong Kong Institute of Surveyors.

Basis of valuation Our valuation of the Property represents its market value which we would define as the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

Valuation Assumptions Our valuation has been made on the assumption that the owner sells the Property on the open market without the benefit of a deferred term contract, leaseback, management agreement, joint venture or any similar arrangement which would serve to increase the value of the Property.

In the course of our valuation of the Property which is situated in Beijing, the PRC, we have relied on the advice given by HK Gateway Plaza Company Limited (as the owner of the Property) (the “Owner”) and the Manager’s legal advisors, Commerce & Finance Law Offices, regarding the title to the Property. We have based on the PRC legal opinion given by Commerce & Finance Law Offices that the transferable land use rights of the Property for a term of 50 years have been granted and that the land premium has already been fully settled. We have also based on the PRC legal opinion that the grantee or the user of the Property has free and uninterrupted rights to use or to assign or lease the Property for the whole of the unexpired term as granted.

No allowance has been made in our valuation for any charges, mortgages or amounts owing on the Property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the Property is free from encumbrances, restrictions and outgoing of an onerous nature which could affect its value.

— VI-2 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

Method of Valuation In the course of our valuation, we have taken into account the existing tenancies to the Property.

We have adopted Discounted Cash Flow Analysis (“DCF Analysis”) to assess the market value of the property. DCF Analysis involves discounting future net cash flow of the Property to its present value by using an appropriate discount rate that reflects the rate of return required by a third-party investor for an investment of this type. The DCF Analysis, which comprises annual rental income streams, was based mainly on the following assumptions:

(i) We have estimated that market rent for 2007 and 2008 will grow at -5.0% per annum, followed by an annual growth rate of 5.0% for 2009 to 2011. From 2012 to 2016, we adopted a long-term growth rate of 2.0% per annum for the market rent.

(ii) We have made reference to the occupancy rate of similar commercial and office developments in Beijing and adopted a long-run occupancy rate of 95% in our DCF Analysis.

(iii) The discount rate adopted was 9.0%. We take into account the location, the income and tenant mix of the Property and the return requirement of property investors in determining the discount rate.

(iv) A terminal capitalisation rate of 7.5% was applied in the derivation of the present value of the cash flows after year 2016. The terminal capitalisation rate was obtained by reference to the comparable Grade A offices in Beijing and consideration of the characteristics of the Property.

(v) The operating period of the Property is based on the un-expired term of the land use rights of 46 years as mentioned in the land use rights certificate of the property.

— VI-3 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

We have carried out the valuation also by Investment Approach, which is a valuation method commonly applied for investment properties. In the Investment Approach, the net rental income derived from the existing tenancies with due allowance for the reversionary potential of the property was capitalised at a capitalisation rate. The fully leased net income is capitalised over the remaining term of land use rights of the property at an appropriate market yield expected by investors for this type of property. The gross yield adopted for capitalisation of the net rental income is derived with reference to the comparable Grade A offices in Beijing and consideration of the characteristics of the Property. This expected return reflects implicitly the quality of the investment, the expectation of the potential future rental growth and capital appreciation and the risk factor, and is based on our experience in valuing other similar properties.

Another valuation method we have adopted is by Direct Comparison Approach by making reference to comparable sales evidence of Grade A office in Beijing as available in the relevant market.

In forming our opinion of the market value of the advertising spaces, since there is no sales comparables available in the market available to us, we are not able to use the Direct Comparison Approach in its valuation. However, we have valued the advertising spaces by Investment Approach by making reference to comparable rental evidence as available in the relevant market.

Source of information We have relied to a very considerable extent on the information given by the Owner and the Manager’s legal advisors, Commerce & Finance Law Offices, on PRC law and have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, particulars of occupancy, development scheme, construction costs, site and floor areas and all other relevant matters.

— VI-4 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

Dimension, measurements and areas included in this valuation report are based on the area survey report provided to us by the Owner. We have had no reason to doubt the truth and accuracy of the information provided to us by the Owner and the Manager’s legal advisors on PRC law, Commerce & Finance Law Offices, which is material to the valuation. We also have no reason to believe that any information supplied was not fair and reasonable, or that any material facts have been omitted from the information supplied.

Title Investigation We have been provided with and noted copies of documents in relation to the title to the Property. However, we have not been able to conduct searches to verify the ownership of the Property or to ascertain any amendment which may not appear on the copies handed to us.

Site Inspection We have inspected the exterior and, where possible, the interior of the Property. No structural survey has been made by us. According to the Building Consultancy Due Diligence Report prepared by Knight Frank Petty provided to us by the Manager, no serious defects were found. No tests were carried out to any of the services. Unless otherwise stated, we have not been able to carry out detailed on-site measurements to verify the site and gross floor areas of the Property and we have assumed that the areas shown on the documents handed to us are correct.

Currency & Exchange Rates Unless otherwise stated, all money amounts stated herein are in Hong Kong Dollar and Renminbi. The exchange rates adopted in our valuations are HK$1=RMB1.00 which was the approximate exchange rate prevailing as at the date of valuation and there has been no significant fluctuation in such rates between that date and the date of this letter.

— VI-5 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

CONTENTS

PAGE

EXECUTIVE SUMMARY ...... VI-7

1.0 SITUATION AND THE LOCALITY...... VI-8

2.0 TOWN PLANNING ISSUES...... VI-9

3.0 SITEDETAILS...... VI-9

4.0 TITLE PARTICULARS ...... VI-10

5.0 DESCRIPTION OF THE PROPERTY ...... VI-12

6.0 PARTICULAR OF OCCUPANCY ...... VI-16

7.0 VALUATION METHOD ...... VI-25

8.0 BASIS OF VALUATION ...... VI-33

9.0 THE VALUATION ...... VI-34

— VI-6 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

Executive Summary

Beijing Gateway Plaza (excluding the staff canteen situated in basement 1 and basement 2 and the civil defence shelter situated in basement 3), 18 Xiaguangli, East 3rd Ring North Road, Chaoyang District, Beijing, the People’s Republic of China ( 18 )

Owner ...... : HK Gateway Plaza Company Limited ( ) Site Area ...... : 17,690.24 sq.m.

Total Gross floor area ...... : Level Uses Sq.m.

Levels 1-3 Commercial 17,191.50 Levels 4-25 Office 85,544.10 Ancillary Facilities 740.05 Basements Incl. Car Park Spaces 27,012.42 Basements Civil Defence Shelter 8,604.75

Total: 139,092.82

The gross floor area stated in Building Ownership Certificate No.10298 is 130,488.07 sq.m., which excludes the Civil Defence Shelter area. Completion Date ...... : August 2005 Existing Vacancy Rate ...... : 5.8% Approximate Net Monthly Passing Rental ...... : RMB30,259,967.74 (for March 2007) (including the rental from the advertising spaces) Date of Valuation ...... : 31 March 2007 Valuation Method ...... : Discounted Cash Flow Approach, Investment Approach and Direct Comparison Approach Capitalisation Rate for Valuation ...... : 9.0% for office, 10.0% for retail, 5.0% for car park and 18.0% for advertising spaces Discount Rate for DCF Analysis ...... : 9.0% Market Value in existing state ...... : HK$3,978,000,000 Gross Initial Yield ...... : 9.3% for office, 7.8% for retail, 5.3% for car park and 21.6% for advertising spaces

Remark: The Net Monthly Passing Rental is for the month of March 2007 and has factored in the rent-free period and excluding the property management fee.

— VI-7 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

1.0 SITUATION AND THE LOCALITY

1.1 The Property

The Property is situated at Xiaguangli within Yansha Commercial District, adjoining to Sanyuan Bridge of East 3rd Ring Road and Airport Expressway, Chaoyang District, Beijing, the People’s Republic of China.

1.2 Beijing

Beijing is situated in the northeast of the PRC. Neighbouring Tianjin ( ) in the east, the remaining territories of Beijing are contiguous with Hebei ( ) Province. The total area of Beijing comprising the urban districts and suburbs is about 16,800 sq.km. The planned urban area of the city is about 1,041 sq.km., having the boundaries at Dingfuzhuang ( ) in the east, Shijingshan ( ) in the west, Nanyuan ( ) in the south, and Qinghe ( ) in the north. The downtown of the urban area is bounded within the 4th Ring Road, with an area of about 300 sq.km.

1.3 Municipal Administration, Area & Population

There are 18 administrative districts and counties in Beijing and they can be categorised into urban districts, suburban districts and rural areas. Urban districts consist of Dongcheng ( ), Xicheng ( ), Chongwen ( ) and Xuanwu ( ) District. Suburban districts consist of Chaoyang ( ), Haidian ( ), Fengtai ( ) and Shijingshan ( ) District. Rural areas consist of Mentogou ( ), Fangshan ( ), Tongzhou ( ), Shunyi ( ), Daxing ( ), Changping ( ), Pinggu ( ), Miyun ( ), Huairou ( ) and Yanqing ( ). According to Beijing Municipal Bureau of Statistics, Beijing has a total permanent population of 15.81 million in 2006.

1.4 Chaoyang District

Chaoyang District, situated in the eastern part of the urban area of the city, comprises an area of approximately 470.8 sq.km. Chaoyang District is formerly a traditional industrial district of Beijing with more than 200 large to medium municipal industrial enterprises engaged in electronics, textiles, plant and machinery and car manufacturing, etc. However, in recent years, Chaoyang District has gradually developed into a new cultural and sports center of Beijing. Famous buildings in the vicinity includes National Olympic Center, Beijing Workers’ Stadium, China International Exhibition Center and China Agricultural Exhibition Center, etc. The business district of Chaoyang District is mainly located around East 3rd Ring Road and Jianguomen Wai Avenue. Major office developments in the district include China World Trade Centre, Jinggang Center, Kerry Centre. Major commercial properties in the district include Great Wall Sheraton Hotel, Hilton Hotel, Lufthansa Friendship Shopping Center and Scitech Plaza.

— VI-8 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

1.5 Location of the Property

The Property is situated in the north-west side of Xiaoyun Road in the north-east part of Chaoyang District in Beijing. The Property is bounded by East 3rd Ring North Road on the south side, Xiaguangli North Street and Xiaguangli South Street on the west and east sides respectively. The developments nearby comprise mainly office developments, shopping arcades, hotels and embassy residences. The 3rd Embassy District is about 2km east away from the Property. Buildings in the vicinity comprise Silver Tower, Diyang Building, Millennium Tower, Jingxin Mansion, Beijing Landmark Tower, Sunflower Tower, CTS Plaza, Air China Mansion, Ocean Express, US Apartment, Kempinski Hotel, Great Wall Sheraton, Hilton Hotel and Lufthansa Shopping Centre.

1.6 Accessibility of the Property

Accessibility of the Property is reasonably good. Public transport facilities and shuttle bus services are available in the immediate area. The new infrastructure being developed in the vicinity of the Property include No.10 subway, which will begin the operation before the Beijing Olympic Game in 2008. The Beijing Capital International Airport is conveniently accessible via the existing Airport Expressway and the light railway being under construction from Dongzhimen to the Airport, which will shorten the distance from the Property to the Airport to within 15 minutes. Major commercial districts such as Jiangguomen Commercial Area and Zhongguancun are conveniently accessible via the East 3rd Ring Road.

2.0 TOWN PLANNING ISSUES

The Property has been designed as a major office and commercial development in Chaoyang District. Town planning for this district covers ancillary facilities such as commercial centres, education centres and greenery area.

3.0 SITE DETAILS

3.1 Site Area and Site Boundaries

The Property occupies an irregular-shaped site with a total site area of approximately 17,690.24 sq.m.

The site of Beijing Gateway Plaza is located within the Yansha Commercial District and is adjoining to East 3rd Ring Road and Guomen First Road (the Airport Expressway).

3.2 Topography of the Site

The site of the Property is generally levelled.

All typical ancillary facilities to the subject site have been provided, including electricity, water and gas supplies, drainage/sewage pipes, telecommunication and roads.

— VI-9 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

4.0 TITLE PARTICULARS

4.1 System of Land Use Rights in the Mainland China

According to Article 10 of the Constitution of PRC amended in 1988, the right to use land owned by state is recognised through granting of “land use rights”. Land use right thereafter becomes the form of land ownership that can be transferred, assigned, leased and mortgaged in the PRC. Land use right can be obtained by local and foreign entities through tender, auction or listing held by the government. Land premium will be levied, usually on a lump sum basis for the grant of the land use rights and a Certificate for Use of State-owned Land ( ) will be issued. Public utilities services charges will be charged for the provision of utilities services to the edge of the site boundary and resettlement compensation will be charged for the resettlement of existing occupiers residing on the site. Upon completion of the new development erected on the site, Realty Title Certificate ( ) certifying the ownership of the development will be issued by the relevant Real Estate Administration Bureau ( ).

4.2 Building Ownership Certificate

According to the Building Ownership Certificate No. 10298 issued by Beijing Construction Committee on 6 April 2006, the particulars of the subject building are as follows:

(i) Grantee: HK Gateway Plaza Company Limited ( )

(ii) Location: No. 18 Xiaguangli, East 3rd Ring North Road, Chaoyang District (Beijing Gateway Plaza)

(iii) Gross Floor Area: 130,488.07 sq.m. (excludes the Civil Defence Shelter area)

4.3 Certificate for Use of State-owned Land

According to the Certificate for Use of State-owned Land No. (2003) 0075 issued by Beijing Land Resources Bureau on 25 April 2006, the particulars of the subject land are as follows:

(i) Grantee: HK Gateway Plaza Company Limited ( )

(ii) Location: No. 18 Xiaguangli, East 3rd Ring North Road, Chaoyang District (Beijing Gateway Plaza)

(iii) Site Area: 17,690.24 sq.m.

(iv) Land Use: Composite and underground car parking spaces

(v) Land Use Term: Due to expire on 25 February 2053

— VI-10 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

4.4 Grant Contract of Land Use Rights

According to the Grant Contract of Land Use Rights No. (2003) 148 dated 26 February 2003, the Property has been granted to Beijing Bestride Estate Development Company Limited ( ) with details as follows:

(i) Site Area: 17,690.24 sq.m.

(ii) Planned Gross 103,800 sq.m. (above ground) Floor Area: 34,995 sq.m. (under ground)

(iii) Land Use: Composite and underground car parking spaces

(iv) Land Use Term: 50 years from 26 February 2003

(v) Completion Date: Not later than 31 December 2005

(vi) Land Premium: RMB166,197,500

(vii) Payment RMB24,929,625 on the date of entering the contract Arrangement: RMB141,267,875 within 180 days from the date of entering the contract

According to the legal opinion provided by Commerce & Finance Law Offices, the above land premium has been fully settled and the Certificate for the Use of State-owned Land No. (2003) 0075 issued by Beijing Land Resources Bureau on 25 April 2006 was obtained.

4.5 Planning Permit for Construction Use of Land

According to the Planning Permit for Construction Use of Land No. 2002-0037 on 28 January 2002, the Property was permitted for development with a site area of 17,690.24 sq.m.

4.6 Planning Permit for Construction Works

According to the Planning Permit for Construction Works No. 2002-0973 on 30 July 2002, the Property has been approved for development with the following details:

(i) Gross Floor Area: Total 139,495 sq.m. including 35,697 sq.m. under ground

(ii) Building Height: 103.8 metres (above ground) 13.6 metres (under ground)

(iii) No. of Storey: 25-storey (above ground) 3-storey (under ground)

— VI-11 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

4.7 Business Licence

According to the Business Registration Certificate No.36195083-000-11-06-A issued by Hong Kong Registrar of Companies, HK Gateway Plaza Company Limited ( ) is legally established with an operation period from 10 November 2006 to 9 November 2007.

According to the above documents and permits, the relevant licences and approvals in respect of the title to the Property have been granted.

5.0 DESCRIPTION OF THE PROPERTY

5.1 The Property

Beijing Gateway Plaza was completed in August 2005. The Property comprises two 25-storey towers known as Tower A and Tower B, plus a three-level car park/ancillary basement. Levels 1 to 3 of the Property are designed for retail/banking/club uses. The remaining upper floors of the Property are for office use.

Levels 12 and 13, 14 and 15, 24 and 25 of both Tower A and Tower B are of duplex design whilst Levels 20 to 22 of both of the towers are of triplex design.

The basement of the Property comprises the plant room, ancillary facilities including swimming pool, gymnasium and sauna and a total of 675 car park spaces. The swimming pool, gymnasium and sauna are still under construction.

— VI-12 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

5.2 Gross floor area

According to the floor area survey report, the gross floor areas of the Property are as follows:

Tower A Tower B Floor Designated Use GFA (sq.m.) Floor Designated Use GFA (sq.m.)

Level 1 Securities firm 3,431.05 Level 1 Securities firm; BMW 3,431.05 show room Level 2 Securities firm 2,480.01 Level 2 Securities firm 2,480.01 Level 3 Retail 2,684.69 Level 3 Kitchen Western Restaurant Restaurant Hall 2,684.69 Level 4 Office 2,044.52 Level 4 Office 2,044.52 Level 5 Office 2,044.52 Level 5 Office 2,044.52 Level 6 Office 2,044.52 Level 6 Office 2,044.52 Level 7 Office 2,044.52 Level 7 Office 2,044.52 Level 8 Office 2,044.52 Level 8 Office 2,044.52 Level 9 Office 2,044.52 Level 9 Office 2,044.52 Level 10 Office 2,044.52 Level 10 Office 2,044.52 Level 11 Office 2,044.52 Level 11 Office 2,044.52 Level 12 Office* 2,044.52 Level 12 Office* 2,044.52 Level 13 Office* 1,982.45 Level 13 Office* 1,982.45 Level 14 Office* 2,044.52 Level 14 Office* 2,044.52 Level 15 Office* 1,982.45 Level 15 Office* 1,982.45 Level 16 Office 2,044.52 Level 16 Office 2,044.52 Level 17 Office 2,044.52 Level 17 Office 2,044.52 Level 18 Office 2,044.52 Level 18 Office 2,044.52 Level 19 Office 2,044.52 Level 19 Office 2,044.52 Level 20 Office** 2,044.52 Level 20 Office** 2,044.52 Level 21 Office** 1,880.26 Level 21 Office** 1,880.26 Level 22 Office** 1,880.26 Level 22 Office** 1,880.26 Level 23 Office 1,473.92 Level 23 Office 1,473.92 Level 24 Office*** 1,473.92 Level 24 Office*** 1,473.92 Level 25 Office*** 1,347.56 Level 25 Office*** 1,347.56 Mezzanine of Mezzanine of 25/F 83.43 25/F 83.43 Mechanical Mechanical floor 309.58 floor 324.75 Mezzanine of Mezzanine of Mechanical Mechanical floor 52.86 floor 52.86 Sub-total 51,730.24 Sub-total 51,745.41 Total: GFA (above ground) 103,475.65

GFA under ground: Basement B3 12,262.32 B2 11,092.57 B1 12,262.28 Total: GFA (under ground) 35,617.17 Include. Car Park Spaces 21,803.47 No. of Car Parks 675 Civil Defence Shelter 8,604.75 Total GFA (above ground + under ground) 139,092.82

— VI-13 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

Lettable floor area

According to the floor area survey report and the materials provided by the company, the lettable floor areas of the Property are as follows:

Tower A Lettable Area Tower B Lettable Area Floor Designated Use (sq.m.) Floor Designated Use (sq.m.)

Level 1 Securities firm 2,050.70 Level 1 Securities firm; 2,028.14 BMW show room Level 2 Securities firm 2,123.68 Level 2 Securities firm 2,123.68 Level 3 Retail 1,701.33 Level 3 Kitchen 1,651.53 Western Restaurant Restaurant Hall Level 4 Office 2,288.96 Level 4 Office 2,288.96 Level 5 Office 2,238.23 Level 5 Office 2,238.23 Level 6 Office 2,286.33 Level 6 Office 2,286.33 Level 7 Office 2,286.33 Level 7 Office 2,286.33 Level 8 Office 2,286.33 Level 8 Office 2,286.33 Level 9 Office 2,286.33 Level 9 Office 2,286.33 Level 10 Office 2,286.33 Level 10 Office 2,286.33 Level 11 Office 2,286.33 Level 11 Office 2,286.33 Level 12 Office* 2,286.32 Level 12 Office* 2,286.32 Level 13 Office* 2,198.97 Level 13 Office* 2,194.61 Level 14 Office* 2,286.32 Level 14 Office* 2,286.32 Level 15 Office* 2,198.97 Level 15 Office* 2,194.61 Level 16 Office 2,286.33 Level 16 Office 2,286.33 Level 17 Office 2,286.33 Level 17 Office 2,286.33 Level 18 Office 2,286.33 Level 18 Office 2,286.33 Level 19 Office 2,286.33 Level 19 Office 2,286.33 Level 20 Office** 2,284.00 Level 20 Office** 2,284.00 Level 21 Office** 2,065.32 Level 21 Office** 2,065.32 Level 22 Office** 2,065.32 Level 22 Office** 2,065.32 Level 23 Office 1,555.66 Level 23 Office 1,555.66 Level 24 Office*** 1,555.66 Level 24 Office*** 1,555.66 Level 25 Office*** 1,474.75 Level 25 Office*** 1,474.75 Sub-total: 53,237.44 Sub-total: 53,156.36

Total: 106,393.80

Remarks:

* Internal staircases linking Unit F on Level 12 and Unit F on Level 13, and Unit F on Level 14 and Unit F on Level 15 in Tower A and Tower B. ** Internal staircases linking Level 20, Level 21 and Level 22 in Tower A and Tower B. *** Internal staircases linking Level 24 and Level 25 in Tower A and Tower B.

— VI-14 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

5.3 Construction

According to our recent inspection, the Property is constructed of reinforced concrete with anodised aluminium framed curtain walling and stone slabs on the external elevation. Internally, the main entrance lobby of the Property is decorated with marble flooring and walls, whereas the floor lobbies and corridors are finished with carpeted flooring and gypsum board suspended ceiling.

Photos of the Property are shown as follows:

5.4 Facilities and Services

Vertical transportation of Levels 1 to 3 of the Property is mainly served by three escalators, whereas the upper floors of each of the two office towers are mainly served by eight passenger lifts, two service lifts and two staircases.

Other facilities and services of the Property include air-conditioning and heating system, auto-fire sprinklers and auto-fire detection systems, closed circuit cameras system and patrolling stations for the security control, car parking spaces and loading/unloading areas provided in the basement.

— VI-15 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

Moreover, a club-house will be provided on the 1st and 2nd Floors of Tower B to serve the tenants of the Property with facilities including swimming pool, gymnasium and sauna, which are still under construction.

5.5 General Comments

The Property is a commercial development completed in August 2005. Our inspection revealed that the Property is of high quality construction and maintained in good condition.

6.0 PARTICULARS OF OCCUPANCY

6.1 Occupancy

According to the copies of tenancy agreements and the summary of rental schedule provided to us by the Manager, a total of about 100,242.68 sq.m. gross floor area of the Property is leased to various tenants for terms ranging from two to ten years at a monthly rental of approximately RMB27,343,301.07, exclusive of management fee. The latest expiry date of the tenancies is on 7 September 2015. The existing occupancy rate of the Property is 94.2% as at 31 March 2007.

6.2 Major Tenants

There are currently 85 committed leases. The top 10 tenants and the respective tenancy profiles are summarised as below:

*Lettable Area

(sq.m.)

Major Tenants BMW Group ...... 12,739.58 Sony Group ...... 6,414.64 Bank of China, Beijing Chaoyang Sub-branch...... 5,875.71 SK Group ...... 5,704.72 Hurray Holdings Co., Ltd...... 4,803.64 Cummins Group ...... 4,586.07 Fuji Xerox Co., Ltd...... 4,485.29 Zurich Financial Service Group ...... 2,286.33 Heng An Standard Life Insurance Co., Ltd...... 2,286.33 NTT Group...... 2,286.33

Sub-total: ...... 51,468.64 Other tenants ...... 48,774.04

Total: ...... 100,242.68

Remark: * The lettable area is based on the survey report. ## English translation of the company names is for identification purpose only.

— VI-16 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

Industry Sector Lettable Area Leased % of Leased Lettable Area

(sq.m.)

Banking and Finance...... 14,640.22 14.6% Energy and natural resources...... 0.00 0.0% Professional and Business services...... 9,820.30 9.8% Wholesalers / Retailers ...... 0.00 0.0% Insurance / Non-bank and securities financial...... 0.00 0.0% Government ...... 0.00 0.0% Engineering and architectural ...... 0.00 0.0% Industrial goods ...... 24,442.97 24.4% Electronic goods ...... 6,414.64 6.4% Textile and clothing ...... 0.00 0.0% Conglomerate ...... 5,602.82 5.6% IT / Software...... 14,127.12 14.1% Transportation and logistics...... 0.00 0.0% Health and personal care ...... 0.00 0.0% Automotive...... 12,739.58 12.7% Others ...... 12,455.03 12.4%

Total...... 100,242.68 100.0%

TENANT MIX BY INDUSTRY (% OF LEASED LETTABLE AREA)

IT/Software Automotive 14.1% 12.7% Others 12.4%

Conglomerate 5.6%

Banking and Finance 14.6% Electronic goods 6.4% Industrial goods Professional and 24.4% Business services 9.8%

— VI-17 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

6.3 Tenancy Agreement of Advertising Spaces

According to the Advertising Right Agreement entered into between Beijing Bestride Estate Development Company Limited ( ) (the “Grantor”) and Beijing Shenmingda Advertise Co., LTD ( ) (the “Grantee”) dated 18 July 2006, the Grantor has agreed the Grantee has the right to erect and use all of the 21 advertising spaces of the property for a lease term of 3 years started from 18 July 2006 to 17 July 2009, at annual rentals of RMB35,000,000, RMB38,000,000 and RMB40,000,000 for the first, second and third years respectively. Among the 21 advertising spaces, 19 of them are erected outdoor surrounding the building and the remaining two are erected on the top roof of the building.

According to Advertising Right Transfer Agreement entered into between Beijing Bestride Estate Development Company Limited, Beijing Shenmingda Advertise Co., LTD and HK Gateway Plaza Company Limited in 2007, Beijing Bestride has agreed to transfer its rights and liabilities stated on the above said Advertising Right Agreement to HK Gateway. The Agreement came into effective from 26 April 2006.

6.4 Occupancy by Number of Tenants

The following table presents the relationship between the number of tenants and their respective lettable area profiles. 91.8% of the tenants occupy units smaller than 3,000 sq.m. The remaining 8.2% of the tenants (the top 7 tenants) occupy 37.8% of the leased lettable area.

Lettable Area No. of Tenants Profile

% of total Area Tower A Tower B Total lettable area

< 1,000 sq.m...... 35 24 59 28.1% > 1,000 & < 3,000 sq.m...... 13 6 19 34.1% > 3,000 sq.m...... 2 5 7 37.8%

Total ...... 50 35 85 100.0%

<1,000sq.m. >1,000&<3,000sq.m. >3,000sq.m.

Tower B 5 6 24

2 13 Tower A 35

0 5 10 15 20 25 30 35

— VI-18 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

LEASED LETTABLE AREA PROFILE (BY SQ.M.)

< 1,000 sq.m. 28.1% > 3,000 sq.m. 37.8%

> 1,000 & < 3,000 sq.m. 34.1%

6.5 Occupancy by Unit Rental and Monthly Rental

The following table and charts depict the relationship between the unit rental, monthly rental and number of tenants. 86.2% of the monthly rental is receivable from leases with unit rental below RMB320 per sq.m. Whereas 44.8% of the monthly rental is receivable from leases with unit rental between RMB240-280 per sq.m.

98.8% of the tenants are leasing at unit rental below RMB360 per sq.m. and 47.0% of the tenants are leasing at unit rental between RMB240-280 per sq.m.

BEIJING GATEWAY PLAZA — RENTAL ANALYSIS AS OF 31 MARCH 2007

Monthly Rental* Number of Tenants

Unit Rental Towers A and B Towers A and B

RMB % No. of Tenants %

>RMB400 ...... 2,783,390.85 10.2% 1 1.2% RMB360-400 ...... — 0.0% 0 0.0% RMB320-360 ...... 1,002,871.80 3.7% 4 4.7% RMB280-320 ...... 6,804,999.21 24.9% 34 40.0% RMB240-280 ...... 12,261,940.32 44.8% 40 47.0% RMB200-240 ...... 4,007,315.85 14.6% 5 5.9% RMB120-200# ...... 482,783.04 1.8% 1 1.2%

Total...... 27,343,301.07 100.0% 85 100.0%

Remark: * The monthly rents are as stated in tenancy agreements, which are exclusive of the management fees and not adjusted for rent free period. # Rental is based on a fixed basic rent and a 8% revenue after deduction of the membership fee.

— VI-19 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

RENTAL ANALYSIS AS OF 31 MARCH 2007 (BY MONTHLY RENTAL)

>RMB400 10.2% RMB360-400 0.0% RMB320-360 3.7% RMB280-320 RMB120-200 24.9% 1.8%

RMB200-240 14.6%

RMB240-280 44.8%

RENTAL ANALYSIS AS OF 31 MARCH 2007 (BY NO. OF TENANTS)

>RMB400 RMB120-200 1.2% RMB360-400 1.2% 0.0%

RMB200-240 RMB320-360 5.9% 4.7%

RMB280-320 40.0%

RMB240-280 47.0%

General Comment on the Passing Rental

In general, the current rental profile of the Property is at the market level.

— VI-20 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

6.6 Lease Expiry Analysis

The findings of the lease expiry analysis in respect of tenancies of the Property as of 31 March 2007 are summarised as follow:

Lettable Area * Monthly Rental

Area No. of Leased Year of Expiring Tenant % of Total (sq.m.) % of Total RMB % of Total

2007...... 6 7.0% 4,424.63 4.4% 1,190,114.45 4.4% 2008...... 27 31.8% 26,427.25 26.4% 7,580,198.13 27.7% 2009...... 36 42.4% 36,486.95 36.4% 9,567,969.20 35.0% 2010...... 6 7.0% 9,715.90 9.7% 2,196,224.94 8.0% After 2010 ...... 10 11.8% 23,187.95 23.1% 6,808,794.35 24.9%

Total ...... 85 100.0% 100,242.68 100.0% 27,343,301.07 100.0%

Remark: * The monthly rents are stated in the tenancy agreements, which are exclusive of the management fees and not adjusted for rent free period.

6.7 Lease Expiry Analysis by Financial Year

Referring to the following table and charts, the latest expiry date of the current committed leases is in 2015. 46.0% of the leases in Tower A will be expired in 2008, whilst 71.4% of the leases in Tower B will be expired in 2009.

No. of Tenants

Tower A Tower B

Year of Expiring No. of Tenants % of Total No. of Tenants % of Total

2007 ...... 6 12.0% 0 0% 2008 ...... 23 46.0% 4 11.4% 2009 ...... 11 22.0% 25 71.4% 2010 ...... 3 6.0% 3 8.6% After 2010...... 7 14.0% 3 8.6%

Total...... 50 100.0% 35 100.0%

— VI-21 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

As depicted in the bar charts, most of the leases in Tower A will be expired in 2008, whilst for Tower B is 2009. 27 leases will expire in 2008, of which 23 leases are in Tower A and 4 leases are in Tower B. 36 leases will expire in 2009, of which 11 leases are in Tower A and 25 leases are in Tower B. Most of the leases are leased for terms of 2 to 3 years.

Lease Expiry Profile for Tower A As of 31 March 2007 — By No. of Tenants

23 25

20 2007 2008 15 11 2009 2010 7 10 6 After 2010 3 5

0 2007 2008 2009 2010 After 2010

Lease Expiry Profile for Tower B As of 31 March 2007 — By No. of Tenants

25 25

2007 20 2008 2009 15 2010 After 2010 10

4 5 3 3 0

0 2007 2008 2009 2010 After 2010

— VI-22 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

6.8 Lease Expiry Analysis by Lettable Area

In line with the Lease Expiry Analysis by Financial Year, most of the leased lettable area of Tower A will be available for re-leasing in 2008, whilst for Tower B is 2009. The re-lettable areas are 24,551.08 sq.m. for Tower A in 2008 and 29,617.91 sq.m. for Tower B in 2009. 23.1% of the lettable areas are of a longer lease terms which will be expired after 2010.

Lettable Area

Tower A Tower B

Area Area Year of Expiring (sq.m.) % of Total (sq.m.) % of Total

2007 ...... 4,424.63 8.7% 0 0.0% 2008 ...... 24,551.08 47.9% 1,876.17 3.8% 2009 ...... 6,869.04 13.4% 29,617.91 60.4% 2010 ...... 4,931.47 9.6% 4,784.43 9.8% After 2010...... 10,448.37 20.4% 12,739.58 26.0%

Total...... 51,224.59 100.0% 49,018.09 100.0%

Lease Expiry Profile for Tower A and B As of 31 March 2007 — By Lettable Area

Tower A

2007 8.7% After 2010 20.4%

2010 9.6%

2008 2009 47.9% 13.4%

Tower B

2007 2008 0.0% 3.8%

After 2010 26.0%

2010 9.8% 2009 60.4% — VI-23 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

6.9 Lease Expiry Analysis by Monthly Rental

As most of the leases will be expired in 2008 and 2009, 45.5% and 65.3% of the monthly rental income in Tower A and Tower B are subjected to renewal respectively. On the other hand, 24.9% of the total rental incomes are generated from long leases which will be expired after 2010.

* Monthly Rental Tower A Tower B Year RMB % of Total RMB % of Total

2007 ...... 1,190,114.45 7.7% 0.00 0.0% 2008 ...... 7,050,894.18 45.5% 529,303.95 4.5% 2009 ...... 1,823,061.83 11.8% 7,744,907.37 65.3% 2010 ...... 1,317,064.77 8.5% 879,160.17 7.4% After 2010 ...... 4,100,888.35 26.5% 2,707,906.00 22.8%

Total...... 15,482,023.58 100.0% 11,861,277.49 100.0%

Remark: * The monthly rents are stated in the tenancy agreements, which are exclusive of the management fees and not adjusted for rent free period.

Lease Expiry Profile for Tower A and B As of 31 March 2007 — Monthly Rental by Lease Expiry Date

Tower A

2010 After 2010 8.5% 26.5%

2007 7.7% 2009 11.8%

2008 45.5%

Tower B

2007 After 2010 0.0% 22.8% 2008 4.5%

2010 7.4% 2009 65.3%

— VI-24 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

7.0 VALUATION METHOD

We have valued the Property by the Direct Comparison Approach assuming sale of the Property with the benefit of vacant possession and by making reference to comparable sales evidence as available in the relevant market. We have also adopted the Investment Approach including Direct Capitalisation Method and Discounted Cash Flow Method (“DCF”) Method to derive the value of the Property.

7.1 Discounted Cash Flow Method (DCF Method)

DCF Method involves discounting the future net cash flow of the Property to its present value by applying an appropriate discount rate that reflects the rate of return normally required by investors for similar investments.

Projected Cash Flow for Commercial and Office Units

The commercial and office units are currently leased under 85 leases. The projection of the future cash flow for commercial and office units of the Property is divided into two components. The first component is the committed tenancies, whilst the second component is the uncommitted vacant units at the date of valuation.

For the committed tenancy component, the future cash flow is projected by reference to the tenancy agreements. The existing effective rental incomes of the committed tenancies are projected for their respective unexpired terms of contractual tenancies. Upon the expiry of the existing tenancy, the unit is assumed to be leased at the then prevailing market rents with one month rent-free period for every 12 months lease term.

For the uncommitted vacant units, we have projected the cash flow by referring to their respective current market rentals and assumed occupancy rate. The vacant units are estimated to be leased at a term of one month rent-free period for every 12 months lease term, which is consistent with most of the tenancies of the Property. The vacant units are assumed to be leased at the prevailing market rents. The time period to find new tenant is accounted for in the Property’s 5% vacancy rate allowance.

Projected Cash Flow for Car Park Spaces and Advertisement Spaces

For the car park spaces, the future cash flow is estimated by taking into account the following monthly rental rate, growth of the rental rate and the anticipated occupancy rate:

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

monthly rental rate (RMB/car park) ...... 760 722 758 796 836 853 870 887 905 923 growth of the rental rate ...... -5% -5% 5% 5% 5% 2% 2% 2% 2% 2% anticipated occupancy rate ... 90% 90% 90% 90% 90% 90% 90% 90% 90% 90%

— VI-25 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

For the advertisement spaces, the future cash flow is estimated by taking into account the contracted annual rental rate / market rental rate and the anticipated rental growth rate of the advertising spaces:

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 annual rental rate (RMB)...... 36,372,603 39,019,178 32,568,924 24,566,214 25,401,465 26,265,115 27,158,129 28,081,505 29,036,276 30,023,510 growth of the rental rate...... — 7% -17% -25% 3% 3% 3% 3% 3% 3%

The Market Value of the Property by DCF Approach

The cash flows of the effective rental incomes for commercial and office units (both committed and vacant units), car park spaces and advertisement spaces are projected over a 10-year period from 2007 to 2016. The cash flows of the effective rental incomes are projected with reference to the estimated occupancy rate, rent-free period, renovation period, market rent and projected annual growth rate. The corresponding Business Tax and Property Tax and operating expenses are subtracted from the Effective Gross Income to derive the Net Operating Income (NOI).

The economic life of the Property is based on the un-expired land use right term of the Property. Terminal value of the Property is computed assuming the NOI will grow at a long-term growth rate of 2.0% p.a. over the period from 2017 to the expiry date of the land use rights term of the Property on 25 February 2053. With reference to the DTZ Index for Beijing Grade A office rental from first quarter 2000 to fourth quarter 2006 published by DTZ Research which recorded the CAGR of approximate 1.75%, we come to the opinion that the long term growth rate of 2.0% is reasonable. The present value of the NOI and terminal value is derived by discounting the projected cash flow at the Discount Rate. The summation of the present values of the NOI and terminal value of the above-mentioned committed tenancies and vacant units, the car park spaces and advertisement spaces derives the Market Value of the Property.

Assumptions for DCF Approach

In performing the DCF analysis, a number of assumptions have been made. The material assumptions are listed below:

(i) Discount Rate and Terminal Capitalisation Rate

The Discount Rate applied in this valuation is 9.0%. We have investigated the return requirement of property investors active in Beijing office market. Based on the discussion with property investors and consideration of location, rental income and tenant mix of the Property, we come to the opinion that the Discount Rate of 9.0% is reasonable for the Property.

— VI-26 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

A terminal capitalisation rate of 7.5% is applied to derive the terminal value of the Property from 2017 to the expiry date of the land use rights term of the Property on 25 February 2053. The terminal capitalisation rate is obtained by reference to the comparable Grade A offices in Beijing and consideration of the characteristics of the Property by analysis of the market rent and the capital value of similar properties in the locality. In determining the terminal capitalisation rate, we have allowed for the difference between the NOI and gross market rent.

(ii) Projected Annual Growth Rate

The projected annual growth rates for market rent for the Property from 2007 to 2008 is -5.0% p.a. and 5.0% p.a. from 2009 to 2011 with reference to the Property rental trend forecast in the Market Study Research Report prepared by Knight Frank Petty for the Manager.

The projected long-term annual growth rate of 2.0% for 2012 to 2016 is estimated by making reference to DTZ Index from Q1 2000 to Q4 2006 for Beijing Grade A office rental with consideration of market conditions of Beijing Grade A office. The same growth rate is applied to the market rents of the office and commercial units and car park spaces.

(iii) Occupancy Rate

With reference to the Market Study Research Report prepared by Knight Frank Petty for the manager and occupancy rates of similar commercial and office properties in Beijing, we come to the opinion that it is reasonable to apply a 95% occupancy rate for the Property in the long-run.

(iv) Rent-Free Period

For the uncommitted vacant units and upon the expiring of committed tenancy, we have applied a one month rent-free period for every 12 months leasing term for the commercial and office units. The derivation of the afore-mentioned periods is by reference to the similar commercial and office units in Beijing and is consistent to the tenancies of the Property. For the committed tenancies, the rent-free period is based on the existing tenancy agreements of the Property.

(v) Operating Expenses

The major costs and expenses directly related to the operation of the Property and the assumptions of the operating expenses are listed in the following:

(1) Leasing expenses: The leasing expenses is derived base on the market norm that charges 1.5 months rental for 36 months lease.

(2) Insurance: 0.1% with respect to the replacement value of the Property.

— VI-27 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

(3) Tenancy management fee: Based on the Property Management Agreement, the Property Manager will be entitled to a tenancy management fee of RMB30,000 per month.

(4) Property management fee: According to the Property Management Agreement, the Property Manager will be entitled to receive for each financial year a fee of 6% of the Operating Expenses, subject to a minimum of RMB40,000 per month.

(5) Repair, maintenance and capital expenditure: We rely on the 10-year forecast of repair, maintenance and capital expenditure in Building Consultancy Due Diligence Report prepared by Knight Frank Petty for the Manager.

(6) Business tax: 5% with respect to the effective gross income of the Property.

(7) Urban Real Estate Tax: 0.84% of the cost of the Property.

(vi) Net Operating Income

The Net Operating Income (NOI) represents the income generated from the commercial operation of the Property after deduction of Operating Expenses as stated above. No income tax, loans or interest expenses have been taken into consideration in this DCF valuation.

(vii) Operating Period

The operating period of the Property is based on the expiry date of the land use right term as stipulated in the relevant land use right certificate. The land use right will be expiring on 25 February 2053 for composite (office and commercial) and underground car park uses.

— VI-28 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

Summary of DCF Parameters

The DCF analysis of the Property was prepared on 31 March 2007. A summary of the parameters used in the DCF analysis is shown below:

Parameters

Total Gross Floor Area of the Property* (sq.m.) ...... 139,092.82 sq.m. Total Lettable Area* ...... 106,393.80 sq.m. Total Lettable Area for office units*...... 94,714.70 sq.m. Total Lettable Area for commercial units*...... 11,679.10 sq.m. Number of car park spaces*...... 675 Rent-free period (for every 12 month lease term ) ...... 1 month Discount Rate ...... 9.0% Terminal Capitalisation Rate...... 7.5% Occupancy Rate ...... 94.2% Projected Annual Growth Rate: 2007-2008 ...... -5.0% 2009-2011 ...... 5.0% 2012-2016 ...... 2.0%

*Remark: GFA, Total Lettable Area and number of car park spaces of the Property are based on area survey report

7.2 Investment Approach

In the course of our valuation, we have also adopted the Investment Approach, which is a valuation method by capitalising the rental incomes derived from the existing tenancies of the Property at an appropriate market yield for their respective unexpired terms of the contractual tenancies, with due allowance for the reversionary potential (i.e. the expiry of the existing tenancies) of the respective properties. Upon the expiry of the existing tenancies, the respective floor spaces are assumed to be leased at market rental which are then capitalised for the remaining term of the land use rights of the Property. The summing up of the capitalised values of the term income and the reversionary income after being deferred represents the market value of the Property. In the course of our valuation, we have assumed a maximum occupancy rate of the Property at 95%.

The capitalisation rate adopted in our valuation is derived from our analysis of the relationship between the current market rent and the current capital value of similar properties in the locality. The gross yield adopted in our valuation is at about 10.0% for the retail portion, 9.0% for the office portion, 5.0% for the car parks portion and 18.0% for the advertising spaces. The gross yield adopted for this valuation is derived with reference to the comparable Grade A offices in Beijing and consideration of the characteristics of the Property. This expected return reflects implicitly the quality of the investment, the expectation of the potential future rental growth and capital appreciation and relevant risk factors, and is based on our experience in valuing other similar properties.

— VI-29 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

7.3 Office Rental Comparables

According to the rent roll provided to us, the average office rental of the property as at 31 March 2007 was RMB263 per sq.m. per month. In the course of our valuation, we have also considered the following rental comparables of Grade A office developments in the locality:

Asking Rental per Mgt. Fee Floor Plate month per month Completion Area (RMB per (RMB per Property Location Year (sq.m.) sq.m.) sq.m.) Remarks

Jiangguomen Wai Avenue / Guanghua Road Area China World Jianguomen Wai 1999 1,417-1,551 384-464 (N) 40.8 (N) At better location Trade Centre Avenue (N) and with better Tower 2 quality than the Property

Kerry Center Guang Hua Road 1999 2,520-2,967 304 (G) 28 (G) At better location (G) and with better quality than the Property

NCI Tower Jianguomen Wai 2004 2,600 (N) 304 (N) 32 (N) Lower quality than Avenue the Property

The Exchange East 3rd Ring 2001 1,891 (G) 200-208 (G) 28 (G) Better location but Beijing Road lower quality than the Property

Chaoyangmen Area China Life Tower Chaoyangmen 2001 2,200 (N) 272 (N) 44.8 (N) In different Wai Avenue commercial circle, similar quality

East 3rd Ring Road Lufthansa Center Liangmaqiao 1992 2,122 (G) 280 (G) 25.6 (G) Similar location but Road/ East 3rd lower quality than Ring Road the Property

Landmark Tower East 3rd Ring 1990 730 (N) 320 (N) 28 (G) Similar location but Road lower quality than the Property

— VI-30 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

Asking Rental per Mgt. Fee Floor Plate month per month Completion Area (RMB per (RMB per Property Location Year (sq.m.) sq.m.) sq.m.) Remarks

Capital Mansion Langmaqiao 1991 2,000 (G) 224-240 (G) 28 (G) More inferior location Road/ East 3rd and quality than the Ring Road Property

Pacific Century Gongti East 3rd 1999 1,883-2,467 224 (G) 28 (G) More inferior location Plaza Ring North Road (G) and similar quality

Hyundai Motor Xiaoyun Road/ 2000 2,500 (G) 224(G) 28(G) More inferior location Tower East 3rd Ring and quality than the Road Property

Silver Tower East 3rd Ring 1998 2,350 (G) 224(G) 32 (G) Similar location and Road quality

Remark: ‘N’ denotes ‘Net Floor Area’ and ‘G’ denotes ‘Gross Floor Area’.

Transaction Rent Per Transaction month (RMB Transaction Property Location Date per sq.m.) Area (sq.m.) Storey

Jiangguomen Wai Avenue/Guanghua Road Area Kerry Centre Guang Hua Road 2006.4 333 339.31 28

Twins Tower Jianguomen Wai 2006.2 248.3 470.59 23 Avenue

Beijing Fortune Plaza Guang Hua Road 2005.6 256 300 30

Financial Street Area/East Chang An Avenue Winland International Fuxingmen 2006.8 286 6,823.11 19-20 Finance Center

East 2nd Ring Road China Resources Building Jianguomen 2005.11 264.8 321.32 6

— VI-31 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

7.4 Office Sales Comparables

We have also noted the following comparables of selling price of office developments in the locality:

*Asking Average Completion Price (RMB per Property Location Day sq.m.) Remarks

Jiangguomen Wai Avenue/Guanghua Road Area Beijing Fortune Plaza Guang Hua Road 2005 Phase I: 28,000 Similar location and same Phase II: 35,000- quality with the Property 45,000

Central Int’l Trade Ctr Jianguomen Wai 2005 27,000 Similar location but slightly Avenue lower quality than the Property

Jin Di Ctr Jianguo Road 2007 24,000 Poor location, similar quality with the Property

Financial Street Area/East Chang An Avenue ChenSunny Plaza Fuxingmen 2006 28,000 In different commercial circle, similar quality

Total Transacted Transaction *Transacted Transaction Transacted Rent Per Property Location Date Price Area Price Storey month Yield Remarks

(RMB per (RMB per sq.m.) (sq.m.) (1,000 RMB) sq.m.) (%)

Jiangguomen Wai Avenue / Guanghua Road Area Beijing Fortune Guang Hua 2005.3.12 27,590 1,328 36,640 43 256 11.1 Similar location and Plaza Road same quality with the Property Vantone Center Chaoyangmen 2006.7.28 24,208 745 18,035 23 _ Similar location but Wai Avenue slightly lower quality than the Property Soho Shangdu Dongdaqiao 2005.4.30 25,475 242 6,165 3 150 7.1 Similar location but Road slightly lower quality than the Property Central Int’l Jianguomen 2006.7.6 26,260 2,686 70,534 32 212 9.7 Similar location but Trade Ctr Wai Avenue slightly lower quality than the Property Wanda Plaza Jianguo Road 2006.9.8 24,818 733 18,192 22 _ Similar location but slightly lower quality than the Property

— VI-32 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

Total Transacted Transaction *Transacted Transaction Transacted Rent Per Property Location Date Price Area Price Storey month Yield Remarks

(RMB per (RMB per sq.m.) (sq.m.) (1,000 RMB) sq.m.) (%)

Financial Street Area/East Chang An Avenue ChemSunny Fuxingmen 2007.1.4 34,000 3,750.98 127,533 5 _ In different Plaza commercial circle, similar quality East 2nd Ring Road New Poly Plaza Dongsishitiao 2007.1.16 31,000 3,451 106,981 18 _ In different commercial circle, similar quality

* Based on gross floor area.

8.0 BASIS OF VALUATION

8.1 The Property

Beijing Gateway Plaza comprises two 25-storey, known as Tower A and Tower B, plus a three-level car park/ancillary basement erected over a land with a site area of 17,690.24 sq.m. The Property was newly completed in August 2005 with a total gross floor area of approximately 139,092.82 sq.m. (include Civil Defence Shelter area).

8.2 Basis of Valuation and Assumptions

Our recent inspection reveals that the Property was newly completed and partly leased to various tenants. In the course of our valuation, we have taken into account the existing occupancy condition of the Property.

We have taken into account the following legal opinion provided by Commerce & Finance Law Offices in our valuation:

(i) The Property is transferable together with the residual term of land use rights at no extra land premium or other onerous payment payable to the government;

(ii) all land grant fee, costs of public utilities and ancillary infrastructure fee have been fully settled;

(iii) the proposed design and construction of the Property have been approved by the relevant government departments; and

(iv) the Property may be freely disposed of to the purchasers.

— VI-33 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

8.3 Valuation Rationale

En-bloc Grade A office transaction and sales comparables with similar quality to the Property are scarce in the locality. As the Property is an investment property with income- producing nature, we consider that the Investment Approach and DCF Approach are more appropriate methods of valuation in assessment of the market value. In the DCF Approach, we have taken into account the projected cash flows including the estimated rental growth and the expenses. The concluded valuation is based on a weighting of 40% for each of the Investment Approach and the DCF Approach and 20% for the Comparison Approach.

9.0 THE VALUATION

Based on the above analysis, we are of the opinion that the market value of the Property subject to the existing tenancies, as at 31 March 2007, was in the sum of HK$3,978,000,000 (HONG KONG DOLLAR THREE THOUSAND NINE HUNDRED AND SEVENTY EIGHT MILLION). Our valuation by the various methodologies are summarised as follows and we have not assigned value to the civil defence shelter or the staff canteen:

Valuation Summary Valuation Method Capital Value in existing state (HK$)

Discounted Cash Flow Approach...... 4,078,000,000 Investment Approach ...... 3,902,000,000 Comparison Approach* ...... 3,932,000,000

* Valuation of the advertising spaces is calculated by the Investment Approach.

We hereby confirm that we are independent of and not connected with any of the Manager and its connected persons, or any of their respective associates. We have no direct or indirect interests in RREEF China Commercial Trust and its significant shareholders, or any of their respective associates and we have no direct or indirect interests in the securities or assets of the Manager and its connected persons, or any of their respective associates. The valuer’s compensation is not contingent upon the reporting of a predetermined value or direction in value that favours the cause of the Vendor, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event.

We confirm that the valuation is carried out on an impartial basis and we have no conflict of interest with the parties concerned.

— VI-34 — APPENDIX VI INDEPENDENT PROPERTY VALUER’S VALUATION REPORT

Yours faithfully, for and on behalf of DTZ Debenham Tie Leung Limited

Andrew K.F. Chan Registered Professional Surveyor (GP) China Real Estate Appraiser MSc., M.H.K.I.S., M.R.I.C.S., Director

Note: Mr. Andrew K. F. Chan is a Registered Professional Surveyor who has over 18 years experience in valuation of properties in Hong Kong and in the PRC.

— VI-35 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

PN21 PN23(a) PN23(b) PN23(e)

4/F Shui On Centre, 6-8 Harbour Road Wanchai, Hong Kong

+852 2840 1177 +852 2840 0600 fax

knightfrank.com

11 June 2007

HSBC Institutional Trust Services (Asia) Limited Level 30, HSBC Main Building 1 Queen’s Road Central Hong Kong

The Trustee for RREEF China Commercial REIT RREEF China REIT Management Limited 53/F, Cheung Kong Center 2 Queen’s Road Central Hong Kong

Joint Global Coordinators, Bookrunners and Listing Agents Deutsche Bank AG, Hong Kong Branch 55/F, Cheung Kong Center 2 Queen’s Road Central Hong Kong

The Hongkong and Shanghai Banking Corporation Limited 1 Queen’s Road Central Hong Kong

Dear Sirs,

Beijing Grade Office Property Market Overview

We have acted as an independent market consultant for RREEF China REIT Management Limited and have prepared an independent market overview report in relation to Beijing Grade A office property market in connection with the listing of the RREEF China Commercial Trust “RREEF CCT” on the Main Board of the Stock Exchange of Hong Kong Limited. The report includes an overview of the China and Beijing economies, and the Grade A office property markets in Beijing and in the Lufthansa area.

— VII-1 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

EXECUTIVE SUMMARY

1. China is a long-term growth story with multiple drivers. Accelerating urbanisation and deepening industrialisation will ensure that the Chinese economy will be on a fast track for many years to come. The continued application of advanced technology and a further improvement in the investment environment are set to enhance productivity in the domestic economy.

2. Beijing’s economic development will be more sustainable than that of many other Mainland cities due to its unique competitive advantages. These include its unrivalled talent pool, its highly attractive tourist spots and its status as the country’s capital. Also, both cyclical and structural factors are favourable to its economic growth.

3. At the end of 2006, Beijing’s Grade A office stock was estimated to be 3.97 million sq.m., which can be broken down as follows:

● Premium Grade A 20.7% or 0.82 million sq.m.

● General Grade A 79.3% or 3.15 million sq.m.

4. Premium Grade A offices are superior to general Grade A offices in terms of floor plates, building quality, management, ownership, occupancy rates and locations. Premium Grade A offices are those single-owned high-end office buildings having large floor plates, premium building quality, international management, high occupancy rates and locations with easy access to all modes of public transport (More detailed definition in Appendix 2).

5. At the end of 2006, Beijing Gateway Plaza, the subject building, is one of the nine buildings that could be categorised as premium Grade A office space in Beijing. Beijing Gateway is also the only premium Grade A office in the Lufthansa area.

6. As at end of 2006, we believe that there are only three office buildings in Beijing, namely Beijing Kerry Centre, China World Trade Centre II and Winland International Financial Centre, that are of a better quality than Beijing Gateway Plaza. These three buildings have a total gross floor area of 237,000 sq.m., accounting for just 6.0% of Beijing’s total Grade A office stock as at the end of 2006. These three buildings are ranked higher than the subject building mainly because they have higher concentration of reputable international corporations.

7. The Lufthansa area is the home to the Third Embassy District with five-star hotels, shopping malls, international schools and high-end residential compounds. As the host to the European Chamber of Commerce and the German Center, the area is popular with European and German-based companies. The district offers convenient access to the city’s downtown, Beijing Capital International Airport, the Olympic Village and the Haidian District. Because of these factors Lufthansa office submarket has always outperformed the overall market in Beijing. For example, its vacancy rate has been consistently lower

— VII-2 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

than the market average since 2001. At the end of 2006, the vacancy rate of Grade A offices in the Lufthansa area stood at only 7.6%, significantly lower than the market average of 12.0%. We believe that Lufthansa area’s ability to maintain a higher occupancy than the market average will continue with the area’s improving infrastructure, healthy tenant mix and tight supply over the next three years.

8. Beijing Gateway Plaza was launched in the market and available for lease in 2005. At the end of 2006 the building enjoyed a high occupancy rate of approximately 90%1 and we expect that rate to grow and stabilise at around 95%.

9. The supply of new Grade A offices in Beijing in 2007 and 2008 will total 2.58 million sq. m., which is a significant amount. However, it should be noted that this spike in supply is a result of the market’s expectation that there will be a construction moratorium before Olympics starts in August 2008. The market believes that large-scale construction work will be banned in 2008, putting substantial pressure on developers to finish their projects before the end of 2007. In reality the 2007 supply represents the bulk of the total supply for the period between 2007 and 2010, with only limited new supply coming on stream between the second half of 2008 and 2010.

10. Between 2007 and 2010, average annual supply of total Grade A office will amount to 644,150 sq.m., compared with the average supply of 580,900 sq.m. and average take up of 513,000 sq.m. between 2004 and 2006. However, for the premium Grade A sector, average annual supply will amount to only 127,500 sq.m. between 2007 and 2010, less than the average take up of 130,635 sq.m. between 2004 and 2006, and only slightly higher than the average supply of 122,978 sq.m. during the 2004-2006 period.

11. It should also be noted that the bulk of the supply in the period of 2007-2010 will be outside the Lufthansa area. Furthermore, the majority of supply is in the general Grade A sector (2.07 million sq.m., 80.2%), with a relatively small proportion of premium Grade A offices. Also there will be no premium Grade A offices developed within the Lufthansa district in the next three years. The new supply of premium Grade A offices between 2007 and 2010 at 510,000 sq.m., representing 62% of the stock at the end of 2006, should be totally absorbed before 2010.

Note:

(1) “Occupancy rate=1-Vacancy rate”.

— VII-3 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

12. The massive amount of new supply in 2007 will place pressure on the Beijing office market. Nonetheless, we believe that Beijing Gateway Plaza will outperform the market in the period up to 2010. As a premium Grade A building it has attracted a large number of quality tenants on long lease terms. The peak tenancy expiry period will be in the second half of 2008 and 2009 when limited new supply will come on stream. With the amount of investments that the existing tenants have spent on their fit outs we do not expect a significant number of lease terminations.

13. With a continuous influx of foreign companies setting up offices in Beijing and an increasing number of domestic enterprises that are willing and able to afford better quality office space, premium Grade A office market in Beijing will outperform general Grade A office market.

1. An Overview of China’s Economy

1.1 Economic Miracle

The global economic landscape has been reshaped by the phenomenal growth of the Chinese economy. China has been one of the world’s fastest-growing economies of the last quarter century, with its real GDP growth averaging 9.8% per annum between 1980 and 2005, according to China’s State Statistical Bureau (Exhibit 1). China’s economic prowess has expanded greatly since late 1970s. Between 1978 and 2005 China’s nominal GDP’s ranking rose from the 10th to the 4th position, after the US, Japan and Germany, according to the World Bank. In 2005 China was the world’s second largest economy in terms of purchasing power parity, only after the US, with its economy 120% bigger than that of Japan, according to the World Fact Book (Exhibit 2).

Exhibit 1: China Real GDP Growth

% 16

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: China Statistical Abstract, 2006

— VII-4 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 2: Ranking of GDP by Purchasing Power Parity (2005)

(US$ Bn)

United States 12,360

China 8,859

Japan 4,018

India 3,611

Germany 2,504

United Kingdom 1,830

France 1,816

- 5,000 10,000 15,000

Source: The World Fact Book, 2006.

In tandem with this strong economic growth, both the wealth and standard of living of Chinese families has expanded accordingly. Per-capita net income in the rural area grew seven-folds from RMB393 in 1985 to RMB3,255 in 2005. For those living in the urban area, per-capita disposable income expanded by 13-folds, from RMB739 to RMB10,493 between 1985 and 2005 (Exhibit 3).

Exhibit 3: Per-Capita Income In China (Urban Areas)

RMB 12,000

10,000

8,000

6,000

4,000

2,000

- 1985 1990 1995 2000 2005

Source: China Statistical Yearbook, 2006

— VII-5 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

The country’s robust growth has benefited most Chinese families in the last decade. In 2004 even the poorest tenth urban households had on average more than one colour television set (Exhibit 4). The penetration rate of colour televisions among rural households rose from less than 50% to 84% between 1999 and 2005 (Exhibit 5). As a result, China is experiencing a “surplus economy” which is characterised by an over-supply of agricultural and industrial products, as compared to two decades ago when most commodities were in short supply.

Exhibit 4: Penetration Rate of Durable Goods (Urban Households)

Poorest 10% Richest 10%

In % 1999 2005 1999 2005

Colour TV 92.9 107.3 130.1 172.3 Washing Machine 79.9 81.7 99.1 103.8 Refrigerator 59.5 65.3 89.8 104.1 Air Conditioner 9.8 18.9 43.6 178.7 Mobile Phone 1.5 61.2 16.7 199.8 Personal Computer 1.8 7.3 12 85.1 Automobile N/A 0.3 0.8 16.2 Piano N/A 0.4 2.6 7.4

Source: China Statistical Yearbook, 2006

Exhibit 5: Penetration Rate of Durable Goods (Rural Households)

In % 2000 2005

Colour TV 48.7 84.0 Washing Machine 28.6 40.2 Refrigerator 12.3 20.1 Air Conditioner 1.3 6.4 Mobile Phone 4.3 50.2

Source: China Statistical Yearbook, 2006

1.2 Sustainability of Growth

Despite China’s phenomenal economic development, some observers doubt the sustainability of its growth, citing the examples of Brazil, Mexico and Thailand, which plunged into prolonged recession after sustained prosperity for many years. Some observers also say that China has been too reliant on investment for growth.

— VII-6 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Nonetheless, in our view, China’s growth model is in a healthy shape. A common trait of the above-mentioned developing countries that fell from grace is that they relied heavily on short-term capital inflows (like external debt) to pay for their consumption or investment spending. A reversal of this capital inflow is what triggered the financial crisis as debt-ridden enterprises and financial institutions faced serious liquidity problems. However, China’s capital inflow has been through foreign direct investment (FDI), where the investment risks are mainly borne by foreign investors and are thus less prone to being withdrawn swiftly. (Exhibit 6). That means that China is less likely to face a financial crisis triggered by capital flight.

Exhibit 6: FDI as % of Total Capital Inflow

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1991 19921993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: The National Bureau of Statistics

Further a re-statement of China’s GDP figures at the end of 2005 has calmed fears of over-investment. The census revealed that the ratio of investment as a % of GDP was in fact lower than previously stated. In addition, private consumption asa%ofGDPwasalso understated due to under-reported growth in the services sector over the past decade. These findings mean that the Chinese economy has been in a much better economic balance than many observers thought.

1.3 A Long-Term Growth Story

Urbanisation and industrialisation are the two key drivers of China’s long-term economic development. Currently more than 745 million Chinese (or some 57% of China’s population) still reside in the countryside compared with 80.6% in 1980 as shown in Exhibit 7. It will take another 25 years to reduce this ratio (rural population as a share of total population) to 35%. To facilitate this goal will require massive investment in infrastructure and construction ranging from schools, hospitals, railways, roads and sewage system to various types of property developments.

— VII-7 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 7: Accelerating Urbanisation

(Urban population as % of Total Population) 60

0 1980 1985 1990 1995 2000 2005 Source: China Statistical Yearbook, 2006

Though the “Made in China” labels are almost ubiquitous in the developed countries, China currently accounts for just around 10% of the world exports, as its industrial consumables are mostly low-end products (Exhibit 8). However, this trend will not continue as China is set to climb the value-added ladder by shifting from OEM to home-made designs and brand-names, bringing forth continuing application of advanced foreign technology and further improving its investment environment.

Exhibit 8: Share of Chinese Exports in the World Market

12%

10%

0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Source: China Statistical Yearbook, 2006 and World Trade Organisation

— VII-8 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

2. Beijing Economic Overview

2.1 A Prosperous City

Beijing is one of the most prosperous cities in China. As China’s political and cultural centre, Beijing is one of the four autonomous municipalities along with Shanghai, Tianjin and Chongqing that enjoy similar economic and administrative autonomy of a province. In terms of GDP, Beijing is the country’s second largest city after Shanghai (Exhibit 9). With a population of more than 15 million, Beijing is the third most populous city in China after Chongqing and Shanghai.

Exhibit 9: GDP Comparison of Major Cities in China (2005)

Shanghai 915 Beijing 689 Guangzhou 515 Shenzhen 495 Tianjin 370 Nanjing 241 Chengdu 237 Dalian 215 Shenyang 208 Jinan 188 Wuhan 168 Changsha 152

- 100 200 300 400 500 600 700 800 900 1,000 Amount (RMB bn)

Source: China Statistical Yearbook, 2006

— VII-9 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

In parallel with China’s economic resurgence, Beijing has experienced rapid economic transformation in the past quarter century. Beijing’s GDP grew by an average annual rate of 12% in inflation-adjusted terms between the period of 2001 and 2005 (Exhibit 10). Bank deposits, a good measure of the wealth of citizens and corporate sector, increased by an average of 20% per annum for the same period and export growth averaged at 30% per annum (Exhibit 11).

Exhibit 10: Beijing’s Real GDP Growth

16%

14%

12%

10%

0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: China Statistical Abstract, 2006

Exhibit 11: Beijing’s Exports

US$ Mn Year-on-Year % Change 18,000 70% Value Year-on-Year % Change 16,000 60%

14,000 50%

12,000 40%

10,000 30%

8,000 20%

6,000 10%

4,000 0%

2,000 -10%

- -20% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: Beijing Statistical Yearbook, 2006

— VII-10 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Per capita total income of urban households grew sixteen-fold from RMB1,159 to RMB19,533 between 1985 and 2005, as seen in Exhibit 12. Although Beijing’s per-capita GDP of US$5,680 in 2005 may be low compared to developed economies like the US and Japan, its standard of living has already exceeded the levels of some newly-industrialised economies (e.g. Manila, whose per-capita GDP stood at US$3,482 in 2005).

Exhibit 12: Per-Capita Income in Beijing (Urban Area)

RMB 25,000

20,000

15,000

10,000

5,000

- 1985 1990 1995 2000 2005

Source: Beijing Statistical Yearbook, 2006

2.2 Unique Competitive Edges

While many coastal cities in China have shared the common feature of rapid economic growth in the past 25 years, Beijing has its own competitive edges that are likely to make its economic development more sustainable than that of other Chinese cities.

This is due to a number of reasons but principally Beijing has an unrivalled pool of talent not matched by other Mainland cities. Besides having the largest number of institutions of higher education and scientific research in the country, it is also home to the prestigious Beijing University and Tsinghua University. By the end of 2004, there were more than 15,000 science and technology research institutes in the city, employing more than 300,000 people. This strength in human capital has facilitated the establishment of a Chinese “Silicon Valley” known as “Zhongguancun”. This high-tech research and development area is home to many of China’s largest technology companies such as Lenovo, Sina and Baidu.

In addition, Beijing enjoys the status of being the country’s capital city. Prior to the economic reforms started in the late 1970s, Beijing was home to most of country’s national (state-owned) enterprises. Today, though most of these enterprises have been corporatised, many of them continue to be headquartered in Beijing due to its proximity to monetary and

— VII-11 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING industrial policy makers. In 2005, 51 Beijing-based enterprises paid RMB103.5 billon in taxes to the country and were ranked among the top 500 corporate taxpayers, according to the State Administration of Taxation. Such a contribution is unmatched by any other city or province in the country.

Beijing has been the capital of China for approximately 600 years and as a consequence has enjoyed a stable source of tourism revenue. The Forbidden City and the Great Wall — Beijing’s prime tourist spots — feature the country’s richest cultural heritages and are World Heritage Sites like the Pyramids in Egypt and the Colosseum in Rome. These unique sites will continue to generate a huge amount of tourism revenue. In 2005, Beijing received 125 million local tourists, generating revenue of RMB130 billion. In the same year, Beijing’s international tourism revenue reached US$3.6 billion, which ranked number one among all Mainland cities (Exhibit 13). Beijing is likely to see a jump in the number of tourists in 2008 when it hosts the Olympic Games.

Exhibit 13: Beijing’s International Tourism Receipts

US$ Mn yoy % Change 4,000 80%

3,500 60% 3,000 40% 2,500 20% 2,000 0% 1,500 -20% 1,000

500 -40%

- -60% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: Beijing Statistical Yearbook, 2006

2.3 A Regional Leader

Beijing has a co-leadership role with Tianjin in the Bohai Rim Economic Circle. The Bohai Rim encompasses Beijing, Tianjin, Hebei, Shandong and Liaoning, and measures up to an area of 518,000 sq.km. with its 230 million population. The Bohai Rim Economic Circle is a growth engine in Northern China that is comparable to the Pearl River Delta and the Yangtze River Delta. In 2005, it generated 26% of the country’s GDP (Exhibit 14). The region is rich in natural resources and has a large supply of labour (low cost and skilled). The Bohai Rim also has a solid industrial base where the country’s largest steel and oil enterprises are located. Beijing has a lot to benefit from the Bohai Rim.

— VII-12 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 14: The Prowess of Bohai Rim Economic Circle (2005)

(As % of National Total)

GDP Exports Population

Bohai Rim...... 25.8 18.2 17.5 Pearl River Delta ...... 11.9 31.3 7.0 Yantze River Delta ...... 22.4 38.1 10.8 Others ...... 39.9 12.4 64.7

National Total...... 100.0 100.0 100.0

Source: China Statistical Abstract, 2006

In addition, Beijing could benefit from population inflows from the Bohai Rim, which will partly offset the pressure of rising costs. Migrants from neighbouring provinces have accounted for a large part of the increase in Beijing’s population, which rose by 13.85 million to 15.38 million between 2001 and 2005.

2.4 Thriving Industries

Due to its unique competitive advantages and its leading role in the Bohai Rim Economic Circle, Beijing has become home to a number of thriving industries.

High-tech sector — Support from the Central Government as well as the availability of skilled talent have contributed to the success of the high-tech industry in Beijing. In 2005, the added value of Beijing’s high-tech sector grew by 35% compared to 2004. Electronics and information technology has played an important role with its added value accounting for 76% of the total added value of all high-tech industries in Beijing. Zhongguancun Science Park, the “Silicon Valley” of China, is one of the most successful high-tech zones in China in terms of number of enterprises, number of employees, gross output value and total revenue of high-tech enterprises. At the end of 2005, the park was accommodating some 6,000 high-tech companies employing about 700,000 professionals.

Automotive industry — Beijing became China’s fifth largest automobiles production base in 2004. The number of automobiles produced in Beijing increased from 137,000 units in 2000 to 587,000 units in 2005. Overseas automobiles makers are keen to form joint ventures in Beijing to tap the capital’s rapidly expanding market. For instance, Hyundai from South Korea co-operated with Beijing Auto to form Beijing Hyundai Automobile Limited, whose sales surpassed 220,000 units in 2005 and reached 190,000 units in the first three quarters of 2006. A joint venture formed by Mercedes-Benz and Beijing Auto also opened a manufacturing plant in September 2006. Increasingly foreign investors are using China as an automobile production base for exports. Coupled with rapidly increasing car ownership in the capital backed by a burgeoning middle class, Beijing’s automotive industry is well-poised to see exponential growth in the next five years.

— VII-13 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Services sector — Beijing has also seen rapid development of its service industries in recent years. The number of people employed in the service sector increased 72% to 5.8 million from 2000 to 2005 (Exhibit 15). In the same period, the share of service workers as a percentage of the total labour force rose from 54.6% to 66.6% (Exhibit 16). The fast growth of Beijing’s service sector can be traced to China opening up its services industries to foreign investors and Beijing’s rapidly rising per-capita income, which has created strong demand for services. Demand for business services, financial services as well as information and software services has been particularly strong, as indicated by the high payroll growth rates in these industries in recent years.

Exhibit 15: Number of Service Workers in Beijing (Mn)

Mn 6

0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: Beijing Statistical Yearbook, 2006

Exhibit 16: Beijing’s Employment by Sector

Service Industrial Agricultural % of Total 100% 90%

80% 70% 60%

50% 40% 30% 20% 10% 0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 20032004 2005

Source: Beijing Statistical Yearbook, 2006

— VII-14 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Banking and finance industry — Beijing’s banking and finance industry has a solid foundation. The country’s largest four state-controlled commercial banks and the largest three insurance companies are all headquartered in Beijing. Beijing was among the first batch of Mainland cities that allowed foreign banks to conduct Renminbi business. The city has the second largest number of branches of foreign banks, after only Shanghai.

Similarly, the insurance industry in Beijing has experienced phenomenal growth in recent years, with a three-fold increase in the number of companies from 13 to 47 in 2005. In the same year, total insurance premium in Beijing rose by 78% to RMB49.8 billion.

2.5 Promising Economic Outlook

Both cyclical and structural factors are favourable to Beijing’s economic development.

Beijing will host the Olympic Games in 2008. To this end, the Beijing government is spending a total of RMB280 billion in upgrading its urban infrastructure between 2002 and 2008. In the near term, the preparation for the Olympic Games will mean a big boost to the city’s economy, as this requires extensive construction ranging from telecom and transport infrastructure to stadium and related facilities. As a result, many industries are expected to benefit from the upgrading. The contribution of the 2008 Olympic Games to the city’s GDP growth is estimated to be 2.5 percentage points per year between 2002 and 2008, according to the Statistical Bureau of Beijing. Undoubtedly hosting the Olympic games will also bring global attention onto Beijing.

Exhibit 17: Population in Beijing

Mn 20 18.00 18

15.38 16 14.93 14.23 14.56 13.64 13.85 14 12.51 12.59 12.40 12.46 12.57 11.25 12 10.86 10.94 11.02 11.12

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2020

Source: Beijing Statistical Yearbook, 2006

— VII-15 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

At the end of 2004, Beijing unveiled a blueprint with a goal of transforming the capital into a modern cosmopolitan city comparable to global cities such as London, New York and Tokyo. The government planners expect the city to provide homes to 18 million people by 2020, with an infrastructure capable of supporting 20 million people (Exhibit 17). Such a plan means that an investment boom in Beijing would probably go beyond 2008, providing support to the city’s medium-term development.

Foreign investors are positive about Beijing’s economic prospects. By the end of 2005, the city was home to more than 9,000 foreign-invested enterprises (including joint-ventures and co-operatives), along with over 10,000 representative offices set up by foreign entities (Exhibit 18). Out of the 500 world’s largest enterprises, some 200 are already operating in the city. More than 40 of these multi-national corporations, including NEC, P&G, Microsoft and SUN, have established their R&D centres and production plants in various industrial parks in Beijing. Inflow of foreign direct investment rose 29.1% in 2006, after growing 14.4% in 2005.

Exhibit 18: Beijing Foreign-invested Representative Offices

Number 11,000 10,132 10,000

9,000 9,180

8,000 8,392 7,976 7,083 7,451 7,000 6,758 6,413 6,000 6,107 5,532 5,000 4,726 4,000

3,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Beijing’s huge hinterland, unrivalled talent pool, unique tourist attractions as well as its status as the country’s capital mean that its economic outlook is promising over the long term. Coupled with fast population growth, robust domestic business formation and continuous capital inflows, this will create immense demand in the property sector and commercial property in particular.

— VII-16 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

3. Beijing’s Town Planning and Infrastructure Development

3.1 Beijing’s Planned Zoned Areas

In 2004, Beijing unveiled an ambitious blueprint with a near-term target of developing the city into a centre for international exchange in 2008 and a medium-term target of developing the city into a world-class service centre by 2020. These targets have required the Beijing municipal government to rationalise land use, improve infrastructure and promote urban redevelopment.

The old town plan in Beijing adopted a “one-centre” layout with the downtown area (which is defined as the area within the 3rd Ring Road for the purpose of this section) housing a significant proportion of urban functions, including commercial facilities, office buildings and public institutions such as hospitals, government departments and schools. As the city continues to expand outward, the pressure on the centre has intensified, resulting in serious traffic congestion and a considerable strain on urban functions including water supply and various social amenities.

3.2 From One Centre to Multiple Centres

In a bid to create enough capacity for further development of the city into a metropolitan and a major business hub in Asia, the Beijing municipal government decided to adopt an aggressive urban development strategy which can be summarised by the layout of “Two Axes — Two Belts and Multi Centres” (Exhibit 19).

Exhibit 19: Two Axes — Two Belts & Multi-Centres Layout

Source: Beijing Municipal Planning Bureau

— VII-17 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

“Two Axes” refers to the extensions of the North-South central axis through the Forbidden City and the East-West Chang An Avenue axis across the city. The Two Axes, as backbones of the city’s infrastructure, will be enhanced and further developed to ensure the political, cultural and economic functions of the capital are maximised.

The “Two Belts” include a Development Belt to the east of Beijing and an Ecological Belt to the west.

The Development Belt runs from the north eastern suburban districts of Huairou and Miyun to neighbouring Hebei Province and Tianjin City to the south east (Exhibit 20). The Development Belt is expected to absorb industries and population migrating from the downtown area. The CBD and the Luthansa area to the east of the city will benefit from the development of the Development Belt as economic activities shifts eastward in line with the new town plan.

Exhibit 20: The Development Belts

Source: Beijing Municipal Institute of City Planning & Design

— VII-18 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

The Ecological Belt, connecting the hills of West Beijing, serves as an ecological buffer zone, linking Yanqing, a county located one and a half hour’s drive north west of Beijing and the Changping districts in the north and Mentougou, Liangxiang and Huangcun to the South. The development of the Ecological Belt will enhance the attractiveness of Beijing as a business centre for multinationals and their employees.

The “Multiple Centres”, which are expected to shoulder different urban functions, are designed to reduce excess population density and the resulting urban problems in any particular district. The “Multiple Centres” include the Central Business District, the Lufthansa area, the Financial Street, the Olympic Park and the Zhongguancun Science and Technology Park. In addition, a number of new towns will be developed in the “Two Belts” to provide space for further population and economic growth.

3.3 From the Ring Roads to Subways

Beijing’s road network spreads out in bands of concentric Ring Roads radiating from the Forbidden City and is the result of the old “One Centre” layout of the city (Exhibit 21). The 5th Ring Road was completed in 2003 and the 6th Ring Road will be completed in 2007 (Exhibit 22). Traffic on the Ring Roads has worsened due to the rapidly rising car ownership.

— VII-19 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 21: Beijing’s Ring Road System

Source: Beijing Municipal Planning Bureau

Exhibit 22: Beijing Ring Road Information

Ring Road Line Length (KM) Completion Ring Road Status

2nd Ring Road ...... 23.7 1962 Inner city transportation backbone 3rd Ring Road ...... 48.0 1981 Major transportation hub in downtown area 4th Ring Road ...... 65.5 2001 City-round freeway 5th Ring Road ...... 93.0 2003 Outer city expressway 6th Ring Road ...... 188.0 2007 Outer city expressway 7th Ring Road ...... N/A Under Planning Outer city expressway

Source: Beijing Municipal Urban Planning Bureau

The subway system is expected to play a much more important role in intra-city transport by greatly enhancing the efficiency of travelling within the city. By providing links between major districts and the fringe areas, the expanding subway system is expected to greatly alleviate the pressure on the Ring Roads. In addition to the existing four subway lines, six more

— VII-20 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING lines will be added before the Olympic Games by August 2008. More subway lines will be constructed after 2008, in line with the city’s continuous development (Exhibit 23). According to the Urban Planning Commission of Beijing government, when the subway system is fully completed people living in the Beijing suburbs will be able to get to work within an hour (Exhibit 24).

Exhibit 23: Beijing Planned Subway System

Source: Beijing Municipal Institute of City Planning & Design

— VII-21 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 24: Beijing’s Planned Subway Information

Number of Point of Subway Line Length (KM) Stations Departure Terminus Completion

Subway Line 1 ...... 30.4 23 Pingguoyuan Sihuidong 1969 Subway Line 2 (Loop Line) ...... 23.1 18 Xizhimen Xizhimen 1984 Subway Line 4 ...... 28.1 24 Majialou Loubeicun end of 2007 Subway Line 5 ...... 27.6 24 Changping Songjiazhuang 2007 Taipingzhuang Subway Line 6 ...... ——— — begin construction after 2008 Subway Batong Line ...... 19.0 13 Sihui Tuqiao 2003 Subway Line 9 ...... 18.3 15 Beijing World Capital — Park Gymnasium Subway Line 10 (Phase I)...... 32.9 28 Wanliu Landianchang Phase 1 before Road 2008 13 (Light Rail) ...... 40.5 16 Xizhimen Dongzhimen 2002 Olympic Branch Line ...... 4.3 4 Panda Forest Park 2008 Roundabout Yizhuang Line ...... 26.0 5 Songjiazhuang Yizhuang before 2008 Economic Development Zone Beijing Capital International Airport- Dongzhimen Express Rail Link ...... 28.5 4 Dongzhimen Capital Airport 2008

Source: Beijing Municipal Planning Bureau

— VII-22 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

3.4 Improving External Transport

A sophisticated railway network originating from Beijing is already in place given the city’s status as the capital and a major transport hub of the country (Exhibit 25).

Exhibit 25: Beijing’s Railway Links

Domestic Train Lines International Train Lines

Jingguang Railway to Guangzhou Railway to Kowloon in Hong Kong Jinghu Railway to Shanghai Railway to Pyongyang in North Korea Jingha Railway to Harbin Railway to Moscow in Russia Jingbao Railway to Baotou in Inner Mongolia Jingyuan Railway to Taiyuan in Shanxi Jingcheng Railway to Chengde in Hebei Jingqin Railway to Qinhuangdao in Hebei

Moreover, Beijing is the starting point for 11 out of China’s 12 national highways. These are major trunk routes, some being toll roads, connecting Beijing to the rest of China. 813 kilometres of China’s national highways lie within the municipality of Beijing.

In addition to the railway network and national highways, Beijing’s external transportation system has been enhanced by the expressways. Currently, there are nine expressways linking Beijing to outlying suburbs or other cities (Exhibit 26).

Exhibit 26: Beijing’s Existing Expressways

Expressways Length Linkage

Badaling Expressway...... 70 km Madian - Badaling Great Wall Jingcheng Expressway...... 23 km Taiyanggong - Gaoliying Airport Expressway ...... 19 km Sanyuanqiao - Beijing Capital International Airport Jingtong Expressway ...... 15 km Dawang Bridge - Tongzhou District Jingha Expressway ...... NA Beijing to Harbin Jingshen Expressway...... 658 km Sifang Bridge - Shenyang Jingjintang Expressway...... NA Fenzhongsi - Tianjin - Tanggu Jingkai Expressway ...... 40 km Yuquanying - Yufa Jingshi Expressway ...... 270 km Liuliqiao - Shijiazhuang

As the host city of the 2008 Olympics, Beijing has been developing a large number of expressways. The municipal government has outlined plans to complete 890 km of expressway before 2008. The network of expressways around Beijing will soon amount to as many as 15 when the six under construction are built. Those under construction are Jingping/Jingji, Northern Jingjin, Southern Jingjin, 2nd Airport Expressway, Northern Airport Expressway and Litian Expressway.

— VII-23 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

According to China Ministry of Communication major plans are in the works for several national expressways originating from Beijing (Exhibit 27).

Exhibit 27: Expressways on the Drawing Board

Beijing — Hong Kong/Macau Beijing — Shanghai Beijing — Urumqi

Beijing’s improving external transport link will strengthen its logistics capacity and enhance its role as a leader in the Boihai Rim region as well as its status as a major business hub in Asia.

4. Analysis of the Beijing Office Market

4.1 Introduction

Beijing Gateway Plaza is one of the nine premium Grade A office buildings in Beijing. At the end of 2006, the amount of premium Grade A stock stood at 820,000 sq.m., representing some 20.7% of the 3.97 million sq.m. of total Grade A office stock.

Exhibit 28: Beijing Grade A Office Stock Breakdown

Premium Grade A office building 20.7%

General Grade A office building 79.3% Source: Knight Frank

Grade A office is defined by Knight Frank to encompass both general Grade A and premium Grade A offices. These two categories are differentiated by a number of factors, including their floor plates, overall building quality, management, ownerships, occupancy rates and locations. Premium Grade A offices are high-end office buildings of single-ownership (usually by institutional investors) with large floor plates, high building quality, international management and high occupancy rates. They are in excellent locations with easy access to all modes of public transport. (Appendix 1 for details of definition).

— VII-24 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

As of the end of 2006, we believe that there are only three office buildings, namely Beijing Kerry Centre, China World Trade Centre and Winland International Financial Center that are superior to Beijing Gateway Plaza. These three buildings have a total gross floor area of 237,000 sq.m., accounting for just 6.0% of Beijing’s total Grade A stock as at the end of 2006.

A note-worthy characteristic of the premium Grade A office buildings is their ability to maintain high and stable occupancy rate after a relatively short let up period. Knight Frank has monitored the trends of occupancy rates of the premium Grade A office buildings in Beijing. We have observed that this category of buildings on average achieved occupancy rates of over 80%2 within 18 months after the projects were released for leasing. Furthermore, these buildings achieved occupancy rates of approximately 90%3 within 24 months after their launch.

At the end of 2006, the average occupancy rate of the six premium Grade A offices that were completed before 2005 was over 92%4. Occupancy rate for Beijing Gateway Plaza was approximately 90%5 at the end of 2006, outperforming the two other premium Grade A buildings that were also completed in the same year, according to Knight Frank. These two buildings had a combined occupancy of approximately 72%6. In our view, building quality and location have contributed to Beijing Gateway Plaza’s outstanding performance. Winland (at Financial Street) and LG towers (in CBD and its vicinity) were the other two new premium buildings completed in 2005 (see more details in Exhibit 36).

Due to the 2008 Olympics we expect to see a large amount of supply of Grade A stock arriving on the market in the lead up to the games. Of the estimated 2.58 million sq.m. of Grade A office space that will come on stream between 2007 and 2008, we estimate that 510,000 sq.m. will be classified as premium Grade A. Given the anticipated moratorium that restricts building construction during the Olympic Games period in 2008 (this moratorium is discussed in details later in our report) we do not expect to see any new premium Grade A supply between 2009 and 2010. As such, the average annual supply of premium Grade A offices for the period between 2007 and 2010 will amount to only 127,500 sq.m., marginally lower than the average take-up of 130,600 sq.m. between 2004 and 2006.

Notes:

(2,3,4,5,6) “Occupancy rate=1-Vacancy rate”.

— VII-25 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

It is our view that take-up for 2007 and 2008 should reflect the pricing of new buildings and an improving economy. We believe that take-up for 2007 and 2008 will grow by an average rate of 5% per year above the average take-up for the period between 2004 and 2006. Between 2009 and 2010 we believe that the take-up will remain the same as in 2008. Based upon these assumptions the premium Grade A submarket will reach above 95% occupancy in 2010.

4.2 Major Office Submarkets in Beijing

The majority of Grade A offices are located in Central Business District (CBD) and its vicinity. The vicinity refers to the Chaoyangmen area along the Northeast Second Ring Road and the Jianguomen area. At the end of 2006, the CBD and its vicinity together accounted for 48.9% of total Grade A office stock in Beijing, followed by Beijing Financial Street (BFS), which accounted for 21.8%. Grade A office stock in the Lufthansa area (the submarket where Beijing Gateway Plaza is located) accounted for 13.5% of the city total, while the Zhongguancun (ZGC) area accounted for 13.4% (Exhibit 29).

Exhibit 29: Grade A Office Stock by Region

'000 sq.m. CBD and Vicinity Lufthansa Area BFS ZGC Others 4,500

4,000 2.4% 13.4% 3,500

3,000 21.8%

2,500 13.5% 2,000

1,500

1,000 48.9%

500

0 2001 2002 2003 2004 2005 2006

Source: Knight Frank

Beijing’s expanding office market has resulted in the formation of distinct commercial districts, which effectively operate as relatively independent sub-districts within the city (Exhibit 30). Each of them has different features, strengths and mix of business activities.

— VII-26 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 30: Major Office Submarkets in Beijing

Source: Knight Frank

4.2.1 Lufthansa area in Chaoyang District

The Lufthansa area refers to the area around the Lufthansa Centre and Sanyuan Flyover. The completion of Landmark Tower and the Lufthansa Centre in the early 1990s were milestones in this area’s development. The area has been popular with German and European-based companies due to the establishment of the German Center and the European Chamber of Commerce in Landmark and Lufthansa Center respectively.

Lufthansa has been one of Beijing’s fastest developing commercial areas, largely due to its convenient access to the CBD, Beijing Capital International Airport, the Olympic Village and the Haidian District. A cluster of new Grade A office buildings developed in the last five years has brought the landscape on a par with other mature office districts such as the CBD and its vicinity as well as Beijing Financial Street. New developments in this area include the Beijing Gateway Plaza (105,600 sq.m.), Hyundai Motor Tower (50,000 sq.m.) and Air China Plaza (42,000 sq.m.). As at the end of 2006, Beijing Gateway Plaza was the only premium Grade A office development in this submarket.

The Lufthansa area is home to the Third Embassy District, a selection of five-star hotels and shopping malls. There are a number of luxury villas and high-end serviced apartments together with a handful of renowned international schools in this area. A cluster of unique restaurants and specialty markets (e.g. flower/home decorations) have also added to the area’s diversity.

— VII-27 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

4.2.2 CBD and Vicinity

The CBD office market in Beijing refers to the office buildings within the 3.99-sq.km. radius of Chaoyang CBD as well as those in its vicinity. The vicinity includes Chaoyangmen in the Chaoyang District as well as the Jianguomen area at the junction of the Chaoyang and Dongcheng districts.

Currently, China World Trade Centre and Beijing Kerry Centre are two of the landmark buildings in this area. Two upcoming projects are expected to become new landmarks in this area. The 186-metre Yin Tai Centre, which is scheduled to be completed in late 2007, will be the second highest building in the city. The China World Phase III will be the tallest building in the city once the development is completed before the Olympic Games in 2008.

According to the Beijing Central Business Administrative Commission, in the first half of 2005, the Chaoyang CBD was home to 2,814 enterprises of which 65.8% belonged to the service industry. Statistics show that more than 130 of the Fortune 500 enterprises have established offices in the CBD and its vicinity, accounting for 76% of the Fortune 500 companies that have operations in Beijing.

4.2.3 Beijing Financial Street (BFS) in Xicheng District

BFS is located to the north of Chang’an Avenue and east of the western part of the 2nd Ring Road. The area measures 1,700 metres in length and 600 metres in width. The area is located in the vicinity of local government agencies (Sanlihe) and the junction of the Subway interchange of Fuxingmen. Currently, the submarket is home to 530 well-known corporations and institutions, including the national headquarters of nine commercial banks, 58 corporations directly affiliated with the central government departments, 19 listed companies as well as 38 ministries and financial regulatory bodies. It is expected that BFS will evolve into a prime location for large state-owned companies, particularly those in the financial and telecom sectors due to their preference to be close to governmental and regulatory bodies.

Moreover, in response to the preferential policies adopted by the Xicheng Government to develop the financial industry many multinational financial institutions set up offices or branches in BFS. In the first half of 2006, two multinational financial giants, Goldman Sachs and JPMorgan, relocated their Beijing offices from the CBD to Winland International Center within BFS.

4.2.4 Zhongguancun (ZGC) in Haidian District

ZGC lies within the Haidian District and has been the centre of Beijing’s high-tech industry since the mid-1990s. On the back of economic reform and an open-door policy, Beijing’s high-tech industry grew rapidly and created many prestigious technology enterprises such as Beida Founder and Lenovo Group, which are mostly located in ZGC. As a result, ZGC has made a name for itself as the “Silicon Valley” of China.

— VII-28 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

According to the Statistic Bureau of Beijing, as at the end of 2004, there were 20,364 high-tech enterprises in the ZGC Science Park, an increase of 24.9 % year-on-year.

4.3 Grade A Office Supply, Take-up and Vacancy

2001 to 2003 was a period of global economic downturn with the benefits arising from China’s entry into the WTO not yet fully realised. After the SARS outbreak in 2003, the Chinese economy began to take off with expanding export growth and burgeoning capital inflows.

Exhibit 31: Take-up and Supply of Grade A Offices

2001-2003 Annual Average 2004-2006 Annual Average

Supply Take-up Supply Take-up

(sq.m.) 195,333 174,590 581,135 513,108

Between 2004 and 2006, the average annual supply of Grade A offices in Beijing was about 581,000 sq.m., with most of the supply coming on stream in 2004 and 2005, according to Knight Frank. Many Grade A office developments that should have been released between 2001 and 2003 were put on hold due to the global economic slowdown. When the global economy recovered and investors’ confidence returned, developers began to accelerate construction and marketing of office projects. Consequently, a significant amount of supply was released into the market. Office supply stood at 649,725 sq.m. and 812,680 sq.m. in 2004 and 2005 respectively, according to Knight Frank.

Between 2004 and 2006, the average annual take up of office area in Grade A office buildings in Beijing was about 513,108 sq.m., 11.7% below the average annual supply in the same period, according to Knight Frank. In 2006, total Grade A office building space take-up was 505,586 sq.m., significantly higher than the year’s supply of 281,000 sq.m. Subsequently the average vacancy rate slipped from 19.0% (the end of 2005) to 12.0% (the end of 2006), according to Knight Frank.

— VII-29 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 32: Grade A Office Supply, Net Take-up and Vacancy Rate

sq.m. Annual Supply Takeup Vacancy Rate

900,000 20%

800,000 18%

16% 700,000 14% 600,000 12% 500,000 10% 400,000 8% 300,000 6%

200,000 4%

100,000 2%

0 0% 2001 2002 2003 2004 2005 2006

Source: Knight Frank, January 2007

The Premium Grade A office sub-sector stock was estimated at 820,000 sq.m. by the end of 2006, accounting for 20.7% of all Grade A office buildings stock, according to Knight Frank.

According to our definition, there are only nine premium Grade A office buildings in Beijing. There are six in the CBD and one in Lufthansa, Beijing Financial Street and Zhongguancun. Premium Grade A office stock by commercial sub-districts is summarised in Exhibit 33.

Exhibit 33: Beijing Premium Grade A Office Stock by Commercial Sub-districts

'000 sq.m. CBD and Vicinity Lufthansa Area BFS ZGC Others 1,000

900 10.7% 800 10.4% 700

600 20.0%

500

400

300 58.9% 200

100

0 2001 2002 2003 2004 2005 2006

Source: Knight Frank

— VII-30 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Since 2001, vacancy rates of premium Grade A offices in Beijing have generally been on a down-trend, except for 2004 and 2005 when vacancy rates rebounded to 19.4% and 28.3% respectively due to an influx of new supply of approximately 145,000 sq.m. and 278,680 sq.m. respectively. Due to strong demand for premium quality office space, the newly released supply was absorbed fairly rapidly thus pushing the vacancy rate down to an estimated 11.0% by the end of 2006 (Exhibit 34).

Exhibit 34: Beijing Premium Grade A Office Vacancy Rate

(sq.m.) Annual Supply Takeup Vacancy Rate 300,000 40%

35% 250,000

30%

200,000 25%

150,000 20%

15% 100,000 10%

50,000 5%

0 0% 2001 2002 2003 2004 2005 2006

Source: Knight Frank

The average annual take-up in the premium Grade A sub-market stood at an estimated 130,635 sq.m. between 2004 and 2006. The demand for premium Grade A office space in Beijing is mainly driven by foreign companies that require a modern working environment and can afford higher rental levels. Such tenants include global technology giants, joint-venture automotive companies and foreign investment banks.

Exhibit 35: Take-up and Supply of Premium Grade A Offices

2001-2003 Annual Average 2004-2006 Annual Average

Supply Take-up Supply Take-up

(sq.m.) 50,000 42,620 141,227 130,635

It should be noted that given the small size of premium Grade A stock, the launch of a new office will have a significant impact on overall vacancy. As such, the addition of new supply between 2004 and 2005 created a spike in vacancy. If we ignore these new additions and look at the six buildings that were launched before 2005, overall vacancy stands at an estimated 6.0% at the end 2006 (Exhibit 36).

— VII-31 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 36: Vacancy Rates of Beijing Premium Grade A Offices by Launch Time

Q4 2005 Q4 2006

Six established buildings ...... 8.6% 6.0% Beijing Gateway Plaza ...... 60.0% 10.0% Two other buildings launched in 2005 ...... 81.0% 28.0%

It is important to note that the premium Grade A office submarket maintains high and stable occupancy rates after a relatively short letting period. We have monitored occupancy trends within this submarket and we have found that the buildings, on average, achieved occupancy rates of over 80% within 18 months after the projects were released for leasing. Furthermore, these buildings achieved occupancy rates of approximately 90% within 24 months after the launch.

Beijing Gateway Plaza was launched in Q3 2005 and its occupancy rate as at the end of 2006 was approximately 90%7. This is in line with the majority of the premium Grade A stock completed before 2005. The other two buildings launched in the same year achieved an average occupancy rate of 72%. Thus Beijing Gateway Plaza’s performance has clearly outpaced the other two premium Grade A buildings. In our view, Gateway’s outstanding performance was a result of its location and quality construction.

Note:

(7) “Occupancy rate=1-Vacancy rate”.

— VII-32 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

4.4 Grade A Office Rentals

Grade A office rentals in Beijing reached a trough at the end of 2003, when the economy was still recovering from the SARS outbreak. The rentals grew by 4.5% by December 2006 compared with December 2003, according to Knight Frank. During this three-year period, Beijing Financial Street led the market with highest rental growth of 26.3%, followed by the Lufthansa area with a healthy rental growth of 8.2%. Zhongguancun’s office rental growth achieved 3.4% during this period whilst the CBD and its vicinity recorded the worst performance with rentals having declined by 3.1%, due to a supply hike in this area, according to Knight Frank.

Exhibit 37: Grade A Office Rental Index, Q4/03 - Q4/06 (Q4/03 = 100)

CBD and Vicinity Lufthansa Area BFS ZGC

140

120

100

40 Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006

Source: Knight Frank

By the end of 2006, premium Grade A office rental was commanding an average of 22.5% more than the general Grade A office rentals.

— VII-33 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 38: Beijing Grade A Office Rental Index

Premium Grade A Rental General Grade A Rental

140

130 (Premium Grade A Office Rental in Q4/06 = 100)

120

110

100

40 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2000 2000 2000 2000 2001 2001 2001 2001 2002 2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 2004 2005 2005 2005 2005 2006 2006 2006 2006

Source: Knight Frank

— VII-34 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

4.5 Grade A Office Sales Prices

In 2000 and 2001, the estimated rental yield of Grade A offices in Beijing stood between 10% to 12%. The high investment yield attracted a large number of investors, who pushed up the average prices of offices by over 30% between early 2000 and mid-2002. After experiencing poor demand in 2003 and over-supply in 2004, the value of Grade A offices in Beijing has been increasing since early 2005. Average prices increased by 18% between the second quarter of 2005 and the fourth quarter of 2006 (Exhibit 39). Rental yields hovered at around 8% in the fourth quarter of 2006, according to Knight Frank.

Exhibit 39: Grade A Office Sales Price Index, Q1/00 - Q4/06

Q1/2000 = 100 160

140

120

100

Source: Knight Frank

It should be noted that the above analysis is based on the transaction information of general Grade A properties, excluding premium Grade A buildings, which are not commonly traded.

— VII-35 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

4.6 Grade A Office Tenant Profile

A survey on tenant8 profile of major Grade A offices in Beijing was conducted by Knight Frank in December 2005. The results showed that apart from domestic companies (32%), American companies were the largest group of occupiers of office space in Beijing (28%), followed by European-based enterprises (22%) (Exhibit 40). Demand for office space by multinational companies is likely to remain strong given China’s further integration with the world economy.

Exhibit 40: Grade A Office Occupancy by Tenant Origin (As at the end of 2005)

Others 13.0% Domestic Japan and South Korea 32.0% 5.0%

EU 22.0%

America 28.0%

Source: Knight Frank, December 2005

(8) Note: Major office tenant refers to those who occupied office space above 1,000 sq m.

— VII-36 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

In terms of business segment, Beijing’s Grade A offices were primarily occupied by companies in the high-tech and telecommunication sectors accounting for 30% of the total, followed by those in the banking and insurance industries accounting for 18% of the total (Exhibit 41).

Exhibit 41: Grade A Office Occupancy by Business Segment (As at the end of 2005)

Banking and Insurance 18% Others 21%

Professional Services 16%

Manufacturer 15%

Hi-tech and Telecommunication 30%

Source: Knight Frank, December 2005

Beijing has witnessed rapid development of its tertiary industries in recent years. Preferential policies have been in place at both state and district levels to support the development of the financial and technology sectors. As such, demand for office space is expected to remain robust.

4.7 Grade A Office Supply

Looking ahead, there will be significant supply of Grade A offices in Beijing in 2007. This supply spike should be considered in the light of a likely government moratorium on construction activities aimed at reducing pollution in the city in the run-up to the Olympic Games. It is expected that government will, in 2008, put a stop to all real estate developments within the Third Ring Road, where most of the upcoming supply of Grade A offices is located.

In anticipation of this moratorium, most developers of office projects are trying to accelerate their development pace to complete their projects before 2008 to avoid unwanted delay of construction. We estimate that a large amount of Grade A office space will come on stream in 2007, with little new supply in 2008, especially in the second half of the year (Exhibit 42 & 43).

— VII-37 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

In terms of future supply, we estimate that 2.44 million sq.m. of Grade A office space will be completed during 2007. The majority will be located within Chaoyang CBD and its vicinity, accounting for 63% of the total supply in the city. Total projected new Grade A office supply in 2008 is 140,000 sq.m.

Exhibit 42: Grade A Office Future Supply by Region (2006-2008F)

sq.m. CBD and Vicinity Lufthansa Area BFS ZGC Others 3,000,000 Annual Average Supply (2006 - 2008) = 953,202 sq. m.

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0 2006 2007F 2008F

Source: Knight Frank

By the end of 2008, the CBD and its vicinity will remain the major Grade A office submarket in Beijing, accounting for 56.0% of the total stock of the entire city, 4.6 percentage points higher than that at the end of 2006. Projected premium Grade A developments coming on stream in this area include China Central Place, Yintai and China World Trade Centre Phase III.

— VII-38 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Lufthansa area’s share will remain unchanged at about 13%. Due to limited land supply available for development, BFS and ZGC will see their market shares in total Grade A office stock reduced to 18.4% and 8.1% respectively by the end of 2008 (Exhibit 43).

Exhibit 43: Beijing Grade A Office Stock Distribution, 2006-2008F

CBD and Vicinity Lufthansa Area BFS ZGC Others

Source: Knight Frank

Of the estimated 2.58 million sq.m. of Grade A office space that will become available to the market between 2007 and 2008, we estimate only 510,000 sq.m. (or 19.8%) will be classified as premium Grade A (Exhibits 43 and 44).

Exhibit 44: Increase in Supply by Types of Offices

Stock New Supply New Supply as % (end 2006) (2007-2008) of end-2006 stock

(sq.m.) (sq.m.)

General Grade A ...... 3,148,118 2,066,600 66% Premium Grade A...... 817,680 510,000 62% Total ...... 3,965,798 2,576,600 65%

— VII-39 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

By 2008, three new premium Grade A developments, namely China Central Place, Yintai and China World Trade Centre Phase III, will bring forth a combined GFA of 390,000 sq.m. to CBD and its vicinity. A premium Grade A development known as ChemSunny with an estimated 120,000 sq.m. will be introduced into the Beijing Financial Street in 2007. There will be no new premium Grade A supply in 2007 and 2008 in both Lufthansa and the Zhongguancun submarkets.

Exhibit 45: Beijing Premium Grade A Office Supply (Note: We do not envisage new supply during 2009 and 2010)

End 2006 Stock 2007 New supply 2008 New supply Submarkets (sq.m.) (sq.m.) (sq.m.)

CBD and Vicinity...... 524,085 290,000 100,000 Lufthansa area...... 105,595 0 0 BFS...... 93,000 120,000 0 ZGC ...... 95,000 0 0 Others ...... 0 0 0 City Overall ...... 817,680 410,000 100,000

Source: Knight Frank

At the end of 2001, there were four premium Grade A buildings in Beijing. Five additional buildings were completed between 2002 and 2005 with no new completions in 2006. In 2007 and 2008, we expect to see 410,000 sq.m. and 100,000 sq.m. of new completions respectively. In 2009 and 2010, we do not foresee any new supply due to the likely Olympic Games moratorium. Between 2007 and 2010 average annual supply of premium Grade A office will amount to only 127,500 sq.m., less than the average take up of 130,635 sq.m. between 2004 and 2006.

Exhibit 46: Office Supply by Types of Offices

2007-2010 2004-2006 Annual Average Annual Average

Supply Take-up Supply

(sq.m.) (sq.m.) (sq.m.)

Premium Grade A ...... 141,227 130,635 127,500 Total Grade A ...... 581,135 513,108 644,150

Clearly, the moratorium has compressed supply as developers are racing to complete their buildings. Without taking economic growth into account, if we were to extrapolate the average take-up achieved between 2004 and 2006, we estimate that the new supply will be absorbed by the middle of 2010.

— VII-40 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

4.8 Grade A Office Demand

Increasing business formation in Beijing has been the major driver of Grade A office demand (Exhibit 47).

Exhibit 47: Number of Registered Companies in Beijing (1999-2005)

Company Type 1999 2000 2001 2002 2003 20049 2005

Source: Beijing Statistical Yearbooks, various issues; Knight Frank

The rapid expansion of established companies amid strong economic growth has also added to the demand of Grade A offices. Knight Frank has estimated the growth in the number of domestic companies and multinational institutions in Beijing with reference to factors like foreign direct investment, export performance and economic growth. Between 2004 and 2008, we expect that the number of foreign invested companies, representative offices and domestic companies, which are major Grade A office tenants, to increase further. In the recent years, we have observed a trend of increasing number of domestic enterprises able to afford high-end office space.

China’s strong growth momentum and the capital city’s potential to be an Asian metropolis and a leader in the Bohai Rim Region will prompt increasing number of domestic and multinational companies to expand their operations in Beijing, thus sustaining Grade A office demand in the city (Exhibit 48).

To prepare for the Olympic Games, the Beijing government has planned to spend a total of RMB280 billion to upgrade the urban infrastructure between 2002 and 2008. In the near term, the preparation for the Olympic Games would mean a big boost to the city’s economy, as this requires large construction work ranging from telecom and transport infrastructure to stadiums and related facilities. Many industries are expected to benefit. However, construction companies and transport utilities’ expanding businesses are likely to boost demand for Grade B offices more than Grade A offices. Unlike investment banks or law firms, construction and engineering firms are generally not keen to spend a significant amount of money for high-end office space.

(9) Note: The numbers of foreign-invested enterprises and domestic enterprises for 2004 have not been found on the Beijing Statistical Yearbooks.

— VII-41 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 48: Number of Registered Companies

Foreign-Invested Representative Offices Domestic 400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0 1999 2000 2001 2002 2003 2005 2006F 2007F 2008F

Source: China Statistical Yearbooks (1999-2003, 2005); Knight Frank (2006F-2008F)

Looking ahead, the major forces driving demand for Grade A offices in Beijing are likely to include:

● Expansion of enterprises in the tertiary industry, especially those in the financial, high-tech and professional services;

● New international entrants setting up businesses in Beijing;

● International and local enterprises seeking to upgrade their accommodation, taking advantage of new and better-quality space.

● Consolidation of companies into single locations;

● Economic uplift associated with the 2008 Olympics; and

● New Chinese enterprises entering the Beijing market.

The central government planners intend to expand Beijing’s infrastructure to support 20 million people by 2020. Such a plan means that an investment boom in Beijing is likely to continue beyond 2008, providing support to the city’s medium term development. The completion of Olympic-related infrastructure projects is unlikely to result in a decline in investment contraction in Beijing. Given the companies involved in the infrastructure projects are mainly tenants of industrial buildings or Grade B offices, any impact on the Grade A office market would be minimal.

— VII-42 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

4.9 Grade A Office Market Forecast

Although demand for Grade A offices will continue to increase in 2007, it will not be able to match the abundant supply in the same period. We anticipate that the average vacancy rates will rise in 2007, when new supply reaches a historical high at about 2.44 million sq.m. In 2007, the citywide Grade A vacancy rate is projected to be over 37%. Intense competition will appear in CBD and the vicinity, as over 60% of the projected supply is coming from this submarket.

The supply of new Grade A offices in Beijing in 2007 is significant. However, as pointed out earlier this spike in supply is a result of the market’s expectation that there will be a construction moratorium associated with the Beijing Olympics resulting in developers racing to finish their projects before the end of 2007. In reality, the 2007 supply represents the bulk of the total supply for the years 2007 to 2010, with only limited supply coming on stream between the second half of 2008 and 2010.

If we do not take into account the forecast of future economic growth and simply extrapolate the 2004 and 2006 average take-up for Grade A office, we would expect that the vacancy rate would peak in 2007 at 37.5% falling to 15.3% in 2010 as demonstrated in Exhibit 49 below.

However, in our view, a more likely scenario is the abundant supply in 2007 will result in lower rental costs, initially within the new buildings, which in turn will help boost take-up. In addition, the improving economic environment will result in a natural growth in take-up. We believe that take up for 2007 and 2008 will grow by an average rate of 5% per year above the average take-up for the period from 2004 to 2006. For years 2009 and 2010, we have assumed that the take-up will remain the same as in 2008. Assumption 2 in Exhibit 49 illustrates this scenario.

— VII-43 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 49: Beijing Grade A Office Supply, Net Take-up and Vacancy

'000 sq.m.

Assumption 1 (leading to Vacancy Rate 1): The average take-up for Grade A offices between 2004 and 2006 is adopted for 2007 to 2010.

Assumption 2 (leading to Vacancy Rate 2): 2007 and 2008 take-up will grow by an average of 5% p.a. above the average take up for the period 2004 to 2006. For 2009 and 2010, we have assumed that the take-up will remain the same as 2008.

Source: Knight Frank

We believe that the premium Grade A submarket will outperform the general Grade A market. In the years 2007 and 2008 we expect to see 510,000 sq.m. of new completions with no new supply in 2009 and 2010. Annual take-up for premium Grade A between 2004 and 2006 stood at 130,635 sq.m. If we ignore future economic growth and simply extrapolate the take up between 2004 and 2006, the projected vacancy rate in the premium Grade A sector will be 5.9% by year end 2010 as detailed in Exhibit 46.

— VII-44 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

In considering growth scenarios that take into consideration the aggressive pricing of new buildings and an improving economy, we have adopted the same growth assumptions as we used in assessing the Grade A (i.e. take-up for 2007 and 2008 will grow by an average rate of 5% per year above the average take-up for the period 2004 to 2006). Between 2009 and 2010, we have assumed that the take up will remain the same as in 2008. Our forecasts are shown in Assumption 2 in Exhibit 50.

Exhibit 50: Premium Grade A Office Supply, Net Take-up and Vacancy

('000 sq.m.)

Assumption 1 (leading to Vacancy Rate 1): The average take-up for Premium Grade A offices between 2004 and 2006 is adopted for 2007 to 2010.

Source: Knight Frank

— VII-45 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Assumption 1

2006 2007 2008 2009 2010

Annual Supply ...... 0 410,000 100,000 0 0 Total Stock ...... 817,680 1,227,680 1,327,680 1,327,680 1,327,680 Occupied Space ...... 727,405 858,040 988,675 1,119,310 1,249,945 Takeup ...... 160,399 130,635 130,635 130,635 130,635 Vacancy Rate ...... 11.0% 30.1% 25.5% 15.7% 5.9%

Assumption 2

2006 2007 2008 2009 2010

Annual Supply ...... 0 410,000 100,000 0 0 Total Stock ...... 817,680 1,227,680 1,327,680 1,327,680 1,327,680 Occupied Space ...... 727,405 864,572 1,008,597 1,152,622 1,296,647 Takeup ...... 160,399 137,167 144,025 144,025 144,025 Vacancy Rate ...... 11.0% 29.6% 24.0% 13.2% 2.3%

4.9.1 Premium Grade A Office Rental Forecast

Despite strong take-up, the average rental of Grade A offices in Beijing is likely to experience a downward pressure in 2007 during the supply spike.

However, when the market experiences exceptionally low levels of supply between 2008 and 2010, it will provide an opportunity for the market to absorb the excess supply, especially in the premium Grade A submarket. Rentals for premium Grade A are expected to bottom out in 2008 and will eventually pick up in 2009.

Assuming that the uncompleted projects will resume work in 2009, it is our view that there will be no supply before 2010. Projects that commence work in 2009 are likely to be completed in 2011, it is therefore reasonable to expect some rental growth from 2009 onwards when the supply and demand in the premium Grade A market are more balanced (Exhibit 51).

Exhibit 51: Forecasts of Premium Grade A Office Annual Rental Growth in Beijing City1

2007 2008 2009 2010 2011

Rental Growth Rate ...... -8% -6% +3% +5% +5%

— VII-46 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

5. District and Neighbourhood Analysis

5.1 District Analysis

Beijing Gateway Plaza, the subject building, is located at the north section of the east 3rd Ring Road in Lufthansa area of Chaoyang District. To understand the subject building, one needs to understand Chaoyang District and the Lufthansa area.

Chaoyang District, located in the eastern part of the Beijing, is one of the city’s largest districts, with a total area of 471 sq.km. and a population of 2.3 million. Chaoyang District hosts the Ministry of Foreign Affairs and is home to 146 foreign embassies located in its three existing embassy areas (Jianguomenwai, Sanlitun and Liangmaqiao). The fourth embassy area being planned will be built in Wangjing in Chaoyang District. Currently approximately 90% of international organisations that have established their offices in Beijing are located in Chaoyang District.

Chaoyang District has long been the preferred choice of many multinational enterprises that have operations in Beijing. A key reason is that many high-end residential units that suit the needs of foreign professionals are located in the eastern part of the city, where Chaoyang District is situated. According to the Chaoyang District government, of the approximately 200 Fortune 500 foreign enterprises that had a presence in Beijing at the end of 2005, two-third of them were located in Chaoyang District. That is why Chaoyang district has more than half of Beijing’s four and five star-rated hotels and Grade A office buildings.

There are now four major districts in Chaoyang District: the CBD (or Guomao area), the Chaowai area, the Lufthansa area, and the Olympic Village. The CBD and the Chaowai area are the more mature business districts, the Olympic Village is more likely to develop into a residential area with ample retail space after the Olympic Games in 2008, while the Lufthansa area is a business district with increasing attractions to big enterprises.

In 2005, the GDP of Chaoyang District was recorded at RMB123.04 billion, representing an increase of 10.0% year-on-year and contributing to nearly one fifth of Beijing’stotal.Inthe same year, 830 foreign-funded enterprises were approved to register in Chaoyang, representing an increase of 54.6% from 2004, of which 22 ranked among the Fortune 500 enterprises (Exhibit 52).

— VII-47 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 52: Macro Economic Indicators in Chaoyang District

2005 1H/2006

Amount Amount Index (billion) % Year-on-year (billion) % Year-on-year

GDP...... RMB123.04 +10.0 RMB67.33 +11.8 Fixed Assets Investment...... RMB36.05 +9.2 RMB20.86 +22.9 Investment in Real Estate...... RMB26.79 +11.1 N/A N/A Retail Sales ...... RMB77.84 +14.0 RMB44.89 +24.7 Real Utilised Foreign Investment ...... US$1.43 +8.3 US$1.25 +98.4

Source: Chaoyang Statistics Bureau

5.2 Neighbourhood Analysis — Lufthansa area

The Lufthansa area refers to the area around the Lufthansa Center and Sanyuan Flyover.

5.2.1 Supply and Demand in Lufthansa area

At the end of 2006, Lufthansa area’s Grade A office stock at 537,147 sq.m. accounted for only 13.5% of the market total. The area will see four new projects (21st Century Center, Sunny Region, Pacific International Centre and TYG Center) with a combined GFA of 337,000 sq.m. to come on stream by the end of 2007. This new supply accounts for just 13.1% of Beijing’s total new supply in this period. No new project is expected to be launched in the Lufthansa area in 2008 (Exhibit 53). Judging from the upcoming project’s planned specifications and locations, buildings released in 2007 will not be as attractive as Beijing Gateway Plaza, which will continue to remain the only premium Grade A office in the Lufthansa area at least until the end of 2009. The locations of Sunny Region and 21st Century are not as easily accessible as Beijing Gateway Plaza; TYG Centre will be sold for strata-title but only single-owned buildings can be categorised as Premium Grade A; and Pacific International Center is located next to a wholesale market which may have a negative impact on the grading of the neighbouring office buildings. For these reasons, we do not expect the new supply in 2007 to pose any direct competition to the subject building.

Exhibit 53: Future Office Supply in Lufthansa area

Project Name Completion GFA (sq.m.)

21st Century Center ...... 2007 78,000 Sunny Region...... 2007 60,000 Pacific International Center ...... 2007 89,000 TYG Centre ...... 2007 110,000 Total...... 337,000

— VII-48 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Our survey conducted in July 2006 on the Lufthansa area’s major office tenants indicated that over half of the tenants are multinational companies from the EU, USA or Japan. Domestic companies only account for about 28% (Exhibit 54).

Exhibit 54: End User Breakdown by Origin

Others 20% Domestic 28%

Japan 11%

USA EU 16% 25%

Source: Knight Frank

The area houses a diverse and healthy mix of tenants from different industries. About 27% of them are from the banking and finance industry, 18% from professional services, 14% from manufacturing and 12% from high-tech and information technology (Exhibit 55).

Exhibit 55: End User Breakdown by Industry

Banking and Insurance Others 27% 29%

Manufacturing 14% Hi-tech and Information Professional Services Technology 18% 12%

Source: Knight Frank

We are optimistic about the demand for quality office space in the Lufthansa area due to its rapidly improving transport infrastructure and excellent location. The area has convenient access to the city centre, Beijing Capital International Airport, the Olympic Village and Haidian District and is positioned to be the major beneficiary of the Subway station and the high-speed train line construction project. Subway No. 10 will have two stations in the Lufthansa area. The Beijing Capital International Airport - Dongzhimen Express Rail Link will connect the Lufthansa

— VII-49 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING area with the Beijing Capital International Airport and the city’s earliest subway network at Dongzhimen. The Dongzhimen interchange is only 3.0 km from the Beijing Gateway Plaza. The first phase of Subway No. 10 is expected to be completed by 2007, while the Beijing Capital International Airport - Dongzhimen Express Rail Link is expected to be completed by mid 2008. These two lines are set to significantly improve the area’s traffic condition and overall accessibility, and further enhance the Lufthansa area’s already strong appeal to a growing number of multinational companies.

With distinct tenant profiles, Beijing Financial Street (BFS) and Zhongguancun (ZGC) are in a league of their own. As China’s Silicon Valley, ZGC attracts mainly the technology companies. BFS primarily attracts tenants from the financial services industry and those companies that want to be close to the government. Both BFS and ZGC have limited stock and new supply in the next three years. Thus these two submarkets should place no visible competitive pressure on the Lufthansa area. The supply hike in 2007 will affect mainly the CBD and its vicinity, which will account for 63.2% of the total office supply during the year.

Exhibit 56: Vacancy Rates of Grade A Offices (Lufthansa vs Beijing Citywide)

Vacancy Rate (Citywide) Vacancy Rate (Lufthansa) 40%

35%

30%

25%

20%

15%

10%

0% 2001 2002 2003 2004 2005 2006

Source: Knight Frank

The Grade A office market in the Lufthansa area has always outperformed the market average in Beijing. For example, its vacancy rate has been consistently lower than the market average since 2001, as shown in Exhibit 56. We believe Lufthansa area’s ability to maintain a higher occupancy than the market average will continue with the improving transportation system in the area, its healthy tenant mix and limited supply in the next three years.

— VII-50 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

5.3 Beijing Gateway Plaza

According to the tenancy schedule as of 31 December 2006, the total floor area of Beijing Gateway Plaza is 106,403 sq.m., of which 97% is for offices and the remaining 3% for retail. Completed in 2005, most of the floor area has been taken up achieving a 90% occupancy rate10. The retail floor space is fully let, while the 10% vacant area is for office space11.

Beijing Gateway Plaza was launched for lease in 2005. At the end of 2006, the building enjoyed a high occupancy rate of around 90%12 and we expect the occupancy to grow and stabilise at around 95%13. The high occupancy rate of Grade A offices in the Lufthansa area signifies a strong demand for quality office space in this area. The 94.2% occupancy14 of Beijing Gateway Plaza at the end of the first quarter of 2007 was comparable to other established buildings in the vicinity, as indicated in Exhibit 57 below:

Exhibit 57: Occupancy of Buildings in the Vicinity of Beijing Gateway Plaza

Rent (US$/sq.m./ Occupancy Project Name Completion GFA (sq.m.) Mth gross) (%) Landmark Tower ...... 1990, 1998 35,000 22 95 Lufthansa Center...... 1992 11,000 22 95 Silver Tower ...... 1997 75,000 21 90 Sunflower Tower...... 1999 53,000 21 97 Hyundai Motor Tower...... 2000 68,000 24 98

The average occupancy rate and rentals of Grade A offices in the Lufthansa are likely to edge down when the four planned projects15 are completed in 2007. However, most of the impact will be borne by the newly completed buildings, with minimal pressure on the quality office buildings already established in the area, such as Beijing Gateway Plaza.

Beijing Gateway Plaza will continue to be only premium Grade A building in the Lufthansa area until at least 2009. With an international property management firm in place, it is likely that the property will be well managed and maintained in the foreseeable future. Established companies tend to upgrade to quality offices in prime locations when there is large amount of

Notes: (10,11,12,13, 14) “Occupancy rate=1-Vacancy rate”.

(15) See Exhibit 53 for the details of the four projects.

— VII-51 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING office space available in the market. A flight to quality is expected to minimise the adverse impact of upcoming oversupply on the subject building. In addition, the subject building has attracted a large number of quality tenants with rather long lease term, including the BMW that moved in over the third quarter of 2006. Such tenants have already spent a large amount of fit-out cost and are unlikely to move out in the next five years. We therefore expect the building’s occupancy level to be sustained at approximately 95%16 over the next five years, with a natural vacancy rate of approximately 5%17.

An analysis of the expiry profile of the tenancy schedule indicates that only 4.4% of the building’s total lettable area will be subject to renewal in 2007. These indicate that the building’s overall rental income will be under little pressure from the supply hike impact in 2007, even though the average market rental is expected to drop during this period.

To sum up, in terms of rental growth in the next few years, Premium Grade A offices in Beijing will outperform General Grade A offices while the office market in Lufthansa area will outperform the overall market. Given that Beijing Gateway Plaza would remain the only Premium Grade A office building in Lufthansa area at least until 2009, the subject building’s overall rental income is not likely to be under great pressure. Despite the likely scenario that the average market rent in Beijing may be under downward pressure in 2007 and 2008 when the market is still absorbing the abundant supply completed in 2007, the subject building should be able to enjoy a growth in rental income from 2009 to 2011 (Exhibit 58).

Exhibit 58: Estimated Market Rental Growth Rate and Vacancy Rate of the Subject Building in the Next Five Years

2007 2008 2009 2010 2011 Rental Growth Rate ...... -5% -5% +5% +5% +5% Occupancy Rate ...... 95% 95% 95% 95% 95%

Notes: (16,17) “Occupancy rate=1-Vacancy rate”

— VII-52 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Appendix 1: An Overview of China’s Commercial Real Estate Market

China’s commercial real estate sector, which includes office and retail properties, has been experiencing very strong growth in recent years. As the Chinese economy has grown and modernised, the role of cities has become increasingly important. The dramatic transformations in the urban structure of the Chinese economy are driving strong demand for all forms of real estate, especially in major cities. Currently some 43% of China’s population resides in urban areas compared with just about 19% in 1980 as shown in Exhibit 59, according to China Statistical Yearbook (2006).

Exhibit 59: Accelerating Urbanisation

(Urban population as % of Total Population) 50

0 1980 1985 1990 1995 2000 2005

Source: China Statistical Yearbook, 2006

This urbanisation trend is widespread across China, such that the country had a total of 113 cities with a population of more than one million people in 2005, and three cities with more than ten million people, according to the Yearbook of China’s Cities (2006). Many of these cities are regional centres with heavy concentrations of economic activity. Although the national GDP per capita was only slightly above US$1,700 in 2005, there were 57 cities (including the four Tier-1 cities of Beijing, Shanghai, Shenzhen and Guangzhou) with over one million people and per-capita GDP over US$3,000. These 57 cities in aggregate only accounted for 14% of the total population but contributed 43% of the country’s GDP, according to Knight Frank.

— VII-53 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 60: Chinese Cities with Over 1 million People and GDP per Capita over US$3,000

Population (million) 18 Shanghai 16

Beijing 14

Wuhan Tianjin 8 Shenzhen

China’s per-capita GDP in US dollar terms may look low compared to many developed economies but this does not mean the purchasing power of its people is proportionately low. Given the low cost of living in China, the income level of its middle class can be much lower than their counterparts in the developed countries while enjoying decent purchasing power. Homes, cars, consumer products, insurance and travel have had been their consumption focus. Financing consumption with bank credit is part of their consumption habits. Consumer loans have increased from almost non-existence in 1998 to 10% of total bank loans in June 2006. So far China’s middle-class population is mostly clustered in the urban area along the east coast, in particular the Pearl River Delta, Yangtze River Delta and Bohai Rim Economic Circle.

— VII-54 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Pearl River Delta

The Pearl River Delta is located in Guangdong Province, embracing nine cities including Guangzhou, Shenzhen, Dongguan, Foshan, Zhuhai, Jiangmen, Zhongshan, Huizhou and Zhaoqing.

Since China opened its door in the late 1970s, Guangdong has been one of the country’s leading economic regions and is a major manufacturing base (statistics of Guangdong Province is used as a proxy for the Pearl River Delta). In 2005, Guangdong accounted for 31.3% of the country’s exports, 14.2% of gross industrial output and 11.7% of retail sales value. Key industries in Guangdong include electronics, petrochemical, building materials, textile and clothing as well as food and beverages. Guangdong is already a key manufacturing base in the global production chain. Some segments of its toy industry have a global market share in excess of 60%, while watches produced in Shenzhen alone accounted for more than 40% of the global market in 2003, according to Hong Kong Trade Development Council.

Yangtze River Delta

— VII-55 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Bohai Rim Economic Circle

Bohai Rim Economic Circle encompasses the municipalities of Beijing and Tianjin, as well as the provinces of Hebei, Liaoning and Shandong. Major cities in this region include Beijing, Tianjin, Shenyang, Dalian, Jinan, Qingdao and Shijiazhuang, etc. In 2005, this region accounted for 18.2% of the country’s exports, 25.2% of gross industrial output and 24.1% of retail sales value.

China’s Office Property Market

— VII-56 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

In the face of this strong demand and, given the relative shortage of quality office space, most of China’s major cities have experienced a surge of new supply over recent years. During much of the 1990s, new construction activity in Shanghai and Beijing averaged over 20% of the existing stock. The scale of construction activity, coupled with the inherent cyclicality of office markets, means that vacancy rates and rental growth has tended to be fairly volatile over recent years. As the markets gain scale and critical mass, it is likely that new construction will come to represent a smaller share of the overall inventory, and this is likely to reduce the volatility of vacancy rates and rental growth.

Beyond the strong and sustained nature of demand for office space and the likely reduction in the volatility of the major markets, there are a number of additional factors that will influence the performance of office markets over the coming years.

A second additional feature of the maturing of the market is the marked variations within individual cities, at the sub-market and asset-specific levels. The scale of many of the larger cities means that they tend to have multiple CBDs and, with the continual improvements to the transportation infrastructure and occupier preferences, the relative strength of different sub-markets can vary over time within individual cities. This is clearly demonstrated for the case of Beijing, as explained below, but is also apparent within other major cities.

— VII-57 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 61: Office Stock of Major Mainland Cities

Tertiary Industry Grade A Office as%ofGDP Stock (million City (2005) sq.m.) (2006)

Beijing...... 67.7% 4.0 Shanghai...... 50.2% 6.5 Shenzhen ...... 56.9% 1.0 Guangzhou...... 47.4% 1.2 Hangzhou...... 44.1% 0.5 Dalian ...... 45.2% 0.3 Tianjin ...... 41.1% 0.5 Chengdu...... 49.8% 0.2 Chongqing...... 43.9% 0.2 Wuhan...... 49.6% 0.6

Source: Knight Frank

The rental yields of Grade A offices in China’s first-tier cities are significantly higher than the counterparts in developed economies. Rental yields of prime offices in Beijing, Guangzhou, Shanghai and Shenzhen ranged between 7% and 9%, compared with just around 4.6% in Hong Kong in the last quarter of 2006. The high rental yields are a key factor driving foreigners’ investment in China’s office sector.

Exhibit 62: Occupancy Cost and Yield

Grade A Office CBD Capital Gross Rent Rate/Initial Yield Markets (US$/sq.ft./Year) (%) Period

London West End ...... 195 4.0 1Q07 Tokyo Otemachi/Marunouchi...... 150 3.5 4Q06 Hong Kong - Central ...... 144 4.6 1Q07 London City ...... 115 4.3 1Q07 Paris...... 93 4.0 4Q06 New York Midtown ...... 69 4.9 1Q07 Singapore ...... 49 6.8 1Q07 Sydney ...... 48 5.9 1Q07 New York Downtown ...... 44 5.6 1Q07 Seoul...... 44 6.7 4Q06 Shanghai ...... 38 8.0 1Q07 Beijing ...... 28 7.9 1Q07

Source: Knight Frank

— VII-58 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Beijing

Beijing’s office market is expecting a surge in new supply in 2007 due to the expected moratorium on new development during the hosting of the Olympic Games in 2008. This surge of new supply is, however, concentrated in particular sub-markets, most particularly in the CBD where vacancies are set to rise. The new supply in other office submarkets such as Lufthansa and Financial Street is less significant compared with the CBD. The high occupancy rates in these sub-markets, coupled with strong occupier demand, means that vacancy rates are likely to remain relatively low, certainly compared with the CBD. The liberalisation of the local banking and insurance industries will underpin strong demand in Beijing office market as a whole but there will continue to be marked variations across the major sub-markets.

Shanghai

In Shanghai, the short term prospects for the office market remain good due to the resilience of demand and, with limited to moderate new supply in the Puxi and Pudong area, declining vacancy rates. By the end of 2006, vacancy rates had declined to close to 6% and prime rents continued to grow strongly. New supply is expected to come to the market in 2008 and 2009 with the majority in the Pudong area. This is likely to push the vacancy rate up, particularly for the older and secondary office stock given the high quality of the space that is being completed. Over the medium and longer term, the outlook of the market is positive due to the strength of demand and underlying economic fundamentals of this key business centre of China.

Guangzhou

Shenzhen

— VII-59 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING increased ties between Shenzhen and Hong Kong, and the Guangzhou-Shenzhen-Hong Kong Rail Link. Despite the strong demand, the office vacancy rate is expected to rise in the short term, but office rents will be likely to remain stable as a number of occupiers seek to upgrade their existing accommodation.

Other Markets

Retail Property Market in China

Although the office markets in China are highly cyclical, the retail markets are benefiting from structural changes associated with the maturing of the overall retail market (see Exhibit 63 and 64). Rising prosperity together with the liberalisation of the retail sector including the relaxation of restrictions on foreign retailers entering China, has boosted retailer demand for the limited amount of high quality retail space in prime location. These factors are set to continue to underpin strong rental growth for prime retail sectors and markets across China.

Exhibit 63: Retail Sales in China, RMB Billion

RMB Bn 7,000

6,000

5,000 1991-2005 CAGR= 15.0%

4,000

3,000

2,000

1,000

0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: China Statistical Yearbook, 2006

— VII-60 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Exhibit 64: Per Capita Annual Disposable Income of Urban Households in China

RMB 12,000

10,000

1991-2005 CAGR= 13.9% 8,000

6,000

4,000

2,000

0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: China Statistical Yearbook, 2006

Prospects for prime rents in the Tier-1 cities remain more favourable. For instance, retail rents in Shanghai rose by around 30% in 2006 due to the strong demand, often driven by high-profile international retailers, and the limited amount of space in the downtown commercial areas. With new prime retail developments mostly pre-let, vacancy rates are expected to trend downwards during the remainder of the decade, such that positive rental growth is likely to continue. In Beijing, prime rental growth was broadly flat in 2006 due to the anticipation of a surge in new supply in 2007 and retailers’ increasing resistance to paying higher rents. The vacancy rate is expected to peak in 2007, with modest rental growth likely to return by the end of the decade with retail sales being buoyed by rising tourism, increasing disposable incomes and the 2008 Olympics. Retail markets in Shenzhen and Guangzhou were active in 2006 with major local and international retailers taking up more retail space, driven by buoyant retail sales.

— VII-61 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Appendix 2: Specifications of Premium Grade A vs General Grade A

There is no single commonly accepted standard market definition for the grading of office premises in Beijing. As such, the categorisation of offices by grade is to a large extent subjective and varies dependent upon the source. Knight Frank grades offices in Beijing into Grades A, B and C. It further subdivides Grade A into to General and Premium Grade A, a necessary subdivision given the rapid development of the city’s office markets over time as well as the completion of a small number of premium buildings that stand out above others in the market.

Grade A offices by definition incorporate those that provide for good general design and construction quality, building management systems and services, and are well located in established commercial areas within the city, with easy access to major roads and the city’s public transport network. All such offices incorporate good technical specifications and services, including lifts (speed and number), heating, ventilation and air conditioning (HVAC), power supply (including sufficient provision for back-up power), telecommunications infrastructure and provision. Typical floor plates are large, with limited interruption from interior columns, and ceilings (both slab to slab and slab to suspended ceiling) are high.

Premium Grade A offices incorporate the small number of offices in Beijing that meet the very highest parameters of Knight Frank’s definition of Grade A on all counts, or indeed exceed them in certain instances. In addition, Premium Grade A offices are all retained under single ownership, generally by institutional type investors, for long term investment purposes, with accommodation offered for lease only.

— VII-62 — APPENDIX VII LETTER FROM THE INDEPENDENT MARKET CONSULTANT IN RELATION TO ITS ANALYSIS REPORT ON THE OFFICE PROPERTY MARKET IN BEIJING

Limitations on Report

The market report contains forward-looking statements that are provided as Knight Frank’s beliefs, expectations, forecasts or predictions for the future. All such statements relating to future matters are based on the information known to Knight Frank at the date of preparing this document. We stress that such statements should be treated as an indicative estimation of possibilities rather than absolute certainties. The forecast process involves assumptions about a substantial number of variables, which are highly responsive to changing conditions. Variations of any one of the variables may significantly affect outcomes and Knight Frank draws your attention to this. Therefore, Knight Frank cannot assure that the forecasts outlined in this report will be achieved or that such forward-looking statements outlined in the report will prove to be correct. Interested parties must be cautioned not to place undue reliance on such statements.

Where as a result of new available information, future events or otherwise, Knight Frank undertakes no obligation to publicly update or revise any forward-looking statements contained in this report, except as required by law. All forward-looking statements contained in this report are qualified by reference to this cautionary statement.

Knight Frank has relied upon external third-party information in producing this report, including the forward-looking statements. We want to draw your attention that there is no independent verification of any of the external party documents or information referred to herein. This report is limited to the matters stated in it and no opinion is implied or may be inferred beyond the matters expressly stated herein.

This market report is prepared by Knight Frank for information only. Whilst reasonable care has been taken in its preparation, no representation is made or responsibility accepted for the accuracy of the whole or any part of it. The report is subject to changes and therefore does not constitute, nor constitute part of, an offer or a contract. Interested parties should not rely on the statements or representation of facts in this report but must satisfy themselves by inspection or otherwise as to the accuracy. No representation, warranty or covenant, expressed or implied, is given and no undertaking as to accuracy, reasonableness or completeness of the information contained in this report.

— VII-63 — APPENDIX VIII LETTER FROM THE PROPERTY CONSULTANT IN RELATION TO ITS BUILDING DUE DILIGENCE REPORT

4/F Shui On Centre, 6-8 Harbour Road Wanchai, Hong Kong

+852 2840 1177 +852 2840 0600 fax

knightfrank.com

11 June 2007

HSBC Institutional Trust Services (Asia) Limited Level 30, HSBC Main Building 1 Queen’s Road Central Hong Kong

The Trustee for RREEF China Commercial REIT RREEF China REIT Management Limited 53/F, Cheung Kong Center 2 Queen’s Road Central Hong Kong

Joint Global Coordinators, Bookrunners and Listing Agents Deutsche Bank AG, Hong Kong Branch 55/F, Cheung Kong Center 2 Queen’s Road Central Hong Kong

The Hongkong and Shanghai Banking Corporation Limited 1 Queen’s Road Central Hong Kong

Dear Sirs

Building Consultancy Review Summary

1. Introduction

Knight Frank Petty Limited was appointed as the Building Consultant to conduct a building consultancy review of the Beijing Gateway Plaza (hereinafter referred to as “the Premises”). This letter provides a summary of our approach and findings. In our role as the Building Consultant, we:

1 conducted comprehensive building condition survey of the Premises between 30 October 2005 and 5 November 2005 and re-inspected between 29 September 2006

— VIII-1 — APPENDIX VIII LETTER FROM THE PROPERTY CONSULTANT IN RELATION TO ITS BUILDING DUE DILIGENCE REPORT

and 2 October 2006 and between 16 April 2007 and 18 April 2007 to confirm the structural integrity of the Premises, identify any existing defects and to evaluate the reliability of the information provided to us by Beijing Bestride Estate Development Company Limited for the purposes of this review.

2 compiled 10-Year Forecasts of Repair, Maintenance and Capital Expenditure of the Premises; and

3 identified areas of deviation from relevant building and building services drawings provided by Beijing Bestride Estate Development Company Limited.

Any confirmation as to the structural integrity of the Premises is limited to the extent that it can be verified by visual inspection.

2. Conclusion

Condition of the Premises

Based on our comprehensive building condition survey and re-inspection, we believe that the Premises were in reasonable condition, consistent with buildings of a similar age, type and usage and that there were no material defects that would affect the operation and usage of the Premises and impede the transfer of the Premises. The repair, maintenance and capital expenditure forecasts were calculated on the basis of current local market rates and therefore the future expenditure requirements are comparable with the amounts generally required for premises of similar age and commercial usage profile.

In addition, our comprehensive building condition survey and re-inspection findings were made available to the Independent Property Valuer and included information on:

● 10-Year Forecasts of Repair, Maintenance and Capital Expenditure (“CAPEX”)

● 10-Year Mechanical and Electrical Repair and Maintenance CAPEX Forecasts

3. Survey and Re-inspection Conducted

Comprehensive Building Condition Survey

The comprehensive building condition survey carried out on the Premises referred to above was conducted by a Registered Professional Surveyor (Building Surveying) and included an in-depth review of the Premises, which covered their fabric, structure and building services installations, to verify their present physical condition.

The comprehensive building condition survey comprised a visual inspection of the external facades, roofs and internal common areas to establish their overall condition and

— VIII-2 — APPENDIX VIII LETTER FROM THE PROPERTY CONSULTANT IN RELATION TO ITS BUILDING DUE DILIGENCE REPORT state of repair. Particular attention was paid to the existence of defects such as cracks, spalled concrete, exposed and corroded reinforcement, loosen/debonded plaster, damaged external finishes and water seepage. All defects and outstanding items identified in the visual inspections were noted in our comprehensive building condition survey report.

Re-inspections

The re-inspection was carried out on the Premises between 29 September 2006 and 2 October 2006 and between 16 April 2007 and 18 April 2007 and included an in-depth review of the Premises, which covered their fabric, structure and building services installations, to verify their present physical condition.

The re-inspection comprised a visual inspection of the external facades, roofs and internal common areas to re-confirm their overall condition and state of repair. Particular attention was paid to whether or not the previously identified defects and outstanding items still exist and to the identification of any new major defects.

10-Year Forecasts of Repair, Maintenance and Capital Expenditure

We prepared 10-Year Forecasts of Repair, Maintenance and Capital Expenditure for the Premises for the 10 years ending 2016, including the estimated costs of maintaining the Premises and associated building services installations, based on the maintenance history of the Premises and building services as provided by Beijing Bestride Estate Development Company Limited and their existing condition. The Premises was under defects liability period until September 2007. It was expected that defects in relation to the main contractor’s substandard works were to be rectified by the building main contractor. As such, no immediate repair cost was allowed in preparing the forecasts.

The following methodologies were used in preparing the forecasts:

Comprehensive Building Condition Surveys and Re-inspection

● Estimated routine annual maintenance costs were based on the historical data provided by Beijing Bestride Estate Development Company Limited the existing site conditions and our professional judgment in formulating appropriate maintenance schedules.

● Estimated costs were based on current market rates, with the following inflation rates being used to project expenditure over the next 10 years.

Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Inflation Rate...... 2.3% 2.5% 2.8% 3.1% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5%

— VIII-3 — APPENDIX VIII LETTER FROM THE PROPERTY CONSULTANT IN RELATION TO ITS BUILDING DUE DILIGENCE REPORT

● The estimated expenditure on repairs and maintenance was calculated on the basis of sufficient work being carried out to maintain the existing standards of the Premises in good condition, consistent with private sector maintenance practices.

To obtain background information for the preparation of the forecasts for the Premises, we reviewed the maintenance records, budgets and available relevant current test certificates provided to us by Beijing Bestride Estate Development Company Limited.

Our 10-Year Forecasts of Repair, Maintenance and Capital Expenditure were made available to the Independent Property Valuer to facilitate the valuation of the Premises.

Category of Expenditure 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

(RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB’000)

Repair, Maintenance & Capital Expenditure ...... 2,171.95 2,496.66 2,704.66 3,858.56 2,903.25 3,661.66 3,174.46 2,578.61 7,352.81 2,890.11

The capital expenditure figures shown above include building and building services expenditure. Building capital expenditure items include re-roofing and internal refurbishment. Building services capital expenditure items include replacement of water pumps and swimming pool plant.

Deviation From Approved Drawings

The following works were identified in the external area which deviated from the approved drawings: i) Addition of signage board on ventilation house at the front, ii) Addition of metal-framed arched canopies above basement car park entrances, iii) Addition of metal cage housing gas equipment in the external area at the rear of the Premises and iv) Addition of signage on roofs of the two towers facing the front. Some design drawings were provided, however, no approved drawings regarding the structures were provided. No obvious structural defects due to addition of the above structures were found.

Portions of entrance lobby on G/F were found used as dinning area of the club house, with loose seating provided.

— VIII-4 — APPENDIX VIII LETTER FROM THE PROPERTY CONSULTANT IN RELATION TO ITS BUILDING DUE DILIGENCE REPORT

4. Reports Delivered

Reports were prepared in relation to the Premises for which comprehensive building condition survey and re-inspection were conducted and included:

— A detailed description of our findings

— An assessment of the structural soundness of the Premises

— Plans indicating the location of photographs taken

— Photographs of typical defects

— Estimated costs of recommended repairs/replacement

— 10-Year Forecast of Repair, Maintenance and Capital Expenditure for the Premises

— List of outstanding items

5. Condition of the Premises

As noted above, our comprehensive building condition survey and re-inspections revealed that the Premises were in reasonable condition, consistent with buildings of a similar age, type and usage and that there were no material defects that would impede the transfer of the Premises.

6. Information Provided to Independent Property Valuer

Our comprehensive building condition survey was made available to the Independent Property Valuer. We provided the Independent Property Valuer with 10-Year forecasts of repair, maintenance and capital expenditure for the Premises.

— VIII-5 — APPENDIX VIII LETTER FROM THE PROPERTY CONSULTANT IN RELATION TO ITS BUILDING DUE DILIGENCE REPORT

7. Limiting Conditions

In carrying out our review, we have relied upon the maintenance records, plans, schematic diagrams, test certificates and maintenance and capital expenditure records provided to us by Beijing Bestride Estate Development Company Limited which we have supplemented with interviews of Beijing Bestride Estate Development Company Limited staff, and independently verified through physical site inspections and verifications. While we believe this information to be accurate, our review, including the comprehensive building condition survey andre-inspection, were conducted on a purely visual basis, without testing, opening-up or investigation and we cannot accept responsibility for the condition of concealed or inaccessible parts of the Premises or for the information provided to us by Beijing Bestride Estate Development Company Limited.

Yours faithfully, For and on behalf of Knight Frank Petty Limited David Chan BA(Hons) Dip Arch MSc MCIOB MRIBA MHKIA MNFPA MSFPE Registered Architect Divisional Director Building Consultancy

— VIII-6 — APPENDIX IX OVERVIEW OF RELEVANT LAWS AND REGULATIONS IN THE PRC AND COMPARISON OF CERTAIN ASPECTS OF ITS PROPERTY LAWS AND THE LAWS OF HONG KONG

PN22(c) Set out below is a summary of certain aspects of PRC law and regulations which are relevant to RREEF CCT’s operations. These include laws relating to land, disposal of property, property management, foreign exchange control, company law and equity joint venture law in the PRC. Certain laws and regulations relating to taxation in the PRC are discussed in the section headed “Taxation” of this Offering Circular.

The Land and Property System of the PRC

The land system

PRC law distinguishes between the ownership of land and the right to use land.

According to the Constitution of the PRC, all land in the cities is owned by the State while land in the rural and suburban areas, unless otherwise specified by law, is owned by collectives. Houses sites ( ), privately farmed crop land ( ) and hilly land ( )are also owned by collectives. The State may expropriate or take over land and pay compensation in accordance with law if such land is required for public benefit.

Under the Interim Regulations on Grant and Transfer of Urban Land Use Rights (the “Urban Land Regulations”), a system for the grant and transfer of state land in urban areas was implemented. Pursuant to this system, all local and foreign companies, enterprises and other organisations and individuals in the PRC are permitted to acquire land use rights and to develop and operate property in accordance with law.

Under the Urban Land Regulations, the grant for use of State land refers to the grant of a land use right by the State to a land user for a definite period subject to the payment of a land premium by the land user. The maximum term of the grant depends on the type of use of the land. Such term is generally as follows:

● up to 70 years for residential use;

● up to 50 years for industrial use or for public (e.g. educational, technology, cultural, hygiene or sports) use;

● up to 40 years for commercial (which includes wholesale and retail), tourism and entertainment uses; and

● up to 50 years for all other uses (which include office and warehouse).

Upon expiration of the term of grant, it is possible for a land user to renew such term subject to the execution of a new land grant contract and payment of a land grant premium. If the term of the grant is not renewed, the land use right of the land and ownership of any building thereon will revert to the State without compensation.

— IX-1 — APPENDIX IX OVERVIEW OF RELEVANT LAWS AND REGULATIONS IN THE PRC AND COMPARISON OF CERTAIN ASPECTS OF ITS PROPERTY LAWS AND THE LAWS OF HONG KONG

Grant of land use rights

Land use rights may be granted by agreement, public auction, tender or bidding.

The Law of the Administration of Urban Real Estate of the PRC ( ) provides that: “land for commercial use, tourism, entertainment and construction of luxury flats shall be sold by public auction wherever it is feasible, and may be sold by mutual agreement if sale by public auction or competitive bidding is not feasible”. On 30 April 2001, the State Council promulgated a Notice on Strengthening the Administration of State-owned Land ( ) which stipulates that the supply of State-owned land shall be announced to the public unless there are concerns regarding State security or confidentiality issues. If, after a scheduled supply of land for commercial development and other use is announced, there are two or more prospective investors who intend to develop the same land parcel, the relevant land parcel shall be made available to the market by the government at the municipal or county levels through competitive bidding or public auction. However, in the absence of clear provisions on the scope and procedures for organising and implementing competitive bidding, public auction and public tender, it was still common for property developers to obtain State-owned land use rights for property development by agreement.

On 9 May 2002, the State Bureau of Land Resources of the People’s Republic of China promulgated the Regulations on the Grant of State-owned Land Use Rights through Competitive Bidding, Public Auction and Public Tender ( ). Pursuant to these regulations, land for operational use (including commercial use, tourism, entertainment and commodity housing development) will be granted by competitive bidding, public auction or public tender and, in the case of land for use other than commercial use, tourism, entertainment and commodity housing development, if there are two or more prospective purchasers after the announcement of the relevant land supply schedule, then the grant of the land shall be by competitive bidding, public auction or public tender.

On 11 June 2003, the Ministry of Land and Resource of the PRC promulgated the Regulation on Transfer of State Owned Land Use Rights by Agreement ( ). According to this regulation, land use rights may be granted by way of agreement if it is not required under applicable laws and regulations that the land be granted by public auction, tender or bidding.

Upon signing of the contract for the grant of land use right, the grantee is required to pay the land grant premium in accordance with the terms of the contract. Once the land grant premium is paid in full, the contract may be submitted to the relevant local bureau for the issue of a land use right certificate evidencing the grant of land use right.

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Transfer of land use rights

Subject to any restrictions imposed, the party to which the land use right is granted may transfer such land use right. The transfer may be by way of sale, exchange or gift. The term of land use right for the transferred land is the original term granted under the contract of grant of land use right less the term which has already been enjoyed by the original grantee.

A transfer of land use right must be evidenced by a written contract. Upon such transfer, all rights and obligations contained in the original contract for the grant of land use right by the State are deemed to be simultaneously transferred to the transferee, together with any buildings and other fixtures on the land. The transfer must be duly registered at the relevant local land bureau and a new certificate of land use right will be issued and the original land certificate of land use right will be suspended.

Under Article 38 of the Law of the Administration of Urban Real Estate of the PRC ( ), in relation to a transfer of land for which land use rights were acquired by way of grant, the following conditions must be met:

● the land grant premium for the grant of land use rights must have been paid in full in accordance with the land grant contract and a certificate of land use right ( ) must have been obtained;

● investment in or development of such land must have been made or carried out in accordance with the terms of the land grant contract;

● if the investment or development involves the construction of building on the land, more than 25.0% of the total amount of investment or development must have been made or completed; and

● where the investment or development involves a large tract of land, conditions for the use of the land for industrial or other construction purposes must have been met.

Termination of land use right

A land use right will terminate upon the expiration of the term of the grant specified in the relevant land grant contract. Land use right may also terminate upon withdrawal of the land use rights by the State or by loss of the land etc.

The State generally will not withdraw a land use right prior to the expiration of its term of grant under the land grant contract. In exceptional circumstances, and if it is in the public interest, the State has the right to assume the land use right in accordance with law and offer compensation to the land user, having regard to the period for which the land user has already enjoyed in respect of the land and the actual circumstance relating to the use and development of the land.

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Upon expiry of the term of grant under the land grant contract, the land use right of the land and ownership of the buildings and fixtures erected thereon will revert to the State without compensation unless renewal application is granted. The land user will have to take steps to surrender the land use right certificate and cancel the registration of the certificate in accordance with relevant regulations.

A land user may apply for renewal of the term of the land use right and such application will be granted unless for public benefit the land needs to be taken back, if the application is granted, the land user is required to enter into a new land grant contract, pay a land grant premium and effect the necessary registration of the renewed right.

Documents of title

There are two types of title registrations in the PRC, namely land registration and building registration. Land registration is effected by the issue of land use right certificate by the relevant authority to the land owner evidencing that the land owner has obtained land use rights which can be assigned, mortgaged or leased. The building registration is the issue of a building ownership certificate ( ) to the building owner evidencing that the building owner has obtained building ownership rights in respect of the building. According to the Land Registration Regulations ( ) promulgated by the State Land Administration Bureau on 18 November 1989 and amended on 18 December 1995 (the amendment became effective on 1 February 1996), and the Administration Rules on Regulations of Urban Real Estate Property ( ) promulgated by the Ministry of Construction on 27 October 1997, implemented on 1 January 1998 and revised subsequently on 15 August 2001, all land use rights and building ownership rights which are duly registered are protected by law. The two different systems are commonly maintained separately in many cities including Beijing in the PRC.

Mortgage

The grant of mortgages in the PRC is governed by the Security Law of the PRC ( ) and by relevant laws regulating real estate. Under this law, any mortgage agreement must be in writing. For mortgages of urban real properties, buildings newly erected on a piece of land after a mortgage contract has been entered into will not be subject to the mortgage.

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The validity of a mortgage depends on the validity of the mortgage contract, possession of the real estate and land use right certificate and/or land use rights certificate by the mortgagor and registration of the mortgage with appropriate authorities. If the loan in respect of which the mortgage was given is not duly repaid, a mortgagee has the following options to enforce the mortgaged properties:

● with the consent of the mortgagee, the mortgagor may sell the mortgaged property to the mortgagee at a discount to satisfy the outstanding debt, or sell the mortgaged property to a third party and the mortgagee enjoys the first priority to be repaid;

● after delivering written notice to the mortgagor, the mortgagee may appoint an auction agency to auction the mortgaged property; and/or

● the mortgagee may commence litigation procedures at PRC courts.

Lease

The Urban Land Regulations, the Law of the Administration of Urban Real Estate of the PRC ( ) and Measures for Administration of Leasing of Urban Buildings ( ) permit leasing of land use rights and properties constructed on land obtained by way of grant. Under these measures, the lease shall be in writing and shall be registered with the relevant real property administrative authority within 30 days of execution. These measures also stipulates a tenant has the right to sub-let the property with the prior consent of the landlord. Pursuant to these measures, a tenant enjoys a right of first refusal to purchase the property if the landlord offers to transfer the leased property to a third party on similar terms. If the landlord transfer the leased property to a third party, the new owner of the leased property shall be obliged to fulfill the lease agreement with the tenant.

In Beijing, according to the Notice on Strengthening Administration of Registration and Filing of Leasing of Property ( ) issued by Beijing Municipality Bureau of State Land and Resources on 9 June 2004, the landlord shall undertake the procedures for registration and filing of the lease agreement with the local land and housing bureau within 30 days of the execution of the lease agreement. The documents including but not limited to the lease agreement, the title or other certificates proving the landlord’s legal rights to the leased property or the proof for the consent on the sublease by the original owner of the leased property in case of a sublease shall be submitted for the registration and filing of the lease agreement.

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Tenancy Laws

Chapter 13 of the Contract Law of the People’s Republic of China ( ) provides that the lease agreement shall be in writing if its term is over six months, and the term of any lease agreement shall not exceed 20 years; that any change of ownership to the leased property does not affect the valid leasing contract; that the tenant may sub-let the leased property if it is agreed by the landlord and the lease agreement between the landlord and the tenant is still valid and binding; and that when the landlord is to sell a dwelling unit under a lease, it shall give the tenant a reasonable advance notice before the sale, and the tenant has the right of first refusal to renew such lease if the tenant is willing to match the same lease terms (including rental rates) as a prospective new tenant, subject to the tenant giving the landlord prior notice of his intention to renew.

The tenant must pay rent on time in accordance with the lease contract. In the event of default of rental payment without reasonable cause, the landlord may ask the tenant to pay within a reasonable period of time, or otherwise terminate the lease with a default fine.

Except as mentioned below, if the landlord wishes to terminate the lease before its expiry date, prior consent shall be obtained from the tenants who are entitled to be indemnified for any resulting loss.

The landlord has the right to terminate the lease and take back the property if the tenant commits any of the following:

1) sub-let the property without prior consent from the landlord;

2) transfer, lend or swap the property without prior consent from the landlord;

3) restructure or convert uses of the property without prior consent from the landlord;

4) default in rental payment for six consecutive months;

5) leave a state-owned dwelling unit vacant for more than six months without reasonable causes;

6) use the property for illegal operations;

7) damage the property deliberately; and

8) other situations allowing the landlord to take back the property under relevant laws regulations.

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If a tenant defaults in rental payment, apart from the right to terminate the lease as stated above, the landlord may bring an action against such tenant at the People’s Court in the PRC to recover any overdue and unpaid rental.

Sale and transfer of property

The PRC government has issued a series of laws, rules and regulations in relation to property transactions, for example, the Law of the Administration of Urban Real Estate of the PRC ( ), Administrative Rules for Urban Property Sale in Beijing City ( ), etc. The Ministry of Construction promulgated the Provisions on Administration of Transfer of Urban Real Estate PRC ( )in August 2001. Pursuant to such rules and regulations, the property owner has the right in accordance with law to dispose of a property by way of sale, gift, exchange, or other forms of transfer and to mortgage the property. The right to ownership of a building and the land use right to the land on which the building is constructed must be transferred or mortgaged at the same time.

The parties to a transfer must enter into a real estate transfer contract in writing and register the transfer with the real estate administration authority having jurisdiction over the location of the real estate within 90 days of the execution of transfer.

A joint holder of the property interest, a lessee and other person enjoying priority right under law has a right of first refusal to purchase the property on the same terms.

Regulations on foreign investment in PRC real estate market

On 24 July 2006, the Ministry of Construction, the Ministry or Commerce, the National Development and Reform Commission, the People’s Bank of China, the State Administration for Industry and Commerce and the State Administration of Foreign Exchange jointly issued the Opinion on Regulating the Access and Management of Foreign Capital in the Real Estate Market with the serial code of JZF [2006] No. 171 ( “171 Opinion”). The 171 Opinion aims to regulate access for foreign investment in the real estate market and to strengthen management of real estate purchases by foreign invested enterprises. The 171 Opinion provides that a foreign institution or a foreign individual shall establish a foreign-invested enterprise in order to purchase real property in the PRC which is not intended for that institution or individual’s own use. The registered capital of such foreign-invested enterprise must be at least 50% of its total investment in PRC real property if the amount of such investment exceeds US$10 million. Branches and representative offices of foreign institutions in the PRC and foreign individual who work or study in the PRC for more than one year may purchase real property for their own use but not for any other purpose; and foreign institutions which have no branches or representative offices in the PRC or foreign individuals who work

— IX-7 — APPENDIX IX OVERVIEW OF RELEVANT LAWS AND REGULATIONS IN THE PRC AND COMPARISON OF CERTAIN ASPECTS OF ITS PROPERTY LAWS AND THE LAWS OF HONG KONG or study in the PRC for less than a year are prohibited from purchasing any real property in the PRC. Residents of Hong Kong, Macau and Taiwan and foreigners of Chinese origin are not subject to the one-year residency requirement and may purchase real property in the PRC for their own use.

The Property Law of PRC

Pursuant to the Property Law of the People’s Republic of China (the “Property Law”) adopted by the National People’s Congress in March 2007 and to be taken effect on October 1, 2007, the property right of the state, collective, individual or any other right holder shall be under the protection of law, and no entity or individual may infringe upon it. According to the Property Law, the varieties and contents of property rights shall be stipulated by law, and the creation, change, transfer or elimination of the property right of a realty shall be registered according to law. Except otherwise prescribed by law, the creation, change, transfer or elimination of the property right of a realty shall become effective only after it is registered according to law. The Property Law also stipulated that the creation or transfer of the property right of a chattel shall be delivered according to law. Except otherwise prescribed by law, the creation or transfer of the property right of a chattel shall become effective only upon delivery.

Property Management Rules in the PRC

The State Council promulgated the Property Management Rules ( )on8 June 2003, which came into effect on 1 September 2003. The rules stipulate that property owners have the right to appoint and dismiss property management enterprises and implemented a qualification system to regulate property management enterprises which are involved in property management. The Department of Construction promulgated a Notice on Administrative Rules Regarding Property Owners’ Committee ( )on26March 2003 which stipulated that the property owners’ meeting is only valid with the attendance of owners representing more than 50.0% of all the voting rights. A resolution passed by the property owners’ committee is only effective with the consents of owners representing over 50.0% of all voting rights of the owners attending such meeting. However, for important resolution, for example, amendment of a deed of mutual covenants, appointment or dismissal of property managers, a special resolution passed by owners representing at least two-thirds of all voting rights of the owners attending such meeting is required.

Under the Measures for the Administration of Qualifications of Property Management Enterprises ( ) promulgated by the Ministry of Construction on 17 March 2004, effective from 1 May 2004, a property management enterprise shall apply for examination of its qualification by the qualification approval authority according to the said measures. A property management enterprise which has passed such examination will be issued with a Qualification Certificate evidencing the qualification classification by the relevant authority. No enterprise may engage in property management without undertaking a qualification examination conducted by the authority and obtaining a Qualification Certificate.

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Property management fees comprise the property management cost, statutory tax and property managers’ remuneration. Property management fees for residential properties are regulated by the recommended price stipulated by the government. The property management fee for other properties is subject to market price adjustment. The exact amount of property management fees payable to a property management enterprise as remuneration may be agreed by the contracting parties by reference to the two methods. According to the Rules on Property Management Service Fees ( ) jointly promulgated by the National Development and Reform Commission and the Ministry of Construction on 13 November 2003, the exact amount of property management fees payable to a property management enterprise as remuneration may be agreed by the contracting parties by reference to a fixed management fee ( ) or a percentage basis management fee ( ). The property management enterprise may collect a fixed management fees from the property owners which covers all the operating cost incurred for property management, the property management enterprise itself shall account for any shortfall and retain any surplus. The property management enterprise may also charge its management fees by reference to a fixed percentage of the total management fees collected, the balance of the total management fees collected will be used for covering the operating cost incurred for property management, the property owners shall account for any shortfall and retain any surplus.

Foreign Exchange Controls

The lawful currency of the PRC is the Renminbi, which is subject to foreign exchange controls and is not at the current time freely convertible into foreign currency. The SAFE, under the authority of People’s Bank of China (“PBOC”), is empowered with the functions of administering all matters relating to foreign exchange, including the enforcement of foreign exchange control regulations.

On 28 December 1993, the PBOC, under the authority of the State Council, promulgated the Notice of the People’s Bank of China Concerning Further Reform of Foreign Currency Control System ( ), effective from 1 January 1994. This notice announced the abolition of the system of foreign exchange quotas, the implementation of conditional convertibility of Renminbi in current account items, the establishment of the system of settlement and payment of foreign exchange by banks, and the unification of the official Renminbi exchange rate and the market rate for Renminbi established at swap centres.

On 29 January 1996, the State Council promulgated new Regulations of the PBOC for the Control of Foreign Exchange ( ) which became effective from 1 April 1996. These regulations classify all international payments and transfers into current account items and capital account items. Current account items are no longer subject to SAFE approval while capital account items still are. These regulations were subsequently amended on 14 January 1997. The latest amendment affirmatively states that the State shall not restrict international current account payments and transfers.

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On 20 June 1996, the PBOC promulgated the Regulations for Administration of Settlement, Sale and Payment of Foreign Exchange ( ) (the “Settlement Regulation”) which became effective on 1 July 1996. The Settlement Regulations superseded the Provisional Regulations for the Administration of Settlement, Sale and Payment of Foreign Exchange ( ) and abolished the remaining restrictions on convertibility of foreign exchange in respect of current account items while retaining the existing restrictions on foreign exchange transactions in respect of capital account items. On the basis of the Settlement Regulations, the PBOC also published the Announcement on the Implementation of Foreign Exchange Settlement and Sale at Banks by Foreign-invested Enterprise ( ). This announcement permits foreign-invested enterprises to open, on the basis of their needs, foreign exchange settlement accounts for current account receipts and payments of foreign exchange along with specialised accounts for capital account receipts and payments at designated foreign exchange banks.

On 25 October 1998, the PBOC and the SAFE promulgated the Notice Concerning the Discontinuance of Foreign Exchange Swapping Business ( ) pursuant to which and with effect from 1 December 1998, all foreign exchange swapping business in the PRC for foreign-invested enterprises shall be discontinued, while the trading of foreign exchange by foreign-invested enterprise shall come under the banking system for the settlement and sale of foreign exchange.

On 1 January 1994, the former dual exchange rate system for Renminbi was abolished and replaced by a managed floating exchange rate system, which is determined by demand and supply. The PBOC sets and publishes daily the Renminbi/US dollar base exchange rate. This exchange rate is determined with reference to the transaction price for Renminbi/US dollar in the inter-bank foreign exchange market on the previous day. The PBOC will also, with reference to exchange rates in the international foreign exchange market, announce the exchange rates of Renminbi against other major currencies. In foreign exchange transactions, designated foreign exchange banks may, within a specified range, freely determine the applicable exchange rate in accordance with the exchange rate announced by the PBOC. The PBOC recently announced that with approval from the State Council, and beginning from 21 July 2005, China has implemented a regulated, managed floating exchange rate system based on market supply and demand and in reference to a package of currencies.

Save for foreign-invested enterprises or other enterprises which are specially exempted by relevant regulations, all entities in the PRC (except for some foreign trading companies and production enterprises having import and export rights, which are entitled to retain part of foreign exchange income generated from their current account transactions and to make payments using such retained foreign exchanges in their current account transactions or approved capital account transactions) must sell their foreign exchange income to designated foreign exchange banks. Foreign exchange income from loans issued by organisations outside the territory or from the issuance of bonds and shares is not required to be sold to designated foreign exchange banks, but may be deposited in foreign exchange accounts at the designated foreign exchange banks.

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Chinese enterprises (including foreign-invested enterprises) which require foreign exchange for transactions relating to current account items may, without the approval of SAFE, effect payment from their foreign exchange accounts or convert and pay at the designated foreign exchange banks, based on valid receipts and proof. Foreign-invested enterprises which need foreign exchange for the distribution of profits to their shareholders, and Chinese enterprises which in accordance with regulations are required to pay dividends to shareholders in foreign exchange may, after passing the necessary board resolutions on the distribution of profits, effect payment from their foreign exchange account or convert and pay at the designated foreign exchange banks.

Convertibility of foreign exchange in respect of capital account items, like direct investment and capital contribution, is still subject to restriction, and prior approval from SAFE and the relevant branch must be sought.

On September 2006, the State Administration of Foreign Exchange and the Ministry of Construction jointly issued Notice in respect of standardisation of issues relating Foreign Exchange of Real Estate Market, with the serial code of HF[2006] No.47, or the 47 Notice to implement the Opinion on Regulating the Access and Management of Foreign Capital in the Real Estate Market with serial code JZF [2006] No.171. The 47 Notice provides, among other things, the specific procedures for purchasing houses by branches and representative offices established in the PRC by foreign institutions, foreign individuals who work or study in the PRC for more than one year, and residents of Hong Kong, Macau and Taiwan as well as foreigners of Chinese origin. The 47 Notice also stipulates that if the foreign institution or foreign individual invests in domestic real estate developer by share transfer or acquisition in other method, such purchaser shall pay the full amount of consideration to the domestic in a lump.

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Comparison of Certain Aspects of PRC and Hong Kong Property Law

The following is a general comparison of the legal protection of proprietary rights over real estate conferred by the legal systems of PRC and Hong Kong:

PRC Hong Kong

General General

Under Article 5 of the Law of the The legal system of Hong Kong upholds the administration of Urban Real Estate of the principle of the rule of law and the PRC ( ), the independence of the judiciary. Under the legitimate rights and interests of the owners concept of “one country, two systems”, Hong over real estate shall be protected by the law Kong enjoys a high degree of autonomy and of PRC, on which no person may unlawfully its legal system is fundamentally separate infringe. from that of the People’s Republic of China.

In general, the legitimate rights and interests Under Article 6 of the Basic Law of the Hong of the owners over real estate in PRC are Kong Special Administrative Region, which is protected under PRC law. Hong Kong’s constitution, the Hong Kong Special Administrative Region shall protect the right of private ownership of property in accordance with law.

In general, proprietary rights of land owners over real estate in Hong Kong are protected under Hong Kong law which consists of both the Hong Kong legislations and common law decisions.

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PRC Hong Kong

Land System in the PRC System of Land Holding in Hong Kong

PRC law distinguishes between the All land title in Hong Kong is leasehold held ownership of land and the right to use land. under land grants from the government save According to the Constitution of the PRC, and except the St. John’s Cathedral which is unless specified by law, all land in the cities is the only freehold property in Hong Kong. owned by the State while land in the rural and suburban areas, unless otherwise specified The terms of the government grant vary from by law, is owned by collectives. Houses sites short term leases or licences to leases of up ( ), privately farmed crop land ( ) to 999 years. Old leases will continue until and hilly land ( ) are also owned by they expire and may be renewed. Most new collectives. The State may expropriate or take leases tend to be granted for terms of 50 over land and pay compensation in years although occasionally they are longer. accordance with law if such land is required Leases in various parts of Hong Kong which for public benefit. were due to expire prior to 1997 have been automatically extended through to 30 June Under the Interim Regulations on Grant and 2047 without the requirement for any Transfer of Urban Land Use Rights (the additional premium paid to the government. In “Urban Land Regulations”), a system for the the past, rent payable under government grant and transfer of state land in urban areas grant has ordinarily been nominal but for was implemented. Pursuant to this system, all leases granted after 1 July 1997 the local and foreign companies, enterprises and government rent is calculated at a rate of 3% other organisations and individuals in the of the ratable value of the property PRC are permitted to acquire land use rights concerned. and to develop and operate property in accordance with law.

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PRC Hong Kong

Under the Urban Land Regulations, the grant Older government grant tended to contain for use of State land refers to the grant of a fewer restrictions whereas newer grants land use right by the State to a land user for a usually incorporate extensive development definite period subject to the payment of a requirements, restrictions and obligations. If a land premium by the land user. The maximum grantee pays the required premium, term of the grant depends on the type of use government rent and complies with the land of the land. Such term is generally as follows: grant conditions, he is entitled to peaceful enjoyment of the land and the government will ● up to 70 years for residential use; not exercise its right of re-entry without a valid cause. Although certain government leases ● up to 50 years for industrial use or for may contain government’s right of land public use (e.g. educational, cultural or resumption for public interest, it is only in very recreational) use; exceptional circumstances that privately owned property will be compulsorily acquired ● up to 40 years for commercial, tourism by the government (such as for the Mass and entertainment uses; and Transit Railway development). In all such cases, compensation will be paid to the ● up to 50 years for all other uses. affected owners.

Upon expiration of the term of grant, it is There are no restrictions in Hong Kong over possible for a land user to renew such term ownership of land. Property in Hong Kong can subject to the execution of a new land grant be owned by any legal entity, whether an contract and payment of a land grant individual or a local or overseas corporation. premium. If the term of the grant is not Property transactions in Hong Kong are, renewed, the land use right of the land and however, subject to local tax and stamp duty ownership of any building thereon will revert payment. to the State without compensation.

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PRC Hong Kong

Land use rights may be granted by agreement, public auction, tender or bidding. The Law of the Administration of Urban Real Estate of the PRC ( ) provides that: “land for commercial use, tourism, entertainment and construction of luxury flats shall be sold by public auction wherever it is feasible, and may be sold by mutual agreement if sale by public auction or competitive bidding is not feasible.” On 30 April 2001, the State Council promulgated a Notice on Strengthening the Administration of State-owned Land ( ) which stipulates that the supply of State-owned land shall be announced to the public unless there are concerns regarding State security or confidentiality issues. If, after a scheduled supply of land for commercial development and other use is announced, there are two or more prospective investors who intend to develop the same land parcel, the relevant land parcel shall be made available to the market by the government at the municipal or county levels through competitive bidding or public auction. However, in the absence of clear provisions on the scope and procedures for organizing and implementing competitive bidding, public auction and public tender, it was still common for property developers to obtain State-owned land use rights for property development by agreement.

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PRC Hong Kong development) will be granted by competitive bidding, public auction or public tender and, in the case of land for use other than commercial use, tourism, entertainment and commodity housing development, if there are two or more prospective purchasers after the announcement of the relevant land supply schedule, then the grant of the land shall be by competitive bidding, public auction or public tender.

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PRC Hong Kong

● the land grant premium for the grant of land use rights must have been paid in full in accordance with the land grant contract and a certificate of land use right ( ) must have been obtained;

● investment in or development of such land must have been made or carried out in accordance with the terms of the land grant contract;

● if the investment or development involves the construction of building on the land, more than 25.0% of the total amount of investment or development must have been made or completed; and

● where the investment or development involves a large tract of land, conditions for the use of the land for industrial or other construction purposes must have been met.

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PRC Hong Kong

Pursuant to the State Council promulgated Strata Title Ownership the Property Management Rules ( ) on 8 June 2003, which came Apart from single leasehold ownership of land into effect on 1 September 2003. granted by the government, it is more common to find strata-title ownership in Hong ● If there is only one owner, or if there are Kong’s multi-storeys buildings. Such strata- very few owners, all owners can together title ownership is structured by way of each agree not to set up an owners’ committee owner of a unit holding a certain number of and exercise all relevant powers through notional undivided shares out of a total the owners’ general meeting. number of undivided shares attributable to the whole development together with the ● The quorum for an owners’ general exclusive right to own and use a particular meeting is owners representing more specified unit (residential flat or other type of than 1/2 of all voting rights in respect of unit) in the development. These undivided the property. shares are frequently allocated by the relevant architect of the project and The Department of Construction promulgated ownership is regulated by the terms of what is a Notice on Administrative Rules Regarding called a Deed of Mutual Covenant (“DMC”). Property Owners’ Committee ( ) This is the master document which governs on 26 March 2003 which stipulated that the the rights and obligations of co-owners of the following matters shall be passed by owners units in a particular development and is holding over 2/3 of all voting rights in respect registered against each unit in the of the property: development at the Land Registry. The DMC also provides for other co-ownership matters ● amending the deed of mutual convent or such as the rights of way through the common rules of proceedings of the owners’ parts, the delineation of the common areas, general meeting; or the management of the building by the relevant management company, the payment ● appointment or dismissal of the property of management fees, meetings of the owners management company; or etc. The DMC is usually drawn up according to the guidelines laid down by the government ● proposals to use and continuously raise and rules laid down by The Law Society of special repair fund. Hong Kong. In recent years, the Building Management Ordinance (Cap.344) was Other resolutions may be passed by owners enacted to deal with unfair terms in the DMC representing more than 1/2 of all voting rights and it also regulates arrangements between in respect of the property. co-owners and managers regarding the management of multi-storey buildings in Hong Kong.

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PRC Hong Kong

Documents of Title Land Registration

There are two types of title registrations in the The ownership of property in Hong Kong is PRC, namely land registration and building registered at the Land Registry. Such registration. Land registration is effected by registration is not a title registration system the issue of land use right certificate by the but the Land Registration Ordinance relevant authority to the land owner (Cap.128) provides that all documents evidencing that the land owner has obtained affecting or creating interests in land duly land use rights which can be assigned, registered will rank in priority of interest mortgaged or leased. The building against each other. Each piece of land or registration is the issue of a building property or a unit or a flat in a development ownership certificate ( )tothe will have its own register opened against it at building owner evidencing that the building the Land Registry. A record of all transactions owner has obtained building ownership rights affecting the property concerned starting from in respect of the building. According to the the original government grant under which the Land Registration Regulations ( ) lease of the property is held to subsequent promulgated by the State Land Administration dealings of the property, such as agreements Bureau on 18 November 1989 and amended for sale and purchase, assignments, on 18 December 1995 (the amendment mortgages, releases, government orders, the became effective on 1 February 1996), and DMC or other encumbrances affecting the the Administration Rules on Regulations property etc are registered at the Land of Urban Real Estate Property Registry. As such, any land owner’s ( ) promulgated by the proprietary right over Hong Kong property can Ministry of Construction on 27 October 1997, be ascertained by a search at the Hong Kong implemented on 1 January 1998 and revised Land Registry. subsequently on 15 August 2001, all land use rights and building ownership rights which are In July 2004, the Land Title Ordinance was duly registered are protected by law. passed by the Hong Kong government which will allow title to property to be established by The two different systems are commonly reference to a title register. This will give maintained separately in many cities in the greater security to property interest and will PRC. However, in Shenzhen, Guangzhou, also simplify conveyancing procedures in Shanghai and some other major cities, the Hong Kong. two system have been consolidated and a single composite real estate and land use right certificate ( ) will be issued to evidence the ownership of both land use rights and the buildings erected thereon. Such single composite real estate and land use right certificate is in compliance with the Law of the Administration of Urban Real Estate of the PRC ( ) and the Administration Rules on Regulations of Urban Real Estate Property ( ).

— IX-19 — APPENDIX IX OVERVIEW OF RELEVANT LAWS AND REGULATIONS IN THE PRC AND COMPARISON OF CERTAIN ASPECTS OF ITS PROPERTY LAWS AND THE LAWS OF HONG KONG

PRC Hong Kong

Proving Title to Property

As the proposed land title registration system will only come into effect after a 12 years “incubation period”, title to property in Hong Kong still needs to be proved by investigation of the physical title deeds to ensure that the title is validly held by an owner through proper devolution of title and that it is unencumbered.

The main law governing real estate and property transaction in Hong Kong is the Conveyancing and Property Ordinance (Cap.219) (“CPO”). The CPO is adopted from English statutes and it is also assisted by common law. It simplifies and codifies most areas of Hong Kong land laws and conveyancing matters. Real estate transactions in Hong Kong are made more certain and efficient by the operation of the CPO.

Leases/Tenancies in PRC Leases/Tenancies in Hong Kong

The Urban Land Regulations, the Law of the Land owner is usually free to let out property Administration of Urban Real Estate of the (whether it is a piece of land or a unit) to a PRC ( ) and tenant by means of a lease (for a term of over Measures for Administration of Leasing of three years) or a lease (for a term of less than Urban Buildings ( ) permit three years) although occasionally there may leasing of land use rights and properties be restrictions in the relevant government constructed on land obtained by way of grant. grant, mortgages or DMC on letting. Lease Under these measures, the lease must be in and tenancy are subject to stamp duty and for writing and must be registered with the leases over a term of three years, they should relevant real property administrative authority be registered at the Land Registry in order to within 30 days of execution. These measures obtain priority against third party interest. also stipulates a tenant has the right to sub-let the property with the prior consent of the The main area of law governing lease or landlord. tenancy matter in Hong Kong is the Landlord and Tenant (Consolidation) Ordinance (Cap.7) (“Ordinance”). Prior to July 2004, tenants in Hong Kong were generally protected under the Ordinance.

— IX-20 — APPENDIX IX OVERVIEW OF RELEVANT LAWS AND REGULATIONS IN THE PRC AND COMPARISON OF CERTAIN ASPECTS OF ITS PROPERTY LAWS AND THE LAWS OF HONG KONG

PRC Hong Kong

Chapter 13 of the Contract Law of With the commencement of the Landlord and the People’s Republic of China Tenant (Consolidation) (Amendment) ( ) provides that the lease Ordinance 2004 on 9 July 2004, the security agreement shall be in writing if its term is over of tenure enjoyed by domestic tenant under six months, and the term of any lease Part IV of the Ordinance was removed while agreement shall not exceed 20 years; that any the fixed term non-domestic tenancy will now change of ownership to the leased property end upon expiry of its term and the landlord is does not affect the valid leasing contract; that no longer required to give the six months the tenant may sub-let the leased property if it statutory notice to quit under Part V of the is agreed by the landlord and the lease Ordinance in order to end the tenancy. This agreement between the landlord and the change in law allows for free operation of the tenant is still valid and binding; and that when private rental market and reduces the landlord is to sell a dwelling unit under a government intervention in private tenancy lease, it shall give tenant reasonable advance matters. notice before the sale, and the tenant has the right of first refusal to renew such lease if the Under Hong Kong law, land owners are free to tenant is willing to match the same lease negotiate the terms of the lease with its tenant terms (including rental rates) as a prospective so long as it does not breach the terms and new tenant, subject to the tenant giving the conditions of the government grant, the DMC landlord prior notice of his intention to renew. and other governing ordinances or regulations. It is very common in Hong Kong for landlord to impose extensive obligations upon the tenant whilst the landlord retains most of the rights. Typically, the landlord’s obligations are limited to the giving of “quiet enjoyment” (which is a legal concept involving the non-interference with the tenant’s legal rights under the lease), payment of government rent and a qualified repairing obligation. The tenant’s obligations, on the other hand, usually include covenants to pay rent, management charges, rates and other outgoings, to keep the interior of the property in repair, to observe the terms of the DMC and the government grant, not to contravene any ordinances or government regulations, not to assign or underlet and only to use the property for approved purposes etc.

If disputes arise (such as non-payment of rent or breach of major terms of the lease or tenancy), they may be settled through legal proceedings in either the Lands Tribunal or at different levels of the courts in Hong Kong according to their judicial powers.

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A. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection free of charge at the App B24 registered office of the Manager at 53/F, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong during normal business hours up to and including the Listing Date (up to 12:00 noon):

1. Trust Deed;

2. each of the agreements, undertakings and documents described in the section headed “Material Agreements and Other Documents” in this Offering Circular;

3. Accountants’ Reports on the Property, which are set out in Appendix I and Appendix II to this Offering Circular;

4. Profit forecast of RREEF CCT, together with the reporting accountants’ letter on the accounting policies of such forecast and the Joint Global Coordinators’ comfort letter, the text of which are set out in Appendix IV to this Offering Circular;

5. Letter from the Independent Property Valuer in relation to Rental Income, the text of which is set out in Appendix V to this Offering Circular;

6. Independent Property Valuer’s Valuation Report, the text of which is set out in Appendix VI to this Offering Circular;

7. Letter from the Independent Market Consultant in relation to its Analysis Report on the Office Property Market in Beijing, the text of which is set out in Appendix VII to this Offering Circular, and the full report of the Market Consultant;

8. Letter from the Property Consultant in relation to its Building Due Diligence Report, the text of which is set out in Appendix VIII to this Offering Circular;

9. Written consents referred to in the section headed “Qualifications and Consents of Experts” in section B of this Appendix;

10. Hong Kong Underwriting Agreement;

11. Corporate governance policy of the Manager; and

12. Trustee’s appointment letters of the directors of the BVI Property Company and the HK Property Company.

— X-1 — APPENDIX X GENERAL INFORMATION

B. QUALIFICATIONS AND CONSENTS OF EXPERTS

The qualifications of the experts who have given opinions in this Offering Circular are as follows:

Deutsche Bank AG, Hong Kong Branch A deemed registered institution under the SFO to carry on types 1, 4, 6, 7 and 9 regulated activities as defined under the SFO and a licensed bank under the Banking Ordinance

The Hongkong and Shanghai Banking A registered institution to conduct types 1, 4 Corporation Limited and 6 regulated activities under the SFO and is also a licensed bank under the Banking Ordinance

KPMG Certified Public Accountants

DTZ Debenham Tie Leung Limited Independent Property Valuer

Knight Frank Petty Limited Independent Market Consultant

Knight Frank Petty Limited Independent Property Consultant

The Joint Global Coordinators, KPMG, DTZ Debenham Tie Leung Limited and Knight App B22 Frank Petty Limited, have given and have not withdrawn their respective written consents to B23 the issue of this Offering Circular with the inclusion of their reports and/or letters and/or the references to their names included herein in the form and context in which they are respectively included.

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C. MISCELLANEOUS

Save as disclosed in this Offering Circular, as at the Latest Practicable Date:

(a) none of the Directors nor any of the parties listed in section B of this Appendix is AppB2(p) interested in RREEF CCT’s promotion, or in any assets which have, within the two years immediately preceding the issue of this Offering Circular, been acquired or disposed of by or leased to RREEF CCT, or are proposed to be acquired or disposed of by or leased to RREEF CCT or any companies controlled by it;

(b) none of the Directors nor any of the parties listed in section B of this Appendix are materially interested in any contract or arrangement subsisting at the date of this Offering Circular which is significant in relation to RREEF CCT’s business;

(i) is interested legally or beneficially in any of the Units or any shares in any of the companies controlled by RREEF CCT; or

(ii) has any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for RREEF CCT’s securities;

(d) no amount or securities or benefit has been paid or allotted or given by RREEF CCT within the two years preceding the date of this Offering Circular to any of RREEF CCT’s promoters nor is any such amount or securities or benefit intended to be paid or allotted or given;

(e) none of the Directors or their respective associates has any interest in the top five tenants in respect of the Properties taken as a whole, in terms of Rental Income for the month ended 31 December 2006, other than, in the case of any tenant or its holding company which is a listed company, as a shareholder holding less than 0.1% of the issued share capital of the listed company;

(f) there are no outstanding loans or guarantees granted or provided by RREEF CCT or any companies controlled by it to, or for the benefit of, any of the Directors;

(g) within the two years preceding the date of this Offering Circular, RREEF CCT has not issued nor agreed to issue any Units fully or partly paid either for cash or for a consideration other than cash;

(h) save in connection with the Underwriting Agreements, no outstanding Units are under option or have been agreed conditionally or unconditionally to be put under option;

— X-3 — APPENDIX X GENERAL INFORMATION

(i) RREEF CCT has not issued nor agreed to issue any founder units, management units or deferred units;

(j) none of the equity and debt securities of RREEF CCT are listed or dealt with on any other stock exchange nor is any listing or permission to deal in the equity and debt securities being or proposed to be sought;

(k) RREEF CCT has no outstanding convertible debt securities;

(l) within the two years immediately preceding the date of this Offering Circular, no commissions, discounts, brokerages or other special items have been granted or paid to any Director, proposed Director, promoter, any of the parties listed in section B of this Appendix nor any other person in connection with the issue or sale of any Units or shares or loan capital of RREEF CCT or any of the companies controlled by it;

(m) there are no arrangements in existence under which future dividends of RREEF CCT are to be waived or agreed to be waived; and

(n) there have been no interruptions in the business of the BVI Property Company or the HK Property Company which may have or have already had a significant effect on the financial position of the BVI Property Company or the HK Property Company, taken as a whole, in the last 12 months.

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